• Seeks to deliver maximum long-term, after-tax return, consistent with preservation of capital
• Employs an actively managed, multi-sector approach, investing in a broad range of global fixed-income securities
• Allows manager to invest according to PIMCO’s market views, without benchmark constraints or significant sector/instrument limitations
• Provides tax advantages by holding at least half of assets in municipal bonds

Flexible Approach

PIMCO Unconstrained Tax Managed Bond Fund is not tethered to benchmark-specific guidelines and the Fund has only moderate sector or instrument limitations. This flexibility permits PIMCO to more fully express its secular views on the fixed-income market. It also differentiates the Fund from traditional core bond funds, which are generally limited in terms of how much they can vary exposures relative to a fixed-income benchmark.

Beyond a Traditional Core Bond Fund

The Fund’s flexible investment approach and broader diversification provide an opportunity to enhance after-tax returns, while also offering traditional benefits of a core bond fund such as capital preservation potential, liquidity and diversification. The unconstrained approach also gives the Fund’s manager greater latitude in its risk management.

Tax Management

The Fund may be appropriate for tax-sensitive investors looking to reduce their tax burdens. At least half of net assets are typically invested in municipal bonds, which are exempt from federal income taxes and, in some cases, state taxes as well. Municipal bonds have also historically offered lower volatility than other fixed-income sectors.* The Fund also generally avoids securities that trigger the federal alternative minimum tax.

PIMCO’s Expertise

Widely recognized as one of the world’s premier bond managers, PIMCO has been managing fixed-income securities for more than 30 years. In that time, the firm has developed deep management expertise across markets, strategies and asset classes, including global and tax-efficient portfolios. PIMCO is also one of the largest investment advisors in the country, as measured by assets under management, with a client list that includes many of the largest companies in the U.S.

The Fund’s investment process begins with PIMCO’s annual secular forum, at which the firm develops its three-to-five-year outlook for the global economy and interest rates. Quarterly meetings are then held to discuss how the outlook applies to upcoming three-to-12-month periods and to forecast specific influencing factors, including interest rate volatility, yield curve movement and credit trends. Taken together, these sessions set the firm’s basic views on duration, yield-curve positioning, sector weighting and credit quality. Bottom-up strategies, including credit analysis, quantitative research and individual issue selection are provided by the sector specialists.

The Fund’s investment approach may lead to concentrated exposure in areas of the bond market that entail greater risks. For example, the Fund may invest up to 40% of its total assets in below-investment-grade securities, which carry a higher degree of credit risk, and may be speculative and more volatile. The Fund may also invest without limitation in securities denominated in foreign currencies and in U.S. dollar-denominated securities of foreign issuers, and can assume up to 35% exposure in non-U.S. currency. The Fund also has the ability to invest up to 50% of its total assets in securities and instruments tied to emerging market countries. These non-U.S. investments entail specialized risks such as political and economic risks and the risk of currency fluctuations. The Fund may also invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements.

Mr. Dialynas is a Managing Director, portfolio manager, and a senior member of PIMCO's investment strategy group. He joined PIMCO in 1980. He holds a bachelor’s degree in economics from Pomona College, and holds an MBA in finance from The University of Chicago Graduate School of Business.

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.