• Offers attractive capital appreciation potential by focusing on investments in countries exhitibiting improving economic and financial fundamentals.
• Strategy involves investment in currencies of, or in fixed income instruments denominated in the currencies of, developing markets.
• Provides investors willing to accept the additional risks associated with developing market securities and currencies with the opportunity to reduce portfolio exposure to U.S. interest rates.
• The Developing Local markets strategy benefits from the team's considerable experience, market presence, and expertise.

Tempering Risk with Diversification

Local-currency-denominated investments in developing markets have low correlations with other asset classes.** They also provide investors an opportunity to reduce their portfolio's exposure to a rise in U.S. interest rates and are likely to benefit from declines in the value of the U.S. dollar.

Reward Potential

Over half the world's fixed income securities are issued outside of the United States. Within this foreign issuance, developing markets have historically provided investors with attractive risk-adjusted returns.

Expert Management

As measured by assets under management, PIMCO is one of the largest investment advisors in the country. Among PIMCO's clients are many of the 100 largest U.S. corporations. And with close to $48 billion in emerging markets holdings, PIMCO is one of the largest participants in this area of the bond market.

Total Return Philosophy
Many bond funds concentrate solely on providing income. But concentrating on income alone can mean sacrificing capital appreciation potential. The Fund seeks maximum total return taking into consideration both income and capital appreciation potential.

Intensive Risk Management

Fundamental to the process of risk management are a variety of analytical tools, which are available to measure and monitor exposures in the portfolio. In addition to these measures, PIMCO closely monitors economic, political, and other developments that impact the domestic and external markets of emerging markets countries.

PIMCO's Developing Local Markets Strategy involves investment in currencies of, or in fixed income instruments denominated in the currencies of, developing markets. A "developing market" is considered to be any non-U.S. country, excluding those countries that have been classified by the World Bank as high-income Organization for Economic Co-operation and Development (OECD) economies for the past five consecutive years. Investments may include local currency denominated bonds, currency forwards, and derivatives such as options, futures contracts, or swap agreements.

The top-down investment process begins with PIMCO's annual secular forum at which the firm develops a 3- to 5-year outlook for the global economy and interest rates. This helps set the basic portfolio parameters, including duration, yield-curve positioning, sector weightings, credit quality breakdown and finally, individual issue selection. PIMCO then employs its well-tested country selection process with respect to emerging economies. This process requires that each country PIMCO invests in satisfies three independent criteria; 1) strong underlying credit fundamentals, 2) limited risk from the external environment and global economy, and 3) lack of susceptibility to a de-facto deterioration of credit quality or financial contagion due to imbalanced market technicals. In managing local currency exposures, PIMCO will pay particular attention to the country's domestic savings and investment flows, the balance of payments, the outlook for inflation, technical factors specific to the local markets, longer-term valuation metrics such as real effective exchange rates (REER) and purchasing power parity (PPP), and other factors likely to drive currency and interest rate moves.

Mr. Gomez is an Executive Vice President, portfolio manager and Co-Head of the Emerging Markets team. He joined PIMCO in 2003 after working with Goldman Sachs. Prior to that, he spent a year in Colombia as a financial consultant to the Ministry of Finance and Public Credit. Mr. Gomez holds a bachelor's degree from the University of Pennsylvania and an MBA from The Wharton School.

Newport Beach, California

Led by Founder and Co-Chief Investment Officer Bill Gross, PIMCO is widely recognized as one of the premier bond managers in the world. PIMCO applies this expertise to a range of core and specialized investment portfolios.