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Appendix
PERFORMANCE AND FEE
Past performance is not a guarantee or a reliable indicator of future results. The performance figures presented reflect the total return performance, unless otherwise noted, for Institutional Class shares
(after fees) and reflect changes in share price and reinvestment of dividend and capital gain distributions. All periods longer than one year are annualized. Periods less than one year are cumulative.
Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective
or policies. A new or smaller Fund’s performance may not represent how the Fund is expected to or may perform in the long-term. New Funds have limited operating histories for investors to evaluate and new
and smaller Funds may not attract sufficient assets to achieve investment and trading efficiencies. A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder
redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may
adversely affect performance.
It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under
income tax regulations. It is possible that the 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 see the fund’s most recent shareholder report for more details.
Although the Fund may seek to maintain stable distributions, the Fund’s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns,
fluctuations in market interest rates, Fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the Fund’s distribution rate
or that the rate will be sustainable in the future.
For instance, during periods of low or declining interest rates, the Fund’s distributable income and dividend levels may decline for many reasons. For example, the Fund may have to deploy uninvested assets
(whether from purchases of Fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that
may be held by the Fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the Fund’s distributable income and dividend
levels.
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.
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 as compared to its 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
ASSET ALLOCATION
Asset allocation is the process of distributing investments among various classes of investments (e.g., stocks and bonds). It does not guarantee future results, ensure a profit or protect against loss.
ATTRIBUTION ANALYSIS
The attribution analysis contained herein is calculated by PIMCO and is intended to provide an estimate as to which elements of a strategy contributed (positively or negatively) to a portfolio’s performance.
Attribution analysis is not a precise measure and should not be relied upon for investment decisions.
CHART
Performance results for certain charts and graphs may be limited by date ranges specified on those charts and graphs; different time periods may produce different results.
CORRELATION
The correlation of various indexes or securities against one another or against inflation is based upon data over a certain time period. These correlations may vary substantially in the future or over different time](https://image.slidesharecdn.com/8sharon-220309092902/85/Dr-vi-Sharon-ocin22-16-320.jpg)
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Dr. Αvi Sharon, ocin22
This document discusses retirement planning and decumulation strategies. It provides historical context on retirement in Greek culture and the transition to individual saving. It also discusses the challenges facing retirees in the US, including managing withdrawals, market risks, and longevity risks. The document advocates for combining safety and growth in retirement portfolios, and outlines strategies like target date funds, income replacement, and combining various account types to help solve decumulation challenges.
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Dr. Αvi Sharon, ocin22
- 1. The Decumulation Dilemma: TurningWealth into Income
- 2. 2 The Bonds ofFamily and State A Long History of Retirement in Greek Culture The God “Geras” and “Baleful” old age Laertes on Ithaca: Kinship Support in Retirement Solon: Linking “Eldercare” to Public Service Aristotle (Athenian Constitution: 1293 a3-7): “All citizens take part…the predominance of the masses…even the poor…by receiving pay.” Jury service (3 obols) and the distinction between Oligarchy and Democracy
- 3. 3 The Transition toIndividual Saving in Greece The Complementarity of the Third Pillar Source: “Towards a New Social Contract: Greek Pensions Halfway Through Adjustment,” Platon Tinios, Hellenic Observatory
- 4. 4 The Boomer Wavein the US: ~12,000 New Retirees Every Day Generational Transition…From Savers to Spenders 2014 was a Tipping Point for Decumulation The Experience in the US: The Long (401K) Runway for Employer DC Plans Source: Deutsche Bank and PIMCO
- 5. 5 Turning Income intoWealth: Nudging toward Retirement Success From Paycheck to Retirement Spending CFA Institute Behavioral Science Lessons: “Default” in early, contribute often, stay the course, hit “Target Date” Evolution of Total Wealth, Savings and Withdrawals Impact of Making all the Wrong Choices
- 6. 6 93% 93% 92% 89% 83% 76% 67% 57% 45% 0% 20% 40% 60% 80% 100% 4035 30 25 20 15 10 5 0 Years to retirement PIMCO PIMCO glide path: engineered with the goal of delivering sufficient and consistent retirement income1 As of 31 December 2021 SOURCE: PIMCO, Morningstar For illustrative purposes only. 1Income distributions are not guaranteed. Refer to Appendix for additional asset allocation, chart, glide path, index, investment strategy, and risk information. RPB_phil_02 Building retirement savings Defending retirement wealth Supporting retirement income U.S. Fixed income Global bonds Long treasuries Long TIPS TIPS Emerging market bonds High yield Real estate Emerging market equities Non-U.S. equities U.S. small cap equities U.S. large cap equities Total equity exposure (PIMCO) Total equity exposure (industry)
- 7. 7 Bonds are different: Goactive where it matters and passive where it saves Fixed income active managers have generally outperformed their passive counterparts1 Active fee premium is highest for equities As of 31 December 2021. SOURCE: Morningstar. Past performance is not a guarantee or a reliable indicator of future results. 1Percentage of active managers that generated excess returns versus the median passive manager, (classified as “Index Fund” by Morningstar), based on 5-year after fee returns for each Fund families’ lowest priced share class) 2Based on prospectus net expense ratio of actively-managed funds relative “Index Fund” strategies, as defined by Morningstar. Average fee premium based on average premium across the fixed income and equity Morningstar categories specified below. Based on Morningstar U.S. ETF and U.S. Open-End Fund Categories (Institutional shares only). Large cap represented by Morningstar US Large Cap Blend category, Small Cap represented by Morningstar US Small Cap Blend category, Global (equities) represented by Morningstar World Large Stock Blend category, Core represented by Morningstar Intermediate Core Bond and Intermediate Core-Plus Bond categories, High Yield represented by Morningstar US High Yield Bond category, Global (bonds) represented by Morningstar World Bond category Refer to appendix for additional investment strategy and risk information. Active fee premium for equity managers2: 55 bps Active fee premium for fixed income managers2: 30 bps 0% 20% 40% 60% 80% 100% Large cap Small cap Global Core High yield Global Equities Fixed Income Percent of active managers outperforming (%) 30% 77%
- 8.
- 9. 9 You don’t knowhow long you’re going to live. You don’t know how long your spouse is going to live. You don’t know what the markets are going to do – it’s a problem that gives the best mathematicians big headaches. – Dr. Richard Thaler PIMCO Senior Advisor on Retirement and Behavioral Science
- 10. 10 Running for theExits May Backfire: Managing Misbehavior Hypothetical forecast for illustrative purposes only Stocks represent the total return of the S&P 500 Index; bonds represent the total return of the Bloomberg Barclays US Aggregate Index; cash represents the ICE BOfAML 3M T bill. Performance does not reflect the deduction of the fees and costs of an investment product. If these fees were reflected performance would be lower. Figure is provided for illustrative purposes and is not indicative of the past or future performance of any PIMCO product.
- 11. 11 Cash flow iskey: Mollifies loss aversion; mitigates misbehaviors* *High cash flow is defined as income greater than $125k Source: PIMCO Retirement Decumulation Study, 2021 Cash flow: (Emotional) reactivity to risks Among respondents entering retirement, those with a cash flow were 1.9 times LESS likely to be highly loss averse compared to the other groups. Confidence in retirement spending plan The presence of some source of regular cash flow was linked to higher confidence in every group
- 12. 12 401(k) IRA 529 Solving for Decumulation:Income to Outcome “Paycheck” Replacement For Illustrative Purposes Only *Investment products contain risk and may lose value. There is no guarantee that an investment product will be successful in producing income. Investors should consult their investment professional prior to making an investment decision. Growth Portfolio
- 13. 13 Combining Safety andGrowth Income to Outcome Over Time Value Growth Portfolio Time Paycheck Portfolio For illustrative purposes only.
- 14.
- 15. 15 PIMCO glide pathassumptions As of 31 December 2021 SOURCE: PIMCO, Employee Benefit Research Institute (EBRI) Hypothetical example for illustrative purposes only 1Index return estimates are based on the product of risk factor exposures and projected risk factor premia. The projections of risk factor premia rely on historical data, valuation metrics and qualitative inputs from senior PIMCO investment professionals. U.S. Large Cap: S&P 500 Total Return Index; U.S. Small Cap: Russell 2000 Total Return Index; Global Equities: MSCI EAFE Total Return Index; EM Equities: MSCI EM Total Return Index; Real Estate: Dow Jones U.S. Select REIT Total Return Index; Commodities: Bloomberg Commodity Total Return Index; High Yield: ICE BofAML US HY BB-B Rated Constrained Index; EM Fixed income: JPMorgan Government Bond Index – Emerging Markets Global Diversified (Unhedged); Global Fixed Income: Bloomberg Global Aggregate Index (USD-Hedged); US Fixed Income: Bloomberg U.S. Aggregate Index; TIPS: Bloomberg U.S. TIPS Index; Long Treasuries: Bloomberg Long-Term Treasury Index; Long TIPS: Bloomberg U.S. TIPS: 10-year+ Index; Cash: ICE BofA Merrill Lynch U.S. 3-month Treasury Bill Index. Refer to appendix for additional glide path, index, return assumptions, investment strategy, and risk information RETURN ASSUMPTIONS Asset class Nominal return assumptions¹ (Over 40 years) Cash 2.4% U.S. fixed income 3.3% Long Treasuries 3.2% Global fixed income 3.2% EM fixed income 5.6% High yield 4.7% TIPS 2.9% Long TIPS 3.4% Commodities 1.9% Real estate 5.5% U.S. large cap 5.6% U.S. small cap 5.5% Global equities 5.6% EM equities 7.7% CONTRIBUTION RATES Cohort Participant Employer Total 25-29 5.52% 3.64% 9.16% 30-34 5.58% 3.71% 9.29% 35-39 5.67% 3.73% 9.40% 40-44 5.79% 3.75% 9.54% 45-49 5.96% 3.78% 9.74% 50-54 6.30% 3.79% 10.09% 55-59 6.70% 3.82% 10.52% 60-65 7.04% 3.73% 10.77% INCOME ASSUMPTIONS Cohort Real income ('000s) 25-29 $51 30-34 $60 35-39 $67 40-44 $70 45-49 $70 50-54 $70 55-59 $70 60-65 $70
- 16. 16 Appendix PERFORMANCE AND FEE Pastperformance is not a guarantee or a reliable indicator of future results. The performance figures presented reflect the total return performance, unless otherwise noted, for Institutional Class shares (after fees) and reflect changes in share price and reinvestment of dividend and capital gain distributions. All periods longer than one year are annualized. Periods less than one year are cumulative. Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective or policies. A new or smaller Fund’s performance may not represent how the Fund is expected to or may perform in the long-term. New Funds have limited operating histories for investors to evaluate and new and smaller Funds may not attract sufficient assets to achieve investment and trading efficiencies. A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may adversely affect performance. It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the 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 see the fund’s most recent shareholder report for more details. Although the Fund may seek to maintain stable distributions, the Fund’s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns, fluctuations in market interest rates, Fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the Fund’s distribution rate or that the rate will be sustainable in the future. For instance, during periods of low or declining interest rates, the Fund’s distributable income and dividend levels may decline for many reasons. For example, the Fund may have to deploy uninvested assets (whether from purchases of Fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that may be held by the Fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the Fund’s distributable income and dividend levels. 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. 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 as compared to its 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 ASSET ALLOCATION Asset allocation is the process of distributing investments among various classes of investments (e.g., stocks and bonds). It does not guarantee future results, ensure a profit or protect against loss. ATTRIBUTION ANALYSIS The attribution analysis contained herein is calculated by PIMCO and is intended to provide an estimate as to which elements of a strategy contributed (positively or negatively) to a portfolio’s performance. Attribution analysis is not a precise measure and should not be relied upon for investment decisions. CHART Performance results for certain charts and graphs may be limited by date ranges specified on those charts and graphs; different time periods may produce different results. CORRELATION The correlation of various indexes or securities against one another or against inflation is based upon data over a certain time period. These correlations may vary substantially in the future or over different time
- 17. 17 Appendix HYPOTHETICAL EXAMPLE HYPOTHETICAL PERFORMANCERESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. INVESTMENT STRATEGY There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. No representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those shown MORNINGSTAR RANKING Past rankings are no guarantee of future rankings. Monthly Morningstar Ranking as of 31 December 2021 for the Institutional Class Shares for PIMCO; other classes may have different performance characteristics. The Morningstar Rankings are calculated by Morningstar and are based on the total return performance unless otherwise noted, with distributions reinvested and operating expenses deducted. Morningstar does not take into account sales charges. Fund Rankings: PIMCO RealPath Blend Income Instl (US OE Target-Date Retirement):1-year: 10 out of 172; 3-year: 1 out of 161; 5-year: 1 out of 144; S.I.: 1 out of 129; PIMCO RealPath Blend 2025 Institutional (US OE Target-Date 2025):1-year: 52 out of 226; 3-year: 20 out of 214 ;5-year: 24 out of 189; S.I.: 34 out of 165; PIMCO RealPath Blend 2030 Institutional (US OE Target-Date 2030): 1-year: 38 out of 227; 3-year: 49 out of 210; 5-year: 45 out of 185; S.I.: 52 out of 164; PIMCO RealPath Blend 2035 Institutional (US OE Target-Date 2035): 1-year: 42 out of 219; 3-year: 82 out of 208; 5-year: 75 out of 183; S.I.: 71 out of 160; PIMCO RealPath Blend 2040 Institutional (US OE Target-Date 2040): 1-year: 41 out of 221; 3-year: 110 out of 210; 5-year: 93 out of 185; S.I.: 84 out of 164; PIMCO RealPath Blend 2045 Institutional (US OE Target-Date 2045): 1-year: 46 out of 219; 3-year: 126 out of 208; 5-year: 94 out of 183; S.I.: 90 out of 160; PIMCO RealPath Blend 2050 Institutional (US OE Target-Date 2050): 1- year: 30 out of 221; 3-year: 118 out of 210; 5-year: 95 out of 185; S.I.: 88 out of 164; PIMCO RealPath Blend 2055 Institutional (US OE Target-Date 2055): 1-year: 35 out of 219; 3-year: 122 out of 208; 5-year: 100 out of 180; S.I.: 88 out of 154; PIMCO REALPATH® Blend 2060 Instl (US OE Target-Date 2060+): 1-year: 140 out of 211. The Morningstar Rankings are calculated by Morningstar and are based on the total return performance, with distributions reinvested and operating expenses deducted. Morningstar does not take into account sales charges. Underlying Fund Rankings: PIMCO Total Return Fund Morningstar ranking for Intermediate-Term Bond category: 1-year : 305 out of 604; 3-year: 351 out of 591; 5-year: 229 out of 557; 10-year: 200 out of 490; PIMCO Income Fund Morningstar ranking for Multisector Bond category: 1-year : 144 out of 344; 3-year: 186 out of 287; 5-year: 71 out of 263; 10-year: 1 out of 180; PIMCO Long-Term U.S. Government Fund Morningstar ranking for Long Government category: 1-year: 6 out of 34; 3-year: 21 out of 31; 5-year: 20 out of 30; 10-year: 11 out of 26; PIMCO International Bond (hedged) Morningstar ranking for World Bond category: 1-year: 60 out of 128; 3-year: 78 out of 114; 5-year: 37 out of 94; 10-year: 8 out of 63; PIMCO Emerging Markets Local Currency and Bond Fund Morningstar ranking for Emerging Markets Bond category: 1-year: 83 out of 277; 3-year: 58 out of 267; 5-year: 53 out of 253; 10-year: 34 out of 115; PIMCO High Yield Fund Morningstar ranking for High Yield Bond category: 1-year: 481 out of 687; 3-year: 282 out of 657; 5-year: 215 out of 626; 10-year: 176 out of 504; PIMCO Real Return Fund Morningstar ranking for Inflation-Protected Bond category: 1-year: 74 out of 211; 3-year: 13 out of 208; 5-year: 11 out of 200; 10-year: 11 out of 161; PIMCO Long-Term Real Return Fund Morningstar ranking for Inflation-Protected Bond category: 1-year: 25 out of 211; 3-year: 2 out of 208; 5-year: 1 out of 200; 10-year: 1 out of 161; Vanguard Institutional Index Fund Morningstar ranking for Large Blend category: 1-year : 302 out of 1392; 3-year: 277 out of 1288; 5-year: 204 out of 1218; 10-year: 114 out of 1040; Vanguard Small-Cap Index Morningstar ranking for Small Blend category: 1-year: 515 out of 632; 3-year: 148 out of 617; 5-year: 66 out of 587; 10-year: 65 out of 475; Vanguard Developed Markets Index Morningstar ranking for Foreign Large Blend category: 1-year: 242 out of 776; 3-year: 290 out of 730; 5-year: 215 out of 682; 10-year: 140 out of 554; Vanguard EM Stock Index Fund Morningstar ranking for Diversified EM Equities category: 1-year: 280 out of 804; 3-year: 369 out of 751; 5-year: 371 out of 686; 10-year: 273 out of 476. © 2022 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
- 18. 18 Appendix MORNINGSTAR RATING The MorningstarAnalyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five-pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research. For actively managed strategies, people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. For passive strategies, process receives an 80% weighting, while people and parent each receive a 10% weighting. For both active and passive strategies, performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further modified by a measure of the dispersion of historical alphas among relevant peers. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, the modification by alpha dispersion is not used. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net alpha relative to Morningstar category peers for active funds. For passive funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will be able to deliver a higher alpha net of fees than the lesser of the relevant Morningstar category median or 0. The level of the rating relates to the level of expected net alpha relative to Morningstar category peers for passive funds. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will deliver a weighted pillar score above a predetermined threshold within its peer group. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months. For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance-- Disclosure/default.aspx. The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund. OUTLOOK Statements concerning financial market trends are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice. PORTFOLIO STRUCTURE Portfolio structure is subject to change without notice and may not be representative of current or future allocations. STRATEGY AVAILABILITY Strategy availability may be limited to certain investment vehicles; not all investment vehicles may be available to all investors. Please contact your PIMCO representative for more information. RETURN ASSUMPTIONS Return assumptions are for illustrative purposes only and are not a prediction or a projection of return. Return assumption is an estimate of what investments may earn on average over the long term. Actual returns may be higher or lower than those shown and may vary substantially over shorter time periods. !mk_RPB_appendix
- 19. 19 Appendix RISK The fund investsin other funds and performance is subject to underlying investment weightings which will vary. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Sovereign securities are generally backed by the issuing government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. Inflation-linked bonds (ILBs) issued by a government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be suitable for all investors. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax: a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes. The cost of investing in the Fund will generally be higher than the cost of investing in a fund that invests directly in individual stocks and bonds. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Investing in securities of smaller companies tends to be more volatile and less liquid than securities of larger companies. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Derivatives and commodity-linked derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Commodity-linked derivative instruments may involve additional costs and risks such as changes in commodity index volatility or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss. TAIL RISK HEDGING Tail risk hedging may involve entering into financial derivatives that are expected to increase in value during the occurrence of tail events. Investing in a tail event instrument could lose all or a portion of its value even in a period of severe market stress. A tail event is unpredictable; therefore, investments in instruments tied to the occurrence of a tail event are speculative. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. TARGET DATE FUNDS The Funds were designed to provide investors with a comprehensive retirement solution tailored to the time when they expect to retire and plan to start withdrawing money (the "target date"). Each 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 the Fund is not guaranteed at any time, including the target date. PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2022, PIMCO PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY, 10019 is a company of PIMCO. INDEX DESCRIPTION Bloomberg Long-Term Treasury consists of U.S. Treasury issues with maturities of 10 or more years. Bloomberg U.S. Aggregate Index represents securities that are SEC-registered, taxable and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. These major sectors are subdivided into more specific indexes that are calculated and reported on a regular basis. Bloomberg U.S. TIPS Index is an unmanaged market index comprised of all U.S. Treasury Inflation Protected Securities rated investment grade (Baa3 or better), have at least one year to final maturity, and at least $250 million par amount outstanding. Performance data for this index prior to 10/97 represents returns of the Barclays Inflation Notes Index. !mk_RPB_appendix
- 20. 20 Appendix ICE BofAML U.S.High Yield, BB-B Rated, Constrained Index tracks the performance of BB-B Rated U.S. Dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Qualifying bonds are capitalization-weighted provided the total allocation to an individual issuer (defined by Bloomberg tickers) does not exceed 2%. Issuers that exceed the limit are reduced to 2% and the face value of each of their bonds is adjusted on a pro-rata basis. Similarly, the face value of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis. Merrill Lynch 3-Month Treasury Bill Index Dow Jones U.S. Select Real Estate Investment Trust (REIT) Total Return Index, a subset of the Dow Jones U.S. Select Real Estate Securities Total Return Index, is an unmanaged index composed of U.S. publicly traded Real Estate Investment Trusts. This index was formerly known as the Dow Jones Wilshire REIT Index. Bloomberg Global Aggregate (USD Hedged) Index 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. JPMorgan Government Bond Index-Emerging Markets Global Diversified Index (Unhedged) is a comprehensive global local emerging markets index, and consists of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure. The Lipper Mixed-Asset Target-Date Funds Average is an average of funds that seek to maximize assets for retirement or other purposes with an expected time horizon not to exceed the target year. The total return of the Lipper Average does not include the effect of sales charges. The MSCI Emerging Markets Net Dividend Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. The MSCI EAFE Net Dividend Hedged USD Index is an unmanaged index of issuers in countries of Europe, Australia, and the Far East represented in U.S. Dollars on a hedged basis. The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. Bloomberg Commodity Index Total Return is an unmanaged index composed of futures contracts on a number of physical commodities. The index is designed to be a highly liquid and diversified benchmark for commodities as an asset class. The futures exposures of the benchmark are collateralized by US T-bills. The 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. These materials are being provided on the express basis that they and any related communications (whether written or oral) will not cause Pacific Investment Management Company LLC (or any affiliate) (collectively, “PIMCO”) to become an investment advice fiduciary under ERISA or the Internal Revenue Code, as the recipients are fully aware that PIMCO (i) is not undertaking to provide impartial investment advice, make a recommendation regarding the acquisition, holding or disposal of an investment, act as an impartial adviser, or give advice in a fiduciary capacity, and (ii) has a financial interest in the offering and sale of one or more products and services, which may depend on a number of factors relating to PIMCO (and its affiliates’) internal business objectives, and which has been disclosed to the recipient. These materials are also being provided on PIMCO’s understanding that the recipients they are directed to are all financially sophisticated, capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies. If this is not the case, we ask that you inform us immediately. You should consult your own separate advisors before making any investment decisions. !mk_RPB_appendix