• An attractive alternative to taxable issues, which may be particularly beneficial should tax rates rise.
• High-quality emphasis on general obligation bonds and pre-refunded bonds.
• Access to PIMCO’s muni bond management expertise.

Attractive After-Tax Income

Municipal bonds are one of the most efficient tools for investors to earn income free of federal income taxes, and in many cases state and local taxes as well. With marginal tax rates potentially moving higher, tax-free income may become an increasingly valuable benefit for investors.

A High-Quality Orientation

PIMCO MuniGO Fund focuses on two of the highest-quality sectors of the municipal bonds market: intermediate-term, general obligation bonds (GO) and pre-refunded bonds. GO securities are supported by the full faith and credit of the issuer — states, counties or cities — as well as the issuer’s taxing power, while pre-refunded bonds are backed by U.S. Treasury and agency securities. Municipal bonds, which have historically had extremely low default rates, have also been less volatile than many other asset classes. Of course, municipal bonds will rise or fall in value in response to interest rate fluctuations.

Individual Credit Analysis

The Fund’s manager takes a total return approach to security selection, weighing both the income and potential appreciation characteristics. Individual bond factors such as finances, credit quality, call risks and structures are all carefully considered. Access to PIMCO’s time-tested research process may make the Fund a preferable option to a laddered portfolio of individual bonds.

PIMCO’s Muni Expertise

PIMCO, one of the world’s premier asset managers, has been investing in municipal bonds for over 13 years. As part of its risk management process, the firm employs proprietary quantitative tools specifically designed for its municipal portfolios. PIMCO is one of the largest participants in the muni bond market, allowing Fund shareholders to benefit from economies of scale typically unavailable to individual investors.

The Fund’s investment process begins with PIMCO’s three-to-five year outlook for the global economy and interest rates, formulated at the firm’s annual Secular Forum; it is supplemented by PIMCO’s cyclical outlook, which specifies a near-term forecast. These views help set basic portfolio parameters, including duration, yield curve positioning, sector weightings and credit quality. These “top-down” macro views are then combined with bottom-up input — including credit analysis, quantitative research and individual issue selection — provided by the firm’s experienced sector specialists.

John Cummings, an Executive Vice President and portfolio manager within PIMCO's municipal bond team, joined PIMCO in 2002. He began his investment career in 1983 and holds an MBA in finance from Rutgers University.

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.