• Provides an efficient way to hedge a portfolio against a potential downturn in stocks.
• Employs an innovative portfolio structure that combines a passive short position in the S&P 500 Index with PIMCO's active bond management capabilities.
• Managed by renowned PIMCO founder and CIO Bill Gross.
• Capitalizes on PIMCO's expertise in seeking positive alpha—excess risk-adjusted return.

An Efficient Hedge Against Potential Stock Market Downturns
PIMCO StocksPLUS TR Short Strategy Fund can provide an efficient way to gain short exposure to the S&P 500 Index as a hedge against a stock market decline. The Fund's strategy is similar to that of PIMCO StocksPLUS Total Return Fund, but instead of gaining long stock market exposure through the purchase of S&P 500 Index-linked derivatives, the Fund sells these derivatives to gain inverse exposure to the S&P 500 Index. It then fully collateralizes this exposure with an actively managed portfolio of high-quality, low- to intermediate-duration bonds. As a result, the Fund offers performance that is inversely linked to the return of the S&P 500 Index, with the potential to generate excess returns through active management of the fixed-income collateral. Of course, investors should bear in mind that while the Fund will tend to perform well when the S&P 500 Index declines, it will generally incur a loss when the S&P 500 Index rises.

Expert Management from PIMCO
As measured by assets under management, PIMCO is one of the country's largest investment advisors with a client list that includes many of the largest U.S. corporations. PIMCO was one of the first investment managers to specialize in active fixed-income management and pioneered a total return approach to bond investing—one that focuses on both income and capital appreciation—more than 30 years ago.

The Fund employs PIMCO's renowned Total Return strategy in managing the underlying bond portfolio. Central to PIMCO's success in employing this approach is the belief that no single strategy should dominate performance. By drawing on multiple sources of value that arise from a diversified bond portfolio, PIMCO believes it can generate attractive risk-adjusted total returns.

PIMCO StocksPLUS TR Short Strategy Fund backs a short position in S&P 500 Index-linked derivative instruments (index-linked instruments) with a low- to intermediate-duration portfolio of higher quality bonds. In managing the fixed-income collateral, the portfolio manager employs a Total Return bond strategy. This begins with PIMCO's three- to five-year outlook for the global economy and interest rates, developed at the firm's annual Secular Forum. This helps set basic portfolio parameters, including duration, yield-curve positioning, sector weightings and credit quality. Bottom-up strategies, such as credit analysis and quantitative research, are meshed with the top-down strategies to add value. The result will be a portfolio with a higher average credit quality and a low to intermediate duration, actively managed within a one- to six-year range.

Tax Considerations
It's important to note that the Fund's strategy can involve high portfolio turnover. As a result, the Fund may incur greater transaction costs and realize taxable capital gains, including short-term capital gains which are generally taxed at ordinary income tax rates. Investors should consult their professional tax advisors for more information, including the benefits of investing through a tax-deferred account.

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.