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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-22375
PIMCO Equity Series
(Exact name of registrant as specified in charter)
650 Newport Center Drive, Newport Beach, CA 92660
(Address of principal executive office)
Trent W. Walker
Treasurer (Principal Financial & Accounting Officer)
PIMCO Equity Series
650 Newport Center Drive
Newport Beach, CA 92660
(Name and address of agent for service)
Copies to:
Brendan C. Fox
Dechert LLP
1900 K Street, N.W.
Washington, D.C. 20006
Registrant’s telephone number, including area code: (888) 877-4626
Date of fiscal year end: June 30
Date of reporting period: June 30, 2017
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
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| Item 1. | Reports to Shareholders. |
The following are copies of the reports transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1).
| • | PIMCO Equity Series Funds |
| • | PIMCO Equity Series RAE Fundamental Funds |
| • | PIMCO Equity Series RealPath® Blend Funds |
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PIMCO Equity Series®
Annual Report
June 30, 2017
PIMCO Dividend and Income Fund
PIMCO EqS® Long/Short Fund
Share Classes
| ∎ | Institutional |
| ∎ | P |
| ∎ | D |
| ∎ | A |
| ∎ | C |
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This material is authorized for use only when preceded or accompanied by the current PIMCO Equity Series prospectus. The Shareholder Reports for the other series of the PIMCO Equity Series are printed separately.
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Dear Shareholder,
Please find enclosed the Annual Report for the PIMCO Equity Series covering the twelve-month reporting period ended June 30, 2017. The following pages contain specific details about the investment performance of each fund and a discussion of the factors that most affected performance during the reporting period.
Highlights of the financial markets during the twelve-month reporting period include:
| ∎ | The outcome of Brexit in June 2016, whereby U.K. voters opted to leave the European Union, prompted market volatility to rise, sovereign yields to rally significantly, and risk assets to generally underperform. Investor risk appetite returned later, however, as investors viewed the global economy as stable and expectations for further central bank easing helped anchor risk appetite. Improving commodity prices and fiscal stimulus in China also contributed to renewed investor confidence. |
| ∎ | Leading up to the U.S. presidential election on November 8, investors generally shook off a number of political developments, including new leadership in the U.K. and Brazil, and a coup attempt in Turkey. In this environment, volatility generally remained low and risk assets rallied. Central banks were featured prominently in the headlines as monetary policy concerns (in particular, the longevity of central bank support) lingered beneath the seemingly benign market environment. In December, the Federal Reserve (“Fed”) raised its key lending rate, the Federal Funds Rate, by 0.25% to a range of 0.50% to 0.75%. Furthermore, equities moved higher (U.S. stock indices set record highs), credit spreads tightened, and emerging market (“EM”) assets continued to gain over this period. |
| ∎ | Through early 2017, the robust risk sentiment that marked the post-U.S. election period broadly continued, though there were some signs of moderation towards the end of March. Early challenges in President Donald Trump’s policy agenda left some investors less optimistic about the potential for other highly anticipated agenda items such as tax reform and infrastructure spending. Still, solid fundamental data, relatively easy financial conditions, and optimism among businesses and consumers helped encourage positive investor sentiment. This environment provided an opportunity for the Fed to continue on its path towards policy normalization, and led the Fed to raise the Federal Funds Rate again in March by 0.25% to a range of 0.75% to 1.00%. |
| ∎ | Geopolitics, including elections in several countries as well as political controversy in both the U.S. and Brazil, dominated headlines and contributed to brief periods of market volatility throughout the last quarter of the reporting period. In the U.S., the Fed raised the Federal Funds Rate once again in June by 0.25% to a range of 1.00% to 1.25%, and unveiled details of its plan to gradually unwind its balance sheet, contributing to a flattening yield curve. A perceived hawkish shift in tone from other major central banks, including the European Central Bank, the Bank of England, and the Bank of Canada, spurred most developed market yields to rise even as longer-term interest rates actually fell in the U.S. The fundamental economic backdrop remained largely intact and the broader risk rally continued as equities marched higher, credit spreads tightened, and EM assets strengthened. |
| ∎ | Global developed market equities experienced strong performance amid a period marked by low economic volatility and strong corporate earnings growth despite geopolitical uncertainty. International equity markets (developed ex-U.S.), as represented by the MSCI EAFE Net Dividend Index (USD Hedged), returned 23.50% and the MSCI EAFE Net Dividend Index (USD Unhedged), returned 20.27% over the reporting period. U.S. equities, as represented by the S&P 500 Index, returned 17.90%. Japanese equities, as represented by the Nikkei 225 Index (in JPY), returned 31.03% over the reporting period and European equities, as represented by the MSCI Europe Index in EUR, returned 17.96% over the reporting period. |
| ∎ | EM equities, as represented by the MSCI Emerging Markets Index (Net Dividends in USD), returned 23.75% over the reporting period. Emerging markets benefited from an improvement in global conditions and a stabilization of macro fundamentals despite a decline in commodity prices. A more dovish Federal Reserve, lower-for-longer |
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global central bank policy and an orderly rebalancing in China along with a return to growth in select countries and improving current accounts contributed to strong performance for EM equities. |
| ∎ | U.S. Treasuries, as represented by the Bloomberg Barclays U.S. Treasury Index, declined 2.32% for the reporting period. Yields across the U.S. Treasury yield curve rose in reaction to the Fed’s interest rate increases, rising concern over inflation and strong investor risk appetite. The benchmark ten-year U.S. Treasury note yielded 2.31% at the end of the reporting period, up from 1.49% on June 30, 2016. The Bloomberg Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, declined 0.31% for the reporting period. |
If you have any questions regarding the PIMCO Equity Series, please contact your account manager or financial adviser, or call one of our shareholder associates at 888.87.PIMCO (888.877.4626). We also invite you to visit our website at www.pimco.com to learn more about our views and global thought leadership.
Thank you again, for the trust you place in us. We value your commitment and will continue to work diligently to meet your broad investment and investment solution needs.
 | Sincerely,
Brent R. Harris Chairman of the Board,
August 24, 2017 |
Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income distributions and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. It is not possible to invest directly in an unmanaged index.
| ANNUAL REPORT | JUNE 30, 2017 | 3 |
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Important Information About the Funds
PIMCO Equity Series (the “Trust”) is an open-end management investment company.
We believe that equity funds have an important role to play in a well-diversified investment portfolio. It is important to note, however, that equity funds are subject to notable risks. Among other things, equity and equity-related securities may decline in value due to both real and perceived general market, economic, and industry conditions.
The values of equity securities, such as common stocks and preferred stocks, have historically risen and fallen in periodic cycles and may decline due to general market conditions, which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. Equity securities may also decline due to factors that affect a particular industry or industries, such as labor shortages, increased production costs and competitive conditions within an industry. In addition, the value of an equity security may decline for a number of reasons that directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets. Different types of equity securities may react differently to these developments and a change in the financial condition of a single issuer may affect securities markets as a whole.
During a general downturn in the securities markets, multiple asset classes, including equity securities, may decline in value simultaneously. The market price of equity securities owned by a Fund may go up or down, sometimes rapidly or unpredictably. Equity securities generally have greater price volatility than fixed income securities and common stocks generally have the greatest appreciation and depreciation potential of all equity securities.
The Funds may be subject to various risks as described in the Funds’ prospectus. Some of these risks may include, but are not limited to, the following: equity risk, dividend-oriented stocks risk, value investing risk, foreign (non-U.S.) investment risk, emerging markets risk, sovereign debt risk, market risk, issuer risk, interest rate risk, call risk, credit risk, high yield and distressed company risk, cash holdings risk, currency risk, real estate risk, liquidity risk, leveraging risk, issuer non-diversification risk, management risk, small-cap and mid-cap company risk, derivatives risk, model risk mortgage-related and other asset-backed securities risk, short sale risk and convertible securities risk. A complete description of these and other risks is contained in the Funds’ prospectus.
The Funds may use derivative instruments for hedging purposes or as part of an investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market
risk, credit risk, leverage risk, management risk and the risk that a Fund may not be able to close out a position when it would be most advantageous to do so. Changes in regulation relating to a mutual fund’s use of derivatives and related instruments could potentially limit or impact a Fund’s ability to invest in derivatives, limit a Fund’s ability to employ certain strategies that use derivatives and/or adversely affect the value or performance of derivatives and a Fund. Certain derivative transactions may have a leveraging effect on a Fund. For example, a small investment in a derivative instrument may have a significant impact on a Fund’s exposure to interest rates, currency exchange rates or other investments. As a result, a relatively small price movement in an asset, instrument or component of the index underlying a derivative instrument may cause an immediate and substantial loss or gain, which translates into heightened volatility for the Funds. A Fund may engage in such transactions regardless of whether the Fund owns the asset, instrument or components of the index underlying the derivative instrument. A Fund may invest a significant portion of its assets in these types of instruments. If it does, the Fund’s investment exposure could far exceed the value of its portfolio securities and its investment performance could be primarily dependent upon securities it does not own. Investing in foreign (non-U.S.) securities may entail risk due to foreign (non-U.S.) economic and political developments; this risk may be increased when investing in emerging markets.
The value of an equity security of an issuer that has paid dividends in the past may decrease if the issuer reduces or eliminates future payments to its shareholders. If the dividends or distributions received by a Fund decrease, the Fund may have less income to distribute to the Fund’s shareholders. In addition, during certain market conditions, the equity securities of issuers that have paid regular dividends or distributions may not be widely available or may be highly concentrated in particular sectors of the market. A Fund may invest a significant portion of its assets in value stocks. Value stocks may perform differently from other types of stocks and the market as a whole. A value stock may decrease in price or may not increase in price as anticipated by PIMCO if it continues to be undervalued by the market or the factors that the portfolio manager believes will cause the stock price to increase do not occur.
The geographical classification of foreign (non-U.S.) securities in this report are classified by the country of incorporation of a holding. In certain instances, a security’s country of incorporation may be different from its country of economic exposure.
On each individual Fund Summary page in this Shareholder Report, the Average Annual Total Return table and Cumulative Returns chart measure performance assuming that any dividend and capital gain distributions were reinvested. Returns do not reflect the deduction of taxes that a shareholder would pay on (i) Fund distributions or (ii) the
| 4 | PIMCO EQUITY SERIES |
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redemption of Fund shares. The Cumulative Returns chart and Average Annual Total Return table reflect any sales load that would have applied at the time of purchase or any Contingent Deferred Sales Charge (“CDSC”) that would have applied if a full redemption occurred on the last business day of the period shown in the Cumulative Returns chart. Class A shares are subject to an initial sales charge. A CDSC may be imposed in certain circumstances on Class A shares that are purchased without an initial sales charge and then redeemed during the first 12 months after purchase. Class C shares are subject to a 1% CDSC, which may apply in the first year. The Cumulative Returns chart reflects only Institutional Class performance. Performance may vary by share class based on each class’s expense ratios. Performance shown is net of fees and expenses. The minimum initial investment amount for Institutional Class and Class P shares is $1,000,000. The minimum initial investment amount for Class A, Class C and Class D shares is
$1,000. Each Fund measures its performance against at least one broad-based securities market index (“benchmark index”). The benchmark index does not take into account fees, expenses, or taxes. A Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. There is no assurance that any Fund, including any Fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a Fund’s total return in excess of that of the Fund’s benchmark between reporting periods or 2) a Fund’s total return in excess of the Fund’s historical returns between reporting periods. Unusual performance is defined as a significant change in a Fund’s performance as compared to one or more previous reporting periods.
The following table discloses the inception dates of each Fund and its respective share classes along with each Fund’s diversification status as of period end:
| Fund Name | Fund Inception | Institutional Class | Class P | Class D | Class A | Class C | Diversification Status | |||||||||||||||||||||||
PIMCO Dividend and Income Fund | 12/14/11 | 12/14/11 | 12/14/11 | 12/14/11 | 12/14/11 | 12/14/11 | Diversified | |||||||||||||||||||||||
PIMCO EqS® Long/Short Fund | 04/20/12 | 04/20/12 | 04/30/12 | 04/30/12 | 04/30/12 | 04/30/12 | Non-diversified | |||||||||||||||||||||||
An investment in a Fund is not a bank deposit and is not guaranteed or insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. It is possible to lose money on investments in a Fund.
The Trustees are responsible generally for overseeing the management of the Trust. The Trustees authorize the Trust to enter into service agreements with the Adviser, the Distributor, the Administrator and other service providers in order to provide, and in some cases authorize service providers to procure through other parties, necessary or desirable services on behalf of the Trust and the Funds. Shareholders are not parties to or third-party beneficiaries of such service agreements. Neither a Fund’s prospectus nor a Fund’s summary prospectus, the Trust’s Statement of Additional Information (“SAI”), any contracts filed as exhibits to the Trust’s registration statement, nor any other communications, disclosure documents or regulatory filings (including this report) from or on behalf of the Trust or a Fund creates a contract between or among any shareholder of a Fund, on the one hand, and the Trust, a Fund, a service provider to the Trust or a Fund, and/or the Trustees or officers of the Trust, on the other hand. The Trustees (or the Trust and its officers, service providers or other delegates acting under authority of the Trustees) may amend the most recent prospectus or use a new prospectus, summary prospectus or SAI with respect to a Fund or the Trust, and/or amend, file and/or issue any other communications, disclosure documents or regulatory filings, and may amend or enter into any contracts to which the Trust or a Fund is a party, and interpret the investment objective(s), policies, restrictions and contractual provisions applicable to any Fund, without shareholder
input or approval, except in circumstances in which shareholder approval is specifically required by law (such as changes to fundamental investment policies) or where a shareholder approval requirement is specifically disclosed in the Trust’s then-current prospectus or SAI.
PIMCO has adopted written proxy voting policies and procedures (“Proxy Policy”) as required by Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended. The Proxy Policy has been adopted by the Trust as the policies and procedures that PIMCO will use when voting proxies on behalf of a Fund. A description of the policies and procedures that PIMCO uses to vote proxies relating to portfolio securities of a Fund, and information about how the Fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30th, are available without charge, upon request, by calling the Trust at (888) 87-PIMCO, on the Fund’s website at www.pimco.com, and on the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
The Trust files a complete schedule of each Fund’s holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. A copy of a Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. A Fund’s Form N-Q is also available without charge, upon request, by calling the Trust at (888) 87-PIMCO and on the Fund’s website at www.pimco.com. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
| ANNUAL REPORT | JUNE 30, 2017 | 5 |
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PIMCO Dividend and Income Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO Dividend and Income Fund (the “Fund”) seeks to provide current income that exceeds the average yield on global stocks, and as a secondary objective, seeks to provide long-term capital appreciation, by investing under normal circumstances at least 80% of its assets in a diversified portfolio of income-producing investments, and will typically invest between 60-80% of its assets in equity and equity-related securities (such portion of the Fund’s portfolio, the “Equity Sleeve”) providing exposure to a portfolio of stocks (the “RAE Income Global Portfolio”) through investment in the securities that comprise the RAE Income Global Portfolio. The stocks for the Equity Sleeve are selected by the Fund’s sub-adviser, Research Affiliates, LLC from a broad universe of global equities. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||||||
| 1 Year | 5 Year | Fund Inception (12/14/11) | ||||||||||||
 | PIMCO Dividend and Income Fund Institutional Class | 14.01% | 6.93% | 7.56% | ||||||||||
| PIMCO Dividend and Income Fund Class P | 13.86% | 6.85% | 7.50% | |||||||||||
| PIMCO Dividend and Income Fund Class D | 13.59% | 6.57% | 7.21% | |||||||||||
| PIMCO Dividend and Income Fund Class A | 13.54% | 6.56% | 7.20% | |||||||||||
| PIMCO Dividend and Income Fund Class A (adjusted) | 7.28% | 5.36% | 6.11% | |||||||||||
| PIMCO Dividend and Income Fund Class C | 12.70% | 5.78% | 6.39% | |||||||||||
| PIMCO Dividend and Income Fund Class C (adjusted) | 11.70% | 5.78% | 6.39% | |||||||||||
 | MSCI World Index± | 18.20% | 11.38% | 12.12% | ||||||||||
 | 75% MSCI World Index/25% Bloomberg Barclays Global Aggregate USD Unhedged±± | 12.80% | 8.73% | 9.39% | ||||||||||
All Fund returns are net of fees and expenses.
± The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of 23 developed market country indices.
±± The benchmark is a blend of 75% MSCI World Index/25% Bloomberg Barclays Global Aggregate USD Unhedged. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of 23 developed market country indices. Bloomberg Barclays Global Aggregate USD Unhedged provides a broad-based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the Pan-European Aggregate, and the Asian-Pacific Aggregate Indices. The index also includes Eurodollar and Euro-Yen corporate bonds, Canadian Government securities, and USD investment grade 144A securities.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, which includes the Acquired Fund Fees and Expenses, as supplemented, is 0.83% for the Institutional Class shares, 0.93% for the Class P shares, 1.18% for the Class D shares, 1.18% for the Class A shares, and 1.93% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
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| Institutional Class - PQIIX | Class P - PQIPX | Class D - PQIDX | Class A - PQIZX | Class C - PQICX |
Geographic Breakdown as of 06/30/20171§
United States | 48.2% | |||||||
United Kingdom | 9.7% | |||||||
Japan | 9.6% | |||||||
France | 6.3% | |||||||
Germany | 4.8% | |||||||
Spain | 2.8% | |||||||
Australia | 2.6% | |||||||
Netherlands | 2.4% | |||||||
Switzerland | 2.0% | |||||||
Canada | 1.8% | |||||||
Cayman Islands | 1.6% | |||||||
Italy | 1.4% | |||||||
Other | 5.9% |
Sector Breakdown as of 06/30/20171§
Financials | 22.9% | |||||||
Industrials | 9.7% | |||||||
Energy | 9.3% | |||||||
Asset-Backed Securities | 7.0% | |||||||
Health Care | 6.8% | |||||||
Utilities | 6.3% | |||||||
Information Technology | 5.8% | |||||||
Consumer Discretionary | 5.3% | |||||||
Consumer Staples | 4.6% | |||||||
U.S. Treasury Obligations | 4.6% | |||||||
Materials | 4.4% | |||||||
Telecommunication Services | 4.0% | |||||||
Non-Agency Mortgage-Backed Securities | 3.4% | |||||||
U.S. Government Agencies | 2.3% | |||||||
Loan Participations and Assignments | 1.0% | |||||||
Other | 1.6% |
1 % of Investments, at value.
§ Geographic and Sector Breakdown and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Overweight exposure to, and selection in, industrials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Holdings of non-agency mortgage-backed securities contributed to absolute returns, as these securities generated positive total returns during the reporting period. |
| » | Exposure to high yield corporate credit contributed to absolute returns, as these securities generated positive total returns during the reporting period. |
| » | Overweight exposure to, and selection in, consumer discretionary detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Underweight exposure to, and selection in, healthcare detracted from relative returns, as the sector outperformed the benchmark index and the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, telecommunication services detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 7 |
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Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO EqS® Long/Short Fund seeks long-term capital appreciation by investing under normal circumstances in long and short positions of equity and equity-related securities, including common and preferred stock (and securities convertible into, or that PIMCO expects to be exchanged for, common or preferred stock), utilizing a fundamental investing style that integrates bottom-up and top-down research. The Fund will normally invest a substantial portion of its assets in equity and equity-related securities. The Fund may also invest in fixed income securities of varying maturities, cash and cash equivalents. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017* | ||||||||||||||||||
| 1 Year | 5 Year | 10 Year | Fund Inception (01/01/03) | |||||||||||||||
| PIMCO EqS® Long/Short Fund Institutional Class | 10.38% | 7.46% | 7.20% | 11.26% | |||||||||||||
| PIMCO EqS® Long/Short Fund Class P | 10.28% | 7.39% | 7.15% | 11.22% | ||||||||||||||
| PIMCO EqS® Long/Short Fund Class D | 9.93% | 7.07% | 6.99% | 11.11% | ||||||||||||||
| PIMCO EqS® Long/Short Fund Class A | 9.97% | 7.08% | 7.00% | 11.11% | ||||||||||||||
| PIMCO EqS® Long/Short Fund Class A (adjusted) | 3.93% | 5.89% | 6.39% | 10.68% | ||||||||||||||
| PIMCO EqS® Long/Short Fund Class C | 9.07% | 6.27% | 6.58% | 10.81% | ||||||||||||||
| PIMCO EqS® Long/Short Fund Class C (adjusted) | 8.07% | 6.27% | 6.58% | 10.81% | ||||||||||||||
| 3 Month USD LIBOR Index± | 0.91% | 0.44% | 1.02% | 1.66% | |||||||||||||
All Fund returns are net of fees and expenses.
± The 3 Month USD LIBOR (London Interbank Offered Rate) Index is an average interest rate, determined by the ICE Benchmark Administration, that banks charge one another for the use of short-term money (3 months) in England’s Eurodollar market.
It is not possible to invest directly in an unmanaged index.
* For periods prior to April 20, 2012, the Fund’s performance reflects the performance when the Fund was a partnership, net of actual fees and expenses charged to individual partnership accounts in the aggregate. If the performance had been restated to reflect the applicable fees and expenses of each share class, the performance may have been higher or lower. The Fund began operations as a partnership on January 1, 2003 and, on April 20, 2012, was reorganized into a newly-formed fund that was registered as an investment company under the Investment Company Act of 1940. Prior to the reorganization, the Fund had an investment objective, investment strategies, investment guidelines, and restrictions that were substantially similar to those currently applicable to the Fund; however, the Fund was not registered as an investment company under the Investment Company Act of 1940 and was not subject to its requirements or requirements imposed by the Internal Revenue Code of 1986 which, if applicable, may have adversely affected its performance. The performance of Class P, D, A and C shares for the period from April 20, 2012 to April 30, 2012 is based on the performance of the Institutional Class shares of the Fund. The performance of each class of shares will differ as a result of the different levels of fees and expenses applicable to each class of shares.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 2.44% for the Institutional Class shares, 2.54% for the Class P shares, 2.79% for the Class D shares, 2.79% for the Class A shares, and 3.54% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
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| Institutional Class - PMHIX | Class P - PMHBX | Class D - PMHDX | Class A - PMHAX | Class C - PMHCX |
Top 10 Holdings as of 06/30/20171§
Kansas City Southern | 3.2% | |||||||
Williams Partners LP | 2.5% | |||||||
Berkshire Hathaway, Inc. ‘B’ | 2.5% | |||||||
Alphabet, Inc. ‘C’ | 2.3% | |||||||
Oracle Corp. | 2.3% | |||||||
First Republic Bank | 2.2% | |||||||
First Data Corp. ‘A’ | 2.2% | |||||||
TransCanada Corp. | 2.1% | |||||||
Fortis, Inc. | 2.0% | |||||||
U.S. Bancorp | 2.0% |
Sector Breakdown as of 06/30/20172§
Health Care | 11.5% | |||||||
Consumer Discretionary | 10.9% | |||||||
Financials | 10.0% | |||||||
Energy | 9.8% | |||||||
Information Technology | 7.0% | |||||||
Industrials | 6.8% | |||||||
Utilities | 2.4% | |||||||
Other | (0.4% | ) |
1 % of Investments, at value.
2 % of net exposure (Investments, at value less Securities Sold Short). Financial derivative instruments and short-term instruments are not taken into consideration.
§ Top 10 Holdings, Sector Breakdown and % of investments exclude securities sold short, financial derivative instruments, and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | The Fund’s long position in First Data Corporation contributed to absolute returns, as the price of the company’s stock rose over the reporting period. |
| » | The Fund’s long position in CSX Corporation contributed to absolute returns, as the price of the company’s stock rose over the reporting period. |
| » | The Fund’s long position in IHS Markit contributed to absolute returns, as the price of the company’s stock rose over the reporting period. |
| » | The Fund’s long position in Kansas City Southern contributed to absolute returns, as the price of the company’s stock rose over the reporting period. |
| » | The Fund’s long position in Royal Caribbean Cruises contributed to absolute returns, as the price of the company’s stock rose over the reporting period. |
| » | The Fund’s short equity positions detracted from absolute returns, as the prices of these securities generally rose during the reporting period. |
| » | The Fund’s long position in Kroger detracted from absolute returns, as the price of the company’s stock fell during the reporting period. |
| ANNUAL REPORT | JUNE 30, 2017 | 9 |
Table of Contents
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and exchange fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for all Funds and share classes is from January 1, 2017 to June 30, 2017 unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these rows, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the appropriate row for your share class, in the column entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) on purchase payments and exchange fees. Therefore, the information under the heading “Hypothetical (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Expense ratios may vary from period to period because of various factors such as an increase in expenses that are not covered by the management fees, such as fees and expenses of the independent trustees and their counsel, extraordinary expenses and interest expense.
| Actual | Hypothetical (5% return before expenses) | |||||||||||||||||||||||||||||||||||||||
| Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,063.30 | $ | 4.14 | $ | 1,000.00 | $ | 1,020.78 | $ | 4.06 | 0.81 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,062.80 | 4.65 | 1,000.00 | 1,020.28 | 4.56 | 0.91 | |||||||||||||||||||||||||||||||||
| Class D | 1,000.00 | 1,061.50 | 5.93 | 1,000.00 | 1,019.04 | 5.81 | 1.16 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,060.70 | 5.93 | 1,000.00 | 1,019.04 | 5.81 | 1.16 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,057.00 | 9.74 | 1,000.00 | 1,015.32 | 9.54 | 1.91 | |||||||||||||||||||||||||||||||||
PIMCO EqS® Long/Short Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,085.00 | $ | 10.24 | $ | 1,000.00 | $ | 1,014.98 | $ | 9.89 | 1.98 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,084.50 | 10.75 | 1,000.00 | 1,014.48 | 10.39 | 2.08 | |||||||||||||||||||||||||||||||||
| Class D | 1,000.00 | 1,082.50 | 12.03 | 1,000.00 | 1,013.24 | 11.63 | 2.33 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,083.60 | 12.04 | 1,000.00 | 1,013.24 | 11.63 | 2.33 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,078.70 | 15.87 | 1,000.00 | 1,009.52 | 15.35 | 3.08 | |||||||||||||||||||||||||||||||||
* Expenses Paid During Period are equal to the net annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
** Net Annualized Expense Ratio is reflective of any applicable contractual fee waivers and/or expense reimbursements or voluntary fee waivers. Details regarding fee waivers, if any, can be found in Note 9, Fees and Expenses, in the Notes to Financial Statements.
| 10 | PIMCO EQUITY SERIES |
Table of Contents
(THIS PAGE INTENTIONALLY LEFT BLANK)
| ANNUAL REPORT | JUNE 30, 2017 | 11 |
Table of Contents
| Investment Operations | Less Distributions(b) | |||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.94 | $ | 0.30 | $ | 1.08 | $ | 1.38 | $ | (0.23 | ) | $ | 0.00 | $ | 0.00 | $ | (0.23 | ) | ||||||||||||||||||
06/30/2016 | 12.29 | 0.43 | (1.58 | ) | (1.15 | ) | (0.44 | ) | (0.76 | ) | 0.00 | (1.20 | ) | |||||||||||||||||||||||
06/30/2015 | 13.12 | 0.47 | (0.50 | ) | (0.03 | ) | (0.46 | ) | (0.34 | ) | 0.00 | (0.80 | ) | |||||||||||||||||||||||
06/30/2014 | 11.60 | 0.44 | 1.54 | 1.98 | (0.46 | ) | 0.00 | 0.00 | (0.46 | ) | ||||||||||||||||||||||||||
06/30/2013 | 10.47 | 0.54 | 1.03 | 1.57 | (0.42 | ) | (0.02 | ) | 0.00 | (0.44 | ) | |||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.96 | 0.30 | 1.07 | 1.37 | (0.22 | ) | 0.00 | 0.00 | (0.22 | ) | ||||||||||||||||||||||||||
06/30/2016 | 12.30 | 0.39 | (1.54 | ) | (1.15 | ) | (0.43 | ) | (0.76 | ) | 0.00 | (1.19 | ) | |||||||||||||||||||||||
06/30/2015 | 13.13 | 0.46 | (0.50 | ) | (0.04 | ) | (0.45 | ) | (0.34 | ) | 0.00 | (0.79 | ) | |||||||||||||||||||||||
06/30/2014 | 11.62 | 0.44 | 1.52 | 1.96 | (0.45 | ) | 0.00 | 0.00 | (0.45 | ) | ||||||||||||||||||||||||||
06/30/2013 | 10.48 | 0.54 | 1.03 | 1.57 | (0.41 | ) | (0.02 | ) | 0.00 | (0.43 | ) | |||||||||||||||||||||||||
| Class D | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.94 | 0.27 | 1.07 | 1.34 | (0.19 | ) | 0.00 | 0.00 | (0.19 | ) | ||||||||||||||||||||||||||
06/30/2016 | 12.29 | 0.36 | (1.54 | ) | (1.18 | ) | (0.41 | ) | (0.76 | ) | 0.00 | (1.17 | ) | |||||||||||||||||||||||
06/30/2015 | 13.12 | 0.46 | (0.53 | ) | (0.07 | ) | (0.42 | ) | (0.34 | ) | 0.00 | (0.76 | ) | |||||||||||||||||||||||
06/30/2014 | 11.61 | 0.40 | 1.53 | 1.93 | (0.42 | ) | 0.00 | 0.00 | (0.42 | ) | ||||||||||||||||||||||||||
06/30/2013 | 10.47 | 0.46 | 1.09 | 1.55 | (0.39 | ) | (0.02 | ) | 0.00 | (0.41 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.94 | 0.27 | 1.07 | 1.34 | (0.20 | ) | 0.00 | 0.00 | (0.20 | ) | ||||||||||||||||||||||||||
06/30/2016 | 12.29 | 0.39 | (1.57 | ) | (1.18 | ) | (0.41 | ) | (0.76 | ) | 0.00 | (1.17 | ) | |||||||||||||||||||||||
06/30/2015 | 13.12 | 0.43 | (0.50 | ) | (0.07 | ) | (0.42 | ) | (0.34 | ) | 0.00 | (0.76 | ) | |||||||||||||||||||||||
06/30/2014 | 11.61 | 0.42 | 1.51 | 1.93 | (0.42 | ) | 0.00 | 0.00 | (0.42 | ) | ||||||||||||||||||||||||||
06/30/2013 | 10.47 | 0.48 | 1.07 | 1.55 | (0.39 | ) | (0.02 | ) | 0.00 | (0.41 | ) | |||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.92 | 0.18 | 1.07 | 1.25 | (0.11 | ) | 0.00 | 0.00 | (0.11 | ) | ||||||||||||||||||||||||||
06/30/2016 | 12.27 | 0.31 | (1.57 | ) | (1.26 | ) | (0.33 | ) | (0.76 | ) | 0.00 | (1.09 | ) | |||||||||||||||||||||||
06/30/2015 | 13.10 | 0.34 | (0.51 | ) | (0.17 | ) | (0.32 | ) | (0.34 | ) | 0.00 | (0.66 | ) | |||||||||||||||||||||||
06/30/2014 | 11.59 | 0.33 | 1.51 | 1.84 | (0.33 | ) | 0.00 | 0.00 | (0.33 | ) | ||||||||||||||||||||||||||
06/30/2013 | 10.46 | 0.40 | 1.06 | 1.46 | (0.31 | ) | (0.02 | ) | 0.00 | (0.33 | ) | |||||||||||||||||||||||||
PIMCO EqS® Long/Short Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 11.69 | $ | (0.04 | ) | $ | 1.20 | $ | 1.16 | $ | (0.36 | ) | $ | (0.23 | ) | $ | 0.00 | $ | (0.59 | ) | ||||||||||||||||
06/30/2016 | 12.07 | (0.17 | ) | (0.07 | ) | (0.24 | ) | 0.00 | (0.14 | ) | 0.00 | (0.14 | ) | |||||||||||||||||||||||
06/30/2015 | 11.92 | 0.02 | 0.18 | 0.20 | 0.00 | (0.05 | ) | 0.00 | (0.05 | ) | ||||||||||||||||||||||||||
06/30/2014 | 11.09 | (0.10 | ) | 1.60 | 1.50 | (0.06 | ) | (0.61 | ) | 0.00 | (0.67 | ) | ||||||||||||||||||||||||
06/30/2013 | 9.71 | 0.15 | 1.27 | 1.42 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 11.63 | (0.05 | ) | 1.19 | 1.14 | (0.35 | ) | (0.23 | ) | 0.00 | (0.58 | ) | ||||||||||||||||||||||||
06/30/2016 | 12.02 | (0.18 | ) | (0.07 | ) | (0.25 | ) | 0.00 | (0.14 | ) | 0.00 | (0.14 | ) | |||||||||||||||||||||||
06/30/2015 | 11.88 | 0.02 | 0.17 | 0.19 | 0.00 | (0.05 | ) | 0.00 | (0.05 | ) | ||||||||||||||||||||||||||
06/30/2014 | 11.08 | (0.08 | ) | 1.56 | 1.48 | (0.07 | ) | (0.61 | ) | 0.00 | (0.68 | ) | ||||||||||||||||||||||||
06/30/2013 | 9.70 | (0.05 | ) | 1.47 | 1.42 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| Class D | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 11.53 | (0.08 | ) | 1.18 | 1.10 | (0.33 | ) | (0.23 | ) | 0.00 | (0.56 | ) | ||||||||||||||||||||||||
06/30/2016 | 11.95 | (0.20 | ) | (0.08 | ) | (0.28 | ) | 0.00 | (0.14 | ) | 0.00 | (0.14 | ) | |||||||||||||||||||||||
06/30/2015 | 11.84 | (0.02 | ) | 0.18 | 0.16 | 0.00 | (0.05 | ) | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
06/30/2014 | 11.06 | (0.12 | ) | 1.57 | 1.45 | (0.06 | ) | (0.61 | ) | 0.00 | (0.67 | ) | ||||||||||||||||||||||||
06/30/2013 | 9.70 | (0.10 | ) | 1.48 | 1.38 | (0.02 | ) | 0.00 | 0.00 | (0.02 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 11.52 | (0.08 | ) | 1.18 | 1.10 | (0.34 | ) | (0.23 | ) | 0.00 | (0.57 | ) | ||||||||||||||||||||||||
06/30/2016 | 11.94 | (0.21 | ) | (0.07 | ) | (0.28 | ) | 0.00 | (0.14 | ) | 0.00 | (0.14 | ) | |||||||||||||||||||||||
06/30/2015 | 11.83 | (0.02 | ) | 0.18 | 0.16 | 0.00 | (0.05 | ) | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
06/30/2014 | 11.05 | (0.12 | ) | 1.57 | 1.45 | (0.06 | ) | (0.61 | ) | 0.00 | (0.67 | ) | ||||||||||||||||||||||||
06/30/2013 | 9.70 | (0.00 | )^ | 1.38 | 1.38 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | |||||||||||||||||||||||||
| 12 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets | ||||||||||||||||||||||||||||||||||
| Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Expenses | Expenses Excluding Waivers | Expenses Excluding Interest Expense and Dividends on Securities Sold Short | Expenses Excluding Interest Expense and Dividends on Securities Sold Short and Waivers | Net Investment Income (Loss) | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 11.09 | 14.01 | % | $ | 23,087 | 0.80 | % | 0.81 | % | 0.79 | % | 0.80 | % | 2.88 | % | 93 | % | |||||||||||||||||
| 9.94 | (9.06 | ) | 31,840 | 0.83 | (c) | 1.00 | (c) | 0.83 | (c) | 1.00 | (c) | 4.03 | 114 | |||||||||||||||||||||
| 12.29 | (0.12 | ) | 68,607 | 0.83 | 1.00 | 0.83 | 1.00 | 3.70 | 98 | |||||||||||||||||||||||||
| 13.12 | 17.23 | 90,408 | 0.84 | 1.00 | 0.84 | 1.00 | 3.56 | 79 | ||||||||||||||||||||||||||
| 11.60 | 15.17 | 69,203 | 0.83 | 1.00 | 0.83 | 1.00 | 4.66 | 75 | ||||||||||||||||||||||||||
| 11.11 | 13.86 | 24,731 | 0.90 | 0.91 | 0.89 | 0.90 | 2.79 | 93 | ||||||||||||||||||||||||||
| 9.96 | (9.05 | ) | 34,120 | 0.93 | (c) | 1.10 | (c) | 0.93 | (c) | 1.10 | (c) | 3.53 | 114 | |||||||||||||||||||||
| 12.30 | (0.22 | ) | 169,790 | 0.93 | 1.10 | 0.93 | 1.10 | 3.64 | 98 | |||||||||||||||||||||||||
| 13.13 | 17.05 | 158,122 | 0.94 | 1.10 | 0.94 | 1.10 | 3.53 | 79 | ||||||||||||||||||||||||||
| 11.62 | 15.15 | 85,724 | 0.93 | 1.10 | 0.93 | 1.10 | 4.62 | 75 | ||||||||||||||||||||||||||
| 11.09 | 13.59 | 8,117 | 1.15 | 1.16 | 1.14 | 1.15 | 2.51 | 93 | ||||||||||||||||||||||||||
| 9.94 | (9.38 | ) | 10,623 | 1.18 | (c) | 1.35 | (c) | 1.18 | (c) | 1.35 | (c) | 3.37 | 114 | |||||||||||||||||||||
| 12.29 | (0.47 | ) | 41,094 | 1.18 | 1.35 | 1.18 | 1.35 | 3.59 | 98 | |||||||||||||||||||||||||
| 13.12 | 16.78 | 32,523 | 1.19 | 1.35 | 1.19 | 1.35 | 3.19 | 79 | ||||||||||||||||||||||||||
| 11.61 | 14.91 | 23,204 | 1.18 | 1.35 | 1.18 | 1.35 | 4.00 | 75 | ||||||||||||||||||||||||||
| 11.08 | 13.54 | 144,912 | 1.15 | 1.16 | 1.14 | 1.15 | 2.53 | 93 | ||||||||||||||||||||||||||
| 9.94 | (9.38 | ) | 167,857 | 1.18 | (c) | 1.35 | (c) | 1.18 | (c) | 1.35 | (c) | 3.67 | 114 | |||||||||||||||||||||
| 12.29 | (0.49 | ) | 296,317 | 1.18 | 1.35 | 1.18 | 1.35 | 3.39 | 98 | |||||||||||||||||||||||||
| 13.12 | 16.78 | 320,719 | 1.19 | 1.35 | 1.19 | 1.35 | 3.34 | 79 | ||||||||||||||||||||||||||
| 11.61 | 14.91 | 117,579 | 1.18 | 1.35 | 1.18 | 1.35 | 4.18 | 75 | ||||||||||||||||||||||||||
| 11.06 | 12.70 | 140,710 | 1.90 | 1.91 | 1.89 | 1.90 | 1.75 | 93 | ||||||||||||||||||||||||||
| 9.92 | (10.07 | ) | 195,393 | 1.93 | (c) | 2.10 | (c) | 1.93 | (c) | 2.10 | (c) | 2.91 | 114 | |||||||||||||||||||||
| 12.27 | (1.23 | ) | 358,171 | 1.93 | 2.10 | 1.93 | 2.10 | 2.67 | 98 | |||||||||||||||||||||||||
| 13.10 | 15.97 | 353,287 | 1.94 | 2.10 | 1.94 | 2.10 | 2.67 | 79 | ||||||||||||||||||||||||||
| 11.59 | 14.08 | 86,879 | 1.93 | 2.10 | 1.93 | 2.10 | 3.42 | 75 | ||||||||||||||||||||||||||
| $ | 12.26 | 10.38 | % | $ | 188,022 | 1.86 | % | 1.87 | % | 1.49 | % | 1.50 | % | (0.32 | )% | 251 | % | |||||||||||||||||
| 11.69 | (2.02 | ) | 243,341 | 2.44 | 2.45 | 1.50 | 1.51 | (1.46 | ) | 672 | ||||||||||||||||||||||||
| 12.07 | 1.74 | 299,808 | 1.91 | 1.92 | 1.49 | 1.50 | 0.20 | 450 | (d) | |||||||||||||||||||||||||
| 11.92 | 13.59 | 545,346 | 2.02 | 2.04 | 1.48 | 1.50 | (0.82 | ) | 522 | |||||||||||||||||||||||||
| 11.09 | 14.66 | 329,610 | 2.65 | 2.75 | 1.40 | 1.50 | 1.45 | 528 | ||||||||||||||||||||||||||
| 12.19 | 10.28 | 138,946 | 1.96 | 1.97 | 1.59 | 1.60 | (0.44 | ) | 251 | |||||||||||||||||||||||||
| 11.63 | (2.11 | ) | 249,973 | 2.54 | 2.55 | 1.60 | 1.61 | (1.51 | ) | 672 | ||||||||||||||||||||||||
| 12.02 | 1.66 | 207,511 | 2.01 | 2.02 | 1.59 | 1.60 | 0.16 | 450 | (d) | |||||||||||||||||||||||||
| 11.88 | 13.40 | 277,661 | 2.00 | 2.02 | 1.58 | 1.60 | (0.71 | ) | 522 | |||||||||||||||||||||||||
| 11.08 | 14.77 | 15,664 | 3.94 | 4.04 | 1.50 | 1.60 | (0.48 | ) | 528 | |||||||||||||||||||||||||
| 12.07 | 9.93 | 46,418 | 2.21 | 2.22 | 1.84 | 1.85 | (0.70 | ) | 251 | |||||||||||||||||||||||||
| 11.53 | (2.37 | ) | 62,130 | 2.79 | 2.80 | 1.85 | 1.86 | (1.74 | ) | 672 | ||||||||||||||||||||||||
| 11.95 | 1.41 | 44,227 | 2.26 | 2.27 | 1.84 | 1.85 | (0.19 | ) | 450 | (d) | ||||||||||||||||||||||||
| 11.84 | 13.13 | 77,934 | 2.31 | 2.33 | 1.83 | 1.85 | (1.01 | ) | 522 | |||||||||||||||||||||||||
| 11.06 | 14.31 | 12,421 | 3.95 | 4.05 | 1.75 | 1.85 | (0.97 | ) | 528 | |||||||||||||||||||||||||
| 12.05 | 9.97 | 88,636 | 2.21 | 2.22 | 1.84 | 1.85 | (0.67 | ) | 251 | |||||||||||||||||||||||||
| 11.52 | (2.38 | ) | 147,582 | 2.79 | 2.80 | 1.85 | 1.86 | (1.79 | ) | 672 | ||||||||||||||||||||||||
| 11.94 | 1.41 | 172,843 | 2.26 | 2.27 | 1.84 | 1.85 | (0.18 | ) | 450 | (d) | ||||||||||||||||||||||||
| 11.83 | 13.17 | 382,160 | 2.27 | 2.29 | 1.83 | 1.85 | (0.98 | ) | 522 | |||||||||||||||||||||||||
| 11.05 | 14.27 | 24,759 | 3.62 | 3.72 | 1.75 | 1.85 | (0.03 | ) | 528 | |||||||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 13 |
Table of Contents
Financial Highlights (Cont.)
| �� | Investment Operations | Less Distributions(b) | ||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO EqS® Long/Short Fund (Cont.) | ||||||||||||||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 11.20 | $ | (0.16 | ) | $ | 1.13 | $ | 0.97 | $ | (0.29 | ) | $ | (0.23 | ) | $ | 0.00 | $ | (0.52 | ) | ||||||||||||||||
06/30/2016 | 11.69 | (0.29 | ) | (0.06 | ) | (0.35 | ) | 0.00 | (0.14 | ) | 0.00 | (0.14 | ) | |||||||||||||||||||||||
06/30/2015 | 11.67 | (0.11 | ) | 0.18 | 0.07 | 0.00 | (0.05 | ) | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
06/30/2014 | 10.98 | (0.20 | ) | 1.55 | 1.35 | (0.05 | ) | (0.61 | ) | 0.00 | (0.66 | ) | ||||||||||||||||||||||||
06/30/2013 | 9.69 | 0.01 | 1.29 | 1.30 | (0.01 | ) | 0.00 | 0.00 | (0.01 | ) | ||||||||||||||||||||||||||
| ^ | Reflects an amount rounding to less than one cent. |
| (a) | Per share amounts based on average number of shares outstanding during the year or period. |
| (b) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| (c) | Effective June 16, 2016, the Fund’s Investment advisory fee was decreased by 0.20% to an annual rate of 0.49%. |
| (d) | The amount previously reported as 763% in the Fund’s annual report has been restated, as above. |
| 14 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets | ||||||||||||||||||||||||||||||||||
| Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Expenses | Expenses Excluding Waivers | Expenses Excluding Interest Expense and Dividends on Securities Sold Short | Expenses Excluding Interest Expense and Dividends on Securities Sold Short and Waivers | Net Investment Income (Loss) | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 11.65 | 9.07 | % | $ | 91,557 | 2.96 | % | 2.97 | % | 2.59 | % | 2.60 | % | (1.41 | )% | 251 | % | |||||||||||||||||
| 11.20 | (3.03 | ) | 145,358 | 3.54 | 3.55 | 2.60 | 2.61 | (2.52 | ) | 672 | ||||||||||||||||||||||||
| 11.69 | 0.66 | 140,719 | 3.01 | 3.02 | 2.59 | 2.60 | (0.95 | ) | 450 | (d) | ||||||||||||||||||||||||
| 11.67 | 12.26 | 214,485 | 3.00 | 3.02 | 2.58 | 2.60 | (1.71 | ) | 522 | |||||||||||||||||||||||||
| 10.98 | 13.41 | 9,530 | 4.04 | 4.14 | 2.50 | 2.60 | 0.13 | 528 | ||||||||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 15 |
Table of Contents
Statements of Assets and Liabilities
| (Amounts in thousands†, except per share amounts) | PIMCO Dividend and Income Fund | PIMCO EqS® Long/Short Fund | ||||||
Assets: | ||||||||
Investments, at value | ||||||||
Investments in securities* | $ | 347,421 | $ | 383,210 | ||||
Investments in Affiliates | 2,789 | 166,968 | ||||||
Financial Derivative Instruments | ||||||||
Exchange-traded or centrally cleared | 53 | 43 | ||||||
Over the counter | 327 | 351 | ||||||
Cash | 1,395 | 0 | ||||||
Deposits with counterparty | 837 | 99,786 | ||||||
Foreign currency, at value | 973 | 236 | ||||||
Receivable for investments sold | 23,329 | 16,299 | ||||||
Receivable for TBA investments sold | 13,446 | 0 | ||||||
Receivable for Fund shares sold | 519 | 429 | ||||||
Interest and/or dividends receivable | 1,636 | 750 | ||||||
Dividends receivable from Affiliates | 2 | 192 | ||||||
Reimbursement receivable from PIMCO | 0 | 3 | ||||||
Other assets | 1 | 1 | ||||||
Total Assets | 392,728 | 668,268 | ||||||
Liabilities: | ||||||||
Borrowings & Other Financing Transactions | ||||||||
Payable for reverse repurchase agreements | $ | 5,318 | $ | 0 | ||||
Payable for sale-buyback transactions | 2,163 | 0 | ||||||
Payable for short sales | 98 | 97,759 | ||||||
Financial Derivative Instruments | ||||||||
Exchange-traded or centrally cleared | 103 | 112 | ||||||
Over the counter | 475 | 1,464 | ||||||
Payable for investments purchased | 20,975 | 13,086 | ||||||
Payable for investments in Affiliates purchased | 2 | 192 | ||||||
Payable for investments purchased on a delayed-delivery basis | 2 | 0 | ||||||
Payable for TBA investments purchased | 20,308 | 0 | ||||||
Deposits from counterparty | 40 | 0 | ||||||
Payable for Fund shares redeemed | 1,224 | 1,162 | ||||||
Accrued investment advisory fees | 149 | 504 | ||||||
Accrued supervisory and administrative fees | 119 | 249 | ||||||
Accrued distribution fees | 96 | 70 | ||||||
Accrued servicing fees | 63 | 39 | ||||||
Accrued reimbursement to PIMCO | 14 | 0 | ||||||
Other liabilities | 22 | 52 | ||||||
Total Liabilities | 51,171 | 114,689 | ||||||
Net Assets | $ | 341,557 | $ | 553,579 | ||||
Net Assets Consist of: | ||||||||
Paid in capital | $ | 437,505 | $ | 502,636 | ||||
Undistributed (overdistributed) net investment income | 1,723 | 1,167 | ||||||
Accumulated undistributed net realized gain (loss) | (120,347 | ) | 25,331 | |||||
Net unrealized appreciation (depreciation) | 22,676 | 24,445 | ||||||
Net Assets | $ | 341,557 | $ | 553,579 | ||||
Cost of investments in securities | $ | 324,679 | $ | 356,790 | ||||
Cost of investments in Affiliates | $ | 2,789 | $ | 166,964 | ||||
Cost of foreign currency held | $ | 974 | $ | 230 | ||||
Proceeds received on short sales | $ | 97 | $ | 96,932 | ||||
Cost or premiums of financial derivative instruments, net | $ | (373 | ) | $ | 0 | |||
* Includes repurchase agreements of: | $ | 478 | $ | 8,167 | ||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| 16 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| PIMCO Dividend and Income Fund | PIMCO EqS® Long/Short Fund | |||||||
Net Assets: | ||||||||
Institutional Class | $ | 23,087 | $ | 188,022 | ||||
Class P | 24,731 | 138,946 | ||||||
Class D | 8,117 | 46,418 | ||||||
Class A | 144,912 | 88,636 | ||||||
Class C | 140,710 | 91,557 | ||||||
Shares Issued and Outstanding: | ||||||||
Institutional Class | 2,081 | 15,346 | ||||||
Class P | 2,226 | 11,405 | ||||||
Class D | 732 | 3,846 | ||||||
Class A | 13,075 | 7,360 | ||||||
Class C | 12,721 | 7,860 | ||||||
Net Asset Value Per Share Outstanding: | ||||||||
Institutional Class | $ | 11.09 | $ | 12.26 | ||||
Class P | 11.11 | 12.19 | ||||||
Class D | 11.09 | 12.07 | ||||||
Class A | 11.08 | 12.05 | ||||||
Class C | 11.06 | 11.65 | ||||||
| ANNUAL REPORT | JUNE 30, 2017 | 17 |
Table of Contents
| Year Ended June 30, 2017 | ||||||||
| (Amounts in thousands†) | PIMCO Dividend and Income Fund | PIMCO EqS® Long/Short Fund | ||||||
Investment Income: | ||||||||
Interest | $ | 3,924 | $ | 878 | ||||
Dividends, net of foreign taxes* | 9,936 | 7,211 | ||||||
Dividends from Investments in Affiliates | 16 | 1,645 | ||||||
Total Income | 13,876 | 9,734 | ||||||
Expenses: | ||||||||
Investment advisory fees | 1,852 | 6,593 | ||||||
Supervisory and administrative fees | 1,486 | 3,299 | ||||||
Distribution and/or servicing fees - Class D | 24 | 114 | ||||||
Distribution fees - Class C | 1,257 | 876 | ||||||
Servicing fees - Class A | 374 | 284 | ||||||
Servicing fees - Class C | 419 | 292 | ||||||
Dividends on short sales | 0 | 1,916 | ||||||
Trustee fees | 54 | 94 | ||||||
Interest expense | 34 | 384 | ||||||
Miscellaneous expense | 19 | 31 | ||||||
Total Expenses | 5,519 | 13,883 | ||||||
Waiver and/or Reimbursement by PIMCO | (54 | ) | (94 | ) | ||||
Net Expenses | 5,465 | 13,789 | ||||||
Net Investment Income (Loss) | 8,411 | (4,055 | ) | |||||
Net Realized Gain (Loss): | ||||||||
Investments in securities | 8,496 | 86,033 | ||||||
Investments in Affiliates | (1 | ) | 58 | |||||
Exchange-traded or centrally cleared financial derivative instruments | 1,122 | (3,274 | ) | |||||
Over the counter financial derivative instruments | 1,337 | 458 | ||||||
Short sales | (1 | ) | (6,091 | ) | ||||
Foreign currency | 16 | (136 | ) | |||||
Net Realized Gain (Loss) | 10,969 | 77,048 | ||||||
Net Change in Unrealized Appreciation (Depreciation): | ||||||||
Investments in securities | 28,686 | (15,444 | ) | |||||
Investments in Affiliates | (1 | ) | (28 | ) | ||||
Exchange-traded or centrally cleared financial derivative instruments | (789 | ) | (692 | ) | ||||
Over the counter financial derivative instruments | (176 | ) | (384 | ) | ||||
Short sales | 0 | 871 | ||||||
Foreign currency assets and liabilities | 73 | 416 | ||||||
Net Change in Unrealized Appreciation (Depreciation) | 27,793 | (15,261 | ) | |||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 47,173 | $ | 57,732 | ||||
* Foreign tax withholdings - Dividends | $ | 591 | $ | 163 | ||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| 18 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Statements of Changes in Net Assets
PIMCO | PIMCO EqS® Long/Short Fund | |||||||||||||||
| (Amount in thousands†) | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | ||||||||||||
Increase (Decrease) in Net Assets from: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 8,411 | $ | 21,611 | $ | (4,055 | ) | $ | (15,129 | ) | ||||||
Net realized gain (loss) | 10,969 | (132,213 | ) | 77,048 | 4,258 | |||||||||||
Net change in unrealized appreciation (depreciation) | 27,793 | 12,518 | (15,261 | ) | (10,199 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 47,173 | (98,084 | ) | 57,732 | (21,070 | ) | ||||||||||
Distributions to Shareholders: | ||||||||||||||||
From net investment income | ||||||||||||||||
Institutional Class | (525 | ) | (1,746 | ) | (5,009 | ) | 0 | |||||||||
Class P | (468 | ) | (3,101 | ) | (4,762 | ) | 0 | |||||||||
Class D | (156 | ) | (848 | ) | (1,056 | ) | 0 | |||||||||
Class A | (2,620 | ) | (8,671 | ) | (3,239 | ) | 0 | |||||||||
Class C | (1,732 | ) | (8,146 | ) | (2,934 | ) | 0 | |||||||||
Class R | (0 | ) | (4 | )^ | 0 | 0 | ||||||||||
From net realized capital gains | ||||||||||||||||
Institutional Class | 0 | (2,576 | ) | (3,352 | ) | (2,579 | ) | |||||||||
Class P | 0 | (5,302 | ) | (3,145 | ) | (3,075 | ) | |||||||||
Class D | 0 | (1,876 | ) | (852 | ) | (641 | ) | |||||||||
Class A | 0 | (16,603 | ) | (2,245 | ) | (1,768 | ) | |||||||||
Class C | 0 | (19,121 | ) | (2,370 | ) | (1,826 | ) | |||||||||
Class R | 0 | (18 | )^ | 0 | 0 | |||||||||||
Total Distributions(a) | (5,501 | ) | (68,012 | ) | (28,964 | ) | (9,889 | ) | ||||||||
Portfolio Share Transactions: | ||||||||||||||||
Net increase (decrease) resulting from Fund share transactions** | (139,948 | ) | (328,333 | ) | (323,573 | ) | 14,235 | |||||||||
Total Increase (Decrease) in Net Assets | (98,276 | ) | (494,429 | ) | (294,805 | ) | (16,724 | ) | ||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 439,833 | 934,262 | 848,384 | 865,108 | ||||||||||||
End of year* | $ | 341,557 | $ | 439,833 | $ | 553,579 | $ | 848,384 | ||||||||
* Including undistributed (overdistributed) net investment income of: | $ | 1,723 | $ | (1,410 | ) | $ | 1,167 | $ | 690 | |||||||
| † | A zero balance may reflect actual amount rounding to less than one thousand. |
| ^ | Class R Shares liquidated at the close of business on January 22, 2016. |
| ** | See Note 13, Share of Beneficial Interest, in the Notes to Financial Statements. |
| (a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| ANNUAL REPORT | JUNE 30, 2017 | 19 |
Table of Contents
| Year Ended June 30, 2017 | ||||
| (Amounts in thousands) | PIMCO EqS® Long/Short Fund | |||
Cash Flows Provided by (Used for) Operating Activities: | ||||
Net increase (decrease) in net assets resulting from operations | $ | 57,732 | ||
Adjustments to Reconcile Net Increase (Decrease) in Net Assets from Operations to Net Cash Provided by (Used for) Operating Activities: | ||||
Purchases of long-term securities | (945,344 | ) | ||
Proceeds from sales of long-term securities | 1,224,935 | |||
(Purchases) Proceeds from sales of short-term portfolio investments, net | 147,435 | |||
(Increase) decrease in deposits with counterparty | (35,448 | ) | ||
(Increase) decrease in receivable for investments sold | 8,705 | |||
(Increase) decrease in interest and/or dividends receivable | (121 | ) | ||
(Increase) decrease in dividends receivable from Affiliates | 5 | |||
Proceeds from (Payments on) exchange-traded or centrally cleared financial derivative instruments | (3,897 | ) | ||
Proceeds from (Payments on) over the counter financial derivative instruments | 457 | |||
Increase (Decrease) in reimbursement receivable from PIMCO | 148 | |||
(Increase) decrease in other assets | (1 | ) | ||
Increase (decrease) in payable for investments purchased | (65,054 | ) | ||
Increase (decrease) in deposits from counterparty | (420 | ) | ||
Increase (decrease) in accrued investment advisory fees | (241 | ) | ||
Increase (decrease) in accrued supervisory and administrative fees | (124 | ) | ||
Increase (decrease) in accrued distribution fees | (34 | ) | ||
Increase (decrease) in accrued servicing fees | (22 | ) | ||
Proceeds from (Payments on) short sales transactions, net | 27,138 | |||
Proceeds from (Payments on) foreign currency transactions | 280 | |||
Increase (decrease) in other liabilities | (178 | ) | ||
Net Realized (Gain) Loss | ||||
Investments in securities | (86,033 | ) | ||
Investments in Affiliates | (58 | ) | ||
Exchange-traded or centrally cleared financial derivative instruments | 3,274 | |||
Over the counter financial derivative instruments | (458 | ) | ||
Short sales | 6,091 | |||
Foreign currency | 136 | |||
Net Change in Unrealized (Appreciation) Depreciation | ||||
Investments in securities | 15,444 | |||
Investments in Affiliates | 28 | |||
Exchange-traded or centrally cleared financial derivative instruments | 692 | |||
Over the counter financial derivative instruments | 384 | |||
Short sales | (871 | ) | ||
Foreign currency assets and liabilities | (416 | ) | ||
Net amortization (accretion) on investments | (502 | ) | ||
Net Cash Provided by (Used for) Operating Activities | 353,662 | |||
Cash Flows Received from (Used for) Financing Activities: | ||||
Proceeds from shares sold | 175,266 | |||
Payments on shares redeemed | (528,628 | ) | ||
Cash distributions paid* | (66 | ) | ||
Net Cash Received from (Used for) Financing Activities | (353,428 | ) | ||
Net Increase (Decrease) in Cash and Foreign Currency | 234 | |||
Cash and Foreign Currency: | ||||
Beginning of year | 2 | |||
End of year | $ | 236 | ||
* Reinvestment of distributions | $ | 28,898 | ||
Supplemental Disclosure of Cash Flow Information: | ||||
Interest expense paid during the year | $ | 353 | ||
A Statement of Cash Flows is presented when the Fund had a significant amount of borrowing during the year, based on the average total borrowing outstanding in relation to total assets or when substantially all of the Fund’s investments were not classified as Level 1 or 2 in the fair value hierarchy.
| 20 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund
June 30, 2017
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 101.7% | ||||||||||||
| ASSET-BACKED SECURITIES 7.1% | ||||||||||||
| CAYMAN ISLANDS 1.6% | ||||||||||||
Mariner CLO LLC |
| |||||||||||
2.743% due 07/23/2026 | $ | 700 | $ | 700 | ||||||||
MP CLO Ltd. |
| |||||||||||
2.606% due 10/25/2025 | 750 | 753 | ||||||||||
NewMark Capital Funding CLO Ltd. |
| |||||||||||
2.330% due 06/02/2025 | 1,100 | 1,101 | ||||||||||
OZLM Ltd. |
| |||||||||||
2.458% due 04/17/2026 | 1,000 | 1,005 | ||||||||||
Palmer Square CLO Ltd. |
| |||||||||||
2.378% due 10/17/2027 | 700 | 700 | ||||||||||
TICP CLO Ltd. |
| |||||||||||
2.347% due 04/26/2026 | 1,100 | 1,102 | ||||||||||
|
| |||||||||||
Total Cayman Islands | 5,361 | |||||||||||
|
| |||||||||||
| NETHERLANDS 0.2% | ||||||||||||
Pallas CDO BV |
| |||||||||||
0.024% due 07/16/2082 | EUR | 815 | 891 | |||||||||
|
| |||||||||||
Total Netherlands |
| 891 | ||||||||||
|
| |||||||||||
| UNITED STATES 5.3% | ||||||||||||
Conseco Financial Corp. |
| |||||||||||
6.280% due 09/01/2030 | $ | 534 | 565 | |||||||||
Credit Suisse First Boston Mortgage Securities Corp. |
| |||||||||||
1.836% due 01/25/2032 | 1,524 | 1,458 | ||||||||||
EMC Mortgage Loan Trust |
| |||||||||||
2.324% due 02/25/2041 | 39 | 39 | ||||||||||
HSI Asset Securitization Corp. Trust |
| |||||||||||
1.386% due 12/25/2036 | 5,323 | 2,278 | ||||||||||
Morgan Stanley Home Equity Loan Trust |
| |||||||||||
1.316% due 12/25/2036 | 2,014 | 1,125 | ||||||||||
1.636% due 12/25/2035 | 3,600 | 3,456 | ||||||||||
Navient Student Loan Trust |
| |||||||||||
2.266% due 12/27/2066 | 790 | 795 | ||||||||||
Progress Residential Trust |
| |||||||||||
2.709% due 09/17/2033 | 996 | 1,013 | ||||||||||
Residential Asset Securities Corp. Trust |
| |||||||||||
2.101% due 01/25/2034 | 1,908 | 1,862 | ||||||||||
Structured Asset Investment Loan Trust |
| |||||||||||
1.366% due 09/25/2036 | 6,174 | 5,517 | ||||||||||
|
| |||||||||||
Total United States |
| 18,108 | ||||||||||
|
| |||||||||||
Total Asset-Backed Securities (Cost $23,189) | 24,360 | |||||||||||
|
| |||||||||||
| LOAN PARTICIPATIONS AND ASSIGNMENTS 1.0% | ||||||||||||
| BRAZIL 0.0% | ||||||||||||
OGX |
| |||||||||||
TBD% due 04/10/2049 ^ | 15 | 4 | ||||||||||
|
| |||||||||||
Total Brazil |
| 4 | ||||||||||
|
| |||||||||||
| CANADA 0.0% | ||||||||||||
Restaurant Brands International, Inc. |
| |||||||||||
3.476% - 3.546% due 02/16/2024 | 10 | 10 | ||||||||||
Valeant Pharmaceuticals International, Inc. |
| |||||||||||
5.830% due 04/01/2022 | 10 | 10 | ||||||||||
|
| |||||||||||
Total Canada |
| 20 | ||||||||||
|
| |||||||||||
| IRELAND 0.0% | ||||||||||||
Avolon Holdings Ltd. |
| |||||||||||
3.962% due 03/20/2022 | 39 | 39 | ||||||||||
|
| |||||||||||
Total Ireland |
| 39 | ||||||||||
|
| |||||||||||
| LUXEMBOURG 0.0% | ||||||||||||
Avolon Holdings Ltd. |
| |||||||||||
3.462% due 09/20/2020 | 5 | 5 | ||||||||||
|
| |||||||||||
Total Luxembourg |
| 5 | ||||||||||
|
| |||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| UNITED STATES 1.0% | ||||||||||||
AmWINS Group, Inc. |
| |||||||||||
3.836% - 7.000% due 01/25/2024 | $ | 7 | $ | 7 | ||||||||
BWAY Holding Co. |
| |||||||||||
4.326% due 04/03/2024 | 10 | 10 | ||||||||||
Diamond Resorts Corp. |
| |||||||||||
7.226% due 08/11/2023 | 99 | 100 | ||||||||||
Energy Future Intermediate Holding Co. LLC |
| |||||||||||
TBD% due 06/23/2018 | 240 | 241 | ||||||||||
4.295% due 06/30/2017 | 1,988 | 1,992 | ||||||||||
Hilton Worldwide Finance LLC |
| |||||||||||
3.216% due 10/25/2023 | 291 | 293 | ||||||||||
iHeartCommunications, Inc. |
| |||||||||||
7.976% due 01/30/2019 | 300 | 246 | ||||||||||
Las Vegas Sands LLC |
| |||||||||||
3.230% due 03/29/2024 | 396 | 397 | ||||||||||
Post Holdings, Inc. |
| |||||||||||
TBD% due 05/24/2024 | 10 | 10 | ||||||||||
Sprint Communications, Inc. |
| |||||||||||
3.750% due 02/02/2024 | 100 | 100 | ||||||||||
TEX Operations Co. LLC |
| |||||||||||
3.795% due 08/04/2023 | 5 | 5 | ||||||||||
3.976% due 08/04/2023 | 23 | 23 | ||||||||||
|
| |||||||||||
Total United States | 3,424 | |||||||||||
|
| |||||||||||
Total Loan Participations and Assignments |
| 3,492 | ||||||||||
|
| |||||||||||
| SHARES | ||||||||||||
| COMMON STOCKS 73.8% | ||||||||||||
| AUSTRALIA 2.6% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Myer Holdings Ltd. | 147,257 | 95 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.3% | ||||||||||||
Coca-Cola Amatil Ltd. | 25,495 | 181 | ||||||||||
Metcash Ltd. (b) | 164,285 | 303 | ||||||||||
Woolworths Ltd. | 27,330 | 536 | ||||||||||
|
| |||||||||||
| 1,020 | ||||||||||||
|
| |||||||||||
| ENERGY 0.2% | ||||||||||||
Woodside Petroleum Ltd. | 8,882 | 204 | ||||||||||
WorleyParsons Ltd. | 63,944 | 551 | ||||||||||
|
| |||||||||||
| 755 | ||||||||||||
|
| |||||||||||
| FINANCIALS 1.0% | ||||||||||||
AMP Ltd. | 64,969 | 259 | ||||||||||
Australia & New Zealand Banking Group Ltd. | 81,943 | 1,809 | ||||||||||
Genworth Mortgage Insurance Australia Ltd. | 70,041 | 158 | ||||||||||
National Australia Bank Ltd. | 41,629 | 947 | ||||||||||
Suncorp Group Ltd. | 39,792 | 453 | ||||||||||
|
| |||||||||||
| 3,626 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.1% | ||||||||||||
Primary Health Care Ltd. | 67,183 | 188 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Downer EDI Ltd. | 56,497 | 278 | ||||||||||
|
| |||||||||||
| MATERIALS 0.8% | ||||||||||||
BHP Billiton Ltd. | 92,902 | 1,656 | ||||||||||
CSR Ltd. | 68,205 | 222 | ||||||||||
Fortescue Metals Group Ltd. | 33,266 | 133 | ||||||||||
Incitec Pivot Ltd. | 9,999 | 26 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Mineral Resources Ltd. | 13,240 | $ | 110 | |||||||||
Orica Ltd. | 17,954 | 285 | ||||||||||
OZ Minerals Ltd. | 36,666 | 209 | ||||||||||
|
| |||||||||||
| 2,641 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telstra Corp. Ltd. | 61,330 | 203 | ||||||||||
|
| |||||||||||
Total Australia | 8,806 | |||||||||||
|
| |||||||||||
| AUSTRIA 0.5% | ||||||||||||
| ENERGY 0.2% | ||||||||||||
OMV AG | 13,100 | 680 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.2% | ||||||||||||
Raiffeisen Bank International | 29,456 | 744 | ||||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 927 | 26 | ||||||||||
|
| |||||||||||
| 770 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
voestalpine AG | 8,316 | 388 | ||||||||||
|
| |||||||||||
Total Austria | 1,838 | |||||||||||
|
| |||||||||||
| BELGIUM 0.1% | ||||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Proximus S.A. | 7,998 | 280 | ||||||||||
|
| |||||||||||
Total Belgium | 280 | |||||||||||
|
| |||||||||||
| BRAZIL 0.0% | ||||||||||||
| ENERGY 0.0% | ||||||||||||
OGX Petroleo e Gas S.A. SP - ADR (b) | 6,334 | 0 | ||||||||||
|
| |||||||||||
Total Brazil | 0 | |||||||||||
|
| |||||||||||
| CANADA 1.7% | ||||||||||||
| ENERGY 0.3% | ||||||||||||
Baytex Energy Corp. (b) | 43,503 | 106 | ||||||||||
Bonavista Energy Corp. | 44,307 | 93 | ||||||||||
Encana Corp. | 14,724 | 129 | ||||||||||
Enerplus Corp. | 28,259 | 229 | ||||||||||
Husky Energy, Inc. (b) | 32,731 | 371 | ||||||||||
Obsidian Energy Ltd. (b) | 112,722 | 142 | ||||||||||
Pengrowth Energy Corp. (b) | 44,043 | 35 | ||||||||||
|
| |||||||||||
| 1,105 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.8% | ||||||||||||
Bank of Montreal | 6,754 | 496 | ||||||||||
Canadian Imperial Bank | 13,397 | 1,089 | ||||||||||
Genworth MI Canada, Inc. | 4,189 | 115 | ||||||||||
Home Capital Group, Inc. | 7,440 | 97 | ||||||||||
IGM Financial, Inc. | 5,269 | 163 | ||||||||||
National Bank of Canada | 10,811 | 455 | ||||||||||
Power Corp. of Canada | 14,754 | 337 | ||||||||||
Power Financial Corp. | 5,674 | 146 | ||||||||||
|
| |||||||||||
| 2,898 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Bombardier, Inc. ‘B’ (b) | 60,937 | 111 | ||||||||||
Russel Metals, Inc. | 6,424 | 129 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 21 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
WestJet Airlines Ltd. | 2,646 | $ | 47 | |||||||||
|
| |||||||||||
| 287 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.3% | ||||||||||||
IAMGOLD Corp. (b) | 11,340 | 58 | ||||||||||
Potash Corp. of Saskatchewan, Inc. | 13,288 | 217 | ||||||||||
Teck Resources Ltd. ‘B’ | 42,008 | 728 | ||||||||||
|
| |||||||||||
| 1,003 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.2% | ||||||||||||
Atco Ltd. ‘I’ | 9,141 | 357 | ||||||||||
TransAlta Corp. | 45,636 | 292 | ||||||||||
|
| |||||||||||
| 649 | ||||||||||||
|
| |||||||||||
Total Canada | 5,942 | |||||||||||
|
| |||||||||||
| DENMARK 0.5% | ||||||||||||
| INDUSTRIALS 0.4% | ||||||||||||
AP Moller - Maersk A/S ‘B’ | 588 | 1,184 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
TDC A/S | 62,794 | 365 | ||||||||||
|
| |||||||||||
Total Denmark | 1,549 | |||||||||||
|
| |||||||||||
| FINLAND 0.3% | ||||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Metso Oyj | 2,766 | 96 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Stora Enso Oyj ‘R’ | 33,262 | 430 | ||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
Fortum Oyj | 20,311 | 319 | ||||||||||
|
| |||||||||||
Total Finland | 845 | |||||||||||
|
| |||||||||||
| FRANCE 5.9% | ||||||||||||
| CONSUMER DISCRETIONARY 0.9% | ||||||||||||
Cie Generale des Etablissements Michelin | 7,355 | 979 | ||||||||||
Lagardere S.C.A. | 22,083 | 697 | ||||||||||
Television Francaise 1 | 6,175 | 86 | ||||||||||
Vivendi S.A. | 51,792 | 1,153 | ||||||||||
|
| |||||||||||
| 2,915 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.3% | ||||||||||||
Carrefour S.A. | 14,588 | 369 | ||||||||||
Casino Guichard Perrachon S.A. | 10,749 | 636 | ||||||||||
|
| |||||||||||
| 1,005 | ||||||||||||
|
| |||||||||||
| ENERGY 0.6% | ||||||||||||
Total S.A. | 38,044 | 1,889 | ||||||||||
Vallourec S.A. | 29,230 | 178 | ||||||||||
|
| |||||||||||
| 2,067 | ||||||||||||
|
| |||||||||||
| FINANCIALS 1.6% | ||||||||||||
BNP Paribas S.A. | 27,375 | 1,971 | ||||||||||
CNP Assurances | 9,413 | 211 | ||||||||||
Eurazeo S.A. | 954 | 72 | ||||||||||
Natixis S.A. | 34,695 | 233 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Societe Generale S.A. | 55,969 | $ | 3,018 | |||||||||
|
| |||||||||||
| 5,505 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 1.1% | ||||||||||||
Sanofi | 38,759 | 3,714 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.6% | ||||||||||||
Alstom S.A. (b) | 2,067 | 72 | ||||||||||
Bouygues S.A. | 20,540 | 865 | ||||||||||
Cie de Saint-Gobain | 7,661 | 409 | ||||||||||
Rexel S.A. | 15,242 | 249 | ||||||||||
Vinci S.A. | 5,225 | 446 | ||||||||||
|
| |||||||||||
| 2,041 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Orange S.A. | 50,943 | 811 | ||||||||||
|
| |||||||||||
| UTILITIES 0.6% | ||||||||||||
Electricite de France S.A. | 78,692 | 853 | ||||||||||
Engie S.A. | 72,296 | 1,091 | ||||||||||
|
| |||||||||||
| 1,944 | ||||||||||||
|
| |||||||||||
Total France | 20,002 | |||||||||||
|
| |||||||||||
| GERMANY 4.2% | ||||||||||||
| CONSUMER DISCRETIONARY 0.7% | ||||||||||||
Bayerische Motoren Werke AG | 14,026 | 1,304 | ||||||||||
Daimler AG | 13,865 | 1,006 | ||||||||||
|
| |||||||||||
| 2,310 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.3% | ||||||||||||
METRO AG | 28,714 | 970 | ||||||||||
Suedzucker AG | 9,315 | 195 | ||||||||||
|
| |||||||||||
| 1,165 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.4% | ||||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 5,532 | 1,119 | ||||||||||
Talanx AG | 1,285 | 48 | ||||||||||
|
| |||||||||||
| 1,167 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.3% | ||||||||||||
Bayer AG | 6,646 | 861 | ||||||||||
Rhoen Klinikum AG | 4,402 | 129 | ||||||||||
|
| |||||||||||
| 990 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.7% | ||||||||||||
Bilfinger SE | 6,532 | 257 | ||||||||||
Deutsche Lufthansa AG | 76,930 | 1,753 | ||||||||||
Deutsche Post AG | 7,463 | 280 | ||||||||||
|
| |||||||||||
| 2,290 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.7% | ||||||||||||
BASF SE | 20,964 | 1,945 | ||||||||||
Evonik Industries AG | 5,379 | 172 | ||||||||||
K+S AG | 14,859 | 382 | ||||||||||
|
| |||||||||||
| 2,499 | ||||||||||||
|
| |||||||||||
| UTILITIES 1.1% | ||||||||||||
E.ON SE | 149,145 | 1,408 | ||||||||||
RWE AG (b) | 116,852 | 2,334 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Uniper SE | 6,220 | $ | 117 | |||||||||
|
| |||||||||||
| 3,859 | ||||||||||||
|
| |||||||||||
Total Germany | 14,280 | |||||||||||
|
| |||||||||||
| HONG KONG 0.6% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
SJM Holdings Ltd. | 369,000 | 389 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Noble Group Ltd. | 198,400 | 67 | ||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Kingboard Chemical Holdings Ltd. | 84,000 | 334 | ||||||||||
|
| |||||||||||
| REAL ESTATE 0.4% | ||||||||||||
Kerry Properties Ltd. | 64,500 | 219 | ||||||||||
New World Development Co. Ltd. | 21,000 | 27 | ||||||||||
Shimao Property Holdings Ltd. | 151,000 | 258 | ||||||||||
Swire Pacific Ltd. ‘A’ | 38,500 | 376 | ||||||||||
Wheelock & Co. Ltd. | 43,000 | 324 | ||||||||||
|
| |||||||||||
| 1,204 | ||||||||||||
|
| |||||||||||
Total Hong Kong | �� | 1,994 | ||||||||||
|
| |||||||||||
| ISRAEL 0.3% | ||||||||||||
| FINANCIALS 0.1% | ||||||||||||
Bank Leumi Le-Israel BM | 75,388 | 366 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Israel Chemicals Ltd. | 61,472 | 290 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 144,300 | 240 | ||||||||||
|
| |||||||||||
Total Israel | 896 | |||||||||||
|
| |||||||||||
| ITALY 1.3% | ||||||||||||
| ENERGY 0.5% | ||||||||||||
Eni SpA | 117,302 | 1,763 | ||||||||||
Snam SpA | 19,099 | 83 | ||||||||||
|
| |||||||||||
| 1,846 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.2% | ||||||||||||
Assicurazioni Generali SpA | 13,388 | 220 | ||||||||||
Poste Italiane SpA | 83,266 | 571 | ||||||||||
|
| |||||||||||
| 791 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.6% | ||||||||||||
Enel SpA | 355,690 | 1,908 | ||||||||||
|
| |||||||||||
Total Italy | 4,545 | |||||||||||
|
| |||||||||||
| JAPAN 9.8% | ||||||||||||
| CONSUMER DISCRETIONARY 1.1% | ||||||||||||
Aisin Seiki Co. Ltd. | 6,900 | 355 | ||||||||||
Benesse Holdings, Inc. | 7,400 | 280 | ||||||||||
Bridgestone Corp. | 7,300 | 316 | ||||||||||
DCM Holdings Co. Ltd. | 3,500 | 31 | ||||||||||
EDION Corp. | 3,600 | 33 | ||||||||||
Fuji Media Holdings, Inc. | 16,600 | 226 | ||||||||||
| 22 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Honda Motor Co. Ltd. | 17,000 | $ | 466 | |||||||||
Isuzu Motors Ltd. | 15,400 | 191 | ||||||||||
JVC Kenwood Corp. | 10,000 | 30 | ||||||||||
KYB Corp. | 10,000 | 51 | ||||||||||
Mitsubishi Motors Corp. | 7,000 | 46 | ||||||||||
Nikon Corp. | 16,100 | 258 | ||||||||||
Nissan Motor Co. Ltd. | 94,400 | 943 | ||||||||||
Onward Holdings Co. Ltd. | 14,000 | 103 | ||||||||||
Sega Sammy Holdings, Inc. | 4,100 | 55 | ||||||||||
Sumitomo Rubber Industries Ltd. | 16,500 | 279 | ||||||||||
Toyoda Gosei Co. Ltd. | 1,000 | 24 | ||||||||||
Yokohama Rubber Co. Ltd. | 9,700 | 196 | ||||||||||
|
| |||||||||||
| 3,883 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.2% | ||||||||||||
Coca-Cola Bottlers Japan, Inc. | 5,900 | 171 | ||||||||||
Japan Tobacco, Inc. | 1,100 | 39 | ||||||||||
Kirin Holdings Co. Ltd. | 28,800 | 587 | ||||||||||
|
| |||||||||||
| 797 | ||||||||||||
|
| |||||||||||
| ENERGY 0.3% | ||||||||||||
Idemitsu Kosan Co. Ltd. | 8,100 | 231 | ||||||||||
Inpex Corp. | 11,000 | 106 | ||||||||||
JXTG Holdings, Inc. | 128,900 | 564 | ||||||||||
|
| |||||||||||
| 901 | ||||||||||||
|
| |||||||||||
| FINANCIALS 2.5% | ||||||||||||
Chiba Bank Ltd. | 19,000 | 138 | ||||||||||
Daiwa Securities Group, Inc. | 33,000 | 197 | ||||||||||
Fukuoka Financial Group, Inc. | 19,000 | 91 | ||||||||||
Gunma Bank Ltd. | 20,900 | 126 | ||||||||||
Hokuhoku Financial Group, Inc. | 6,400 | 102 | ||||||||||
Mitsubishi UFJ Financial Group, Inc. | 382,500 | 2,580 | ||||||||||
Mizuho Financial Group, Inc. | 826,700 | 1,516 | ||||||||||
Nishi-Nippon Financial | 7,300 | 76 | ||||||||||
North Pacific Bank Ltd. | 34,700 | 122 | ||||||||||
Resona Holdings, Inc. | 109,400 | 604 | ||||||||||
SBI Holdings, Inc. | 9,300 | 126 | ||||||||||
Sumitomo Mitsui Financial | 49,200 | 1,921 | ||||||||||
Sumitomo Mitsui Trust | 14,400 | 517 | ||||||||||
T&D Holdings, Inc. | 23,400 | 358 | ||||||||||
Yamaguchi Financial Group, Inc. | 2,000 | 24 | ||||||||||
|
| |||||||||||
| 8,498 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.2% | ||||||||||||
Daiichi Sankyo Co. Ltd. | 17,700 | 418 | ||||||||||
Takeda Pharmaceutical Co. Ltd. | 6,000 | 304 | ||||||||||
|
| |||||||||||
| 722 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 2.2% | ||||||||||||
Asahi Glass Co. Ltd. | 14,200 | 600 | ||||||||||
Dai Nippon Printing Co. Ltd. | 16,000 | 178 | ||||||||||
Hitachi Construction Machinery Co. Ltd. | 12,300 | 309 | ||||||||||
ITOCHU Corp. | 40,800 | 607 | ||||||||||
Japan Airlines Co. Ltd. | 10,600 | 328 | ||||||||||
Kawasaki Heavy Industries Ltd. | 16,000 | 48 | ||||||||||
Komatsu Ltd. | 29,100 | 747 | ||||||||||
Marubeni Corp. | 112,000 | 726 | ||||||||||
Mitsubishi Corp. | 36,200 | 761 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Mitsubishi Heavy Industries Ltd. | 94,000 | $ | 387 | |||||||||
Mitsui & Co. Ltd. | 73,400 | 1,051 | ||||||||||
Mitsui Engineering & Shipbuilding Co. Ltd. | 55,000 | 79 | ||||||||||
Nippon Yusen KK | 177,000 | 331 | ||||||||||
Sumitomo Corp. | 67,900 | 885 | ||||||||||
Sumitomo Heavy Industries Ltd. | 11,000 | 73 | ||||||||||
Toppan Printing Co. Ltd. | 2,000 | 22 | ||||||||||
Toshiba Corp. | 191,000 | 463 | ||||||||||
Toyota Tsusho Corp. | 2,500 | 75 | ||||||||||
|
| |||||||||||
| 7,670 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 2.1% | ||||||||||||
Brother Industries Ltd. | 9,500 | 220 | ||||||||||
Canon, Inc. | 48,400 | 1,646 | ||||||||||
DeNA Co. Ltd. | 900 | 20 | ||||||||||
Fujitsu Ltd. | 200,000 | 1,479 | ||||||||||
Gree, Inc. | 15,900 | 139 | ||||||||||
Hitachi Ltd. | 377,000 | 2,325 | ||||||||||
Ibiden Co. Ltd. | 16,400 | 284 | ||||||||||
Nippon Electric Glass Co. Ltd. | 11,000 | 401 | ||||||||||
Ricoh Co. Ltd. | 84,900 | 752 | ||||||||||
|
| |||||||||||
| 7,266 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.6% | ||||||||||||
Asahi Kasei Corp. | 16,000 | 172 | ||||||||||
Denka Co. Ltd. | 19,000 | 98 | ||||||||||
DIC Corp. | 6,300 | 228 | ||||||||||
Kobe Steel Ltd. | 24,800 | 256 | ||||||||||
Kuraray Co. Ltd. | 1,300 | 24 | ||||||||||
Mitsubishi Materials Corp. | 800 | 24 | ||||||||||
Mitsui Mining & Smelting Co. Ltd. | 40,000 | 157 | ||||||||||
Nippon Light Metal Holdings | 14,300 | 34 | ||||||||||
Rengo Co. Ltd. | 22,200 | 129 | ||||||||||
Showa Denko KK | 21,300 | 497 | ||||||||||
Sumitomo Metal Mining Co. Ltd. | 9,000 | 120 | ||||||||||
Ube Industries Ltd. | 69,000 | 178 | ||||||||||
|
| |||||||||||
| 1,917 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.0% | ||||||||||||
Daito Trust Construction Co. Ltd. | 600 | 93 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.5% | ||||||||||||
Nippon Telegraph & | 25,500 | 1,204 | ||||||||||
NTT DOCOMO, Inc. | 14,500 | 343 | ||||||||||
|
| |||||||||||
| 1,547 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
Chugoku Electric Power Co., Inc. | 12,700 | 140 | ||||||||||
Hokuriku Electric Power Co. | 17,800 | 161 | ||||||||||
|
| |||||||||||
| 301 | ||||||||||||
|
| |||||||||||
Total Japan | 33,595 | |||||||||||
|
| |||||||||||
| LUXEMBOURG 0.3% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
RTL Group S.A. | 1,850 | 140 | ||||||||||
|
| |||||||||||
| MATERIALS 0.3% | ||||||||||||
ArcelorMittal | 37,966 | 861 | ||||||||||
|
| |||||||||||
Total Luxembourg | 1,001 | |||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| MACAU 0.0% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Wynn Macau Ltd. | 19,200 | $ | 45 | |||||||||
|
| |||||||||||
Total Macau | 45 | |||||||||||
|
| |||||||||||
| MEXICO 0.0% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Desarrolladora Homex S.A.B. de C.V. (b) | 41,996 | 3 | ||||||||||
|
| |||||||||||
Total Mexico | 3 | |||||||||||
|
| |||||||||||
| NETHERLANDS 2.1% | ||||||||||||
| CONSUMER STAPLES 0.2% | ||||||||||||
Koninklijke Ahold Delhaize NV | 36,694 | 700 | ||||||||||
|
| |||||||||||
| ENERGY 1.3% | ||||||||||||
Fugro NV (b) | 9,846 | 146 | ||||||||||
Royal Dutch Shell PLC ‘A’ | 160,105 | 4,257 | ||||||||||
|
| |||||||||||
| 4,403 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.1% | ||||||||||||
Aegon NV | 91,653 | 469 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.4% | ||||||||||||
Koninklijke Philips NV | 38,986 | 1,388 | ||||||||||
PostNL NV | 9,881 | 46 | ||||||||||
|
| |||||||||||
| 1,434 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
VEON Ltd. ADR | 71,507 | 280 | ||||||||||
|
| |||||||||||
Total Netherlands | 7,286 | |||||||||||
|
| |||||||||||
| NEW ZEALAND 0.0% | ||||||||||||
| TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
Spark New Zealand Ltd. | 36,493 | 101 | ||||||||||
|
| |||||||||||
Total New Zealand | 101 | |||||||||||
|
| |||||||||||
| NORWAY 0.7% | ||||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Marine Harvest ASA | 13,059 | 224 | ||||||||||
|
| |||||||||||
| ENERGY 0.4% | ||||||||||||
Aker Solutions ASA | 13,572 | 61 | ||||||||||
Statoil ASA | 83,137 | 1,379 | ||||||||||
|
| |||||||||||
| 1,440 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.1% | ||||||||||||
DNB ASA | 12,930 | 220 | ||||||||||
Gjensidige Forsikring ASA | 5,751 | 98 | ||||||||||
|
| |||||||||||
| 318 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Yara International ASA | 5,844 | 220 | ||||||||||
|
| |||||||||||
Total Norway | 2,202 | |||||||||||
|
| |||||||||||
| PORTUGAL 0.1% | ||||||||||||
| UTILITIES 0.1% | ||||||||||||
EDP - Energias de Portugal S.A. | 106,653 | 349 | ||||||||||
|
| |||||||||||
Total Portugal | 349 | |||||||||||
|
| |||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 23 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
| SINGAPORE 0.1% | ||||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Keppel Corp. Ltd. | 82,700 | $ | 378 | |||||||||
|
| |||||||||||
Total Singapore | 378 | |||||||||||
|
| |||||||||||
| SPAIN 2.8% | ||||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Distribuidora Internacional de Alimentacion S.A. | 39,565 | 247 | ||||||||||
|
| |||||||||||
| FINANCIALS 1.8% | ||||||||||||
Banco Santander S.A. | 896,476 | 5,953 | ||||||||||
Mapfre S.A. | 86,120 | 301 | ||||||||||
|
| |||||||||||
| 6,254 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.3% | ||||||||||||
Abertis Infraestructuras S.A. | 12,961 | 240 | ||||||||||
ACS Actividades de Construccion y Servicios S.A. | 19,001 | 735 | ||||||||||
Obrascon Huarte Lain S.A. | 66,248 | 238 | ||||||||||
|
| |||||||||||
| 1,213 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.3% | ||||||||||||
Telefonica S.A. | 91,655 | 949 | ||||||||||
|
| |||||||||||
| UTILITIES 0.3% | ||||||||||||
Endesa S.A. | 38,462 | 887 | ||||||||||
|
| |||||||||||
Total Spain | 9,550 | |||||||||||
|
| |||||||||||
| SWEDEN 0.6% | ||||||||||||
| FINANCIALS 0.2% | ||||||||||||
Nordea Bank AB | 42,814 | 545 | ||||||||||
Ratos AB ‘B’ | 31,038 | 148 | ||||||||||
|
| |||||||||||
| 693 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.1% | ||||||||||||
Getinge AB ‘B’ | 8,880 | 174 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Skanska AB ‘B’ | 6,947 | 165 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.3% | ||||||||||||
Tele2 AB ‘B’ | 63,511 | 666 | ||||||||||
Telia Co. AB | 103,478 | 477 | ||||||||||
|
| |||||||||||
| 1,143 | ||||||||||||
|
| |||||||||||
Total Sweden | 2,175 | |||||||||||
|
| |||||||||||
| SWITZERLAND 2.0% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Garmin Ltd. | 4,370 | 223 | ||||||||||
|
| |||||||||||
| ENERGY 0.0% | ||||||||||||
Transocean Ltd. | 10,721 | 88 | ||||||||||
|
| |||||||||||
| FINANCIALS 1.2% | ||||||||||||
Baloise Holding AG | 982 | 152 | ||||||||||
Swiss Life Holding AG | 2,379 | 805 | ||||||||||
Swiss Re AG | 12,642 | 1,159 | ||||||||||
Zurich Insurance Group AG | 6,683 | 1,950 | ||||||||||
|
| |||||||||||
| 4,066 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| HEALTH CARE 0.6% | ||||||||||||
Novartis AG | 9,043 | $ | 755 | |||||||||
Roche Holding AG | 5,354 | 1,368 | ||||||||||
|
| |||||||||||
| 2,123 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
ABB Ltd. | 2,925 | 73 | ||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.0% | ||||||||||||
TE Connectivity Ltd. | 820 | 64 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Swisscom AG | 459 | 222 | ||||||||||
|
| |||||||||||
Total Switzerland | 6,859 | |||||||||||
|
| |||||||||||
| UNITED KINGDOM 7.5% | ||||||||||||
| CONSUMER DISCRETIONARY 0.3% | ||||||||||||
Kingfisher PLC | 86,023 | 337 | ||||||||||
Marks & Spencer Group PLC | 112,113 | 487 | ||||||||||
Pearson PLC | 24,826 | 223 | ||||||||||
|
| |||||||||||
| 1,047 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.4% | ||||||||||||
J Sainsbury PLC | 147,206 | 483 | ||||||||||
Tate & Lyle PLC | 13,002 | 112 | ||||||||||
WM Morrison Supermarkets PLC | 227,428 | 714 | ||||||||||
|
| |||||||||||
| 1,309 | ||||||||||||
|
| |||||||||||
| ENERGY 1.1% | ||||||||||||
BP PLC | 646,508 | 3,732 | ||||||||||
Subsea 7 S.A. | 9,755 | 131 | ||||||||||
|
| |||||||||||
| 3,863 | ||||||||||||
|
| |||||||||||
| FINANCIALS 3.7% | ||||||||||||
Barclays PLC | 583,530 | 1,543 | ||||||||||
Direct Line Insurance Group PLC | 33,412 | 155 | ||||||||||
HSBC Holdings PLC | 844,579 | 7,839 | ||||||||||
Old Mutual PLC | 313,930 | 792 | ||||||||||
Standard Chartered PLC (b) | 196,200 | 1,987 | ||||||||||
Standard Life PLC | 33,422 | 174 | ||||||||||
|
| |||||||||||
| 12,490 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.5% | ||||||||||||
GlaxoSmithKline PLC | 74,087 | 1,577 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.5% | ||||||||||||
Aggreko PLC | 5,168 | 62 | ||||||||||
BAE Systems PLC | 63,606 | 525 | ||||||||||
Firstgroup PLC (b) | 126,140 | 207 | ||||||||||
IMI PLC | 3,671 | 57 | ||||||||||
Rolls-Royce Holdings PLC | 52,644 | 611 | ||||||||||
Smiths Group PLC | 2,707 | 56 | ||||||||||
Stagecoach Group PLC | 44,625 | 109 | ||||||||||
|
| |||||||||||
| 1,627 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.3% | ||||||||||||
Anglo American PLC (b) | 38,724 | 517 | ||||||||||
Rio Tinto PLC | 12,207 | 517 | ||||||||||
|
| |||||||||||
| 1,034 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
Vodafone Group PLC | 499,569 | $ | 1,419 | |||||||||
|
| |||||||||||
| UTILITIES 0.3% | ||||||||||||
Centrica PLC | 277,583 | 724 | ||||||||||
Drax Group PLC | 41,240 | 175 | ||||||||||
National Grid PLC | 12,376 | 153 | ||||||||||
Severn Trent PLC | 2,378 | 68 | ||||||||||
|
| |||||||||||
| 1,120 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 25,486 | |||||||||||
|
| |||||||||||
| UNITED STATES 29.8% | ||||||||||||
| CONSUMER DISCRETIONARY 2.2% | ||||||||||||
Abercrombie & Fitch Co. ‘A’ | 24,029 | 299 | ||||||||||
Coach, Inc. | 3,161 | 150 | ||||||||||
Dillard’s, Inc. ‘A’ | 5,475 | 316 | ||||||||||
Ford Motor Co. | 40,451 | 453 | ||||||||||
GameStop Corp. ‘A’ | 10,443 | 226 | ||||||||||
Gap, Inc. | 24,164 | 531 | ||||||||||
GNC Holdings, Inc. ‘A’ | 25,166 | 212 | ||||||||||
Goodyear Tire & Rubber Co. | 3,061 | 107 | ||||||||||
Guess?, Inc. | 10,939 | 140 | ||||||||||
Kohl’s Corp. | 23,209 | 897 | ||||||||||
Macy’s, Inc. | 16,233 | 377 | ||||||||||
Mattel, Inc. | 5,310 | 114 | ||||||||||
Nordstrom, Inc. | 5,552 | 266 | ||||||||||
Regal Entertainment Group ‘A’ | 6,318 | 129 | ||||||||||
Rent-A-Center, Inc. | 11,146 | 131 | ||||||||||
Staples, Inc. | 61,786 | 622 | ||||||||||
Time, Inc. | 14,102 | 202 | ||||||||||
Tupperware Brands Corp. | 3,797 | 267 | ||||||||||
Viacom, Inc. ‘B’ | 34,437 | 1,156 | ||||||||||
Weight Watchers International, Inc. (b) | 14,890 | 498 | ||||||||||
Wynn Resorts Ltd. | 2,783 | 373 | ||||||||||
|
| |||||||||||
| 7,466 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 2.9% | ||||||||||||
Altria Group, Inc. | 3,308 | 246 | ||||||||||
Archer-Daniels-Midland Co. | 4,501 | 186 | ||||||||||
Avon Products, Inc. (b) | 127,574 | 485 | ||||||||||
Bunge Ltd. | 3,745 | 279 | ||||||||||
Herbalife Ltd. (b) | 6,873 | 490 | ||||||||||
Kimberly-Clark Corp. | 1,301 | 168 | ||||||||||
Nu Skin Enterprises, Inc. ‘A’ | 480 | 30 | ||||||||||
PepsiCo, Inc. | 3,796 | 439 | ||||||||||
Philip Morris International, Inc. | 19,333 | 2,271 | ||||||||||
Procter & Gamble Co. | 23,328 | 2,033 | ||||||||||
Wal-Mart Stores, Inc. | 40,732 | 3,083 | ||||||||||
Whole Foods Market, Inc. | 880 | 37 | ||||||||||
|
| |||||||||||
| 9,747 | ||||||||||||
|
| |||||||||||
| ENERGY 4.5% | ||||||||||||
Apache Corp. | 7,222 | 346 | ||||||||||
California Resources Corp. (b) | 13,468 | 115 | ||||||||||
Chesapeake Energy Corp. (b) | 95,524 | 475 | ||||||||||
Chevron Corp. | 34,638 | 3,614 | ||||||||||
ConocoPhillips | 35,856 | 1,576 | ||||||||||
CONSOL Energy, Inc. (b) | 6,172 | 92 | ||||||||||
Denbury Resources, Inc. (b) | 69,422 | 106 | ||||||||||
Devon Energy Corp. | 1,703 | 55 | ||||||||||
Diamond Offshore Drilling, Inc. (b) | 12,225 | 132 | ||||||||||
Exxon Mobil Corp. | 63,337 | 5,113 | ||||||||||
| 24 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Hess Corp. | 12,128 | $ | 532 | |||||||||
HollyFrontier Corp. | 11,099 | 305 | ||||||||||
Marathon Oil Corp. | 33,228 | 394 | ||||||||||
Marathon Petroleum Corp. | 9,422 | 493 | ||||||||||
Murphy Oil Corp. | 14,197 | 364 | ||||||||||
National Oilwell Varco, Inc. | 16,369 | 539 | ||||||||||
Occidental Petroleum Corp. | 5,936 | 355 | ||||||||||
ONEOK, Inc. | 520 | 27 | ||||||||||
Patterson-UTI Energy, Inc. | 1,121 | 23 | ||||||||||
Superior Energy Services, Inc. (b) | 4,288 | 45 | ||||||||||
Tesoro Corp. | 886 | 83 | ||||||||||
Valero Energy Corp. | 6,348 | 428 | ||||||||||
Williams Cos., Inc. | 5,105 | 155 | ||||||||||
|
| |||||||||||
| 15,367 | ||||||||||||
|
| |||||||||||
| FINANCIALS 5.3% | ||||||||||||
Aflac, Inc. | 5,416 | 421 | ||||||||||
American Express Co. | 10,055 | 847 | ||||||||||
American International Group, Inc. | 48,567 | 3,036 | ||||||||||
Assurant, Inc. | 2,951 | 306 | ||||||||||
Capital One Financial Corp. | 15,644 | 1,293 | ||||||||||
Discover Financial Services | 11,375 | 707 | ||||||||||
Donnelley Financial Solutions, Inc. (b) | 1,511 | 35 | ||||||||||
Fifth Third Bancorp | 15,360 | 399 | ||||||||||
Franklin Resources, Inc. | 7,376 | 330 | ||||||||||
Goldman Sachs Group, Inc. | 1,649 | 366 | ||||||||||
JPMorgan Chase & Co. | 41,324 | 3,777 | ||||||||||
Loews Corp. | 5,889 | 276 | ||||||||||
LPL Financial Holdings, Inc. | 3,473 | 148 | ||||||||||
Navient Corp. | 49,250 | 820 | ||||||||||
People’s United Financial, Inc. | 11,231 | 198 | ||||||||||
PNC Financial Services Group, Inc. | 5,598 | 699 | ||||||||||
Santander Consumer USA Holdings, Inc. (b) | 21,297 | 272 | ||||||||||
SLM Corp. (b) | 43,865 | 504 | ||||||||||
T Rowe Price Group, Inc. | 341 | 25 | ||||||||||
Travelers Cos., Inc. | 14,567 | 1,843 | ||||||||||
U.S. Bancorp | 10,505 | 545 | ||||||||||
Voya Financial, Inc. | 8,362 | 309 | ||||||||||
Wells Fargo & Co. | 20,191 | 1,126 | ||||||||||
|
| |||||||||||
| 18,282 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 4.2% | ||||||||||||
Anthem, Inc. | 13,380 | 2,517 | ||||||||||
Baxter International, Inc. | 5,337 | 323 | ||||||||||
Community Health Systems, Inc. (b) | 34,767 | 346 | ||||||||||
HCA Holdings, Inc. (b) | 17,889 | 1,560 | ||||||||||
Merck & Co., Inc. | 47,069 | 3,017 | ||||||||||
Pfizer, Inc. | 176,751 | 5,937 | ||||||||||
Quest Diagnostics, Inc. | 5,138 | 571 | ||||||||||
|
| |||||||||||
| 14,271 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 2.0% | ||||||||||||
AGCO Corp. | 1,844 | 124 | ||||||||||
Armstrong World Industries, Inc. (b) | 5,676 | 261 | ||||||||||
Caterpillar, Inc. | 14,295 | 1,536 | ||||||||||
CSX Corp. | 7,004 | 382 | ||||||||||
Cummins, Inc. | 342 | 56 | ||||||||||
Deere & Co. | 13,781 | 1,703 | ||||||||||
Emerson Electric Co. | 16,712 | 996 | ||||||||||
Fluor Corp. | 2,202 | 101 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
L3 Technologies, Inc. | 2,436 | $ | 407 | |||||||||
LSC Communications, Inc. | 1,552 | 33 | ||||||||||
Norfolk Southern Corp. | 5,673 | 691 | ||||||||||
Oshkosh Corp. | 455 | 31 | ||||||||||
Pitney Bowes, Inc. | 19,434 | 294 | ||||||||||
RR Donnelley & Sons Co. | 6,808 | 85 | ||||||||||
Ryder System, Inc. | 945 | 68 | ||||||||||
Trinity Industries, Inc. | 3,482 | 98 | ||||||||||
|
| |||||||||||
| 6,866 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 3.7% | ||||||||||||
Avnet, Inc. | 653 | 25 | ||||||||||
Booz Allen Hamilton Holding Corp. | 9,638 | 314 | ||||||||||
CA, Inc. | 12,322 | 425 | ||||||||||
Conduent, Inc. (b) | 9,390 | 150 | ||||||||||
Corning, Inc. | 23,289 | 700 | ||||||||||
HP, Inc. | 58,806 | 1,028 | ||||||||||
Intel Corp. | 53,267 | 1,797 | ||||||||||
International Business Machines Corp. | 35,963 | 5,532 | ||||||||||
Jabil Circuit, Inc. | 5,735 | 167 | ||||||||||
KLA-Tencor Corp. | 268 | 25 | ||||||||||
Seagate Technology PLC | 29,285 | 1,135 | ||||||||||
Symantec Corp. | 13,000 | 367 | ||||||||||
Western Digital Corp. | 2,956 | 262 | ||||||||||
Western Union Co. | 19,389 | 369 | ||||||||||
Xerox Corp. | 16,451 | 473 | ||||||||||
|
| |||||||||||
| 12,769 | ||||||||||||
|
| |||||||||||
| MATERIALS 1.2% | ||||||||||||
CF Industries Holdings, Inc. | 11,147 | 312 | ||||||||||
Cliffs Natural Resources, Inc. (b) | 4,971 | 34 | ||||||||||
Domtar Corp. | 9,147 | 352 | ||||||||||
Dow Chemical Co. | 4,292 | 271 | ||||||||||
Freeport-McMoRan, Inc. (b) | 76,545 | 919 | ||||||||||
Huntsman Corp. | 9,962 | 257 | ||||||||||
International Paper Co. | 3,839 | 217 | ||||||||||
LyondellBasell Industries NV ‘A’ | 11,269 | 951 | ||||||||||
Mosaic Co. | 27,810 | 635 | ||||||||||
Newmont Mining Corp. | 7,663 | 248 | ||||||||||
|
| |||||||||||
| 4,196 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 1.9% | ||||||||||||
AT&T, Inc. | 71,234 | 2,688 | ||||||||||
CenturyLink, Inc. | 46,141 | 1,102 | ||||||||||
Frontier Communications Corp. | 82,044 | 95 | ||||||||||
Telephone & Data Systems, Inc. | 2,649 | 73 | ||||||||||
Verizon Communications, Inc. | 57,614 | 2,573 | ||||||||||
Windstream Holdings, Inc. | 4,951 | 19 | ||||||||||
|
| |||||||||||
| 6,550 | ||||||||||||
|
| |||||||||||
| UTILITIES 1.9% | ||||||||||||
American Electric Power Co., Inc. | 9,081 | 631 | ||||||||||
CenterPoint Energy, Inc. | 15,901 | 435 | ||||||||||
Consolidated Edison, Inc. | 9,207 | 744 | ||||||||||
Entergy Corp. | 15,215 | 1,168 | ||||||||||
Exelon Corp. | 30,683 | 1,107 | ||||||||||
FirstEnergy Corp. | 29,147 | 850 | ||||||||||
Great Plains Energy, Inc. | 3,909 | 114 | ||||||||||
Pinnacle West Capital Corp. | 3,219 | 274 | ||||||||||
PPL Corp. | 5,436 | 210 | ||||||||||
Public Service Enterprise Group, Inc. | 12,339 | 531 | ||||||||||
Southern Co. | 3,991 | 191 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Vectren Corp. | 1,789 | $ | 105 | |||||||||
|
| |||||||||||
| 6,360 | ||||||||||||
|
| |||||||||||
Total United States | 101,874 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $230,096) |
| 251,881 | ||||||||||
|
| |||||||||||
| PRINCIPAL AMOUNT (000S) | ||||||||||||
| CORPORATE BONDS & NOTES 7.1% | ||||||||||||
| AUSTRALIA 0.1% | ||||||||||||
| BANKING & FINANCE 0.1% | ||||||||||||
National Australia Bank Ltd. | ||||||||||||
1.375% due 07/12/2019 | 400 | 396 | ||||||||||
|
| |||||||||||
Total Australia | 396 | |||||||||||
|
| |||||||||||
| AUSTRIA 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
OGX Austria GmbH |
| |||||||||||
8.500% due 06/01/2018 ^ | 200 | 0 | ||||||||||
8.375% due 04/01/2022 ^ | 200 | 0 | ||||||||||
|
| |||||||||||
| 0 | ||||||||||||
|
| |||||||||||
Total Austria | 0 | |||||||||||
|
| |||||||||||
| BRAZIL 0.4% | ||||||||||||
| UTILITIES 0.4% | ||||||||||||
Petrobras Global Finance BV |
| |||||||||||
5.375% due 01/27/2021 | 483 | 492 | ||||||||||
6.250% due 12/14/2026 | GBP | 100 | 133 | |||||||||
6.850% due 06/05/2115 | $ | 108 | 96 | |||||||||
6.875% due 01/20/2040 | 2 | 2 | ||||||||||
8.375% due 05/23/2021 | 485 | 544 | ||||||||||
6.125% due 01/17/2022 | 67 | 69 | ||||||||||
7.375% due 01/17/2027 | 116 | 123 | ||||||||||
7.250% due 03/17/2044 | 36 | 36 | ||||||||||
|
| |||||||||||
| 1,495 | ||||||||||||
|
| |||||||||||
Total Brazil | 1,495 | |||||||||||
|
| |||||||||||
| CANADA 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Burger King Worldwide, Inc. | ||||||||||||
4.250% due 05/15/2024 | 30 | 30 | ||||||||||
NOVA Chemicals Corp. |
| |||||||||||
4.875% due 06/01/2024 | 2 | 2 | ||||||||||
5.250% due 06/01/2027 | 7 | 7 | ||||||||||
Valeant Pharmaceuticals International, Inc. |
| |||||||||||
6.500% due 03/15/2022 | 13 | 14 | ||||||||||
7.000% due 03/15/2024 | 25 | 26 | ||||||||||
|
| |||||||||||
| 79 | ||||||||||||
|
| |||||||||||
Total Canada | 79 | |||||||||||
|
| |||||||||||
| CAYMAN ISLANDS 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Park Aerospace Holdings Ltd. |
| |||||||||||
5.250% due 08/15/2022 | 21 | 22 | ||||||||||
5.500% due 02/15/2024 | 7 | 7 | ||||||||||
|
| |||||||||||
| 29 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.0% | ||||||||||||
Odebrecht Drilling Norbe Ltd. |
| |||||||||||
6.350% due 06/30/2022 | 143 | 78 | ||||||||||
Transocean Phoenix Ltd. | ||||||||||||
7.750% due 10/15/2024 | 5 | 5 | ||||||||||
|
| |||||||||||
| 83 | ||||||||||||
|
| |||||||||||
Total Cayman Islands | 112 | |||||||||||
|
| |||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 25 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| DENMARK 0.4% | ||||||||||||
| BANKING & FINANCE 0.4% | ||||||||||||
Nykredit Realkredit A/S | ||||||||||||
3.000% due 10/01/2047 | DKK | 7,946 | $ | 1,277 | ||||||||
|
| |||||||||||
Total Denmark | 1,277 | |||||||||||
|
| |||||||||||
| FINLAND 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Nokia Oyj |
| |||||||||||
3.375% due 06/12/2022 | $ | 6 | 6 | |||||||||
4.375% due 06/12/2027 | 6 | 6 | ||||||||||
|
| |||||||||||
| 12 | ||||||||||||
|
| |||||||||||
Total Finland | 12 | |||||||||||
|
| |||||||||||
| FRANCE 0.6% | ||||||||||||
| BANKING & FINANCE 0.4% | ||||||||||||
BPCE S.A. | ||||||||||||
12.500% due 09/30/2019 (f) | 100 | 122 | ||||||||||
RCI Banque S.A. | ||||||||||||
3.500% due 04/03/2018 | 1,000 | 1,012 | ||||||||||
|
| |||||||||||
| 1,134 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.2% | ||||||||||||
SFR Group S.A. | ||||||||||||
7.375% due 05/01/2026 | 700 | 762 | ||||||||||
|
| |||||||||||
Total France | 1,896 | |||||||||||
|
| |||||||||||
| GERMANY 0.2% | ||||||||||||
| BANKING & FINANCE 0.2% | ||||||||||||
Deutsche Bank AG | ||||||||||||
4.250% due 10/14/2021 | 590 | 618 | ||||||||||
|
| |||||||||||
Total Germany | 618 | |||||||||||
|
| |||||||||||
| IRELAND 0.2% | ||||||||||||
| INDUSTRIALS 0.2% | ||||||||||||
Russian Railways via RZD Capital PLC |
| |||||||||||
7.487% due 03/25/2031 | GBP | 300 | 485 | |||||||||
|
| |||||||||||
Total Ireland | 485 | |||||||||||
|
| |||||||||||
| ITALY 0.1% | ||||||||||||
| UTILITIES 0.1% | ||||||||||||
Telecom Italia SpA | ||||||||||||
7.375% due 12/15/2017 | 250 | 335 | ||||||||||
|
| |||||||||||
Total Italy | 335 | |||||||||||
|
| |||||||||||
| LUXEMBOURG 0.6% | ||||||||||||
| BANKING & FINANCE 0.2% | ||||||||||||
Sberbank of Russia Via SB Capital S.A. |
| |||||||||||
3.352% due 11/15/2019 | EUR | 200 | 242 | |||||||||
6.125% due 02/07/2022 | $ | 400 | 436 | |||||||||
|
| |||||||||||
| 678 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Intelsat Jackson Holdings S.A. | ||||||||||||
9.750% due 07/15/2025 (a) | 28 | 28 | ||||||||||
Nielsen Co. Luxembourg SARL | ||||||||||||
5.000% due 02/01/2025 | 4 | 4 | ||||||||||
|
| |||||||||||
| 32 | ||||||||||||
|
| |||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| UTILITIES 0.4% | ||||||||||||
Gazprom Neft OAO Via GPN Capital S.A. |
| |||||||||||
4.375% due 09/19/2022 | $ | 300 | $ | 306 | ||||||||
6.000% due 11/27/2023 | 300 | 328 | ||||||||||
Gazprom OAO Via Gaz Capital S.A. |
| |||||||||||
9.250% due 04/23/2019 | 600 | 667 | ||||||||||
5.999% due 01/23/2021 | 30 | 32 | ||||||||||
6.605% due 02/13/2018 | EUR | 50 | 59 | |||||||||
|
| |||||||||||
| 1,392 | ||||||||||||
|
| |||||||||||
Total Luxembourg | 2,102 | |||||||||||
|
| |||||||||||
| MEXICO 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Corp. GEO S.A.B. de C.V. |
| |||||||||||
8.875% due 03/27/2022 ^ | $ | 300 | 0 | |||||||||
9.250% due 06/30/2020 ^ | 100 | 0 | ||||||||||
Petroleos Mexicanos | ||||||||||||
6.500% due 03/13/2027 | 40 | 43 | ||||||||||
|
| |||||||||||
| 43 | ||||||||||||
|
| |||||||||||
Total Mexico | 43 | |||||||||||
|
| |||||||||||
| MULTINATIONAL 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Venator Finance SARL | ||||||||||||
5.750% due 07/15/2025 | 2 | 2 | ||||||||||
|
| |||||||||||
Total Multinational | 2 | |||||||||||
|
| |||||||||||
| NETHERLANDS 0.1% | ||||||||||||
| BANKING & FINANCE 0.1% | ||||||||||||
Cooperatieve Rabobank UA | ||||||||||||
6.625% due 06/29/2021 (f) | EUR | 200 | 254 | |||||||||
Stichting AK Rabobank Certificaten |
| |||||||||||
6.500% due 12/29/2049 (f) | 25 | 34 | ||||||||||
|
| |||||||||||
| 288 | ||||||||||||
|
| |||||||||||
Total Netherlands | 288 | |||||||||||
|
| |||||||||||
| UNITED KINGDOM 1.7% | ||||||||||||
| BANKING & FINANCE 1.4% | ||||||||||||
Barclays Bank PLC |
| |||||||||||
14.000% due 06/15/2019 (f) | GBP | 300 | 476 | |||||||||
7.625% due 11/21/2022 | $ | 430 | 493 | |||||||||
HSBC Holdings PLC |
| |||||||||||
3.600% due 05/25/2023 | 200 | 207 | ||||||||||
6.000% due 09/29/2023 (f) | EUR | 320 | 411 | |||||||||
Lloyds Banking Group PLC |
| |||||||||||
7.875% due 06/27/2029 (f) | GBP | 400 | 611 | |||||||||
7.625% due 06/27/2023 (f) | 200 | 289 | ||||||||||
Royal Bank of Scotland Group PLC |
| |||||||||||
7.500% due 08/10/2020 (f) | $ | 360 | 372 | |||||||||
2.500% due 03/22/2023 | EUR | 350 | 425 | |||||||||
Santander UK Group Holdings PLC |
| |||||||||||
4.750% due 09/15/2025 | $ | 760 | 790 | |||||||||
Tesco Property Finance PLC | ||||||||||||
6.052% due 10/13/2039 | GBP | 414 | 613 | |||||||||
|
| |||||||||||
| 4,687 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.3% | ||||||||||||
EI Group PLC | ||||||||||||
6.875% due 02/15/2021 | 200 | 291 | ||||||||||
Marston’s Issuer PLC |
| |||||||||||
5.641% due 07/15/2035 | 200 | 239 | ||||||||||
Mitchells & Butlers Finance PLC |
| |||||||||||
0.739% due 12/15/2030 | 144 | 174 | ||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
Spirit Issuer PLC |
| |||||||||||
6.582% due 12/28/2027 | GBP | 200 | $ | 285 | ||||||||
3.000% due 12/28/2031 | 22 | 28 | ||||||||||
Unique Pub Finance Co. PLC |
| |||||||||||
5.659% due 06/30/2027 | 46 | 68 | ||||||||||
|
| |||||||||||
| 1,085 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 5,772 | |||||||||||
|
| |||||||||||
| UNITED STATES 2.7% | ||||||||||||
| BANKING & FINANCE 1.3% | ||||||||||||
Brighthouse Financial, Inc. |
| |||||||||||
3.700% due 06/22/2027 | $ | 12 | 12 | |||||||||
4.700% due 06/22/2047 | 14 | 14 | ||||||||||
Cantor Fitzgerald LP |
| |||||||||||
7.875% due 10/15/2019 | 280 | 309 | ||||||||||
CIT Group, Inc. |
| |||||||||||
3.875% due 02/19/2019 | 378 | 388 | ||||||||||
Crown Castle International Corp. |
| |||||||||||
4.000% due 03/01/2027 | 8 | 8 | ||||||||||
CTR Partnership LP |
| |||||||||||
5.250% due 06/01/2025 | 12 | 12 | ||||||||||
CyrusOne LP |
| |||||||||||
5.000% due 03/15/2024 | 5 | 5 | ||||||||||
5.375% due 03/15/2027 | 3 | 3 | ||||||||||
Equinix, Inc. |
| |||||||||||
5.375% due 05/15/2027 | 16 | 17 | ||||||||||
Exela Intermediate LLC |
| |||||||||||
10.000% due 07/15/2023 (a) | 16 | 16 | ||||||||||
Howard Hughes Corp. |
| |||||||||||
5.375% due 03/15/2025 | 27 | 28 | ||||||||||
International Lease Finance Corp. |
| |||||||||||
7.125% due 09/01/2018 | 325 | 344 | ||||||||||
6.250% due 05/15/2019 | 1,110 | 1,191 | ||||||||||
Navient Corp. |
| |||||||||||
8.000% due 03/25/2020 | 600 | 672 | ||||||||||
6.500% due 06/15/2022 | 56 | 60 | ||||||||||
Oppenheimer Holdings, Inc. |
| |||||||||||
6.750% due 07/01/2022 | 6 | 6 | ||||||||||
Provident Funding Associates LP |
| |||||||||||
6.375% due 06/15/2025 | 4 | 4 | ||||||||||
Springleaf Finance Corp. |
| |||||||||||
8.250% due 12/15/2020 | 980 | 1,103 | ||||||||||
6.125% due 05/15/2022 | 298 | 315 | ||||||||||
|
| |||||||||||
| 4,507 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 1.1% | ||||||||||||
Anheuser-Busch InBev Finance, Inc. |
| |||||||||||
4.900% due 02/01/2046 | 17 | 19 | ||||||||||
Broadcom Corp. |
| |||||||||||
3.000% due 01/15/2022 | 68 | 69 | ||||||||||
3.625% due 01/15/2024 | 6 | 6 | ||||||||||
3.875% due 01/15/2027 | 26 | 27 | ||||||||||
Caesars Entertainment Operating Co., Inc. |
| |||||||||||
8.500% due 02/15/2020 ^(g) | 286 | 369 | ||||||||||
9.000% due 02/15/2020 ^(g) | 240 | 311 | ||||||||||
CDK Global, Inc. |
| |||||||||||
4.875% due 06/01/2027 | 7 | 7 | ||||||||||
Chemours Co. |
| |||||||||||
5.375% due 05/15/2027 | 6 | 6 | ||||||||||
Cimarex Energy Co. |
| |||||||||||
3.900% due 05/15/2027 | 7 | 7 | ||||||||||
Community Health Systems, Inc. |
| |||||||||||
6.250% due 03/31/2023 | 23 | 24 | ||||||||||
CVS Pass-Through Trust |
| |||||||||||
8.353% due 07/10/2031 | 521 | 673 | ||||||||||
Diamond Resorts International, Inc. |
| |||||||||||
7.750% due 09/01/2023 | 103 | 110 | ||||||||||
EW Scripps Co. |
| |||||||||||
5.125% due 05/15/2025 | 3 | 3 | ||||||||||
First Quality Finance Co., Inc. |
| |||||||||||
5.000% due 07/01/2025 | 5 | 5 | ||||||||||
| 26 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
HCA, Inc. |
| |||||||||||
5.500% due 06/15/2047 | $ | 14 | $ | 15 | ||||||||
Hexion, Inc. |
| |||||||||||
13.750% due 02/01/2022 | 9 | 8 | ||||||||||
Hilton Worldwide Finance LLC |
| |||||||||||
4.625% due 04/01/2025 | 30 | 31 | ||||||||||
4.875% due 04/01/2027 | 19 | 20 | ||||||||||
iHeartCommunications, Inc. |
| |||||||||||
9.000% due 03/01/2021 | 3 | 2 | ||||||||||
9.000% due 12/15/2019 | 54 | 43 | ||||||||||
9.000% due 09/15/2022 | 697 | 519 | ||||||||||
j2 Cloud Services LLC |
| |||||||||||
6.000% due 07/15/2025 | 5 | 5 | ||||||||||
KFC Holding Co. |
| |||||||||||
4.750% due 06/01/2027 | 10 | 10 | ||||||||||
Molina Healthcare, Inc. |
| |||||||||||
4.875% due 06/15/2025 | 3 | 3 | ||||||||||
PetSmart, Inc. |
| |||||||||||
5.875% due 06/01/2025 | 23 | 22 | ||||||||||
Sirius XM Radio, Inc. |
| |||||||||||
3.875% due 08/01/2022 (a) | 13 | 13 | ||||||||||
5.000% due 08/01/2027 (a) | 5 | 5 | ||||||||||
Surgery Center Holdings, Inc. |
| |||||||||||
6.750% due 07/01/2025 | 3 | 3 | ||||||||||
Symantec Corp. |
| |||||||||||
5.000% due 04/15/2025 | 5 | 5 | ||||||||||
Tech Data Corp. |
| |||||||||||
3.700% due 02/15/2022 | 5 | 5 | ||||||||||
4.950% due 02/15/2027 | 6 | 6 | ||||||||||
Tenet Healthcare Corp. |
| |||||||||||
4.625% due 07/15/2024 | 30 | 30 | ||||||||||
THC Escrow Corp. |
| |||||||||||
4.625% due 07/15/2024 | 6 | 6 | ||||||||||
Time Warner Cable LLC |
| |||||||||||
6.750% due 07/01/2018 | 500 | 523 | ||||||||||
5.000% due 02/01/2020 | 600 | 641 | ||||||||||
Time Warner, Inc. |
| |||||||||||
3.800% due 02/15/2027 | 14 | 14 | ||||||||||
VeriSign, Inc. |
| |||||||||||
4.750% due 07/15/2027 | 3 | 3 | ||||||||||
WellCare Health Plans, Inc. |
| |||||||||||
5.250% due 04/01/2025 | 13 | 14 | ||||||||||
Wyndham Worldwide Corp. |
| |||||||||||
4.500% due 04/01/2027 | 6 | 6 | ||||||||||
4.150% due 04/01/2024 | 5 | 5 | ||||||||||
Wynn Las Vegas LLC |
| |||||||||||
5.250% due 05/15/2027 | 19 | 20 | ||||||||||
|
| |||||||||||
| 3,613 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.3% | ||||||||||||
AT&T, Inc. |
| |||||||||||
5.650% due 02/15/2047 | 8 | 9 | ||||||||||
2.023% due 07/15/2021 | 164 | 166 | ||||||||||
FirstEnergy Corp. |
| |||||||||||
3.900% due 07/15/2027 | 12 | 12 | ||||||||||
4.850% due 07/15/2047 | 9 | 9 | ||||||||||
Kinder Morgan Finance Co. LLC |
| |||||||||||
6.000% due 01/15/2018 | 800 | 817 | ||||||||||
Verizon Communications, Inc. |
| |||||||||||
5.250% due 03/16/2037 | 50 | 54 | ||||||||||
5.500% due 03/16/2047 | 40 | 44 | ||||||||||
4.125% due 03/16/2027 | 70 | 72 | ||||||||||
|
| |||||||||||
| 1,183 | ||||||||||||
|
| |||||||||||
Total United States | 9,303 | |||||||||||
|
| |||||||||||
Total Corporate Bonds & Notes |
| 24,215 | ||||||||||
|
| |||||||||||
| NON-AGENCY MORTGAGE-BACKED SECURITIES 3.5% | ||||||||||||
| UNITED KINGDOM 0.8% | ||||||||||||
Eurosail PLC |
| |||||||||||
1.240% due 06/13/2045 | GBP | 1,214 | 1,518 | |||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
Grifonas Finance PLC |
| |||||||||||
0.042% due 08/28/2039 | EUR | 424 | $ | 416 | ||||||||
Juno Eclipse Ltd. |
| |||||||||||
0.000% due 11/20/2022 | 259 | 291 | ||||||||||
RMAC PLC |
| |||||||||||
0.529% due 06/12/2036 | GBP | 307 | 387 | |||||||||
|
| |||||||||||
Total United Kingdom | 2,612 | |||||||||||
|
| |||||||||||
| UNITED STATES 2.7% | ||||||||||||
Banc of America Alternative Loan Trust |
| |||||||||||
6.000% due 04/25/2036 ^ | $ | 57 | 53 | |||||||||
6.000% due 07/25/2046 ^ | 120 | 106 | ||||||||||
Banc of America Funding Trust |
| |||||||||||
3.171% due 05/20/2036 ^ | 26 | 24 | ||||||||||
Banc of America Mortgage Trust |
| |||||||||||
3.401% due 11/20/2046 ^ | 10 | 9 | ||||||||||
6.000% due 10/25/2036 ^ | 32 | 28 | ||||||||||
Bear Stearns Mortgage Funding Trust |
| |||||||||||
7.500% due 08/25/2036 | 153 | 149 | ||||||||||
Chase Mortgage Finance Trust |
| |||||||||||
3.221% due 09/25/2036 ^ | 69 | 62 | ||||||||||
Countrywide Alternative Loan Trust |
| |||||||||||
1.916% due 10/25/2037 ^ | 5,615 | 1,882 | ||||||||||
6.000% due 06/25/2036 ^ | 174 | 146 | ||||||||||
6.000% due 02/25/2037 ^ | 83 | 59 | ||||||||||
6.250% due 12/25/2036 ^ | 33 | 25 | ||||||||||
Countrywide Home Loan Mortgage Pass-Through Trust |
| |||||||||||
1.716% due 07/25/2037 ^ | 27 | 17 | ||||||||||
Credit Suisse First Boston Mortgage Securities Corp. |
| |||||||||||
6.000% due 11/25/2035 ^ | 22 | 12 | ||||||||||
6.000% due 01/25/2036 | 51 | 46 | ||||||||||
Credit Suisse Mortgage Capital Certificates |
| |||||||||||
2.810% due 12/29/2037 | 202 | 145 | ||||||||||
First Horizon Alternative Mortgage Securities Trust |
| |||||||||||
3.217% due 06/25/2036 | 518 | 426 | ||||||||||
HSI Asset Loan Obligation Trust |
| |||||||||||
6.000% due 06/25/2037 ^ | 13 | 12 | ||||||||||
JPMorgan Alternative Loan Trust |
| |||||||||||
5.652% due 05/26/2037 | 109 | 92 | ||||||||||
JPMorgan Mortgage Trust |
| |||||||||||
6.500% due 07/25/2036 ^ | 121 | 96 | ||||||||||
Merrill Lynch Mortgage Investors Trust |
| |||||||||||
3.231% due 03/25/2036 ^ | 19 | 14 | ||||||||||
Residential Accredit Loans, Inc. Trust |
| |||||||||||
1.616% due 10/25/2045 | 133 | 117 | ||||||||||
5.500% due 03/25/2037 | 620 | 510 | ||||||||||
6.250% due 03/25/2037 ^ | 48 | 41 | ||||||||||
Structured Adjustable Rate Mortgage Loan Trust |
| |||||||||||
3.357% due 10/25/2036 ^ | 3,049 | 2,480 | ||||||||||
Wells Fargo Alternative Loan Trust |
| |||||||||||
3.509% due 07/25/2037 ^ | 1,617 | 1,457 | ||||||||||
Wells Fargo Commercial Mortgage Trust |
| |||||||||||
3.412% due 09/15/2058 | 1,156 | 1,203 | ||||||||||
|
| |||||||||||
Total United States | 9,211 | |||||||||||
|
| |||||||||||
Total Non-Agency Mortgage-Backed Securities (Cost $12,539) |
| 11,823 | ||||||||||
|
| |||||||||||
| MUNICIPAL BONDS & NOTES 0.6% | ||||||||||||
| CALIFORNIA 0.2% | ||||||||||||
California State Public Works Board Revenue Notes, Series 2011 |
| |||||||||||
5.786% due 12/01/2021 | 750 | 808 | ||||||||||
|
| |||||||||||
Total California | 808 | |||||||||||
|
| |||||||||||
| ILLINOIS 0.1% | ||||||||||||
Illinois State General Obligation Bonds, (BABs), Series 2010 |
| |||||||||||
6.630% due 02/01/2035 | 15 | 15 | ||||||||||
7.350% due 07/01/2035 | 5 | 5 | ||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
Illinois State General Obligation Bonds, Series 2003 |
| |||||||||||
5.100% due 06/01/2033 | $ | 150 | $ | 141 | ||||||||
|
| |||||||||||
Total Illinois | 161 | |||||||||||
|
| |||||||||||
| MICHIGAN 0.1% | ||||||||||||
Michigan Tobacco Settlement Finance Authority Revenue Bonds, Series 2006 |
| |||||||||||
7.309% due 06/01/2034 | 215 | 215 | ||||||||||
|
| |||||||||||
Total Michigan | 215 | |||||||||||
|
| |||||||||||
| VIRGINIA 0.1% | ||||||||||||
Tobacco Settlement Financing Corp., Virginia Revenue Bonds, Series 2007 |
| |||||||||||
6.706% due 06/01/2046 | 385 | 338 | ||||||||||
|
| |||||||||||
Total Virginia | 338 | |||||||||||
|
| |||||||||||
| WEST VIRGINIA 0.1% | ||||||||||||
Tobacco Settlement Finance Authority, West Virginia Revenue Bonds, Series 2007 |
| |||||||||||
7.467% due 06/01/2047 | 360 | 353 | ||||||||||
|
| |||||||||||
Total West Virginia | 353 | |||||||||||
|
| |||||||||||
Total Municipal Bonds & Notes |
| 1,875 | ||||||||||
|
| |||||||||||
| SHARES | ||||||||||||
| PREFERRED STOCKS 0.6% | ||||||||||||
| GERMANY 0.6% | ||||||||||||
| INDUSTRIALS 0.6% | ||||||||||||
Volkswagen AG | 13,073 | 1,997 | ||||||||||
|
| |||||||||||
Total Preferred Stocks (Cost $1,833) |
| 1,997 | ||||||||||
|
| |||||||||||
| REAL ESTATE INVESTMENT TRUSTS 0.3% | ||||||||||||
| CANADA 0.1% | ||||||||||||
| REAL ESTATE 0.1% | ||||||||||||
Dream Office Real Estate Investment Trust | 14,726 | 222 | ||||||||||
|
| |||||||||||
Total Canada | 222 | |||||||||||
|
| |||||||||||
| UNITED STATES 0.2% | ||||||||||||
| FINANCIALS 0.1% | ||||||||||||
AGNC Investment Corp. | 2,248 | 48 | ||||||||||
Annaly Capital Management, Inc. | 32,644 | 393 | ||||||||||
Two Harbors Investment Corp. | 2,554 | 25 | ||||||||||
|
| |||||||||||
| 466 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.1% | ||||||||||||
CoreCivic, Inc. | 7,320 | 202 | ||||||||||
Iron Mountain, Inc. | 6,193 | 213 | ||||||||||
|
| |||||||||||
| 415 | ||||||||||||
|
| |||||||||||
Total United States | 881 | |||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts |
| 1,103 | ||||||||||
|
| |||||||||||
| RIGHTS 0.0% | ||||||||||||
| SPAIN 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
ACS Actividades de Construccion y Servicios S.A. | 19,001 | 15 | ||||||||||
|
| |||||||||||
Total Rights (Cost $16) | 15 | |||||||||||
|
| |||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 27 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| SOVEREIGN ISSUES 0.5% | ||||||||||||
| BRAZIL 0.1% | ||||||||||||
Brazil Notas do Tesouro Nacional |
| |||||||||||
6.000% due 05/15/2045 (e) | BRL | 1,499 | $ | 471 | ||||||||
|
| |||||||||||
Total Brazil | 471 | |||||||||||
|
| |||||||||||
| GREECE 0.2% | ||||||||||||
Republic of Greece Government International Bond |
| |||||||||||
3.800% due 08/08/2017 | JPY | 39,000 | 346 | |||||||||
4.500% due 07/03/2017 | 10,000 | 89 | ||||||||||
4.750% due 04/17/2019 | EUR | 100 | 116 | |||||||||
|
| |||||||||||
Total Greece | 551 | |||||||||||
|
| |||||||||||
| KUWAIT 0.1% | ||||||||||||
Kuwait International Government Bond |
| |||||||||||
3.500% due 03/20/2027 | $ | 385 | 394 | |||||||||
|
| |||||||||||
Total Kuwait | 394 | |||||||||||
|
| |||||||||||
| SAUDI ARABIA 0.1% | ||||||||||||
Saudi Government International Bond |
| |||||||||||
4.500% due 10/26/2046 | 200 | 204 | ||||||||||
|
| |||||||||||
Total Saudi Arabia | 204 | |||||||||||
|
| |||||||||||
| SPAIN 0.0% | ||||||||||||
Autonomous Community of Catalonia |
| |||||||||||
4.900% due 09/15/2021 | EUR | 50 | 61 | |||||||||
|
| |||||||||||
Total Spain | 61 | |||||||||||
|
| |||||||||||
Total Sovereign Issues (Cost $1,821) |
| 1,681 | ||||||||||
|
| |||||||||||
| U.S. GOVERNMENT AGENCIES 2.3% | ||||||||||||
| UNITED STATES 2.3% | ||||||||||||
Fannie Mae |
| |||||||||||
2.500% due 07/01/2031 | $ | 1,000 | 1,006 | |||||||||
3.000% due 11/01/2029 | 32 | 33 | ||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
Fannie Mae, TBA |
| |||||||||||
3.000% due 09/01/2047 | $ | 1,300 | $ | 1,294 | ||||||||
3.500% due 09/01/2047 | 3,500 | 3,583 | ||||||||||
Freddie Mac, TBA | ||||||||||||
3.000% due 07/01/2047 | 2,000 | 1,995 | ||||||||||
|
| |||||||||||
Total U.S. Government Agencies |
| 7,911 | ||||||||||
|
| |||||||||||
| U.S. TREASURY OBLIGATIONS 4.7% | ||||||||||||
| UNITED STATES 4.7% | ||||||||||||
U.S. Treasury Bonds |
| |||||||||||
2.875% due 11/15/2046 | 1,000 | 1,008 | ||||||||||
U.S. Treasury Notes |
| |||||||||||
1.125% due 06/30/2021 | 1,100 | 1,074 | ||||||||||
1.750% due 11/30/2021 | 900 | 898 | ||||||||||
1.750% due 03/31/2022 | 300 | 298 | ||||||||||
1.750% due 05/15/2022 | 300 | 298 | ||||||||||
1.750% due 09/30/2022 | 500 | 495 | ||||||||||
1.750% due 05/15/2023 | 700 | 690 | ||||||||||
1.875% due 01/31/2022 | 1,600 | 1,602 | ||||||||||
1.875% due 02/28/2022 (i) | 1,400 | 1,402 | ||||||||||
1.875% due 08/31/2022 | 500 | 499 | ||||||||||
2.000% due 07/31/2022 | 400 | 402 | ||||||||||
2.000% due 11/15/2026 (i) | 760 | 741 | ||||||||||
2.125% due 12/31/2021 | 1,500 | 1,519 | ||||||||||
2.125% due 06/30/2022 | 1,000 | 1,011 | ||||||||||
2.125% due 02/29/2024 | 400 | 400 | ||||||||||
2.250% due 12/31/2023 | 3,610 | 3,646 | ||||||||||
2.250% due 01/31/2024 | 190 | 192 | ||||||||||
|
| |||||||||||
Total U.S. Treasury Obligations |
| 16,175 | ||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 0.2% | ||||||||||||
| REPURCHASE AGREEMENTS (h) 0.1% | ||||||||||||
| 478 | ||||||||||||
|
| |||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| ARGENTINA TREASURY BILLS 0.1% | ||||||||||||
3.128% due 08/25/2017 - 02/09/2018 (c)(d) | $ | 419 | $ | 415 | ||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $893) | 893 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $324,679) | 347,421 | |||||||||||
|
| |||||||||||
| SHARES | ||||||||||||
| INVESTMENTS IN AFFILIATES 0.8% | ||||||||||||
| SHORT-TERM INSTRUMENTS 0.8% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 0.8% | ||||||||||||
PIMCO Short-Term | 282,118 | 2,789 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $2,789) | 2,789 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $2,789) | 2,789 | |||||||||||
| Total Investments 102.5% (Cost $327,468) | $ | 350,210 | ||||||||||
Financial Derivative (Cost or Premiums, net $(373)) | (198 | ) | ||||||||||
| Other Assets and Liabilities, net (2.5)% | (8,455 | ) | ||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 341,557 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| ^ | Security is in default. |
| (a) | When-issued security. |
| (b) | Security did not produce income within the last twelve months. |
| (c) | Coupon represents a weighted average yield to maturity. |
| (d) | Zero coupon security. |
| (e) | Principal amount of security is adjusted for inflation. |
| (f) | Perpetual maturity; date shown, if applicable, represents next contractual call date. |
| (g) | Security is subject to a forbearance agreement entered into by the Fund which forbears the Fund from taking action to, among other things, accelerate and collect payments on the subject note with respect to specified events of default. |
BORROWINGS AND OTHER FINANCING TRANSACTIONS
(h) REPURCHASE AGREEMENTS:
| Counterparty | Lending Rate | Settlement Date | Maturity Date | Principal Amount | Collateralized By | Collateral (Received) | Repurchase Agreements, at Value | Repurchase Agreement Proceeds to be Received(1) | ||||||||||||||||||||||
| SSB | 0.050 | % | 06/30/2017 | 07/03/2017 | $ | 478 | U.S. Treasury Notes 3.500% due 05/15/2020(2) | $ | (488 | ) | $ | 478 | $ | 478 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
Total Repurchase Agreements |
| $ | (488 | ) | $ | 478 | $ | 478 | ||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
| 28 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
REVERSE REPURCHASE AGREEMENTS:
| Counterparty | Borrowing Rate(3) | Settlement Date | Maturity Date | Amount Borrowed(3) | Payable for Reverse Repurchase Agreements | |||||||||||||||
SCX | 1.160 | % | 05/19/2017 | 08/21/2017 | $ | (1,620 | ) | $ | (1,622 | ) | ||||||||||
| 1.170 | 05/24/2017 | 08/24/2017 | (3,691 | ) | (3,696 | ) | ||||||||||||||
|
| |||||||||||||||||||
Total Reverse Repurchase Agreements |
| $ | (5,318 | ) | ||||||||||||||||
|
| |||||||||||||||||||
SALE-BUYBACK TRANSACTIONS:
| Counterparty | Borrowing Rate(3) | Borrowing Date | Maturity Date | Amount Borrowed(3) | Payable for Sale-Buyback Transactions | |||||||||||||||
GSC | 1.060 | % | 05/04/2017 | 07/03/2017 | $ | (1,408 | ) | $ | (1,410 | ) | ||||||||||
MSC | 1.500 | 06/23/2017 | 07/07/2017 | (752 | ) | (753 | ) | |||||||||||||
|
| |||||||||||||||||||
Total Sale-Buyback Transactions |
| $ | (2,163 | ) | ||||||||||||||||
|
| |||||||||||||||||||
SHORT SALES:
| Description | Coupon | Maturity Date | Principal Amount | Proceeds | Payable for Short Sales | |||||||||||||||
U.S. Treasury Obligations 0.0% | ||||||||||||||||||||
United States 0.0% | ||||||||||||||||||||
U.S. Treasury Notes | 1.125% | 09/30/2021 | $ 100 | $ | (97 | ) | $ | (98 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Short Sales 0.0% | $ | (97 | ) | $ | (98 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||
BORROWINGS AND OTHER FINANCING TRANSACTIONS SUMMARY
The following is a summary by counterparty of the market value of Borrowings and Other Financing Transactions and collateral pledged/(received) as of June 30, 2017:
| Counterparty | Repurchase Agreement Proceeds to be Received | Payable for Reverse Repurchase Agreements | Payable for Sale-Buyback Transactions | Payable for Short Sales | Total Borrowings and Other Financing Transactions | Collateral Pledged/(Received) | Net Exposure(4) | |||||||||||||||||||||
Global/Master Repurchase Agreement | ||||||||||||||||||||||||||||
SCX | $ | 0 | $ | (5,318 | ) | $ | 0 | $ | 0 | $ | (5,318 | ) | $ | 5,248 | $ | (70 | ) | |||||||||||
SSB | 478 | 0 | 0 | 0 | 478 | (488 | ) | (10 | ) | |||||||||||||||||||
Master Securities Forward Transaction Agreement | ||||||||||||||||||||||||||||
BPG | 0 | 0 | 0 | (98 | ) | (98 | ) | 0 | (98 | ) | ||||||||||||||||||
GSC | 0 | 0 | (1,410 | ) | 0 | (1,410 | ) | 1,402 | (8 | ) | ||||||||||||||||||
MSC | 0 | 0 | (753 | ) | 0 | (753 | ) | 741 | (12 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Borrowings and Other Financing Transactions | $ | 478 | $ | (5,318 | ) | $ | (2,163 | ) | $ | (98 | ) | |||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
CERTAIN TRANSFERS ACCOUNTED FOR AS SECURED BORROWINGS
Remaining Contractual Maturity of the Agreements
| Overnight and Continuous | Up to 30 days | 31-90 days | Greater Than 90 days | Total | ||||||||||||||||
Reverse Repurchase Agreements | ||||||||||||||||||||
U.S. Treasury Obligations | $ | 0 | $ | 0 | $ | (5,318 | ) | $ | 0 | $ | (5,318 | ) | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 0 | $ | 0 | $ | (5,318 | ) | $ | 0 | $ | (5,318 | ) | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Sale-Buyback Transactions | ||||||||||||||||||||
U.S. Treasury Obligations | 0 | (2,163 | ) | 0 | 0 | (2,163 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 0 | $ | (2,163 | ) | $ | 0 | $ | 0 | $ | (2,163 | ) | ||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total Borrowings | $ | 0 | $ | (2,163 | ) | $ | (5,318 | ) | $ | 0 | $ | (7,481 | ) | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Gross amount of recognized liabilities for reverse repurchase agreements and sale-buyback financing transactions |
| $ | (7,481 | ) | ||||||||||||||||
|
| |||||||||||||||||||
| (i) | Securities with an aggregate market value of $7,391 have been pledged as collateral under the terms of under the terms of the above master agreements as of June 30, 2017. |
| (1) | Includes accrued interest. |
| (2) | Collateral is held in custody by the counterparty. |
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 29 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
| (3) | The average amount of borrowings outstanding during the period ended June 30, 2017 was $(3,378) at a weighted average interest rate of 0.838%. Average borrowings may include sale-buyback transactions and reverse repurchase agreements, if held during the period. |
| (4) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from borrowings and other financing transactions can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 8, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
(j) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
FUTURES CONTRACTS:
LONG FUTURES CONTRACTS
| Description | Expiration Month | # of Contracts | Notional Amount | Unrealized Appreciation/ (Depreciation) | Variation Margin | |||||||||||||||||
| Asset | Liability | |||||||||||||||||||||
U.S. Treasury 10-Year Note September Futures | 09/2017 | 16 | $ | 2,009 | $ | (1 | ) | $ | 0 | $ | (4 | ) | ||||||||||
|
|
|
|
|
| |||||||||||||||||
Total Futures Contracts |
| $ | (1 | ) | $ | 0 | $ | (4 | ) | |||||||||||||
|
|
|
|
|
| |||||||||||||||||
SWAP AGREEMENTS:
CREDIT DEFAULT SWAPS ON CREDIT INDICES - BUY PROTECTION(1)
| Fixed Receive Rate | Maturity Date | Notional Amount(2) | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Market Value(3) | Variation Margin | ||||||||||||||||||||||||||
| Index/Tranches | Asset | Liability | ||||||||||||||||||||||||||||||
CDX.HY-27 5-Year Index | 5.000 | % | 12/20/2021 | $ | 1,584 | $ | (101 | ) | $ | (21 | ) | $ | (122 | ) | $ | 0 | $ | (4 | ) | |||||||||||||
CDX.HY-28 5-Year Index | 5.000 | 06/20/2022 | 500 | (36 | ) | 1 | (35 | ) | 0 | (1 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
| $ | (137 | ) | $ | (20 | ) | $ | (157 | ) | $ | 0 | $ | (5 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
INTEREST RATE SWAPS
| Pay/Receive Floating Rate | Floating Rate Index | Fixed Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Market Value | Variation Margin | ||||||||||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||||||||
Receive | 3-Month USD-LIBOR | 1.750 | % | 06/21/2047 | $ | 150 | $ | 33 | $ | (6 | ) | $ | 27 | $ | 1 | $ | 0 | |||||||||||||||||||||
Receive(4) | 3-Month USD-LIBOR | 2.250 | 12/20/2022 | 900 | (14 | ) | 6 | (8 | ) | 2 | 0 | |||||||||||||||||||||||||||
Receive(4) | 3-Month USD-LIBOR | 2.500 | 12/20/2027 | 6,200 | (159 | ) | 80 | (79 | ) | 18 | (1 | ) | ||||||||||||||||||||||||||
Receive(4) | 3-Month USD-LIBOR | 2.750 | 12/20/2047 | 700 | (49 | ) | 25 | (24 | ) | 3 | 0 | |||||||||||||||||||||||||||
Pay(4) | 3-Month ZAR-JIBAR | 7.750 | 09/20/2022 | ZAR | 29,900 | 4 | 18 | 22 | 0 | (11 | ) | |||||||||||||||||||||||||||
Pay | 3-Month ZAR-JIBAR | 8.250 | 03/15/2022 | 2,800 | 1 | 6 | 7 | 0 | (1 | ) | ||||||||||||||||||||||||||||
Pay | 6-Month AUD-BBR-BBSW | 2.750 | 06/17/2026 | AUD | 7,000 | 254 | (280 | ) | (26 | ) | 0 | (58 | ) | |||||||||||||||||||||||||
Pay | 6-Month AUD-BBR-BBSW | 3.000 | 03/21/2027 | 300 | 6 | (3 | ) | 3 | 0 | (3 | ) | |||||||||||||||||||||||||||
Receive(4) | 6-Month EUR-EURIBOR | 1.000 | 09/20/2027 | EUR | 400 | (3 | ) | 1 | (2 | ) | 1 | 0 | ||||||||||||||||||||||||||
Receive(4) | 6-Month GBP-LIBOR | 1.500 | 09/20/2027 | GBP | 900 | (13 | ) | (2 | ) | (15 | ) | 0 | (2 | ) | ||||||||||||||||||||||||
Receive | 6-Month JPY-LIBOR | 0.000 | 09/20/2026 | JPY | 320,000 | 68 | (4 | ) | 64 | 5 | 0 | |||||||||||||||||||||||||||
Receive(4) | 6-Month JPY-LIBOR | 0.400 | 03/27/2029 | 40,000 | 0 | 0 | 0 | 1 | 0 | |||||||||||||||||||||||||||||
Receive(4) | 6-Month JPY-LIBOR | 0.415 | 03/25/2029 | 20,000 | 0 | 0 | 0 | 1 | 0 | |||||||||||||||||||||||||||||
Receive(4) | 6-Month JPY-LIBOR | 0.450 | 03/20/2029 | 830,000 | (34 | ) | (10 | ) | (44 | ) | 21 | 0 | ||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 5.610 | 07/07/2021 | MXN | 700 | (2 | ) | 0 | (2 | ) | 0 | 0 | ||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 5.797 | 09/06/2021 | 4,500 | (14 | ) | 5 | (9 | ) | 0 | (1 | ) | ||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 5.950 | 01/30/2026 | 600 | (3 | ) | 0 | ) | (3 | ) | 0 | 0 | ||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 5.990 | 01/30/2026 | 4,300 | (4 | ) | (14 | ) | (18 | ) | 0 | (1 | ) | |||||||||||||||||||||||||
Receive | 28-Day MXN-TIIE | 6.080 | 03/10/2026 | 15,500 | (15 | ) | (44 | ) | (59 | ) | 0 | (5 | ) | |||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 6.490 | 09/08/2026 | 30,000 | 13 | (88 | ) | (75 | ) | 0 | (9 | ) | ||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 6.750 | 08/31/2021 | 2,000 | (1 | ) | 1 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.030 | 11/10/2021 | 2,400 | 0 | 1 | 1 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.199 | 12/03/2021 | 500 | 0 | 1 | 1 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.350 | 11/17/2021 | 600 | 0 | 1 | 1 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.380 | 11/04/2026 | 100 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.387 | 11/17/2021 | 500 | 0 | 1 | 1 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.537 | 02/23/2022 | 1,000 | 0 | 2 | 2 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.817 | 02/17/2027 | 1,100 | 0 | 3 | 3 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 7.865 | 02/02/2027 | 2,400 | 0 | 7 | 7 | 0 | (1 | ) | ||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 8.010 | 02/04/2027 | 1,200 | 0 | 4 | 4 | 0 | 0 | |||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 8.090 | 01/15/2027 | 3,300 | 0 | 12 | 12 | 0 | (1 | ) | ||||||||||||||||||||||||||||
Pay | 28-Day MXN-TIIE | 8.120 | 01/15/2027 | 700 | 0 | 3 | 3 | 0 | 0 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
| $ | 68 | $ | (274 | ) | $ | (206 | ) | $ | 53 | $ | (94 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Total Swap Agreements | $ | (69 | ) | $ | (294 | ) | $ | (363 | ) | $ | 53 | $ | (99 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
| 30 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 0 | $ | 0 | $ | 53 | $ | 53 | $ | 0 | $ | (4 | ) | $ | (99 | ) | $ | (103 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Cash of $780 has been pledged as collateral for exchange-traded and centrally cleared financial derivative instruments as of June 30, 2017. See Note 8, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements.
| (1) | If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash, securities or other deliverable obligations equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
| (2) | The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
| (3) | The prices and resulting values for credit default swap agreements on credit indices serve as indicators of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced indices’ credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. |
| (4) | This instrument has a forward starting effective date. See Note 2, Securities Transactions and Investment Income, in the Notes to Financial Statements for further information. |
(k) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
FORWARD FOREIGN CURRENCY CONTRACTS:
| Counterparty | Settlement Month | Currency to be Delivered | Currency to be Received | Unrealized Appreciation/ (Depreciation) | ||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||
AZD | 07/2017 | $ | 741 | AUD | 976 | $ | 10 | $ | 0 | |||||||||||||||
| 08/2017 | AUD | 976 | $ | 740 | 0 | (10 | ) | |||||||||||||||||
BOA | 07/2017 | DKK | 8,362 | 1,226 | 0 | (58 | ) | |||||||||||||||||
| 07/2017 | EUR | 1,822 | 2,048 | 0 | (33 | ) | ||||||||||||||||||
| 07/2017 | GBP | 59 | 76 | 0 | (1 | ) | ||||||||||||||||||
| 07/2017 | $ | 1,257 | DKK | 8,302 | 19 | 0 | ||||||||||||||||||
| 08/2017 | TRY | 123 | $ | 34 | 0 | 0 | ||||||||||||||||||
| 08/2017 | $ | 237 | TRY | 865 | 6 | 0 | ||||||||||||||||||
| 10/2017 | DKK | 8,302 | $ | 1,263 | 0 | (19 | ) | |||||||||||||||||
BPS | 07/2017 | $ | 1,910 | EUR | 1,679 | 8 | 0 | |||||||||||||||||
| 07/2017 | 4,493 | JPY | 502,939 | 0 | (21 | ) | ||||||||||||||||||
| 08/2017 | EUR | 1,679 | $ | 1,913 | 0 | (8 | ) | |||||||||||||||||
| 08/2017 | JPY | 502,939 | 4,498 | 21 | 0 | |||||||||||||||||||
| 08/2017 | $ | 90 | MXN | 1,653 | 1 | 0 | ||||||||||||||||||
| 08/2017 | 216 | PEN | 710 | 2 | 0 | |||||||||||||||||||
BRC | 08/2017 | 1,268 | MXN | 24,442 | 72 | 0 | ||||||||||||||||||
CBK | 07/2017 | EUR | 52 | $ | 58 | 0 | (1 | ) | ||||||||||||||||
| 07/2017 | GBP | 2,143 | 2,757 | 0 | (34 | ) | ||||||||||||||||||
| 07/2017 | $ | 219 | EUR | 195 | 3 | 0 | ||||||||||||||||||
| 07/2017 | 121 | JPY | 13,212 | 0 | (3 | ) | ||||||||||||||||||
DUB | 07/2017 | BRL | 1,604 | $ | 485 | 1 | 0 | |||||||||||||||||
| 07/2017 | $ | 481 | BRL | 1,605 | 3 | 0 | ||||||||||||||||||
| 08/2017 | BRL | 1,604 | $ | 478 | 0 | (3 | ) | |||||||||||||||||
| 08/2017 | $ | 132 | TRY | 489 | 5 | 0 | ||||||||||||||||||
FBF | 07/2017 | JPY | 6,919 | $ | 63 | 1 | 0 | |||||||||||||||||
| 08/2017 | MXN | 3,088 | 167 | 0 | (2 | ) | ||||||||||||||||||
GLM | 07/2017 | AUD | 66 | 49 | 0 | (2 | ) | |||||||||||||||||
| 07/2017 | JPY | 509,233 | 4,604 | 77 | 0 | |||||||||||||||||||
| 07/2017 | $ | 517 | GBP | 404 | 9 | 0 | ||||||||||||||||||
| 08/2017 | 199 | TRY | 754 | 13 | 0 | |||||||||||||||||||
| 09/2017 | EUR | 1,375 | $ | 1,572 | 0 | (5 | ) | |||||||||||||||||
| 09/2017 | GBP | 3,500 | 4,540 | 0 | (30 | ) | ||||||||||||||||||
| 09/2017 | JPY | 37,500 | 335 | 1 | 0 | |||||||||||||||||||
| 10/2017 | $ | 451 | RUB | 26,436 | 0 | (13 | ) | |||||||||||||||||
HUS | 08/2017 | 113 | TRY | 413 | 3 | 0 | ||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 31 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
| Counterparty | Settlement Month | Currency to be Delivered | Currency to be Received | Unrealized Appreciation/ (Depreciation) | ||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||
JPM | 07/2017 | AUD | 910 | $ | 673 | $ | 0 | $ | (26 | ) | ||||||||||||||
| 07/2017 | $ | 543 | �� | GBP | 422 | 6 | 0 | |||||||||||||||||
| 08/2017 | 34 | TRY | 127 | 1 | 0 | |||||||||||||||||||
NGF | 08/2017 | MXN | 952 | $ | 53 | 1 | 0 | |||||||||||||||||
| 08/2017 | $ | 57 | TRY | 219 | 4 | 0 | ||||||||||||||||||
SCX | 07/2017 | BRL | 1,604 | $ | 511 | 26 | 0 | |||||||||||||||||
| 07/2017 | $ | 485 | BRL | 1,604 | 0 | (1 | ) | |||||||||||||||||
| 08/2017 | 101 | TRY | 378 | 5 | 0 | |||||||||||||||||||
UAG | 07/2017 | 1,764 | GBP | 1,376 | 29 | 0 | ||||||||||||||||||
| 08/2017 | GBP | 1,376 | $ | 1,765 | 0 | (29 | ) | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Forward Foreign Currency Contracts |
| $ | 327 | $ | (299 | ) | ||||||||||||||||||
|
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|
| |||||||||||||||||||||
WRITTEN OPTIONS:
FOREIGN CURRENCY OPTIONS
| Counterparty | Description | Strike Price | Expiration Date | Notional Amount | Premiums (Received) | Market Value | ||||||||||||||||||||
| FBF | Call - OTC USD versus BRL | BRL | 3.510 | 08/29/2017 | $ | 900 | $ | (11 | ) | $ | (8 | ) | ||||||||||||||
|
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|
| |||||||||||||||||||||||
Total Written Options | $ | (11 | ) | $ | (8 | ) | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
Notional Amount in $ | $ | 0 | $ | 900 | $ | 0 | $ | 0 | $ | 0 | $ | 900 | ||||||||||||
Premiums | $ | 0 | $ | (11 | ) | $ | 0 | $ | 0 | $ | 0 | $ | (11 | ) | ||||||||||
SWAP AGREEMENTS:
CREDIT DEFAULT SWAPS ON CORPORATE ISSUES - SELL PROTECTION(1)
| Counterparty | Reference Entity | Fixed Receive Rate | Maturity Date | Implied Credit Spread at June 30, 2017(2) | Notional Amount(3) | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | ||||||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||||
| GST | Petrobras Global Finance BV | 2.866% | 12/20/2021 | 3.009% | $ 200 | $ | (37 | ) | $ | 21 | $ | 0 | $ | (16 | ) | |||||||||||||||||||
|
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|
|
|
|
|
| |||||||||||||||||||||||||||
CREDIT DEFAULT SWAPS ON CREDIT INDICES - SELL PROTECTION(1)
| Counterparty | Index/Tranches | Fixed Receive Rate | Maturity Date | Notional Amount(3) | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value(4) | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||
| DUB | CMBX.NA.AAA.9 Index | (1.364 | )% | 09/17/2058 | $ | 2,300 | $ | (128 | ) | $ | 97 | $ | 0 | $ | (31 | ) | ||||||||||||||
| FBF | CMBX.NA.AAA.9 Index | (1.364 | ) | 09/17/2058 | 600 | (24 | ) | 16 | 0 | (8 | ) | |||||||||||||||||||
| GST | CMBX.NA.AAA.10 Index | (2.240 | ) | 11/17/2059 | 4,000 | (85 | ) | (6 | ) | 0 | (91 | ) | ||||||||||||||||||
| MYC | CMBX.NA.AAA.9 Index | (1.364 | ) | 09/17/2058 | 1,600 | (88 | ) | 66 | 0 | (22 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||
| $ | (325 | ) | $ | 173 | $ | 0 | $ | (152 | ) | |||||||||||||||||||||
|
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|
|
|
|
|
| |||||||||||||||||||||||
Total Swap Agreements | $ | (362 | ) | $ | 194 | $ | 0 | $ | (168 | ) | ||||||||||||||||||||
|
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| |||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(5) | ||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | ||||||||||||||||||||||||||||||||||||||||
AZD | $ | 10 | $ | 0 | $ | 0 | $ | 10 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||
BOA | 25 | 0 | 0 | 25 | (111 | ) | 0 | 0 | (111 | ) | (86 | ) | 0 | (86 | ) | |||||||||||||||||||||||||||||||||
BPS | 32 | 0 | 0 | 32 | (29 | ) | 0 | 0 | (29 | ) | 3 | 0 | 3 | |||||||||||||||||||||||||||||||||||
BRC | 72 | 0 | 0 | 72 | 0 | 0 | 0 | 0 | 72 | 0 | 72 | |||||||||||||||||||||||||||||||||||||
CBK | 3 | 0 | 0 | 3 | (38 | ) | 0 | 0 | (38 | ) | (35 | ) | (40 | ) | (75 | ) | ||||||||||||||||||||||||||||||||
DUB | 9 | 0 | 0 | 9 | (3 | ) | 0 | (31 | ) | (34 | ) | (25 | ) | 0 | (25 | ) | ||||||||||||||||||||||||||||||||
FBF | 1 | 0 | 0 | 1 | (2 | ) | (8 | ) | (8 | ) | (18 | ) | (17 | ) | 0 | (17 | ) | |||||||||||||||||||||||||||||||
GLM | 100 | 0 | 0 | 100 | (50 | ) | 0 | 0 | (50 | ) | 50 | 0 | 50 | |||||||||||||||||||||||||||||||||||
| 32 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| Financial Derivative Assets | Financial Derivative Liabilities | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(5) | ||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | ||||||||||||||||||||||||||||||||||||||||
GST | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (107 | ) | $ | (107 | ) | $ | (107 | ) | $ | 0 | $ | (107 | ) | ||||||||||||||||||||||
HUS | 3 | 0 | 0 | 3 | 0 | 0 | 0 | 0 | 3 | 0 | 3 | |||||||||||||||||||||||||||||||||||||
JPM | 7 | 0 | 0 | 7 | (26 | ) | 0 | 0 | (26 | ) | (19 | ) | 0 | (19 | ) | |||||||||||||||||||||||||||||||||
MYC | 0 | 0 | 0 | 0 | 0 | 0 | (22 | ) | (22 | ) | (22 | ) | 0 | (22 | ) | |||||||||||||||||||||||||||||||||
NGF | 5 | 0 | 0 | 5 | 0 | 0 | 0 | 0 | 5 | 0 | 5 | |||||||||||||||||||||||||||||||||||||
SCX | 31 | 0 | 0 | 31 | (1 | ) | 0 | 0 | (1 | ) | 30 | 0 | 30 | |||||||||||||||||||||||||||||||||||
UAG | 29 | 0 | 0 | 29 | (29 | ) | 0 | 0 | (29 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
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|
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|
|
|
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|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 327 | $ | 0 | $ | 0 | $ | 327 | $ | (299 | ) | $ | (8 | ) | $ | (168 | ) | $ | (475 | ) | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
| (1) | If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash, securities or other deliverable obligations equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
| (2) | Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues as of period end serve as indicators of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. |
| (3) | The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
| (4) | The prices and resulting values for credit default swap agreements on credit indices serve as indicators of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced indices’ credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. |
| (5) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 8, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 7, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 53 | $ | 53 | ||||||||||||
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| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 327 | $ | 0 | $ | 327 | ||||||||||||
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| |||||||||||||
| $ | 0 | $ | 0 | $ | 0 | $ | 327 | $ | 53 | $ | 380 | |||||||||||||
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| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 4 | $ | 4 | ||||||||||||
Swap Agreements | 0 | 5 | 0 | 0 | 94 | 99 | ||||||||||||||||||
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| |||||||||||||
| $ | 0 | $ | 5 | $ | 0 | $ | 0 | $ | 98 | $ | 103 | |||||||||||||
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| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 299 | $ | 0 | $ | 299 | ||||||||||||
Written Options | 0 | 0 | 0 | 8 | 0 | 8 | ||||||||||||||||||
Swap Agreements | 0 | 168 | 0 | 0 | 0 | 168 | ||||||||||||||||||
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| |||||||||||||
| $ | 0 | $ | 168 | $ | 0 | $ | 307 | $ | 0 | $ | 475 | |||||||||||||
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|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 173 | $ | 0 | $ | 307 | $ | 98 | $ | 578 | |||||||||||||
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| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 33 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | 0 | $ | 634 | $ | (12 | ) | $ | 622 | |||||||||||
Swap Agreements | 0 | 21 | 0 | 0 | 479 | 500 | ||||||||||||||||||
|
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|
| |||||||||||||
| $ | 0 | $ | 21 | $ | 0 | $ | 634 | $ | 467 | $ | 1,122 | |||||||||||||
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| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 1,151 | $ | 0 | $ | 1,151 | ||||||||||||
Swap Agreements | 0 | 166 | 0 | 0 | 20 | 186 | ||||||||||||||||||
|
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|
|
|
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|
| |||||||||||||
| $ | 0 | $ | 166 | $ | 0 | $ | 1,151 | $ | 20 | $ | 1,337 | |||||||||||||
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| |||||||||||||
| $ | 0 | $ | 187 | $ | 0 | $ | 1,785 | $ | 487 | $ | 2,459 | |||||||||||||
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| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | 0 | $ | (482 | ) | $ | (1 | ) | $ | (483 | ) | |||||||||
Swap Agreements | 0 | (32 | ) | 0 | 0 | (274 | ) | (306 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | (32 | ) | $ | 0 | $ | (482 | ) | $ | (275 | ) | $ | (789 | ) | |||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | (351 | ) | $ | 0 | $ | (351 | ) | ||||||||||
Written Options | 0 | 0 | 0 | 3 | 0 | 3 | ||||||||||||||||||
Swap Agreements | 0 | 172 | 0 | 0 | 0 | 172 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 172 | $ | 0 | $ | (348 | ) | $ | 0 | $ | (176 | ) | |||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 140 | $ | 0 | $ | (830 | ) | $ | (275 | ) | $ | (965 | ) | ||||||||||
|
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| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Asset-Backed Securities |
| |||||||||||||||
Cayman Islands | $ | 0 | $ | 5,361 | $ | 0 | $ | 5,361 | ||||||||
Netherlands | 0 | 891 | 0 | 891 | ||||||||||||
United States | 0 | 18,108 | 0 | 18,108 | ||||||||||||
Loan Participations and Assignments | ||||||||||||||||
Brazil | 0 | 0 | 4 | 4 | ||||||||||||
Canada | 0 | 20 | 0 | 20 | ||||||||||||
Ireland | 0 | 39 | 0 | 39 | ||||||||||||
Luxembourg | 0 | 5 | 0 | 5 | ||||||||||||
United States | 0 | 3,424 | 0 | 3,424 | ||||||||||||
Common Stocks |
| |||||||||||||||
Australia |
| |||||||||||||||
Consumer Discretionary | 0 | 95 | 0 | 95 | ||||||||||||
Consumer Staples | 0 | 1,020 | 0 | 1,020 | ||||||||||||
Energy | 0 | 755 | 0 | 755 | ||||||||||||
Financials | 0 | 3,626 | 0 | 3,626 | ||||||||||||
Health Care | 0 | 188 | 0 | 188 | ||||||||||||
Industrials | 0 | 278 | 0 | 278 | ||||||||||||
Materials | 0 | 2,641 | 0 | 2,641 | ||||||||||||
Telecommunication Services | 0 | 203 | 0 | 203 | ||||||||||||
Austria |
| |||||||||||||||
Energy | 0 | 680 | 0 | 680 | ||||||||||||
Financials | 0 | 770 | 0 | 770 | ||||||||||||
Materials | 0 | 388 | 0 | 388 | ||||||||||||
Belgium |
| |||||||||||||||
Telecommunication Services | 0 | 280 | 0 | 280 | ||||||||||||
Canada |
| |||||||||||||||
Energy | 1,105 | 0 | 0 | 1,105 | ||||||||||||
Financials | 2,898 | 0 | 0 | 2,898 | ||||||||||||
Industrials | 287 | 0 | 0 | 287 | ||||||||||||
Materials | 1,003 | 0 | 0 | 1,003 | ||||||||||||
Utilities | 649 | 0 | 0 | 649 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Denmark |
| |||||||||||||||
Industrials | $ | 0 | $ | 1,184 | $ | 0 | $ | 1,184 | ||||||||
Telecommunication Services | 0 | 365 | 0 | 365 | ||||||||||||
Finland |
| |||||||||||||||
Industrials | 0 | 96 | 0 | 96 | ||||||||||||
Materials | 0 | 430 | 0 | 430 | ||||||||||||
Utilities | 0 | 319 | 0 | 319 | ||||||||||||
France |
| |||||||||||||||
Consumer Discretionary | 0 | 2,915 | 0 | 2,915 | ||||||||||||
Consumer Staples | 0 | 1,005 | 0 | 1,005 | ||||||||||||
Energy | 0 | 2,067 | 0 | 2,067 | ||||||||||||
Financials | 72 | 5,433 | 0 | 5,505 | ||||||||||||
Health Care | 0 | 3,714 | 0 | 3,714 | ||||||||||||
Industrials | 0 | 2,041 | 0 | 2,041 | ||||||||||||
Telecommunication Services | 0 | 811 | 0 | 811 | ||||||||||||
Utilities | 0 | 1,944 | 0 | 1,944 | ||||||||||||
Germany |
| |||||||||||||||
Consumer Discretionary | 0 | 2,310 | 0 | 2,310 | ||||||||||||
Consumer Staples | 0 | 1,165 | 0 | 1,165 | ||||||||||||
Financials | 0 | 1,167 | 0 | 1,167 | ||||||||||||
Health Care | 0 | 990 | 0 | 990 | ||||||||||||
Industrials | 0 | 2,290 | 0 | 2,290 | ||||||||||||
Materials | 0 | 2,499 | 0 | 2,499 | ||||||||||||
Utilities | 0 | 3,859 | 0 | 3,859 | ||||||||||||
Hong Kong |
| |||||||||||||||
Consumer Discretionary | 0 | 389 | 0 | 389 | ||||||||||||
Industrials | 0 | 67 | 0 | 67 | ||||||||||||
Information Technology | 0 | 334 | 0 | 334 | ||||||||||||
Real Estate | 0 | 1,204 | 0 | 1,204 | ||||||||||||
Israel |
| |||||||||||||||
Financials | 0 | 366 | 0 | 366 | ||||||||||||
Materials | 0 | 290 | 0 | 290 | ||||||||||||
Telecommunication Services | 0 | 240 | 0 | 240 | ||||||||||||
| 34 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Italy |
| |||||||||||||||
Energy | $ | 0 | $ | 1,846 | $ | 0 | $ | 1,846 | ||||||||
Financials | 0 | 791 | 0 | 791 | ||||||||||||
Utilities | 0 | 1,908 | 0 | 1,908 | ||||||||||||
Japan |
| |||||||||||||||
Consumer Discretionary | 0 | 3,883 | 0 | 3,883 | ||||||||||||
Consumer Staples | 0 | 797 | 0 | 797 | ||||||||||||
Energy | 0 | 901 | 0 | 901 | ||||||||||||
Financials | 0 | 8,498 | 0 | 8,498 | ||||||||||||
Health Care | 0 | 722 | 0 | 722 | ||||||||||||
Industrials | 0 | 7,670 | 0 | 7,670 | ||||||||||||
Information Technology | 0 | 7,266 | 0 | 7,266 | ||||||||||||
Materials | 0 | 1,917 | 0 | 1,917 | ||||||||||||
Real Estate | 0 | 93 | 0 | 93 | ||||||||||||
Telecommunication Services | 0 | 1,547 | 0 | 1,547 | ||||||||||||
Utilities | 0 | 301 | 0 | 301 | ||||||||||||
Luxembourg |
| |||||||||||||||
Consumer Discretionary | 0 | 140 | 0 | 140 | ||||||||||||
Materials | 861 | 0 | 0 | 861 | ||||||||||||
Macau |
| |||||||||||||||
Consumer Discretionary | 0 | 45 | 0 | 45 | ||||||||||||
Mexico |
| |||||||||||||||
Consumer Discretionary | 3 | 0 | 0 | 3 | ||||||||||||
Netherlands |
| |||||||||||||||
Consumer Staples | 0 | 700 | 0 | 700 | ||||||||||||
Energy | 0 | 4,403 | 0 | 4,403 | ||||||||||||
Financials | 0 | 469 | 0 | 469 | ||||||||||||
Industrials | 0 | 1,434 | 0 | 1,434 | ||||||||||||
Telecommunication Services | 280 | 0 | 0 | 280 | ||||||||||||
New Zealand |
| |||||||||||||||
Telecommunication Services | 0 | 101 | 0 | 101 | ||||||||||||
Norway |
| |||||||||||||||
Consumer Staples | 0 | 224 | 0 | 224 | ||||||||||||
Energy | 0 | 1,440 | 0 | 1,440 | ||||||||||||
Financials | 0 | 318 | 0 | 318 | ||||||||||||
Materials | 0 | 220 | 0 | 220 | ||||||||||||
Portugal |
| |||||||||||||||
Utilities | 0 | 349 | 0 | 349 | ||||||||||||
Singapore |
| |||||||||||||||
Industrials | 0 | 378 | 0 | 378 | ||||||||||||
Spain |
| |||||||||||||||
Consumer Staples | 0 | 247 | 0 | 247 | ||||||||||||
Financials | 0 | 6,254 | 0 | 6,254 | ||||||||||||
Industrials | 0 | 1,213 | 0 | 1,213 | ||||||||||||
Telecommunication Services | 0 | 949 | 0 | 949 | ||||||||||||
Utilities | 0 | 887 | 0 | 887 | ||||||||||||
Sweden |
| |||||||||||||||
Financials | 0 | 693 | 0 | 693 | ||||||||||||
Health Care | 0 | 174 | 0 | 174 | ||||||||||||
Industrials | 0 | 165 | 0 | 165 | ||||||||||||
Telecommunication Services | 0 | 1,143 | 0 | 1,143 | ||||||||||||
Switzerland |
| |||||||||||||||
Consumer Discretionary | 223 | 0 | 0 | 223 | ||||||||||||
Energy | 88 | 0 | 0 | 88 | ||||||||||||
Financials | 0 | 4,066 | 0 | 4,066 | ||||||||||||
Health Care | 0 | 2,123 | 0 | 2,123 | ||||||||||||
Industrials | 0 | 73 | 0 | 73 | ||||||||||||
Information Technology | 64 | 0 | 0 | 64 | ||||||||||||
Telecommunication Services | 0 | 222 | 0 | 222 | ||||||||||||
United Kingdom |
| |||||||||||||||
Consumer Discretionary | 0 | 1,047 | 0 | 1,047 | ||||||||||||
Consumer Staples | 0 | 1,309 | 0 | 1,309 | ||||||||||||
Energy | 0 | 3,863 | 0 | 3,863 | ||||||||||||
Financials | 0 | 12,490 | 0 | 12,490 | ||||||||||||
Health Care | 0 | 1,577 | 0 | 1,577 | ||||||||||||
Industrials | 0 | 1,627 | 0 | 1,627 | ||||||||||||
Materials | 0 | 1,034 | 0 | 1,034 | ||||||||||||
Telecommunication Services | 0 | 1,419 | 0 | 1,419 | ||||||||||||
Utilities | 0 | 1,120 | 0 | 1,120 | ||||||||||||
United States |
| |||||||||||||||
Consumer Discretionary | 7,466 | 0 | 0 | 7,466 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Consumer Staples | $ | 9,747 | $ | 0 | $ | 0 | $ | 9,747 | ||||||||
Energy | 15,367 | 0 | 0 | 15,367 | ||||||||||||
Financials | 18,282 | 0 | 0 | 18,282 | ||||||||||||
Health Care | 14,271 | 0 | 0 | 14,271 | ||||||||||||
Industrials | 6,866 | 0 | 0 | 6,866 | ||||||||||||
Information Technology | 12,769 | 0 | 0 | 12,769 | ||||||||||||
Materials | 4,196 | 0 | 0 | 4,196 | ||||||||||||
Telecommunication Services | 6,550 | 0 | 0 | 6,550 | ||||||||||||
Utilities | 6,360 | 0 | 0 | 6,360 | ||||||||||||
Corporate Bonds & Notes |
| |||||||||||||||
Australia |
| |||||||||||||||
Banking & Finance | 0 | 396 | 0 | 396 | ||||||||||||
Brazil |
| |||||||||||||||
Utilities | 0 | 1,495 | 0 | 1,495 | ||||||||||||
Canada |
| |||||||||||||||
Industrials | 0 | 79 | 0 | 79 | ||||||||||||
Cayman Islands |
| |||||||||||||||
Industrials | 0 | 29 | 0 | 29 | ||||||||||||
Utilities | 0 | 83 | 0 | 83 | ||||||||||||
Denmark |
| |||||||||||||||
Banking & Finance | 0 | 1,277 | 0 | 1,277 | ||||||||||||
Finland |
| |||||||||||||||
Industrials | 0 | 12 | 0 | 12 | ||||||||||||
France |
| |||||||||||||||
Banking & Finance | 0 | 1,134 | 0 | 1,134 | ||||||||||||
Industrials | 0 | 762 | 0 | 762 | ||||||||||||
Germany |
| |||||||||||||||
Banking & Finance | 0 | 618 | 0 | 618 | ||||||||||||
Ireland |
| |||||||||||||||
Industrials | 0 | 485 | 0 | 485 | ||||||||||||
Italy |
| |||||||||||||||
Utilities | 0 | 335 | 0 | 335 | ||||||||||||
Luxembourg |
| |||||||||||||||
Banking & Finance | 0 | 678 | 0 | 678 | ||||||||||||
Industrials | 0 | 32 | 0 | 32 | ||||||||||||
Utilities | 0 | 1,392 | 0 | 1,392 | ||||||||||||
Mexico |
| |||||||||||||||
Industrials | 0 | 43 | 0 | 43 | ||||||||||||
Multinational |
| |||||||||||||||
Industrials | 0 | 2 | 0 | 2 | ||||||||||||
Netherlands |
| |||||||||||||||
Banking & Finance | 0 | 288 | 0 | 288 | ||||||||||||
United Kingdom |
| |||||||||||||||
Banking & Finance | 0 | 4,687 | 0 | 4,687 | ||||||||||||
Industrials | 0 | 1,085 | 0 | 1,085 | ||||||||||||
United States |
| |||||||||||||||
Banking & Finance | 0 | 4,507 | 0 | 4,507 | ||||||||||||
Industrials | 0 | 3,613 | 0 | 3,613 | ||||||||||||
Utilities | 0 | 1,183 | 0 | 1,183 | ||||||||||||
Non-Agency Mortgage-Backed Securities |
| |||||||||||||||
United Kingdom | 0 | 2,612 | 0 | 2,612 | ||||||||||||
United States | 0 | 9,119 | 92 | 9,211 | ||||||||||||
Municipal Bonds & Notes |
| |||||||||||||||
California | 0 | 808 | 0 | 808 | ||||||||||||
Illinois | 0 | 161 | 0 | 161 | ||||||||||||
Michigan | 0 | 215 | 0 | 215 | ||||||||||||
Virginia | 0 | 338 | 0 | 338 | ||||||||||||
West Virginia | 0 | 353 | 0 | 353 | ||||||||||||
Preferred Stocks |
| |||||||||||||||
Germany | ||||||||||||||||
Industrials | 0 | 1,997 | 0 | 1,997 | ||||||||||||
Real Estate Investment Trusts |
| |||||||||||||||
Canada | ||||||||||||||||
Real Estate | 222 | 0 | 0 | 222 | ||||||||||||
United States |
| |||||||||||||||
Financials | 466 | 0 | 0 | 466 | ||||||||||||
Real Estate | 415 | 0 | 0 | 415 | ||||||||||||
Rights |
| |||||||||||||||
Spain |
| |||||||||||||||
Industrials | 15 | 0 | 0 | 15 | ||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 35 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
June 30, 2017
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Sovereign Issues |
| |||||||||||||||
Brazil | $ | 0 | $ | 471 | $ | 0 | $ | 471 | ||||||||
Greece | 0 | 551 | 0 | 551 | ||||||||||||
Kuwait | 0 | 394 | 0 | 394 | ||||||||||||
Saudi Arabia | 0 | 204 | 0 | 204 | ||||||||||||
Spain | 0 | 61 | 0 | 61 | ||||||||||||
U.S. Government Agencies |
| |||||||||||||||
United States | 0 | 7,911 | 0 | 7,911 | ||||||||||||
U.S. Treasury Obligations |
| |||||||||||||||
United States | 0 | 16,175 | 0 | 16,175 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Repurchase Agreements | 0 | 478 | 0 | 478 | ||||||||||||
Argentina Treasury Bills | 0 | 415 | 0 | 415 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 110,525 | $ | 236,800 | $ | 96 | $ | 347,421 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | $ | 2,789 | $ | 0 | $ | 0 | $ | 2,789 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 113,314 | $ | 236,800 | $ | 96 | $ | 350,210 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Short Sales, at Value - Liabilities |
| |||||||||||||||
United States | $ | 0 | $ | (98 | ) | $ | 0 | $ | (98 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | 0 | 53 | 0 | 53 | ||||||||||||
Over the counter | 0 | 327 | 0 | 327 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 380 | $ | 0 | $ | 380 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | (4 | ) | (99 | ) | 0 | (103 | ) | |||||||||
Over the counter | 0 | (475 | ) | 0 | (475 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | (4 | ) | $ | (574 | ) | $ | 0 | $ | (578 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | (4 | ) | $ | (194 | ) | $ | 0 | $ | (198 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 113,310 | $ | 236,508 | $ | 96 | $ | 349,914 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 36 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO EqS® Long/Short Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 69.2% | ||||||||||||
| COMMON STOCKS 64.4% | ||||||||||||
| CANADA 6.3% | ||||||||||||
| ENERGY 4.3% | ||||||||||||
Canadian Natural Resources Ltd. | 213,000 | $ | 6,146 | |||||||||
Suncor Energy, Inc. | 214,000 | 6,253 | ||||||||||
TransCanada Corp. | 240,000 | 11,441 | ||||||||||
|
| |||||||||||
| 23,840 | ||||||||||||
|
| |||||||||||
| UTILITIES 2.0% | ||||||||||||
Fortis, Inc. | 315,000 | 11,071 | ||||||||||
|
| |||||||||||
Total Canada | 34,911 | |||||||||||
|
| |||||||||||
| IRELAND 1.6% | ||||||||||||
| HEALTH CARE 1.6% | ||||||||||||
Medtronic PLC | 100,000 | 8,875 | ||||||||||
|
| |||||||||||
Total Ireland | 8,875 | |||||||||||
|
| |||||||||||
| SWITZERLAND 2.8% | ||||||||||||
| HEALTH CARE 2.8% | ||||||||||||
Lonza Group AG | 38,000 | 8,232 | ||||||||||
Novartis AG | 88,000 | 7,350 | ||||||||||
|
| |||||||||||
| 15,582 | ||||||||||||
|
| |||||||||||
Total Switzerland | 15,582 | |||||||||||
|
| |||||||||||
| UNITED STATES 53.7% | ||||||||||||
| CONSUMER DISCRETIONARY 10.3% | ||||||||||||
Carnival Corp. | 160,000 | 10,491 | ||||||||||
Expedia, Inc. | 65,000 | 9,682 | ||||||||||
Hyatt Hotels Corp. ‘A’ (a) | 110,000 | 6,183 | ||||||||||
Las Vegas Sands Corp. (g) | 140,000 | 8,945 | ||||||||||
Newell Brands, Inc. | 135,000 | 7,239 | ||||||||||
Royal Caribbean Cruises Ltd. | 75,000 | 8,192 | ||||||||||
Wynn Resorts Ltd. | 45,000 | 6,035 | ||||||||||
|
| |||||||||||
| 56,767 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 2.2% | ||||||||||||
Coca-Cola Co. | 210,000 | 9,419 | ||||||||||
PepsiCo, Inc. | 25,000 | 2,887 | ||||||||||
|
| |||||||||||
| 12,306 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| ENERGY 6.4% | ||||||||||||
Enable Midstream Partners LP (g) | 142,000 | $ | 2,263 | |||||||||
Enterprise Products Partners LP | 377,500 | 10,223 | ||||||||||
ONEOK, Inc. (g) | 173,000 | 9,024 | ||||||||||
Williams Partners LP | 345,000 | 13,838 | ||||||||||
|
| |||||||||||
| 35,348 | ||||||||||||
|
| |||||||||||
| FINANCIALS 11.0% | ||||||||||||
Berkshire Hathaway, Inc. ‘B’ (a) | 80,000 | 13,550 | ||||||||||
First Republic Bank | 120,000 | 12,012 | ||||||||||
Nasdaq, Inc. | 50,000 | 3,574 | ||||||||||
Signature Bank (a) | 75,000 | 10,765 | ||||||||||
U.S. Bancorp | 210,000 | 10,903 | ||||||||||
Wells Fargo & Co. | 180,000 | 9,974 | ||||||||||
|
| |||||||||||
| 60,778 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 5.9% | ||||||||||||
Abbott Laboratories | 175,000 | 8,507 | ||||||||||
Johnson & Johnson | 70,000 | 9,260 | ||||||||||
Laboratory Corp. of America Holdings (a) | 52,000 | 8,015 | ||||||||||
Quintiles IMS Holdings, Inc. (a) | 80,000 | 7,160 | ||||||||||
|
| |||||||||||
| 32,942 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 9.4% | ||||||||||||
JetBlue Airways Corp. (a)(g) | 260,000 | 5,936 | ||||||||||
Kansas City Southern | 170,000 | 17,790 | ||||||||||
KAR Auction Services, Inc. | 165,000 | 6,925 | ||||||||||
Union Pacific Corp. | 100,000 | 10,891 | ||||||||||
United Continental Holdings, Inc. (a) | 140,000 | 10,535 | ||||||||||
|
| |||||||||||
| 52,077 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 8.5% | ||||||||||||
Alphabet, Inc. ‘C’ (a) | 14,000 | 12,722 | ||||||||||
First Data Corp. ‘A’ (a) | 650,000 | 11,830 | ||||||||||
Oracle Corp. | 250,000 | 12,535 | ||||||||||
Ultimate Software Group, Inc. (a) | 48,000 | 10,083 | ||||||||||
|
| |||||||||||
| 47,170 | ||||||||||||
|
| |||||||||||
Total United States | 297,388 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $330,343) | 356,756 | |||||||||||
|
| |||||||||||
| PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
| U.S. TREASURY OBLIGATIONS 0.6% | ||||||||||||
| UNITED STATES 0.6% | ||||||||||||
U.S. Treasury Floating Rate Notes |
| |||||||||||
1.177% due 07/31/2018 (j) | $ | 3,200 | $ | 3,206 | ||||||||
|
| |||||||||||
Total U.S. Treasury Obligations (Cost $3,200) | 3,206 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 4.2% | ||||||||||||
| REPURCHASE AGREEMENTS (d) 1.5% | ||||||||||||
| 8,167 | ||||||||||||
|
| |||||||||||
| U.S. TREASURY BILLS 2.7% | ||||||||||||
0.904% due 07/20/2017 - 08/31/2017 (b)(c)(h)(j) | 15,100 | 15,081 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $23,247) | 23,248 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $356,790) | 383,210 | |||||||||||
|
| |||||||||||
| SHARES | ||||||||||||
| INVESTMENTS IN AFFILIATES 30.2% | ||||||||||||
| SHORT-TERM INSTRUMENTS 30.2% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 30.2% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 16,889,304 | 166,968 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $166,964) | 166,968 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $166,964) | 166,968 | |||||||||||
| Total Investments 99.4% (Cost $523,754) | $ | 550,178 | ||||||||||
| Securities Sold Short (e) (17.7)% (Proceeds $96,932) | (97,759 | ) | ||||||||||
Financial Derivative (Cost or Premiums, net $0) | (1,182 | ) | ||||||||||
| Other Assets and Liabilities, net 18.5% | 102,342 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 553,579 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND SHARES):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Security did not produce income within the last twelve months. |
| (b) | Coupon represents a weighted average yield to maturity. |
| (c) | Zero coupon security. |
BORROWINGS AND OTHER FINANCING TRANSACTIONS
(d) REPURCHASE AGREEMENTS:
| Counterparty | Lending Rate | Settlement Date | Maturity Date | Principal Amount | Collateralized By | Collateral (Received) | Repurchase Agreements, at Value | Repurchase Agreement Proceeds to be Received(1) | ||||||||||||||||||||||
| SSB | 0.050 | % | 06/30/2017 | 07/03/2017 | $ | 8,167 | U.S. Treasury Notes 3.500% due 05/15/2020(2) | $ | (8,333 | ) | $ | 8,167 | $ | 8,167 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
Total Repurchase Agreements |
| $ | (8,333 | ) | $ | 8,167 | $ | 8,167 | ||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 37 |
Table of Contents
Schedule of Investments PIMCO EqS® Long/Short Fund (Cont.)
(e) SECURITIES SOLD SHORT
| Counterparty | Description | Shares | Proceeds | Payable for Short Sales(3) | ||||||||||
Common Stocks (16.2)% | ||||||||||||||
Brazil (0.3)% | ||||||||||||||
Industrials (0.3)% | ||||||||||||||
GSC | Embraer S.A. SP - ADR | 90,000 | $ | (1,787 | ) | $ | (1,645 | ) | ||||||
|
|
|
| |||||||||||
Total Brazil | (1,787 | ) | (1,645 | ) | ||||||||||
|
|
|
| |||||||||||
Canada (1.9)% | ||||||||||||||
Energy (0.9)% | ||||||||||||||
Enbridge, Inc. | 120,000 | (4,912 | ) | (4,780 | ) | |||||||||
|
|
|
| |||||||||||
Industrials (1.0)% | ||||||||||||||
FOB | Canadian Pacific Railway Ltd. | 35,000 | (5,159 | ) | (5,644 | ) | ||||||||
|
|
|
| |||||||||||
Total Canada | (10,071 | ) | (10,424 | ) | ||||||||||
|
|
|
| |||||||||||
France (0.5)% | ||||||||||||||
Consumer Discretionary (0.5)% | ||||||||||||||
GSC | Publicis Groupe S.A. | 35,000 | (2,685 | ) | (2,681 | ) | ||||||||
|
|
|
| |||||||||||
Total France | (2,685 | ) | (2,681 | ) | ||||||||||
|
|
|
| |||||||||||
Switzerland (0.6)% | ||||||||||||||
Information Technology (0.6)% | ||||||||||||||
Logitech International S.A. | 95,000 | (3,144 | ) | (3,496 | ) | |||||||||
|
|
|
| |||||||||||
Total Switzerland | (3,144 | ) | (3,496 | ) | ||||||||||
|
|
|
| |||||||||||
United Kingdom (0.9)% | ||||||||||||||
Consumer Discretionary (0.2)% | ||||||||||||||
WPP PLC | 60,000 | (1,347 | ) | (1,292 | ) | |||||||||
|
|
|
| |||||||||||
Industrials (0.7)% | ||||||||||||||
Rolls-Royce Holdings PLC | 311,438 | (2,826 | ) | (3,663 | ) | |||||||||
|
|
|
| |||||||||||
Total United Kingdom | (4,173 | ) | (4,955 | ) | ||||||||||
|
|
|
| |||||||||||
United States (12.0)% | ||||||||||||||
Consumer Discretionary (0.7)% | ||||||||||||||
FOB | Bloomin’ Brands, Inc. | 65,000 | (1,346 | ) | (1,380 | ) | ||||||||
Buckle, Inc. | 130,430 | (4,040 | ) | (2,322 | ) | |||||||||
|
|
|
| |||||||||||
| (5,386 | ) | (3,702 | ) | |||||||||||
|
|
|
| |||||||||||
Consumer Staples (1.7)% | ||||||||||||||
GSC | Church & Dwight Co., Inc. | 50,000 | (2,531 | ) | (2,594 | ) | ||||||||
Clorox Co. | 25,000 | (3,351 | ) | (3,331 | ) | |||||||||
FOB | Procter & Gamble Co. | 40,000 | (3,437 | ) | (3,486 | ) | ||||||||
|
|
|
| |||||||||||
| (9,319 | ) | (9,411 | ) | |||||||||||
|
|
|
| |||||||||||
Energy (1.8)% | ||||||||||||||
GSC | Exxon Mobil Corp. | 90,000 | (7,758 | ) | (7,266 | ) | ||||||||
Marathon Petroleum Corp. | 50,000 | (2,574 | ) | (2,616 | ) | |||||||||
|
|
|
| |||||||||||
| (10,332 | ) | (9,882 | ) | |||||||||||
|
|
|
| |||||||||||
Financials (2.8)% | ||||||||||||||
Affiliated Managers Group, Inc. | 37,000 | (6,144 | ) | (6,137 | ) | |||||||||
Franklin Resources, Inc. | 50,000 | (2,122 | ) | (2,249 | ) | |||||||||
Invesco Ltd. | 128,000 | (4,132 | ) | (4,504 | ) | |||||||||
FOB | T Rowe Price Group, Inc. | 38,000 | (2,724 | ) | (2,842 | ) | ||||||||
|
|
|
| |||||||||||
| (15,122 | ) | (15,732 | ) | |||||||||||
|
|
|
| |||||||||||
Health Care (1.0)% | ||||||||||||||
Community Health Systems, Inc. | 190,000 | (1,868 | ) | (1,892 | ) | |||||||||
HCA Healthcare, Inc. | 40,000 | (3,324 | ) | (3,488 | ) | |||||||||
|
|
|
| |||||||||||
| (5,192 | ) | (5,380 | ) | |||||||||||
|
|
|
| |||||||||||
Industrials (1.9)% | ||||||||||||||
GSC | FTI Consulting, Inc. | 70,000 | (2,924 | ) | (2,447 | ) | ||||||||
FOB | Lockheed Martin Corp. | 23,000 | (6,017 | ) | (6,385 | ) | ||||||||
GSC | Macquarie Infrastructure Corp. | 22,000 | (1,751 | ) | (1,725 | ) | ||||||||
|
|
|
| |||||||||||
| (10,692 | ) | (10,557 | ) | |||||||||||
|
|
|
| |||||||||||
| 38 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| Counterparty | Description | Shares | Proceeds | Payable for Short Sales(3) | ||||||||||
Information Technology (2.1)% | ||||||||||||||
FOB | Booz Allen Hamilton Holding Corp. | 122,000 | $ | (4,332 | ) | $ | (3,991 | ) | ||||||
GSC | CSRA, Inc. | 60,000 | (1,943 | ) | (1,905 | ) | ||||||||
Leidos Holdings, Inc. | 61,000 | (3,196 | ) | (3,164 | ) | |||||||||
FOB | Science Applications International Corp. | 40,000 | (2,897 | ) | (2,777 | ) | ||||||||
|
|
|
| |||||||||||
| (12,368 | ) | (11,837 | ) | |||||||||||
|
|
|
| |||||||||||
Total United States | (68,411 | ) | (66,501 | ) | ||||||||||
|
|
|
| |||||||||||
Total Common Stocks | (90,271 | ) | (89,702 | ) | ||||||||||
|
|
|
| |||||||||||
Exchange-Traded Funds (1.4)% | ||||||||||||||
United States (1.4)% | ||||||||||||||
VanEck Vectors Semiconductor ETF | 75,000 | (5,024 | ) | (6,140 | ) | |||||||||
GSC | Technology Select Sector SPDR Fund | 35,000 | (1,635 | ) | (1,915 | ) | ||||||||
|
|
|
| |||||||||||
Total Exchange-Traded Funds | (6,659 | ) | (8,055 | ) | ||||||||||
|
|
|
| |||||||||||
Preferred Stocks 0.0% | ||||||||||||||
United Kingdom 0.0% | ||||||||||||||
Industrials 0.0% | ||||||||||||||
Rolls Royce Group PLC ‘C’ | 1,584,529 | (2 | ) | (2 | ) | |||||||||
|
|
|
| |||||||||||
Total Preferred Stocks | (2 | ) | (2 | ) | ||||||||||
|
|
|
| |||||||||||
Total Short Sales (17.6)% | $ | (96,932 | ) | $ | (97,759 | ) | ||||||||
|
|
|
| |||||||||||
BORROWINGS AND OTHER FINANCING TRANSACTIONS SUMMARY
The following is a summary by counterparty of the market value of Borrowings and Other Financing Transactions and collateral pledged/(received) as of June 30, 2017:
| Counterparty | Repurchase Agreement Proceeds to be Received | Payable for Reverse Repurchase Agreements | Payable for Sale-Buyback Transactions | Payable for Short Sales | Total Borrowings and Other Financing Transactions | Collateral Pledged/(Received) | Net Exposure(4) | |||||||||||||||||||||
Global/Master Repurchase Agreement | ||||||||||||||||||||||||||||
SSB | $ | 8,167 | $ | 0 | $ | 0 | $ | 0 | $ | 8,167 | $ | (8,333 | ) | $ | (166 | ) | ||||||||||||
Prime Brokerage Agreement | ||||||||||||||||||||||||||||
FOB | 0 | 0 | 0 | (40,347 | ) | (40,347 | ) | 49,266 | 8,919 | |||||||||||||||||||
GSC | 0 | 0 | 0 | (57,412 | ) | (57,412 | ) | 69,967 | 12,555 | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Borrowings and Other Financing Transactions | $ | 8,167 | $ | 0 | $ | 0 | $ | (97,759 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
| (g) | Securities with an aggregate market value of $20,456 and cash of $98,777 have been pledged as collateral as of June 30, 2017 for equity short sales and equity options as governed by prime brokerage agreements and agreements governing listed equity option transactions. |
| (1) | Includes accrued interest. |
| (2) | Collateral is held in custody by the counterparty. |
| (3) | Payable for short sales includes $235 of dividends payable. |
| (4) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from borrowings and other financing transactions can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 8, Master Arrangements in the Notes to Financial Statements for more information regarding master netting arrangements. |
(f) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
FUTURES CONTRACTS:
SHORT FUTURES CONTRACTS
| Description | Expiration Month | # of Contracts | Notional Amount | Unrealized Appreciation/ (Depreciation) | Variation Margin | |||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||
E-mini S&P 500 Index September Futures | 09/2017 | 114 | $ | (13,799 | ) | $ | 44 | $ | 0 | $ | (5 | ) | ||||||||||||
Russell 2000 Mini Index September Futures | 09/2017 | 234 | (16,547 | ) | (76 | ) | 43 | 0 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
| $ | (32 | ) | $ | 43 | $ | (5 | ) | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Futures Contracts |
| $ | (32 | ) | $ | 43 | $ | (5 | ) | |||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 39 |
Table of Contents
Schedule of Investments PIMCO EqS® Long/Short Fund (Cont.)
SWAP AGREEMENTS:
CREDIT DEFAULT SWAPS ON CREDIT INDICES - BUY PROTECTION(1)
| Index/Tranches | Fixed Receive Rate | Maturity Date | Notional Amount(2) | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Market Value(3) | Variation Margin | |||||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CDX.HY-27 5-Year Index | 5.000 | % | 12/21/2021 | $ | 49,500 | $ | (3,137 | ) | $ | (660 | ) | $ | (3,797 | ) | $ | 0 | $ | (107 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Total Swap Agreements |
| $ | (3,137 | ) | $ | (660 | ) | $ | (3,797 | ) | $ | 0 | $ | (107 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 0 | $ | 43 | $ | 0 | $ | 43 | $ | 0 | $ | (5) | $ | (107) | $ | (112) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| (h) | Securities with an aggregate market value of $1,844 and cash of $1,131 have been pledged as collateral for exchange-traded and centrally cleared financial derivative instruments as of June 30, 2017. See Note 8, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
| (1) | If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash, securities or other deliverable obligations equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. |
| (2) | The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement. |
| (3) | The prices and resulting values for credit default swap agreements on credit indices serve as indicators of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced indices’ credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. |
(i) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
FORWARD FOREIGN CURRENCY CONTRACTS:
Counterparty | Settlement | Currency to | Currency to be Received | Unrealized Appreciation/ (Depreciation) | ||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||
BOA | 07/2017 | GBP | 1,805 | $ | 2,320 | $ | 0 | $ | (31 | ) | ||||||||||||||
BPS | 07/2017 | CAD | 32,771 | 24,351 | 0 | (919 | ) | |||||||||||||||||
| 07/2017 | EUR | 427 | 486 | 0 | (2 | ) | ||||||||||||||||||
| 08/2017 | $ | 486 | EUR | 427 | 2 | 0 | ||||||||||||||||||
CBK | 07/2017 | BRL | 7,551 | $ | 2,296 | 17 | 0 | |||||||||||||||||
| 07/2017 | $ | 2,282 | BRL | 7,551 | 0 | (3 | ) | |||||||||||||||||
DUB | 07/2017 | BRL | 7,527 | $ | 2,275 | 3 | 0 | |||||||||||||||||
| 07/2017 | $ | 2,319 | BRL | 7,527 | 0 | (47 | ) | |||||||||||||||||
FBF | 07/2017 | CHF | 8,480 | $ | 8,702 | 0 | (141 | ) | ||||||||||||||||
JPM | 07/2017 | $ | 25,000 | CAD | 32,771 | 270 | 0 | |||||||||||||||||
| 07/2017 | 480 | EUR | 427 | 8 | 0 | |||||||||||||||||||
| 08/2017 | CAD | 32,771 | $ | 25,014 | 0 | (270 | ) | |||||||||||||||||
RBC | 07/2017 | $ | 8,830 | CHF | 8,480 | 13 | 0 | |||||||||||||||||
| 08/2017 | CHF | 8,480 | $ | 8,846 | 0 | (13 | ) | |||||||||||||||||
UAG | 07/2017 | $ | 2,313 | GBP | 1,805 | 38 | 0 | |||||||||||||||||
| 08/2017 | GBP | 1,805 | $ | 2,315 | 0 | (38 | ) | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Forward Foreign Currency Contracts |
| $ | 351 | $ | (1,464 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||||
| 40 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged | Net Exposure(1) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (31 | ) | $ | 0 | $ | 0 | $ | (31 | ) | $ | (31 | ) | $ | 0 | $ | (31 | ) | ||||||||||||||||||||||
BPS | 2 | 0 | 0 | 2 | (921 | ) | 0 | 0 | (921 | ) | (919 | ) | 746 | (173 | ) | |||||||||||||||||||||||||||||||||
CBK | 17 | 0 | 0 | 17 | (3 | ) | 0 | 0 | (3 | ) | 14 | 0 | 14 | |||||||||||||||||||||||||||||||||||
DUB | 3 | 0 | 0 | 3 | (47 | ) | 0 | 0 | (47 | ) | (44 | ) | 0 | (44 | ) | |||||||||||||||||||||||||||||||||
FBF | 0 | 0 | 0 | 0 | (141 | ) | 0 | 0 | (141 | ) | (141 | ) | 0 | (141 | ) | |||||||||||||||||||||||||||||||||
JPM | 278 | 0 | 0 | 278 | (270 | ) | 0 | 0 | (270 | ) | 8 | 0 | 8 | |||||||||||||||||||||||||||||||||||
RBC | 13 | 0 | 0 | 13 | (13 | ) | 0 | 0 | (13 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
UAG | 38 | 0 | 0 | 38 | (38 | ) | 0 | 0 | (38 | ) | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 351 | $ | 0 | $ | 0 | $ | 351 | $ | (1,464 | ) | $ | 0 | $ | 0 | $ | (1,464 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (j) | Securities with an aggregate market value of $746 have been pledged as collateral for financial derivative instruments as governed by International Swaps and Derivatives Association, Inc. master agreements as of June 30, 2017. |
| (1) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 8, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 7, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | 43 | $ | 0 | $ | 0 | $ | 43 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 351 | $ | 0 | $ | 351 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | 43 | $ | 351 | $ | 0 | $ | 394 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | 5 | $ | 0 | $ | 0 | $ | 5 | ||||||||||||
Swap Agreements | 0 | 107 | 0 | 0 | 0 | 107 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 107 | $ | 5 | $ | 0 | $ | 0 | $ | 112 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 1,464 | $ | 0 | $ | 1,464 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 107 | $ | 5 | $ | 1,464 | $ | 0 | $ | 1,576 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | (2,574 | ) | $ | 0 | $ | 0 | $ | (2,574 | ) | ||||||||||
Swap Agreements | 0 | (699 | ) | 0 | 0 | (1 | ) | (700 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | (699 | ) | $ | (2,574 | ) | $ | 0 | $ | (1 | ) | $ | (3,274 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 458 | $ | 0 | $ | 458 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | (699 | ) | $ | (2,574 | ) | $ | 458 | $ | (1 | ) | $ | (2,816 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 41 |
Table of Contents
Schedule of Investments PIMCO EqS® Long/Short Fund (Cont.)
June 30, 2017
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Change in Unrealized (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | (32 | ) | $ | 0 | $ | 0 | $ | (32 | ) | ||||||||||
Swap Agreements | 0 | (660 | ) | 0 | 0 | 0 | (660 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | (660 | ) | $ | (32 | ) | $ | 0 | $ | 0 | $ | (692 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | (384 | ) | $ | 0 | $ | (384 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | (660 | ) | $ | (32 | ) | $ | (384 | ) | $ | 0 | $ | (1,076 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Canada | ||||||||||||||||
Energy | $ | 23,840 | $ | 0 | $ | 0 | $ | 23,840 | ||||||||
Utilities | 11,071 | 0 | 0 | 11,071 | ||||||||||||
Ireland | ||||||||||||||||
Health Care | 8,875 | 0 | 0 | 8,875 | ||||||||||||
Switzerland | ||||||||||||||||
Health Care | 0 | 15,582 | 0 | 15,582 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 56,767 | 0 | 0 | 56,767 | ||||||||||||
Consumer Staples | 12,306 | 0 | 0 | 12,306 | ||||||||||||
Energy | 35,348 | 0 | 0 | 35,348 | ||||||||||||
Financials | 60,778 | 0 | 0 | 60,778 | ||||||||||||
Health Care | 32,942 | 0 | 0 | 32,942 | ||||||||||||
Industrials | 52,077 | 0 | 0 | 52,077 | ||||||||||||
Information Technology | 47,170 | 0 | 0 | 47,170 | ||||||||||||
U.S. Treasury Obligations | ||||||||||||||||
United States | 0 | 3,206 | 0 | 3,206 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Repurchase Agreements | 0 | 8,167 | 0 | 8,167 | ||||||||||||
U.S. Treasury Bills | 0 | 15,081 | 0 | 15,081 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 341,174 | $ | 42,036 | $ | 0 | $ | 383,210 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value | ||||||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | $ | 166,968 | $ | 0 | $ | 0 | $ | 166,968 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 508,142 | $ | 42,036 | $ | 0 | $ | 550,178 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Short Sales, at Value - Liabilities | ||||||||||||||||
Brazil | ||||||||||||||||
Industrials | $ | (1,645 | ) | $ | 0 | $ | 0 | $ | (1,645 | ) | ||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Canada | ||||||||||||||||
Energy | $ | (4,780 | ) | $ | 0 | $ | 0 | $ | (4,780 | ) | ||||||
Industrials | (5,644 | ) | 0 | 0 | (5,644 | ) | ||||||||||
France | ||||||||||||||||
Consumer Discretionary | 0 | (2,682 | ) | 0 | (2,682 | ) | ||||||||||
Switzerland | ||||||||||||||||
Information Technology | 0 | (3,496 | ) | 0 | (3,496 | ) | ||||||||||
United Kingdom | ||||||||||||||||
Consumer Discretionary | 0 | (1,292 | ) | 0 | (1,292 | ) | ||||||||||
Industrials | (2 | ) | (3,662 | ) | 0 | (3,664 | ) | |||||||||
United States | ||||||||||||||||
Consumer Discretionary | (3,702 | ) | 0 | 0 | (3,702 | ) | ||||||||||
Consumer Staples | (9,411 | ) | 0 | 0 | (9,411 | ) | ||||||||||
Energy | (9,882 | ) | 0 | 0 | (9,882 | ) | ||||||||||
Financials | (15,732 | ) | 0 | 0 | (15,732 | ) | ||||||||||
Health Care | (5,381 | ) | 0 | 0 | (5,381 | ) | ||||||||||
Industrials | (10,557 | ) | 0 | 0 | (10,557 | ) | ||||||||||
Information Technology | (19,891 | ) | 0 | 0 | (19,891 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | (86,627 | ) | $ | (11,132 | ) | $ | 0 | $ | (97,759 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | 43 | 0 | 0 | 43 | ||||||||||||
Over the counter | 0 | 351 | 0 | 351 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 43 | $ | 351 | $ | 0 | $ | 394 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | (112 | ) | 0 | 0 | (112 | ) | ||||||||||
Over the counter | 0 | (1,464 | ) | 0 | (1,464 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | (112 | ) | $ | (1,464 | ) | $ | 0 | $ | (1,576 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | (69 | ) | $ | (1,113 | ) | $ | 0 | $ | (1,182 | ) | |||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 421,446 | $ | 29,791 | $ | 0 | $ | 451,237 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 42 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
1. ORGANIZATION
PIMCO Equity Series (the “Trust”) was established as a Delaware statutory trust on December 28, 2009. The Trust is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Information presented in these financial statements pertains to the Institutional Class, Class P, Class D, Class A, Class C and Class R shares of the funds (each a “Fund” and collectively the “Funds”) indicated on the cover of this report. Pacific Investment Management Company LLC (“PIMCO”) serves as the investment adviser (the “Adviser”) for the Funds. Effective June 16, 2016, Research Affiliates, LLC (“Research Affiliates”) serves as the interim sub-adviser with respect to the equity portion of the PIMCO Dividend and Income Fund. Effective June 16, 2016, PIMCO and Research Affiliates have also engaged Parametric Portfolio Associates, LLC (“Parametric”) on an interim basis to implement the equity portion of the PIMCO Dividend and Income Fund’s investment strategies. On August 26, 2016, the Fund’s shareholders approved definitive agreements retaining Research Affiliates and Parametric as sub-adviser and portfolio implementer, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Each Fund is treated as an investment company under the reporting requirements of U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
(a) Securities Transactions and Investment Income Securities transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date. Realized gains (losses) from securities sold are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as a Fund is informed of the ex-dividend date. Interest income, adjusted for the accretion of discounts and amortization of premiums, is recorded on the accrual basis from settlement date, with the exception of securities with a forward starting effective date, where interest income is recorded on the accrual basis from effective date. For convertible securities, premiums attributable to
the conversion feature are not amortized. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statements of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statements of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term capital gain distributions received from registered investment companies, if any, are recorded as realized gains.
Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is probable.
(b) Cash and Foreign Currency The functional and reporting currency for the Funds is the U.S. dollar. The market values of foreign securities, currency holdings and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the current exchange rates each business day. Purchases and sales of securities and income and expense items denominated in foreign currencies, if any, are translated into U.S. dollars at the exchange rate in effect on the transaction date. The Funds do not separately report the effects of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized gain (loss) and net change in unrealized appreciation (depreciation) from investments on the Statements of Operations. The Funds may invest in foreign currency-denominated securities and may engage in foreign currency transactions either on a spot (cash) basis at the rate prevailing in the currency exchange market at the time or through a forward foreign currency contract. Realized foreign exchange gains (losses) arising from sales of spot foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid are included in net realized gain (loss) on foreign currency transactions on the Statements of Operations. Net unrealized foreign exchange gains (losses) arising from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period are included in net change in unrealized appreciation (depreciation) on foreign currency assets and liabilities on the Statements of Operations.
| ANNUAL REPORT | JUNE 30, 2017 | 43 |
Table of Contents
Notes to Financial Statements (Cont.)
(c) Multiclass Operations Each class offered by the Trust has equal rights as to assets and voting privileges (except that shareholders of a class have exclusive voting rights regarding any matter relating solely to that class of shares). Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains (losses) are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include supervisory and administrative and distribution and servicing fees. Under certain circumstances, the per share net asset value (“NAV”) of a class of the respective Fund’s shares may be different from the per share NAV of another class of shares as a result of the different daily expense accruals applicable to each class of shares.
(d) Distributions to Shareholders The following table shows the anticipated frequency of distributions from net investment income, if any, for each Fund.
| Distribution Frequency | ||||||||||||
| Fund Name | Declared | Distributed | ||||||||||
PIMCO Dividend and Income Fund | Quarterly | Quarterly | ||||||||||
PIMCO EqS® Long/Short Fund | Annually | Annually | ||||||||||
Net realized capital gains earned by each Fund, if any, will be distributed no less frequently than once each year.
Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP. Differences between tax regulations and U.S. GAAP may cause timing differences between income and capital gain recognition. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. As a result, income distributions and capital gain distributions declared during a fiscal period may differ significantly from the net investment income (loss) and realized gains (losses) reported on each Fund’s annual financial statements presented under U.S. GAAP.
If a Fund estimates that a portion of one of its dividend distributions may be comprised of amounts from sources other than net investment income in accordance with its policies and good accounting practices, the Fund will notify shareholders of record of the estimated composition of such distribution through a Section 19 Notice. For these purposes, a Fund estimates the source or sources from which a distribution is paid, to the close of the period as of which it is paid, in reference to its internal accounting records and related accounting practices. If, based on such accounting records and practices, it is estimated that a particular distribution does not include capital gains or paid-in surplus or other capital sources, a Section 19 Notice generally would not be issued. It is important to note that differences exist between a Fund’s daily internal accounting records and practices, a Fund’s financial statements presented in accordance with U.S. GAAP,
and recordkeeping practices under income tax regulations. For instance, a Fund’s internal accounting records and practices may take into account, among other factors, tax-related characteristics of certain sources of distributions that differ from treatment under U.S. GAAP. Examples of such differences may include, among others, the treatment of paydowns on mortgage-backed securities purchased at a discount and periodic payments under interest rate swap contracts. Accordingly, among other consequences, it is possible that a Fund may not issue a Section 19 Notice in situations where the Fund’s financial statements prepared later and in accordance with U.S. GAAP and/or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please visit www.pimco.com for the most recent Section 19 Notice, if applicable, for additional information regarding the estimated composition of distributions. Final determination of a distribution’s tax character will be reported on Form 1099 DIV sent to shareholders for the calendar year.
Distributions classified as a tax basis return of capital, if any, are reflected on the Statements of Changes in Net Assets and have been recorded to paid in capital. In addition, other amounts have been reclassified between undistributed (overdistributed) net investment income (loss), accumulated undistributed (overdistributed) net realized gain (loss) and/or paid in capital to more appropriately conform U.S. GAAP to tax characterizations of distributions.
(e) New Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”), ASU 2014-15 requiring management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern. The ASU is effective prospectively for annual periods ending after December 15, 2016, and interim periods thereafter. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
In May 2015, the FASB issued ASU 2015-07 which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share practical expedient. The ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical expedient. The ASU is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
In March 2016, the FASB issued ASU 2016-05 which provides guidance related to the impact of derivative contract novations on certain
| 44 | PIMCO EQUITY SERIES |
Table of Contents
June 30, 2017
relationships under Accounting Standards Codification (“ASC”) 815. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In August 2016, the FASB issued ASU 2016-15 which amends ASC 230 to clarify guidance on the classification of certain cash receipts and cash payments in the Statement of Cash Flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2016, the U.S. Securities and Exchange Commission (“SEC”) adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for these amendments is August 1, 2017. Compliance is based on reporting period-end date. At this time, management is evaluating the implications of these changes on the financial statements.
In November 2016, the FASB issued ASU 2016-18 which amends ASC 230 to provide guidance on the classification and presentation of changes in restricted cash and restricted cash equivalents on the Statement of Cash Flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In March 2017, the FASB issued ASU 2017-08 which provides guidance related to the amortization period for certain purchased callable debt securities held at a premium. The ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS
(a) Investment Valuation Policies The price of a Fund’s shares is based on the Fund’s NAV. The NAV of a Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to that Fund or class, by the total number of shares outstanding of that Fund or class.
On each day that the New York Stock Exchange (“NYSE”) is open, Fund shares are ordinarily valued as of the close of regular trading (“NYSE Close”). Information that becomes known to the Funds or their agents after the time as of which NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of a security or the NAV determined earlier that day. Each Fund reserves the right to change the time as of which its respective NAV is calculated if the Fund closes earlier, or as permitted by the SEC.
For purposes of calculating NAV, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on the basis of official closing prices or the last reported sales prices, or if no sales are reported, based on quotes obtained from established market makers or prices (including evaluated prices) supplied by the Funds’ approved pricing services, quotation reporting systems and other third-party sources (together, “Pricing Services”). The Funds will normally use pricing data for domestic equity securities received shortly after the NYSE Close and do not normally take into account trading, clearances or settlements that take place after the NYSE Close. If market value pricing is used, a foreign (non-U.S.) equity security traded on a foreign exchange or on more than one exchange is typically valued using pricing information from the exchange considered by the Adviser to be the primary exchange. A foreign (non-U.S.) equity security will be valued as of the close of trading on the foreign exchange, or the NYSE Close, if the NYSE Close occurs before the end of trading on the foreign exchange. Domestic and foreign (non-U.S.) fixed income securities, non-exchange traded derivatives, and equity options are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services using data reflecting the earlier closing of the principal markets for those securities. Prices obtained from Pricing Services may be based on, among other things, information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Certain fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date. Exchange-traded options, except equity options, futures and options on futures are valued at the settlement price determined by the relevant exchange. Swap agreements are valued on the basis of bid quotes obtained from brokers and dealers or market-based prices supplied by Pricing Services. A Fund’s investments in open-end management investment companies, other than exchange-traded funds (“ETFs”), are valued at the NAVs of such investments.
If a foreign (non-U.S.) equity security’s value has materially changed after the close of the security’s primary exchange or principal market but before the NYSE Close, the security may be valued at fair value based on procedures established and approved by the Board of
| ANNUAL REPORT | JUNE 30, 2017 | 45 |
Table of Contents
Notes to Financial Statements (Cont.)
Trustees (the “Board”). Foreign (non-U.S.) equity securities that do not trade when the NYSE is open are also valued at fair value. With respect to foreign (non-U.S.) equity securities, the Fund may determine the fair value of investments based on information provided by Pricing Services and other third-party vendors, which may recommend fair value or adjustments with reference to other securities, indices or assets. In considering whether fair valuation is required and in determining fair values, the Fund may, among other things, consider significant events (which may be considered to include changes in the value of U.S. securities or securities indices) that occur after the close of the relevant market and before the NYSE Close. A Fund may utilize modeling tools provided by third-party vendors to determine fair values of foreign (non-U.S.) securities. Foreign exchanges may permit trading in foreign (non-U.S.) equity securities on days when the Trust is not open for business, which may result in a Fund’s portfolio investments being affected when shareholders are unable to buy or sell shares.
Senior secured floating rate loans for which an active secondary market exists to a reliable degree will be valued at the mean of the last available bid/ask prices in the market for such loans, as provided by a Pricing Service. Senior secured floating rate loans for which an active secondary market does not exist to a reliable degree will be valued at fair value, which is intended to approximate market value. In valuing a senior secured floating rate loan at fair value, the factors considered may include, but are not limited to, the following: (a) the creditworthiness of the borrower and any intermediate participants, (b) the terms of the loan, (c) recent prices in the market for similar loans, if any, and (d) recent prices in the market for instruments of similar quality, rate, period until next interest rate reset and maturity.
Investments valued in currencies other than the U.S. dollar are converted to the U.S. dollar using exchange rates obtained from Pricing Services. As a result, the value of such investments and, in turn, the NAV of a Fund’s shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of investments traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the Trust is not open for business. As a result, to the extent that a Fund holds foreign (non-U.S.) investments, the value of those investments may change at times when shareholders are unable to buy or sell shares and the value of such investments will be reflected in the Fund’s next calculated NAV.
Investments for which market quotes or market based valuations are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated to the Adviser the responsibility for applying the fair
valuation methods. In the event that market quotes or market based valuations are not readily available, and the security or asset cannot be valued pursuant to a Board approved valuation method, the value of the security or asset will be determined in good faith by the Valuation Oversight Committee of the Board (“Valuation Oversight Committee”), generally based on recommendations provided by the Adviser. The Adviser may consult with the Sub-Adviser or Parametric in providing such recommendations or otherwise with respect to valuation of the PIMCO Dividend and Income Fund’s portfolio securities or other assets. Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information, bid/ask information, indicative market quotations (“Broker Quotes”), Pricing Services’ prices), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Adviser the responsibility for monitoring significant events that may materially affect the values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be reevaluated in light of such significant events.
When a Fund uses fair valuation to determine the value of a portfolio security or other asset for purposes of calculating its NAV, such investments will not be priced on the basis of quotes from the primary market in which they are traded, but rather may be priced by another method that the Board or persons acting at their direction believe reflects fair value. Fair valuation may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot ensure that fair values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold. The Funds’ use of fair valuation may also help to deter “stale price arbitrage” as discussed under the “Abusive Trading Practices” section in each Fund’s prospectus.
(b) Fair Value Hierarchy U.S. GAAP describes fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to valuation methods and requires disclosure of the fair value hierarchy, separately for each major category of assets and liabilities,
| 46 | PIMCO EQUITY SERIES |
Table of Contents
June 30, 2017
that segregates fair value measurements into levels (Level 1, 2, or 3). The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Levels 1, 2, and 3 of the fair value hierarchy are defined as follows:
| ∎ | Level 1 — Quoted prices in active markets or exchanges for identical assets and liabilities. |
| ∎ | Level 2 — Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. |
| ∎ | Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair value of investments. |
In accordance with the requirements of U.S. GAAP, the amounts of transfers between Levels 1 and 2 and transfers into and out of Level 3, if material, are disclosed in the Notes to Schedule of Investments for each respective Fund.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to realized gain (loss), unrealized appreciation (depreciation), purchases and sales, accrued discounts (premiums), and transfers into and out of the Level 3 category during the period. The end of period value is used for the transfers between Levels of a Fund’s assets and liabilities. Additionally, U.S. GAAP requires quantitative information regarding the significant unobservable inputs used in the determination of fair value of assets or liabilities categorized as Level 3 in the fair value hierarchy. In accordance with the requirements of U.S. GAAP, a fair value hierarchy, and if material, a Level 3 reconciliation and details of significant unobservable inputs, have been included in the Notes to Schedule of Investments for each respective Fund.
(c) Valuation Techniques and the Fair Value Hierarchy Level 1 and Level 2 trading assets and trading liabilities, at fair value The valuation methods (or “techniques”) and significant inputs used in determining the fair values of portfolio securities or other assets and liabilities categorized as Level 1 and Level 2 of the fair value hierarchy are as follows:
Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations,
sovereign issues, bank loans, convertible preferred securities and non-U.S. bonds are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services that use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models. The Pricing Services’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Fixed income securities purchased on a delayed-delivery basis or as a repurchase commitment in a sale-buyback transaction are marked to market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.
Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by Pricing Services that use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows and market-based yield spreads for each tranche, and incorporate deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Common stocks, ETFs, exchange-traded notes and financial derivative instruments, such as futures contracts, rights and warrants, or options on futures that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy.
Valuation adjustments may be applied to certain securities that are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the NYSE Close. These securities are valued using Pricing Services that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.
Equity-linked securities are valued by referencing the last reported sale or settlement price of the linked referenced equity on the day of valuation. Foreign exchange adjustments are applied to the last
| ANNUAL REPORT | JUNE 30, 2017 | 47 |
Table of Contents
Notes to Financial Statements (Cont.)
reported price to convert the linked equity’s trading currency to the contract’s settling currency. These investments are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment companies (other than ETFs) will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Investments in unregistered open-end investment companies will be calculated based upon the NAVs of such investments and are considered Level 1 provided that the NAVs are observable, calculated daily and are the value at which both purchases and sales will be conducted.
Equity exchange-traded options and over the counter financial derivative instruments, such as forward foreign currency contracts and options contracts derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued on the basis of quotes obtained from a quotation reporting system, established market makers or Pricing Services (normally determined as of the NYSE Close). Depending on the product and the terms of the transaction, financial derivative instruments can be valued by Pricing Services using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as quoted prices, issuer details, indices, bid/ask spreads, interest rates, implied volatilities, yield curves, dividends and exchange rates. Financial derivative instruments that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Centrally cleared swaps and over the counter swaps derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. They are valued using a broker-dealer bid quotation or on market-based prices provided by Pricing Services (normally determined as of the NYSE close). Centrally cleared swaps and over the counter swaps can be valued by Pricing Services using a series of techniques, including simulation pricing models. The pricing models may use inputs that are observed from actively quoted markets such as the overnight index swap rate (“OIS”), London Interbank Offered Rate (“LIBOR”) forward rate, interest rates, yield curves and credit spreads. These securities are categorized as Level 2 of the fair value hierarchy.
Level 3 trading assets and trading liabilities, at fair value When a fair valuation method is applied by the Adviser that uses significant unobservable inputs, investments will be priced by a method that the Board or persons acting at their direction believe reflects fair value and are categorized as Level 3 of the fair value hierarchy.
Short-term debt instruments (such as commercial paper) having a remaining maturity of 60 days or less may be valued at amortized cost, so long as the amortized cost value of such short-term debt instruments is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. These securities are categorized as Level 2 or Level 3 of the fair value hierarchy depending on the source of the base price.
4. SECURITIES AND OTHER INVESTMENTS
(a) Investments in Affiliates
Each Fund may invest in the PIMCO Short-Term Floating NAV Portfolio III and the PIMCO Short-Term Floating NAV Portfolio IV (“Central Funds”) to the extent permitted by the Act and rules thereunder. The Central Funds are registered investment companies created for use solely by the series of the Trust and other series of registered investment companies advised by the Adviser, in connection with their cash management activities. The main investments of the Central Funds are money market and short maturity fixed income instruments. The Central Funds may incur expenses related to their investment activities, but do not pay Investment Advisory Fees or Supervisory and Administrative Fees to the Adviser. The Central Funds are considered to be affiliated with the Funds. The table below shows the Funds’ transactions in and earnings from investments in an affiliated Fund for the period ended June 30, 2017 (amounts in thousands†):
| Investments in PIMCO Short-Term Floating NAV Portfolio III | ||||||||||||||||||||||||||||||||||||
| Fund Name | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | $ | 7,674 | $ | 79,717 | $ | (84,600 | ) | $ | (1 | ) | $ | (1 | ) | $ | 2,789 | $ | 16 | $ | 0 | |||||||||||||||||
PIMCO EqS® Long/Short Fund | 252,193 | 636,845 | (722,100 | ) | 58 | (28 | ) | 166,968 | 1,645 | 0 | ||||||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
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(b) Investments in Securities
Delayed-Delivery Transactions Certain Funds may purchase or sell securities on a delayed-delivery basis. These transactions involve a commitment by a Fund to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery transactions are outstanding, a Fund will designate or receive as collateral liquid assets in an amount sufficient to meet the purchase price or respective obligations. When purchasing a security on a delayed-delivery basis, a Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its NAV. A Fund may dispose of or renegotiate a delayed-delivery transaction after it is entered into, which may result in a realized gain (loss). When a Fund has sold a security on a delayed-delivery basis, the Fund does not participate in future gains (losses) with respect to the security.
Loan Participations, Assignments and Originations Certain Funds may invest in direct debt instruments which are interests in amounts owed to lenders or lending syndicates by corporate, governmental, or other borrowers. A Fund’s investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties or investments in or originations of loans by the Fund or Funds. A loan is often administered by a bank or other financial institution (the “agent”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement. A Fund may invest in multiple series or tranches of a loan, which may have varying terms and carry different associated risks. When a Fund purchases assignments from agents it acquires direct rights against the borrowers of the loans. These loans may include participations in bridge loans, which are loans taken out by borrowers for a short period (typically less than one year) pending arrangement of more permanent financing through, for example, the issuance of bonds, frequently high yield bonds issued for the purpose of acquisitions.
The types of loans and related investments in which the Funds may invest include, among others, senior loans, subordinated loans (including second lien loans, B-Notes and mezzanine loans), whole loans, commercial real estate and other commercial loans and structured loans. The Funds may originate loans or acquire direct interests in loans through primary loan distributions and/or in private transactions. In the case of subordinated loans, there may be significant indebtedness ranking ahead of the borrower’s obligation to the holder of such a loan, including in the event of the borrower’s insolvency. Mezzanine loans are typically secured by a pledge of an equity interest in the mortgage borrower that owns the real estate rather than an interest in a mortgage.
Investments in loans may include unfunded loan commitments, which are contractual obligations for funding. Unfunded loan commitments may include revolving credit facilities, which may obligate a Fund to supply additional cash to the borrower on demand. Unfunded loan commitments represent a future obligation in full, even though a percentage of the committed amount may not be utilized by the borrower. When investing in a loan participation, a Fund has the right to receive payments of principal, interest and any fees to which it is entitled only from the agent selling the loan agreement and only upon receipt of payments by the agent from the borrower. A Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a loan. In certain circumstances, a Fund may receive a penalty fee upon the prepayment of a loan by a borrower. Fees earned or paid are recorded as a component of interest income or interest expense, respectively, on the Statements of Operations. As of June 30, 2017, the Funds had no unfunded loan commitments outstanding.
Mortgage-Related and Other Asset-Backed Securities Certain Funds may invest in mortgage-related and other asset-backed securities that directly or indirectly represent a participation in, or are secured by and payable from, loans on real property. Mortgage-related securities are created from pools of residential or commercial mortgage loans, including mortgage loans made by savings and loan institutions, mortgage bankers, commercial banks and others. These securities provide a monthly payment which consists of both interest and principal. Interest may be determined by fixed or adjustable rates. The rate of prepayments on underlying mortgages will affect the price and volatility of a mortgage-related security, and may have the effect of shortening or extending the effective duration of the security relative to what was anticipated at the time of purchase. The timely payment of principal and interest of certain mortgage-related securities is guaranteed with the full faith and credit of the U.S. Government. Pools created and guaranteed by non-governmental issuers, including government-sponsored corporations, may be supported by various forms of insurance or guarantees, but there can be no assurance that private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. Many of the risks of investing in mortgage-related securities secured by commercial mortgage loans reflect the effects of local and other economic conditions on real estate markets, the ability of tenants to make lease payments, and the ability of a property to attract and retain tenants. These securities may be less liquid and may exhibit greater price volatility than other types of mortgage-related or other asset-backed securities. Other asset-backed securities are created from many types of assets, including auto loans, credit card receivables, home equity loans, and student loans.
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Notes to Financial Statements (Cont.)
Collateralized Debt Obligations (“CDOs”) include Collateralized Bond Obligations (“CBOs”), Collateralized Loan Obligations (“CLOs”) and other similarly structured securities. CBOs and CLOs are types of asset-backed securities. A CBO is a trust which is backed by a diversified pool of high risk, below investment grade fixed income securities. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. The risks of an investment in a CDO depend largely on the type of the collateral securities and the class of the CDO in which a Fund invests. In addition to the normal risks associated with fixed income securities discussed elsewhere in this report and each Fund’s prospectus and statement of additional information (e.g., prepayment risk, credit risk, liquidity risk, market risk, structural risk, legal risk and interest rate risk (which may be exacerbated if the interest rate payable on a structured financing changes based on multiples of changes in interest rates or inversely to changes in interest rates)), CBOs, CLOs and other CDOs carry additional risks including, but not limited to, (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments, (ii) the quality of the collateral may decline in value or default, (iii) a Fund may invest in CBOs, CLOs, or other CDOs that are subordinate to other classes, and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.
Collateralized Mortgage Obligations (“CMOs”) are debt obligations of a legal entity that are collateralized by whole mortgage loans or private mortgage bonds and divided into classes. CMOs are structured into multiple classes, often referred to as “tranches”, with each class bearing a different stated maturity and entitled to a different schedule for payments of principal and interest, including prepayments. CMOs may be less liquid and may exhibit greater price volatility than other types of mortgage-related or asset-backed securities.
Real Estate Investment Trusts (“REITs”) Certain Funds may invest in REITs, which are pooled investment vehicles that own, and typically operate, income-producing real estate. If a REIT meets certain requirements, including distributing to shareholders substantially all of its taxable income (other than net capital gains), then it is not taxed on the income distributed to shareholders. Distributions received from REITs may be characterized as income, capital gain or a return of capital. A return of capital is recorded by a Fund as a reduction to the cost basis of its investment in the REIT. REITs are subject to management fees and other expenses, and so the Funds that invest in REITs will bear their proportionate share of the costs of the REITs’ operations.
U.S. Government Agencies or Government-Sponsored Enterprises Certain Funds may invest in securities of U.S. Government agencies or government-sponsored enterprises. U.S. Government securities are obligations of and, in certain cases, guaranteed by, the U.S. Government, its agencies or instrumentalities. Some U.S. Government securities, such as Treasury bills, notes and bonds, and securities guaranteed by the Government National Mortgage Association (“GNMA” or “Ginnie Mae”), are supported by the full faith and credit of the U.S. Government; others, such as those of the Federal Home Loan Banks, are supported by the right of the issuer to borrow from the U.S. Department of the Treasury (the “U.S. Treasury”); and others, such as those of the Federal National Mortgage Association (“FNMA” or “Fannie Mae”), are supported by the discretionary authority of the U.S. Government to purchase the agency’s obligations. U.S. Government securities may include zero coupon securities. Zero coupon securities do not distribute interest on a current basis and tend to be subject to a greater risk than interest-paying securities.
Government-related guarantors (i.e., not backed by the full faith and credit of the U.S. Government) include FNMA and the Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”). FNMA is a government-sponsored corporation. FNMA purchases conventional (i.e., not insured or guaranteed by any government agency) residential mortgages from a list of approved seller/servicers which include state and federally chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA, but are not backed by the full faith and credit of the U.S. Government. FHLMC issues Participation Certificates (“PCs”), which are pass-through securities, each representing an undivided interest in a pool of residential mortgages. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but PCs are not backed by the full faith and credit of the U.S. Government.
Certain Funds may engage in strategies where they seek to extend the expiration or maturity of a position, such as a To-Be-Announced (“TBA”) security on an underlying asset, by closing out the position before expiration and opening a new position with respect to the same underlying asset with a later expiration date. TBA securities purchased or sold are reflected on the Statements of Assets and Liabilities as an asset or liability, respectively.
When-Issued Transactions Certain Funds may purchase or sell securities on a when-issued basis. These transactions are made conditionally because a security, although authorized, has not yet been issued in the market. Transactions to purchase or sell securities on a when-issued basis involve a commitment by a Fund to purchase or sell these securities for a predetermined price or yield, with payment and
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delivery taking place beyond the customary settlement period. A Fund may sell when-issued securities before they are delivered, which may result in a realized gain (loss).
5. BORROWINGS AND OTHER FINANCING TRANSACTIONS
The following disclosures contain information on a Fund’s ability to lend or borrow cash or securities to the extent permitted under the Act, which may be viewed as borrowing or financing transactions by a Fund. The location of these instruments in each Fund’s financial statements is described below. For a detailed description of credit and counterparty risks that can be associated with borrowings and other financing transactions, please see Note 7, Principal Risks.
(a) Repurchase Agreements Certain Funds may engage in repurchase agreements. Under the terms of a typical repurchase agreement, a Fund purchases an underlying debt obligation (collateral) subject to an obligation of the seller to repurchase, and a Fund to resell, the obligation at an agreed-upon price and time. In an open maturity repurchase agreement, there is no pre-determined repurchase date and the agreement can be terminated by the Fund or counterparty at any time. The underlying securities for all repurchase agreements are held by a Fund’s custodian or designated subcustodians under tri-party repurchase agreements and in certain instances will remain in custody with the counterparty. The market value of the collateral must be equal to or exceed the total amount of the repurchase obligations, including interest. Repurchase agreements, if any, including accrued interest, are included on the Statements of Assets and Liabilities. Interest earned is recorded as a component of interest income on the Statements of Operations. In periods of increased demand for collateral, a Fund may pay a fee for the receipt of collateral, which may result in interest expense to the Fund.
(b) Reverse Repurchase Agreements Certain Funds may enter into reverse repurchase agreements. In a reverse repurchase agreement, a Fund delivers a security in exchange for cash to a financial institution, the counterparty, with a simultaneous agreement to repurchase the same or substantially the same security at an agreed upon price and date. In an open maturity reverse repurchase agreement, there is no pre-determined repurchase date and the agreement can be terminated by the Fund or counterparty at any time. A Fund is entitled to receive principal and interest payments, if any, made on the security delivered to the counterparty during the term of the agreement. Cash received in exchange for securities delivered plus accrued interest payments to be made by a Fund to counterparties are reflected as a liability on the Statements of Assets and Liabilities. Interest payments made by a Fund to counterparties are recorded as a component of interest expense on the Statements of Operations. In periods of increased demand for the
security, a Fund may receive a fee for use of the security by the counterparty, which may result in interest income to the Fund. A Fund will segregate assets determined to be liquid by the Adviser or will otherwise cover its obligations under reverse repurchase agreements.
(c) Sale-Buybacks Certain Funds may enter into financing transactions referred to as ‘sale-buybacks’. A sale-buyback transaction consists of a sale of a security by a Fund to a financial institution, the counterparty, with a simultaneous agreement to repurchase the same or substantially the same security at an agreed-upon price and date. A Fund is not entitled to receive principal and interest payments, if any, made on the security sold to the counterparty during the term of the agreement. The agreed-upon proceeds for securities to be repurchased by a Fund are reflected as a liability on the Statements of Assets and Liabilities. A Fund will recognize net income represented by the price differential between the price received for the transferred security and the agreed-upon repurchase price. This is commonly referred to as the ‘price drop’. A price drop consists of (i) the foregone interest and inflationary income adjustments, if any, a Fund would have otherwise received had the security not been sold and (ii) the negotiated financing terms between a Fund and counterparty. Foregone interest and inflationary income adjustments, if any, are recorded as components of interest income on the Statements of Operations. Interest payments based upon negotiated financing terms made by a Fund to counterparties are recorded as a component of interest expense on the Statements of Operations. In periods of increased demand for the security, a Fund may receive a fee for use of the security by the counterparty, which may result in interest income to the Fund. A Fund will segregate assets determined to be liquid by the Adviser or will otherwise cover its obligations under sale-buyback transactions.
(d) Short Sales Certain Funds may enter into short sales transactions. Short sales are transactions in which a Fund sells a security that it may not own. A Fund may make short sales of securities to (i) offset potential declines in long positions in similar securities, (ii) to increase the flexibility of the Fund, (iii) for investment return, (iv) as part of a risk arbitrage strategy, and (v) as part of its overall portfolio management strategies involving the use of derivative instruments. When a Fund engages in a short sale, it may borrow the security sold short and deliver it to the counterparty. A Fund will ordinarily have to pay a fee or premium to borrow a security and be obligated to repay the lender of the security any dividend or interest that accrues on the security during the period of the loan. Securities sold in short sale transactions and the dividend or interest payable on such securities, if any, are reflected as payable for short sales on the Statements of Assets and Liabilities. Short sales expose a Fund to the risk that it will be required to cover its short position at a time when the security or other asset has appreciated in value, thus resulting in losses to a Fund. A short sale is
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Notes to Financial Statements (Cont.)
“against the box” if a Fund holds in its portfolio or has the right to acquire the security sold short at no additional cost. A Fund will be subject to additional risks to the extent that it engages in short sales that are not “against the box.” A Fund’s loss on a short sale could theoretically be unlimited in cases where a Fund is unable, for whatever reason, to close out its short position.
6. FINANCIAL DERIVATIVE INSTRUMENTS
The following disclosures contain information on how and why the Funds use financial derivative instruments, and how financial derivative instruments affect the Funds’ financial position, results of operations and cash flows. The location and fair value amounts of these instruments on the Statements of Assets and Liabilities and the net realized gain (loss) and net change in unrealized appreciation (depreciation) on the Statements of Operations, each categorized by type of financial derivative contract and related risk exposure, are included in a table in the Notes to Schedules of Investments. The financial derivative instruments outstanding as of period end and the amounts of net realized gain (loss) and net change in unrealized appreciation (depreciation) on financial derivative instruments during the period, as disclosed in the Notes to Schedules of Investments, serve as indicators of the volume of financial derivative activity for the Funds.
(a) Forward Foreign Currency Contracts Certain Funds may enter into forward foreign currency contracts in connection with settling planned purchases or sales of securities, to hedge the currency exposure associated with some or all of a Fund’s securities or as a part of an investment strategy. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of a forward foreign currency contract fluctuates with changes in foreign currency exchange rates. Forward foreign currency contracts are marked to market daily, and the change in value is recorded by a Fund as an unrealized gain (loss). Realized gains (losses) are equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed and are recorded upon delivery or receipt of the currency. These contracts may involve market risk in excess of the unrealized gain (loss) reflected on the Statements of Assets and Liabilities. In addition, a Fund could be exposed to risk if the counterparties are unable to meet the terms of the contracts or if the value of the currency changes unfavorably to the U.S. dollar. To mitigate such risk, cash or securities may be exchanged as collateral pursuant to the terms of the underlying contracts.
(b) Futures Contracts Certain Funds may enter into futures contracts. A futures contract is an agreement to buy or sell a security or other asset for a set price on a future date. A Fund may use futures contracts to manage its exposure to the securities markets or to movements in
interest rates and currency values. The primary risks associated with the use of futures contracts are the imperfect correlation between the change in market value of the securities held by a Fund and the prices of futures contracts and the possibility of an illiquid market. Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker an amount of cash, U.S. Government and Agency Obligations, or select sovereign debt, in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and based on such movements in the price of the contracts, an appropriate payable or receivable for the change in value may be posted or collected by the Fund (“Futures Variation Margin”). Gains (losses) are recognized but not considered realized until the contracts expire or close. Futures contracts involve, to varying degrees, risk of loss in excess of the Futures Variation Margin included within exchange traded or centrally cleared financial derivative instruments on the Statements of Assets and Liabilities.
(c) Options Contracts Certain Funds may write or purchase options to enhance returns or to hedge an existing position or future investment. A Fund may write call and put options on securities and financial derivative instruments it owns or in which it may invest. Writing put options tends to increase a Fund’s exposure to the underlying instrument. Writing call options tends to decrease a Fund’s exposure to the underlying instrument. When a Fund writes a call or put, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. These liabilities are included on the Statements of Assets and Liabilities. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying futures, swap, security or currency transaction to determine the realized gain (loss). Certain options may be written with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. A Fund as a writer of an option has no control over whether the underlying instrument may be sold (“call”) or purchased (“put”) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk a Fund may not be able to enter into a closing transaction because of an illiquid market.
Certain Funds may also purchase put and call options. Purchasing call options tends to increase a Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease a Fund’s exposure to the underlying instrument. A Fund pays a premium which is included as an asset on the Statements of Assets and Liabilities and subsequently marked to market to reflect the current value of the
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option. Premiums paid for purchasing options which expire are treated as realized losses. Certain options may be purchased with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying investment transaction to determine the realized gain (loss) when the underlying transaction is executed.
Foreign Currency Options Certain Funds may write or purchase foreign currency options. Purchasing foreign currency options gives a Fund the right, but not the obligation to buy or sell specified amounts of currency at a rate of exchange that may be exercised by a certain date. These options may be used as a short or long hedge against possible variations in foreign exchange rates or to gain exposure to foreign currencies.
(d) Swap Agreements Certain Funds may invest in swap agreements. Swap agreements are bilaterally negotiated agreements between a Fund and a counterparty to exchange or swap investment cash flows, assets, foreign currencies or market-linked returns at specified, future intervals. Swap agreements may be privately negotiated in the over the counter market (“OTC swaps”) or may be cleared through a third party, known as a central counterparty or derivatives clearing organization (“Centrally Cleared Swaps”). A Fund may enter into asset, credit default, cross-currency, interest rate, total return, variance and other forms of swap agreements to manage its exposure to credit, currency, interest rate, commodity, equity and inflation risk. In connection with these agreements, securities or cash may be identified as collateral or margin in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.
Centrally Cleared Swaps are marked to market daily based upon valuations as determined from the underlying contract or in accordance with the requirements of the central counterparty or derivatives clearing organization. Changes in market value, if any, are reflected as a component of net change in unrealized appreciation (depreciation) on the Statements of Operations. Daily changes in valuation of centrally cleared swaps (“Swap Variation Margin”), if any, are disclosed within centrally cleared financial derivative instruments on the Statements of Assets and Liabilities. OTC swap payments received or paid at the beginning of the measurement period are included on the Statements of Assets and Liabilities and represent premiums paid or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). Upfront premiums received (paid) are
initially recorded as liabilities (assets) and subsequently marked to market to reflect the current value of the swap. These upfront premiums are recorded as realized gain (loss) on the Statements of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain (loss) on the Statements of Operations. Net periodic payments received or paid by a Fund are included as part of realized gain (loss) on the Statements of Operations.
For purposes of applying a Fund’s investment policies and restrictions, swap agreements are generally valued by a Fund at market value. In the case of a credit default swap, in applying certain of a Fund’s investment policies and restrictions, the Funds will value the credit default swap at its notional value or its full exposure value (i.e., the sum of the notional amount for the contract plus the market value), but may value the credit default swap at market value for purposes of applying certain of a Fund’s other investment policies and restrictions. For example, a Fund may value credit default swaps at full exposure value for purposes of a Fund’s credit quality guidelines (if any) because such value in general better reflects a Fund’s actual economic exposure during the term of the credit default swap agreement. As a result, a Fund may, at times, have notional exposure to an asset class (before netting) that is greater or lesser than the stated limit or restriction noted in a Fund’s prospectus. In this context, both the notional amount and the market value may be positive or negative depending on whether a Fund is selling or buying protection through the credit default swap. The manner in which certain securities or other instruments are valued by a Fund for purposes of applying investment policies and restrictions may differ from the manner in which those investments are valued by other types of investors.
Entering into swap agreements involves, to varying degrees, elements of interest, credit, market and documentation risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in interest rates.
A Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life, to the extent that amount is positive. The risk may be mitigated by having a master netting arrangement between a Fund and the counterparty and by the posting of collateral to a Fund to cover a Fund’s exposure to the counterparty. To the extent a Fund has a policy to limit the net amount owed to or to be received from a single counterparty under existing swap agreements, such limitation only applies to counterparties to
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OTC swaps and does not apply to centrally cleared swaps where the counterparty is a central counterparty or derivatives clearing organization.
Credit Default Swap Agreements Certain Funds may use credit default swaps on corporate, loan, sovereign, U.S. municipal or U.S. Treasury issues to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where a Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer’s default. Credit default swap agreements involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event that the referenced entity, obligation or index, as specified in the swap agreement, undergoes a certain credit event. As a seller of protection on credit default swap agreements, a Fund will generally receive from the buyer of protection a fixed rate of income throughout the term of the swap provided that there is no credit event. As the seller, a Fund would effectively add leverage to its portfolio because, in addition to its total net assets, a Fund would be subject to investment exposure on the notional amount of the swap.
If a Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, a Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If a Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, a Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection’s right to choose the deliverable obligation with the lowest value following a credit event).
Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset-backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. A Fund may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Credit default swaps on indices are instruments for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.
Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate, loan, sovereign, U.S. municipal or U.S. Treasury issues as of period end, if any, are disclosed in the Notes to Schedules of Investments. They serve as an indicator of the current status of payment/performance risk and represent the likelihood or risk of default for the reference entity. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
The maximum potential amount of future payments (undiscounted) that a Fund as a seller of protection could be required to make under a
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credit default swap agreement equals the notional amount of the agreement. Notional amounts of each individual credit default swap agreement outstanding as of period end for which a Fund is the seller of protection are disclosed in the Notes to Schedules of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Fund for the same referenced entity or entities.
Interest Rate Swap Agreements Certain Funds are subject to interest rate risk exposure in the normal course of pursuing their investment objectives. The value of the fixed rate bonds that the Funds hold may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, a Fund may enter into interest rate swap agreements. Interest rate swap agreements involve the exchange by a Fund with another party for their respective commitment to pay or receive interest on the notional amount of principal. Certain forms of interest rate swap agreements may include: (i) interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate, or “cap”, (ii) interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified rate, or “floor”, (iii) interest rate collars, under which a party sells a cap and purchases a floor or vice versa in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels, (iv) callable interest rate swaps, under which the buyer pays an upfront fee in consideration for the right to early terminate the swap transaction in whole, at zero cost and at a predetermined date and time prior to the maturity date, (v) spreadlocks, which allow the interest rate swap users to lock in the forward differential (or spread) between the interest rate swap rate and a specified benchmark, or (vi) basis swaps, under which two parties can exchange variable interest rates based on different segments of money markets.
7. PRINCIPAL RISKS
In the normal course of business, the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists due to such things as changes in the market (market risk) or failure or inability of the other party to a transaction to perform (credit and counterparty risk). See below for a detailed description of select principal risks. For a more comprehensive list of potential risks the Funds may be subject to, please see the Important Information About the Funds.
Market Risks A Fund’s investments in financial derivative instruments and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign (non-U.S.) currency and equity risks.
The market values of equities, such as common stocks and preferred securities or equity related investments such as futures and options, have historically risen and fallen in periodic cycles and may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Different types of equity securities may react differently to these developments. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.
Issuers that have paid regular dividends or distributions to shareholders may not continue to do so in the future. An issuer may reduce or eliminate future dividends or distributions at any time and for any reason. Moreover, a Fund may use a dividend capture strategy (i.e., purchasing an equity security shortly before the issuer pays a dividend and selling it shortly thereafter), which may expose the Fund to higher portfolio turnover, increased trading costs and the potential for capital loss or gain, particularly in the event of significant short-term price movements of stocks subject to dividend capture trading. Also, securities purchased to capture a dividend often decline in value at the time of sale (i.e., shortly following the dividend) and the resulting realized loss to the Fund may exceed the amount of the dividend received, thereby negatively impacting the Fund’s net asset value.
Interest rate risk is the risk that fixed income securities and other instruments held by a Fund will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by a Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Interest rate changes can be sudden and unpredictable, and a Fund may lose money if these changes are not anticipated by the Fund’s management. A Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended.
Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates that incorporates a security’s yield, coupon, final maturity and call features, among other characteristics. Convexity is an additional measure of interest rate sensitivity that measures the rate of change of duration in response to changes in interest rates. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. A wide variety of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, general economic conditions, etc.). Under current
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economic conditions, interest rates are near historically low levels. The Funds may be subject to heightened interest rate risk because the Fed has ended its quantitative easing program and has begun, and may continue, to raise interest rates. To the extent that the Fed continues to raise interest rates, there is a risk that rates across the financial system may rise. Further, while bond markets have steadily grown over the past three decades, dealer “market making” ability has not kept pace and in some cases has decreased. Given the importance of intermediary “market making” in creating a robust and active market, fixed income securities are currently facing increased volatility and liquidity risks. All of these factors, collectively and/or individually, could cause a Fund to lose value. If a Fund lost enough value, the Fund could face increased shareholder redemptions, which could force the Fund to liquidate investments at disadvantageous times or prices, thereby adversely affecting the Fund. Also, a Fund may be adversely affected when a large shareholder purchases or redeems large amounts of shares, which can occur at any time and may impact the Fund in the same manner as a high volume of purchase or redemption requests. Large shareholder transactions may impact a Fund’s liquidity and net asset value. Such transactions may also increase a Fund’s transaction costs or otherwise cause a Fund to perform differently than intended. Moreover, the Funds are subject to the risk that other shareholders may make investment decisions based on the choices of a large shareholder.
If a Fund invests directly in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, foreign (non-U.S.) currencies, or in financial derivative instruments that provide exposure to foreign (non-U.S.) currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, a Fund’s investments in foreign currency-denominated securities may reduce the Fund’s returns.
Credit and Counterparty Risks A Fund will be exposed to credit risk to parties with whom it trades and will also bear the risk of settlement default. A Fund minimizes concentrations of credit risk by undertaking transactions with a large number of customers and counterparties on recognized and reputable exchanges, where applicable. Over the counter (“OTC”) derivative transactions are subject to the risk that a counterparty to the transaction will not fulfill its contractual obligations to the other party, as many of the protections afforded to centrally cleared derivative transactions might not be available for OTC
derivative transactions. For derivatives traded on an exchange or through a central counterparty, credit risk resides with a Fund’s clearing broker, or the clearinghouse itself, rather than with a counterparty in an OTC derivative transaction. A Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a financial derivative instruments contract, repurchase agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities and financial derivative instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings.
Similar to credit risk, a Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which a Fund has unsettled or open transactions will default. PIMCO, as the Adviser, seeks to minimize counterparty risks to the Funds through a number of ways. Prior to entering into transactions with a new counterparty, the PIMCO Counterparty Risk Committee conducts an extensive credit review of such counterparty and must approve the use of such counterparty. Furthermore, pursuant to the terms of the underlying contract, to the extent that unpaid amounts owed to a Fund exceed a predetermined threshold, such counterparty is required to advance collateral to the Fund in the form of cash or securities equal in value to the unpaid amount owed to the Fund. A Fund may invest such collateral in securities or other instruments and will typically pay interest to the counterparty on the collateral received. If the unpaid amount owed to a Fund subsequently decreases, the Fund would be required to return to the counterparty all or a portion of the collateral previously advanced. PIMCO’s attempts to minimize counterparty risk may, however, be unsuccessful.
All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once a Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.
Model Risk In making investment allocation decisions, Research Affiliates LLC (the “Sub-Adviser”) may utilize quantitative models that may be proprietary or developed by third-parties. These models are used by the Sub-Adviser to help determine a Fund’s investment allocation decisions. Investment models used in making investment allocation decisions may not adequately take into account certain factors and may result in a decline in the value of your investment. Models rely on accurate financial and market data inputs. If inaccurate data is entered into a model, the resulting information will be incorrect. In addition, the models used may be predictive in nature and such models may result in an incorrect assessment of future events. The
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models evaluate securities or securities markets based on certain assumptions concerning the interplay of market factors. The markets or the prices of individual securities may be affected by factors not foreseen in developing the models.
8. MASTER ARRANGEMENTS
A Fund may be subject to various netting arrangements (“Master Agreements”) with select counterparties. Master Agreements govern the terms of certain transactions, and reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Each type of Master Agreement governs certain types of transactions. Different types of transactions may be traded out of different legal entities or affiliates of a particular organization, resulting in the need for multiple agreements with a single counterparty. As the Master Agreements are specific to unique operations of different asset types, they allow a Fund to close out and net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single Master Agreement with a counterparty. For financial reporting purposes the Statements of Assets and Liabilities generally present derivative assets and liabilities on a gross basis, which reflects the full risks and exposures prior to netting.
Master Agreements can also help limit counterparty risk by specifying collateral posting arrangements at pre-arranged exposure levels. Under most Master Agreements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Agreement with a counterparty in a given account exceeds a specified threshold, which typically ranges from zero to $250,000 depending on the counterparty and the type of Master Agreement. United States Treasury Bills and U.S. dollar cash are generally the preferred forms of collateral, although other forms of AAA rated paper or sovereign securities may be used depending on the terms outlined in the applicable Master Agreement. Securities and cash pledged as collateral are reflected as assets on the Statements of Assets and Liabilities as either a component of Investments at value (securities) or Deposits with counterparty. Cash collateral received is not typically held in a segregated account and as such is reflected as a liability on the Statements of Assets and Liabilities as Deposits from counterparty. The market value of any securities received as collateral is not reflected as a component of NAV. A Fund’s overall exposure to counterparty risk can change substantially within a short period, as it is affected by each transaction subject to the relevant Master Agreement.
Master Repurchase Agreements and Global Master Repurchase Agreements (individually and collectively “Master Repo Agreements”) govern repurchase, reverse repurchase, and sale-buyback transactions between a Fund and select counterparties. Master Repo Agreements
maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral. The market value of transactions under the Master Repo Agreement, collateral pledged or received, and the net exposure by counterparty as of period end are disclosed in the Notes to Schedules of Investments.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern certain forward settling transactions, such as TBA securities, delayed-delivery or sale-buyback transactions by and between a Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, transaction initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral. The market value of forward settling transactions, collateral pledged or received, and the net exposure by counterparty as of period end is disclosed in the Notes to Schedules of Investments.
Customer Account Agreements and related addenda govern cleared derivatives transactions such as futures, options on futures, and cleared OTC derivatives. Such transactions require posting of initial margin as determined by each relevant clearing agency which is segregated in an account at a futures commission merchant (“FCM”) registered with the Commodity Futures Trading Commission (“CFTC”). In the United States, counterparty risk may be reduced as creditors of an FCM cannot have a claim to Fund assets in the segregated account. Portability of exposure reduces risk to the Funds. Variation margin, or changes in market value, are exchanged daily, but may not be netted between futures and cleared OTC derivatives unless the parties have agreed to a separate arrangement in respect of portfolio margining. The market value or accumulated unrealized appreciation (depreciation), initial margin posted, and any unsettled variation margin as of period end is disclosed in the Notes to Schedules of Investments.
Prime Broker Arrangements may be entered into to facilitate execution and/or clearing of listed equity option transactions or short sales of equity securities between a Fund and selected counterparties. The arrangements provide guidelines surrounding the rights, obligations, and other events, including, but not limited to, margin, execution, and settlement. These agreements maintain provisions for, among other things, payments, maintenance of collateral, events of default, and termination. Margin and other assets delivered as collateral are typically in the possession of the prime broker and would offset any obligations due to the prime broker. The market values of listed options and securities sold short and related collateral are disclosed in the Notes to Schedules of Investments.
International Swaps and Derivatives Association, Inc. Master Agreements and Credit Support Annexes (“ISDA Master Agreements”) govern bilateral OTC derivative transactions entered into by a Fund
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with select counterparties. ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral posting and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. In limited circumstances, the ISDA Master Agreement may contain additional
provisions that add counterparty protection beyond coverage of existing daily exposure if the counterparty has a decline in credit quality below a predefined level. These amounts, if any, may be segregated with a third-party custodian. The market value of OTC financial derivative instruments, collateral received or pledged, and net exposure by counterparty as of period end are disclosed in the Notes to Schedules of Investments.
9. FEES AND EXPENSES
(a) Investment Advisory Fee PIMCO is a majority-owned subsidiary of Allianz Asset Management of America L.P. (“Allianz Asset Management”) and serves as the Adviser to the Trust, pursuant to an investment advisory contract. The Adviser receives a monthly fee from each Fund at an annual rate based on average daily net assets (the “Investment Advisory Fee”). The Investment Advisory Fee for all classes is charged at an annual rate as noted in the table in note (b) below.
(b) Supervisory and Administrative Fee PIMCO serves as administrator (the “Administrator”) and provides supervisory and administrative services to the Trust for which it receives a monthly supervisory and administrative fee based on each share class’s average daily net assets (the “Supervisory and Administrative Fee”). As the Administrator, PIMCO bears the costs of various third-party services, including audit, custodial, portfolio accounting, legal, transfer agency and printing costs.
The Investment Advisory Fees and Supervisory and Administrative Fees for all classes, as applicable, are charged at an annual rate as noted in the following table (calculated as a percentage of each Fund’s average daily net assets attributable to each class):
| Investment Advisory Fee | Supervisory and Administrative Fee | |||||||||||||||||||||||||||||||
| Fund Name | All Classes | Institutional Class | Class P | Class D | Class A | Class C | ||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | 0.49% | 0.30% | 0.40% | 0.40% | 0.40% | 0.40% | ||||||||||||||||||||||||||
PIMCO EqS® Long/Short Fund | 1.04% | 0.45% | 0.55% | 0.55% | 0.55% | 0.55% | ||||||||||||||||||||||||||
(c) Distribution and Servicing Fees PIMCO Investments LLC, a wholly-owned subsidiary of PIMCO, serves as the distributor (“Distributor”) of the Trust’s shares.
The Trust has adopted separate Distribution and Servicing Plans with respect to the Class A and Class C shares of the Trust pursuant to Rule 12b-1 under the Act. In connection with the distribution of Class C shares of the Trust, the Distributor receives distribution fees from the Trust of up to 0.75% for Class C shares and in connection with personal services rendered to Class A and Class C shareholders and the maintenance of such shareholder accounts, the Distributor receives servicing fees from the Trust of up to 0.25% for each of Class A and Class C shares (percentages reflect annual rates of the average daily net assets attributable to the applicable class).
The Trust has adopted a Distribution and Servicing Plan with respect to the Class D shares of each Fund pursuant to Rule 12b-1 under the Act (the “Class D Plan”). Under the terms of the Class D Plan, a Fund is permitted to compensate the Distributor out of the assets attributable to the Class D shares of the Fund, in an amount up to 0.25% on an annual basis of the average daily net assets of the Fund’s Class D shares for providing, or procuring through financial intermediaries,
distribution, shareholder services, and/or maintenance of shareholder accounts with respect to Class D shareholders of the Fund, some of which may be deemed to be primarily intended to result in the sale of Class D shares.
The Trust paid distribution and servicing fees at effective rates as noted in the following table (calculated as a percentage of each Fund’s average daily net assets attributable to each class):
| Distribution Fee | Servicing Fee | �� | ||||||||||
Class D | — | 0.25% | ||||||||||
Class A | — | 0.25% | ||||||||||
Class C | 0.75% | 0.25% | ||||||||||
The Distributor also received the proceeds of the initial sales charges paid by the shareholders upon the purchase of Class A shares and the contingent deferred sales charges paid by the shareholders upon certain redemptions of Class A and Class C shares. For the period ended June 30, 2017, the Distributor retained $83,117 representing commissions (sales charges) and contingent deferred sales charges from the Trust.
(d) Fund Expenses PIMCO provides or procures supervisory and administrative services for shareholders and also bears the costs of
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various third-party services required by the Funds, including audit, custodial, portfolio accounting, legal, transfer agency and printing costs. The Trust is responsible for the following expenses: (i) taxes and governmental fees; (ii) brokerage fees and commissions and other portfolio transaction expenses; (iii) the costs of borrowing money, including interest expense; (iv) fees and expenses of the Trustees who are not “interested persons” of PIMCO or the Trust, and any counsel retained exclusively for their benefit; (v) extraordinary expense, including costs of litigation and indemnification expenses; (vi) organizational expenses; and (vii) any expenses allocated or allocable to a specific class of shares, and may include certain other expenses as permitted by the Trust’s Multi-Class Plan adopted pursuant to Rule 18f-3 under the Act and subject to review and approval by the Trustees. The ratio of expenses to average net assets per share class, as disclosed on the Financial Highlights, may differ from the annual funds operating expenses per share class.
Each Trustee, other than those affiliated with PIMCO or its affiliates, receives an annual retainer of $62,000, plus $6,250 for each Board meeting attended in person, $375 ($750 in the case of the audit committee chair with respect to audit committee meetings) for each committee meeting attended and $750 for each Board meeting attended telephonically, plus reimbursement of related expenses. In addition, the audit committee chair receives an additional annual retainer of $9,000, the valuation oversight committee lead receives an additional annual retainer of $2,000 (to the extent there are co-leads
of the valuation oversight committee, the annual retainer will be split evenly between the co-leads, so that each co-lead individually receives an additional retainer of $1,000) and the governance committee chair receives an additional annual retainer of $750.
These expenses are allocated on a pro rata basis to each Fund of the Trust according to its respective net assets. The Trust pays no compensation directly to any Trustee or any other officer who is affiliated with the Administrator, all of whom receive remuneration for their services to the Trust from the Administrator or its affiliates.
(e) Expense Limitation Pursuant to the Expense Limitation Agreement, PIMCO has agreed to waive a portion of the Funds’ Supervisory and Administrative Fee, or reimburse the Funds, to the extent that each Fund’s organizational expenses and pro rata share of Trustee Fees exceed 0.0049%, the “Expense Limit” (calculated as a percentage of each Fund’s average daily net assets attributable to each class). The Expense Limitation Agreement will automatically renew for one-year terms unless PIMCO provides written notice to the Trust at least 30 days prior to the end of the then current term.
Pursuant to the Fee Waiver Agreement, PIMCO previously contractually agreed to reduce its Advisory Fee for the PIMCO Dividend and Income Fund. Effective June 16, 2016, this contractual agreement has been terminated. The waiver is reflected in the Statement of Operations as a component of Waiver and/or Reimbursement by PIMCO.
Under certain conditions, PIMCO may be reimbursed for these waived amounts in future periods, not to exceed thirty-six months after the waiver. The total recoverable amounts to PIMCO at June 30, 2017, were as follows (amounts in thousands):
| Expiring within | ||||||||||||||||||||
| Fund Name | 12 months | 13 - 24 months | 25 - 36 months | Total | ||||||||||||||||
PIMCO Dividend and Income Fund | $ | 1,483 | $ | 1,078 | $ | 54 | $ | 2,615 | ||||||||||||
PIMCO EqS® Long/Short Fund | 66 | 88 | 94 | 248 | ||||||||||||||||
10. RELATED PARTY TRANSACTIONS
The Adviser, Administrator, and Distributor are related parties. Fees paid to these parties are disclosed in Note 9, Fees and Expenses, and the accrued related party fee amounts are disclosed on the Statements of Assets and Liabilities.
Certain Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of securities by the Funds from or to another fund or portfolio that are, or could be, considered an affiliate, or an affiliate of an affiliate, by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 under the Act. Further, as defined under the procedures, each transaction is effected
at the current market price. During the period ended June 30, 2017,
the Funds below engaged in purchases and sales of securities pursuant to Rule 17a-7 under the Act (amounts in thousands):
| Fund Name | Purchases | Sales | ||||||||||
PIMCO Dividend and Income Fund | $ | 1,760 | $ | 9,837 | ||||||||
11. GUARANTEES AND INDEMNIFICATIONS
Under the Trust’s organizational documents, each Trustee or officer of the Trust is indemnified and each employee or other agent of the Trust (including the Trust’s investment manager) may be indemnified, to the extent permitted by the Act, against certain liabilities that may arise out of performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may
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be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts.
12. PURCHASES AND SALES OF SECURITIES
The length of time a Fund has held a particular security is not generally a consideration in investment decisions. A change in the securities held by a Fund is known as “portfolio turnover.” Each Fund may engage in frequent and active trading of portfolio securities to achieve its investment objective, particularly during periods of volatile market
movements. High portfolio turnover may involve correspondingly greater transaction costs to a Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestments in other securities. Such sales may also result in realization of taxable capital gains, including short-term capital gains (which are generally taxed at ordinary income tax rates). The transaction costs and tax effects associated with portfolio turnover may adversely affect a Fund’s performance. The portfolio turnover rates are reported in the Financial Highlights.
Purchases and sales of securities (excluding short-term investments) for the period ended June 30, 2017, were as follows (amounts in thousands):
| U.S. Government/Agency | All Other | |||||||||||||||||||
| Portfolio Name | Purchases | Sales | Purchases | Sales | ||||||||||||||||
PIMCO Dividend and Income Fund | $ | 246,080 | $ | 221,489 | $ | 105,167 | $ | 233,886 | ||||||||||||
PIMCO EqS® Long/Short Fund | 3,200 | 3,203 | 1,230,240 | 1,533,595 | ||||||||||||||||
13. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest with a $0.001 par value. Changes in shares of beneficial interest were as follows (shares and amounts in thousands†):
| PIMCO Dividend and Income Fund | PIMCO EqS® Long/Short Fund | |||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 481 | $ | 5,077 | 1,999 | $ | 19,199 | 7,197 | $ | 85,903 | 18,899 | $ | 220,296 | ||||||||||||||||||||||
Class P | 1,301 | 13,940 | 2,499 | 27,174 | 3,787 | 44,711 | 20,667 | 242,511 | ||||||||||||||||||||||||||
Class D | 239 | 2,512 | 702 | 7,868 | 1,894 | 22,459 | 3,190 | 37,157 | ||||||||||||||||||||||||||
Class A | 2,502 | 26,751 | 4,205 | 46,505 | 1,094 | 12,795 | 5,433 | 63,329 | ||||||||||||||||||||||||||
Class C | 1,240 | 13,111 | 4,077 | 44,242 | 733 | 8,292 | 4,981 | 56,809 | ||||||||||||||||||||||||||
Class R | 0 | 0 | 2 | ^ | 15 | ^ | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 49 | 525 | 426 | 4,233 | 729 | 8,346 | 218 | 2,550 | ||||||||||||||||||||||||||
Class P | 29 | 313 | 564 | 5,610 | 693 | 7,887 | 263 | 3,072 | ||||||||||||||||||||||||||
Class D | 14 | 153 | 271 | 2,689 | 169 | 1,907 | 55 | 640 | ||||||||||||||||||||||||||
Class A | 207 | 2,207 | 2,181 | 21,595 | 485 | 5,471 | 152 | 1,763 | ||||||||||||||||||||||||||
Class C | 134 | 1,419 | 2,223 | 21,928 | 484 | 5,287 | 161 | 1,820 | ||||||||||||||||||||||||||
Class R | 0 | 0 | 2 | ^ | 22 | ^ | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (1,652 | ) | (17,251 | ) | (4,804 | ) | (50,731 | ) | (13,394 | ) | (159,365 | ) | (23,144 | ) | (271,801 | ) | ||||||||||||||||||
Class P | (2,530 | ) | (26,477 | ) | (13,443 | ) | (141,787 | ) | (14,564 | ) | (171,916 | ) | (16,702 | ) | (193,796 | ) | ||||||||||||||||||
Class D | (590 | ) | (6,226 | ) | (3,248 | ) | (33,913 | ) | (3,606 | ) | (41,959 | ) | (1,558 | ) | (18,122 | ) | ||||||||||||||||||
Class A | (6,527 | ) | (68,337 | ) | (13,604 | ) | (140,011 | ) | (7,030 | ) | (81,866 | ) | (7,254 | ) | (84,522 | ) | ||||||||||||||||||
Class C | (8,358 | ) | (87,665 | ) | (15,791 | ) | (162,722 | ) | (6,340 | ) | (71,525 | ) | (4,195 | ) | (47,471 | ) | ||||||||||||||||||
Class R | 0 | 0 | (27 | )^ | (249 | )^ | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | (13,461 | ) | $ | (139,948 | ) | (31,766 | ) | $ | (328,333 | ) | (27,669 | ) | $ | (323,573 | ) | 1,166 | $ | 14,235 | ||||||||||||||||
| ^ | Class R Shares liquidated at the close of business on January 22, 2016. |
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
14. REGULATORY AND LITIGATION MATTERS
The Funds are not named as defendants in any material litigation or arbitration proceedings and are not aware of any material litigation or claim pending or threatened against them.
The foregoing speaks only as of the date of the preparation of this report.
15. FEDERAL INCOME TAX MATTERS
Each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code (the “Code”) and distribute
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all of its taxable income and net realized gains, if applicable, to shareholders. Accordingly, no provision for Federal income taxes has been made.
A Fund may be subject to local withholding taxes, including those imposed on realized capital gains. Any applicable foreign capital gains tax is accrued daily based upon net unrealized gains, and may be payable following the sale of any applicable investments.
In accordance with U.S. GAAP, the Adviser has reviewed the Funds’ tax positions for all open tax years. As of June 30, 2017, the Funds have
recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.
The Funds file U.S. tax returns. While the statute of limitations remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ending in 2013-2016, no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
As of June 30, 2017, the components of distributable taxable earnings are as follows (amounts in thousands†):
| Undistributed Ordinary Income(1) | Undistributed Long-Term Capital Gains | Net Tax Basis Unrealized Appreciation/ (Depreciation)(2) | Other Book-to-Tax Accounting Differences(3) | Accumulated Capital Losses(4) | Qualified Late-Year Loss Deferral - Capital(5) | Qualified Late-Year Loss Deferral - Ordinary(6) | ||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | $ | 1,864 | $ | 0 | $ | 22,503 | $ | (57 | ) | $ | (120,258 | ) | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO EqS® Long/Short Fund | 11,006 | 16,804 | 23,168 | (35 | ) | 0 | 0 | 0 | ||||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | Includes undistributed short-term capital gains, if any. |
| (2) | Adjusted for open wash sale loss deferrals and accelerated recognition of unrealized gain on certain futures, forward contracts, short dividend expenditures, Lehman adjustments, passive foreign investment companies (PFICs) and convertible preferred stock for federal income tax purposes. Also adjusted for differences between book and tax realized, partnership adjustments, and unrealized gain/loss on swap contracts. |
| (3) | Represents differences in income tax regulations and financial accounting principles generally accepted in the United States of America, namely for straddle loss deferrals, and organizational expenditure. |
| (4) | Capital losses available to offset future net capital gains expire in varying amounts as shown below. |
| (5) | Capital losses realized during the period November 1, 2016 through June 30, 2017 which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
| (6) | Specified losses realized during the period November 1, 2016 through June 30, 2017 and Ordinary losses realized during the period January 1, 2017 through June 30, 2017, which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
Under the Regulated Investment Company Modernization Act of 2010, a fund is permitted to carry forward any new capital losses for an unlimited period. Additionally, such capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term under previous law.
As of June 30, 2017, the Funds had the following post-effective capital losses with no expiration (amounts in thousands†):
| Short-Term | Long-Term | |||||||||||
PIMCO Dividend and Income Fund | $ | 66,361 | $ | 53,897 | ||||||||
PIMCO EqS® Long/Short Fund | 0 | 0 | ||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
As of June 30, 2017, the aggregate cost and the net unrealized appreciation/(depreciation) of investments for federal income tax purposes are as follows (amounts in thousands†):
| Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation/ (Depreciation)(7) | |||||||||||||||||
PIMCO Dividend and Income Fund | $ | 327,563 | $ | 33,092 | $ | (10,445 | ) | $ | 22,647 | |||||||||||
PIMCO EqS® Long/Short Fund | 525,987 | 27,620 | (3,429 | ) | 24,191 | |||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (7) | Primary differences, if any, between book and tax net unrealized appreciation/(depreciation) on investments are attributable to open wash sale loss deferrals, short dividend expenditures, Lehman adjustments, passive foreign investment companies (PFICs), partnership adjustments and convertible preferred stock. |
| ANNUAL REPORT | JUNE 30, 2017 | 61 |
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Notes to Financial Statements (Cont.)
June 30, 2017
For the fiscal years ended June 30, 2017 and June 30, 2016, respectively, the Funds made the following tax basis distributions (amounts in thousands†):
| June 30, 2017 | June 30, 2016 | |||||||||||||||||||||||||||
| Ordinary Income Distributions(8) | Long-Term Capital Gain Distributions | Return of Capital(9) | Ordinary Income Distributions(8) | Long-Term Capital Gain Distributions | Return of Capital(9) | |||||||||||||||||||||||
PIMCO Dividend and Income Fund | $ | 5,501 | $ | 0 | $ | 0 | $ | 29,712 | $ | 38,301 | $ | 0 | ||||||||||||||||
PIMCO EqS® Long/Short Fund | 27,119 | 1,845 | 0 | 2 | 9,887 | 0 | ||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (8) | Includes short-term capital gains, if any, distributed. |
| (9) | A portion of the distributions made represents a tax return of capital. Return of capital distributions have been reclassified from undistributed net investment income to paid-in capital to more appropriately conform financial accounting to tax accounting. |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of PIMCO Equity Series® and Shareholders of the PIMCO Dividend and Income Fund and PIMCO EqS® Long/Short Fund
In our opinion, the (i) accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations, of changes in net assets, and of cash flows and the financial highlights present fairly, in all material respects, the financial position of the PIMCO EqS® Long/Short Fund as of June 30, 2017, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, and (ii) accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the PIMCO Dividend and Income Fund as of June 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, (two of the funds constituting the PIMCO Equity Series®, hereafter referred to as the “Funds”), in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of June 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
August 24, 2017
| ANNUAL REPORT | JUNE 30, 2017 | 63 |
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Glossary: (abbreviations that may be used in the preceding statements)
(Unaudited)
Counterparty Abbreviations: | ||||||||||
| AZD BOA BPG BPS BRC CBK DUB FBF | Australia and New Zealand Banking Group Bank of America N.A. BNP Paribas Securities Corp. BNP Paribas S.A. Barclays Bank PLC Citibank N.A. Deutsche Bank AG Credit Suisse International | FOB GLM GSC GST HUS IND JPM | Credit Suisse Securities (USA) LLC Goldman Sachs Bank USA Goldman Sachs & Co. Goldman Sachs International HSBC Bank USA N.A. Crédit Agricole Corporate and Investment Bank S.A. JPMorgan Chase Bank N.A. | MYC NGF RBC SCX SSB UAG MSC | Morgan Stanley Capital Services, Inc. Nomura Global Financial Products, Inc. Royal Bank of Canada Standard Chartered Bank State Street Bank and Trust Co. UBS AG Stamford Morgan Stanley & Co., Inc. | |||||
Currency Abbreviations: | ||||||||||
| AUD BRL CAD CHF DKK | Australian Dollar Brazilian Real Canadian Dollar Swiss Franc Danish Krone | EUR GBP JPY MXN PEN | Euro British Pound Japanese Yen Mexican Peso Peruvian New Sol | RUB TRY USD (or $) ZAR | Russian Ruble Turkish New Lira United States Dollar South African Rand | |||||
Index/Spread Abbreviations: | ||||||||||
| CDX.HY | Credit Derivatives Index - High Yield | CMBX | Commercial Mortgage-Backed Index | S&P 500 | Standard & Poor’s 500 Index | |||||
Other Abbreviations: | ||||||||||
| ADR BABs BBR BBSW CLO | American Depositary Receipt Build America Bonds Bank Bill Rate Bank Bill Swap Reference Rate Collateralized Loan Obligation | EURIBOR JIBAR LIBOR SP - ADR | Euro Interbank Offered Rate Johannesburg Interbank Agreed Rate London Interbank Offered Rate Sponsored American Depositary Receipt | SPDR TBA TBD% TIIE | Standard & Poor’s Depositary Receipts To-Be-Announced Interest rate to be determined when loan settles Tasa de Interés Interbancaria de Equilibrio “Equilibrium Interbank Interest Rate” | |||||
| 64 | PIMCO EQUITY SERIES |
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Federal Income Tax Information
(Unaudited)
As required by the Internal Revenue Code (“Code”) and Treasury Regulations, if applicable, shareholders must be notified within 60 days of the Funds’ fiscal year end regarding the status of qualified dividend income and the dividend received deduction.
Dividend Received Deduction. Corporate shareholders are generally entitled to take the dividend received deduction on the portion of a Fund’s dividend distribution that qualifies under tax law. The percentage of the following Funds’ Fiscal 2017 ordinary income dividend that qualifies for the corporate dividend received deduction is set forth in the table below.
Qualified Dividend Income. Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), the following percentage of ordinary dividends paid during the calendar year was designated as “qualified dividend income”, as defined in the Act, subject to reduced tax rates in 2017 set forth in the table below.
Qualified Interest Income and Qualified Short-Term Capital Gain (for non-U.S. resident shareholders only). Under the American Jobs Creation Act of 2004, the following amounts of ordinary dividends paid during the fiscal year ended June 30, 2017 are considered to be derived from “qualified interest income,” as defined in Section 871(k)(1)(E) of the Code, and therefore are designated as interest-related dividends, as defined in Section 871(k)(1)(C) of the Code. Further, the following amounts of ordinary dividends paid during the fiscal year ended June 30, 2017 are considered to be derived from “qualified short-term capital gain,” as defined in Section 871(k)(2)(D) of the Code, and therefore are designated as qualified short-term gain dividends, as defined by Section 871(k)(2)(C) of the Code are also set forth in the table below.
| Dividend Received Deduction % | Qualified Dividend Income % | Qualified Interest Income (000s† ) | Qualified Short-Term Capital Gain (000s†) | |||||||||||||||||
PIMCO Dividend and Income Fund | 68.97% | 100.00% | $ | 2,784 | $ | 0 | ||||||||||||||
PIMCO EqS® Long/Short Fund | 12.86% | 18.17% | 17,000 | 10,118 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
Foreign Taxes. The Funds’ have made an election under the Internal Revenue Code Section 853 to pass through foreign taxes paid. Shareholders will receive more detailed information along with their Form 1099-DIV.
| Foreign Source Income | Foreign Taxes Pass Through | |||||||||||
PIMCO Dividend and Income Fund | $ | 6,613,214 | $ | 603,498 | ||||||||
PIMCO EqS® Long/Short Fund | 0 | 0 | ||||||||||
Shareholders are advised to consult their own tax advisor with respect to the tax consequences of their investment in the Trust. In January 2018, you will be advised on IRS Form 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2017.
| ANNUAL REPORT | JUNE 30, 2017 | 65 |
Table of Contents
The charts below identify the Trustees and executive officers of the Trust. Unless otherwise indicated, the address of all persons below is 650 Newport Center Drive, Newport Beach, CA 92660.
The Funds’ Statement of Additional Information includes more information about the Trustees and Officers. To request a free copy, call PIMCO at (888) 87-PIMCO or visit the Funds’ website at www.pimco.com.
| Name, Year of Birth and Position Held with Trust* | Term of Office and Length of Time Served† | Principal Occupation(s) During Past 5 Years | Number of Funds in Fund Complex Overseen by Trustee | Other Public Company and Investment Company Directorships Held by Trustee During the Past 5 Years | ||||
| Interested Trustees1 | ||||||||
Brent R. Harris (1959) Chairman of the Board | 03/2010 to present | Managing Director, PIMCO. Formerly, member of Executive Committee, PIMCO. | 163 | Chairman and Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust; Director, StocksPLUS® Management, Inc; and member of Board of Governors, Investment Company Institute. | ||||
| Independent Trustees | ||||||||
Jennifer Holden Dunbar (1963) Trustee | 02/2016 to present | Managing Director, Dunbar Partners, LLC (business consulting and investments). | 163 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust; Director, PS Business Parks; Director, Big 5 Sporting Goods Corporation. | ||||
Peter B. McCarthy (1950) Trustee | 09/2011 to present | Formerly, Assistant Secretary and Chief Financial Officer, United States Department of Treasury; Deputy Managing Director, Institute of International Finance. | 163 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. | ||||
Ronald C. Parker (1951) Trustee | 02/2016 to present | Director of Roseburg Forest Products Company. Formerly, Chairman of the Board, The Ford Family Foundation. Formerly President, Chief Executive Officer, Hampton Affiliates (forestry products). | 163 | Trustee, PIMCO Equity Series VIT; Lead Independent Trustee, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. | ||||
| * | Unless otherwise noted, the information for the individuals listed is as of June 30, 2017. |
| 1 | Mr. Harris is an “interested persons” of the Trust (as that term is defined in the 1940 Act) because of his affiliations with PIMCO. |
| † | Trustees serve until their successors are duly elected and qualified. |
| 66 | PIMCO EQUITY SERIES |
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(Unaudited)
Executive Officers
| Name, Year of Birth and Position Held with Trust* | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years† | ||
Peter G. Strelow (1970) President | 02/2014 to present
Senior Vice President 11/2013 to 02/2014
Vice President 03/2010 to 11/2013 | Managing Director, Chief Administrative Officer and Co-Chief Operating Officer PIMCO. President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
David C. Flattum (1964) Chief Legal Officer | 03/2010 to present | Managing Director and General Counsel, PIMCO. Chief Legal Officer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Formerly, Managing Director, Chief Operating Officer and General Counsel, Allianz Asset Management of America L.P. | ||
Jennifer E. Durham (1970) Chief Compliance Officer | 03/2010 to present | Managing Director and Chief Compliance Officer, PIMCO. Chief Compliance Officer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Brent R. Harris (1959) Senior Vice President | 03/2010 to present | Managing Director, PIMCO. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Formerly, member of Executive Committee, PIMCO. | ||
Joshua D. Ratner (1976)** Vice President - Senior Counsel, Secretary | 11/2013 to present
Assistant Secretary 03/2010 to 01/2011 | Executive Vice President and Senior Counsel, PIMCO. Chief Legal Officer, PIMCO Investments LLC. Vice President – Senior Counsel, Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Vice President, Secretary and Chief Legal Officer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Ryan G. Leshaw (1980) Assistant Secretary | 05/2012 to present | Senior Vice President and Senior Counsel, PIMCO. Assistant Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Associate, Willkie Farr & Gallagher LLP. | ||
Stacie D. Anctil (1969) Vice President | 05/2015 to present
Assistant Treasurer 03/2010 to 05/2015 | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
William G. Galipeau (1974) Vice President | 11/2013 to present | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Treasurer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Eric D. Johnson (1970)** Vice President | 05/2011 to present | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Henrik P. Larsen (1970) Vice President | 03/2010 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Bijal Y. Parikh (1978) Vice President | 02/2017 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Greggory S. Wolf (1970) Vice President | 05/2011 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Trent W. Walker (1974) Treasurer | 11/2013 to present
Assistant Treasurer 03/2010 to 11/2013 | Executive Vice President, PIMCO. Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Assistant Treasurer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Erik C. Brown (1967) Assistant Treasurer | 03/2010 to present | Executive Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Laura S. Melman (1966)** Assistant Treasurer | 02/2017 to present | Senior Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Colleen D. Miller (1980)** Assistant Treasurer | 02/2017 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Vice President Cohen & Steers Capital Management. | ||
Christopher M. Morin (1980) Assistant Treasurer | 08/2016 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Vice President of Operations, Standard Life Investments USA; Assistant Vice President, Brown Brothers Harriman. | ||
Jason J. Nagler (1982)** Assistant Treasurer | 05/2015 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Head of Mutual Fund Reporting, GMO and Assistant Treasurer, GMO Trust and GMO Series Trust Funds. | ||
| * | Unless otherwise noted, the information for the individuals listed is as of June 30, 2017. |
| ANNUAL REPORT | JUNE 30, 2017 | 67 |
Table of Contents
Management of the Trust (Cont.)
(Unaudited)
| † | The term “PIMCO Closed-End Funds” as used herein includes: PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PCM Fund Inc., PIMCO Corporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO Dynamic Credit and Mortgage Income Fund, PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Opportunity Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II and PIMCO Strategic Income Fund, Inc.; the term “PIMCO-Sponsored Interval Funds” as used herein includes: PIMCO Flexible Credit Income Fund. |
| ** | The address of these officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
| 68 | PIMCO EQUITY SERIES |
Table of Contents
(Unaudited)
The Funds2,3 consider customer privacy to be a fundamental aspect of their relationships with shareholders and are committed to maintaining the confidentiality, integrity and security of their current, prospective and former shareholders’ non-public personal information. The Funds have developed policies that are designed to protect this confidentiality, while allowing shareholder needs to be served.
OBTAINING PERSONAL INFORMATION
In the course of providing shareholders with products and services, the Funds and certain service providers to the Funds, such as the Funds’ investment advisers or sub-advisers (“Advisers”), may obtain non-public personal information about shareholders, which may come from sources such as account applications and other forms, from other written, electronic or verbal correspondence, from shareholder transactions, from a shareholder’s brokerage or financial advisory firm, financial advisor or consultant, and/or from information captured on applicable websites.
RESPECTING YOUR PRIVACY
As a matter of policy, the Funds do not disclose any non-public personal information provided by shareholders or gathered by the Funds to non-affiliated third parties, except as required or permitted by law or as necessary for such third parties to perform their agreements with respect to the Funds. As is common in the industry, non-affiliated companies may from time to time be used to provide certain services, such as preparing and mailing prospectuses, reports, account statements and other information, conducting research on shareholder satisfaction and gathering shareholder proxies. The Funds or their affiliates may also retain non-affiliated companies to market Fund shares or products which use Fund shares and enter into joint marketing arrangements with them and other companies. These companies may have access to a shareholder’s personal and account information, but are permitted to use this information solely to provide the specific service or as otherwise permitted by law. In most cases, the shareholders will be clients of a third party, but the Funds may also provide a shareholder’s personal and account information to the shareholder’s respective brokerage or financial advisory firm and/or financial advisor or consultant.
SHARING INFORMATION WITH THIRD PARTIES
The Funds reserve the right to disclose or report personal or account information to non-affiliated third parties in limited circumstances where the Funds believe in good faith that disclosure is required under law, to cooperate with regulators or law enforcement authorities, to protect their rights or property, or upon reasonable request by any fund advised by PIMCO in which a shareholder has invested. In addition, the Funds may disclose information about a shareholder or a
shareholder’s accounts to a non-affiliated third party at the shareholder’s request or with the consent of the shareholder.
SHARING INFORMATION WITH AFFILIATES
The Funds may share shareholder information with their affiliates in connection with servicing shareholders’ accounts, and subject to applicable law may provide shareholders with information about products and services that the Funds or their Advisers, distributors or their affiliates (“Service Affiliates”) believe may be of interest to such shareholders. The information that the Funds may share may include, for example, a shareholder’s participation in the Funds or in other investment programs sponsored by a Service Affiliate, a shareholder’s ownership of certain types of accounts (such as IRAs), information about the Funds’ experiences or transactions with a shareholder, information captured on applicable websites, or other data about a shareholder’s accounts, subject to applicable law. The Funds’ Service Affiliates, in turn, are not permitted to share shareholder information with non-affiliated entities, except as required or permitted by law.
PROCEDURES TO SAFEGUARD PRIVATE INFORMATION
The Funds take seriously the obligation to safeguard shareholder non-public personal information. In addition to this policy, the Funds have implemented procedures that are designed to restrict access to a shareholder’s non-public personal information to internal personnel who need to know that information to perform their jobs, such as servicing shareholder accounts or notifying shareholders of new products or services. Physical, electronic and procedural safeguards are in place to guard a shareholder’s non-public personal information.
INFORMATION COLLECTED FROM WEBSITES
Websites maintained by the Funds or their service providers may use a variety of technologies to collect information that help the Funds and their service providers understand how the website is used. Information collected from your web browser (including small files stored on your device that are commonly referred to as “cookies”) allow the websites to recognize your web browser and help to personalize and improve your user experience and enhance navigation of the website. In addition, the Funds or their Service Affiliates may use third parties to place advertisements for the Funds on other websites, including banner advertisements. Such third parties may collect anonymous information through the use of cookies or action tags (such as web beacons). The information these third parties collect is generally limited to technical and web navigation information, such as your IP address, web pages visited and browser type, and does not include personally identifiable information such as name, address, phone number or email address. If you are a registered user of the Funds’ website, the Funds or their service providers or third party firms
| ANNUAL REPORT | JUNE 30, 2017 | 69 |
Table of Contents
Privacy Policy1 (Cont.)
(Unaudited)
engaged by the Funds or their service providers may collect or share information submitted by you, which may include personally identifiable information. This information can be useful to the Funds when assessing and offering services and website features. You can change your cookie preferences by changing the setting on your web browser to delete or reject cookies. If you delete or reject cookies, some website pages may not function properly. The Funds do not look for web browser “do not track” requests.
CHANGES TO THE PRIVACY POLICY
From time to time, the Funds may update or revise this privacy policy. If there are changes to the terms of this privacy policy, documents containing the revised policy on the relevant website will be updated.
1 Amended as of February 14, 2017.
2 PIMCO Investments LLC (“PI”) serves as the Funds’ distributor. This Privacy Policy applies to the activities of PI to the extent that PI regularly effects or engages in transactions with or for a Fund shareholder who is the record owner of such shares. For purposes of this Privacy Policy, references to “the Funds” shall include PI when acting in this capacity.
3 When distributing this Policy, a Fund may combine the distribution with any similar distribution of its investment adviser’s privacy policy. The distributed, combined policy may be written in the first person (i.e., by using “we” instead of “the Funds”).
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Table of Contents
General Information
Investment Adviser and Administrator
Pacific Investment Management Company LLC
650 Newport Center Drive
Newport Beach, CA 92660
Investment Sub-Adviser
Research Affiliates, LLC
620 Newport Center Drive, Suite 900
Newport Beach, CA 92660
Distributor
PIMCO Investments LLC
1633 Broadway
New York, NY 10019
Custodian
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
Transfer Agent
Boston Financial Data Services
Institutional Class, Class P, Administrative Class, Class D
330 W. 9th Street, 5th Floor
Kansas City, MO 64105
Boston Financial Data Services
Class A, Class C, Class R
P.O. Box 55060
Boston, MA 02205-5060
Legal Counsel
Dechert LLP
1900 K Street, N.W.
Washington, D.C. 20006
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
1100 Walnut Street, Suite 1300
Kansas City, MO 64106
This report is submitted for the general information of the shareholders of the PIMCO Equity Series.
Table of Contents
PES3001AR_063017
Table of Contents
PIMCO Equity Series®
Annual Report
June 30, 2017
PIMCO REALPATH® Blend 2020 Fund
PIMCO REALPATH® Blend 2025 Fund
PIMCO REALPATH® Blend 2030 Fund
PIMCO REALPATH® Blend 2035 Fund
PIMCO REALPATH® Blend 2040 Fund
PIMCO REALPATH® Blend 2045 Fund
PIMCO REALPATH® Blend 2050 Fund
PIMCO REALPATH® Blend 2055 Fund
PIMCO REALPATH® Blend Income Fund
Share Classes
| ∎ | Institutional |
| ∎ | Administrative |
| ∎ | A |
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| 20 | 60 | |||||||
| 22 | 63 | |||||||
| 24 | 66 | |||||||
This material is authorized for use only when preceded or accompanied by the current PIMCO Equity Series prospectus. The Shareholder Reports for the other series of PIMCO Equity Series are printed separately.
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Dear Shareholder,
Please find enclosed the Annual Report for the PIMCO Equity Series covering the twelve-month reporting period ended June 30, 2017. The following pages contain specific details about the investment performance of each fund and a discussion of the factors that most affected performance during the reporting period.
Highlights of the financial markets during the twelve-month reporting period include:
| ∎ | The outcome of Brexit in June 2016, whereby U.K. voters opted to leave the European Union, prompted market volatility to rise, sovereign yields to rally significantly, and risk assets to generally underperform. Investor risk appetite returned later, however, as investors viewed the global economy as stable and expectations for further central bank easing helped anchor risk appetite. Improving commodity prices and fiscal stimulus in China also contributed to renewed investor confidence. |
| ∎ | Leading up to the U.S. presidential election on November 8, investors generally shook off a number of political developments, including new leadership in the U.K. and Brazil, and a coup attempt in Turkey. In this environment, volatility generally remained low and risk assets rallied. Central banks were featured prominently in the headlines as monetary policy concerns (in particular, the longevity of central bank support) lingered beneath the seemingly benign market environment. In December, the Federal Reserve (“Fed”) raised its key lending rate, the Federal Funds Rate, by 0.25% to a range of 0.50% to 0.75%. Furthermore, equities moved higher (U.S. stock indices set record highs), credit spreads tightened, and emerging market (“EM”) assets continued to gain over this period. |
| ∎ | Through early 2017, the robust risk sentiment that marked the post-U.S. election period broadly continued, though there were some signs of moderation towards the end of March. Early challenges in President Donald Trump’s policy agenda left some investors less optimistic about the potential for other highly anticipated agenda items such as tax reform and infrastructure spending. Still, solid fundamental data, relatively easy financial conditions, and optimism among businesses and consumers helped encourage positive investor sentiment. This environment provided an opportunity for the Fed to continue on its path towards policy normalization, and led the Fed to raise the Federal Funds Rate again in March by 0.25% to a range of 0.75% to 1.00%. |
| ∎ | Geopolitics, including elections in several countries as well as political controversy in both the U.S. and Brazil, dominated headlines and contributed to brief periods of market volatility throughout the last quarter of the reporting period. In the U.S., the Fed raised the Federal Funds Rate once again in June by 0.25% to a range of 1.00% to 1.25%, and unveiled details of its plan to gradually unwind its balance sheet, contributing to a flattening yield curve. A perceived hawkish shift in tone from other major central banks, including the European Central Bank, the Bank of England, and the Bank of Canada, spurred most developed market yields to rise even as longer-term interest rates actually fell in the U.S. The fundamental economic backdrop remained largely intact and the broader risk rally continued as equities marched higher, credit spreads tightened, and EM assets strengthened. |
| ∎ | Global developed market equities experienced strong performance amid a period marked by low economic volatility and strong corporate earnings growth despite geopolitical uncertainty. International equity markets (developed ex-U.S.), as represented by the MSCI EAFE Net Dividend Index (USD Hedged), returned 23.50% and the MSCI EAFE Net Dividend Index (USD Unhedged), returned 20.27% over the reporting period. U.S. equities, as represented by the S&P 500 Index, returned 17.90%. Japanese equities, as represented by the Nikkei 225 Index (in JPY), returned 31.03% over the reporting period and European equities, as represented by the MSCI Europe Index in EUR, returned 17.96% over the reporting period. |
| ∎ | EM equities, as represented by the MSCI Emerging Markets Index (Net Dividends in USD), returned 23.75% over the reporting period. Emerging markets benefited from an improvement in global conditions and a stabilization of macro fundamentals despite a decline in commodity prices. A more dovish Federal Reserve, lower-for-longer |
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global central bank policy and an orderly rebalancing in China along with a return to growth in select countries and improving current accounts contributed to strong performance for EM equities. |
| ∎ | U.S. Treasuries, as represented by the Bloomberg Barclays U.S. Treasury Index, declined 2.32% for the reporting period. Yields across the U.S. Treasury yield curve rose in reaction to the Fed’s interest rate increases, rising concern over inflation and strong investor risk appetite. The benchmark ten-year U.S. Treasury note yielded 2.31% at the end of the reporting period, up from 1.49% on June 30, 2016. The Bloomberg Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, declined 0.31% for the reporting period. |
If you have any questions regarding the PIMCO Equity Series, please contact your account manager or financial adviser, or call one of our shareholder associates at 888.87.PIMCO (888.877.4626). We also invite you to visit our website at www.pimco.com to learn more about our views and global thought leadership.
Thank you again, for the trust you place in us. We value your commitment and will continue to work diligently to meet your broad investment and investment solution needs.
 | Sincerely,
Brent R. Harris Chairman of the Board, PIMCO Equity Series
August 24, 2017
|
Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income distributions and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. It is not possible to invest directly in an unmanaged index.
| ANNUAL REPORT | JUNE 30, 2017 | 3 |
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Important Information About the Funds
PIMCO Equity Series (the “Trust”) is an open-end management investment company.
We believe that equity funds have an important role to play in a well-diversified investment portfolio. It is important to note, however, that equity funds are subject to notable risks. Among other things, equity and equity-related securities may decline in value due to both real and perceived general market, economic, and industry conditions.
The Funds are each “fund of funds,” which is a term used to describe mutual funds that pursue their investment objective by investing in other mutual funds instead of investing directly in stocks or bonds of other issuers. Under normal circumstances, the Funds invest in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, as amended, equity securities, fixed income instruments of varying maturities, or related derivatives on any of the preceding securities mentioned. The Funds may invest in Institutional Class or Class M shares of any funds of the Trust and PIMCO Funds, and in other affiliated funds, including funds of PIMCO ETF Trust, except funds of funds (collectively, “Underlying PIMCO Funds”), and unaffiliated funds that are registered under the Investment Company Act of 1940 (collectively, “Acquired Funds”). The risks and strategies associated with an investment in the Fund may result from direct investments and/or indirect exposure through investment in Acquired Funds.
In an environment where interest rates may trend upward, rising rates would negatively impact the performance of certain funds, and fixed income securities held by a Fund are likely to decrease in value. A number of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, general economic conditions, etc.). In addition, changes in interest rates can be sudden and significant, and there is no guarantee that management will anticipate such movement accurately.
The values of equity securities, such as common stocks and preferred stocks, have historically risen and fallen in periodic cycles and may decline due to general market conditions, which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. Equity securities may also decline due to factors that affect a particular industry or industries, such as labor shortages, increased production costs and competitive conditions within an industry. In addition, the value of an equity security may decline for a number of reasons that directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets. Different types of
equity securities may react differently to these developments and a change in the financial condition of a single issuer may affect securities markets as a whole.
During a general downturn in the securities markets, multiple asset classes, including equity securities, may decline in value simultaneously. The market price of equity securities owned by a Fund may go up or down, sometimes rapidly or unpredictably. Equity securities generally have greater price volatility than fixed income securities and common stocks generally have the greatest appreciation and depreciation potential of all equity securities.
Interest rates in the U.S. are at or near historically low levels. As such, funds that invest in fixed income securities may currently face an increased exposure to the risks associated with a rising interest rate environment. This is especially true as the Fed ended its quantitative easing program in October 2014 and has begun, and may continue, to raise interest rates. To the extent the Fed continues to raise interest rates, there is a risk that rates across the financial system may rise. Further, while the U.S. bond market has steadily grown over the past three decades, dealer inventories of corporate bonds have remained relatively stagnant. As a result, there has been a significant reduction in the ability of dealers to “make markets.”
Bond funds and individual bonds with a longer duration (a measure used to determine the sensitivity of a security’s price to changes in interest rates) tend to be more sensitive to changes in interest rates, usually making them more volatile than securities or funds with shorter durations. All of the factors mentioned above, individually or collectively, could lead to increased volatility and/or lower liquidity in the fixed income markets or negatively impact a Fund’s performance or cause the Fund to incur losses. As a result, a Fund may experience increased shareholder redemptions, which, among other things, could further reduce the net assets of the Fund.
The Funds may be subject to various risks as described in the Funds’ prospectus. Some of these risks may include, but are not limited to, the following: allocation risk, acquired fund risk, new / small fund risk, equity risk, value investing risk, interest rate risk, call risk, credit risk, high yield and distressed company risk, market risk, issuer risk, liquidity risk, derivatives risk, commodity risk, mortgage-related and other asset-backed securities risk, foreign (non-U.S.) investment risk, real estate risk, emerging market risk, sovereign debt risk, currency risk, leveraging risk, small-cap and mid-cap company risk, management risk, short sale risk, tax risk, subsidiary risk, arbitrage risk, and convertible securities risk. A complete description of these risks is contained in the Funds’ prospectus.
The Funds may use derivative instruments for hedging purposes or as part of an investment strategy. Use of these instruments may involve
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certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, leverage risk, management risk and the risk that a Fund may not be able to close out a position when it would be most advantageous to do so. Changes in regulation relating to a mutual fund’s use of derivatives and related instruments could potentially limit or impact a Fund’s ability to invest in derivatives, limit the Fund’s ability to employ certain strategies that use derivatives and/or adversely affect the value or performance of derivatives and the Fund. Certain derivative transactions may have a leveraging effect on a Fund. For example, a small investment in a derivative instrument may have a significant impact on a Fund’s exposure to interest rates, currency exchange rates or other investments. As a result, a relatively small price movement in an asset, instrument or component of the index underlying a derivative instrument may cause an immediate and substantial loss or gain, which translates into heightened volatility of the Fund. A Fund may engage in such transactions regardless of whether the Fund owns the asset, instrument or components of the index underlying the derivative instrument. A Fund may invest a significant portion of its assets in these types of instruments. If it does, the Fund’s investment exposure could far exceed the value of its portfolio securities and its investment performance could be primarily dependent upon securities it does not own. Investing in foreign (non-U.S.) securities may entail risk due to foreign (non-U.S.) economic and political developments; this risk may be increased when investing in emerging markets.
For example, if a Fund invests in emerging market debt, it may face increased exposure to interest rate, liquidity, volatility, and redemption risk due to the specific economic, political, geographical, or legal background of the foreign (non-U.S.) issuer.
The value of an equity security of an issuer that has paid dividends in the past may decrease if the issuer reduces or eliminates future payments to its shareholders. If the dividends or distributions received by a Fund decrease, the Fund may have less income to distribute to the Fund’s shareholders. In addition, during certain market conditions, the equity securities of issuers that have paid regular dividends or distributions may not be widely available or may be highly concentrated in particular sectors of the market. A Fund may invest a significant portion of its assets in value stocks. Value stocks may perform differently from other types of stocks and the market as a whole. A value stock may decrease in price or may not increase in price as anticipated by PIMCO if it continues to be undervalued by the market or the factors that the portfolio manager believes will cause the stock price to increase do not occur.
The geographical classification of foreign (non-U.S.) securities in this report are classified by the country of incorporation of a holding. In certain instances, a security’s country of incorporation may be different from its country of economic exposure.
The PIMCO REALPATH® Blend Funds are intended for investors who prefer to have their asset allocation decisions made by professional money managers and are designed to offer individual investors comprehensive asset allocation strategies tailored to the time when they expect to retire or to begin withdrawing assets. Each PIMCO REALPATH® Blend Fund is designed for investors expecting to retire or to begin withdrawing portions of their investments around the year indicated in the Fund’s name. The retirement year included in the REALPATH® Blend Fund’s name does not necessarily represent the specific year you expect to begin withdrawing your assets. It is intended only as a general guide.
The PIMCO REALPATH® Blend Funds are designed to provide investors with a comprehensive retirement solution tailored to the time when they expect to retire or plan to start withdrawing money (the “target date”). Each PIMCO REALPATH® Blend Fund follows a target asset allocation schedule that changes over time to help reduce portfolio risk, increasing its exposure to conservative investments as the target date approaches. The principal value of a Fund is not guaranteed at any time, including the target date. A Fund’s shareholders may experience losses, including losses near, at, or after the target year indicated in the PIMCO REALPATH® Blend Fund’s name.
On each individual Fund Summary page in this Shareholder Report, the Average Annual Total Return table and Cumulative Returns chart measure performance assuming that any dividend and capital gain distributions were reinvested. Returns do not reflect the deduction of taxes that a shareholder would pay on (i) Fund distributions or (ii) the redemption of Fund shares. The Cumulative Returns chart and Average Annual Total Return table reflect any sales load that would have applied at the time of purchase or any Contingent Deferred Sales Charge (“CDSC”) that would have applied if a full redemption occurred on the last business day of the period shown in the Cumulative Returns chart. Class A shares are subject to an initial sales charge. A CDSC may be imposed in certain circumstances on Class A shares that are purchased without an initial sales charge and then redeemed during the first 12 months after purchase. The Cumulative Returns chart reflects only Institutional Class performance. Performance may vary by share class based on each class’s expense ratios. Performance shown is net of fees and expenses. The minimum initial investment amount for Institutional Class and Administrative Class shares is $1,000,000. The minimum initial investment amount for Class A shares is $1,000. Each Fund measures its performance against at least one broad-based securities market index (“benchmark index”). The benchmark index does not take into account fees, expenses, or taxes. A Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. There is no assurance that any Fund, including any Fund that has experienced high or unusual
| ANNUAL REPORT | JUNE 30, 2017 | 5 |
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Important Information About the Funds (cont.)
performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a Fund’s total return in excess of that of the Fund’s benchmark between reporting periods or 2) a Fund’s total return in
excess of the Fund’s historical returns between reporting periods. Unusual performance is defined as a significant change in a Fund’s performance as compared to one or more previous reporting periods.
The following table discloses the inception dates of each Fund and its respective share classes along with each Fund’s diversification status as of period end:
| Fund Name | Fund Inception | Institutional Class | Administrative Class | Class D | Class A | Class R | Diversification Status | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 12/31/14 | 12/31/14 | 12/31/14 | — | 12/31/14 | — | Diversified | |||||||||||||||||||||||||
An investment in a Fund is not a bank deposit and is not guaranteed or insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. It is possible to lose money on investments in a Fund.
The Trustees are responsible generally for overseeing the management of the Trust. The Trustees authorize the Trust to enter into service agreements with the Adviser, the Distributor, the Administrator and other service providers in order to provide, and in some cases authorize service providers to procure through other parties, necessary or desirable services on behalf of the Trust and the Funds. Shareholders are not parties to or third-party beneficiaries of such service agreements. Neither a Fund’s prospectus nor a Fund’s summary prospectus, the Trust’s Statement of Additional Information (“SAI”), any contracts filed as exhibits to the Trust’s registration statement, nor any other communications, disclosure documents or regulatory filings (including this report) from or on behalf of the Trust or a Fund creates a contract between or among any shareholder of a Fund, on the one hand, and the Trust, a Fund, a service provider to the Trust or a Fund, and/or the Trustees or officers of the Trust, on the other hand. The Trustees (or the Trust and its officers, service providers or other delegates acting under authority of the Trustees) may amend the most recent prospectus or use a new prospectus, summary prospectus or SAI with respect to a Fund or the Trust, and/or amend, file and/or issue any other communications, disclosure documents or regulatory filings, and may amend or enter into any contracts to which the Trust or a Fund is a party, and interpret the investment objective(s), policies, restrictions and contractual provisions applicable to any Fund, without shareholder
input or approval, except in circumstances in which shareholder approval is specifically required by law (such as changes to fundamental investment policies) or where a shareholder approval requirement is specifically disclosed in the Trust’s then-current prospectus or SAI.
PIMCO has adopted written proxy voting policies and procedures (“Proxy Policy”) as required by Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended. The Proxy Policy has been adopted by the Trust as the policies and procedures that PIMCO will use when voting proxies on behalf of a Fund. A description of the policies and procedures that PIMCO uses to vote proxies relating to portfolio securities of a Fund, and information about how the Fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30th, are available without charge, upon request, by calling the Trust at (888) 87-PIMCO, on the Fund’s website at www.pimco.com, and on the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
The Trust files a complete schedule of each Fund’s holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. A copy of a Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. A Fund’s Form N-Q is also available without charge, upon request, by calling the Trust at (888) 87-PIMCO and on the Fund’s website at www.pimco.com. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
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PIMCO REALPATH® Blend 2020 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2020 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
 | PIMCO REALPATH® Blend 2020 Fund Institutional Class | 9.33% | 4.86% | |||||||
| PIMCO REALPATH® Blend 2020 Fund Administrative Class | 9.06% | 4.58% | ||||||||
| PIMCO REALPATH® Blend 2020 Fund Class A | 8.73% | 4.34% | ||||||||
| PIMCO REALPATH® Blend 2020 Fund Class A (adjusted) | 2.72% | 2.01% | ||||||||
 | S&P Target Date 2020 Index± | 9.84% | 5.30% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.39% for the Institutional Class shares, 0.64% for the Administrative Class shares and 0.89% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
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| Institutional Class - PBZNX | Administrative Class - PBZDX | Class A - PBZAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 24.6% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 13.2% | |||||||
PIMCO Income Fund | 11.8% | |||||||
PIMCO Total Return Fund | 7.3% | |||||||
PIMCO Real Return Fund | 7.3% | |||||||
PIMCO Real Return Asset Fund | 6.6% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 5.2% | |||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 4.5% | |||||||
PIMCO High Yield Fund | 4.5% | |||||||
PIMCO Long-Term Credit Fund | 3.3% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
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PIMCO REALPATH® Blend 2025 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2025 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2025 Fund Institutional Class | 10.33% | 5.05% | |||||||
| PIMCO REALPATH® Blend 2025 Fund Administrative Class | 9.98% | 4.76% | ||||||||
| PIMCO REALPATH® Blend 2025 Fund Class A | 9.85% | 4.53% | ||||||||
| PIMCO REALPATH® Blend 2025 Fund Class A (adjusted) | 3.84% | 2.19% | ||||||||
| S&P Target Date 2025 Index± | 11.26% | 5.78% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.35% for the Institutional Class shares, 0.60% for the Administrative Class shares and 0.85% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
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| Institutional Class - PPZRX | Administrative Class - PPZDX | Class A - PPZAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 29.0% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 15.5% | |||||||
PIMCO Income Fund | 9.1% | |||||||
PIMCO Real Return Asset Fund | 7.4% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 6.2% | |||||||
PIMCO Total Return Fund | 5.1% | |||||||
PIMCO High Yield Fund | 4.0% | |||||||
PIMCO Long Duration Total Return Fund | 3.7% | |||||||
PIMCO Long-Term Credit Fund | 3.7% | |||||||
PIMCO Real Return Fund | 3.6% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
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PIMCO REALPATH® Blend 2030 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2030 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2030 Fund Institutional Class | 12.20% | 5.63% | |||||||
| PIMCO REALPATH® Blend 2030 Fund Administrative Class | 11.76% | 5.34% | ||||||||
| PIMCO REALPATH® Blend 2030 Fund Class A | 11.64% | 5.10% | ||||||||
| PIMCO REALPATH® Blend 2030 Fund Class A (adjusted) | 5.54% | 2.75% | ||||||||
| S&P Target Date 2030 Index± | 12.55% | 6.20% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.32% for the Institutional Class shares, 0.57% for the Administrative Class shares and 0.82% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 12 | PIMCO EQUITY SERIES |
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| Institutional Class - PBPNX | Administrative Class - PBPRX | Class A - PBPAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 33.4% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 17.7% | |||||||
PIMCO Income Fund | 7.9% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 7.2% | |||||||
PIMCO Real Return Asset Fund | 5.9% | |||||||
PIMCO High Yield Fund | 4.0% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 3.9% | |||||||
PIMCO Total Return Fund | 3.9% | |||||||
PIMCO Long Duration Total Return Fund | 3.1% | |||||||
PIMCO Long-Term Credit Fund | 3.0% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 13 |
Table of Contents
PIMCO REALPATH® Blend 2035 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2035 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2035 Fund Institutional Class | 13.29% | 5.77% | |||||||
| PIMCO REALPATH® Blend 2035 Fund Administrative Class | 13.01% | 5.49% | ||||||||
| PIMCO REALPATH® Blend 2035 Fund Class A | 12.66% | 5.25% | ||||||||
| PIMCO REALPATH® Blend 2035 Fund Class A (adjusted) | 6.42% | 2.90% | ||||||||
| S&P Target Date 2035 Index± | 13.85% | 6.61% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.28% for the Institutional Class shares, 0.53% for the Administrative Class shares and 0.78% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 14 | PIMCO EQUITY SERIES |
Table of Contents
| Institutional Class - PDGZX | Administrative Class - PDGDX | Class A - PDGAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 37.3% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 19.5% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 8.0% | |||||||
PIMCO Income Fund | 6.8% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4.3% | |||||||
PIMCO High Yield Fund | 3.9% | |||||||
PIMCO Real Return Asset Fund | 3.5% | |||||||
PIMCO Total Return Fund | 2.9% | |||||||
PIMCO Long Duration Total Return Fund | 2.3% | |||||||
PIMCO Long-Term Credit Fund | 2.3% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 15 |
Table of Contents
PIMCO REALPATH® Blend 2040 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2040 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2040 Fund Institutional Class | 13.73% | 5.99% | |||||||
| PIMCO REALPATH® Blend 2040 Fund Administrative Class | 13.48% | 5.71% | ||||||||
| PIMCO REALPATH® Blend 2040 Fund Class A | 13.24% | 5.47% | ||||||||
| PIMCO REALPATH® Blend 2040 Fund Class A (adjusted) | 7.03% | 3.12% | ||||||||
| S&P Target Date 2040 Index± | 14.77% | 6.90% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.25% for the Institutional Class shares, 0.50% for the Administrative Class shares and 0.75% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 16 | PIMCO EQUITY SERIES |
Table of Contents
| Institutional Class - PVPNX | Administrative Class - PVPRX | Class A - PVPAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 40.3% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 20.9% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 8.8% | |||||||
PIMCO Income Fund | 5.5% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4.5% | |||||||
PIMCO High Yield Fund | 3.5% | |||||||
PIMCO Real Return Asset Fund | 2.4% | |||||||
PIMCO Total Return Fund | 1.9% | |||||||
PIMCO Emerging Local Bond Fund | 1.8% | |||||||
PIMCO Long-Term Credit Fund | 1.8% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 17 |
Table of Contents
PIMCO REALPATH® Blend 2045 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2045 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2045 Fund Institutional Class | 14.12% | 5.87% | |||||||
| PIMCO REALPATH® Blend 2045 Fund Administrative Class | 13.77% | 5.60% | ||||||||
| PIMCO REALPATH® Blend 2045 Fund Class A | 13.50% | 5.35% | ||||||||
| PIMCO REALPATH® Blend 2045 Fund Class A (adjusted) | 7.27% | 3.00% | ||||||||
| S&P Target Date 2045 Index± | 15.52% | 7.12% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.23% for the Institutional Class shares, 0.48% for the Administrative Class shares and 0.73% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 18 | PIMCO EQUITY SERIES |
Table of Contents
| Institutional Class - PVQNX | Administrative Class - PVQDX | Class A - PVQAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 41.9% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 21.6% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 9.1% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4.9% | |||||||
PIMCO Income Fund | 4.1% | |||||||
PIMCO High Yield Fund | 2.9% | |||||||
PIMCO Real Return Asset Fund | 2.1% | |||||||
PIMCO Emerging Local Bond Fund | 1.5% | |||||||
PIMCO Long Duration Total Return Fund | 1.2% | |||||||
PIMCO Long-Term Credit Fund | 1.2% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 19 |
Table of Contents
PIMCO REALPATH® Blend 2050 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2050 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2050 Fund Institutional Class | 14.40% | 6.04% | |||||||
| PIMCO REALPATH® Blend 2050 Fund Administrative Class | 14.05% | 5.74% | ||||||||
| PIMCO REALPATH® Blend 2050 Fund Class A | 13.74% | 5.46% | ||||||||
| PIMCO REALPATH® Blend 2050 Fund Class A (adjusted) | 7.48% | 3.11% | ||||||||
| S&P Target Date 2050 Index± | 16.24% | 7.33% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.21% for the Institutional Class shares, 0.46% for the Administrative Class shares and 0.71% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 20 | PIMCO EQUITY SERIES |
Table of Contents
| Institutional Class - PPQZX | Administrative Class - PPQDX | Class A - PPQAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 42.7% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 21.8% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 9.3% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5.1% | |||||||
PIMCO Income Fund | 3.6% | |||||||
PIMCO High Yield Fund | 2.8% | |||||||
PIMCO Real Return Asset Fund | 1.9% | |||||||
PIMCO Emerging Local Bond Fund | 1.4% | |||||||
PIMCO Real Return Fund | 1.1% | |||||||
PIMCO Long-Term Credit Fund | 1.0% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 21 |
Table of Contents
PIMCO REALPATH® Blend 2055 Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend 2055 Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend 2055 Fund Institutional Class | 14.35% | 5.98% | |||||||
| PIMCO REALPATH® Blend 2055 Fund Administrative Class | 14.11% | 5.72% | ||||||||
| PIMCO REALPATH® Blend 2055 Fund Class A | 13.62% | 5.39% | ||||||||
| PIMCO REALPATH® Blend 2055 Fund Class A (adjusted) | 7.37% | 3.04% | ||||||||
| S&P Target Date 2055+ Index± | 16.72% | 7.44% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.21% for the Institutional Class shares, 0.46% for the Administrative Class shares and 0.71% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 22 | PIMCO EQUITY SERIES |
Table of Contents
| Institutional Class - PRQZX | Administrative Class - PRQDX | Class A - PRQAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 43.0% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 22.0% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 9.3% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5.1% | |||||||
PIMCO Income Fund | 3.8% | |||||||
PIMCO High Yield Fund | 2.8% | |||||||
PIMCO Real Return Asset Fund | 2.0% | |||||||
PIMCO Emerging Local Bond Fund | 1.3% | |||||||
PIMCO Real Return Fund | 1.1% | |||||||
PIMCO Long Duration Total Return Fund | 1.0% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 23 |
Table of Contents
PIMCO REALPATH® Blend Income Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO REALPATH® Blend Income Fund seeks to maximize total return, consistent with prudent investment management, by investing in a combination of affiliated and unaffiliated funds that are registered under the Investment Company Act of 1940, equity securities, Fixed Income Instruments of varying maturities, or related derivatives on any securities mentioned above. Under normal circumstances, the Fund seeks to invest substantially all of its equity exposure in index tracking securities, including investments in affiliated or unaffiliated investment companies, which will be registered under the 1940 Act, or related derivatives on such securities or indexes. “Fixed Income Instruments” include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will invest in such funds, securities, instruments and other investments to the extent permitted under the 1940 Act, or any exemptive relief therefrom. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (12/31/14) | |||||||||
| PIMCO REALPATH® Blend Income Fund Institutional Class | 8.85% | 4.82% | |||||||
| PIMCO REALPATH® Blend Income Fund Administrative Class | 8.71% | 4.58% | ||||||||
| PIMCO REALPATH® Blend Income Fund Class A | 8.39% | 4.31% | ||||||||
| PIMCO REALPATH® Blend Income Fund Class A (adjusted) | 2.39% | 1.98% | ||||||||
| S&P Target Date Retirement Income Index± | 4.95% | 3.52% | |||||||
All Fund returns are net of fees and expenses.
± The S&P Target Date Index Series is comprised of eleven multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to each asset class. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date, as indicated in the index name, and is based on market observations through an annual survey of target date fund managers.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.39% for the Institutional Class shares, 0.64% for the Administrative Class shares and 0.89% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 24 | PIMCO EQUITY SERIES |
Table of Contents
| Institutional Class - PBRNX | Administrative Class - PBRDX | Class A - PBRAX |
Top 10 Holdings as of 06/30/20171§
Vanguard 500 Index Fund ‘Admiral’ | 22.3% | |||||||
PIMCO Income Fund | 14.0% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 11.9% | |||||||
PIMCO Real Return Fund | 10.2% | |||||||
PIMCO Total Return Fund | 8.7% | |||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 6.3% | |||||||
PIMCO Real Return Asset Fund | 5.3% | |||||||
PIMCO High Yield Fund | 5.2% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 4.6% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 2.6% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Exposure to U.S. large market capitalization equities benefited absolute performance, as U.S. large market capitalization equities posted positive returns. |
| » | Exposure to U.S. high yield credit benefited absolute performance, as U.S. high yield credit posted positive returns. |
| » | Exposure to developed market ex-U.S. equities benefited absolute performance, as developed market ex-U.S. equities posted positive returns. |
| » | Exposure to emerging market equities benefited absolute performance, as emerging market equities posted positive returns. |
| » | Exposure to U.S. small market capitalization equities benefited absolute performance, as U.S. small market capitalization equities posted positive returns. |
| » | Exposure to long-term Treasuries detracted from absolute performance, as long-term Treasuries posted negative returns. |
| ANNUAL REPORT | JUNE 30, 2017 | 25 |
Table of Contents
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and exchange fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for all Funds and share classes is from January 1, 2017 to June 30, 2017 unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these rows, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the appropriate row for your share class, in the column entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) on purchase payments and exchange fees. Therefore, the information under the heading “Hypothetical (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Expense ratios may vary from period to period because of various factors such as an increase in expenses that are not covered by the management fees, such as fees and expenses of the independent trustees and their counsel, extraordinary expenses and interest expense.
| Actual | Hypothetical (5% return before expenses) | |||||||||||||||||||||||||||||||||||||||
| Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,065.40 | $ | 0.20 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.20 | 0.04 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,064.20 | 1.48 | 1,000.00 | 1,023.36 | 1.45 | 0.29 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,062.20 | 2.76 | 1,000.00 | 1,022.12 | 2.71 | 0.54 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,072.90 | $ | 0.21 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.20 | 0.04 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,070.90 | 1.49 | 1,000.00 | 1,023.36 | 1.45 | 0.29 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,069.70 | 2.77 | 1,000.00 | 1,022.12 | 2.71 | 0.54 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,080.00 | $ | 0.26 | $ | 1,000.00 | $ | 1,024.55 | $ | 0.25 | 0.05 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,077.90 | 1.55 | 1,000.00 | 1,023.31 | 1.51 | 0.30 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,078.00 | 2.83 | 1,000.00 | 1,022.07 | 2.76 | 0.55 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,084.70 | $ | 0.31 | $ | 1,000.00 | $ | 1,024.50 | $ | 0.30 | 0.06 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,084.30 | 1.60 | 1,000.00 | 1,023.26 | 1.56 | 0.31 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,082.10 | 2.89 | 1,000.00 | 1,022.02 | 2.81 | 0.56 | |||||||||||||||||||||||||||||||||
| 26 | PIMCO EQUITY SERIES |
Table of Contents
| Actual | Hypothetical (5% return before expenses) | |||||||||||||||||||||||||||||||||||||||
| Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,089.00 | $ | 0.31 | $ | 1,000.00 | $ | 1,024.50 | $ | 0.30 | 0.06 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,086.80 | 1.60 | 1,000.00 | 1,023.26 | 1.56 | 0.31 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,085.80 | 2.90 | 1,000.00 | 1,022.02 | 2.81 | 0.56 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,091.40 | $ | 0.31 | $ | 1,000.00 | $ | 1,024.50 | $ | 0.30 | 0.06 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,090.30 | 1.61 | 1,000.00 | 1,023.26 | 1.56 | 0.31 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,089.20 | 2.90 | 1,000.00 | 1,022.02 | 2.81 | 0.56 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,092.90 | $ | 0.31 | $ | 1,000.00 | $ | 1,024.50 | $ | 0.30 | 0.06 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,090.90 | 1.61 | 1,000.00 | 1,023.26 | 1.56 | 0.31 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,089.10 | 2.90 | 1,000.00 | 1,022.02 | 2.81 | 0.56 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,092.30 | $ | 0.31 | $ | 1,000.00 | $ | 1,024.50 | $ | 0.30 | 0.06 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,091.00 | 1.61 | 1,000.00 | 1,023.26 | 1.56 | 0.31 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,089.20 | 2.90 | 1,000.00 | 1,022.02 | 2.81 | 0.56 | |||||||||||||||||||||||||||||||||
PIMCO REALPATH® Blend Income Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,061.10 | $ | 0.20 | $ | 1,000.00 | $ | 1,024.60 | $ | 0.20 | 0.04 | % | ||||||||||||||||||||||||||
| Administrative Class | 1,000.00 | 1,060.00 | 1.48 | 1,000.00 | 1,023.36 | 1.45 | 0.29 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,058.00 | 2.76 | 1,000.00 | 1,022.12 | 2.71 | 0.54 | |||||||||||||||||||||||||||||||||
* Expenses Paid During Period are equal to the net annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
** Net Annualized Expense Ratio is reflective of any applicable contractual fee waivers and/or expense reimbursements or voluntary fee waivers. Details regarding fee waivers, if any, can be found in Note 8, Fees and Expenses, in the Notes to Financial Statements.
| ANNUAL REPORT | JUNE 30, 2017 | 27 |
Table of Contents
| Investment Operations | Less Distributions(b) | |||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.90 | $ | 0.31 | $ | 0.60 | $ | 0.91 | $ | (0.23 | ) | $ | 0.00 | $ | 0.00 | $ | (0.23 | ) | ||||||||||||||||||
06/30/2016 | 9.97 | 0.32 | (0.06 | ) | 0.26 | (0.31 | ) | (0.02 | ) | 0.00 | (0.33 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.11 | (0.09 | ) | 0.02 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.90 | 0.27 | 0.62 | 0.89 | (0.21 | ) | 0.00 | 0.00 | (0.21 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.97 | 0.29 | (0.06 | ) | 0.23 | (0.28 | ) | (0.02 | ) | 0.00 | (0.30 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.10 | (0.09 | ) | 0.01 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.91 | 0.33 | 0.53 | 0.86 | (0.20 | ) | 0.00 | 0.00 | (0.20 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.97 | 0.27 | (0.06 | ) | 0.21 | (0.25 | ) | (0.02 | ) | 0.00 | (0.27 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.09 | (0.09 | ) | 0.00 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.85 | $ | 0.30 | $ | 0.70 | $ | 1.00 | $ | (0.22 | ) | $ | 0.00 | $ | 0.00 | $ | (0.22 | ) | ||||||||||||||||||
06/30/2016 | 9.99 | 0.32 | (0.12 | ) | 0.20 | (0.32 | ) | (0.02 | ) | 0.00 | (0.34 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | (0.08 | ) | 0.04 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.85 | 0.28 | 0.69 | 0.97 | (0.20 | ) | 0.00 | 0.00 | (0.20 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.99 | 0.28 | (0.11 | ) | 0.17 | (0.29 | ) | (0.02 | ) | 0.00 | (0.31 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.11 | (0.08 | ) | 0.03 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.85 | 0.32 | 0.64 | 0.96 | (0.19 | ) | 0.00 | 0.00 | (0.19 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.99 | 0.24 | (0.10 | ) | 0.14 | (0.26 | ) | (0.02 | ) | 0.00 | (0.28 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.10 | (0.08 | ) | 0.02 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.87 | $ | 0.31 | $ | 0.88 | $ | 1.19 | $ | (0.25 | ) | $ | 0.00 | $ | 0.00 | $ | (0.25 | ) | ||||||||||||||||||
06/30/2016 | 10.00 | 0.31 | (0.16 | ) | 0.15 | (0.25 | ) | (0.03 | ) | 0.00 | (0.28 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.13 | (0.08 | ) | 0.05 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.88 | 0.29 | 0.85 | 1.14 | (0.22 | ) | 0.00 | 0.00 | (0.22 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.00 | 0.29 | (0.15 | ) | 0.14 | (0.23 | ) | (0.03 | ) | 0.00 | (0.26 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | (0.08 | ) | 0.04 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.87 | 0.33 | 0.80 | 1.13 | (0.22 | ) | 0.00 | 0.00 | (0.22 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.00 | 0.26 | (0.16 | ) | 0.10 | (0.20 | ) | (0.03 | ) | 0.00 | (0.23 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.10 | (0.07 | ) | 0.03 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.83 | $ | 0.31 | $ | 0.98 | $ | 1.29 | $ | (0.21 | ) | $ | 0.00 | $ | 0.00 | $ | (0.21 | ) | ||||||||||||||||||
06/30/2016 | 10.04 | 0.29 | (0.24 | ) | 0.05 | (0.23 | ) | (0.03 | ) | 0.00 | (0.26 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.13 | (0.04 | ) | 0.09 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.83 | 0.25 | 1.01 | 1.26 | (0.18 | ) | 0.00 | 0.00 | (0.18 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.04 | 0.26 | (0.24 | ) | 0.02 | (0.20 | ) | (0.03 | ) | 0.00 | (0.23 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.11 | (0.03 | ) | 0.08 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.88 | 0.32 | 0.92 | 1.24 | (0.18 | ) | 0.00 | 0.00 | (0.18 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.03 | 0.20 | (0.19 | ) | 0.01 | (0.13 | ) | (0.03 | ) | 0.00 | (0.16 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | (0.05 | ) | 0.07 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| 28 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||||||||||||||||||
| Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Expenses | Expenses Excluding Waivers | Expenses Excluding Interest Expense | Expenses Excluding Interest Expense and Waivers | Net Investment Income (Loss) | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 10.58 | 9.33 | % | $ | 8,511 | 0.04 | % | 0.05 | % | 0.04 | % | 0.05 | % | 2.97 | % | 36 | % | |||||||||||||||||
| 9.90 | 2.77 | 4,152 | 0.03 | 0.03 | 0.03 | 0.03 | 3.28 | 45 | ||||||||||||||||||||||||||
| 9.97 | 0.19 | 3,007 | 0.03 | * | 0.57 | * | 0.03 | * | 0.57 | * | 2.20 | * | 5 | |||||||||||||||||||||
| 10.58 | 9.06 | 11 | 0.29 | 0.30 | 0.29 | 0.30 | 2.63 | 36 | ||||||||||||||||||||||||||
| 9.90 | 2.45 | 10 | 0.28 | 0.28 | 0.28 | 0.28 | 3.01 | 45 | ||||||||||||||||||||||||||
| 9.97 | 0.08 | 10 | 0.28 | * | 0.82 | * | 0.28 | * | 0.82 | * | 1.92 | * | 5 | |||||||||||||||||||||
| 10.57 | 8.73 | 2,394 | 0.54 | 0.55 | 0.54 | 0.55 | 3.12 | 36 | ||||||||||||||||||||||||||
| 9.91 | 2.29 | 10 | 0.53 | 0.53 | 0.53 | 0.53 | 2.81 | 45 | ||||||||||||||||||||||||||
| 9.97 | (0.03 | ) | 10 | 0.53 | * | 1.07 | * | 0.53 | * | 1.07 | * | 1.70 | * | 5 | ||||||||||||||||||||
| $ | 10.63 | 10.33 | % | $ | 6,131 | 0.04 | % | 0.05 | % | 0.04 | % | 0.05 | % | 2.94 | % | 27 | % | |||||||||||||||||
| 9.85 | 2.10 | 3,395 | 0.03 | 0.03 | 0.03 | 0.03 | 3.32 | 59 | ||||||||||||||||||||||||||
| 9.99 | 0.39 | 3,026 | 0.03 | * | 0.57 | * | 0.03 | * | 0.57 | * | 2.38 | * | 5 | |||||||||||||||||||||
| 10.62 | 9.98 | 28 | 0.29 | 0.30 | 0.29 | 0.30 | 2.72 | 27 | ||||||||||||||||||||||||||
| 9.85 | 1.81 | 16 | 0.28 | 0.28 | 0.28 | 0.28 | 2.96 | 59 | ||||||||||||||||||||||||||
| 9.99 | 0.30 | 15 | 0.28 | * | 0.82 | * | 0.28 | * | 0.82 | * | 2.20 | * | 5 | |||||||||||||||||||||
| 10.62 | 9.85 | 3,899 | 0.54 | 0.55 | 0.54 | 0.55 | 3.06 | 27 | ||||||||||||||||||||||||||
| 9.85 | 1.50 | 27 | 0.53 | 0.53 | 0.53 | 0.53 | 2.49 | 59 | ||||||||||||||||||||||||||
| 9.99 | 0.17 | 11 | 0.53 | * | 1.07 | * | 0.53 | * | 1.07 | * | 1.92 | * | 5 | |||||||||||||||||||||
| $ | 10.81 | 12.20 | % | $ | 12,978 | 0.05 | % | 0.06 | % | 0.05 | % | 0.06 | % | 2.99 | % | 23 | % | |||||||||||||||||
| 9.87 | 1.67 | 6,409 | 0.04 | 0.04 | 0.04 | 0.04 | 3.22 | 65 | ||||||||||||||||||||||||||
| 10.00 | 0.49 | 3,015 | 0.04 | * | 0.58 | * | 0.04 | * | 0.58 | * | 2.55 | * | 6 | |||||||||||||||||||||
| 10.80 | 11.76 | 39 | 0.30 | 0.31 | 0.30 | 0.31 | 2.75 | 23 | ||||||||||||||||||||||||||
| 9.88 | 1.52 | 23 | 0.29 | 0.29 | 0.29 | 0.29 | 3.05 | 65 | ||||||||||||||||||||||||||
| 10.00 | 0.37 | 10 | 0.29 | * | 0.83 | * | 0.29 | * | 0.83 | * | 2.30 | * | 6 | |||||||||||||||||||||
| 10.78 | 11.64 | 3,118 | 0.55 | 0.56 | 0.55 | 0.56 | 3.13 | 23 | ||||||||||||||||||||||||||
| 9.87 | 1.15 | 13 | 0.54 | 0.54 | 0.54 | 0.54 | 2.74 | 65 | ||||||||||||||||||||||||||
| 10.00 | 0.27 | 10 | 0.54 | * | 1.08 | * | 0.54 | * | 1.08 | * | 2.04 | * | 6 | |||||||||||||||||||||
| $ | 10.91 | 13.29 | % | $ | 17,276 | 0.06 | % | 0.07 | % | 0.06 | % | 0.07 | % | 2.95 | % | 20 | % | |||||||||||||||||
| 9.83 | 0.64 | 5,958 | 0.05 | 0.05 | 0.05 | 0.05 | 3.05 | 56 | ||||||||||||||||||||||||||
| 10.04 | 0.89 | 3,027 | 0.05 | * | 0.58 | * | 0.05 | * | 0.58 | * | 2.48 | * | 6 | |||||||||||||||||||||
| 10.91 | 13.01 | 34 | 0.31 | 0.32 | 0.31 | 0.32 | 2.35 | 20 | ||||||||||||||||||||||||||
| 9.83 | 0.34 | 10 | 0.30 | 0.30 | 0.30 | 0.30 | 2.69 | 56 | ||||||||||||||||||||||||||
| 10.04 | 0.77 | 10 | 0.30 | * | 0.83 | * | 0.30 | * | 0.83 | * | 2.22 | * | 6 | |||||||||||||||||||||
| 10.94 | 12.66 | 3,296 | 0.56 | 0.57 | 0.56 | 0.57 | 2.96 | 20 | ||||||||||||||||||||||||||
| 9.88 | 0.21 | 10 | 0.55 | 0.55 | 0.55 | 0.55 | 2.10 | 56 | ||||||||||||||||||||||||||
| 10.03 | 0.65 | 22 | 0.55 | * | 1.08 | * | 0.55 | * | 1.08 | * | 2.33 | * | 6 | |||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 29 |
Table of Contents
Financial Highlights (Cont.)
| Investment Operations | Less Distributions(b) | |||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.84 | $ | 0.34 | $ | 1.00 | $ | 1.34 | $ | (0.18 | ) | $ | 0.00 | $ | 0.00 | $ | (0.18 | ) | ||||||||||||||||||
06/30/2016 | 10.07 | 0.28 | (0.24 | ) | 0.04 | (0.24 | ) | (0.03 | ) | 0.00 | (0.27 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | 0.00 | 0.12 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | ||||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.83 | 0.24 | 1.07 | 1.31 | (0.15 | ) | 0.00 | 0.00 | (0.15 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.07 | 0.27 | (0.27 | ) | 0.00 | (0.21 | ) | (0.03 | ) | 0.00 | (0.24 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.11 | 0.00 | 0.11 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.83 | 0.32 | 0.97 | 1.29 | (0.14 | ) | 0.00 | 0.00 | (0.14 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.07 | 0.25 | (0.27 | ) | (0.02 | ) | (0.19 | ) | (0.03 | ) | 0.00 | (0.22 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.10 | 0.00 | 0.10 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | ||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.79 | $ | 0.35 | $ | 1.02 | $ | 1.37 | $ | (0.16 | ) | $ | 0.00 | $ | 0.00 | $ | (0.16 | ) | ||||||||||||||||||
06/30/2016 | 10.10 | 0.27 | (0.32 | ) | (0.05 | ) | (0.23 | ) | (0.03 | ) | 0.00 | (0.26 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | 0.03 | 0.15 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | ||||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.79 | 0.25 | 1.09 | 1.34 | (0.14 | ) | 0.00 | 0.00 | (0.14 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.09 | 0.24 | (0.31 | ) | (0.07 | ) | (0.20 | ) | (0.03 | ) | 0.00 | (0.23 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.14 | (0.01 | ) | 0.13 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.80 | 0.32 | 0.99 | 1.31 | (0.12 | ) | 0.00 | 0.00 | (0.12 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.09 | 0.22 | (0.31 | ) | (0.09 | ) | (0.17 | ) | (0.03 | ) | 0.00 | (0.20 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.09 | 0.03 | 0.12 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | ||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.82 | $ | 0.35 | $ | 1.05 | $ | 1.40 | $ | (0.17 | ) | $ | 0.00 | $ | 0.00 | $ | (0.17 | ) | ||||||||||||||||||
06/30/2016 | 10.11 | 0.27 | (0.32 | ) | (0.05 | ) | (0.21 | ) | (0.03 | ) | 0.00 | (0.24 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | 0.04 | 0.16 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | ||||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.82 | 0.24 | 1.13 | 1.37 | (0.15 | ) | 0.00 | 0.00 | (0.15 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.10 | 0.24 | (0.30 | ) | (0.06 | ) | (0.19 | ) | (0.03 | ) | 0.00 | (0.22 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | 0.02 | 0.14 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.80 | 0.30 | 1.03 | 1.33 | (0.13 | ) | 0.00 | 0.00 | (0.13 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.10 | 0.23 | (0.32 | ) | (0.09 | ) | (0.18 | ) | (0.03 | ) | 0.00 | (0.21 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.10 | 0.03 | 0.13 | (0.03 | ) | 0.00 | 0.00 | (0.03 | ) | ||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.80 | $ | 0.27 | $ | 1.12 | $ | 1.39 | $ | (0.17 | ) | $ | 0.00 | $ | 0.00 | $ | (0.17 | ) | ||||||||||||||||||
06/30/2016 | 10.11 | 0.27 | (0.33 | ) | (0.06 | ) | (0.22 | ) | (0.03 | ) | 0.00 | (0.25 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.12 | 0.04 | 0.16 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | ||||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.80 | 0.22 | 1.15 | 1.37 | (0.14 | ) | 0.00 | 0.00 | (0.14 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.11 | 0.24 | (0.33 | ) | (0.09 | ) | (0.19 | ) | (0.03 | ) | 0.00 | (0.22 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.11 | 0.04 | 0.15 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.79 | 0.31 | 1.01 | 1.32 | (0.13 | ) | 0.00 | 0.00 | (0.13 | ) | ||||||||||||||||||||||||||
06/30/2016 | 10.09 | 0.22 | (0.32 | ) | (0.10 | ) | (0.17 | ) | (0.03 | ) | 0.00 | (0.20 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.13 | 0.00 | 0.13 | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||||
| 30 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||||||||||||||||||
| Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Expenses | Expenses Excluding Waivers | Expenses Excluding Interest Expense | Expenses Excluding Interest Expense and Waivers | Net Investment Income (Loss) | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 11.00 | 13.73 | % | $ | 24,381 | 0.06 | % | 0.07 | % | 0.06 | % | 0.07 | % | 3.16 | % | 15 | % | |||||||||||||||||
| 9.84 | 0.48 | 3,509 | 0.05 | 0.05 | 0.05 | 0.05 | 2.90 | 43 | ||||||||||||||||||||||||||
| 10.07 | 1.19 | 3,036 | 0.05 | * | 0.58 | * | 0.05 | * | 0.58 | * | 2.39 | * | 6 | |||||||||||||||||||||
| 10.99 | 13.48 | 52 | 0.31 | 0.32 | 0.31 | 0.32 | 2.33 | 15 | ||||||||||||||||||||||||||
| 9.83 | 0.14 | 36 | 0.30 | 0.30 | 0.30 | 0.30 | 2.89 | 43 | ||||||||||||||||||||||||||
| 10.07 | 1.08 | 12 | 0.30 | * | 0.83 | * | 0.30 | * | 0.83 | * | 2.20 | * | 6 | |||||||||||||||||||||
| 10.98 | 13.24 | 5,285 | 0.56 | 0.57 | 0.56 | 0.57 | 2.98 | 15 | ||||||||||||||||||||||||||
| 9.83 | (0.10 | ) | 30 | 0.55 | 0.55 | 0.55 | 0.55 | 2.63 | 43 | |||||||||||||||||||||||||
| 10.07 | 0.98 | 11 | 0.55 | * | 1.08 | * | 0.55 | * | 1.08 | * | 1.93 | * | 6 | |||||||||||||||||||||
| $ | 11.00 | 14.12 | % | $ | 36,311 | 0.06 | % | 0.07 | % | 0.06 | % | 0.07 | % | 3.27 | % | 10 | % | |||||||||||||||||
| 9.79 | (0.45 | ) | 3,415 | 0.05 | 0.05 | 0.05 | 0.05 | 2.84 | 41 | |||||||||||||||||||||||||
| 10.10 | 1.48 | 3,044 | 0.05 | * | 0.58 | * | 0.05 | * | 0.58 | * | 2.37 | * | 6 | |||||||||||||||||||||
| 10.99 | 13.77 | 60 | 0.31 | 0.32 | 0.31 | 0.32 | 2.35 | 10 | ||||||||||||||||||||||||||
| 9.79 | (0.63 | ) | 39 | 0.30 | 0.30 | 0.30 | 0.30 | 2.55 | 41 | |||||||||||||||||||||||||
| 10.09 | 1.33 | 39 | 0.30 | * | 0.83 | * | 0.30 | * | 0.83 | * | 2.69 | * | 6 | |||||||||||||||||||||
| 10.99 | 13.50 | 3,071 | 0.56 | 0.57 | 0.56 | 0.57 | 2.94 | 10 | ||||||||||||||||||||||||||
| 9.80 | (0.81 | ) | 10 | 0.55 | 0.55 | 0.55 | 0.55 | 2.31 | 41 | |||||||||||||||||||||||||
| 10.09 | 1.16 | 10 | 0.55 | * | 1.08 | * | 0.55 | * | 1.08 | * | 1.86 | * | 6 | |||||||||||||||||||||
| $ | 11.05 | 14.40 | % | $ | 43,554 | 0.06 | % | 0.07 | % | 0.06 | % | 0.07 | % | 3.26 | % | 10 | % | |||||||||||||||||
| 9.82 | (0.40 | ) | 3,934 | 0.05 | 0.05 | 0.05 | 0.05 | 2.86 | 38 | |||||||||||||||||||||||||
| 10.11 | 1.59 | 3,046 | 0.05 | * | 0.58 | * | 0.05 | * | 0.58 | * | 2.39 | * | 6 | |||||||||||||||||||||
| 11.04 | 14.05 | 21 | 0.31 | 0.32 | 0.31 | 0.32 | 2.26 | 10 | ||||||||||||||||||||||||||
| 9.82 | (0.60 | ) | 13 | 0.30 | 0.30 | 0.30 | 0.30 | 2.53 | 38 | |||||||||||||||||||||||||
| 10.10 | 1.39 | 14 | 0.30 | * | 0.83 | * | 0.30 | * | 0.83 | * | 2.33 | * | 6 | |||||||||||||||||||||
| 11.00 | 13.74 | 3,440 | 0.56 | 0.57 | 0.56 | 0.57 | 2.79 | 10 | ||||||||||||||||||||||||||
| 9.80 | (0.89 | ) | 110 | 0.55 | 0.55 | 0.55 | 0.55 | 2.47 | 38 | |||||||||||||||||||||||||
| 10.10 | 1.31 | 15 | 0.55 | * | 1.08 | * | 0.55 | * | 1.08 | * | 2.05 | * | 6 | |||||||||||||||||||||
| $ | 11.02 | 14.35 | % | $ | 6,555 | 0.06 | % | 0.07 | % | 0.06 | % | 0.07 | % | 2.56 | % | 14 | % | |||||||||||||||||
| 9.80 | (0.47 | ) | 3,388 | 0.05 | 0.05 | 0.05 | 0.05 | 2.83 | 38 | |||||||||||||||||||||||||
| 10.11 | 1.58 | 3,048 | 0.05 | * | 0.58 | * | 0.05 | * | 0.58 | * | 2.39 | * | 5 | |||||||||||||||||||||
| 11.03 | 14.11 | 16 | 0.31 | 0.32 | 0.31 | 0.32 | 2.11 | 14 | ||||||||||||||||||||||||||
| 9.80 | (0.77 | ) | 11 | 0.30 | 0.30 | 0.30 | 0.30 | 2.54 | 38 | |||||||||||||||||||||||||
| 10.11 | 1.47 | 11 | 0.30 | * | 0.83 | * | 0.30 | * | 0.83 | * | 2.18 | * | 5 | |||||||||||||||||||||
| 10.98 | 13.62 | 1,799 | 0.56 | 0.57 | 0.56 | 0.57 | 2.85 | 14 | ||||||||||||||||||||||||||
| 9.79 | (0.94 | ) | 60 | 0.55 | 0.55 | 0.55 | 0.55 | 2.29 | 38 | |||||||||||||||||||||||||
| 10.09 | 1.28 | 66 | 0.55 | * | 1.08 | * | 0.55 | * | 1.08 | * | 2.53 | * | 5 | |||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 31 |
Table of Contents
Financial Highlights (Cont.)
| Investment Operations | Less Distributions(b) | |||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO REALPATH® Blend Income Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.92 | $ | 0.31 | $ | 0.56 | $ | 0.87 | $ | (0.25 | ) | $ | 0.00 | $ | 0.00 | $ | (0.25 | ) | ||||||||||||||||||
06/30/2016 | 9.95 | 0.32 | 0.00 | 0.32 | (0.32 | ) | (0.02 | ) | (0.01 | ) | (0.35 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.10 | (0.10 | ) | 0.00 | (0.05 | ) | 0.00 | 0.00 | (0.05 | ) | |||||||||||||||||||||||||
| Administrative Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.92 | 0.28 | 0.57 | 0.85 | (0.22 | ) | 0.00 | 0.00 | (0.22 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.94 | 0.29 | 0.01 | 0.30 | (0.29 | ) | (0.02 | ) | (0.01 | ) | (0.32 | ) | ||||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.09 | (0.11 | ) | (0.02 | ) | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.91 | 0.31 | 0.51 | 0.82 | (0.21 | ) | 0.00 | 0.00 | (0.21 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.94 | 0.28 | (0.01 | ) | 0.27 | (0.27 | ) | (0.02 | ) | (0.01 | ) | (0.30 | ) | |||||||||||||||||||||||
12/31/2014 - 06/30/2015 | 10.00 | 0.13 | (0.15 | ) | (0.02 | ) | (0.04 | ) | 0.00 | 0.00 | (0.04 | ) | ||||||||||||||||||||||||
| * | Annualized |
| (a) | Per share amounts based on average number of shares outstanding during the year or period. |
| (b) | The Tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| (c) | Ratios shown do not include expenses of the investment companies in which a Fund may invest. See Note 8, Fees and Expenses, in the Notes to Financial Statements for more information regarding the expenses and any applicable fee waivers associated with these investments. |
| 32 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||||||||||||||||||
| Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Expenses | Expenses Excluding Waivers | Expenses Excluding Interest Expense | Expenses Excluding Interest Expense and Waivers | Net Investment Income (Loss) | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 10.54 | 8.85 | % | $ | 6,027 | 0.04 | % | 0.05 | % | 0.04 | % | 0.05 | % | 2.95 | % | 30 | % | |||||||||||||||||
| 9.92 | 3.33 | 3,317 | 0.03 | 0.03 | 0.03 | 0.03 | 3.34 | 41 | ||||||||||||||||||||||||||
| 9.95 | (0.02 | ) | 3,035 | 0.03 | * | 0.56 | * | 0.03 | * | 0.56 | * | 2.03 | * | 4 | ||||||||||||||||||||
| 10.55 | 8.71 | 74 | 0.29 | 0.30 | 0.29 | 0.30 | 2.68 | 30 | ||||||||||||||||||||||||||
| 9.92 | 3.08 | 50 | 0.28 | 0.28 | 0.28 | 0.28 | 2.95 | 41 | ||||||||||||||||||||||||||
| 9.94 | (0.21 | ) | 14 | 0.28 | * | 0.81 | * | 0.28 | * | 0.81 | * | 1.84 | * | 4 | ||||||||||||||||||||
| 10.52 | 8.39 | 1,661 | 0.54 | 0.55 | 0.54 | 0.55 | 2.91 | 30 | ||||||||||||||||||||||||||
| 9.91 | 2.75 | 70 | 0.53 | 0.53 | 0.53 | 0.53 | 2.84 | 41 | ||||||||||||||||||||||||||
| 9.94 | (0.22 | ) | 73 | 0.53 | * | 1.06 | * | 0.53 | * | 1.06 | * | 2.61 | * | 4 | ||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 33 |
Table of Contents
Statements of Assets and Liabilities
| (Amounts in thousands†, except per share amounts) | PIMCO REALPATH® Blend 2020 Fund | PIMCO REALPATH® Blend 2025 Fund | PIMCO REALPATH® Blend 2030 Fund | PIMCO REALPATH® Blend 2035 Fund | ||||||||||||
Assets: | ||||||||||||||||
Investments, at value | ||||||||||||||||
Investments in securities | $ | 4,916 | $ | 5,351 | $ | 9,923 | $ | 14,008 | ||||||||
Investments in Affiliates | 5,774 | 4,548 | 6,022 | 6,262 | ||||||||||||
Financial Derivative Instruments | ||||||||||||||||
Exchange-traded or centrally cleared | 20 | 20 | 5 | 5 | ||||||||||||
Over the counter | 12 | 11 | 20 | 28 | ||||||||||||
Cash | 144 | 87 | 142 | 272 | ||||||||||||
Receivable for Fund shares sold | 59 | 50 | 28 | 36 | ||||||||||||
Dividends receivable from Affiliates | 20 | 16 | 21 | 22 | ||||||||||||
Total Assets | 10,945 | 10,083 | 16,161 | 20,633 | ||||||||||||
Liabilities: | ||||||||||||||||
Financial Derivative Instruments | ||||||||||||||||
Exchange-traded or centrally cleared | $ | 7 | $ | 7 | $ | 3 | $ | 3 | ||||||||
Over the counter | 0 | 0 | 0 | 0 | ||||||||||||
Payable for investments in Affiliates purchased | 20 | 16 | 21 | 22 | ||||||||||||
Accrued investment advisory fees | 0 | 0 | 0 | 0 | ||||||||||||
Accrued supervisory and administrative fees | 1 | 1 | 1 | 1 | ||||||||||||
Accrued servicing fees | 1 | 1 | 1 | 1 | ||||||||||||
Accrued reimbursement to PIMCO | 0 | 0 | 0 | 0 | ||||||||||||
Total Liabilities | 29 | 25 | 26 | 27 | ||||||||||||
Net Assets | $ | 10,916 | $ | 10,058 | $ | 16,135 | $ | 20,606 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Paid in capital | $ | 10,443 | $ | 9,670 | $ | 15,010 | $ | 19,461 | ||||||||
Undistributed (overdistributed) net investment income | 33 | 30 | 90 | 116 | ||||||||||||
Accumulated undistributed net realized gain (loss) | (49 | ) | (87 | ) | 33 | (16 | ) | |||||||||
Net unrealized appreciation (depreciation) | 489 | 445 | 1,002 | 1,045 | ||||||||||||
Net Assets | $ | 10,916 | $ | 10,058 | $ | 16,135 | $ | 20,606 | ||||||||
Cost of investments in securities | $ | 4,537 | $ | 4,981 | $ | 9,067 | $ | 13,097 | ||||||||
Cost of investments in Affiliates | $ | 5,670 | $ | 4,477 | $ | 5,893 | $ | 6,153 | ||||||||
Cost or premiums of financial derivative instruments, net | $ | 19 | $ | 19 | $ | 5 | $ | 5 | ||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| 34 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| PIMCO REALPATH® Blend 2040 Fund | PIMCO REALPATH® Blend 2045 Fund | PIMCO REALPATH® Blend 2050 Fund | PIMCO REALPATH® Blend 2055 Fund | PIMCO REALPATH® Blend Income Fund | ||||||||||||||
| $ | 21,973 | $ | 30,422 | $ | 36,704 | $ | 6,517 | $ | 3,118 | |||||||||
| 7,539 | 8,833 | 9,797 | 1,684 | 4,403 | ||||||||||||||
| 2 | 2 | 2 | 2 | 16 | ||||||||||||||
| 42 | 57 | 68 | 12 | 7 | ||||||||||||||
| 103 | 12 | 212 | 81 | 195 | ||||||||||||||
| 64 | 122 | 239 | 77 | 30 | ||||||||||||||
| 26 | 28 | 30 | 5 | 15 | ||||||||||||||
| 29,749 | 39,476 | 47,052 | 8,378 | 7,784 | ||||||||||||||
| $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 6 | |||||||||
| 0 | 1 | 1 | 0 | 0 | ||||||||||||||
| 26 | 28 | 30 | 5 | 15 | ||||||||||||||
| 1 | 1 | 1 | 0 | 0 | ||||||||||||||
| 2 | 2 | 2 | 1 | 1 | ||||||||||||||
| 1 | 1 | 1 | 1 | 0 | ||||||||||||||
| 0 | 0 | 1 | 0 | 0 | ||||||||||||||
| 31 | 34 | 37 | 8 | 22 | ||||||||||||||
| $ | 29,718 | $ | 39,442 | $ | 47,015 | $ | 8,370 | $ | 7,762 | |||||||||
| $ | 28,733 | $ | 38,335 | $ | 45,651 | $ | 7,878 | $ | 7,462 | |||||||||
| 152 | 208 | 247 | 54 | 15 | ||||||||||||||
| (20 | ) | (30 | ) | (12 | ) | (34 | ) | (26 | ) | |||||||||
| 853 | 929 | 1,129 | 472 | 311 | ||||||||||||||
| $ | 29,718 | $ | 39,442 | $ | 47,015 | $ | 8,370 | $ | 7,762 | |||||||||
| $ | 21,227 | $ | 29,592 | $ | 35,680 | $ | 6,069 | $ | 2,872 | |||||||||
| $ | 7,471 | $ | 8,788 | $ | 9,756 | $ | 1,670 | $ | 4,340 | |||||||||
| $ | 3 | $ | 3 | $ | 3 | $ | 3 | $ | 16 | |||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 35 |
Table of Contents
Statements of Assets and Liabilities (Cont.)
| PIMCO REALPATH® Blend 2020 Fund | PIMCO REALPATH® Blend 2025 Fund | PIMCO REALPATH® Blend 2030 Fund | PIMCO REALPATH® Blend 2035 Fund | |||||||||||||
Net Assets: | ||||||||||||||||
Institutional Class | $ | 8,511 | $ | 6,131 | $ | 12,978 | $ | 17,276 | ||||||||
Administrative Class | 11 | 28 | 39 | 34 | ||||||||||||
Class A | 2,394 | 3,899 | 3,118 | 3,296 | ||||||||||||
Shares Issued and Outstanding: | ||||||||||||||||
Institutional Class | 805 | 577 | 1,201 | 1,583 | ||||||||||||
Administrative Class | 1 | 3 | 4 | 3 | ||||||||||||
Class A | 226 | 367 | 289 | 301 | ||||||||||||
Net Asset Value Per Share Outstanding: | ||||||||||||||||
Institutional Class | $ | 10.58 | $ | 10.63 | $ | 10.81 | $ | 10.91 | ||||||||
Administrative Class | 10.58 | 10.62 | 10.80 | 10.91 | ||||||||||||
Class A | 10.57 | 10.62 | 10.78 | 10.94 | ||||||||||||
| 36 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| PIMCO REALPATH® Blend 2040 Fund | PIMCO REALPATH® Blend 2045 Fund | PIMCO REALPATH® Blend 2050 Fund | PIMCO REALPATH® Blend 2055 Fund | PIMCO REALPATH® Blend Income Fund | ||||||||||||||
| $ | 24,381 | $ | 36,311 | $ | 43,554 | $ | 6,555 | $ | 6,027 | |||||||||
| 52 | 60 | 21 | 16 | 74 | ||||||||||||||
| 5,285 | 3,071 | 3,440 | 1,799 | 1,661 | ||||||||||||||
| 2,216 | 3,300 | 3,942 | 595 | 572 | ||||||||||||||
| 5 | 5 | 2 | 1 | 7 | ||||||||||||||
| 481 | 280 | 313 | 164 | 158 | ||||||||||||||
| $ | 11.00 | $ | 11.00 | $ | 11.05 | $ | 11.02 | $ | 10.54 | |||||||||
| 10.99 | 10.99 | 11.04 | 11.03 | 10.55 | ||||||||||||||
| 10.98 | 10.99 | 11.00 | 10.98 | 10.52 | ||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 37 |
Table of Contents
| Year Ended June 30, 2017 | ||||||||||||||||
| (Amounts in thousands†) | PIMCO REALPATH® Blend 2020 Fund | PIMCO REALPATH® Blend 2025 Fund | PIMCO REALPATH® Blend 2030 Fund | PIMCO REALPATH® Blend 2035 Fund | ||||||||||||
Investment Income: | ||||||||||||||||
Dividends | $ | 69 | $ | 74 | $ | 137 | $ | 167 | ||||||||
Dividends from Investments in Affiliates | 128 | 102 | 149 | 121 | ||||||||||||
Total Income | 197 | 176 | 286 | 288 | ||||||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 1 | 1 | 2 | 3 | ||||||||||||
Supervisory and administrative fees | 3 | 4 | 4 | 4 | ||||||||||||
Servicing fees - Class A | 2 | 2 | 2 | 3 | ||||||||||||
Trustee fees | 1 | 1 | 1 | 1 | ||||||||||||
Miscellaneous expense | 0 | 0 | 1 | 1 | ||||||||||||
Total Expenses | 7 | 8 | 10 | 12 | ||||||||||||
Waiver and/or Reimbursement by PIMCO | (1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||
Net Expenses | 6 | 7 | 9 | 11 | ||||||||||||
Net Investment Income (Loss) | 191 | 169 | 277 | 277 | ||||||||||||
Net Realized Gain (Loss): | ||||||||||||||||
Investments in securities | 6 | 4 | 44 | 15 | ||||||||||||
Investments in Affiliates | (20 | ) | (19 | ) | 1 | (2 | ) | |||||||||
Net capital gain distributions received from Affiliate investments | 9 | 7 | 9 | 5 | ||||||||||||
Exchange-traded or centrally cleared financial derivative instruments | (17 | ) | (18 | ) | (4 | ) | (5 | ) | ||||||||
Over the counter financial derivative instruments | (14 | ) | (13 | ) | (18 | ) | (18 | ) | ||||||||
Net Realized Gain (Loss) | (36 | ) | (39 | ) | 32 | (5 | ) | |||||||||
Net Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||
Investments in securities | 379 | 388 | 701 | 812 | ||||||||||||
Investments in Affiliates | 48 | 49 | 42 | 61 | ||||||||||||
Exchange-traded or centrally cleared financial derivative instruments | (2 | ) | (1 | ) | 1 | 1 | ||||||||||
Over the counter financial derivative instruments | 5 | 3 | (2 | ) | 0 | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) | 430 | 439 | 742 | 874 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 585 | $ | 569 | $ | 1,051 | $ | 1,146 | ||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| 38 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| PIMCO REALPATH® Blend 2040 Fund | PIMCO REALPATH® Blend 2045 Fund | PIMCO REALPATH® Blend 2050 Fund | PIMCO REALPATH® Blend 2055 Fund | PIMCO REALPATH® Blend Income Fund | ||||||||||||||
| $ | 202 | $ | 252 | $ | 302 | $ | 92 | $ | 45 | |||||||||
| 92 | 82 | 87 | 36 | 103 | ||||||||||||||
| 294 | 334 | 389 | 128 | 148 | ||||||||||||||
| 3 | 3 | 3 | 2 | 1 | ||||||||||||||
| 5 | 4 | 5 | 2 | 2 | ||||||||||||||
| 4 | 2 | 3 | 1 | 1 | ||||||||||||||
| 1 | 1 | 1 | 1 | 1 | ||||||||||||||
| 1 | 1 | 1 | 0 | 0 | ||||||||||||||
| 14 | 11 | 13 | 6 | 5 | ||||||||||||||
| (1 | ) | 0 | (1 | ) | 0 | (1 | ) | |||||||||||
| 13 | 11 | 12 | 6 | 4 | ||||||||||||||
| 281 | 323 | 377 | 122 | 144 | ||||||||||||||
| 4 | 5 | 10 | 0 | 5 | ||||||||||||||
| (3 | ) | (3 | ) | 2 | (6 | ) | (9 | ) | ||||||||||
| 2 | 2 | 2 | 2 | 4 | ||||||||||||||
| (4 | ) | (4 | ) | (4 | ) | (4 | ) | (15 | ) | |||||||||
| (23 | ) | (27 | ) | (30 | ) | (7 | ) | (11 | ) | |||||||||
| (24 | ) | (27 | ) | (20 | ) | (15 | ) | (26 | ) | |||||||||
| 775 | 880 | 1,050 | 496 | 267 | ||||||||||||||
| 62 | 44 | 37 | 16 | 41 | ||||||||||||||
| 1 | 1 | 1 | 1 | (1 | ) | |||||||||||||
| 25 | 39 | 47 | (5 | ) | 3 | |||||||||||||
| 863 | 964 | 1,135 | 508 | 310 | ||||||||||||||
| $ | 1,120 | $ | 1,260 | $ | 1,492 | $ | 615 | $ | 428 | |||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 39 |
Table of Contents
Statements of Changes in Net Assets
| PIMCO REALPATH® Blend 2020 Fund | PIMCO REALPATH® Blend 2025 Fund | PIMCO REALPATH® Blend 2030 Fund | PIMCO REALPATH® Blend 2035 Fund | |||||||||||||||||||||||||||||
| (Amounts in thousands†) | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | ||||||||||||||||||||||||
Increase (Decrease) in Net Assets from: | ||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income (loss) | $ | 191 | $ | 111 | $ | 169 | $ | 112 | $ | 277 | $ | 134 | $ | 277 | $ | 127 | ||||||||||||||||
Net realized gain (loss) | (36 | ) | (39 | ) | (39 | ) | (82 | ) | 32 | (41 | ) | (5 | ) | (55 | ) | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | 430 | 89 | 439 | 34 | 742 | 289 | 874 | 189 | ||||||||||||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 585 | 161 | 569 | 64 | 1,051 | 382 | 1,146 | 261 | ||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||
Institutional Class | (133 | ) | (110 | ) | (100 | ) | (115 | ) | (185 | ) | (109 | ) | (154 | ) | (104 | ) | ||||||||||||||||
Administrative Class | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (1 | ) | (0 | ) | (0 | ) | (0 | ) | ||||||||||||||||
Class A | (14 | ) | (0 | ) | (19 | ) | (0 | ) | (4 | ) | (0 | ) | (5 | ) | (0 | ) | ||||||||||||||||
From net realized capital gains | ||||||||||||||||||||||||||||||||
Institutional Class | 0 | (7 | ) | 0 | (7 | ) | 0 | (9 | ) | 0 | (10 | ) | ||||||||||||||||||||
Administrative Class | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | ||||||||||||||||||||
Class A | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | ||||||||||||||||||||
Tax basis return of capital | ||||||||||||||||||||||||||||||||
Institutional Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Total Distributions(a) | (147 | ) | (117 | ) | (119 | ) | (122 | ) | (190 | ) | (118 | ) | (159 | ) | (114 | ) | ||||||||||||||||
Portfolio Share Transactions: | ||||||||||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions** | 6,306 | 1,101 | 6,170 | 444 | 8,829 | 3,146 | 13,641 | 2,772 | ||||||||||||||||||||||||
Total Increase (Decrease) in Net Assets | 6,744 | 1,145 | 6,620 | 386 | 9,690 | 3,410 | 14,628 | 2,919 | ||||||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||||||
Beginning of year | 4,172 | 3,027 | 3,438 | 3,052 | 6,445 | 3,035 | 5,978 | 3,059 | ||||||||||||||||||||||||
End of year* | $ | 10,916 | $ | 4,172 | $ | 10,058 | $ | 3,438 | $ | 16,135 | $ | 6,445 | $ | 20,606 | $ | 5,978 | ||||||||||||||||
* Including undistributed (overdistributed) net investment income of: | $ | 33 | $ | 0 | $ | 30 | $ | (7 | ) | $ | 90 | $ | 32 | $ | 116 | $ | 25 | |||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| ** | See Note 12, Shares of Beneficial Interest, in the Notes to Financial Statements. |
| (a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| 40 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| PIMCO REALPATH® Blend 2040 Fund | PIMCO REALPATH® Blend 2045 Fund | PIMCO REALPATH® Blend 2050 Fund | PIMCO REALPATH® Blend 2055 Fund | PIMCO REALPATH® Blend Income Fund | ||||||||||||||||||||||||||||||||||
| Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | |||||||||||||||||||||||||||||
| $ | 281 | $ | 90 | $ | 323 | $ | 87 | $ | 377 | $ | 91 | $ | 122 | $ | 85 | $ | 144 | $ | 105 | |||||||||||||||||||
| (24 | ) | (43 | ) | (27 | ) | (53 | ) | (20 | ) | (48 | ) | (15 | ) | (50 | ) | (26 | ) | (26 | ) | |||||||||||||||||||
| 863 | (4 | ) | 964 | (36 | ) | 1,135 | (9 | ) | 508 | (39 | ) | 310 | 36 | |||||||||||||||||||||||||
| | 1,120 | 43 | 1,260 | (2 | ) | 1,492 | 34 | 615 | (4 | ) | 428 | 115 | ||||||||||||||||||||||||||
| (106 | ) | (77 | ) | (94 | ) | (73 | ) | (108 | ) | (72 | ) | (66 | ) | (71 | ) | (102 | ) | (103 | ) | |||||||||||||||||||
| (1 | ) | (1 | ) | (1 | ) | (1 | ) | (0 | ) | (0 | ) | (1 | ) | (0 | ) | (1 | ) | (0 | ) | |||||||||||||||||||
| (4 | ) | (1 | ) | (0 | ) | (0 | ) | (1 | ) | (2 | ) | (2 | ) | (1 | ) | (11 | ) | (2 | ) | |||||||||||||||||||
| 0 | (9 | ) | 0 | (9 | ) | 0 | (8 | ) | 0 | (9 | ) | 0 | (5 | ) | ||||||||||||||||||||||||
| 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | ||||||||||||||||||||||||
| 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | (0 | ) | ||||||||||||||||||||||||
| 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (3 | ) | ||||||||||||||||||||||||||||
| 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (0 | ) | ||||||||||||||||||||||||||||
| 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (0 | ) | ||||||||||||||||||||||||||||
| (111 | ) | (88 | ) | (95 | ) | (83 | ) | (109 | ) | (82 | ) | (69 | ) | (81 | ) | (114 | ) | (113 | ) | |||||||||||||||||||
| | 25,134 | 561 | 34,813 | 456 | 41,575 | 1,030 | 4,365 | 419 | 4,011 | 313 | ||||||||||||||||||||||||||||
| 26,143 | 516 | 35,978 | 371 | 42,958 | 982 | 4,911 | 334 | 4,325 | 315 | |||||||||||||||||||||||||||||
| 3,575 | 3,059 | 3,464 | 3,093 | 4,057 | 3,075 | 3,459 | 3,125 | 3,437 | 3,122 | |||||||||||||||||||||||||||||
| $ | 29,718 | $ | 3,575 | $ | 39,442 | $ | 3,464 | $ | 47,015 | $ | 4,057 | $ | 8,370 | $ | 3,459 | $ | 7,762 | $ | 3,437 | |||||||||||||||||||
| $ | 152 | $ | 10 | $ | 208 | $ | 11 | $ | 247 | $ | 17 | $ | 54 | $ | 12 | $ | 15 | $ | (5 | ) | ||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 41 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2020 Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 45.0% | ||||||||||||
| MUTUAL FUNDS 45.0% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 11,778 | $ | 2,636 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 106,526 | 1,413 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 16,386 | 555 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4,805 | 312 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $4,537) | 4,916 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $4,537) | 4,916 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 52.9% | ||||||||||||
| MUTUAL FUNDS (a) 49.7% | ||||||||||||
PIMCO Emerging Local Bond Fund | 31,899 | 239 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 45,830 | 482 | ||||||||||
PIMCO High Yield Fund | 53,100 | 478 | ||||||||||
PIMCO Income Fund | 102,163 | 1,262 | ||||||||||
PIMCO Long Duration Total Return Fund | 31,768 | 350 | ||||||||||
PIMCO Long-Term Credit Fund | 29,128 | 351 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 86,091 | $ | 706 | |||||||||
PIMCO Real Return Fund | 70,993 | 776 | ||||||||||
PIMCO Total Return Fund | 76,076 | 778 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $5,318) | 5,422 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 3.2% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 3.2% | ||||||||||||
PIMCO Short-Term | 35,611 | 352 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $352) | 352 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $5,670) | 5,774 | |||||||||||
| Total Investments 97.9% (Cost $10,207) | $ | 10,690 | ||||||||||
Financial Derivative (Cost or Premiums, net $19) | 25 | |||||||||||
| Other Assets and Liabilities, net 1.9% | 201 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 10,916 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 1,700.000 | 12/15/2017 | 1 | $ | 3 | $ | 0 | |||||||||||||
Put - CBOE S&P 500 | 1,850.000 | 12/15/2017 | 1 | 5 | 1 | |||||||||||||||
Put - CBOE S&P 500 | 2,000.000 | 06/15/2018 | 5 | 20 | 19 | |||||||||||||||
|
|
|
| |||||||||||||||||
| $ | 28 | $ | 20 | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options |
| $ | 28 | $ | 20 | |||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 1,500.000 | 12/15/2017 | 1 | $ | (1 | ) | $ | 0 | ||||||||||||
Put - CBOE S&P 500 | 1,675.000 | 06/15/2018 | 5 | (8 | ) | (7 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
| $ | (9 | ) | $ | (7 | ) | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options |
| $ | (9 | ) | $ | (7 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 20 | $ | 0 | $ | 0 | $ | 20 | $ | (7) | $ | 0 | $ | 0 | $ | (7) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| 42 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 9 | 0 | (5 | ) | 0 | 6 | |||||||||||||||||
Premiums | $ | (4 | ) | $ | (12 | ) | $ | 0 | $ | 7 | $ | 0 | $ | (9 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 1,143 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 188 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | ||||||||||||||||||
GST | Receive | DWRTFT Index | 32 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 297 | 0 | 7 | 7 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 200 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | 33 | 0 | 1 | 1 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 12 | $ | 12 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 12 | $ | 12 | $ | 0 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 4 | $ | 0 | $ | 4 | ||||||||||||||||||||||||||
GST | 0 | 0 | 7 | 7 | 0 | 0 | 0 | 0 | 7 | 0 | 7 | |||||||||||||||||||||||||||||||||||||
JPM | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 1 | 0 | 1 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 12 | $ | 12 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 20 | $ | 0 | $ | 0 | $ | 20 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 5 | $ | 0 | $ | 7 | $ | 0 | $ | 0 | $ | 12 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 5 | $ | 0 | $ | 27 | $ | 0 | $ | 0 | $ | 32 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 7 | $ | 0 | $ | 0 | $ | 7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 43 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2020 Fund (Cont.)
June 30, 2017
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (25 | ) | $ | 0 | $ | 0 | $ | (25 | ) | ||||||||||
Written Options | 0 | 0 | 7 | 0 | 0 | 7 | ||||||||||||||||||
Futures | 0 | 0 | 1 | 0 | 0 | 1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (17 | ) | $ | 0 | $ | 0 | $ | (17 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (14 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (14 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (14 | ) | $ | 0 | $ | (17 | ) | $ | 0 | $ | 0 | $ | (31 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 5 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 5 | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 4,916 | $ | 0 | $ | 0 | $ | 4,916 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 4,916 | $ | 0 | $ | 0 | $ | 4,916 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 5,422 | 0 | 0 | 5,422 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 352 | 0 | 0 | 352 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 5,774 | $ | 0 | $ | 0 | $ | 5,774 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 10,690 | $ | 0 | $ | 0 | $ | 10,690 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 20 | $ | 0 | $ | 20 | ||||||||
Over the counter | 0 | 12 | 0 | 12 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 32 | $ | 0 | $ | 32 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (7 | ) | $ | 0 | $ | (7 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 25 | $ | 0 | $ | 25 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 10,690 | $ | 25 | $ | 0 | $ | 10,715 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 44 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2025 Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||
| INVESTMENTS IN SECURITIES 53.2% | ||||||||||
| MUTUAL FUNDS 53.2% | ||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 12,802 | $ | 2,864 | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 115,700 | 1,534 | ||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 18,056 | 612 | ||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5,245 | 341 | ||||||||
| ||||||||||
| Total Mutual Funds (Cost $4,981) | 5,351 | |||||||||
| ||||||||||
| Total Investments in Securities (Cost $4,981) | 5,351 | |||||||||
| ||||||||||
| INVESTMENTS IN AFFILIATES 45.2% | ||||||||||
| MUTUAL FUNDS (a) 40.2% | ||||||||||
PIMCO Emerging Local Bond Fund | 26,002 | 195 | ||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 20,397 | 215 | ||||||||
PIMCO High Yield Fund | 44,208 | 398 | ||||||||
PIMCO Income Fund | 73,131 | 903 | ||||||||
PIMCO Long Duration Total Return Fund | 33,515 | 369 | ||||||||
PIMCO Long-Term Credit Fund | 30,676 | 369 | ||||||||
| SHARES | MARKET VALUE (000S) | |||||||||
PIMCO Real Return Asset Fund | 89,601 | $ | 735 | |||||||
PIMCO Real Return Fund | 32,565 | 356 | ||||||||
PIMCO Total Return Fund | 49,428 | 506 | ||||||||
| ||||||||||
Total Mutual Funds (Cost $3,975) | 4,046 | |||||||||
| ||||||||||
| SHORT-TERM INSTRUMENTS 5.0% | ||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 5.0% | ||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 50,825 | 502 | ||||||||
| ||||||||||
| Total Short-Term Instruments (Cost $502) | 502 | |||||||||
| ||||||||||
| Total Investments in Affiliates (Cost $4,477) | 4,548 | |||||||||
| Total Investments 98.4% (Cost $9,458) | $ | 9,899 | ||||||||
Financial Derivative (Cost or Premiums, net $19) |
| 24 | ||||||||
| Other Assets and Liabilities, net 1.4% | 135 | |||||||||
| ||||||||||
| Net Assets 100.0% | $ | 10,058 | ||||||||
| ||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 1,700.000 | 12/15/2017 | 1 | $ | 3 | $ | 0 | |||||||||||||
Put - CBOE S&P 500 | 1,850.000 | 12/15/2017 | 1 | 5 | 1 | |||||||||||||||
Put - CBOE S&P 500 | 2,000.000 | 06/15/2018 | 5 | 20 | 19 | |||||||||||||||
|
|
|
| |||||||||||||||||
| $ | 28 | $ | 20 | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 28 | $ | 20 | ||||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 1,500.000 | 12/15/2017 | 1 | $ | (1 | ) | $ | 0 | ||||||||||||
Put - CBOE S&P 500 | 1,675.000 | 06/15/2018 | 5 | (8 | ) | (7 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
| $ | (9 | ) | $ | (7 | ) | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (9 | ) | $ | (7 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Market Value | Variation Margin Liability | |||||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Total | Written Options | Futures | Swap Agreements | Total | |||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 20 | $ | 0 | $ | 0 | $ | 20 | $ | (7) | $ | 0 | $ | 0 | $ | (7) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 45 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2025 Fund (Cont.)
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 4 | 8 | 0 | (6 | ) | 0 | 6 | |||||||||||||||||
Premiums | $ | (10 | ) | $ | (11 | ) | $ | 0 | $ | 12 | $ | 0 | $ | (9 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 1,142 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 187 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | ||||||||||||||||||
FBF | Receive | DWRTFT Index | 1 | 1-Month USD-LIBOR plus a specified spread | 11/08/2017 | 10 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
GST | Receive | DWRTFT Index | 34 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 316 | 0 | 7 | 7 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 41 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | 7 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 11 | $ | 11 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 11 | $ | 11 | $ | 0 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 4 | $ | 0 | $ | 4 | ||||||||||||||||||||||||||
GST | 0 | 0 | 7 | 7 | 0 | 0 | 0 | 0 | 7 | 0 | 7 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 11 | $ | 11 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 20 | $ | 0 | $ | 0 | $ | 20 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 4 | $ | 0 | $ | 7 | $ | 0 | $ | 0 | $ | 11 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 4 | $ | 0 | $ | 27 | $ | 0 | $ | 0 | $ | 31 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 7 | $ | 0 | $ | 0 | $ | 7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| 46 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (30 | ) | $ | 0 | $ | 0 | $ | (30 | ) | ||||||||||
Written Options | 0 | 0 | 12 | 0 | 0 | 12 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (18 | ) | $ | 0 | $ | 0 | $ | (18 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | (12 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (13 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (12 | ) | $ | 0 | $ | (19 | ) | $ | 0 | $ | 0 | $ | (31 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 6 | $ | 0 | $ | 0 | $ | 6 | ||||||||||||
Written Options | 0 | 0 | (7 | ) | 0 | 0 | (7 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 4 | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | 3 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 4 | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 5,351 | $ | 0 | $ | 0 | $ | 5,351 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 5,351 | $ | 0 | $ | 0 | $ | 5,351 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 4,046 | 0 | 0 | 4,046 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | 502 | 0 | 0 | 502 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 4,548 | $ | 0 | $ | 0 | $ | 4,548 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 9,899 | $ | 0 | $ | 0 | $ | 9,899 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 20 | $ | 0 | $ | 20 | ||||||||
Over the counter | 0 | 11 | 0 | 11 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 31 | $ | 0 | $ | 31 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (7 | ) | $ | 0 | $ | (7 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 24 | $ | 0 | $ | 24 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 9,899 | $ | 24 | $ | 0 | $ | 9,923 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 47 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2030 Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 61.5% | ||||||||||||
| MUTUAL FUNDS 61.5% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 23,800 | $ | 5,325 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 213,033 | 2,825 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 33,809 | 1,145 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 9,665 | 628 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $9,067) |
| 9,923 | ||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $9,067) | 9,923 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 37.3% | ||||||||||||
| MUTUAL FUNDS (a) 32.3% | ||||||||||||
PIMCO Emerging Local Bond Fund | 42,749 | 320 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 17,061 | 179 | ||||||||||
PIMCO High Yield Fund | 70,712 | 636 | ||||||||||
PIMCO Income Fund | 101,670 | 1,256 | ||||||||||
PIMCO Long Duration Total Return Fund | 44,067 | 486 | ||||||||||
PIMCO Long-Term Credit Fund | 40,334 | 486 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 115,597 | $ | 948 | |||||||||
PIMCO Real Return Fund | 26,083 | 285 | ||||||||||
PIMCO Total Return Fund | 59,972 | 614 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $5,081) |
| 5,210 | ||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 5.0% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 5.0% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 82,128 | 812 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $812) | 812 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $5,893) | 6,022 | |||||||||||
| Total Investments 98.8% (Cost $14,960) | $ | 15,945 | ||||||||||
Financial Derivative (Cost or Premiums, net $5) |
| 22 | ||||||||||
| Other Assets and Liabilities, net 1.1% | 168 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 16,135 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,150.000 | 12/15/2017 | 2 | $ | 20 | $ | 5 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options |
| $ | 20 | $ | 5 | |||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,050.000 | 12/15/2017 | 2 | $ | (15 | ) | $ | (3 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options |
| $ | (15 | ) | $ | (3 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 5 | $ | 0 | $ | 0 | $ | 5 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| 48 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 2 | 0 | (2 | ) | 0 | 2 | |||||||||||||||||
Premiums | $ | (4 | ) | $ | (15 | ) | $ | 0 | $ | 4 | $ | 0 | $ | (15 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 1,268 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ | 208 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | |||||||||||||||||||
GST | Receive | DWRTFT Index | 63 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 586 | 0 | 14 | 14 | 0 | ||||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 574 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | 94 | 0 | 2 | 2 | 0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
| $ | 0 | $ | 20 | $ | 20 | $ | 0 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 20 | $ | 20 | $ | 0 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 4 | $ | 0 | $ | 4 | ||||||||||||||||||||||||||
GST | 0 | 0 | 14 | 14 | 0 | 0 | 0 | 0 | 14 | 0 | 14 | |||||||||||||||||||||||||||||||||||||
JPM | 0 | 0 | 2 | 2 | 0 | 0 | 0 | 0 | 2 | 0 | 2 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 20 | $ | 20 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 5 | $ | 0 | $ | 0 | $ | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 6 | $ | 0 | $ | 14 | $ | 0 | $ | 0 | $ | 20 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 6 | $ | 0 | $ | 19 | $ | 0 | $ | 0 | $ | 25 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 3 | $ | 0 | $ | 0 | $ | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 49 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2030 Fund (Cont.)
June 30, 2017
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (8 | ) | $ | 0 | $ | 0 | $ | (8 | ) | ||||||||||
Written Options | 0 | 0 | 4 | 0 | 0 | 4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | (20 | ) | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | (18 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (20 | ) | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (22 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (7 | ) | ||||||||||
Written Options | 0 | 0 | 8 | 0 | 0 | 8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 6 | $ | 0 | $ | (8 | ) | $ | 0 | $ | 0 | $ | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 6 | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 9,923 | $ | 0 | $ | 0 | $ | 9,923 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 9,923 | $ | 0 | $ | 0 | $ | 9,923 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 5,210 | 0 | 0 | 5,210 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | 812 | 0 | 0 | 812 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 6,022 | $ | 0 | $ | 0 | $ | 6,022 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 15,945 | $ | 0 | $ | 0 | $ | 15,945 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 5 | $ | 0 | $ | 5 | ||||||||
Over the counter | 0 | 20 | 0 | 20 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 25 | $ | 0 | $ | 25 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (3 | ) | $ | 0 | $ | (3 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 22 | $ | 0 | $ | 22 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 15,945 | $ | 22 | $ | 0 | $ | 15,967 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 50 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2035 Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||
| INVESTMENTS IN SECURITIES 68.0% | ||||||||||
| MUTUAL FUNDS 68.0% | ||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 33,765 | $ | 7,555 | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 298,398 | 3,957 | ||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 48,157 | 1,631 | ||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 13,316 | 865 | ||||||||
| ||||||||||
Total Mutual Funds (Cost $13,097) | 14,008 | |||||||||
| ||||||||||
| Total Investments in Securities (Cost $13,097) | 14,008 | |||||||||
| ||||||||||
| INVESTMENTS IN AFFILIATES 30.4% | ||||||||||
| MUTUAL FUNDS (a) 25.5% | ||||||||||
PIMCO Emerging Local Bond Fund | 53,905 | 404 | ||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 16,920 | 178 | ||||||||
PIMCO High Yield Fund | 89,141 | 802 | ||||||||
PIMCO Income Fund | 110,926 | 1,370 | ||||||||
PIMCO Long Duration Total Return Fund | 41,991 | 463 | ||||||||
PIMCO Long-Term Credit Fund | 38,434 | 463 | ||||||||
| SHARES | MARKET VALUE (000S) | |||||||||
PIMCO Real Return Asset Fund | 86,143 | $ | 706 | |||||||
PIMCO Real Return Fund | 25,763 | 282 | ||||||||
PIMCO Total Return Fund | 57,285 | 586 | ||||||||
| ||||||||||
Total Mutual Funds (Cost $5,145) | 5,254 | |||||||||
| ||||||||||
| SHORT-TERM INSTRUMENTS 4.9% | ||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 4.9% | ||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 101,958 | 1,008 | ||||||||
| ||||||||||
| Total Short-Term Instruments (Cost $1,008) | 1,008 | |||||||||
| ||||||||||
| Total Investments in Affiliates (Cost $6,153) | 6,262 | |||||||||
| Total Investments 98.4% (Cost $19,250) | $ | 20,270 | ||||||||
Financial Derivative (Cost or Premiums, net $5) | 30 | |||||||||
| Other Assets and Liabilities, net 1.5% | 306 | |||||||||
| ||||||||||
| Net Assets 100.0% | $ | 20,606 | ||||||||
| ||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,150.000 | 12/15/2017 | 2 | $ | 20 | $ | 5 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options |
| $ | 20 | $ | 5 | |||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,050.000 | 12/15/2017 | 2 | $ | (15 | ) | $ | (3 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (15 | ) | $ | (3 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 5 | $ | 0 | $ | 0 | $ | 5 | $ | (3) | $ | 0 | $ | 0 | $ | (3 | ) | |||||||||||||||||||
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|
|
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|
|
| |||||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 51 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2035 Fund (Cont.)
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 3 | 2 | 0 | (3 | ) | 0 | 2 | |||||||||||||||||
Premiums | $ | (12 | ) | $ | (15 | ) | $ | 0 | $ | 12 | $ | 0 | $ | (15 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 2,060 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ | 338 | $ | 0 | $ | 7 | $ | 7 | $ | 0 | |||||||||||||||||||
GST | Receive | DWRTFT Index | 91 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 845 | 0 | 20 | 20 | 0 | ||||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 334 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | 55 | 0 | 1 | 1 | 0 | ||||||||||||||||||||||||
|
|
|
|
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|
|
| |||||||||||||||||||||||||||
| $ | 0 | $ | 28 | $ | 28 | $ | 0 | |||||||||||||||||||||||||||
|
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|
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| |||||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 28 | $ | 28 | $ | 0 | ||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 7 | $ | 7 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 7 | $ | 0 | $ | 7 | ||||||||||||||||||||||||||
GST | 0 | 0 | 20 | 20 | 0 | 0 | 0 | 0 | 20 | 0 | 20 | |||||||||||||||||||||||||||||||||||||
JPM | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 1 | 0 | 1 | |||||||||||||||||||||||||||||||||||||
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|
|
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|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 28 | $ | 28 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 5 | $ | 0 | $ | 0 | $ | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 8 | $ | 0 | $ | 20 | $ | 0 | $ | 0 | $ | 28 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 8 | $ | 0 | $ | 25 | $ | 0 | $ | 0 | $ | 33 | |||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 3 | $ | 0 | $ | 0 | $ | 3 | ||||||||||||
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| |||||||||||||
| 52 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (17 | ) | $ | 0 | $ | 0 | $ | (17 | ) | ||||||||||
Written Options | 0 | 0 | 12 | 0 | 0 | 12 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (5 | ) | $ | 0 | $ | 0 | $ | (5 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | (22 | ) | $ | 0 | $ | 4 | $ | 0 | $ | 0 | $ | (18 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (22 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (23 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 8 | $ | 0 | $ | (8 | ) | $ | 0 | $ | 0 | $ | 0 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 8 | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 14,008 | $ | 0 | $ | 0 | $ | 14,008 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 14,008 | $ | 0 | $ | 0 | $ | 14,008 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 5,254 | 0 | 0 | 5,254 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | 1,008 | 0 | 0 | 1,008 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 6,262 | $ | 0 | $ | 0 | $ | 6,262 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 20,270 | $ | 0 | $ | 0 | $ | 20,270 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 5 | $ | 0 | $ | 5 | ||||||||
Over the counter | 0 | 28 | 0 | 28 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 33 | $ | 0 | $ | 33 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (3 | ) | $ | 0 | $ | (3 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 30 | $ | 0 | $ | 30 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 20,270 | $ | 30 | $ | 0 | $ | 20,300 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 53 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2040 Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 74.0% | ||||||||||||
| MUTUAL FUNDS 74.0% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 53,092 | $ | 11,879 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 465,833 | 6,177 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 76,315 | 2,586 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 20,484 | 1,331 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $21,227) | 21,973 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $21,227) | 21,973 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 25.3% | ||||||||||||
| MUTUAL FUNDS (a) 20.6% | ||||||||||||
PIMCO Emerging Local Bond Fund | 69,470 | 520 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 23,173 | 244 | ||||||||||
PIMCO High Yield Fund | 114,854 | 1,034 | ||||||||||
PIMCO Income Fund | 131,106 | 1,619 | ||||||||||
PIMCO Long Duration Total Return Fund | 47,147 | 520 | ||||||||||
PIMCO Long-Term Credit Fund | 43,153 | 520 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 87,335 | $ | 716 | |||||||||
PIMCO Real Return Fund | 34,765 | 380 | ||||||||||
PIMCO Total Return Fund | 56,586 | 579 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $6,064) | 6,132 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 4.7% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 4.7% | ||||||||||||
PIMCO Short-Term | 142,333 | 1,407 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $1,407) | 1,407 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $7,471) | 7,539 | |||||||||||
| Total Investments 99.3% (Cost $28,698) | $ | 29,512 | ||||||||||
Financial Derivative (Cost or Premiums, net $3) | 43 | |||||||||||
| Other Assets and Liabilities, net 0.6% | 163 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 29,718 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,150.000 | 12/15/2017 | 1 | $ | 10 | $ | 2 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options |
| $ | 10 | $ | 2 | |||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,050.000 | 12/15/2017 | 1 | $ | (7 | ) | $ | (1 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options |
| $ | (7 | ) | $ | (1 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Market Value | Variation Margin Liability | |||||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Total | Written Options | Futures | Swap Agreements | Total | |||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 2 | $ | 0 | $ | 0 | $ | 2 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
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| |||||||||||||||||||||
| 54 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||
# of Contracts | 2 | 1 | 0 | (2 | ) | 0 | 1 | |||||||||||||
Premiums | $ | (6 | ) | $ | (7 | ) | $ 0 | $ | 6 | $ 0 | $ | (7 | ) | |||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 3,431 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 563 | $ | 0 | $ | 12 | $ | 12 | $ | 0 | ||||||||||||||||||
GST | Receive | DWRTFT Index | 141 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 1,310 | 0 | 30 | 30 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 48 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | 8 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 42 | $ | 42 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 42 | $ | 42 | $ | 0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 12 | $ | 12 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 12 | $ | 0 | $ | 12 | ||||||||||||||||||||||||||
GST | 0 | 0 | 30 | 30 | 0 | 0 | 0 | 0 | 30 | 0 | 30 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 42 | $ | 42 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 12 | $ | 0 | $ | 30 | $ | 0 | $ | 0 | $ | 42 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 12 | $ | 0 | $ | 32 | $ | 0 | $ | 0 | $ | 44 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 55 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2040 Fund (Cont.)
June 30, 2017
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (10 | ) | ||||||||||
Written Options | 0 | 0 | 6 | 0 | 0 | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | (26 | ) | $ | 0 | $ | 3 | $ | 0 | $ | 0 | $ | (23 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (26 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (27 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 11 | $ | 0 | $ | 14 | $ | 0 | $ | 0 | $ | 25 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 11 | $ | 0 | $ | 15 | $ | 0 | $ | 0 | $ | 26 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 21,973 | $ | 0 | $ | 0 | $ | 21,973 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 21,973 | $ | 0 | $ | 0 | $ | 21,973 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 6,132 | 0 | 0 | 6,132 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | 1,407 | 0 | 0 | 1,407 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 7,539 | $ | 0 | $ | 0 | $ | 7,539 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 29,512 | $ | 0 | $ | 0 | $ | 29,512 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 2 | $ | 0 | $ | 2 | ||||||||
Over the counter | 0 | 42 | 0 | 42 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 44 | $ | 0 | $ | 44 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 43 | $ | 0 | $ | 43 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 29,512 | $ | 43 | $ | 0 | $ | 29,555 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 56 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2045 Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 77.1% | ||||||||||||
| MUTUAL FUNDS 77.1% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 73,516 | $ | 16,450 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 639,250 | 8,477 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 105,354 | 3,569 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 29,636 | 1,926 | ||||||||||
|
| |||||||||||
| Total Mutual Funds (Cost $29,592) | 30,422 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $29,592) | 30,422 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 22.4% | ||||||||||||
| MUTUAL FUNDS (a) 16.1% | ||||||||||||
PIMCO Emerging Local Bond Fund | 77,331 | 579 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 27,046 | 285 | ||||||||||
PIMCO High Yield Fund | 127,825 | 1,150 | ||||||||||
PIMCO Income Fund | 131,365 | 1,622 | ||||||||||
PIMCO Long Duration Total Return Fund | 43,041 | 474 | ||||||||||
PIMCO Long-Term Credit Fund | 39,394 | 474 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 100,053 | $ | 821 | |||||||||
PIMCO Real Return Fund | 41,498 | 454 | ||||||||||
PIMCO Total Return Fund | 45,514 | 466 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $6,280) | 6,325 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 6.3% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 6.3% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 253,721 | 2,508 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $2,508) | 2,508 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $8,788) | 8,833 | |||||||||||
| Total Investments 99.5% (Cost $38,380) | $ | 39,255 | ||||||||||
Financial Derivative (Cost or Premiums, net $3) | 57 | |||||||||||
| Other Assets and Liabilities, net 0.4% | 130 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 39,442 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,150.000 | 12/15/2017 | 1 | $ | 10 | $ | 2 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 10 | $ | 2 | ||||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,050.000 | 12/15/2017 | 1 | $ | (7 | ) | $ | (1 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (7 | ) | $ | (1 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 2 | $ | 0 | $ | 0 | $ | 2 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 57 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2045 Fund (Cont.)
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 1 | 0 | (2 | ) | 0 | 1 | |||||||||||||||||
Premiums | $ | (6 | ) | $ | (7 | ) | $ | 0 | $ | 6 | $ | 0 | $ | (7 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 4,501 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 739 | $ | 0 | $ | 15 | $ | 15 | $ | 0 | ||||||||||||||||||
FBF | Receive | DWRTFT Index | 6 | 1-Month USD-LIBOR plus a specified spread | 11/08/2017 | 58 | 0 | (1 | ) | 0 | (1 | ) | ||||||||||||||||||||
GST | Receive | DWRTFT Index | 192 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 1,784 | 0 | 42 | 42 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 56 | $ | 57 | $ | (1 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 56 | $ | 57 | $ | (1 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 15 | $ | 15 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 15 | $ | 0 | $ | 15 | ||||||||||||||||||||||||||
FBF | 0 | 0 | 0 | 0 | 0 | 0 | (1 | ) | (1 | ) | (1 | ) | 0 | (1 | ) | |||||||||||||||||||||||||||||||||
GST | 0 | 0 | 42 | 42 | 0 | 0 | 0 | 0 | 42 | 0 | 42 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 57 | $ | 57 | $ | 0 | $ | 0 | $ | (1 | ) | $ | (1 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 15 | $ | 0 | $ | 42 | $ | 0 | $ | 0 | $ | 57 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 15 | $ | 0 | $ | 44 | $ | 0 | $ | 0 | $ | 59 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| 58 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | 2 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (10 | ) | ||||||||||
Written Options | 0 | 0 | 6 | 0 | 0 | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (31 | ) | $ | 0 | $ | 4 | $ | 0 | $ | 0 | $ | (27 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (31 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (31 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 15 | $ | 0 | $ | 24 | $ | 0 | $ | 0 | $ | 39 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 15 | $ | 0 | $ | 25 | $ | 0 | $ | 0 | $ | 40 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 30,422 | $ | 0 | $ | 0 | $ | 30,422 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 30,422 | $ | 0 | $ | 0 | $ | 30,422 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 6,325 | 0 | 0 | 6,325 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | 2,508 | 0 | 0 | 2,508 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 8,833 | $ | 0 | $ | 0 | $ | 8,833 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 39,255 | $ | 0 | $ | 0 | $ | 39,255 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 2 | $ | 0 | $ | 2 | ||||||||
Over the counter | 0 | 57 | 0 | 57 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 59 | $ | 0 | $ | 59 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | 0 | (1 | ) | 0 | (1 | ) | ||||||||||
Over the counter | 0 | (1 | ) | 0 | (1 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | (2 | ) | $ | 0 | $ | (2 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 57 | $ | 0 | $ | 57 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 39,255 | $ | 57 | $ | 0 | $ | 39,312 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 59 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2050 Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 78.0% | ||||||||||||
| MUTUAL FUNDS 78.0% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 88,723 | $ | 19,852 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 765,768 | 10,154 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 127,789 | 4,330 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 36,440 | 2,368 | ||||||||||
|
| |||||||||||
| Total Mutual Funds (Cost $35,680) | 36,704 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $35,680) | 36,704 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 20.9% | ||||||||||||
| MUTUAL FUNDS (a) 14.3% | ||||||||||||
PIMCO Emerging Local Bond Fund | 86,031 | 644 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 30,088 | 316 | ||||||||||
PIMCO High Yield Fund | 142,204 | 1,280 | ||||||||||
PIMCO Income Fund | 137,409 | 1,697 | ||||||||||
PIMCO Long Duration Total Return Fund | 42,181 | 465 | ||||||||||
PIMCO Long-Term Credit Fund | 38,608 | 465 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 108,957 | $ | 893 | |||||||||
PIMCO Real Return Fund | 47,165 | 516 | ||||||||||
PIMCO Total Return Fund | 40,145 | 411 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $6,646) | 6,687 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 6.6% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 6.6% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 314,584 | 3,110 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $3,110) | 3,110 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $9,756) | 9,797 | |||||||||||
| Total Investments 98.9% (Cost $45,436) | $ | 46,501 | ||||||||||
Financial Derivative (Cost or Premiums, net $3) | 68 | |||||||||||
| Other Assets and Liabilities, net 1.0% | 446 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 47,015 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,150.000 | 12/15/2017 | 1 | $ | 10 | $ | 2 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 10 | $ | 2 | ||||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,050.000 | 12/15/2017 | 1 | $ | (7 | ) | $ | (1 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (7 | ) | $ | (1 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 2 | $ | 0 | $ | 0 | $ | 2 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| 60 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 1 | 0 | (2 | ) | 0 | 1 | |||||||||||||||||
Premiums | $ | (6 | ) | $ | (7 | ) | $ | 0 | $ | 6 | $ | 0 | $ | (7 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 5,293 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 869 | $ | 0 | $ | 18 | $ | 18 | $ | 0 | ||||||||||||||||||
FBF | Receive | DWRTFT Index | 8 | 1-Month USD-LIBOR plus a specified spread | 11/08/2017 | 77 | 0 | (1 | ) | 0 | (1 | ) | ||||||||||||||||||||
GST | Receive | DWRTFT Index | 232 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 2,156 | 0 | 50 | 50 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 67 | $ | 68 | $ | (1 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 67 | $ | 68 | $ | (1 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 18 | $ | 18 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 18 | $ | 0 | $ | 18 | ||||||||||||||||||||||||||
FBF | 0 | 0 | 0 | 0 | 0 | 0 | (1 | ) | (1 | ) | (1 | ) | 0 | (1 | ) | |||||||||||||||||||||||||||||||||
GST | 0 | 0 | 50 | 50 | 0 | 0 | 0 | 0 | 50 | 0 | 50 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 68 | $ | 68 | $ | 0 | $ | 0 | $ | (1 | ) | $ | (1 | ) | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
| |||||||||||||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 18 | $ | 0 | $ | 50 | $ | 0 | $ | 0 | $ | 68 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 18 | $ | 0 | $ | 52 | $ | 0 | $ | 0 | $ | 70 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 61 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2050 Fund (Cont.)
June 30, 2017
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | 2 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (10 | ) | ||||||||||
Written Options | 0 | 0 | 6 | 0 | 0 | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | (36 | ) | $ | 0 | $ | 6 | $ | 0 | $ | 0 | $ | (30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (36 | ) | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | (34 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 17 | $ | 0 | $ | 30 | $ | 0 | $ | 0 | $ | 47 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 17 | $ | 0 | $ | 31 | $ | 0 | $ | 0 | $ | 48 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 36,704 | $ | 0 | $ | 0 | $ | 36,704 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 36,704 | $ | 0 | $ | 0 | $ | 36,704 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 6,687 | 0 | 0 | 6,687 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 3,110 | 0 | 0 | 3,110 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 9,797 | $ | 0 | $ | 0 | $ | 9,797 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 46,501 | $ | 0 | $ | 0 | $ | 46,501 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 2 | $ | 0 | $ | 2 | ||||||||
Over the counter | 0 | 68 | 0 | 68 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 70 | $ | 0 | $ | 70 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | 0 | (1 | ) | 0 | (1 | ) | ||||||||||
Over the counter | 0 | (1 | ) | 0 | (1 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | (2 | ) | $ | 0 | $ | (2 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 68 | $ | 0 | $ | 68 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 46,501 | $ | 68 | $ | 0 | $ | 46,569 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 62 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2055 Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 77.9% | ||||||||||||
| MUTUAL FUNDS 77.9% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 15,771 | $ | 3,529 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 135,906 | 1,802 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 22,610 | 766 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 6,467 | 420 | ||||||||||
|
| |||||||||||
| Total Mutual Funds (Cost $6,069) | 6,517 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $6,069) | 6,517 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 20.1% | ||||||||||||
| MUTUAL FUNDS (a) 14.1% | ||||||||||||
PIMCO Emerging Local Bond Fund | 14,722 | 110 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 5,154 | 54 | ||||||||||
PIMCO High Yield Fund | 25,349 | 228 | ||||||||||
PIMCO Income Fund | 24,915 | 308 | ||||||||||
PIMCO Long Duration Total Return Fund | 7,227 | 80 | ||||||||||
PIMCO Long-Term Credit Fund | 6,615 | 80 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 19,806 | $ | 163 | |||||||||
PIMCO Real Return Fund | 8,063 | 88 | ||||||||||
PIMCO Total Return Fund | 6,870 | 70 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $1,166) | 1,181 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 6.0% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 6.0% | ||||||||||||
PIMCO Short-Term | 50,942 | 503 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $504) | 503 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $1,670) | 1,684 | |||||||||||
| Total Investments 98.0% (Cost $7,739) | $ | 8,201 | ||||||||||
Financial Derivative (Cost or Premiums, net $3) | 13 | |||||||||||
| Other Assets and Liabilities, net 1.9% | 156 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 8,370 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,150.000 | 12/15/2017 | 1 | $ | 10 | $ | 2 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options |
| $ | 10 | $ | 2 | |||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 2,050.000 | 12/15/2017 | 1 | $ | (7 | ) | $ | (1 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options |
| $ | (7 | ) | $ | (1 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Total | Market Value | Variation Margin Liability | Total | |||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Written Options | Futures | Swap Agreements | |||||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 2 | $ | 0 | $ | 0 | $ | 2 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 63 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend 2055 Fund (Cont.)
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 1 | 0 | (2 | ) | 0 | 1 | |||||||||||||||||
Premiums | $ | (6 | ) | $ | (7 | ) | $ | 0 | $ | 6 | $ | 0 | $ | (7 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 980 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 161 | $ | 0 | $ | 3 | $ | 3 | $ | 0 | ||||||||||||||||||
FBF | Receive | DWRTFT Index | 2 | 1-Month USD-LIBOR plus a specified spread | 11/08/2017 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
GST | Receive | DWRTFT Index | 40 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 372 | 0 | 9 | 9 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 12 | $ | 12 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 12 | $ | 12 | $ | 0 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 3 | $ | 3 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3 | $ | 0 | $ | 3 | ||||||||||||||||||||||||||
GST | 0 | 0 | 9 | 9 | 0 | 0 | 0 | 0 | 9 | 0 | 9 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 12 | $ | 12 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master netting arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter |
| |||||||||||||||||||||||
Swap Agreements | $ | 3 | $ | 0 | $ | 9 | $ | 0 | $ | 0 | $ | 12 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 3 | $ | 0 | $ | 11 | $ | 0 | $ | 0 | $ | 14 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| 64 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (10 | ) | ||||||||||
Written Options | 0 | 0 | 6 | 0 | 0 | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (10 | ) | $ | 0 | $ | 3 | $ | 0 | $ | 0 | $ | (7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (10 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (11 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared |
| |||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 3 | $ | 0 | $ | (8 | ) | $ | 0 | $ | 0 | $ | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 3 | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 6,517 | $ | 0 | $ | 0 | $ | 6,517 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 6,517 | $ | 0 | $ | 0 | $ | 6,517 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 1,181 | 0 | 0 | 1,181 | ||||||||||||
Short-Term Instruments |
| |||||||||||||||
Central Funds Used for Cash Management Purposes | 503 | 0 | 0 | 503 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 1,684 | $ | 0 | $ | 0 | $ | 1,684 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 8,201 | $ | 0 | $ | 0 | $ | 8,201 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 2 | $ | 0 | $ | 2 | ||||||||
Over the counter | 0 | 12 | 0 | 12 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 14 | $ | 0 | $ | 14 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 13 | $ | 0 | $ | 13 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 8,201 | $ | 13 | $ | 0 | $ | 8,214 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 65 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend Income Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 40.2% | ||||||||||||
| MUTUAL FUNDS 40.2% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 7,498 | $ | 1,678 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 67,652 | 897 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 10,195 | 345 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 3,050 | 198 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,872) | 3,118 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $2,872) | 3,118 | |||||||||||
|
| |||||||||||
| INVESTMENTS IN AFFILIATES 56.7% | ||||||||||||
| MUTUAL FUNDS (a) 55.3% | ||||||||||||
PIMCO Emerging Local Bond Fund | 25,617 | 192 | ||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 45,249 | 476 | ||||||||||
PIMCO High Yield Fund | 43,295 | 390 | ||||||||||
PIMCO Income Fund | 84,979 | 1,050 | ||||||||||
PIMCO Long Duration Total Return Fund | 16,913 | 186 | ||||||||||
PIMCO Long-Term Credit Fund | 15,311 | 184 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Real Return Asset Fund | 48,512 | $ | 398 | |||||||||
PIMCO Real Return Fund | 69,747 | 763 | ||||||||||
PIMCO Total Return Fund | 64,052 | 655 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $4,231) | 4,294 | |||||||||||
|
| |||||||||||
| SHORT-TERM INSTRUMENTS 1.4% | ||||||||||||
| CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 1.4% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 11,004 | 109 | ||||||||||
|
| |||||||||||
| Total Short-Term Instruments (Cost $109) | 109 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $4,340) | 4,403 | |||||||||||
| Total Investments 96.9% (Cost $7,212) | $ | 7,521 | ||||||||||
Financial Derivative (Cost or Premiums, net $16) | 17 | |||||||||||
| Other Assets and Liabilities, net 2.9% | 224 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 7,762 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF CONTRACTS AND UNITS):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
PURCHASED OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Cost | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 1,700.000 | 12/15/2017 | 1 | $ | 3 | $ | 0 | |||||||||||||
Put - CBOE S&P 500 | 1,850.000 | 12/15/2017 | 1 | 4 | 1 | |||||||||||||||
Put - CBOE S&P 500 | 2,000.000 | 06/15/2018 | 4 | 16 | 15 | |||||||||||||||
|
|
|
| |||||||||||||||||
| $ | 23 | $ | 16 | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 23 | $ | 16 | ||||||||||||||||
|
|
|
| |||||||||||||||||
WRITTEN OPTIONS:
OPTIONS ON INDICES
| Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 | 1,500.000 | 12/15/2017 | 1 | $ | (1 | ) | $ | 0 | ||||||||||||
Put - CBOE S&P 500 | 1,675.000 | 06/15/2018 | 4 | (6 | ) | (6 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
| $ | (7 | ) | $ | (6 | ) | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (7 | ) | $ | (6 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED SUMMARY
The following is a summary of the market value and variation margin of Exchange-Traded or Centrally Cleared Financial Derivative Instruments as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| Market Value | Variation Margin Asset | Market Value | Variation Margin Liability | |||||||||||||||||||||||||||||||||
| Purchased Options | Futures | Swap Agreements | Total | Written Options | Futures | Swap Agreements | Total | |||||||||||||||||||||||||||||
Total Exchange-Traded or Centrally Cleared | $ | 16 | $ | 0 | $ | 0 | $ | 16 | $ | (6) | $ | 0 | $ | 0 | $ | (6) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| 66 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2017:
| Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 7 | 0 | (4 | ) | 0 | 5 | |||||||||||||||||
Premiums | $ | (4 | ) | $ | (9 | ) | $ | 0 | $ | 6 | $ | 0 | $ | (7 | ) | |||||||||
SWAP AGREEMENTS:
TOTAL RETURN SWAPS ON COMMODITY AND EQUITY INDICES
| Counterparty | Pay/Receive(1) | Underlying Reference | # of Units | Financing Rate | Maturity Date | Notional Amount | Premiums Paid/(Received) | Unrealized Appreciation/ (Depreciation) | Swap Agreements, at Value | |||||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||||||||||
CBK | Receive | BCOMTR Index | 915 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2017 | $ 150 | $ | 0 | $ | 3 | $ | 3 | $ | 0 | ||||||||||||||||||
GST | Receive | DWRTFT Index | 20 | 1-Month USD-LIBOR plus a specified spread | 04/11/2018 | 186 | 0 | 4 | 4 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| $ | 0 | $ | 7 | $ | 7 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 7 | $ | 7 | $ | 0 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(2) | |||||||||||||||||||||||||||||||||||||
CBK | $ | 0 | $ | 0 | $ | 3 | $ | 3 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3 | $ | 0 | $ | 3 | ||||||||||||||||||||||||||
GST | 0 | 0 | 4 | 4 | 0 | 0 | 0 | 0 | 4 | 0 | 4 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 7 | $ | 7 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Receive represents that the Fund receives payments for any positive return on the underlying reference. The Fund makes payments for any negative return on such underlying reference. Pay represents that the Fund receives payments for any negative return on the underlying reference. The Fund makes payments for any positive return on such underlying reference. |
| (2) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 16 | $ | 0 | $ | 0 | $ | 16 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 3 | $ | 0 | $ | 4 | $ | 0 | $ | 0 | $ | 7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 3 | $ | 0 | $ | 20 | $ | 0 | $ | 0 | $ | 23 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 6 | $ | 0 | $ | 0 | $ | 6 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 67 |
Table of Contents
Schedule of Investments PIMCO REALPATH® Blend Income Fund (Cont.)
June 30, 2017
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain (Loss) on Financial Derivative Instruments | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (21 | ) | $ | 0 | $ | 0 | $ | (21 | ) | ||||||||||
Written Options | 0 | 0 | 6 | 0 | 0 | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 0 | $ | 0 | $ | (15 | ) | $ | 0 | $ | 0 | $ | (15 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (11 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (11 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | (11 | ) | $ | 0 | $ | (15 | ) | $ | 0 | $ | 0 | $ | (26 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 3 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| $ | 3 | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value | ||||||||||||||||
Mutual Funds | $ | 3,118 | $ | 0 | $ | 0 | $ | 3,118 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 3,118 | $ | 0 | $ | 0 | $ | 3,118 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value | ||||||||||||||||
Mutual Funds | 4,294 | 0 | 0 | 4,294 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 109 | 0 | 0 | 109 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 4,403 | $ | 0 | $ | 0 | $ | 4,403 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 7,521 | $ | 0 | $ | 0 | $ | 7,521 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 16 | $ | 0 | $ | 16 | ||||||||
Over the counter | 0 | 7 | 0 | 7 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| $ | 0 | $ | 23 | $ | 0 | $ | 23 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (6 | ) | $ | 0 | $ | (6 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Total Financial Derivative Instruments | $ | 0 | $ | 17 | $ | 0 | $ | 17 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 7,521 | $ | 17 | $ | 0 | $ | 7,538 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 68 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
1. ORGANIZATION
PIMCO Equity Series (the “Trust”) was established as a Delaware statutory trust on December 28, 2009. The Trust is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Information presented in these financial statements pertains to the Institutional Class, Administrative Class and Class A shares of the funds (each a “Fund” and collectively the “Funds”) indicated on the cover of this report. Pacific Investment Management Company LLC (“PIMCO”) serves as the investment adviser (the “Adviser”) for the Funds. Each Fund may invest substantially all of its assets in Institutional Class or Class M shares of any funds of the Trust and PIMCO Funds, and in other affiliated funds, including funds of PIMCO ETF Trust, except funds of funds (“Underlying PIMCO Funds”), and unaffiliated funds that are registered under the Act (collectively, “Acquired Funds”).
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Each Fund is treated as an investment company under the reporting requirements of U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
(a) Securities Transactions and Investment Income Securities transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date. Realized gains (losses) from securities sold are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as a Fund is informed of the ex-dividend date. Interest income, adjusted for the accretion of discounts and amortization of premiums, is recorded on the accrual basis from settlement date, with the exception of securities with a forward starting effective date, where interest income is recorded on the accrual basis from effective date. For convertible securities, premiums attributable to the conversion feature are not amortized. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statements of
Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statements of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term capital gain distributions received from registered investment companies, if any, are recorded as realized gains.
(b) Multiclass Operations Each class offered by the Trust has equal rights as to assets and voting privileges (except that shareholders of a class have exclusive voting rights regarding any matter relating solely to that class of shares). Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains (losses) are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include supervisory and administrative and distribution and servicing fees. Under certain circumstances, the per share net asset value (“NAV”) of a class of the respective Fund’s shares may be different from the per share NAV of another class of shares as a result of the different daily expense accruals applicable to each class of shares.
(c) Distributions to Shareholders The following table shows the anticipated frequency of distributions from net investment income, if any, for each Fund.
| Distribution Frequency | ||||||||||||
| Fund Name | Declared | Distributed | ||||||||||
PIMCO REALPATH® Blend 2020 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2025 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2030 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2035 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2040 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2045 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2050 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend 2055 Fund | Quarterly | Quarterly | ||||||||||
PIMCO REALPATH® Blend Income Fund | Quarterly | Quarterly | ||||||||||
Net realized capital gains earned by each Fund, if any, will be distributed no less frequently than once each year.
Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP. Differences between tax regulations and U.S. GAAP may cause timing differences between income and capital gain recognition. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. As a result, income distributions and capital gain distributions declared during a fiscal period may differ significantly from the net investment
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income (loss) and realized gains (losses) reported on each Fund’s annual financial statements presented under U.S. GAAP.
If a Fund estimates that a portion of one of its dividend distributions may be comprised of amounts from sources other than net investment income in accordance with its policies and good accounting practices, the Fund will notify shareholders of record of the estimated composition of such distribution through a Section 19 Notice. For these purposes, a Fund estimates the source or sources from which a distribution is paid, to the close of the period as of which it is paid, in reference to its internal accounting records and related accounting practices. If, based on such accounting records and practices, it is estimated that a particular distribution does not include capital gains or paid-in surplus or other capital sources, a Section 19 Notice generally would not be issued. It is important to note that differences exist between a Fund’s daily internal accounting records and practices, a Fund’s financial statements presented in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. For instance, a Fund’s internal accounting records and practices may take into account, among other factors, tax-related characteristics of certain sources of distributions that differ from treatment under U.S. GAAP. Examples of such differences may include, among others, the treatment of paydowns on mortgage-backed securities purchased at a discount and periodic payments under interest rate swap contracts. Accordingly, among other consequences, it is possible that a Fund may not issue a Section 19 Notice in situations where the Fund’s financial statements prepared later and in accordance with U.S. GAAP and/or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please visit www.pimco.com for the most recent Section 19 Notice, if applicable, for additional information regarding the estimated composition of distributions. Final determination of a distribution’s tax character will be reported on Form 1099 DIV sent to shareholders for the calendar year.
Distributions classified as a tax basis return of capital, if any, are reflected on the Statements of Changes in Net Assets and have been recorded to paid in capital. In addition, other amounts have been reclassified between undistributed (overdistributed) net investment income (loss), accumulated undistributed (overdistributed) net realized gain (loss) and/or paid in capital to more appropriately conform U.S. GAAP to tax characterizations of distributions.
(d) New Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”), ASU 2014-15 requiring management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern. The ASU is effective prospectively for annual periods
ending after December 15, 2016, and interim periods thereafter. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
In May 2015, the FASB issued ASU 2015-07 which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share practical expedient. The ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical expedient. The ASU is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
In March 2016, the FASB issued ASU 2016-05 which provides guidance related to the impact of derivative contract novations on certain relationships under Accounting Standards Codification (“ASC”) 815. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In August 2016, the FASB issued ASU 2016-15 which amends ASC 230 to clarify guidance on the classification of certain cash receipts and cash payments in the Statement of Cash Flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2016, the U.S. Securities and Exchange Commission (“SEC”) adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for these amendments is August 1, 2017. Compliance is based on reporting period-end date. At this time, management is evaluating the implications of these changes on the financial statements.
In November 2016, the FASB issued ASU 2016-18 which amends ASC 230 to provide guidance on the classification and presentation of changes in restricted cash and restricted cash equivalents on the Statement of Cash Flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
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In March 2017, the FASB issued ASU 2017-08 which provides guidance related to the amortization period for certain purchased callable debt securities held at a premium. The ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS
(a) Investment Valuation Policies The price of a Fund’s shares is based on the Fund’s NAV. The NAV of a Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to that Fund or class, by the total number of shares outstanding of that Fund or class.
On each day that the New York Stock Exchange (“NYSE”) is open, Fund shares are ordinarily valued as of the close of regular trading (“NYSE Close”). Information that becomes known to the Funds or their agents after the time as of which NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of a security or the NAV determined earlier that day. Each Fund reserves the right to change the time as of which its respective NAV is calculated if the Fund closes earlier, or as permitted by the SEC.
For purposes of calculating NAV, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on the basis of official closing prices or the last reported sales prices, or if no sales are reported, based on quotes obtained from established market makers or prices (including evaluated prices) supplied by the Funds’ approved pricing services, quotation reporting systems and other third-party sources (together, “Pricing Services”). The Funds will normally use pricing data for domestic equity securities received shortly after the NYSE Close and do not normally take into account trading, clearances or settlements that take place after the NYSE Close. If market value pricing is used, a foreign (non-U.S.) equity security traded on a foreign exchange or on more than one exchange is typically valued using pricing information from the exchange considered by the Adviser to be the primary exchange. A foreign (non-U.S.) equity security will be valued as of the close of trading on the foreign exchange, or the NYSE Close, if the NYSE Close occurs before the end of trading on the foreign exchange. Domestic and foreign (non-U.S.) fixed income securities, non-exchange traded derivatives, and equity options are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services using data reflecting the earlier closing of the principal markets for those securities. Prices obtained from Pricing Services may be based on, among other things, information provided by market
makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Certain fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date. Exchange-traded options, except equity options, futures and options on futures are valued at the settlement price determined by the relevant exchange. Swap agreements are valued on the basis of bid quotes obtained from brokers and dealers or market-based prices supplied by Pricing Services. A Fund’s investments in open-end management investment companies, other than exchange-traded funds (“ETFs”), are valued at the NAVs of such investments.
If a foreign (non-U.S.) equity security’s value has materially changed after the close of the security’s primary exchange or principal market but before the NYSE Close, the security may be valued at fair value based on procedures established and approved by the Board of Trustees of the Trust (the “Board”). Foreign (non-U.S.) equity securities that do not trade when the NYSE is open are also valued at fair value. With respect to foreign (non-U.S.) equity securities, the Fund may determine the fair value of investments based on information provided by Pricing Services and other third-party vendors, which may recommend fair value or adjustments with reference to other securities, indices or assets. In considering whether fair valuation is required and in determining fair values, the Fund may, among other things, consider significant events (which may be considered to include changes in the value of U.S. securities or securities indices) that occur after the close of the relevant market and before the NYSE Close. A Fund may utilize modeling tools provided by third-party vendors to determine fair values of foreign (non-U.S.) securities. Foreign exchanges may permit trading in foreign (non-U.S.) equity securities on days when the Trust is not open for business, which may result in a Fund’s portfolio investments being affected when shareholders are unable to buy or sell shares.
Senior secured floating rate loans for which an active secondary market exists to a reliable degree will be valued at the mean of the last available bid/ask prices in the market for such loans, as provided by a Pricing Service. Senior secured floating rate loans for which an active secondary market does not exist to a reliable degree will be valued at fair value, which is intended to approximate market value. In valuing a senior secured floating rate loan at fair value, the factors considered may include, but are not limited to, the following: (a) the creditworthiness of the borrower and any intermediate participants, (b) the terms of the loan, (c) recent prices in the market for similar loans, if any, and (d) recent prices in the market for instruments of similar quality, rate, period until next interest rate reset and maturity.
Investments valued in currencies other than the U.S. dollar are converted to the U.S. dollar using exchange rates obtained from Pricing Services. As a result, the value of such investments and, in turn, the
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NAV of a Fund’s shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of investments traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the Trust is not open for business. As a result, to the extent that a Fund holds foreign (non-U.S.) investments, the value of those investments may change at times when shareholders are unable to buy or sell shares and the value of such investments will be reflected in the Fund’s next calculated NAV.
Investments for which market quotes or market based valuations are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated to the Adviser the responsibility for applying the fair valuation methods. In the event that market quotes or market based valuations are not readily available, and the security or asset cannot be valued pursuant to a Board approved valuation method, the value of the security or asset will be determined in good faith by the Valuation Oversight Committee of the Board (“Valuation Oversight Committee”), generally based on recommendations provided by the Adviser. The Adviser may consult with the Sub-Adviser or Parametric in providing such recommendations or otherwise with respect to valuation of the PIMCO Dividend and Income Fund’s portfolio securities or other assets. Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information, bid/ask information, indicative market quotations (“Broker Quotes”), Pricing Services’ prices), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Adviser the responsibility for monitoring significant events that may materially affect the values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be reevaluated in light of such significant events.
When a Fund uses fair valuation to determine the value of a portfolio security or other asset for purposes of calculating its NAV, such investments will not be priced on the basis of quotes from the primary market in which they are traded, but rather may be priced by another method that the Board or persons acting at their direction believe reflects fair value. Fair valuation may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security
values as of the time of pricing, the Trust cannot ensure that fair values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold. The Funds’ use of fair valuation may also help to deter “stale price arbitrage” as discussed under the “Abusive Trading Practices” section in each Fund’s prospectus.
(b) Fair Value Hierarchy U.S. GAAP describes fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to valuation methods and requires disclosure of the fair value hierarchy, separately for each major category of assets and liabilities, that segregates fair value measurements into levels (Level 1, 2, or 3). The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Levels 1, 2, and 3 of the fair value hierarchy are defined as follows:
| ∎ | Level 1 — Quoted prices in active markets or exchanges for identical assets and liabilities. |
| ∎ | Level 2 — Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. |
| ∎ | Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair value of investments. |
In accordance with the requirements of U.S. GAAP, the amounts of transfers between Levels 1 and 2 and transfers into and out of Level 3, if material, are disclosed in the Notes to Schedule of Investments for each respective Fund.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to realized gain (loss), unrealized appreciation (depreciation), purchases and sales, accrued discounts (premiums), and transfers into and out of the Level 3 category during the period. The end of period value is used for the transfers between Levels of a Fund’s assets and liabilities. Additionally,
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U.S. GAAP requires quantitative information regarding the significant unobservable inputs used in the determination of fair value of assets or liabilities categorized as Level 3 in the fair value hierarchy. In accordance with the requirements of U.S. GAAP, a fair value hierarchy, and if material, a Level 3 reconciliation and details of significant unobservable inputs, have been included in the Notes to Schedule of Investments for each respective Fund.
(c) Valuation Techniques and the Fair Value Hierarchy
Level 1 and Level 2 trading assets and trading liabilities, at fair value The valuation methods (or “techniques”) and significant inputs used in determining the fair values of portfolio securities or other assets and liabilities categorized as Level 1 and Level 2 of the fair value hierarchy are as follows:
Common stocks, ETFs, exchange-traded notes and financial derivative instruments, such as futures contracts, rights and warrants, or options on futures that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy.
Investments in registered open-end investment companies (other than ETFs) will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Investments in unregistered open-end investment companies will be calculated based upon the NAVs of such investments and are considered Level 1 provided that the NAVs are observable, calculated daily and are the value at which both purchases and sales will be conducted.
Equity exchange-traded options and over the counter financial derivative instruments, such as forward foreign currency contracts and options contracts derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued on the basis of quotes obtained from a quotation reporting system, established market makers or Pricing Services (normally determined as of the NYSE Close). Depending on the product and the terms of the transaction, financial derivative instruments can be valued by Pricing Services using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as quoted prices, issuer details, indices, bid/ask spreads, interest rates, implied volatilities, yield curves, dividends and exchange rates.
Financial derivative instruments that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Centrally cleared swaps and over the counter swaps derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. They are valued using a broker-dealer bid quotation or on market-based prices provided by Pricing Services (normally determined as of the NYSE close). Centrally cleared swaps and over the counter swaps can be valued by Pricing Services using a series of techniques, including simulation pricing models. The pricing models may use inputs that are observed from actively quoted markets such as the overnight index swap rate (“OIS”), London Interbank Offered Rate (“LIBOR”) forward rate, interest rates, yield curves and credit spreads. These securities are categorized as Level 2 of the fair value hierarchy.
Level 3 trading assets and trading liabilities, at fair value When a fair valuation method is applied by the Adviser that uses significant unobservable inputs, investments will be priced by a method that the Board or persons acting at their direction believe reflects fair value and are categorized as Level 3 of the fair value hierarchy.
Short-term debt instruments (such as commercial paper) having a remaining maturity of 60 days or less may be valued at amortized cost, so long as the amortized cost value of such short-term debt instruments is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. These securities are categorized as Level 2 or Level 3 of the fair value hierarchy depending on the source of the base price.
4. SECURITIES AND OTHER INVESTMENTS
(a) Investments in Affiliates
Each Fund may invest substantially all of its assets in Underlying PIMCO Funds and Acquired Funds. The Underlying PIMCO Funds are considered to be affiliated with the Funds. Each Fund may also invest in the PIMCO Short-Term Floating NAV Portfolio III and the PIMCO Short-Term Floating NAV Portfolio IV (“Central Funds”) to the extent permitted by the Act and rules thereunder. The Central Funds are registered investment companies created for use solely by the series of the Trust and other series of registered investment companies advised by the Adviser, in connection with their cash management activities. The main investments of the Central Funds are money market and short maturity fixed income instruments. The Central Funds may incur
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expenses related to their investment activities, but do not pay Investment Advisory Fees or Supervisory and Administrative Fees to the Adviser. The Central Funds are considered to be affiliated with the Funds. The tables below show the Funds’ transactions in and earnings from investments in the affiliated Funds for the period ended June 30, 2017 (amounts in thousands†):
PIMCO REALPATH® Blend 2020 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 0 | $ | 236 | $ | 0 | $ | 0 | $ | 3 | $ | 239 | $ | 3 | $ | 0 | ||||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 92 | 410 | (22 | ) | 0 | 2 | 482 | 2 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 313 | 453 | (308 | ) | (4 | ) | 24 | 478 | 22 | 0 | ||||||||||||||||||||||||||
PIMCO Income Fund | 504 | 985 | (258 | ) | 1 | 30 | 1,262 | 36 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 196 | 306 | (139 | ) | (12 | ) | (1 | ) | 350 | 14 | 9 | |||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 196 | 290 | (140 | ) | 0 | 5 | 351 | 12 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 392 | 586 | (255 | ) | (4 | ) | (13 | ) | 706 | 16 | 0 | |||||||||||||||||||||||||
PIMCO Real Return Fund | 418 | 664 | (297 | ) | 0 | (9 | ) | 776 | 13 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 2,002 | (1,650 | ) | 0 | 0 | 352 | 2 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 192 | 638 | (58 | ) | (1 | ) | 7 | 778 | 8 | 0 | ||||||||||||||||||||||||||
Totals | $ | 2,303 | $ | 6,570 | $ | (3,127 | ) | $ | (20 | ) | $ | 48 | $ | 5,774 | $ | 128 | $ | 9 | ||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2025 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 0 | $ | 192 | $ | 0 | $ | 0 | $ | 3 | $ | 195 | $ | 3 | $ | 0 | ||||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 41 | 173 | 0 | 0 | 1 | 215 | 1 | 0 | ||||||||||||||||||||||||||||
PIMCO High Yield Fund | 256 | 408 | (283 | ) | (6 | ) | 23 | 398 | 18 | 0 | ||||||||||||||||||||||||||
PIMCO Income Fund | 321 | 625 | (64 | ) | 0 | 21 | 903 | 25 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 171 | 299 | (94 | ) | (10 | ) | 3 | 369 | 14 | 7 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 172 | 283 | (94 | ) | (1 | ) | 9 | 369 | 11 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 343 | 603 | (197 | ) | (3 | ) | (11 | ) | 735 | 16 | 0 | |||||||||||||||||||||||||
PIMCO Real Return Fund | 205 | 430 | (276 | ) | 1 | (4 | ) | 356 | 7 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 1,002 | (500 | ) | 0 | 0 | 502 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 66 | 436 | 0 | 0 | 4 | 506 | 4 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 1,575 | $ | 4,451 | $ | (1,508 | ) | $ | (19 | ) | $ | 49 | $ | 4,548 | $ | 102 | $ | 7 | ||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2030 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 0 | $ | 316 | $ | 0 | $ | 0 | $ | 4 | $ | 320 | $ | 4 | $ | 0 | ||||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 64 | 114 | 0 | 0 | 1 | 179 | 1 | 0 | ||||||||||||||||||||||||||||
PIMCO High Yield Fund | 482 | 532 | (407 | ) | (4 | ) | 33 | 636 | 30 | 0 | ||||||||||||||||||||||||||
PIMCO Income Fund | 553 | 795 | (122 | ) | 1 | 29 | 1,256 | 42 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 244 | 368 | (114 | ) | (4 | ) | (8 | ) | 486 | 17 | 9 | |||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 245 | 355 | (122 | ) | 1 | 7 | 486 | 18 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 489 | 734 | (255 | ) | 2 | (22 | ) | 948 | 20 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 164 | 270 | (147 | ) | 5 | (7 | ) | 285 | 5 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 406 | 906 | (500 | ) | 0 | 0 | 812 | 6 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 70 | 539 | 0 | 0 | 5 | 614 | 6 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 2,717 | $ | 4,929 | $ | (1,667 | ) | $ | 1 | $ | 42 | $ | 6,022 | $ | 149 | $ | 9 | |||||||||||||||||||
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| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2035 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 50 | $ | 360 | $ | (10 | ) | $ | 0 | $ | 4 | $ | 404 | $ | 7 | $ | 0 | |||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 60 | 130 | (13 | ) | 0 | 1 | 178 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 399 | 706 | (327 | ) | (4 | ) | 28 | 802 | 28 | 0 | ||||||||||||||||||||||||||
PIMCO Income Fund | 458 | 1,063 | (178 | ) | 1 | 26 | 1,370 | 37 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 137 | 365 | (38 | ) | (2 | ) | 1 | 463 | 11 | 5 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 137 | 354 | (38 | ) | 1 | 9 | 463 | 11 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 183 | 574 | (43 | ) | 1 | (9 | ) | 706 | 10 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 119 | 226 | (61 | ) | 1 | (3 | ) | 282 | 4 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 401 | 1,107 | (500 | ) | 0 | 0 | 1,008 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 60 | 522 | 0 | 0 | 4 | 586 | 5 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 2,004 | $ | 5,407 | $ | (1,208 | ) | $ | (2 | ) | $ | 61 | $ | 6,262 | $ | 121 | $ | 5 | ||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2040 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 67 | $ | 454 | $ | (7 | ) | $ | 0 | $ | 6 | $ | 520 | $ | 9 | $ | 0 | |||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 34 | 226 | (17 | ) | 0 | 1 | 244 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 174 | 1,026 | (182 | ) | (4 | ) | 20 | 1,034 | 19 | 0 | ||||||||||||||||||||||||||
PIMCO Income Fund | 208 | 1,488 | (96 | ) | 0 | 19 | 1,619 | 27 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 59 | 452 | 0 | 0 | 9 | 520 | 7 | 2 | ||||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 56 | 451 | 0 | 0 | 13 | 520 | 8 | 0 | ||||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 73 | 650 | 0 | 0 | (7 | ) | 716 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Fund | 71 | 380 | (68 | ) | 0 | (3 | ) | 380 | 3 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 201 | 2,306 | (1,100 | ) | 0 | 0 | 1,407 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 34 | 541 | 0 | 0 | 4 | 579 | 4 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 977 | $ | 7,974 | $ | (1,470 | ) | $ | (4 | ) | $ | 62 | $ | 7,539 | $ | 92 | $ | 2 | ||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2045 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 69 | $ | 544 | $ | (41 | ) | $ | (1 | ) | $ | 8 | $ | 579 | $ | 9 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 32 | 272 | (19 | ) | 0 | 0 | 285 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 100 | 1,061 | (21 | ) | 0 | 10 | 1,150 | 15 | 0 | |||||||||||||||||||||||||||
PIMCO Income Fund | 136 | 1,480 | (9 | ) | 0 | 15 | 1,622 | 22 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 52 | 435 | (20 | ) | (3 | ) | 10 | 474 | 6 | 2 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 54 | 430 | (20 | ) | 0 | 10 | 474 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 70 | 759 | 0 | 0 | (8 | ) | 821 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Fund | 69 | 446 | (58 | ) | 1 | (4 | ) | 454 | 4 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 201 | 2,507 | (200 | ) | 0 | 0 | 2,508 | 8 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 32 | 431 | 0 | 0 | 3 | 466 | 3 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 815 | $ | 8,365 | $ | (388 | ) | $ | (3 | ) | $ | 44 | $ | 8,833 | $ | 82 | $ | 2 | ||||||||||||||||||
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| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2050 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 81 | $ | 608 | $ | (52 | ) | $ | 1 | $ | 6 | $ | 644 | $ | 11 | $ | 0 | |||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 41 | 299 | (24 | ) | 0 | 0 | 316 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 101 | 1,169 | 0 | 0 | 10 | 1,280 | 16 | 0 | ||||||||||||||||||||||||||||
PIMCO Income Fund | 142 | 1,539 | 0 | 0 | 16 | 1,697 | 23 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 63 | 435 | (38 | ) | (1 | ) | 6 | 465 | 6 | 2 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 63 | 431 | (39 | ) | 1 | 9 | 465 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 49 | 852 | 0 | 0 | (8 | ) | 893 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Fund | 81 | 506 | (67 | ) | 1 | (5 | ) | 516 | 4 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 301 | 3,609 | (800 | ) | 0 | 0 | 3,110 | 9 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 40 | 368 | 0 | 0 | 3 | 411 | 3 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 962 | $ | 9,816 | $ | (1,020 | ) | $ | 2 | $ | 37 | $ | 9,797 | $ | 87 | $ | 2 | |||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend 2055 Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 72 | $ | 72 | $ | (37 | ) | $ | (4 | ) | $ | 7 | $ | 110 | $ | 5 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 35 | 36 | (17 | ) | 0 | 0 | 54 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 85 | 137 | 0 | 0 | 6 | 228 | 7 | 0 | ||||||||||||||||||||||||||||
PIMCO Income Fund | 120 | 181 | 0 | 0 | 7 | 308 | 9 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 51 | 59 | (27 | ) | (2 | ) | (1 | ) | 80 | 3 | 2 | |||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 53 | 53 | (27 | ) | 0 | 1 | 80 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 35 | 131 | 0 | 0 | (3 | ) | 163 | 2 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Fund | 69 | 67 | (47 | ) | 0 | (1 | ) | 88 | 2 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 201 | 502 | (200 | ) | 0 | 0 | 503 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 35 | 35 | 0 | 0 | 0 | 70 | 1 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 756 | $ | 1,273 | $ | (355 | ) | $ | (6 | ) | $ | 16 | $ | 1,684 | $ | 36 | $ | 2 | ||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
PIMCO REALPATH® Blend Income Fund
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 0 | $ | 198 | $ | (9 | ) | $ | 0 | $ | 3 | $ | 192 | $ | 3 | $ | 0 | |||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 102 | 393 | (21 | ) | 0 | 2 | 476 | 2 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 256 | 302 | (184 | ) | (2 | ) | 18 | 390 | 17 | 0 | ||||||||||||||||||||||||||
PIMCO Income Fund | 567 | 764 | (311 | ) | 1 | 29 | 1,050 | 35 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 120 | 140 | (67 | ) | (5 | ) | (2 | ) | 186 | 8 | 4 | |||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 123 | 129 | (71 | ) | 1 | 2 | 184 | 7 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 240 | 298 | (132 | ) | (1 | ) | (7 | ) | 398 | 10 | 0 | |||||||||||||||||||||||||
PIMCO Real Return Fund | 343 | 489 | (60 | ) | (1 | ) | (8 | ) | �� | 763 | 11 | 0 | ||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 107 | 1,402 | (1,400 | ) | 0 | 0 | 109 | 2 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 309 | 416 | (72 | ) | (2 | ) | 4 | 655 | 8 | 0 | ||||||||||||||||||||||||||
Totals | $ | 2,167 | $ | 4,531 | $ | (2,327 | ) | $ | (9 | ) | $ | 41 | $ | 4,403 | $ | 103 | $ | 4 | ||||||||||||||||||
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| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
5. FINANCIAL DERIVATIVE INSTRUMENTS
The following disclosures contain information on how and why the Funds use financial derivative instruments, and how financial derivative instruments affect the Funds’ financial position, results of operations and cash flows. The location and fair value amounts of these instruments on the Statements of Assets and Liabilities and the net realized gain (loss) and net change in unrealized appreciation (depreciation) on the Statements of Operations, each categorized by type of financial derivative contract and related risk exposure, are included in a table in the Notes to Schedules of Investments. The financial derivative instruments outstanding as of period end and the amounts of net realized gain (loss) and net change in unrealized appreciation (depreciation) on financial derivative instruments during the period, as disclosed in the Notes to Schedules of Investments, serve as indicators of the volume of financial derivative activity for the Funds.
(a) Futures Contracts Certain Funds may enter into futures contracts. A futures contract is an agreement to buy or sell a security or other asset for a set price on a future date. A Fund may use futures contracts to manage its exposure to the securities markets or to movements in interest rates and currency values. The primary risks associated with the use of futures contracts are the imperfect correlation between the change in market value of the securities held by a Fund and the prices of futures contracts and the possibility of an illiquid market. Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker an amount of cash, U.S. Government and Agency Obligations, or select sovereign debt, in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and based on such movements in the price of the contracts, an appropriate payable or receivable for the change in value may be posted or collected by the Fund (“Futures Variation Margin”). Gains (losses) are recognized but not considered realized until the contracts expire or close. Futures contracts involve, to varying degrees, risk of loss in excess of the Futures Variation Margin included within exchange traded or centrally cleared financial derivative instruments on the Statements of Assets and Liabilities.
(b) Options Contracts Certain Funds may write or purchase options to enhance returns or to hedge an existing position or future investment. A Fund may write call and put options on securities and financial derivative instruments it owns or in which it may invest. Writing put options tends to increase a Fund’s exposure to the underlying instrument. Writing call options tends to decrease a Fund’s exposure to the underlying instrument. When a Fund writes a call or put, an
amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. These liabilities are included on the Statements of Assets and Liabilities. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying futures, swap, security or currency transaction to determine the realized gain (loss). Certain options may be written with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. A Fund as a writer of an option has no control over whether the underlying instrument may be sold (“call”) or purchased (“put”) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk a Fund may not be able to enter into a closing transaction because of an illiquid market.
Certain Funds may also purchase put and call options. Purchasing call options tends to increase a Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease a Fund’s exposure to the underlying instrument. A Fund pays a premium which is included as an asset on the Statements of Assets and Liabilities and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. Certain options may be purchased with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying investment transaction to determine the realized gain (loss) when the underlying transaction is executed.
Options on Indices Certain Funds may write or purchase options on indices (“Index Option”). An Index Option uses a specified index as the underlying instrument for the option contract. The exercise for an Index Option will not include physical delivery of the underlying index but will result in a cash transfer of the amount of the difference between the settlement price of the underlying index and the strike price.
(c) Swap Agreements Certain Funds may invest in swap agreements. Swap agreements are bilaterally negotiated agreements between a Fund and a counterparty to exchange or swap investment cash flows, assets, foreign currencies or market-linked returns at specified, future intervals. Swap agreements may be privately negotiated in the over the counter market (“OTC swaps”) or may be cleared through a third party,
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known as a central counterparty or derivatives clearing organization (“Centrally Cleared Swaps”). A Fund may enter into asset, credit default, cross-currency, interest rate, total return, variance and other forms of swap agreements to manage its exposure to credit, currency, interest rate, commodity, equity and inflation risk. In connection with these agreements, securities or cash may be identified as collateral or margin in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.
Centrally Cleared Swaps are marked to market daily based upon valuations as determined from the underlying contract or in accordance with the requirements of the central counterparty or derivatives clearing organization. Changes in market value, if any, are reflected as a component of net change in unrealized appreciation (depreciation) on the Statements of Operations. Daily changes in valuation of centrally cleared swaps (“Swap Variation Margin”), if any, are disclosed within centrally cleared financial derivative instruments on the Statements of Assets and Liabilities. OTC swap payments received or paid at the beginning of the measurement period are included on the Statements of Assets and Liabilities and represent premiums paid or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). Upfront premiums received (paid) are initially recorded as liabilities (assets) and subsequently marked to market to reflect the current value of the swap. These upfront premiums are recorded as realized gain (loss) on the Statements of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain (loss) on the Statements of Operations. Net periodic payments received or paid by a Fund are included as part of realized gain (loss) on the Statements of Operations.
For purposes of applying a Fund’s investment policies and restrictions, swap agreements are generally valued by a Fund at market value. In the case of a credit default swap, in applying certain of a Fund’s investment policies and restrictions, the Funds will value the credit default swap at its notional value or its full exposure value (i.e., the sum of the notional amount for the contract plus the market value), but may value the credit default swap at market value for purposes of applying certain of a Fund’s other investment policies and restrictions. For example, a Fund may value credit default swaps at full exposure value for purposes of a Fund’s credit quality guidelines (if any) because such value in general better reflects a Fund’s actual economic exposure during the term of the credit default swap agreement. As a result, a Fund may, at times, have notional exposure to an asset class (before netting) that is greater or lesser than the stated limit or restriction noted in a Fund’s prospectus. In this context, both the notional amount
and the market value may be positive or negative depending on whether a Fund is selling or buying protection through the credit default swap. The manner in which certain securities or other instruments are valued by a Fund for purposes of applying investment policies and restrictions may differ from the manner in which those investments are valued by other types of investors.
Entering into swap agreements involves, to varying degrees, elements of interest, credit, market and documentation risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in interest rates.
A Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life, to the extent that amount is positive. The risk may be mitigated by having a master netting arrangement between a Fund and the counterparty and by the posting of collateral to a Fund to cover a Fund’s exposure to the counterparty. To the extent a Fund has a policy to limit the net amount owed to or to be received from a single counterparty under existing swap agreements, such limitation only applies to counterparties to OTC swaps and does not apply to centrally cleared swaps where the counterparty is a central counterparty or derivatives clearing organization.
Total Return Swap Agreements Certain Funds may enter into total return swap agreements to gain or mitigate exposure to the underlying reference asset. Total return swap agreements involve commitments where single or multiple cash flows are exchanged based on the price of an underlying reference asset and on a fixed or variable interest rate. Total return swap agreements may involve commitments to pay interest in exchange for a market-linked return. One counterparty pays out the total return of a specific reference asset, which may include an underlying equity, index, or bond, and in return receives a fixed or variable rate. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, a Fund would receive payments based on any net positive total return and would owe payments in the event of a net negative total return. As the payer, a Fund would owe payments on any net positive total return, and would receive payments in the event of a net negative total return.
6. PRINCIPAL RISKS
In the normal course of business, the Funds (or Acquired Funds) trade financial instruments and enter into financial transactions where risk of potential loss exists due to such things as changes in the market (market
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risk) or failure or inability of the other party to a transaction to perform (credit and counterparty risk). See below for a detailed description of select principal risks. For a more comprehensive list of potential risks the Funds may be subject to, please see the Important Information About the Funds.
Except with regard to the Investments in Mutual Funds subsection (if any), and unless stated otherwise, any reference in the below subsections to a “Fund” includes the Fund, and, where applicable, Acquired Funds, Underlying Funds and Underlying PIMCO Funds.
Investments in Mutual Funds To the extent that certain Funds invest substantially all of their respective assets in Acquired Funds, the risks associated with investing in these Funds will be closely related to the risks associated with the securities and other investments held by the Acquired Funds. The ability of the Funds to achieve their respective investment objectives may depend upon the ability of the Acquired Funds to achieve their respective investment objectives. There can be no assurance that the investment objective of any Acquired Fund will be achieved. The NAV of each Fund will fluctuate in response to changes in the respective NAV of the Acquired Funds in which it invests. The extent to which the investment performance and risks associated with the Funds correlate to those of a particular Acquired Fund will depend upon the extent to which the assets of the Funds are allocated from time to time for investment in the Acquired Funds, which will vary. Investing in Acquired Funds involves certain additional expenses and tax results that would not be present when investing in a mutual fund that invests directly in individual stocks and bonds.
Certain Funds’ investment performance depends upon how each Fund’s assets are allocated and reallocated according to each Fund’s asset allocation targets and ranges. A principal risk of investing in each Fund is that the Funds’ asset allocation sub-adviser will make less than optimal or poor asset allocation decisions. The asset allocation sub-adviser attempts to identify investment allocations for the Acquired Funds that will provide consistent, quality performance for the Funds, but there is no guarantee that such allocation techniques will produce the desired results.
Market Risks A Fund’s investments in financial derivative instruments and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign (non-U.S.) currency, equity and commodity risks.
The market values of equities, such as common stocks and preferred securities or equity related investments such as futures and options, have historically risen and fallen in periodic cycles and may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings,
changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Different types of equity securities may react differently to these developments. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.
Issuers that have paid regular dividends or distributions to shareholders may not continue to do so in the future. An issuer may reduce or eliminate future dividends or distributions at any time and for any reason. Moreover, a Fund may use a dividend capture strategy (i.e., purchasing an equity security shortly before the issuer pays a dividend and selling it shortly thereafter), which may expose the Fund to higher portfolio turnover, increased trading costs and the potential for capital loss or gain, particularly in the event of significant short-term price movements of stocks subject to dividend capture trading. Also, securities purchased to capture a dividend often decline in value at the time of sale (i.e., shortly following the dividend) and the resulting realized loss to the Fund may exceed the amount of the dividend received, thereby negatively impacting the Fund’s net asset value.
Interest rate risk is the risk that fixed income securities and other instruments held by a Fund will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by a Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Interest rate changes can be sudden and unpredictable, and a Fund may lose money if these changes are not anticipated by the Fund’s management. A Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended.
Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates that incorporates a security’s yield, coupon, final maturity and call features, among other characteristics. Convexity is an additional measure of interest rate sensitivity that measures the rate of change of duration in response to changes in interest rates. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. A wide variety of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, general economic conditions, etc.). Under current economic conditions, interest rates are near historically low levels. Thus, the Funds currently face a heightened level of interest rate risk, especially since the Federal Reserve Board has ended its quantitative easing program and has begun, and may continue, to raise interest rates. To the extent the Federal Reserve Board continues to raise interest rates, there is a risk that rates across the financial system may
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rise. Further, while bond markets have steadily grown over the past three decades, dealer “market making” ability has not kept pace and in some cases has decreased. Given the importance of intermediary “market making” in creating a robust and active market, fixed income securities are currently facing increased volatility and liquidity risks. All of these factors, collectively and/or individually, could cause a Fund to lose value. If a Fund lost enough value, the Fund could face increased shareholder redemptions, which could force the Fund to liquidate investments at disadvantageous times or prices, thereby adversely affecting the Fund. Also, a Fund may be adversely affected when a large shareholder purchases or redeems large amounts of shares, which can occur at any time and may impact the Fund in the same manner as a high volume of purchase or redemption requests. Large shareholder transactions may impact a Fund’s liquidity and net asset value. Such transactions may also increase a Fund’s transaction costs or otherwise cause a Fund to perform differently than intended. Moreover, the Funds are subject to the risk that other shareholders may make investment decisions based on the choices of a large shareholder.
If a Fund invests directly in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, foreign (non-U.S.) currencies, or in financial derivative instruments that provide exposure to foreign (non-U.S.) currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, a Fund’s investments in foreign currency-denominated securities may reduce the Fund’s returns.
Credit and Counterparty Risks A Fund will be exposed to credit risk to parties with whom it trades and will also bear the risk of settlement default. A Fund minimizes concentrations of credit risk by undertaking transactions with a large number of customers and counterparties on recognized and reputable exchanges, where applicable. Over the counter (“OTC”) derivative transactions are subject to the risk that a counterparty to the transaction will not fulfill its contractual obligations to the other party, as many of the protections afforded to centrally cleared derivative transactions might not be available for OTC derivative transactions. For derivatives traded on an exchange or through a central counterparty, credit risk resides with a Fund’s clearing broker, or the clearinghouse itself, rather than with a counterparty in an OTC derivative transaction. A Fund could lose money if the issuer or guarantor of a fixed income security, or the
counterparty to a financial derivative instruments contract, repurchase agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities and financial derivative instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings.
Similar to credit risk, a Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which a Fund has unsettled or open transactions will default. PIMCO, as the Adviser, seeks to minimize counterparty risks to the Funds through a number of ways. Prior to entering into transactions with a new counterparty, the PIMCO Counterparty Risk Committee conducts an extensive credit review of such counterparty and must approve the use of such counterparty. Furthermore, pursuant to the terms of the underlying contract, to the extent that unpaid amounts owed to a Fund exceed a predetermined threshold, such counterparty is required to advance collateral to the Fund in the form of cash or securities equal in value to the unpaid amount owed to the Fund. A Fund may invest such collateral in securities or other instruments and will typically pay interest to the counterparty on the collateral received. If the unpaid amount owed to a Fund subsequently decreases, the Fund would be required to return to the counterparty all or a portion of the collateral previously advanced. PIMCO’s attempts to minimize counterparty risk may, however, be unsuccessful.
All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once a Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.
7. MASTER ARRANGEMENTS
A Fund may be subject to various netting arrangements (“Master Agreements”) with select counterparties. Master Agreements govern the terms of certain transactions, and reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Each type of Master Agreement governs certain types of transactions. Different types of transactions may be traded out of different legal entities or affiliates of a particular organization, resulting in the need for multiple agreements with a single counterparty. As the Master Agreements are specific to unique operations of different asset types, they allow a Fund to close out and net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single Master Agreement with a counterparty. For financial reporting purposes the Statements of Assets
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and Liabilities generally present derivative assets and liabilities on a gross basis, which reflects the full risks and exposures prior to netting.
Master Agreements can also help limit counterparty risk by specifying collateral posting arrangements at pre-arranged exposure levels. Under most Master Agreements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Agreement with a counterparty in a given account exceeds a specified threshold, which typically ranges from zero to $250,000 depending on the counterparty and the type of Master Agreement. United States Treasury Bills and U.S. dollar cash are generally the preferred forms of collateral, although other forms of AAA rated paper or sovereign securities may be used depending on the terms outlined in the applicable Master Agreement. Securities and cash pledged as collateral are reflected as assets on the Statements of Assets and Liabilities as either a component of Investments at value (securities) or Deposits with counterparty. Cash collateral received is not typically held in a segregated account and as such is reflected as a liability on the Statements of Assets and Liabilities as Deposits from counterparty. The market value of any securities received as collateral is not reflected as a component of NAV. A Fund’s overall exposure to counterparty risk can change substantially within a short period, as it is affected by each transaction subject to the relevant Master Agreement.
Master Repurchase Agreements and Global Master Repurchase Agreements (individually and collectively “Master Repo Agreements”) govern repurchase, reverse repurchase, and sale-buyback transactions between a Fund and select counterparties. Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral. The market value of transactions under the Master Repo Agreement, collateral pledged or received, and the net exposure by counterparty as of period end are disclosed in the Notes to Schedules of Investments.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern certain forward settling transactions, such as TBA securities, delayed-delivery or sale-buyback transactions by and between a Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, transaction initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral. The market value of forward settling transactions, collateral pledged or received, and the net exposure by counterparty as of period end is disclosed in the Notes to Schedules of Investments.
Customer Account Agreements and related addenda govern cleared derivatives transactions such as futures, options on futures, and cleared OTC derivatives. Such transactions require posting of initial margin as
determined by each relevant clearing agency which is segregated in an account at a futures commission merchant (“FCM”) registered with the Commodity Futures Trading Commission (“CFTC”). In the United States, counterparty risk may be reduced as creditors of an FCM cannot have a claim to Fund assets in the segregated account. Portability of exposure reduces risk to the Funds. Variation margin, or changes in market value, are exchanged daily, but may not be netted between futures and cleared OTC derivatives unless the parties have agreed to a separate arrangement in respect of portfolio margining. The market value or accumulated unrealized appreciation (depreciation), initial margin posted, and any unsettled variation margin as of period end is disclosed in the Notes to Schedules of Investments.
International Swaps and Derivatives Association, Inc. Master Agreements and Credit Support Annexes (“ISDA Master Agreements”) govern bilateral OTC derivative transactions entered into by a Fund with select counterparties. ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral posting and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. In limited circumstances, the ISDA Master Agreement may contain additional provisions that add counterparty protection beyond coverage of existing daily exposure if the counterparty has a decline in credit quality below a predefined level. These amounts, if any, may be segregated with a third-party custodian. The market value of OTC financial derivative instruments, collateral received or pledged, and net exposure by counterparty as of period end are disclosed in the Notes to Schedules of Investments.
8. FEES AND EXPENSES
(a) Investment Advisory Fee PIMCO is a majority-owned subsidiary of Allianz Asset Management of America L.P. (“Allianz Asset Management”) and serves as the Adviser to the Trust, pursuant to an investment advisory contract. The Adviser receives a monthly fee from each Fund at an annual rate based on average daily net assets (the “Investment Advisory Fee”). The Investment Advisory Fee for all classes is charged at an annual rate as noted in the table in note (b) below.
(b) Supervisory and Administrative Fee PIMCO serves as administrator (the “Administrator”) and provides supervisory and administrative services to the Trust for which it receives a monthly supervisory and administrative fee based on each share class’s average daily net assets (the “Supervisory and Administrative Fee”). As the Administrator, PIMCO bears the costs of various third-party services, including audit, custodial, portfolio accounting, legal, transfer agency and printing costs.
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The Investment Advisory Fees and Supervisory and Administrative Fees for all classes, as applicable, are charged at an annual rate as noted in the following table (calculated as a percentage of each Fund’s average daily net assets attributable to each class):
| Investment Advisory Fee | Supervisory and Administrative Fee | |||||||||||||||||||||||||||||||
| Portfolio Name | All Classes | Institutional Class | Administrative Class | Class D | Class A | Class R | ||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | 0.01% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 0.01% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 0.02% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 0.03% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 0.03% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 0.03% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 0.03% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 0.03% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 0.01% | 0.02% | 0.02% | 0.27% | * | 0.27% | 0.27% | * | ||||||||||||||||||||||||
| * | This particular share class has been registered with the SEC, but has not yet launched. |
(c) Distribution and Servicing Fees PIMCO Investments LLC, a wholly-owned subsidiary of PIMCO, serves as the distributor (“Distributor”) of the Trust’s shares.
The Trust has adopted separate Distribution and Servicing Plans with respect to the Class A and Class R shares of the Trust pursuant to Rule 12b-1 under the Act. In connection with the distribution of Class R shares of the Trust, the Distributor receives distribution fees from the Trust of up to 0.25% for Class R shares, and in connection with personal services rendered to Class A and Class R shareholders and the maintenance of such shareholder accounts, the Distributor receives servicing fees from the Trust of up to 0.25% for each of Class A and Class R shares (percentages reflect annual rates of the average daily net assets attributable to the applicable class).
The Trust has adopted a Distribution and Servicing Plan with respect to the Class D shares of each Fund pursuant to Rule 12b-1 under the Act (the “Class D Plan”). Under the terms of the Class D Plan, a Fund is permitted to compensate the Distributor out of the assets attributable to the Class D shares of the Fund, in an amount up to 0.25% on an annual basis of the average daily net assets of the Fund’s Class D shares for providing, or procuring through financial intermediaries, distribution, shareholder services, and/or maintenance of shareholder accounts with respect to Class D shareholders of the Fund, some of which may be deemed to be primarily intended to result in the sale of Class D shares.
The Trust has adopted a Distribution and Servicing Plan with respect to the Administrative Class shares of each Fund pursuant to Rule 12b-1 under the Act (the “Administrative Class Plan”). Under the terms of the Administrative Class Plan, a Fund may compensate the Distributor for providing, or procuring through financial intermediaries, distribution, administrative, recordkeeping, shareholder and/or related services with respect to Administrative Class shares. The Administrative Class Plan
permits a Fund to make total payments at an annual rate of up to 0.25% of the average daily net assets attributable to the Administrative Class shares.
The Trust paid distribution and servicing fees at effective rates as noted in the following table (calculated as a percentage of each Fund’s average daily net assets attributable to each class):
| Distribution Fee | Servicing Fee | |||||||||||
Administrative Class | — | 0.25% | ||||||||||
Class D | — | 0.25% | * | |||||||||
Class A | — | 0.25% | ||||||||||
Class R | 0.25% | * | 0.25% | * | ||||||||
| * | This particular share class has been registered with the SEC, but has not yet launched. |
The Distributor also received the proceeds of the initial sales charges paid by the shareholders upon the purchase of Class A shares and the contingent deferred sales charges paid by the shareholders upon certain redemptions of Class A and Class C shares. For the period ended June 30, 2017, the Distributor retained $83,117 representing commissions (sales charges) and contingent deferred sales charges from the Trust.
(d) Fund Expenses PIMCO provides or procures supervisory and administrative services for shareholders and also bears the costs of various third-party services required by the Funds, including audit, custodial, portfolio accounting, legal, transfer agency and printing costs. The Trust is responsible for the following expenses: (i) taxes and governmental fees; (ii) brokerage fees and commissions and other portfolio transaction expenses; (iii) the costs of borrowing money, including interest expense; (iv) fees and expenses of the Trustees who are not “interested persons” of PIMCO or the Trust, and any counsel retained exclusively for their benefit; (v) extraordinary expense,
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including costs of litigation and indemnification expenses; (vi) organizational expenses; and (vii) any expenses allocated or allocable to a specific class of shares, and may include certain other expenses as permitted by the Trust’s Multi-Class Plan adopted pursuant to Rule 18f-3 under the Act and subject to review and approval by the Trustees. The ratio of expenses to average net assets per share class, as disclosed on the Financial Highlights, may differ from the annual fund operating expenses per share class.
Each Trustee, other than those affiliated with PIMCO or its affiliates, receives an annual retainer of $62,000, plus $6,250 for each Board meeting attended in person, $375 ($750 in the case of the audit committee chair with respect to audit committee meetings) for each committee meeting attended and $750 for each Board meeting attended telephonically, plus reimbursement of related expenses. In addition, the audit committee chair receives an additional annual retainer of $9,000, the valuation oversight committee lead receives an additional annual retainer of $2,000 (to the extent there are co-leads of the valuation oversight committee, the annual retainer will be split
evenly between the co-leads, so that each co-lead individually receives an additional retainer of $1,000) and the governance committee chair receives an additional annual retainer of $750.
These expenses are allocated on a pro rata basis to each Fund of the Trust according to its respective net assets. The Trust pays no compensation directly to any Trustee or any other officer who is affiliated with the Administrator, all of whom receive remuneration for their services to the Trust from the Administrator or its affiliates.
(e) Expense Limitation Pursuant to the Expense Limitation Agreement, PIMCO has agreed to waive a portion of the Funds’ Supervisory and Administrative Fee, or reimburse the Funds, to the extent that each Fund’s organizational expenses and pro rata share of Trustee Fees exceed 0.0049%, the “Expense Limit” (calculated as a percentage of each Fund’s average daily net assets attributable to each class). The Expense Limitation Agreement will automatically renew for one-year terms unless PIMCO provides written notice to the Trust at least 30 days prior to the end of the then current term.
Under certain conditions, PIMCO may be reimbursed for these waived amounts in future periods, not to exceed thirty-six months after the waiver. The total recoverable amounts to PIMCO at June 30, 2017, were as follows (amounts in thousands†):
| Expiring within | ||||||||||||||||||||
| Fund Name | 12 months | 13-24 months | 25-36 months | Total | ||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | $ | 16 | $ | 0 | $ | 1 | $ | 17 | ||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 16 | 0 | 1 | 17 | ||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 16 | 0 | 1 | 17 | ||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 16 | 0 | 1 | 17 | ||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 16 | 0 | 1 | 17 | ||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 16 | 0 | 0 | 16 | ||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 16 | 0 | 1 | 17 | ||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 16 | 0 | 0 | 16 | ||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 16 | 0 | 1 | 17 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
(f) Acquired Fund Fees and Expenses Underlying PIMCO Fund expenses incurred by a Fund will vary with changes in the expenses of the Underlying PIMCO Funds, as well as the allocation of the Fund’s assets.
The expenses associated with investing in a fund of funds are generally higher than those for mutual funds that do not invest in other mutual funds. The cost of investing in a fund of funds will generally be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. By investing in a fund of funds, an investor will indirectly bear fees and expenses charged by Acquired Funds in addition to each Fund’s direct fees and expenses. In addition, the use of a fund of funds structure could affect the timing, amount and character of distributions to the shareholders and may therefore increase the amount of taxes payable by shareholders.
9. RELATED PARTY TRANSACTIONS
The Adviser, Administrator, and Distributor are related parties. Fees paid to these parties are disclosed in Note 8, Fees and Expenses, and the accrued related party fee amounts are disclosed on the Statements of Assets and Liabilities.
10. GUARANTEES AND INDEMNIFICATIONS
Under the Trust’s organizational documents, each Trustee or officer of the Trust is indemnified and each employee or other agent of the Trust (including the Trust’s investment manager) may be indemnified, to the extent permitted by the Act, against certain liabilities that may arise out of performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of indemnification clauses. The Funds’ maximum exposure under these
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arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts.
11. PURCHASES AND SALES OF SECURITIES
The length of time a Fund has held a particular security is not generally a consideration in investment decisions. A change in the securities held by a Fund is known as “portfolio turnover.” Each Fund may engage in frequent and active trading of portfolio securities to achieve its investment objective, particularly during periods of volatile market
movements. High portfolio turnover may involve correspondingly greater transaction costs to a Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestments in other securities. Such sales may also result in realization of taxable capital gains, including short-term capital gains (which are generally taxed at ordinary income tax rates). The transaction costs and tax effects associated with portfolio turnover may adversely affect a Fund’s performance. The portfolio turnover rates are reported in the Financial Highlights.
Purchases and sales of securities (excluding short-term investments) for the period ended June 30, 2017, were as follows (amounts in thousands†):
| U.S. Government/Agency | All Other | |||||||||||||||||||
| Fund Name | Purchases | Sales | Purchases | Sales | ||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | $ | 0 | $ | 0 | $ | 8,183 | $ | 2,212 | ||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 0 | 0 | 7,230 | 1,470 | ||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 0 | 0 | 10,385 | 1,995 | ||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 0 | 0 | 14,741 | 1,775 | ||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 0 | 0 | 25,284 | 1,234 | ||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 0 | 0 | 33,589 | 879 | ||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 0 | 0 | 39,682 | 1,041 | ||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 0 | 0 | 4,675 | 594 | ||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 0 | 0 | 5,268 | 1,439 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
12. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest with a $0.0001 par value. Changes in shares of beneficial interest were as follows (shares and amounts in thousands†):
| PIMCO REALPATH® Blend 2020 Fund | PIMCO REALPATH® Blend 2025 Fund | |||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 770 | $ | 8,002 | 106 | $ | 988 | 549 | $ | 5,708 | 109 | $ | 1,070 | ||||||||||||||||||||||
Administrative Class | 0 | 2 | 0 | 0 | 1 | 11 | 1 | 0 | ||||||||||||||||||||||||||
Class A | 247 | 2,555 | 0 | 0 | 363 | 3,763 | 2 | 15 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 13 | 133 | 12 | 117 | 10 | 100 | 13 | 122 | ||||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 1 | 14 | 0 | 0 | 2 | 19 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (397 | ) | (4,160 | ) | 0 | (4 | ) | (326 | ) | (3,420 | ) | (81 | ) | (762 | ) | |||||||||||||||||||
Administrative Class | 0 | (2 | ) | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
Class A | (23 | ) | (238 | ) | 0 | 0 | (1 | ) | (11 | ) | 0 | (1 | ) | |||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 611 | $ | 6,306 | 118 | $ | 1,101 | 598 | $ | 6,170 | 44 | $ | 444 | ||||||||||||||||||||||
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| PIMCO REALPATH® Blend 2030 Fund | PIMCO REALPATH® Blend 2035 Fund | |||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 908 | $ | 9,604 | 403 | $ | 3,640 | 1,341 | $ | 14,359 | 297 | $ | 2,716 | ||||||||||||||||||||||
Administrative Class | 2 | 12 | 1 | 12 | 3 | 32 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 291 | 3,032 | 0 | 3 | 303 | 3,207 | 2 | 16 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 18 | 185 | 12 | 118 | 15 | 154 | 12 | 114 | ||||||||||||||||||||||||||
Administrative Class | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 4 | 0 | 0 | 1 | 5 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (375 | ) | (3,980 | ) | (66 | ) | (627 | ) | (379 | ) | (4,065 | ) | (5 | ) | (47 | ) | ||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | (1 | ) | (11 | ) | 0 | 0 | ||||||||||||||||||||||||
Class A | (3 | ) | (29 | ) | 0 | 0 | (4 | ) | (40 | ) | (3 | ) | (27 | ) | ||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 841 | $ | 8,829 | 350 | $ | 3,146 | 1,279 | $ | 13,641 | 303 | $ | 2,772 | ||||||||||||||||||||||
| PIMCO REALPATH® Blend 2040 Fund | PIMCO REALPATH® Blend 2045 Fund | |||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 2,275 | $ | 24,531 | 45 | $ | 433 | 3,323 | $ | 35,870 | 44 | $ | 422 | ||||||||||||||||||||||
Administrative Class | 1 | 12 | 3 | 23 | 5 | 52 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 481 | 5,113 | 2 | 20 | 281 | 2,982 | 0 | 0 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 10 | 106 | 9 | 86 | 9 | 94 | 9 | 82 | ||||||||||||||||||||||||||
Administrative Class | 0 | 1 | 0 | 1 | 0 | 1 | 0 | 1 | ||||||||||||||||||||||||||
Class A | 0 | 4 | 0 | 1 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (425 | ) | (4,596 | ) | 0 | 0 | (381 | ) | (4,124 | ) | (5 | ) | (49 | ) | ||||||||||||||||||||
Administrative Class | 0 | (1 | ) | 0 | 0 | (4 | ) | (39 | ) | 0 | 0 | |||||||||||||||||||||||
Class A | (3 | ) | (36 | ) | 0 | (3 | ) | (2 | ) | (23 | ) | 0 | 0 | |||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 2,339 | $ | 25,134 | 59 | $ | 561 | 3,231 | $ | 34,813 | 48 | $ | 456 | ||||||||||||||||||||||
| PIMCO REALPATH® Blend 2050 Fund | PIMCO REALPATH® Blend 2055 Fund | |||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 3,959 | $ | 42,900 | 95 | $ | 900 | 263 | $ | 2,836 | 39 | $ | 358 | ||||||||||||||||||||||
Administrative Class | 1 | 5 | 0 | 0 | 6 | 66 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 305 | 3,233 | 11 | 99 | 169 | 1,791 | 0 | 5 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 10 | 108 | 8 | 80 | 6 | 66 | 8 | 79 | ||||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 1 | 0 | 2 | 0 | 2 | 0 | 1 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (428 | ) | (4,643 | ) | (4 | ) | (42 | ) | (20 | ) | (216 | ) | (2 | ) | (15 | ) | ||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | (6 | ) | (66 | ) | 0 | 0 | ||||||||||||||||||||||||
Class A | (3 | ) | (29 | ) | (1 | ) | (9 | ) | (11 | ) | (115 | ) | (1 | ) | (9 | ) | ||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 3,844 | $ | 41,575 | 109 | $ | 1,030 | 407 | $ | 4,365 | 44 | $ | 419 | ||||||||||||||||||||||
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| PIMCO REALPATH® Blend Income Fund | ||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||
Receipts for shares sold | ||||||||||||||||||
Institutional Class | 675 | $ | 7,015 | 24 | $ | 231 | ||||||||||||
Administrative Class | 3 | 26 | 3 | 39 | ||||||||||||||
Class A | 151 | 1,554 | 2 | 12 | ||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||
Institutional Class | 10 | 102 | 12 | 111 | ||||||||||||||
Administrative Class | 0 | 1 | 0 | 0 | ||||||||||||||
Class A | 1 | 11 | 0 | 2 | ||||||||||||||
Cost of shares redeemed | ||||||||||||||||||
Institutional Class | (448 | ) | (4,682 | ) | (6 | ) | (61 | ) | ||||||||||
Administrative Class | (1 | ) | (7 | ) | 0 | (4 | ) | |||||||||||
Class A | (1 | ) | (9 | ) | (2 | ) | (17 | ) | ||||||||||
Net increase (decrease) resulting from Fund share transactions | 390 | $ | 4,011 | 33 | $ | 313 | ||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
The following table discloses the number of shareholders that own 10% or more of the outstanding shares of a fund along with their respective percent ownership, if any. Some of these shareholders may be considered related parties, which may include, but are not limited to, the investment manager and its affiliates, affiliated broker dealers, fund of funds and directors or employees of the Trust or Adviser.
| Shareholders that own 10% or more of outstanding shares | Total percentage of portfolio held by shareholders that own 10% or more of outstanding shares | |||||||||||||||||||
| Non-Related Parties | Related Parties | Non-Related Parties | Related Parties | |||||||||||||||||
PIMCO REALPATH™ Blend 2020 Fund | 1 | 0 | 19 | % | 0 | % | ||||||||||||||
PIMCO REALPATH™ Blend 2025 Fund | 1 | 0 | 34 | % | 0 | % | ||||||||||||||
PIMCO REALPATH™ Blend 2030 Fund | 1 | 0 | 18 | % | 0 | % | ||||||||||||||
PIMCO REALPATH™ Blend 2035 Fund | 1 | 0 | 15 | % | 0 | % | ||||||||||||||
PIMCO REALPATH™ Blend 2040 Fund | 1 | 0 | 18 | % | 0 | % | ||||||||||||||
PIMCO REALPATH™ Blend 2055 Fund | 1 | 1 | 21 | % | 42 | % | ||||||||||||||
PIMCO REALPATH™ Blend Income Fund | 1 | 0 | 18 | % | 0 | % | ||||||||||||||
13. REGULATORY AND LITIGATION MATTERS
The Funds are not named as defendants in any material litigation or arbitration proceedings and are not aware of any material litigation or claim pending or threatened against them.
The foregoing speaks only as of the date of the preparation of this report.
14. FEDERAL INCOME TAX MATTERS
Each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code (the “Code”) and distribute all of its taxable income and net realized gains, if applicable, to shareholders. Accordingly, no provision for Federal income taxes has been made.
A Fund may be subject to local withholding taxes, including those imposed on realized capital gains. Any applicable foreign capital gains
tax is accrued daily based upon net unrealized gains, and may be payable following the sale of any applicable investments.
In accordance with U.S. GAAP, the Adviser has reviewed the Funds’ tax positions for all open tax years. As of June 30, 2017, the Funds have recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.
The Funds file U.S. tax returns. While the statute of limitations remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ending in 2013-2016, no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
| 86 | PIMCO EQUITY SERIES |
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June 30, 2017
As of June 30, 2017, the components of distributable taxable earnings are as follows (amounts in thousands†):
| Undistributed Ordinary Income(1) | Undistributed Long-Term Capital Gains | Net Tax Basis Unrealized Appreciation/ (Depreciation)(2) | Other Book-to-Tax Accounting Differences(3) | Accumulated Capital Losses(4) | Qualified Late-Year Loss Deferral - Capital(5) | Qualified Late-Year Loss Deferral - Ordinary(6) | ||||||||||||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | $ | 45 | $ | 0 | $ | 444 | $ | 0 | $ | (16 | ) | $ | 0 | $ | 0 | |||||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 42 | 0 | 399 | 0 | (53 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 130 | 29 | 966 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 146 | 0 | 1,007 | 0 | (8 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 195 | 0 | 800 | 0 | (10 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 266 | 0 | 858 | 0 | (17 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 317 | 0 | 1,059 | 0 | (12 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 67 | 0 | 449 | 0 | (24 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 23 | 0 | 288 | 0 | (11 | ) | 0 | 0 | ||||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | Includes undistributed short-term capital gains, if any. |
| (2) | Adjusted for open wash sale loss deferrals and accelerated recognition of unrealized gain on certain options contracts, and return of capital adjustments, for federal income tax purposes. Also adjusted for differences between book and tax realized and unrealized gain/loss on swap contracts. |
| (3) | Represents differences in income tax regulations and financial accounting principles generally accepted in the United States of America, mainly for organizational expenditures. |
| (4) | Capital losses available to offset future net capital gains expire in varying amounts as shown below. |
| (5) | Capital losses realized during the period November 1, 2016 through June 30, 2017 which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
| (6) | Specified losses realized during the period November 1, 2016 through June 30, 2017 and Ordinary losses realized during the period January 1, 2017 through June 30, 2017, which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
Under the Regulated Investment Company Modernization Act of 2010, a fund is permitted to carry forward any new capital losses for an unlimited period. Additionally, such capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term under previous law.
As of June 30, 2017, the Funds had the following post-effective capital losses with no expiration (amounts in thousands†):
| Short-Term | Long-Term | |||||||||||
PIMCO REALPATH® Blend 2020 Fund | $ | 0 | $ | 16 | ||||||||
PIMCO REALPATH® Blend 2025 Fund | 38 | 15 | ||||||||||
PIMCO REALPATH® Blend 2030 Fund | 0 | 0 | ||||||||||
PIMCO REALPATH® Blend 2035 Fund | 0 | 8 | ||||||||||
PIMCO REALPATH® Blend 2040 Fund | 0 | 10 | ||||||||||
PIMCO REALPATH® Blend 2045 Fund | 0 | 17 | ||||||||||
PIMCO REALPATH® Blend 2050 Fund | 0 | 12 | ||||||||||
PIMCO REALPATH® Blend 2055 Fund | 6 | 18 | ||||||||||
PIMCO REALPATH® Blend Income Fund | 0 | 11 | ||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
As of June 30, 2017, the aggregate cost and the net unrealized appreciation/(depreciation) of investments for federal income tax purposes are as follows (amounts in thousands†):
| Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation/ (Depreciation) | |||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | $ | 10,246 | $ | 444 | $ | 0 | $ | 444 | ||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 9,498 | 404 | (3 | ) | 401 | |||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 14,980 | 965 | 0 | 965 | ||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 19,262 | 1,008 | 0 | 1,008 | ||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 28,711 | 806 | (5 | ) | 801 | |||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 38,395 | 868 | (8 | ) | 860 | |||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 45,440 | 1,069 | (8 | ) | 1,061 | |||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 7,751 | 452 | (2 | ) | 450 | |||||||||||||||
PIMCO REALPATH® Blend Income Fund | 7,231 | 295 | (5 | ) | 290 | |||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (7) | Primary differences, if any, between book and tax net unrealized appreciation/(depreciation) on investments are attributable to open wash sale loss deferrals, and return of capital adjustments. |
| ANNUAL REPORT | JUNE 30, 2017 | 87 |
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Notes to Financial Statements (Cont.)
June 30, 2017
For the fiscal years ended June 30, 2017 and June 30, 2016, respectively, the Funds made the following tax basis distributions (amounts in thousands†):
| June 30, 2017 | June 30, 2016 | |||||||||||||||||||||||||||
| Ordinary Income Distributions(8) | Long-Term Capital Gain Distributions | Return of Capital(9) | Ordinary Income Distributions(8) | Long-Term Capital Gain Distributions | Return of Capital(9) | |||||||||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | $ | 147 | $ | 0 | $ | 0 | $ | 117 | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 119 | 0 | 0 | 122 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 190 | 0 | 0 | 118 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 159 | 0 | 0 | 114 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 111 | 0 | 0 | 88 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 95 | 0 | 0 | 83 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 109 | 0 | 0 | 82 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 69 | 0 | 0 | 81 | 0 | 0 | ||||||||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 114 | 0 | 0 | 110 | 0 | 3 | ||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (8) | Includes short-term capital gains, if any, distributed. |
| (9) | A portion of the distributions made represents a tax return of capital. Return of capital distributions have been reclassified from undistributed net investment income to paid-in capital to more appropriately conform financial accounting to tax accounting. |
| 88 | PIMCO EQUITY SERIES |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of PIMCO Equity Series® and Shareholders of the PIMCO REALPATH™ Blend 2020 Fund, PIMCO REALPATH™ Blend 2025 Fund, PIMCO REALPATH™ Blend 2030 Fund, PIMCO REALPATH™ Blend 2035 Fund, PIMCO REALPATH™ Blend 2040 Fund, PIMCO REALPATH™ Blend 2045 Fund, PIMCO REALPATH™ Blend 2050 Fund, PIMCO REALPATH™ Blend 2055 Fund, and PIMCO REALPATH™ Blend Income Fund
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the PIMCO REALPATH™ Blend 2020 Fund, PIMCO REALPATH™ Blend 2025 Fund, PIMCO REALPATH™ Blend 2030 Fund, PIMCO REALPATH™ Blend 2035 Fund, PIMCO REALPATH™ Blend 2040 Fund, PIMCO REALPATH™ Blend 2045 Fund, PIMCO REALPATH™ Blend 2050 Fund, PIMCO REALPATH™ Blend 2055 Fund, and PIMCO REALPATH™ Blend Income Fund, (nine of the funds constituting the PIMCO Equity Series®, hereafter referred to as the “Funds”) as of June 30, 2017, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and each of their financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of June 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
August 24, 2017
| ANNUAL REPORT | JUNE 30, 2017 | 89 |
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Glossary: (abbreviations that may be used in the preceding statements)
(Unaudited)
Counterparty Abbreviations: | ||||||||||
| CBK | Citibank N.A. | GST | Goldman Sachs International | JPM | JPMorgan Chase Bank N.A. | |||||
| FBF | Credit Suisse International | |||||||||
Currency Abbreviations: | ||||||||||
| USD (or $) | United States Dollar | |||||||||
Exchange Abbreviations: | ||||||||||
| CBOE | Chicago Board Options Exchange | |||||||||
Index/Spread Abbreviations: | ||||||||||
| BCOMTR | Bloomberg Commodity Index Total Return | DWRTFT | Dow Jones Wilshire REIT Total Return Index | S&P 500 | Standard & Poor’s 500 Index | |||||
Other Abbreviations: | ||||||||||
| LIBOR | London Interbank Offered Rate | TBA | To-Be-Announced | |||||||
| 90 | PIMCO EQUITY SERIES |
Table of Contents
Federal Income Tax Information
(Unaudited)
As required by the Internal Revenue Code (“Code”) and Treasury Regulations, if applicable, shareholders must be notified within 60 days of the Funds’ fiscal year end regarding the status of qualified dividend income and the dividend received deduction.
Dividend Received Deduction. Corporate shareholders are generally entitled to take the dividend received deduction on the portion of a Fund’s dividend distribution that qualifies under tax law. The percentage of the following Funds’ Fiscal 2017 ordinary income dividend that qualifies for the corporate dividend received deduction is set forth in the table below.
Qualified Dividend Income. Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), the following percentage of ordinary dividends paid during the calendar year was designated as “qualified dividend income”, as defined in the Act, subject to reduced tax rates in 2017 set forth in the table below.
Qualified Interest Income and Qualified Short-Term Capital Gain (for non-U.S. resident shareholders only). Under the American Jobs Creation Act of 2004, the following amounts of ordinary dividends paid during the fiscal year ended June 30, 2017 are considered to be derived from “qualified interest income,” as defined in Section 871(k)(1)(E) of the Code, and therefore are designated as interest-related dividends, as defined in Section 871(k)(1)(C) of the Code. Further, the following amounts of ordinary dividends paid during the fiscal year ended June 30, 2017 are considered to be derived from “qualified short-term capital gain,” as defined in Section 871(k)(2)(D) of the Code, and therefore are designated as qualified short-term gain dividends, as defined by Section 871(k)(2)(C) of the Code are also set forth in the table below.
| Dividend Received Deduction % | Qualified Dividend Income % | Qualified Interest Income (000s† ) | Qualified Short-Term Capital Gain (000s†) | |||||||||||||||||
PIMCO REALPATH® Blend 2020 Fund | 0.00% | 0.00% | $ | 0 | $ | 0 | ||||||||||||||
PIMCO REALPATH® Blend 2025 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2030 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2035 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2040 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2045 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2050 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend 2055 Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
PIMCO REALPATH® Blend Income Fund | 0.00% | 0.00% | 0 | 0 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
Shareholders are advised to consult their own tax advisor with respect to the tax consequences of their investment in the Trust.
In January 2018, you will be advised on IRS Form 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2017.
| ANNUAL REPORT | JUNE 30, 2017 | 91 |
Table of Contents
The charts below identify the Trustees and executive officers of the Trust. Unless otherwise indicated, the address of all persons below is 650 Newport Center Drive, Newport Beach, CA 92660.
The Funds’ Statement of Additional Information includes more information about the Trustees and Officers. To request a free copy, call PIMCO at (888) 87-PIMCO or visit the Funds’ website at www.pimco.com.
| Name, Year of Birth and Position Held with Trust* | Term of Office and Length of Time Served† | Principal Occupation(s) During Past 5 Years | Number of Funds in Fund Complex Overseen by Trustee | Other Public Company and Investment Company Directorships Held by Trustee During the Past 5 Years | ||||
| Interested Trustees1 | ||||||||
Brent R. Harris (1959) Chairman of the Board | 03/2010 to present | Managing Director, PIMCO. Formerly, member of Executive Committee, PIMCO. | 163 | Chairman and Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust; Director, StocksPLUS® Management, Inc; and member of Board of Governors, Investment Company Institute. | ||||
| Independent Trustees | ||||||||
Jennifer Holden Dunbar (1963) Trustee | 02/2016 to present | Managing Director, Dunbar Partners, LLC (business consulting and investments). | 163 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust; Director, PS Business Parks; Director, Big 5 Sporting Goods Corporation. | ||||
Peter B. McCarthy (1950) Trustee | 09/2011 to present | Formerly, Assistant Secretary and Chief Financial Officer, United States Department of Treasury; Deputy Managing Director, Institute of International Finance. | 163 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. | ||||
Ronald C. Parker (1951) Trustee | 02/2016 to present | Director of Roseburg Forest Products Company. Formerly, Chairman of the Board, The Ford Family Foundation. Formerly President, Chief Executive Officer, Hampton Affiliates (forestry products). | 163 | Trustee, PIMCO Equity Series VIT; Lead Independent Trustee, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. | ||||
| * | Unless otherwise noted, the information for the individuals listed is as of June 30, 2017. |
| 1 | Mr. Harris is an “interested persons” of the Trust (as that term is defined in the 1940 Act) because of his affiliations with PIMCO. |
| † | Trustees serve until their successors are duly elected and qualified. |
| 92 | PIMCO EQUITY SERIES |
Table of Contents
(Unaudited)
Executive Officers
| Name, Year of Birth and Position Held with Trust* | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years† | ||
Peter G. Strelow (1970) President | 02/2014 to present
Senior Vice President 11/2013 to 02/2014
Vice President 03/2010 to 11/2013 | Managing Director, Chief Administrative Officer and Co-Chief Operating Officer PIMCO. President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
David C. Flattum (1964) Chief Legal Officer | 03/2010 to present | Managing Director and General Counsel, PIMCO. Chief Legal Officer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Formerly, Managing Director, Chief Operating Officer and General Counsel, Allianz Asset Management of America L.P. | ||
Jennifer E. Durham (1970) Chief Compliance Officer | 03/2010 to present | Managing Director and Chief Compliance Officer, PIMCO. Chief Compliance Officer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Brent R. Harris (1959) Senior Vice President | 03/2010 to present | Managing Director, PIMCO. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Formerly, member of Executive Committee, PIMCO. | ||
Joshua D. Ratner (1976)** Vice President - Senior Counsel, Secretary | 11/2013 to present
Assistant Secretary 03/2010 to 01/2011 | Executive Vice President and Senior Counsel, PIMCO. Chief Legal Officer, PIMCO Investments LLC. Vice President – Senior Counsel, Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Vice President, Secretary and Chief Legal Officer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Ryan G. Leshaw (1980) Assistant Secretary | 05/2012 to present | Senior Vice President and Senior Counsel, PIMCO. Assistant Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Associate, Willkie Farr & Gallagher LLP. | ||
Stacie D. Anctil (1969) Vice President | 05/2015 to present
Assistant Treasurer 03/2010 to 05/2015 | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
William G. Galipeau (1974) Vice President | 11/2013 to present | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Treasurer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Eric D. Johnson (1970)** Vice President | 05/2011 to present | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Henrik P. Larsen (1970) Vice President | 03/2010 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Bijal Y. Parikh (1978) Vice President | 02/2017 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Greggory S. Wolf (1970) Vice President | 05/2011 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Trent W. Walker (1974) Treasurer | 11/2013 to present
Assistant Treasurer 03/2010 to 11/2013 | Executive Vice President, PIMCO. Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Assistant Treasurer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Erik C. Brown (1967) Assistant Treasurer | 03/2010 to present | Executive Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Laura S. Melman (1966)** Assistant Treasurer | 02/2017 to present | Senior Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Colleen D. Miller (1980)** Assistant Treasurer | 02/2017 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Vice President Cohen & Steers Capital Management. | ||
Christopher M. Morin (1980) Assistant Treasurer | 08/2016 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Vice President of Operations, Standard Life Investments USA; Assistant Vice President, Brown Brothers Harriman. | ||
Jason J. Nagler (1982)** Assistant Treasurer | 05/2015 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Head of Mutual Fund Reporting, GMO and Assistant Treasurer, GMO Trust and GMO Series Trust Funds. | ||
| * | Unless otherwise noted, the information for the individuals listed is as of June 30, 2017. |
| ANNUAL REPORT | JUNE 30, 2017 | 93 |
Table of Contents
Management of the Trust (Cont.)
(Unaudited)
| † | The term “PIMCO Closed-End Funds” as used herein includes: PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PCM Fund Inc., PIMCO Corporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO Dynamic Credit and Mortgage Income Fund, PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Opportunity Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II and PIMCO Strategic Income Fund, Inc.; the term “PIMCO-Sponsored Interval Funds” as used herein includes: PIMCO Flexible Credit Income Fund. |
| ** | The address of these officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
| 94 | PIMCO EQUITY SERIES |
Table of Contents
(Unaudited)
The Funds2,3 consider customer privacy to be a fundamental aspect of their relationships with shareholders and are committed to maintaining the confidentiality, integrity and security of their current, prospective and former shareholders’ non-public personal information. The Funds have developed policies that are designed to protect this confidentiality, while allowing shareholder needs to be served.
OBTAINING PERSONAL INFORMATION
In the course of providing shareholders with products and services, the Funds and certain service providers to the Funds, such as the Funds’ investment advisers or sub-advisers (“Advisers”), may obtain non-public personal information about shareholders, which may come from sources such as account applications and other forms, from other written, electronic or verbal correspondence, from shareholder transactions, from a shareholder’s brokerage or financial advisory firm, financial advisor or consultant, and/or from information captured on applicable websites.
RESPECTING YOUR PRIVACY
As a matter of policy, the Funds do not disclose any non-public personal information provided by shareholders or gathered by the Funds to non-affiliated third parties, except as required or permitted by law or as necessary for such third parties to perform their agreements with respect to the Funds. As is common in the industry, non-affiliated companies may from time to time be used to provide certain services, such as preparing and mailing prospectuses, reports, account statements and other information, conducting research on shareholder satisfaction and gathering shareholder proxies. The Funds or their affiliates may also retain non-affiliated companies to market Fund shares or products which use Fund shares and enter into joint marketing arrangements with them and other companies. These companies may have access to a shareholder’s personal and account information, but are permitted to use this information solely to provide the specific service or as otherwise permitted by law. In most cases, the shareholders will be clients of a third party, but the Funds may also provide a shareholder’s personal and account information to the shareholder’s respective brokerage or financial advisory firm and/or financial advisor or consultant.
SHARING INFORMATION WITH THIRD PARTIES
The Funds reserve the right to disclose or report personal or account information to non-affiliated third parties in limited circumstances where the Funds believe in good faith that disclosure is required under law, to cooperate with regulators or law enforcement authorities, to protect their rights or property, or upon reasonable request by any fund advised by PIMCO in which a shareholder has invested. In addition, the Funds may disclose information about a shareholder or a
shareholder’s accounts to a non-affiliated third party at the shareholder’s request or with the consent of the shareholder.
SHARING INFORMATION WITH AFFILIATES
The Funds may share shareholder information with their affiliates in connection with servicing shareholders’ accounts, and subject to applicable law may provide shareholders with information about products and services that the Funds or their Advisers, distributors or their affiliates (“Service Affiliates”) believe may be of interest to such shareholders. The information that the Funds may share may include, for example, a shareholder’s participation in the Funds or in other investment programs sponsored by a Service Affiliate, a shareholder’s ownership of certain types of accounts (such as IRAs), information about the Funds’ experiences or transactions with a shareholder, information captured on applicable websites, or other data about a shareholder’s accounts, subject to applicable law. The Funds’ Service Affiliates, in turn, are not permitted to share shareholder information with non-affiliated entities, except as required or permitted by law.
PROCEDURES TO SAFEGUARD PRIVATE INFORMATION
The Funds take seriously the obligation to safeguard shareholder non-public personal information. In addition to this policy, the Funds have implemented procedures that are designed to restrict access to a shareholder’s non-public personal information to internal personnel who need to know that information to perform their jobs, such as servicing shareholder accounts or notifying shareholders of new products or services. Physical, electronic and procedural safeguards are in place to guard a shareholder’s non-public personal information.
INFORMATION COLLECTED FROM WEBSITES
Websites maintained by the Funds or their service providers may use a variety of technologies to collect information that help the Funds and their service providers understand how the website is used. Information collected from your web browser (including small files stored on your device that are commonly referred to as “cookies”) allow the websites to recognize your web browser and help to personalize and improve your user experience and enhance navigation of the website. In addition, the Funds or their Service Affiliates may use third parties to place advertisements for the Funds on other websites, including banner advertisements. Such third parties may collect anonymous information through the use of cookies or action tags (such as web beacons). The information these third parties collect is generally limited to technical and web navigation information, such as your IP address, web pages visited and browser type, and does not include personally identifiable information such as name, address, phone number or email address. If you are a registered user of the Funds’ website, the Funds or their service providers or third party firms engaged by the Funds or their service providers may collect or share
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Privacy Policy1 (Cont.)
(Unaudited)
information submitted by you, which may include personally identifiable information. This information can be useful to the Funds when assessing and offering services and website features. You can change your cookie preferences by changing the setting on your web browser to delete or reject cookies. If you delete or reject cookies, some website pages may not function properly. The Funds do not look for web browser “do not track” requests.
CHANGES TO THE PRIVACY POLICY
From time to time, the Funds may update or revise this privacy policy. If there are changes to the terms of this privacy policy, documents containing the revised policy on the relevant website will be updated.
1 Amended as of February 14, 2017.
2 PIMCO Investments LLC (“PI”) serves as the Funds’ distributor. This Privacy Policy applies to the activities of PI to the extent that PI regularly effects or engages in transactions with or for a Fund shareholder who is the record owner of such shares. For purposes of this Privacy Policy, references to “the Funds” shall include PI when acting in this capacity.
3 When distributing this Policy, a Fund may combine the distribution with any similar distribution of its investment adviser’s privacy policy. The distributed, combined policy may be written in the first person (i.e., by using “we” instead of “the Funds”).
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General Information
Investment Adviser and Administrator
Pacific Investment Management Company LLC
650 Newport Center Drive
Newport Beach, CA 92660
Distributor
PIMCO Investments LLC
1633 Broadway
New York, NY 10019
Custodian
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
Transfer Agent
Boston Financial Data Services
Institutional Class, Class P, Administrative Class, Class D
330 W. 9th Street, 5th Floor
Kansas City, MO 64105
Boston Financial Data Services
Class A, Class C, Class R
P.O. Box 55060
Boston, MA 02205-5060
Legal Counsel
Dechert LLP
1900 K Street, N.W.
Washington, D.C. 20006
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
1100 Walnut Street, Suite 1300
Kansas City, MO 64106
This report is submitted for the general information of the shareholders of the PIMCO Equity Series.
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PES3002AR_063017
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PIMCO Equity Series®
Annual Report
June 30, 2017
PIMCO RAE Fundamental Emerging Markets Fund
PIMCO RAE Fundamental Global Fund
PIMCO RAE Fundamental Global ex-US Fund
PIMCO RAE Fundamental International Fund
PIMCO RAE Fundamental US Fund
PIMCO RAE Fundamental US Small Fund
Share Classes
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This material is authorized for use only when preceded or accompanied by the current PIMCO Equity Series prospectus. The Shareholder Reports for the other series of the PIMCO Equity Series are printed separately.
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Dear Shareholder,
Please find enclosed the Annual Report for the PIMCO Equity Series covering the twelve-month reporting period ended June 30, 2017. The following pages contain specific details about the investment performance of each fund and a discussion of the factors that most affected performance during the reporting period.
Highlights of the financial markets during the twelve-month reporting period include:
| ∎ | The outcome of Brexit in June 2016, whereby U.K. voters opted to leave the European Union, prompted market volatility to rise, sovereign yields to rally significantly, and risk assets to generally underperform. Investor risk appetite returned later, however, as investors viewed the global economy as stable and expectations for further central bank easing helped anchor risk appetite. Improving commodity prices and fiscal stimulus in China also contributed to renewed investor confidence. |
| ∎ | Leading up to the U.S. presidential election on November 8, investors generally shook off a number of political developments, including new leadership in the U.K. and Brazil, and a coup attempt in Turkey. In this environment, volatility generally remained low and risk assets rallied. Central banks were featured prominently in the headlines as monetary policy concerns (in particular, the longevity of central bank support) lingered beneath the seemingly benign market environment. In December, the Federal Reserve (“Fed”) raised its key lending rate, the Federal Funds Rate, by 0.25% to a range of 0.50% to 0.75%. Furthermore, equities moved higher (U.S. stock indices set record highs), credit spreads tightened, and emerging market (“EM”) assets continued to gain over this period. |
| ∎ | Through early 2017, the robust risk sentiment that marked the post-U.S. election period broadly continued, though there were some signs of moderation towards the end of March. Early challenges in President Donald Trump’s policy agenda left some investors less optimistic about the potential for other highly anticipated agenda items such as tax reform and infrastructure spending. Still, solid fundamental data, relatively easy financial conditions, and optimism among businesses and consumers helped encourage positive investor sentiment. This environment provided an opportunity for the Fed to continue on its path towards policy normalization, and led the Fed to raise the Federal Funds Rate again in March by 0.25% to a range of 0.75% to 1.00%. |
| ∎ | Geopolitics, including elections in several countries as well as political controversy in both the U.S. and Brazil, dominated headlines and contributed to brief periods of market volatility throughout the last quarter of the reporting period. In the U.S., the Fed raised the Federal Funds Rate once again in June by 0.25% to a range of 1.00% to 1.25%, and unveiled details of its plan to gradually unwind its balance sheet, contributing to a flattening yield curve. A perceived hawkish shift in tone from other major central banks, including the European Central Bank, the Bank of England, and the Bank of Canada, spurred most developed market yields to rise even as longer-term interest rates actually fell in the U.S. The fundamental economic backdrop remained largely intact and the broader risk rally continued as equities marched higher, credit spreads tightened, and EM assets strengthened. |
| ∎ | Global developed market equities experienced strong performance amid a period marked by low economic volatility and strong corporate earnings growth despite geopolitical uncertainty. International equity markets (developed ex-U.S.), as represented by the MSCI EAFE Net Dividend Index (USD Hedged), returned 23.50% and the MSCI EAFE Net Dividend Index (USD Unhedged), returned 20.27% over the reporting period. U.S. equities, as represented by the S&P 500 Index, returned 17.90%. Japanese equities, as represented by the Nikkei 225 Index (in JPY), returned 31.03% over the reporting period and European equities, as represented by the MSCI Europe Index in EUR, returned 17.96% over the reporting period. |
| ∎ | EM equities, as represented by the MSCI Emerging Markets Index (Net Dividends in USD), returned 23.75% over the reporting period. Emerging markets benefited from an improvement in global conditions and a stabilization of macro fundamentals despite a decline in commodity prices. A more dovish Federal Reserve, lower-for-longer |
| 2 | PIMCO EQUITY SERIES |
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global central bank policy and an orderly rebalancing in China along with a return to growth in select countries and improving current accounts contributed to strong performance for EM equities. |
| ∎ | U.S. Treasuries, as represented by the Bloomberg Barclays U.S. Treasury Index, declined 2.32% for the reporting period. Yields across the U.S. Treasury yield curve rose in reaction to the Fed’s interest rate increases, rising concern over inflation and strong investor risk appetite. The benchmark ten-year U.S. Treasury note yielded 2.31% at the end of the reporting period, up from 1.49% on June 30, 2016. The Bloomberg Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, declined 0.31% for the reporting period. |
If you have any questions regarding the PIMCO Equity Series, please contact your account manager or financial adviser, or call one of our shareholder associates at 888.87.PIMCO (888.877.4626). We also invite you to visit our website at www.pimco.com to learn more about our views and global thought leadership.
Thank you again, for the trust you place in us. We value your commitment and will continue to work diligently to meet your broad investment and investment solution needs.
 | Sincerely,
Brent R. Harris Chairman of the Board,
August 24, 2017
|
Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income distributions and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. It is not possible to invest directly in an unmanaged index.
| ANNUAL REPORT | JUNE 30, 2017 | 3 |
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Important Information About the Funds
PIMCO Equity Series (the “Trust”) is an open-end management investment company.
We believe that equity funds have an important role to play in a well-diversified investment portfolio. It is important to note, however, that equity funds are subject to notable risks. Among other things, equity and equity-related securities may decline in value due to both real and perceived general market, economic, and industry conditions.
The PIMCO RAE Fundamental Global Fund and PIMCO RAE Fundamental Global ex-US Fund are each “fund of funds,” which is a term used to describe mutual funds that pursue their investment objective by investing in other mutual funds instead of investing directly in stocks or bonds of other issuers. Under normal circumstances, the PIMCO RAE Fundamental Global Fund invests substantially all of its assets in Institutional Class shares of the PIMCO RAE Fundamental US Fund, PIMCO RAE Fundamental International Fund (“International Fund”) and PIMCO RAE Fundamental Emerging Markets Fund (“Emerging Markets Fund”) (collectively, “Underlying Funds”), and equity securities that are eligible investments for the Underlying Funds. Under normal circumstances, the PIMCO RAE Fundamental Global ex-US Fund invests substantially all of its assets in Institutional Class shares of the International Fund and Emerging Markets Fund, equity securities of small companies economically tied to non-U.S. countries, and securities that are eligible investments for the International Fund and Emerging Markets Fund. The PIMCO RAE Fundamental Global Fund and PIMCO RAE Fundamental Global ex-US Fund may invest in other affiliated funds and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940 (together with the Underlying Funds, “Acquired Funds”). The cost of investing in these Funds will generally be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds.
The values of equity securities, such as common stocks and preferred stocks, have historically risen and fallen in periodic cycles and may decline due to general market conditions, which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. Equity securities may also decline due to factors that affect a particular industry or industries, such as labor shortages, increased production costs and competitive conditions within an industry. In addition, the value of an equity security may decline for a number of reasons that directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets. Different types of equity securities may react differently to these developments and a change in the financial condition of a single issuer may affect securities markets as a whole.
During a general downturn in the securities markets, multiple asset classes, including equity securities, may decline in value simultaneously. The market price of equity securities owned by a Fund may go up or down, sometimes rapidly or unpredictably. Equity securities generally have greater price volatility than fixed income securities and common stocks generally have the greatest appreciation and depreciation potential of all corporate securities.
The Funds may be subject to various risks as described in the Funds’ prospectus. Some of these risks may include, but are not limited to, the following: new/small fund risk, allocation risk, acquired fund risk, equity risk, value investing risk, foreign (non-U.S.) investment risk, emerging markets risk, issuer non-diversification risk, market risk, issuer risk, credit risk, distressed company risk, currency risk, liquidity risk, leveraging risk, management risk, small company risk, arbitrage risk, derivatives risk and model risk. A complete description of these and other risks is contained in the Funds’ prospectus.
The Funds may use derivative instruments for hedging purposes or as part of an investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, leverage risk, management risk and the risk that a Fund may not be able to close out a position when it would be most advantageous to do so. Changes in regulation relating to a mutual fund’s use of derivatives and related instruments could potentially limit or impact a Fund’s ability to invest in derivatives, limit a Fund’s ability to employ certain strategies that use derivatives and/or adversely affect the value or performance of derivatives and a Fund. Certain derivative transactions may have a leveraging effect on a Fund. For example, a small investment in a derivative instrument may have a significant impact on a Fund’s exposure to interest rates, currency exchange rates or other investments. As a result, a relatively small price movement in an asset, instrument or component of the index underlying a derivative instrument may cause an immediate and substantial loss or gain, which translates into heightened volatility for the Funds. A Fund may engage in such transactions regardless of whether the Fund owns the asset, instrument or components of the index underlying the derivative instrument. A Fund may invest a significant portion of its assets in these types of instruments. If it does, the Fund’s investment exposure could far exceed the value of its portfolio securities and its investment performance could be primarily dependent upon securities it does not own. Investing in foreign (non-U.S.) securities may entail risk due to foreign (non-U.S.) economic and political developments; this risk may be increased when investing in emerging markets. For example, if an Underlying Fund invests in emerging market debt, it may face increased exposure to interest rate, liquidity, volatility, and redemption risk due to the specific economic, political, geographical, or legal background of the foreign (non-U.S.) issuer.
| 4 | PIMCO EQUITY SERIES |
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The value of an equity security of an issuer that has paid dividends in the past may decrease if the issuer reduces or eliminates future payments to its shareholders. If the dividends or distributions received by a Fund decrease, the Fund may have less income to distribute to the Fund’s shareholders. In addition, during certain market conditions, the equity securities of issuers that have paid regular dividends or distributions may not be widely available or may be highly concentrated in particular sectors of the market. A Fund may invest a significant portion of its assets in value stocks. Value stocks may perform differently from other types of stocks and the market as a whole. A value stock may decrease in price or may not increase in price as anticipated by PIMCO if it continues to be undervalued by the market or the factors that the portfolio manager believes will cause the stock price to increase do not occur.
The geographical classification of foreign (non-U.S.) securities in this report are classified by the country of incorporation of a holding. In certain instances, a security’s country of incorporation may be different from its country of economic exposure.
On each individual Fund Summary page in this Shareholder Report, the Average Annual Total Return table and Cumulative Returns chart measure performance assuming that any dividend and capital gain distributions were reinvested. Returns do not reflect the deduction of taxes that a shareholder would pay on (i) Fund distributions or (ii) the redemption of Fund shares. The Cumulative Returns chart and Average Annual Total Return table reflect any sales load that would have
applied at the time of purchase or any Contingent Deferred Sales Charge (“CDSC”) that would have applied if a full redemption occurred on the last business day of the period shown in the Cumulative Returns chart. Class A shares are subject to an initial sales charge. A CDSC may be imposed in certain circumstances on Class A shares that are purchased without an initial sales charge and then redeemed during the first 12 months after purchase. Class C shares are subject to a 1% CDSC, which may apply in the first year. The Cumulative Returns chart reflects only Institutional Class performance. Performance may vary by share class based on each class’s expense ratios. Performance shown is net of fees and expenses. The minimum initial investment amount for Institutional Class and Class P shares is $1,000,000. The minimum initial investment amount for Class A and Class C shares is $1,000. Each Fund measures its performance against at least one broad-based securities market index (“benchmark index”). The benchmark index does not take into account fees, expenses, or taxes. A Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. There is no assurance that any Fund, including any Fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a Fund’s total return in excess of that of the Fund’s benchmark between reporting periods or 2) a Fund’s total return in excess of the Fund’s historical returns between reporting periods. Unusual performance is defined as a significant change in a Fund’s performance as compared to one or more previous reporting periods.
The following table discloses the inception dates of each Fund and its respective share classes along with the Fund’s diversification status as of period end:
| Fund Name | Fund Inception | Institutional Class | Class P | Class A | Class C | Diversification Status | ||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | Non-diversified | ||||||||||||||||||||||
PIMCO RAE Fundamental Global Fund | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | Non-diversified | ||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | Non-diversified | ||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | Non-diversified | ||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | Non-diversified | ||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | 06/05/15 | Non-diversified | ||||||||||||||||||||||
An investment in a Fund is not a bank deposit and is not guaranteed or insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. It is possible to lose money on investments in a Fund.
The Trustees are responsible generally for overseeing the management of the Trust. The Trustees authorize the Trust to enter into service agreements with the Adviser, the Distributor, the Administrator and other service providers in order to provide, and in some cases authorize service providers to procure through other parties, necessary or desirable services on behalf of the Trust and the Funds. Shareholders
are not parties to or third-party beneficiaries of such service agreements. Neither a Fund’s prospectus nor a Fund’s summary prospectus, the Trust’s Statement of Additional Information (“SAI”), any contracts filed as exhibits to the Trust’s registration statement, nor any other communications, disclosure documents or regulatory filings (including this report) from or on behalf of the Trust or a Fund creates a contract between or among any shareholder of a Fund, on the one hand, and the Trust, a Fund, a service provider to the Trust or a Fund, and/or the Trustees or officers of the Trust, on the other hand. The Trustees (or the Trust and its officers, service providers or other delegates acting under authority of the Trustees) may amend the most
| ANNUAL REPORT | JUNE 30, 2017 | 5 |
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Important Information About the Funds (Cont.)
recent prospectus or use a new prospectus, summary prospectus or SAI with respect to a Fund or the Trust, and/or amend, file and/or issue any other communications, disclosure documents or regulatory filings, and may amend or enter into any contracts to which the Trust or a Fund is a party, and interpret the investment objective(s), policies, restrictions and contractual provisions applicable to any Fund, without shareholder input or approval, except in circumstances in which shareholder approval is specifically required by law (such as changes to fundamental investment policies) or where a shareholder approval requirement is specifically disclosed in the Trust’s then-current prospectus or SAI.
PIMCO has adopted written proxy voting policies and procedures (“Proxy Policy”) as required by Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended. The Proxy Policy has been adopted by the Trust as the policies and procedures that PIMCO will use when voting proxies on behalf of a Fund. A description of the policies and
procedures that PIMCO uses to vote proxies relating to portfolio securities of a Fund, and information about how the Fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30th, are available without charge, upon request, by calling the Trust at (888) 87-PIMCO, on the Fund’s website at www.pimco.com, and on the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
The Trust files a complete schedule of each Fund’s holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. A copy of a Fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. A Fund’s Form N-Q is also available without charge, upon request, by calling the Trust at (888) 87-PIMCO and on the Fund’s website at www.pimco.com. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
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| ANNUAL REPORT | JUNE 30, 2017 | 7 |
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PIMCO RAE Fundamental Emerging Markets Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO RAE Fundamental Emerging Markets Fund seeks long-term capital appreciation by investing under normal circumstances at least 80% of its assets in investments that are economically tied to emerging market countries. Specifically, under normal circumstances, the Fund will obtain exposure to a portfolio of stocks economically tied to emerging market countries (“RAE Fundamental Emerging Markets Portfolio”) through investment in the securities that comprise the RAE Fundamental Emerging Markets Portfolio. The stocks are selected by the Fund’s sub-adviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017* | ||||||||||||||||||
| 1 Year | 5 Year | 10 Year | Fund Inception (05/31/06) | |||||||||||||||
 | PIMCO RAE Fundamental Emerging Markets Fund Institutional Class | 27.53% | 4.27% | 2.98% | 6.36% | |||||||||||||
| PIMCO RAE Fundamental Emerging Markets Fund Class P | 27.46% | 4.23% | 2.96% | 6.35% | ||||||||||||||
| PIMCO RAE Fundamental Emerging Markets Fund Class A | 27.06% | 4.15% | 2.92% | 6.31% | ||||||||||||||
| PIMCO RAE Fundamental Emerging Markets Fund Class A (adjusted) | 22.29% | 3.36% | 2.52% | 5.94% | ||||||||||||||
| PIMCO RAE Fundamental Emerging Markets Fund Class C | 26.13% | 3.81% | 2.75% | 6.15% | ||||||||||||||
| PIMCO RAE Fundamental Emerging Markets Fund Class C (adjusted) | 25.13% | 3.81% | 2.75% | 6.15% | ||||||||||||||
 | MSCI Emerging Markets Index± | 23.75% | 3.96% | 1.91% | 5.17% | |||||||||||||
All Fund returns are net of fees and expenses.
± The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.
It is not possible to invest directly in an unmanaged index.
* For periods prior to June 5, 2015, the Fund’s performance reflects the performance when the Fund was a partnership, net of actual fees and expenses charged to individual partnership accounts in the aggregate. If the performance had been restated to reflect the applicable fees and expenses of each share class, the performance may have been higher or lower. The Fund began operations as a partnership on May 31, 2006 and, on June 5, 2015, was reorganized into a newly-formed fund that was registered as an investment company under the Investment Company Act of 1940. Prior to the reorganization, the Fund had an investment objective, investment strategies, investment guidelines, and restrictions that were substantially similar to those currently applicable to the Fund; however, the Fund was not registered as an investment company under the Investment Company Act of 1940 and was not subject to its requirements or requirements imposed by the Internal Revenue Code of 1986 which, if applicable, may have adversely affected its performance. The performance of each class of shares will differ as a result of the different levels of fees and expenses applicable to each class of shares.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.95% for the Institutional Class shares, 1.05% for the Class P shares, 1.30% for the Class A shares and 2.05% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
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| Institutional Class - PEIFX | Class P - PEPFX | Class A - PEAFX | Class C - PECFX |
Geographic Breakdown as of 06/30/20171§
China | 18.9% | |||||||
South Korea | 17.8% | |||||||
Brazil | 15.7% | |||||||
Russia | 9.5% | |||||||
Taiwan | 8.5% | |||||||
India | 6.9% | |||||||
South Africa | 5.4% | |||||||
Hong Kong | 3.7% | |||||||
Poland | 2.8% | |||||||
Turkey | 2.6% | |||||||
Thailand | 2.3% | |||||||
Greece | 1.7% | |||||||
Indonesia | 1.3% | |||||||
Mexico | 1.3% | |||||||
Chile | 1.1% | |||||||
Other | 0.5% |
1 % of Investments, at value.
§ Geographic Breakdown and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Overweight exposure to, and selection in, materials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Selection in financials contributed to relative returns, as the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, consumer staples contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, industrials contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to information technology detracted from relative returns, as the sector outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 9 |
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PIMCO RAE Fundamental Global Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO RAE Fundamental Global Fund seeks long-term capital appreciation. Under normal circumstances the Fund invests substantially all of its assets in three PIMCO Funds (the “Underlying Funds”) and equity securities that are eligible investments for the Underlying Funds. Each of the Underlying Funds obtains exposure to a portfolio of stocks (each, a “RAE Fundamental Portfolio”). The stocks are selected by the Fund’s sub-adviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (06/05/15) | |||||||||
| PIMCO RAE Fundamental Global Fund Institutional Class | 19.60% | 5.98% | |||||||
| PIMCO RAE Fundamental Global Fund Class P | 19.49% | 5.84% | ||||||||
| PIMCO RAE Fundamental Global Fund Class A | 19.18% | 5.62% | ||||||||
| PIMCO RAE Fundamental Global Fund Class A (adjusted) | 14.73% | 3.69% | ||||||||
| PIMCO RAE Fundamental Global Fund Class C | 18.30% | 4.83% | ||||||||
| PIMCO RAE Fundamental Global Fund Class C (adjusted) | 17.30% | 4.83% | ||||||||
| MSCI All Country World Index± | 18.78% | 6.06% | |||||||
All Fund returns are net of fees and expenses.
± The MSCI All Country World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The Index consists of 46 country indices comprising 23 developed and 23 emerging market country indices.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying Fund Expense), as supplemented, is 1.16% for the Institutional Class shares, 1.26% for the Class P shares, 1.51% for the Class A shares and 2.26% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 10 | PIMCO EQUITY SERIES |
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| Institutional Class - PFQIX | Class P - PFQPX | Class A - PFQAX | Class C - PFQCX |
Top Holdings as of 06/30/20171§
PIMCO RAE Fundamental International Fund | 49.2% | |||||||
PIMCO RAE Fundamental U.S. Fund | 38.2% | |||||||
PIMCO RAE Fundamental Emerging Markets Fund | 12.6% |
1 % of Investments, at value.
§ Top Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Overweight exposure to, and selection in, financials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, materials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Selection in industrials contributed to relative returns, as the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, consumer staples contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, real estate contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Underweight exposure to information technology detracted from relative returns, as the sector outperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 11 |
Table of Contents
PIMCO RAE Fundamental Global ex-US Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO RAE Fundamental Global ex-US Fund seeks long-term capital appreciation. Under normal circumstances the Fund invests substantially all of its assets in two PIMCO Funds (the “Underlying Funds”) and securities that are eligible investment for the Underlying Funds. Each of the Underlying Funds obtains exposure to a portfolio of stocks (each, a “RAE Fundamental Portfolio”). The stocks are selected by the Fund’s sub-adviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (06/05/15) | |||||||||
| PIMCO RAE Fundamental Global ex-US Fund Institutional Class | 23.98% | 4.20% | |||||||
| PIMCO RAE Fundamental Global ex-US Fund Class P | 23.87% | 4.07% | ||||||||
| PIMCO RAE Fundamental Global ex-US Fund Class A | 23.65% | 3.86% | ||||||||
| PIMCO RAE Fundamental Global ex-US Fund Class A (adjusted) | 18.98% | 1.96% | ||||||||
| PIMCO RAE Fundamental Global ex-US Fund Class C | 22.68% | 3.07% | ||||||||
| PIMCO RAE Fundamental Global ex-US Fund Class C (adjusted) | 21.68% | 3.07% | ||||||||
| MSCI All Country World ex US Index± | 20.45% | 3.28% | |||||||
All Fund returns are net of fees and expenses.
± The MSCI All Country World ex US Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The Index consists of 45 country indices comprising 22 developed and 23 emerging market country indices.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, which includes the Acquired Fund Fees and Expenses (Underlying Fund Expense), as supplemented, is 1.31% for the Institutional Class shares, 1.41% for the Class P shares, 1.66% for the Class A shares and 2.41% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 12 | PIMCO EQUITY SERIES |
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| Institutional Class - PZRIX | Class P - PZRPX | Class A - PZRAX | Class C - PZRCX |
Top Holdings as of 06/30/20171§
PIMCO RAE Fundamental International Fund | 79.6% | |||||||
PIMCO RAE Fundamental Emerging Markets Fund | 20.4% |
1 % of Investments, at value.
§ Top Holdings and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Overweight exposure to, and selection in, financials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, materials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Selection in industrials contributed to relative returns, as the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, health care contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, consumer staples contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to information technology detracted from relative returns, as the sector outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns as the sector and the Fund’s holdings underperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 13 |
Table of Contents
PIMCO RAE Fundamental International Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO RAE Fundamental International Fund seeks long-term capital appreciation by obtaining under normal circumstances exposure to a portfolio of stocks economically tied to at least three foreign (non-U.S.) countries (“RAE Fundamental International Portfolio”) through investment in the securities that comprise the RAE Fundamental International Portfolio. The stocks are selected by the Fund’s sub-adviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017 | ||||||||||
| 1 Year | Fund Inception (06/05/15) | |||||||||
| PIMCO RAE Fundamental International Fund Institutional Class | 22.76% | 3.73% | |||||||
| PIMCO RAE Fundamental International Fund Class P | 22.67% | 3.64% | ||||||||
| PIMCO RAE Fundamental International Fund Class A | 22.34% | 3.37% | ||||||||
| PIMCO RAE Fundamental International Fund Class A (adjusted) | 17.79% | 1.47% | ||||||||
| PIMCO RAE Fundamental International Fund Class C | 21.44% | 2.58% | ||||||||
| PIMCO RAE Fundamental International Fund Class C (adjusted) | 20.44% | 2.58% | ||||||||
| MSCI EAFE Index± | 20.27% | 3.23% | |||||||
All Fund returns are net of fees and expenses.
± MSCI EAFE Index is an unmanaged index designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada.
It is not possible to invest directly in an unmanaged index.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.60% for the Institutional Class shares, 0.70% for the Class P shares, 0.95% for the Class A shares and 1.70% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 14 | PIMCO EQUITY SERIES |
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| Institutional Class - PPYIX | Class P - PPYPX | Class A - PPYAX | Class C - PPYCX |
Geographic Breakdown as of 06/30/20171§
Japan | 22.2% | |||||||
United Kingdom | 16.2% | |||||||
France | 11.8% | |||||||
Germany | 10.0% | |||||||
Canada | 7.2% | |||||||
Australia | 6.0% | |||||||
Switzerland | 5.7% | |||||||
Spain | 4.5% | |||||||
Netherlands | 3.5% | |||||||
Italy | 2.9% | |||||||
Sweden | 2.1% | |||||||
Hong Kong | 1.3% | |||||||
Norway | 1.0% | |||||||
Other | 5.6% |
1 % of Investments, at value.
§ Geographic Breakdown and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Overweight exposure to, and selection in, financials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, health care contributed to relative returns, as the sector underperformed the index and the Fund’s holdings outperformed the benchmark index. |
| » | Selection in industrials contributed to relative returns, as the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to, and selection in, consumer staples contributed to relative returns, as the sector underperformed the benchmark index and the Fund’s holdings outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, materials contributed to relative returns as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Underweight exposure to information technology detracted from relative returns as the sector outperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 15 |
Table of Contents
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO RAE Fundamental US Fund seeks long-term capital appreciation by investing under normal circumstances at least 80% of its assets in securities of U.S. companies. Specifically, under normal circumstances, the Fund will obtain exposure to a portfolio of stocks of U.S. companies (“RAE Fundamental US Portfolio”) through investment in the securities that comprise the RAE Fundamental US Portfolio. The stocks are selected by the Fund’s sub-adviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017* | ||||||||||||||||||
| 1 Year | 5 Year | 10 Year | Fund Inception (12/22/04) | |||||||||||||||
| PIMCO RAE Fundamental US Fund Institutional Class | 13.33% | 13.89% | 6.76% | 7.98% | |||||||||||||
| PIMCO RAE Fundamental US Fund Class P | 13.15% | 13.83% | 6.73% | 7.96% | ||||||||||||||
| PIMCO RAE Fundamental US Fund Class A | 12.83% | 13.70% | 6.67% | 7.91% | ||||||||||||||
| PIMCO RAE Fundamental US Fund Class A (adjusted) | 8.62% | 12.84% | 6.26% | 7.58% | ||||||||||||||
| PIMCO RAE Fundamental US Fund Class C | 11.94% | 13.32% | 6.49% | 7.77% | ||||||||||||||
| PIMCO RAE Fundamental US Fund Class C (adjusted) | 10.94% | 13.32% | 6.49% | 7.77% | ||||||||||||||
| S&P 500 Index± | 17.90% | 14.63% | 7.18% | 7.94% | ¨ | ||||||||||||
All Fund returns are net of fees and expenses.
¨ Average annual total return since 12/31/2004.
± S&P 500 Index is an unmanaged market index generally considered representative of the stock market as a whole. The Index focuses on the large-cap segment of the U.S. equities market.
It is not possible to invest directly in an unmanaged index.
* For periods prior to June 5, 2015, the Fund’s performance reflects the performance when the Fund was a partnership, net of actual fees and expenses charged to individual partnership accounts in the aggregate. If the performance had been restated to reflect the applicable fees and expenses of each share class, the performance may have been higher or lower. The Fund began operations as a partnership on December 22, 2004 and, on June 5, 2015, was reorganized into a newly-formed fund that was registered as an investment company under the Investment Company Act of 1940. Prior to the reorganization, the Fund had an investment objective, investment strategies, investment guidelines, and restrictions that were substantially similar to those currently applicable to the Fund; however, the Fund was not registered as an investment company under the Investment Company Act of 1940 and was not subject to its requirements or requirements imposed by the Internal Revenue Code of 1986 which, if applicable, may have adversely affected its performance. The performance of each class of shares will differ as a result of the different levels of fees and expenses applicable to each class of shares.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.50% for the Institutional Class shares, 0.60% for the Class P shares, 0.90% for the Class A shares and 1.65% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 16 | PIMCO EQUITY SERIES |
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| Institutional Class - PKAIX | Class P - PKAPX | Class A - PKAAX | Class C - PKACX |
Sector Breakdown as of 06/30/20171§
Financials | 19.2% | |||||||
Information Technology | 18.0% | |||||||
Health Care | 11.9% | |||||||
Consumer Discretionary | 10.6% | |||||||
Industrials | 10.0% | |||||||
Energy | 9.1% | |||||||
Consumer Staples | 7.4% | |||||||
Utilities | 5.7% | |||||||
Materials | 4.2% | |||||||
Telecommunication Services | 3.6% | |||||||
Other | 0.3% |
1 % of Investments, at value.
§ Sector Breakdown and % of Investments exclude securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Underweight exposure to real estate contributed to relative returns, as the sector underperformed the benchmark index. |
| » | Underweight exposure to healthcare contributed to relative returns, as the sector underperformed the benchmark index. |
| » | Underweight exposure to, and selection in, information technology detracted from relative returns, as the sector outperformed the benchmark index and the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Selection in consumer discretionary detracted from relative returns, as the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, telecommunication services detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to utilities detracted from relative returns, as the sector underperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 17 |
Table of Contents
PIMCO RAE Fundamental US Small Fund
Cumulative Returns Through June 30, 2017
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
PIMCO RAE Fundamental US Small Fund seeks long-term capital appreciation by investing under normal circumstances at least 80% of its assets in securities of small companies economically tied to the United States. Specifically, under normal circumstances, the Fund will obtain exposure to a portfolio of stocks of U.S. small companies (“RAE Fundamental US Small Portfolio”) through investment in the securities that comprise the RAE Fundamental US Small Portfolio. The stocks are selected by the Fund’s sub-adviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. Fund strategies may change from time to time. Please refer to the Fund’s current prospectus for more information regarding the Fund’s strategy.
| Average Annual Total Return for the period ended June 30, 2017* | ||||||||||||||||||
| 1 Year | 5 Year | 10 Year | Fund Inception (09/29/05) | |||||||||||||||
| PIMCO RAE Fundamental US Small Fund Institutional Class | 20.70% | 14.29% | 7.20% | 8.40% | |||||||||||||
| PIMCO RAE Fundamental US Small Fund Class P | 20.59% | 14.22% | 7.17% | 8.38% | ||||||||||||||
| PIMCO RAE Fundamental US Small Fund Class A | 20.32% | 14.09% | 7.11% | 8.32% | ||||||||||||||
| PIMCO RAE Fundamental US Small Fund Class A (adjusted) | 15.83% | 13.22% | 6.70% | 7.97% | ||||||||||||||
| PIMCO RAE Fundamental US Small Fund Class C | 19.37% | 13.75% | 6.95% | 8.19% | ||||||||||||||
| PIMCO RAE Fundamental US Small Fund Class C (adjusted) | 18.37% | 13.75% | 6.95% | 8.19% | ||||||||||||||
| Russell 2000® Index± | 24.60% | 13.70% | 6.92% | 8.06% ¨ | |||||||||||||
All Fund returns are net of fees and expenses.
¨ Average annual total return since 9/30/2005
± Russell 2000® Index is composed of 2,000 of the smallest companies in the Russell 3000 Index and is considered to be representative of the small cap market in general.
It is not possible to invest directly in an unmanaged index.
* For periods prior to June 5, 2015, the Fund’s performance reflects the performance when the Fund was a partnership, net of actual fees and expenses charged to individual partnership accounts in the aggregate. If the performance had been restated to reflect the applicable fees and expenses of each share class, the performance may have been higher or lower. The Fund began operations as a partnership on September 29, 2005 and, on June 5, 2015, was reorganized into a newly-formed fund that was registered as an investment company under the Investment Company Act of 1940. Prior to the reorganization, the Fund had an investment objective, investment strategies, investment guidelines, and restrictions that were substantially similar to those currently applicable to the Fund; however, the Fund was not registered as an investment company under the Investment Company Act of 1940 and was not subject to its requirements or requirements imposed by the Internal Revenue Code of 1986 which, if applicable, may have adversely affected its performance. The performance of each class of shares will differ as a result of the different levels of fees and expenses applicable to each class of shares.
Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index. The adjusted returns take into account the maximum sales charge of 3.75% on Class A shares and 1.00% CDSC on Class C shares. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented, is 0.60% for the Institutional Class shares, 0.70% for the Class P shares, 1.00% for the Class A shares and 1.75% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus.
| 18 | PIMCO EQUITY SERIES |
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| Institutional Class - PMJIX | Class P - PMJPX | Class A - PMJAX | Class C - PMJCX |
Sector Breakdown as of 06/30/20171§
Industrials | 19.5% | |||||||
Financials | 18.7% | |||||||
Consumer Discretionary | 17.2% | |||||||
Information Technology | 12.7% | |||||||
Real Estate | 7.7% | |||||||
Health Care | 6.4% | |||||||
Materials | 6.2% | |||||||
Energy | 4.2% | |||||||
Utilities | 3.4% | |||||||
Consumer Staples | 2.7% | |||||||
Telecommunication Services | 1.3% |
1 % of Investments, at value.
§ Sector Breakdown and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
The following affected performance during the reporting period:
| » | Overweight exposure to, and selection in, industrials contributed to relative returns, as the sector and the Fund’s holdings outperformed the benchmark index. |
| » | Underweight exposure to real estate contributed to relative returns, as the sector underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, consumer discretionary detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Underweight exposure to, and selection in, healthcare detracted from relative returns, as the sector outperformed the benchmark index and the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, energy detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Overweight exposure to, and selection in, telecommunication services detracted from relative returns, as the sector and the Fund’s holdings underperformed the benchmark index. |
| » | Underweight exposure to, and selection in, financials detracted from relative returns, as the sector outperformed the benchmark index and the Fund’s holdings underperformed the benchmark index. |
| ANNUAL REPORT | JUNE 30, 2017 | 19 |
Table of Contents
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and exchange fees and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for all Funds and share classes is from January 1, 2017 to June 30, 2017 unless noted otherwise in the table and footnotes below.
Actual Expenses
The information in the table under the heading “Actual” provides information about actual account values and actual expenses. You may use the information in these rows, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the appropriate row for your share class, in the column entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information in the table under the heading “Hypothetical (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) on purchase payments and exchange fees. Therefore, the information under the heading “Hypothetical (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Expense ratios may vary from period to period because of various factors such as an increase in expenses that are not covered by the management fees, such as fees and expenses of the independent trustees and their counsel, extraordinary expenses and interest expense.
Actual | Hypothetical | |||||||||||||||||||||||||||||||||||||||
| Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,118.80 | $ | 3.99 | $ | 1,000.00 | $ | 1,021.03 | $ | 3.81 | 0.76 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,118.10 | 4.52 | 1,000.00 | 1,020.53 | 4.31 | 0.86 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,116.70 | 5.83 | 1,000.00 | 1,019.29 | 5.56 | 1.11 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,112.70 | 9.74 | 1,000.00 | 1,015.57 | 9.30 | 1.86 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Global Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,091.10 | $ | 0.10 | $ | 1,000.00 | $ | 1,024.70 | $ | 0.10 | 0.02 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,091.30 | 0.62 | 1,000.00 | 1,024.20 | 0.60 | 0.12 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,089.40 | 1.92 | 1,000.00 | 1,022.96 | 1.86 | 0.37 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,085.00 | 5.79 | 1,000.00 | 1,019.24 | 5.61 | 1.12 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,123.10 | $ | 0.05 | $ | 1,000.00 | $ | 1,024.74 | $ | 0.05 | 0.01 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,122.20 | 0.58 | 1,000.00 | 1,024.25 | 0.55 | 0.11 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,121.40 | 1.89 | 1,000.00 | 1,023.01 | 1.81 | 0.36 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,117.80 | 5.83 | 1,000.00 | 1,019.29 | 5.56 | 1.11 | |||||||||||||||||||||||||||||||||
| 20 | PIMCO EQUITY SERIES |
Table of Contents
Actual | Hypothetical | |||||||||||||||||||||||||||||||||||||||
| Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Beginning Account Value (01/01/17) | Ending Account Value (06/30/17) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,122.40 | $ | 2.68 | $ | 1,000.00 | $ | 1,022.27 | $ | 2.56 | 0.51 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,121.60 | 3.21 | 1,000.00 | 1,021.77 | 3.06 | 0.61 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,120.40 | 4.52 | 1,000.00 | 1,020.53 | 4.31 | 0.86 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,116.40 | 8.45 | 1,000.00 | 1,016.81 | 8.05 | 1.61 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,041.40 | $ | 2.08 | $ | 1,000.00 | $ | 1,022.76 | $ | 2.06 | 0.41 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 1,040.50 | 2.58 | 1,000.00 | 1,022.27 | 2.56 | 0.51 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 1,039.60 | 4.10 | 1,000.00 | 1,020.78 | 4.06 | 0.81 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 1,035.00 | 7.87 | 1,000.00 | 1,017.06 | 7.80 | 1.56 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||||||||||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 996.40 | $ | 2.52 | $ | 1,000.00 | $ | 1,022.27 | $ | 2.56 | 0.51 | % | ||||||||||||||||||||||||||
| Class P | 1,000.00 | 995.50 | 3.02 | 1,000.00 | 1,021.77 | 3.06 | 0.61 | |||||||||||||||||||||||||||||||||
| Class A | 1,000.00 | 994.60 | 4.50 | 1,000.00 | 1,020.28 | 4.56 | 0.91 | |||||||||||||||||||||||||||||||||
| Class C | 1,000.00 | 990.90 | 8.19 | 1,000.00 | 1,016.56 | 8.30 | 1.66 | |||||||||||||||||||||||||||||||||
* Expenses Paid During Period are equal to the net annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
** Net Annualized Expense Ratio is reflective of any applicable contractual fee waivers and/or expense reimbursements or voluntary fee waivers. Details regarding fee waivers, if any, can be found in Note 8, Fees and Expenses, in the Notes to Financial Statements.
| ANNUAL REPORT | JUNE 30, 2017 | 21 |
Table of Contents
| Investment Operations | Less Distributions(b) | |||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 8.73 | $ | 0.20 | $ | 2.17 | $ | 2.37 | $ | (0.27 | ) | $ | 0.00 | $ | 0.00 | $ | (0.27 | ) | ||||||||||||||||||
06/30/2016 | 9.95 | 0.32 | (1.37 | ) | (1.05 | ) | (0.17 | ) | 0.00 | 0.00 | (0.17 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.06 | (0.11 | ) | (0.05 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.70 | 0.23 | 2.12 | 2.35 | (0.26 | ) | 0.00 | 0.00 | (0.26 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.96 | 0.25 | (1.33 | ) | (1.08 | ) | (0.18 | ) | 0.00 | 0.00 | (0.18 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.06 | (0.10 | ) | (0.04 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.73 | 0.14 | 2.19 | 2.33 | (0.25 | ) | 0.00 | 0.00 | (0.25 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.96 | 0.22 | (1.30 | ) | (1.08 | ) | (0.15 | ) | 0.00 | 0.00 | (0.15 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.08 | (0.12 | ) | (0.04 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.67 | 0.12 | 2.12 | 2.24 | (0.25 | ) | 0.00 | 0.00 | (0.25 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.95 | 0.21 | (1.36 | ) | (1.15 | ) | (0.13 | ) | 0.00 | 0.00 | (0.13 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.06 | (0.11 | ) | (0.05 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
PIMCO RAE Fundamental Global Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.32 | $ | 0.24 | $ | 1.55 | $ | 1.79 | $ | (0.24 | ) | $ | (0.09 | ) | $ | 0.00 | $ | (0.33 | ) | |||||||||||||||||
06/30/2016 | 9.86 | 0.14 | (0.58 | ) | (0.44 | ) | (0.10 | ) | 0.00 | 0.00 | (0.10 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.00 | )^ | (0.14 | ) | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.31 | 0.02 | 1.76 | 1.78 | (0.24 | ) | (0.09 | ) | 0.00 | (0.33 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.85 | 0.08 | (0.52 | ) | (0.44 | ) | (0.10 | ) | 0.00 | 0.00 | (0.10 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.00 | )^ | (0.15 | ) | (0.15 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.29 | 0.18 | 1.57 | 1.75 | (0.23 | ) | (0.09 | ) | 0.00 | (0.32 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.85 | 0.02 | (0.48 | ) | (0.46 | ) | (0.10 | ) | 0.00 | 0.00 | (0.10 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.00 | )^ | (0.15 | ) | (0.15 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.22 | 0.11 | 1.55 | 1.66 | (0.20 | ) | (0.09 | ) | 0.00 | (0.29 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.84 | 0.00 | (0.52 | ) | (0.52 | ) | (0.10 | ) | 0.00 | 0.00 | (0.10 | ) | ||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.01 | ) | (0.15 | ) | (0.16 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 8.68 | $ | 0.22 | $ | 1.83 | $ | 2.05 | $ | (0.22 | ) | $ | 0.00 | $ | (0.02 | ) | $ | (0.24 | ) | |||||||||||||||||
06/30/2016 | 9.86 | 0.10 | (1.18 | ) | (1.08 | ) | (0.10 | ) | 0.00 | (0.00 | )^ | (0.10 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.00 | )^ | (0.14 | ) | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.67 | 0.07 | 1.97 | 2.04 | (0.22 | ) | 0.00 | (0.02 | ) | (0.24 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.86 | 0.09 | (1.18 | ) | (1.09 | ) | (0.10 | ) | 0.00 | (0.00 | )^ | (0.10 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.00 | )^ | (0.14 | ) | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.66 | 0.10 | 1.92 | 2.02 | (0.22 | ) | 0.00 | (0.02 | ) | (0.24 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.86 | (0.00 | ) | (1.11 | ) | (1.11 | ) | (0.09 | ) | 0.00 | (0.00 | )^ | (0.09 | ) | ||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.00 | )^ | (0.14 | ) | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.61 | 0.10 | 1.83 | 1.93 | (0.18 | ) | 0.00 | (0.02 | ) | (0.20 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.85 | (0.06 | ) | (1.11 | ) | (1.17 | ) | (0.07 | ) | 0.00 | (0.00 | )^ | (0.07 | ) | ||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | (0.01 | ) | (0.14 | ) | (0.15 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 8.56 | $ | 0.28 | $ | 1.64 | $ | 1.92 | $ | (0.21 | ) | $ | 0.00 | $ | 0.00 | $ | (0.21 | ) | ||||||||||||||||||
06/30/2016 | 9.83 | 0.28 | (1.32 | ) | (1.04 | ) | (0.08 | ) | (0.15 | ) | 0.00 | (0.23 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.02 | (0.19 | ) | (0.17 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| 22 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||||||||||||||||||
Net Asset Period | Total Return | Net Assets End of Year or | Expenses | Expenses Waivers | Expenses Interest Expense | Expenses Interest | Net Investment | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 10.83 | 27.53 | % | $ | 1,510,983 | 0.75 | % | 0.96 | % | 0.75 | % | 0.96 | % | 1.99 | % | 43 | % | |||||||||||||||||
| 8.73 | (10.32 | ) | 1,379,204 | 0.76 | 0.96 | 0.76 | 0.96 | 3.92 | 30 | |||||||||||||||||||||||||
| 9.95 | (0.50 | ) | 199,378 | 0.75 | * | 0.98 | * | 0.75 | * | 0.98 | * | 10.11 | * | 7 | ||||||||||||||||||||
| 10.79 | 27.46 | 14,664 | 0.85 | 1.06 | 0.85 | 1.06 | 2.18 | 43 | ||||||||||||||||||||||||||
| 8.70 | (10.54 | ) | 1,827 | 0.86 | 1.06 | 0.86 | 1.06 | 3.25 | 30 | |||||||||||||||||||||||||
| 9.96 | (0.40 | ) | 10 | 0.85 | * | 1.08 | * | 0.85 | * | 1.08 | * | 10.09 | * | 7 | ||||||||||||||||||||
| 10.81 | 27.06 | 1,937 | 1.10 | 1.31 | 1.10 | 1.31 | 1.35 | 43 | ||||||||||||||||||||||||||
| 8.73 | (10.61 | ) | 146 | 1.11 | 1.31 | 1.11 | 1.31 | 2.64 | 30 | |||||||||||||||||||||||||
| 9.96 | (0.40 | ) | 19 | 1.10 | * | 1.33 | * | 1.10 | * | 1.33 | * | 13.46 | * | 7 | ||||||||||||||||||||
| 10.66 | 26.13 | 1,081 | 1.85 | 2.06 | 1.85 | 2.06 | 1.18 | 43 | ||||||||||||||||||||||||||
| 8.67 | (11.33 | ) | 95 | 1.86 | 2.06 | 1.86 | 2.06 | 2.56 | 30 | |||||||||||||||||||||||||
| 9.95 | (0.50 | ) | 10 | 1.85 | * | 2.08 | * | 1.85 | * | 2.08 | * | 9.08 | * | 7 | ||||||||||||||||||||
| $ | 10.78 | 19.60 | % | $ | 409,144 | 0.01 | % | 0.71 | % | 0.01 | % | 0.71 | % | 2.36 | % | 20 | % | |||||||||||||||||
| 9.32 | (4.38 | ) | 282,274 | 0.04 | 0.71 | 0.04 | 0.71 | 1.59 | 13 | |||||||||||||||||||||||||
| 9.86 | (1.40 | ) | 38,160 | 0.04 | * | 0.86 | * | 0.04 | * | 0.86 | * | (0.04 | )* | 2 | ||||||||||||||||||||
| 10.76 | 19.49 | 3,127 | 0.11 | 0.81 | 0.11 | 0.81 | 0.22 | 20 | ||||||||||||||||||||||||||
| 9.31 | (4.44 | ) | 57 | 0.14 | 0.81 | 0.14 | 0.81 | 0.92 | 13 | |||||||||||||||||||||||||
| 9.85 | (1.50 | ) | 10 | 0.14 | * | 0.96 | * | 0.14 | * | 0.96 | * | (0.14 | )* | 2 | ||||||||||||||||||||
| 10.72 | 19.18 | 1,009 | 0.36 | 1.06 | 0.36 | 1.06 | 1.79 | 20 | ||||||||||||||||||||||||||
| 9.29 | (4.61 | ) | 286 | 0.39 | 1.06 | 0.39 | 1.06 | 0.23 | 13 | |||||||||||||||||||||||||
| 9.85 | (1.50 | ) | 10 | 0.39 | * | 1.21 | * | 0.39 | * | 1.21 | * | (0.40 | )* | 2 | ||||||||||||||||||||
| 10.59 | 18.30 | 1,469 | 1.11 | 1.81 | 1.11 | 1.81 | 1.11 | 20 | ||||||||||||||||||||||||||
| 9.22 | (5.29 | ) | 667 | 1.14 | 1.81 | 1.14 | 1.81 | (0.04 | ) | 13 | ||||||||||||||||||||||||
| 9.84 | (1.60 | ) | 17 | 1.14 | * | 1.96 | * | 1.14 | * | 1.96 | * | (1.06 | )* | 2 | ||||||||||||||||||||
| $ | 10.49 | 23.98 | % | $ | 78,610 | 0.00 | %† | 0.76 | % | 0.00 | %† | 0.76 | % | 2.23 | % | 8 | % | |||||||||||||||||
| 8.68 | (10.93 | ) | 62,809 | 0.00 | † | 0.76 | 0.00 | † | 0.76 | 1.10 | 8 | |||||||||||||||||||||||
| 9.86 | (1.40 | ) | 70,077 | 0.01 | * | 0.84 | * | 0.01 | * | 0.84 | * | (0.02 | )* | 2 | ||||||||||||||||||||
| 10.47 | 23.87 | 349 | 0.10 | 0.86 | 0.10 | 0.86 | 0.69 | 8 | ||||||||||||||||||||||||||
| 8.67 | (11.07 | ) | 9 | 0.10 | 0.86 | 0.10 | 0.86 | 1.01 | 8 | |||||||||||||||||||||||||
| 9.86 | (1.40 | ) | 10 | 0.11 | * | 0.94 | * | 0.11 | * | 0.94 | * | (0.11 | )* | 2 | ||||||||||||||||||||
| 10.44 | 23.65 | 717 | 0.35 | 1.11 | 0.35 | 1.11 | 1.02 | 8 | ||||||||||||||||||||||||||
| 8.66 | (11.29 | ) | 9 | 0.35 | 1.11 | 0.35 | 1.11 | (0.02 | ) | 8 | ||||||||||||||||||||||||
| 9.86 | (1.40 | ) | 10 | 0.36 | * | 1.19 | * | 0.36 | * | 1.19 | * | (0.37 | )* | 2 | ||||||||||||||||||||
| 10.34 | 22.68 | 1,009 | 1.10 | 1.86 | 1.10 | 1.86 | 0.99 | 8 | ||||||||||||||||||||||||||
| 8.61 | (11.90 | ) | 354 | 1.10 | 1.86 | 1.10 | 1.86 | (0.67 | ) | 8 | ||||||||||||||||||||||||
| 9.85 | (1.50 | ) | 10 | 1.11 | * | 1.94 | * | 1.11 | * | 1.94 | * | (1.12 | )* | 2 | ||||||||||||||||||||
| $ | 10.27 | 22.76 | % | $ | 475,759 | 0.50 | % | 0.61 | % | 0.50 | % | 0.61 | % | 2.90 | % | 20 | % | |||||||||||||||||
| 8.56 | (10.60 | ) | 247,182 | 0.50 | 0.61 | 0.50 | 0.61 | 3.25 | 39 | |||||||||||||||||||||||||
| 9.83 | (1.70 | ) | 151,532 | 0.50 | * | 0.64 | * | 0.50 | * | 0.64 | * | 2.68 | * | 7 | ||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 23 |
Table of Contents
Financial Highlights (Cont.)
| Investment Operations | Less Distributions(b) | |||||||||||||||||||||||||||||||||||
| Selected Per Share Data for the Year or Period Ended: | Net Asset Value Period | Net Investment Income (Loss)(a) | Net Realized/ Unrealized Gain (Loss) | Total | From Net Investment Income | From Net Realized Capital Gains | Tax Basis Return of Capital | Total | ||||||||||||||||||||||||||||
PIMCO RAE Fundamental International Fund (Cont.) | ||||||||||||||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 8.55 | $ | 0.29 | $ | 1.62 | $ | 1.91 | $ | (0.22 | ) | $ | 0.00 | $ | 0.00 | $ | (0.22 | ) | ||||||||||||||||||
06/30/2016 | 9.83 | 0.28 | (1.33 | ) | (1.05 | ) | (0.08 | ) | (0.15 | ) | 0.00 | (0.23 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.02 | (0.19 | ) | (0.17 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.55 | 0.29 | 1.60 | 1.89 | (0.20 | ) | 0.00 | 0.00 | (0.20 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.83 | 0.34 | (1.42 | ) | (1.08 | ) | (0.05 | ) | (0.15 | ) | 0.00 | (0.20 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.18 | ) | (0.17 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 8.45 | 0.16 | 1.63 | 1.79 | (0.17 | ) | 0.00 | 0.00 | (0.17 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.83 | 0.28 | (1.43 | ) | (1.15 | ) | (0.08 | ) | (0.15 | ) | 0.00 | (0.23 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.18 | ) | (0.17 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.82 | $ | 0.22 | $ | 1.07 | $ | 1.29 | $ | (0.22 | ) | $ | (0.32 | ) | $ | 0.00 | $ | (0.54 | ) | |||||||||||||||||
06/30/2016 | 9.85 | 0.22 | 0.08 | 0.30 | (0.11 | ) | (0.22 | ) | 0.00 | (0.33 | ) | |||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.16 | ) | (0.15 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.81 | 0.21 | 1.06 | 1.27 | (0.22 | ) | (0.32 | ) | 0.00 | (0.54 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.85 | 0.21 | 0.08 | 0.29 | (0.11 | ) | (0.22 | ) | 0.00 | (0.33 | ) | |||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.16 | ) | (0.15 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.79 | 0.17 | 1.07 | 1.24 | (0.21 | ) | (0.32 | ) | 0.00 | (0.53 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.86 | 0.18 | 0.07 | 0.25 | (0.10 | ) | (0.22 | ) | 0.00 | (0.32 | ) | |||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.15 | ) | (0.14 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.71 | 0.09 | 1.06 | 1.15 | (0.20 | ) | (0.32 | ) | 0.00 | (0.52 | ) | |||||||||||||||||||||||||
06/30/2016 | 9.85 | 0.11 | 0.06 | 0.17 | (0.09 | ) | (0.22 | ) | 0.00 | (0.31 | ) | |||||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.16 | ) | (0.15 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class | ||||||||||||||||||||||||||||||||||||
06/30/2017 | $ | 9.31 | $ | 0.12 | $ | 1.81 | $ | 1.93 | $ | (0.14 | ) | $ | 0.00 | $ | 0.00 | $ | (0.14 | ) | ||||||||||||||||||
06/30/2016 | 9.93 | 0.10 | (0.57 | ) | (0.47 | ) | (0.04 | ) | (0.11 | ) | 0.00 | (0.15 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.08 | ) | (0.07 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class P | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.29 | 0.12 | 1.79 | 1.91 | (0.13 | ) | 0.00 | 0.00 | (0.13 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.92 | 0.11 | (0.59 | ) | (0.48 | ) | (0.04 | ) | (0.11 | ) | 0.00 | (0.15 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.09 | ) | (0.08 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class A | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.29 | 0.10 | 1.79 | 1.89 | (0.13 | ) | 0.00 | 0.00 | (0.13 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.92 | 0.08 | (0.60 | ) | (0.52 | ) | (0.00 | )^ | (0.11 | ) | 0.00 | (0.11 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.01 | (0.09 | ) | (0.08 | ) | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||
| Class C | ||||||||||||||||||||||||||||||||||||
06/30/2017 | 9.19 | 0.01 | 1.77 | 1.78 | (0.10 | ) | 0.00 | 0.00 | (0.10 | ) | ||||||||||||||||||||||||||
06/30/2016 | 9.91 | 0.01 | (0.58 | ) | (0.57 | ) | (0.04 | ) | (0.11 | ) | 0.00 | (0.15 | ) | |||||||||||||||||||||||
06/05/2015 - 06/30/2015 | 10.00 | 0.00 | ^ | (0.09 | ) | (0.09 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||||||||
| * | Annualized |
| ^ | Reflects an amount rounding to less than one cent. |
| † | Less than 0.005%. |
| (a) | Per share amounts based on average number of shares outstanding during the year or period. |
| (b) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| (c) | Ratios shown do not include expenses of the investment companies in which a Fund may invest. See Note 8, Fees and Expenses, in the Notes to Financial Statements for more information regarding the expenses and any applicable fee waivers associated with these investments. |
| 24 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
| Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
| Ratios to Average Net Assets(c) | ||||||||||||||||||||||||||||||||||
| Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or | Expenses | Expenses Excluding Waivers | Expenses Excluding Interest Expense | Expenses Excluding Interest Expense and Waivers | Net Investment Income (Loss) | Portfolio Turnover Rate | ||||||||||||||||||||||||||
| $ | 10.24 | 22.67 | % | $ | 4,998 | 0.60 | % | 0.71 | % | 0.60 | % | 0.71 | % | 3.03 | % | 20 | % | |||||||||||||||||
| 8.55 | (10.70 | ) | 1,041 | 0.60 | 0.71 | 0.60 | 0.71 | 3.24 | 39 | |||||||||||||||||||||||||
| 9.83 | (1.70 | ) | 10 | 0.60 | * | 0.74 | * | 0.60 | * | 0.74 | * | 2.57 | * | 7 | ||||||||||||||||||||
| 10.24 | 22.34 | 323 | 0.85 | 0.96 | 0.85 | 0.96 | 2.99 | 20 | ||||||||||||||||||||||||||
| 8.55 | (10.95 | ) | 46 | 0.85 | 0.96 | 0.85 | 0.96 | 3.94 | 39 | |||||||||||||||||||||||||
| 9.83 | (1.70 | ) | 10 | 0.85 | * | 0.99 | * | 0.85 | * | 0.99 | * | 2.32 | * | 7 | ||||||||||||||||||||
| 10.07 | 21.44 | 507 | 1.60 | 1.71 | 1.60 | 1.71 | 1.69 | 20 | ||||||||||||||||||||||||||
| 8.45 | (11.69 | ) | 300 | 1.60 | 1.71 | 1.60 | 1.71 | 3.28 | 39 | |||||||||||||||||||||||||
| 9.83 | (1.70 | ) | 10 | 1.60 | * | 1.74 | * | 1.60 | * | 1.74 | * | 1.56 | * | 7 | ||||||||||||||||||||
| $ | 10.57 | 13.33 | % | $ | 620,951 | 0.40 | % | 0.51 | % | 0.40 | % | 0.51 | % | 2.08 | % | 31 | % | |||||||||||||||||
| 9.82 | 3.16 | 511,838 | 0.40 | 0.51 | 0.40 | 0.51 | 2.29 | 42 | ||||||||||||||||||||||||||
| 9.85 | (1.50 | ) | 447,755 | 0.40 | * | 0.51 | * | 0.40 | * | 0.51 | * | 2.03 | * | 5 | ||||||||||||||||||||
| 10.54 | 13.15 | 7,769 | 0.50 | 0.61 | 0.50 | 0.61 | 1.99 | 31 | ||||||||||||||||||||||||||
| 9.81 | 3.09 | 3,372 | 0.50 | 0.61 | 0.50 | 0.61 | 2.23 | 42 | ||||||||||||||||||||||||||
| 9.85 | (1.50 | ) | 10 | 0.50 | * | 0.61 | * | 0.50 | * | 0.61 | * | 1.92 | * | 5 | ||||||||||||||||||||
| 10.50 | 12.83 | 7,259 | 0.80 | 0.91 | 0.80 | 0.91 | 1.68 | 31 | ||||||||||||||||||||||||||
| 9.79 | 2.67 | 2,982 | 0.80 | 0.91 | 0.80 | 0.91 | 1.88 | 42 | ||||||||||||||||||||||||||
| 9.86 | (1.40 | ) | 14 | 0.80 | * | 0.91 | * | 0.80 | * | 0.91 | * | 1.67 | * | 5 | ||||||||||||||||||||
| 10.34 | 11.94 | 5,452 | 1.55 | 1.66 | 1.55 | 1.66 | 0.92 | 31 | ||||||||||||||||||||||||||
| 9.71 | 1.89 | 1,765 | 1.55 | 1.66 | 1.55 | 1.66 | 1.15 | 42 | ||||||||||||||||||||||||||
| 9.85 | (1.50 | ) | 10 | 1.55 | * | 1.66 | * | 1.55 | * | 1.66 | * | 0.86 | * | 5 | ||||||||||||||||||||
| $ | 11.10 | 20.70 | % | $ | 93,541 | 0.50 | % | 0.61 | % | 0.50 | % | 0.61 | % | 1.13 | % | 45 | % | |||||||||||||||||
| 9.31 | (4.68 | ) | 81,226 | 0.50 | 0.61 | 0.50 | 0.61 | 1.10 | 85 | |||||||||||||||||||||||||
| 9.93 | (0.70 | ) | 46,426 | 0.50 | * | 0.73 | * | 0.50 | * | 0.73 | * | 1.44 | * | 9 | ||||||||||||||||||||
| 11.07 | 20.59 | 3,902 | 0.60 | 0.71 | 0.60 | 0.71 | 1.12 | 45 | ||||||||||||||||||||||||||
| 9.29 | (4.79 | ) | 1,456 | 0.60 | 0.71 | 0.60 | 0.71 | 1.26 | 85 | |||||||||||||||||||||||||
| 9.92 | (0.80 | ) | 10 | 0.60 | * | 0.83 | * | 0.60 | * | 0.83 | * | 1.33 | * | 9 | ||||||||||||||||||||
| 11.05 | 20.32 | 8,549 | 0.90 | 1.01 | 0.90 | 1.01 | 0.88 | 45 | ||||||||||||||||||||||||||
| 9.29 | (5.11 | ) | 1,699 | 0.90 | 1.01 | 0.90 | 1.01 | 0.85 | 85 | |||||||||||||||||||||||||
| 9.92 | (0.80 | ) | 10 | 0.90 | * | 1.13 | * | 0.90 | * | 1.13 | * | 1.04 | * | 9 | ||||||||||||||||||||
| 10.87 | 19.37 | 558 | 1.65 | 1.76 | 1.65 | 1.76 | 0.08 | 45 | ||||||||||||||||||||||||||
| 9.19 | (5.69 | ) | 247 | 1.65 | 1.76 | 1.65 | 1.76 | 0.08 | 85 | |||||||||||||||||||||||||
| 9.91 | (0.90 | ) | 10 | 1.65 | * | 1.88 | * | 1.65 | * | 1.88 | * | 0.28 | * | 9 | ||||||||||||||||||||
* Annualized
^ Reflects an amount rounding to less than one cent.
† Less than 0.005%.
(a) Per share amounts based on average number of shares outstanding during the year or period.
(b) The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information.
| ANNUAL REPORT | JUNE 30, 2017 | 25 |
Table of Contents
Statements of Assets and Liabilities
| (Amounts in thousands†, except per share amounts) | PIMCO RAE Fundamental Emerging Markets Fund | PIMCO RAE Fundamental Global Fund | PIMCO RAE Fundamental Global ex-US Fund | PIMCO RAE Fundamental International Fund | PIMCO RAE Fundamental US Fund | PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments, at value | ||||||||||||||||||||||||
Investments in securities | $ | 1,518,120 | $ | 0 | $ | 0 | $ | 478,577 | $ | 637,823 | $ | 106,173 | ||||||||||||
Investments in Affiliates | 0 | 414,240 | 80,474 | 0 | 0 | 0 | ||||||||||||||||||
Cash | 0 | 510 | 203 | 5,999 | 3,110 | 1,095 | ||||||||||||||||||
Foreign currency, at value | 1,095 | 0 | 0 | 1,828 | 0 | 0 | ||||||||||||||||||
Receivable for investments sold | 17,579 | 0 | 0 | 4 | 1 | 1 | ||||||||||||||||||
Receivable for Fund shares sold | 39 | 31 | 11 | 600 | 6 | 0 | ||||||||||||||||||
Interest and/or dividends receivable | 10,219 | 0 | 0 | 1,334 | 806 | 175 | ||||||||||||||||||
Reimbursement receivable from PIMCO | 8 | 2 | 0 | 1 | 3 | 0 | ||||||||||||||||||
Other assets | 0 | 0 | 0 | 13 | 0 | 0 | ||||||||||||||||||
Total Assets | 1,547,060 | 414,783 | 80,688 | 488,356 | 641,749 | 107,444 | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Financial Derivative Instruments | ||||||||||||||||||||||||
Over the counter | $ | 2 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Payable for investments purchased | 12,666 | 0 | 0 | 6,355 | 0 | 683 | ||||||||||||||||||
Payable for Fund shares redeemed | 222 | 15 | 0 | 164 | 78 | 159 | ||||||||||||||||||
Overdraft due to custodian | 1,991 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Accrued investment advisory fees | 376 | 0 | 0 | 77 | 82 | 23 | ||||||||||||||||||
Accrued supervisory and administrative fees | 566 | 10 | 0 | 115 | 139 | 25 | ||||||||||||||||||
Accrued distribution fees | 1 | 1 | 1 | 1 | 4 | 0 | ||||||||||||||||||
Accrued servicing fees | 1 | 1 | 0 | 0 | 3 | 2 | ||||||||||||||||||
Accrued taxes payable | 1,539 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other liabilities | 1,031 | 7 | 2 | 57 | 12 | 2 | ||||||||||||||||||
Total Liabilities | 18,395 | 34 | 3 | 6,769 | 318 | 894 | ||||||||||||||||||
Net Assets | $ | 1,528,665 | $ | 414,749 | $ | 80,685 | $ | 481,587 | $ | 641,431 | $ | 106,550 | ||||||||||||
Net Assets Consist of: | ||||||||||||||||||||||||
Paid in capital | $ | 1,135,756 | $ | 361,197 | $ | 76,619 | $ | 418,947 | $ | 493,289 | $ | 87,074 | ||||||||||||
Undistributed (overdistributed) net investment income | 146 | (6 | ) | (3 | ) | 6,420 | 5,215 | 292 | ||||||||||||||||
Accumulated undistributed net realized gain (loss) | 58,371 | 4,607 | (708 | ) | (11,989 | ) | 16,271 | 467 | ||||||||||||||||
Net unrealized appreciation (depreciation) | 334,392 | 48,951 | 4,777 | 68,209 | 126,656 | 18,717 | ||||||||||||||||||
Net Assets | $ | 1,528,665 | $ | 414,749 | $ | 80,685 | $ | 481,587 | $ | 641,431 | $ | 106,550 | ||||||||||||
Cost of investments in securities | $ | 1,182,105 | $ | 0 | $ | 0 | $ | 410,386 | $ | 511,167 | $ | 87,456 | ||||||||||||
Cost of investments in Affiliates | $ | 0 | $ | 365,289 | $ | 75,697 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Cost of foreign currency held | $ | 1,098 | $ | 0 | $ | 0 | $ | 1,828 | $ | 0 | $ | 0 | ||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| 26 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| PIMCO RAE Fundamental Emerging Markets Fund | PIMCO RAE Fundamental Global Fund | PIMCO RAE Fundamental Global ex-US Fund | PIMCO RAE Fundamental International Fund | PIMCO RAE Fundamental US Fund | PIMCO RAE Fundamental US Small Fund | |||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Institutional Class | $ | 1,510,983 | $ | 409,144 | $ | 78,610 | $ | 475,759 | $ | 620,951 | $ | 93,541 | ||||||||||||
Class P | 14,664 | 3,127 | 349 | 4,998 | 7,769 | 3,902 | ||||||||||||||||||
Class A | 1,937 | 1,009 | 717 | 323 | 7,259 | 8,549 | ||||||||||||||||||
Class C | 1,081 | 1,469 | 1,009 | 507 | 5,452 | 558 | ||||||||||||||||||
Shares Issued and Outstanding: | ||||||||||||||||||||||||
Institutional Class | 139,462 | 37,945 | 7,496 | 46,346 | 58,750 | 8,426 | ||||||||||||||||||
Class P | 1,360 | 291 | 33 | 488 | 737 | 352 | ||||||||||||||||||
Class A | 179 | 94 | 69 | 32 | 691 | 773 | ||||||||||||||||||
Class C | 101 | 139 | 98 | 50 | 527 | 51 | ||||||||||||||||||
Net Asset Value Per Share Outstanding: | ||||||||||||||||||||||||
Institutional Class | $ | 10.83 | $ | 10.78 | $ | 10.49 | $ | 10.27 | $ | 10.57 | $ | 11.10 | ||||||||||||
Class P | 10.79 | 10.76 | 10.47 | 10.24 | 10.54 | 11.07 | ||||||||||||||||||
Class A | 10.81 | 10.72 | 10.44 | 10.24 | 10.50 | 11.05 | ||||||||||||||||||
Class C | 10.66 | 10.59 | 10.34 | 10.07 | 10.34 | 10.87 | ||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 27 |
Table of Contents
| Year Ended June 30, 2017 | ||||||||||||||||||||||||
| (Amounts in thousands†) | PIMCO RAE Fundamental Emerging Markets Fund | PIMCO RAE Fundamental Global Fund | PIMCO RAE Fundamental Global ex-US Fund | PIMCO RAE Fundamental International Fund | PIMCO RAE Fundamental US Fund | PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||
Investment Income: | ||||||||||||||||||||||||
Dividends, net of foreign taxes* | $ | 41,060 | $ | 0 | $ | 0 | $ | 11,693 | $ | 14,468 | $ | 1,625 | ||||||||||||
Dividends from Investments in Affiliates | 0 | 9,109 | 1,584 | 0 | 0 | 0 | ||||||||||||||||||
Total Income | 41,060 | 9,109 | 1,584 | 11,693 | 14,468 | 1,625 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Investment advisory fees | 7,480 | 1,537 | 284 | 1,028 | 1,453 | 345 | ||||||||||||||||||
Supervisory and administrative fees | 6,741 | 1,155 | 249 | 1,032 | 1,473 | 257 | ||||||||||||||||||
Distribution fees - Class C | 4 | 8 | 5 | 3 | 31 | 3 | ||||||||||||||||||
Servicing fees - Class A | 5 | 1 | 1 | 1 | 13 | 12 | ||||||||||||||||||
Servicing fees - Class C | 1 | 3 | 2 | 1 | 11 | 1 | ||||||||||||||||||
Trustee fees | 167 | 43 | 9 | 37 | 71 | 12 | ||||||||||||||||||
Interest expense | 37 | 1 | 0 | 4 | 0 | 0 | ||||||||||||||||||
Miscellaneous expense | 73 | 19 | 3 | 17 | 29 | 5 | ||||||||||||||||||
Total Expenses | 14,508 | 2,767 | 553 | 2,123 | 3,081 | 635 | ||||||||||||||||||
Waiver and/or Reimbursement by PIMCO | (3,159 | ) | (2,682 | ) | (541 | ) | (380 | ) | (653 | ) | (111 | ) | ||||||||||||
Net Expenses | 11,349 | 85 | 12 | 1,743 | 2,428 | 524 | ||||||||||||||||||
Net Investment Income (Loss) | 29,711 | 9,024 | 1,572 | 9,950 | 12,040 | 1,101 | ||||||||||||||||||
Net Realized Gain (Loss): | ||||||||||||||||||||||||
Investments in securities | 96,989 | 0 | 0 | 4,238 | 26,145 | 8,359 | ||||||||||||||||||
Investments in Affiliates | 0 | 1,825 | (306 | ) | 0 | 0 | 0 | |||||||||||||||||
Net capital gain distributions received from Affiliate investments | 0 | 4,600 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Over the counter financial derivative instruments | 208 | 0 | 0 | (5 | ) | 0 | 0 | |||||||||||||||||
Foreign currency | (602 | ) | 0 | 0 | (81 | ) | 0 | 0 | ||||||||||||||||
Net Realized Gain (Loss) | 96,595 | 6,425 | (306 | ) | 4,152 | 26,145 | 8,359 | |||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||||||||||
Investments in securities | 239,597 | 0 | 0 | 56,105 | 33,222 | 8,156 | ||||||||||||||||||
Investments in Affiliates | 0 | 51,717 | 13,744 | 0 | 0 | 0 | ||||||||||||||||||
Over the counter financial derivative instruments | (410 | ) | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Foreign currency assets and liabilities | 439 | 0 | 0 | 66 | 0 | 0 | ||||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) | 239,626 | 51,717 | 13,744 | 56,171 | 33,222 | 8,156 | ||||||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 365,932 | $ | 67,166 | $ | 15,010 | $ | 70,273 | $ | 71,407 | $ | 17,616 | ||||||||||||
* Foreign tax withholdings - Dividends | $ | 5,752 | $ | 0 | $ | 0 | $ | 1,198 | $ | 0 | $ | 0 | ||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| 28 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Statements of Changes in Net Assets
| PIMCO RAE Fundamental Emerging Markets Fund | PIMCO RAE Fundamental Global Fund | PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||
| (Amounts in thousands†) | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | ||||||||||||||||||
Increase (Decrease) in Net Assets from: | ||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 29,711 | $ | 16,472 | $ | 9,024 | $ | 2,268 | $ | 1,572 | $ | 689 | ||||||||||||
Net realized gain (loss) | 96,595 | (37,135 | ) | 6,425 | 2,243 | (306 | ) | (381 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | 239,626 | 100,046 | 51,717 | (2,222 | ) | 13,744 | (8,010 | ) | ||||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 365,932 | 79,383 | 67,166 | 2,289 | 15,010 | (7,702 | ) | |||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||
Institutional Class | (40,860 | ) | (3,853 | ) | (9,363 | ) | (2,395 | ) | (1,557 | ) | (692 | ) | ||||||||||||
Class P | (92 | ) | (61 | ) | (4 | ) | (0 | ) | (1 | ) | 0 | |||||||||||||
Class A | (40 | ) | (1 | ) | (12 | ) | (2 | ) | (4 | ) | 0 | |||||||||||||
Class C | (9 | ) | (0 | ) | (21 | ) | (3 | ) | (10 | ) | 0 | |||||||||||||
From net realized capital gains | ||||||||||||||||||||||||
Institutional Class | 0 | 0 | (3,530 | ) | 0 | 0 | 0 | |||||||||||||||||
Class P | 0 | 0 | (1 | ) | 0 | 0 | 0 | |||||||||||||||||
Class A | 0 | 0 | (5 | ) | 0 | 0 | 0 | |||||||||||||||||
Class C | 0 | 0 | (10 | ) | 0 | 0 | 0 | |||||||||||||||||
Tax basis return of capital | ||||||||||||||||||||||||
Institutional Class | 0 | 0 | 0 | 0 | (126 | ) | (28 | ) | ||||||||||||||||
Class P | 0 | 0 | 0 | 0 | 0 | (0 | ) | |||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 0 | (0 | ) | |||||||||||||||||
Class C | 0 | 0 | 0 | 0 | (2 | ) | (0 | ) | ||||||||||||||||
Total Distributions(a) | (41,001 | ) | (3,915 | ) | (12,946 | ) | (2,400 | ) | (1,700 | ) | (720 | ) | ||||||||||||
Portfolio Share Transactions: | ||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions** | (177,538 | ) | 1,106,387 | 77,245 | 245,198 | 4,194 | 1,496 | |||||||||||||||||
Total Increase (Decrease) in Net Assets | 147,393 | 1,181,855 | 131,465 | 245,087 | 17,504 | (6,926 | ) | |||||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Beginning of year | 1,381,272 | 199,417 | 283,284 | 38,197 | 63,181 | 70,107 | ||||||||||||||||||
End of year* | $ | 1,528,665 | $ | 1,381,272 | $ | 414,749 | $ | 283,284 | $ | 80,685 | $ | 63,181 | ||||||||||||
* Including undistributed (overdistributed) net investment income of: | $ | 146 | $ | 12,896 | $ | (6 | ) | $ | (48 | ) | $ | (3 | ) | $ | (3 | ) | ||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| ** | See Note 12, Share of Beneficial Interest, in the Notes to Financial Statements. |
| (a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| ANNUAL REPORT | JUNE 30, 2017 | 29 |
Table of Contents
Statements of Changes in Net Assets (Cont.)
| PIMCO RAE Fundamental International Fund | PIMCO RAE Fundamental US Fund | PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||||||
| (Amounts in thousands†) | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | Year Ended June 30, 2017 | Year Ended June 30, 2016 | ||||||||||||||||||
Increase (Decrease) in Net Assets from: | ||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 9,950 | $ | 5,793 | $ | 12,040 | $ | 10,617 | $ | 1,101 | $ | 934 | ||||||||||||
Net realized gain (loss) | 4,152 | (14,145 | ) | 26,145 | 15,976 | 8,359 | (7,337 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | 56,171 | (10,831 | ) | 33,222 | (13,066 | ) | 8,156 | 3,050 | ||||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 70,273 | (19,183 | ) | 71,407 | 13,527 | 17,616 | (3,353 | ) | ||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||
Institutional Class | (7,439 | ) | (1,748 | ) | (12,165 | ) | (5,444 | ) | (1,184 | ) | (518 | ) | ||||||||||||
Class P | (152 | ) | (9 | ) | (138 | ) | (21 | ) | (22 | ) | (1 | ) | ||||||||||||
Class A | (1 | ) | (0 | ) | (103 | ) | (15 | ) | (39 | ) | (0 | ) | ||||||||||||
Class C | (9 | ) | (2 | ) | (94 | ) | (3 | ) | (4 | ) | (1 | ) | ||||||||||||
From net realized capital gains | ||||||||||||||||||||||||
Institutional Class | 0 | (3,508 | ) | (16,709 | ) | (11,342 | ) | 0 | (1,268 | ) | ||||||||||||||
Class P | 0 | (17 | ) | (167 | ) | (43 | ) | 0 | (2 | ) | ||||||||||||||
Class A | 0 | (0 | ) | (137 | ) | (32 | ) | 0 | (5 | ) | ||||||||||||||
Class C | 0 | (1 | ) | (133 | ) | (6 | ) | 0 | (0 | ) | ||||||||||||||
Tax basis return of capital | ||||||||||||||||||||||||
Institutional Class | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Class P | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Class C | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total Distributions(a) | (7,601 | ) | (5,285 | ) | (29,646 | ) | (16,906 | ) | (1,249 | ) | (1,795 | ) | ||||||||||||
Portfolio Share Transactions: | ||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions** | 170,346 | 121,475 | 79,713 | 75,547 | 5,555 | 43,320 | ||||||||||||||||||
Total Increase (Decrease) in Net Assets | 233,018 | 97,007 | 121,474 | 72,168 | 21,922 | 38,172 | ||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Beginning of year | 248,569 | 151,562 | 519,957 | 447,789 | 84,628 | 46,456 | ||||||||||||||||||
End of year* | $ | 481,587 | $ | 248,569 | $ | 641,431 | $ | 519,957 | $ | 106,550 | $ | 84,628 | ||||||||||||
* Including undistributed (overdistributed) net investment income of: | $ | 6,420 | $ | 4,019 | $ | 5,215 | $ | 5,529 | $ | 292 | $ | 441 | ||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| ** | See Note 12, Share of Beneficial Interest, in the Notes to Financial Statements. |
| (a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| 30 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 99.3% | ||||||||||||
| COMMON STOCKS 93.1% | ||||||||||||
| BRAZIL 9.9% | ||||||||||||
| CONSUMER DISCRETIONARY 0.4% | ||||||||||||
Cyrela Brazil Realty S.A. Empreendimentos e Participacoes | 429,600 | $ | 1,421 | |||||||||
Grendene S.A. | 89,500 | 692 | ||||||||||
MRV Engenharia e Participacoes S.A. | 381,000 | 1,555 | ||||||||||
Via Varejo S.A. | 848,800 | 2,788 | ||||||||||
|
| |||||||||||
| 6,456 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.6% | ||||||||||||
Ambev S.A. ADR | 178,057 | 978 | ||||||||||
BRF S.A. | 122,000 | 1,444 | ||||||||||
JBS S.A. | 785,500 | 1,548 | ||||||||||
Marfrig Global Foods S.A. (a) | 1,437,500 | 2,933 | ||||||||||
Natura Cosmeticos S.A. | 354,800 | 2,752 | ||||||||||
|
| |||||||||||
| 9,655 | ||||||||||||
|
| |||||||||||
| ENERGY 1.7% | ||||||||||||
Cosan S.A. Industria e Comercio | 92,800 | 968 | ||||||||||
Petroleo Brasileiro S.A. SP - ADR (a) | 3,145,894 | 25,136 | ||||||||||
|
| |||||||||||
| 26,104 | ||||||||||||
|
| |||||||||||
| FINANCIALS 4.0% | ||||||||||||
Banco Bradesco S.A. ADR | 1,847,213 | 15,702 | ||||||||||
Banco do Brasil S.A. | 2,559,600 | 20,706 | ||||||||||
BM&FBovespa S.A. - Bolsa de Valores Mercadorias e Futuros | 190,600 | 1,136 | ||||||||||
BTG Pactual Group | 97,886 | 443 | ||||||||||
Itau Unibanco Holding S.A. SP - ADR ‘H’ | 1,946,454 | 21,509 | ||||||||||
Porto Seguro S.A. | 53,800 | 497 | ||||||||||
Sul America S.A. | 265,446 | 1,418 | ||||||||||
|
| |||||||||||
| 61,411 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.0% | ||||||||||||
Hypermarcas S.A. | 33,300 | 279 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.2% | ||||||||||||
CCR S.A. | 75,200 | 384 | ||||||||||
EcoRodovias Infraestrutura e Logistica S.A. | 328,400 | 1,026 | ||||||||||
Embraer S.A. SP - ADR | 24,676 | 450 | ||||||||||
Localiza Rent a Car S.A. | 15,645 | 213 | ||||||||||
|
| |||||||||||
| 2,073 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.8% | ||||||||||||
Cia Siderurgica Nacional S.A. SP - ADR (a) | 1,350,165 | 2,903 | ||||||||||
Duratex S.A. | 409,400 | 1,010 | ||||||||||
Fibria Celulose S.A. SP - ADR | 179,671 | 1,825 | ||||||||||
Gerdau S.A. SP - ADR | 2,286,129 | 6,973 | ||||||||||
|
| |||||||||||
| 12,711 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.1% | ||||||||||||
BR Malls Participacoes S.A. | 263,058 | 949 | ||||||||||
BR Properties S.A. | 189,200 | 514 | ||||||||||
|
| |||||||||||
| 1,463 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
Telefonica Brasil S.A. ADR | 180,777 | $ | 2,439 | |||||||||
TIM Participacoes S.A. ADR | 196,937 | 2,914 | ||||||||||
|
| |||||||||||
| 5,353 | ||||||||||||
|
| |||||||||||
| UTILITIES 1.7% | ||||||||||||
AES Tiete Energia S.A. | 401,200 | 1,653 | ||||||||||
Alupar Investimento S.A. | 66,625 | 364 | ||||||||||
Cia de Saneamento Basico do Estado de Sao Paulo ADR | 269,768 | 2,568 | ||||||||||
Cia de Saneamento de Minas Gerais-COPASA | 129,000 | 1,558 | ||||||||||
Cia Energetica de Minas Gerais SP - ADR | 3,912,976 | 9,391 | ||||||||||
CPFL Energia S.A. ADR | 161,487 | 2,576 | ||||||||||
EDP - Energias do Brasil S.A. | 361,500 | 1,548 | ||||||||||
Energisa S.A. | 20,600 | 149 | ||||||||||
Engie Brasil Energia S.A. | 76,700 | 785 | ||||||||||
Light S.A. | 582,000 | 3,937 | ||||||||||
Transmissora Alianca de Energia Eletrica S.A. | 163,400 | 1,087 | ||||||||||
|
| |||||||||||
| 25,616 | ||||||||||||
|
| |||||||||||
Total Brazil | 151,121 | |||||||||||
|
| |||||||||||
| CHILE 1.1% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Ripley Corp. S.A. | 809,914 | 621 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.2% | ||||||||||||
Cencosud S.A. | 1,110,749 | 2,957 | ||||||||||
|
| |||||||||||
| ENERGY 0.1% | ||||||||||||
Empresas COPEC S.A. | 73,964 | 809 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.2% | ||||||||||||
Banco de Chile | 5,031,222 | 659 | ||||||||||
Banco de Credito e Inversiones | 9,244 | 517 | ||||||||||
Banco Santander Chile ADR | 45,042 | 1,145 | ||||||||||
Sociedad Matriz del Banco de Chile S.A. ‘B’ | 1,734,105 | 703 | ||||||||||
|
| |||||||||||
| 3,024 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Latam Airlines Group S.A. SP - ADR | 115,177 | 1,275 | ||||||||||
|
| |||||||||||
| MATERIALS 0.4% | ||||||||||||
Antofagasta PLC | 247,812 | 2,585 | ||||||||||
CAP S.A. | 276,075 | 2,200 | ||||||||||
Empresas CMPC S.A. | 267,178 | 640 | ||||||||||
Sociedad Quimica y Minera de Chile S.A. SP - ADR | 16,317 | 539 | ||||||||||
|
| |||||||||||
| 5,964 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
Empresa Nacional de Telecomunicaciones S.A. | 57,297 | 623 | ||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
Colbun S.A. | 859,160 | 184 | ||||||||||
Enel Americas S.A. ADR | 104,841 | 989 | ||||||||||
Enel Chile S.A. | 2,561,270 | 281 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Enel Generacion Chile S.A. ADR | 8,362 | $ | 189 | |||||||||
Inversiones Aguas Metropolitanas S.A. | 237,683 | 399 | ||||||||||
|
| |||||||||||
| 2,042 | ||||||||||||
|
| |||||||||||
Total Chile | 17,315 | |||||||||||
|
| |||||||||||
| CHINA 18.8% | ||||||||||||
| CONSUMER DISCRETIONARY 0.5% | ||||||||||||
Belle International Holdings Ltd. | 6,457,000 | 5,090 | ||||||||||
Dongfeng Motor Group Co. Ltd. ‘H’ | 394,000 | 465 | ||||||||||
GOME Electrical Appliances Holding Ltd. | 2,286,000 | 281 | ||||||||||
Zhongsheng Group Holdings Ltd. | 705,000 | 1,315 | ||||||||||
|
| |||||||||||
| 7,151 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Tingyi Cayman Islands Holding Corp. | 1,608,000 | 1,907 | ||||||||||
Want Want China Holdings Ltd. | 213,000 | 144 | ||||||||||
|
| |||||||||||
| 2,051 | ||||||||||||
|
| |||||||||||
| ENERGY 2.8% | ||||||||||||
China Coal Energy Co. Ltd. ‘H’ | 1,188,000 | 575 | ||||||||||
China Oilfield Services Ltd.‘H’ | 320,000 | 256 | ||||||||||
China Petroleum & Chemical Corp. ‘H’ | 18,036,400 | 14,123 | ||||||||||
China Shenhua Energy Co. Ltd. ‘H’ | 3,193,500 | 7,105 | ||||||||||
CNOOC Ltd. | 12,248,000 | 13,439 | ||||||||||
PetroChina Co. Ltd. ‘H’ | 10,520,000 | 6,436 | ||||||||||
Yanzhou Coal Mining Co. Ltd. ‘H’ | 1,658,000 | 1,486 | ||||||||||
|
| |||||||||||
| 43,420 | ||||||||||||
|
| |||||||||||
| FINANCIALS 10.1% | ||||||||||||
Agricultural Bank of China Ltd. ‘H’ | 29,336,000 | 13,865 | ||||||||||
Bank of China Ltd. ‘H’ | 56,146,000 | 27,532 | ||||||||||
Bank of Communications Co. Ltd. ‘H’ | 8,872,000 | 6,259 | ||||||||||
China Cinda Asset Management Co. Ltd. ‘H’ | 1,825,000 | 680 | ||||||||||
China CITIC Bank Corp. Ltd. ‘H’ | 5,769,000 | 3,531 | ||||||||||
China Construction Bank Corp. ‘H’ | 62,530,000 | 48,626 | ||||||||||
China Everbright Bank Co. Ltd. ‘H’ | 3,046,000 | 1,423 | ||||||||||
China Huarong Asset Management Co. Ltd. ‘H’ | 3,331,000 | 1,296 | ||||||||||
China Life Insurance Co. Ltd. ‘H’ | 676,000 | 2,066 | ||||||||||
China Merchants Bank Co. Ltd. ‘H’ | 1,370,500 | 4,130 | ||||||||||
China Minsheng Banking Corp. Ltd. ‘H’ | 3,211,100 | 3,203 | ||||||||||
Chongqing Rural Commercial Bank Co. Ltd. ‘H’ | 3,150,000 | 2,124 | ||||||||||
Industrial & Commercial Bank of China Ltd. ‘H’ | 51,079,000 | 34,472 | ||||||||||
People’s Insurance Co. Group of China Ltd. ‘H’ | 3,810,000 | 1,600 | ||||||||||
Ping An Insurance Group Co. of China Ltd. ‘H’ | 299,000 | 1,970 | ||||||||||
Postal Savings Bank of China Co. Ltd. ‘H’ | 2,766,000 | 1,594 | ||||||||||
|
| |||||||||||
| 154,371 | ||||||||||||
|
| |||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 31 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
| HEALTH CARE 0.1% | ||||||||||||
China Resources Pharmaceutical Group Ltd. | 1,017,000 | $ | 1,270 | |||||||||
Sihuan Pharmaceutical Holdings Group Ltd. | 355,000 | 149 | ||||||||||
|
| |||||||||||
| 1,419 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.9% | ||||||||||||
Air China Ltd. ‘H’ | 850,000 | 876 | ||||||||||
Beijing Capital International Airport Co. Ltd. ‘H’ | 316,000 | 445 | ||||||||||
China Communications Construction Co. Ltd. ‘H’ | 257,000 | 331 | ||||||||||
China Energy Engineering Corp. Ltd. ‘H’ | 1,058,000 | 217 | ||||||||||
China Lesso Group Holdings Ltd. | 292,000 | 224 | ||||||||||
China Railway Construction Corp. Ltd. ‘H’ | 336,500 | 439 | ||||||||||
China Southern Airlines Co. Ltd. ‘H’ | 760,000 | 642 | ||||||||||
Guangshen Railway Co. Ltd. ‘H’ | 932,000 | 462 | ||||||||||
Harbin Electric Co. Ltd. ‘H’ | 1,388,000 | 701 | ||||||||||
Qinhuangdao Port Co. Ltd. ‘H’ | 500,000 | 178 | ||||||||||
Shanghai Electric Group Co. Ltd. ‘H’ | 992,000 | 476 | ||||||||||
Shenzhen Expressway Co. Ltd. ‘H’ | 146,000 | 133 | ||||||||||
Sinopec Engineering Group Co. Ltd. ‘H’ | 1,143,500 | 1,030 | ||||||||||
Sinotrans Ltd. ‘H’ | 1,089,000 | 558 | ||||||||||
Sinotruk Hong Kong Ltd. | 1,248,500 | 906 | ||||||||||
Weichai Power Co. Ltd. ‘H’ | 1,616,000 | 1,412 | ||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | 1,465,700 | 1,267 | ||||||||||
Zhejiang Expressway Co. Ltd. ‘H’ | 1,326,000 | 1,732 | ||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. ‘H’ | 1,754,400 | 854 | ||||||||||
|
| |||||||||||
| 12,883 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.4% | ||||||||||||
Changyou.com Ltd. ADR (a) | 13,347 | 517 | ||||||||||
Legend Holdings Corp. ‘H’ | 632,800 | 1,734 | ||||||||||
Lenovo Group Ltd. | 3,940,000 | 2,487 | ||||||||||
Semiconductor Manufacturing International Corp. (a) | 445,000 | 516 | ||||||||||
Sohu.com, Inc. (a) | 16,875 | 760 | ||||||||||
|
| |||||||||||
| 6,014 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.9% | ||||||||||||
Angang Steel Co. Ltd. ‘H’ | 802,000 | 597 | ||||||||||
Anhui Conch Cement Co. Ltd. ‘H’ | 362,500 | 1,260 | ||||||||||
China BlueChemical Ltd. ‘H’ | 2,306,000 | 543 | ||||||||||
China Hongqiao Group Ltd. | 872,500 | 394 | ||||||||||
China National Building Material Co. Ltd. ‘H’ | 13,962,000 | 8,293 | ||||||||||
China National Materials Co. Ltd. ‘H’ | 1,261,000 | 418 | ||||||||||
China Zhongwang Holdings Ltd. | 972,800 | 427 | ||||||||||
Fosun International Ltd. | 190,000 | 297 | ||||||||||
Jiangxi Copper Co. Ltd. ‘H’ | 480,000 | 788 | ||||||||||
Maanshan Iron & Steel Co. Ltd. ‘H’ (a) | 532,000 | 212 | ||||||||||
|
| |||||||||||
| 13,229 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| REAL ESTATE 2.3% | ||||||||||||
Agile Group Holdings Ltd. | 3,652,000 | $ | 3,344 | |||||||||
Beijing Capital Land Ltd. ‘H’ | 442,000 | 209 | ||||||||||
China Evergrande Group | 3,342,000 | 5,996 | ||||||||||
CIFI Holdings Group Co. Ltd. | 954,000 | 424 | ||||||||||
Country Garden Holdings Co. Ltd. | 4,155,000 | 4,820 | ||||||||||
Fantasia Holdings Group Co. Ltd. | 1,207,500 | 173 | ||||||||||
Future Land Development Holdings Ltd. | 3,107,138 | 1,186 | ||||||||||
Greentown China Holdings Ltd. | 2,092,500 | 2,305 | ||||||||||
Guangzhou R&F Properties Co. Ltd. ‘H’ | 2,471,400 | 3,843 | ||||||||||
Kaisa Group Holdings Ltd. (a) | 2,212,000 | 700 | ||||||||||
KWG Property Holding Ltd. | 2,471,000 | 1,655 | ||||||||||
Logan Property Holdings Co. Ltd. | 658,000 | 434 | ||||||||||
Longfor Properties Co. Ltd. | 346,500 | 744 | ||||||||||
Powerlong Real Estate Holdings Ltd. | 2,201,000 | 947 | ||||||||||
Red Star Macalline Group Corp. Ltd. ‘H’ | 346,800 | 355 | ||||||||||
Shui On Land Ltd. | 5,167,500 | 1,251 | ||||||||||
Sino-Ocean Group Holding Ltd. | 4,336,000 | 2,121 | ||||||||||
SOHO China Ltd. | 4,231,000 | 2,087 | ||||||||||
Sunac China Holdings Ltd. | 621,000 | 1,297 | ||||||||||
Yuzhou Properties Co. Ltd. | 1,561,000 | 919 | ||||||||||
|
| |||||||||||
| 34,810 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
China Communications Services Corp. Ltd. ‘H’ | 3,368,000 | 1,940 | ||||||||||
China Telecom Corp. Ltd. ‘H’ | 9,642,000 | 4,579 | ||||||||||
|
| |||||||||||
| 6,519 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.3% | ||||||||||||
Beijing Jingneng Clean Energy Co. Ltd. ‘H’ | 604,000 | 178 | ||||||||||
China Longyuan Power Group Corp. Ltd. ‘H’ | 510,000 | 371 | ||||||||||
Datang International Power Generation Co. Ltd. ‘H’ | 5,794,000 | 1,847 | ||||||||||
Huadian Fuxin Energy Corp. Ltd. ‘H’ | 3,324,000 | 796 | ||||||||||
Huadian Power International Corp. Ltd. ‘H’ | 894,000 | 399 | ||||||||||
Huaneng Power International, Inc. ‘H’ | 2,350,000 | 1,632 | ||||||||||
|
| |||||||||||
| 5,223 | ||||||||||||
|
| |||||||||||
Total China | 287,090 | |||||||||||
|
| |||||||||||
| CYPRUS 0.0% | ||||||||||||
| FINANCIALS 0.0% | ||||||||||||
Bank of Cyprus Holdings PLC (a) | 49,534 | 183 | ||||||||||
|
| |||||||||||
Total Cyprus | 183 | |||||||||||
|
| |||||||||||
| GREECE 1.6% | ||||||||||||
| CONSUMER DISCRETIONARY 0.2% | ||||||||||||
FF Group (a) | 29,782 | 728 | ||||||||||
OPAP S.A. | 249,515 | 2,821 | ||||||||||
|
| |||||||||||
| 3,549 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| FINANCIALS 1.2% | ||||||||||||
Alpha Bank AE (a) | 2,762,065 | $ | 6,808 | |||||||||
Eurobank Ergasias S.A. (a) | 706,769 | 790 | ||||||||||
National Bank of Greece S.A. (a) | 18,649,200 | 7,097 | ||||||||||
Piraeus Bank S.A. (a) | 14,660,353 | 3,594 | ||||||||||
|
| |||||||||||
| 18,289 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Hellenic Telecommunications Organization S.A. | 189,955 | 2,286 | ||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
Admie IPTO S.A. (a) | 267,829 | 685 | ||||||||||
Public Power Corp. S.A. | 136,634 | 342 | ||||||||||
|
| |||||||||||
| 1,027 | ||||||||||||
|
| |||||||||||
Total Greece | 25,151 | |||||||||||
|
| |||||||||||
| HONG KONG 3.7% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
China Travel International Investment Hong Kong Ltd. | 672,000 | 194 | ||||||||||
Dah Chong Hong Holdings Ltd. | 600,000 | 275 | ||||||||||
|
| |||||||||||
| 469 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.5% | ||||||||||||
China Agri-Industries Holdings Ltd. | 2,582,000 | 1,071 | ||||||||||
China Resources Beer Holdings Co. Ltd. | 2,198,000 | 5,543 | ||||||||||
|
| |||||||||||
| 6,614 | ||||||||||||
|
| |||||||||||
| ENERGY 0.1% | ||||||||||||
Kunlun Energy Co. Ltd. | 2,212,000 | 1,875 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.5% | ||||||||||||
BOC Hong Kong Holdings Ltd. | 971,000 | 4,647 | ||||||||||
China Taiping Insurance Holdings Co. Ltd. | 1,085,800 | 2,753 | ||||||||||
Far East Horizon Ltd. | 193,000 | 168 | ||||||||||
|
| |||||||||||
| 7,568 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.4% | ||||||||||||
China Merchants Port Holdings Co. Ltd. | 236,000 | 654 | ||||||||||
CITIC Ltd. | 1,078,000 | 1,621 | ||||||||||
COSCO SHIPPING Ports Ltd. | 1,698,000 | 1,992 | ||||||||||
Shanghai Industrial Holdings Ltd. | 793,000 | 2,346 | ||||||||||
|
| |||||||||||
| 6,613 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.2% | ||||||||||||
China Resources Cement Holdings Ltd. | 3,436,000 | 1,707 | ||||||||||
Shougang Fushan Resources Group Ltd. | 6,556,000 | 1,217 | ||||||||||
|
| |||||||||||
| 2,924 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.6% | ||||||||||||
China Jinmao Holdings Group Ltd. | 5,120,000 | 2,110 | ||||||||||
China Overseas Grand Oceans Group Ltd. | 1,451,000 | 775 | ||||||||||
China Resources Land Ltd. | 342,000 | 996 | ||||||||||
| 32 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Poly Property Group Co. Ltd. | 6,145,000 | $ | 2,701 | |||||||||
Shenzhen Investment Ltd. | 1,418,000 | 626 | ||||||||||
Yuexiu Property Co. Ltd. | 13,208,000 | 2,249 | ||||||||||
|
| |||||||||||
| 9,457 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 1.0% | ||||||||||||
China Mobile Ltd. | 617,500 | 6,547 | ||||||||||
China Unicom Hong Kong Ltd. | 5,706,000 | 8,470 | ||||||||||
|
| |||||||||||
| 15,017 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.4% | ||||||||||||
China Power International Development Ltd. | 4,402,000 | 1,562 | ||||||||||
China Resources Power Holdings Co. Ltd. | 1,974,000 | 3,875 | ||||||||||
|
| |||||||||||
| 5,437 | ||||||||||||
|
| |||||||||||
Total Hong Kong | 55,974 | |||||||||||
|
| |||||||||||
| INDIA 6.8% | ||||||||||||
| CONSUMER DISCRETIONARY 0.2% | ||||||||||||
Amtek Auto Ltd. (a) | 268,817 | 135 | ||||||||||
Tata Motors Ltd. | 483,370 | 3,231 | ||||||||||
|
| |||||||||||
| 3,366 | ||||||||||||
|
| |||||||||||
| ENERGY 0.5% | ||||||||||||
Bharat Petroleum Corp. Ltd. | 16,072 | 159 | ||||||||||
Coal India Ltd. | 298,204 | 1,127 | ||||||||||
Hindustan Petroleum Corp. Ltd. | 100,320 | 791 | ||||||||||
Indian Oil Corp. Ltd. | 159,663 | 948 | ||||||||||
Oil & Natural Gas Corp. Ltd. | 1,229,393 | 2,990 | ||||||||||
Oil India Ltd. | 142,290 | 568 | ||||||||||
Reliance Industries Ltd. (a) | 51,149 | 1,094 | ||||||||||
|
| |||||||||||
| 7,677 | ||||||||||||
|
| |||||||||||
| FINANCIALS 2.2% | ||||||||||||
Allahabad Bank | 1,591,625 | 1,666 | ||||||||||
Andhra Bank | 2,124,792 | 1,793 | ||||||||||
Bank of Baroda | 507,109 | 1,268 | ||||||||||
Bank of India | 944,450 | 2,040 | ||||||||||
Canara Bank (a) | 575,243 | 2,920 | ||||||||||
ICICI Bank Ltd. | 472,490 | 2,126 | ||||||||||
IDBI Bank Ltd. (a) | 352,020 | 291 | ||||||||||
Indian Bank | 314,450 | 1,373 | ||||||||||
Indian Overseas Bank (a) | 373,878 | 144 | ||||||||||
Oriental Bank of Commerce | 1,163,410 | 2,544 | ||||||||||
Power Finance Corp. Ltd. | 830,091 | 1,581 | ||||||||||
Punjab National Bank (a) | 1,483,556 | 3,131 | ||||||||||
Rural Electrification Corp. Ltd. | 1,351,785 | 3,592 | ||||||||||
State Bank of India | 1,235,194 | 5,220 | ||||||||||
Syndicate Bank | 990,920 | 1,125 | ||||||||||
UCO Bank (a) | 542,251 | 280 | ||||||||||
Union Bank of India | 1,136,760 | 2,591 | ||||||||||
|
| |||||||||||
| 33,685 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.0% | ||||||||||||
Piramal Enterprises Ltd. (a) | 13,233 | 571 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.8% | ||||||||||||
Adani Enterprises Ltd. (a) | 769,550 | 1,577 | ||||||||||
Aditya Birla Nuvo Ltd. | 12,650 | 364 | ||||||||||
Bharat Heavy Electricals Ltd. | 738,321 | 1,542 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
GMR Infrastructure Ltd. (a) | 605,816 | $ | 186 | |||||||||
Jaiprakash Associates Ltd. (a) | 23,971,603 | 8,138 | ||||||||||
|
| |||||||||||
| 11,807 | ||||||||||||
|
| |||||||||||
| MATERIALS 2.6% | ||||||||||||
Grasim Industries Ltd. | 15,594 | 300 | ||||||||||
Hindalco Industries Ltd. | 2,358,209 | 6,959 | ||||||||||
Hindustan Zinc Ltd. | 45,740 | 185 | ||||||||||
Jindal Steel & Power Ltd. (a) | 3,097,033 | 5,889 | ||||||||||
JSW Steel Ltd. | 818,758 | 2,571 | ||||||||||
National Aluminium Co. Ltd. | 648,300 | 648 | ||||||||||
NMDC Ltd. | 391,447 | 656 | ||||||||||
Steel Authority of India Ltd. | 2,231,291 | 2,012 | ||||||||||
Tata Chemicals Ltd. | 111,951 | 1,053 | ||||||||||
Tata Steel Ltd. | 1,260,003 | 10,622 | ||||||||||
Vedanta Ltd. | 1,576,122 | 6,051 | ||||||||||
Vedanta Resources PLC | 307,205 | 2,568 | ||||||||||
|
| |||||||||||
| 39,514 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.0% | ||||||||||||
DLF Ltd. (a) | 104,717 | 309 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Bharti Airtel Ltd. | 56,464 | 333 | ||||||||||
Reliance Communications Ltd. (a) | 4,730,799 | 1,576 | ||||||||||
|
| |||||||||||
| 1,909 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.4% | ||||||||||||
Adani Power Ltd. (a) | 509,410 | 234 | ||||||||||
CESC Ltd. | 15,099 | 202 | ||||||||||
NHPC Ltd. | 2,073,190 | 1,008 | ||||||||||
NTPC Ltd. | 234,987 | 578 | ||||||||||
Reliance Infrastructure Ltd. | 132,171 | 1,019 | ||||||||||
Tata Power Co. Ltd. | 1,747,154 | 2,174 | ||||||||||
|
| |||||||||||
| 5,215 | ||||||||||||
|
| |||||||||||
Total India | 104,053 | |||||||||||
|
| |||||||||||
| INDONESIA 1.3% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Astra International Tbk PT | 1,699,900 | 1,139 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Indofood Sukses Makmur Tbk PT | 1,731,900 | 1,118 | ||||||||||
|
| |||||||||||
| ENERGY 0.6% | ||||||||||||
Adaro Energy Tbk PT | 21,932,000 | 2,595 | ||||||||||
Bumi Resources Tbk PT (a) | 37,992,000 | 967 | ||||||||||
Indo Tambangraya Megah Tbk PT | 1,209,000 | 1,570 | ||||||||||
Tambang Batubara Bukit Asam Persero Tbk PT | 1,670,718 | 1,499 | ||||||||||
United Tractors Tbk PT | 1,188,200 | 2,446 | ||||||||||
|
| |||||||||||
| 9,077 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.2% | ||||||||||||
Bank Danamon Indonesia Tbk PT | 807,500 | 309 | ||||||||||
Bank Mandiri Persero Tbk PT | 1,770,000 | 1,697 | ||||||||||
Bank Negara Indonesia Persero Tbk PT | 2,579,400 | 1,268 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Bank Rakyat Indonesia Persero Tbk PT | 1,046,700 | $ | 1,195 | |||||||||
|
| |||||||||||
| 4,469 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Berlian Laju Tanker Tbk PT (a) | 707,200 | 0 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Indah Kiat Pulp & Paper Corp. Tbk PT | 782,000 | 150 | ||||||||||
Semen Indonesia Persero Tbk PT | 764,300 | 573 | ||||||||||
Vale Indonesia Tbk PT (a) | 4,120,900 | 573 | ||||||||||
|
| |||||||||||
| 1,296 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telekomunikasi Indonesia Persero Tbk PT | 4,030,100 | 1,369 | ||||||||||
XL Axiata Tbk PT | 694,000 | 177 | ||||||||||
|
| |||||||||||
| 1,546 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
Perusahaan Gas Negara Persero Tbk | 6,996,500 | 1,180 | ||||||||||
|
| |||||||||||
Total Indonesia | 19,825 | |||||||||||
|
| |||||||||||
| MALAYSIA 0.4% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
DRB-Hicom Bhd. | 932,200 | 386 | ||||||||||
Genting Bhd. | 64,400 | 141 | ||||||||||
UMW Holdings Bhd. (a) | 168,300 | 234 | ||||||||||
|
| |||||||||||
| 761 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.0% | ||||||||||||
British American Tobacco Malaysia Bhd. | 35,700 | 361 | ||||||||||
Felda Global Ventures Holdings Bhd. | 498,400 | 199 | ||||||||||
|
| |||||||||||
| 560 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.2% | ||||||||||||
Alliance Financial Group Bhd. | 225,400 | 202 | ||||||||||
AMMB Holdings Bhd. | 443,700 | 504 | ||||||||||
CIMB Group Holdings Bhd. | 602,600 | 924 | ||||||||||
Malayan Banking Bhd. | 457,800 | 1,027 | ||||||||||
Public Bank Bhd. | 32,400 | 153 | ||||||||||
RHB Bank Bhd. | 255,900 | 302 | ||||||||||
|
| |||||||||||
| 3,112 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
AirAsia Bhd. | 273,000 | 207 | ||||||||||
Sime Darby Bhd. | 84,500 | 187 | ||||||||||
|
| |||||||||||
| 394 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.0% | ||||||||||||
Sunway Bhd. | 214,900 | 196 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
Axiata Group Bhd. | 141,600 | 159 | ||||||||||
Telekom Malaysia Bhd. | 116,000 | 180 | ||||||||||
|
| |||||||||||
| 339 | ||||||||||||
|
| |||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 33 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
| UTILITIES 0.1% | ||||||||||||
Malakoff Corp. Bhd. | 570,600 | $ | 141 | |||||||||
Tenaga Nasional Bhd. | 111,200 | 366 | ||||||||||
YTL Corp. Bhd. | 504,900 | 172 | ||||||||||
YTL Power International Bhd. | 586,600 | 198 | ||||||||||
|
| |||||||||||
| 877 | ||||||||||||
|
| |||||||||||
Total Malaysia | 6,239 | |||||||||||
|
| |||||||||||
| MEXICO 1.2% | ||||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Coca-Cola Femsa S.A.B. de C.V. SP - ADR | 7,560 | 640 | ||||||||||
Fomento Economico Mexicano S.A.B. de C.V. SP - ADR | 2,552 | 251 | ||||||||||
|
| |||||||||||
| 891 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.3% | ||||||||||||
Grupo Elektra S.A.B. de C.V. | 71,380 | 2,981 | ||||||||||
Grupo Financiero Santander Mexico S.A.B. de C.V. ADR ‘B’ | 135,746 | 1,309 | ||||||||||
|
| |||||||||||
| 4,290 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.2% | ||||||||||||
Alfa S.A.B. de C.V. ‘A’ | 698,600 | 991 | ||||||||||
OHL Mexico S.A.B. de C.V. | 1,626,400 | 2,346 | ||||||||||
|
| |||||||||||
| 3,337 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.3% | ||||||||||||
Cemex S.A.B. de C.V. SP - ADR (a) | 483,345 | 4,553 | ||||||||||
Grupo Mexico S.A.B. de C.V. ‘B’ | 88,699 | 249 | ||||||||||
Industrias Penoles S.A.B. de C.V. | 35,785 | 810 | ||||||||||
|
| |||||||||||
| 5,612 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.3% | ||||||||||||
America Movil S.A.B. de C.V. | 314,070 | 5,000 | ||||||||||
|
| |||||||||||
Total Mexico | 19,130 | |||||||||||
|
| |||||||||||
| PHILIPPINES 0.1% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Alliance Global Group, Inc. | 1,002,000 | 284 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
PLDT, Inc. | 21,800 | 776 | ||||||||||
|
| |||||||||||
Total Philippines | 1,060 | |||||||||||
|
| |||||||||||
| POLAND 2.7% | ||||||||||||
| ENERGY 0.2% | ||||||||||||
Grupa Lotos S.A. (a) | 116,091 | 1,598 | ||||||||||
Polski Koncern Naftowy Orlen S.A. | 30,026 | 907 | ||||||||||
Polskie Gornictwo Naftowe i Gazownictwo S.A. | 699,900 | 1,194 | ||||||||||
|
| |||||||||||
| 3,699 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.6% | ||||||||||||
Bank Handlowy w Warszawie S.A. | 33,170 | 616 | ||||||||||
Bank Pekao S.A. | 49,422 | 1,664 | ||||||||||
Getin Noble Bank S.A. (a) | 742,020 | 282 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 361,991 | $ | 3,366 | |||||||||
Powszechny Zaklad Ubezpieczen S.A. | 313,513 | 3,772 | ||||||||||
|
| |||||||||||
| 9,700 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Asseco Poland S.A. | 84,037 | 1,106 | ||||||||||
|
| |||||||||||
| MATERIALS 0.9% | ||||||||||||
Jastrzebska Spolka Weglowa S.A. | 105,768 | 2,111 | ||||||||||
KGHM Polska Miedz S.A. | 354,098 | 10,562 | ||||||||||
Synthos S.A. | 523,284 | 685 | ||||||||||
|
| |||||||||||
| 13,358 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Orange Polska S.A. | 1,472,553 | 2,039 | ||||||||||
|
| |||||||||||
| UTILITIES 0.8% | ||||||||||||
Enea S.A. (a) | 439,590 | 1,584 | ||||||||||
Energa S.A. | 910,212 | 2,572 | ||||||||||
PGE Polska Grupa Energetyczna S.A. | 1,352,962 | 4,420 | ||||||||||
Tauron Polska Energia S.A. | 3,240,335 | 3,131 | ||||||||||
|
| |||||||||||
| 11,707 | ||||||||||||
|
| |||||||||||
Total Poland | 41,609 | |||||||||||
|
| |||||||||||
| RUSSIA 9.1% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
M.Video PJSC | 22,020 | 147 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.3% | ||||||||||||
X5 Retail Group NV GDR (a) | 107,111 | 3,712 | ||||||||||
|
| |||||||||||
| ENERGY 5.4% | ||||||||||||
Gazprom Neft PJSC SP - ADR | 55,312 | 847 | ||||||||||
Gazprom PJSC SP - ADR | 7,625,766 | 30,221 | ||||||||||
Lukoil PJSC SP - ADR | 507,614 | 24,744 | ||||||||||
Rosneft Oil, Co. PJSC GDR | 1,144,700 | 6,228 | ||||||||||
Surgutneftegas OJSC SP - ADR | 4,304,492 | 18,519 | ||||||||||
Tatneft PJSC SP - ADR | 48,268 | 1,819 | ||||||||||
TMK PJSC | 226,980 | 294 | ||||||||||
|
| |||||||||||
| 82,672 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.4% | ||||||||||||
Sberbank of Russia PJSC | 507,673 | 5,261 | ||||||||||
VTB Bank PJSC GDR | 538,376 | 1,133 | ||||||||||
|
| |||||||||||
| 6,394 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.4% | ||||||||||||
Aeroflot PJSC (a) | 1,594,160 | 5,267 | ||||||||||
|
| |||||||||||
| MATERIALS 1.1% | ||||||||||||
Alrosa PJSC | 129,121 | 190 | ||||||||||
Evraz PLC (a) | 1,096,360 | 2,953 | ||||||||||
Magnitogorsk Iron & Steel OJSC | 961,400 | 543 | ||||||||||
Mechel PJSC SP - ADR | 479,989 | 2,222 | ||||||||||
MMC Norilsk Nickel PJSC ADR | 493,788 | 6,806 | ||||||||||
Novolipetsk Steel PJSC GDR | 53,070 | 1,027 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PhosAgro PJSC GDR | 63,904 | $ | 848 | |||||||||
Severstal PJSC GDR | 143,042 | 1,876 | ||||||||||
|
| |||||||||||
| 16,465 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.0% | ||||||||||||
LSR Group PJSC GDR | 44,940 | 128 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.8% | ||||||||||||
MegaFon PJSC SP - GDR | 277,392 | 2,537 | ||||||||||
Mobile TeleSystems PJSC | 1,641,590 | 6,560 | ||||||||||
Rostelecom PJSC | 1,657,600 | 2,005 | ||||||||||
Sistema PJSC FC SP - GDR | 392,052 | 1,638 | ||||||||||
|
| |||||||||||
| 12,740 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.7% | ||||||||||||
Federal Grid Co. Unified Energy System PJSC | 1,191,680,000 | 3,471 | ||||||||||
Inter RAO UES PJSC | 24,000,000 | 1,554 | ||||||||||
Mosenergo PJSC | 6,070,000 | 230 | ||||||||||
Rosseti PJSC | 195,285,012 | 2,663 | ||||||||||
RusHydro PJSC | 213,528,000 | 2,871 | ||||||||||
Unipro PJSC | 10,847,000 | 460 | ||||||||||
|
| |||||||||||
| 11,249 | ||||||||||||
|
| |||||||||||
Total Russia | 138,774 | |||||||||||
|
| |||||||||||
| SOUTH AFRICA 5.4% | ||||||||||||
| CONSUMER DISCRETIONARY 0.2% | ||||||||||||
Imperial Holdings Ltd. | 145,573 | 1,788 | ||||||||||
Tsogo Sun Holdings Ltd. | 233,065 | 399 | ||||||||||
|
| |||||||||||
| 2,187 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.0% | ||||||||||||
Massmart Holdings Ltd. | 67,450 | 544 | ||||||||||
|
| |||||||||||
| ENERGY 0.1% | ||||||||||||
Exxaro Resources Ltd. | 231,552 | 1,645 | ||||||||||
|
| |||||||||||
| FINANCIALS 1.8% | ||||||||||||
Barclays Africa Group Ltd. | 473,358 | 5,205 | ||||||||||
FirstRand Ltd. | 416,330 | 1,501 | ||||||||||
Investec Ltd. | 307,525 | 2,268 | ||||||||||
Liberty Holdings Ltd. | 362,650 | 3,119 | ||||||||||
MMI Holdings Ltd. | 812,911 | 1,258 | ||||||||||
Nedbank Group Ltd. | 248,883 | 3,974 | ||||||||||
Sanlam Ltd. | 335,781 | 1,663 | ||||||||||
Standard Bank Group Ltd. | 793,698 | 8,741 | ||||||||||
|
| |||||||||||
| 27,729 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.1% | ||||||||||||
Life Healthcare Group Holdings Ltd. | 420,430 | 823 | ||||||||||
Netcare Ltd. | 387,973 | 763 | ||||||||||
|
| |||||||||||
| 1,586 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.3% | ||||||||||||
Barloworld Ltd. | 534,733 | 4,447 | ||||||||||
Bidvest Group Ltd. | 10,708 | 129 | ||||||||||
|
| |||||||||||
| 4,576 | ||||||||||||
|
| |||||||||||
| MATERIALS 1.9% | ||||||||||||
African Rainbow Minerals Ltd. | 221,960 | 1,429 | ||||||||||
AngloGold Ashanti Ltd. SP - ADR | 65,410 | 636 | ||||||||||
| 34 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Assore Ltd. | 18,549 | $ | 276 | |||||||||
Gold Fields Ltd. SP - ADR | 1,019,076 | 3,546 | ||||||||||
Harmony Gold Mining Co. Ltd. | 106,800 | 176 | ||||||||||
Impala Platinum Holdings Ltd. (a) | 511,029 | 1,441 | ||||||||||
Kumba Iron Ore Ltd. (a) | 439,228 | 5,739 | ||||||||||
Lonmin PLC (a) | 465,481 | 399 | ||||||||||
Mondi Ltd. | 82,719 | 2,142 | ||||||||||
Nampak Ltd. (a) | 1,397,034 | 2,028 | ||||||||||
Sappi Ltd. | 279,988 | 1,863 | ||||||||||
Sasol Ltd. | 277,084 | 7,774 | ||||||||||
Sibanye Gold Ltd. | 646,453 | 743 | ||||||||||
|
| |||||||||||
| 28,192 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 1.0% | ||||||||||||
MTN Group Ltd. | 1,359,517 | 11,852 | ||||||||||
Telkom S.A. SOC Ltd. | 552,228 | 2,598 | ||||||||||
Vodacom Group Ltd. | 116,439 | 1,463 | ||||||||||
|
| |||||||||||
| 15,913 | ||||||||||||
|
| |||||||||||
Total South Africa | 82,372 | |||||||||||
|
| |||||||||||
| SOUTH KOREA 17.7% | ||||||||||||
| CONSUMER DISCRETIONARY 3.1% | ||||||||||||
CJ O Shopping Co. Ltd. | 9,412 | 1,575 | ||||||||||
Hankook Tire Co. Ltd. | 16,010 | 890 | ||||||||||
Hyundai Department Store Co. Ltd. | 4,226 | 408 | ||||||||||
Hyundai Mobis Co. Ltd. | 6,479 | 1,417 | ||||||||||
Hyundai Motor Co. | 123,531 | 17,223 | ||||||||||
Hyundai Wia Corp. | 8,872 | 541 | ||||||||||
Kia Motors Corp. | 146,976 | 4,909 | ||||||||||
Kumho Tire Co., Inc. (a) | 268,130 | 1,760 | ||||||||||
LG Electronics, Inc. | 172,563 | 12,106 | ||||||||||
LOTTE Himart Co. Ltd. | 5,986 | 365 | ||||||||||
Lotte Shopping Co. Ltd. | 18,175 | 4,823 | ||||||||||
Mando Corp. | 1,777 | 400 | ||||||||||
Shinsegae, Inc. | 6,554 | 1,315 | ||||||||||
|
| |||||||||||
| 47,732 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.3% | ||||||||||||
CJ CheilJedang Corp. | 442 | 140 | ||||||||||
E-MART, Inc. | 12,197 | 2,499 | ||||||||||
Hite Jinro Co. Ltd. | 45,670 | 930 | ||||||||||
KT&G Corp. | 1,593 | 163 | ||||||||||
|
| |||||||||||
| 3,732 | ||||||||||||
|
| |||||||||||
| ENERGY 0.1% | ||||||||||||
GS Holdings Corp. | 15,816 | 943 | ||||||||||
SK Innovation Co. Ltd. | 6,086 | 843 | ||||||||||
|
| |||||||||||
| 1,786 | ||||||||||||
|
| |||||||||||
| FINANCIALS 4.1% | ||||||||||||
BNK Financial Group, Inc. | 164,086 | 1,569 | ||||||||||
DGB Financial Group, Inc. | 278,723 | 2,874 | ||||||||||
Dongbu Insurance Co. Ltd. | 2,581 | 153 | ||||||||||
Hana Financial Group, Inc. | 318,821 | 12,591 | ||||||||||
Hanwha Life Insurance Co. Ltd. | 447,209 | 2,719 | ||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 40,724 | 1,401 | ||||||||||
Industrial Bank of Korea | 333,087 | 4,145 | ||||||||||
JB Financial Group Co. Ltd. | 87,740 | 488 | ||||||||||
KB Financial Group, Inc. | 196,985 | 9,946 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Mirae Asset Life Insurance Co. Ltd. | 212,489 | $ | 975 | |||||||||
Samsung Card Co. Ltd. | 33,226 | 1,135 | ||||||||||
Samsung Fire & Marine Insurance Co. Ltd. | 580 | 143 | ||||||||||
Samsung Life Insurance Co. Ltd. | 38,138 | 3,899 | ||||||||||
Shinhan Financial Group Co. Ltd. | 213,030 | 9,191 | ||||||||||
Tongyang Life Insurance Co. Ltd. | 106,230 | 927 | ||||||||||
Woori Bank | 656,720 | 10,579 | ||||||||||
|
| |||||||||||
| 62,735 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 1.7% | ||||||||||||
Asiana Airlines, Inc. (a) | 323,370 | 1,732 | ||||||||||
CJ Corp. | 11,302 | 1,872 | ||||||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 11,015 | 0 | ||||||||||
Doosan Corp. | 19,319 | 2,010 | ||||||||||
Doosan Heavy Industries & Construction Co. Ltd. | 115,666 | 2,119 | ||||||||||
Doosan Infracore Co. Ltd. (a) | 450,573 | 3,335 | ||||||||||
Hanwha Corp. | 51,545 | 2,136 | ||||||||||
Hyundai Construction Equipment Co. Ltd. (a) | 1,184 | 356 | ||||||||||
Hyundai Electric & Energy System Co. Ltd. (a) | 1,226 | 334 | ||||||||||
Hyundai Engineering & Construction Co. Ltd. | 20,518 | 827 | ||||||||||
KCC Corp. | 412 | 157 | ||||||||||
Korean Air Lines Co. Ltd. (a) | 137,682 | 4,657 | ||||||||||
LG Corp. | 3,107 | 210 | ||||||||||
LS Corp. | 52,554 | 3,350 | ||||||||||
Samsung Heavy Industries Co. Ltd. | 112,012 | 1,220 | ||||||||||
SK Networks Co. Ltd. | 285,395 | 1,559 | ||||||||||
|
| |||||||||||
| 25,874 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 4.8% | ||||||||||||
Hyundai Robotics Co. Ltd. (a) | 3,980 | 1,345 | ||||||||||
LG Display Co. Ltd. | 156,771 | 5,070 | ||||||||||
LG Innotek Co. Ltd. | 2,238 | 323 | ||||||||||
Samsung Electro-Mechanics Co. Ltd. | 8,909 | 795 | ||||||||||
Samsung Electronics Co. Ltd. | 29,756 | 61,976 | ||||||||||
SK Hynix, Inc. | 75,360 | 4,437 | ||||||||||
|
| |||||||||||
| 73,946 | ||||||||||||
|
| |||||||||||
| MATERIALS 1.6% | ||||||||||||
Dongkuk Steel Mill Co. Ltd. | 211,184 | 2,700 | ||||||||||
Hanwha Chemical Corp. | 13,300 | 351 | ||||||||||
Hyundai Steel Co. | 55,142 | 2,995 | ||||||||||
Kolon Industries, Inc. | 15,204 | 916 | ||||||||||
LG Chem Ltd. | 552 | 140 | ||||||||||
POSCO | 71,181 | 17,830 | ||||||||||
|
| |||||||||||
| 24,932 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 1.5% | ||||||||||||
KT Corp. SP - ADR | 640,194 | 10,653 | ||||||||||
LG Uplus Corp. | 456,767 | 6,229 | ||||||||||
SK Telecom Co. Ltd. SP - ADR | 210,295 | 5,398 | ||||||||||
|
| |||||||||||
| 22,280 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.5% | ||||||||||||
Korea Electric Power Corp. | 114,261 | 4,074 | ||||||||||
Korea Gas Corp. | 65,231 | 3,034 | ||||||||||
|
| |||||||||||
| 7,108 | ||||||||||||
|
| |||||||||||
Total South Korea | 270,125 | |||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| TAIWAN 8.4% | ||||||||||||
| CONSUMER DISCRETIONARY 0.3% | ||||||||||||
Cheng Shin Rubber Industry Co. Ltd. | 358,000 | $ | 761 | |||||||||
Far Eastern Department Stores Ltd. | 1,029,000 | 533 | ||||||||||
Formosa Taffeta Co. Ltd. | 360,000 | 361 | ||||||||||
Pou Chen Corp. | 951,000 | 1,315 | ||||||||||
Ruentex Industries Ltd. | 554,000 | 827 | ||||||||||
Yulon Motor Co. Ltd. | 825,000 | 740 | ||||||||||
|
| |||||||||||
| 4,537 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Uni-President Enterprises Corp. | 922,640 | 1,850 | ||||||||||
|
| |||||||||||
| FINANCIALS 1.5% | ||||||||||||
Cathay Financial Holding Co. Ltd. | 1,345,000 | 2,214 | ||||||||||
Chailease Holding Co. Ltd. | 184,000 | 513 | ||||||||||
China Development Financial Holding Corp. | 4,950,000 | 1,437 | ||||||||||
China Life Insurance Co. Ltd. | 4,007,632 | 3,995 | ||||||||||
CTBC Financial Holding Co. Ltd. | 1,404,000 | 920 | ||||||||||
First Financial Holding Co. Ltd. | 723,000 | 483 | ||||||||||
Fubon Financial Holding Co. Ltd. (a) | 997,000 | 1,587 | ||||||||||
Hua Nan Financial Holdings Co. Ltd. | 1,475,948 | 856 | ||||||||||
Mega Financial Holding Co. Ltd. | 2,558,658 | 2,127 | ||||||||||
Mercuries Life Insurance Co. Ltd. (a) | 1,155,000 | 600 | ||||||||||
Shanghai Commercial & Savings Bank Ltd. | 849,663 | 876 | ||||||||||
Shin Kong Financial Holding Co. Ltd. (a) | 9,427,903 | 2,508 | ||||||||||
SinoPac Financial Holdings Co. Ltd. | 5,044,601 | 1,542 | ||||||||||
Taishin Financial Holding Co. Ltd. | 3,908,772 | 1,779 | ||||||||||
Taiwan Business Bank | 3,382,750 | 945 | ||||||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 377,710 | 200 | ||||||||||
Yuanta Financial Holding Co. Ltd. | 1,406,000 | 619 | ||||||||||
|
| |||||||||||
| 23,201 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.3% | ||||||||||||
China Airlines Ltd. | 1,480,000 | 449 | ||||||||||
Far Eastern New Century Corp. | 3,344,520 | 2,719 | ||||||||||
Taiwan High Speed Rail Corp. | 479,000 | 401 | ||||||||||
Teco Electric and Machinery Co. Ltd. | 856,000 | 822 | ||||||||||
|
| |||||||||||
| 4,391 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 5.3% | ||||||||||||
Acer, Inc. | 3,744,000 | 1,961 | ||||||||||
Advanced Semiconductor Engineering, Inc. | 844,580 | 1,083 | ||||||||||
Asustek Computer, Inc. | 360,000 | 3,400 | ||||||||||
AU Optronics Corp. | 12,790,000 | 5,838 | ||||||||||
Catcher Technology Co. Ltd. | 13,000 | 155 | ||||||||||
Compal Electronics, Inc. | 5,187,000 | 3,494 | ||||||||||
Foxconn Technology Co. Ltd. | 102,000 | 308 | ||||||||||
Hon Hai Precision Industry Co. Ltd. | 2,705,145 | 10,399 | ||||||||||
HTC Corp. | 1,888,000 | 4,502 | ||||||||||
Innolux Corp. | 16,172,000 | 8,444 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 35 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
Inventec Corp. | 1,702,000 | $ | 1,386 | |||||||||
Lite-On Technology Corp. | 2,142,035 | 3,516 | ||||||||||
MediaTek, Inc. | 294,000 | 2,515 | ||||||||||
Novatek Microelectronics Corp. | 254,000 | 1,026 | ||||||||||
Pegatron Corp. | 220,000 | 688 | ||||||||||
Powertech Technology, Inc. | 397,000 | 1,225 | ||||||||||
Quanta Computer, Inc. | 1,026,000 | 2,427 | ||||||||||
Siliconware Precision Industries Co. Ltd. | 380,000 | 614 | ||||||||||
Synnex Technology International Corp. | 1,115,650 | 1,250 | ||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. SP - ADR | 248,224 | 8,678 | ||||||||||
TPK Holding Co. Ltd. | 1,280,000 | 3,922 | ||||||||||
Unimicron Technology Corp. | 2,767,000 | 1,605 | ||||||||||
United Microelectronics Corp. | 12,482,000 | 6,058 | ||||||||||
Wistron Corp. | 4,673,358 | 4,750 | ||||||||||
WPG Holdings Ltd. | 1,304,000 | 1,740 | ||||||||||
Yageo Corp. | 236,036 | 822 | ||||||||||
Zhen Ding Technology Holding Ltd. | 61,000 | 144 | ||||||||||
|
| |||||||||||
| 81,950 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.6% | ||||||||||||
Asia Cement Corp. | 2,028,000 | 1,739 | ||||||||||
China Steel Corp. | 2,740,000 | 2,228 | ||||||||||
Formosa Chemicals & Fibre Corp. | 201,000 | 631 | ||||||||||
Formosa Plastics Corp. | 118,000 | 360 | ||||||||||
Nan Ya Plastics Corp. | 223,000 | 553 | ||||||||||
Taiwan Cement Corp. | 2,682,000 | 3,101 | ||||||||||
|
| |||||||||||
| 8,612 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.1% | ||||||||||||
Farglory Land Development Co. Ltd. | 297,000 | 381 | ||||||||||
Highwealth Construction Corp. | 437,000 | 723 | ||||||||||
|
| |||||||||||
| 1,104 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Chunghwa Telecom Co. Ltd. | 661,000 | 2,345 | ||||||||||
Far EasTone Telecommunications Co. Ltd. | 178,000 | 453 | ||||||||||
|
| |||||||||||
| 2,798 | ||||||||||||
|
| |||||||||||
Total Taiwan | 128,443 | |||||||||||
|
| |||||||||||
| THAILAND 2.3% | ||||||||||||
| CONSUMER STAPLES 0.0% | ||||||||||||
Charoen Pokphand Foods PCL | 385,300 | 281 | ||||||||||
|
| |||||||||||
| ENERGY 0.8% | ||||||||||||
Banpu PCL | 4,433,500 | 2,165 | ||||||||||
PTT Exploration & Production PCL | 1,758,200 | 4,459 | ||||||||||
PTT PCL | 586,700 | 6,385 | ||||||||||
|
| |||||||||||
| 13,009 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.9% | ||||||||||||
Bangkok Bank PCL | 665,500 | 3,622 | ||||||||||
Kasikornbank PCL | 349,200 | 2,039 | ||||||||||
Krung Thai Bank PCL | 3,772,475 | 2,086 | ||||||||||
Siam Commercial Bank PCL | 630,600 | 2,883 | ||||||||||
Thanachart Capital PCL | 1,852,600 | 2,506 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Tisco Financial Group PCL | 172,200 | $ | 385 | |||||||||
|
| |||||||||||
| 13,521 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.3% | ||||||||||||
Thai Airways International PCL (a) | 7,482,300 | 4,269 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
PTT Global Chemical PCL | 591,800 | 1,193 | ||||||||||
|
| |||||||||||
| REAL ESTATE 0.0% | ||||||||||||
Pruksa Holding PCL | 235,200 | 154 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Total Access Communication PCL | 2,010,500 | 3,104 | ||||||||||
|
| |||||||||||
Total Thailand | 35,531 | |||||||||||
|
| |||||||||||
| TURKEY 2.6% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Arcelik A/S | 76,440 | 566 | ||||||||||
Vestel Elektronik Sanayi ve Ticaret A/S (a) | 79,639 | 156 | ||||||||||
|
| |||||||||||
| 722 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.2% | ||||||||||||
Anadolu Efes Biracilik Ve Malt Sanayii A/S | 68,830 | 428 | ||||||||||
Migros Ticaret A/S | 250,990 | 1,966 | ||||||||||
|
| |||||||||||
| 2,394 | ||||||||||||
|
| |||||||||||
| ENERGY 0.0% | ||||||||||||
Tupras Turkiye Petrol Rafinerileri A/S | 12,020 | 346 | ||||||||||
|
| |||||||||||
| FINANCIALS 1.8% | ||||||||||||
Akbank TAS | 915,040 | 2,549 | ||||||||||
Haci Omer Sabanci Holding A/S | 1,999,440 | 6,211 | ||||||||||
Turkiye Garanti Bankasi A/S | 1,067,540 | 2,971 | ||||||||||
Turkiye Halk Bankasi A/S | 1,349,500 | 5,044 | ||||||||||
Turkiye Is Bankasi ‘C’ | 2,901,660 | 6,144 | ||||||||||
Turkiye Vakiflar Bankasi TAO ‘D’ | 1,305,000 | 2,400 | ||||||||||
Yapi ve Kredi Bankasi A/S | 1,366,510 | 1,743 | ||||||||||
|
| |||||||||||
| 27,062 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.3% | ||||||||||||
KOC Holding A/S | 268,350 | 1,234 | ||||||||||
TAV Havalimanlari Holding A/S | 31,134 | 167 | ||||||||||
Turk Hava Yollari AO (a) | 1,156,870 | 2,646 | ||||||||||
Turkiye Sise ve Cam Fabrikalari A/S | 495,110 | 647 | ||||||||||
|
| |||||||||||
| 4,694 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.2% | ||||||||||||
Eregli Demir ve Celik Fabrikalari TAS | 1,260,087 | 2,524 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Turk Telekomunikasyon A/S | 790,330 | 1,401 | ||||||||||
Turkcell Iletisim Hizmetleri A/S | 189,776 | 624 | ||||||||||
|
| |||||||||||
| 2,025 | ||||||||||||
|
| |||||||||||
Total Turkey | 39,767 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $1,131,916) | 1,423,762 | |||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| PREFERRED STOCKS 6.2% | ||||||||||||
| BRAZIL 5.8% | ||||||||||||
| BANKING & FINANCE 0.2% | ||||||||||||
Banco do Estado do Rio Grande do Sul S.A. | 569,400 | $ | 2,258 | |||||||||
Itausa - Investimentos Itau S.A. | 181,300 | 494 | ||||||||||
|
| |||||||||||
| 2,752 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 4.4% | ||||||||||||
Braskem S.A. | 277,800 | 2,868 | ||||||||||
Cia Brasileira de Distribuicao | 395,400 | 7,776 | ||||||||||
Metalurgica Gerdau S.A. | 7,459,500 | 11,191 | ||||||||||
Suzano Papel e Celulose S.A. | 99,400 | 428 | ||||||||||
Usinas Siderurgicas de Minas Gerais S.A. | 1,091,300 | 1,515 | ||||||||||
Vale S.A. | 5,353,100 | 43,482 | ||||||||||
|
| |||||||||||
| 67,260 | ||||||||||||
|
| |||||||||||
| UTILITIES 1.2% | ||||||||||||
Centrais Eletricas Brasileiras S.A. | 1,218,800 | 6,037 | ||||||||||
Cia de Gas de Sao Paulo - COMGAS | 21,900 | 306 | ||||||||||
Cia de Saneamento do Parana | 342,000 | 1,125 | ||||||||||
Cia de Transmissao de Energia Eletrica Paulista | 37,800 | 736 | ||||||||||
Cia Energetica de Sao Paulo | 804,300 | 3,758 | ||||||||||
Cia Paranaense de Energia | 355,400 | 2,631 | ||||||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. | 844,222 | 3,224 | ||||||||||
|
| |||||||||||
| 17,817 | ||||||||||||
|
| |||||||||||
Total Brazil | 87,829 | |||||||||||
|
| |||||||||||
| INDIA 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Vedanta Ltd. | ||||||||||||
7.500% | 3,985,080 | 617 | ||||||||||
|
| |||||||||||
Total India | 617 | |||||||||||
|
| |||||||||||
| RUSSIA 0.4% | ||||||||||||
| UTILITIES 0.4% | ||||||||||||
Bashneft PJSC | 70,264 | 1,380 | ||||||||||
Transneft PJSC | 1,673 | 4,532 | ||||||||||
|
| |||||||||||
| 5,912 | ||||||||||||
|
| |||||||||||
Total Russia | 5,912 | |||||||||||
|
| |||||||||||
Total Preferred Stocks (Cost $50,189) | 94,358 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $1,182,105) | 1,518,120 | |||||||||||
| Total Investments 99.3% (Cost $1,182,105) | $ | 1,518,120 | ||||||||||
Financial Derivative (Cost or Premiums, net $0) | (2 | ) | ||||||||||
| Other Assets and Liabilities, net 0.7% | 10,547 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 1,528,665 | ||||||||||
|
| |||||||||||
| 36 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Security did not produce income within the last twelve months. |
(b) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
FORWARD FOREIGN CURRENCY CONTRACTS:
| Counterparty | Settlement Month | Currency to be Delivered | Currency to be Received | Unrealized Appreciation/ (Depreciation) | ||||||||||||||||||||
| Asset | Liability | |||||||||||||||||||||||
SSB | 07/2017 | $ | 645 | IDR | 8,571,687 | $ | 0 | $ | (2 | ) | ||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Forward Foreign Currency Contracts |
| $ | 0 | $ | (2 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER SUMMARY
The following is a summary by counterparty of the market value of OTC financial derivative instruments and collateral pledged/(received) as of June 30, 2017:
| Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged/ (Received) | Net Exposure(1) | |||||||||||||||||||||||||||||||||||||
SSB | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (2 | ) | $ | (2 | ) | $ | 0 | $ | (2 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
| (1) | Net Exposure represents the net receivable/(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same legal entity. See Note 7, Master Arrangements, in the Notes to Financial Statements for more information regarding master arrangements. |
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
Fair Values of Financial Derivative Instruments on the Statements of Assets and Liabilities as of June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 2 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
| Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain on Financial Derivative Instruments |
| |||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 208 | $ | 0 | $ | 208 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | (410 | ) | $ | 0 | $ | (410 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 37 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Brazil | ||||||||||||||||
Consumer Discretionary | $ | 6,456 | $ | 0 | $ | 0 | $ | 6,456 | ||||||||
Consumer Staples | 9,655 | 0 | 0 | 9,655 | ||||||||||||
Energy | 26,104 | 0 | 0 | 26,104 | ||||||||||||
Financials | 61,411 | 0 | 0 | 61,411 | ||||||||||||
Health Care | 279 | 0 | 0 | 279 | ||||||||||||
Industrials | 2,073 | 0 | 0 | 2,073 | ||||||||||||
Materials | 12,711 | 0 | 0 | 12,711 | ||||||||||||
Real Estate | 1,463 | 0 | 0 | 1,463 | ||||||||||||
Telecommunication Services | 5,353 | 0 | 0 | 5,353 | ||||||||||||
Utilities | 25,616 | 0 | 0 | 25,616 | ||||||||||||
Chile | ||||||||||||||||
Consumer Discretionary | 621 | 0 | 0 | 621 | ||||||||||||
Consumer Staples | 2,957 | 0 | 0 | 2,957 | ||||||||||||
Energy | 809 | 0 | 0 | 809 | ||||||||||||
Financials | 3,024 | 0 | 0 | 3,024 | ||||||||||||
Industrials | 1,275 | 0 | 0 | 1,275 | ||||||||||||
Materials | 3,379 | 2,585 | 0 | 5,964 | ||||||||||||
Telecommunication Services | 623 | 0 | 0 | 623 | ||||||||||||
Utilities | 2,042 | 0 | 0 | 2,042 | ||||||||||||
China | ||||||||||||||||
Consumer Discretionary | 0 | 7,151 | 0 | 7,151 | ||||||||||||
Consumer Staples | 0 | 2,051 | 0 | 2,051 | ||||||||||||
Energy | 0 | 43,420 | 0 | 43,420 | ||||||||||||
Financials | 0 | 154,371 | 0 | 154,371 | ||||||||||||
Health Care | 0 | 1,419 | 0 | 1,419 | ||||||||||||
Industrials | 0 | 12,883 | 0 | 12,883 | ||||||||||||
Information Technology | 1,277 | 4,737 | 0 | 6,014 | ||||||||||||
Materials | 0 | 12,835 | 394 | 13,229 | ||||||||||||
Real Estate | 355 | 34,455 | 0 | 34,810 | ||||||||||||
Telecommunication Services | 0 | 6,519 | 0 | 6,519 | ||||||||||||
Utilities | 0 | 5,223 | 0 | 5,223 | ||||||||||||
Cyprus |
| |||||||||||||||
Financials | 183 | 0 | 0 | 183 | ||||||||||||
Greece |
| |||||||||||||||
Consumer Discretionary | 2,821 | 728 | 0 | 3,549 | ||||||||||||
Financials | 0 | 18,289 | 0 | 18,289 | ||||||||||||
Telecommunication Services | 0 | 2,286 | 0 | 2,286 | ||||||||||||
Utilities | 685 | 342 | 0 | 1,027 | ||||||||||||
Hong Kong |
| |||||||||||||||
Consumer Discretionary | 0 | 469 | 0 | 469 | ||||||||||||
Consumer Staples | 0 | 6,614 | 0 | 6,614 | ||||||||||||
Energy | 0 | 1,875 | 0 | 1,875 | ||||||||||||
Financials | 0 | 7,568 | 0 | 7,568 | ||||||||||||
Industrials | 0 | 6,613 | 0 | 6,613 | ||||||||||||
Materials | 0 | 2,924 | 0 | 2,924 | ||||||||||||
Real Estate | 0 | 9,457 | 0 | 9,457 | ||||||||||||
Telecommunication Services | 0 | 15,017 | 0 | 15,017 | ||||||||||||
Utilities | 0 | 5,437 | 0 | 5,437 | ||||||||||||
India |
| |||||||||||||||
Consumer Discretionary | 0 | 3,366 | 0 | 3,366 | ||||||||||||
Energy | 0 | 7,677 | 0 | 7,677 | ||||||||||||
Financials | 0 | 33,685 | 0 | 33,685 | ||||||||||||
Health Care | 0 | 571 | 0 | 571 | ||||||||||||
Industrials | 0 | 11,807 | 0 | 11,807 | ||||||||||||
Materials | 0 | 39,514 | 0 | 39,514 | ||||||||||||
Real Estate | 0 | 309 | 0 | 309 | ||||||||||||
Telecommunication Services | 0 | 1,909 | 0 | 1,909 | ||||||||||||
Utilities | 0 | 5,215 | 0 | 5,215 | ||||||||||||
Indonesia |
| |||||||||||||||
Consumer Discretionary | 0 | 1,139 | 0 | 1,139 | ||||||||||||
Consumer Staples | 0 | 1,118 | 0 | 1,118 | ||||||||||||
Energy | 0 | 9,077 | 0 | 9,077 | ||||||||||||
Financials | 0 | 4,469 | 0 | 4,469 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Materials | $ | 150 | $ | 1,146 | $ | 0 | $ | 1,296 | ||||||||
Telecommunication Services | 0 | 1,546 | 0 | 1,546 | ||||||||||||
Utilities | 0 | 1,180 | 0 | 1,180 | ||||||||||||
Malaysia |
| |||||||||||||||
Consumer Discretionary | 0 | 761 | 0 | 761 | ||||||||||||
Consumer Staples | 361 | 199 | 0 | 560 | ||||||||||||
Financials | 0 | 3,112 | 0 | 3,112 | ||||||||||||
Industrials | 0 | 394 | 0 | 394 | ||||||||||||
Real Estate | 0 | 196 | 0 | 196 | ||||||||||||
Telecommunication Services | 180 | 159 | 0 | 339 | ||||||||||||
Utilities | 339 | 538 | 0 | 877 | ||||||||||||
Mexico |
| |||||||||||||||
Consumer Staples | 891 | 0 | 0 | 891 | ||||||||||||
Financials | 4,290 | 0 | 0 | 4,290 | ||||||||||||
Industrials | 3,337 | 0 | 0 | 3,337 | ||||||||||||
Materials | 5,612 | 0 | 0 | 5,612 | ||||||||||||
Telecommunication Services | 5,000 | 0 | 0 | 5,000 | ||||||||||||
Philippines |
| |||||||||||||||
Industrials | 0 | 284 | 0 | 284 | ||||||||||||
Telecommunication Services | 0 | 776 | 0 | 776 | ||||||||||||
Poland |
| |||||||||||||||
Energy | 0 | 3,699 | 0 | 3,699 | ||||||||||||
Financials | 282 | 9,418 | 0 | 9,700 | ||||||||||||
Information Technology | 1,106 | 0 | 0 | 1,106 | ||||||||||||
Materials | 2,111 | 11,247 | 0 | 13,358 | ||||||||||||
Telecommunication Services | 0 | 2,039 | 0 | 2,039 | ||||||||||||
Utilities | 0 | 11,707 | 0 | 11,707 | ||||||||||||
Russia |
| |||||||||||||||
Consumer Discretionary | 147 | 0 | 0 | 147 | ||||||||||||
Consumer Staples | 3,712 | 0 | 0 | 3,712 | ||||||||||||
Energy | 7,285 | 75,387 | 0 | 82,672 | ||||||||||||
Financials | 306 | 6,088 | 0 | 6,394 | ||||||||||||
Industrials | 5,267 | 0 | 0 | 5,267 | ||||||||||||
Materials | 4,343 | 12,122 | 0 | 16,465 | ||||||||||||
Real Estate | 128 | 0 | 0 | 128 | ||||||||||||
Telecommunication Services | 1,915 | 10,825 | 0 | 12,740 | ||||||||||||
Utilities | 230 | 11,019 | 0 | 11,249 | ||||||||||||
South Africa |
| |||||||||||||||
Consumer Discretionary | 0 | 2,187 | 0 | 2,187 | ||||||||||||
Consumer Staples | 544 | 0 | 0 | 544 | ||||||||||||
Energy | 0 | 1,645 | 0 | 1,645 | ||||||||||||
Financials | 3,526 | 24,203 | 0 | 27,729 | ||||||||||||
Health Care | 0 | 1,586 | 0 | 1,586 | ||||||||||||
Industrials | 4,447 | 129 | 0 | 4,576 | ||||||||||||
Materials | 4,634 | 23,558 | 0 | 28,192 | ||||||||||||
Telecommunication Services | 2,598 | 13,315 | 0 | 15,913 | ||||||||||||
South Korea |
| |||||||||||||||
Consumer Discretionary | 365 | 47,367 | 0 | 47,732 | ||||||||||||
Consumer Staples | 0 | 3,732 | 0 | 3,732 | ||||||||||||
Energy | 0 | 1,786 | 0 | 1,786 | ||||||||||||
Financials | 0 | 62,735 | 0 | 62,735 | ||||||||||||
Industrials | 690 | 25,184 | 0 | 25,874 | ||||||||||||
Information Technology | 1,345 | 72,601 | 0 | 73,946 | ||||||||||||
Materials | 0 | 24,932 | 0 | 24,932 | ||||||||||||
Telecommunication Services | 16,051 | 6,229 | 0 | 22,280 | ||||||||||||
Utilities | 0 | 7,108 | 0 | 7,108 | ||||||||||||
Taiwan |
| |||||||||||||||
Consumer Discretionary | 0 | 4,537 | 0 | 4,537 | ||||||||||||
Consumer Staples | 0 | 1,850 | 0 | 1,850 | ||||||||||||
Financials | 876 | 22,325 | 0 | 23,201 | ||||||||||||
Industrials | 0 | 4,391 | 0 | 4,391 | ||||||||||||
Information Technology | 8,678 | 73,272 | 0 | 81,950 | ||||||||||||
Materials | 0 | 8,612 | 0 | 8,612 | ||||||||||||
Real Estate | 0 | 1,104 | 0 | 1,104 | ||||||||||||
Telecommunication Services | 0 | 2,798 | 0 | 2,798 | ||||||||||||
| 38 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Thailand |
| |||||||||||||||
Consumer Staples | $ | 0 | $ | 281 | $ | 0 | $ | 281 | ||||||||
Energy | 0 | 13,009 | 0 | 13,009 | ||||||||||||
Financials | 0 | 13,521 | 0 | 13,521 | ||||||||||||
Industrials | 0 | 4,269 | 0 | 4,269 | ||||||||||||
Materials | 0 | 1,193 | 0 | 1,193 | ||||||||||||
Real Estate | 0 | 154 | 0 | 154 | ||||||||||||
Telecommunication Services | 0 | 3,104 | 0 | 3,104 | ||||||||||||
Turkey |
| |||||||||||||||
Consumer Discretionary | 0 | 722 | 0 | 722 | ||||||||||||
Consumer Staples | 0 | 2,394 | 0 | 2,394 | ||||||||||||
Energy | 0 | 346 | 0 | 346 | ||||||||||||
Financials | 0 | 27,062 | 0 | 27,062 | ||||||||||||
Industrials | 0 | 4,694 | 0 | 4,694 | ||||||||||||
Materials | 0 | 2,524 | 0 | 2,524 | ||||||||||||
Telecommunication Services | 0 | 2,025 | 0 | 2,025 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Preferred Stocks |
| |||||||||||||||
Brazil |
| |||||||||||||||
Banking & Finance | $ | 2,752 | $ | 0 | $ | 0 | $ | 2,752 | ||||||||
Industrials | 67,260 | 0 | 0 | 67,260 | ||||||||||||
Utilities | 17,817 | 0 | 0 | 17,817 | ||||||||||||
India |
| |||||||||||||||
Industrials | 0 | 0 | 617 | 617 | ||||||||||||
Russia |
| |||||||||||||||
Utilities | 0 | 5,912 | 0 | 5,912 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 349,747 | $ | 1,167,362 | $ | 1,011 | $ | 1,518,120 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Over the counter | $ | 0 | $ | (2 | ) | $ | 0 | $ | (2 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 349,747 | $ | 1,167,360 | $ | 1,011 | $ | 1,518,118 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 39 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Global Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN AFFILIATES 99.9% | ||||||||||||
| MUTUAL FUNDS (a) 99.9% | ||||||||||||
| UNITED STATES 99.9% | ||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 4,817,733 | $ | 52,176 | |||||||||
PIMCO RAE Fundamental International Fund | 19,827,487 | 203,628 | ||||||||||
PIMCO RAE Fundamental U.S. Fund | 14,989,211 | 158,436 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $365,289) |
| 414,240 | ||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $365,289) | 414,240 | |||||||||||
| Total Investments 99.9% (Cost $365,289) | $ | 414,240 | ||||||||||
| Other Assets and Liabilities, net 0.1% | 509 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 414,749 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at | ||||||||||||
Investments in Affiliates, at Value | ||||||||||||||||
Mutual Funds | ||||||||||||||||
United States | $ | 414,240 | $ | 0 | $ | 0 | $ | 414,240 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 414,240 | $ | 0 | $ | 0 | $ | 414,240 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2017.
| 40 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Global ex-US Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN AFFILIATES 99.7% | ||||||||||||
| MUTUAL FUNDS (a) 99.7% | ||||||||||||
| UNITED STATES 99.7% | ||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 1,515,563 | $ | 16,414 | |||||||||
PIMCO RAE Fundamental International Fund | 6,237,606 | 64,060 | ||||||||||
|
| |||||||||||
| Total Mutual Funds (Cost $75,697) | 80,474 | |||||||||||
|
| |||||||||||
| Total Investments in Affiliates (Cost $75,697) | 80,474 | |||||||||||
| Total Investments 99.7% (Cost $75,697) | $ | 80,474 | ||||||||||
| Other Assets and Liabilities, net 0.3% | 211 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 80,685 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Institutional Class Shares of each Fund. |
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Affiliates, at Value | ||||||||||||||||
Mutual Funds | ||||||||||||||||
United States | $ | 80,474 | $ | 0 | $ | 0 | $ | 80,474 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 80,474 | $ | 0 | $ | 0 | $ | 80,474 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 41 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 99.4% | ||||||||||||
| COMMON STOCKS 98.6% | ||||||||||||
| AUSTRALIA 5.9% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Crown Resorts Ltd. | 9,745 | $ | 92 | |||||||||
Myer Holdings Ltd. | 308,819 | 198 | ||||||||||
Tabcorp Holdings Ltd. | 23,432 | 79 | ||||||||||
|
| |||||||||||
| 369 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.6% | ||||||||||||
Coca-Cola Amatil Ltd. | 27,163 | 193 | ||||||||||
Metcash Ltd. (a) | 202,487 | 373 | ||||||||||
Wesfarmers Ltd. | 34,666 | 1,069 | ||||||||||
Woolworths Ltd. | 68,273 | 1,340 | ||||||||||
|
| |||||||||||
| 2,975 | ||||||||||||
|
| |||||||||||
| ENERGY 0.4% | ||||||||||||
Origin Energy Ltd. | 69,447 | 366 | ||||||||||
Whitehaven Coal Ltd. | 59,987 | 132 | ||||||||||
Woodside Petroleum Ltd. | 23,242 | 533 | ||||||||||
WorleyParsons Ltd. | 82,106 | 708 | ||||||||||
|
| |||||||||||
| 1,739 | ||||||||||||
|
| |||||||||||
| FINANCIALS 2.2% | ||||||||||||
AMP Ltd. | 74,728 | 298 | ||||||||||
Australia & New Zealand Banking Group Ltd. | 107,122 | 2,365 | ||||||||||
Bendigo & Adelaide Bank Ltd. | 37,382 | 318 | ||||||||||
Commonwealth Bank of Australia | 26,660 | 1,696 | ||||||||||
Genworth Mortgage Insurance Australia Ltd. | 76,099 | 171 | ||||||||||
Insurance Australia Group Ltd. | 20,336 | 106 | ||||||||||
Macquarie Group Ltd. | 5,355 | 364 | ||||||||||
National Australia Bank Ltd. | 93,313 | 2,123 | ||||||||||
Suncorp Group Ltd. | 101,855 | 1,160 | ||||||||||
Westpac Banking Corp. | 80,167 | 1,877 | ||||||||||
|
| |||||||||||
| 10,478 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.1% | ||||||||||||
CSL Ltd. | 905 | 96 | ||||||||||
Primary Health Care Ltd. | 95,384 | 267 | ||||||||||
Sonic Healthcare Ltd. | 6,187 | 115 | ||||||||||
|
| |||||||||||
| 478 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.4% | ||||||||||||
ALS Ltd. | 16,979 | 97 | ||||||||||
Aurizon Holdings Ltd. | 53,933 | 222 | ||||||||||
CIMIC Group Ltd. | 11,237 | 335 | ||||||||||
Cleanaway Waste Management Ltd. | 81,072 | 86 | ||||||||||
Downer EDI Ltd. | 120,155 | 592 | ||||||||||
Qantas Airways Ltd. | 74,039 | 326 | ||||||||||
Spotless Group Holdings Ltd. | 204,188 | 180 | ||||||||||
|
| |||||||||||
| 1,838 | ||||||||||||
|
| |||||||||||
| MATERIALS 2.0% | ||||||||||||
BHP Billiton Ltd. | 263,897 | 4,704 | ||||||||||
BHP Billiton PLC | 200,206 | 3,067 | ||||||||||
BlueScope Steel Ltd. | 9,502 | 96 | ||||||||||
Boral Ltd. | 34,887 | 186 | ||||||||||
CSR Ltd. | 94,891 | 308 | ||||||||||
Fortescue Metals Group Ltd. | 109,058 | 437 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Incitec Pivot Ltd. | 57,143 | $ | 150 | |||||||||
Mineral Resources Ltd. | 25,343 | 211 | ||||||||||
Orica Ltd. | 28,916 | 460 | ||||||||||
OZ Minerals Ltd. | 47,937 | 273 | ||||||||||
|
| |||||||||||
| 9,892 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telstra Corp. Ltd. | 189,531 | 626 | ||||||||||
|
| |||||||||||
| UTILITIES 0.0% | ||||||||||||
AGL Energy Ltd. | 5,728 | 112 | ||||||||||
AusNet Services | 75,497 | 101 | ||||||||||
|
| |||||||||||
| 213 | ||||||||||||
|
| |||||||||||
Total Australia | 28,608 | |||||||||||
|
| |||||||||||
| AUSTRIA 0.8% | ||||||||||||
| ENERGY 0.2% | ||||||||||||
OMV AG | 22,088 | 1,147 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.5% | ||||||||||||
Erste Group Bank AG | 24,239 | 928 | ||||||||||
Raiffeisen Bank International AG (a) | 38,570 | 974 | ||||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 8,273 | 234 | ||||||||||
|
| |||||||||||
| 2,136 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Oesterreichische Post AG | 2,010 | 87 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
voestalpine AG | 9,650 | 450 | ||||||||||
|
| |||||||||||
| REAL ESTATE 0.0% | ||||||||||||
IMMOFINANZ AG | 38,858 | 89 | ||||||||||
|
| |||||||||||
Total Austria | 3,909 | |||||||||||
|
| |||||||||||
| BELGIUM 0.5% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
D’ieteren S.A. | 1,760 | 82 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.0% | ||||||||||||
Anheuser-Busch InBev S.A. NV | 1,726 | 191 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.3% | ||||||||||||
Ageas | 19,963 | 804 | ||||||||||
KBC Group NV | 6,875 | 521 | ||||||||||
|
| |||||||||||
| 1,325 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
bpost S.A. | 5,343 | 129 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Solvay S.A. | 1,536 | 206 | ||||||||||
Umicore S.A. | 1,084 | 75 | ||||||||||
|
| |||||||||||
| 281 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Proximus S.A. | 10,761 | 377 | ||||||||||
|
| |||||||||||
Total Belgium | 2,385 | |||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| CANADA 7.0% | ||||||||||||
| CONSUMER DISCRETIONARY 0.4% | ||||||||||||
Canadian Tire Corp. Ltd. ‘A’ | 3,033 | $ | 345 | |||||||||
Hudson’s Bay Co. | 23,931 | 213 | ||||||||||
Magna International, Inc. | 16,971 | 786 | ||||||||||
Quebecor, Inc. ‘B’ | 5,456 | 181 | ||||||||||
Shaw Communications, Inc. ‘B’ | 10,156 | 222 | ||||||||||
|
| |||||||||||
| 1,747 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Empire Co. Ltd. ‘A’ | 8,383 | 143 | ||||||||||
George Weston Ltd. | 3,251 | 294 | ||||||||||
Loblaw Cos. Ltd. | 1,714 | 96 | ||||||||||
|
| |||||||||||
| 533 | ||||||||||||
|
| |||||||||||
| ENERGY 1.6% | ||||||||||||
ARC Resources Ltd. | 14,563 | 191 | ||||||||||
Baytex Energy Corp. (a) | 109,904 | 267 | ||||||||||
Bonavista Energy Corp. | 90,205 | 189 | ||||||||||
Cameco Corp. | 9,715 | 88 | ||||||||||
Canadian Natural Resources Ltd. | 24,466 | 706 | ||||||||||
Cenovus Energy, Inc. | 68,835 | 508 | ||||||||||
Crescent Point Energy Corp. | 31,818 | 243 | ||||||||||
Enbridge, Inc. | 4,407 | 176 | ||||||||||
Encana Corp. | 61,078 | 537 | ||||||||||
Enerplus Corp. | 80,574 | 654 | ||||||||||
Gran Tierra Energy, Inc. (a) | 34,856 | 77 | ||||||||||
Husky Energy, Inc. (a) | 48,729 | 553 | ||||||||||
MEG Energy Corp. (a) | 52,215 | 153 | ||||||||||
Mullen Group Ltd. | 7,992 | 99 | ||||||||||
Obsidian Energy Ltd. (a) | 170,963 | 215 | ||||||||||
Pengrowth Energy Corp. (a) | 130,604 | 103 | ||||||||||
Precision Drilling Corp. (a) | 46,446 | 159 | ||||||||||
ShawCor Ltd. | 3,629 | 74 | ||||||||||
Suncor Energy, Inc. | 73,667 | 2,152 | ||||||||||
TransCanada Corp. | 14,538 | 693 | ||||||||||
Vermilion Energy, Inc. | 3,457 | 110 | ||||||||||
|
| |||||||||||
| 7,947 | ||||||||||||
|
| |||||||||||
| FINANCIALS 2.8% | ||||||||||||
Bank of Montreal | 25,142 | 1,846 | ||||||||||
Bank of Nova Scotia | 39,186 | 2,357 | ||||||||||
Canadian Imperial Bank of Commerce | 19,087 | 1,551 | ||||||||||
Genworth MI Canada, Inc. | 6,557 | 180 | ||||||||||
Home Capital Group, Inc. | 11,674 | 153 | ||||||||||
IGM Financial, Inc. | 6,056 | 188 | ||||||||||
Manulife Financial Corp. | 17,660 | 331 | ||||||||||
National Bank of Canada | 15,138 | 637 | ||||||||||
Onex Corp. | 6,531 | 523 | ||||||||||
Power Corp. of Canada | 26,833 | 612 | ||||||||||
Power Financial Corp. | 12,093 | 310 | ||||||||||
Royal Bank of Canada | 31,902 | 2,316 | ||||||||||
Sun Life Financial, Inc. | 9,336 | 334 | ||||||||||
Thomson Reuters Corp. | 7,999 | 370 | ||||||||||
Toronto-Dominion Bank | 36,442 | 1,837 | ||||||||||
|
| |||||||||||
| 13,545 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.7% | ||||||||||||
Air Canada (a) | 97,036 | 1,301 | ||||||||||
Bombardier, Inc. ‘B’ (a) | 207,902 | 378 | ||||||||||
Canadian National Railway Co. | 11,041 | 896 | ||||||||||
Canadian Pacific Railway Ltd. | 976 | 157 | ||||||||||
| 42 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Finning International, Inc. | 11,220 | $ | 220 | |||||||||
Russel Metals, Inc. | 5,372 | 108 | ||||||||||
SNC-Lavalin Group, Inc. (b) | 2,086 | 90 | ||||||||||
TFI International, Inc. | 6,281 | 135 | ||||||||||
WestJet Airlines Ltd. | 15,975 | 285 | ||||||||||
|
| |||||||||||
| 3,570 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.1% | ||||||||||||
BlackBerry Ltd. (a) | 28,217 | 282 | ||||||||||
|
| |||||||||||
| MATERIALS 0.8% | ||||||||||||
Agrium, Inc. | 5,455 | 494 | ||||||||||
Barrick Gold Corp. | 14,322 | 228 | ||||||||||
First Quantum Minerals Ltd. | 47,080 | 398 | ||||||||||
Goldcorp, Inc. | 6,192 | 80 | ||||||||||
IAMGOLD Corp. (a) | 18,751 | 97 | ||||||||||
Kinross Gold Corp. (a) | 21,021 | 86 | ||||||||||
Lundin Mining Corp. | 24,000 | 136 | ||||||||||
Potash Corp. of Saskatchewan, Inc. | 57,789 | 942 | ||||||||||
Teck Resources Ltd. ‘B’ | 79,696 | 1,381 | ||||||||||
Yamana Gold, Inc. | 75,980 | 185 | ||||||||||
|
| |||||||||||
| 4,027 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
BCE, Inc. | 6,682 | 301 | ||||||||||
Rogers Communications, Inc. ‘B’ | 5,930 | 280 | ||||||||||
TELUS Corp. | 10,955 | 378 | ||||||||||
|
| |||||||||||
| 959 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.3% | ||||||||||||
Atco Ltd. ‘I’ | 9,893 | 387 | ||||||||||
Capital Power Corp. | 15,751 | 295 | ||||||||||
Just Energy Group, Inc. | 17,786 | 93 | ||||||||||
Superior Plus Corp. | 13,969 | 123 | ||||||||||
TransAlta Corp. | 50,791 | 325 | ||||||||||
|
| |||||||||||
| 1,223 | ||||||||||||
|
| |||||||||||
Total Canada | 33,833 | |||||||||||
|
| |||||||||||
| DENMARK 0.8% | ||||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Carlsberg A/S ‘B’ | 3,652 | 390 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.1% | ||||||||||||
Danske Bank A/S | 8,602 | 331 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.5% | ||||||||||||
AP Moller - Maersk A/S ‘B’ | 866 | 1,744 | ||||||||||
ISS A/S | 21,918 | 861 | ||||||||||
|
| |||||||||||
| 2,605 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
TDC A/S | 106,499 | 619 | ||||||||||
|
| |||||||||||
Total Denmark | 3,945 | |||||||||||
|
| |||||||||||
| FINLAND 0.6% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Nokian Renkaat Oyj | 828 | 34 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Kesko Oyj ‘B’ | 6,732 | 342 | ||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Metso Oyj | 9,826 | $ | 341 | |||||||||
Wartsila Oyj Abp | 1,535 | 91 | ||||||||||
|
| |||||||||||
| 432 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.3% | ||||||||||||
Stora Enso Oyj ‘R’ | 46,725 | 604 | ||||||||||
UPM-Kymmene Oyj | 28,438 | 811 | ||||||||||
|
| |||||||||||
| 1,415 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
Fortum Oyj | 35,514 | 557 | ||||||||||
|
| |||||||||||
Total Finland | 2,780 | |||||||||||
|
| |||||||||||
| FRANCE 11.8% | ||||||||||||
| CONSUMER DISCRETIONARY 1.7% | ||||||||||||
Accor S.A. | 2,130 | 100 | ||||||||||
Christian Dior SE | 1,832 | 524 | ||||||||||
Cie Generale des Etablissements Michelin | 10,671 | 1,420 | ||||||||||
Elior Group | 9,792 | 285 | ||||||||||
Eutelsat Communications S.A. | 3,109 | 79 | ||||||||||
Havas S.A. | 8,868 | 93 | ||||||||||
Kering | 1,755 | 598 | ||||||||||
Lagardere S.C.A. | 24,634 | 777 | ||||||||||
LVMH Moet Hennessy Louis Vuitton SE | 3,301 | 825 | ||||||||||
Peugeot S.A. | 35,015 | 698 | ||||||||||
Publicis Groupe S.A. | 5,233 | 390 | ||||||||||
Renault S.A. | 5,421 | 491 | ||||||||||
Television Francaise 1 | 17,632 | 247 | ||||||||||
Vivendi S.A. | 67,966 | 1,513 | ||||||||||
|
| |||||||||||
| 8,040 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.7% | ||||||||||||
Carrefour S.A. | 60,683 | 1,534 | ||||||||||
Casino Guichard Perrachon S.A. | 19,089 | 1,131 | ||||||||||
Danone S.A. | 6,570 | 493 | ||||||||||
Pernod-Ricard S.A. | 1,369 | 183 | ||||||||||
|
| |||||||||||
| 3,341 | ||||||||||||
|
| |||||||||||
| ENERGY 0.8% | ||||||||||||
CGG S.A. (a) | 13,511 | 62 | ||||||||||
Total S.A. | 65,269 | 3,241 | ||||||||||
Vallourec S.A. | 74,134 | 451 | ||||||||||
|
| |||||||||||
| 3,754 | ||||||||||||
|
| |||||||||||
| FINANCIALS 3.2% | ||||||||||||
AXA S.A. | 72,402 | 1,983 | ||||||||||
BNP Paribas S.A. | 75,633 | 5,445 | ||||||||||
CNP Assurances | 18,029 | 405 | ||||||||||
Credit Agricole S.A. | 111,086 | 1,789 | ||||||||||
Eurazeo S.A. | 6,206 | 466 | ||||||||||
Natixis S.A. | 59,775 | 401 | ||||||||||
SCOR SE | 8,919 | 354 | ||||||||||
Societe Generale S.A. | 87,839 | 4,737 | ||||||||||
Wendel S.A. | 782 | 116 | ||||||||||
|
| |||||||||||
| 15,696 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 1.2% | ||||||||||||
Sanofi | 60,659 | 5,812 | ||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| INDUSTRIALS 2.4% | ||||||||||||
Air France-KLM (a) | 225,746 | $ | 3,222 | |||||||||
Airbus SE | 2,139 | 177 | ||||||||||
Alstom S.A. (a) | 12,527 | 437 | ||||||||||
Bouygues S.A. | 30,532 | 1,286 | ||||||||||
Cie de Saint-Gobain | 33,348 | 1,781 | ||||||||||
Eiffage S.A. | 7,802 | 709 | ||||||||||
Rexel S.A. | 42,624 | 697 | ||||||||||
Safran S.A. | 2,075 | 190 | ||||||||||
Schneider Electric SE | 14,000 | 1,076 | ||||||||||
Teleperformance | 1,325 | 170 | ||||||||||
Vinci S.A. | 19,233 | 1,641 | ||||||||||
Zodiac Aerospace | 3,535 | 96 | ||||||||||
|
| |||||||||||
| 11,482 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.2% | ||||||||||||
Atos SE | 4,985 | 700 | ||||||||||
Capgemini S.A. | 1,115 | 115 | ||||||||||
|
| |||||||||||
| 815 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Air Liquide S.A. | 3,225 | 398 | ||||||||||
Arkema S.A. | 2,292 | 245 | ||||||||||
|
| |||||||||||
| 643 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
Orange S.A. | 115,355 | 1,836 | ||||||||||
|
| |||||||||||
| UTILITIES 1.1% | ||||||||||||
Electricite de France S.A. | 148,177 | 1,606 | ||||||||||
Engie S.A. | 199,572 | 3,012 | ||||||||||
Suez | 18,973 | 351 | ||||||||||
Veolia Environnement S.A. | 14,942 | 316 | ||||||||||
|
| |||||||||||
| 5,285 | ||||||||||||
|
| |||||||||||
Total France | 56,704 | |||||||||||
|
| |||||||||||
| GERMANY 9.4% | ||||||||||||
| CONSUMER DISCRETIONARY 1.2% | ||||||||||||
adidas AG | 4,109 | 788 | ||||||||||
Bayerische Motoren Werke AG | 21,132 | 1,966 | ||||||||||
Continental AG | 829 | 179 | ||||||||||
Daimler AG | 37,411 | 2,713 | ||||||||||
Hugo Boss AG | 2,348 | 165 | ||||||||||
|
| |||||||||||
| 5,811 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.4% | ||||||||||||
METRO AG | 46,685 | 1,577 | ||||||||||
Suedzucker AG | 13,058 | 273 | ||||||||||
|
| |||||||||||
| 1,850 | ||||||||||||
|
| |||||||||||
| FINANCIALS 2.1% | ||||||||||||
Commerzbank AG | 257,031 | 3,069 | ||||||||||
Deutsche Bank AG | 251,623 | 4,474 | ||||||||||
Deutsche Pfandbriefbank AG | 19,759 | 244 | ||||||||||
Hannover Rueck SE | 1,825 | 219 | ||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 8,958 | 1,813 | ||||||||||
Talanx AG | 11,984 | 448 | ||||||||||
|
| |||||||||||
| 10,267 | ||||||||||||
|
| |||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 43 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
| HEALTH CARE 0.6% | ||||||||||||
Bayer AG | 17,883 | $ | 2,318 | |||||||||
Fresenius Medical Care AG & Co. KGaA | 999 | 96 | ||||||||||
Fresenius SE & Co. KGaA | 3,247 | 279 | ||||||||||
Rhoen Klinikum AG | 3,842 | 112 | ||||||||||
|
| |||||||||||
| 2,805 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 1.9% | ||||||||||||
Bilfinger SE | 9,098 | 357 | ||||||||||
Deutsche Lufthansa AG | 129,101 | 2,942 | ||||||||||
Deutsche Post AG | 62,555 | 2,348 | ||||||||||
Fraport AG Frankfurt Airport Services Worldwide | 2,343 | 207 | ||||||||||
GEA Group AG | 2,796 | 115 | ||||||||||
Hochtief AG | 2,577 | 473 | ||||||||||
OSRAM Licht AG | 1,901 | 152 | ||||||||||
Rheinmetall AG | 2,691 | 256 | ||||||||||
Siemens AG | 16,469 | 2,266 | ||||||||||
|
| |||||||||||
| 9,116 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.2% | ||||||||||||
Infineon Technologies AG | 3,956 | 84 | ||||||||||
SAP SE | 6,895 | 722 | ||||||||||
|
| |||||||||||
| 806 | ||||||||||||
|
| |||||||||||
| MATERIALS 1.4% | ||||||||||||
BASF SE | 33,364 | 3,096 | ||||||||||
Evonik Industries AG | 10,583 | 339 | ||||||||||
HeidelbergCement AG | 5,429 | 526 | ||||||||||
K+S AG | 23,398 | 601 | ||||||||||
Lanxess AG | 5,704 | 433 | ||||||||||
Linde AG | 4,052 | 771 | ||||||||||
Salzgitter AG | 13,342 | 545 | ||||||||||
thyssenkrupp AG | 11,252 | 321 | ||||||||||
|
| |||||||||||
| 6,632 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Deutsche Telekom AG | 66,088 | 1,191 | ||||||||||
|
| |||||||||||
| UTILITIES 1.4% | ||||||||||||
E.ON SE | 258,286 | 2,438 | ||||||||||
Innogy SE | 7,794 | 307 | ||||||||||
RWE AG (a) | 188,488 | 3,765 | ||||||||||
Uniper SE | 20,811 | 391 | ||||||||||
|
| |||||||||||
| 6,901 | ||||||||||||
|
| |||||||||||
Total Germany | 45,379 | |||||||||||
|
| |||||||||||
| HONG KONG 1.3% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Galaxy Entertainment Group Ltd. | 15,000 | 91 | ||||||||||
Li & Fung Ltd. | 152,000 | 55 | ||||||||||
SJM Holdings Ltd. | 384,000 | 405 | ||||||||||
|
| |||||||||||
| 551 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.0% | ||||||||||||
Hang Seng Bank Ltd. | 4,400 | 92 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.1% | ||||||||||||
Cathay Pacific Airways Ltd. | 177,000 | 275 | ||||||||||
MTR Corp. Ltd. | 16,500 | 93 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Noble Group Ltd. | 188,480 | $ | 63 | |||||||||
Orient Overseas International Ltd. | 13,000 | 93 | ||||||||||
|
| |||||||||||
| 524 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Kingboard Chemical Holdings Ltd. | 104,500 | 416 | ||||||||||
|
| |||||||||||
| MATERIALS 0.0% | ||||||||||||
Nine Dragons Paper Holdings Ltd. | 67,000 | 89 | ||||||||||
|
| |||||||||||
| REAL ESTATE 0.9% | ||||||||||||
Hang Lung Group Ltd. | 63,000 | 261 | ||||||||||
Hang Lung Properties Ltd. | 22,000 | 55 | ||||||||||
Hongkong Land Holdings Ltd. | 12,000 | 88 | ||||||||||
Hysan Development Co. Ltd. | 23,000 | 110 | ||||||||||
Kerry Properties Ltd. | 105,000 | 356 | ||||||||||
New World Development Co. Ltd. | 450,000 | 570 | ||||||||||
Shimao Property Holdings Ltd. | 212,000 | 363 | ||||||||||
Sino Land Co. Ltd. | 46,000 | 75 | ||||||||||
Sun Hung Kai Properties Ltd. | 36,000 | 529 | ||||||||||
Swire Pacific Ltd. ‘A’ | 56,500 | 552 | ||||||||||
Wharf Holdings Ltd. | 79,000 | 654 | ||||||||||
Wheelock & Co. Ltd. | 58,000 | 437 | ||||||||||
|
| |||||||||||
| 4,050 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.1% | ||||||||||||
CLP Holdings Ltd. | 30,500 | 323 | ||||||||||
|
| |||||||||||
Total Hong Kong | 6,045 | |||||||||||
|
| |||||||||||
| IRELAND 0.3% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Adient PLC | 1,982 | 129 | ||||||||||
|
| |||||||||||
| HEALTH CARE 0.2% | ||||||||||||
Endo International PLC (a) | 16,854 | 188 | ||||||||||
Medtronic PLC | 6,131 | 544 | ||||||||||
|
| |||||||||||
| 732 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
AerCap Holdings NV (a) | 3,055 | 142 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
CRH PLC | 7,308 | 259 | ||||||||||
Smurfit Kappa Group PLC | 11,551 | 360 | ||||||||||
|
| |||||||||||
| 619 | ||||||||||||
|
| |||||||||||
Total Ireland | 1,622 | |||||||||||
|
| |||||||||||
| ISRAEL 0.6% | ||||||||||||
| FINANCIALS 0.3% | ||||||||||||
Bank Hapoalim BM | 79,856 | 538 | ||||||||||
Bank Leumi Le-Israel BM | 118,276 | 575 | ||||||||||
Israel Discount Bank Ltd.‘A’ (a) | 128,545 | 339 | ||||||||||
|
| |||||||||||
| 1,452 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.1% | ||||||||||||
Teva Pharmaceutical Industries Ltd. SP - ADR | 28,187 | 936 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Israel Chemicals Ltd. | 61,001 | 288 | ||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 212,013 | $ | 352 | |||||||||
|
| |||||||||||
Total Israel | 3,028 | |||||||||||
|
| |||||||||||
| ITALY 2.9% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Mediaset SpA | 60,336 | 238 | ||||||||||
|
| |||||||||||
| ENERGY 0.6% | ||||||||||||
Eni SpA | 186,294 | 2,800 | ||||||||||
Saipem SpA (a) | 5,521 | 20 | ||||||||||
Snam SpA | 37,453 | 164 | ||||||||||
|
| |||||||||||
| 2,984 | ||||||||||||
|
| |||||||||||
| FINANCIALS 1.4% | ||||||||||||
Assicurazioni Generali SpA | 67,502 | 1,114 | ||||||||||
BPER Banca | 45,758 | 229 | ||||||||||
Intesa Sanpaolo SpA | 291,124 | 926 | ||||||||||
Mediobanca SpA | 13,969 | 138 | ||||||||||
Poste Italiane SpA | 140,770 | 965 | ||||||||||
UniCredit SpA | 98,876 | 1,852 | ||||||||||
Unione di Banche Italiane SpA | 212,737 | 917 | ||||||||||
Unipol Gruppo Finanziario SpA | 91,712 | 403 | ||||||||||
|
| |||||||||||
| 6,544 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Leonardo SpA | 11,963 | 199 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telecom Italia SpA (a) | 646,830 | 598 | ||||||||||
|
| |||||||||||
| UTILITIES 0.7% | ||||||||||||
A2A SpA | 56,502 | 94 | ||||||||||
Enel SpA | 575,087 | 3,084 | ||||||||||
Hera SpA | 35,558 | 109 | ||||||||||
|
| |||||||||||
| 3,287 | ||||||||||||
|
| |||||||||||
Total Italy | 13,850 | |||||||||||
|
| |||||||||||
| JAPAN 22.0% | ||||||||||||
| CONSUMER DISCRETIONARY 4.3% | ||||||||||||
Aisin Seiki Co. Ltd. | 8,800 | 452 | ||||||||||
Asatsu-DK, Inc. | 3,000 | 75 | ||||||||||
Bandai Namco Holdings, Inc. | 1,700 | 58 | ||||||||||
Benesse Holdings, Inc. | 8,800 | 333 | ||||||||||
Bridgestone Corp. | 25,900 | 1,120 | ||||||||||
DCM Holdings Co. Ltd. | 17,800 | 156 | ||||||||||
Denso Corp. | 9,800 | 416 | ||||||||||
EDION Corp. | 15,100 | 137 | ||||||||||
Fuji Media Holdings, Inc. | 20,200 | 275 | ||||||||||
Honda Motor Co. Ltd. | 71,900 | 1,970 | ||||||||||
Isetan Mitsukoshi Holdings Ltd. ‘L’ | 27,800 | 280 | ||||||||||
Isuzu Motors Ltd. | 21,600 | 268 | ||||||||||
J Front Retailing Co. Ltd. | 6,000 | 92 | ||||||||||
JVC Kenwood Corp. | 83,000 | 248 | ||||||||||
Kohnan Shoji Co. Ltd. | 4,000 | 75 | ||||||||||
KYB Corp. | 27,000 | 139 | ||||||||||
Mazda Motor Corp. | 28,300 | 398 | ||||||||||
Mitsubishi Motors Corp. | 41,600 | 275 | ||||||||||
Nikon Corp. | 22,000 | 353 | ||||||||||
Nissan Motor Co. Ltd. | 158,200 | 1,580 | ||||||||||
| 44 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
NOK Corp. | 3,200 | $ | 68 | |||||||||
Onward Holdings Co. Ltd. | 25,000 | 185 | ||||||||||
Panasonic Corp. | 164,900 | 2,247 | ||||||||||
Pioneer Corp. (a) | 146,100 | 293 | ||||||||||
Sega Sammy Holdings, Inc. | 8,900 | 120 | ||||||||||
Seiko Holdings Corp. | 63,000 | 258 | ||||||||||
Sekisui Chemical Co. Ltd. | 20,300 | 364 | ||||||||||
Sekisui House Ltd. | 15,200 | 269 | ||||||||||
Sharp Corp. (a) | 122,000 | 452 | ||||||||||
Skylark Co. Ltd. | 9,900 | 142 | ||||||||||
Sony Corp. | 26,800 | 1,022 | ||||||||||
Subaru Corp. | 5,000 | 169 | ||||||||||
Sumitomo Electric Industries Ltd. | 36,100 | 558 | ||||||||||
Sumitomo Forestry Co. Ltd. | 7,400 | 117 | ||||||||||
Sumitomo Rubber Industries Ltd. | 22,700 | 384 | ||||||||||
Suzuki Motor Corp. | 13,900 | 662 | ||||||||||
Takashimaya Co. Ltd. | 26,000 | 248 | ||||||||||
Takata Corp. (a) | 18,200 | 6 | ||||||||||
Tokai Rika Co. Ltd. | 4,300 | 80 | ||||||||||
Toyo Tire & Rubber Co. Ltd. | 11,400 | 234 | ||||||||||
Toyoda Gosei Co. Ltd. | 2,800 | 67 | ||||||||||
Toyota Industries Corp. | 2,000 | 106 | ||||||||||
Toyota Motor Corp. | 52,900 | 2,781 | ||||||||||
Yamada Denki Co. Ltd. | 52,000 | 259 | ||||||||||
Yamaha Motor Co. Ltd. | 7,100 | 184 | ||||||||||
Yokohama Rubber Co. Ltd. | 15,900 | 320 | ||||||||||
Yoshinoya Holdings Co. Ltd. | 9,800 | 163 | ||||||||||
Zensho Holdings Co. Ltd. | 8,800 | 160 | ||||||||||
|
| |||||||||||
| 20,618 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 1.0% | ||||||||||||
Aeon Co. Ltd. | 54,847 | 834 | ||||||||||
Asahi Group Holdings Ltd. | 7,900 | 297 | ||||||||||
Coca-Cola Bottlers Japan, Inc. | 5,100 | 148 | ||||||||||
Ito En Ltd. | 900 | 33 | ||||||||||
Japan Tobacco, Inc. | 8,956 | 315 | ||||||||||
Kao Corp. | 2,400 | 143 | ||||||||||
Kirin Holdings Co. Ltd. | 56,800 | 1,158 | ||||||||||
Lion Corp. | 5,000 | 104 | ||||||||||
Morinaga Milk Industry Co. Ltd. | 31,000 | 236 | ||||||||||
NH Foods Ltd. | 4,000 | 122 | ||||||||||
Nichirei Corp. | 4,100 | 115 | ||||||||||
Nippon Suisan Kaisha Ltd. | 24,900 | 146 | ||||||||||
Sapporo Holdings Ltd. | 7,900 | 218 | ||||||||||
Seven & i Holdings Co. Ltd. | 8,900 | 367 | ||||||||||
Shiseido Co. Ltd. | 13,200 | 470 | ||||||||||
Yamazaki Baking Co. Ltd. | 9,000 | 179 | ||||||||||
|
| |||||||||||
| 4,885 | ||||||||||||
|
| |||||||||||
| ENERGY 0.3% | ||||||||||||
Idemitsu Kosan Co. Ltd. | 14,900 | 424 | ||||||||||
Inpex Corp. | 44,500 | 430 | ||||||||||
Japan Petroleum Exploration Co. Ltd. | 4,400 | 92 | ||||||||||
JXTG Holdings, Inc. | 173,150 | 757 | ||||||||||
|
| |||||||||||
| 1,703 | ||||||||||||
|
| |||||||||||
| FINANCIALS 4.3% | ||||||||||||
77 Bank Ltd. | 25,000 | 123 | ||||||||||
Aozora Bank Ltd. | 24,000 | 92 | ||||||||||
Bank of Kyoto Ltd. | 10,000 | 95 | ||||||||||
Chiba Bank Ltd. | 46,000 | 335 | ||||||||||
Chugoku Bank Ltd. | 4,600 | 69 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Credit Saison Co. Ltd. | 3,900 | $ | 76 | |||||||||
Dai-ichi Life Holdings, Inc. | 87,200 | 1,583 | ||||||||||
Daiwa Securities Group, Inc. | 69,000 | 411 | ||||||||||
Fukuoka Financial Group, Inc. | 61,000 | 291 | ||||||||||
Gunma Bank Ltd. | 30,400 | 183 | ||||||||||
Hachijuni Bank Ltd. | 23,100 | 147 | ||||||||||
Hokuhoku Financial Group, Inc. | 16,600 | 266 | ||||||||||
Iyo Bank Ltd. | 16,900 | 140 | ||||||||||
Japan Post Bank Co. Ltd. | 33,100 | 425 | ||||||||||
Japan Post Holdings Co. Ltd. | 24,400 | 304 | ||||||||||
Mitsubishi UFJ Financial Group, Inc. | 601,400 | 4,056 | ||||||||||
Mizuho Financial Group, Inc. | 1,315,200 | 2,411 | ||||||||||
MS&AD Insurance Group Holdings, Inc. | 10,500 | 354 | ||||||||||
Nishi-Nippon Financial Holdings, Inc. | 7,200 | 75 | ||||||||||
Nomura Holdings, Inc. | 170,000 | 1,025 | ||||||||||
North Pacific Bank Ltd. | 46,400 | 163 | ||||||||||
Okasan Securities Group, Inc. | 14,000 | 90 | ||||||||||
ORIX Corp. | 52,100 | 811 | ||||||||||
Resona Holdings, Inc. | 192,100 | 1,061 | ||||||||||
SBI Holdings, Inc. | 22,200 | 302 | ||||||||||
Senshu Ikeda Holdings, Inc. | 20,700 | 88 | ||||||||||
Shinsei Bank Ltd. | 77,000 | 135 | ||||||||||
Shizuoka Bank Ltd. | 14,000 | 127 | ||||||||||
Sompo Holdings, Inc. | 6,000 | 233 | ||||||||||
Sony Financial Holdings, Inc. | 18,000 | 308 | ||||||||||
Sumitomo Mitsui Financial Group, Inc. | 76,700 | 2,995 | ||||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 23,300 | 837 | ||||||||||
T&D Holdings, Inc. | 55,300 | 846 | ||||||||||
Tokio Marine Holdings, Inc. | 9,000 | 374 | ||||||||||
Yamaguchi Financial Group, Inc. | 11,000 | 133 | ||||||||||
|
| |||||||||||
| 20,964 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.5% | ||||||||||||
Astellas Pharma, Inc. | 32,000 | 392 | ||||||||||
Daiichi Sankyo Co. Ltd. | 21,816 | 515 | ||||||||||
Hoya Corp. | 6,100 | 318 | ||||||||||
Otsuka Holdings Co. Ltd. | 5,728 | 245 | ||||||||||
Sumitomo Dainippon Pharma Co. Ltd. | 9,600 | 131 | ||||||||||
Suzuken Co. Ltd. | 3,400 | 113 | ||||||||||
Takeda Pharmaceutical Co. Ltd. | 17,500 | 888 | ||||||||||
|
| |||||||||||
| 2,602 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 4.2% | ||||||||||||
ANA Holdings, Inc. | 107,000 | 373 | ||||||||||
Asahi Glass Co. Ltd. | 19,600 | 828 | ||||||||||
Central Japan Railway Co. | 1,300 | 212 | ||||||||||
Dai Nippon Printing Co. Ltd. | 41,000 | 457 | ||||||||||
Daikin Industries Ltd. | 1,500 | 154 | ||||||||||
East Japan Railway Co. | 8,200 | 785 | ||||||||||
Ebara Corp. | 2,300 | 64 | ||||||||||
Fuji Electric Co. Ltd. | 28,000 | 148 | ||||||||||
Fujikura Ltd. | 42,300 | 356 | ||||||||||
Furukawa Electric Co. Ltd. | 8,700 | 388 | ||||||||||
GS Yuasa Corp. | 16,000 | 70 | ||||||||||
Hanwa Co. Ltd. | 11,000 | 79 | ||||||||||
Hitachi Construction Machinery Co. Ltd. | 16,800 | 423 | ||||||||||
IHI Corp. | 90,000 | 308 | ||||||||||
ITOCHU Corp. | 46,600 | 694 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Iwatani Corp. | 26,000 | $ | 161 | |||||||||
Japan Airlines Co. Ltd. | 15,100 | 468 | ||||||||||
JTEKT Corp. | 10,600 | 156 | ||||||||||
Kanematsu Corp. | 98,000 | 201 | ||||||||||
Kawasaki Heavy Industries Ltd. | 95,000 | 283 | ||||||||||
Kawasaki Kisen Kaisha Ltd. | 77,000 | 185 | ||||||||||
Komatsu Ltd. | 38,700 | 993 | ||||||||||
Kubota Corp. | 5,600 | 95 | ||||||||||
LIXIL Group Corp. | 9,600 | 241 | ||||||||||
Marubeni Corp. | 138,100 | 895 | ||||||||||
Mitsubishi Corp. | 49,700 | 1,045 | ||||||||||
Mitsubishi Electric Corp. | 76,100 | 1,101 | ||||||||||
Mitsubishi Heavy Industries Ltd. | 225,000 | 926 | ||||||||||
Mitsui & Co. Ltd. | 103,000 | 1,474 | ||||||||||
Mitsui Engineering & Shipbuilding Co. Ltd. | 132,000 | 189 | ||||||||||
Mitsui OSK Lines Ltd. | 133,000 | 393 | ||||||||||
Nippon Express Co. Ltd. | 26,000 | 163 | ||||||||||
Nippon Sheet Glass Co. Ltd. (a) | 50,900 | 422 | ||||||||||
Nippon Yusen KK | 326,000 | 609 | ||||||||||
Nisshinbo Holdings, Inc. | 7,100 | 72 | ||||||||||
NSK Ltd. | 15,900 | 200 | ||||||||||
NTN Corp. | 55,000 | 256 | ||||||||||
Recruit Holdings Co. Ltd. | 5,100 | 88 | ||||||||||
Sojitz Corp. | 126,100 | 310 | ||||||||||
Sumitomo Corp. | 95,800 | 1,249 | ||||||||||
Sumitomo Heavy Industries Ltd. | 52,000 | 345 | ||||||||||
Tokyu Corp. | 9,000 | 69 | ||||||||||
Toppan Printing Co. Ltd. | 35,000 | 385 | ||||||||||
Toshiba Corp. | 506,000 | 1,226 | ||||||||||
Toyota Tsusho Corp. | 18,300 | 550 | ||||||||||
West Japan Railway Co. | 4,300 | 304 | ||||||||||
|
| |||||||||||
| 20,393 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 3.5% | ||||||||||||
Brother Industries Ltd. | 21,000 | 486 | ||||||||||
Canon, Inc. | 73,150 | 2,488 | ||||||||||
Citizen Watch Co. Ltd. | 26,700 | 188 | ||||||||||
DeNA Co. Ltd. | 3,500 | 79 | ||||||||||
FUJIFILM Holdings Corp. | 18,600 | 671 | ||||||||||
Fujitsu Ltd. | 308,000 | 2,278 | ||||||||||
Gree, Inc. | 34,000 | 297 | ||||||||||
Hitachi Ltd. | 597,000 | 3,681 | ||||||||||
Hitachi Maxell Ltd. | 3,800 | 78 | ||||||||||
Ibiden Co. Ltd. | 23,200 | 401 | ||||||||||
Japan Display, Inc. (a) | 188,000 | 357 | ||||||||||
Konica Minolta, Inc. | 65,800 | 549 | ||||||||||
Kyocera Corp. | 6,300 | 366 | ||||||||||
NEC Corp. | 462,000 | 1,228 | ||||||||||
Nippon Electric Glass Co. Ltd. | 15,600 | 569 | ||||||||||
Oki Electric Industry Co. Ltd. | 8,200 | 116 | ||||||||||
Omron Corp. | 6,100 | 266 | ||||||||||
Ricoh Co. Ltd. | 137,900 | 1,222 | ||||||||||
Rohm Co. Ltd. | 1,800 | 139 | ||||||||||
Seiko Epson Corp. | 16,600 | 370 | ||||||||||
Taiyo Yuden Co. Ltd. | 8,300 | 131 | ||||||||||
TDK Corp. | 2,500 | 165 | ||||||||||
Tokyo Electron Ltd. | 2,500 | 338 | ||||||||||
Toshiba TEC Corp. | 14,000 | 73 | ||||||||||
Yokogawa Electric Corp. | 7,600 | 122 | ||||||||||
|
| |||||||||||
| 16,658 | ||||||||||||
|
| |||||||||||
| MATERIALS 2.1% | ||||||||||||
Asahi Kasei Corp. | 68,000 | 734 | ||||||||||
Denka Co. Ltd. | 36,000 | 186 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 45 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
DIC Corp. | 10,100 | $ | 365 | |||||||||
JFE Holdings, Inc. | 41,200 | 717 | ||||||||||
JSR Corp. | 4,200 | 73 | ||||||||||
Kaneka Corp. | 12,000 | 92 | ||||||||||
Kobe Steel Ltd. | 67,800 | 699 | ||||||||||
Kuraray Co. Ltd. | 14,300 | 260 | ||||||||||
Mitsubishi Chemical Holdings Corp. | 116,100 | 967 | ||||||||||
Mitsubishi Gas Chemical Co., Inc. | 5,000 | 106 | ||||||||||
Mitsubishi Materials Corp. | 12,100 | 367 | ||||||||||
Mitsui Chemicals, Inc. | 45,000 | 240 | ||||||||||
Mitsui Mining & Smelting Co. Ltd. | 101,000 | 396 | ||||||||||
Nippon Light Metal Holdings Co. Ltd. | 73,100 | 174 | ||||||||||
Nippon Paper Industries Co. Ltd. | 19,618 | 402 | ||||||||||
Nippon Steel & Sumitomo Metal Corp. | 15,100 | 342 | ||||||||||
Nisshin Steel Co. Ltd. | 7,200 | 79 | ||||||||||
Oji Holdings Corp. | 59,000 | 305 | ||||||||||
Rengo Co. Ltd. | 16,700 | 97 | ||||||||||
Shin-Etsu Chemical Co. Ltd. | 4,300 | 391 | ||||||||||
Showa Denko KK | 32,700 | 763 | ||||||||||
Sumitomo Chemical Co. Ltd. | 139,000 | 803 | ||||||||||
Sumitomo Metal Mining Co. Ltd. | 10,000 | 134 | ||||||||||
Taiheiyo Cement Corp. | 50,000 | 183 | ||||||||||
Teijin Ltd. | 10,600 | 205 | ||||||||||
Tokuyama Corp. (a) | 78,000 | 377 | ||||||||||
Tosoh Corp. | 25,000 | 258 | ||||||||||
Ube Industries Ltd. | 115,000 | 297 | ||||||||||
|
| |||||||||||
| 10,012 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.1% | ||||||||||||
Daito Trust Construction Co. Ltd. | 1,000 | 156 | ||||||||||
Daiwa House Industry Co. Ltd. | 3,100 | 106 | ||||||||||
Nomura Real Estate Holdings, Inc. | 3,600 | 71 | ||||||||||
|
| |||||||||||
| 333 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.8% | ||||||||||||
KDDI Corp. | 9,400 | 249 | ||||||||||
Nippon Telegraph & Telephone Corp. | 35,700 | 1,685 | ||||||||||
NTT DOCOMO, Inc. | 19,800 | 468 | ||||||||||
SoftBank Group Corp. | 16,100 | 1,309 | ||||||||||
|
| |||||||||||
| 3,711 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.9% | ||||||||||||
Chubu Electric Power Co., Inc. | 62,800 | 835 | ||||||||||
Chugoku Electric Power Co., Inc. | 20,000 | 221 | ||||||||||
Electric Power Development Co. Ltd. | 3,500 | 86 | ||||||||||
Hokkaido Electric Power Co., Inc. | 12,200 | 93 | ||||||||||
Hokuriku Electric Power Co. | 26,288 | 237 | ||||||||||
Kansai Electric Power Co., Inc. | 55,600 | 767 | ||||||||||
Tohoku Electric Power Co., Inc. | 33,100 | 459 | ||||||||||
Tokyo Electric Power Co. Holdings, Inc. (a) | 332,800 | 1,374 | ||||||||||
Tokyo Gas Co. Ltd. | 10,000 | 52 | ||||||||||
|
| |||||||||||
| 4,124 | ||||||||||||
|
| |||||||||||
Total Japan | 106,003 | |||||||||||
|
| |||||||||||
| LUXEMBOURG 0.4% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
RTL Group S.A. | 3,299 | 249 | ||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| ENERGY 0.0% | ||||||||||||
Tenaris S.A. | 9,549 | $ | 149 | |||||||||
|
| |||||||||||
| MATERIALS 0.3% | ||||||||||||
ArcelorMittal | 67,420 | 1,530 | ||||||||||
|
| |||||||||||
Total Luxembourg | 1,928 | |||||||||||
|
| |||||||||||
| MACAU 0.1% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Sands China Ltd. | 20,000 | 91 | ||||||||||
Wynn Macau Ltd. | 140,800 | 329 | ||||||||||
|
| |||||||||||
| 420 | ||||||||||||
|
| |||||||||||
Total Macau | 420 | |||||||||||
|
| |||||||||||
| NETHERLANDS 3.5% | ||||||||||||
| CONSUMER STAPLES 0.4% | ||||||||||||
Heineken Holding NV | 5,294 | 485 | ||||||||||
Koninklijke Ahold Delhaize NV | 66,864 | 1,276 | ||||||||||
|
| |||||||||||
| 1,761 | ||||||||||||
|
| |||||||||||
| ENERGY 1.4% | ||||||||||||
Fugro NV (a) | 17,075 | 253 | ||||||||||
Royal Dutch Shell PLC ‘A’ | 249,029 | 6,622 | ||||||||||
|
| |||||||||||
| 6,875 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.8% | ||||||||||||
ABN AMRO Group NV | 18,250 | 484 | ||||||||||
Aegon NV | 188,364 | 964 | ||||||||||
ASR Nederland NV | 5,785 | 195 | ||||||||||
ING Groep NV | 99,337 | 1,715 | ||||||||||
NN Group NV | 15,507 | 550 | ||||||||||
|
| |||||||||||
| 3,908 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.6% | ||||||||||||
Boskalis Westminster | 1,109 | 36 | ||||||||||
Koninklijke Philips NV | 56,058 | 1,996 | ||||||||||
Philips Lighting NV | 6,723 | 248 | ||||||||||
PostNL NV | 36,685 | 171 | ||||||||||
Randstad Holding NV | 2,124 | 124 | ||||||||||
Wolters Kluwer NV | 5,089 | 215 | ||||||||||
|
| |||||||||||
| 2,790 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.2% | ||||||||||||
Akzo Nobel NV | 5,682 | 494 | ||||||||||
Koninklijke DSM NV | 4,592 | 334 | ||||||||||
|
| |||||||||||
| 828 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Koninklijke KPN NV | 62,197 | 199 | ||||||||||
VEON Ltd. ADR | 131,126 | 513 | ||||||||||
|
| |||||||||||
| 712 | ||||||||||||
|
| |||||||||||
Total Netherlands | 16,874 | |||||||||||
|
| |||||||||||
| NEW ZEALAND 0.2% | ||||||||||||
| MATERIALS 0.1% | ||||||||||||
Fletcher Building Ltd. | 47,464 | 278 | ||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Spark New Zealand Ltd. | 126,368 | 350 | ||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| UTILITIES 0.0% | ||||||||||||
Contact Energy Ltd. | 24,542 | $ | 94 | |||||||||
|
| |||||||||||
Total New Zealand | 722 | |||||||||||
|
| |||||||||||
| NORWAY 1.0% | ||||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Marine Harvest ASA | 13,360 | 228 | ||||||||||
Orkla ASA | 23,094 | 235 | ||||||||||
|
| |||||||||||
| 463 | ||||||||||||
|
| |||||||||||
| ENERGY 0.5% | ||||||||||||
Aker Solutions ASA | 14,586 | 66 | ||||||||||
Statoil ASA | 139,210 | 2,308 | ||||||||||
|
| |||||||||||
| 2,374 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.2% | ||||||||||||
DNB ASA | 46,503 | 792 | ||||||||||
Gjensidige Forsikring ASA | 12,598 | 215 | ||||||||||
|
| |||||||||||
| 1,007 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Norsk Hydro ASA | 57,271 | 317 | ||||||||||
Yara International ASA | 10,599 | 399 | ||||||||||
|
| |||||||||||
| 716 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telenor ASA | 18,624 | 309 | ||||||||||
|
| |||||||||||
Total Norway | 4,869 | |||||||||||
|
| |||||||||||
| PORTUGAL 0.2% | ||||||||||||
| CONSUMER STAPLES 0.0% | ||||||||||||
Sonae SGPS S.A. | 94,053 | 104 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.0% | ||||||||||||
Banco Espirito Santo S.A. (a) | 59,573 | 1 | ||||||||||
|
| |||||||||||
| MATERIALS 0.0% | ||||||||||||
Navigator Co. S.A. | 31,910 | 138 | ||||||||||
|
| |||||||||||
| UTILITIES 0.2% | ||||||||||||
EDP - Energias de Portugal S.A. | 202,375 | 662 | ||||||||||
|
| |||||||||||
Total Portugal | 905 | |||||||||||
|
| |||||||||||
| SINGAPORE 0.9% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Jardine Cycle & Carriage Ltd. | 3,300 | 106 | ||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.0% | ||||||||||||
Wilmar International Ltd. | 47,900 | 116 | ||||||||||
|
| |||||||||||
| FINANCIALS 0.5% | ||||||||||||
DBS Group Holdings Ltd. | 60,610 | 912 | ||||||||||
Oversea-Chinese Banking Corp. Ltd. | 77,000 | 603 | ||||||||||
United Overseas Bank Ltd. | 40,700 | 684 | ||||||||||
|
| |||||||||||
| 2,199 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.2% | ||||||||||||
Hutchison Port Holdings Trust | 220,700 | 95 | ||||||||||
| 46 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Keppel Corp. Ltd. | 145,500 | $ | 664 | |||||||||
Singapore Airlines Ltd. | 39,067 | 287 | ||||||||||
|
| |||||||||||
| 1,046 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.0% | ||||||||||||
Venture Corp. Ltd. | 20,100 | 176 | ||||||||||
|
| |||||||||||
| REAL ESTATE 0.1% | ||||||||||||
CapitaLand Ltd. | 61,900 | 157 | ||||||||||
Yanlord Land Group Ltd. | 60,000 | 77 | ||||||||||
|
| |||||||||||
| 234 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Singapore Telecommunications Ltd. | 91,900 | 260 | ||||||||||
|
| |||||||||||
Total Singapore | 4,137 | |||||||||||
|
| |||||||||||
| SOUTH AFRICA 0.1% | ||||||||||||
| FINANCIALS 0.1% | ||||||||||||
Investec PLC | 24,772 | 185 | ||||||||||
|
| |||||||||||
| MATERIALS 0.0% | ||||||||||||
Mondi PLC | 6,306 | 165 | ||||||||||
|
| |||||||||||
Total South Africa | 350 | |||||||||||
|
| |||||||||||
| SPAIN 4.5% | ||||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Distribuidora Internacional de Alimentacion S.A. | 39,950 | 249 | ||||||||||
|
| |||||||||||
| ENERGY 0.2% | ||||||||||||
Repsol S.A. | 68,798 | 1,054 | ||||||||||
|
| |||||||||||
| FINANCIALS 2.6% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 146,668 | 1,222 | ||||||||||
Banco de Sabadell S.A. | 102,162 | 208 | ||||||||||
Banco Santander S.A. | 1,512,801 | 10,045 | ||||||||||
CaixaBank S.A. | 131,640 | 629 | ||||||||||
Mapfre S.A. | 154,019 | 539 | ||||||||||
|
| |||||||||||
| 12,643 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.4% | ||||||||||||
Abengoa S.A. ‘B’ (a) | 226,011 | 3 | ||||||||||
Abertis Infraestructuras S.A. | 15,438 | 286 | ||||||||||
ACS Actividades de Construccion y Servicios S.A. | 29,370 | 1,136 | ||||||||||
Ferrovial S.A. | 3,817 | 85 | ||||||||||
Obrascon Huarte Lain S.A. | 94,514 | 340 | ||||||||||
|
| |||||||||||
| 1,850 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.6% | ||||||||||||
Telefonica S.A. | 264,090 | 2,734 | ||||||||||
|
| |||||||||||
| UTILITIES 0.6% | ||||||||||||
Acciona S.A. | 3,524 | 310 | ||||||||||
Endesa S.A. | 61,473 | 1,418 | ||||||||||
Gas Natural SDG S.A. | 17,198 | 403 | ||||||||||
Iberdrola S.A. | 109,133 | 865 | ||||||||||
|
| |||||||||||
| 2,996 | ||||||||||||
|
| |||||||||||
Total Spain | 21,526 | |||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| SWEDEN 2.1% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Electrolux AB ‘B’ | 3,746 | $ | 123 | |||||||||
Hennes & Mauritz AB ‘B’ | 5,340 | 133 | ||||||||||
|
| |||||||||||
| 256 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.1% | ||||||||||||
Essity AB ‘B’ (a) | 8,809 | 241 | ||||||||||
Swedish Match AB | 4,503 | 159 | ||||||||||
|
| |||||||||||
| 400 | ||||||||||||
|
| |||||||||||
| FINANCIALS 0.7% | ||||||||||||
Nordea Bank AB | 128,229 | 1,633 | ||||||||||
Ratos AB ‘B’ | 36,740 | 175 | ||||||||||
Skandinaviska Enskilda Banken AB ‘A’ | 50,729 | 614 | ||||||||||
Svenska Handelsbanken AB ‘A’ | 28,678 | 411 | ||||||||||
Swedbank AB ‘A’ | 30,111 | 735 | ||||||||||
|
| |||||||||||
| 3,568 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.0% | ||||||||||||
Getinge AB ‘B’ | 6,283 | 123 | ||||||||||
|
| |||||||||||
| INDUSTRIALS 0.6% | ||||||||||||
Atlas Copco AB ‘A’ | 13,482 | 518 | ||||||||||
Sandvik AB | 39,981 | 630 | ||||||||||
Skanska AB ‘B’ | 7,347 | 175 | ||||||||||
SKF AB ‘B’ | 9,411 | 191 | ||||||||||
Volvo AB ‘B’ | 68,098 | 1,161 | ||||||||||
|
| |||||||||||
| 2,675 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.2% | ||||||||||||
Telefonaktiebolaget LM Ericsson ‘B’ | 151,136 | 1,087 | ||||||||||
|
| |||||||||||
| MATERIALS 0.1% | ||||||||||||
Boliden AB | 5,758 | 157 | ||||||||||
SSAB AB ‘A’ (a) | 52,896 | 241 | ||||||||||
Svenska Cellulosa AB S.C.A. ‘B’ | 8,809 | 67 | ||||||||||
|
| |||||||||||
| 465 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.3% | ||||||||||||
Tele2 AB ‘B’ | 84,929 | 890 | ||||||||||
Telia Co. AB | 129,959 | 599 | ||||||||||
|
| |||||||||||
| 1,489 | ||||||||||||
|
| |||||||||||
Total Sweden | 10,063 | |||||||||||
|
| |||||||||||
| SWITZERLAND 5.7% | ||||||||||||
| CONSUMER DISCRETIONARY 0.2% | ||||||||||||
Cie Financiere Richemont S.A. | 4,745 | 393 | ||||||||||
Garmin Ltd. | 5,771 | 294 | ||||||||||
Swatch Group AG | 461 | 171 | ||||||||||
|
| |||||||||||
| 858 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 0.8% | ||||||||||||
Aryzta AG | 4,448 | 147 | ||||||||||
Coca-Cola HBC AG | 3,772 | 111 | ||||||||||
Nestle S.A. | 38,095 | 3,322 | ||||||||||
|
| |||||||||||
| 3,580 | ||||||||||||
|
| |||||||||||
| ENERGY 0.1% | ||||||||||||
Transocean Ltd. | 63,578 | 523 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Weatherford International PLC (a) | 27,432 | $ | 106 | |||||||||
|
| |||||||||||
| 629 | ||||||||||||
|
| |||||||||||
| FINANCIALS 2.1% | ||||||||||||
Baloise Holding AG | 2,097 | 325 | ||||||||||
Credit Suisse Group AG | 143,052 | 2,082 | ||||||||||
Swiss Life Holding AG | 3,981 | 1,347 | ||||||||||
Swiss Re AG | 20,793 | 1,905 | ||||||||||
UBS Group AG | 78,753 | 1,339 | ||||||||||
Zurich Insurance Group AG | 10,944 | 3,194 | ||||||||||
|
| |||||||||||
| 10,192 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 1.3% | ||||||||||||
Novartis AG | 46,241 | 3,862 | ||||||||||
Roche Holding AG | 9,330 | 2,384 | ||||||||||
|
| |||||||||||
| 6,246 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 0.5% | ||||||||||||
ABB Ltd. | 48,307 | 1,199 | ||||||||||
Adecco Group AG | 5,220 | 398 | ||||||||||
SGS S.A. | 36 | 87 | ||||||||||
Wolseley PLC | 7,492 | 460 | ||||||||||
|
| |||||||||||
| 2,144 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.2% | ||||||||||||
STMicroelectronics NV | 44,801 | 645 | ||||||||||
TE Connectivity Ltd. | 6,391 | 503 | ||||||||||
|
| |||||||||||
| 1,148 | ||||||||||||
|
| |||||||||||
| MATERIALS 0.5% | ||||||||||||
Glencore PLC | 611,658 | 2,292 | ||||||||||
LafargeHolcim Ltd. | 2,255 | 130 | ||||||||||
|
| |||||||||||
| 2,422 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
Swisscom AG | 413 | 200 | ||||||||||
|
| |||||||||||
Total Switzerland | 27,419 | |||||||||||
|
| |||||||||||
| UNITED KINGDOM 15.9% | ||||||||||||
| CONSUMER DISCRETIONARY 1.7% | ||||||||||||
Berkeley Group Holdings PLC | 2,274 | 96 | ||||||||||
Burberry Group PLC | 7,694 | 166 | ||||||||||
Compass Group PLC | 33,700 | 711 | ||||||||||
Fiat Chrysler Automobiles NV (a) | 237,002 | 2,519 | ||||||||||
GKN PLC | 67,872 | 288 | ||||||||||
InterContinental Hotels Group PLC | 3,179 | 177 | ||||||||||
Kingfisher PLC | 191,173 | 749 | ||||||||||
Marks & Spencer Group PLC | 196,425 | 853 | ||||||||||
Next PLC | 4,994 | 251 | ||||||||||
Pearson PLC | 71,571 | 644 | ||||||||||
Sky PLC | 14,041 | 182 | ||||||||||
Thomas Cook Group PLC | 209,715 | 246 | ||||||||||
William Hill PLC | 56,046 | 186 | ||||||||||
WPP PLC | 44,656 | 940 | ||||||||||
|
| |||||||||||
| 8,008 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 1.9% | ||||||||||||
British American Tobacco PLC | 30,438 | 2,074 | ||||||||||
Diageo PLC | 14,830 | 438 | ||||||||||
Imperial Brands PLC | 17,391 | 781 | ||||||||||
J Sainsbury PLC | 296,529 | 973 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 47 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
Reckitt Benckiser Group PLC | 3,694 | $ | 374 | |||||||||
Tate & Lyle PLC | 11,481 | 99 | ||||||||||
Tesco PLC (a) | 297,618 | 655 | ||||||||||
Unilever NV | 24,724 | 1,365 | ||||||||||
Unilever PLC | 24,419 | 1,322 | ||||||||||
WM Morrison Supermarkets PLC | 325,971 | 1,024 | ||||||||||
|
| |||||||||||
| 9,105 | ||||||||||||
|
| |||||||||||
| ENERGY 1.7% | ||||||||||||
Amec Foster Wheeler PLC | 16,345 | 100 | ||||||||||
BP PLC | 1,351,771 | 7,803 | ||||||||||
Subsea 7 S.A. | 26,648 | 359 | ||||||||||
Tullow Oil PLC (a) | 44,290 | 87 | ||||||||||
|
| |||||||||||
| 8,349 | ||||||||||||
|
| |||||||||||
| FINANCIALS 5.8% | ||||||||||||
3i Group PLC | 12,796 | 150 | ||||||||||
Aberdeen Asset Management PLC | 21,486 | 85 | ||||||||||
Aviva PLC | 137,606 | 944 | ||||||||||
Barclays PLC | 1,827,811 | 4,834 | ||||||||||
CYBG PLC (a) | 49,642 | 179 | ||||||||||
Direct Line Insurance Group PLC | 103,556 | 480 | ||||||||||
HSBC Holdings PLC | 1,372,642 | 12,741 | ||||||||||
Lloyds Banking Group PLC | 1,988,210 | 1,713 | ||||||||||
Man Group PLC | 95,764 | 193 | ||||||||||
NEX Group PLC | 17,548 | 143 | ||||||||||
Old Mutual PLC | 504,997 | 1,274 | ||||||||||
Royal Bank of Scotland Group PLC (a) | 576,737 | 1,861 | ||||||||||
Standard Chartered PLC (a) | 308,823 | 3,128 | ||||||||||
Standard Life PLC | 65,460 | 340 | ||||||||||
|
| |||||||||||
| 28,065 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 0.9% | ||||||||||||
AstraZeneca PLC | 26,487 | 1,774 | ||||||||||
GlaxoSmithKline PLC | 112,467 | 2,394 | ||||||||||
|
| |||||||||||
| 4,168 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 1.6% | ||||||||||||
Aggreko PLC | 14,395 | 172 | ||||||||||
Ashtead Group PLC | 3,594 | 74 | ||||||||||
BAE Systems PLC | 144,988 | 1,197 | ||||||||||
CNH Industrial NV | 50,962 | 578 | ||||||||||
easyJet PLC | 13,492 | 239 | ||||||||||
Experian PLC | 10,165 | 209 | ||||||||||
Firstgroup PLC (a) | 178,831 | 293 | ||||||||||
G4S PLC | 90,657 | 386 | ||||||||||
IMI PLC | 9,627 | 150 | ||||||||||
International Consolidated Airlines Group S.A. | 35,775 | 284 | ||||||||||
National Express Group PLC | 27,972 | 134 | ||||||||||
RELX NV | 9,758 | 201 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
RELX PLC | 12,471 | $ | 270 | |||||||||
Rentokil Initial PLC | 44,234 | 157 | ||||||||||
Rolls-Royce Holdings PLC | 133,462 | 1,548 | ||||||||||
Royal Mail PLC | 187,490 | 1,029 | ||||||||||
Smiths Group PLC | 11,554 | 240 | ||||||||||
Stagecoach Group PLC | 102,148 | 248 | ||||||||||
Travis Perkins PLC | 5,552 | 105 | ||||||||||
Weir Group PLC | 4,685 | 106 | ||||||||||
|
| |||||||||||
| 7,620 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.0% | ||||||||||||
Sage Group PLC | 12,944 | 116 | ||||||||||
|
| |||||||||||
| MATERIALS 1.3% | ||||||||||||
Anglo American PLC (a) | 87,813 | 1,173 | ||||||||||
KAZ Minerals PLC (a) | 48,225 | 325 | ||||||||||
Rio Tinto Ltd. | 39,798 | 1,934 | ||||||||||
Rio Tinto PLC | 69,722 | 2,953 | ||||||||||
|
| |||||||||||
| 6,385 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
BT Group PLC | 73,923 | 284 | ||||||||||
Inmarsat PLC | 8,803 | 88 | ||||||||||
Vodafone Group PLC | 493,660 | 1,402 | ||||||||||
|
| |||||||||||
| 1,774 | ||||||||||||
|
| |||||||||||
| UTILITIES 0.6% | ||||||||||||
Centrica PLC | 471,244 | 1,229 | ||||||||||
Drax Group PLC | 74,511 | 316 | ||||||||||
National Grid PLC | 61,226 | 759 | ||||||||||
Severn Trent PLC | 6,191 | 176 | ||||||||||
SSE PLC | 24,203 | 458 | ||||||||||
United Utilities Group PLC | 14,526 | 164 | ||||||||||
|
| |||||||||||
| 3,102 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 76,692 | |||||||||||
|
| |||||||||||
| UNITED STATES 0.1% | ||||||||||||
| CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Carnival PLC | 9,135 | 604 | ||||||||||
|
| |||||||||||
Total United States | 604 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $406,686) |
| 474,600 | ||||||||||
|
| |||||||||||
| PREFERRED STOCKS 0.5% | ||||||||||||
| GERMANY 0.5% | ||||||||||||
| INDUSTRIALS 0.5% | ||||||||||||
Henkel AG & Co. KGaA | 597 | 82 | ||||||||||
Schaeffler AG | 4,849 | 70 | ||||||||||
Volkswagen AG | 14,901 | 2,276 | ||||||||||
|
| |||||||||||
| 2,428 | ||||||||||||
|
| |||||||||||
Total Preferred Stocks (Cost $2,168) |
| 2,428 | ||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| REAL ESTATE INVESTMENT TRUSTS 0.3% | ||||||||||||
| AUSTRALIA 0.1% | ||||||||||||
| REAL ESTATE 0.1% | ||||||||||||
Scentre Group | 31,328 | $ | 97 | |||||||||
Stockland | 42,168 | 142 | ||||||||||
|
| |||||||||||
| 239 | ||||||||||||
|
| |||||||||||
Total Australia | 239 | |||||||||||
|
| |||||||||||
| CANADA 0.1% | ||||||||||||
| REAL ESTATE 0.1% | ||||||||||||
Artis Real Estate Investment Trust | 12,044 | 122 | ||||||||||
Cominar Real Estate Investment Trust | 10,024 | 98 | ||||||||||
Dream Office Real Estate Investment Trust | 17,067 | 257 | ||||||||||
H&R Real Estate Investment Trust | 11,861 | 202 | ||||||||||
|
| |||||||||||
| 679 | ||||||||||||
|
| |||||||||||
Total Canada | 679 | |||||||||||
|
| |||||||||||
| UNITED KINGDOM 0.1% | ||||||||||||
| REAL ESTATE 0.1% | ||||||||||||
British Land Co. PLC | 11,358 | 90 | ||||||||||
Intu Properties PLC | 40,024 | 140 | ||||||||||
Land Securities Group PLC | 28,384 | 375 | ||||||||||
|
| |||||||||||
| 605 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 605 | |||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts (Cost $1,507) | 1,523 | |||||||||||
|
| |||||||||||
| RIGHTS 0.0% | ||||||||||||
| SPAIN 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
ACS Actividades de Construccion y Servicios S.A. | 29,370 | 23 | ||||||||||
|
| |||||||||||
Total Rights (Cost $25) | 23 | |||||||||||
|
| |||||||||||
| WARRANTS 0.0% | ||||||||||||
| SPAIN 0.0% | ||||||||||||
| INDUSTRIALS 0.0% | ||||||||||||
Abengoa S.A. - Exp. 03/31/2025 | 226,011 | 3 | ||||||||||
|
| |||||||||||
| Total Warrants (Cost $0) | 3 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $410,386) | 478,577 | |||||||||||
| Total Investments 99.4% (Cost $410,386) | $ | 478,577 | ||||||||||
| Other Assets and Liabilities, net 0.6% | 3,010 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 481,587 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Security did not produce income within the last twelve months. |
(b) RESTRICTED SECURITIES:
| Issuer Description | Acquisition Date | Cost | Market Value | Market Value as Percentage of Net Assets | ||||||||||||||||||
SNC-Lavalin Group, Inc. | 05/31/2016 - 12/16/2016 | $ 86 | $ | 90 | 0.02% | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||||
| 48 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
FAIR VALUE OF FINANCIAL DERIVATIVE INSTRUMENTS
The following is a summary of the fair valuation of the Fund’s derivative instruments categorized by risk exposure. See Note 6, Principal Risks, in the Notes to Financial Statements on risks of the Fund.
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2017:
| Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Realized Gain on Financial Derivative Instruments | ||||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | (5 | ) | $ | 0 | $ | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Australia | ||||||||||||||||
Consumer Discretionary | $ | 0 | $ | 369 | $ | 0 | $ | 369 | ||||||||
Consumer Staples | 0 | 2,975 | 0 | 2,975 | ||||||||||||
Energy | 0 | 1,739 | 0 | 1,739 | ||||||||||||
Financials | 0 | 10,478 | 0 | 10,478 | ||||||||||||
Health Care | 0 | 478 | 0 | 478 | ||||||||||||
Industrials | 0 | 1,838 | 0 | 1,838 | ||||||||||||
Materials | 0 | 9,892 | 0 | 9,892 | ||||||||||||
Telecommunication Services | 0 | 626 | 0 | 626 | ||||||||||||
Utilities | 0 | 213 | 0 | 213 | ||||||||||||
Austria | ||||||||||||||||
Energy | 0 | 1,147 | 0 | 1,147 | ||||||||||||
Financials | 0 | 2,136 | 0 | 2,136 | ||||||||||||
Industrials | 87 | 0 | 0 | 87 | ||||||||||||
Materials | 0 | 450 | 0 | 450 | ||||||||||||
Real Estate | 0 | 89 | 0 | 89 | ||||||||||||
Belgium | ||||||||||||||||
Consumer Discretionary | 0 | 82 | 0 | 82 | ||||||||||||
Consumer Staples | 0 | 191 | 0 | 191 | ||||||||||||
Financials | 0 | 1,325 | 0 | 1,325 | ||||||||||||
Industrials | 0 | 129 | 0 | 129 | ||||||||||||
Materials | 0 | 281 | 0 | 281 | ||||||||||||
Telecommunication Services | 0 | 377 | 0 | 377 | ||||||||||||
Canada | ||||||||||||||||
Consumer Discretionary | 1,747 | 0 | 0 | 1,747 | ||||||||||||
Consumer Staples | 533 | 0 | 0 | 533 | ||||||||||||
Energy | 7,947 | 0 | 0 | 7,947 | ||||||||||||
Financials | 13,545 | 0 | 0 | 13,545 | ||||||||||||
Industrials | 3,570 | 0 | 0 | 3,570 | ||||||||||||
Information Technology | 282 | 0 | 0 | 282 | ||||||||||||
Materials | 4,027 | 0 | 0 | 4,027 | ||||||||||||
Telecommunication Services | 959 | 0 | 0 | 959 | ||||||||||||
Utilities | 1,223 | 0 | 0 | 1,223 | ||||||||||||
Denmark | ||||||||||||||||
Consumer Staples | 0 | 390 | 0 | 390 | ||||||||||||
Financials | 0 | 331 | 0 | 331 | ||||||||||||
Industrials | 0 | 2,605 | 0 | 2,605 | ||||||||||||
Telecommunication Services | 0 | 619 | 0 | 619 | ||||||||||||
Finland | ||||||||||||||||
Consumer Discretionary | 0 | 34 | 0 | 34 | ||||||||||||
Consumer Staples | 0 | 342 | 0 | 342 | ||||||||||||
Industrials | 0 | 432 | 0 | 432 | ||||||||||||
Materials | 0 | 1,415 | 0 | 1,415 | ||||||||||||
Utilities | 0 | 557 | 0 | 557 | ||||||||||||
France | ||||||||||||||||
Consumer Discretionary | 524 | 7,516 | 0 | 8,040 | ||||||||||||
Consumer Staples | 0 | 3,341 | 0 | 3,341 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Energy | $ | 0 | $ | 3,754 | $ | 0 | $ | 3,754 | ||||||||
Financials | 466 | 15,230 | 0 | 15,696 | ||||||||||||
Health Care | 0 | 5,812 | 0 | 5,812 | ||||||||||||
Industrials | 0 | 11,482 | 0 | 11,482 | ||||||||||||
Information Technology | 0 | 815 | 0 | 815 | ||||||||||||
Materials | 0 | 643 | 0 | 643 | ||||||||||||
Telecommunication Services | 0 | 1,836 | 0 | 1,836 | ||||||||||||
Utilities | 0 | 5,285 | 0 | 5,285 | ||||||||||||
Germany | ||||||||||||||||
Consumer Discretionary | 0 | 5,811 | 0 | 5,811 | ||||||||||||
Consumer Staples | 0 | 1,850 | 0 | 1,850 | ||||||||||||
Financials | 0 | 10,267 | 0 | 10,267 | ||||||||||||
Health Care | 0 | 2,805 | 0 | 2,805 | ||||||||||||
Industrials | 0 | 9,116 | 0 | 9,116 | ||||||||||||
Information Technology | 0 | 806 | 0 | 806 | ||||||||||||
Materials | 0 | 6,632 | 0 | 6,632 | ||||||||||||
Telecommunication Services | 0 | 1,191 | 0 | 1,191 | ||||||||||||
Utilities | 0 | 6,901 | 0 | 6,901 | ||||||||||||
Hong Kong | ||||||||||||||||
Consumer Discretionary | 0 | 551 | 0 | 551 | ||||||||||||
Financials | 0 | 92 | 0 | 92 | ||||||||||||
Industrials | 0 | 524 | 0 | 524 | ||||||||||||
Information Technology | 0 | 416 | 0 | 416 | ||||||||||||
Materials | 0 | 89 | 0 | 89 | ||||||||||||
Real Estate | 0 | 4,050 | 0 | 4,050 | ||||||||||||
Utilities | 0 | 323 | 0 | 323 | ||||||||||||
Ireland | ||||||||||||||||
Consumer Discretionary | 129 | 0 | 0 | 129 | ||||||||||||
Health Care | 732 | 0 | 0 | 732 | ||||||||||||
Industrials | 142 | 0 | 0 | 142 | ||||||||||||
Materials | 360 | 259 | 0 | 619 | ||||||||||||
Israel | ||||||||||||||||
Financials | 0 | 1,452 | 0 | 1,452 | ||||||||||||
Health Care | 936 | 0 | 0 | 936 | ||||||||||||
Materials | 0 | 288 | 0 | 288 | ||||||||||||
Telecommunication Services | 0 | 352 | 0 | 352 | ||||||||||||
Italy | ||||||||||||||||
Consumer Discretionary | 0 | 238 | 0 | 238 | ||||||||||||
Energy | 0 | 2,984 | 0 | 2,984 | ||||||||||||
Financials | 0 | 6,544 | 0 | 6,544 | ||||||||||||
Industrials | 0 | 199 | 0 | 199 | ||||||||||||
Telecommunication Services | 0 | 598 | 0 | 598 | ||||||||||||
Utilities | 0 | 3,287 | 0 | 3,287 | ||||||||||||
Japan | ||||||||||||||||
Consumer Discretionary | 0 | 20,618 | 0 | 20,618 | ||||||||||||
Consumer Staples | 0 | 4,885 | 0 | 4,885 | ||||||||||||
Energy | 0 | 1,703 | 0 | 1,703 | ||||||||||||
Financials | 0 | 20,964 | 0 | 20,964 | ||||||||||||
Health Care | 0 | 2,602 | 0 | 2,602 | ||||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 49 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
June 30, 2017
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Industrials | $ | 0 | $ | 20,393 | $ | 0 | $ | 20,393 | ||||||||
Information Technology | 0 | 16,658 | 0 | 16,658 | ||||||||||||
Materials | 0 | 10,012 | 0 | 10,012 | ||||||||||||
Real Estate | 0 | 333 | 0 | 333 | ||||||||||||
Telecommunication Services | 0 | 3,711 | 0 | 3,711 | ||||||||||||
Utilities | 0 | 4,124 | 0 | 4,124 | ||||||||||||
Luxembourg | ||||||||||||||||
Consumer Discretionary | 0 | 249 | 0 | 249 | ||||||||||||
Energy | 0 | 149 | 0 | 149 | ||||||||||||
Materials | 1,530 | 0 | 0 | 1,530 | ||||||||||||
Macau | ||||||||||||||||
Consumer Discretionary | 0 | 420 | 0 | 420 | ||||||||||||
Netherlands | ||||||||||||||||
Consumer Staples | 0 | 1,761 | 0 | 1,761 | ||||||||||||
Energy | 0 | 6,875 | 0 | 6,875 | ||||||||||||
Financials | 195 | 3,713 | 0 | 3,908 | ||||||||||||
Industrials | 0 | 2,790 | 0 | 2,790 | ||||||||||||
Materials | 0 | 828 | 0 | 828 | ||||||||||||
Telecommunication Services | 513 | 199 | 0 | 712 | ||||||||||||
New Zealand | ||||||||||||||||
Materials | 0 | 278 | 0 | 278 | ||||||||||||
Telecommunication Services | 0 | 350 | 0 | 350 | ||||||||||||
Utilities | 0 | 94 | 0 | 94 | ||||||||||||
Norway | ||||||||||||||||
Consumer Staples | 0 | 463 | 0 | 463 | ||||||||||||
Energy | 0 | 2,374 | 0 | 2,374 | ||||||||||||
Financials | 0 | 1,007 | 0 | 1,007 | ||||||||||||
Materials | 0 | 716 | 0 | 716 | ||||||||||||
Telecommunication Services | 0 | 309 | 0 | 309 | ||||||||||||
Portugal | ||||||||||||||||
Consumer Staples | 0 | 104 | 0 | 104 | ||||||||||||
Financials | 0 | 0 | 1 | 1 | ||||||||||||
Materials | 0 | 138 | 0 | 138 | ||||||||||||
Utilities | 0 | 662 | 0 | 662 | ||||||||||||
Singapore | ||||||||||||||||
Consumer Discretionary | 0 | 106 | 0 | 106 | ||||||||||||
Consumer Staples | 0 | 116 | 0 | 116 | ||||||||||||
Financials | 0 | 2,199 | 0 | 2,199 | ||||||||||||
Industrials | 0 | 1,046 | 0 | 1,046 | ||||||||||||
Information Technology | 0 | 176 | 0 | 176 | ||||||||||||
Real Estate | 0 | 234 | 0 | 234 | ||||||||||||
Telecommunication Services | 0 | 260 | 0 | 260 | ||||||||||||
South Africa | ||||||||||||||||
Financials | 0 | 185 | 0 | 185 | ||||||||||||
Materials | 0 | 165 | 0 | 165 | ||||||||||||
Spain | ||||||||||||||||
Consumer Staples | 0 | 249 | 0 | 249 | ||||||||||||
Energy | 0 | 1,054 | 0 | 1,054 | ||||||||||||
Financials | 0 | 12,643 | 0 | 12,643 | ||||||||||||
Industrials | 3 | 1,847 | 0 | 1,850 | ||||||||||||
Telecommunication Services | 0 | 2,734 | 0 | 2,734 | ||||||||||||
Utilities | 0 | 2,996 | 0 | 2,996 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Sweden | ||||||||||||||||
Consumer Discretionary | $ | 0 | $ | 256 | $ | 0 | $ | 256 | ||||||||
Consumer Staples | 241 | 159 | 0 | 400 | ||||||||||||
Financials | 0 | 3,568 | 0 | 3,568 | ||||||||||||
Health Care | 0 | 123 | 0 | 123 | ||||||||||||
Industrials | 0 | 2,675 | 0 | 2,675 | ||||||||||||
Information Technology | 0 | 1,087 | 0 | 1,087 | ||||||||||||
Materials | 0 | 465 | 0 | 465 | ||||||||||||
Telecommunication Services | 0 | 1,489 | 0 | 1,489 | ||||||||||||
Switzerland | ||||||||||||||||
Consumer Discretionary | 294 | 564 | 0 | 858 | ||||||||||||
Consumer Staples | 0 | 3,580 | 0 | 3,580 | ||||||||||||
Energy | 629 | 0 | 0 | 629 | ||||||||||||
Financials | 0 | 10,192 | 0 | 10,192 | ||||||||||||
Health Care | 0 | 6,246 | 0 | 6,246 | ||||||||||||
Industrials | 0 | 2,144 | 0 | 2,144 | ||||||||||||
Information Technology | 503 | 645 | 0 | 1,148 | ||||||||||||
Materials | 0 | 2,422 | 0 | 2,422 | ||||||||||||
Telecommunication Services | 0 | 200 | 0 | 200 | ||||||||||||
United Kingdom | ||||||||||||||||
Consumer Discretionary | 2,705 | 5,303 | 0 | 8,008 | ||||||||||||
Consumer Staples | 0 | 9,105 | 0 | 9,105 | ||||||||||||
Energy | 0 | 8,349 | 0 | 8,349 | ||||||||||||
Financials | 0 | 28,065 | 0 | 28,065 | ||||||||||||
Health Care | 0 | 4,168 | 0 | 4,168 | ||||||||||||
Industrials | 0 | 7,620 | 0 | 7,620 | ||||||||||||
Information Technology | 0 | 116 | 0 | 116 | ||||||||||||
Materials | 0 | 6,385 | 0 | 6,385 | ||||||||||||
Telecommunication Services | 0 | 1,774 | 0 | 1,774 | ||||||||||||
Utilities | 0 | 3,102 | 0 | 3,102 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 0 | 604 | 0 | 604 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Germany | ||||||||||||||||
Industrials | 0 | 2,428 | 0 | 2,428 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
Australia | ||||||||||||||||
Real Estate | 0 | 239 | 0 | 239 | ||||||||||||
Canada | ||||||||||||||||
Real Estate | 679 | 0 | 0 | 679 | ||||||||||||
United Kingdom | ||||||||||||||||
Real Estate | 0 | 605 | 0 | 605 | ||||||||||||
Rights | ||||||||||||||||
Spain | ||||||||||||||||
Industrials | 23 | 0 | 0 | 23 | ||||||||||||
Warrants | ||||||||||||||||
Spain | ||||||||||||||||
Industrials | 3 | 0 | 0 | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 44,527 | $ | 434,049 | $ | 1 | $ | 478,577 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 50 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Fund
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 99.4% | ||||||||||||
| COMMON STOCKS 98.7% | ||||||||||||
| BERMUDA 0.1% | ||||||||||||
| FINANCIALS 0.1% | ||||||||||||
XL Group Ltd. | 9,923 | $ | 435 | |||||||||
|
| |||||||||||
Total Bermuda | 435 | |||||||||||
|
| |||||||||||
| CANADA 0.0% | ||||||||||||
| FINANCIALS 0.0% | ||||||||||||
Thomson Reuters Corp. | 2,611 | 121 | ||||||||||
|
| |||||||||||
Total Canada | 121 | |||||||||||
|
| |||||||||||
| IRELAND 0.1% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Adient PLC | 405 | 26 | ||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Accenture PLC ‘A’ | 7,898 | 977 | ||||||||||
|
| |||||||||||
Total Ireland | 1,003 | |||||||||||
|
| |||||||||||
| UNITED STATES 98.5% | ||||||||||||
| CONSUMER DISCRETIONARY 10.5% | ||||||||||||
Abercrombie & Fitch Co. ‘A’ | 62,046 | 772 | ||||||||||
American Eagle Outfitters, Inc. | 14,301 | 172 | ||||||||||
Ascena Retail Group, Inc. (a) | 31,107 | 67 | ||||||||||
AutoNation, Inc. (a) | 4,781 | 202 | ||||||||||
Bed Bath & Beyond, Inc. | 54,440 | 1,655 | ||||||||||
Best Buy Co., Inc. | 42,511 | 2,437 | ||||||||||
Big Lots, Inc. | 16,449 | 794 | ||||||||||
Brinker International, Inc. | 7,674 | 292 | ||||||||||
Caesars Entertainment Corp. (a) | 39,351 | 472 | ||||||||||
Carnival Corp. | 9,504 | 623 | ||||||||||
CBS Corp. NVDR ‘B’ | 32,221 | 2,055 | ||||||||||
Chico’s FAS, Inc. | 22,141 | 209 | ||||||||||
Coach, Inc. | 11,641 | 551 | ||||||||||
Comcast Corp. ‘A’ | 108,791 | 4,234 | ||||||||||
Dick’s Sporting Goods, Inc. | 5,158 | 205 | ||||||||||
Dillard’s, Inc. ‘A’ | 15,598 | 900 | ||||||||||
Discovery Communications, Inc. ‘A’ (a) | 12,000 | 310 | ||||||||||
Foot Locker, Inc. | 2,499 | 123 | ||||||||||
Ford Motor Co. | 124,685 | 1,395 | ||||||||||
Fossil Group, Inc. (a) | 38,230 | 396 | ||||||||||
GameStop Corp. ‘A’ | 46,092 | 996 | ||||||||||
Gap, Inc. | 67,647 | 1,487 | ||||||||||
General Motors Co. | 63,591 | 2,221 | ||||||||||
Genuine Parts Co. | 1,410 | 131 | ||||||||||
GNC Holdings, Inc. ‘A’ | 78,179 | 659 | ||||||||||
Goodyear Tire & Rubber Co. | 8,785 | 307 | ||||||||||
Graham Holdings Co. ‘B’ | 423 | 254 | ||||||||||
Guess?, Inc. | 22,240 | 284 | ||||||||||
H&R Block, Inc. | 3,986 | 123 | ||||||||||
Harley-Davidson, Inc. | 10,799 | 583 | ||||||||||
Hasbro, Inc. | 1,032 | 115 | ||||||||||
Home Depot, Inc. | 21,805 | 3,345 | ||||||||||
HSN, Inc. | 3,419 | 109 | ||||||||||
International Game Technology PLC | 26,491 | 485 | ||||||||||
Interpublic Group of Cos., Inc. | 20,285 | 499 | ||||||||||
JC Penney Co., Inc. (a) | 38,184 | 177 | ||||||||||
Kohl’s Corp. | 73,186 | 2,830 | ||||||||||
L Brands, Inc. | 1,628 | 88 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Las Vegas Sands Corp. | 6,894 | $ | 440 | |||||||||
Liberty Interactive Corp. QVC Group ‘A’ (a) | 10,166 | 249 | ||||||||||
Lowe’s Cos., Inc. | 36,200 | 2,807 | ||||||||||
Macy’s, Inc. | 48,634 | 1,130 | ||||||||||
Mattel, Inc. | 15,154 | 326 | ||||||||||
McDonald’s Corp. | 22,024 | 3,373 | ||||||||||
MGM Resorts International | 9,350 | 293 | ||||||||||
NIKE, Inc. ‘B’ | 3,674 | 217 | ||||||||||
Nordstrom, Inc. | 20,725 | 991 | ||||||||||
Office Depot, Inc. | 129,894 | 733 | ||||||||||
Omnicom Group, Inc. | 13,216 | 1,096 | ||||||||||
Ralph Lauren Corp. | 6,034 | 445 | ||||||||||
Regal Entertainment Group ‘A’ | 16,476 | 337 | ||||||||||
Rent-A-Center, Inc. | 21,513 | 252 | ||||||||||
Sally Beauty Holdings, Inc. (a) | 5,416 | 110 | ||||||||||
Scripps Networks Interactive, Inc. ‘A’ | 5,323 | 364 | ||||||||||
Sears Holdings Corp. (a) | 36,576 | 324 | ||||||||||
Staples, Inc. | 174,246 | 1,755 | ||||||||||
Target Corp. | 38,280 | 2,002 | ||||||||||
Tiffany & Co. | 1,307 | 123 | ||||||||||
Time Warner, Inc. | 48,678 | 4,888 | ||||||||||
Time, Inc. | 25,657 | 368 | ||||||||||
TJX Cos., Inc. | 4,626 | 334 | ||||||||||
Tribune Media Co. ‘A’ | 14,425 | 588 | ||||||||||
Tupperware Brands Corp. | 9,203 | 646 | ||||||||||
Twenty-First Century Fox, Inc. ‘A’ | 30,331 | 860 | ||||||||||
Urban Outfitters, Inc. (a) | 9,805 | 182 | ||||||||||
Viacom, Inc. ‘B’ | 90,882 | 3,051 | ||||||||||
Visteon Corp. (a) | 5,437 | 555 | ||||||||||
Walt Disney Co. | 16,938 | 1,800 | ||||||||||
Weight Watchers International, Inc. (a) | 33,697 | 1,126 | ||||||||||
Wendy’s Co. | 22,353 | 347 | ||||||||||
Wyndham Worldwide Corp. | 16,463 | 1,653 | ||||||||||
Wynn Resorts Ltd. | 6,984 | 937 | ||||||||||
|
| |||||||||||
| 67,259 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 7.4% | ||||||||||||
Altria Group, Inc. | 23,166 | 1,725 | ||||||||||
Archer-Daniels-Midland Co. | 20,572 | 851 | ||||||||||
Avon Products, Inc. (a) | 204,405 | 777 | ||||||||||
Bunge Ltd. | 11,650 | 869 | ||||||||||
Coca-Cola Co. | 68,814 | 3,086 | ||||||||||
Colgate-Palmolive Co. | 13,229 | 981 | ||||||||||
Costco Wholesale Corp. | 1,602 | 256 | ||||||||||
CVS Health Corp. | 21,255 | 1,710 | ||||||||||
Dr Pepper Snapple Group, Inc. | 7,055 | 643 | ||||||||||
General Mills, Inc. | 13,935 | 772 | ||||||||||
Herbalife Ltd. (a) | 16,619 | 1,185 | ||||||||||
HRG Group, Inc. | 28,093 | 498 | ||||||||||
JM Smucker Co. | 980 | 116 | ||||||||||
Kellogg Co. | 2,907 | 202 | ||||||||||
Kimberly-Clark Corp. | 1,400 | 181 | ||||||||||
Kroger Co. | 75,151 | 1,753 | ||||||||||
Mondelez International, Inc. ‘A’ | 19,152 | 827 | ||||||||||
Nu Skin Enterprises, Inc. ‘A’ | 10,361 | 651 | ||||||||||
PepsiCo, Inc. | 41,629 | 4,808 | ||||||||||
Philip Morris International, Inc. | 54,269 | 6,374 | ||||||||||
Procter & Gamble Co. | 88,125 | 7,680 | ||||||||||
Rite Aid Corp. (a) | 151,840 | 448 | ||||||||||
Safeway Casa Ley CVR | 38,866 | 5 | ||||||||||
Safeway PDC LLC CVR | 38,866 | 1 | ||||||||||
SUPERVALU, Inc. (a) | 149,672 | 492 | ||||||||||
Sysco Corp. | 10,403 | 524 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Wal-Mart Stores, Inc. | 119,494 | $ | 9,043 | |||||||||
Whole Foods Market, Inc. | 18,912 | 796 | ||||||||||
|
| |||||||||||
| 47,254 | ||||||||||||
|
| |||||||||||
| ENERGY 9.0% | ||||||||||||
Anadarko Petroleum Corp. | 6,366 | 289 | ||||||||||
Apache Corp. | 24,963 | 1,196 | ||||||||||
Baker Hughes, Inc. | 10,700 | 583 | ||||||||||
California Resources Corp. (a) | 48,163 | 412 | ||||||||||
Chesapeake Energy Corp. (a) | 451,036 | 2,242 | ||||||||||
Chevron Corp. | 115,011 | 11,999 | ||||||||||
ConocoPhillips | 109,589 | 4,818 | ||||||||||
CONSOL Energy, Inc. (a) | 25,104 | 375 | ||||||||||
CVR Energy, Inc. | 19,326 | 421 | ||||||||||
Denbury Resources, Inc. (a) | 191,605 | 293 | ||||||||||
Devon Energy Corp. | 5,856 | 187 | ||||||||||
Diamond Offshore Drilling, Inc. (a) | 30,493 | 330 | ||||||||||
EOG Resources, Inc. | 1,015 | 92 | ||||||||||
EP Energy Corp. ‘A’ (a) | 54,343 | 199 | ||||||||||
Exxon Mobil Corp. | 185,941 | 15,011 | ||||||||||
Halliburton Co. | 20,084 | 858 | ||||||||||
Helmerich & Payne, Inc. | 1,487 | 81 | ||||||||||
Hess Corp. | 32,096 | 1,408 | ||||||||||
HollyFrontier Corp. | 39,662 | 1,090 | ||||||||||
Kinder Morgan, Inc. | 50,352 | 965 | ||||||||||
Marathon Oil Corp. | 122,398 | 1,450 | ||||||||||
Marathon Petroleum Corp. | 44,821 | 2,346 | ||||||||||
Murphy Oil Corp. | 46,612 | 1,195 | ||||||||||
Nabors Industries Ltd. | 55,733 | 454 | ||||||||||
National Oilwell Varco, Inc. | 48,275 | 1,590 | ||||||||||
Occidental Petroleum Corp. | 29,868 | 1,788 | ||||||||||
Oceaneering International, Inc. | 8,865 | 202 | ||||||||||
ONEOK, Inc. | 4,839 | 252 | ||||||||||
Patterson-UTI Energy, Inc. | 9,429 | 190 | ||||||||||
Phillips 66 | 10,727 | 887 | ||||||||||
QEP Resources, Inc. (a) | 8,739 | 88 | ||||||||||
Schlumberger Ltd. | 10,628 | 700 | ||||||||||
Southwestern Energy Co. (a) | 22,909 | 139 | ||||||||||
Superior Energy Services, Inc. (a) | 19,928 | 208 | ||||||||||
Tesoro Corp. | 5,626 | 527 | ||||||||||
Valero Energy Corp. | 31,684 | 2,137 | ||||||||||
Whiting Petroleum Corp. (a) | 26,136 | �� | 144 | |||||||||
Williams Cos., Inc. | 22,634 | 685 | ||||||||||
WPX Energy, Inc. (a) | 9,738 | 94 | ||||||||||
|
| |||||||||||
| 57,925 | ||||||||||||
|
| |||||||||||
| FINANCIALS 18.7% | ||||||||||||
Aflac, Inc. | 13,381 | 1,039 | ||||||||||
Allstate Corp. | 27,798 | 2,458 | ||||||||||
Ally Financial, Inc. | 152,146 | 3,180 | ||||||||||
American Express Co. | 55,329 | 4,661 | ||||||||||
American Financial Group, Inc. | 4,410 | 438 | ||||||||||
American International Group, Inc. | 130,206 | 8,140 | ||||||||||
Ameriprise Financial, Inc. | 12,702 | 1,617 | ||||||||||
Assurant, Inc. | 9,966 | 1,033 | ||||||||||
Bank of America Corp. | 412,120 | 9,998 | ||||||||||
Bank of New York Mellon Corp. | 29,335 | 1,497 | ||||||||||
BB&T Corp. | 16,787 | 762 | ||||||||||
Berkshire Hathaway, Inc. ‘B’ (a) | 19,651 | 3,328 | ||||||||||
BlackRock, Inc. | 1,533 | 648 | ||||||||||
Capital One Financial Corp. | 34,755 | 2,871 | ||||||||||
CIT Group, Inc. | 14,208 | 692 | ||||||||||
Citigroup, Inc. | 167,897 | 11,229 | ||||||||||
Citizens Financial Group, Inc. | 34,917 | 1,246 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 51 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
CME Group, Inc. | 952 | $ | 119 | |||||||||
CNO Financial Group, Inc. | 13,228 | 276 | ||||||||||
Comerica, Inc. | 4,514 | 331 | ||||||||||
Discover Financial Services | 29,003 | 1,804 | ||||||||||
Donnelley Financial Solutions, Inc. (a) | 3,420 | 79 | ||||||||||
Fifth Third Bancorp | 36,633 | 951 | ||||||||||
Franklin Resources, Inc. | 23,740 | 1,063 | ||||||||||
Genworth Financial, Inc. ‘A’ (a) | 327,760 | 1,236 | ||||||||||
Goldman Sachs Group, Inc. | 18,674 | 4,144 | ||||||||||
Hartford Financial Services Group, Inc. | 20,667 | 1,086 | ||||||||||
Invesco Ltd. | 12,364 | 435 | ||||||||||
JPMorgan Chase & Co. | 165,584 | 15,134 | ||||||||||
KeyCorp | 11,327 | 212 | ||||||||||
Legg Mason, Inc. | 28,321 | 1,081 | ||||||||||
Leucadia National Corp. | 24,768 | 648 | ||||||||||
Lincoln National Corp. | 16,041 | 1,084 | ||||||||||
Loews Corp. | 20,980 | 982 | ||||||||||
LPL Financial Holdings, Inc. | 7,824 | 332 | ||||||||||
MetLife, Inc. | 41,759 | 2,294 | ||||||||||
Morgan Stanley | 15,506 | 691 | ||||||||||
Navient Corp. | 131,450 | 2,189 | ||||||||||
New York Community Bancorp, Inc. | 10,947 | 144 | ||||||||||
People’s United Financial, Inc. | 24,419 | 431 | ||||||||||
PHH Corp. (a) | 20,086 | 277 | ||||||||||
PNC Financial Services Group, Inc. | 14,664 | 1,831 | ||||||||||
Principal Financial Group, Inc. | 3,888 | 249 | ||||||||||
Progressive Corp. | 11,718 | 517 | ||||||||||
Prudential Financial, Inc. | 8,402 | 909 | ||||||||||
Raymond James Financial, Inc. | 1,533 | 123 | ||||||||||
Regions Financial Corp. | 54,147 | 793 | ||||||||||
Reinsurance Group of America, Inc. | 4,165 | 535 | ||||||||||
Santander Consumer USA Holdings, Inc. (a) | 52,402 | 669 | ||||||||||
SLM Corp. (a) | 110,624 | 1,272 | ||||||||||
State Street Corp. | 15,323 | 1,375 | ||||||||||
SunTrust Banks, Inc. | 18,510 | 1,050 | ||||||||||
Synchrony Financial | 52,190 | 1,556 | ||||||||||
T Rowe Price Group, Inc. | 1,692 | 126 | ||||||||||
Travelers Cos., Inc. | 38,573 | 4,881 | ||||||||||
U.S. Bancorp | 38,562 | 2,002 | ||||||||||
Unum Group | 2,663 | 124 | ||||||||||
Voya Financial, Inc. | 68,511 | 2,527 | ||||||||||
Wells Fargo & Co. | 124,741 | 6,912 | ||||||||||
White Mountains Insurance Group Ltd. | 316 | 274 | ||||||||||
|
| |||||||||||
| 119,585 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 11.8% | ||||||||||||
Abbott Laboratories | 20,922 | 1,017 | ||||||||||
AbbVie, Inc. | 10,971 | 795 | ||||||||||
Aetna, Inc. | 19,265 | 2,925 | ||||||||||
Amgen, Inc. | 23,775 | 4,095 | ||||||||||
Anthem, Inc. | 40,252 | 7,573 | ||||||||||
Baxter International, Inc. | 7,290 | 441 | ||||||||||
Becton Dickinson and Co. | 2,031 | 396 | ||||||||||
Bioverativ, Inc. (a) | 284 | 17 | ||||||||||
Bristol-Myers Squibb Co. | 6,693 | 373 | ||||||||||
Brookdale Senior Living, Inc. (a) | 19,437 | 286 | ||||||||||
Cardinal Health, Inc. | 2,223 | 173 | ||||||||||
Cigna Corp. | 708 | 119 | ||||||||||
Community Health Systems, Inc. (a) | 146,098 | 1,455 | ||||||||||
CR Bard, Inc. | 665 | 210 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Eli Lilly & Co. | 11,824 | $ | 973 | |||||||||
Envision Healthcare Corp. (a) | 6,077 | 381 | ||||||||||
Express Scripts Holding Co. (a) | 27,235 | 1,739 | ||||||||||
Gilead Sciences, Inc. | 16,955 | 1,200 | ||||||||||
HCA Holdings, Inc. (a) | 46,808 | 4,082 | ||||||||||
Humana, Inc. | 4,841 | 1,165 | ||||||||||
Johnson & Johnson | 60,939 | 8,062 | ||||||||||
Kindred Healthcare, Inc. | 43,332 | 505 | ||||||||||
LifePoint Health, Inc. (a) | 15,396 | 1,034 | ||||||||||
Mallinckrodt PLC (a) | 5,092 | 228 | ||||||||||
McKesson Corp. | 4,725 | 777 | ||||||||||
Merck & Co., Inc. | 146,167 | 9,368 | ||||||||||
Patterson Cos., Inc. | 4,792 | 225 | ||||||||||
Pfizer, Inc. | 470,715 | 15,811 | ||||||||||
Quest Diagnostics, Inc. | 12,509 | 1,390 | ||||||||||
Tenet Healthcare Corp. (a) | 64,414 | 1,246 | ||||||||||
UnitedHealth Group, Inc. | 29,923 | 5,548 | ||||||||||
Universal Health Services, Inc. ‘B’ | 1,747 | 213 | ||||||||||
Valeant Pharmaceuticals International, Inc. (a) | 96,236 | 1,665 | ||||||||||
Varex Imaging Corp. (a) | 995 | 34 | ||||||||||
Varian Medical Systems, Inc. (a) | 1,422 | 147 | ||||||||||
Zimmer Biomet Holdings, Inc. | 1,467 | 188 | ||||||||||
|
| |||||||||||
| 75,856 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 10.0% | ||||||||||||
3M Co. | 10,928 | 2,275 | ||||||||||
AGCO Corp. | 6,728 | 453 | ||||||||||
American Airlines Group, Inc. | 31,009 | 1,560 | ||||||||||
Armstrong World Industries, Inc. (a) | 12,693 | 584 | ||||||||||
Avis Budget Group, Inc. (a) | 49,263 | 1,343 | ||||||||||
Boeing Co. | 9,106 | 1,801 | ||||||||||
Caterpillar, Inc. | 42,548 | 4,572 | ||||||||||
Cintas Corp. | 851 | 107 | ||||||||||
CSX Corp. | 66,392 | 3,622 | ||||||||||
Cummins, Inc. | 8,722 | 1,415 | ||||||||||
Deere & Co. | 41,037 | 5,072 | ||||||||||
Delta Air Lines, Inc. | 1,297 | 70 | ||||||||||
Dover Corp. | 8,351 | 670 | ||||||||||
Dun & Bradstreet Corp. | 3,191 | 345 | ||||||||||
Emerson Electric Co. | 47,676 | 2,842 | ||||||||||
FedEx Corp. | 4,628 | 1,006 | ||||||||||
Flowserve Corp. | 9,948 | 462 | ||||||||||
Fluor Corp. | 15,413 | 706 | ||||||||||
Fortive Corp. | 1,717 | 109 | ||||||||||
General Dynamics Corp. | 5,098 | 1,010 | ||||||||||
General Electric Co. | 247,125 | 6,675 | ||||||||||
Hertz Global Holdings, Inc. (a) | 54,844 | 631 | ||||||||||
Honeywell International, Inc. | 4,053 | 540 | ||||||||||
Illinois Tool Works, Inc. | 17,217 | 2,466 | ||||||||||
Ingersoll-Rand PLC | 3,793 | 347 | ||||||||||
Johnson Controls International PLC | 7,987 | 346 | ||||||||||
L3 Technologies, Inc. | 5,015 | 838 | ||||||||||
Lincoln Electric Holdings, Inc. | 1,397 | 129 | ||||||||||
Lockheed Martin Corp. | 3,309 | 919 | ||||||||||
LSC Communications, Inc. | 3,420 | 73 | ||||||||||
ManpowerGroup, Inc. | 5,300 | 592 | ||||||||||
Norfolk Southern Corp. | 16,169 | 1,968 | ||||||||||
Northrop Grumman Corp. | 11,499 | 2,952 | ||||||||||
Oshkosh Corp. | 5,529 | 381 | ||||||||||
Owens Corning | 1,924 | 129 | ||||||||||
PACCAR, Inc. | 2,177 | 144 | ||||||||||
Parker-Hannifin Corp. | 2,737 | 437 | ||||||||||
Pitney Bowes, Inc. | 48,630 | 734 | ||||||||||
Quanta Services, Inc. (a) | 11,312 | 372 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Raytheon Co. | 8,198 | $ | 1,324 | |||||||||
Republic Services, Inc. | 7,998 | 510 | ||||||||||
RR Donnelley & Sons Co. | 32,652 | 409 | ||||||||||
Ryder System, Inc. | 6,220 | 448 | ||||||||||
Stanley Black & Decker, Inc. | 1,449 | 204 | ||||||||||
Timken Co. | 6,558 | 303 | ||||||||||
Trinity Industries, Inc. | 17,837 | 500 | ||||||||||
Union Pacific Corp. | 37,671 | 4,103 | ||||||||||
United Continental Holdings, Inc. (a) | 5,028 | 378 | ||||||||||
United Rentals, Inc. (a) | 4,409 | 497 | ||||||||||
United Technologies Corp. | 26,462 | 3,231 | ||||||||||
Univar, Inc. (a) | 3,771 | 110 | ||||||||||
Waste Management, Inc. | 12,770 | 937 | ||||||||||
WW Grainger, Inc. | 2,424 | 437 | ||||||||||
|
| |||||||||||
| 64,088 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 17.7% | ||||||||||||
Activision Blizzard, Inc. | 25,313 | 1,457 | ||||||||||
Advanced Micro Devices, Inc. (a) | 20,275 | 253 | ||||||||||
Alphabet, Inc. ‘C’ (a) | 1,482 | 1,347 | ||||||||||
Amdocs Ltd. | 4,910 | 317 | ||||||||||
Anixter International, Inc. (a) | 2,511 | 196 | ||||||||||
Apple, Inc. | 134,396 | 19,356 | ||||||||||
Applied Materials, Inc. | 39,908 | 1,649 | ||||||||||
Arrow Electronics, Inc. (a) | 12,909 | 1,012 | ||||||||||
Avnet, Inc. | 14,978 | 582 | ||||||||||
Booz Allen Hamilton Holding Corp. | 24,931 | 811 | ||||||||||
Brocade Communications Systems, Inc. | 22,474 | 283 | ||||||||||
CA, Inc. | 32,196 | 1,110 | ||||||||||
Cisco Systems, Inc. | 150,854 | 4,722 | ||||||||||
Conduent, Inc. (a) | 19,238 | 307 | ||||||||||
Corning, Inc. | 117,372 | 3,527 | ||||||||||
Dell Technologies, Inc. ‘V’ (a) | 4,316 | 264 | ||||||||||
DXC Technology Co. | 24,001 | 1,841 | ||||||||||
eBay, Inc. (a) | 7,394 | 258 | ||||||||||
F5 Networks, Inc. (a) | 944 | 120 | ||||||||||
Fidelity National Information Services, Inc. | 2,218 | 189 | ||||||||||
First Data Corp. ‘A’ (a) | 6,435 | 117 | ||||||||||
Flex Ltd. (a) | 6,369 | 104 | ||||||||||
Hewlett Packard Enterprise Co. | 263,907 | 4,378 | ||||||||||
HP, Inc. | 236,608 | 4,136 | ||||||||||
Intel Corp. | 292,433 | 9,867 | ||||||||||
InterActiveCorp (a) | 9,622 | 993 | ||||||||||
International Business Machines Corp. | 88,651 | 13,637 | ||||||||||
Intuit, Inc. | 839 | 112 | ||||||||||
Jabil Circuit, Inc. | 17,629 | 515 | ||||||||||
Juniper Networks, Inc. | 24,765 | 691 | ||||||||||
Keysight Technologies, Inc. (a) | 8,260 | 322 | ||||||||||
KLA-Tencor Corp. | 7,364 | 674 | ||||||||||
Leidos Holdings, Inc. | 5,868 | 303 | ||||||||||
Micron Technology, Inc. (a) | 71,184 | 2,126 | ||||||||||
Microsoft Corp. | 145,904 | 10,057 | ||||||||||
Motorola Solutions, Inc. | 19,226 | 1,668 | ||||||||||
NCR Corp. (a) | 9,042 | 369 | ||||||||||
NetApp, Inc. | 41,738 | 1,672 | ||||||||||
Oracle Corp. | 110,817 | 5,556 | ||||||||||
Qorvo, Inc. (a) | 8,028 | 508 | ||||||||||
QUALCOMM, Inc. | 58,878 | 3,251 | ||||||||||
Seagate Technology PLC | 91,410 | 3,542 | ||||||||||
Symantec Corp. | 109,386 | 3,090 | ||||||||||
Tech Data Corp. (a) | 6,944 | 701 | ||||||||||
Teradata Corp. (a) | 22,240 | 656 | ||||||||||
Texas Instruments, Inc. | 21,995 | 1,692 | ||||||||||
| 52 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
TiVo Corp. | 4,644 | $ | 87 | |||||||||
Versum Materials, Inc. | 899 | 29 | ||||||||||
Western Digital Corp. | 9,795 | 868 | ||||||||||
Western Union Co. | 52,717 | 1,004 | ||||||||||
Xerox Corp. | 41,416 | 1,190 | ||||||||||
Xilinx, Inc. | 1,772 | 114 | ||||||||||
|
| |||||||||||
| 113,630 | ||||||||||||
|
| |||||||||||
| MATERIALS 4.2% | ||||||||||||
AdvanSix, Inc. (a) | 387 | 12 | ||||||||||
Albemarle Corp. | 1,409 | 149 | ||||||||||
Alcoa Corp. | 30,894 | 1,009 | ||||||||||
Ashland Global Holdings, Inc. | 3,346 | 220 | ||||||||||
Avery Dennison Corp. | 2,019 | 178 | ||||||||||
Ball Corp. | 7,094 | 299 | ||||||||||
Bemis Co., Inc. | 3,257 | 151 | ||||||||||
CF Industries Holdings, Inc. | 31,742 | 887 | ||||||||||
Chemours Co. | 67,952 | 2,577 | ||||||||||
Cliffs Natural Resources, Inc. (a) | 59,667 | 413 | ||||||||||
Domtar Corp. | 22,288 | �� | 856 | |||||||||
Dow Chemical Co. | 35,259 | 2,224 | ||||||||||
E.I. du Pont de Nemours & Co. | 20,630 | 1,665 | ||||||||||
FMC Corp. | 2,414 | 176 | ||||||||||
Freeport-McMoRan, Inc. (a) | 287,397 | 3,452 | ||||||||||
Huntsman Corp. | 26,345 | 681 | ||||||||||
International Paper Co. | 23,185 | 1,312 | ||||||||||
LyondellBasell Industries NV ‘A’ | 36,340 | 3,067 | ||||||||||
Monsanto Co. | 17,811 | 2,108 | ||||||||||
Mosaic Co. | 76,154 | 1,739 | ||||||||||
Newmont Mining Corp. | 30,701 | 994 | ||||||||||
Nucor Corp. | 3,955 | 229 | ||||||||||
Owens-Illinois, Inc. (a) | 16,423 | 393 | ||||||||||
Packaging Corp. of America | 1,209 | 135 | ||||||||||
PPG Industries, Inc. | 4,027 | 443 | ||||||||||
Praxair, Inc. | 5,791 | 768 | ||||||||||
Reliance Steel & Aluminum Co. | 6,416 | 467 | ||||||||||
U.S. Steel Corp. | 16,104 | 356 | ||||||||||
WestRock Co. | 2,327 | 132 | ||||||||||
|
| |||||||||||
| 27,092 | ||||||||||||
|
| |||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
| TELECOMMUNICATION SERVICES 3.5% | ||||||||||||
AT&T, Inc. | 308,056 | $ | 11,623 | |||||||||
CenturyLink, Inc. | 124,733 | 2,979 | ||||||||||
Frontier Communications Corp. | 168,469 | 195 | ||||||||||
T-Mobile US, Inc. (a) | 5,594 | 339 | ||||||||||
Telephone & Data Systems, Inc. | 17,617 | 489 | ||||||||||
Verizon Communications, Inc. | 154,019 | 6,878 | ||||||||||
Windstream Holdings, Inc. | 47,053 | 183 | ||||||||||
|
| |||||||||||
| 22,686 | ||||||||||||
|
| |||||||||||
| UTILITIES 5.7% | ||||||||||||
AES Corp. | 175,858 | 1,954 | ||||||||||
Alliant Energy Corp. | 2,768 | 111 | ||||||||||
Ameren Corp. | 23,858 | 1,304 | ||||||||||
American Electric Power Co., Inc. | 27,555 | 1,914 | ||||||||||
Calpine Corp. (a) | 126,661 | 1,714 | ||||||||||
CenterPoint Energy, Inc. | 49,916 | 1,367 | ||||||||||
CMS Energy Corp. | 5,391 | 249 | ||||||||||
Consolidated Edison, Inc. | 24,782 | 2,003 | ||||||||||
Dominion Energy, Inc. | 1,428 | 109 | ||||||||||
DTE Energy Co. | 9,775 | 1,034 | ||||||||||
Duke Energy Corp. | 33,301 | 2,784 | ||||||||||
Edison International | 15,841 | 1,239 | ||||||||||
Entergy Corp. | 42,222 | 3,241 | ||||||||||
Exelon Corp. | 92,126 | 3,323 | ||||||||||
FirstEnergy Corp. | 81,302 | 2,371 | ||||||||||
Great Plains Energy, Inc. | 12,075 | 354 | ||||||||||
Hawaiian Electric Industries, Inc. | 3,702 | 120 | ||||||||||
MDU Resources Group, Inc. | 38,270 | 1,003 | ||||||||||
National Fuel Gas Co. | 4,905 | 274 | ||||||||||
NextEra Energy, Inc. | 5,047 | 707 | ||||||||||
NRG Energy, Inc. | 86,893 | 1,496 | ||||||||||
OGE Energy Corp. | 3,537 | 123 | ||||||||||
PG&E Corp. | 17,433 | 1,157 | ||||||||||
Pinnacle West Capital Corp. | 8,984 | 765 | ||||||||||
Portland General Electric Co. | 2,066 | 94 | ||||||||||
PPL Corp. | 25,953 | 1,003 | ||||||||||
Public Service Enterprise Group, Inc. | 34,493 | 1,484 | ||||||||||
SCANA Corp. | 4,758 | 319 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Sempra Energy | 820 | $ | 93 | |||||||||
Southern Co. | 27,095 | 1,297 | ||||||||||
Southwest Gas Holdings, Inc. | 1,483 | 108 | ||||||||||
UGI Corp. | 5,327 | 258 | ||||||||||
Vectren Corp. | 4,230 | 247 | ||||||||||
Westar Energy, Inc. | 1,245 | 66 | ||||||||||
Xcel Energy, Inc. | 17,191 | 789 | ||||||||||
|
| |||||||||||
| 36,474 | ||||||||||||
|
| |||||||||||
Total United States | 631,849 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $507,200) |
| 633,408 | ||||||||||
|
| |||||||||||
| REAL ESTATE INVESTMENT TRUSTS 0.7% | ||||||||||||
| UNITED STATES 0.7% | ||||||||||||
| FINANCIALS 0.4% | ||||||||||||
AGNC Investment Corp. | 30,331 | 646 | ||||||||||
Annaly Capital Management, Inc. | 91,230 | 1,099 | ||||||||||
Chimera Investment Corp. | 19,267 | 359 | ||||||||||
Two Harbors Investment Corp. | 24,480 | 243 | ||||||||||
|
| |||||||||||
| 2,347 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.3% | ||||||||||||
CoreCivic, Inc. | 21,975 | 606 | ||||||||||
Hospitality Properties Trust | 9,497 | 277 | ||||||||||
Iron Mountain, Inc. | 16,046 | 551 | ||||||||||
Quality Care Properties, Inc. (a) | 13,259 | 243 | ||||||||||
Senior Housing Properties Trust | 11,493 | 235 | ||||||||||
Weyerhaeuser Co. | 4,671 | 156 | ||||||||||
|
| |||||||||||
| 2,068 | ||||||||||||
|
| |||||||||||
| Total Real Estate Investment Trusts (Cost $3,967) | 4,415 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $511,167) | 637,823 | |||||||||||
| Total Investments 99.4% (Cost $511,167) | $ | 637,823 | ||||||||||
| Other Assets and Liabilities, net 0.6% | 3,608 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 641,431 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Security did not produce income within the last twelve months. |
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks |
| |||||||||||||||
Bermuda |
| |||||||||||||||
Financials | $ | 435 | $ | 0 | $ | 0 | $ | 435 | ||||||||
Canada |
| |||||||||||||||
Financials | 121 | 0 | 0 | 121 | ||||||||||||
Ireland |
| |||||||||||||||
Consumer Discretionary | 26 | 0 | 0 | 26 | ||||||||||||
Information Technology | 977 | 0 | 0 | 977 | ||||||||||||
United States |
| |||||||||||||||
Consumer Discretionary | 67,259 | 0 | 0 | 67,259 | ||||||||||||
Consumer Staples | 47,248 | 0 | 6 | 47,254 | ||||||||||||
Energy | 57,925 | 0 | 0 | 57,925 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Financials | $ | 119,585 | $ | 0 | $ | 0 | $ | 119,585 | ||||||||
Health Care | 75,856 | 0 | 0 | 75,856 | ||||||||||||
Industrials | 64,088 | 0 | 0 | 64,088 | ||||||||||||
Information Technology | 113,630 | 0 | 0 | 113,630 | ||||||||||||
Materials | 27,092 | 0 | 0 | 27,092 | ||||||||||||
Telecommunication Services | 22,686 | 0 | 0 | 22,686 | ||||||||||||
Utilities | 36,474 | 0 | 0 | 36,474 | ||||||||||||
Real Estate Investment Trusts |
| |||||||||||||||
United States |
| |||||||||||||||
Financials | 2,347 | 0 | 0 | 2,347 | ||||||||||||
Real Estate | 2,068 | 0 | 0 | 2,068 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 637,817 | $ | 0 | $ | 6 | $ | 637,823 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 53 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund
| SHARES | MARKET VALUE (000S) | |||||||||||
| INVESTMENTS IN SECURITIES 99.6% | ||||||||||||
| COMMON STOCKS 89.1% | ||||||||||||
| INDIA 0.0% | ||||||||||||
| CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Eros International PLC (a) | 1,412 | $ | 16 | |||||||||
|
| |||||||||||
Total India | 16 | |||||||||||
|
| |||||||||||
| UNITED KINGDOM 0.2% | ||||||||||||
| FINANCIALS 0.2% | ||||||||||||
Janus Henderson Group PLC (a) | 6,324 | 210 | ||||||||||
|
| |||||||||||
Total United Kingdom | 210 | |||||||||||
|
| |||||||||||
| UNITED STATES 88.9% | ||||||||||||
| CONSUMER DISCRETIONARY 17.1% | ||||||||||||
Aaron’s, Inc. | 10,462 | 407 | ||||||||||
Adtalem Global Education, Inc. | 15,103 | 573 | ||||||||||
AMC Entertainment Holdings, | 2,988 | 68 | ||||||||||
America’s Car-Mart, Inc. (a) | 1,703 | 66 | ||||||||||
American Axle & Manufacturing Holdings, Inc. (a) | 7,063 | 110 | ||||||||||
American Outdoor Brands Corp. (a) | 3,790 | 84 | ||||||||||
American Public Education, Inc. (a) | 2,846 | 67 | ||||||||||
Asbury Automotive Group, Inc. (a) | 2,586 | 146 | ||||||||||
Ascena Retail Group, Inc. (a) | 28,089 | 60 | ||||||||||
Ascent Capital Group, Inc. ‘A’ (a) | 3,447 | 53 | ||||||||||
Barnes & Noble Education, Inc. (a) | 9,204 | 98 | ||||||||||
Barnes & Noble, Inc. | 15,875 | 121 | ||||||||||
Beazer Homes USA, Inc. (a) | 2,520 | 35 | ||||||||||
Big 5 Sporting Goods Corp. | 4,337 | 57 | ||||||||||
Biglari Holdings, Inc. (a) | 120 | 48 | ||||||||||
BJ’s Restaurants, Inc. (a) | 1,060 | 39 | ||||||||||
Bloomin’ Brands, Inc. | 9,313 | 198 | ||||||||||
Bob Evans Farms, Inc. | 4,531 | 325 | ||||||||||
Boyd Gaming Corp. | 12,112 | 300 | ||||||||||
Bridgepoint Education, Inc. (a) | 1,720 | 25 | ||||||||||
Brinker International, Inc. | 1,987 | 76 | ||||||||||
Buckle, Inc. | 8,439 | 150 | ||||||||||
Buffalo Wild Wings, Inc. (a) | 362 | 46 | ||||||||||
Cable One, Inc. | 182 | 129 | ||||||||||
Caesars Acquisition Co. ‘A’ (a) | 4,215 | 80 | ||||||||||
Caleres, Inc. | 6,025 | 167 | ||||||||||
Callaway Golf Co. | 4,407 | 56 | ||||||||||
Capella Education Co. | 1,948 | 167 | ||||||||||
Career Education Corp. (a) | 18,154 | 174 | ||||||||||
Carrols Restaurant Group, Inc. (a) | 6,271 | 77 | ||||||||||
Cato Corp. ‘A’ | 4,857 | 85 | ||||||||||
Century Communities, Inc. (a) | 777 | 19 | ||||||||||
Cheesecake Factory, Inc. | 2,789 | 140 | ||||||||||
Chico’s FAS, Inc. | 7,804 | 74 | ||||||||||
Children’s Place, Inc. | 2,075 | 212 | ||||||||||
Choice Hotels International, Inc. | 2,387 | 153 | ||||||||||
Churchill Downs, Inc. | 156 | 29 | ||||||||||
Citi Trends, Inc. | 1,504 | 32 | ||||||||||
ClubCorp Holdings, Inc. | 989 | 13 | ||||||||||
Conn’s, Inc. (a) | 7,531 | 144 | ||||||||||
Container Store Group, Inc. (a) | 5,355 | 32 | ||||||||||
Cooper Tire & Rubber Co. | 5,016 | 181 | ||||||||||
Cooper-Standard Holding, Inc. (a) | 2,388 | 241 | ||||||||||
Core-Mark Holding Co., Inc. | 2,428 | 80 | ||||||||||
Crocs, Inc. (a) | 17,087 | 132 | ||||||||||
Dana, Inc. | 17,581 | 393 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Dave & Buster’s Entertainment, Inc. (a) | 2,580 | $ | 172 | |||||||||
Deckers Outdoor Corp. (a) | 3,301 | 225 | ||||||||||
Denny’s Corp. (a) | 3,503 | 41 | ||||||||||
DineEquity, Inc. | 1,596 | 70 | ||||||||||
Dorman Products, Inc. (a) | 1,263 | 105 | ||||||||||
Drive Shack, Inc. | 14,940 | 47 | ||||||||||
DSW Inc. ‘A’ | 7,393 | 131 | ||||||||||
Eldorado Resorts, Inc. (a) | 6,807 | 136 | ||||||||||
Entercom Communications | 1,237 | 13 | ||||||||||
Ethan Allen Interiors, Inc. | 2,033 | 66 | ||||||||||
Etsy, Inc. (a) | 740 | 11 | ||||||||||
EW Scripps Co. ‘A’ (a) | 1,025 | 18 | ||||||||||
Express, Inc. (a) | 16,630 | 112 | ||||||||||
Extended Stay America, Inc. | 2,859 | 55 | ||||||||||
Fiesta Restaurant Group, Inc. (a) | 1,787 | 37 | ||||||||||
Finish Line, Inc. ‘A’ | 11,448 | 162 | ||||||||||
Five Below, Inc. (a) | 1,493 | 74 | ||||||||||
Francesca’s Holdings Corp. (a) | 2,544 | 28 | ||||||||||
Fred’s, Inc. ‘A’ | 6,453 | 60 | ||||||||||
FTD Cos., Inc. (a) | 2,607 | 52 | ||||||||||
G-III Apparel Group Ltd. (a) | 2,191 | 55 | ||||||||||
Gannett Co., Inc. | 33,577 | 293 | ||||||||||
Genesco, Inc. (a) | 5,152 | 175 | ||||||||||
Gentherm, Inc. (a) | 283 | 11 | ||||||||||
GoPro, Inc. ‘A’ (a) | 4,500 | 37 | ||||||||||
Grand Canyon Education, Inc. (a) | 1,395 | 109 | ||||||||||
Gray Television, Inc. (a) | 1,196 | 16 | ||||||||||
Group 1 Automotive, Inc. | 2,997 | 190 | ||||||||||
Groupon, Inc. (a) | 52,841 | 203 | ||||||||||
Guess?, Inc. | 11,472 | 147 | ||||||||||
Haverty Furniture Cos., Inc. | 2,674 | 67 | ||||||||||
Helen of Troy Ltd. (a) | 1,237 | 116 | ||||||||||
Hibbett Sports, Inc. (a) | 3,340 | 69 | ||||||||||
Hilton Grand Vacations, Inc. (a) | 1,236 | 45 | ||||||||||
Horizon Global Corp. (a) | 1,124 | 16 | ||||||||||
Houghton Mifflin Harcourt Co. (a) | 7,461 | 92 | ||||||||||
Hovnanian Enterprises, Inc. ‘A’ (a) | 5,883 | 16 | ||||||||||
HSN, Inc. | 3,271 | 104 | ||||||||||
Iconix Brand Group, Inc. (a) | 28,502 | 197 | ||||||||||
ILG, Inc. | 2,902 | 80 | ||||||||||
International Speedway Corp. ‘A’ | 2,594 | 97 | ||||||||||
iRobot Corp. (a) | 1,563 | 131 | ||||||||||
Jack in the Box, Inc. | 1,730 | 170 | ||||||||||
JAKKS Pacific, Inc. (a) | 6,665 | 27 | ||||||||||
John Wiley & Sons, Inc. ‘A’ | 3,931 | 207 | ||||||||||
K12, Inc. (a) | 5,119 | 92 | ||||||||||
Kate Spade & Co. (a) | 2,650 | 49 | ||||||||||
KB Home | 913 | 22 | ||||||||||
Kirkland’s, Inc. (a) | 3,928 | 40 | ||||||||||
La Quinta Holdings, Inc. (a) | 7,026 | 104 | ||||||||||
La-Z-Boy, Inc. | 2,220 | 72 | ||||||||||
Lands’ End, Inc. (a) | 6,371 | 95 | ||||||||||
Laureate Education, Inc. ‘A’ (a) | 1,845 | 32 | ||||||||||
LCI Industries | 1,054 | 108 | ||||||||||
Libbey, Inc. | 6,723 | 54 | ||||||||||
Liberty TripAdvisor Holdings, Inc. ‘A’ (a) | 5,470 | 63 | ||||||||||
Lions Gate Entertainment | 458 | 13 | ||||||||||
Lions Gate Entertainment Corp. ‘B’ (a) | 3,030 | 80 | ||||||||||
Lithia Motors, Inc. ‘A’ | 325 | 31 | ||||||||||
Loral Space & Communications, Inc. (a) | 1,107 | 46 | ||||||||||
Lumber Liquidators Holdings, | 4,745 | 119 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
M/I Homes, Inc. (a) | 3,259 | $ | 93 | |||||||||
Marcus Corp. | 1,776 | 54 | ||||||||||
Marriott Vacations | 2,118 | 249 | ||||||||||
MDC Holdings, Inc. | 1,766 | 62 | ||||||||||
MDC Partners, Inc. ‘A’ | 4,262 | 42 | ||||||||||
Media General, Inc. CVR | 2,855 | 6 | ||||||||||
Meredith Corp. | 3,614 | 215 | ||||||||||
Meritage Homes Corp. (a) | 1,278 | 54 | ||||||||||
Modine Manufacturing Co. (a) | 5,312 | 88 | ||||||||||
Monro Muffler Brake, Inc. | 649 | 27 | ||||||||||
Movado Group, Inc. | 2,568 | 65 | ||||||||||
MSG Networks, Inc. ‘A’ (a) | 956 | 21 | ||||||||||
Murphy USA, Inc. (a) | 2,923 | 217 | ||||||||||
NACCO Industries, Inc. ‘A’ | 558 | 40 | ||||||||||
National CineMedia, Inc. | 8,847 | 66 | ||||||||||
New York Times Co. ‘A’ | 9,757 | 173 | ||||||||||
Nexstar Media Group, Inc. ‘A’ | 1,250 | 75 | ||||||||||
Nutrisystem, Inc. | 1,818 | 95 | ||||||||||
Ollie’s Bargain Outlet Holdings, Inc. (a) | 1,704 | 73 | ||||||||||
Oxford Industries, Inc. | 1,173 | 73 | ||||||||||
Papa John’s International, Inc. | 769 | 55 | ||||||||||
Party City Holdco, Inc. (a) | 2,131 | 33 | ||||||||||
Penn National Gaming, Inc. (a) | 11,780 | 252 | ||||||||||
Perry Ellis International, Inc. (a) | 3,276 | 64 | ||||||||||
PetMed Express, Inc. | 1,224 | 50 | ||||||||||
Pier 1 Imports, Inc. | 55,293 | 287 | ||||||||||
Pinnacle Entertainment, Inc. (a) | 9,804 | 194 | ||||||||||
Potbelly Corp. (a) | 4,479 | 51 | ||||||||||
Red Robin Gourmet Burgers, | 838 | 55 | ||||||||||
Red Rock Resorts, Inc. ‘A’ | 664 | 16 | ||||||||||
Regis Corp. (a) | 9,870 | 101 | ||||||||||
Rent-A-Center, Inc. | 21,698 | 254 | ||||||||||
RH (a) | 1,227 | 79 | ||||||||||
Ruby Tuesday, Inc. (a) | 12,447 | 25 | ||||||||||
Ruth’s Hospitality Group, Inc. | 605 | 13 | ||||||||||
Scholastic Corp. | 4,280 | 187 | ||||||||||
Scientific Games Corp. ‘A’ (a) | 5,312 | 139 | ||||||||||
SeaWorld Entertainment, Inc. | 17,503 | 285 | ||||||||||
Select Comfort Corp. (a) | 4,015 | 142 | ||||||||||
Shoe Carnival, Inc. | 1,323 | 28 | ||||||||||
Shutterfly, Inc. (a) | 2,139 | 102 | ||||||||||
Sinclair Broadcast Group, Inc. ‘A’ | 2,962 | 97 | ||||||||||
Sonic Automotive, Inc. ‘A’ | 9,784 | 190 | ||||||||||
Sonic Corp. | 1,796 | 48 | ||||||||||
Sotheby’s (a) | 5,933 | 318 | ||||||||||
Sportsman’s Warehouse Holdings, Inc. (a) | 5,134 | 28 | ||||||||||
Stage Stores, Inc. | 12,256 | 25 | ||||||||||
Standard Motor Products, Inc. | 1,518 | 79 | ||||||||||
Stein Mart, Inc. | 8,668 | 15 | ||||||||||
Steven Madden Ltd. (a) | 2,261 | 90 | ||||||||||
Stoneridge, Inc. (a) | 3,052 | 47 | ||||||||||
Strayer Education, Inc. | 3,207 | 299 | ||||||||||
Sturm Ruger & Co., Inc. | 1,474 | 92 | ||||||||||
Superior Industries | 2,224 | 46 | ||||||||||
Tailored Brands, Inc. | 5,232 | 58 | ||||||||||
Taylor Morrison Home Corp. ‘A’ (a) | 655 | 16 | ||||||||||
Tempur Sealy International, Inc. (a) | 834 | 45 | ||||||||||
Texas Roadhouse, Inc. | 1,588 | 81 | ||||||||||
Time, Inc. | 11,785 | 169 | ||||||||||
TopBuild Corp. (a) | 2,073 | 110 | ||||||||||
Tower International, Inc. | 2,079 | 47 | ||||||||||
TravelCenters of America LLC (a) | 9,552 | 39 | ||||||||||
TRI Pointe Group, Inc. (a) | 2,605 | 34 | ||||||||||
| 54 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
tronc, Inc. (a) | 8,329 | $ | 107 | |||||||||
Tuesday Morning Corp. (a) | 6,030 | 11 | ||||||||||
Universal Electronics, Inc. (a) | 252 | 17 | ||||||||||
Vera Bradley, Inc. (a) | 3,167 | 31 | ||||||||||
Vista Outdoor, Inc. (a) | 2,281 | 51 | ||||||||||
Vitamin Shoppe, Inc. (a) | 5,044 | 59 | ||||||||||
Wendy’s Co. | 20,362 | 316 | ||||||||||
William Lyon Homes ‘A’ (a) | 1,450 | 35 | ||||||||||
Wolverine World Wide, Inc. | 5,562 | 156 | ||||||||||
ZAGG, Inc. (a) | 1,857 | 16 | ||||||||||
Zumiez, Inc. (a) | 2,633 | 33 | ||||||||||
|
| |||||||||||
| 18,272 | ||||||||||||
|
| |||||||||||
| CONSUMER STAPLES 2.7% | ||||||||||||
Alliance One International, Inc. (a) | 2,085 | 30 | ||||||||||
Andersons, Inc. | 1,996 | 68 | ||||||||||
B&G Foods, Inc. | 2,246 | 80 | ||||||||||
Boston Beer Co., Inc. ‘A’ (a) | 270 | 36 | ||||||||||
Cal-Maine Foods, Inc. | 1,530 | 60 | ||||||||||
Central Garden & Pet Co. ‘A’ (a) | 5,969 | 179 | ||||||||||
Coca-Cola Bottling Co. Consolidated | 314 | 72 | ||||||||||
Darling Ingredients, Inc. (a) | 13,515 | 213 | ||||||||||
Dean Foods Co. | 9,978 | 170 | ||||||||||
Energizer Holdings, Inc. | 3,469 | 166 | ||||||||||
Fresh Del Monte Produce, Inc. | 3,436 | 175 | ||||||||||
Ingles Markets, Inc. ‘A’ | 3,152 | 105 | ||||||||||
Inter Parfums, Inc. | 1,744 | 64 | ||||||||||
J&J Snack Foods Corp. | 476 | 63 | ||||||||||
Medifast, Inc. | 1,298 | 54 | ||||||||||
National Beverage Corp. | 298 | 28 | ||||||||||
Omega Protein Corp. | 1,531 | 27 | ||||||||||
Performance Food Group Co. (a) | 4,421 | 121 | ||||||||||
PriceSmart, Inc. | 854 | 75 | ||||||||||
Revlon, Inc. ‘A’ (a) | 849 | 20 | ||||||||||
Sanderson Farms, Inc. | 1,191 | 138 | ||||||||||
Seneca Foods Corp. ‘A’ (a) | 589 | 18 | ||||||||||
Smart & Final Stores, Inc. (a) | 3,607 | 33 | ||||||||||
SpartanNash Co. | 3,312 | 86 | ||||||||||
Sprouts Farmers Market, Inc. (a) | 2,401 | 54 | ||||||||||
United Natural Foods, Inc. (a) | 3,953 | 145 | ||||||||||
Universal Corp. | 3,693 | 239 | ||||||||||
USANA Health Sciences, Inc. (a) | 854 | 55 | ||||||||||
Vector Group Ltd. | 6,956 | 148 | ||||||||||
Village Super Market, Inc. ‘A’ | 646 | 17 | ||||||||||
WD-40 Co. | 658 | 73 | ||||||||||
Weis Markets, Inc. | 1,655 | 81 | ||||||||||
|
| |||||||||||
| 2,893 | ||||||||||||
|
| |||||||||||
| ENERGY 4.2% | ||||||||||||
Alon USA Energy, Inc. | 6,410 | 85 | ||||||||||
Archrock, Inc. | 12,671 | 144 | ||||||||||
Atwood Oceanics, Inc. (a) | 35,108 | 286 | ||||||||||
Basic Energy Services, Inc. (a) | 435 | 11 | ||||||||||
Bill Barrett Corp. (a) | 37,689 | 116 | ||||||||||
Bristow Group, Inc. | 13,693 | 105 | ||||||||||
California Resources Corp. (a) | 4,336 | 37 | ||||||||||
Callon Petroleum Co. (a) | 1,752 | 19 | ||||||||||
CARBO Ceramics, Inc. (a) | 8,587 | 59 | ||||||||||
Carrizo Oil & Gas, Inc. (a) | 2,709 | 47 | ||||||||||
Cloud Peak Energy, Inc. (a) | 59,074 | 208 | ||||||||||
Cobalt International Energy, Inc. (a) | 400 | 1 | ||||||||||
Contango Oil & Gas Co. (a) | 3,871 | 26 | ||||||||||
Delek U.S. Holdings, Inc. | 13,335 | 353 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Denbury Resources, Inc. (a) | 8,155 | $ | 12 | |||||||||
Dril-Quip, Inc. (a) | 1,775 | 87 | ||||||||||
Enbridge Energy Management LLC (a) | 2,411 | 37 | ||||||||||
Enbridge Energy Management LLC | 58,437 | 0 | ||||||||||
EP Energy Corp. ‘A’ (a) | 4,151 | 15 | ||||||||||
Era Group, Inc. (a) | 6,139 | 58 | ||||||||||
EXCO Resources, Inc. (a) | 1,510 | 4 | ||||||||||
Exterran Corp. (a) | 2,660 | 71 | ||||||||||
Fairmount Santrol Holdings, Inc. (a) | 8,009 | 31 | ||||||||||
Forum Energy Technologies, | 6,807 | 106 | ||||||||||
Gener8 Maritime, Inc. (a) | 6,303 | 36 | ||||||||||
Geospace Technologies Corp. (a) | 1,639 | 23 | ||||||||||
Green Plains, Inc. | 4,398 | 90 | ||||||||||
Gulfport Energy Corp. (a) | 882 | 13 | ||||||||||
Helix Energy Solutions Group, | 12,877 | 73 | ||||||||||
Hornbeck Offshore Services, Inc. (a) | 13,050 | 37 | ||||||||||
International Seaways, Inc. (a) | 3,174 | 69 | ||||||||||
Kosmos Energy Ltd. (a) | 7,579 | 49 | ||||||||||
Laredo Petroleum, Inc. (a) | 2,752 | 29 | ||||||||||
McDermott International, Inc. (a) | 14,797 | 106 | ||||||||||
Newpark Resources, Inc. (a) | 14,388 | 106 | ||||||||||
Northern Oil and Gas, Inc. (a) | 7,443 | 10 | ||||||||||
Oasis Petroleum, Inc. (a) | 9,890 | 80 | ||||||||||
Oil States International, Inc. (a) | 5,256 | 143 | ||||||||||
Overseas Shipholding Group, Inc. ‘A’ (a) | 11,820 | 31 | ||||||||||
Parker Drilling Co. (a) | 27,912 | 38 | ||||||||||
PBF Energy, Inc. ‘A’ | 7,174 | 160 | ||||||||||
PDC Energy, Inc. (a) | 682 | 29 | ||||||||||
Peabody Energy Corp. (a) | 1,322 | 32 | ||||||||||
PHI, Inc. NVDR (a) | 1,325 | 13 | ||||||||||
Pioneer Energy Services Corp. (a) | 25,598 | 52 | ||||||||||
Renewable Energy Group, Inc. (a) | 5,914 | 77 | ||||||||||
Resolute Energy Corp. (a) | 347 | 10 | ||||||||||
REX American Resources Corp. (a) | 721 | 70 | ||||||||||
Rowan Cos. PLC ‘A’ (a) | 11,973 | 123 | ||||||||||
RPC, Inc. | 2,047 | 41 | ||||||||||
Sanchez Energy Corp. (a) | 2,674 | 19 | ||||||||||
SEACOR Holdings, Inc. (a) | 3,957 | 136 | ||||||||||
SEACOR Marine Holdings, Inc. (a) | 3,978 | 81 | ||||||||||
SemGroup Corp. ‘A’ | 2,248 | 61 | ||||||||||
SM Energy Co. | 9,229 | 152 | ||||||||||
Stone Energy Corp. (a) | 794 | 15 | ||||||||||
Tesco Corp. (a) | 7,095 | 32 | ||||||||||
TETRA Technologies, Inc. (a) | 4,390 | 12 | ||||||||||
U.S. Silica Holdings, Inc. | 1,077 | 38 | ||||||||||
Unit Corp. (a) | 17,095 | 320 | ||||||||||
W&T Offshore, Inc. (a) | 34,868 | 68 | ||||||||||
Westmoreland Coal Co. (a) | 2,791 | 14 | ||||||||||
World Fuel Services Corp. | 2,351 | 90 | ||||||||||
|
| |||||||||||
| 4,496 | ||||||||||||
|
| |||||||||||
| FINANCIALS 15.4% | ||||||||||||
Allegiance Bancshares, Inc. (a) | 390 | 15 | ||||||||||
Ambac Financial Group, Inc. (a) | 11,571 | 201 | ||||||||||
American Equity Investment Life Holding Co. | 23,916 | 629 | ||||||||||
AMERISAFE, Inc. | 468 | 27 | ||||||||||
Arlington Asset Investment | 2,070 | 28 | ||||||||||
Artisan Partners Asset Management, Inc. ‘A’ | 460 | 14 | ||||||||||
Associated Banc-Corp | 7,004 | 177 | ||||||||||
Astoria Financial Corp. | 9,029 | 182 | ||||||||||
Baldwin & Lyons, Inc. ‘B’ | 926 | 23 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Banc of California, Inc. | 1,693 | $ | 36 | |||||||||
BancFirst Corp. | 489 | 47 | ||||||||||
Bancorp, Inc. (a) | 2,219 | 17 | ||||||||||
BancorpSouth, Inc. | 3,748 | 114 | ||||||||||
Bank of Hawaii Corp. | 1,318 | 109 | ||||||||||
BankUnited, Inc. | 3,604 | 122 | ||||||||||
Beneficial Bancorp, Inc. | 2,592 | 39 | ||||||||||
Berkshire Hills Bancorp, Inc. | 2,089 | 73 | ||||||||||
BGC Partners, Inc. ‘A’ | 14,770 | 187 | ||||||||||
BofI Holding, Inc. (a) | 515 | 12 | ||||||||||
Boston Private Financial Holdings, Inc. | 3,609 | 55 | ||||||||||
Brookline Bancorp, Inc. | 6,800 | 99 | ||||||||||
Bryn Mawr Bank Corp. | 668 | 28 | ||||||||||
Camden National Corp. | 1,477 | 63 | ||||||||||
Capital Bank Financial Corp. ‘A’ | 1,900 | 72 | ||||||||||
Capitol Federal Financial, Inc. | 12,969 | 184 | ||||||||||
Cathay General Bancorp | 1,840 | 70 | ||||||||||
Chemical Financial Corp. | 3,749 | 181 | ||||||||||
Citizens & Northern Corp. | 745 | 17 | ||||||||||
City Holding Co. | 1,537 | 101 | ||||||||||
Cohen & Steers, Inc. | 1,212 | 49 | ||||||||||
Columbia Banking System, Inc. | 1,855 | 74 | ||||||||||
Community Bank System, Inc. | 1,548 | 86 | ||||||||||
Community Trust Bancorp, Inc. | 1,975 | 86 | ||||||||||
Cowen, Inc. (a) | 5,145 | 84 | ||||||||||
Crawford & Co. ‘B’ | 1,601 | 15 | ||||||||||
Customers Bancorp, Inc. (a) | 972 | 27 | ||||||||||
CVB Financial Corp. | 2,651 | 59 | ||||||||||
Dime Community Bancshares, Inc. | 2,994 | 59 | ||||||||||
Donnelley Financial Solutions, | 4,092 | 94 | ||||||||||
Eagle Bancorp, Inc. (a) | 560 | 35 | ||||||||||
eHealth, Inc. (a) | 3,823 | 72 | ||||||||||
Employers Holdings, Inc. | 3,410 | 144 | ||||||||||
Encore Capital Group, Inc. (a) | 2,692 | 108 | ||||||||||
Enova International, Inc. (a) | 9,958 | 148 | ||||||||||
Enterprise Financial Services Corp. | 1,028 | 42 | ||||||||||
Essent Group Ltd. (a) | 842 | 31 | ||||||||||
Evercore Partners, Inc. ‘A’ | 2,073 | 146 | ||||||||||
Ezcorp, Inc. ‘A’ (a) | 21,904 | 169 | ||||||||||
FBL Financial Group, Inc. ‘A’ | 1,155 | 71 | ||||||||||
FCB Financial Holdings, Inc. ‘A’ (a) | 1,364 | 65 | ||||||||||
Federal Agricultural Mortgage Corp. ‘C’ | 1,055 | 68 | ||||||||||
Federated Investors, Inc. ‘B’ | 4,092 | 116 | ||||||||||
Fidelity & Guaranty Life | 2,114 | 66 | ||||||||||
Fidelity Southern Corp. | 578 | 13 | ||||||||||
Financial Institutions, Inc. | 1,679 | 50 | ||||||||||
First Bancorp | 1,664 | 52 | ||||||||||
First Busey Corp. | 2,773 | 81 | ||||||||||
First Citizens BancShares, Inc. ‘A’ | 54 | 20 | ||||||||||
First Commonwealth Financial Corp. | 6,128 | 78 | ||||||||||
First Community Bancshares, Inc. | 1,399 | 38 | ||||||||||
First Defiance Financial Corp. | 648 | 34 | ||||||||||
First Financial Bancorp | 7,650 | 212 | ||||||||||
First Financial Bankshares, Inc. | 928 | 41 | ||||||||||
First Financial Corp. | 1,856 | 88 | ||||||||||
First Interstate BancSystem, Inc. ‘A’ | 1,662 | 62 | ||||||||||
First Merchants Corp. | 1,527 | 61 | ||||||||||
First Midwest Bancorp, Inc. | 2,015 | 47 | ||||||||||
FirstCash, Inc. | 4,268 | 249 | ||||||||||
Flagstar Bancorp, Inc. (a) | 2,692 | 83 | ||||||||||
Flushing Financial Corp. | 3,355 | 95 | ||||||||||
FNB Corp. | 9,270 | 131 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 55 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
FNFV Group (a) | 2,311 | $ | 37 | |||||||||
Fulton Financial Corp. | 17,296 | 329 | ||||||||||
Glacier Bancorp, Inc. | 2,120 | 78 | ||||||||||
Great Southern Bancorp, Inc. | 695 | 37 | ||||||||||
Great Western Bancorp, Inc. | 4,434 | 181 | ||||||||||
Green Dot Corp. ‘A’ (a) | 3,114 | 120 | ||||||||||
Greenhill & Co., Inc. | 5,501 | 111 | ||||||||||
Hancock Holding Co. | 4,999 | 245 | ||||||||||
Heartland Financial USA, Inc. | 643 | 30 | ||||||||||
Hercules Capital, Inc. | 4,121 | 55 | ||||||||||
Heritage Financial Corp. | 1,285 | 34 | ||||||||||
Hilltop Holdings, Inc. | 4,521 | 119 | ||||||||||
Home BancShares, Inc. | 526 | 13 | ||||||||||
HomeStreet, Inc. (a) | 1,619 | 45 | ||||||||||
HomeTrust Bancshares, Inc. (a) | 927 | 23 | ||||||||||
Hope Bancorp, Inc. | 1,570 | 29 | ||||||||||
Horace Mann Educators Corp. | 2,168 | 82 | ||||||||||
IBERIABANK Corp. | 843 | 69 | ||||||||||
Independent Bank Corp. | 657 | 44 | ||||||||||
Infinity Property & Casualty Corp. | 1,082 | 102 | ||||||||||
International Bancshares Corp. | 4,224 | 148 | ||||||||||
Investment Technology Group, Inc. | 1,984 | 42 | ||||||||||
KCG Holdings, Inc. ‘A’ (a) | 17,420 | 347 | ||||||||||
Kemper Corp. | 6,180 | 239 | ||||||||||
Lakeland Bancorp, Inc. | 2,678 | 50 | ||||||||||
Lakeland Financial Corp. | 495 | 23 | ||||||||||
LPL Financial Holdings, Inc. | 6,028 | 256 | ||||||||||
MainSource Financial Group, Inc. | 1,478 | 50 | ||||||||||
MB Financial, Inc. | 999 | 44 | ||||||||||
MBIA, Inc. (a) | 43,682 | 412 | ||||||||||
Mercury General Corp. | 2,086 | 113 | ||||||||||
Morningstar, Inc. | 855 | 67 | ||||||||||
National Bank Holdings Corp. ‘A’ | 6,935 | 230 | ||||||||||
National Western Life Group, Inc. ‘A’ | 212 | 68 | ||||||||||
Nationstar Mortgage Holdings, Inc. (a) | 5,092 | 91 | ||||||||||
Navigators Group, Inc. | 1,864 | 102 | ||||||||||
NBT Bancorp, Inc. | 5,287 | 195 | ||||||||||
Nelnet, Inc. ‘A’ | 3,785 | 178 | ||||||||||
Northfield Bancorp, Inc. | 4,807 | 82 | ||||||||||
Northwest Bancshares, Inc. | 14,903 | 233 | ||||||||||
OceanFirst Financial Corp. | 971 | 26 | ||||||||||
Ocwen Financial Corp. (a) | 55,650 | 150 | ||||||||||
Old National Bancorp | 8,173 | 141 | ||||||||||
OneBeacon Insurance Group Ltd. ‘A’ | 4,028 | 73 | ||||||||||
Oritani Financial Corp. | 3,506 | 60 | ||||||||||
Pacific Premier Bancorp, Inc. (a) | 930 | 34 | ||||||||||
Park National Corp. | 1,260 | 131 | ||||||||||
Piper Jaffray Cos. | 2,479 | 149 | ||||||||||
PRA Group, Inc. (a) | 3,494 | 132 | ||||||||||
Primerica, Inc. | 3,145 | 238 | ||||||||||
ProAssurance Corp. | 5,827 | 354 | ||||||||||
Provident Financial Services, Inc. | 5,649 | 143 | ||||||||||
Regional Management Corp. (a) | 3,477 | 82 | ||||||||||
Renasant Corp. | 1,078 | 47 | ||||||||||
RLI Corp. | 2,446 | 134 | ||||||||||
S&T Bancorp, Inc. | 1,295 | 46 | ||||||||||
Safety Insurance Group, Inc. | 1,190 | 81 | ||||||||||
Sandy Spring Bancorp, Inc. | 1,335 | 54 | ||||||||||
Selective Insurance Group, Inc. | 2,137 | 107 | ||||||||||
ServisFirst Bancshares, Inc. | 1,280 | 47 | ||||||||||
Simmons First National Corp. ‘A’ | 426 | 23 | ||||||||||
South State Corp. | 473 | 41 | ||||||||||
State Bank Financial Corp. | 1,280 | 35 | ||||||||||
Stewart Information Services Corp. | 465 | 21 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Stock Yards Bancorp, Inc. | 1,059 | $ | 41 | |||||||||
TCF Financial Corp. | 16,701 | 266 | ||||||||||
Tompkins Financial Corp. | 1,045 | 82 | ||||||||||
Towne Bank | 2,357 | 73 | ||||||||||
TriCo Bancshares | 605 | 21 | ||||||||||
Triumph Bancorp, Inc. (a) | 650 | 16 | ||||||||||
TrustCo Bank Corp. | 11,620 | 90 | ||||||||||
Trustmark Corp. | 5,580 | 179 | ||||||||||
UMB Financial Corp. | 1,382 | 103 | ||||||||||
Union Bankshares Corp. | 2,126 | 72 | ||||||||||
United Bankshares, Inc. | 1,674 | 66 | ||||||||||
United Fire Group, Inc. | 1,227 | 54 | ||||||||||
Universal Insurance Holdings, Inc. | 1,900 | 48 | ||||||||||
Univest Corp. of Pennsylvania | 1,904 | 57 | ||||||||||
Valley National Bancorp | 25,049 | 296 | ||||||||||
Waddell & Reed Financial, Inc. ‘A’ | 23,233 | 439 | ||||||||||
Walker & Dunlop, Inc. (a) | 591 | 29 | ||||||||||
Walter Investment Management Corp. (a) | 1,801 | 2 | ||||||||||
Washington Federal, Inc. | 9,748 | 324 | ||||||||||
Washington Trust Bancorp, Inc. | 696 | 36 | ||||||||||
Waterstone Financial, Inc. | 1,852 | 35 | ||||||||||
WesBanco, Inc. | 1,304 | 52 | ||||||||||
Westamerica Bancorporation | 2,371 | 133 | ||||||||||
Wintrust Financial Corp. | 1,553 | 119 | ||||||||||
World Acceptance Corp. (a) | 4,301 | 322 | ||||||||||
WSFS Financial Corp. | 847 | 38 | ||||||||||
|
| |||||||||||
| 16,366 | ||||||||||||
|
| |||||||||||
| HEALTH CARE 6.4% | ||||||||||||
Abaxis, Inc. | 691 | 37 | ||||||||||
Acorda Therapeutics, Inc. (a) | 4,424 | 87 | ||||||||||
Akorn, Inc. (a) | 1,033 | 35 | ||||||||||
Alere, Inc. (a) | 1,883 | 94 | ||||||||||
Allscripts Healthcare Solutions, Inc. (a) | 11,463 | 146 | ||||||||||
Almost Family, Inc. (a) | 1,076 | 66 | ||||||||||
AMAG Pharmaceuticals, Inc. (a) | 2,051 | 38 | ||||||||||
Amedisys, Inc. (a) | 2,683 | 169 | ||||||||||
AMN Healthcare Services, Inc. (a) | 1,985 | 78 | ||||||||||
Analogic Corp. | 960 | 70 | ||||||||||
AngioDynamics, Inc. (a) | 4,329 | 70 | ||||||||||
AquaBounty Technologies, Inc. (a) | 5 | 0 | ||||||||||
BioScrip, Inc. (a) | 12,765 | 35 | ||||||||||
Bluebird Bio, Inc. (a) | 154 | 16 | ||||||||||
Cambrex Corp. (a) | 1,100 | 66 | ||||||||||
Cantel Medical Corp. | 1,030 | 80 | ||||||||||
Capital Senior Living Corp. (a) | 1,747 | 27 | ||||||||||
Cardiovascular Systems, Inc. (a) | 491 | 16 | ||||||||||
Catalent, Inc. (a) | 1,054 | 37 | ||||||||||
Chemed Corp. | 1,398 | 286 | ||||||||||
Civitas Solutions, Inc. (a) | 547 | 10 | ||||||||||
Computer Programs & Systems, Inc. | 587 | 19 | ||||||||||
CONMED Corp. | 2,782 | 142 | ||||||||||
Depomed, Inc. (a) | 4,530 | 49 | ||||||||||
Emergent BioSolutions, Inc. (a) | 2,721 | 92 | ||||||||||
Ensign Group, Inc. | 740 | 16 | ||||||||||
Exactech, Inc. (a) | 1,393 | 41 | ||||||||||
Globus Medical, Inc. ‘A’ (a) | 3,104 | 103 | ||||||||||
Haemonetics Corp. (a) | 2,435 | 96 | ||||||||||
Halyard Health, Inc. (a) | 8,856 | 348 | ||||||||||
HMS Holdings Corp. (a) | 4,319 | 80 | ||||||||||
Horizon Pharma PLC (a) | 2,905 | 34 | ||||||||||
ICU Medical, Inc. (a) | 582 | 100 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Impax Laboratories, Inc. (a) | 6,755 | $ | 109 | |||||||||
INC Research Holdings, Inc. ‘A’ (a) | 1,170 | 68 | ||||||||||
Inovalon Holdings, Inc. ‘A’ (a) | 2,797 | 37 | ||||||||||
Integer Holdings Corp. (a) | 2,543 | 110 | ||||||||||
Integra LifeSciences Holdings Corp. (a) | 3,204 | 175 | ||||||||||
Invacare Corp. | 11,045 | 146 | ||||||||||
Lannett Co., Inc. (a) | 1,633 | 33 | ||||||||||
LHC Group, Inc. (a) | 959 | 65 | ||||||||||
Luminex Corp. | 1,584 | 33 | ||||||||||
Magellan Health, Inc. (a) | 4,694 | 342 | ||||||||||
Masimo Corp. (a) | 1,289 | 118 | ||||||||||
Medicines Co. (a) | 2,493 | 95 | ||||||||||
Medidata Solutions, Inc. (a) | 570 | 45 | ||||||||||
Meridian Bioscience, Inc. | 3,294 | 52 | ||||||||||
Merit Medical Systems, Inc. (a) | 3,116 | 119 | ||||||||||
Molina Healthcare, Inc. (a) | 2,808 | 194 | ||||||||||
Myriad Genetics, Inc. (a) | 16,107 | 416 | ||||||||||
National HealthCare Corp. | 956 | 67 | ||||||||||
Natus Medical, Inc. (a) | 1,398 | 52 | ||||||||||
Neogen Corp. (a) | 938 | 65 | ||||||||||
NuVasive, Inc. (a) | 1,650 | 127 | ||||||||||
NxStage Medical, Inc. (a) | 684 | 17 | ||||||||||
Omnicell, Inc. (a) | 1,662 | 72 | ||||||||||
Orthofix International NV (a) | 2,527 | 117 | ||||||||||
Owens & Minor, Inc. | 8,142 | 262 | ||||||||||
PAREXEL International Corp. (a) | 369 | 32 | ||||||||||
PDL BioPharma, Inc. | 79,096 | 195 | ||||||||||
PharMerica Corp. (a) | 2,556 | 67 | ||||||||||
PRA Health Sciences, Inc. (a) | 963 | 72 | ||||||||||
Prestige Brands Holdings, Inc. (a) | 1,473 | 78 | ||||||||||
Providence Service Corp. (a) | 554 | 28 | ||||||||||
Quality Systems, Inc. (a) | 7,068 | 122 | ||||||||||
Quorum Health Corp. (a) | 2,466 | 10 | ||||||||||
RadNet, Inc. (a) | 8,568 | 66 | ||||||||||
SciClone Pharmaceuticals, Inc. (a) | 2,936 | 32 | ||||||||||
Select Medical Holdings Corp. (a) | 22,645 | 348 | ||||||||||
Spectrum Pharmaceuticals, Inc. (a) | 3,853 | 29 | ||||||||||
Surgery Partners, Inc. (a) | 1,687 | 38 | ||||||||||
Tivity Health, Inc. (a) | 3,384 | 135 | ||||||||||
U.S. Physical Therapy, Inc. | 394 | 24 | ||||||||||
|
| |||||||||||
| 6,795 | ||||||||||||
|
| |||||||||||
| INDUSTRIALS 19.4% | ||||||||||||
AAON, Inc. | 1,042 | 38 | ||||||||||
AAR Corp. | 5,513 | 192 | ||||||||||
ABM Industries, Inc. | 5,241 | 218 | ||||||||||
ACCO Brands Corp. (a) | 15,504 | 181 | ||||||||||
Actuant Corp. ‘A’ | 10,721 | 264 | ||||||||||
Advisory Board Co. (a) | 526 | 27 | ||||||||||
Aegion Corp. (a) | 3,473 | 76 | ||||||||||
Aerovironment, Inc. (a) | 652 | 25 | ||||||||||
Air Lease Corp. | 1,108 | 41 | ||||||||||
Air Transport Services Group, | 6,123 | 133 | ||||||||||
Aircastle Ltd. | 9,793 | 213 | ||||||||||
Alamo Group, Inc. | 153 | 14 | ||||||||||
Albany International Corp. ‘A’ | 2,036 | 109 | ||||||||||
Allegiant Travel Co. | 599 | 81 | ||||||||||
Altra Industrial Motion Corp. | 1,985 | 79 | ||||||||||
Apogee Enterprises, Inc. | 598 | 34 | ||||||||||
Applied Industrial Technologies, Inc. | 3,976 | 235 | ||||||||||
ArcBest Corp. | 516 | 11 | ||||||||||
Argan, Inc. | 227 | 14 | ||||||||||
Armstrong Flooring, Inc. (a) | 813 | 15 | ||||||||||
| 56 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
Armstrong World Industries, | 1,515 | $ | 70 | |||||||||
Astec Industries, Inc. | 1,114 | 62 | ||||||||||
Astronics Corp. (a) | 323 | 10 | ||||||||||
Atlas Air Worldwide Holdings, Inc. (a) | 4,045 | 211 | ||||||||||
AZZ, Inc. | 892 | 50 | ||||||||||
Babcock & Wilcox Enterprises, Inc. (a) | 4,902 | 58 | ||||||||||
Barnes Group, Inc. | 3,221 | 189 | ||||||||||
Beacon Roofing Supply, Inc. (a) | 2,657 | 130 | ||||||||||
Brady Corp. ‘A’ | 5,773 | 196 | ||||||||||
Briggs & Stratton Corp. | 7,118 | 172 | ||||||||||
Brink’s Co. | 4,004 | 268 | ||||||||||
CAI International, Inc. (a) | 2,710 | 64 | ||||||||||
Casella Waste Systems, | 5,191 | 85 | ||||||||||
CBIZ, Inc. (a) | 6,445 | 97 | ||||||||||
Chart Industries, Inc. (a) | 3,951 | 137 | ||||||||||
CIRCOR International, Inc. | 1,037 | 62 | ||||||||||
Civeo Corp. (a) | 17,534 | 37 | ||||||||||
Clean Harbors, Inc. (a) | 3,437 | 192 | ||||||||||
Columbus McKinnon Corp. | 545 | 14 | ||||||||||
Comfort Systems USA, Inc. | 1,289 | 48 | ||||||||||
Continental Building Products, Inc. (a) | 906 | 21 | ||||||||||
Covanta Holding Corp. | 9,810 | 129 | ||||||||||
CRA International, Inc. | 592 | 21 | ||||||||||
Cubic Corp. | 1,753 | 81 | ||||||||||
Deluxe Corp. | 649 | 45 | ||||||||||
DigitalGlobe, Inc. (a) | 6,310 | 210 | ||||||||||
Douglas Dynamics, Inc. | 1,153 | 38 | ||||||||||
Ducommun, Inc. (a) | 1,056 | 33 | ||||||||||
DXP Enterprises, Inc. (a) | 2,066 | 71 | ||||||||||
Dycom Industries, Inc. (a) | 1,127 | 101 | ||||||||||
Encore Wire Corp. | 1,218 | 52 | ||||||||||
EnerSys | 2,235 | 162 | ||||||||||
Ennis, Inc. | 2,857 | 55 | ||||||||||
EnPro Industries, Inc. | 2,077 | 148 | ||||||||||
ESCO Technologies, Inc. | 1,998 | 119 | ||||||||||
Essendant, Inc. | 9,510 | 141 | ||||||||||
Esterline Technologies Corp. (a) | 3,732 | 354 | ||||||||||
Exponent, Inc. | 1,273 | 74 | ||||||||||
Federal Signal Corp. | 2,919 | 51 | ||||||||||
Forward Air Corp. | 510 | 27 | ||||||||||
Franklin Electric Co., Inc. | 2,051 | 85 | ||||||||||
FTI Consulting, Inc. (a) | 4,710 | 165 | ||||||||||
GATX Corp. | 6,979 | 449 | ||||||||||
Generac Holdings, Inc. (a) | 6,987 | 252 | ||||||||||
General Cable Corp. | 10,672 | 174 | ||||||||||
Gibraltar Industries, Inc. (a) | 1,468 | 52 | ||||||||||
Global Brass & Copper Holdings, Inc. | 3,279 | 100 | ||||||||||
Granite Construction, Inc. | 1,757 | 85 | ||||||||||
Greenbrier Cos., Inc. | 2,771 | 128 | ||||||||||
Griffon Corp. | 6,134 | 135 | ||||||||||
H&E Equipment Services, Inc. | 5,903 | 120 | ||||||||||
Harsco Corp. (a) | 21,373 | 344 | ||||||||||
Hawaiian Holdings, Inc. (a) | 3,414 | 160 | ||||||||||
Healthcare Services Group, Inc. | 1,018 | 48 | ||||||||||
Heartland Express, Inc. | 2,687 | 56 | ||||||||||
Heidrick & Struggles International, Inc. | 3,147 | 68 | ||||||||||
Herc Holdings, Inc. (a) | 9,537 | 375 | ||||||||||
Herman Miller, Inc. | 2,509 | 76 | ||||||||||
Hill International, Inc. (a) | 10,367 | 54 | ||||||||||
Hillenbrand, Inc. | 3,689 | 133 | ||||||||||
HNI Corp. | 2,631 | 105 | ||||||||||
Hub Group, Inc. ‘A’ (a) | 677 | 26 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Huron Consulting Group, Inc. (a) | 756 | $ | 33 | |||||||||
Hyster-Yale Materials Handling, Inc. | 833 | 58 | ||||||||||
ICF International, Inc. (a) | 1,380 | 65 | ||||||||||
InnerWorkings, Inc. (a) | 3,729 | 43 | ||||||||||
Insperity, Inc. | 1,470 | 104 | ||||||||||
Interface, Inc. | 2,335 | 46 | ||||||||||
John Bean Technologies Corp. | 1,077 | 106 | ||||||||||
Kadant, Inc. | 961 | 72 | ||||||||||
Kaman Corp. | 3,010 | 150 | ||||||||||
KBR, Inc. | 9,556 | 145 | ||||||||||
Kelly Services, Inc. ‘A’ | 5,308 | 119 | ||||||||||
Kennametal, Inc. | 8,585 | 321 | ||||||||||
KeyW Holding Corp. (a) | 1,949 | 18 | ||||||||||
Kforce, Inc. | 4,766 | 93 | ||||||||||
Kimball International, Inc. ‘B’ | 2,693 | 45 | ||||||||||
Kirby Corp. (a) | 1,081 | 72 | ||||||||||
KLX, Inc. (a) | 5,538 | 277 | ||||||||||
Knight Transportation, Inc. | 3,172 | 117 | ||||||||||
Knoll, Inc. | 2,430 | 49 | ||||||||||
Korn/Ferry International | 3,210 | 111 | ||||||||||
Kratos Defense & Security Solutions, Inc. (a) | 9,001 | 107 | ||||||||||
Landstar System, Inc. | 1,730 | 148 | ||||||||||
Layne Christensen Co. (a) | 1,823 | 16 | ||||||||||
Lindsay Corp. | 687 | 61 | ||||||||||
LSC Communications, Inc. | 7,121 | 152 | ||||||||||
Lydall, Inc. (a) | 310 | 16 | ||||||||||
Manitowoc Co., Inc. | 8,086 | 49 | ||||||||||
Marten Transport Ltd. | 1,104 | 30 | ||||||||||
Masonite International Corp. (a) | 915 | 69 | ||||||||||
MasTec, Inc. (a) | 3,716 | 168 | ||||||||||
Matson, Inc. | 1,452 | 44 | ||||||||||
Matthews International Corp. ‘A’ | 781 | 48 | ||||||||||
McGrath RentCorp | 3,355 | 116 | ||||||||||
Mercury Systems, Inc. (a) | 728 | 31 | ||||||||||
Meritor, Inc. (a) | 8,794 | 146 | ||||||||||
Milacron Holdings Corp. (a) | 1,112 | 20 | ||||||||||
Mistras Group, Inc. (a) | 800 | 18 | ||||||||||
Mobile Mini, Inc. | 1,732 | 52 | ||||||||||
Moog, Inc. ‘A’ (a) | 4,432 | 318 | ||||||||||
MRC Global, Inc. (a) | 16,327 | 270 | ||||||||||
MSA Safety, Inc. | 2,099 | 170 | ||||||||||
Mueller Industries, Inc. | 5,597 | 170 | ||||||||||
Mueller Water Products, Inc. ‘A’ | 5,597 | 65 | ||||||||||
Multi-Color Corp. | 249 | 20 | ||||||||||
MYR Group, Inc. (a) | 852 | 26 | ||||||||||
National Presto Industries, Inc. | 901 | 100 | ||||||||||
Navigant Consulting, Inc. (a) | 4,034 | 80 | ||||||||||
Navistar International Corp. (a) | 8,767 | 230 | ||||||||||
NOW, Inc. (a) | 8,173 | 131 | ||||||||||
On Assignment, Inc. (a) | 1,226 | 66 | ||||||||||
Powell Industries, Inc. | 545 | 17 | ||||||||||
Primoris Services Corp. | 2,506 | 62 | ||||||||||
Quad/Graphics, Inc. | 10,807 | 248 | ||||||||||
Quanex Building Products Corp. | 2,216 | 47 | ||||||||||
Raven Industries, Inc. | 2,305 | 77 | ||||||||||
RBC Bearings, Inc. (a) | 633 | 64 | ||||||||||
Regal Beloit Corp. | 2,729 | 223 | ||||||||||
Resources Connection, Inc. | 4,613 | 63 | ||||||||||
Rexnord Corp. (a) | 9,018 | 210 | ||||||||||
Roadrunner Transportation Systems, Inc. (a) | 7,087 | 51 | ||||||||||
RPX Corp. (a) | 6,117 | 85 | ||||||||||
Rush Enterprises, Inc. ‘A’ (a) | 5,372 | 200 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Saia, Inc. (a) | 3,659 | $ | 188 | |||||||||
Scorpio Bulkers, Inc. (a) | 14,893 | 106 | ||||||||||
Simpson Manufacturing Co., Inc. | 3,002 | 131 | ||||||||||
SkyWest, Inc. | 17,030 | 598 | ||||||||||
Spirit Airlines, Inc. (a) | 769 | 40 | ||||||||||
SPX Corp. (a) | 6,786 | 171 | ||||||||||
SPX FLOW, Inc. (a) | 10,933 | 403 | ||||||||||
Standex International Corp. | 412 | 37 | ||||||||||
Steelcase, Inc. ‘A’ | 8,404 | 118 | ||||||||||
Sun Hydraulics Corp. | 725 | 31 | ||||||||||
Swift Transportation Co. (a) | 9,248 | 245 | ||||||||||
Team, Inc. (a) | 325 | 8 | ||||||||||
Tennant Co. | 985 | 73 | ||||||||||
Terex Corp. | 5,329 | 200 | ||||||||||
Tetra Tech, Inc. | 3,364 | 154 | ||||||||||
Textainer Group Holdings Ltd. | 7,060 | 102 | ||||||||||
Thermon Group Holdings, Inc. (a) | 2,151 | 41 | ||||||||||
Titan International, Inc. | 5,388 | 65 | ||||||||||
Titan Machinery, Inc. (a) | 4,692 | 84 | ||||||||||
Trex Co., Inc. (a) | 386 | 26 | ||||||||||
TriMas Corp. (a) | 2,353 | 49 | ||||||||||
TriNet Group, Inc. (a) | 514 | 17 | ||||||||||
Triumph Group, Inc. | 10,723 | 339 | ||||||||||
TrueBlue, Inc. (a) | 1,473 | 39 | ||||||||||
Tutor Perini Corp. (a) | 4,826 | 139 | ||||||||||
UniFirst Corp. | 677 | 95 | ||||||||||
Univar, Inc. (a) | 4,321 | 126 | ||||||||||
Universal Forest Products, Inc. | 1,050 | 92 | ||||||||||
Valmont Industries, Inc. | 1,776 | 266 | ||||||||||
Veritiv Corp. (a) | 2,658 | 120 | ||||||||||
Viad Corp. | 906 | 43 | ||||||||||
Wabash National Corp. | 3,689 | 81 | ||||||||||
WageWorks, Inc. (a) | 207 | 14 | ||||||||||
Watts Water Technologies, Inc. ‘A’ | 2,269 | 143 | ||||||||||
Welbilt, Inc. (a) | 3,523 | 66 | ||||||||||
Werner Enterprises, Inc. | 4,747 | 139 | ||||||||||
Wesco Aircraft Holdings, Inc. (a) | 3,177 | 34 | ||||||||||
WESCO International, Inc. (a) | 3,638 | 208 | ||||||||||
West Corp. | 8,302 | 194 | ||||||||||
YRC Worldwide, Inc. (a) | 5,569 | 62 | ||||||||||
|
| |||||||||||
| 20,690 | ||||||||||||
|
| |||||||||||
| INFORMATION TECHNOLOGY 12.6% | ||||||||||||
3D Systems Corp. (a) | 3,654 | 68 | ||||||||||
ACI Worldwide, Inc. (a) | 3,090 | 69 | ||||||||||
Acxiom Corp. (a) | 3,888 | 101 | ||||||||||
ADTRAN, Inc. | 8,121 | 168 | ||||||||||
Advanced Energy Industries, | 1,615 | 104 | ||||||||||
Alpha & Omega Semiconductor Ltd. (a) | 2,964 | 49 | ||||||||||
Ambarella, Inc. (a) | 278 | 13 | ||||||||||
Amkor Technology, Inc. (a) | 16,962 | 166 | ||||||||||
Anixter International, Inc. (a) | 1,543 | 121 | ||||||||||
Avid Technology, Inc. (a) | 15,430 | 81 | ||||||||||
AVX Corp. | 4,322 | 71 | ||||||||||
Bankrate, Inc. (a) | 4,899 | 63 | ||||||||||
Belden, Inc. | 1,848 | 139 | ||||||||||
Benchmark Electronics, Inc. (a) | 5,990 | 193 | ||||||||||
Black Box Corp. | 4,598 | 39 | ||||||||||
Blackbaud, Inc. | 196 | 17 | ||||||||||
Blackhawk Network Holdings, Inc. (a) | 944 | 41 | ||||||||||
Blucora, Inc. (a) | 5,590 | 118 | ||||||||||
Bottomline Technologies de, | 353 | 9 | ||||||||||
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 57 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund (Cont.)
| SHARES | MARKET VALUE (000S) | |||||||||||
BroadSoft, Inc. (a) | 358 | $ | 15 | |||||||||
Brooks Automation, Inc. | 4,102 | 89 | ||||||||||
Cabot Microelectronics Corp. | 3,368 | 249 | ||||||||||
CACI International, Inc. ‘A’ (a) | 3,566 | 446 | ||||||||||
Ciena Corp. (a) | 2,752 | 69 | ||||||||||
Cirrus Logic, Inc. (a) | 991 | 62 | ||||||||||
Coherent, Inc. (a) | 743 | 167 | ||||||||||
CommVault Systems, Inc. (a) | 1,569 | �� | 89 | |||||||||
Comtech Telecommunications Corp. | 12,710 | 241 | ||||||||||
Convergys Corp. | 9,891 | 235 | ||||||||||
CoreLogic, Inc. (a) | 1,883 | 82 | ||||||||||
Cray, Inc. (a) | 1,803 | 33 | ||||||||||
Cree, Inc. (a) | 12,474 | 307 | ||||||||||
CSG Systems International, Inc. | 3,473 | 141 | ||||||||||
CTS Corp. | 538 | 12 | ||||||||||
Daktronics, Inc. | 2,521 | 24 | ||||||||||
DHI Group, Inc. (a) | 10,102 | 29 | ||||||||||
Diebold Nixdorf, Inc. | 8,578 | 240 | ||||||||||
Diodes, Inc. (a) | 4,873 | 117 | ||||||||||
Eastman Kodak Co. (a) | 6,233 | 57 | ||||||||||
Ebix, Inc. | 3,202 | 173 | ||||||||||
Electro Scientific Industries, Inc. (a) | 1,240 | 10 | ||||||||||
Electronics For Imaging, Inc. (a) | 2,540 | 120 | ||||||||||
EnerNOC, Inc. (a) | 4,932 | 38 | ||||||||||
Entegris, Inc. (a) | 4,690 | 103 | ||||||||||
ePlus, Inc. (a) | 1,459 | 108 | ||||||||||
Everi Holdings, Inc. (a) | 5,631 | 41 | ||||||||||
ExlService Holdings, Inc. (a) | 1,499 | 83 | ||||||||||
Extreme Networks, Inc. (a) | 4,636 | 43 | ||||||||||
FARO Technologies, Inc. (a) | 1,741 | 66 | ||||||||||
Finisar Corp. (a) | 4,757 | 124 | ||||||||||
FireEye, Inc. (a) | 1,702 | 26 | ||||||||||
Fitbit, Inc. ‘A’ (a) | 3,110 | 16 | ||||||||||
Harmonic, Inc. (a) | 20,177 | 106 | ||||||||||
II-VI, Inc. (a) | 2,622 | 90 | ||||||||||
Insight Enterprises, Inc. (a) | 6,587 | 263 | ||||||||||
Integrated Device Technology, Inc. (a) | 3,368 | 87 | ||||||||||
InterDigital, Inc. | 2,613 | 202 | ||||||||||
Internap Corp. (a) | 4,066 | 15 | ||||||||||
Itron, Inc. (a) | 3,794 | 257 | ||||||||||
Kemet Corp. (a) | 3,741 | 48 | ||||||||||
Knowles Corp. (a) | 10,693 | 181 | ||||||||||
Lattice Semiconductor Corp. (a) | 6,987 | 47 | ||||||||||
Liquidity Services, Inc. (a) | 9,531 | 61 | ||||||||||
Littelfuse, Inc. | 511 | 84 | ||||||||||
LivePerson, Inc. (a) | 1,138 | 12 | ||||||||||
LogMeIn, Inc. | 148 | 15 | ||||||||||
Lumentum Holdings, Inc. (a) | 2,186 | 125 | ||||||||||
ManTech International Corp. ‘A’ | 3,831 | 159 | ||||||||||
Methode Electronics, Inc. | 1,291 | 53 | ||||||||||
MicroStrategy, Inc. ‘A’ (a) | 332 | 64 | ||||||||||
MKS Instruments, Inc. | 2,432 | 164 | ||||||||||
MoneyGram International, Inc. (a) | 6,196 | 107 | ||||||||||
Monolithic Power Systems, Inc. | 309 | 30 | ||||||||||
Monotype Imaging Holdings, Inc. | 1,079 | 20 | ||||||||||
MTS Systems Corp. | 1,679 | 87 | ||||||||||
NETGEAR, Inc. (a) | 3,288 | 142 | ||||||||||
NetScout Systems, Inc. (a) | 3,087 | 106 | ||||||||||
NeuStar, Inc. ‘A’ (a) | 9,743 | 325 | ||||||||||
NIC, Inc. | 1,712 | 32 | ||||||||||
Novanta, Inc. (a) | 634 | 23 | ||||||||||
OSI Systems, Inc. (a) | 1,454 | 109 | ||||||||||
Park Electrochemical Corp. | 2,074 | 38 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
PC Connection, Inc. | 650 | $ | 18 | |||||||||
PCM, Inc. (a) | 553 | 10 | ||||||||||
Pegasystems, Inc. | 833 | 49 | ||||||||||
Perficient, Inc. (a) | 1,053 | 20 | ||||||||||
Photronics, Inc. (a) | 6,548 | 62 | ||||||||||
Plantronics, Inc. | 2,833 | 148 | ||||||||||
Plexus Corp. (a) | 3,096 | 163 | ||||||||||
Power Integrations, Inc. | 913 | 67 | ||||||||||
Progress Software Corp. | 7,946 | 245 | ||||||||||
Rambus, Inc. (a) | 3,501 | 40 | ||||||||||
RealPage, Inc. (a) | 1,557 | 56 | ||||||||||
Rogers Corp. (a) | 1,160 | 126 | ||||||||||
Sanmina Corp. (a) | 8,731 | 333 | ||||||||||
ScanSource, Inc. (a) | 3,011 | 121 | ||||||||||
Science Applications International Corp. | 2,179 | 151 | ||||||||||
Semtech Corp. (a) | 3,989 | 143 | ||||||||||
Silicon Laboratories, Inc. (a) | 2,433 | 166 | ||||||||||
Sonus Networks, Inc. (a) | 7,182 | 53 | ||||||||||
Stratasys Ltd. (a) | 6,350 | 148 | ||||||||||
Super Micro Computer, Inc. (a) | 891 | 22 | ||||||||||
Sykes Enterprises, Inc. (a) | 5,713 | 192 | ||||||||||
Synaptics, Inc. (a) | 1,155 | 60 | ||||||||||
Synchronoss Technologies, Inc. (a) | 2,237 | 37 | ||||||||||
Syntel, Inc. | 1,768 | 30 | ||||||||||
TeleTech Holdings, Inc. | 1,104 | 45 | ||||||||||
TiVo Corp. | 15,541 | 290 | ||||||||||
TTM Technologies, Inc. (a) | 10,639 | 185 | ||||||||||
Ultra Clean Holdings, Inc. (a) | 1,771 | 33 | ||||||||||
Unisys Corp. (a) | 30,978 | 396 | ||||||||||
Universal Display Corp. | 178 | 19 | ||||||||||
Veeco Instruments, Inc. (a) | 4,734 | 132 | ||||||||||
VeriFone Systems, Inc. (a) | 7,750 | 140 | ||||||||||
Verint Systems, Inc. (a) | 4,107 | 167 | ||||||||||
Versum Materials, Inc. | 503 | 16 | ||||||||||
Viavi Solutions, Inc. (a) | 11,453 | 121 | ||||||||||
Virtusa Corp. (a) | 994 | 29 | ||||||||||
Vishay Intertechnology, Inc. | 30,007 | 498 | ||||||||||
Web.com Group, Inc. (a) | 2,451 | 62 | ||||||||||
WebMD Health Corp. (a) | 2,978 | 175 | ||||||||||
Xcerra Corp. (a) | 1,536 | 15 | ||||||||||
XO Group, Inc. (a) | 1,871 | 33 | ||||||||||
Xperi Corp. | 1,298 | 39 | ||||||||||
Yelp, Inc. (a) | 1,020 | 31 | ||||||||||
Zebra Technologies Corp. ‘A’ (a) | 180 | 18 | ||||||||||
Zynga, Inc. ‘A’ (a) | 53,468 | 195 | ||||||||||
|
| |||||||||||
| 13,436 | ||||||||||||
|
| |||||||||||
| MATERIALS 6.2% | ||||||||||||
A Schulman, Inc. | 3,077 | 98 | ||||||||||
AdvanSix, Inc. (a) | 2,242 | 70 | ||||||||||
AK Steel Holding Corp. (a) | 12,754 | 84 | ||||||||||
Allegheny Technologies, Inc. | 14,912 | 254 | ||||||||||
Boise Cascade Co. (a) | 3,452 | 105 | ||||||||||
Cabot Corp. | 1,547 | 83 | ||||||||||
Calgon Carbon Corp. | 3,941 | 60 | ||||||||||
Carpenter Technology Corp. | 3,884 | 145 | ||||||||||
Century Aluminum Co. (a) | 6,374 | 99 | ||||||||||
Clearwater Paper Corp. (a) | 2,759 | 129 | ||||||||||
Cliffs Natural Resources, Inc. (a) | 39,978 | 277 | ||||||||||
Coeur Mining, Inc. (a) | 4,092 | 35 | ||||||||||
Commercial Metals Co. | 13,646 | 265 | ||||||||||
Compass Minerals International, Inc. | 1,855 | 121 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Ferro Corp. (a) | 3,511 | $ | 64 | |||||||||
Flotek Industries, Inc. (a) | 1,308 | 12 | ||||||||||
FutureFuel Corp. | 2,947 | 44 | ||||||||||
GCP Applied Technologies, | 2,412 | 74 | ||||||||||
Gold Resource Corp. | 12,608 | 51 | ||||||||||
Greif, Inc. ‘A’ | 6,206 | 346 | ||||||||||
HB Fuller Co. | 2,688 | 137 | ||||||||||
Hecla Mining Co. | 19,116 | 98 | ||||||||||
Ingevity Corp. (a) | 522 | 30 | ||||||||||
Innophos Holdings, Inc. | 3,632 | 159 | ||||||||||
Innospec, Inc. | 1,537 | 101 | ||||||||||
Intrepid Potash, Inc. (a) | 5,885 | 13 | ||||||||||
Kaiser Aluminum Corp. | 1,629 | 144 | ||||||||||
KapStone Paper and Packaging Corp. | 5,504 | 114 | ||||||||||
Koppers Holdings, Inc. (a) | 2,261 | 82 | ||||||||||
Kraton Corp. (a) | 2,849 | 98 | ||||||||||
Kronos Worldwide, Inc. | 5,636 | 103 | ||||||||||
Louisiana-Pacific Corp. (a) | 3,627 | 87 | ||||||||||
LSB Industries, Inc. (a) | 3,660 | 38 | ||||||||||
Materion Corp. | 2,406 | 90 | ||||||||||
Minerals Technologies, Inc. | 1,451 | 106 | ||||||||||
Myers Industries, Inc. | 4,065 | 73 | ||||||||||
Neenah Paper, Inc. | 981 | 79 | ||||||||||
Olympic Steel, Inc. | 1,980 | 39 | ||||||||||
OMNOVA Solutions, Inc. (a) | 5,868 | 57 | ||||||||||
PH Glatfelter Co. | 6,448 | 126 | ||||||||||
Platform Specialty Products | 11,236 | 142 | ||||||||||
PolyOne Corp. | 4,609 | 179 | ||||||||||
Quaker Chemical Corp. | 446 | 65 | ||||||||||
Rayonier Advanced Materials, Inc. | 7,730 | 122 | ||||||||||
Ryerson Holding Corp. (a) | 10,123 | 100 | ||||||||||
Schnitzer Steel Industries, Inc. ‘A’ | 4,896 | 123 | ||||||||||
Schweitzer-Mauduit International, Inc. | 2,660 | 99 | ||||||||||
Silgan Holdings, Inc. | 5,788 | 184 | ||||||||||
Stepan Co. | 1,687 | 147 | ||||||||||
Summit Materials, Inc. ‘A’ (a) | 1,200 | 35 | ||||||||||
SunCoke Energy, Inc. (a) | 13,504 | 147 | ||||||||||
TimkenSteel Corp. (a) | 10,571 | 162 | ||||||||||
Tredegar Corp. | 2,047 | 31 | ||||||||||
Trinseo S.A. | 2,858 | 196 | ||||||||||
Tronox Ltd. ‘A’ | 27,618 | 418 | ||||||||||
Worthington Industries, Inc. | 4,957 | 249 | ||||||||||
|
| |||||||||||
| 6,589 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 0.2% | ||||||||||||
Alexander & Baldwin, Inc. | 1,239 | 51 | ||||||||||
Forestar Group, Inc. (a) | 3,040 | 52 | ||||||||||
HFF, Inc. ‘A’ | 487 | 17 | ||||||||||
Kennedy-Wilson Holdings, Inc. | 685 | 13 | ||||||||||
RE/MAX Holdings, Inc. ‘A’ | 496 | 28 | ||||||||||
RMR Group, Inc. ‘A’ | 377 | 18 | ||||||||||
St. Joe Co. (a) | 2,285 | 43 | ||||||||||
|
| |||||||||||
| 222 | ||||||||||||
|
| |||||||||||
| TELECOMMUNICATION SERVICES 1.3% | ||||||||||||
ATN International, Inc. | 703 | 48 | ||||||||||
Cincinnati Bell, Inc. (a) | 7,215 | 141 | ||||||||||
Cogent Communications Holdings, Inc. | 2,014 | 81 | ||||||||||
Consolidated Communications Holdings, Inc. | 5,929 | 127 | ||||||||||
FairPoint Communications, Inc. (a) | 6,209 | 97 | ||||||||||
| 58 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
| SHARES | MARKET VALUE (000S) | |||||||||||
General Communication, Inc. ‘A’ (a) | 5,975 | $ | 219 | |||||||||
HC2 Holdings, Inc. (a) | 2,591 | 15 | ||||||||||
IDT Corp. ‘B’ | 1,027 | 15 | ||||||||||
Iridium Communications, Inc. (a) | 19,606 | 217 | ||||||||||
Lumos Networks Corp. (a) | 2,843 | 51 | ||||||||||
Shenandoah Telecommunications Co. | 2,276 | 70 | ||||||||||
Spok Holdings, Inc. | 3,114 | 55 | ||||||||||
Vonage Holdings Corp. (a) | 14,402 | 94 | ||||||||||
Windstream Holdings, Inc. | 46,949 | 182 | ||||||||||
|
| |||||||||||
| 1,412 | ||||||||||||
|
| |||||||||||
| UTILITIES 3.4% | ||||||||||||
ALLETE, Inc. | 3,141 | 225 | ||||||||||
American States Water Co. | 2,762 | 131 | ||||||||||
Atlantic Power Corp. (a) | 8,032 | 19 | ||||||||||
Avista Corp. | 7,722 | 328 | ||||||||||
California Water Service Group | 5,366 | 198 | ||||||||||
Chesapeake Utilities Corp. | 971 | 73 | ||||||||||
Dynegy, Inc. (a) | 34,696 | 287 | ||||||||||
El Paso Electric Co. | 5,167 | 267 | ||||||||||
MGE Energy, Inc. | 3,052 | 196 | ||||||||||
Middlesex Water Co. | 1,391 | 55 | ||||||||||
New Jersey Resources Corp. | 1,579 | 63 | ||||||||||
Northwest Natural Gas Co. | 4,517 | 270 | ||||||||||
NorthWestern Corp. | 2,293 | 140 | ||||||||||
NRG Yield, Inc. ‘C’ | 2,540 | 45 | ||||||||||
Ormat Technologies, Inc. | 807 | 47 | ||||||||||
Otter Tail Corp. | 4,546 | 180 | ||||||||||
Pattern Energy Group, Inc. | 2,303 | 55 | ||||||||||
PNM Resources, Inc. | 13,084 | 500 | ||||||||||
SJW Group | 1,879 | 92 | ||||||||||
South Jersey Industries, Inc. | 3,077 | 105 | ||||||||||
Spire, Inc. | 2,096 | 146 | ||||||||||
TerraForm Global, Inc. ‘A’ (a) | 4,451 | 23 | ||||||||||
TerraForm Power, Inc. ‘A’ (a) | 3,462 | 42 | ||||||||||
Unitil Corp. | 2,208 | 107 | ||||||||||
|
| |||||||||||
| 3,594 | ||||||||||||
|
| |||||||||||
Total United States | 94,765 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $77,059) |
| 94,991 | ||||||||||
|
| |||||||||||
| REAL ESTATE INVESTMENT TRUSTS 10.5% | ||||||||||||
| UNITED STATES 10.5% | ||||||||||||
| FINANCIALS 3.1% | ||||||||||||
AG Mortgage Investment Trust, Inc. | 5,356 | 98 | ||||||||||
Anworth Mortgage Asset Corp. | 26,602 | 160 | ||||||||||
Apollo Commercial Real Estate Finance, Inc. | 4,671 | 87 | ||||||||||
Ares Commercial Real Estate Corp. | 2,374 | 31 | ||||||||||
ARMOUR Residential REIT, Inc. | 3,720 | 93 | ||||||||||
Blackstone Mortgage Trust, Inc. ‘A’ | 2,394 | 76 | ||||||||||
Capstead Mortgage Corp. | 20,016 | 209 | ||||||||||
CYS Investments, Inc. | 24,330 | 205 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
Dynex Capital, Inc. | 12,272 | $ | 87 | |||||||||
Invesco Mortgage Capital, Inc. | 22,123 | 370 | ||||||||||
Ladder Capital Corp. | 3,773 | 50 | ||||||||||
MFA Financial, Inc. | 54,504 | 457 | ||||||||||
MTGE Investment Corp. | 9,965 | 187 | ||||||||||
New Residential Investment Corp. | 9,200 | 143 | ||||||||||
New York Mortgage Trust, Inc. | 16,862 | 105 | ||||||||||
PennyMac Mortgage Investment Trust | 14,103 | 258 | ||||||||||
Redwood Trust, Inc. | 12,765 | 217 | ||||||||||
Resource Capital Corp. | 9,716 | 99 | ||||||||||
Two Harbors Investment Corp. | 23,103 | 229 | ||||||||||
Western Asset Mortgage Capital Corp. | 11,993 | 123 | ||||||||||
|
| |||||||||||
| 3,284 | ||||||||||||
|
| |||||||||||
| REAL ESTATE 7.4% | ||||||||||||
Acadia Realty Trust | 1,989 | 55 | ||||||||||
Agree Realty Corp. | 1,006 | 46 | ||||||||||
Alexander’s, Inc. | 35 | 15 | ||||||||||
American Assets Trust, Inc. | 1,120 | 44 | ||||||||||
Armada Hoffler Properties, Inc. | 1,887 | 24 | ||||||||||
Ashford Hospitality Prime, Inc. | 3,508 | 36 | ||||||||||
Ashford Hospitality Trust, Inc. | 18,609 | 113 | ||||||||||
Brandywine Realty Trust | 19,328 | 339 | ||||||||||
Care Capital Properties, Inc. | 5,803 | 155 | ||||||||||
CBL & Associates Properties, Inc. | 44,209 | 373 | ||||||||||
Cedar Realty Trust, Inc. | 17,679 | 86 | ||||||||||
Chatham Lodging Trust | 783 | 16 | ||||||||||
Chesapeake Lodging Trust | 2,015 | 49 | ||||||||||
Colony Starwood Homes | 706 | 24 | ||||||||||
Columbia Property Trust, Inc. | 17,539 | 393 | ||||||||||
CorEnergy Infrastructure Trust, Inc. | 418 | 14 | ||||||||||
Corporate Office Properties Trust | 8,040 | 282 | ||||||||||
Cousins Properties, Inc. | 8,532 | 75 | ||||||||||
DiamondRock Hospitality Co. | 15,897 | 174 | ||||||||||
EastGroup Properties, Inc. | 1,395 | 117 | ||||||||||
Education Realty Trust, Inc. | 624 | 24 | ||||||||||
Empire State Realty Trust, Inc. ‘A’ | 2,995 | 62 | ||||||||||
First Industrial Realty Trust, Inc. | 1,678 | 48 | ||||||||||
First Potomac Realty Trust | 7,274 | 81 | ||||||||||
Franklin Street Properties Corp. | 11,275 | 125 | ||||||||||
GEO Group, Inc. | 9,313 | 275 | ||||||||||
Getty Realty Corp. | 1,851 | 46 | ||||||||||
Gladstone Commercial Corp. | 1,856 | 40 | ||||||||||
Global Net Lease, Inc. | 1,710 | 38 | ||||||||||
Government Properties Income Trust | 7,139 | 131 | ||||||||||
Hersha Hospitality Trust | 4,101 | 76 | ||||||||||
InfraREIT, Inc. | 895 | 17 | ||||||||||
Investors Real Estate Trust | 18,559 | 115 | ||||||||||
iStar Inc. (a) | 3,932 | 47 | ||||||||||
Kite Realty Group Trust | 5,959 | 113 | ||||||||||
LaSalle Hotel Properties | 5,467 | 163 | ||||||||||
Lexington Realty Trust | 19,265 | 191 | ||||||||||
| SHARES | MARKET VALUE (000S) | |||||||||||
LTC Properties, Inc. | 798 | $ | 41 | |||||||||
Mack-Cali Realty Corp. | 11,965 | 325 | ||||||||||
Monmouth Real Estate Investment Corp. | 2,055 | 31 | ||||||||||
Monogram Residential Trust, Inc. | 10,697 | 104 | ||||||||||
National Health Investors, Inc. | 1,151 | 91 | ||||||||||
New Senior Investment Group, Inc. | 10,063 | 101 | ||||||||||
Outfront Media, Inc. | 5,302 | 123 | ||||||||||
Parkway, Inc. | 734 | 17 | ||||||||||
Pebblebrook Hotel Trust | 1,597 | 51 | ||||||||||
Pennsylvania Real Estate Investment Trust | 7,039 | 80 | ||||||||||
Piedmont Office Realty Trust, Inc. ‘A’ | 14,760 | 311 | ||||||||||
Potlatch Corp. | 1,976 | 90 | ||||||||||
Preferred Apartment Communities, Inc. ‘A’ | 941 | 15 | ||||||||||
PS Business Parks, Inc. | 1,083 | 143 | ||||||||||
QTS Realty Trust, Inc. ‘A’ | 1,109 | 58 | ||||||||||
RAIT Financial Trust | 27,283 | 60 | ||||||||||
Ramco-Gershenson Properties Trust | 9,529 | 123 | ||||||||||
Retail Opportunity Investments Corp. | 2,146 | 41 | ||||||||||
Retail Properties of America, Inc. ‘A’ | 4,321 | 53 | ||||||||||
Rexford Industrial Realty, Inc. | 1,373 | 38 | ||||||||||
RLJ Lodging Trust | 8,531 | 170 | ||||||||||
Ryman Hospitality Properties, Inc. | 3,217 | 206 | ||||||||||
Sabra Health Care REIT, Inc. | 4,212 | 101 | ||||||||||
Select Income REIT | 3,415 | 82 | ||||||||||
Seritage Growth Properties ‘A’ | 946 | 40 | ||||||||||
STAG Industrial, Inc. | 1,661 | 46 | ||||||||||
Summit Hotel Properties, Inc. | 3,892 | 73 | ||||||||||
Sunstone Hotel Investors, Inc. | 12,271 | 198 | ||||||||||
Terreno Realty Corp. | 486 | 16 | ||||||||||
Tier REIT, Inc. | 8,154 | 151 | ||||||||||
Urban Edge Properties | 1,802 | 43 | ||||||||||
Urstadt Biddle Properties, Inc. ‘A’ | 2,590 | 51 | ||||||||||
Washington Prime Group, Inc. | 41,003 | 343 | ||||||||||
Washington Real Estate Investment Trust | 4,263 | 136 | ||||||||||
Xenia Hotels & Resorts, Inc. | 16,726 | 324 | ||||||||||
|
| |||||||||||
| 7,898 | ||||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts | 11,182 | |||||||||||
|
| |||||||||||
| Total Investments in Securities (Cost $87,456) | 106,173 | |||||||||||
| Total Investments 99.6% (Cost $87,456) | $ | 106,173 | ||||||||||
| Other Assets and Liabilities, net 0.4% | 377 | |||||||||||
|
| |||||||||||
| Net Assets 100.0% | $ | 106,550 | ||||||||||
|
| |||||||||||
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*):
| * | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (a) | Security did not produce income within the last twelve months. |
| See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2017 | 59 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund (Cont.)
June 30, 2017
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2017 in valuing the Fund’s assets and liabilities:
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
India | ||||||||||||||||
Consumer Discretionary | $ | 16 | $ | 0 | $ | 0 | $ | 16 | ||||||||
United Kingdom | ||||||||||||||||
Financials | 210 | 0 | 0 | 210 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 18,266 | 0 | 6 | 18,272 | ||||||||||||
Consumer Staples | 2,893 | 0 | 0 | 2,893 | ||||||||||||
Energy | 4,496 | 0 | 0 | 4,496 | ||||||||||||
Financials | 16,366 | 0 | 0 | 16,366 | ||||||||||||
Health Care | 6,795 | 0 | 0 | 6,795 | ||||||||||||
| Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2017 | ||||||||||||
Industrials | $ | 20,690 | $ | 0 | $ | 0 | $ | 20,690 | ||||||||
Information Technology | 13,436 | 0 | 0 | 13,436 | ||||||||||||
Materials | 6,589 | 0 | 0 | 6,589 | ||||||||||||
Real Estate | 222 | 0 | 0 | 222 | ||||||||||||
Telecommunication Services | 1,412 | 0 | 0 | 1,412 | ||||||||||||
Utilities | 3,594 | 0 | 0 | 3,594 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
United States | ||||||||||||||||
Financials | 3,284 | 0 | 0 | 3,284 | ||||||||||||
Real Estate | 7,898 | 0 | 0 | 7,898 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 106,167 | $ | 0 | $ | 6 | $ | 106,173 | ||||||||
|
|
|
|
|
|
|
| |||||||||
There were no significant transfers among Levels 1, 2, or 3 during the period ended June 30, 2017.
| 60 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2017
1. ORGANIZATION
PIMCO Equity Series (the “Trust”) was established as a Delaware statutory trust on December 28, 2009. The Trust is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. Information presented in these financial statements pertains to the Institutional Class, Class P, Class A and Class C shares of the funds (each a “Fund” and collectively the “Funds”) indicated on the cover of this report. Pacific Investment Management Company LLC (“PIMCO”) serves as the investment adviser (the “Adviser”) for the Funds. Research Affiliates, LLC (“Research Affiliates”) serves as the sub-adviser for the Funds. PIMCO and Research Affiliates have also engaged Parametric Portfolio Associates, LLC (“Parametric”) to implement all or a portion of each Fund’s investment strategies. The PIMCO RAE Fundamental Global Fund may invest substantially all of its assets in Institutional Class shares of the PIMCO RAE Fundamental US Fund, PIMCO RAE Fundamental International Fund (“International Fund”) and PIMCO RAE Fundamental Emerging Markets Fund (“Emerging Markets Fund”) (collectively, “Underlying Funds”), and equity securities that are eligible investments for the Underlying Funds. The PIMCO RAE Fundamental Global ex-US Fund may invest substantially all of its assets in Institutional Class shares of the International Fund and Emerging Markets Fund, equity securities of small companies economically tied to non-U.S. countries, and securities that are eligible investments for the International Fund and Emerging Markets Fund. The PIMCO RAE Fundamental Global Fund and PIMCO RAE Fundamental Global ex-US Fund may invest in other affiliated funds and unaffiliated funds, which may or may not be registered under the Investment Company Act of 1940 (together with the Underlying Funds, “Acquired Funds”).
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Each Fund is treated as an investment company under the reporting requirements of U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
(a) Securities Transactions and Investment Income Securities transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for
the security after the trade date. Realized gains (losses) from securities sold are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as a Fund is informed of the ex-dividend date. Interest income, adjusted for the accretion of discounts and amortization of premiums, is recorded on the accrual basis from settlement date, with the exception of securities with a forward starting effective date, where interest income is recorded on the accrual basis from effective date. For convertible securities, premiums attributable to the conversion feature are not amortized. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statements of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statements of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term capital gain distributions received from registered investment companies, if any, are recorded as realized gains.
(b) Cash and Foreign Currency The functional and reporting currency for the Funds is the U.S. dollar. The market values of foreign securities, currency holdings and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the current exchange rates each business day. Purchases and sales of securities and income and expense items denominated in foreign currencies, if any, are translated into U.S. dollars at the exchange rate in effect on the transaction date. The Funds do not separately report the effects of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized gain (loss) and net change in unrealized appreciation (depreciation) from investments on the Statements of Operations. The Funds may invest in foreign currency-denominated securities and may engage in foreign currency transactions either on a spot (cash) basis at the rate prevailing in the currency exchange market at the time or through a forward foreign currency contract. Realized foreign exchange gains (losses) arising from sales of spot foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid are included in net realized gain (loss) on foreign currency transactions on the Statements of Operations. Net unrealized foreign exchange gains (losses) arising from changes in foreign exchange rates on foreign denominated assets
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and liabilities other than investments in securities held at the end of the reporting period are included in net change in unrealized appreciation (depreciation) on foreign currency assets and liabilities on the Statements of Operations.
(c) Multiclass Operations Each class offered by the Trust has equal rights as to assets and voting privileges (except that shareholders of a class have exclusive voting rights regarding any matter relating solely to that class of shares). Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains (losses) are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include supervisory and administrative and distribution and servicing fees. Under certain circumstances, the per share net asset value (“NAV”) of a class of the respective Fund’s shares may be different from the per share NAV of another class of shares as a result of the different daily expense accruals applicable to each class of shares.
(d) Distributions to Shareholders The following table shows the anticipated frequency of distributions from net investment income, if any, for each Fund.
| Distribution Frequency | ||||||||||||
| Fund Name | Declared | Distributed | ||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | Annually | Annually | ||||||||||
PIMCO RAE Fundamental Global Fund | Annually | Annually | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | Annually | Annually | ||||||||||
PIMCO RAE Fundamental International Fund | Annually | Annually | ||||||||||
PIMCO RAE Fundamental US Fund | Annually | Annually | ||||||||||
PIMCO RAE Fundamental US Small Fund | Annually | Annually | ||||||||||
Net realized capital gains earned by each Fund, if any, will be distributed no less frequently than once each year.
Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP. Differences between tax regulations and U.S. GAAP may cause timing differences between income and capital gain recognition. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. As a result, income distributions and capital gain distributions declared during a fiscal period may differ significantly from the net investment income (loss) and realized gains (losses) reported on each Fund’s annual financial statements presented under U.S. GAAP.
If a Fund estimates that a portion of one of its dividend distributions may be comprised of amounts from sources other than net investment income in accordance with its policies and good accounting practices, the Fund will notify shareholders of record of the estimated composition of such distribution through a Section 19 Notice. For these purposes, a Fund estimates the source or sources from which a distribution is paid, to the
close of the period as of which it is paid, in reference to its internal accounting records and related accounting practices. If, based on such accounting records and practices, it is estimated that a particular distribution does not include capital gains or paid-in surplus or other capital sources, a Section 19 Notice generally would not be issued. It is important to note that differences exist between a Fund’s daily internal accounting records and practices, a Fund’s financial statements presented in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. For instance, a Fund’s internal accounting records and practices may take into account, among other factors, tax-related characteristics of certain sources of distributions that differ from treatment under U.S. GAAP. Examples of such differences may include, among others, the treatment of paydowns on mortgage-backed securities purchased at a discount and periodic payments under interest rate swap contracts. Accordingly, among other consequences, it is possible that a Fund may not issue a Section 19 Notice in situations where the Fund’s financial statements prepared later and in accordance with U.S. GAAP and/or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please visit www.pimco.com for the most recent Section 19 Notice, if applicable, for additional information regarding the estimated composition of distributions. Final determination of a distribution’s tax character will be reported on Form 1099 DIV sent to shareholders for the calendar year.
Distributions classified as a tax basis return of capital, if any, are reflected on the Statements of Changes in Net Assets and have been recorded to paid in capital. In addition, other amounts have been reclassified between undistributed (overdistributed) net investment income (loss), accumulated undistributed (overdistributed) net realized gain (loss) and/or paid in capital to more appropriately conform U.S. GAAP to tax characterizations of distributions.
(e) New Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”), ASU 2014-15 requiring management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern. The ASU is effective prospectively for annual periods ending after December 15, 2016, and interim periods thereafter. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
In May 2015, the FASB issued ASU 2015-07 which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share practical expedient. The ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical expedient. The ASU is effective for annual periods beginning after December 15, 2015 and interim
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periods within those annual periods. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
In March 2016, the FASB issued ASU 2016-05 which provides guidance related to the impact of derivative contract novations on certain relationships under Accounting Standards Codification (“ASC”) 815. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In August 2016, the FASB issued ASU 2016-15 which amends ASC 230 to clarify guidance on the classification of certain cash receipts and cash payments in the Statement of Cash Flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2016, the U.S. Securities and Exchange Commission (“SEC”) adopted new rules and forms, and amendments to certain current rules and forms, to modernize reporting and disclosure of information by registered investment companies. The amendments to Regulation S-X will require standardized, enhanced disclosure about derivatives in investment company financial statements, and will also change the rules governing the form and content of such financial statements. The compliance date for these amendments is August 1, 2017. Compliance is based on reporting period-end date. At this time, management is evaluating the implications of these changes on the financial statements.
In November 2016, the FASB issued ASU 2016-18 which amends ASC 230 to provide guidance on the classification and presentation of changes in restricted cash and restricted cash equivalents on the Statement of Cash Flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.
In March 2017, the FASB issued ASU 2017-08 which provides guidance related to the amortization period for certain purchased callable debt securities held at a premium. The ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Funds have adopted the ASU. The implementation of the ASU did not have an impact on the Funds’ financial statements.
3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS
(a) Investment Valuation Policies The price of a Fund’s shares is based on the Fund’s NAV. The NAV of a Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to that Fund or class, by the total number of shares outstanding of that Fund or class.
On each day that the New York Stock Exchange (“NYSE”) is open, Fund shares are ordinarily valued as of the close of regular trading (“NYSE Close”). Information that becomes known to the Funds or their agents after the time as of which NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of a security or the NAV determined earlier that day. Each Fund reserves the right to change the time as of which its respective NAV is calculated if the Fund closes earlier, or as permitted by the SEC.
For purposes of calculating NAV, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on the basis of official closing prices or the last reported sales prices, or if no sales are reported, based on quotes obtained from established market makers or prices (including evaluated prices) supplied by the Funds’ approved pricing services, quotation reporting systems and other third-party sources (together, “Pricing Services”). The Funds will normally use pricing data for domestic equity securities received shortly after the NYSE Close and do not normally take into account trading, clearances or settlements that take place after the NYSE Close. If market value pricing is used, a foreign (non-U.S.) equity security traded on a foreign exchange or on more than one exchange is typically valued using pricing information from the exchange considered by the Adviser to be the primary exchange. A foreign (non-U.S.) equity security will be valued as of the close of trading on the foreign exchange, or the NYSE Close, if the NYSE Close occurs before the end of trading on the foreign exchange. Domestic and foreign (non-U.S.) fixed income securities, non-exchange traded derivatives, and equity options are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services using data reflecting the earlier closing of the principal markets for those securities. Prices obtained from Pricing Services may be based on, among other things, information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Certain fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date. Exchange-traded options, except equity options, futures and options on futures are valued at the settlement price determined by the relevant exchange. Swap agreements are valued on the basis of bid quotes obtained from brokers and dealers or market-based prices supplied by Pricing Services. A Fund’s investments in open-end management investment companies, other than exchange-traded funds (“ETFs”), are valued at the NAVs of such investments.
If a foreign (non-U.S.) equity security’s value has materially changed after the close of the security’s primary exchange or principal market but before the NYSE Close, the security may be valued at fair value based on procedures established and approved by the Board of Trustees of the Trust (the “Board”). Foreign (non-U.S.) equity securities that do not trade when the NYSE is open are also valued at fair value.
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With respect to foreign (non-U.S.) equity securities, the Fund may determine the fair value of investments based on information provided by Pricing Services and other third-party vendors, which may recommend fair value or adjustments with reference to other securities, indices or assets. In considering whether fair valuation is required and in determining fair values, the Fund may, among other things, consider significant events (which may be considered to include changes in the value of U.S. securities or securities indices) that occur after the close of the relevant market and before the NYSE Close. A Fund may utilize modeling tools provided by third-party vendors to determine fair values of foreign (non-U.S.) securities. Foreign exchanges may permit trading in foreign (non-U.S.) equity securities on days when the Trust is not open for business, which may result in a Fund’s portfolio investments being affected when shareholders are unable to buy or sell shares.
Senior secured floating rate loans for which an active secondary market exists to a reliable degree will be valued at the mean of the last available bid/ask prices in the market for such loans, as provided by a Pricing Service. Senior secured floating rate loans for which an active secondary market does not exist to a reliable degree will be valued at fair value, which is intended to approximate market value. In valuing a senior secured floating rate loan at fair value, the factors considered may include, but are not limited to, the following: (a) the creditworthiness of the borrower and any intermediate participants, (b) the terms of the loan, (c) recent prices in the market for similar loans, if any, and (d) recent prices in the market for instruments of similar quality, rate, period until next interest rate reset and maturity.
Investments valued in currencies other than the U.S. dollar are converted to the U.S. dollar using exchange rates obtained from Pricing Services. As a result, the value of such investments and, in turn, the NAV of a Fund’s shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of investments traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the Trust is not open for business. As a result, to the extent that a Fund holds foreign (non-U.S.) investments, the value of those investments may change at times when shareholders are unable to buy or sell shares and the value of such investments will be reflected in the Fund’s next calculated NAV.
Investments for which market quotes or market based valuations are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated to the Adviser the responsibility for applying the fair valuation methods. In the event that market quotes or market based valuations are not readily available, and the security or asset cannot be valued pursuant to a Board approved valuation method, the value of the security or asset will be determined in good faith by the Valuation Oversight Committee of the Board (“Valuation Oversight Committee”),
generally based on recommendations provided by the Adviser. The Adviser may consult with the Sub-Adviser or Parametric in providing such recommendations or otherwise with respect to valuation of the PIMCO Dividend and Income Fund’s portfolio securities or other assets. Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information, bid/ask information, indicative market quotations (“Broker Quotes”), Pricing Services’ prices), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Adviser the responsibility for monitoring significant events that may materially affect the values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be reevaluated in light of such significant events.
When a Fund uses fair valuation to determine the value of a portfolio security or other asset for purposes of calculating its NAV, such investments will not be priced on the basis of quotes from the primary market in which they are traded, but rather may be priced by another method that the Board or persons acting at their direction believe reflects fair value. Fair valuation may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot ensure that fair values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold. The Funds’ use of fair valuation may also help to deter “stale price arbitrage” as discussed under the “Abusive Trading Practices” section in each Fund’s prospectus.
(b) Fair Value Hierarchy U.S. GAAP describes fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to valuation methods and requires disclosure of the fair value hierarchy, separately for each major category of assets and liabilities, that segregates fair value measurements into levels (Level 1, 2, or 3). The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Levels 1, 2, and 3 of the fair value hierarchy are defined as follows:
| ∎ | Level 1 — Quoted prices in active markets or exchanges for identical assets and liabilities. |
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| ∎ | Level 2 — Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. |
| ∎ | Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair value of investments. |
In accordance with the requirements of U.S. GAAP, the amounts of transfers between Levels 1 and 2 and transfers into and out of Level 3, if material, are disclosed in the Notes to Schedule of Investments for each respective Fund.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to realized gain (loss), unrealized appreciation (depreciation), purchases and sales, accrued discounts (premiums), and transfers into and out of the Level 3 category during the period. The end of period value is used for the transfers between Levels of a Fund’s assets and liabilities. Additionally, U.S. GAAP requires quantitative information regarding the significant unobservable inputs used in the determination of fair value of assets or liabilities categorized as Level 3 in the fair value hierarchy. In accordance with the requirements of U.S. GAAP, a fair value hierarchy, and if material, a Level 3 reconciliation and details of significant unobservable inputs, have been included in the Notes to Schedule of Investments for each respective Fund.
(c) Valuation Techniques and the Fair Value Hierarchy
Level 1 and Level 2 trading assets and trading liabilities, at fair value The valuation methods (or “techniques”) and significant inputs used in determining the fair values of portfolio securities or other assets and liabilities categorized as Level 1 and Level 2 of the fair value hierarchy are as follows:
Common stocks, ETFs, exchange-traded notes and financial derivative instruments, such as futures contracts, rights and warrants, or options on futures that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy.
Valuation adjustments may be applied to certain securities that are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the NYSE
Close. These securities are valued using Pricing Services that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.
Equity-linked securities are valued by referencing the last reported sale or settlement price of the linked referenced equity on the day of valuation. Foreign exchange adjustments are applied to the last reported price to convert the linked equity’s trading currency to the contract’s settling currency. These investments are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment companies (other than ETFs) will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Investments in unregistered open-end investment companies will be calculated based upon the NAVs of such investments and are considered Level 1 provided that the NAVs are observable, calculated daily and are the value at which both purchases and sales will be conducted.
Level 3 trading assets and trading liabilities, at fair value When a fair valuation method is applied by the Adviser that uses significant unobservable inputs, investments will be priced by a method that the Board or persons acting at their direction believe reflects fair value and are categorized as Level 3 of the fair value hierarchy.
Short-term debt instruments (such as commercial paper) having a remaining maturity of 60 days or less may be valued at amortized cost, so long as the amortized cost value of such short-term debt instruments is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. These securities are categorized as Level 2 or Level 3 of the fair value hierarchy depending on the source of the base price.
4. SECURITIES AND OTHER INVESTMENTS
(a) Investments in Affiliates
The PIMCO RAE Fundamental Global Fund may invest substantially all of its assets in Acquired Funds and equity securities that are eligible investments for the Underlying Funds. The PIMCO RAE Fundamental Global ex-US Fund may invest substantially all of its assets in Acquired Funds (except the PIMCO RAE Fundamental US Fund), equity securities of small companies economically tied to non-U.S. countries, and securities that are eligible investments for the International Fund and Emerging Markets Fund. The Underlying Funds are considered to be affiliated with the PIMCO RAE Fundamental Global Fund and PIMCO RAE Fundamental Global ex-US Fund.
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Each Fund may invest in the PIMCO Short-Term Floating NAV Portfolio III and the PIMCO Short-Term Floating NAV Portfolio IV (“Central Funds”) to the extent permitted by the Act and rules thereunder. The Central Funds are registered investment companies created for use solely by the series of the Trust and other series of registered investment companies advised by the Adviser, in connection with their cash management activities. The main investments of the Central Funds are money market and short maturity fixed income instruments. The Central Funds may incur expenses related to their investment activities, but do not pay Investment Advisory Fees or Supervisory and Administrative Fees to the Adviser. The Central Funds are considered to be affiliated with the Funds. The tables below show the Funds’ transactions in and earnings from investments in the affiliated Funds for the period ended June 30, 2017 (amounts in thousands†):
| PIMCO RAE Fundamental Global Fund | ||||||||||||||||||||||||||||||||||||
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 30,974 | $ | 16,358 | $ | (4,444 | ) | $ | 275 | $ | 9,013 | $ | 52,176 | $ | 1,345 | $ | 0 | |||||||||||||||||||
PIMCO RAE Fundamental International Fund | 106,007 | 79,187 | (13,274 | ) | 181 | 31,527 | 203,628 | 3,977 | 0 | |||||||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 145,903 | 58,611 | (58,624 | ) | 1,369 | 11,177 | 158,436 | 3,787 | 4,600 | |||||||||||||||||||||||||||
Totals | $ | 282,884 | $ | 154,156 | $ | (76,342 | ) | $ | 1,825 | $ | 51,717 | $ | 414,240 | $ | 9,109 | $ | 4,600 | |||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
| PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||
| Underlying PIMCO Funds | Market Value 06/30/2016 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2017 | Dividend Income(1) | Realized Net Capital Gain Distributions(1) | ||||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 14,274 | $ | 1,886 | $ | (3,061 | ) | $ | (2 | ) | $ | 3,317 | $ | 16,414 | $ | 400 | $ | 0 | ||||||||||||||||||
PIMCO RAE Fundamental International Fund | 48,849 | 7,418 | (2,330 | ) | (304 | ) | 10,427 | 64,060 | 1,184 | 0 | ||||||||||||||||||||||||||
Totals | $ | 63,123 | $ | 9,304 | $ | (5,391 | ) | $ | (306 | ) | $ | 13,744 | $ | 80,474 | $ | 1,584 | $ | 0 | ||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | The tax characterization of distributions is determined in accordance with Federal income tax regulations. The actual tax characterization of distributions paid are determined at the end of the fiscal year of the affiliated fund. See Note 2, Distributions to Shareholders, in the Notes to Financial Statements for more information. |
(b) Investments in Securities
Real Estate Investment Trusts (“REITs”) Certain Funds may invest in REITs, which are pooled investment vehicles that own, and typically operate, income-producing real estate. If a REIT meets certain requirements, including distributing to shareholders substantially all of its taxable income (other than net capital gains), then it is not taxed on the income distributed to shareholders. Distributions received from REITs may be characterized as income, capital gain or a return of capital. A return of capital is recorded by a Fund as a reduction to the cost basis of its investment in the REIT. REITs are subject to management fees and other expenses, and so the Funds that invest in REITs will bear their proportionate share of the costs of the REITs’ operations.
Restricted Securities Certain Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities may generally be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. Disposal of
restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities held by the Funds at June 30, 2017 are disclosed in the Notes to Schedules of Investments.
Warrants Certain Funds may receive warrants. Warrants are securities that are usually issued together with a debt security or preferred stock and that give the holder the right to buy a proportionate amount of common stock at a specified price. Warrants are freely transferable and are often traded on major exchanges. Warrants normally have a life that is measured in years and entitle the holder to buy common stock of a company at a price that is usually higher than the market price at the time the warrant is issued. Warrants may entail greater risks than certain other types of investments. Generally, warrants do not carry the right to receive dividends or exercise voting rights with respect to the underlying securities, and they do not represent any rights in the assets of the issuer. In addition, their value does not necessarily change with the value of the underlying securities, and they cease to have value if they are not exercised on or before their expiration date. If the market price of the underlying stock does not exceed the exercise price during
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the life of the warrant, the warrant will expire worthless. Warrants may increase the potential profit or loss to be realized from the investment as compared with investing the same amount in the underlying securities. Similarly, the percentage increase or decrease in the value of an equity security warrant may be greater than the percentage increase or decrease in the value of the underlying common stock. Warrants may relate to the purchase of equity or debt securities. Debt obligations with warrants attached to purchase equity securities have many characteristics of convertible securities and their prices may, to some degree, reflect the performance of the underlying stock. Debt obligations also may be issued with warrants attached to purchase additional debt securities at the same coupon rate. A decline in interest rates would permit a Fund to sell such warrants at a profit. If interest rates rise, these warrants would generally expire with no value.
5. FINANCIAL DERIVATIVE INSTRUMENTS
The following disclosures contain information on how and why the Funds use financial derivative instruments, and how financial derivative instruments affect the Funds’ financial position, results of operations and cash flows. The location and fair value amounts of these instruments on the Statements of Assets and Liabilities and the net realized gain (loss) and net change in unrealized appreciation (depreciation) on the Statements of Operations, each categorized by type of financial derivative contract and related risk exposure, are included in a table in the Notes to Schedules of Investments. The financial derivative instruments outstanding as of period end and the amounts of net realized gain (loss) and net change in unrealized appreciation (depreciation) on financial derivative instruments during the period, as disclosed in the Notes to Schedules of Investments, serve as indicators of the volume of financial derivative activity for the Funds.
(a) Forward Foreign Currency Contracts Certain Funds may enter into forward foreign currency contracts in connection with settling planned purchases or sales of securities, to hedge the currency exposure associated with some or all of a Fund’s securities or as a part of an investment strategy. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of a forward foreign currency contract fluctuates with changes in foreign currency exchange rates. Forward foreign currency contracts are marked to market daily, and the change in value is recorded by a Fund as an unrealized gain (loss). Realized gains (losses) are equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed and are recorded upon delivery or receipt of the currency. These contracts may involve market risk in excess of the unrealized gain (loss) reflected on the Statements of Assets and Liabilities. In addition, a Fund could be exposed to risk if the counterparties are unable to meet the terms of the contracts or if the value of the currency changes unfavorably to the U.S. dollar. To mitigate such risk, cash or securities may be exchanged as collateral pursuant to the terms of the underlying contracts.
6. PRINCIPAL RISKS
In the normal course of business, the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists due to such things as changes in the market (market risk) or failure or inability of the other party to a transaction to perform (credit and counterparty risk). See below for a detailed description of select principal risks. For a more comprehensive list of potential risks the Funds may be subject to, please see the Important Information About the Funds.
Except with regard to the Investments in Mutual Funds subsection (if any), and unless stated otherwise, any reference in the below subsections to a “Fund” includes the Fund, and, where applicable, Acquired Funds, Underlying Funds and Underlying PIMCO Funds.
Investments in Mutual Funds To the extent that certain Funds invest substantially all of their respective assets in Acquired Funds, the risks associated with investing in these Funds will be closely related to the risks associated with the securities and other investments held by the Acquired Funds. The ability of the Funds to achieve their respective investment objectives may depend upon the ability of the Acquired Funds to achieve their respective investment objectives. There can be no assurance that the investment objective of any Acquired Fund will be achieved. The NAV of each Fund will fluctuate in response to changes in the respective NAV of the Acquired Funds in which it invests. The extent to which the investment performance and risks associated with the Funds correlate to those of a particular Acquired Fund will depend upon the extent to which the assets of the Funds are allocated from time to time for investment in the Acquired Funds, which will vary. Investing in Acquired Funds involves certain additional expenses and tax results that would not be present when investing in a mutual fund that invests directly in individual stocks and bonds.
Certain Funds’ investment performance depends upon how each Fund’s assets are allocated and reallocated according to each Fund’s asset allocation targets and ranges. A principal risk of investing in each Fund is that the Funds’ investment adviser will make less than optimal or poor asset allocation decisions. The investment adviser attempts to identify investment allocations for the Acquired Funds that will provide consistent, quality performance for the Funds, but there is no guarantee that such allocation techniques will produce the desired results.
Market Risks A Fund’s investments in financial derivative instruments and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign (non-U.S.) currency and equity risks.
The market values of equities, such as common stocks and preferred securities or equity related investments such as futures and options, have historically risen and fallen in periodic cycles and may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic
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conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Different types of equity securities may react differently to these developments. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.
Issuers that have paid regular dividends or distributions to shareholders may not continue to do so in the future. An issuer may reduce or eliminate future dividends or distributions at any time and for any reason. Moreover, a Fund may use a dividend capture strategy (i.e., purchasing an equity security shortly before the issuer pays a dividend and selling it shortly thereafter), which may expose the Fund to higher portfolio turnover, increased trading costs and the potential for capital loss or gain, particularly in the event of significant short-term price movements of stocks subject to dividend capture trading. Also, securities purchased to capture a dividend often decline in value at the time of sale (i.e., shortly following the dividend) and the resulting realized loss to the Fund may exceed the amount of the dividend received, thereby negatively impacting the Fund’s net asset value.
Interest rate risk is the risk that fixed income securities and other instruments held by a Fund will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by a Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Interest rate changes can be sudden and unpredictable, and a Fund may lose money if these changes are not anticipated by the Fund’s management. A Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended.
Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates that incorporates a security’s yield, coupon, final maturity and call features, among other characteristics. Convexity is an additional measure of interest rate sensitivity that measures the rate of change of duration in response to changes in interest rates. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. A wide variety of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, general economic conditions, etc.). Under current economic conditions, interest rates are near historically low levels. Thus, the Funds currently face a heightened level of interest rate risk, especially since the Federal Reserve Board has ended its quantitative easing program and has begun, and may continue, to raise interest rates. To the extent the Federal Reserve Board continues to raise interest rates, there is a risk that rates across the financial system may
rise. Further, while bond markets have steadily grown over the past three decades, dealer “market making” ability has not kept pace and in some cases has decreased. Given the importance of intermediary “market making” in creating a robust and active market, fixed income securities are currently facing increased volatility and liquidity risks. All of these factors, collectively and/or individually, could cause a Fund to lose value. If a Fund lost enough value, the Fund could face increased shareholder redemptions, which could force the Fund to liquidate investments at disadvantageous times or prices, thereby adversely affecting the Fund. Also, a Fund may be adversely affected when a large shareholder purchases or redeems large amounts of shares, which can occur at any time and may impact the Fund in the same manner as a high volume of purchase or redemption requests. Large shareholder transactions may impact a Fund’s liquidity and net asset value. Such transactions may also increase a Fund’s transaction costs or otherwise cause a Fund to perform differently than intended. Moreover, the Funds are subject to the risk that other shareholders may make investment decisions based on the choices of a large shareholder.
To the extent that a Fund may invest in securities and instruments that are economically tied to Russia, the Fund is subject to various risks such as, but not limited to political, economic, legal, market and currency risks. The risks include uncertain political and economic policies, short-term market volatility, poor accounting standards, corruption and crime, an inadequate regulatory system, and unpredictable taxation. Investments in Russia are particularly subject to the risk that further economic sanctions may be imposed by the United States and/or other countries. Such sanctions, which may impact companies in many sectors, including energy, financial services and defense, among others, may negatively impact a Fund’s performance and/or ability to achieve its investment objective. The Russian securities market, as compared to U.S. markets, has significant price volatility, less liquidity, a smaller market capitalization and a smaller number of traded securities. Adverse currency exchange rates are a risk and there may be a lack of available currency hedging instruments. Investments in Russia may be subject to the risk of nationalization or expropriation of assets. Oil, natural gas, metals, and timber account for a significant portion of Russia’s exports, leaving the country vulnerable to swings in world prices.
If a Fund invests directly in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, foreign (non-U.S.) currencies, or in financial derivative instruments that provide exposure to foreign (non-U.S.) currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks
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or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, a Fund’s investments in foreign currency-denominated securities may reduce the Fund’s returns.
Credit and Counterparty Risks A Fund will be exposed to credit risk to parties with whom it trades and will also bear the risk of settlement default. A Fund minimizes concentrations of credit risk by undertaking transactions with a large number of customers and counterparties on recognized and reputable exchanges, where applicable. Over the counter (“OTC”) derivative transactions are subject to the risk that a counterparty to the transaction will not fulfill its contractual obligations to the other party, as many of the protections afforded to centrally cleared derivative transactions might not be available for OTC derivative transactions. For derivatives traded on an exchange or through a central counterparty, credit risk resides with a Fund’s clearing broker, or the clearinghouse itself, rather than with a counterparty in an OTC derivative transaction. A Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a financial derivative instruments contract, repurchase agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities and financial derivative instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings.
Similar to credit risk, a Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which a Fund has unsettled or open transactions will default. PIMCO, as the Adviser, seeks to minimize counterparty risks to the Funds through a number of ways. Prior to entering into transactions with a new counterparty, the PIMCO Counterparty Risk Committee conducts an extensive credit review of such counterparty and must approve the use of such counterparty. Furthermore, pursuant to the terms of the underlying contract, to the extent that unpaid amounts owed to a Fund exceed a predetermined threshold, such counterparty is required to advance collateral to the Fund in the form of cash or securities equal in value to the unpaid amount owed to the Fund. A Fund may invest such collateral in securities or other instruments and will typically pay interest to the counterparty on the collateral received. If the unpaid amount owed to a Fund subsequently decreases, the Fund would be required to return to the counterparty all or a portion of the collateral previously advanced. PIMCO’s attempts to minimize counterparty risk may, however, be unsuccessful.
All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once a Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.
Model Risk In making investment allocation decisions, Research Affiliates LLC (the “Sub-Adviser”) may utilize quantitative models that
may be proprietary or developed by third-parties. These models are used by the Sub-Adviser to help determine a Fund’s investment allocation decisions. Investment models used in making investment allocation decisions may not adequately take into account certain factors and may result in a decline in the value of your investment. Models rely on accurate financial and market data inputs. If inaccurate data is entered into a model, the resulting information will be incorrect. In addition, the models used may be predictive in nature and such models may result in an incorrect assessment of future events. The models evaluate securities or securities markets based on certain assumptions concerning the interplay of market factors. The markets or the prices of individual securities may be affected by factors not foreseen in developing the models.
7. MASTER ARRANGEMENTS
A Fund may be subject to various netting arrangements (“Master Agreements”) with select counterparties. Master Agreements govern the terms of certain transactions, and reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Each type of Master Agreement governs certain types of transactions. Different types of transactions may be traded out of different legal entities or affiliates of a particular organization, resulting in the need for multiple agreements with a single counterparty. As the Master Agreements are specific to unique operations of different asset types, they allow a Fund to close out and net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single Master Agreement with a counterparty. For financial reporting purposes the Statements of Assets and Liabilities generally present derivative assets and liabilities on a gross basis, which reflects the full risks and exposures prior to netting.
Master Agreements can also help limit counterparty risk by specifying collateral posting arrangements at pre-arranged exposure levels. Under most Master Agreements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Agreement with a counterparty in a given account exceeds a specified threshold, which typically ranges from zero to $250,000 depending on the counterparty and the type of Master Agreement. United States Treasury Bills and U.S. dollar cash are generally the preferred forms of collateral, although other forms of AAA rated paper or sovereign securities may be used depending on the terms outlined in the applicable Master Agreement. Securities and cash pledged as collateral are reflected as assets on the Statements of Assets and Liabilities as either a component of Investments at value (securities) or Deposits with counterparty. Cash collateral received is not typically held in a segregated account and as such is reflected as a liability on the Statements of Assets and Liabilities as Deposits from counterparty. The market value of any securities received as collateral is not reflected as a component of NAV. A Fund’s
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overall exposure to counterparty risk can change substantially within a short period, as it is affected by each transaction subject to the relevant Master Agreement.
Master Repurchase Agreements and Global Master Repurchase Agreements (individually and collectively “Master Repo Agreements”) govern repurchase, reverse repurchase, and sale-buyback transactions between a Fund and select counterparties. Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral. The market value of transactions under the Master Repo Agreement, collateral pledged or received, and the net exposure by counterparty as of period end are disclosed in the Notes to Schedules of Investments.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern certain forward settling transactions, such as TBA securities, delayed-delivery or sale-buyback transactions by and between a Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, transaction initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral. The market value of forward settling transactions, collateral pledged or received, and the net exposure by counterparty as of period end is disclosed in the Notes to Schedules of Investments.
Customer Account Agreements and related addenda govern cleared derivatives transactions such as futures, options on futures, and cleared OTC derivatives. Such transactions require posting of initial margin as determined by each relevant clearing agency which is segregated in an account at a futures commission merchant (“FCM”) registered with the
Commodity Futures Trading Commission (“CFTC”). In the United States, counterparty risk may be reduced as creditors of an FCM cannot have a claim to Fund assets in the segregated account. Portability of exposure reduces risk to the Funds. Variation margin, or changes in market value, are exchanged daily, but may not be netted between futures and cleared OTC derivatives unless the parties have agreed to a separate arrangement in respect of portfolio margining. The market value or accumulated unrealized appreciation (depreciation), initial
margin posted, and any unsettled variation margin as of period end are disclosed in the Notes to Schedules of Investments.
International Swaps and Derivatives Association, Inc. Master Agreements and Credit Support Annexes (“ISDA Master Agreements”) govern bilateral OTC derivative transactions entered into by a Fund with select counterparties. ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral posting and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. In limited circumstances, the ISDA Master Agreement may contain additional provisions that add counterparty protection beyond coverage of existing daily exposure if the counterparty has a decline in credit quality below a predefined level. These amounts, if any, may be segregated with a third-party custodian. The market value of OTC financial derivative instruments, collateral received or pledged, and net exposure by counterparty as of period end are disclosed in the Notes to Schedules of Investments.
8. FEES AND EXPENSES
(a) Investment Advisory Fee PIMCO is a majority-owned subsidiary of Allianz Asset Management of America L.P. (“Allianz Asset Management”) and serves as the Adviser to the Trust, pursuant to an investment advisory contract. The Adviser receives a monthly fee from each Fund at an annual rate based on average daily net assets (the “Investment Advisory Fee”). The Investment Advisory Fee for all classes is charged at an annual rate as noted in the table in note (b) below.
(b) Supervisory and Administrative Fee PIMCO serves as administrator (the “Administrator”) and provides supervisory and administrative services to the Trust for which it receives a monthly supervisory and administrative fee based on each share class’s average daily net assets (the “Supervisory and Administrative Fee”). As the Administrator, PIMCO bears the costs of various third-party services, including audit, custodial, portfolio accounting, legal, transfer agency and printing costs.
The Investment Advisory Fees and Supervisory and Administrative Fees for all classes, as applicable, are charged at an annual rate as noted in the following table (calculated as a percentage of each Fund’s average daily net assets attributable to each class):
| Investment Advisory Fee | Supervisory and Administrative Fee | |||||||||||||||||||||||||||
| Fund Name | All Classes | Institutional Class | Class P | Class A | Class C | |||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund(1) | 0.50% | 0.45% | 0.55% | 0.55% | 0.55% | |||||||||||||||||||||||
PIMCO RAE Fundamental Global Fund(1)(2) | 0.40% | 0.30% | 0.40% | 0.40% | 0.40% | |||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund(1)(2) | 0.40% | 0.35% | 0.45% | 0.45% | 0.45% | |||||||||||||||||||||||
PIMCO RAE Fundamental International Fund(3) | 0.30% | 0.30% | 0.40% | 0.40% | 0.40% | |||||||||||||||||||||||
PIMCO RAE Fundamental US Fund(3) | 0.25% | 0.25% | 0.35% | 0.40% | 0.40% | |||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund(3) | 0.35% | 0.25% | 0.35% | 0.40% | 0.40% | |||||||||||||||||||||||
| (1) | PIMCO has contractually agreed, through October 31, 2017, to reduce its advisory fee by 0.20% of the average daily net assets of the Fund. |
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| (2) | PIMCO has contractually agreed, through October 31, 2017, to waive, first, the advisory fee and, second, the supervisory and administrative fee it receives from the Fund in an amount equal to the expenses attributable to the Management Fees of Underlying Funds indirectly incurred by the Fund in connection with its investments in Underlying Funds, to the extent the Fund’s Management Fees are greater than or equal to the Management Fees of the Underlying Funds. This waiver renews annually for a full year unless terminated by PIMCO upon at least 30 days’ notice prior to the end of the contract term. |
| (3) | PIMCO has contractually agreed, through October 31, 2017, to reduce its advisory fee by 0.10% of the average daily net assets of the Fund. |
(c) Distribution and Servicing Fees PIMCO Investments LLC, a wholly-owned subsidiary of PIMCO, serves as the distributor (“Distributor”) of the Trust’s shares.
The Trust has adopted separate Distribution and Servicing Plans with respect to the Class A and Class C shares of the Trust pursuant to Rule 12b-1 under the Act. In connection with the distribution of Class C shares of the Trust, the Distributor receives distribution fees from the Trust of up to 0.75%, and in connection with personal services rendered to Class A and Class C shareholders and the maintenance of such shareholder accounts, the Distributor receives servicing fees from the Trust of up to 0.25% for each of Class A and Class C shares (percentages reflect annual rates of the average daily net assets attributable to the applicable class).
The Trust paid distribution and servicing fees at effective rates as noted in the following table (calculated as a percentage of each Fund’s average daily net assets attributable to each class):
| Distribution Fee | Servicing Fee | |||||||||||
Class A | — | 0.25% | ||||||||||
Class C | 0.75% | 0.25% | ||||||||||
The Distributor also received the proceeds of the initial sales charges paid by the shareholders upon the purchase of Class A shares and the contingent deferred sales charges paid by the shareholders upon certain redemptions of Class A and Class C shares. For the period ended June 30, 2017, the Distributor retained $83,117 representing commissions (sales charges) and contingent deferred sales charges from the Trust.
(d) Fund Expenses PIMCO provides or procures supervisory and administrative services for shareholders and also bears the costs of various third-party services required by the Funds, including audit, custodial, portfolio accounting, legal, transfer agency and printing costs. The Trust is responsible for the following expenses: (i) taxes and governmental fees; (ii) brokerage fees and commissions and other portfolio transaction expenses; (iii) the costs of borrowing money, including interest expense; (iv) fees and expenses of the Trustees who are not “interested persons” of PIMCO or the Trust, and any counsel retained exclusively for their benefit; (v) extraordinary expense, including costs of litigation and indemnification expenses; (vi) organizational expenses; and (vii) any expenses allocated or allocable to a specific class of shares, and may include certain other expenses as permitted by the Trust’s Multi-Class Plan adopted pursuant to Rule 18f-3 under the Act and subject to review and approval by the Trustees. The ratio of expenses to average net assets per share class, as disclosed on the Financial Highlights, may differ from the annual fund operating expenses per share class.
Each Trustee, other than those affiliated with PIMCO or its affiliates, receives an annual retainer of $62,000, plus $6,250 for each Board meeting attended in person, $375 ($750 in the case of the audit committee chair with respect to audit committee meetings) for each committee meeting attended and $750 for each Board meeting attended telephonically, plus reimbursement of related expenses. In addition, the audit committee chair receives an additional annual retainer of $9,000, the valuation oversight committee lead receives an additional annual retainer of $2,000 (to the extent there are co-leads of the valuation oversight committee, the annual retainer will be split evenly between the co-leads, so that each co-lead individually receives an additional retainer of $1,000) and the governance committee chair receives an additional annual retainer of $750.
These expenses are allocated on a pro rata basis to each Fund of the Trust according to its respective net assets. The Trust pays no compensation directly to any Trustee or any other officer who is affiliated with the Administrator, all of whom receive remuneration for their services to the Trust from the Administrator or its affiliates.
(e) Expense Limitation Pursuant to the Expense Limitation Agreement, PIMCO has agreed to waive a portion of the Funds’ Supervisory and Administrative Fee, or reimburse the Funds, to the extent that each Fund’s organizational expenses and pro rata share of Trustee Fees exceed 0.0049%, the “Expense Limit” (calculated as a percentage of each Fund’s average daily net assets attributable to each class). The Expense Limitation Agreement will automatically renew for one-year terms unless PIMCO provides written notice to the Trust at least 30 days prior to the end of the then current term.
Pursuant to the Fee Wavier Agreement, PIMCO contractually agreed to waive a portion of the Advisory Fee as set forth in the following table (calculated as a percentage of each Fund’s average daily net assets). The Fee Waiver Agreement will automatically renew for one-year terms unless PIMCO provides written notice to the Trust at least 30 days prior to the end of the then current term. The waiver is reflected in the Statements of Operations as a component of Waiver and/or Reimbursement by PIMCO.
| Fund Name | Fee Waiver | Expiration Date | ||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 0.20% | 10/31/2017 | ||||||||||
PIMCO RAE Fundamental Global Fund | 0.20% | 10/31/2017 | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0.20% | 10/31/2017 | ||||||||||
PIMCO RAE Fundamental International Fund | 0.10% | 10/31/2017 | ||||||||||
PIMCO RAE Fundamental US Fund | 0.10% | 10/31/2017 | ||||||||||
PIMCO RAE Fundamental US Small Fund | 0.10% | 10/31/2017 | ||||||||||
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Under certain conditions, PIMCO may be reimbursed for these waived amounts in future periods, not to exceed thirty-six months after the waiver. The total recoverable amounts to PIMCO (from the Fee Waiver Agreement and Expense Limitation Agreement combined) at June 30, 2017, were as follows (amounts in thousands†):
| Expiring within | ||||||||||||||||||||
| Fund Name | 12 months | 13-24 months | 25-36 months | Total | ||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 0 | $ | 850 | $ | 3,159 | $ | 4,009 | ||||||||||||
PIMCO RAE Fundamental Global Fund | 40 | 293 | 811 | 1,144 | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 63 | 132 | 151 | 346 | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 45 | 195 | 380 | 620 | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 38 | 510 | 653 | 1,201 | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 54 | 93 | 111 | 258 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
(f) Acquired Fund Fees and Expenses Acquired Fund expenses will vary with changes in the expenses of the Acquired Funds, as well as the allocation of the Funds’ assets.
The expenses associated with investing in a fund of funds are generally higher than those for mutual funds that do not invest in other mutual funds. The cost of investing in a fund of funds will generally be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. By investing in a fund of funds, an investor will indirectly bear fees and expenses charged by Acquired Funds in addition to each Fund’s direct fees and expenses. In addition, the use of a fund of funds structure could affect the timing, amount and character of distributions to the shareholders and may therefore increase the amount of taxes payable by shareholders.
PIMCO has contractually agreed, through October 31, 2017, to waive, first, the Investment Advisory Fee and, second, the Supervisory and Administrative Fees it receives from the PIMCO RAE Fundamental Global Fund in an amount equal to the expenses attributable to the Investment Advisory Fees and the Supervisory and Administrative Fees of the PIMCO RAE Fundamental Emerging Markets Fund, PIMCO RAE Fundamental International Fund, and PIMCO RAE Fundamental US Fund indirectly incurred by the PIMCO RAE Fundamental Global Fund in connection with its investments in such Funds, to the extent the PIMCO RAE Fundamental Global Fund’s Investment Advisory Fee and Supervisory and Administrative Fees are greater than or equal to the Investment Advisory Fee and Supervisory and Administrative Fees of such Funds. This waiver renews annually for a full year unless terminated by PIMCO upon at least 30 days’ notice prior to the end of the contract term.
PIMCO has contractually agreed, through October 31, 2017, to waive, first, the Investment Advisory Fee and, second, the Supervisory and Administrative Fees it receives from the PIMCO RAE Fundamental Global ex-US Fund in an amount equal to the expenses attributable to the Investment Advisory Fees and the Supervisory and Administrative Fees of the PIMCO RAE Fundamental Emerging Markets Fund and
PIMCO RAE Fundamental International Fund indirectly incurred by the PIMCO RAE Fundamental Global ex-US Fund in connection with its investments in such Funds, to the extent the PIMCO RAE Fundamental Global ex-US Fund’s Investment Advisory Fee and Supervisory and Administrative Fees are greater than or equal to the Investment Advisory Fee and Supervisory and Administrative Fees of such Funds. This waiver renews annually for a full year unless terminated by PIMCO upon at least 30 days’ notice prior to the end of the contract term.
The waivers are reflected on the Statements of Operations as a component of Waiver and/or Reimbursement by PIMCO. During the period ended June 30, 2017, the Funds below waived the following fees (amounts in thousands):
| Fund Name | Waived Fees | |||||||
PIMCO RAE Fundamental Global Fund | $ | 1,871 | ||||||
PIMCO RAE Fundamental Global ex-US Fund | 390 | |||||||
9. RELATED PARTY TRANSACTIONS
The Adviser, Administrator, and Distributor are related parties. Fees paid to these parties are disclosed in Note 8, Fees and Expenses, and the accrued related party fee amounts are disclosed on the Statements of Assets and Liabilities.
10. GUARANTEES AND INDEMNIFICATIONS
Under the Trust’s organizational documents, each Trustee or officer of the Trust is indemnified and each employee or other agent of the Trust (including the Trust’s investment manager) may be indemnified, to the extent permitted by the Act, against certain liabilities that may arise out of performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts.
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11. PURCHASES AND SALES OF SECURITIES
The length of time a Fund has held a particular security is not generally a consideration in investment decisions. A change in the securities held by a Fund is known as “portfolio turnover.” Each Fund may engage in frequent and active trading of portfolio securities to achieve its investment objective, particularly during periods of volatile market movements. High portfolio turnover may involve correspondingly greater transaction costs to a Fund, including brokerage commissions
or dealer mark-ups and other transaction costs on the sale of securities and reinvestments in other securities. Such sales may also result in realization of taxable capital gains, including short-term capital gains (which are generally taxed at ordinary income tax rates). The transaction costs and tax effects associated with portfolio turnover may adversely affect a Fund’s performance. The portfolio turnover rates are reported in the Financial Highlights.
Purchases and sales of securities (excluding short-term investments) for the period ended June 30, 2017, were as follows (amounts in thousands†):
| U.S. Government/Agency | All Other | |||||||||||||||||||
| Fund Name | Purchases | Sales | Purchases | Sales | ||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 0 | $ | 0 | $ | 632,437 | $ | 821,315 | ||||||||||||
PIMCO RAE Fundamental Global Fund | 0 | 0 | 154,159 | 76,342 | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0 | 0 | 9,303 | 5,391 | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 0 | 0 | 271,057 | 65,686 | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 0 | 0 | 240,912 | 175,923 | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 0 | 0 | 49,992 | 43,728 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
12. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest with a $0.001 par value. Changes in shares of beneficial interest were as follows (shares and amounts in thousands†):
| PIMCO RAE Fundamental Emerging Markets Fund | PIMCO RAE Fundamental Global Fund | PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 25,177 | $ | 257,984 | 145,199 | $ | 1,158,870 | 8,572 | $ | 83,162 | 26,449 | $ | 244,485 | 374 | $ | 3,637 | 91 | $ | 769 | ||||||||||||||||||||||||||||||||
Class P | 1,697 | 17,758 | 544 | 4,321 | 357 | 3,687 | 5 | 49 | 33 | 334 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class A | 559 | 5,606 | 76 | 655 | 71 | 731 | 32 | 295 | 69 | 671 | 9 | 82 | ||||||||||||||||||||||||||||||||||||||
Class C | 107 | 1,103 | 12 | 100 | 97 | 964 | 75 | 678 | 66 | 635 | 41 | 350 | ||||||||||||||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 4,256 | 40,860 | 422 | 3,228 | 1,225 | 12,217 | 234 | 2,108 | 180 | 1,683 | 84 | 720 | ||||||||||||||||||||||||||||||||||||||
Class P | 10 | 91 | 8 | 60 | 1 | 5 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class A | 4 | 40 | 0 | 1 | 2 | 17 | 0 | 2 | 0 | 4 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class C | 1 | 9 | 0 | 0 | 3 | 31 | 0 | 3 | 1 | 12 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | (47,996 | ) | (491,118 | ) | (7,631 | ) | (57,799 | ) | (2,141 | ) | (22,369 | ) | (265 | ) | (2,360 | ) | (296 | ) | (2,660 | ) | (43 | ) | (340 | ) | ||||||||||||||||||||||||||
Class P | (557 | ) | (5,597 | ) | (343 | ) | (2,532 | ) | (73 | ) | (759 | ) | 0 | 0 | (1 | ) | (15 | ) | 0 | 0 | ||||||||||||||||||||||||||||||
Class A | (401 | ) | (4,097 | ) | (61 | ) | (504 | ) | (10 | ) | (104 | ) | (2 | ) | (22 | ) | (1 | ) | (10 | ) | (9 | ) | (81 | ) | ||||||||||||||||||||||||||
Class C | (18 | ) | (177 | ) | (2 | ) | (13 | ) | (33 | ) | (337 | ) | (5 | ) | (40 | ) | (10 | ) | (98 | ) | (1 | ) | (4 | ) | ||||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | (17,161 | ) | $ | (177,538 | ) | 138,224 | $ | 1,106,387 | 8,071 | $ | 77,245 | 26,523 | $ | 245,198 | 415 | $ | 4,194 | 172 | $ | 1,496 | ||||||||||||||||||||||||||||||
| ANNUAL REPORT | JUNE 30, 2017 | 73 |
Table of Contents
Notes to Financial Statements (Cont.)
| PIMCO RAE Fundamental International Fund | PIMCO RAE Fundamental US Fund | PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | Year Ended 06/30/2017 | Year Ended 06/30/2016 | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 19,815 | $ | 189,367 | 17,278 | $ | 152,235 | 13,507 | $ | 139,095 | 19,612 | $ | 190,056 | 850 | $ | 9,150 | 10,568 | $ | 96,202 | ||||||||||||||||||||||||||||||||
Class P | 806 | 7,617 | 189 | 1,661 | 762 | 7,885 | 403 | 3,819 | 356 | 3,909 | 171 | 1,524 | ||||||||||||||||||||||||||||||||||||||
Class A | 28 | 257 | 4 | 40 | 449 | 4,662 | 445 | 4,174 | 647 | 7,142 | 216 | 1,945 | ||||||||||||||||||||||||||||||||||||||
Class C | 32 | 304 | 41 | 339 | 440 | 4,491 | 199 | 1,851 | 44 | 479 | 29 | 255 | ||||||||||||||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 815 | 7,429 | 595 | 5,154 | 2,784 | 28,874 | 1,786 | 16,713 | 106 | 1,184 | 200 | 1,786 | ||||||||||||||||||||||||||||||||||||||
Class P | 17 | 152 | 3 | 25 | 29 | 305 | 7 | 64 | 2 | 22 | 0 | 3 | ||||||||||||||||||||||||||||||||||||||
Class A | 0 | 1 | 0 | 0 | 23 | 236 | 5 | 46 | 4 | 39 | 1 | 5 | ||||||||||||||||||||||||||||||||||||||
Class C | 1 | 9 | 0 | 2 | 22 | 226 | 1 | 9 | 0 | 3 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | (3,164 | ) | (30,253 | ) | (4,401 | ) | (37,347 | ) | (9,645 | ) | (99,837 | ) | (14,734 | ) | (138,985 | ) | (1,256 | ) | (13,718 | ) | (6,719 | ) | (57,926 | ) | ||||||||||||||||||||||||||
Class P | (457 | ) | (4,350 | ) | (71 | ) | (585 | ) | (398 | ) | (4,142 | ) | (67 | ) | (636 | ) | (163 | ) | (1,775 | ) | (15 | ) | (136 | ) | ||||||||||||||||||||||||||
Class A | (1 | ) | (11 | ) | 0 | (4 | ) | (86 | ) | (885 | ) | (146 | ) | (1,397 | ) | (61 | ) | (666 | ) | (35 | ) | (310 | ) | |||||||||||||||||||||||||||
Class C | (19 | ) | (176 | ) | (6 | ) | (45 | ) | (117 | ) | (1,197 | ) | (19 | ) | (167 | ) | (20 | ) | (214 | ) | (3 | ) | (28 | ) | ||||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 17,873 | $ | 170,346 | 13,632 | $ | 121,475 | 7,770 | $ | 79,713 | 7,492 | $ | 75,547 | 509 | $ | 5,555 | 4,413 | $ | 43,320 | ||||||||||||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
The following table discloses the number of shareholders that own 10% or more of the outstanding shares of a Fund along with their respective percent ownership, if any. Some of these shareholders may be considered related parties, which may include, but are not limited to, the investment manager and its affiliates, affiliated broker dealers, fund of funds and directors or employees of the Trust or Adviser.
| Shareholders that own 10% or more of outstanding shares | Total percentage of portfolio held by shareholders that own 10% or more of outstanding shares | |||||||||||||||||||
| Non-Related Parties | Related Parties | Non-Related Parties | Related Parties | |||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 0 | 2 | 0% | 82% | ||||||||||||||||
PIMCO RAE Fundamental Global Fund | 1 | 0 | 17% | 0% | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 2 | 0 | 92% | 0% | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 0 | 3 | 0% | 69% | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 0 | 1 | 0% | 25% | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 2 | 0 | 56% | 0% | ||||||||||||||||
13. REGULATORY AND LITIGATION MATTERS
The Funds are not named as defendants in any material litigation or arbitration proceedings and are not aware of any material litigation or claim pending or threatened against them.
The foregoing speaks only as of the date of the preparation of this report.
14. FEDERAL INCOME TAX MATTERS
Each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code (the “Code”) and distribute all of its taxable income and net realized gains, if applicable, to shareholders. Accordingly, no provision for Federal income taxes has been made.
A Fund may be subject to local withholding taxes, including those imposed on realized capital gains. Any applicable foreign capital gains
tax is accrued daily based upon net unrealized gains, and may be payable following the sale of any applicable investments.
In accordance with U.S. GAAP, the Adviser has reviewed the Funds’ tax positions for all open tax years. As of June 30, 2017, the Funds have recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.
The Funds file U.S. tax returns. While the statute of limitations remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ending in 2013-2016, no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
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June 30, 2017
As of June 30, 2017, the components of distributable taxable earnings are as follows (amounts in thousands†):
| Undistributed Ordinary Income(1) | Undistributed Long-Term Capital Gains | Net Tax Basis Unrealized Appreciation/ (Depreciation)(2) | Other Book-to-Tax Accounting Differences(3) | Accumulated Capital Losses(4) | Qualified Late-Year Loss Deferral - Capital(5) | Qualified Late-Year Loss Deferral - Ordinary(6) | ||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 85,064 | $ | 13,354 | $ | 314,405 | $ | (18 | ) | $ | (19,896 | ) | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO RAE Fundamental Global Fund | 989 | 5,127 | 47,442 | (6 | ) | 0 | 0 | 0 | ||||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0 | 0 | 4,558 | (3 | ) | (489 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 6,703 | 0 | 57,873 | (8 | ) | (1,928 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 8,786 | 18,690 | 120,685 | (19 | ) | 0 | 0 | 0 | ||||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 303 | 2,868 | 16,309 | (4 | ) | 0 | 0 | 0 | ||||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (1) | Includes undistributed short-term capital gains, if any. |
| (2) | Adjusted for open wash sale loss deferrals and the accelerated recognition of unrealized gain or loss on certain forward contracts for federal income tax purposes. Also adjusted for differences between book and tax realized and unrealized gain (loss) on convertible preferred securities, non-REIT return of capital, passive foreign investment companies (PFIC), accrued foreign tax expense, and deemed dividends from corporate actions. |
| (3) | Represents differences in income tax regulations and financial accounting principles generally accepted in the United States of America, mainly for organizational expenditures. |
| (4) | Capital losses available to offset future net capital gains expire in varying amounts as shown below. |
| (5) | Capital losses realized during the period November 1, 2016 through June 30, 2017 which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
| (6) | Specified losses realized during the period November 1, 2016 through June 30, 2017 and Ordinary losses realized during the period January 1, 2017 through June 30, 2017, which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
Under the Regulated Investment Company Act of 2010, a fund is permitted to carry forward any new capital losses for an unlimited period. Additionally, such capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term under previous law.
As of June 30, 2017, the Funds had the following post-effective capital losses with no expiration (amounts in thousands†):(7)
| Short-Term | Long-Term | |||||||||||
PIMCO RAE Fundamental Emerging Markets Fund* | $ | 3,635 | $ | 16,261 | ||||||||
PIMCO RAE Fundamental Global Fund | 0 | 0 | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 212 | 277 | ||||||||||
PIMCO RAE Fundamental International Fund | 1,564 | 364 | ||||||||||
PIMCO RAE Fundamental US Fund | 0 | 0 | ||||||||||
PIMCO RAE Fundamental US Small Fund | 0 | 0 | ||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (7) | *Portion of amount represents realized loss and recognized built-in loss, which is carried forward to future years to offset future realized gain subject to certain limitations. |
As of June 30, 2017, the aggregate cost and the net unrealized appreciation/(depreciation) of investments for federal income tax purposes are as follows (amounts in thousands†):
| Federal Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation/ (Depreciation)(8) | |||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 1,202,148 | $ | 332,826 | $ | (16,854 | ) | $ | 315,972 | |||||||||||
PIMCO RAE Fundamental Global Fund | 366,798 | 47,442 | 0 | 47,442 | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 75,917 | 4,557 | 0 | 4,557 | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 420,739 | 63,252 | (5,414 | ) | 57,838 | |||||||||||||||
PIMCO RAE Fundamental US Fund | 517,136 | 136,991 | (16,304 | ) | 120,687 | |||||||||||||||
PIMCO RAE Fundamental US Small Fund | 89,865 | 20,954 | (4,646 | ) | 16,308 | |||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (8) | Primary differences, if any, between book and tax net unrealized appreciation/(depreciation) on investments are attributable to open wash sale loss deferrals, convertible preferred securities, non-REIT return of capital, passive foreign investment companies (PFICs), accrued foreign tax expense and deemed dividends from corporate actions for federal income tax purposes. |
| ANNUAL REPORT | JUNE 30, 2017 | 75 |
Table of Contents
Notes to Financial Statements (Cont.)
June 30, 2017
For the fiscal years ended June 30, 2017 and June 30, 2016, respectively, the Funds made the following tax basis distributions (amounts in thousands†):
| June 30, 2017 | June 30, 2016 | |||||||||||||||||||||||||||
| Ordinary Income Distributions(9) | Long-Term Capital Gain Distributions | Return of Capital(10) | Ordinary Income Distributions(9) | Long-Term Capital Gain Distributions | Return of Capital(10) | |||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 41,001 | $ | 0 | $ | 0 | $ | 3,915 | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO RAE Fundamental Global Fund | 9,400 | 3,546 | 0 | 2,315 | 85 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 1,572 | 0 | 128 | 692 | 0 | 28 | ||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 7,601 | 0 | 0 | 1,761 | 3,524 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 13,428 | 16,218 | 0 | 5,483 | 11,423 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 1,249 | 0 | 0 | 622 | 1,173 | 0 | ||||||||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
| (9) | Includes short-term capital gains, if any, distributed. |
| (10) | A portion of the distributions made represents a tax return of capital. Return of capital distributions have been reclassified from undistributed net investment income to paid-in capital to more appropriately conform financial accounting to tax accounting. |
| 76 | PIMCO EQUITY SERIES |
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of PIMCO Equity Series® and Shareholders of the PIMCO RAE
Fundamental Emerging Markets Fund, PIMCO RAE Fundamental Global Fund, PIMCO RAE
Fundamental Global ex-US Fund, PIMCO RAE Fundamental International Fund, PIMCO RAE
Fundamental US Fund, and PIMCO RAE Fundamental US Small Fund
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the PIMCO RAE Fundamental Emerging Markets Fund, PIMCO RAE Fundamental Global Fund, PIMCO RAE Fundamental Global ex-US Fund, PIMCO RAE Fundamental International Fund, PIMCO RAE Fundamental US Fund, and PIMCO RAE Fundamental US Small Fund, (six of the portfolios constituting the PIMCO Equity Series®, hereafter referred to as the “Funds”), as of June 30, 2017, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and each of their financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of June 30, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
August 24, 2017
| ANNUAL REPORT | JUNE 30, 2017 | 77 |
Table of Contents
Glossary: (abbreviations that may be used in the preceding statements)
(Unaudited)
Counterparty Abbreviations: | ||||||||||
| SSB | State Street Bank and Trust Co. | |||||||||
Currency Abbreviations: | ||||||||||
| IDR | Indonesian Rupiah | USD (or $) | United States Dollar | |||||||
Municipal Bond or Agency Abbreviations: | ||||||||||
| GDR | Global Depositary Receipt | |||||||||
Other Abbreviations: | ||||||||||
| ADR | American Depositary Receipt | SP - ADR | Sponsored American Depositary Receipt | TBA | To-Be-Announced | |||||
| REIT | Real Estate Investment Trust | SP - GDR | Sponsored Global Depositary Receipt | |||||||
| 78 | PIMCO EQUITY SERIES |
Table of Contents
Federal Income Tax Information
(Unaudited)
As required by the Internal Revenue Code (“Code”) and Treasury Regulations, if applicable, shareholders must be notified within 60 days of the Funds’ fiscal year end regarding the status of qualified dividend income and the dividend received deduction.
Dividend Received Deduction. Corporate shareholders are generally entitled to take the dividend received deduction on the portion of a Fund’s dividend distribution that qualifies under tax law. The percentage of the following Funds’ Fiscal 2017 ordinary income dividend that qualifies for the corporate dividend received deduction is set forth in the table below.
Qualified Dividend Income. Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), the following percentage of ordinary dividends paid during the calendar year was designated as “qualified dividend income”, as defined in the Act, subject to reduced tax rates in 2017 set forth in the table below.
Qualified Interest Income and Qualified Short-Term Capital Gain (for non-U.S. resident shareholders only). Under the American Jobs Creation Act of 2004, the following amounts of ordinary dividends paid during the fiscal year ended June 30, 2017 are considered to be derived from “qualified interest income,” as defined in Section 871(k)(1)(E) of the Code, and therefore are designated as interest-related dividends, as defined in Section 871(k)(1)(C) of the Code. Further, the following amounts of ordinary dividends paid during the fiscal year ended June 30, 2017 are considered to be derived from “qualified short-term capital gain,” as defined in Section 871(k)(2)(D) of the Code, and therefore are designated as qualified short-term gain dividends, as defined by Section 871(k)(2)(C) of the Code are also set forth in the table below.
| Dividend Received Deduction % | Qualified Dividend Income % | Qualified Interest Income (000s† ) | Qualified Short-Term Capital Gain (000s†) | |||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 0.00% | 69.96% | $ | 0 | $ | 0 | ||||||||||||||
PIMCO RAE Fundamental Global Fund | 40.30% | 89.80% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0.00% | 86.10% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 0.00% | 100.00% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 100.00% | 100.00% | 0 | 927 | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 96.93% | 97.23% | 0 | 0 | ||||||||||||||||
| † | A zero balance may reflect actual amounts rounding to less than one thousand. |
Foreign Taxes. The Funds’ have made an election under the Internal Revenue Code Section 853 to pass through foreign taxes paid. Shareholders will receive more detailed information along with their Form 1099-DIV.
| Foreign Source Income | Foreign Taxes Pass Through | |||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 46,650,031 | $ | 5,649,155 | ||||||||
PIMCO RAE Fundamental Global Fund | 12,35,515 | 529,341 | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 1,573,763 | 157,155 | ||||||||||
PIMCO RAE Fundamental International Fund | 12,797,286 | 1,188,113 | ||||||||||
PIMCO RAE Fundamental US Fund | 0 | 0 | ||||||||||
PIMCO RAE Fundamental US Small Fund | 0 | 0 | ||||||||||
Shareholders are advised to consult their own tax advisor with respect to the tax consequences of their investment in the Trust. In January 2018, you will be advised on IRS Form 1099-DIV as to the federal tax status of the dividends and distributions received by you in calendar year 2017.
| ANNUAL REPORT | JUNE 30, 2017 | 79 |
Table of Contents
The charts below identify the Trustees and executive officers of the Trust. Unless otherwise indicated, the address of all persons below is 650 Newport Center Drive, Newport Beach, CA 92660.
The Funds’ Statement of Additional Information includes more information about the Trustees and Officers. To request a free copy, call PIMCO at (888) 87-PIMCO or visit the Funds’ website at www.pimco.com.
| Name, Year of Birth and Position Held with Trust* | Term of Office and Length of Time Served† | Principal Occupation(s) During Past 5 Years | Number of Funds in Fund Complex Overseen by Trustee | Other Public Company and Investment Company Directorships Held by Trustee During the Past 5 Years | ||||
| Interested Trustees1 | ||||||||
Brent R. Harris (1959) Chairman of the Board | 03/2010 to present | Managing Director, PIMCO. Formerly, member of Executive Committee, PIMCO. | 163 | Chairman and Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust; Director, StocksPLUS® Management, Inc; and member of Board of Governors, Investment Company Institute. | ||||
| Independent Trustees | ||||||||
Jennifer Holden Dunbar (1963) Trustee | 02/2016 to present | Managing Director, Dunbar Partners, LLC (business consulting and investments). | 163 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust; Director, PS Business Parks; Director, Big 5 Sporting Goods Corporation. | ||||
Peter B. McCarthy (1950) Trustee | 09/2011 to present | Formerly, Assistant Secretary and Chief Financial Officer, United States Department of Treasury; Deputy Managing Director, Institute of International Finance. | 163 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. | ||||
Ronald C. Parker (1951) Trustee | 02/2016 to present | Director of Roseburg Forest Products Company. Formerly, Chairman of the Board, The Ford Family Foundation. Formerly President, Chief Executive Officer, Hampton Affiliates (forestry products). | 163 | Trustee, PIMCO Equity Series VIT; Lead Independent Trustee, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. | ||||
| * | Unless otherwise noted, the information for the individuals listed is as of June 30, 2017. |
| 1 | Mr. Harris is an “interested persons” of the Trust (as that term is defined in the 1940 Act) because of his affiliations with PIMCO. |
| † | Trustees serve until their successors are duly elected and qualified. |
| 80 | PIMCO EQUITY SERIES |
Table of Contents
(Unaudited)
Executive Officers
| Name, Year of Birth and Position Held with Trust* | Term of Office and Length of Time Served | Principal Occupation(s) During Past 5 Years† | ||
Peter G. Strelow (1970) President | 02/2014 to present
Senior Vice President 11/2013 to 02/2014
Vice President 03/2010 to 11/2013 | Managing Director, Chief Administrative Officer and Co-Chief Operating Officer PIMCO. President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
David C. Flattum (1964) Chief Legal Officer | 03/2010 to present | Managing Director and General Counsel, PIMCO. Chief Legal Officer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Formerly, Managing Director, Chief Operating Officer and General Counsel, Allianz Asset Management of America L.P. | ||
Jennifer E. Durham (1970) Chief Compliance Officer | 03/2010 to present | Managing Director and Chief Compliance Officer, PIMCO. Chief Compliance Officer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Brent R. Harris (1959) Senior Vice President | 03/2010 to present | Managing Director, PIMCO. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Formerly, member of Executive Committee, PIMCO. | ||
Joshua D. Ratner (1976)** Vice President - Senior Counsel, Secretary | 11/2013 to present
Assistant Secretary 03/2010 to 01/2011 | Executive Vice President and Senior Counsel, PIMCO. Chief Legal Officer, PIMCO Investments LLC. Vice President – Senior Counsel, Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Vice President, Secretary and Chief Legal Officer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Ryan G. Leshaw (1980) Assistant Secretary | 05/2012 to present | Senior Vice President and Senior Counsel, PIMCO. Assistant Secretary, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Associate, Willkie Farr & Gallagher LLP. | ||
Stacie D. Anctil (1969) Vice President | 05/2015 to present
Assistant Treasurer 03/2010 to 05/2015 | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
William G. Galipeau (1974) Vice President | 11/2013 to present | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Treasurer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Eric D. Johnson (1970)** Vice President | 05/2011 to present | Executive Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Henrik P. Larsen (1970) Vice President | 03/2010 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Bijal Y. Parikh (1978) Vice President | 02/2017 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Greggory S. Wolf (1970) Vice President | 05/2011 to present | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Trent W. Walker (1974) Treasurer | 11/2013 to present
Assistant Treasurer 03/2010 to 11/2013 | Executive Vice President, PIMCO. Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. Assistant Treasurer, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Erik C. Brown (1967) Assistant Treasurer | 03/2010 to present | Executive Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Laura S. Melman (1966)** Assistant Treasurer | 02/2017 to present | Senior Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. | ||
Colleen D. Miller (1980)** Assistant Treasurer | 02/2017 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Vice President Cohen & Steers Capital Management. | ||
Christopher M. Morin (1980) Assistant Treasurer | 08/2016 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Vice President of Operations, Standard Life Investments USA; Assistant Vice President, Brown Brothers Harriman. | ||
Jason J. Nagler (1982)** Assistant Treasurer | 05/2015 to present | Vice President, PIMCO. Assistant Treasurer, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, PIMCO-Sponsored Interval Funds and PIMCO-Sponsored Closed-End Funds. Formerly, Head of Mutual Fund Reporting, GMO and Assistant Treasurer, GMO Trust and GMO Series Trust Funds. | ||
| * | Unless otherwise noted, the information for the individuals listed is as of June 30, 2017. |
| ANNUAL REPORT | JUNE 30, 2017 | 81 |
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Management of the Trust (Cont.)
(Unaudited)
| † | The term “PIMCO Closed-End Funds” as used herein includes: PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, PCM Fund Inc., PIMCO Corporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO Dynamic Credit and Mortgage Income Fund, PIMCO Dynamic Income Fund, PIMCO Global StocksPLUS® & Income Fund, PIMCO High Income Fund, PIMCO Income Opportunity Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II and PIMCO Strategic Income Fund, Inc.; the term “PIMCO-Sponsored Interval Funds” as used herein includes: PIMCO Flexible Credit Income Fund. |
| ** | The address of these officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
| 82 | PIMCO EQUITY SERIES |
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(Unaudited)
The Funds2,3 consider customer privacy to be a fundamental aspect of their relationships with shareholders and are committed to maintaining the confidentiality, integrity and security of their current, prospective and former shareholders’ non-public personal information. The Funds have developed policies that are designed to protect this confidentiality, while allowing shareholder needs to be served.
OBTAINING PERSONAL INFORMATION
In the course of providing shareholders with products and services, the Funds and certain service providers to the Funds, such as the Funds’ investment advisers or sub-advisers (“Advisers”), may obtain non-public personal information about shareholders, which may come from sources such as account applications and other forms, from other written, electronic or verbal correspondence, from shareholder transactions, from a shareholder’s brokerage or financial advisory firm, financial advisor or consultant, and/or from information captured on applicable websites.
RESPECTING YOUR PRIVACY
As a matter of policy, the Funds do not disclose any non-public personal information provided by shareholders or gathered by the Funds to non-affiliated third parties, except as required or permitted by law or as necessary for such third parties to perform their agreements with respect to the Funds. As is common in the industry, non-affiliated companies may from time to time be used to provide certain services, such as preparing and mailing prospectuses, reports, account statements and other information, conducting research on shareholder satisfaction and gathering shareholder proxies. The Funds or their affiliates may also retain non-affiliated companies to market Fund shares or products which use Fund shares and enter into joint marketing arrangements with them and other companies. These companies may have access to a shareholder’s personal and account information, but are permitted to use this information solely to provide the specific service or as otherwise permitted by law. In most cases, the shareholders will be clients of a third party, but the Funds may also provide a shareholder’s personal and account information to the shareholder’s respective brokerage or financial advisory firm and/or financial advisor or consultant.
SHARING INFORMATION WITH THIRD PARTIES
The Funds reserve the right to disclose or report personal or account information to non-affiliated third parties in limited circumstances where the Funds believe in good faith that disclosure is required under law, to cooperate with regulators or law enforcement authorities, to protect their rights or property, or upon reasonable request by any fund advised by PIMCO in which a shareholder has invested. In addition, the Funds may disclose information about a shareholder or a shareholder’s accounts to a non-affiliated third party at the shareholder’s request or with the consent of the shareholder.
SHARING INFORMATION WITH AFFILIATES
The Funds may share shareholder information with their affiliates in connection with servicing shareholders’ accounts, and subject to applicable law may provide shareholders with information about products and services that the Funds or their Advisers, distributors or their affiliates (“Service Affiliates”) believe may be of interest to such shareholders. The information that the Funds may share may include, for example, a shareholder’s participation in the Funds or in other investment programs sponsored by a Service Affiliate, a shareholder’s ownership of certain types of accounts (such as IRAs), information about the Funds’ experiences or transactions with a shareholder, information captured on applicable websites, or other data about a shareholder’s accounts, subject to applicable law. The Funds’ Service Affiliates, in turn, are not permitted to share shareholder information with non-affiliated entities, except as required or permitted by law.
PROCEDURES TO SAFEGUARD PRIVATE INFORMATION
The Funds take seriously the obligation to safeguard shareholder non-public personal information. In addition to this policy, the Funds have implemented procedures that are designed to restrict access to a shareholder’s non-public personal information to internal personnel who need to know that information to perform their jobs, such as servicing shareholder accounts or notifying shareholders of new products or services. Physical, electronic and procedural safeguards are in place to guard a shareholder’s non-public personal information.
INFORMATION COLLECTED FROM WEBSITES
Websites maintained by the Funds or their service providers may use a variety of technologies to collect information that help the Funds and their service providers understand how the website is used. Information collected from your web browser (including small files stored on your device that are commonly referred to as “cookies”) allow the websites to recognize your web browser and help to personalize and improve your user experience and enhance navigation of the website. In addition, the Funds or their Service Affiliates may use third parties to place advertisements for the Funds on other websites, including banner advertisements. Such third parties may collect anonymous information through the use of cookies or action tags (such as web beacons). The information these third parties collect is generally limited to technical and web navigation information, such as your IP address, web pages visited and browser type, and does not include personally identifiable information such as name, address, phone number or email address. If you are a registered user of the Funds’ website, the Funds or their service providers or third party firms engaged by the Funds or their service providers may collect or share information submitted by you, which may include personally identifiable information. This information can be useful to the Funds
| ANNUAL REPORT | JUNE 30, 2017 | 83 |
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(Unaudited)
when assessing and offering services and website features. You can change your cookie preferences by changing the setting on your web browser to delete or reject cookies. If you delete or reject cookies, some website pages may not function properly. The Funds do not look for web browser “do not track” requests.
CHANGES TO THE PRIVACY POLICY
From time to time, the Funds may update or revise this privacy policy. If there are changes to the terms of this privacy policy, documents containing the revised policy on the relevant website will be updated.
1 Amended as of February 14, 2017.
2 PIMCO Investments LLC (“PI”) serves as the Funds’ distributor. This Privacy Policy applies to the activities of PI to the extent that PI regularly effects or engages in transactions with or for a Fund shareholder who is the record owner of such shares. For purposes of this Privacy Policy, references to “the Funds” shall include PI when acting in this capacity.
3 When distributing this Policy, a Fund may combine the distribution with any similar distribution of its investment adviser’s privacy policy. The distributed, combined policy may be written in the first person (i.e., by using “we” instead of “the Funds”).
| 84 | PIMCO EQUITY SERIES |
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General Information
Investment Adviser and Administrator
Pacific Investment Management Company LLC
650 Newport Center Drive
Newport Beach, CA 92660
Investment Sub-Adviser
Research Affiliates, LLC
620 Newport Center Drive, Suite 900
Newport Beach, CA 92660
Distributor
PIMCO Investments LLC
1633 Broadway
New York, NY 10019
Custodian
State Street Bank and Trust Company
801 Pennsylvania Avenue
Kansas City, MO 64105
Transfer Agent
Boston Financial Data Services
Institutional Class, Class P, Administrative Class, Class D
330 W. 9th Street, 5th Floor
Kansas City, MO 64105
Boston Financial Data Services
Class A, Class C, Class R
P.O. Box 55060
Boston, MA 02205-5060
Legal Counsel
Dechert LLP
1900 K Street, N.W.
Washington, D.C. 20006
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
1100 Walnut Street, Suite 1300
Kansas City, MO 64106
This report is submitted for the general information of the shareholders of the PIMCO Equity Series.
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PES3003AR_063017
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| Item 2. | Code of Ethics. |
As of the end of the period covered by this report, the Registrant has adopted a code of ethics (the “Code”) that applies to the Registrant’s principal executive officer and principal financial officer. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the principal executive officer or principal financial officer during the period covered by this report.
A copy of the Code is included as an exhibit to this report.
| Item 3. | Audit Committee Financial Expert. |
| (a) | The Board of Trustees has determined that Peter B. McCarthy, who serves on the Board’s audit committee, qualifies as an “audit committee financial expert” as such term is defined in the instructions to this Item 3. The Board has also determined that Mr. Parker is “independent” as such term is interpreted under this Item 3. |
| Item 4. | Principal Accountant Fees and Services. |
| (a) | Fiscal Year Ended | Audit Fees | ||||
| June 30, 2017 | $491,328 | |||||
| June 30, 2016 | $432,388 | |||||
| (b) | Fiscal Year Ended | Audit-Related Fees (1) | ||||
| June 30, 2017 | $— | |||||
| June 30, 2016 | $5,500 | |||||
| (c) | Fiscal Year Ended | Tax Fees | ||||
June 30, 2017 June 30, 2016 | $24,550 $— | |||||
| (d) | Fiscal Year Ended | All Other Fees (2) | ||||
June 30, 2017 June 30, 2016 | $— $— | |||||
“Audit Fees” represents aggregate fees billed for each of the last two fiscal years for professional services rendered for the audit of the PIMCO Equity Series (the “Trust” or “Registrant”) annual financial statements or services that are normally provided by the accountant in connection with statutory or regulatory filings or engagements for those fiscal years.
“Audit-Related Fees” represents aggregate fees billed for each of the last two fiscal years for assurance and related services reasonably related to the performance of the audit of the Trust’s annual financial statements for those years.
“Tax Fees” represents aggregate fees billed for each of the last two fiscal years for professional services related to tax compliance, tax advice and tax planning, including review of federal and state income tax returns, review of excise tax distribution requirements and preparation of excise tax returns.
“All Other Fees” represents aggregate fees, if any, billed for other products and services rendered by the principal accountant to the Trust for the last two fiscal years.
| (1) | Includes aggregate fees billed for review of the Registrant’s semi-annual reports to shareholders related to fair value securities held by the Trust. |
| (2) | There were no “All Other Fees” for the last two fiscal years. |
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| (e) | Pre-approval policies and procedures |
(1) The Registrant’s Audit Committee has adopted pre-approval policies and procedures (the “Procedures”) to govern the Audit Committee’s pre-approval of (i) all audit services and permissible non- audit services to be provided to the Registrant by its independent accountant, and (ii) all permissible non-audit services to be provided by such independent accountant to the Registrant’s investment adviser and to any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant (collectively, the “Service Affiliates”) if the services provided directly relate to the Registrant’s operations and financial reporting. In accordance with the Procedures, the Audit Committee is responsible for the engagement of the independent accountant to certify the Registrant’s financial statements for each fiscal year. With respect to the pre-approval of non-audit services provided to the Registrant and its Service Affiliates, the Procedures provide that the Audit Committee may annually pre-approve a list of types or categories of non-audit services that may be provided to the Registrant or its Service Affiliates, or the Audit Committee may pre-approve such services on a project-by-project basis as they arise. Unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by the independent accountant. The Procedures also permit the Audit Committee to delegate authority to one or more of its members to pre-approve any proposed non-audit services that have not been previously pre- approved by the Audit Committee, subject to the ratification by the full Audit Committee no later than its next scheduled meeting.
(2) With respect to the services described in paragraphs (b) through (d) of this Item 4, no amount was approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
| (f) | Not applicable. |
| (g) |
| Aggregate Non-Audit Fees Billed to Entity | ||||||||
Entity | June 30, 2017 | June 30, 2016 | ||||||
PIMCO Equity Series Trust | $ | 24,550 | $ | 5,500 | ||||
Pacific Investment Management Company LLC (“PIMCO”) | 8,531,028 | 7,767,308 | ||||||
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| |||||
Totals | $ | 8,555,578 | $ | 7,772,808 | ||||
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| (h) | The Registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to the Registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant which were not pre-approved (not requiring pre-approval) is compatible with maintaining the principal accountant’s independence. |
| Item 5. | Audit Committee of Listed Registrants. |
The Registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A)
of the Securities Exchange Act of 1934, as amended. The audit committee is comprised of:
Jennifer Holden Dunbar
Kym Hubbard
Peter B. McCarthy
Ronald C. Parker
| Item 6. | Schedule of Investments. |
The information required by this Item 6 is included as part of the annual reports to shareholders filed under Item 1 of this Form N-CSR.
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
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| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which shareholders may recommend nominees to the Trust’s Board of Trustees since the Trust last provided disclosure in response to this item.
| Item 11. | Controls and Procedures. |
(a) The principal executive officer and principal financial & accounting officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) provide reasonable assurances that material information relating to the Registrant is made known to them by the appropriate persons, are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
| Item 12. | Exhibits. |
| (a)(1) | Exhibit 99.CODE— Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. |
| (a)(2) | Exhibit 99.CERT—Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| (b) | Exhibit 99.906CERT—Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PIMCO Equity Series | ||
| By: | /s/ Peter G. Strelow | |
| Peter G. Strelow | ||
| President (Principal Executive Officer) | ||
| Date: August 28, 2017 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Peter G. Strelow | |
| Peter G. Strelow | ||
| President (Principal Executive Officer) | ||
| Date: August 28, 2017 | ||
| By: | /s/ Trent W. Walker | |
| Trent W. Walker | ||
| Treasurer (Principal Financial & Accounting Officer) | ||
| Date: August 28, 2017 | ||