• Takes a relatively conservative approach to the emerging markets debt asset class, investing primarily in U.S.-dollar denominated intermediate-term bonds.
• Invests primarily in U.S.-dollar denominated intermediate-term bonds.
• PIMCO's seasoned emerging markets bond team has over 100 years of combined experience in investing and emerging markets economic policy.

Tempering Risk With Diversification
Historically, bond markets in different countries have tended to move in varying patterns from each other and the U.S. market. With a globally diversified portfolio of bonds, you can attempt to temper the volatility that would occur if you invested only in the United States or any other single country.

Reward Potential
Over half of the world's fixed income securities are issued outside the United States. And compared to more developed countries, bonds issued in emerging market countries can offer higher yields and strong capital appreciation potential for aggressive investors willing to assume additional risk.

Expert Management
As measured by assets under management, PIMCO is one of the largest investment advisors in the country. PIMCO's emerging markets bond team has more than 100 years of combined experience in investing and emerging markets economic policy.

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 income and capital appreciation potential.

A Conservative Approach To Emerging Markets
Investing in emerging market bonds can entail special risks, including less liquidity and adverse foreign economic and political developments. The manager takes several steps to make the Fund a relatively conservative emerging market bond investment:

• Conducts extensive credit analysis on all bonds considered for the Fund's portfolio
• Maintains at least a BB average quality
• Invests in an intermediate-term portfolio
• Seeks to focus primarily on U.S.-dollar dominated emerging market securities

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. The manager is then guided by risk-adjusted, real yields. Markets are ranked by their relevant country risk and each ranking is compared to the real yields to determine which countries have the best risk-adjusted yield. Tactical currency allocations are determined according to short-term yields, market trends or technical factors and fundamental analysis focused on measures of relative purchasing power. The manager’s goal is to identify not only which countries to overweight or underweight, but also where on each country's yield curve the Fund should take an exposure. The manager may at times use futures to replicate bond positions.** This strategy can offer the opportunity to outperform physical bond securities due to the relative pricing of the futures contracts and PIMCO's active management of the collateral backing the futures.

** Futures may also be used to manage the Fund portfolio's overall duration and sector exposure.

Mr. Mewbourne is a managing director, portfolio manager and head of the emerging markets, diversified income (co-head), and Insurance portfolio management teams. He has longtime portfolio management experience spanning a broad range of asset classes. He holds an engineering degree in computer science from the University of Pennsylvania.

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.