An actively managed portfolio of emerging-market currencies

PIMCO believes that emerging markets will be the growth engine of the global economy over the coming years. By investing primarily in the currencies of a broad range of emerging markets exhibiting improving economic and financial fundamentals, the Fund helps investors tap their attractive growth and diversification potential.

Attractive risk-adjusted return potential from emerging-market (EM) currencies

Instead of investing in EM government or corporate bonds issued in dollars or Euros, the Fund invests primarily in the currencies of, and fixed-income instruments denominated in the currencies of, EM countries. This enables PIMCO to seek to take advantage of these countries’ strengthening economies and fiscal reforms. Although subject to uncertain political and economic conditions, EM currency markets have historically provided investors with attractive risk-adjusted returns.

Help diversify your overall portfolio

EM currencies tend to have low correlations with other asset classes like U.S. stocks and bonds, and may help enhance overall portfolio diversification. Of course, this does not guarantee a profit or protect against a loss. The Fund’s shorter-term, non-U.S.-dollar-denominated focus can help investors reduce their portfolios’ exposure to a potential rise in U.S. interest rates, and may help investors benefit from declines in the value of the U.S. dollar.

PIMCO has extensive experience investing in emerging markets

The PIMCO emerging markets team has more than 100 years of combined experience in investing and emerging markets economic policy. With over $40 billion invested in emerging markets (as of 12/31/2008)—including large economies like Brazil, Russia, India and China, plus fast-growing nations like Israel, Singapore and Hong Kong—PIMCO is one of the largest investors in this sector.

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 where the firm develops a three- to five-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.