• Takes a conservative approach to high-yield investing by concentrating on the upper credit tiers of the high yield market and focusing on income as well as capital management.
• Avoids exposure to the more risky and speculative lower-tier of non-investment grade bonds.
• Utilizes PIMCO's disciplined approach to credit research, accessing the full breadth and depth of PIMCO's in-house global credit team.

Greater Income Potential
Below investment grade bonds are often the issues of corporations that lack a long-term track record of earnings or growth. In general, these lower-rated securities are considered riskier than other fixed-income instruments. To compensate investors for taking on this additional risk, below investment grade bonds have the potential for significantly higher income – which is why they are commonly referred to as "high yield" bonds.

Attractive Risk/Reward Tradeoff
PIMCO High Yield Fund attempts to control the risk by investing in better quality high yield bonds. By focusing on the upper- and middle-credit quality tiers of the high yield market, the Fund avoids exposure to the more speculative and risky lower-tier high yield bonds. This focus on quality has, in the past, resulted in a less volatile high yield fund without sacrificing return potential.

Expert Management

As measured by assets under management, PIMCO is one of the largest investment advisors in the country.

The top-down investment process begins with PIMCO's annual secular forum at which the firm develops a 3-5 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 individual issue selection. The Fund focuses on the upper-tier credits, within the below investment grade universe, because historically they have delivered the best risk/return profile. Consideration of yield is only one component of our approach. We also consider capital appreciation and principal preservation through intensive fundamental, macroeconomic, industry and company-specific research. Furthermore, intermediate maturity bonds are emphasized to ensure that Fund performance is driven by credit characteristics, not interest rate risk. Finally, non-traditional sectors are employed in small doses to enhance return and increase diversification.

Bill Gross, CFA, is a founder and Managing Director of PIMCO. He began his investment career in 1969 and is widely regarded as the world's foremost fixed income authority.

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.