• Portfolio Managers adhere to a strict value discipline, seeking fundamentally sound companies that are seen as undervalued.  
• Investment approach allows for broad diversification which can help to reduce some of the risks associated with small-cap investing.
• Each holding is expected to pay a dividend, which can offer cushioning during periods of market fluctuation.

• Screen for positive fundamentals—Apply a screen for positive fundamental characteristics to a universe of approximately 4,000 small-cap stocks.
• Conduct in-depth research and analysis— Research each of the approximately 500 remaining possible investments, looking for companies with low price-to-earnings multiples, dividend yields, and positive prospective earnings, among other factors.
• Restrict industry concentrations—Avoid overexposure to any one sector by restricting the number of stocks held in a single industry.
• Construct portfolio—Select approximately 100-150 of the most attractive securities identified, diversified across industries.  Each holding is expected to pay a dividend.
• Regularly monitor for buy and sell candidates—Continually repeat the research process to identify new buy and sell candidates. Generally, sell a stock when an alternative stock with strong fundamentals demonstrates a lower price-to-earnings ratio, a higher dividend yield, or other qualitative metrics.

Potential of Undervalued Stocks

Investors often focus on a few high growth sectors, allowing strong opportunities in other industries to go unnoticed. Allianz NFJ Small-Cap Value Fund may be a beneficial way to invest in these undervalued stocks.

Expert Management
NFJ Investment Group has a strong track record and consists of a team of managers dedicated to a pure, deep value approach to equity investing. Each of these professionals participates in the investment process, serving as portfolio manager and securities analyst. This team approach means broader resources are committed to portfolio construction.

Risk Management
NFJ adheres to a strict value philosophy, seeking undervalued, fundamentally sound companies. What sets the firm apart from other value-oriented managers is its emphasis on risk management. To temper the risks associated with equity investing, NFJ maintains broad industry diversification and expects each stock in Allianz NFJ Small-Cap Value Fund to pay a dividend-a characteristic they believe is an important sign of financial stability.

Mr. Campbell has over three years of experience in investment and financial analysis. Prior to joining NFJ Investment Group in 2007, Mr. Campbell attended Harvard Business School, where he received an MBA. Before business school, Mr. Campbell worked as an investment banking analyst for Lazard and Merrill Lynch. He received his BBA degree in Finance from the University of Texas in 2003.

Ben Fischer, CFA, is Managing Director and Portfolio Manager of NFJ Investment Group. A founding partner of NFJ, Mr. Fischer's experience in the value sector began in 1966.

Paul Magnuson is a Managing Director and a Portfolio Manager at NFJ. He has worked in equity analysis and portfolio management since 1985. He received his B.B.A. in finance from the University of Nebraska.

R. Burns McKinney, CFA, is a Portfolio Manager who joined NFJ in 2006. His previous investment experience includes equity research and analysis at Evergreen Investments and Merrill Lynch, where he was a Vice President of equity research. He holds an M.B.A. from the Wharton School and a B.A. from Dartmouth.

Dallas, Texas

NFJ employs a deep value equity investment style that focuses on dividends, discipline and diversification. Over the years, the firm's strict adherence to this approach has helped it to deliver consistent results for investors with lower-than-average risk.