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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, 2016
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 is a copy of the report 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 RealPathTM Blend Funds |
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PIMCO Equity Series®
Annual Report
June 30, 2016
PIMCO Dividend and Income Fund
PIMCO EqS® Long/Short Fund
Share Classes
n | Institutional |
n | P |
n | D |
n | A |
n | C |
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Approval of Investment Advisory Contract and Other Agreements | 63 | |||||||
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Fund | Fund Summary | Schedule of Investments | ||||||
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8 | 32 |
* | Prior to June 16, 2016, the PIMCO Dividend and Income Fund was named the PIMCO Dividend and Income Builder Fund. |
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, 2016. 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.
Outside of the reporting period, PIMCO announced on July 19, 2016 that the firm’s Managing Directors have selected Emmanuel (Manny) Roman as PIMCO’s next Chief Executive Officer. PIMCO’s current CEO Douglas Hodge will assume a new role as Managing Director and Senior Advisor when Mr. Roman joins PIMCO on November 1st.
The announcement of Mr. Roman as PIMCO’s CEO is the culmination of a process undertaken by the firm to hire a senior executive who would add leadership and strategic insights combined with a deep appreciation of PIMCO’s diversified global businesses, investment process and focus on superior investment performance and client-service. Mr. Roman’s appointment has the full support of the firm’s leadership including Mr. Hodge, PIMCO’s President Jay Jacobs, the firm’s Executive Committee and its Managing Directors. Mr. Roman has nearly 30 years of experience in the investment industry, with expertise in fixed income and proven executive leadership, most recently as CEO of Man Group PLC, one of the world’s largest publicly-traded alternative asset managers and a leader in liquid, high-alpha investment strategies.
Highlights of the financial markets during the twelve-month reporting period include:
n | The first half of the reporting period through mid-February 2016 was marked by ongoing concerns over the global impact of a slowdown in the Chinese economy, which drove commodity prices and inflation expectations generally lower. By March, a recovery in the price of oil and expectations of lower interest rates for longer supported a rally in risk assets. The Bank of Japan (“BOJ”) and the People’s Bank of China, for example, indicated their intent for further policy easing, with the BOJ resorting to a negative interest rate policy in February 2016. The European Central Bank (“ECB”) also resorted to unconventional monetary policy with additional easing measures and an expansion of its quantitative easing program by shifting its focus toward domestic credit, pushing government yields into negative territory. In June 2016, the ECB began purchasing corporate bonds to help invigorate economic growth and stimulate inflation in the region. |
n | In the U.S., concerns regarding the global impact of tightening financial conditions and renewed U.S. dollar strength kept the Federal Reserve (“Fed”) on hold at their June 2016 meeting, after slightly raising interest rates at their December 2015 meeting. In addition, the U.S. dollar appreciated against most European and emerging market currencies, while falling against the Japanese yen. The U.S. interest rate yield curve flattened as the ten-year U.S. Treasury yield rallied to all-time lows and short-term rates rose with the initial December 2015 Fed rate hike. Revised first quarter 2016 U.S. gross domestic product (“GDP”) data released in late June was marginally stronger as retail sales, housing and consumer sentiment data indicated an improving economy. |
n | Market movements and news headlines at the end of the reporting period were dominated by the unexpected outcome of the U.K. referendum on June 23, 2016. Initial investor reaction to the Brexit vote was largely “risk-off” as various assets re-priced to the surprise outcome, with U.S. Treasuries, the Japanese yen and gold headlining a safe-haven rally. However, aside from the Pound Sterling and European and Japanese equities, most asset classes recovered in the ensuing week as investors reassessed the impact of the Brexit vote on global growth expectations. |
n | Global developed market equities experienced weak performance amid a period marked by economic uncertainty, increased volatility and geopolitical concerns. U.S. equities, as represented by the S&P 500 Index, were a bright spot, returning 3.99% over the reporting period. International equity markets (developed ex-U.S.), as represented by the MSCI EAFE Net Dividend Index (USD Hedged) declined 9.90% over the reporting period and the MSCI EAFE Net Dividend Index (USD Unhedged) declined 10.16% over the reporting period. Japanese equities, as represented by the Nikkei 225 Index in JPY, declined 21.86% over the reporting period, and |
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European equities, as represented by the MSCI Europe Index in EUR, declined 10.96% over the reporting period. During the first eight months of the reporting period, declining commodities prices and China’s economic deceleration drove concerns of slowing global growth, which weighed on equity returns. However, in the last third of the reporting period, developed market equities began to rebound from previous lows as global central banks resorted to increasingly unconventional monetary policy. However, late in the reporting period in June, global equities were pressured once again due to Britain’s decision to leave the European Union. |
n | Emerging market (“EM”) equities, as represented by the MSCI Emerging Markets Index (Net Dividends in USD), declined 12.05% over the reporting period. Concerns over slower economic growth in China, a bear market in commodities, political corruption in Latin America and several attempts by the People’s Bank of China to support the domestic equity market added to fears of slowing global growth. Late in the reporting period, emerging market equities experienced a strong rebound following February 2016 lows, with cyclicals and commodity-linked markets leading the rally. |
n | U.S. Treasuries, as represented by the Barclays U.S. Treasury Index, returned 6.22% for the reporting period. Yields beyond one-year maturities declined across the U.S. Treasury yield curve as a more dovish tone from the Fed after its June 2016 meeting, coupled with the surprise result of the U.K. referendum, pushed expectations for policy normalization further into the future. Investors also looked to U.S. Treasuries for their perceived safety and as a source of high-quality yield. The benchmark ten-year U.S. Treasury note yielded 1.49% at the end of the reporting period, down from 2.35% on June 30, 2015. The Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, returned 6.00% 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 have placed 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 22, 2016
|
Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income dividends 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.
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Important Information About the Funds
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: new/small fund risk, 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, mortgage-related and other asset-backed securities risk, short sale risk, convertible securities 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. 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 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
4 | PIMCO EQUITY SERIES |
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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 (i) 18 months after purchase for purchases made prior to August 10, 2015 and (ii) 12 months after purchase for purchases made on or after August 10, 2015. The Cumulative Returns chart reflects only
Institutional Class performance. Performance for Class P, Administrative Class, Class D, Class A, Class C and Class R shares, if applicable, are typically lower than Institutional Class performance due to the lower expenses paid by Institutional Class shares. Performance shown is net of fees and expenses. A Fund’s total annual operating expense ratios
on each individual Fund Summary page are as of the currently effective prospectus, as supplemented to date. The minimum initial investment amount for Institutional Class, Class P and Administrative Class shares is $1,000,000. The minimum initial investment amount for Class A, Class C and Class D shares is $1,000. There is no minimum initial investment for Class R shares. Each Fund measures its performance against a 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.
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 PIMCO Equity Series 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.
PIMCO Equity Series files a complete schedule of each Fund’s portfolio 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 will also be 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 Dividend and Income Fund
Cumulative Returns Through June 30, 2016
$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 (formerly, PIMCO Dividend and Income Builder Fund) (the “Fund”) seeks to provide current income that exceeds the average yield on global stocks, 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”). The stocks for the Equity Sleeve are selected by the Fund’s sub-adviser, Research Affiliates, LLC from a broad universe of global equities. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/14/11) | |||||||||
PIMCO Dividend and Income Fund Institutional Class | (9.06)% | 6.19% | ||||||||
PIMCO Dividend and Income Fund Class P | (9.05)% | 6.15% | ||||||||
PIMCO Dividend and Income Fund Class D | (9.38)% | 5.85% | ||||||||
PIMCO Dividend and Income Fund Class A | (9.38)% | 5.85% | ||||||||
PIMCO Dividend and Income Fund Class A (adjusted) | (14.39)% | 4.54% | ||||||||
PIMCO Dividend and Income Fund Class C | (10.07)% | 5.05% | ||||||||
PIMCO Dividend and Income Fund Class C (adjusted) | (10.88)% | 5.05% | ||||||||
MSCI World Index± | (2.78)% | 10.83% | ||||||||
MSCI All Country World Index* | (3.73)% | 9.65% | ||||||||
75% MSCI World Index/25% Barclays Global Aggregate USD Unhedged±± | 0.22% | 8.66% | ||||||||
75% MSCI All Country World Index/25% Barclays Global Aggregate USD Unhedged** | (0.51)% | 7.79% |
All Fund returns are net of fees and expenses.
* Prior to June 16, 2016, The Fund’s primary benchmark was the MSCI All Country World Index. 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.
** Prior to June 16, 2016, The Fund’s secondary benchmark was the 75% MSCI All Country World Index/25% Barclays Global Aggregate USD Unhedged Index. The benchmark is a blend of 75% MSCI All Country World Index/25% Barclays Global Aggregate USD Unhedged. 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. Barclays Global Aggregate (USD Unhedged) 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.
± 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% 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. Barclays Global Aggregate (USD Unhedged) 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. It is not possible to invest directly in an unmanaged index.
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, is 1.00% for the Institutional Class shares, 1.10% for the Class P shares, 1.35% for the Class D shares, 1.35% for the Class A shares, and 2.10% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus. For performance current to the most recent month-end, visit www.pimco.com.
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Institutional Class - PQIIX | Class P - PQIPX | Class D - PQIDX | Class A - PQIZX | Class C - PQICX |
Top 10 Holdings as of 06/30/20161§
Exxon Mobil Corp. | 2.7% | |||||||
AT&T, Inc. | 2.3% | |||||||
Pfizer, Inc. | 2.3% | |||||||
Royal Dutch Shell PLC ‘A’ | 2.2% | |||||||
International Business Machines Corp. | 1.8% | |||||||
Chevron Corp. | 1.8% | |||||||
HSBC Holdings PLC | 1.6% | |||||||
Intel Corp. | 1.4% | |||||||
BP PLC | 1.4% | |||||||
Structured Asset Investment Loan Trust | 1.3% |
Geographic Breakdown as of 06/30/20161§
United States | 46.4% | |||||||
United Kingdom | 9.8% | |||||||
Japan | 8.8% | |||||||
France | 6.3% | |||||||
Netherlands | 3.3% | |||||||
Germany | 3.3% | |||||||
Spain | 2.5% | |||||||
Canada | 2.4% | |||||||
Switzerland | 2.0% | |||||||
Italy | 1.6% | |||||||
Australia | 1.2% | |||||||
Denmark | 1.0% | |||||||
Other | 5.6% |
Sector Breakdown as of 06/30/20161§
Financials | 17.3% | |||||||
Energy | 15.3% | |||||||
Utilities | 8.8% | |||||||
Health Care | 8.2% | |||||||
Telecommunication Services | 7.9% | |||||||
Industrials | 7.2% | |||||||
Information Technology | 6.2% | |||||||
Consumer Staples | 5.6% | |||||||
Consumer Discretionary | 5.1% | |||||||
Materials | 4.8% | |||||||
Asset-Backed Securities | 3.8% | |||||||
Non-Agency Mortgage-Backed Securities | 3.0% | |||||||
Other | 1.1% |
1 % of Investments, at value.
§ Top 10 Holdings, Geographic and Sector Breakdown, and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Stock selection in the financials sector detracted from relative returns, as the Fund’s holdings generally underperformed the MSCI World Index. |
» | Stock selection in the industrials sector detracted from relative returns, as the Fund’s holdings generally underperformed the MSCI World Index. |
» | Stock selection in the energy sector detracted from relative returns, as the Fund’s holdings generally underperformed the MSCI World Index. |
» | Stock selection in the information technology sector detracted from relative returns, as the Fund’s holdings generally underperformed the MSCI World Index. |
» | The Fund’s overweight position in PG&E Corporation contributed to relative returns, as the security increased in price. |
» | Exposure to U.S. duration contributed to absolute performance, as yields generally declined. |
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Cumulative Returns Through June 30, 2016
$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. |
Average Annual Total Return for the period ended June 30, 2016* | ||||||||||||||||||
1 Year | 5 Year | 10 Year | Fund Inception (01/01/03) | |||||||||||||||
PIMCO EqS® Long/Short Fund Institutional Class | (2.02)% | 3.57% | 7.91% | 11.32% | ||||||||||||||
PIMCO EqS® Long/Short Fund Class P | (2.11)% | 3.50% | 7.87% | 11.29% | ||||||||||||||
PIMCO EqS® Long/Short Fund Class D | (2.37)% | 3.26% | 7.74% | 11.20% | ||||||||||||||
PIMCO EqS® Long/Short Fund Class A | (2.38)% | 3.26% | 7.74% | 11.20% | ||||||||||||||
PIMCO EqS® Long/Short Fund Class A (adjusted) | (7.71)% | 2.10% | 7.14% | 10.73% | ||||||||||||||
PIMCO EqS® Long/Short Fund Class C | (3.03)% | 2.62% | 7.41% | 10.94% | ||||||||||||||
PIMCO EqS® Long/Short Fund Class C (adjusted) | (3.99)% | 2.62% | 7.41% | 10.94% | ||||||||||||||
3 Month USD LIBOR Index± | 0.46% | 0.35% | 1.48% | 1.72% |
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, is 1.91% for the Institutional Class shares, 2.01% for the Class P shares, 2.26% for the Class D shares, 2.26% for the Class A shares, and 3.01% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus. For performance current to the most recent month-end, visit www.pimco.com.
8 | PIMCO EQUITY SERIES |
Table of Contents
Institutional Class - PMHIX | Class P - PMHBX | Class D - PMHDX | Class A - PMHAX | Class C - PMHCX |
Top 10 Holdings as of 06/30/20161§
Allstate Corp. | 5.8% | |||||||
Iron Mountain, Inc. | 4.7% | |||||||
DST Systems, Inc. | 4.3% | |||||||
Nestle S.A. | 4.1% | |||||||
Spectra Energy Partners LP | 3.6% | |||||||
First Data Corp. ‘A’ | 3.4% | |||||||
HCA Holdings, Inc. | 3.4% | |||||||
Laboratory Corp. of America Holdings | 3.2% | |||||||
Level 3 Communications, Inc. | 3.1% | |||||||
TransCanada Corp. | 3.1% |
Sector Breakdown as of 06/30/20162§
Financials | 12.9% | |||||||
Consumer Discretionary | 11.1% | |||||||
Information Technology | 7.7% | |||||||
Health Care | 7.4% | |||||||
Energy | 7.2% | |||||||
Consumer Staples | 5.1% | |||||||
Industrials | 4.2% | |||||||
Telecommunication Services | 3.4% | |||||||
Other | 0.9% |
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 excludes securities sold short, financial derivative instruments, and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | The Fund’s long equity positions detracted from absolute returns, as the prices of these securities generally declined. |
» | The Fund’s long positions detracted from absolute performance, notably First Data Corporation and Community Health Systems, as the prices of these securities declined. |
» | The Fund’s short equity positions contributed to absolute returns, as the prices of these securities generally declined. |
» | The Fund’s long position in Iron Mountain contributed to absolute returns, as the price of this security rose. |
ANNUAL REPORT | JUNE 30, 2016 | 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, 2016 to June 30, 2016 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 column for your share class, in the column titled “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 (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,025.20 | $ | 4.11 | $ | 1,000.00 | $ | 1,020.39 | $ | 4.10 | 0.83 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,026.80 | 4.61 | 1,000.00 | 1,019.91 | 4.59 | 0.93 | |||||||||||||||||||||||||||||||||
Class D | 1,000.00 | 1,024.60 | 5.84 | 1,000.00 | 1,018.68 | 5.82 | 1.18 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,023.60 | 5.84 | 1,000.00 | 1,018.68 | 5.82 | 1.18 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 1,020.20 | 9.53 | 1,000.00 | 1,015.01 | 9.51 | 1.93 | |||||||||||||||||||||||||||||||||
PIMCO EqS® Long/Short Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,002.60 | $ | 11.02 | $ | 1,000.00 | $ | 1,013.45 | $ | 11.08 | 2.25 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,001.70 | 11.50 | 1,000.00 | 1,012.96 | 11.57 | 2.35 | |||||||||||||||||||||||||||||||||
Class D | 1,000.00 | 1,000.90 | 12.72 | 1,000.00 | 1,011.74 | 12.79 | 2.60 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,000.90 | 12.72 | 1,000.00 | 1,011.74 | 12.79 | 2.60 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 998.20 | 16.37 | 1,000.00 | 1,008.07 | 16.45 | 3.35 |
* 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 179/366 (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 can be found in Note 8 in the Notes to Financial Statements.
10 | PIMCO EQUITY SERIES |
Table of Contents
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ANNUAL REPORT | JUNE 30, 2016 | 11 |
Table of Contents
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 Investment Operations | Dividends from Net Investment Income | Distributions from Net Realized Capital Gains | Total Distributions(b) | |||||||||||||||||||||
PIMCO Dividend and Income Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
06/30/2016 | $ | 12.29 | $ | 0.43 | $ | (1.58 | ) | $ | (1.15 | ) | $ | (0.44 | ) | $ | (0.76 | ) | $ | (1.20 | ) | |||||||||
06/30/2015 | 13.12 | 0.47 | (0.50 | ) | (0.03 | ) | (0.46 | ) | (0.34 | ) | (0.80 | ) | ||||||||||||||||
06/30/2014 | 11.60 | 0.44 | 1.54 | 1.98 | (0.46 | ) | 0.00 | (0.46 | ) | |||||||||||||||||||
06/30/2013 | 10.47 | 0.54 | 1.03 | 1.57 | (0.42 | ) | (0.02 | ) | (0.44 | ) | ||||||||||||||||||
12/14/2011 - 06/30/2012 | 10.00 | 0.25 | 0.47 | 0.72 | (0.25 | ) | 0.00 | (0.25 | ) | |||||||||||||||||||
Class P | ||||||||||||||||||||||||||||
06/30/2016 | 12.30 | 0.39 | (1.54 | ) | (1.15 | ) | (0.43 | ) | (0.76 | ) | (1.19 | ) | ||||||||||||||||
06/30/2015 | 13.13 | 0.46 | (0.50 | ) | (0.04 | ) | (0.45 | ) | (0.34 | ) | (0.79 | ) | ||||||||||||||||
06/30/2014 | 11.62 | 0.44 | 1.52 | 1.96 | (0.45 | ) | 0.00 | (0.45 | ) | |||||||||||||||||||
06/30/2013 | 10.48 | 0.54 | 1.03 | 1.57 | (0.41 | ) | (0.02 | ) | (0.43 | ) | ||||||||||||||||||
12/14/2011 - 06/30/2012 | 10.00 | 0.30 | 0.42 | 0.72 | (0.24 | ) | 0.00 | (0.24 | ) | |||||||||||||||||||
Class D | ||||||||||||||||||||||||||||
06/30/2016 | 12.29 | 0.36 | (1.54 | ) | (1.18 | ) | (0.41 | ) | (0.76 | ) | (1.17 | ) | ||||||||||||||||
06/30/2015 | 13.12 | 0.46 | (0.53 | ) | (0.07 | ) | (0.42 | ) | (0.34 | ) | (0.76 | ) | ||||||||||||||||
06/30/2014 | 11.61 | 0.40 | 1.53 | 1.93 | (0.42 | ) | 0.00 | (0.42 | ) | |||||||||||||||||||
06/30/2013 | 10.47 | 0.46 | 1.09 | 1.55 | (0.39 | ) | (0.02 | ) | (0.41 | ) | ||||||||||||||||||
12/14/2011 - 06/30/2012 | 10.00 | 0.26 | 0.44 | 0.70 | (0.23 | ) | 0.00 | (0.23 | ) | |||||||||||||||||||
Class A | ||||||||||||||||||||||||||||
06/30/2016 | 12.29 | 0.39 | (1.57 | ) | (1.18 | ) | (0.41 | ) | (0.76 | ) | (1.17 | ) | ||||||||||||||||
06/30/2015 | 13.12 | 0.43 | (0.50 | ) | (0.07 | ) | (0.42 | ) | (0.34 | ) | (0.76 | ) | ||||||||||||||||
06/30/2014 | 11.61 | 0.42 | 1.51 | 1.93 | (0.42 | ) | 0.00 | (0.42 | ) | |||||||||||||||||||
06/30/2013 | 10.47 | 0.48 | 1.07 | 1.55 | (0.39 | ) | (0.02 | ) | (0.41 | ) | ||||||||||||||||||
12/14/2011 - 06/30/2012 | 10.00 | 0.26 | 0.44 | 0.70 | (0.23 | ) | 0.00 | (0.23 | ) | |||||||||||||||||||
Class C | ||||||||||||||||||||||||||||
06/30/2016 | 12.27 | 0.31 | (1.57 | ) | (1.26 | ) | (0.33 | ) | (0.76 | ) | (1.09 | ) | ||||||||||||||||
06/30/2015 | 13.10 | 0.34 | (0.51 | ) | (0.17 | ) | (0.32 | ) | (0.34 | ) | (0.66 | ) | ||||||||||||||||
06/30/2014 | 11.59 | 0.33 | 1.51 | 1.84 | (0.33 | ) | 0.00 | (0.33 | ) | |||||||||||||||||||
06/30/2013 | 10.46 | 0.40 | 1.06 | 1.46 | (0.31 | ) | (0.02 | ) | (0.33 | ) | ||||||||||||||||||
12/14/2011 - 06/30/2012 | 10.00 | 0.24 | 0.41 | 0.65 | (0.19 | ) | 0.00 | (0.19 | ) | |||||||||||||||||||
PIMCO EqS® Long/Short Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
06/30/2016 | $ | 12.07 | $ | (0.17 | ) | $ | (0.07 | ) | $ | (0.24 | ) | $ | 0.00 | $ | (0.14 | ) | $ | (0.14 | ) | |||||||||
06/30/2015 | 11.92 | 0.02 | 0.18 | 0.20 | 0.00 | (0.05 | ) | (0.05 | ) | |||||||||||||||||||
06/30/2014 | 11.09 | (0.10 | ) | 1.60 | 1.50 | (0.06 | ) | (0.61 | ) | (0.67 | ) | |||||||||||||||||
06/30/2013 | 9.71 | 0.15 | 1.27 | 1.42 | (0.04 | ) | 0.00 | (0.04 | ) | |||||||||||||||||||
04/20/2012 - 06/30/2012 | 10.00 | (0.02 | ) | (0.27 | ) | (0.29 | ) | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Class P | ||||||||||||||||||||||||||||
06/30/2016 | 12.02 | (0.18 | ) | (0.07 | ) | (0.25 | ) | 0.00 | (0.14 | ) | (0.14 | ) | ||||||||||||||||
06/30/2015 | 11.88 | 0.02 | 0.17 | 0.19 | 0.00 | (0.05 | ) | (0.05 | ) | |||||||||||||||||||
06/30/2014 | 11.08 | (0.08 | ) | 1.56 | 1.48 | (0.07 | ) | (0.61 | ) | (0.68 | ) | |||||||||||||||||
06/30/2013 | 9.70 | (0.05 | ) | 1.47 | 1.42 | (0.04 | ) | 0.00 | (0.04 | ) | ||||||||||||||||||
04/30/2012 - 06/30/2012 | 10.00 | (0.02 | ) | (0.28 | ) | (0.30 | ) | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Class D | ||||||||||||||||||||||||||||
06/30/2016 | 11.95 | (0.20 | ) | (0.08 | ) | (0.28 | ) | 0.00 | (0.14 | ) | (0.14 | ) | ||||||||||||||||
06/30/2015 | 11.84 | (0.02 | ) | 0.18 | 0.16 | 0.00 | (0.05 | ) | (0.05 | ) | ||||||||||||||||||
06/30/2014 | 11.06 | (0.12 | ) | 1.57 | 1.45 | (0.06 | ) | (0.61 | ) | (0.67 | ) | |||||||||||||||||
06/30/2013 | 9.70 | (0.10 | ) | 1.48 | 1.38 | (0.02 | ) | 0.00 | (0.02 | ) | ||||||||||||||||||
04/30/2012 - 06/30/2012 | 10.00 | (0.03 | ) | (0.27 | ) | (0.30 | ) | 0.00 | 0.00 | 0.00 |
Please see footnotes on page 14.
12 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets Excluding Waivers | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Dividends on Securities Sold Short | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Dividends on Securities Sold Short and Waivers | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||
$ | 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 | ||||||||||||||||||||||||||
10.47 | 7.17 | 11,170 | 0.83 | * | 1.57 | * | 0.83 | * | 1.57 | * | 4.35 | * | 28 | |||||||||||||||||||||
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 | ||||||||||||||||||||||||||
10.48 | 7.21 | 8,207 | 0.93 | * | 2.47 | * | 0.93 | * | 2.47 | * | 5.28 | * | 28 | |||||||||||||||||||||
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 | ||||||||||||||||||||||||||
10.47 | 6.98 | 2,306 | 1.18 | * | 2.26 | * | 1.18 | * | 2.26 | * | 4.52 | * | 28 | |||||||||||||||||||||
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 | ||||||||||||||||||||||||||
10.47 | 6.98 | 13,314 | 1.18 | * | 2.43 | * | 1.18 | * | 2.43 | * | 4.62 | * | 28 | |||||||||||||||||||||
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 | ||||||||||||||||||||||||||
10.46 | 6.46 | 8,000 | 1.93 | * | 3.46 | * | 1.93 | * | 3.46 | * | 4.27 | * | 28 | |||||||||||||||||||||
$ | 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 | ||||||||||||||||||||||||||
9.71 | (2.90 | ) | 212,229 | 1.52 | * | 2.41 | * | 1.40 | * | 2.29 | * | (1.30 | )* | 113 | ||||||||||||||||||||
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 | |||||||||||||||||||||||||
9.70 | (3.00 | ) | 10 | 1.62 | * | 2.40 | * | 1.50 | * | 2.28 | * | (1.34 | )* | 113 | ||||||||||||||||||||
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 | |||||||||||||||||||||||||
9.70 | (3.00 | ) | 111 | 1.87 | * | 3.97 | * | 1.77 | * | 3.87 | * | (1.72 | )* | 113 |
ANNUAL REPORT | JUNE 30, 2016 | 13 |
Table of Contents
Financial Highlights (Cont.)
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 Investment Operations | Dividends from Net Investment Income | Distributions from Net Realized Capital Gains | Total Distributions(b) | |||||||||||||||||||||
PIMCO EqS® Long/Short Fund (Cont.) | ||||||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||
06/30/2016 | $ | 11.94 | $ | (0.21 | ) | $ | (0.07 | ) | $ | (0.28 | ) | $ | 0.00 | $ | (0.14 | ) | $ | (0.14 | ) | |||||||||
06/30/2015 | 11.83 | (0.02 | ) | 0.18 | 0.16 | 0.00 | (0.05 | ) | (0.05 | ) | ||||||||||||||||||
06/30/2014 | 11.05 | (0.12 | ) | 1.57 | 1.45 | (0.06 | ) | (0.61 | ) | (0.67 | ) | |||||||||||||||||
06/30/2013 | 9.70 | (0.00 | )^ | 1.38 | 1.38 | (0.03 | ) | 0.00 | (0.03 | ) | ||||||||||||||||||
04/30/2012 - 06/30/2012 | 10.00 | (0.03 | ) | (0.27 | ) | (0.30 | ) | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||
06/30/2016 | 11.69 | (0.29 | ) | (0.06 | ) | (0.35 | ) | 0.00 | (0.14 | ) | (0.14 | ) | ||||||||||||||||
06/30/2015 | 11.67 | (0.11 | ) | 0.18 | 0.07 | 0.00 | (0.05 | ) | (0.05 | ) | ||||||||||||||||||
06/30/2014 | 10.98 | (0.20 | ) | 1.55 | 1.35 | (0.05 | ) | (0.61 | ) | (0.66 | ) | |||||||||||||||||
06/30/2013 | 9.69 | 0.01 | 1.29 | 1.30 | (0.01 | ) | 0.00 | (0.01 | ) | |||||||||||||||||||
04/30/2012 - 06/30/2012 | 10.00 | (0.04 | ) | (0.27 | ) | (0.31 | ) | 0.00 | 0.00 | 0.00 |
* | Annualized |
^ | 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(d) in the Notes to Financial Statements for more information. |
(c) | Effective June 16, 2016, the Fund’s 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
Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets Excluding Waivers | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Dividends on Securities Sold Short | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Dividends on Securities Sold Short and Waivers | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||
$ | 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 | |||||||||||||||||||||||||
9.70 | (3.00 | ) | 1,219 | 1.87 | * | 3.17 | * | 1.74 | * | 3.04 | * | (1.70 | )* | 113 | ||||||||||||||||||||
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 | ||||||||||||||||||||||||||
9.69 | (3.10 | ) | 53 | 2.62 | * | 4.50 | * | 2.52 | * | 4.40 | * | (2.46 | )* | 113 |
ANNUAL REPORT | JUNE 30, 2016 | 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* | $ | 438,887 | $ | 653,891 | ||||
Investments in Affiliates | 7,674 | 252,193 | ||||||
Financial Derivative Instruments | ||||||||
Exchange-traded or centrally cleared | 77 | 0 | ||||||
Over the counter | 1,570 | 127 | ||||||
Deposits with counterparty | 318 | 64,338 | ||||||
Foreign currency, at value | 2,792 | 2 | ||||||
Receivable for investments sold | 10,858 | 25,004 | ||||||
Receivable for Fund shares sold | 744 | 1,535 | ||||||
Interest and/or dividends receivable | 2,745 | 629 | ||||||
Dividends receivable from Affiliates | 9 | 197 | ||||||
Reimbursement receivable from PIMCO | 116 | 151 | ||||||
Total Assets | 465,790 | 998,067 | ||||||
Liabilities: | ||||||||
Borrowings & Other Financing Transactions | ||||||||
Payable for short sales | $ | 0 | $ | 65,402 | ||||
Financial Derivative Instruments | ||||||||
Over the counter | 1,426 | 857 | ||||||
Payable for investments purchased | 14,601 | 78,135 | ||||||
Payable for investments in Affiliates purchased | 9 | 197 | ||||||
Deposits from counterparty | 713 | 420 | ||||||
Payable for Fund shares redeemed | 4,630 | 3,159 | ||||||
Dividends payable | 828 | 0 | ||||||
Overdraft due to custodian | 2,989 | 0 | ||||||
Accrued investment advisory fees | 191 | 745 | ||||||
Accrued supervisory and administrative fees | 147 | 373 | ||||||
Accrued distribution fees | 126 | 104 | ||||||
Accrued servicing fees | 77 | 61 | ||||||
Other liabilities | 220 | 230 | ||||||
Total Liabilities | 25,957 | 149,683 | ||||||
Net Assets | $ | 439,833 | $ | 848,384 | ||||
Net Assets Consist of: | ||||||||
Paid in capital | $ | 577,453 | $ | 826,210 | ||||
Undistributed (overdistributed) net investment income | (1,410 | ) | 690 | |||||
Accumulated undistributed net realized (loss) | (131,093 | ) | (18,222 | ) | ||||
Net unrealized appreciation (depreciation) | (5,117 | ) | 39,706 | |||||
Net Assets | $ | 439,833 | $ | 848,384 | ||||
Cost of investments in securities | $ | 444,831 | $ | 612,026 | ||||
Cost of investments in Affiliates | $ | 7,673 | $ | 252,161 | ||||
Cost of foreign currency held | $ | 2,805 | $ | 2 | ||||
Proceeds received on short sales | $ | 0 | $ | 63,907 | ||||
Cost or premiums of financial derivative instruments, net | $ | (256 | ) | $ | 0 | |||
* Includes repurchase agreements of: | $ | 0 | $ | 466 |
† | 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, 2016
PIMCO Dividend and Income Fund | PIMCO EqS® Long/Short Fund | |||||||
Net Assets: | ||||||||
Institutional Class | $ | 31,840 | $ | 243,341 | ||||
Class P | 34,120 | 249,973 | ||||||
Class D | 10,623 | 62,130 | ||||||
Class A | 167,857 | 147,582 | ||||||
Class C | 195,393 | 145,358 | ||||||
Shares Issued and Outstanding: | ||||||||
Institutional Class | 3,203 | 20,814 | ||||||
Class P | 3,426 | 21,489 | ||||||
Class D | 1,069 | 5,389 | ||||||
Class A | 16,893 | 12,811 | ||||||
Class C | 19,705 | 12,983 | ||||||
Net Asset Value Per Share Outstanding: | ||||||||
Institutional Class | $ | 9.94 | $ | 11.69 | ||||
Class P | 9.96 | 11.63 | ||||||
Class D | 9.94 | 11.53 | ||||||
Class A | 9.94 | 11.52 | ||||||
Class C | 9.92 | 11.20 |
ANNUAL REPORT | JUNE 30, 2016 | 17 |
Table of Contents
Year Ended June 30, 2016 | ||||||||
(Amounts in thousands†) | PIMCO Fund | PIMCO EqS® Long/Short Fund | ||||||
Investment Income: | ||||||||
Interest | $ | 3,916 | $ | 338 | ||||
Dividends, net of foreign taxes* | 26,911 | 5,394 | ||||||
Dividends from Investments in Affiliates | 119 | 2,974 | ||||||
Total Income | 30,946 | 8,706 | ||||||
Expenses: | ||||||||
Investment advisory fees | 4,432 | 9,077 | ||||||
Supervisory and administrative fees | 2,547 | 4,542 | ||||||
Distribution and/or servicing fees - Class D | 59 | 137 | ||||||
Distribution fees - Class C | 2,017 | 1,123 | ||||||
Servicing fees - Class A | 572 | 402 | ||||||
Servicing fees - Class C | 672 | 374 | ||||||
Dividends on short sales | 0 | 5,375 | ||||||
Trustee fees | 71 | 88 | ||||||
Interest expense | 10 | 2,761 | ||||||
Miscellaneous expense | 33 | 44 | ||||||
Total Expenses | 10,413 | 23,923 | ||||||
Waiver and/or Reimbursement by PIMCO | (1,078 | ) | (88 | ) | ||||
Net Expenses | 9,335 | 23,835 | ||||||
Net Investment Income (Loss) | 21,611 | (15,129 | ) | |||||
Net Realized Gain (Loss): | ||||||||
Investments in securities | (135,711 | ) | (25,748 | ) | ||||
Investments in Affiliates | (56 | ) | (1,105 | ) | ||||
Exchange-traded or centrally cleared financial derivative instruments | 165 | (4,660 | ) | |||||
Over the counter financial derivative instruments | 3,413 | 1,245 | ||||||
Short sales | 0 | 35,120 | ||||||
Foreign currency | (24 | ) | (594 | ) | ||||
Net Realized Gain (Loss) | (132,213 | ) | 4,258 | |||||
Net Change in Unrealized Appreciation (Depreciation): | ||||||||
Investments in securities | 10,139 | (6,585 | ) | |||||
Investments in Affiliates | 1 | 43 | ||||||
Exchange-traded or centrally cleared financial derivative instruments | 599 | 2,144 | ||||||
Over the counter financial derivative instruments | 1,828 | (640 | ) | |||||
Short sales | 0 | (5,146 | ) | |||||
Foreign currency assets and liabilities | (49 | ) | (15 | ) | ||||
Net Change in Unrealized Appreciation (Depreciation) | 12,518 | (10,199 | ) | |||||
Net (Decrease) in Net Assets Resulting from Operations | $ | (98,084 | ) | $ | (21,070 | ) | ||
* Foreign tax withholdings - Dividends | $ | 1,167 | $ | 124 |
† | 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 Dividend and Income Fund | PIMCO EqS® Long/Short Fund | |||||||||||||||
(Amounts in thousands†) | Year Ended June 30, 2016 | Year Ended June 30, 2015 | Year Ended June 30, 2016 | Year Ended June 30, 2015 | ||||||||||||
(Decrease) in Net Assets from: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 21,611 | $ | 28,545 | $ | (15,129 | ) | $ | (847 | ) | ||||||
Net realized gain (loss) | (132,213 | ) | 55,272 | 4,258 | 29,852 | |||||||||||
Net change in unrealized appreciation (depreciation) | 12,518 | (97,681 | ) | (10,199 | ) | (33,398 | ) | |||||||||
Net (Decrease) in Net Assets Resulting from Operations | (98,084 | ) | (13,864 | ) | (21,070 | ) | (4,393 | ) | ||||||||
Distributions to Shareholders: | ||||||||||||||||
From net investment income | ||||||||||||||||
Institutional Class | (1,746 | ) | (2,553 | ) | 0 | 0 | ||||||||||
Class P | (3,101 | ) | (5,752 | ) | 0 | 0 | ||||||||||
Class D | (848 | ) | (1,023 | ) | 0 | 0 | ||||||||||
Class A | (8,671 | ) | (9,496 | ) | 0 | 0 | ||||||||||
Class C | (8,146 | ) | (8,670 | ) | 0 | 0 | ||||||||||
Class R | (4 | )^ | (11 | ) | 0 | 0 | ||||||||||
From net realized capital gains | ||||||||||||||||
Institutional Class | (2,576 | ) | (1,739 | ) | (2,579 | ) | (1,891 | ) | ||||||||
Class P | (5,302 | ) | (4,480 | ) | (3,075 | ) | (1,253 | ) | ||||||||
Class D | (1,876 | ) | (690 | ) | (641 | ) | (248 | ) | ||||||||
Class A | (16,603 | ) | (7,435 | ) | (1,768 | ) | (961 | ) | ||||||||
Class C | (19,121 | ) | (8,792 | ) | (1,826 | ) | (787 | ) | ||||||||
Class R | (18 | )^ | (11 | ) | 0 | 0 | ||||||||||
Total Distributions(a) | (68,012 | ) | (50,652 | ) | (9,889 | ) | (5,140 | ) | ||||||||
Portfolio Share Transactions: | ||||||||||||||||
Net increase (decrease) resulting from Fund share transactions** | (328,333 | ) | 43,260 | 14,235 | (622,945 | ) | ||||||||||
Total (Decrease) in Net Assets | (494,429 | ) | (21,256 | ) | (16,724 | ) | (632,478 | ) | ||||||||
Net Assets: | ||||||||||||||||
Beginning of year | 934,262 | 955,518 | 865,108 | 1,497,586 | ||||||||||||
End of year* | $ | 439,833 | $ | 934,262 | $ | 848,384 | $ | 865,108 | ||||||||
* Including undistributed (overdistributed) net investment income of: | $ | (1,410 | ) | $ | (162 | ) | $ | 690 | $ | 89 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
^ | Class R Shares liquidated at the close of business on January 22, 2016. |
** | See Note 12 in the Notes to Financial Statements. |
(a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2(d) in the Notes to Financial Statements for more information. |
ANNUAL REPORT | JUNE 30, 2016 | 19 |
Table of Contents
Year Ended June 30, 2016 | ||||
(Amounts in thousands) | PIMCO EqS® Long/Short Fund | |||
Cash Flows (Used for) Operating Activities: | ||||
Net (decrease) in net assets resulting from operations | $ | (21,070 | ) | |
Adjustments to Reconcile Net (Decrease) in Net Assets from Operations to Net Cash (Used for) Operating Activities: | ||||
Purchases of long-term securities | (3,681,380 | ) | ||
Proceeds from sales of long-term securities | 3,770,658 | |||
Purchases of short-term portfolio investments, net | (215,123 | ) | ||
Decrease in deposits with counterparty | 104,900 | |||
Decrease in receivable for investments sold | 257,691 | |||
Decrease in interest and/or dividends receivable | 116 | |||
(Increase) in dividends receivable from Affiliates | (125 | ) | ||
Payments on exchange-traded or centrally cleared financial derivative instruments | (2,739 | ) | ||
Proceeds from over the counter financial derivative instruments | 1,246 | |||
(Increase) in reimbursement receivable from PIMCO | (46 | ) | ||
(Decrease) in payable for investments purchased | (131,552 | ) | ||
Increase in deposits from counterparty | 420 | |||
(Decrease) in accrued investment advisory fees | (11 | ) | ||
(Decrease) in accrued supervisory and administrative fees | (1 | ) | ||
Increase in accrued distribution fees | 7 | |||
(Decrease) in accrued servicing fees | (4 | ) | ||
Payments on short sales transactions, net | (91,927 | ) | ||
Payments on foreign currency transactions | (609 | ) | ||
(Decrease) in other liabilities | (33 | ) | ||
Net Realized (Gain) Loss | ||||
Investments in securities | 25,478 | |||
Investments in Affiliates | 1,105 | |||
Exchange-traded or centrally cleared financial derivative instruments | 4,660 | |||
Over the counter financial derivative instruments | (1,245 | ) | ||
Short sales | (35,120 | ) | ||
Foreign currency | 594 | |||
Net Change in Unrealized (Appreciation) Depreciation | ||||
Investments in securities | 6,585 | |||
Investments in Affiliates | (43 | ) | ||
Exchange-traded or centrally cleared financial derivative instruments | (2,144 | ) | ||
Over the counter financial derivative instruments | 640 | |||
Short sales | 5,146 | |||
Foreign currency assets and liabilities | 15 | |||
Net amortization (accretion) on investments | 115 | |||
Net Cash (Used for) Operating Activities | (3,796 | ) | ||
Cash Flows Received from Financing Activities: | ||||
Proceeds from shares sold | 620,572 | |||
Payments on shares redeemed | (616,806 | ) | ||
Cash dividend paid* | (44 | ) | ||
Net Cash Received from Financing Activities | 3,722 | |||
Net (Decrease) in Cash and Foreign Currency | (74 | ) | ||
Cash and Foreign Currency: | ||||
Beginning of year | 76 | |||
End of year | $ | 2 | ||
* Reinvestment of distributions | $ | 9,845 | ||
Supplemental Disclosure of Cash Flow Information: | ||||
Interest expense paid during the year | $ | 2,937 |
20 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund
June 30, 2016
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 99.7% | ||||||||||||
ASSET-BACKED SECURITIES 3.8% | ||||||||||||
CAYMAN ISLANDS 0.3% | ||||||||||||
ACAS CLO Ltd. |
| |||||||||||
2.081% due 10/25/2025 (a) | $ | 750 | $ | 750 | ||||||||
Mariner CLO LLC |
| |||||||||||
2.221% due 07/23/2026 (a) | 700 | 700 | ||||||||||
Trainer Wortham First Republic CBO Ltd. |
| |||||||||||
1.834% due 11/06/2038 | 144 | 141 | ||||||||||
|
| |||||||||||
Total Cayman Islands | 1,591 | |||||||||||
|
| |||||||||||
UNITED STATES 3.5% | ||||||||||||
Conseco Financial Corp. |
| |||||||||||
6.280% due 09/01/2030 | 643 | 683 | ||||||||||
Credit Suisse First Boston Mortgage Securities Corp. |
| |||||||||||
1.073% due 01/25/2032 | 1,553 | 1,338 | ||||||||||
EMC Mortgage Loan Trust |
| |||||||||||
1.521% due 02/25/2041 | 39 | 38 | ||||||||||
HSI Asset Securitization Corp. Trust |
| |||||||||||
0.623% due 12/25/2036 | 5,713 | 2,335 | ||||||||||
Morgan Stanley Home Equity Loan Trust |
| |||||||||||
0.553% due 12/25/2036 | 2,138 | 1,193 | ||||||||||
Residential Asset Securities Corp. Trust |
| |||||||||||
1.338% due 01/25/2034 | 2,274 | 2,046 | ||||||||||
SMB Private Education Loan Trust |
| |||||||||||
1.142% due 02/15/2023 | 1,583 | 1,583 | ||||||||||
1.342% due 07/15/2022 | 274 | 274 | ||||||||||
Structured Asset Investment Loan Trust |
| |||||||||||
0.603% due 09/25/2036 | 7,070 | 5,821 | ||||||||||
|
| |||||||||||
Total United States | 15,311 | |||||||||||
|
| |||||||||||
Total Asset-Backed Securities (Cost $16,915) | 16,902 | |||||||||||
|
| |||||||||||
BANK LOAN OBLIGATIONS 0.6% | ||||||||||||
UNITED STATES 0.6% | ||||||||||||
Energy Future Intermediate Holding Co. LLC |
| |||||||||||
4.250% due 12/19/2016 | 1,617 | 1,616 | ||||||||||
Hilton Worldwide Finance LLC |
| |||||||||||
3.500% due 10/26/2020 | 300 | 301 | ||||||||||
iHeartCommunications, Inc. |
| |||||||||||
7.210% due 01/30/2019 | 300 | 220 | ||||||||||
Las Vegas Sands LLC |
| |||||||||||
3.250% due 12/19/2020 | 400 | 400 | ||||||||||
OGX (13.000% PIK) |
| |||||||||||
13.000% due 04/10/2049 (b) | 15 | 13 | ||||||||||
|
| |||||||||||
Total Bank Loan Obligations (Cost $2,630) | 2,550 | |||||||||||
|
| |||||||||||
SHARES | ||||||||||||
COMMON STOCKS 81.7% | ||||||||||||
AUSTRALIA 1.2% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Myer Holdings Ltd. | 447,637 | 378 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Coca-Cola Amatil Ltd. | 44,693 | 276 | ||||||||||
Metcash Ltd. (c) | 287,431 | 412 | ||||||||||
|
| |||||||||||
688 | ||||||||||||
|
| |||||||||||
ENERGY 0.1% | ||||||||||||
Woodside Petroleum Ltd. | 30,109 | 611 | ||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
AMP Ltd. | 66,202 | 258 | ||||||||||
Genworth Mortgage Insurance Australia Ltd. | 106,963 | 222 | ||||||||||
|
| |||||||||||
480 | ||||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
HEALTH CARE 0.1% | ||||||||||||
Primary Health Care Ltd. | 99,443 | $ | 296 | |||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
WorleyParsons Ltd. | 142,765 | 783 | ||||||||||
|
| |||||||||||
MATERIALS 0.4% | ||||||||||||
CSR Ltd. | 113,985 | 313 | ||||||||||
Fortescue Metals Group Ltd. | 392,244 | 1,050 | ||||||||||
Orica Ltd. | 30,157 | 280 | ||||||||||
OZ Minerals Ltd. | 82,403 | 354 | ||||||||||
|
| |||||||||||
1,997 | ||||||||||||
|
| |||||||||||
Total Australia | 5,233 | |||||||||||
|
| |||||||||||
AUSTRIA 0.4% | ||||||||||||
ENERGY 0.2% | ||||||||||||
OMV AG | 26,387 | 742 | ||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
Raiffeisen Bank International AG | 47,328 | 598 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
voestalpine AG | 11,147 | 375 | ||||||||||
|
| |||||||||||
Total Austria | 1,715 | |||||||||||
|
| |||||||||||
BELGIUM 0.1% | ||||||||||||
CONSUMER DISCRETIONARY 0.0% | ||||||||||||
D’ieteren S.A. | 4,506 | 196 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Proximus S.A. | 13,733 | 436 | ||||||||||
|
| |||||||||||
Total Belgium | 632 | |||||||||||
|
| |||||||||||
BRAZIL 0.0% | ||||||||||||
ENERGY 0.0% | ||||||||||||
OGX Petroleo e Gas S.A. SP - ADR | 6,334 | 0 | ||||||||||
|
| |||||||||||
Total Brazil | 0 | |||||||||||
|
| |||||||||||
CANADA 2.4% | ||||||||||||
ENERGY 0.5% | ||||||||||||
Baytex Energy Corp. | 57,942 | 336 | ||||||||||
Bonavista Energy Corp. | 120,109 | 307 | ||||||||||
Enerplus Corp. | 100,892 | 665 | ||||||||||
Husky Energy, Inc. | 61,350 | 749 | ||||||||||
|
| |||||||||||
2,057 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.8% | ||||||||||||
Canadian Imperial Bank of Commerce (i) | 25,303 | 1,900 | ||||||||||
Genworth MI Canada, Inc. | 8,143 | 209 | ||||||||||
IGM Financial, Inc. | 8,102 | 220 | ||||||||||
National Bank of Canada | 17,178 | 588 | ||||||||||
Power Corp. of Canada | 22,086 | 470 | ||||||||||
Power Financial Corp. | 7,263 | 167 | ||||||||||
|
| |||||||||||
3,554 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.0% | ||||||||||||
Russel Metals, Inc. | 12,329 | 218 | ||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
MATERIALS 0.8% | ||||||||||||
IAMGOLD Corp. (c) | 112,832 | $ | 467 | |||||||||
Teck Resources Ltd. ‘B’ | 220,782 | 2,907 | ||||||||||
|
| |||||||||||
3,374 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Manitoba Telecom Services, Inc. | 11,049 | 324 | ||||||||||
|
| |||||||||||
UTILITIES 0.2% | ||||||||||||
Atco Ltd. ‘I’ | 14,484 | 508 | ||||||||||
TransAlta Corp. | 111,278 | 579 | ||||||||||
|
| |||||||||||
1,087 | ||||||||||||
|
| |||||||||||
Total Canada | 10,614 | |||||||||||
|
| |||||||||||
DENMARK 0.3% | ||||||||||||
INDUSTRIALS 0.2% | ||||||||||||
AP Moeller - Maersk A/S ‘B’ | 847 | 1,106 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
TDC A/S | 91,544 | 449 | ||||||||||
|
| |||||||||||
Total Denmark | 1,555 | |||||||||||
|
| |||||||||||
FINLAND 0.3% | ||||||||||||
MATERIALS 0.1% | ||||||||||||
Stora Enso OYJ ‘R’ | 50,157 | 403 | ||||||||||
|
| |||||||||||
UTILITIES 0.2% | ||||||||||||
Fortum OYJ | 46,915 | 754 | ||||||||||
|
| |||||||||||
Total Finland | 1,157 | |||||||||||
|
| |||||||||||
FRANCE 6.0% | ||||||||||||
CONSUMER DISCRETIONARY 0.8% | ||||||||||||
Cie Generale des Etablissements Michelin | 11,044 | 1,041 | ||||||||||
Lagardere S.C.A. | 33,119 | 720 | ||||||||||
Vivendi S.A. | 93,351 | 1,747 | ||||||||||
|
| |||||||||||
3,508 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Casino Guichard Perrachon S.A. | 11,492 | 638 | ||||||||||
|
| |||||||||||
ENERGY 1.0% | ||||||||||||
Total S.A. | 92,182 | 4,421 | ||||||||||
|
| |||||||||||
FINANCIALS 0.7% | ||||||||||||
CNP Assurances | 12,644 | 186 | ||||||||||
Societe Generale S.A. | 89,805 | 2,810 | ||||||||||
|
| |||||||||||
2,996 | ||||||||||||
|
| |||||||||||
HEALTH CARE 1.2% | ||||||||||||
Sanofi | 65,314 | 5,427 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.6% | ||||||||||||
Bouygues S.A. | 23,003 | 659 | ||||||||||
Vinci S.A. | 25,652 | 1,810 | ||||||||||
|
| |||||||||||
2,469 | ||||||||||||
|
| |||||||||||
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 21 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
TELECOMMUNICATION SERVICES 0.6% | ||||||||||||
Orange S.A. | 173,866 | $ | 2,827 | |||||||||
|
| |||||||||||
UTILITIES 0.9% | ||||||||||||
Electricite de France S.A. | 75,992 | 921 | ||||||||||
Engie S.A. | 189,079 | 3,036 | ||||||||||
|
| |||||||||||
3,957 | ||||||||||||
|
| |||||||||||
Total France | 26,243 | |||||||||||
|
| |||||||||||
GERMANY 3.2% | ||||||||||||
CONSUMER DISCRETIONARY 0.3% | ||||||||||||
Bayerische Motoren Werke AG | 18,504 | 1,347 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.3% | ||||||||||||
METRO AG | 30,850 | 949 | ||||||||||
Suedzucker AG | 15,612 | 344 | ||||||||||
|
| |||||||||||
1,293 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.3% | ||||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 9,473 | 1,589 | ||||||||||
|
| |||||||||||
HEALTH CARE 0.1% | ||||||||||||
Rhoen Klinikum AG | 10,332 | 302 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.4% | ||||||||||||
Bilfinger SE | 9,934 | 291 | ||||||||||
Deutsche Lufthansa AG | 117,222 | 1,378 | ||||||||||
|
| |||||||||||
1,669 | ||||||||||||
|
| |||||||||||
MATERIALS 0.6% | ||||||||||||
BASF SE | 22,702 | 1,741 | ||||||||||
Evonik Industries AG | 14,198 | 423 | ||||||||||
K+S AG | 15,113 | 309 | ||||||||||
|
| |||||||||||
2,473 | ||||||||||||
|
| |||||||||||
UTILITIES 1.2% | ||||||||||||
E.ON SE | 266,317 | 2,689 | ||||||||||
RWE AG | 163,478 | 2,603 | ||||||||||
|
| |||||||||||
5,292 | ||||||||||||
|
| |||||||||||
Total Germany | 13,965 | |||||||||||
|
| |||||||||||
HONG KONG 0.5% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
SJM Holdings Ltd. | 480,000 | 295 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Swire Pacific Ltd. ‘A’ | 55,500 | 628 | ||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
Kerry Properties Ltd. | 92,000 | 229 | ||||||||||
Shimao Property Holdings Ltd. | 271,000 | 345 | ||||||||||
Wheelock & Co. Ltd. | 59,000 | 278 | ||||||||||
|
| |||||||||||
852 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Noble Group Ltd. | 2,548,600 | 386 | ||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Kingboard Chemical Holdings Ltd. | 112,000 | $ | 223 | |||||||||
|
| |||||||||||
Total Hong Kong | 2,384 | |||||||||||
|
| |||||||||||
ISRAEL 0.4% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Bank Leumi Le-Israel BM (c) | 173,129 | 608 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Israel Chemicals Ltd. | 92,474 | 360 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 336,980 | 668 | ||||||||||
|
| |||||||||||
Total Israel | 1,636 | |||||||||||
|
| |||||||||||
ITALY 1.7% | ||||||||||||
ENERGY 0.8% | ||||||||||||
Eni SpA | 215,328 | 3,468 | ||||||||||
|
| |||||||||||
FINANCIALS 0.2% | ||||||||||||
Poste Italiane SpA | 111,815 | 743 | ||||||||||
|
| |||||||||||
UTILITIES 0.7% | ||||||||||||
Enel SpA | 598,540 | 2,657 | ||||||||||
Snam SpA | 69,535 | 416 | ||||||||||
|
| |||||||||||
3,073 | ||||||||||||
|
| |||||||||||
Total Italy | 7,284 | |||||||||||
|
| |||||||||||
JAPAN 8.9% | ||||||||||||
CONSUMER DISCRETIONARY 1.0% | ||||||||||||
Aisin Seiki Co. Ltd. | 10,200 | 415 | ||||||||||
Benesse Holdings, Inc. | 19,000 | 446 | ||||||||||
Daihatsu Motor Co. Ltd. | 28,000 | 365 | ||||||||||
Fuji Media Holdings, Inc. | 30,200 | 340 | ||||||||||
Nikon Corp. | 41,800 | 566 | ||||||||||
Nissan Motor Co. Ltd. | 142,100 | 1,268 | ||||||||||
Onward Holdings Co. Ltd. | 35,000 | 218 | ||||||||||
Sumitomo Rubber Industries Ltd. | 22,300 | 298 | ||||||||||
Yamada Denki Co. Ltd. | 92,000 | 486 | ||||||||||
|
| |||||||||||
4,402 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Coca-Cola West Co. Ltd. | 14,200 | 402 | ||||||||||
UNY Group Holdings Co. Ltd. | 48,300 | 406 | ||||||||||
|
| |||||||||||
808 | ||||||||||||
|
| |||||||||||
ENERGY 0.3% | ||||||||||||
Idemitsu Kosan Co. Ltd. | 16,600 | 361 | ||||||||||
JX Holdings, Inc. | 204,500 | 798 | ||||||||||
|
| |||||||||||
1,159 | ||||||||||||
|
| |||||||||||
FINANCIALS 1.7% | ||||||||||||
Daito Trust Construction Co. Ltd. | 2,300 | 373 | ||||||||||
Mitsubishi UFJ Financial Group, Inc. | 547,200 | 2,453 | ||||||||||
Mizuho Financial Group, Inc. | 1,040,600 | 1,498 | ||||||||||
Nishi-Nippon City Bank Ltd. | 114,000 | 200 | ||||||||||
Resona Holdings, Inc. | 190,900 | 698 |
SHARES | MARKET VALUE (000S) | |||||||||||
Sumitomo Mitsui Financial Group, Inc. | 57,000 | $ | 1,646 | |||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 188,000 | 612 | ||||||||||
|
| |||||||||||
7,480 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.5% | ||||||||||||
Daiichi Sankyo Co. Ltd. | 38,700 | 940 | ||||||||||
Takeda Pharmaceutical Co. Ltd. | 26,100 | 1,126 | ||||||||||
|
| |||||||||||
2,066 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 1.8% | ||||||||||||
Hitachi Construction Machinery Co. Ltd. | 22,900 | 334 | ||||||||||
Hoya Corp. | 11,000 | 393 | ||||||||||
ITOCHU Corp. | 57,400 | 702 | ||||||||||
Japan Airlines Co. Ltd. | 18,700 | 602 | ||||||||||
Komatsu Ltd. | 44,200 | 768 | ||||||||||
Marubeni Corp. | 204,300 | 923 | ||||||||||
Mitsubishi Corp. | 45,600 | 803 | ||||||||||
Mitsui & Co. Ltd. | 115,300 | 1,376 | ||||||||||
Nippon Yusen KK | 316,000 | 556 | ||||||||||
Sumitomo Corp. | 101,400 | 1,022 | ||||||||||
West Japan Railway Co. | 5,700 | 361 | ||||||||||
|
| |||||||||||
7,840 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 1.8% | ||||||||||||
Canon, Inc. | 75,100 | 2,144 | ||||||||||
Fujitsu Ltd. | 353,000 | 1,298 | ||||||||||
Hitachi Ltd. | 603,000 | 2,527 | ||||||||||
Ibiden Co. Ltd. | 23,900 | 270 | ||||||||||
Nippon Electric Glass Co. Ltd. | 90,000 | 376 | ||||||||||
Ricoh Co. Ltd. | 147,000 | 1,274 | ||||||||||
|
| |||||||||||
7,889 | ||||||||||||
|
| |||||||||||
MATERIALS 0.7% | ||||||||||||
Asahi Glass Co. Ltd. | 123,000 | 667 | ||||||||||
Denka Co. Ltd. | 47,000 | 190 | ||||||||||
DIC Corp. | 13,000 | 272 | ||||||||||
Mitsubishi Chemical Holdings Corp. | 197,400 | 905 | ||||||||||
Rengo Co. Ltd. | 59,000 | 382 | ||||||||||
Showa Denko KK | 41,700 | 393 | ||||||||||
Sumitomo Metal Mining Co. Ltd. | 21,000 | 214 | ||||||||||
Ube Industries Ltd. | 128,000 | 212 | ||||||||||
|
| |||||||||||
3,235 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.8% | ||||||||||||
Nippon Telegraph & Telephone Corp. | 49,600 | 2,326 | ||||||||||
NTT DOCOMO, Inc. | 46,500 | 1,254 | ||||||||||
|
| |||||||||||
3,580 | ||||||||||||
|
| |||||||||||
UTILITIES 0.1% | ||||||||||||
Chugoku Electric Power Co., Inc. | 26,900 | 342 | ||||||||||
Hokuriku Electric Power Co. | 26,000 | 322 | ||||||||||
|
| |||||||||||
664 | ||||||||||||
|
| |||||||||||
Total Japan | 39,123 | |||||||||||
|
| |||||||||||
LUXEMBOURG 0.4% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
RTL Group S.A. | 2,588 | 212 | ||||||||||
|
|
22 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
MATERIALS 0.3% | ||||||||||||
ArcelorMittal | 301,666 | $ | 1,375 | |||||||||
|
| |||||||||||
Total Luxembourg | 1,587 | |||||||||||
|
| |||||||||||
MEXICO 0.0% | ||||||||||||
CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Desarrolladora Homex S.A.B. de C.V. (c) | 41,996 | 4 | ||||||||||
|
| |||||||||||
Total Mexico | 4 | |||||||||||
|
| |||||||||||
NETHERLANDS 3.1% | ||||||||||||
CONSUMER STAPLES 0.4% | ||||||||||||
Koninklijke Ahold NV | 73,974 | 1,634 | ||||||||||
|
| |||||||||||
ENERGY 2.3% | ||||||||||||
Fugro NV | 18,286 | 322 | ||||||||||
Royal Dutch Shell PLC ‘A’ | 354,437 | 9,722 | ||||||||||
|
| |||||||||||
10,044 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
Koninklijke Philips NV | 45,597 | 1,132 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Koninklijke KPN NV | 175,721 | 626 | ||||||||||
VimpelCom Ltd. SP - ADR | 62,204 | 242 | ||||||||||
|
| |||||||||||
868 | ||||||||||||
|
| |||||||||||
Total Netherlands | 13,678 | |||||||||||
|
| |||||||||||
NEW ZEALAND 0.1% | ||||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Spark New Zealand Ltd. | 208,567 | 530 | ||||||||||
|
| |||||||||||
Total New Zealand | 530 | |||||||||||
|
| |||||||||||
NORWAY 0.8% | ||||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Marine Harvest ASA | 28,713 | 484 | ||||||||||
|
| |||||||||||
ENERGY 0.6% | ||||||||||||
Statoil ASA | 171,487 | 2,963 | ||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
Gjensidige Forsikring ASA | 13,681 | 228 | ||||||||||
|
| |||||||||||
Total Norway | 3,675 | |||||||||||
|
| |||||||||||
PORTUGAL 0.1% | ||||||||||||
UTILITIES 0.1% | ||||||||||||
EDP - Energias de Portugal S.A. | 163,675 | 501 | ||||||||||
|
| |||||||||||
Total Portugal | 501 | |||||||||||
|
| |||||||||||
SINGAPORE 0.1% | ||||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Keppel Corp. Ltd. | 116,900 | 482 | ||||||||||
|
| |||||||||||
Total Singapore | 482 | |||||||||||
|
| |||||||||||
SPAIN 2.5% | ||||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Distribuidora Internacional de Alimentacion S.A. | 53,878 | 315 | ||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
FINANCIALS 1.2% | ||||||||||||
Banco Santander S.A. | 1,271,866 | $ | 4,936 | |||||||||
Mapfre S.A. | 118,386 | 260 | ||||||||||
|
| |||||||||||
5,196 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.3% | ||||||||||||
Abertis Infraestructuras S.A. | 20,280 | 299 | ||||||||||
ACS Actividades de Construccion y Servicios S.A. | 25,367 | 696 | ||||||||||
Obrascon Huarte Lain S.A. | 54,752 | 193 | ||||||||||
|
| |||||||||||
1,188 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.5% | ||||||||||||
Telefonica S.A. | 260,631 | 2,474 | ||||||||||
|
| |||||||||||
UTILITIES 0.4% | ||||||||||||
Endesa S.A. | 89,380 | 1,793 | ||||||||||
|
| |||||||||||
Total Spain | 10,966 | |||||||||||
|
| |||||||||||
SWEDEN 0.6% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Ratos AB ‘B’ | 48,162 | 235 | ||||||||||
|
| |||||||||||
HEALTH CARE 0.1% | ||||||||||||
Getinge AB ‘B’ | 11,877 | 245 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Skanska AB ‘B’ | 12,285 | 257 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.3% | ||||||||||||
Tele2 AB ‘B’ | 108,352 | 952 | ||||||||||
TeliaSonera AB | 159,680 | 756 | ||||||||||
|
| |||||||||||
1,708 | ||||||||||||
|
| |||||||||||
Total Sweden | 2,445 | |||||||||||
|
| |||||||||||
SWITZERLAND 2.0% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Garmin Ltd. | 5,653 | 240 | ||||||||||
|
| |||||||||||
FINANCIALS 1.3% | ||||||||||||
Baloise Holding AG | 3,256 | 362 | ||||||||||
Swiss Life Holding AG | 4,284 | 990 | ||||||||||
Swiss Re AG | 21,651 | 1,891 | ||||||||||
Zurich Insurance Group AG | 9,984 | 2,470 | ||||||||||
|
| |||||||||||
5,713 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.5% | ||||||||||||
Roche Holding AG | 8,924 | 2,355 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Swisscom AG | 1,125 | 559 | ||||||||||
|
| |||||||||||
Total Switzerland | 8,867 | |||||||||||
|
| |||||||||||
UNITED KINGDOM 8.0% | ||||||||||||
CONSUMER DISCRETIONARY 0.4% | ||||||||||||
Home Retail Group PLC | 234,409 | 480 | ||||||||||
Kingfisher PLC | 202,749 | 871 | ||||||||||
Marks & Spencer Group PLC | 135,096 | 578 | ||||||||||
|
| |||||||||||
1,929 | ||||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
CONSUMER STAPLES 0.9% | ||||||||||||
British American Tobacco PLC | 40,130 | $ | 2,602 | |||||||||
J Sainsbury PLC | 195,850 | 610 | ||||||||||
Tate & Lyle PLC | 29,478 | 264 | ||||||||||
WM Morrison Supermarkets PLC | 213,335 | 535 | ||||||||||
|
| |||||||||||
4,011 | ||||||||||||
|
| |||||||||||
ENERGY 1.4% | ||||||||||||
BP PLC | 1,072,875 | 6,280 | ||||||||||
|
| |||||||||||
FINANCIALS 2.8% | ||||||||||||
Barclays PLC | 1,477,262 | 2,748 | ||||||||||
HSBC Holdings PLC | 1,169,602 | 7,246 | ||||||||||
Standard Chartered PLC | 271,746 | 2,062 | ||||||||||
|
| |||||||||||
12,056 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.8% | ||||||||||||
GlaxoSmithKline PLC | 152,197 | 3,268 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.3% | ||||||||||||
BAE Systems PLC | 134,084 | 939 | ||||||||||
Firstgroup PLC (c) | 163,402 | 219 | ||||||||||
Stagecoach Group PLC | 55,414 | 171 | ||||||||||
|
| |||||||||||
1,329 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.5% | ||||||||||||
Vodafone Group PLC | 748,958 | 2,284 | ||||||||||
|
| |||||||||||
UTILITIES 0.9% | ||||||||||||
Centrica PLC | 410,739 | 1,242 | ||||||||||
Drax Group PLC | 79,697 | 346 | ||||||||||
National Grid PLC | 136,197 | 2,003 | ||||||||||
Severn Trent PLC | 14,348 | 468 | ||||||||||
|
| |||||||||||
4,059 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 35,216 | |||||||||||
|
| |||||||||||
UNITED STATES 38.6% | ||||||||||||
CONSUMER DISCRETIONARY 2.3% | ||||||||||||
Abercrombie & Fitch Co. ‘A’ | 32,667 | 582 | ||||||||||
Coach, Inc. | 6,392 | 260 | ||||||||||
Dillard’s, Inc. ‘A’ | 8,818 | 534 | ||||||||||
Ford Motor Co. | 76,866 | 966 | ||||||||||
Gap, Inc. | 57,047 | 1,211 | ||||||||||
Goodyear Tire & Rubber Co. | 7,916 | 203 | ||||||||||
Guess?, Inc. | 21,760 | 327 | ||||||||||
Kohl’s Corp. | 42,739 | 1,621 | ||||||||||
Macy’s, Inc. | 20,105 | �� | 676 | |||||||||
Mattel, Inc. | 10,388 | 325 | ||||||||||
Regal Entertainment Group ‘A’ | 9,930 | 219 | ||||||||||
Rent-A-Center, Inc. | 22,032 | 271 | ||||||||||
Time, Inc. | 22,232 | 366 | ||||||||||
Tupperware Brands Corp. | 5,635 | 317 | ||||||||||
Viacom, Inc. ‘B’ | 38,242 | 1,586 | ||||||||||
Weight Watchers International, Inc. (c) | 30,989 | 360 | ||||||||||
Wynn Resorts Ltd. | 4,565 | 414 | ||||||||||
|
| |||||||||||
10,238 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 3.2% | ||||||||||||
Altria Group, Inc. | 30,484 | 2,102 | ||||||||||
Avon Products, Inc. | 224,208 | 847 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 23 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
Bunge Ltd. | 4,881 | $ | 289 | |||||||||
Herbalife Ltd. (c) | 13,093 | 766 | ||||||||||
Kimberly-Clark Corp. | 4,195 | 577 | ||||||||||
Philip Morris International, Inc. | 48,357 | 4,919 | ||||||||||
Wal-Mart Stores, Inc. | 62,163 | 4,539 | ||||||||||
|
| |||||||||||
14,039 | ||||||||||||
|
| |||||||||||
ENERGY 8.4% | ||||||||||||
Apache Corp. | 21,101 | 1,175 | ||||||||||
Chesapeake Energy Corp. (c) | 436,669 | 1,869 | ||||||||||
Chevron Corp. | 76,595 | 8,029 | ||||||||||
ConocoPhillips | 78,556 | 3,425 | ||||||||||
Denbury Resources, Inc. | 90,721 | 326 | ||||||||||
Diamond Offshore Drilling, Inc. | 15,006 | 365 | ||||||||||
Exxon Mobil Corp. | 128,241 | 12,021 | ||||||||||
Hess Corp. | 21,739 | 1,306 | ||||||||||
HollyFrontier Corp. | 21,865 | 520 | ||||||||||
Marathon Oil Corp. | 92,599 | 1,390 | ||||||||||
Marathon Petroleum Corp. | 32,109 | 1,219 | ||||||||||
Murphy Oil Corp. | 29,768 | 945 | ||||||||||
National Oilwell Varco, Inc. | 30,539 | 1,028 | ||||||||||
Occidental Petroleum Corp. | 22,261 | 1,682 | ||||||||||
Spectra Energy Corp. | 11,164 | 409 | ||||||||||
Valero Energy Corp. | 20,482 | 1,045 | ||||||||||
|
| |||||||||||
36,754 | ||||||||||||
|
| |||||||||||
FINANCIALS 4.0% | ||||||||||||
Aflac, Inc. | 9,319 | 672 | ||||||||||
American International Group, Inc. | 66,829 | 3,535 | ||||||||||
American National Insurance Co. | 1,198 | 136 | ||||||||||
Assurant, Inc. | 8,097 | 699 | ||||||||||
Booz Allen Hamilton Holding Corp. | 18,857 | 559 | ||||||||||
Capital One Financial Corp. | 13,738 | 872 | ||||||||||
Discover Financial Services | 12,465 | 668 | ||||||||||
Fifth Third Bancorp | 11,470 | 202 | ||||||||||
JPMorgan Chase & Co. | 68,454 | 4,254 | ||||||||||
Loews Corp. | 13,419 | 551 | ||||||||||
Navient Corp. | 61,541 | 735 | ||||||||||
People’s United Financial, Inc. | 16,943 | 248 | ||||||||||
Progressive Corp. | 11,658 | 391 | ||||||||||
Reinsurance Group of America, Inc. | 2,407 | 233 | ||||||||||
Santander Consumer USA Holdings, Inc. (c) | 25,136 | 260 | ||||||||||
SLM Corp. (c) | 79,888 | 494 | ||||||||||
Travelers Cos., Inc. | 21,330 | 2,539 | ||||||||||
Western Union Co. | 29,418 | 564 | ||||||||||
|
| |||||||||||
17,612 | ||||||||||||
|
| |||||||||||
HEALTH CARE 5.2% | ||||||||||||
Anthem, Inc. | 25,021 | 3,286 | ||||||||||
Baxter International, Inc. | 14,486 | 655 | ||||||||||
HCA Holdings, Inc. (c) | 29,850 | 2,299 | ||||||||||
Johnson & Johnson | 46,533 | 5,644 | ||||||||||
Pfizer, Inc. | 285,616 | 10,057 | ||||||||||
Quest Diagnostics, Inc. | 8,444 | 687 | ||||||||||
|
| |||||||||||
22,628 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 1.7% | ||||||||||||
Caterpillar, Inc. | 20,921 | 1,586 | ||||||||||
Deere & Co. | 19,270 | 1,562 | ||||||||||
Emerson Electric Co. | 25,150 | 1,312 | ||||||||||
Joy Global, Inc. | 22,500 | 476 |
SHARES | MARKET VALUE (000S) | |||||||||||
L-3 Communications Holdings, Inc. | 5,496 | $ | 806 | |||||||||
Norfolk Southern Corp. | 9,732 | 828 | ||||||||||
RR Donnelley & Sons Co. | 13,507 | 228 | ||||||||||
Waste Management, Inc. | 10,861 | 720 | ||||||||||
|
| |||||||||||
7,518 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 4.5% | ||||||||||||
CA, Inc. | 18,589 | 610 | ||||||||||
Corning, Inc. | 47,966 | 983 | ||||||||||
Dun & Bradstreet Corp. | 1,864 | 227 | ||||||||||
Intel Corp. | 196,607 | 6,449 | ||||||||||
International Business Machines Corp. | 53,224 | 8,078 | ||||||||||
Jabil Circuit, Inc. | 11,005 | 203 | ||||||||||
Lexmark International, Inc. ‘A’ | 9,211 | 348 | ||||||||||
Pitney Bowes, Inc. | 25,371 | 452 | ||||||||||
Seagate Technology PLC | 62,894 | 1,532 | ||||||||||
Xerox Corp. | 97,593 | 926 | ||||||||||
|
| |||||||||||
19,808 | ||||||||||||
|
| |||||||||||
MATERIALS 1.7% | ||||||||||||
Armstrong World Industries, Inc. (c) | 13,456 | 527 | ||||||||||
CF Industries Holdings, Inc. | 19,675 | 474 | ||||||||||
Domtar Corp. | 18,200 | 637 | ||||||||||
Freeport-McMoRan, Inc. | 205,756 | 2,292 | ||||||||||
LyondellBasell Industries NV ‘A’ | 14,675 | 1,092 | ||||||||||
Mosaic Co. | 46,607 | 1,220 | ||||||||||
Newmont Mining Corp. | 29,254 | 1,145 | ||||||||||
Reliance Steel & Aluminum Co. | 3,285 | 253 | ||||||||||
|
| |||||||||||
7,640 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 4.2% | ||||||||||||
AT&T, Inc. | 237,736 | 10,273 | ||||||||||
CenturyLink, Inc. | 65,098 | 1,888 | ||||||||||
Frontier Communications Corp. | 114,962 | 568 | ||||||||||
Telephone & Data Systems, Inc. | 6,846 | 203 | ||||||||||
Verizon Communications, Inc. | 101,970 | 5,694 | ||||||||||
|
| |||||||||||
18,626 | ||||||||||||
|
| |||||||||||
UTILITIES 3.4% | ||||||||||||
Ameren Corp. | 18,140 | 972 | ||||||||||
American Electric Power Co., Inc. | 18,257 | 1,280 | ||||||||||
CenterPoint Energy, Inc. | 29,038 | 697 | ||||||||||
Consolidated Edison, Inc. | 20,531 | 1,651 | ||||||||||
Entergy Corp. | 20,152 | 1,639 | ||||||||||
Exelon Corp. | 37,617 | 1,368 | ||||||||||
FirstEnergy Corp. | 50,806 | 1,774 | ||||||||||
Great Plains Energy, Inc. | 15,061 | 458 | ||||||||||
Pinnacle West Capital Corp. | 7,423 | 602 | ||||||||||
PPL Corp. | 24,777 | 935 | ||||||||||
Public Service Enterprise Group, Inc. | 20,490 | 955 | ||||||||||
Southern Co. | 26,660 | 1,430 | ||||||||||
Vectren Corp. | 5,838 | 307 | ||||||||||
Xcel Energy, Inc. | 18,620 | 834 | ||||||||||
|
| |||||||||||
14,902 | ||||||||||||
|
| |||||||||||
Total United States | 169,765 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $362,242) |
| 359,257 | ||||||||||
|
| |||||||||||
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
CORPORATE BONDS & NOTES 5.3% | ||||||||||||
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 0.3% | ||||||||||||
UTILITIES 0.3% | ||||||||||||
Petrobras Global Finance BV |
| |||||||||||
5.375% due 01/27/2021 | 681 | 630 | ||||||||||
2.768% due 01/15/2019 | 391 | 354 | ||||||||||
4.375% due 05/20/2023 | 45 | 37 | ||||||||||
4.875% due 03/17/2020 | 243 | 228 | ||||||||||
3.536% due 03/17/2020 | 31 | 27 | ||||||||||
4.250% due 10/02/2023 | EUR | 100 | 90 | |||||||||
6.250% due 12/14/2026 | GBP | 100 | 107 | |||||||||
6.850% due 06/05/2115 | $ | 88 | 67 | |||||||||
6.875% due 01/20/2040 | 2 | 2 | ||||||||||
|
| |||||||||||
1,542 | ||||||||||||
|
| |||||||||||
Total Brazil | 1,542 | |||||||||||
|
| |||||||||||
CAYMAN ISLANDS 0.0% | ||||||||||||
UTILITIES 0.0% | ||||||||||||
Odebrecht Drilling Norbe Ltd. |
| |||||||||||
6.350% due 06/30/2022 | 150 | 43 | ||||||||||
|
| |||||||||||
Total Cayman Islands | 43 | |||||||||||
|
| |||||||||||
DENMARK 0.7% | ||||||||||||
BANKING & FINANCE 0.7% | ||||||||||||
Nykredit Realkredit A/S | ||||||||||||
3.000% due 10/01/2047 | DKK | 10,300 | 1,580 | |||||||||
Realkredit Danmark A/S | ||||||||||||
2.000% due 04/01/2017 | 8,800 | 1,336 | ||||||||||
|
| |||||||||||
2,916 | ||||||||||||
|
| |||||||||||
Total Denmark | 2,916 | |||||||||||
|
| |||||||||||
FRANCE 0.4% | ||||||||||||
BANKING & FINANCE 0.1% | ||||||||||||
BPCE S.A. | ||||||||||||
12.500% due 09/30/2019 (g) | $ | 100 | 124 | |||||||||
12.500% due 09/30/2019 (g) | EUR | 300 | 440 | |||||||||
|
| |||||||||||
564 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.3% | ||||||||||||
Numericable SFR S.A. | ||||||||||||
7.375% due 05/01/2026 | $ | 1,400 | 1,386 | |||||||||
|
| |||||||||||
Total France | 1,950 | |||||||||||
|
| |||||||||||
IRELAND 0.1% | ||||||||||||
BANKING & FINANCE 0.0% | ||||||||||||
Vnesheconombank Via VEB Finance PLC |
| |||||||||||
6.902% due 07/09/2020 | 100 | 109 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Russian Railways via RZD Capital PLC |
| |||||||||||
7.487% due 03/25/2031 | GBP | 300 | 436 | |||||||||
|
| |||||||||||
Total Ireland | 545 | |||||||||||
|
| |||||||||||
24 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
LUXEMBOURG 0.5% | ||||||||||||
BANKING & FINANCE 0.2% | ||||||||||||
Sberbank of Russia Via SB Capital S.A. |
| |||||||||||
3.352% due 11/15/2019 | EUR | 200 | $ | 234 | ||||||||
6.125% due 02/07/2022 | $ | 400 | 443 | |||||||||
|
| |||||||||||
677 | ||||||||||||
|
| |||||||||||
UTILITIES 0.3% | ||||||||||||
Gazprom Neft OAO Via GPN Capital S.A. |
| |||||||||||
4.375% due 09/19/2022 | 300 | 297 | ||||||||||
6.000% due 11/27/2023 | 300 | 322 | ||||||||||
Gazprom OAO Via Gaz Capital S.A. |
| |||||||||||
9.250% due 04/23/2019 | 600 | 693 | ||||||||||
5.999% due 01/23/2021 | 30 | 33 | ||||||||||
6.605% due 02/13/2018 | EUR | 50 | 60 | |||||||||
|
| |||||||||||
1,405 | ||||||||||||
|
| |||||||||||
Total Luxembourg | 2,082 | |||||||||||
|
| |||||||||||
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 | ||||||||||
|
| |||||||||||
0 | ||||||||||||
|
| |||||||||||
Total Mexico | 0 | |||||||||||
|
| |||||||||||
NETHERLANDS 0.3% | ||||||||||||
BANKING & FINANCE 0.3% | ||||||||||||
Citycon Treasury BV |
| |||||||||||
2.500% due 10/01/2024 | EUR | 800 | 965 | |||||||||
Cooperatieve Rabobank UA |
| |||||||||||
6.625% due 06/29/2021 (g) | 200 | 223 | ||||||||||
|
| |||||||||||
1,188 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.0% | ||||||||||||
Schaeffler Holding Finance BV (6.875% Cash or 6.875% PIK) |
| |||||||||||
6.875% due 08/15/2018 (b) | 38 | 42 | ||||||||||
|
| |||||||||||
Total Netherlands | 1,230 | |||||||||||
|
| |||||||||||
UNITED KINGDOM 1.4% | ||||||||||||
BANKING & FINANCE 1.2% | ||||||||||||
Barclays Bank PLC |
| |||||||||||
14.000% due 06/15/2019 (g) | GBP | 300 | 485 | |||||||||
Barclays PLC |
| |||||||||||
7.875% due 09/15/2022 (g) | 300 | 361 | ||||||||||
Co-operative Group Holdings Ltd. |
| |||||||||||
6.875% due 07/08/2020 | 200 | 284 | ||||||||||
HSBC Holdings PLC |
| |||||||||||
3.600% due 05/25/2023 | $ | 200 | 205 | |||||||||
3.900% due 05/25/2026 | 284 | 294 | ||||||||||
Lloyds Banking Group PLC |
| |||||||||||
7.875% due 06/27/2029 (g) | GBP | 400 | 505 | |||||||||
7.625% due 06/27/2023 (g) | 200 | 252 | ||||||||||
Mitchells & Butlers Finance PLC |
| |||||||||||
1.022% due 12/15/2030 | 154 | 173 | ||||||||||
Royal Bank of Scotland Group PLC |
| |||||||||||
7.500% due 08/10/2020 (g) | $ | 360 | 332 | |||||||||
8.000% due 08/10/2025 (g) | 750 | 701 | ||||||||||
2.500% due 03/22/2023 | EUR | 350 | 385 | |||||||||
Royal Bank of Scotland PLC |
| |||||||||||
9.500% due 03/16/2022 | $ | 200 | 208 | |||||||||
Tesco Property Finance PLC |
| |||||||||||
5.744% due 04/13/2040 | GBP | 481 | 609 | |||||||||
6.052% due 10/13/2039 | 445 | 592 |
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
TIG FinCo PLC |
| |||||||||||
8.500% due 03/02/2020 | GBP | 60 | $ | 81 | ||||||||
|
| |||||||||||
5,467 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
Enterprise Inns PLC |
| |||||||||||
6.875% due 02/15/2021 | 200 | 280 | ||||||||||
Marstons Issuer PLC |
| |||||||||||
5.641% due 07/15/2035 | 200 | 243 | ||||||||||
Spirit Issuer PLC |
| |||||||||||
6.582% due 12/28/2027 | 200 | 276 | ||||||||||
3.253% due 12/28/2031 | 22 | 27 | ||||||||||
Unique Pub Finance Co. PLC |
| |||||||||||
5.659% due 06/30/2027 | 49 | 65 | ||||||||||
|
| |||||||||||
891 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 6,358 | |||||||||||
|
| |||||||||||
UNITED STATES 1.5% | ||||||||||||
BANKING & FINANCE 1.0% | ||||||||||||
Blackstone CQP Holdco LP |
| |||||||||||
9.296% due 03/19/2019 | $ | 314 | 314 | |||||||||
Cantor Fitzgerald LP |
| |||||||||||
7.875% due 10/15/2019 | 280 | 315 | ||||||||||
CIT Group, Inc. |
| |||||||||||
3.875% due 02/19/2019 | 378 | 381 | ||||||||||
International Lease Finance Corp. |
| |||||||||||
6.250% due 05/15/2019 | 1,110 | 1,198 | ||||||||||
7.125% due 09/01/2018 | 325 | 358 | ||||||||||
Navient Corp. |
| |||||||||||
8.000% due 03/25/2020 | 500 | 512 | ||||||||||
Springleaf Finance Corp. |
| |||||||||||
8.250% due 12/15/2020 | 980 | 985 | ||||||||||
6.900% due 12/15/2017 | 200 | 208 | ||||||||||
|
| |||||||||||
4,271 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.5% | ||||||||||||
Anheuser-Busch InBev Finance, Inc. |
| |||||||||||
2.650% due 02/01/2021 | 16 | 17 | ||||||||||
3.300% due 02/01/2023 | 16 | 17 | ||||||||||
4.700% due 02/01/2036 | 20 | 23 | ||||||||||
4.900% due 02/01/2046 | 20 | 23 | ||||||||||
3.650% due 02/01/2026 | 15 | 16 | ||||||||||
Caesars Entertainment Operating Co., Inc. |
| |||||||||||
8.500% due 02/15/2020 (h) | 291 | 269 | ||||||||||
9.000% due 02/15/2020 (h) | 244 | 226 | ||||||||||
11.250% due 06/01/2017 (h) | 309 | 287 | ||||||||||
CVS Pass-Through Trust |
| |||||||||||
8.353% due 07/10/2031 | 84 | 111 | ||||||||||
Diamond 1 Finance Corp. |
| |||||||||||
5.450% due 06/15/2023 | 20 | 21 | ||||||||||
Express Scripts Holding Co. |
| |||||||||||
3.400% due 03/01/2027 (a) | 22 | 22 | ||||||||||
4.800% due 07/15/2046 (a) | 18 | 18 | ||||||||||
3.000% due 07/15/2023 (a) | 12 | 12 | ||||||||||
iHeartCommunications, Inc. |
| |||||||||||
9.000% due 03/01/2021 | 3 | 2 | ||||||||||
9.000% due 12/15/2019 | 54 | 41 | ||||||||||
9.000% due 09/15/2022 | 677 | 472 | ||||||||||
Oracle Corp. |
| |||||||||||
3.850% due 07/15/2036 (a) | 16 | 16 | ||||||||||
4.000% due 07/15/2046 (a) | 24 | 24 | ||||||||||
1.900% due 09/15/2021 (a) | 49 | 49 | ||||||||||
2.400% due 09/15/2023 (a) | 33 | 33 | ||||||||||
2.650% due 07/15/2026 (a) | 41 | 41 | ||||||||||
Sabine Pass LNG LP |
| |||||||||||
7.500% due 11/30/2016 | 385 | 393 | ||||||||||
|
| |||||||||||
2,133 | ||||||||||||
|
| |||||||||||
UTILITIES 0.0% | ||||||||||||
AT&T, Inc. |
| |||||||||||
2.800% due 02/17/2021 | 8 | 8 |
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
3.600% due 02/17/2023 | $ | 8 | $ | 9 | ||||||||
4.125% due 02/17/2026 | 14 | 15 | ||||||||||
5.650% due 02/15/2047 | 8 | 9 | ||||||||||
|
| |||||||||||
41 | ||||||||||||
|
| |||||||||||
Total United States | 6,445 | |||||||||||
|
| |||||||||||
VENEZUELA 0.1% | ||||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Petroleos de Venezuela S.A. |
| |||||||||||
8.500% due 11/02/2017 | 400 | 281 | ||||||||||
|
| |||||||||||
Total Venezuela | 281 | |||||||||||
|
| |||||||||||
Total Corporate Bonds & Notes (Cost $24,428) | 23,392 | |||||||||||
|
| |||||||||||
NON-AGENCY MORTGAGE-BACKED SECURITIES 3.0% | ||||||||||||
UNITED KINGDOM 0.4% | ||||||||||||
Eurosail PLC |
| |||||||||||
1.524% due 06/13/2045 | GBP | 630 | 713 | |||||||||
Grifonas Finance PLC |
| |||||||||||
0.152% due 08/28/2039 | EUR | 467 | 373 | |||||||||
Juno Eclipse Ltd. |
| |||||||||||
0.000% due 11/20/2022 (c) | 454 | 497 | ||||||||||
RMAC PLC |
| |||||||||||
0.814% due 06/12/2036 | GBP | 339 | 399 | |||||||||
|
| |||||||||||
Total United Kingdom | 1,982 | |||||||||||
|
| |||||||||||
UNITED STATES 2.6% | ||||||||||||
American Home Mortgage Assets Trust |
| |||||||||||
6.250% due 06/25/2037 | $ | 140 | 108 | |||||||||
Banc of America Alternative Loan Trust |
| |||||||||||
6.000% due 04/25/2036 ^ | 70 | 62 | ||||||||||
6.000% due 06/25/2046 ^ | 39 | 32 | ||||||||||
6.000% due 07/25/2046 ^ | 148 | 129 | ||||||||||
Banc of America Funding Trust |
| |||||||||||
3.023% due 05/20/2036 ^ | 33 | 30 | ||||||||||
Banc of America Mortgage Trust |
| |||||||||||
4.881% due 11/20/2046 ^ | 15 | 12 | ||||||||||
6.000% due 10/25/2036 ^ | 39 | 33 | ||||||||||
Bear Stearns Mortgage Funding Trust |
| |||||||||||
7.000% due 08/25/2036 | 185 | 176 | ||||||||||
Chase Mortgage Finance Trust |
| |||||||||||
2.742% due 09/25/2036 ^ | 86 | 75 | ||||||||||
Countrywide Alternative Loan Resecuritization Trust |
| |||||||||||
6.000% due 05/25/2036 ^ | 40 | 30 | ||||||||||
Countrywide Alternative Loan Trust |
| |||||||||||
1.153% due 10/25/2037 ^ | 6,620 | 2,072 | ||||||||||
6.000% due 06/25/2036 ^ | 210 | 168 | ||||||||||
6.000% due 02/25/2037 ^ | 192 | 130 | ||||||||||
6.000% due 06/25/2037 ^ | 639 | 475 | ||||||||||
6.250% due 12/25/2036 ^ | 39 | 28 | ||||||||||
Countrywide Home Loan Mortgage Pass-Through Trust |
| |||||||||||
0.953% due 07/25/2037 ^ | 32 | 19 | ||||||||||
2.760% due 09/25/2037 ^ | 115 | 96 | ||||||||||
Credit Suisse First Boston Mortgage Securities Corp. |
| |||||||||||
6.000% due 11/25/2035 ^ | 24 | 15 | ||||||||||
6.000% due 01/25/2036 | 60 | 45 | ||||||||||
Credit Suisse Mortgage Capital Certificates |
| |||||||||||
2.356% due 12/29/2037 | 202 | 118 | ||||||||||
Credit Suisse Mortgage Capital Mortgage-Backed Trust |
| |||||||||||
5.000% due 03/25/2037 ^ | 3 | 3 | ||||||||||
6.750% due 08/25/2036 ^ | 28 | 22 | ||||||||||
First Horizon Alternative Mortgage Securities Trust |
| |||||||||||
2.809% due 06/25/2036 | 670 | 547 | ||||||||||
HSI Asset Loan Obligation Trust |
| |||||||||||
6.000% due 06/25/2037 ^ | 18 | 15 | ||||||||||
IndyMac Mortgage Loan Trust |
| |||||||||||
2.590% due 06/25/2037 | 229 | 126 | ||||||||||
JPMorgan Alternative Loan Trust |
| |||||||||||
1.829% due 05/26/2037 | 126 | 113 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 25 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
JPMorgan Mortgage Trust |
| |||||||||||
6.500% due 07/25/2036 ^ | $ | 110 | $ | 81 | ||||||||
Merrill Lynch Mortgage Investors Trust |
| |||||||||||
2.821% due 03/25/2036 ^ | 21 | 14 | ||||||||||
Residential Accredit Loans, Inc. Trust |
| |||||||||||
0.853% due 10/25/2045 | 160 | 114 | ||||||||||
5.500% due 03/25/2037 | 742 | 573 | ||||||||||
6.250% due 03/25/2037 ^ | 58 | 47 | ||||||||||
Residential Funding Mortgage Securities, Inc. Trust |
| |||||||||||
6.000% due 10/25/2036 ^ | 15 | 14 | ||||||||||
Structured Adjustable Rate Mortgage Loan Trust |
| |||||||||||
2.872% due 10/25/2036 ^ | 3,601 | 2,656 | ||||||||||
Wells Fargo Alternative Loan Trust |
| |||||||||||
3.083% due 07/25/2037 ^ | 2,241 | 1,901 | ||||||||||
Wells Fargo Commercial Mortgage Trust |
| |||||||||||
3.412% due 09/15/2058 | 1,156 | 1,238 | ||||||||||
|
| |||||||||||
Total United States | 11,317 | |||||||||||
|
| |||||||||||
Total Non-Agency Mortgage-Backed Securities (Cost $14,889) | 13,299 | |||||||||||
|
| |||||||||||
MUNICIPAL BONDS & NOTES 0.2% | ||||||||||||
ILLINOIS 0.0% | ||||||||||||
Illinois State General Obligation Bonds, (BABs), Series 2010 |
| |||||||||||
6.630% due 02/01/2035 | 15 | 16 | ||||||||||
Illinois State General Obligation Bonds, Series 2003 |
| |||||||||||
5.100% due 06/01/2033 | 120 | 114 | ||||||||||
|
| |||||||||||
Total Illinois | 130 | |||||||||||
|
| |||||||||||
MICHIGAN 0.0% | ||||||||||||
Michigan Tobacco Settlement Finance Authority Revenue Bonds, Series 2006 |
| |||||||||||
7.309% due 06/01/2034 | 220 | 214 | ||||||||||
|
| |||||||||||
Total Michigan | 214 | |||||||||||
|
| |||||||||||
VIRGINIA 0.1% | ||||||||||||
Tobacco Settlement Financing Corp., Virginia Revenue Bonds, Series 2007 |
| |||||||||||
6.706% due 06/01/2046 | 385 | 325 | ||||||||||
|
| |||||||||||
Total Virginia | 325 | |||||||||||
|
| |||||||||||
WEST VIRGINIA 0.1% | ||||||||||||
Tobacco Settlement Finance Authority, West Virginia Revenue Bonds, Series 2007 |
| |||||||||||
7.467% due 06/01/2047 | 365 | 348 | ||||||||||
|
| |||||||||||
Total West Virginia | 348 | |||||||||||
|
| |||||||||||
Total Municipal Bonds & Notes (Cost $916) | 1,017 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
PREFERRED STOCKS 0.2% | ||||||||||||
GERMANY 0.2% | ||||||||||||
INDUSTRIALS 0.2% | ||||||||||||
Volkswagen AG | 7,658 | $ | 928 | |||||||||
|
| |||||||||||
Total Preferred Stocks (Cost $1,075) | 928 | |||||||||||
|
| |||||||||||
REAL ESTATE INVESTMENT TRUSTS 0.5% | ||||||||||||
CANADA 0.1% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Dream Office Real Estate Investment Trust | 19,566 | 282 | ||||||||||
|
| |||||||||||
Total Canada | 282 | |||||||||||
|
| |||||||||||
UNITED STATES 0.4% | ||||||||||||
FINANCIALS 0.4% | ||||||||||||
Annaly Capital Management, Inc. | 67,491 | 747 | ||||||||||
Chimera Investment Corp. | 13,818 | 217 | ||||||||||
Corrections Corp. of America | 7,362 | 258 | ||||||||||
Hospitality Properties Trust | 8,649 | 249 | ||||||||||
Iron Mountain, Inc. | 12,104 | 482 | ||||||||||
|
| |||||||||||
1,953 | ||||||||||||
|
| |||||||||||
Total United States | 1,953 | |||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts | 2,235 | |||||||||||
|
| |||||||||||
RIGHTS 0.0% | ||||||||||||
HONG KONG 0.0% | ||||||||||||
INDUSTRIALS 0.0% | ||||||||||||
Noble Group Ltd. | 2,548,600 | 170 | ||||||||||
|
| |||||||||||
Total Hong Kong | 170 | |||||||||||
|
| |||||||||||
SPAIN 0.0% | ||||||||||||
INDUSTRIALS 0.0% | ||||||||||||
ACS Actividades de Construccion y Servicios S.A. | 25,367 | 18 | ||||||||||
|
| |||||||||||
Total Spain | 18 | |||||||||||
|
| |||||||||||
Total Rights (Cost $124) | 188 | |||||||||||
|
| |||||||||||
PRINCIPAL AMOUNT (000S) | ||||||||||||
SOVEREIGN ISSUES 0.3% | ||||||||||||
BRAZIL 0.1% | ||||||||||||
Brazil Notas do Tesouro Nacional Bond |
| |||||||||||
6.000% due 05/15/2045 (f) | BRL | 1,450 | 447 | |||||||||
|
| |||||||||||
Total Brazil | 447 | |||||||||||
|
|
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
GREECE 0.1% | ||||||||||||
Republic of Greece Government International Bond |
| |||||||||||
3.800% due 08/08/2017 | JPY | 39,000 | $ | 357 | ||||||||
4.500% due 07/03/2017 | 10,000 | 91 | ||||||||||
4.750% due 04/17/2019 | EUR | 100 | 101 | |||||||||
|
| |||||||||||
Total Greece | 549 | |||||||||||
|
| |||||||||||
VENEZUELA 0.1% | ||||||||||||
Venezuela Government International Bond |
| |||||||||||
7.650% due 04/21/2025 | $ | 100 | 41 | |||||||||
7.750% due 10/13/2019 | 200 | 91 | ||||||||||
|
| |||||||||||
Total Venezuela | 132 | |||||||||||
|
| |||||||||||
Total Sovereign Issues (Cost $1,440) | 1,128 | |||||||||||
|
| |||||||||||
SHORT-TERM INSTRUMENTS 4.1% | ||||||||||||
U.S. TREASURY BILLS 4.1% | ||||||||||||
0.258% due 09/15/2016 - 09/22/2016 (d)(e) | 18,000 | 17,991 | ||||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $17,990) | 17,991 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $444,831) | 438,887 | |||||||||||
|
| |||||||||||
SHARES | ||||||||||||
INVESTMENTS IN AFFILIATES 1.8% | ||||||||||||
SHORT-TERM INSTRUMENTS 1.8% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 1.8% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 776,393 | 7,674 | ||||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $7,673) | 7,674 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $7,673) | 7,674 | |||||||||||
Total Investments 101.5% (Cost $452,504) | $ | 446,561 | ||||||||||
Financial Derivative (Cost or Premiums, net $(256)) | 221 | |||||||||||
Other Assets and Liabilities, net (1.6)% | (6,949 | ) | ||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 439,833 | ||||||||||
|
|
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) | Payment in-kind security. |
(c) | Security did not produce income within the last twelve months. |
(d) | Coupon represents a weighted average yield to maturity. |
(e) | Zero coupon security. |
(f) | Principal amount of security is adjusted for inflation. |
(g) | Perpetual maturity; date shown, if applicable, represents next contractual call date. |
(h) | 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. |
26 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
(i) RESTRICTED SECURITIES:
Issuer Description | Acquisition Date | Cost | Market Value | Market Value as Percentage of Net Assets | ||||||||||||||
Canadian Imperial Bank of Commerce | 06/20/2016 | $ | 2,019 | $ | 1,900 | 0.43% | ||||||||||||
|
|
|
|
|
|
(j) FINANCIAL DERIVATIVE INSTRUMENTS: EXCHANGE-TRADED OR CENTRALLY CLEARED
FUTURES CONTRACTS:
Description | Type | Expiration Month | # of Contracts | Unrealized | Variation Margin | |||||||||||||||||||
Asset | Liability | |||||||||||||||||||||||
British pound currency September Futures | Short | 09/2016 | 56 | $ | 448 | $ | 64 | $ | 0 | |||||||||||||||
Euro currency September Futures | Short | 09/2016 | 11 | 45 | 4 | 0 | ||||||||||||||||||
Japanese yen currency September Futures | Short | 09/2016 | 3 | (11 | ) | 3 | 0 | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||
Total Futures Contracts | $ | 482 | $ | 71 | $ | 0 | ||||||||||||||||||
|
|
|
|
|
|
SWAP AGREEMENTS:
CREDIT DEFAULT SWAPS ON CREDIT INDICES - SELL PROTECTION (1)
Index/Tranches | Fixed Receive Rate | Maturity Date | Notional Amount (2) | Market Value (3) | Unrealized Appreciation | Variation Margin | ||||||||||||||||||||||
Asset | Liability | |||||||||||||||||||||||||||
CDX.HY-26 5-Year Index | 5.000 | % | 06/20/2021 | $ | 930 | $ | 31 | $ | 9 | $ | 4 | $ | 0 | |||||||||||||||
CDX.IG-26 5-Year Index | 1.000 | 06/20/2021 | 800 | 9 | 4 | 2 | 0 | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 40 | $ | 13 | $ | 6 | $ | 0 | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Swap Agreements | $ | 40 | $ | 13 | $ | 6 | $ | 0 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(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 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. |
(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 an indicator 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. |
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, 2016:
Cash of $318 has been pledged as collateral for exchange-traded and centrally cleared financial derivative instruments as of June 30, 2016. See Note 7, Principal Risks, in the Notes to Financial Statements for more information regarding master netting arrangements.
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 | $ | 0 | $ | 71 | $ | 6 | $ | 77 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 | |||||||||||||||||||||||
BOA | 07/2016 | GBP | 10,959 | $ | 16,069 | $ | 1,480 | $ | 0 | |||||||||||||||
07/2016 | $ | 15,745 | GBP | 10,959 | 0 | (1,156 | ) | |||||||||||||||||
08/2016 | EUR | 2,807 | $ | 3,087 | 0 | (32 | ) | |||||||||||||||||
08/2016 | $ | 774 | MXN | 14,741 | 28 | 0 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 27 |
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 | |||||||||||||||||||||||
GLM | 08/2016 | JPY | 1,641 | $ | 16 | $ | 0 | $ | 0 | |||||||||||||||
HUS | 08/2016 | GBP | 199 | 262 | 0 | (3 | ) | |||||||||||||||||
MSB | 08/2016 | JPY | 399,712 | 3,937 | 62 | 0 | ||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Forward Foreign Currency Contracts | $ | 1,570 | $ | (1,191 | ) | |||||||||||||||||||
|
|
|
|
SWAP AGREEMENTS:
CREDIT DEFAULT SWAPS ON CREDIT INDICES - SELL PROTECTION (1)
Counterparty | Index/Tranches | Fixed Receive Rate | Maturity Date | Notional Amount (2) | Premiums (Received) | Unrealized Appreciation | Swap Agreements, at Value (3) | |||||||||||||||||||||||||||
Asset | Liability | |||||||||||||||||||||||||||||||||
DUB | CMBX.NA.AAA.9 Index | 0.500 | % | 09/17/2058 | $ | 2,300 | $ | (128 | ) | $ | 10 | $ | 0 | $ | (118 | ) | ||||||||||||||||||
MYC | CMBX.NA.AAA.9 Index | 0.500 | 09/17/2058 | 2,300 | (128 | ) | 11 | 0 | (117 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
$ | (256 | ) | $ | 21 | $ | 0 | $ | (235 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Swap Agreements |
| $ | (256 | ) | $ | 21 | $ | 0 | $ | (235 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
(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 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. |
(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 an indicator 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. |
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 (received) as of June 30, 2016:
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 (Received) | Net Exposure (4) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 1,508 | $ | 0 | $ | 0 | $ | 1,508 | $ | (1,188 | ) | $ | 0 | $ | 0 | $ | (1,188 | ) | $ | 320 | $ | (300 | ) | $ | 20 | |||||||||||||||||||||||
DUB | 0 | 0 | 0 | 0 | 0 | 0 | (118 | ) | (118 | ) | (118 | ) | 0 | (118 | ) | |||||||||||||||||||||||||||||||||
HUS | 0 | 0 | 0 | 0 | (3 | ) | 0 | 0 | (3 | ) | (3 | ) | 0 | (3 | ) | |||||||||||||||||||||||||||||||||
MSB | 62 | 0 | 0 | 62 | 0 | 0 | 0 | 0 | 62 | 0 | 62 | |||||||||||||||||||||||||||||||||||||
MYC | 0 | 0 | 0 | 0 | 0 | 0 | (117 | ) | (117 | ) | (117 | ) | 0 | (117 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 1,570 | $ | 0 | $ | 0 | $ | 1,570 | $ | (1,191 | ) | $ | 0 | $ | (235 | ) | $ | (1,426 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) | 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, Principal Risks, in the Notes to Financial Statements for more information regarding master netting arrangements. |
28 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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, 2016:
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 | $ | 0 | $ | 71 | $ | 0 | $ | 71 | ||||||||||||
Swap Agreements | 0 | 6 | 0 | 0 | 0 | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 6 | $ | 0 | $ | 71 | $ | 0 | $ | 77 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 1,570 | $ | 0 | $ | 1,570 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 6 | $ | 0 | $ | 1,641 | $ | 0 | $ | 1,647 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 1,191 | $ | 0 | $ | 1,191 | ||||||||||||
Swap Agreements | 0 | 235 | 0 | 0 | 0 | 235 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 235 | $ | 0 | $ | 1,191 | $ | 0 | $ | 1,426 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | 166 | $ | 0 | $ | 166 | ||||||||||||
Swap Agreements | 0 | (1 | ) | 0 | 0 | 0 | (1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | (1 | ) | $ | 0 | $ | 166 | $ | 0 | $ | 165 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 3,413 | $ | 0 | $ | 3,413 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | (1 | ) | $ | 0 | $ | 3,579 | $ | 0 | $ | 3,578 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Futures | $ | 0 | $ | 0 | $ | 0 | $ | 586 | $ | 0 | $ | 586 | ||||||||||||
Swap Agreements | 0 | 13 | 0 | 0 | 0 | 13 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 13 | $ | 0 | $ | 586 | $ | 0 | $ | 599 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 1,807 | $ | 0 | $ | 1,807 | ||||||||||||
Swap Agreements | 0 | 21 | 0 | 0 | 0 | 21 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 21 | $ | 0 | $ | 1,807 | $ | 0 | $ | 1,828 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 34 | $ | 0 | $ | 2,393 | $ | 0 | $ | 2,427 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Asset-Backed Securities | ||||||||||||||||
Cayman Islands | $ | 1,450 | $ | 141 | $ | 0 | $ | 1,591 | ||||||||
United States | 0 | 15,311 | 0 | 15,311 | ||||||||||||
Bank Loan Obligations | ||||||||||||||||
United States | 0 | 2,537 | 13 | 2,550 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Common Stocks | ||||||||||||||||
Australia | ||||||||||||||||
Consumer Discretionary | $ | 0 | $ | 378 | $ | 0 | $ | 378 | ||||||||
Consumer Staples | 0 | 688 | 0 | 688 | ||||||||||||
Energy | 0 | 611 | 0 | 611 | ||||||||||||
Financials | 0 | 480 | 0 | 480 | ||||||||||||
Health Care | 0 | 296 | 0 | 296 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 29 |
Table of Contents
Schedule of Investments PIMCO Dividend and Income Fund (Cont.)
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Industrials | $ | 0 | $ | 783 | $ | 0 | $ | 783 | ||||||||
Materials | 0 | 1,997 | 0 | 1,997 | ||||||||||||
Austria | ||||||||||||||||
Energy | 0 | 742 | 0 | 742 | ||||||||||||
Financials | 0 | 598 | 0 | 598 | ||||||||||||
Materials | 0 | 375 | 0 | 375 | ||||||||||||
Belgium | ||||||||||||||||
Consumer Discretionary | 0 | 196 | 0 | 196 | ||||||||||||
Telecommunication Services | 0 | 436 | 0 | 436 | ||||||||||||
Canada | ||||||||||||||||
Energy | 2,057 | 0 | 0 | 2,057 | ||||||||||||
Financials | 3,554 | 0 | 0 | 3,554 | ||||||||||||
Industrials | 218 | 0 | 0 | 218 | ||||||||||||
Materials | 3,374 | 0 | 0 | 3,374 | ||||||||||||
Telecommunication Services | 324 | 0 | 0 | 324 | ||||||||||||
Utilities | 1,087 | 0 | 0 | 1,087 | ||||||||||||
Denmark | ||||||||||||||||
Industrials | 0 | 1,106 | 0 | 1,106 | ||||||||||||
Telecommunication Services | 0 | 449 | 0 | 449 | ||||||||||||
Finland | ||||||||||||||||
Materials | 0 | 403 | 0 | 403 | ||||||||||||
Utilities | 0 | 754 | 0 | 754 | ||||||||||||
France | ||||||||||||||||
Consumer Discretionary | 0 | 3,508 | 0 | 3,508 | ||||||||||||
Consumer Staples | 0 | 638 | 0 | 638 | ||||||||||||
Energy | 0 | 4,421 | 0 | 4,421 | ||||||||||||
Financials | 0 | 2,996 | 0 | 2,996 | ||||||||||||
Health Care | 0 | 5,427 | 0 | 5,427 | ||||||||||||
Industrials | 0 | 2,469 | 0 | 2,469 | ||||||||||||
Telecommunication Services | 0 | 2,827 | 0 | 2,827 | ||||||||||||
Utilities | 0 | 3,957 | 0 | 3,957 | ||||||||||||
Germany | ||||||||||||||||
Consumer Discretionary | 0 | 1,347 | 0 | 1,347 | ||||||||||||
Consumer Staples | 0 | 1,293 | 0 | 1,293 | ||||||||||||
Financials | 0 | 1,589 | 0 | 1,589 | ||||||||||||
Health Care | 0 | 302 | 0 | 302 | ||||||||||||
Industrials | 0 | 1,669 | 0 | 1,669 | ||||||||||||
Materials | 0 | 2,473 | 0 | 2,473 | ||||||||||||
Utilities | 0 | 5,292 | 0 | 5,292 | ||||||||||||
Hong Kong | ||||||||||||||||
Consumer Discretionary | 0 | 295 | 0 | 295 | ||||||||||||
Consumer Staples | 0 | 628 | 0 | 628 | ||||||||||||
Financials | 0 | 852 | 0 | 852 | ||||||||||||
Industrials | 0 | 386 | 0 | 386 | ||||||||||||
Information Technology | 0 | 223 | 0 | 223 | ||||||||||||
Israel | ||||||||||||||||
Financials | 0 | 608 | 0 | 608 | ||||||||||||
Materials | 0 | 360 | 0 | 360 | ||||||||||||
Telecommunication Services | 0 | 668 | 0 | 668 | ||||||||||||
Italy | ||||||||||||||||
Energy | 0 | 3,468 | 0 | 3,468 | ||||||||||||
Financials | 0 | 743 | 0 | 743 | ||||||||||||
Utilities | 0 | 3,073 | 0 | 3,073 | ||||||||||||
Japan | ||||||||||||||||
Consumer Discretionary | 0 | 4,402 | 0 | 4,402 | ||||||||||||
Consumer Staples | 0 | 808 | 0 | 808 | ||||||||||||
Energy | 0 | 1,159 | 0 | 1,159 | ||||||||||||
Financials | 0 | 7,480 | 0 | 7,480 | ||||||||||||
Health Care | 0 | 2,066 | 0 | 2,066 | ||||||||||||
Industrials | 0 | 7,840 | 0 | 7,840 | ||||||||||||
Information Technology | 0 | 7,889 | 0 | 7,889 | ||||||||||||
Materials | 0 | 3,235 | 0 | 3,235 | ||||||||||||
Telecommunication Services | 0 | 3,580 | 0 | 3,580 | ||||||||||||
Utilities | 0 | 664 | 0 | 664 | ||||||||||||
Luxembourg | ||||||||||||||||
Consumer Discretionary | 0 | 212 | 0 | 212 | ||||||||||||
Materials | 0 | 1,375 | 0 | 1,375 | ||||||||||||
Mexico | ||||||||||||||||
Consumer Discretionary | 4 | 0 | 0 | 4 | ||||||||||||
Netherlands | ||||||||||||||||
Consumer Staples | 0 | 1,634 | 0 | 1,634 | ||||||||||||
Energy | 322 | 9,722 | 0 | 10,044 | ||||||||||||
Industrials | 0 | 1,132 | 0 | 1,132 | ||||||||||||
Telecommunication Services | 242 | 626 | 0 | 868 | ||||||||||||
New Zealand | ||||||||||||||||
Telecommunication Services | 0 | 530 | 0 | 530 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Norway | ||||||||||||||||
Consumer Staples | $ | 0 | $ | 484 | $ | 0 | $ | 484 | ||||||||
Energy | 0 | 2,963 | 0 | 2,963 | ||||||||||||
Financials | 0 | 228 | 0 | 228 | ||||||||||||
Portugal | ||||||||||||||||
Utilities | 0 | 501 | 0 | 501 | ||||||||||||
Singapore | ||||||||||||||||
Consumer Staples | 0 | 482 | 0 | 482 | ||||||||||||
Spain | ||||||||||||||||
Consumer Staples | 0 | 315 | 0 | 315 | ||||||||||||
Financials | 0 | 5,196 | 0 | 5,196 | ||||||||||||
Industrials | 0 | 1,188 | 0 | 1,188 | ||||||||||||
Telecommunication Services | 0 | 2,474 | 0 | 2,474 | ||||||||||||
Utilities | 0 | 1,793 | 0 | 1,793 | ||||||||||||
Sweden | ||||||||||||||||
Financials | 0 | 235 | 0 | 235 | ||||||||||||
Health Care | 0 | 245 | 0 | 245 | ||||||||||||
Industrials | 0 | 257 | 0 | 257 | ||||||||||||
Telecommunication Services | 0 | 1,708 | 0 | 1,708 | ||||||||||||
Switzerland | ||||||||||||||||
Consumer Discretionary | 240 | 0 | 0 | 240 | ||||||||||||
Financials | 0 | 5,713 | 0 | 5,713 | ||||||||||||
Health Care | 0 | 2,355 | 0 | 2,355 | ||||||||||||
Telecommunication Services | 0 | 559 | 0 | 559 | ||||||||||||
United Kingdom | ||||||||||||||||
Consumer Discretionary | 0 | 1,929 | 0 | 1,929 | ||||||||||||
Consumer Staples | 0 | 4,011 | 0 | 4,011 | ||||||||||||
Energy | 0 | 6,280 | 0 | 6,280 | ||||||||||||
Financials | 0 | 12,056 | 0 | 12,056 | ||||||||||||
Health Care | 0 | 3,268 | 0 | 3,268 | ||||||||||||
Industrials | 0 | 1,329 | 0 | 1,329 | ||||||||||||
Telecommunication Services | 0 | 2,284 | 0 | 2,284 | ||||||||||||
Utilities | 0 | 4,059 | 0 | 4,059 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 10,238 | 0 | 0 | 10,238 | ||||||||||||
Consumer Staples | 14,039 | 0 | 0 | 14,039 | ||||||||||||
Energy | 36,754 | 0 | 0 | 36,754 | ||||||||||||
Financials | 17,612 | 0 | 0 | 17,612 | ||||||||||||
Health Care | 22,628 | 0 | 0 | 22,628 | ||||||||||||
Industrials | 7,518 | 0 | 0 | 7,518 | ||||||||||||
Information Technology | 19,808 | 0 | 0 | 19,808 | ||||||||||||
Materials | 7,640 | 0 | 0 | 7,640 | ||||||||||||
Telecommunication Services | 18,626 | 0 | 0 | 18,626 | ||||||||||||
Utilities | 14,902 | 0 | 0 | 14,902 | ||||||||||||
Corporate Bonds & Notes | ||||||||||||||||
Brazil | ||||||||||||||||
Utilities | 0 | 1,542 | 0 | 1,542 | ||||||||||||
Cayman Islands | ||||||||||||||||
Utilities | 0 | 43 | 0 | 43 | ||||||||||||
Denmark | ||||||||||||||||
Banking & Finance | 0 | 2,916 | 0 | 2,916 | ||||||||||||
France | ||||||||||||||||
Banking & Finance | 0 | 564 | 0 | 564 | ||||||||||||
Industrials | 0 | 1,386 | 0 | 1,386 | ||||||||||||
Ireland | ||||||||||||||||
Banking & Finance | 0 | 109 | 0 | 109 | ||||||||||||
Industrials | 0 | 436 | 0 | 436 | ||||||||||||
Luxembourg | ||||||||||||||||
Banking & Finance | 0 | 677 | 0 | 677 | ||||||||||||
Utilities | 0 | 1,405 | 0 | 1,405 | ||||||||||||
Netherlands | ||||||||||||||||
Banking & Finance | 0 | 1,188 | 0 | 1,188 | ||||||||||||
Industrials | 0 | 42 | 0 | 42 | ||||||||||||
United Kingdom | ||||||||||||||||
Banking & Finance | 0 | 5,467 | 0 | 5,467 | ||||||||||||
Industrials | 0 | 891 | 0 | 891 | ||||||||||||
United States | ||||||||||||||||
Banking & Finance | 0 | 4,271 | 0 | 4,271 | ||||||||||||
Industrials | 0 | 2,133 | 0 | 2,133 | ||||||||||||
Utilities | 0 | 41 | 0 | 41 | ||||||||||||
Venezuela | ||||||||||||||||
Industrials | 0 | 281 | 0 | 281 | ||||||||||||
Non-Agency Mortgage-Backed Securities | ||||||||||||||||
United Kingdom | 0 | 1,982 | 0 | 1,982 | ||||||||||||
United States | 0 | 11,317 | 0 | 11,317 | ||||||||||||
Municipal Bonds & Notes | ||||||||||||||||
Illinois | 0 | 130 | 0 | 130 | ||||||||||||
Michigan | 0 | 214 | 0 | 214 |
30 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Virginia | $ | 0 | $ | 325 | $ | 0 | $ | 325 | ||||||||
West Virginia | 0 | 348 | 0 | 348 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Germany | ||||||||||||||||
Industrials | 0 | 928 | 0 | 928 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
Canada | ||||||||||||||||
Financials | 282 | 0 | 0 | 282 | ||||||||||||
United States | ||||||||||||||||
Financials | 1,953 | 0 | 0 | 1,953 | ||||||||||||
Rights | ||||||||||||||||
Hong Kong | ||||||||||||||||
Industrials | 0 | 170 | 0 | 170 | ||||||||||||
Spain | ||||||||||||||||
Industrials | 18 | 0 | 0 | 18 | ||||||||||||
Sovereign Issues | ||||||||||||||||
Brazil | 0 | 447 | 0 | 447 | ||||||||||||
Greece | 0 | 549 | 0 | 549 | ||||||||||||
Venezuela | 0 | 132 | 0 | 132 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
U.S. Treasury Bills | 0 | 17,991 | 0 | 17,991 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 184,890 | $ | 253,984 | $ | 13 | $ | 438,887 | |||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | $ | 7,674 | $ | 0 | $ | 0 | $ | 7,674 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 192,564 | $ | 253,984 | $ | 13 | $ | 446,561 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | 71 | 6 | 0 | 77 | ||||||||||||
Over the counter | 0 | 1,570 | 0 | 1,570 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 71 | $ | 1,576 | $ | 0 | $ | 1,647 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Over the counter | $ | 0 | $ | (1,426 | ) | $ | 0 | $ | (1,426 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 192,635 | $ | 254,134 | $ | 13 | $ | 446,782 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 31 |
Table of Contents
Schedule of Investments PIMCO EqS® Long/Short Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 77.1% | ||||||||||||
COMMON STOCKS 61.7% | ||||||||||||
AUSTRALIA 0.5% | ||||||||||||
MATERIALS 0.5% | ||||||||||||
Fortescue Metals Group Ltd. | 1,600,000 | $ | 4,282 | |||||||||
|
| |||||||||||
Total Australia | 4,282 | |||||||||||
|
| |||||||||||
CANADA 3.3% | ||||||||||||
ENERGY 3.3% | ||||||||||||
TransCanada Corp. | 625,000 | 28,281 | ||||||||||
|
| |||||||||||
Total Canada | 28,281 | |||||||||||
|
| |||||||||||
SWITZERLAND 4.3% | ||||||||||||
CONSUMER STAPLES 4.3% | ||||||||||||
Nestle S.A. | 475,000 | 36,802 | ||||||||||
|
| |||||||||||
Total Switzerland | 36,802 | |||||||||||
|
| |||||||||||
UNITED KINGDOM 3.7% | ||||||||||||
CONSUMER DISCRETIONARY 3.7% | ||||||||||||
Liberty Global PLC (a) | 410,000 | 11,746 | ||||||||||
Liberty Global PLC LiLAC (a) | 51,155 | 1,662 | ||||||||||
Markit Ltd. (a) | 550,000 | 17,930 | ||||||||||
|
| |||||||||||
31,338 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 31,338 | |||||||||||
|
| |||||||||||
UNITED STATES 49.9% | ||||||||||||
CONSUMER DISCRETIONARY 10.4% | ||||||||||||
Aramark | 650,000 | 21,723 | ||||||||||
Dollar Tree, Inc. (a)(f) | 200,000 | 18,848 | ||||||||||
NVR, Inc. (a)(f) | 11,300 | 20,118 | ||||||||||
Priceline Group, Inc. (a) | 22,000 | 27,465 | ||||||||||
|
| |||||||||||
88,154 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 2.1% | ||||||||||||
Sanderson Farms, Inc. | 200,000 | 17,328 | ||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
ENERGY 3.8% | ||||||||||||
Spectra Energy Partners LP | 685,000 | $ | 32,318 | |||||||||
|
| |||||||||||
FINANCIALS 7.8% | ||||||||||||
Allstate Corp. (f) | 750,000 | 52,462 | ||||||||||
Citizens Financial Group, Inc. | 670,000 | 13,387 | ||||||||||
|
| |||||||||||
65,849 | ||||||||||||
|
| |||||||||||
HEALTH CARE 8.5% | ||||||||||||
Envision Healthcare Holdings, Inc. (a) | 500,000 | 12,685 | ||||||||||
HCA Holdings, Inc. (a) | 400,000 | 30,804 | ||||||||||
Laboratory Corp. of America Holdings (a) | 221,678 | 28,878 | ||||||||||
|
| |||||||||||
72,367 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 5.7% | ||||||||||||
IHS, Inc. (a) | 170,000 | 19,654 | ||||||||||
Kirby Corp. (a) | 260,000 | 16,221 | ||||||||||
Neilsen Holdings PLC | 240,000 | 12,473 | ||||||||||
|
| |||||||||||
48,348 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 8.2% | ||||||||||||
DST Systems, Inc. | 333,129 | 38,786 | ||||||||||
First Data Corp. ‘A’ (a) | 2,810,000 | 31,107 | ||||||||||
|
| |||||||||||
69,893 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 3.4% | ||||||||||||
Level 3 Communications, Inc. (a) | 555,000 | 28,577 | ||||||||||
|
| |||||||||||
Total United States | 422,834 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $493,715) |
| 523,537 | ||||||||||
|
| |||||||||||
REAL ESTATE INVESTMENT TRUSTS 5.0% | ||||||||||||
UNITED STATES 5.0% | ||||||||||||
FINANCIALS 5.0% | ||||||||||||
Iron Mountain, Inc. | 1,060,000 | 42,221 | ||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts (Cost $30,186) |
| 42,221 | ||||||||||
|
| |||||||||||
PRINCIPAL AMOUNT (000S) | MARKET VALUE (000S) | |||||||||||
U.S. TREASURY OBLIGATIONS 0.4% | ||||||||||||
UNITED STATES 0.4% | ||||||||||||
U.S. Treasury Floating Rate Notes |
| |||||||||||
0.450% due 04/30/2018 | $ | 3,200 | $ | 3,201 | ||||||||
|
| |||||||||||
Total U.S. Treasury Obligations (Cost $3,200) | 3,201 | |||||||||||
|
| |||||||||||
SHORT-TERM INSTRUMENTS 10.0% | ||||||||||||
REPURCHASE AGREEMENTS (d) 0.1% | ||||||||||||
466 | ||||||||||||
|
| |||||||||||
U.S. TREASURY BILLS 9.9% | ||||||||||||
0.263% due 07/21/2016 - 12/08/2016 (b)(c)(h) | 84,511 | 84,466 | ||||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $84,925) | 84,932 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $612,026) | 653,891 | |||||||||||
|
| |||||||||||
SHARES | ||||||||||||
INVESTMENTS IN AFFILIATES 29.7% | ||||||||||||
SHORT-TERM INSTRUMENTS 29.7% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 29.7% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 25,515,328 | 252,193 | ||||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $252,161) | 252,193 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $252,161) | 252,193 | |||||||||||
Total Investments 106.8% (Cost $864,187) | $ | 906,084 | ||||||||||
Securities Sold Short (e) (7.7)% (Proceeds $63,907) | (65,402 | ) | ||||||||||
Financial Derivative (Cost or Premiums, net $0) | (730 | ) | ||||||||||
Other Assets and Liabilities, net 1.0% | 8,432 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 848,384 | ||||||||||
|
|
NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS*, EXCEPT NUMBER OF 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 | 0.010 | % | 06/30/2016 | 07/01/2016 | $ | 466 | U.S. Treasury Notes 0.750% due 12/31/2017 | $ | (476 | ) | $ | 466 | $ | 466 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
Total Repurchase Agreements |
| $ | (476 | ) | $ | 466 | $ | 466 | ||||||||||||||||||||||
|
|
|
|
|
|
(1) | Includes accrued interest. |
32 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
(e) SECURITIES SOLD SHORT:
(f) | Securities with an aggregate market value of $29,799 and cash of $64,416 have been pledged as collateral as of June 30, 2016 for equity short sales and equity options as governed by prime brokerage agreements and agreements governing listed equity option transactions. |
Counterparty | Description | Shares | Proceeds | Payable for Short Sales (2) | ||||||||||
Common Stocks | ||||||||||||||
United States | ||||||||||||||
Consumer Discretionary | ||||||||||||||
FOB | AutoZone, Inc. | 5,000 | $ | (3,796 | ) | $ | (3,969 | ) | ||||||
Buckle, Inc. | 170,000 | (5,252 | ) | (4,418 | ) | |||||||||
GSC | Chipotle Mexican Grill, Inc. | 20,000 | (8,286 | ) | (8,055 | ) | ||||||||
Cracker Barrel Old Country Store, Inc. | 20,000 | (3,341 | ) | (3,430 | ) | |||||||||
O’Reilly Automotive, Inc. | 20,000 | (5,110 | ) | (5,422 | ) | |||||||||
Select Comfort Corp. | 60,000 | (1,351 | ) | (1,283 | ) | |||||||||
Consumer Staples | ||||||||||||||
FOB | Sprouts Farmers Market, Inc. | 50,000 | (1,158 | ) | (1,145 | ) | ||||||||
United Natural Foods, Inc. | 50,000 | (2,131 | ) | (2,340 | ) | |||||||||
GSC | Whole Foods Market, Inc. | 230,000 | (7,152 | ) | (7,396 | ) | ||||||||
Health Care | ||||||||||||||
FOB | Quest Diagnostics, Inc. | 120,000 | (9,236 | ) | (9,769 | ) | ||||||||
Industrials | ||||||||||||||
Fastenal Co. | 130,000 | (5,711 | ) | (5,770 | ) | |||||||||
JB Hunt Transport Services, Inc. | 60,000 | (4,776 | ) | (4,856 | ) | |||||||||
Old Dominion Freight Line, Inc. | 35,000 | (2,079 | ) | (2,111 | ) | |||||||||
Information Technology | ||||||||||||||
Square, Inc. | 200,000 | (1,778 | ) | (1,810 | ) | |||||||||
Zillow Group, Inc. ‘C’ | 100,000 | (2,750 | ) | (3,628 | ) | |||||||||
|
|
|
| |||||||||||
Total Short Sales | $ | (63,907 | ) | $ | (65,402 | ) | ||||||||
|
|
|
|
(2) | Payable for short sales includes $31 of dividends payable. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/Pledged | Net Exposure (3) | |||||||||||||||||||||
Global/Master Repurchase Agreement | ||||||||||||||||||||||||||||
SSB | $ | 466 | $ | 0 | $ | 0 | $ | 0 | $ | 466 | $ | (476 | ) | $ | (10 | ) | ||||||||||||
Prime Brokerage Agreement | ||||||||||||||||||||||||||||
FOB | 0 | 0 | 0 | (39,816 | ) | (39,816 | ) | 53,640 | 13,824 | |||||||||||||||||||
GSC | 0 | 0 | 0 | (25,586 | ) | (25,586 | ) | 40,575 | 14,989 | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Borrowings and Other Financing Transactions | $ | 466 | $ | 0 | $ | 0 | $ | (65,402 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
(3) | 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 7, Principal Risks, in the Notes to Financial Statements for more information regarding master netting arrangements. |
(g) 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 | |||||||||||||||||||||||
BRC | 07/2016 | CHF | 13,950 | $ | 14,101 | $ | 0 | $ | (185 | ) | ||||||||||||||
CBK | 07/2016 | $ | 4,205 | EUR | 3,716 | 0 | (81 | ) | ||||||||||||||||
GLM | 07/2016 | EUR | 21,872 | $ | 24,400 | 127 | 0 | |||||||||||||||||
JPM | 07/2016 | AUD | 3,056 | 2,211 | 0 | (68 | ) | |||||||||||||||||
07/2016 | CAD | 22,217 | 16,944 | 0 | (252 | ) | ||||||||||||||||||
UAG | 07/2016 | CHF | 19,969 | 20,179 | 0 | (271 | ) | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Forward Foreign Currency Contracts |
| $ | 127 | $ | (857 | ) | ||||||||||||||||||
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|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 33 |
Table of Contents
Schedule of Investments PIMCO EqS® Long/Short Fund (Cont.)
WRITTEN OPTIONS:
AS OF JUNE 30, 2016, THERE WERE NO OPEN WRITTEN OPTIONS. TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 0 | 2,700 | 0 | 0 | (2,700 | ) | 0 | |||||||||||||||||
Premiums | $ | 0 | $ | (588 | ) | $ | 0 | $ | 0 | $ | 588 | $ | 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 (received)/pledged as of June 30, 2016:
(h) | Securities with an aggregate market value of $585 have been pledged as collateral for financial derivative instruments as governed by International Swaps and Derivatives Association, Inc. master agreements as of June 30, 2016. |
Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Counterparty | Forward Foreign Currency Contracts | Purchased Options | Swap Agreements | Total Over the | Forward Foreign Currency Contracts | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral (Received)/ Pledged | Net Exposure (1) | |||||||||||||||||||||||||||||||||||||
BRC | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (185 | ) | $ | 0 | $ | 0 | $ | (185 | ) | $ | (185 | ) | $ | 282 | $ | 97 | |||||||||||||||||||||||
CBK | 0 | 0 | 0 | 0 | (81 | ) | 0 | 0 | (81 | ) | (81 | ) | 0 | (81 | ) | |||||||||||||||||||||||||||||||||
DUB | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (90 | ) | (90 | ) | |||||||||||||||||||||||||||||||||||
GLM | 127 | 0 | 0 | 127 | 0 | 0 | 0 | 0 | 127 | (330 | ) | (203 | ) | |||||||||||||||||||||||||||||||||||
JPM | 0 | 0 | 0 | 0 | (320 | ) | 0 | 0 | (320 | ) | (320 | ) | 62 | (258 | ) | |||||||||||||||||||||||||||||||||
UAG | 0 | 0 | 0 | 0 | (271 | ) | 0 | 0 | (271 | ) | (271 | ) | 242 | (29 | ) | |||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 127 | $ | 0 | $ | 0 | $ | 127 | $ | (857 | ) | $ | 0 | $ | 0 | $ | (857 | ) | ||||||||||||||||||||||||||||||
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|
|
|
(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, Principal Risks, 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, 2016:
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 127 | $ | 0 | $ | 127 | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 857 | $ | 0 | $ | 857 | ||||||||||||
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|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (2,829 | ) | $ | 0 | $ | 0 | $ | (2,829 | ) | ||||||||||
Futures | 0 | 0 | (1,831 | ) | 0 | 0 | (1,831 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (4,660 | ) | $ | 0 | $ | 0 | $ | (4,660 | ) | |||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 1,245 | $ | 0 | $ | 1,245 | ||||||||||||
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|
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|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (4,660 | ) | $ | 1,245 | $ | 0 | $ | (3,415 | ) | |||||||||||
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34 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | 2,346 | $ | 0 | $ | 0 | $ | 2,346 | ||||||||||||
Futures | 0 | 0 | (202 | ) | 0 | 0 | (202 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 2,144 | $ | 0 | $ | 0 | $ | 2,144 | |||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | (640 | ) | $ | 0 | $ | (640 | ) | ||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 2,144 | $ | (640 | ) | $ | 0 | $ | 1,504 | ||||||||||||
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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, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Australia | ||||||||||||||||
Materials | $ | 0 | $ | 4,282 | $ | 0 | $ | 4,282 | ||||||||
Canada | ||||||||||||||||
Energy | 28,281 | 0 | 0 | 28,281 | ||||||||||||
Switzerland | ||||||||||||||||
Consumer Staples | 0 | 36,802 | 0 | 36,802 | ||||||||||||
United Kingdom | ||||||||||||||||
Consumer Discretionary | 31,338 | 0 | 0 | 31,338 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 88,154 | 0 | 0 | 88,154 | ||||||||||||
Consumer Staples | 17,328 | 0 | 0 | 17,328 | ||||||||||||
Energy | 32,318 | 0 | 0 | 32,318 | ||||||||||||
Financials | 65,849 | 0 | 0 | 65,849 | ||||||||||||
Health Care | 72,367 | 0 | 0 | 72,367 | ||||||||||||
Industrials | 48,348 | 0 | 0 | 48,348 | ||||||||||||
Information Technology | 69,893 | 0 | 0 | 69,893 | ||||||||||||
Telecommunication Services | 28,577 | 0 | 0 | 28,577 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
United States | ||||||||||||||||
Financials | 42,221 | 0 | 0 | 42,221 | ||||||||||||
U.S. Treasury Obligations | ||||||||||||||||
United States | 0 | 3,201 | 0 | 3,201 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Repurchase Agreements | 0 | 466 | 0 | 466 | ||||||||||||
U.S. Treasury Bills | 0 | 84,466 | 0 | 84,466 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 524,674 | $ | 129,217 | $ | 0 | $ | 653,891 | |||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | $ | 252,193 | $ | 0 | $ | 0 | $ | 252,193 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 776,867 | $ | 129,217 | $ | 0 | $ | 906,084 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Short Sales, at Value - Liabilities | ||||||||||||||||
Common Stocks | ||||||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | $ | (26,577 | ) | $ | 0 | $ | 0 | $ | (26,577 | ) | ||||||
Consumer Staples | (10,881 | ) | 0 | 0 | (10,881 | ) | ||||||||||
Health Care | (9,769 | ) | 0 | 0 | (9,769 | ) | ||||||||||
Industrials | (12,737 | ) | 0 | 0 | (12,737 | ) | ||||||||||
Information Technology | (5,438 | ) | 0 | 0 | (5,438 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | (65,402 | ) | $ | 0 | $ | 0 | $ | (65,402 | ) | |||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Over the counter | $ | 0 | $ | 127 | $ | 0 | $ | 127 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Over the counter | $ | 0 | $ | (857 | ) | $ | 0 | $ | (857 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 711,465 | $ | 128,487 | $ | 0 | $ | 839,952 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 35 |
Table of Contents
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 (formerly, PIMCO Dividend and Income Builder 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. As of the date of this report, a meeting of the shareholders of the PIMCO Dividend and Income Fund is scheduled for August 26, 2016 to approve 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 15 days or more 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 are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies are recorded as dividend income. Long-term capital gain distributions received from registered investment companies 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 (see Financial Derivative Instruments, if any). 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
36 | PIMCO EQUITY SERIES |
Table of Contents
June 30, 2016
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 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) Dividends and Distributions to Shareholders The following table shows the anticipated frequency of dividends from net investment income, if any, for each Fund. Distributions from each Fund may be declared and distributed to shareholders only upon the authorization of the Adviser, which authorization may be withheld at the Adviser’s discretion.
Declared and Paid Annually: |
PIMCO EqS® Long/Short Fund |
Declared and Paid Quarterly: |
PIMCO Dividend and Income Fund |
Net realized capital gains earned by each Fund, if any, will be distributed no less frequently than once each year.
Income dividends 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. Examples of events that give rise to timing differences include wash sales, straddles and capital loss carryforwards. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. Examples of transactions that may cause character differences include the treatment of paydowns on mortgage-backed securities, swaps, foreign currency transactions and contingent debt instruments. As a result, income dividends 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.
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 financial accounting to tax characterizations of dividend distributions.
(e) Statements of Cash Flows U.S. GAAP requires entities providing financial statements that report both financial position and results of operations to also provide a Statement of Cash Flows for each period for which results of operations are provided, but exempts investment companies meeting certain conditions. One of the conditions is that substantially all of the entity’s investments were carried at fair value during the period and classified as Level 1 or Level 2 in the fair value hierarchy in accordance with the requirements of U.S. GAAP. Another condition is that the entity had little or no debt, based on the average debt outstanding during the period, in relation to average total assets. Funds with certain degrees of borrowing activity, typically through the use of reverse repurchase agreements or sale-buyback transactions, have been determined to be at a level requiring a Statement of Cash Flows. Statements of Cash Flows, as applicable, have been prepared using the indirect method which requires net increase (decrease) in net assets resulting from operations to be adjusted to reconcile to net cash flows from operating activities.
(f) New Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”), ASU 2014-11, that expanded secured borrowing accounting for certain repurchase agreements. The ASU also sets forth additional disclosure requirements for certain transactions accounted for as sales in order to provide financial statement users with information to compare to similar transactions accounted for as secured borrowings. The ASU became effective prospectively for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. The Funds have adopted the ASU. The financial statements have been modified to provide enhanced disclosures surrounding secured borrowing transactions, if any. See the Notes to Schedules of Investments for additional details.
In August 2014, the FASB issued 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. At this time, management is evaluating the implications of these changes on the financial statements.
ANNUAL REPORT | JUNE 30, 2016 | 37 |
Table of Contents
Notes to Financial Statements (Cont.)
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. At this time, management is evaluating the implications of these changes on the 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 attributable to that Fund or class, less any liabilities, 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 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. 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 or other pricing sources. With respect to any portion of a Fund’s assets that are invested in one or more open-end management investment companies (other than exchange-traded funds (“ETFs”)), the Fund’s NAV will be calculated based upon 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 non-U.S. securities. Foreign (non-U.S.) 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.
38 | PIMCO EQUITY SERIES |
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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 the 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:
n | Level 1 — Inputs using (unadjusted) quoted prices in active markets or exchanges for identical assets and liabilities. |
n | 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. |
n | 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,
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accrued discounts (premiums), and transfers into and out of the Level 3 category during the period. The end of period timing recognition 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 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. Investments in privately held investment funds with significant restrictions on redemption where the inputs to the NAVs are observable will be valued based upon the NAVs of such investments and are categorized as Level 2 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 of such short-term debt instrument is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. Prior to July 31, 2015, short-term debt investments having a maturity of 60 days or less and repurchase agreements were generally valued at amortized cost which approximates fair value. Short-term debt instruments having a remaining maturity of 60 days or less are categorized as Level 2 of the fair value hierarchy.
Equity exchange-traded options and over the counter financial derivative instruments, such as forward foreign currency contracts, options contracts, or swap agreements, derive their value from underlying asset prices, indices, reference rates, and other inputs or a
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combination of these factors. Other than swap agreements, which are valued using a broker-dealer bid quotation or on market-based prices provided by Pricing Services or other pricing sources, 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 listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange (if available).
For centrally cleared credit default swaps, the clearing facility requires its members to provide actionable price levels across complete term structures. These levels along with external third-party prices are used to produce daily settlement prices. These securities are categorized as Level 2 of the fair value hierarchy. Centrally cleared interest rate swaps are valued using a pricing model that references the underlying rates including the overnight index swap rate and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price. 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.
The validity of fair value is reviewed by the Adviser on a periodic basis and may be amended in accordance with the Trust’s valuation procedures.
4. SECURITIES AND OTHER INVESTMENTS
(a) Investments in Affiliates
Each Fund may invest in the PIMCO Short-Term Floating NAV Portfolio III (“Central Fund”) to the extent permitted by the Act and rules thereunder. The Central Fund is a registered investment company 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 Fund are money market and short maturity fixed income instruments. The Central Fund may incur expenses related to its investment activities, but does not pay Investment Advisory Fees or Supervisory and Administrative Fees to the Adviser. The Central Fund is considered to be affiliated with the Funds. The table below shows the Funds’ transactions in and earnings from investments in the affiliated Fund for the period ended June 30, 2016 (amounts in thousands†):
Investments in PIMCO Short-Term Floating NAV Portfolio III | ||||||||||||||||||||||||||||||||||||
Fund Name | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Dividend and Income Fund | $ | 32,430 | $ | 373,116 | $ | (397,817 | ) | $ | (56 | ) | $ | 1 | $ | 7,674 | $ | 119 | $ | 0 | ||||||||||||||||||
PIMCO EqS® Long/Short Fund | 122,481 | 1,421,674 | (1,290,900 | ) | (1,105 | ) | 43 | 252,193 | 2,974 | 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. See Note 2(d) in the Notes to Financial Statements for more information. |
(b) Investments in Securities
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
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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, 2016, 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.
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.
Payment In-Kind Securities Certain Funds may invest in payment in-kind securities (“PIKs”). PIKs may give the issuer the option at each interest payment date of making interest payments in either cash or
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additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require a pro rata adjustment from the unrealized appreciation or depreciation on investments to interest receivable on the Statements of Assets and Liabilities.
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, 2016 are disclosed in the Notes to Schedules of Investments.
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.
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 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.
When-Issued Transactions Certain Funds may purchase or sell securities on a when-issued basis. These transactions are made
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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 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. The underlying securities for all repurchase agreements are held by a Fund’s custodian or designated subcustodians under tri-party repurchase agreements. 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) 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 the Fund. A short sale is “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 the 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 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
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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 The Fund may write or purchase options to enhance returns or to hedge an existing position or future investment. The 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 the Fund’s exposure to the underlying instrument. Writing call options tends to decrease the Fund’s exposure to the underlying instrument. When the 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 Statement 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. The 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 the Fund may not be able to enter into a closing transaction because of an illiquid market.
The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. The Fund pays a premium which is included as an asset on the Statement 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 Securities The Fund may write or purchase options on securities. An option uses a specified security as the underlying instrument for the option contract. The Fund may write or purchase options to enhance returns or to hedge an existing position or future investment.
(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
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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 (see below), however, 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 reflects a Fund’s actual economic exposure during the term of the credit default swap agreement. 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.
Credit Default Swap Agreements A Fund 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
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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 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.
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, 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 an increase 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
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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.). At present, the U.S. and many parts of the world, including certain European countries, are experiencing near historically low interest rates. 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. 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.
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 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 financial derivative instruments traded on exchanges or clearinghouses, the primary credit risk is the creditworthiness of a Fund’s clearing broker or the exchange or clearinghouse itself. 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 the Fund has unsettled or open transactions will default. PIMCO, as the Adviser, minimizes 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 shall 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
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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.
Master Netting 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 To-Be-Announced 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
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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 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:
Investment Advisory Fee | Supervisory and Administrative Fee | |||||||||||||||||||||||||||
Fund Name | All Classes | Institutional Class | Class P | Class D | A, C and R Classes | |||||||||||||||||||||||
PIMCO Dividend and Income Fund (1) | 0.69% | 0.30% | 0.40% | 0.40% | 0.40% | |||||||||||||||||||||||
PIMCO EqS® Long/Short Fund | 1.04% | 0.45% | 0.55% | 0.55% | 0.55% |
(1) | Effective June 16, 2016, the Fund’s Investment Advisory Fee was reduced by 0.20% to 0.49% per annum. |
(c) Distribution and Servicing Fees PIMCO Investments LLC (“PI”), 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, Class C and Class R shares of the Trust pursuant to Rule 12b-1 under the Act. In connection with the distribution of Class C and Class R shares of the Trust, the Distributor receives distribution fees from the Trust of up to 0.75% for Class C shares and 0.25% for Class R shares, and in connection with personal services rendered to Class A, Class C 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, Class C 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
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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 set forth 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 C | 0.75% | 0.25% | ||||||||||
Class R | 0.25% | 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, 2016, the Distributor retained $184,988 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, which include service fees payable with respect to the Administrative Class 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 PIMCO has agreed to waive a portion of the Funds’ Supervisory and Administrative Fees in each Fund’s first fiscal year, to the extent that the payment of each Fund’s pro rata share of organizational expenses and Trustee Fees cause the actual expense ratio to rise above the rates disclosed in the then-current prospectus plus 0.0049%, the “Expense Limit” (calculated as a percentage of each Fund’s average daily net assets attributable to each class).
PIMCO had contractually agreed, through October 31, 2016, to reduce its advisory fee by 0.16% of the average daily net assets of the PIMCO Dividend and Income Fund. This Fee Limitation Agreement renews annually unless terminated by PIMCO upon at least 30 days’ notice prior to the end of the contract term. Effective June 16, 2016, the contractual agreement by PIMCO to reduce it’s advisory fee by 0.16% of the average daily net assets of the PIMCO Dividend and Income Fund has been terminated.
Under the Fee Limitation Agreement, PIMCO is entitled to reimbursement by each Fund of any portion of the Supervisory and Administrative Fee and/or Investment Advisory Fee waived, reduced or reimbursed pursuant to the Fee Limitation Agreement or the Expense Limitation Agreement, respectively (the “Reimbursement Amount”) during the previous three years, provided that such amount paid to PIMCO will not: 1) together with any recoupment of organizational expenses and pro rata Trustees’ fees pursuant to the Expense
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Limitation Agreement, exceed the Expense Limit; 2) exceed the total Reimbursement Amount; or 3) include any amounts previously reimbursed to PIMCO. The Fee 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.
PIMCO may be reimbursed for these waived amounts in future periods, not to exceed thirty-six months after the waiver. Expenses that have been waived may still be reimbursed by the Administrator, to the extent the Fund’s annualized total portfolio operating expenses plus the amount reimbursed does not exceed the Expense Limit. The recoverable amounts to PIMCO at June 30, 2016, were as follows (amounts in thousands):
Fund Name | Recoverable Amounts | |||||||
PIMCO Dividend and Income Fund | $ | 3,789 | ||||||
PIMCO EqS® Long/Short Fund | 206 |
9. RELATED PARTY TRANSACTIONS
The Adviser, Administrator, and Distributor are related parties. Fees payable 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.
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, 2016,
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 | $ | 2,017 | $ | 14,531 |
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.
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, 2016, were as follows (amounts in thousands†):
U S Government/Agency | All Other | |||||||||||||||||||
Fund Name | Purchases | Sales | Purchases | Sales | ||||||||||||||||
PIMCO Dividend and Income Fund | $ | 0 | $ | 0 | $ | 731,451 | $ | 1,100,278 | ||||||||||||
PIMCO EqS® Long/Short Fund | 36,043 | 32,860 | 7,526,036 | 7,471,520 | ||||||||||||||||
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
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June 30, 2016
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 Dividend and Income Fund | PIMCO EqS® Long/Short Fund | |||||||||||||||||||||||||||||||||
Year Ended 06/30/2016 | Year Ended 06/30/2015 | Year Ended 06/30/2016 | Year Ended 06/30/2015 | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 1,999 | $ | 19,199 | 1,504 | $ | 19,087 | 18,899 | $ | 220,296 | 4,616 | $ | 54,428 | ||||||||||||||||||||||
Class P | 2,499 | 27,174 | 7,885 | 100,872 | 20,667 | 242,511 | 18,402 | �� | 216,705 | |||||||||||||||||||||||||
Class D | 702 | 7,868 | 1,954 | 24,794 | 3,190 | 37,157 | 2,701 | 31,509 | ||||||||||||||||||||||||||
Class A | 4,205 | 46,505 | 8,330 | 105,843 | 5,433 | 63,329 | 3,937 | 46,184 | ||||||||||||||||||||||||||
Class C | 4,077 | 44,242 | 8,613 | 108,921 | 4,981 | 56,809 | 3,298 | 38,089 | ||||||||||||||||||||||||||
Class R | 2 | ^ | 15 | ^ | 1 | 14 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 426 | 4,233 | 346 | 4,277 | 218 | 2,550 | 163 | 1,887 | ||||||||||||||||||||||||||
Class P | 564 | 5,610 | 409 | 5,058 | 263 | 3,072 | 108 | 1,248 | ||||||||||||||||||||||||||
Class D | 271 | 2,689 | 137 | 1,691 | 55 | 640 | 22 | 247 | ||||||||||||||||||||||||||
Class A | 2,181 | 21,595 | 1,157 | 14,302 | 152 | 1,763 | 83 | 957 | ||||||||||||||||||||||||||
Class C | 2,223 | 21,928 | 1,088 | 13,410 | 161 | 1,820 | 70 | 784 | ||||||||||||||||||||||||||
Class R | 2 | ^ | 22 | ^ | 2 | 22 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (4,804 | ) | (50,731 | ) | (3,158 | ) | (39,875 | ) | (23,144 | ) | (271,801 | ) | (25,702 | ) | (299,684 | ) | ||||||||||||||||||
Class P | (13,443 | ) | (141,787 | ) | (6,531 | ) | (81,608 | ) | (16,702 | ) | (193,796 | ) | (24,620 | ) | (285,630 | ) | ||||||||||||||||||
Class D | (3,248 | ) | (33,913 | ) | (1,226 | ) | (15,462 | ) | (1,558 | ) | (18,122 | ) | (5,605 | ) | (64,780 | ) | ||||||||||||||||||
Class A | (13,604 | ) | (140,011 | ) | (9,822 | ) | (124,012 | ) | (7,254 | ) | (84,522 | ) | (21,852 | ) | (254,288 | ) | ||||||||||||||||||
Class C | (15,791 | ) | (162,722 | ) | (7,481 | ) | (93,888 | ) | (4,195 | ) | (47,471 | ) | (9,708 | ) | (110,601 | ) | ||||||||||||||||||
Class R | (27 | )^ | (249 | )^ | (15 | ) | (186 | ) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | (31,766 | ) | $ | (328,333 | ) | 3,193 | $ | 43,260 | 1,166 | $ | 14,235 | (54,087 | ) | $ | (622,945 | ) | ||||||||||||||||||
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
^ | Class R Shares liquidated at the close of business on January 22, 2016. |
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.
PIMCO has received a Wells Notice from the staff of the U.S. Securities and Exchange Commission (“SEC”) that relates to the PIMCO Total Return Active Exchange-Traded Fund (“BOND”), a series of PIMCO ETF Trust. The notice indicates the staff’s preliminary determination to recommend that the SEC commence a civil action against PIMCO stemming from a non-public investigation relating to BOND. A Wells Notice is neither a formal allegation of wrongdoing nor a finding that any law was violated.
This matter principally pertains to the valuation of smaller sized positions in non-agency mortgage-backed securities purchased by BOND between its inception on February 29, 2012 and June 30, 2012, BOND’s performance disclosures for that period, and PIMCO’s compliance policies and procedures related to these matters.
The Wells process provides PIMCO with the opportunity to demonstrate to the SEC staff why it believes its conduct was appropriate, in keeping with industry standards, and that no action should be taken. PIMCO believes that this matter is unlikely to have a material adverse effect on any Fund or on PIMCO’s ability to provide investment management services to any Fund.
The foregoing speaks only as of the date 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.
ANNUAL REPORT | JUNE 30, 2016 | 53 |
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Notes to Financial Statements (Cont.)
In accordance with U.S. GAAP, the Adviser has reviewed the Funds’ tax positions for all open tax years. As of June 30, 2016, 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 2013-2015, 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, 2016, 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 | $ | 0 | $ | 0 | $ | (7,793 | ) | $ | (875 | ) | $ | (128,431 | ) | $ | 0 | $ | (521 | ) | ||||||||||||||
PIMCO EqS® Long/Short Fund | 0 | 0 | 30,029 | (39 | ) | (7,816 | ) | 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 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, organizational expenditures, and distributions payable at fiscal year-end. |
(4) | Capital losses available to offset future net capital gains expire in varying amounts in the years shown below. |
(5) | Capital losses realized during the period November 1, 2015 through June 30, 2016 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, 2015 through June 30, 2016 and Ordinary losses realized during the period January 1, 2016 through June 30, 2016, 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, 2016, the Funds had the following post-effective capital losses with no expiration (amounts in thousands†):
Short-Term | Long-Term | |||||||||||
PIMCO Dividend and Income Fund | $ | 73,130 | $ | 55,301 | ||||||||
PIMCO EqS® Long/Short Fund | 6,058 | 1,758 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
As of June 30, 2016, 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 | $ | 454,316 | $ | 11,080 | $ | (18,835 | ) | $ | (7,755 | ) | ||||||||||
PIMCO EqS® Long/Short Fund | 874,593 | 44,101 | (12,610 | ) | 31,491 |
† | 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), and convertible preferred stock. |
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June 30, 2016
For the fiscal years ended June 30, 2016 and June 30, 2015, respectively, the Funds made the following tax basis distributions (amounts in thousands†):
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||||||||
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 | $ | 29,712 | $ | 38,300 | $ | 0 | $ | 27,505 | $ | 23,147 | $ | 0 | ||||||||||||||||
PIMCO EqS® Long/Short Fund | 2 | 9,887 | 0 | 0 | 5,140 | 0 | ||||||||||||||||||||||
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
(8) | Includes short-term capital gains distributed, if any. |
(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. |
ANNUAL REPORT | JUNE 30, 2016 | 55 |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of PIMCO Equity Series®:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations, of changes in net assets, and of cash flows (PIMCO EqS® Long/Short Fund) and the financial highlights present fairly, in all material respects, the financial position of PIMCO Dividend and Income Fund and PIMCO EqS® Long/Short Fund (two series of PIMCO Equity Series®, hereafter referred to as the “Funds”) at June 30, 2016, the results of each of their operations and the cash flows for PIMCO EqS® Long/Short Fund 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 the financial highlights of the Funds for each of the periods presented, 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 at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 22, 2016
56 | PIMCO EQUITY SERIES |
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Glossary: (abbreviations that may be used in the preceding statements)
(Unaudited)
Counterparty Abbreviations: | ||||||||||
BOA | Bank of America N.A. | GLM | Goldman Sachs Bank USA | MSB | Morgan Stanley Bank N.A. | |||||
BRC | Barclays Bank PLC | GSC | Goldman Sachs & Co. | MYC | Morgan Stanley Capital Services, Inc. | |||||
CBK | Citibank N.A. | HUS | HSBC Bank USA N.A. | SSB | State Street Bank and Trust Co. | |||||
DUB | Deutsche Bank AG | JPM | JPMorgan Chase Bank N.A. | UAG | UBS AG Stamford | |||||
FOB | Credit Suisse Securities (USA) LLC | |||||||||
Currency Abbreviations: | ||||||||||
AUD | Australian Dollar | DKK | Danish Krone | JPY | Japanese Yen | |||||
BRL | Brazilian Real | EUR | Euro | MXN | Mexican Peso | |||||
CAD | Canadian Dollar | GBP | British Pound | USD (or $) | United States Dollar | |||||
CHF | Swiss Franc | |||||||||
Index/Spread Abbreviations: | ||||||||||
CDX.HY | Credit Derivatives Index - High Yield | CDX.IG | Credit Derivatives Index - Investment Grade | CMBX | Commercial Mortgage-Backed Index | |||||
Other Abbreviations: | ||||||||||
BABs | Build America Bonds | CLO | Collateralized Loan Obligation | SP - ADR | Sponsored American Depositary Receipt | |||||
CBO | Collateralized Bond Obligation | PIK | Payment-in-Kind |
ANNUAL REPORT | JUNE 30, 2016 | 57 |
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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 2016 ordinary income dividend that qualifies for the corporate dividend received deduction is set forth 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 2016:
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, 2016 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, 2016 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.
Dividend Received Deduction % | Qualified Dividend Income % | Qualified Interest Income (000s† ) | Qualified Short-Term Capital Gain (000s†) | |||||||||||||||||
PIMCO Dividend and Income Fund | 49.24% | 100% | $ | 955 | $ | 7,193 | ||||||||||||||
PIMCO EqS® Long/Short 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 2017, 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 2016.
58 | PIMCO EQUITY SERIES |
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(Unaudited)
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 Trustees* | ||||||||
Brent R. Harris (1959) Chairman of the Board and Trustee | 03/2010 to present | Managing Director, PIMCO. Formerly, member of Executive Committee, PIMCO. | 169 | Chairman and Trustee, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT; Director, StocksPLUS® Management, Inc; and member of Board of Governors, Investment Company Institute. | ||||
Independent Trustees | ||||||||
E. Philip Cannon (1940) Trustee | 03/2010 to present | Private Investor. Formerly, President, Houston Zoo. | 169 | Trustee, PIMCO Equity Series VIT; Lead Independent Trustee, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. Formerly, Trustee, Allianz Funds (formerly, PIMCO Funds: Multi-Manager Series). | ||||
Jennifer Holden Dunbar (1963) Trustee | 02/2016 to present | Managing Director, Dunbar Partners, LLC (business consulting and investments). | 169 | 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. | 169 | 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). | 169 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. |
* | 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. |
ANNUAL REPORT | JUNE 30, 2016 | 59 |
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Management of the Trust (Cont.)
(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, PIMCO. President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust and PIMCO 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. | ||
Douglas M. Hodge (1957) Senior Vice President | 02/2014 to present
President 05/2013 to 02/2014 | Managing Director, Chief Executive Officer, PIMCO (since 2/14); Chief Operating Officer, PIMCO (7/09 - 2/14); Member of Executive Committee and Head of PIMCO’s Asia Pacific region. Member Global Executive Committee, Allianz Asset Management. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Kevin M. Broadwater (1964) Vice President - Senior Counsel | 05/2012 to present | Executive Vice President and Deputy General Counsel, PIMCO. Vice President - Senior Counsel, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
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 and PIMCO 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 and PIMCO 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 | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust and PIMCO 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 and PIMCO Closed-End Funds. Formerly, Vice President, Fidelity Investments. | ||
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 and PIMCO 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. | ||
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 and PIMCO 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 and PIMCO Closed-End Funds. | ||
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 and PIMCO Closed-End Funds. Formerly, Head of Mutual Fund Reporting, GMO and Assistant Treasurer, GMO Trust and GMO Series Trust Funds. |
* | 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 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 address of these officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
60 | 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.
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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 May 13, 2015.
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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Approval of Investment Advisory Contract and Other Agreements
(Unaudited)
Approval of the Interim Sub-Advisory Agreement, Interim Portfolio Implementation Agreement, Amended and Restated Sub-Advisory Agreement and Portfolio Implementation Agreement for PIMCO Dividend and Income Fund
At a meeting held on June 15, 2016, the Board of Trustees (the “Board”) of PIMCO Equity Series (the “Trust”), including all of the independent Trustees (the “Independent Trustees”), considered and approved on behalf of the PIMCO Dividend and Income Fund (the “Fund”), a series of the Trust: the Interim Sub-Advisory Agreement (the “Interim Sub-Advisory Agreement”) between Pacific Investment Management Company LLC (“PIMCO”) and Research Affiliates, LLC (“RALLC”) and the Interim Portfolio Implementation Agreement (the “Interim Portfolio Implementation Agreement”) (together with the Interim Sub-Advisory Agreement, the “Interim Agreements”) among PIMCO, RALLC and Parametric Portfolio Associates LLC (“Parametric”), each for a term no longer than through November 11, 2016; and the Amended and Restated Sub-Advisory Agreement (the “Sub-Advisory Agreement”) between PIMCO and RALLC and the Portfolio Implementation Agreement (the “Portfolio Implementation Agreement”) (together with the Sub-Advisory Agreement, the “Agreements”) among PIMCO, RALLC and Parametric, each subject to approval by the Fund’s shareholders, and each for an initial term of two years following shareholder approval and execution.
The information, material factors and conclusions that formed the basis for the Board’s approvals are described below.
1. INFORMATION RECEIVED
(a) Materials Reviewed The Board received a wide variety of materials relating to the services to be provided by RALLC and Parametric, both in connection with the meeting and the February 25, 2015 meeting at which the Board considered approval of a sub-advisory agreement between PIMCO and RALLC, and a portfolio implementation agreement among PIMCO, RALLC and Parametric, with respect to certain other series of the Trust (the “RAE Fundamental Funds”). The Board reviewed information relating to RALLC’s and Parametric’s financial condition, personnel, investment services and performance, fees and other benefits and profitability, compliance programs and other information relating to the nature, extent and quality of services proposed to be provided by RALLC and Parametric. In addition, the Board also reviewed material provided by counsel to the Trust and the Independent Trustees, which included, among other things, memoranda outlining legal duties of the Board in considering the approval of the Interim Agreements and the Agreements and certain regulatory matters pertaining to the Interim Agreements. The Board also reviewed information about the RALLC and Parametric personnel who would be providing services to PIMCO, RALLC and the Fund under the Interim Agreements and the Agreements.
(b) Review Process In connection with the approval of the Interim Agreements and the Agreements, the Board reviewed written materials prepared by RALLC and Parametric. The Board also requested and received assistance and advice regarding applicable legal standards from Trust counsel. The approval determinations were made on the basis of each Trustee’s business judgment after consideration of all the information presented. Individual Trustees may have given different weights to certain factors and assigned various degrees of materiality to information received in connection with the approval process. In deciding to approve the Interim Agreements and the Agreements, the Board did not identify any single factor or particular information that, in isolation, was controlling. This summary describes the most important, but not all, of the factors considered by the Board.
2. NATURE, EXTENT AND QUALITY OF SERVICES
The Board considered the depth and quality of the investment management process of RALLC and Parametric, including for each entity, the experience and capabilities of its senior management and other personnel, and the overall financial strength and stability of its organization. The Board considered the sub-advisory services proposed to be provided by RALLC to PIMCO and the Fund and the portfolio implementation services proposed to be provided by Parametric to PIMCO, RALLC and the Fund. The Board also considered that, with respect to the services provided by RALLC and Parametric to the Fund, the terms of the Interim Agreements are substantially identical to the terms of the Agreements.
The Board considered information about RALLC’s and Parametric’s personnel responsible for providing services under the Interim Agreements and the Agreements. The Board considered the depth and quality of RALLC’s investment management and research capabilities, the experience and capabilities of its portfolio management personnel, and in particular the experience and capabilities of Robert Arnott, RALLC’s principal, and the overall financial strength of the organization. The Board also considered the depth and quality of Parametric’s trading, risk management, and compliance capabilities and resources, which are integral parts of its role as portfolio implementer.
The Board considered that the RAE Income Global Portfolio is a unique and proprietary product of RALLC, and that the sub-advisory services based on the RAE Income Global Portfolio are only available from RALLC. The Board also considered information about the RAE Income Global Portfolio and RALLC’s RAE Fundamental methodology for portfolio construction. Additionally, the Board considered RALLC’s policies, procedures and systems to assure compliance with applicable laws and regulations.
The Board also considered the services provided by RALLC and Parametric to the RAE Fundamental Funds, the quality of those services and RALLC’s and Parametric’s experience working with PIMCO through
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Approval of Investment Advisory Contract and Other Agreements (Cont.)
(Unaudited)
a sub-advisory and portfolio implementation arrangement, respectively. Further, the Board considered the oversight structure under which PIMCO would oversee RALLC and both PIMCO and RALLC would have oversight responsibility over Parametric, and noted that this oversight structure is the same as the oversight structure in place with respect to the RAE Fundamental Funds.
Ultimately, the Board concluded that the nature, extent and quality of services proposed to be provided by RALLC and Parametric under the Interim Agreements and the Agreements are likely to benefit the Fund and its shareholders.
3. INVESTMENT PERFORMANCE
As the Fund was not sub-advised by RALLC and did not receive portfolio implementation services from Parametric at the time the Interim Agreements and the Agreements were considered, the Board did not receive or consider investment performance information for the Fund.
4. SUB-ADVISORY FEES AND PORTFOLIO IMPLEMENTATION FEES
The Board noted that PIMCO will compensate RALLC and Parametric pursuant to the Interim Agreements and the Agreements and that the Fund will not directly pay for RALLC’s or Parametric’s services. The Board considered favorably the fact that the Fund and shareholders will receive increased and enhanced services from RALLC and Parametric with no increased cost to the Fund. The Board also considered that the compensation PIMCO will pay to RALLC under the Interim Sub-Advisory Agreement and Sub-Advisory Agreement is subject to reduction according to certain breakpoints set forth in the separate interim and final letter agreements, respectively. Moreover, the Board considered that the compensation PIMCO will pay to Parametric under the Interim Portfolio Implementation Agreement and Portfolio Implementation Agreement is subject to reduction according to certain breakpoints.
Based on the information presented by PIMCO, RALLC and Parametric, members of the Board then determined, in the exercise of their business judgment, that the level of the sub-advisory fees to be paid by PIMCO to RALLC and the level of the portfolio implementation fees to be paid by PIMCO to Parametric are reasonable and approval of the Interim Agreements and the Agreements would likely benefit the Fund and its shareholders.
5. SUB-ADVISER AND PORTFOLIO IMPLEMENTER COSTS, LEVEL OF PROFITS AND ECONOMIES OF SCALE
As the Fund was not sub-advised by RALLC and did not receive portfolio implementation services from Parametric at the time the Interim Agreements and the Agreements were considered, information regarding RALLC’s and Parametric’s costs in providing services to the Fund and the profitability of RALLC’s and Parametric’s relationship with
the Fund was not available. Additionally, as noted above, the Board considered that PIMCO will compensate RALLC and Parametric pursuant to the Interim Agreements and the Agreements and that the Fund will not directly pay for RALLC’s or Parametric’s services, and that the compensation PIMCO will pay to RALLC and to Parametric under the Interim Agreements and the Agreements is, in each case, subject to certain breakpoints.
Ultimately, the Board concluded that the Fund’s proposed cost structure, with respect to the fees to be paid by PIMCO to RALLC and Parametric, was reasonable.
6. ANCILLARY BENEFITS
The Board considered whether RALLC or Parametric and their affiliates may receive any other benefits as a result of RALLC’s or Parametric’s relationship with the Fund and noted that neither RALLC nor Parametric expects to receive any indirect or “fallout” benefits from its relationship with the Fund. The Board noted that RALLC has a policy not to engage in soft dollar arrangements and that, as of October 31, 2015, Parametric does not receive research or other products or services from broker-dealers in exchange for client securities transactions.
7. CONCLUSIONS
Based on its review, including its consideration of each of the factors referred to above, the Board concluded that the nature, extent and quality of the services to be rendered to the Fund by RALLC and Parametric supported the approval of the Interim Agreements and the Agreements. The Board concluded that the Interim Agreements and the Agreements were fair and reasonable to the Fund and its shareholders, that the Fund’s shareholders would likely receive reasonable value in return for the sub-advisory fees paid to RALLC by PIMCO and the portfolio implementation fees paid to Parametric by PIMCO, that the approval of the Interim Agreements and the Agreements was in the best interests of the Fund and its shareholders and that the determination to submit the Agreements to shareholders for approval was in the best interests of the Fund and its shareholders.
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A special meeting of shareholders of the series of the Trust was held on February 5, 2016. The special meeting was held for the purpose of electing two (2) Trustees to the Board. Shareholders of all series of the Trust voted together on the proposal, and elected two (2) Trustees at the special meeting. The results of the proxy solicitation on this matter are available in the Funds’ Semi-Annual Report to shareholders for the period ended December 31, 2015.
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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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PES3001AR_063016
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PIMCO Equity Series®
Annual Report
June 30, 2016
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, 2016. 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.
Outside of the reporting period, PIMCO announced on July 19, 2016 that the firm’s Managing Directors have selected Emmanuel (Manny) Roman as PIMCO’s next Chief Executive Officer. PIMCO’s current CEO Douglas Hodge will assume a new role as Managing Director and Senior Advisor when Mr. Roman joins PIMCO on November 1st.
The announcement of Mr. Roman as PIMCO’s CEO is the culmination of a process undertaken by the firm to hire a senior executive who would add leadership and strategic insights combined with a deep appreciation of PIMCO’s diversified global businesses, investment process and focus on superior investment performance and client-service. Mr. Roman’s appointment has the full support of the firm’s leadership including Mr. Hodge, PIMCO’s President Jay Jacobs, the firm’s Executive Committee and its Managing Directors. Mr. Roman has nearly 30 years of experience in the investment industry, with expertise in fixed income and proven executive leadership, most recently as CEO of Man Group PLC, one of the world’s largest publicly-traded alternative asset managers and a leader in liquid, high-alpha investment strategies.
Highlights of the financial markets during the twelve-month reporting period include:
n | The first half of the reporting period through mid-February 2016 was marked by ongoing concerns over the global impact of a slowdown in the Chinese economy, which drove commodity prices and inflation expectations generally lower. By March, a recovery in the price of oil and expectations of lower interest rates for longer supported a rally in risk assets. The Bank of Japan (“BOJ”) and the People’s Bank of China, for example, indicated their intent for further policy easing, with the BOJ resorting to a negative interest rate policy in February 2016. The European Central Bank (“ECB”) also resorted to unconventional monetary policy with additional easing measures and an expansion of its quantitative easing program by shifting its focus toward domestic credit, pushing government yields into negative territory. In June 2016, the ECB began purchasing corporate bonds to help invigorate economic growth and stimulate inflation in the region. |
n | In the U.S., concerns regarding the global impact of tightening financial conditions and renewed U.S. dollar strength kept the Federal Reserve (“Fed”) on hold at their June 2016 meeting, after slightly raising interest rates at their December 2015 meeting. In addition, the U.S. dollar appreciated against most European and emerging market currencies, while falling against the Japanese yen. The U.S. interest rate yield curve flattened as the ten-year U.S. Treasury yield rallied to all-time lows and short-term rates rose with the initial December 2015 Fed rate hike. Revised first quarter 2016 U.S. gross domestic product (“GDP”) data released in late June was marginally stronger as retail sales, housing and consumer sentiment data indicated an improving economy. |
n | Market movements and news headlines at the end of the reporting period were dominated by the unexpected outcome of the U.K. referendum on June 23, 2016. Initial investor reaction to the Brexit vote was largely “risk-off” as various assets re-priced to the surprise outcome, with U.S. Treasuries, the Japanese yen and gold headlining a safe-haven rally. However, aside from the Pound Sterling and European and Japanese equities, most asset classes recovered in the ensuing week as investors reassessed the impact of the Brexit vote on global growth expectations. |
n | Global developed market equities experienced weak performance amid a period marked by economic uncertainty, increased volatility and geopolitical concerns. U.S. equities, as represented by the S&P 500 Index, were a bright spot, returning 3.99% over the reporting period. International equity markets (developed ex-U.S.), as represented by the MSCI EAFE Net Dividend Index (USD Hedged) declined 9.90% over the reporting period and the MSCI EAFE Net Dividend Index (USD Unhedged) declined 10.16% over the reporting period. Japanese equities, as represented by the Nikkei 225 Index in JPY, declined 21.86% over the reporting period, and |
2 | PIMCO EQUITY SERIES |
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European equities, as represented by the MSCI Europe Index in EUR, declined 10.96% over the reporting period. During the first eight months of the reporting period, declining commodities prices and China’s economic deceleration drove concerns of slowing global growth, which weighed on equity returns. However, in the last third of the reporting period, developed market equities began to rebound from previous lows as global central banks resorted to increasingly unconventional monetary policy. However, late in the reporting period in June, global equities were pressured once again due to Britain’s decision to leave the European Union. |
n | Emerging market (“EM”) equities, as represented by the MSCI Emerging Markets Index (Net Dividends in USD), declined 12.05% over the reporting period. Concerns over slower economic growth in China, a bear market in commodities, political corruption in Latin America and several attempts by the People’s Bank of China to support the domestic equity market added to fears of slowing global growth. Late in the reporting period, emerging market equities experienced a strong rebound following February 2016 lows, with cyclicals and commodity-linked markets leading the rally. |
n | U.S. Treasuries, as represented by the Barclays U.S. Treasury Index, returned 6.22% for the reporting period. Yields beyond one-year maturities declined across the U.S. Treasury yield curve as a more dovish tone from the Fed after its June 2016 meeting, coupled with the surprise result of the U.K. referendum, pushed expectations for policy normalization further into the future. Investors also looked to U.S. Treasuries for their perceived safety and as a source of high-quality yield. The benchmark ten-year U.S. Treasury note yielded 1.49% at the end of the reporting period, down from 2.35% on June 30, 2015. The Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, returned 6.00% 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 have placed 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 22, 2016
|
Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income dividends 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, 2016 | 3 |
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Important Information About the Funds
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. 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.
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
4 | PIMCO EQUITY SERIES |
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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 (i) 18 months after purchase for purchases made prior to August 10, 2015 and (ii) 12 months after purchase for purchases made on or after August 10, 2015. The Cumulative Returns chart reflects only Institutional Class performance. Performance for Class P, Administrative Class, Class D, Class A, Class C and Class R shares, if applicable, are typically lower than Institutional Class performance due to the lower expenses paid by Institutional Class shares. Performance shown is net of fees and expenses. A Fund’s total annual operating expense ratios on each individual Fund Summary page are as of the currently effective prospectus, as supplemented to date. The minimum initial investment amount for Institutional Class, Class P and Administrative Class shares is $1,000,000. The minimum initial investment amount for Class A, Class C and Class D shares is $1,000. There is no minimum initial investment for Class R shares. Each Fund measures its performance against a 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.
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 | Administrative Class | Class D | Class A | Class C | Class R | Diversification Status | |||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 06/05/2015 | 06/05/2015 | 06/05/2015 | — | — | 06/05/2015 | 06/05/2015 | — | Non-diversified | |||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Global Fund | 06/05/2015 | 06/05/2015 | 06/05/2015 | — | — | 06/05/2015 | 06/05/2015 | — | Non-diversified | |||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 06/05/2015 | 06/05/2015 | 06/05/2015 | — | — | 06/05/2015 | 06/05/2015 | — | Non-diversified | |||||||||||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 06/05/2015 | 06/05/2015 | 06/05/2015 | — | — | 06/05/2015 | 06/05/2015 | — | Non-diversified | |||||||||||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 06/05/2015 | 06/05/2015 | 06/05/2015 | — | — | 06/05/2015 | 06/05/2015 | — | Non-diversified | |||||||||||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 06/05/2015 | 06/05/2015 | 06/05/2015 | — | — | 06/05/2015 | 06/05/2015 | — | 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
ANNUAL REPORT | JUNE 30, 2016 | 5 |
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Important Information About the Funds (Cont.)
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 PIMCO Equity Series 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.
PIMCO Equity Series files a complete schedule of each Fund’s portfolio 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 will also be 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, 2016 | 7 |
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PIMCO RAE Fundamental Emerging Markets Fund
Cumulative Returns Through June 30, 2016
$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”). The stocks are selected by the Fund’s subadviser, Research Affiliates, LLC, from a broad universe of companies which satisfy certain liquidity and capacity requirements. |
Average Annual Total Return for the period ended June 30, 2016* | ||||||||||||||||||
1 Year | 5 Year | 10 Year | Fund Inception (05/31/06) | |||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund Institutional Class | (10.32)% | (4.42)% | 4.78% | 4.47% | ||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund Class P | (10.54)% | (4.45)% | 4.77% | 4.45% | ||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund Class A | (10.61)% | (4.46)% | 4.76% | 4.44% | ||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund Class A (adjusted) | (13.98)% | (5.19)% | 4.36% | 4.05% | ||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund Class C | (11.33)% | (4.64)% | 4.67% | 4.35% | ||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund Class C (adjusted) | (12.21)% | (4.64)% | 4.67% | 4.35% | ||||||||||||||
MSCI Emerging Markets Index (Net Dividends in USD)± | (12.05)% | (3.78)% | 3.54% | 3.48% |
All Fund returns are net of fees and expenses.
± The MSCI Emerging Markets Index (Net Dividends in USD) 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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
8 | PIMCO EQUITY SERIES |
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Institutional Class - PEIFX | Class P - PEPFX | Class A - PEAFX | Class C - PECFX |
Top 10 Holdings as of 06/30/20161§
Samsung Electronics Co. Ltd. | 3.2% | |||||||
China Construction Bank Corp. ‘H’ | 3.1% | |||||||
Gazprom PJSC SP — ADR | 2.8% | |||||||
Lukoil PJSC SP — ADR | 2.7% | |||||||
Vale S.A. | 2.6% | |||||||
Industrial & Commercial Bank of China Ltd. ‘H’ | 2.2% | |||||||
Itau Unibanco Holding S.A. SP — ADR ‘H’ | 2.2% | |||||||
Surgutneftegas OJSC SP — ADR | 1.9% | |||||||
Bank of China Ltd. ‘H’ | 1.8% | |||||||
Petroleo Brasileiro S.A. SP — ADR | 1.8% |
Geographic Breakdown as of 06/30/20161§
Brazil | 19.5% | |||||||
China | 17.8% | |||||||
Russia | 14.1% | |||||||
South Korea | 13.9% | |||||||
South Africa | 10.3% | |||||||
Taiwan | 7.4% | |||||||
Hong Kong | 4.0% | |||||||
India | 3.5% | |||||||
Thailand | 2.9% | |||||||
Mexico | 2.4% | |||||||
Poland | 2.3% | |||||||
Indonesia | 1.4% | |||||||
Other | 0.5% |
1 % of Investments, at value.
§ Top 10 Holdings, Geographic Breakdown and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s relative performance during the reporting period:
» | Overweight to the telecommunication services sector negatively contributed to relative performance, as the sector underperformed the MSCI Emerging Markets Index. |
» | Positioning in the financials sector negatively contributed to relative performance, as the sector underperformed the MSCI Emerging Markets Index. |
» | An overweight to and positioning within in the oil, gas & consumable fuels industry positively contributed to relative performance, as the Fund’s holdings outperformed the MSCI Emerging Markets Index. |
» | Overweight exposure and positioning in the metals & mining industry positively contributed to relative performance, as the Fund’s holdings outperformed the MSCI Emerging Markets Index. |
ANNUAL REPORT | JUNE 30, 2016 | 9 |
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PIMCO RAE Fundamental Global Fund
Cumulative Returns Through June 30, 2016
$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 by investing under normal circumstances substantially all of its assets in (i) Institutional Class shares of the PIMCO RAE Fundamental US Fund (“US Fund”), the PIMCO RAE Fundamental International Fund (“International Fund”), and the PIMCO RAE Fundamental Emerging Markets Fund (“Emerging Markets Fund”) (together, the US Fund, the International Fund and the Emerging Markets Fund are referred to as the “Underlying Funds”) and (ii) equity securities that are eligible investments for the Underlying Funds. Under normal circumstances, 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (06/05/15) | |||||||||
PIMCO RAE Fundamental Global Fund Institutional Class | (4.38)% | (5.36)% | ||||||||
PIMCO RAE Fundamental Global Fund Class P | (4.44)% | (5.51)% | ||||||||
PIMCO RAE Fundamental Global Fund Class A | (4.61)% | (5.67)% | ||||||||
PIMCO RAE Fundamental Global Fund Class A (adjusted) | (8.15)% | (8.98)% | ||||||||
PIMCO RAE Fundamental Global Fund Class C | (5.29)% | (6.38)% | ||||||||
PIMCO RAE Fundamental Global Fund Class C (adjusted) | (6.23)% | (6.38)% | ||||||||
MSCI All Country World Index± | (3.73)% | (4.59)% |
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, is 1.18% for the Institutional Class shares, 1.28% for the Class P shares, 1.53% for the Class A shares and 2.28% for the Class C shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus. For performance current to the most recent month-end, visit www.pimco.com.
10 | PIMCO EQUITY SERIES |
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Institutional Class - PFQIX | Class P - PFQPX | Class A - PFQAX | Class C - PFQCX |
Top Holdings as of 06/30/20161§
PIMCO RAE Fundamental U.S. Fund | 51.6% | |||||||
PIMCO RAE Fundamental International Fund | 37.5% | |||||||
PIMCO RAE Fundamental Emerging Markets Fund | 10.9% |
1 % of Investments, at value.
§ Top Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s relative performance during the reporting period:
» | Positioning in the financials sector negatively contributed to relative performance, as the sector underperformed the MSCI All Country World Index. |
» | Underweight exposure to the consumer staples sector negatively contributed to relative performance, as the sector outperformed the MSCI All Country World Index. |
» | Overweight exposure to the diversified telecommunication services industry positively contributed to relative performance, as the industry outperformed the MSCI All Country World Index. |
» | Overweight exposure to the utilities sector positively contributed to relative performance, as the sector outperformed the MSCI All Country World Index. |
ANNUAL REPORT | JUNE 30, 2016 | 11 |
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PIMCO RAE Fundamental Global ex-US Fund
Cumulative Returns Through June 30, 2016
$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 by investing under normal circumstances substantially all of its assets in (i) Institutional Class shares of the PIMCO RAE Fundamental International Fund (“International Fund”) and the PIMCO RAE Fundamental Emerging Markets Fund (“Emerging Markets Fund”) (together, the International Fund and the Emerging Markets Fund are referred to as the “Underlying Funds”), (ii) equity securities of small companies economically tied to non-U.S. countries, and (iii) securities that are eligible investments for the Underlying Funds. Under normal circumstances, 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (06/05/15) | |||||||||
PIMCO RAE Fundamental Global ex-US Fund Institutional Class | (10.93)% | (11.44)% | ||||||||
PIMCO RAE Fundamental Global ex-US Fund Class P | (11.07)% | (11.58)% | ||||||||
PIMCO RAE Fundamental Global ex-US Fund Class A | (11.29)% | (11.78)% | ||||||||
PIMCO RAE Fundamental Global ex-US Fund Class A (adjusted) | (14.58)% | (14.88)% | ||||||||
PIMCO RAE Fundamental Global ex-US Fund Class C | (11.90)% | (12.43)% | ||||||||
PIMCO RAE Fundamental Global ex-US Fund Class C (adjusted) | (12.77)% | (12.43)% | ||||||||
MSCI All Country World ex US Index± | (10.24)% | (10.53)% |
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
12 | PIMCO EQUITY SERIES |
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Institutional Class - PZRIX | Class P - PZRPX | Class A - PZRAX | Class C - PZRCX |
Top Holdings as of 06/30/20161§
PIMCO RAE Fundamental International Fund | 77.4% | |||||||
PIMCO RAE Fundamental Emerging Markets Fund | 22.6% |
1 % of Investments, at value.
§ Top Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s relative performance during the reporting period:
» | Overweight exposure and selection in the banks industry negatively contributed to relative performance, as this industry underperformed the MSCI All Country World ex-US Index. |
» | Underweight exposure to the consumer stables sector negatively contributed to relative performance, as this industry outperformed the MSCI All Country World ex-US Index. |
» | Overweight exposure and positioning in metals & mining industry positively contributed to relative performance, as the Fund’s holdings outperformed the MSCI All Country World ex-US Index. |
» | Overweight exposure to the diversified telecommunication services industry positively contributed to relative performance, as this industry outperformed the MSCI All Country World ex-US Index. |
ANNUAL REPORT | JUNE 30, 2016 | 13 |
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PIMCO RAE Fundamental International Fund
Cumulative Returns Through June 30, 2016
$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”). 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (06/05/15) | |||||||||
PIMCO RAE Fundamental International Fund Institutional Class | (10.60)% | (11.39)% | ||||||||
PIMCO RAE Fundamental International Fund Class P | (10.70)% | (11.48)% | ||||||||
PIMCO RAE Fundamental International Fund Class A | (10.95)% | (11.71)% | ||||||||
PIMCO RAE Fundamental International Fund Class A (adjusted) | (14.26)% | (14.82)% | ||||||||
PIMCO RAE Fundamental International Fund Class C | (11.69)% | (12.40)% | ||||||||
PIMCO RAE Fundamental International Fund Class C (adjusted) | (12.55)% | (12.40)% | ||||||||
MSCI EAFE Net Dividend Index (USD Unhedged)± | (10.16)% | (10.49)% |
All Fund returns are net of fees and expenses.
± MSCI EAFE Net Dividend Index (USD Unhedged) is an unmanaged index of issuers in countries of Europe, Australia, and the Far East represented in U.S. Dollars on a unhedged basis.
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
14 | PIMCO EQUITY SERIES |
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Institutional Class - PPYIX | Class P - PPYPX | Class A - PPYAX | Class C - PPYCX |
Top 10 Holdings as of 06/30/20161§
Royal Dutch Shell PLC ‘A’ | 2.7% | |||||||
HSBC Holdings PLC | 2.0% | |||||||
BP PLC | 1.7% | |||||||
Total S.A. | 1.4% | |||||||
Eni SpA | 1.2% | |||||||
Orange S.A. | 1.1% | |||||||
Banco Santander S.A. | 1.0% | |||||||
Statoil ASA | 0.9% | |||||||
Engie S.A. | 0.9% | |||||||
British American Tobacco PLC | 0.9% |
Geographic Breakdown as of 06/30/20161§
United Kingdom | 16.3% | |||||||
Japan | 14.1% | |||||||
France | 11.6% | |||||||
Canada | 11.1% | |||||||
Germany | 9.7% | |||||||
Australia | 9.0% | |||||||
Switzerland | 5.1% | |||||||
Netherlands | 4.8% | |||||||
Spain | 3.3% | |||||||
Italy | 3.2% | |||||||
Sweden | 2.2% | |||||||
Hong Kong | 1.4% | |||||||
Norway | 1.3% | |||||||
Denmark | 1.2% | |||||||
Singapore | 1.0% | |||||||
Other | 4.7% |
1 % of Investments, at value.
§ Top 10 Holdings, Geographic Breakdown and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s relative performance during the reporting period:
» | Underweight exposure to the consumer staples sector negatively contributed to relative performance, as this sector outperformed the MSCI EAFE Index. |
» | Overweight exposure to the financials sector negatively contributed to relative performance, as this sector underperformed the MSCI EAFE Index. |
» | Underweight exposure to the healthcare sector negatively contributed to relative performance, as this sector outperformed the MSCI EAFE Index. |
» | Overweight exposure and positioning in the metals & mining industry positively contributed to relative performance, as the Fund’s holdings outperformed the MSCI EAFE Index. |
» | Overweight exposure and positioning in the diversified telecommunications services industry positively contributed to relative performance, as this industry outperformed the MSCI EAFE Index. |
ANNUAL REPORT | JUNE 30, 2016 | 15 |
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Cumulative Returns Through June 30, 2016
$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”). 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. |
Average Annual Total Return for the period ended June 30, 2016* | ||||||||||||||||||
1 Year | 5 Year | 10 Year | Fund Inception (12/22/04) | |||||||||||||||
PIMCO RAE Fundamental US Fund Institutional Class | 3.16% | 11.81% | 7.55% | 7.53% | ||||||||||||||
PIMCO RAE Fundamental US Fund Class P | 3.09% | 11.80% | 7.54% | 7.52% | ||||||||||||||
PIMCO RAE Fundamental US Fund Class A | 2.67% | 11.73% | 7.51% | 7.49% | ||||||||||||||
PIMCO RAE Fundamental US Fund Class A (adjusted) | (1.14)% | 10.88% | 7.10% | 7.14% | ||||||||||||||
PIMCO RAE Fundamental US Fund Class C | 1.89% | 11.53% | 7.41% | 7.41% | ||||||||||||||
PIMCO RAE Fundamental US Fund Class C (adjusted) | 0.91% | 11.53% | 7.41% | 7.41% | ||||||||||||||
S&P 500 Index± | 3.99% | 12.10% | 7.42% | 7.12% | ** |
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
16 | PIMCO EQUITY SERIES |
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Institutional Class - PKAIX | Class P - PKAPX | Class A - PKAAX | Class C - PKACX |
Top 10 Holdings as of 06/30/20161§
AT&T, Inc. | 3.3% | |||||||
Exxon Mobil Corp. | 3.3% | |||||||
International Business Machines Corp. | 2.5% | |||||||
Chevron Corp. | 2.4% | |||||||
Pfizer, Inc. | 1.9% | |||||||
Apple, Inc. | 1.8% | |||||||
Microsoft Corp. | 1.7% | |||||||
JPMorgan Chase & Co. | 1.6% | |||||||
Alphabet, Inc. ‘C’ | 1.6% | |||||||
Intel Corp. | 1.5% |
Sector Breakdown as of 06/30/20161§
Information Technology | 19.1% | |||||||
Consumer Discretionary | 12.8% | |||||||
Financials | 12.6% | |||||||
Health Care | 11.4% | |||||||
Energy | 11.3% | |||||||
Consumer Staples | 9.5% | |||||||
Industrials | 8.5% | |||||||
Utilities | 6.7% | |||||||
Telecommunication Services | 5.7% | |||||||
Materials | 2.4% |
1 % of Investments, at value.
§ Top 10 Holdings, Sector Breakdown and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s relative performance during the reporting period:
» | Positioning in the consumer discretionary sector negatively contributed to relative performance, as the sector underperformed the S&P 500 index. |
» | Positioning in the information technology sector negatively contributed to relative performance, as the sector outperformed the S&P 500 index. |
» | Overweight exposure to the utilities sector positively contributed to relative performance, as the sector significantly outperformed the S&P 500 index. |
» | Overweight exposure to the diversified telecommunication services industry positively contributed to relative performance, as the industry significantly outperformed the S&P 500 index. |
ANNUAL REPORT | JUNE 30, 2016 | 17 |
Table of Contents
PIMCO RAE Fundamental US Small Fund
Cumulative Returns Through June 30, 2016
$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 U.S. small companies. Specifically, under normal circumstances, the Fund will obtain exposure to a portfolio of stocks of U.S. small companies (“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. |
Average Annual Total Return for the period ended June 30, 2016* | ||||||||||||||||||
1 Year | 5 Year | 10 Year | Fund Inception (09/29/05) | |||||||||||||||
PIMCO RAE Fundamental US Small Fund Institutional Class | (4.68)% | 9.17% | 6.82% | 7.33% | ||||||||||||||
PIMCO RAE Fundamental US Small Fund Class P | (4.79)% | 9.12% | 6.80% | 7.31% | ||||||||||||||
PIMCO RAE Fundamental US Small Fund Class A | (5.11)% | 9.04% | 6.76% | 7.27% | ||||||||||||||
PIMCO RAE Fundamental US Small Fund Class A (adjusted) | (8.70)% | 8.21% | 6.36% | 6.89% | ||||||||||||||
PIMCO RAE Fundamental US Small Fund Class C | (5.69)% | 8.89% | 6.69% | 7.20% | ||||||||||||||
PIMCO RAE Fundamental US Small Fund Class C (adjusted) | (6.61)% | 8.89% | 6.69% | 7.20% | ||||||||||||||
Russell 2000® Index± | (6.73)% | 8.35% | 6.20% | 6.64% | ** |
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. 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.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
18 | PIMCO EQUITY SERIES |
Table of Contents
Institutional Class - PMJIX | Class P - PMJPX | Class A - PMJAX | Class C - PMJCX |
Top 10 Holdings as of 06/30/20161§
World Acceptance Corp. | 0.6% | |||||||
Children’s Place, Inc. | 0.5% | |||||||
NETGEAR, Inc. | 0.5% | |||||||
Northwest Natural Gas Co. | 0.5% | |||||||
Penn National Gaming, Inc. | 0.4% | |||||||
WebMD Health Corp. | 0.4% | |||||||
Empire District Electric Co. | 0.4% | |||||||
Masimo Corp. | 0.4% | |||||||
Boyd Gaming Corp. | 0.4% | |||||||
Progress Software Corp. | 0.4% |
Sector Breakdown as of 06/30/20161§
Consumer Discretionary | 19.7% | |||||||
Financials | 19.2% | |||||||
Information Technology | 17.1% | |||||||
Industrials | 16.0% | |||||||
Health Care | 8.2% | |||||||
Energy | 5.6% | |||||||
Materials | 5.2% | |||||||
Consumer Staples | 4.1% | |||||||
Utilities | 2.6% | |||||||
Telecommunication Services | 2.3% |
1 % of Investments, at value.
§ Top 10 Holdings, Sector Breakdown and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s relative performance during the reporting period:
» | Underweight exposure and positioning within the biotechnology industry positively contributed to relative performance, as the industry underperformed the Russell 2000 Index. |
» | Positioning within the industrials sector positively contributed to relative performance, as the fund holdings outperformed the Russell 2000 Index. |
» | Overweight exposure and positioning in the consumer discretionary sector negatively contributed to relative performance, as the sector underperformed the Russell 2000 Index. |
» | Underweight exposure to the financials sector negatively contributed to relative performance, as the sector outperformed the Russell 2000 Index. |
ANNUAL REPORT | JUNE 30, 2016 | 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, 2016 to June 30, 2016 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 column for your share class, in the column titled “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 (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,162.50 | $ | 4.02 | $ | 1,000.00 | $ | 1,020.74 | $ | 3.76 | 0.76 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,161.50 | 4.55 | 1,000.00 | 1,020.25 | 4.25 | 0.86 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,160.90 | 5.87 | 1,000.00 | 1,019.02 | 5.48 | 1.11 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 1,156.00 | 9.81 | 1,000.00 | 1,015.36 | 9.17 | 1.86 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Global Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,043.70 | $ | 0.20 | $ | 1,000.00 | $ | 1,024.26 | $ | 0.20 | 0.04 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,042.60 | 0.70 | 1,000.00 | 1,023.77 | 0.69 | 0.14 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,041.50 | 1.95 | 1,000.00 | 1,022.55 | 1.93 | 0.39 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 1,037.10 | 5.68 | 1,000.00 | 1,018.88 | 5.63 | 1.14 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,023.60 | $ | 0.00 | $ | 1,000.00 | $ | 1,024.45 | $ | 0.00 | 0.00 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,022.40 | 0.49 | 1,000.00 | 1,023.96 | 0.49 | 0.10 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,021.20 | 1.73 | 1,000.00 | 1,022.74 | 1.73 | 0.35 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 1,017.70 | 5.43 | 1,000.00 | 1,019.07 | 5.43 | 1.10 |
20 | PIMCO EQUITY SERIES |
Table of Contents
Actual | Hypothetical (5% return before expenses) | |||||||||||||||||||||||||||||||||||||||
Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 989.60 | $ | 2.43 | $ | 1,000.00 | $ | 1,022.01 | $ | 2.47 | 0.50 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 988.40 | 2.92 | 1,000.00 | 1,021.52 | 2.97 | 0.60 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 987.30 | 4.13 | 1,000.00 | 1,020.30 | 4.20 | 0.85 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 983.70 | 7.76 | 1,000.00 | 1,016.63 | 7.89 | 1.60 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,060.50 | $ | 2.02 | $ | 1,000.00 | $ | 1,022.50 | $ | 1.98 | 0.40 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,060.50 | 2.52 | 1,000.00 | 1,022.01 | 2.47 | 0.50 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,058.40 | 4.03 | 1,000.00 | 1,020.54 | 3.95 | 0.80 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 1,055.40 | 7.79 | 1,000.00 | 1,016.87 | 7.64 | 1.55 | |||||||||||||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,049.60 | $ | 2.51 | $ | 1,000.00 | $ | 1,022.01 | $ | 2.47 | 0.50 | % | ||||||||||||||||||||||||||
Class P | 1,000.00 | 1,048.50 | 3.01 | 1,000.00 | 1,021.52 | 2.97 | 0.60 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,047.40 | 4.51 | 1,000.00 | 1,020.05 | 4.45 | 0.90 | |||||||||||||||||||||||||||||||||
Class C | 1,000.00 | 1,043.10 | 8.24 | 1,000.00 | 1,016.38 | 8.14 | 1.65 |
* 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 179/366 (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 can be found in Note 7 in the Notes to Financial Statements.
ANNUAL REPORT | JUNE 30, 2016 | 21 |
Table of Contents
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 Investment Operations | Dividends from Net Investment Income | Distributions from Net Realized Capital Gains | Tax Basis Return of Capital | Total Distributions(b) | ||||||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | ||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||
Class P | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 |
22 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets Excluding Waivers | Ratio of Expenses to Average Net Assets Excluding Interest Expense | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Waivers | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 |
ANNUAL REPORT | JUNE 30, 2016 | 23 |
Table of Contents
Financial Highlights (Cont.)
Selected Per Share Data for the Year or Period Ended: | Net Asset Value Period | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total from Investment Operations | Dividends from Net Investment Income | Distributions from Net Realized Capital Gains | Tax Basis Return of Capital | Total Distributions(b) | ||||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | ||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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(d) in the Notes to Financial Statements for more information. |
24 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets Excluding Waivers | Ratio of Expenses to Average Net Assets Excluding Interest Expense | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Waivers | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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 |
ANNUAL REPORT | JUNE 30, 2016 | 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 | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments, at value | ||||||||||||||||||||||||
Investments in securities | $ | 1,368,243 | $ | 0 | $ | 0 | $ | 214,739 | $ | 516,896 | $ | 84,074 | ||||||||||||
Investments in Affiliates | 0 | 282,884 | 63,123 | 0 | 0 | 0 | ||||||||||||||||||
Financial Derivative Instruments | ||||||||||||||||||||||||
Over the counter | 410 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Cash | 45,815 | 413 | 61 | 0 | 2,453 | 510 | ||||||||||||||||||
Foreign currency, at value | 14,026 | 0 | 0 | 1,046 | 0 | 0 | ||||||||||||||||||
Receivable for investments sold | 0 | 0 | 0 | 14,362 | 1 | 1 | ||||||||||||||||||
Receivable for Fund shares sold | 9 | 0 | 0 | 31,275 | 112 | 20 | ||||||||||||||||||
Interest and/or dividends receivable | 12,097 | 0 | 0 | 755 | 689 | 105 | ||||||||||||||||||
Reimbursement receivable from PIMCO | 4 | 4 | 3 | 8 | 23 | 4 | ||||||||||||||||||
Other assets | 0 | 0 | 0 | 13 | 0 | 0 | ||||||||||||||||||
Total Assets | 1,440,604 | 283,301 | 63,187 | 262,198 | 520,174 | 84,714 | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Financial Derivative Instruments | ||||||||||||||||||||||||
Over the counter | $ | 2 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Payable for investments purchased | 57,126 | 0 | 0 | 2,047 | 0 | 0 | ||||||||||||||||||
Payable for Fund shares redeemed | 0 | 0 | 0 | 0 | 0 | 43 | ||||||||||||||||||
Overdraft due to custodian | 0 | 0 | 0 | 11,444 | 0 | 0 | ||||||||||||||||||
Accrued investment advisory fees | 258 | 0 | 0 | 37 | 63 | 17 | ||||||||||||||||||
Accrued supervisory and administrative fees | 388 | 5 | 0 | 55 | 105 | 18 | ||||||||||||||||||
Accrued distribution fees | 0 | 1 | 0 | 0 | 1 | 0 | ||||||||||||||||||
Accrued servicing fees | 0 | 0 | 0 | 0 | 1 | 0 | ||||||||||||||||||
Accrued taxes payable | 333 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other liabilities | 1,225 | 11 | 6 | 46 | 47 | 8 | ||||||||||||||||||
Total Liabilities | 59,332 | 17 | 6 | 13,629 | 217 | 86 | ||||||||||||||||||
Net Assets | $ | 1,381,272 | $ | 283,284 | $ | 63,181 | $ | 248,569 | $ | 519,957 | $ | 84,628 | ||||||||||||
Net Assets Consist of: | ||||||||||||||||||||||||
Paid in capital | $ | 1,313,294 | $ | 283,952 | $ | 72,554 | $ | 248,602 | $ | 413,575 | $ | 81,518 | ||||||||||||
Undistributed (overdistributed) net investment income | 12,896 | (48 | ) | (3 | ) | 4,019 | 5,529 | 441 | ||||||||||||||||
Accumulated undistributed net realized gain (loss) | (39,684 | ) | 2,146 | (403 | ) | (16,090 | ) | 7,419 | (7,892 | ) | ||||||||||||||
Net unrealized appreciation (depreciation) | 94,766 | (2,766 | ) | (8,967 | ) | 12,038 | 93,434 | 10,561 | ||||||||||||||||
Net Assets | $ | 1,381,272 | $ | 283,284 | $ | 63,181 | $ | 248,569 | $ | 519,957 | $ | 84,628 | ||||||||||||
Cost of investments in securities | $ | 1,273,031 | $ | 0 | $ | 0 | $ | 202,653 | $ | 423,462 | $ | 73,513 | ||||||||||||
Cost of investments in Affiliates | $ | 0 | $ | 285,650 | $ | 72,090 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Cost of foreign currency held | $ | 14,024 | $ | 0 | $ | 0 | $ | 1,044 | $ | 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, 2016
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 | $ | 1,379,204 | $ | 282,274 | $ | 62,809 | $ | 247,182 | $ | 511,838 | $ | 81,226 | ||||||||||||
Class P | 1,827 | 57 | 9 | 1,041 | 3,372 | 1,456 | ||||||||||||||||||
Class A | 146 | 286 | 9 | 46 | 2,982 | 1,699 | ||||||||||||||||||
Class C | 95 | 667 | 354 | 300 | 1,765 | 247 | ||||||||||||||||||
Shares Issued and Outstanding: | ||||||||||||||||||||||||
Institutional Class | 158,025 | 30,289 | 7,238 | 28,880 | 52,104 | 8,726 | ||||||||||||||||||
Class P | 210 | 6 | 1 | 122 | 344 | 157 | ||||||||||||||||||
Class A | 17 | 31 | 1 | 5 | 305 | 183 | ||||||||||||||||||
Class C | 11 | 72 | 41 | 36 | 182 | 27 | ||||||||||||||||||
Net Asset Value Per Share Outstanding: | ||||||||||||||||||||||||
Institutional Class | $ | 8.73 | $ | 9.32 | $ | 8.68 | $ | 8.56 | $ | 9.82 | $ | 9.31 | ||||||||||||
Class P | 8.70 | 9.31 | 8.67 | 8.55 | 9.81 | 9.29 | ||||||||||||||||||
Class A | 8.73 | 9.29 | 8.66 | 8.55 | 9.79 | 9.29 | ||||||||||||||||||
Class C | 8.67 | 9.22 | 8.61 | 8.45 | 9.71 | 9.19 |
ANNUAL REPORT | JUNE 30, 2016 | 27 |
Table of Contents
Year Ended June 30, 2016 | ||||||||||||||||||||||||
(Amounts in thousands†) | PIMCO RAE Fundamental Emerging Markets Fund | PIMCO RAE | PIMCO RAE | PIMCO RAE | PIMCO RAE | PIMCO RAE | ||||||||||||||||||
Investment Income: | ||||||||||||||||||||||||
Interest | $ | 0 | $ | 0 | $ | 0 | $ | 16 | $ | 0 | $ | 0 | ||||||||||||
Dividends, net of foreign taxes* | 19,627 | 0 | 0 | 6,681 | 12,513 | 1,367 | ||||||||||||||||||
Dividends from Investments in Affiliates | 0 | 2,327 | 692 | 0 | 0 | 0 | ||||||||||||||||||
Total Income | 19,627 | 2,327 | 692 | 6,697 | 12,513 | 1,367 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Investment advisory fees | 2,086 | 564 | 251 | 535 | 1,162 | 298 | ||||||||||||||||||
Supervisory and administrative fees | 1,878 | 423 | 220 | 536 | 1,166 | 214 | ||||||||||||||||||
Distribution fees - Class C | 0 | 2 | 0 | 1 | 4 | 1 | ||||||||||||||||||
Servicing fees - Class A | 0 | 0 | 0 | 0 | 4 | 1 | ||||||||||||||||||
Servicing fees - Class C | 0 | 1 | 0 | 0 | 1 | 0 | ||||||||||||||||||
Trustee fees | 24 | 11 | 6 | 17 | 45 | 8 | ||||||||||||||||||
Interest expense | 5 | 0 | 0 | 1 | 1 | 0 | ||||||||||||||||||
Miscellaneous expense | 21 | 7 | 3 | 9 | 23 | 4 | ||||||||||||||||||
Total Expenses | 4,014 | 1,008 | 480 | 1,099 | 2,406 | 526 | ||||||||||||||||||
Waiver and/or Reimbursement by PIMCO | (859 | ) | (949 | ) | (477 | ) | (195 | ) | (510 | ) | (93 | ) | ||||||||||||
Net Expenses | 3,155 | 59 | 3 | 904 | 1,896 | 433 | ||||||||||||||||||
Net Investment Income | 16,472 | 2,268 | 689 | 5,793 | 10,617 | 934 | ||||||||||||||||||
Net Realized Gain (Loss): | ||||||||||||||||||||||||
Investments in securities | (36,296 | ) | 0 | 0 | (14,066 | ) | 15,976 | (7,337 | ) | |||||||||||||||
Investments in Affiliates | 0 | (1,641 | ) | (1,234 | ) | 0 | 0 | 0 | ||||||||||||||||
Net capital gain distributions received from Affiliate investments | 0 | 3,884 | 853 | 0 | 0 | 0 | ||||||||||||||||||
Over the counter financial derivative instruments | 823 | 0 | 0 | 30 | 0 | 0 | ||||||||||||||||||
Foreign currency | (1,662 | ) | 0 | 0 | (109 | ) | 0 | 0 | ||||||||||||||||
Net Realized Gain (Loss) | (37,135 | ) | 2,243 | (381 | ) | (14,145 | ) | 15,976 | (7,337 | ) | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||||||||||
Investments in securities | 100,159 | 0 | 0 | (10,783 | ) | (13,066 | ) | 3,050 | ||||||||||||||||
Investments in Affiliates | 0 | (2,222 | ) | (8,010 | ) | 0 | 0 | 0 | ||||||||||||||||
Over the counter financial derivative instruments | 408 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Foreign currency assets and liabilities | (521 | ) | 0 | 0 | (48 | ) | 0 | 0 | ||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) | 100,046 | (2,222 | ) | (8,010 | ) | (10,831 | ) | (13,066 | ) | 3,050 | ||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 79,383 | $ | 2,289 | $ | (7,702 | ) | $ | (19,183 | ) | $ | 13,527 | $ | (3,353 | ) | |||||||||
* Foreign tax withholdings - Dividends | $ | 2,270 | $ | 0 | $ | 0 | $ | 671 | $ | 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, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | ||||||||||||||||||
Increase (Decrease) in Net Assets from: | ||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net investment income (loss) | $ | 16,472 | $ | 1,265 | $ | 2,268 | $ | (1 | ) | $ | 689 | $ | (1 | ) | ||||||||||
Net realized gain (loss) | (37,135 | ) | (1,514 | ) | 2,243 | (12 | ) | (381 | ) | (22 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) | 100,046 | (1,205 | ) | (2,222 | ) | (544 | ) | (8,010 | ) | (957 | ) | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 79,383 | (1,454 | ) | 2,289 | (557 | ) | (7,702 | ) | (980 | ) | ||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||
Institutional Class | (3,853 | ) | 0 | (2,395 | ) | 0 | (692 | ) | 0 | |||||||||||||||
Class P | (61 | ) | 0 | (0 | ) | 0 | (0 | ) | 0 | |||||||||||||||
Class A | (1 | ) | 0 | (2 | ) | 0 | (0 | ) | 0 | |||||||||||||||
Class C | (0 | ) | 0 | (3 | ) | 0 | (0 | ) | 0 | |||||||||||||||
Tax basis return of capital | ||||||||||||||||||||||||
Institutional Class | 0 | 0 | 0 | 0 | (28 | ) | 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) | (3,915 | ) | 0 | (2,400 | ) | 0 | (720 | ) | 0 | |||||||||||||||
Portfolio Share Transactions: | ||||||||||||||||||||||||
Net increase resulting from Fund share transactions** | 1,106,387 | 200,871 | 245,198 | 38,754 | 1,496 | 71,087 | ||||||||||||||||||
Total Increase (Decrease) in Net Assets | 1,181,855 | 199,417 | 245,087 | 38,197 | (6,926 | ) | 70,107 | |||||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Beginning of year or period | 199,417 | 0 | 38,197 | 0 | 70,107 | 0 | ||||||||||||||||||
End of year or period* | $ | 1,381,272 | $ | 199,417 | $ | 283,284 | $ | 38,197 | $ | 63,181 | $ | 70,107 | ||||||||||||
* Including undistributed (overdistributed) net investment income of: | $ | 12,896 | $ | 1,099 | $ | (48 | ) | $ | (1 | ) | $ | (3 | ) | $ | (1 | ) |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
** | See Note 11 in the Notes to Financial Statements. |
(a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2(d) in the Notes to Financial Statements for more information. |
ANNUAL REPORT | JUNE 30, 2016 | 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, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | ||||||||||||||||||
Increase in Net Assets from: | ||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net investment income | $ | 5,793 | $ | 265 | $ | 10,617 | $ | 581 | $ | 934 | $ | 43 | ||||||||||||
Net realized gain (loss) | (14,145 | ) | 1,954 | 15,976 | 4,427 | (7,337 | ) | 918 | ||||||||||||||||
Net change in unrealized appreciation (depreciation) | (10,831 | ) | (4,949 | ) | (13,066 | ) | (11,647 | ) | 3,050 | (1,306 | ) | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | (19,183 | ) | (2,730 | ) | 13,527 | (6,639 | ) | (3,353 | ) | (345 | ) | |||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||
Institutional Class | (1,748 | ) | 0 | (5,444 | ) | 0 | (518 | ) | 0 | |||||||||||||||
Class P | (9 | ) | 0 | (21 | ) | 0 | (1 | ) | 0 | |||||||||||||||
Class A | (0 | ) | 0 | (15 | ) | 0 | (0 | ) | 0 | |||||||||||||||
Class C | (2 | ) | 0 | (3 | ) | 0 | (1 | ) | 0 | |||||||||||||||
From net realized capital gains | ||||||||||||||||||||||||
Institutional Class | (3,508 | ) | 0 | (11,342 | ) | 0 | (1,268 | ) | 0 | |||||||||||||||
Class P | (17 | ) | 0 | (43 | ) | 0 | (2 | ) | 0 | |||||||||||||||
Class A | (0 | ) | 0 | (32 | ) | 0 | (5 | ) | 0 | |||||||||||||||
Class C | (1 | ) | 0 | (6 | ) | 0 | (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) | (5,285 | ) | 0 | (16,906 | ) | 0 | (1,795 | ) | 0 | |||||||||||||||
Portfolio Share Transactions: | ||||||||||||||||||||||||
Net increase resulting from Fund share transactions** | 121,475 | 154,292 | 75,547 | 454,428 | 43,320 | 46,801 | ||||||||||||||||||
Total Increase in Net Assets | 97,007 | 151,562 | 72,168 | 447,789 | 38,172 | 46,456 | ||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Beginning of year or period | 151,562 | 0 | 447,789 | 0 | 46,456 | 0 | ||||||||||||||||||
End of year or period* | $ | 248,569 | $ | 151,562 | $ | 519,957 | $ | 447,789 | $ | 84,628 | $ | 46,456 | ||||||||||||
* Including undistributed net investment income of: | $ | 4,019 | $ | 9 | $ | 5,529 | $ | 566 | $ | 441 | $ | 11 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
** | See Note 11 in the Notes to Financial Statements. |
(a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2(d) 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, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 99.1% | ||||||||||||
COMMON STOCKS 93.3% | ||||||||||||
BRAZIL 14.0% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Lojas Renner S.A. | 57,700 | $ | 426 | |||||||||
MRV Engenharia e Participacoes S.A. | 191,600 | 645 | ||||||||||
Via Varejo S.A. | 171,800 | 398 | ||||||||||
|
| |||||||||||
1,469 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.9% | ||||||||||||
Ambev S.A. ADR | 495,657 | 2,929 | ||||||||||
BRF S.A. | 32,500 | 457 | ||||||||||
Hypermarcas S.A. | 34,400 | 250 | ||||||||||
JBS S.A. | 589,400 | 1,835 | ||||||||||
Marfrig Global Foods S.A. (a) | 1,311,300 | 2,294 | ||||||||||
Natura Cosmeticos S.A. | 678,500 | 5,386 | ||||||||||
|
| |||||||||||
13,151 | ||||||||||||
|
| |||||||||||
ENERGY 1.9% | ||||||||||||
Cosan S.A. Industria e Comercio | 76,800 | 796 | ||||||||||
Petroleo Brasileiro S.A. SP - ADR (a) | 3,453,694 | 24,729 | ||||||||||
Ultrapar Participacoes S.A. | 9,300 | 206 | ||||||||||
|
| |||||||||||
25,731 | ||||||||||||
|
| |||||||||||
FINANCIALS 5.4% | ||||||||||||
Banco Bradesco S.A. ADR | 2,273,505 | 17,756 | ||||||||||
Banco do Brasil S.A. | 3,046,900 | 16,295 | ||||||||||
BM&FBovespa S.A. - Bolsa de Valores Mercadorias e Futuros | 946,800 | 5,305 | ||||||||||
BR Malls Participacoes S.A. | 344,720 | 1,379 | ||||||||||
BR Properties S.A. | 166,100 | 388 | ||||||||||
Cyrela Brazil Realty S.A. Empreendimentos e Participacoes | 169,800 | 544 | ||||||||||
Grupo BTG Pactual | 69,600 | 400 | ||||||||||
Itau Unibanco Holding S.A. SP - ADR ‘H’ | 3,157,458 | 29,806 | ||||||||||
Porto Seguro S.A. | 18,800 | 157 | ||||||||||
Sul America S.A. | 591,559 | 2,880 | ||||||||||
|
| |||||||||||
74,910 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
CCR S.A. | 386,800 | 2,023 | ||||||||||
EcoRodovias Infraestrutura e Logistica S.A. | 206,100 | 537 | ||||||||||
Embraer S.A. SP - ADR | 17,628 | 383 | ||||||||||
|
| |||||||||||
2,943 | ||||||||||||
|
| |||||||||||
MATERIALS 1.5% | ||||||||||||
Cia Siderurgica Nacional S.A. SP - ADR (a) | 5,269,994 | 12,911 | ||||||||||
Duratex S.A. | 199,000 | 527 | ||||||||||
Fibria Celulose S.A. SP - ADR | 93,109 | 629 | ||||||||||
Gerdau S.A. SP - ADR | 3,450,924 | 6,281 | ||||||||||
|
| |||||||||||
20,348 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.9% | ||||||||||||
Telefonica Brasil S.A. ADR | 655,837 | 8,919 | ||||||||||
TIM Participacoes S.A. SP - ADR | 335,595 | 3,541 | ||||||||||
|
| |||||||||||
12,460 | ||||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
UTILITIES 3.1% | ||||||||||||
AES Tiete Energia S.A. | 189,200 | $ | 871 | |||||||||
Cia de Saneamento Basico do Estado de Sao Paulo ADR | 936,927 | 8,395 | ||||||||||
Cia de Saneamento de Minas Gerais-COPASA | 24,100 | 222 | ||||||||||
Cia Energetica de Minas Gerais SP - ADR | 6,061,578 | 13,396 | ||||||||||
CPFL Energia S.A. ADR | 538,152 | 6,921 | ||||||||||
EDP - Energias do Brasil S.A. | 1,452,800 | 6,160 | ||||||||||
Light S.A. | 519,500 | 1,823 | ||||||||||
Tractebel Energia S.A. | 304,000 | 3,625 | ||||||||||
Transmissora Alianca de Energia Eletrica S.A. | 161,600 | 966 | ||||||||||
|
| |||||||||||
42,379 | ||||||||||||
|
| |||||||||||
Total Brazil | 193,391 | |||||||||||
|
| |||||||||||
CHINA 17.6% | ||||||||||||
CONSUMER DISCRETIONARY 0.2% | ||||||||||||
Belle International Holdings Ltd. | 2,778,000 | 1,639 | ||||||||||
Dongfeng Motor Group Co. Ltd. ‘H’ | 130,000 | 137 | ||||||||||
GOME Electrical Appliances Holding Ltd. | 9,323,000 | 1,103 | ||||||||||
|
| |||||||||||
2,879 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Hengan International Group Co. Ltd. | 17,500 | 146 | ||||||||||
Legend Holdings Corp. | 209,400 | 497 | ||||||||||
Qinqin Foodstuffs Group Cayman Co. Ltd. (a) | 3,500 | 5 | ||||||||||
Tingyi Cayman Islands Holding Corp. | 132,000 | 126 | ||||||||||
|
| |||||||||||
774 | ||||||||||||
|
| |||||||||||
ENERGY 3.8% | ||||||||||||
China Coal Energy Co. Ltd. ‘H’ | 305,000 | 160 | ||||||||||
China Petroleum & Chemical Corp. ‘H’ | 27,362,400 | 19,737 | ||||||||||
China Shenhua Energy Co. Ltd. ‘H’ | 3,752,500 | 6,979 | ||||||||||
CNOOC Ltd. | 15,702,000 | 19,620 | ||||||||||
Inner Mongolia Yitai Coal Co. Ltd. ‘B’ | 2,571,594 | 1,941 | ||||||||||
PetroChina Co. Ltd. ‘H’ | 5,762,000 | 3,972 | ||||||||||
Sinopec Engineering Group Co. Ltd. | 330,000 | 297 | ||||||||||
|
| |||||||||||
52,706 | ||||||||||||
|
| |||||||||||
FINANCIALS 11.7% | ||||||||||||
Agile Property Holdings Ltd. | 5,084,000 | 2,717 | ||||||||||
Agricultural Bank of China Ltd. ‘H’ | 30,897,000 | 11,352 | ||||||||||
Bank of China Ltd. ‘H’ | 61,666,000 | 24,864 | ||||||||||
Bank of Communications Co. Ltd. ‘H’ | 9,159,000 | 5,826 | ||||||||||
China CITIC Bank Corp. Ltd. ‘H’ | 4,126,000 | 2,519 | ||||||||||
China Construction Bank Corp. ‘H’ | 63,431,000 | 42,368 | ||||||||||
China Everbright Bank Co. Ltd. ‘H’ | 3,693,000 | 1,687 |
SHARES | MARKET VALUE (000S) | |||||||||||
China Huarong Asset Management Co. Ltd. (a) | 388,000 | $ | 154 | |||||||||
China Life Insurance Co. Ltd. ‘H’ | 1,096,000 | 2,363 | ||||||||||
China Merchants Bank Co. Ltd. ‘H’ | 2,359,500 | 5,311 | ||||||||||
China Minsheng Banking Corp. Ltd. ‘H’ | 3,191,600 | 3,101 | ||||||||||
China Pacific Insurance Group Co. Ltd. ‘H’ | 89,400 | 303 | ||||||||||
Chongqing Rural Commercial Bank Co. Ltd. ‘H’ | 3,704,000 | 1,891 | ||||||||||
Country Garden Holdings Co. Ltd. | 7,418,000 | 3,137 | ||||||||||
Dalian Wanda Commercial Properties Co. Ltd. ‘H’ | 449,700 | 2,786 | ||||||||||
Evergrande Real Estate Group Ltd. | 8,098,000 | 4,964 | ||||||||||
Greentown China Holdings Ltd. | 750,000 | 529 | ||||||||||
Guangzhou R&F Properties Co. Ltd. ‘H’ | 4,292,600 | 5,442 | ||||||||||
Industrial & Commercial Bank of China Ltd. ‘H’ | 54,750,000 | 30,532 | ||||||||||
KWG Property Holding Ltd. | 493,000 | 290 | ||||||||||
Longfor Properties Co. Ltd. | 119,000 | 155 | ||||||||||
New China Life Insurance Co. Ltd. ‘H’ | 155,900 | 558 | ||||||||||
People’s Insurance Co. Group of China Ltd. ‘H’ | 1,163,000 | 449 | ||||||||||
PICC Property & Casualty Co. Ltd. ‘H’ | 206,000 | 325 | ||||||||||
Ping An Insurance Group Co. of China Ltd. ‘H’ | 982,000 | 4,351 | ||||||||||
Shui On Land Ltd. | 601,500 | 155 | ||||||||||
Sino-Ocean Land Holdings Ltd. | 2,806,000 | 1,225 | ||||||||||
SOHO China Ltd. | 5,765,500 | 2,799 | ||||||||||
|
| |||||||||||
162,153 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
Beijing Capital International Airport Co. Ltd. | 474,000 | 515 | ||||||||||
China Communications Construction Co. Ltd. ‘H’ | 1,045,000 | 1,133 | ||||||||||
China Railway Construction Corp. Ltd. ‘H’ | 228,000 | 288 | ||||||||||
China Railway Group Ltd. ‘H’ | 176,000 | 132 | ||||||||||
Guangshen Railway Co. Ltd. ‘H’ | 332,000 | 159 | ||||||||||
Yangzijiang Shipbuilding Holdings Ltd. | 204,000 | 137 | ||||||||||
|
| |||||||||||
2,364 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.3% | ||||||||||||
China Railway Signal & Communication Corp. Ltd. | 258,000 | 172 | ||||||||||
NetEase, Inc. ADR | 5,100 | 986 | ||||||||||
Sohu.com, Inc. (a) | 10,071 | 381 | ||||||||||
Tencent Holdings Ltd. | 143,400 | 3,293 | ||||||||||
|
| |||||||||||
4,832 | ||||||||||||
|
| |||||||||||
MATERIALS 0.5% | ||||||||||||
Anhui Conch Cement Co. Ltd. ‘H’ | 310,000 | 751 | ||||||||||
China National Building Material Co. Ltd. ‘H’ | 14,016,000 | 6,164 | ||||||||||
Fosun International Ltd. | 214,000 | 278 | ||||||||||
Jiangxi Copper Co. Ltd. ‘H’ | 135,000 | 152 | ||||||||||
|
| |||||||||||
7,345 | ||||||||||||
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 31 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
TELECOMMUNICATION SERVICES 0.7% | ||||||||||||
China Communications Services Corp. Ltd. | 910,000 | $ | 477 | |||||||||
China Telecom Corp. Ltd. ‘H’ | 19,326,000 | 8,691 | ||||||||||
|
| |||||||||||
9,168 | ||||||||||||
|
| |||||||||||
UTILITIES 0.1% | ||||||||||||
CGN Power Co. Ltd. | 440,000 | 123 | ||||||||||
Datang International Power Generation Co. Ltd. ‘H’ | 1,274,000 | 360 | ||||||||||
Huaneng Power International, Inc. ‘H’ | 1,244,000 | 774 | ||||||||||
|
| |||||||||||
1,257 | ||||||||||||
|
| |||||||||||
Total China | 243,478 | |||||||||||
|
| |||||||||||
GREECE 0.5% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
FF Group | 14,109 | 263 | ||||||||||
OPAP S.A. | 139,345 | 971 | ||||||||||
|
| |||||||||||
1,234 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.3% | ||||||||||||
Alpha Bank AE (a) | 677,524 | 1,270 | ||||||||||
National Bank of Greece S.A. (a) | 7,320,191 | 1,624 | ||||||||||
Piraeus Bank S.A. (a) | 4,710,600 | 879 | ||||||||||
|
| |||||||||||
3,773 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Hellenic Telecommunications Organization S.A. | 150,183 | 1,372 | ||||||||||
|
| |||||||||||
UTILITIES 0.0% | ||||||||||||
Public Power Corp. S.A. | 66,634 | 183 | ||||||||||
|
| |||||||||||
Total Greece | 6,562 | |||||||||||
|
| |||||||||||
HONG KONG 4.0% | ||||||||||||
CONSUMER STAPLES 0.6% | ||||||||||||
China Agri-Industries Holdings Ltd. (a) | 910,000 | 300 | ||||||||||
China Merchants Holdings International Co. Ltd. | 54,000 | 144 | ||||||||||
China Resources Beer Holdings Co. Ltd. | 3,274,000 | 7,139 | ||||||||||
|
| |||||||||||
7,583 | ||||||||||||
|
| |||||||||||
ENERGY 0.1% | ||||||||||||
Kunlun Energy Co. Ltd. | 1,090,000 | 908 | ||||||||||
|
| |||||||||||
FINANCIALS 0.9% | ||||||||||||
BOC Hong Kong Holdings Ltd. | 959,500 | 2,891 | ||||||||||
China Jinmao Holdings Group Ltd. | 2,016,000 | 571 | ||||||||||
China Overseas Land & Investment Ltd. | 422,000 | 1,345 | ||||||||||
China Resources Land Ltd. | 440,000 | 1,037 | ||||||||||
China Taiping Insurance Holdings Co. Ltd. (a) | 791,400 | 1,489 | ||||||||||
CITIC Ltd. | 377,000 | 552 | ||||||||||
Poly Property Group Co. Ltd. | 9,678,000 | 2,494 | ||||||||||
Shanghai Industrial Holdings Ltd. | 780,000 | 1,775 |
SHARES | MARKET VALUE (000S) | |||||||||||
Yuexiu Property Co. Ltd. | 6,894,000 | $ | 860 | |||||||||
|
| |||||||||||
13,014 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.0% | ||||||||||||
COSCO Pacific Ltd. | 280,000 | 279 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
China Resources Cement Holdings Ltd. | 932,000 | 301 | ||||||||||
Shougang Fushan Resources Group Ltd. | 2,888,000 | 517 | ||||||||||
|
| |||||||||||
818 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 2.1% | ||||||||||||
China Mobile Ltd. | 1,733,500 | 20,052 | ||||||||||
China Unicom Hong Kong Ltd. | 9,192,000 | 9,609 | ||||||||||
|
| |||||||||||
29,661 | ||||||||||||
|
| |||||||||||
UTILITIES 0.2% | ||||||||||||
China Power International Development Ltd. | 2,712,000 | 1,005 | ||||||||||
China Resources Power Holdings Co. Ltd. | 1,370,000 | 2,056 | ||||||||||
|
| |||||||||||
3,061 | ||||||||||||
|
| |||||||||||
Total Hong Kong | 55,324 | |||||||||||
|
| |||||||||||
INDIA 3.5% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Aditya Birla Fashion and Retail Ltd. (a) | 80,622 | 171 | ||||||||||
Tata Motors Ltd. (a) | 171,321 | 1,171 | ||||||||||
|
| |||||||||||
1,342 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Aditya Birla Nuvo Ltd. | 5,177 | 95 | ||||||||||
Hindustan Unilever Ltd. | 47,134 | 628 | ||||||||||
ITC Ltd. | 390,307 | 2,140 | ||||||||||
|
| |||||||||||
2,863 | ||||||||||||
|
| |||||||||||
ENERGY 0.6% | ||||||||||||
Bharat Petroleum Corp. Ltd. | 38,342 | 613 | ||||||||||
Cairn India Ltd. | 856,597 | 1,795 | ||||||||||
Coal India Ltd. | 93,874 | 437 | ||||||||||
Hindustan Petroleum Corp. Ltd. | 116,870 | 1,728 | ||||||||||
Indian Oil Corp. Ltd. | 104,010 | 682 | ||||||||||
Oil & Natural Gas Corp. Ltd. | 443,796 | 1,429 | ||||||||||
Oil India Ltd. | 27,000 | 141 | ||||||||||
Reliance Industries Ltd. | 45,135 | 650 | ||||||||||
Reliance Industries Ltd. SP - GDR | 3,194 | 91 | ||||||||||
|
| |||||||||||
7,566 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.7% | ||||||||||||
Allahabad Bank | 459,419 | 473 | ||||||||||
Andhra Bank | 312,713 | 267 | ||||||||||
Bank of Baroda | 252,917 | 581 | ||||||||||
Bank of India | 706,390 | 1,064 | ||||||||||
Canara Bank | 237,210 | 770 | ||||||||||
DLF Ltd. | 220,790 | 495 | ||||||||||
ICICI Bank Ltd. | 256,973 | 919 | ||||||||||
IDBI Bank Ltd. | 326,400 | 339 | ||||||||||
Oriental Bank of Commerce | 419,654 | 676 |
SHARES | MARKET VALUE (000S) | |||||||||||
Power Finance Corp. Ltd. | 111,490 | $ | 284 | |||||||||
Punjab National Bank | 111,129 | 176 | ||||||||||
Rural Electrification Corp. Ltd. | 151,740 | 391 | ||||||||||
State Bank of India | 451,118 | 1,473 | ||||||||||
State Bank of India SP - GDR | 23,639 | 749 | ||||||||||
Syndicate Bank | 421,663 | 459 | ||||||||||
UCO Bank | 542,251 | 355 | ||||||||||
Union Bank of India | 345,640 | 660 | ||||||||||
|
| |||||||||||
10,131 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.1% | ||||||||||||
Dr Reddy’s Laboratories Ltd. | 4,556 | 230 | ||||||||||
Piramal Enterprises Ltd. | 20,557 | 439 | ||||||||||
Sun Pharmaceutical Industries Ltd. | 67,887 | 771 | ||||||||||
|
| |||||||||||
1,440 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Adani Enterprises Ltd. | 122,330 | 159 | ||||||||||
Bharat Heavy Electricals Ltd. | 327,631 | 624 | ||||||||||
Jaiprakash Associates Ltd. (a) | 7,906,734 | 1,053 | ||||||||||
|
| |||||||||||
1,836 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.4% | ||||||||||||
Infosys Ltd. SP - ADR | 232,733 | 4,154 | ||||||||||
Tata Consultancy Services Ltd. | 23,830 | 902 | ||||||||||
|
| |||||||||||
5,056 | ||||||||||||
|
| |||||||||||
MATERIALS 1.0% | ||||||||||||
Hindalco Industries Ltd. | 855,460 | 1,573 | ||||||||||
Jindal Steel & Power Ltd. | 989,270 | 1,005 | ||||||||||
JSW Steel Ltd. | 49,110 | 1,072 | ||||||||||
NMDC Ltd. | 99,180 | 139 | ||||||||||
Steel Authority of India Ltd. | 776,360 | 524 | ||||||||||
Tata Chemicals Ltd. | 60,950 | 391 | ||||||||||
Tata Steel Ltd. | 1,306,419 | 6,286 | ||||||||||
Vedanta Ltd. | 213,830 | 422 | ||||||||||
Vedanta Resources PLC | 391,071 | 2,185 | ||||||||||
|
| |||||||||||
13,597 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Bharti Airtel Ltd. | 28,520 | 154 | ||||||||||
Reliance Communications Ltd. | 1,038,302 | 789 | ||||||||||
|
| |||||||||||
943 | ||||||||||||
|
| |||||||||||
UTILITIES 0.2% | ||||||||||||
NHPC Ltd. | 798,650 | 298 | ||||||||||
NTPC Ltd. | 174,337 | 403 | ||||||||||
Reliance Infrastructure Ltd. | 67,620 | 549 | ||||||||||
Tata Power Co. Ltd. | 1,377,737 | 1,504 | ||||||||||
|
| |||||||||||
2,754 | ||||||||||||
|
| |||||||||||
Total India | 47,528 | |||||||||||
|
| |||||||||||
INDONESIA 1.4% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Astra International Tbk PT | 3,696,400 | 2,084 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Indofood Sukses Makmur Tbk PT | 2,712,300 | 1,492 | ||||||||||
|
| |||||||||||
32 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
ENERGY 0.1% | ||||||||||||
Adaro Energy Tbk PT | 11,656,200 | $ | 758 | |||||||||
Indo Tambangraya Megah Tbk PT | 470,000 | 336 | ||||||||||
Tambang Batubara Bukit Asam Persero Tbk PT | 571,500 | 336 | ||||||||||
|
| |||||||||||
1,430 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.3% | ||||||||||||
Bank Central Asia Tbk PT | 1,021,700 | 1,034 | ||||||||||
Bank Mandiri Persero Tbk PT | 1,973,100 | 1,428 | ||||||||||
Bank Negara Indonesia Persero Tbk PT | 3,317,400 | 1,315 | ||||||||||
Bank Rakyat Indonesia Persero Tbk PT | 1,247,700 | 1,026 | ||||||||||
|
| |||||||||||
4,803 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Berlian Laju Tanker Tbk PT (a) | 707,200 | 0 | ||||||||||
United Tractors Tbk PT | 663,000 | 748 | ||||||||||
|
| |||||||||||
748 | ||||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Semen Indonesia Persero Tbk PT | 1,088,900 | 776 | ||||||||||
Vale Indonesia Tbk PT (a) | 1,099,000 | 153 | ||||||||||
|
| |||||||||||
929 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
Telekomunikasi Indonesia Persero Tbk PT | 19,707,000 | 5,996 | ||||||||||
|
| |||||||||||
UTILITIES 0.2% | ||||||||||||
Perusahaan Gas Negara Persero Tbk | 12,253,500 | 2,185 | ||||||||||
|
| |||||||||||
Total Indonesia | 19,667 | |||||||||||
|
| |||||||||||
MEXICO 2.4% | ||||||||||||
CONSUMER DISCRETIONARY 0.0% | ||||||||||||
El Puerto de Liverpool S.A.B. de C.V. | 11,900 | 126 | ||||||||||
Grupo Televisa S.A.B. SP - ADR | 4,677 | 122 | ||||||||||
Urbi Desarrollos Urbanos S.A.B. de C.V. (a) | 212,200 | 0 | ||||||||||
|
| |||||||||||
248 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.7% | ||||||||||||
Coca-Cola Femsa S.A.B. de C.V. SP - ADR | 5,608 | 465 | ||||||||||
Fomento Economico Mexicano S.A.B. de C.V. SP - ADR | 23,666 | 2,189 | ||||||||||
Grupo Bimbo S.A.B. de C.V. ‘A’ | 973,700 | 3,054 | ||||||||||
Grupo Comercial Chedraui S.A. de C.V. | 53,000 | 132 | ||||||||||
Kimberly-Clark de Mexico S.A.B. de C.V. ‘A’ | 659,900 | 1,559 | ||||||||||
Wal-Mart de Mexico S.A.B. de C.V. | 987,000 | 2,374 | ||||||||||
|
| |||||||||||
9,773 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.4% | ||||||||||||
Grupo Elektra S.A.B. de C.V. | 8,565 | 119 | ||||||||||
Grupo Financiero Banorte S.A.B. de C.V. ‘O’ | 98,700 | 552 |
SHARES | MARKET VALUE (000S) | |||||||||||
Grupo Financiero Santander Mexico S.A.B. de C.V. ADR ‘B’ | 461,846 | $ | 4,198 | |||||||||
|
| |||||||||||
4,869 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Empresas ICA S.A.B. de C.V. (a) | 1,312,248 | 236 | ||||||||||
Grupo Aeromexico S.A.B. de C.V. (a) | 302,322 | 625 | ||||||||||
OHL Mexico S.A.B. de C.V. (a) | 449,100 | 550 | ||||||||||
|
| |||||||||||
1,411 | ||||||||||||
|
| |||||||||||
MATERIALS 0.5% | ||||||||||||
Cemex S.A.B. de C.V. SP - ADR (a) | 510,460 | 3,150 | ||||||||||
Fresnillo PLC | 61,134 | 1,346 | ||||||||||
Grupo Mexico S.A.B. de C.V. | 471,199 | 1,104 | ||||||||||
Industrias Penoles S.A.B. de C.V. | 81,440 | 1,944 | ||||||||||
|
| |||||||||||
7,544 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.7% | ||||||||||||
America Movil S.A.B. de C.V. SP - ADR ‘L’ | 787,826 | 9,659 | ||||||||||
|
| |||||||||||
Total Mexico | 33,504 | |||||||||||
|
| |||||||||||
POLAND 2.3% | ||||||||||||
ENERGY 0.5% | ||||||||||||
Grupa Lotos S.A. (a) | 53,879 | 417 | ||||||||||
Jastrzebska Spolka Weglowa S.A. | 85,180 | 372 | ||||||||||
Polski Koncern Naftowy Orlen S.A. | 289,916 | 5,092 | ||||||||||
Polskie Gornictwo Naftowe i Gazownictwo S.A. | 943,229 | 1,345 | ||||||||||
|
| |||||||||||
7,226 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.5% | ||||||||||||
Bank Handlowy w Warszawie S.A. | 8,120 | 148 | ||||||||||
Bank Pekao S.A. | 39,632 | 1,384 | ||||||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. (a) | 479,503 | 2,842 | ||||||||||
Powszechny Zaklad Ubezpieczen S.A. | 313,085 | 2,281 | ||||||||||
|
| |||||||||||
6,655 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.0% | ||||||||||||
PKP Cargo S.A. | 12,397 | 104 | ||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Asseco Poland S.A. | 83,900 | 1,113 | ||||||||||
|
| |||||||||||
MATERIALS 0.4% | ||||||||||||
KGHM Polska Miedz S.A. | 296,832 | 5,010 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Orange Polska S.A. | 1,695,428 | 2,186 | ||||||||||
|
| |||||||||||
UTILITIES 0.6% | ||||||||||||
Enea S.A. | 262,438 | 660 | ||||||||||
Energa S.A. | 603,569 | 1,459 | ||||||||||
PGE Polska Grupa Energetyczna S.A. | 1,529,652 | 4,607 |
SHARES | MARKET VALUE (000S) | |||||||||||
Tauron Polska Energia S.A. | 2,522,369 | $ | 1,820 | |||||||||
|
| |||||||||||
8,546 | ||||||||||||
|
| |||||||||||
Total Poland | 30,840 | |||||||||||
|
| |||||||||||
RUSSIA 13.6% | ||||||||||||
CONSUMER STAPLES 0.3% | ||||||||||||
X5 Retail Group NV SP - GDR (a) | 179,798 | 3,588 | ||||||||||
|
| |||||||||||
ENERGY 8.9% | ||||||||||||
Gazprom Neft PJSC SP - ADR | 62,665 | 798 | ||||||||||
Gazprom PJSC SP - ADR | 8,792,440 | 38,012 | ||||||||||
Lukoil PJSC SP - ADR | 892,780 | 37,337 | ||||||||||
Rosneft PJSC | 3,427,994 | 17,614 | ||||||||||
Surgutneftegas OJSC | 4,922,592 | 25,155 | ||||||||||
Tatneft PJSC SP - ADR | 154,937 | 4,792 | ||||||||||
|
| |||||||||||
123,708 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.5% | ||||||||||||
Sberbank of Russia PJSC | 654,133 | 5,731 | ||||||||||
VTB Bank PJSC SP - GDR | 669,046 | 1,381 | ||||||||||
|
| |||||||||||
7,112 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.4% | ||||||||||||
Aeroflot PJSC | 3,755,560 | 5,027 | ||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.0% | ||||||||||||
Mail.Ru Group Ltd. GDR (a) | 5,120 | 93 | ||||||||||
|
| |||||||||||
MATERIALS 1.5% | ||||||||||||
Evraz PLC (a) | 899,248 | 1,653 | ||||||||||
Magnitogorsk Iron & Steel Works OJSC | 1,188,000 | 446 | ||||||||||
Mechel PJSC SP - ADR | 176,804 | 297 | ||||||||||
MMC Norilsk Nickel PJSC ADR | 998,416 | 13,366 | ||||||||||
Novolipetsk Steel PJSC GDR | 34,270 | 445 | ||||||||||
PhosAgro OJSC | 198,216 | 2,924 | ||||||||||
Severstal PJSC | 151,563 | 1,666 | ||||||||||
|
| |||||||||||
20,797 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 1.5% | ||||||||||||
MegaFon PJSC SP - GDR | 355,847 | 3,712 | ||||||||||
Mobile TeleSystems PJSC | 2,881,620 | 11,002 | ||||||||||
Rostelecom PJSC | 1,888,920 | 2,717 | ||||||||||
Sistema JSFC | 261,410 | 1,968 | ||||||||||
Sistema JSFC SP - GDR | 207,664 | 1,564 | ||||||||||
|
| |||||||||||
20,963 | ||||||||||||
|
| |||||||||||
UTILITIES 0.5% | ||||||||||||
Federal Grid PJSC | 1,135,940,000 | 2,751 | ||||||||||
Inter RAO UES PJSC | 32,790,000 | 1,279 | ||||||||||
Rosseti PJSC (a) | 83,022,000 | 803 | ||||||||||
RusHydro PJSC | 197,719,000 | 1,902 | ||||||||||
|
| |||||||||||
6,735 | ||||||||||||
|
| |||||||||||
Total Russia | 188,023 | |||||||||||
�� |
|
| ||||||||||
SOUTH AFRICA 10.2% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Foschini Group Ltd. | 61,505 | 581 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 33 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
Mr Price Group Ltd. | 2,298 | $ | 32 | |||||||||
Truworths International Ltd. | 97,397 | 567 | ||||||||||
Tsogo Sun Holdings Ltd. | 80,210 | 145 | ||||||||||
Woolworths Holdings Ltd. | 64,304 | 368 | ||||||||||
|
| |||||||||||
1,693 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.7% | ||||||||||||
Barloworld Ltd. | 762,269 | 3,798 | ||||||||||
Bid Corp. Ltd. (a) | 95,764 | 1,795 | ||||||||||
Imperial Holdings Ltd. | 279,623 | 2,855 | ||||||||||
Massmart Holdings Ltd. | 32,870 | 281 | ||||||||||
Pick n Pay Stores Ltd. | 32,260 | 157 | ||||||||||
Shoprite Holdings Ltd. | 19,675 | 223 | ||||||||||
Tiger Brands Ltd. | 14,671 | 361 | ||||||||||
|
| |||||||||||
9,470 | ||||||||||||
|
| |||||||||||
ENERGY 1.1% | ||||||||||||
Exxaro Resources Ltd. | 303,120 | 1,396 | ||||||||||
Sasol Ltd. | 502,650 | 13,599 | ||||||||||
|
| |||||||||||
14,995 | ||||||||||||
|
| |||||||||||
FINANCIALS 2.5% | ||||||||||||
Barclays Africa Group Ltd. | 605,337 | 5,937 | ||||||||||
FirstRand Ltd. | 629,650 | 1,922 | ||||||||||
Investec Ltd. | 88,418 | 542 | ||||||||||
Liberty Holdings Ltd. | 378,451 | 3,089 | ||||||||||
MMI Holdings Ltd. | 290,061 | 447 | ||||||||||
Nedbank Group Ltd. | 324,998 | 4,126 | ||||||||||
Sanlam Ltd. | 805,554 | 3,328 | ||||||||||
Standard Bank Group Ltd. | 1,781,500 | 15,516 | ||||||||||
|
| |||||||||||
34,907 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.1% | ||||||||||||
Life Healthcare Group Holdings Ltd. | 117,950 | 290 | ||||||||||
Netcare Ltd. | 112,846 | 240 | ||||||||||
|
| |||||||||||
530 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Aveng Ltd. | 71,944 | 17 | ||||||||||
Bidvest Group Ltd. | 75,398 | 712 | ||||||||||
Reunert Ltd. | 206,414 | 877 | ||||||||||
|
| |||||||||||
1,606 | ||||||||||||
|
| |||||||||||
MATERIALS 3.9% | ||||||||||||
African Rainbow Minerals Ltd. | 69,170 | 434 | ||||||||||
AngloGold Ashanti Ltd. SP - ADR (a) | 810,968 | 14,646 | ||||||||||
Gold Fields Ltd. SP - ADR | 3,239,276 | 15,872 | ||||||||||
Harmony Gold Mining Co. Ltd. SP - ADR (a) | 57,500 | 208 | ||||||||||
Impala Platinum Holdings Ltd. (a) | 1,078,101 | 3,473 | ||||||||||
Kumba Iron Ore Ltd. | 691,597 | 5,227 | ||||||||||
Lonmin PLC (a) | 376,856 | 967 | ||||||||||
Mondi Ltd. | 15,611 | 284 | ||||||||||
Nampak Ltd. | 1,518,757 | 1,971 | ||||||||||
PPC Ltd. | 749,312 | 409 | ||||||||||
Sappi Ltd. (a) | 763,562 | 3,555 | ||||||||||
Sibanye Gold Ltd. | 2,118,780 | 7,214 | ||||||||||
|
| |||||||||||
54,260 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 1.7% | ||||||||||||
MTN Group Ltd. | 1,766,590 | 17,168 |
SHARES | MARKET VALUE (000S) | |||||||||||
Telkom S.A. SOC Ltd. | 853,057 | $ | 3,849 | |||||||||
Vodacom Group Ltd. | 242,448 | 2,763 | ||||||||||
|
| |||||||||||
23,780 | ||||||||||||
|
| |||||||||||
Total South Africa | 141,241 | |||||||||||
|
| |||||||||||
SOUTH KOREA 13.7% | ||||||||||||
CONSUMER DISCRETIONARY 2.3% | ||||||||||||
CJ O Shopping Co. Ltd. | 2,313 | 354 | ||||||||||
Hankook Tire Co. Ltd. | 15,140 | 674 | ||||||||||
Hyundai Department Store Co. Ltd. | 2,732 | 307 | ||||||||||
Hyundai Mobis Co. Ltd. | 9,145 | 2,012 | ||||||||||
Hyundai Motor Co. (a) | 89,464 | 10,583 | ||||||||||
Kia Motors Corp. | 114,356 | 4,309 | ||||||||||
Kumho Tire Co., Inc. (a) | 104,180 | 866 | ||||||||||
LG Corp. | 5,285 | 294 | ||||||||||
LG Electronics, Inc. | 222,801 | 10,493 | ||||||||||
Lotte Shopping Co. Ltd. | 12,681 | 2,243 | ||||||||||
Shinsegae Co. Ltd. | 761 | 129 | ||||||||||
|
| |||||||||||
32,264 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.7% | ||||||||||||
Amorepacific Corp. | 335 | 126 | ||||||||||
CJ Corp. | 16,627 | 2,936 | ||||||||||
E-MART Inc. | 7,895 | 1,191 | ||||||||||
Hite Jinro Co. Ltd. | 13,350 | 278 | ||||||||||
KT&G Corp. | 15,724 | 1,862 | ||||||||||
LG Household & Health Care Ltd. | 146 | 143 | ||||||||||
LS Corp. | 66,106 | 3,248 | ||||||||||
|
| |||||||||||
9,784 | ||||||||||||
|
| |||||||||||
ENERGY 0.6% | ||||||||||||
GS Holdings Corp. | 44,930 | 1,866 | ||||||||||
OCI Co. Ltd. | 1,672 | 133 | ||||||||||
S-Oil Corp. | 21,434 | 1,420 | ||||||||||
SK Innovation Co. Ltd. | 43,250 | 5,329 | ||||||||||
|
| |||||||||||
8,748 | ||||||||||||
|
| |||||||||||
FINANCIALS 3.0% | ||||||||||||
DGB Financial Group, Inc. | 133,833 | 1,013 | ||||||||||
Dongbu Insurance Co. Ltd. | 15,021 | 904 | ||||||||||
Hana Financial Group, Inc. | 190,923 | 3,882 | ||||||||||
Hanwha Life Insurance Co. Ltd. | 346,091 | 1,744 | ||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 77,392 | 1,974 | ||||||||||
Industrial Bank of Korea | 286,383 | 2,790 | ||||||||||
KB Financial Group, Inc. | 191,060 | 5,433 | ||||||||||
LIG Insurance Co. Ltd. | 22,240 | 542 | ||||||||||
Mirae Asset Life Insurance Co. Ltd. | 275,343 | 946 | ||||||||||
Samsung Card Co. Ltd. | 4,160 | 151 | ||||||||||
Samsung Fire & Marine Insurance Co. Ltd. | 1,728 | 397 | ||||||||||
Samsung Life Insurance Co. Ltd. | 63,580 | 5,564 | ||||||||||
Shinhan Financial Group Co. Ltd. | 207,169 | 6,809 | ||||||||||
Woori Bank | 1,049,547 | 8,726 | ||||||||||
|
| |||||||||||
40,875 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.7% | ||||||||||||
Asiana Airlines, Inc. (a) | 54,230 | 206 | ||||||||||
Daewoo Shipbuilding & Marine Engineering Co. Ltd. | 110,150 | 408 |
SHARES | MARKET VALUE (000S) | |||||||||||
Doosan Corp. | 5,384 | $ | 437 | |||||||||
Doosan Heavy Industries & Construction Co. Ltd. | 86,461 | 1,605 | ||||||||||
Doosan Infracore Co. Ltd. (a) | 270,980 | 1,617 | ||||||||||
Hanwha Corp. | 69,135 | 2,148 | ||||||||||
Hyundai Engineering & Construction Co. Ltd. | 4,815 | 141 | ||||||||||
Hyundai Heavy Industries Co. Ltd. | 10,890 | 1,008 | ||||||||||
Korean Air Lines Co. Ltd. (a) | 40,182 | 909 | ||||||||||
Samsung Heavy Industries Co. Ltd. | 52,300 | 421 | ||||||||||
SK Networks Co. Ltd. | 76,700 | 398 | ||||||||||
|
| |||||||||||
9,298 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 3.6% | ||||||||||||
LG Display Co. Ltd. | 158,397 | 3,667 | ||||||||||
Samsung Electro-Mechanics Co. Ltd. | 18,134 | 795 | ||||||||||
Samsung Electronics Co. Ltd. | 35,557 | 44,281 | ||||||||||
SK Hynix, Inc. | 17,050 | 485 | ||||||||||
|
| |||||||||||
49,228 | ||||||||||||
|
| |||||||||||
MATERIALS 0.9% | ||||||||||||
Dongkuk Steel Mill Co. Ltd. | 93,430 | 661 | ||||||||||
Hanwha Chemical Corp. | 35,400 | 740 | ||||||||||
Hyosung Corp. | 11,844 | 1,296 | ||||||||||
Hyundai Steel Co. | 10,969 | 441 | ||||||||||
Kolon Industries, Inc. | 5,899 | 372 | ||||||||||
LG Chem Ltd. | 5,181 | 1,183 | ||||||||||
POSCO Processing & Service Co. Ltd. | 47,437 | 8,404 | ||||||||||
|
| |||||||||||
13,097 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 1.5% | ||||||||||||
KT Corp. SP - ADR | 721,794 | 10,293 | ||||||||||
LG Uplus Corp. | 687,542 | 6,530 | ||||||||||
SK Telecom Co. Ltd. SP - ADR | 194,732 | 4,074 | ||||||||||
|
| |||||||||||
20,897 | ||||||||||||
|
| |||||||||||
UTILITIES 0.4% | ||||||||||||
Korea Electric Power Corp. | 91,618 | 4,809 | ||||||||||
Korea Gas Corp. | 18,375 | 639 | ||||||||||
|
| |||||||||||
5,448 | ||||||||||||
|
| |||||||||||
Total South Korea | 189,639 | |||||||||||
|
| |||||||||||
TAIWAN 7.3% | ||||||||||||
CONSUMER DISCRETIONARY 0.3% | ||||||||||||
Cheng Shin Rubber Industry Co. Ltd. | 65,000 | 137 | ||||||||||
Formosa Taffeta Co. Ltd. | 146,000 | 141 | ||||||||||
Mercuries & Associates Holding Ltd. | 332,000 | 191 | ||||||||||
Pou Chen Corp. | 1,514,000 | 2,038 | ||||||||||
Ruentex Industries Ltd. | 675,000 | 1,019 | ||||||||||
Yulon Motor Co. Ltd. | 168,000 | 144 | ||||||||||
|
| |||||||||||
3,670 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Uni-President Enterprises Corp. | 1,454,640 | 2,873 | ||||||||||
|
| |||||||||||
FINANCIALS 0.7% | ||||||||||||
Cathay Financial Holding Co. Ltd. | 246,000 | 270 |
34 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
China Development Financial Holding Corp. | 2,507,000 | $ | 608 | |||||||||
China Life Insurance Co. Ltd. | 4,783,300 | 3,724 | ||||||||||
Highwealth Construction Corp. | 91,000 | 151 | ||||||||||
Hua Nan Financial Holdings Co. Ltd. | 854,000 | 444 | ||||||||||
Mega Financial Holding Co. Ltd. | 1,999,658 | 1,512 | ||||||||||
Shanghai Commercial & Savings Bank Ltd. | 244,378 | 214 | ||||||||||
Shin Kong Financial Holding Co. Ltd. | 6,067,903 | 1,194 | ||||||||||
SinoPac Financial Holdings Co. Ltd. | 2,789,144 | 828 | ||||||||||
Taishin Financial Holding Co. Ltd. | 1,284,000 | 496 | ||||||||||
Taiwan Business Bank (a) | 1,124,000 | 286 | ||||||||||
Taiwan Cooperative Financial Holding Co. Ltd. | 653,000 | 289 | ||||||||||
|
| |||||||||||
10,016 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Far Eastern New Century Corp. | 2,324,520 | 1,740 | ||||||||||
Teco Electric and Machinery Co. Ltd. | 516,000 | 436 | ||||||||||
|
| |||||||||||
2,176 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 4.8% | ||||||||||||
Acer, Inc. (a) | 2,271,000 | 1,073 | ||||||||||
Advanced Semiconductor Engineering, Inc. | 1,093,000 | 1,244 | ||||||||||
Asustek Computer, Inc. | 408,000 | 3,377 | ||||||||||
AU Optronics Corp. | 6,052,000 | 2,095 | ||||||||||
Catcher Technology Co. Ltd. | 53,000 | 395 | ||||||||||
Compal Electronics, Inc. | 5,437,000 | 3,440 | ||||||||||
Hon Hai Precision Industry Co. Ltd. | 2,825,950 | 7,280 | ||||||||||
HTC Corp. | 973,000 | 3,150 | ||||||||||
Innolux Corp. | 6,558,000 | 2,216 | ||||||||||
Inventec Corp. | 1,698,000 | 1,214 | ||||||||||
Lite-On Technology Corp. | 2,961,770 | 4,079 | ||||||||||
MediaTek, Inc. | 74,000 | 565 | ||||||||||
Novatek Microelectronics Corp. | 39,000 | 146 | ||||||||||
Pegatron Corp. | 470,000 | 998 | ||||||||||
Powertech Technology, Inc. | 859,000 | 1,918 | ||||||||||
Quanta Computer, Inc. | 821,000 | 1,565 | ||||||||||
Siliconware Precision Industries Co. Ltd. | 87,000 | 133 | ||||||||||
Synnex Technology International Corp. | 493,000 | 535 | ||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. SP - ADR | 843,027 | 22,113 | ||||||||||
TPK Holding Co. Ltd. | 292,000 | 570 | ||||||||||
Unimicron Technology Corp. | 1,114,000 | 491 | ||||||||||
United Microelectronics Corp. | 10,273,000 | 4,029 | ||||||||||
Wistron Corp. | 3,456,821 | 2,418 | ||||||||||
WPG Holdings Ltd. | 640,000 | 747 | ||||||||||
Yageo Corp. | 80,000 | 133 | ||||||||||
|
| |||||||||||
65,924 | ||||||||||||
|
| |||||||||||
MATERIALS 0.5% | ||||||||||||
Asia Cement Corp. | 957,000 | 832 | ||||||||||
China Steel Corp. | 3,023,000 | 1,970 | ||||||||||
Formosa Chemicals & Fibre Corp. | 350,000 | 884 | ||||||||||
Formosa Plastics Corp. | 118,000 | 286 | ||||||||||
Nan Ya Plastics Corp. | 73,000 | 139 |
SHARES | MARKET VALUE (000S) | |||||||||||
Taiwan Cement Corp. | 2,266,000 | $ | 2,266 | |||||||||
|
| |||||||||||
6,377 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.7% | ||||||||||||
Chunghwa Telecom Co. Ltd. | 2,090,000 | 7,559 | ||||||||||
Far EasTone Telecommunications Co. Ltd. | 586,000 | 1,419 | ||||||||||
Taiwan Mobile Co. Ltd. | 346,000 | 1,209 | ||||||||||
|
| |||||||||||
10,187 | ||||||||||||
|
| |||||||||||
Total Taiwan | 101,223 | |||||||||||
|
| |||||||||||
THAILAND 2.8% | ||||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Charoen Pokphand Foods PCL | 943,800 | 774 | ||||||||||
Siam Cement PCL | 11,200 | 152 | ||||||||||
|
| |||||||||||
926 | ||||||||||||
|
| |||||||||||
ENERGY 1.4% | ||||||||||||
Banpu Public Co. Ltd. | 6,627,700 | 2,786 | ||||||||||
PTT Exploration & Production PCL | 2,949,300 | 7,083 | ||||||||||
PTT PCL | 976,400 | 8,757 | ||||||||||
Thai Oil PCL | 289,100 | 496 | ||||||||||
|
| |||||||||||
19,122 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.9% | ||||||||||||
Bangkok Bank PCL | 1,060,300 | 4,801 | ||||||||||
Kasikornbank PCL | 491,200 | 2,419 | ||||||||||
Krung Thai Bank PCL | 6,036,875 | 2,812 | ||||||||||
Siam Commercial Bank PCL | 697,900 | 2,774 | ||||||||||
Thanachart Capital PCL | 608,800 | 608 | ||||||||||
|
| |||||||||||
13,414 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
Thai Airways International PCL (a) | 4,006,300 | 2,756 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
PTT Global Chemical PCL | 843,000 | 1,431 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Advanced Info Service PCL | 121,700 | 548 | ||||||||||
Total Access Communication PCL | 526,800 | 485 | ||||||||||
|
| |||||||||||
1,033 | ||||||||||||
|
| |||||||||||
Total Thailand | 38,682 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $1,210,413) |
| 1,289,102 | ||||||||||
|
| |||||||||||
PREFERRED STOCKS 5.7% | ||||||||||||
BRAZIL 5.3% | ||||||||||||
BANKING & FINANCE 0.2% | ||||||||||||
Banco do Estado do Rio Grande do Sul S.A. | 863,300 | 2,295 | ||||||||||
|
| |||||||||||
INDUSTRIALS 3.6% | ||||||||||||
Braskem S.A. | 363,500 | 2,155 | ||||||||||
Cia Brasileira de Distribuicao | 460,800 | 6,701 | ||||||||||
Metalurgica Gerdau S.A. | 6,806,400 | 4,238 | ||||||||||
Suzano Papel e Celulose S.A. | 110,400 | 389 |
SHARES | MARKET VALUE (000S) | |||||||||||
Usinas Siderurgicas de Minas Gerais S.A. | 1,860,400 | $ | 1,141 | |||||||||
Vale S.A. | 8,664,200 | 35,144 | ||||||||||
|
| |||||||||||
49,768 | ||||||||||||
|
| |||||||||||
UTILITIES 1.5% | ||||||||||||
Centrais Eletricas Brasileiras S.A. | 2,370,700 | 12,996 | ||||||||||
Cia de Transmissao de Energia Eletrica Paulista | 16,700 | 325 | ||||||||||
Cia Energetica de Sao Paulo | 704,700 | 2,610 | ||||||||||
Cia Paranaense de Energia | 378,900 | 3,447 | ||||||||||
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. | 604,800 | 1,591 | ||||||||||
|
| |||||||||||
20,969 | ||||||||||||
|
| |||||||||||
Total Brazil | 73,032 | |||||||||||
|
| |||||||||||
RUSSIA 0.4% | ||||||||||||
UTILITIES 0.4% | ||||||||||||
AK Transneft OJSC | 1,647 | 4,283 | ||||||||||
Bashneft PJSC | 29,258 | 871 | ||||||||||
|
| |||||||||||
5,154 | ||||||||||||
|
| |||||||||||
Total Russia | 5,154 | |||||||||||
|
| |||||||||||
Total Preferred Stocks (Cost $62,405) |
| 78,186 | ||||||||||
|
| |||||||||||
REAL ESTATE INVESTMENT TRUSTS 0.0% | ||||||||||||
SOUTH AFRICA 0.0% | ||||||||||||
FINANCIALS 0.0% | ||||||||||||
Growthpoint Properties Ltd. | 128,863 | 225 | ||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts |
| 225 | ||||||||||
|
| |||||||||||
WARRANTS 0.1% | ||||||||||||
THAILAND 0.1% | ||||||||||||
ENERGY 0.1% | ||||||||||||
Banpu PCL - Exp. 06/05/2017 | 2,788,800 | 730 | ||||||||||
|
| |||||||||||
Total Warrants (Cost $0) | 730 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $1,273,031) | 1,368,243 | |||||||||||
Total Investments 99.1% (Cost $1,273,031) | $ | 1,368,243 | ||||||||||
Financial Derivative (Cost or Premiums, net $0) |
| 408 | ||||||||||
Other Assets and Liabilities, net 0.9% | 12,621 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 1,381,272 | ||||||||||
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 35 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Emerging Markets Fund (Cont.)
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 | 07/2016 | $ | 626 | IDR | 8,227,722 | $ | 0 | $ | (2 | ) | ||||||||||||||
07/2016 | 10,838 | ZAR | 165,669 | 410 | 0 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Forward Foreign Currency Contracts |
| $ | 410 | $ | (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 (received)/pledged as of June 30, 2016:
Financial Derivative Assets | Financial Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Counterparty | Forward Foreign | Purchased Options | Swap Agreements | Total Over the Counter | Forward Foreign | Written Options | Swap Agreements | Total Over the Counter | Net Market Value of OTC Derivatives | Collateral Pledged | Net Exposure (1) | |||||||||||||||||||||||||||||||||||||
SSB | $ | 410 | $ | 0 | $ | 0 | $ | 410 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (2 | ) | $ | 408 | $ | 0 | $ | 408 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 410 | $ | 0 | $ | 410 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
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, 2016:
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 | $ | 823 | $ | 0 | $ | 823 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation on Financial Derivative Instruments |
| |||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | 0 | $ | 0 | $ | 0 | $ | 408 | $ | 0 | $ | 408 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
36 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Brazil | ||||||||||||||||
Consumer Discretionary | $ | 1,469 | $ | 0 | $ | 0 | $ | 1,469 | ||||||||
Consumer Staples | 13,151 | 0 | 0 | 13,151 | ||||||||||||
Energy | 25,731 | 0 | 0 | 25,731 | ||||||||||||
Financials | 74,910 | 0 | 0 | 74,910 | ||||||||||||
Industrials | 2,943 | 0 | 0 | 2,943 | ||||||||||||
Materials | 20,348 | 0 | 0 | 20,348 | ||||||||||||
Telecommunication Services | 12,460 | 0 | 0 | 12,460 | ||||||||||||
Utilities | 42,379 | 0 | 0 | 42,379 | ||||||||||||
China | ||||||||||||||||
Consumer Discretionary | 0 | 2,879 | 0 | 2,879 | ||||||||||||
Consumer Staples | 0 | 769 | 5 | 774 | ||||||||||||
Energy | 0 | 52,706 | 0 | 52,706 | ||||||||||||
Financials | 0 | 162,153 | 0 | 162,153 | ||||||||||||
Industrials | 0 | 2,364 | 0 | 2,364 | ||||||||||||
Information Technology | 1,367 | 3,465 | �� | 0 | 4,832 | |||||||||||
Materials | 0 | 7,345 | 0 | 7,345 | ||||||||||||
Telecommunication Services | 0 | 9,168 | 0 | 9,168 | ||||||||||||
Utilities | 0 | 1,257 | 0 | 1,257 | ||||||||||||
Greece | ||||||||||||||||
Consumer Discretionary | 263 | 971 | 0 | 1,234 | ||||||||||||
Financials | 0 | 3,773 | 0 | 3,773 | ||||||||||||
Telecommunication Services | 0 | 1,372 | 0 | 1,372 | ||||||||||||
Utilities | 0 | 183 | 0 | 183 | ||||||||||||
Hong Kong | ||||||||||||||||
Consumer Staples | 0 | 7,583 | 0 | 7,583 | ||||||||||||
Energy | 0 | 908 | 0 | 908 | ||||||||||||
Financials | 0 | 13,014 | 0 | 13,014 | ||||||||||||
Industrials | 0 | 279 | 0 | 279 | ||||||||||||
Materials | 0 | 818 | 0 | 818 | ||||||||||||
Telecommunication Services | 0 | 29,661 | 0 | 29,661 | ||||||||||||
Utilities | 0 | 3,061 | 0 | 3,061 | ||||||||||||
India | ||||||||||||||||
Consumer Discretionary | 0 | 1,342 | 0 | 1,342 | ||||||||||||
Consumer Staples | 0 | 2,863 | 0 | 2,863 | ||||||||||||
Energy | 91 | 7,475 | 0 | 7,566 | ||||||||||||
Financials | 749 | 9,382 | 0 | 10,131 | ||||||||||||
Health Care | 439 | 1,001 | 0 | 1,440 | ||||||||||||
Industrials | 0 | 1,836 | 0 | 1,836 | ||||||||||||
Information Technology | 4,154 | 902 | 0 | 5,056 | ||||||||||||
Materials | 0 | 13,597 | 0 | 13,597 | ||||||||||||
Telecommunication Services | 0 | 943 | 0 | 943 | ||||||||||||
Utilities | 0 | 2,754 | 0 | 2,754 | ||||||||||||
Indonesia | ||||||||||||||||
Consumer Discretionary | 0 | 2,084 | 0 | 2,084 | ||||||||||||
Consumer Staples | 0 | 1,492 | 0 | 1,492 | ||||||||||||
Energy | 0 | 1,430 | 0 | 1,430 | ||||||||||||
Financials | 0 | 4,803 | 0 | 4,803 | ||||||||||||
Industrials | 0 | 748 | 0 | 748 | ||||||||||||
Materials | 0 | 929 | 0 | 929 | ||||||||||||
Telecommunication Services | 0 | 5,996 | 0 | 5,996 | ||||||||||||
Utilities | 0 | 2,185 | 0 | 2,185 | ||||||||||||
Mexico | ||||||||||||||||
Consumer Discretionary | 248 | 0 | 0 | 248 | ||||||||||||
Consumer Staples | 9,773 | 0 | 0 | 9,773 | ||||||||||||
Financials | 4,869 | 0 | 0 | 4,869 | ||||||||||||
Industrials | 1,411 | 0 | 0 | 1,411 | ||||||||||||
Materials | 6,198 | 1,346 | 0 | 7,544 | ||||||||||||
Telecommunication Services | 9,659 | 0 | 0 | 9,659 | ||||||||||||
Poland | ||||||||||||||||
Energy | 0 | 7,226 | 0 | 7,226 | ||||||||||||
Financials | 0 | 6,655 | 0 | 6,655 | ||||||||||||
Industrials | 0 | 104 | 0 | 104 | ||||||||||||
Information Technology | 0 | 1,113 | 0 | 1,113 | ||||||||||||
Materials | 0 | 5,010 | 0 | 5,010 | ||||||||||||
Telecommunication Services | 0 | 2,186 | 0 | 2,186 | ||||||||||||
Utilities | 0 | 8,546 | 0 | 8,546 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Russia | ||||||||||||||||
Consumer Staples | $ | 2,207 | $ | 1,381 | $ | 0 | $ | 3,588 | ||||||||
Energy | 30,912 | 92,796 | 0 | 123,708 | ||||||||||||
Financials | 1,863 | 5,249 | 0 | 7,112 | ||||||||||||
Industrials | 0 | 5,027 | 0 | 5,027 | ||||||||||||
Information Technology | 93 | 0 | 0 | 93 | ||||||||||||
Materials | 7,398 | 13,399 | 0 | 20,797 | ||||||||||||
Telecommunication Services | 4,458 | 16,505 | 0 | 20,963 | ||||||||||||
Utilities | 0 | 6,735 | 0 | 6,735 | ||||||||||||
South Africa | ||||||||||||||||
Consumer Discretionary | 0 | 1,693 | 0 | 1,693 | ||||||||||||
Consumer Staples | 1,795 | 7,675 | 0 | 9,470 | ||||||||||||
Energy | 0 | 14,995 | 0 | 14,995 | ||||||||||||
Financials | 0 | 34,907 | 0 | 34,907 | ||||||||||||
Health Care | 0 | 530 | 0 | 530 | ||||||||||||
Industrials | 894 | 712 | 0 | 1,606 | ||||||||||||
Materials | 31,010 | 23,250 | 0 | 54,260 | ||||||||||||
Telecommunication Services | 0 | 23,780 | 0 | 23,780 | ||||||||||||
South Korea | ||||||||||||||||
Consumer Discretionary | 0 | 32,264 | 0 | 32,264 | ||||||||||||
Consumer Staples | 0 | 9,784 | 0 | 9,784 | ||||||||||||
Energy | 0 | 8,748 | 0 | 8,748 | ||||||||||||
Financials | 0 | 40,875 | 0 | 40,875 | ||||||||||||
Industrials | 0 | 9,298 | 0 | 9,298 | ||||||||||||
Information Technology | 0 | 49,228 | 0 | 49,228 | ||||||||||||
Materials | 0 | 13,097 | 0 | 13,097 | ||||||||||||
Telecommunication Services | 14,367 | 6,530 | 0 | 20,897 | ||||||||||||
Utilities | 0 | 5,448 | 0 | 5,448 | ||||||||||||
Taiwan | ||||||||||||||||
Consumer Discretionary | 0 | 3,670 | 0 | 3,670 | ||||||||||||
Consumer Staples | 0 | 2,873 | 0 | 2,873 | ||||||||||||
Financials | 0 | 10,016 | 0 | 10,016 | ||||||||||||
Industrials | 0 | 2,176 | 0 | 2,176 | ||||||||||||
Information Technology | 22,113 | 43,811 | 0 | 65,924 | ||||||||||||
Materials | 0 | 6,377 | 0 | 6,377 | ||||||||||||
Telecommunication Services | 0 | 10,187 | 0 | 10,187 | ||||||||||||
Thailand | ||||||||||||||||
Consumer Staples | 0 | 926 | 0 | 926 | ||||||||||||
Energy | 0 | 19,122 | 0 | 19,122 | ||||||||||||
Financials | 0 | 13,414 | 0 | 13,414 | ||||||||||||
Industrials | 0 | 2,756 | 0 | 2,756 | ||||||||||||
Materials | 0 | 1,431 | 0 | 1,431 | ||||||||||||
Telecommunication Services | 0 | 1,033 | 0 | 1,033 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Brazil | ||||||||||||||||
Banking & Finance | 2,295 | 0 | 0 | 2,295 | ||||||||||||
Industrials | 49,768 | 0 | 0 | 49,768 | ||||||||||||
Utilities | 20,969 | 0 | 0 | 20,969 | ||||||||||||
Russia | ||||||||||||||||
Utilities | 0 | 5,154 | 0 | 5,154 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
South Africa | ||||||||||||||||
Financials | 0 | 225 | 0 | 225 | ||||||||||||
Warrants | ||||||||||||||||
Thailand | ||||||||||||||||
Energy | 730 | 0 | 0 | 730 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 423,484 | $ | 944,754 | $ | 5 | $ | 1,368,243 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Over the counter | $ | 0 | $ | 410 | $ | 0 | $ | 410 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Over the counter | $ | 0 | $ | (2 | ) | $ | 0 | $ | (2 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 423,484 | $ | 945,162 | $ | 5 | $ | 1,368,651 | ||||||||
|
|
|
|
|
|
|
|
There were assets and liabilities valued at $21,671 transferred from Level 1 to Level 2 during the period ended June 30, 2016. There were no significant assets and liabilities transferred from Level 2 to Level 1 during the period ended June 30, 2016. There were no significant transfers between Levels 2 and 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 37 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Global Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 99.9% | ||||||||||||
MUTUAL FUNDS (a) 99.9% | ||||||||||||
UNITED STATES 99.9% | ||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 3,548,003 | $ | 30,974 | |||||||||
PIMCO RAE Fundamental | 12,383,956 | 106,007 | ||||||||||
PIMCO RAE Fundamental | 14,857,727 | 145,903 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $285,650) | 282,884 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $285,650) | 282,884 | |||||||||||
Total Investments 99.9% (Cost $285,650) | $ | 282,884 | ||||||||||
Other Assets and Liabilities, net 0.1% | 400 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 283,284 | ||||||||||
|
|
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, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Affiliates, at Value | ||||||||||||||||
Mutual Funds | ||||||||||||||||
United States | $ | 282,884 | $ | 0 | $ | 0 | $ | 282,884 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 282,884 | $ | 0 | $ | 0 | $ | 282,884 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
38 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental Global ex-US Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 99.9% | ||||||||||||
MUTUAL FUNDS (a) 99.9% | ||||||||||||
UNITED STATES 99.9% | ||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 1,635,061 | $ | 14,274 | |||||||||
PIMCO RAE Fundamental International Fund | 5,706,662 | 48,849 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $72,090) | 63,123 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $72,090) | 63,123 | |||||||||||
Total Investments 99.9% (Cost $72,090) | $ | 63,123 | ||||||||||
Other Assets and Liabilities, net 0.1% | 58 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 63,181 | ||||||||||
|
|
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, 2016 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 | $ | 63,123 | $ | 0 | $ | 0 | $ | 63,123 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 63,123 | $ | 0 | $ | 0 | $ | 63,123 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 39 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 86.4% | ||||||||||||
COMMON STOCKS 85.1% | ||||||||||||
AUSTRALIA 7.4% | ||||||||||||
CONSUMER DISCRETIONARY 0.2% | ||||||||||||
Fairfax Media Ltd. | 115,659 | $ | 81 | |||||||||
Myer Holdings Ltd. | 157,408 | 133 | ||||||||||
Star Entertainment Grp Ltd. | 27,322 | 111 | ||||||||||
Tabcorp Holdings Ltd. | 37,736 | 130 | ||||||||||
Tatts Group Ltd. | 28,332 | 82 | ||||||||||
|
| |||||||||||
537 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.5% | ||||||||||||
Metcash Ltd. (a) | 152,836 | 219 | ||||||||||
Wesfarmers Ltd. | 16,981 | 512 | ||||||||||
Woolworths Ltd. | 26,197 | 412 | ||||||||||
|
| |||||||||||
1,143 | ||||||||||||
|
| |||||||||||
ENERGY 0.3% | ||||||||||||
Santos Ltd. | 91,798 | 325 | ||||||||||
Woodside Petroleum Ltd. | 14,176 | 288 | ||||||||||
|
| |||||||||||
613 | ||||||||||||
|
| |||||||||||
FINANCIALS 3.1% | ||||||||||||
AMP Ltd. | 112,641 | 439 | ||||||||||
Australia & New Zealand Banking Group Ltd. | 68,211 | 1,243 | ||||||||||
Bank of Queensland Ltd. | 14,552 | 116 | ||||||||||
Bendigo & Adelaide Bank Ltd. | 36,471 | 264 | ||||||||||
Commonwealth Bank of Australia | 21,321 | 1,197 | ||||||||||
Genworth Mortgage Insurance Australia Ltd. | 40,911 | 85 | ||||||||||
Insurance Australia Group Ltd. | 25,784 | 106 | ||||||||||
Macquarie Group Ltd. | 4,902 | 255 | ||||||||||
National Australia Bank Ltd. | 81,762 | 1,570 | ||||||||||
QBE Insurance Group Ltd. | 41,326 | 326 | ||||||||||
Suncorp Group Ltd. | 71,456 | 655 | ||||||||||
Westpac Banking Corp. | 68,987 | 1,530 | ||||||||||
|
| |||||||||||
7,786 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.3% | ||||||||||||
CSL Ltd. | 4,170 | 352 | ||||||||||
Primary Health Care Ltd. | 67,812 | 202 | ||||||||||
Sonic Healthcare Ltd. | 11,054 | 179 | ||||||||||
|
| |||||||||||
733 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.6% | ||||||||||||
Asciano Ltd. | 17,471 | 116 | ||||||||||
Aurizon Holdings Ltd. | 68,266 | 248 | ||||||||||
Brambles Ltd. | 5,746 | 53 | ||||||||||
CIMIC Group Ltd. | 7,257 | 196 | ||||||||||
Cleanaway Waste Management Ltd. | 81,072 | 49 | ||||||||||
Downer EDI Ltd. | 57,351 | 165 | ||||||||||
Lend Lease Group | 7,287 | 69 | ||||||||||
Mineral Resources Ltd. | 6,494 | 41 | ||||||||||
Qantas Airways Ltd. | 86,285 | 183 | ||||||||||
WorleyParsons Ltd. | 58,891 | 323 | ||||||||||
|
| |||||||||||
1,443 | ||||||||||||
|
| |||||||||||
MATERIALS 2.0% | ||||||||||||
Amcor Ltd. | 7,593 | 85 | ||||||||||
BHP Billiton Ltd. | 133,265 | 1,857 |
SHARES | MARKET VALUE (000S) | |||||||||||
BHP Billiton PLC | 70,714 | $ | 895 | |||||||||
BlueScope Steel Ltd. | 17,685 | 86 | ||||||||||
Boral Ltd. | 44,953 | 211 | ||||||||||
CSR Ltd. | 104,788 | 288 | ||||||||||
Fortescue Metals Group Ltd. | 230,513 | 617 | ||||||||||
Iluka Resources Ltd. | 45,236 | 223 | ||||||||||
Incitec Pivot Ltd. | 38,896 | 87 | ||||||||||
Newcrest Mining Ltd. | 12,103 | 210 | ||||||||||
Orica Ltd. | 19,106 | 178 | ||||||||||
OZ Minerals Ltd. | 70,794 | 304 | ||||||||||
|
| |||||||||||
5,041 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telstra Corp. Ltd. | 83,802 | 350 | ||||||||||
|
| |||||||||||
UTILITIES 0.3% | ||||||||||||
AGL Energy Ltd. | 16,744 | 243 | ||||||||||
AusNet Services | 90,862 | 112 | ||||||||||
DUET Group | 21,277 | 40 | ||||||||||
Origin Energy Ltd. | 66,188 | 289 | ||||||||||
|
| |||||||||||
684 | ||||||||||||
|
| |||||||||||
Total Australia | 18,330 | |||||||||||
|
| |||||||||||
AUSTRIA 0.5% | ||||||||||||
ENERGY 0.2% | ||||||||||||
OMV AG | 20,215 | 568 | ||||||||||
|
| |||||||||||
FINANCIALS 0.2% | ||||||||||||
Erste Group Bank AG | 8,655 | 197 | ||||||||||
Raiffeisen Bank International AG | 14,296 | 180 | ||||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 4,033 | 77 | ||||||||||
|
| |||||||||||
454 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.0% | ||||||||||||
Wienerberger AG | 1,984 | 28 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
voestalpine AG | 6,863 | 231 | ||||||||||
|
| |||||||||||
UTILITIES 0.0% | ||||||||||||
Verbund AG | 3,162 | 45 | ||||||||||
|
| |||||||||||
Total Austria | 1,326 | |||||||||||
|
| |||||||||||
BELGIUM 0.8% | ||||||||||||
CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Telenet Group Holding NV (a) | 606 | 28 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.5% | ||||||||||||
Anheuser-Busch InBev NV | 4,438 | 587 | ||||||||||
Delhaize Group | 4,997 | 528 | ||||||||||
|
| |||||||||||
1,115 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.2% | ||||||||||||
Ageas | 12,878 | 448 | ||||||||||
KBC Groep NV | 1,513 | 74 | ||||||||||
|
| |||||||||||
522 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.0% | ||||||||||||
UCB S.A. | 545 | 41 | ||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
MATERIALS 0.0% | ||||||||||||
Solvay S.A. | 647 | $ | 60 | |||||||||
Umicore S.A. | 1,084 | 56 | ||||||||||
|
| |||||||||||
116 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Proximus S.A. | 5,362 | 170 | ||||||||||
|
| |||||||||||
Total Belgium | 1,992 | |||||||||||
|
| |||||||||||
CANADA 9.5% | ||||||||||||
CONSUMER DISCRETIONARY 0.3% | ||||||||||||
Canadian Tire Corp. Ltd. ‘A’ | 1,585 | 173 | ||||||||||
Hudson’s Bay Co. | 3,548 | 43 | ||||||||||
Magna International, Inc. | 8,635 | 303 | ||||||||||
Quebecor, Inc. ‘B’ | 6,356 | 182 | ||||||||||
Shaw Communications, Inc. ‘B’ | 2,784 | 53 | ||||||||||
|
| |||||||||||
754 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Empire Co. Ltd. | 4,260 | 63 | ||||||||||
George Weston Ltd. | 2,783 | 241 | ||||||||||
|
| |||||||||||
304 | ||||||||||||
|
| |||||||||||
ENERGY 2.6% | ||||||||||||
Baytex Energy Corp. | 76,129 | 442 | ||||||||||
Bonavista Energy Corp. | 43,028 | 110 | ||||||||||
Cameco Corp. | 3,558 | 39 | ||||||||||
Canadian Natural Resources Ltd. | 22,586 | 697 | ||||||||||
Cenovus Energy, Inc. | 56,215 | 777 | ||||||||||
Crescent Point Energy Corp. | 30,872 | 488 | ||||||||||
Encana Corp. | 65,038 | 506 | ||||||||||
Enerplus Corp. | 84,786 | 557 | ||||||||||
Husky Energy, Inc. | 13,472 | 164 | ||||||||||
Imperial Oil Ltd. | 3,431 | 109 | ||||||||||
MEG Energy Corp. (a) | 29,189 | 153 | ||||||||||
Pengrowth Energy Corp. | 110,604 | 203 | ||||||||||
PrairieSky Royalty Ltd. (b) | 2,489 | 47 | ||||||||||
Precision Drilling Corp. | 43,140 | 229 | ||||||||||
ShawCor Ltd. | 3,629 | 90 | ||||||||||
Suncor Energy, Inc. | 53,865 | 1,494 | ||||||||||
TransCanada Corp. | 6,460 | 292 | ||||||||||
Vermilion Energy, Inc. | 2,408 | 77 | ||||||||||
|
| |||||||||||
6,474 | ||||||||||||
|
| |||||||||||
FINANCIALS 3.0% | ||||||||||||
Bank of Montreal | 14,557 | 923 | ||||||||||
Bank of Nova Scotia | 16,225 | 795 | ||||||||||
Brookfield Asset Management, Inc. ‘A’ | 7,765 | 257 | ||||||||||
Canadian Imperial Bank of Commerce (b) | 13,167 | 989 | ||||||||||
Great-West Lifeco, Inc. (b) | 6,225 | 164 | ||||||||||
IGM Financial, Inc. | 4,979 | 136 | ||||||||||
Manulife Financial Corp. | 27,537 | 377 | ||||||||||
National Bank of Canada | 6,982 | 239 | ||||||||||
Onex Corp. | 3,252 | 199 | ||||||||||
Power Corp. of Canada | 10,399 | 221 | ||||||||||
Power Financial Corp. | 10,058 | 231 | ||||||||||
Royal Bank of Canada | 22,002 | 1,300 | ||||||||||
Sun Life Financial, Inc. | 13,675 | 449 | ||||||||||
Toronto-Dominion Bank | 29,897 | 1,284 | ||||||||||
|
| |||||||||||
7,564 | ||||||||||||
|
|
40 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INDUSTRIALS 0.6% | ||||||||||||
Air Canada (a) | 53,235 | $ | 366 | |||||||||
Bombardier, Inc. ‘B’ (a) | 170,741 | 256 | ||||||||||
Canadian National Railway Co. | 7,528 | 445 | ||||||||||
Canadian Pacific Railway Ltd. | 301 | 39 | ||||||||||
Finning International, Inc. | 7,291 | 119 | ||||||||||
SNC-Lavalin Group, Inc. | 998 | 42 | ||||||||||
WestJet Airlines Ltd. | 6,748 | 110 | ||||||||||
|
| |||||||||||
1,377 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
BlackBerry Ltd. (a) | 42,726 | 287 | ||||||||||
|
| |||||||||||
MATERIALS 1.9% | ||||||||||||
Agrium, Inc. | 1,620 | 147 | ||||||||||
Barrick Gold Corp. | 42,983 | 918 | ||||||||||
First Quantum Minerals Ltd. | 11,568 | 81 | ||||||||||
Goldcorp, Inc. | 3,034 | 58 | ||||||||||
IAMGOLD Corp. (a) | 80,254 | 332 | ||||||||||
Kinross Gold Corp. (a) | 75,866 | 371 | ||||||||||
Potash Corp. of Saskatchewan, Inc. | 23,912 | 388 | ||||||||||
Teck Resources Ltd. ‘B’ | 132,081 | 1,739 | ||||||||||
Yamana Gold, Inc. | 156,486 | 814 | ||||||||||
|
| |||||||||||
4,848 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.6% | ||||||||||||
BCE, Inc. | 6,052 | 286 | ||||||||||
Manitoba Telecom Services, Inc. | 10,321 | 303 | ||||||||||
Rogers Communications, Inc. ‘B’ | 12,689 | 514 | ||||||||||
TELUS Corp. | 10,391 | 335 | ||||||||||
|
| |||||||||||
1,438 | ||||||||||||
|
| |||||||||||
UTILITIES 0.3% | ||||||||||||
Atco Ltd. ‘I’ | 5,293 | 186 | ||||||||||
Capital Power Corp. | 4,383 | 65 | ||||||||||
Emera, Inc. | 1,098 | 41 | ||||||||||
Fortis, Inc. | 2,192 | 74 | ||||||||||
Superior Plus Corp. | 4,826 | 40 | ||||||||||
TransAlta Corp. | 44,849 | 233 | ||||||||||
|
| |||||||||||
639 | ||||||||||||
|
| |||||||||||
Total Canada | 23,685 | |||||||||||
|
| |||||||||||
COLOMBIA 0.0% | ||||||||||||
ENERGY 0.0% | ||||||||||||
Pacific Exploration and Production Corp. (a) | 79,200 | 0 | ||||||||||
|
| |||||||||||
Total Colombia | 0 | |||||||||||
|
| |||||||||||
DENMARK 1.1% | ||||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Carlsberg A/S ‘B’ | 3,246 | 310 | ||||||||||
|
| |||||||||||
ENERGY 0.0% | ||||||||||||
Vestas Wind Systems A/S | 450 | 30 | ||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
Danske Bank A/S | 8,056 | 212 | ||||||||||
Sydbank A/S | 1,506 | 38 | ||||||||||
|
| |||||||||||
250 | ||||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
HEALTH CARE 0.3% | ||||||||||||
Novo Nordisk A/S ‘B’ | 10,917 | $ | 588 | |||||||||
|
| |||||||||||
INDUSTRIALS 0.4% | ||||||||||||
AP Moeller - Maersk A/S ‘B’ | 525 | 686 | ||||||||||
FLSmidth & Co. A/S | 1,878 | 67 | ||||||||||
ISS A/S | 8,557 | 322 | ||||||||||
|
| |||||||||||
1,075 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
TDC A/S | 86,569 | 424 | ||||||||||
|
| |||||||||||
Total Denmark | 2,677 | |||||||||||
|
| |||||||||||
FINLAND 0.6% | ||||||||||||
CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Nokian Renkaat OYJ | 828 | 30 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.0% | ||||||||||||
Kesko OYJ ‘B’ | 2,100 | 89 | ||||||||||
|
| |||||||||||
ENERGY 0.0% | ||||||||||||
Neste OYJ | 2,890 | 104 | ||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
Sampo OYJ ‘A’ | 2,758 | 113 | ||||||||||
|
| |||||||||||
HEALTH CARE 0.1% | ||||||||||||
Orion OYJ ‘B’ | 3,197 | 124 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.0% | ||||||||||||
Metso OYJ | 2,550 | 60 | ||||||||||
YIT OYJ | 5,301 | 38 | ||||||||||
|
| |||||||||||
98 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Nokia OYJ | 17,267 | 98 | ||||||||||
Tieto OYJ | 3,471 | 95 | ||||||||||
|
| |||||||||||
193 | ||||||||||||
|
| |||||||||||
MATERIALS 0.2% | ||||||||||||
Stora Enso OYJ ‘R’ | 20,331 | 163 | ||||||||||
UPM-Kymmene OYJ | 15,189 | 279 | ||||||||||
|
| |||||||||||
442 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
Elisa OYJ | 1,147 | 44 | ||||||||||
|
| |||||||||||
UTILITIES 0.1% | ||||||||||||
Fortum OYJ | 15,034 | 242 | ||||||||||
|
| |||||||||||
Total Finland | 1,479 | |||||||||||
|
| |||||||||||
FRANCE 9.9% | ||||||||||||
CONSUMER DISCRETIONARY 1.2% | ||||||||||||
Accor S.A. | 2,249 | 86 | ||||||||||
Christian Dior SE | 1,441 | 231 | ||||||||||
Cie Generale des Etablissements Michelin | 6,642 | 626 | ||||||||||
Kering | 880 | 142 | ||||||||||
Lagardere S.C.A. | 4,526 | 98 |
SHARES | MARKET VALUE (000S) | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE | 2,418 | $ | 365 | |||||||||
Peugeot S.A. (a) | 13,655 | 164 | ||||||||||
Publicis Groupe S.A. | 1,753 | 117 | ||||||||||
Renault S.A. | 2,874 | 217 | ||||||||||
Valeo S.A. | 2,565 | 114 | ||||||||||
Vivendi S.A. | 49,676 | 929 | ||||||||||
|
| |||||||||||
3,089 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.8% | ||||||||||||
Carrefour S.A. | 23,127 | 569 | ||||||||||
Casino Guichard Perrachon S.A. | 8,484 | 471 | ||||||||||
Danone S.A. | 7,184 | 503 | ||||||||||
L’Oreal S.A. | 778 | 149 | ||||||||||
Pernod-Ricard S.A. | 2,342 | 259 | ||||||||||
Rallye S.A. | 2,140 | 36 | ||||||||||
Wendel S.A. | 1,045 | 108 | ||||||||||
|
| |||||||||||
2,095 | ||||||||||||
|
| |||||||||||
ENERGY 1.3% | ||||||||||||
CGG S.A. (a) | 28,890 | 20 | ||||||||||
Technip S.A. | 4,106 | 222 | ||||||||||
Total S.A. | 61,702 | 2,959 | ||||||||||
|
| |||||||||||
3,201 | ||||||||||||
|
| |||||||||||
FINANCIALS 1.6% | ||||||||||||
AXA S.A. | 30,601 | 605 | ||||||||||
BNP Paribas S.A. | 37,130 | 1,628 | ||||||||||
CNP Assurances | 9,189 | 136 | ||||||||||
Credit Agricole S.A. | 39,780 | 334 | ||||||||||
Eurazeo S.A. | 740 | 44 | ||||||||||
SCOR SE | 3,467 | 103 | ||||||||||
Societe Generale S.A. | 32,536 | 1,018 | ||||||||||
|
| |||||||||||
3,868 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.8% | ||||||||||||
Essilor International S.A. | 528 | 69 | ||||||||||
Sanofi | 22,437 | 1,864 | ||||||||||
|
| |||||||||||
1,933 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 1.6% | ||||||||||||
Air France-KLM (a) | 71,024 | 448 | ||||||||||
Airbus Group SE | 2,305 | 132 | ||||||||||
Bouygues S.A. | 16,198 | 464 | ||||||||||
Cie de Saint-Gobain | 16,997 | 644 | ||||||||||
Eiffage S.A. | 6,339 | 451 | ||||||||||
Elior Group | 1,811 | 40 | ||||||||||
Rexel S.A. | 14,717 | 185 | ||||||||||
Safran S.A. | 3,966 | 267 | ||||||||||
Schneider Electric SE | 4,507 | 263 | ||||||||||
Thales S.A. | 840 | 70 | ||||||||||
Vinci S.A. | 14,954 | 1,055 | ||||||||||
|
| |||||||||||
4,019 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.3% | ||||||||||||
Atos SE | 3,105 | 256 | ||||||||||
Capgemini S.A. | 1,408 | 121 | ||||||||||
Neopost S.A. | 2,917 | 67 | ||||||||||
Teleperformance S.E. | 998 | 85 | ||||||||||
UBISOFT Entertainment (a) | 2,739 | 100 | ||||||||||
|
| |||||||||||
629 | ||||||||||||
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 41 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
MATERIALS 0.3% | ||||||||||||
Air Liquide S.A. | 3,661 | $ | 381 | |||||||||
Arkema S.A. | 1,762 | 135 | ||||||||||
Vallourec S.A. | 26,274 | 93 | ||||||||||
|
| |||||||||||
609 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.9% | ||||||||||||
Orange S.A. | 143,773 | 2,338 | ||||||||||
|
| |||||||||||
UTILITIES 1.1% | ||||||||||||
Electricite de France S.A. | 23,834 | 289 | ||||||||||
Engie S.A. | 122,042 | 1,960 | ||||||||||
Suez | 12,566 | 196 | ||||||||||
Veolia Environnement S.A. | 17,180 | 371 | ||||||||||
|
| |||||||||||
2,816 | ||||||||||||
|
| |||||||||||
Total France | 24,597 | |||||||||||
|
| |||||||||||
GERMANY 7.8% | ||||||||||||
CONSUMER DISCRETIONARY 1.1% | ||||||||||||
adidas AG | 5,118 | 735 | ||||||||||
Bayerische Motoren Werke AG | 10,272 | 747 | ||||||||||
Continental AG | 1,202 | 227 | ||||||||||
Daimler AG | 12,501 | 748 | ||||||||||
Fielmann AG | 679 | 50 | ||||||||||
ProSiebenSat.1 Media SE | 2,745 | 120 | ||||||||||
|
| |||||||||||
2,627 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.5% | ||||||||||||
Beiersdorf AG | 669 | 63 | ||||||||||
METRO AG | 28,473 | 876 | ||||||||||
Suedzucker AG | 13,616 | 300 | ||||||||||
|
| |||||||||||
1,239 | ||||||||||||
|
| |||||||||||
FINANCIALS 1.3% | ||||||||||||
Commerzbank AG | 91,503 | 596 | ||||||||||
Deutsche Bank AG | 79,962 | 1,105 | ||||||||||
Deutsche Boerse AG | 1,382 | 113 | ||||||||||
Hannover Rueck SE | 1,977 | 207 | ||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 5,712 | 958 | ||||||||||
Talanx AG (a) | 5,592 | 167 | ||||||||||
|
| |||||||||||
3,146 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.6% | ||||||||||||
Bayer AG | 5,078 | 510 | ||||||||||
Fresenius Medical Care AG & Co. KGaA | 2,376 | 207 | ||||||||||
Fresenius SE & Co. KGaA | 6,232 | 458 | ||||||||||
Merck KGaA | 1,584 | 161 | ||||||||||
Rhoen Klinikum AG | 4,822 | 141 | ||||||||||
STADA Arzneimittel AG | 2,600 | 135 | ||||||||||
|
| |||||||||||
1,612 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 1.6% | ||||||||||||
Bilfinger SE | 2,695 | 79 | ||||||||||
Deutsche Lufthansa AG | 67,427 | 793 | ||||||||||
Deutsche Post AG | 34,979 | 985 | ||||||||||
Fraport AG Frankfurt Airport Services Worldwide | 576 | 31 | ||||||||||
GEA Group AG | 1,600 | 75 | ||||||||||
HOCHTIEF AG | 3,385 | 437 | ||||||||||
OSRAM Licht AG | 2,427 | 126 |
SHARES | MARKET VALUE (000S) | |||||||||||
Rheinmetall AG | 3,811 | $ | 227 | |||||||||
Siemens AG | 11,350 | 1,165 | ||||||||||
|
| |||||||||||
3,918 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.3% | ||||||||||||
Infineon Technologies AG | 7,758 | 112 | ||||||||||
SAP SE | 9,360 | 703 | ||||||||||
|
| |||||||||||
815 | ||||||||||||
|
| |||||||||||
MATERIALS 1.1% | ||||||||||||
Aurubis AG | 2,430 | 111 | ||||||||||
BASF SE | 16,103 | 1,235 | ||||||||||
Brenntag AG | 1,232 | 60 | ||||||||||
Evonik Industries AG | 1,994 | 59 | ||||||||||
HeidelbergCement AG | 5,429 | 409 | ||||||||||
K+S AG | 11,530 | 236 | ||||||||||
LANXESS AG | 3,737 | 164 | ||||||||||
Linde AG | 1,028 | 143 | ||||||||||
Salzgitter AG | 7,173 | 190 | ||||||||||
Symrise AG | 1,792 | 122 | ||||||||||
|
| |||||||||||
2,729 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.5% | ||||||||||||
Deutsche Telekom AG | 71,779 | 1,224 | ||||||||||
Freenet AG | 1,628 | 42 | ||||||||||
|
| |||||||||||
1,266 | ||||||||||||
|
| |||||||||||
UTILITIES 0.8% | ||||||||||||
E.ON SE | 102,303 | 1,033 | ||||||||||
RWE AG | 65,798 | 1,048 | ||||||||||
|
| |||||||||||
2,081 | ||||||||||||
|
| |||||||||||
Total Germany | 19,433 | |||||||||||
|
| |||||||||||
HONG KONG 1.2% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Esprit Holdings Ltd. | 47,514 | 36 | ||||||||||
SJM Holdings Ltd. | 197,000 | 121 | ||||||||||
|
| |||||||||||
157 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.3% | ||||||||||||
CK Hutchison Holdings Ltd. | 23,043 | 254 | ||||||||||
Jardine Matheson Holdings Ltd. | 1,000 | 58 | ||||||||||
Swire Pacific Ltd. ‘A’ | 29,000 | 328 | ||||||||||
Wharf Holdings Ltd. | 17,000 | 104 | ||||||||||
|
| |||||||||||
744 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.5% | ||||||||||||
AIA Group Ltd. | 60,600 | 364 | ||||||||||
Bank of East Asia Ltd. | 17,600 | 68 | ||||||||||
Hang Lung Group Ltd. | 9,000 | 27 | ||||||||||
Hang Lung Properties Ltd. | 22,000 | 45 | ||||||||||
Hang Seng Bank Ltd. | 10,500 | 180 | ||||||||||
Hong Kong Exchanges and Clearing Ltd. | 4,100 | 100 | ||||||||||
Hongkong Land Holdings Ltd. | 5,800 | 35 | ||||||||||
Hysan Development Co. Ltd. | 14,000 | 62 | ||||||||||
Kerry Properties Ltd. | 16,000 | 40 | ||||||||||
New World Development Co. Ltd. | 189,000 | 193 | ||||||||||
Shimao Property Holdings Ltd. | 73,000 | 93 |
SHARES | MARKET VALUE (000S) | |||||||||||
Sun Hung Kai Properties Ltd. | 4,000 | $ | 48 | |||||||||
Wheelock & Co. Ltd. | 15,000 | 71 | ||||||||||
|
| |||||||||||
1,326 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Cathay Pacific Airways Ltd. | 87,000 | 128 | ||||||||||
MTR Corp. Ltd. | 22,500 | 114 | ||||||||||
|
| |||||||||||
242 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
PCCW Ltd. | 90,000 | 60 | ||||||||||
|
| |||||||||||
UTILITIES 0.2% | ||||||||||||
CLP Holdings Ltd. | 32,500 | 332 | ||||||||||
|
| |||||||||||
Total Hong Kong | 2,861 | |||||||||||
|
| |||||||||||
IRELAND 0.5% | ||||||||||||
ENERGY 0.0% | ||||||||||||
DCC PLC | 600 | 53 | ||||||||||
|
| |||||||||||
HEALTH CARE 0.2% | ||||||||||||
Medtronic PLC | 6,272 | 544 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Experian PLC | 10,165 | 193 | ||||||||||
|
| |||||||||||
MATERIALS 0.2% | ||||||||||||
CRH PLC | 12,077 | 352 | ||||||||||
Smurfit Kappa Group PLC | 8,973 | 197 | ||||||||||
|
| |||||||||||
549 | ||||||||||||
|
| |||||||||||
Total Ireland | 1,339 | |||||||||||
|
| |||||||||||
ISRAEL 0.7% | ||||||||||||
FINANCIALS 0.2% | ||||||||||||
Bank Hapoalim BM | 36,251 | 183 | ||||||||||
Bank Leumi Le-Israel BM (a) | 60,510 | 212 | ||||||||||
Israel Discount Bank Ltd.‘A’ (a) | 53,271 | 92 | ||||||||||
|
| |||||||||||
487 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.3% | ||||||||||||
Teva Pharmaceutical Industries Ltd. SP - ADR | 14,452 | 726 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Israel Chemicals Ltd. | 49,955 | 194 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. | 98,903 | 196 | ||||||||||
|
| |||||||||||
Total Israel | 1,603 | |||||||||||
|
| |||||||||||
ITALY 2.7% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Ferrari NV | 2,172 | 89 | ||||||||||
Luxottica Group SpA | 723 | 35 | ||||||||||
Mediaset SpA | 23,694 | 83 | ||||||||||
|
| |||||||||||
207 | ||||||||||||
|
|
42 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
ENERGY 1.0% | ||||||||||||
Eni SpA | 153,955 | $ | 2,480 | |||||||||
Saipem SpA (a) | 99,379 | 40 | ||||||||||
|
| |||||||||||
2,520 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.4% | ||||||||||||
Assicurazioni Generali SpA | 13,517 | 159 | ||||||||||
Banca Monte dei Paschi di Siena SpA (a) | 137,449 | 59 | ||||||||||
Banca Popolare dell’Emilia Romagna SC | 14,007 | 51 | ||||||||||
Banco Popolare SC | 7,523 | 18 | ||||||||||
Intesa Sanpaolo SpA | 158,257 | 301 | ||||||||||
Poste Italiane SpA | 29,479 | 196 | ||||||||||
UniCredit SpA | 70,183 | 154 | ||||||||||
Unione di Banche Italiane SpA | 50,492 | 140 | ||||||||||
|
| |||||||||||
1,078 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
Atlantia SpA | 3,374 | 84 | ||||||||||
Prysmian SpA | 3,500 | 77 | ||||||||||
|
| |||||||||||
161 | ||||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Italcementi SpA | 18,191 | 213 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Telecom Italia SpA (a) | 426,637 | 350 | ||||||||||
|
| |||||||||||
UTILITIES 0.9% | ||||||||||||
A2A SpA | 100,720 | 132 | ||||||||||
Enel SpA | 414,569 | 1,841 | ||||||||||
Hera SpA | 9,831 | 27 | ||||||||||
Snam SpA | 38,695 | 231 | ||||||||||
Terna Rete Elettrica Nazionale SpA | 10,054 | 56 | ||||||||||
|
| |||||||||||
2,287 | ||||||||||||
|
| |||||||||||
Total Italy | 6,816 | |||||||||||
|
| |||||||||||
JAPAN 12.2% | ||||||||||||
CONSUMER DISCRETIONARY 1.7% | ||||||||||||
Aisin Seiki Co. Ltd. | 2,100 | 86 | ||||||||||
Aoyama Trading Co. Ltd. | 1,000 | 37 | ||||||||||
Bandai Namco Holdings, Inc. | 1,700 | 44 | ||||||||||
Benesse Holdings, Inc. | 3,100 | 73 | ||||||||||
Bridgestone Corp. | 2,700 | 87 | ||||||||||
Daihatsu Motor Co. Ltd. | 13,400 | 175 | ||||||||||
Daiwa House Industry Co. Ltd. | 2,500 | 73 | ||||||||||
DCM Holdings Co. Ltd. | 5,500 | 47 | ||||||||||
Denso Corp. | 2,300 | 81 | ||||||||||
Fuji Media Holdings, Inc. | 5,800 | 65 | ||||||||||
Honda Motor Co. Ltd. | 27,400 | 687 | ||||||||||
Isetan Mitsukoshi Holdings Ltd. | 7,800 | 69 | ||||||||||
Isuzu Motors Ltd. | 3,500 | 43 | ||||||||||
JVC Kenwood Corp. | 17,000 | 35 | ||||||||||
Mazda Motor Corp. | 4,700 | 62 | ||||||||||
Mitsubishi Motors Corp. | 15,200 | 70 | ||||||||||
Nikon Corp. | 12,800 | 173 | ||||||||||
Nissan Motor Co. Ltd. | 62,400 | 557 | ||||||||||
Panasonic Corp. | 28,500 | 245 | ||||||||||
Sankyo Co. Ltd. | 700 | 26 | ||||||||||
Sega Sammy Holdings, Inc. | 3,600 | 39 | ||||||||||
Sekisui Chemical Co. Ltd. | 3,100 | 38 |
SHARES | MARKET VALUE (000S) | |||||||||||
Sony Corp. | 13,400 | $ | 395 | |||||||||
Sumitomo Electric Industries Ltd. | 5,400 | 72 | ||||||||||
Sumitomo Rubber Industries Ltd. | 7,900 | 106 | ||||||||||
Takashimaya Co. Ltd. | 9,000 | 65 | ||||||||||
Takata Corp. | 9,600 | 37 | ||||||||||
Toyota Motor Corp. | 10,735 | 529 | ||||||||||
Yamada Denki Co. Ltd. | 27,500 | 145 | ||||||||||
Yamaha Corp. | 1,700 | 46 | ||||||||||
Yoshinoya Holdings Co. Ltd. | 3,200 | 44 | ||||||||||
Zensho Holdings Co. Ltd. | 3,100 | 45 | ||||||||||
|
| |||||||||||
4,296 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 1.2% | ||||||||||||
Aeon Co. Ltd. | 45,447 | 706 | ||||||||||
Ajinomoto Co., Inc. | 5,000 | 118 | ||||||||||
Japan Tobacco, Inc. | 3,356 | 135 | ||||||||||
Kao Corp. | 1,800 | 105 | ||||||||||
Kirin Holdings Co. Ltd. | 37,800 | 638 | ||||||||||
Megmilk Snow Brand Co. Ltd. | 1,300 | 45 | ||||||||||
MEIJI Holdings Co. Ltd. | 2,500 | 257 | ||||||||||
Morinaga Milk Industry Co. Ltd. | 6,000 | 42 | ||||||||||
NH Foods Ltd. | 4,000 | 98 | ||||||||||
Nippon Suisan Kaisha Ltd. | 7,000 | 36 | ||||||||||
Nisshin Seifun Group, Inc. | 1,300 | 21 | ||||||||||
Sapporo Holdings Ltd. | 1,400 | 40 | ||||||||||
Seiko Holdings Corp. | 11,000 | 33 | ||||||||||
Seven & Holdings Co. Ltd. | 3,700 | 155 | ||||||||||
Shiseido Co. Ltd. | 4,800 | 125 | ||||||||||
UNY Group Holdings Co. Ltd. | 28,000 | 236 | ||||||||||
Yamazaki Baking Co. Ltd. | 9,000 | 251 | ||||||||||
|
| |||||||||||
3,041 | ||||||||||||
|
| |||||||||||
ENERGY 0.1% | ||||||||||||
Idemitsu Kosan Co. Ltd. | 5,300 | 115 | ||||||||||
JX Holdings, Inc. | 43,400 | 170 | ||||||||||
Showa Shell Sekiyu KK | 4,200 | 39 | ||||||||||
|
| |||||||||||
324 | ||||||||||||
|
| |||||||||||
FINANCIALS 2.1% | ||||||||||||
Chiba Bank Ltd. | 7,000 | 33 | ||||||||||
Concordia Financial Group Ltd. (a) | 15,000 | 58 | ||||||||||
Dai-ichi Life Insurance Co. Ltd. | 40,400 | 452 | ||||||||||
Daiwa Securities Group, Inc. | 7,000 | 37 | ||||||||||
Fukuoka Financial Group, Inc. | 13,000 | 43 | ||||||||||
Hokuhoku Financial Group, Inc. | 18,000 | 20 | ||||||||||
Japan Post Bank Co. Ltd. | 9,400 | 111 | ||||||||||
Japan Post Holdings Co. Ltd. | 14,600 | 178 | ||||||||||
Joyo Bank Ltd. | 11,000 | 41 | ||||||||||
Mitsubishi UFJ Financial Group, Inc. | 283,200 | 1,270 | ||||||||||
Mizuho Financial Group, Inc. | 645,900 | 929 | ||||||||||
MS&AD Insurance Group Holdings, Inc. | 1,900 | 49 | ||||||||||
Nishi-Nippon City Bank Ltd. | 36,000 | 63 | ||||||||||
North Pacific Bank Ltd. | 14,300 | 39 | ||||||||||
ORIX Corp. | 9,100 | 118 | ||||||||||
Resona Holdings, Inc. | 74,700 | 273 | ||||||||||
Sompo Japan Nipponkoa Holdings, Inc. | 1,400 | 37 | ||||||||||
Sony Financial Holdings, Inc. | 10,200 | 115 | ||||||||||
Sumitomo Mitsui Financial Group, Inc. | 31,300 | 904 | ||||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 40,000 | 130 | ||||||||||
T&D Holdings, Inc. | 15,400 | 131 |
SHARES | MARKET VALUE (000S) | |||||||||||
Tokio Marine Holdings, Inc. | 1,400 | $ | 47 | |||||||||
Yamaguchi Financial Group, Inc. | 4,000 | 38 | ||||||||||
|
| |||||||||||
5,116 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.5% | ||||||||||||
Astellas Pharma, Inc. | 12,800 | 201 | ||||||||||
Daiichi Sankyo Co. Ltd. | 20,516 | 498 | ||||||||||
Eisai Co. Ltd. | 2,100 | 117 | ||||||||||
Medipal Holdings Corp. | 2,600 | 43 | ||||||||||
Otsuka Holdings Co. Ltd. | 3,528 | 162 | ||||||||||
Shionogi & Co. Ltd. | 2,100 | 115 | ||||||||||
Takeda Pharmaceutical Co. Ltd. | 3,800 | 164 | ||||||||||
|
| |||||||||||
1,300 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 2.1% | ||||||||||||
ANA Holdings, Inc. | 22,000 | 63 | ||||||||||
Central Japan Railway Co. | 600 | 107 | ||||||||||
Dai Nippon Printing Co. Ltd. | 21,000 | 234 | ||||||||||
East Japan Railway Co. | 2,900 | 269 | ||||||||||
Furukawa Electric Co. Ltd. | 32,000 | 74 | ||||||||||
Hoya Corp. | 2,300 | 82 | ||||||||||
IHI Corp. | 17,000 | 46 | ||||||||||
ITOCHU Corp. | 25,500 | 312 | ||||||||||
Japan Airlines Co. Ltd. | 8,100 | 261 | ||||||||||
Kawasaki Heavy Industries Ltd. | 13,000 | 37 | ||||||||||
Kawasaki Kisen Kaisha Ltd. | 19,000 | 45 | ||||||||||
Komatsu Ltd. | 8,900 | 155 | ||||||||||
Marubeni Corp. | 43,400 | 196 | ||||||||||
Mitsubishi Corp. | 22,100 | 389 | ||||||||||
Mitsubishi Electric Corp. | 10,000 | 119 | ||||||||||
Mitsubishi Heavy Industries Ltd. | 35,000 | 141 | ||||||||||
Mitsui & Co. Ltd. | 44,600 | 532 | ||||||||||
Mitsui Engineering & Shipbuilding Co. Ltd. | 24,000 | 33 | ||||||||||
Mitsui OSK Lines Ltd. | 19,000 | 40 | ||||||||||
Nippon Yusen KK | 73,000 | 128 | ||||||||||
NTN Corp. | 12,000 | 32 | ||||||||||
Sojitz Corp. | 95,400 | 226 | ||||||||||
Sumitomo Corp. | 50,300 | 507 | ||||||||||
Sumitomo Forestry Co. Ltd. | 5,300 | 72 | ||||||||||
Sumitomo Heavy Industries Ltd. | 11,000 | 48 | ||||||||||
Toppan Printing Co. Ltd. | 19,000 | 163 | ||||||||||
Toshiba Corp. | 236,000 | 643 | ||||||||||
Toyota Tsusho Corp. | 1,600 | 35 | ||||||||||
West Japan Railway Co. | 2,800 | 177 | ||||||||||
|
| |||||||||||
5,166 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 1.4% | ||||||||||||
Brother Industries Ltd. | 3,700 | 40 | ||||||||||
Canon, Inc. | 30,550 | 872 | ||||||||||
DeNA Co. Ltd. | 8,900 | 208 | ||||||||||
FUJIFILM Holdings Corp. | 7,800 | 303 | ||||||||||
Fujitsu Ltd. | 105,000 | 386 | ||||||||||
Hitachi Ltd. | 147,000 | 616 | ||||||||||
Ibiden Co. Ltd. | 3,300 | 37 | ||||||||||
Japan Display, Inc. (a) | 33,000 | 54 | ||||||||||
Konica Minolta, Inc. | 13,100 | 96 | ||||||||||
Kyocera Corp. | 800 | 38 | ||||||||||
NEC Corp. | 123,000 | 287 | ||||||||||
Nintendo Co. Ltd. | 300 | 43 | ||||||||||
NTT Data Corp. | 1,100 | 52 | ||||||||||
Omron Corp. | 1,200 | 39 | ||||||||||
Ricoh Co. Ltd. | 36,500 | 316 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 43 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
TDK Corp. | 700 | $ | 39 | |||||||||
|
| |||||||||||
3,426 | ||||||||||||
|
| |||||||||||
MATERIALS 1.1% | ||||||||||||
Asahi Glass Co. Ltd. | 59,000 | 320 | ||||||||||
Asahi Kasei Corp. | 16,000 | 111 | ||||||||||
Denka Co. Ltd. | 17,000 | 69 | ||||||||||
DIC Corp. | 3,600 | 75 | ||||||||||
JFE Holdings, Inc. | 4,000 | 52 | ||||||||||
Kaneka Corp. | 6,000 | 40 | ||||||||||
LIXIL Group Corp. | 2,300 | 38 | ||||||||||
Mitsubishi Chemical Holdings Corp. | 57,400 | 263 | ||||||||||
Mitsubishi Materials Corp. | 41,000 | 98 | ||||||||||
Mitsui Chemicals, Inc. | 32,000 | 118 | ||||||||||
Mitsui Mining & Smelting Co. Ltd. | 69,000 | 115 | ||||||||||
Nippon Kayaku Co. Ltd. | 4,000 | 40 | ||||||||||
Nippon Light Metal Holdings Co. Ltd. | 68,200 | 151 | ||||||||||
Nippon Paper Industries Co. Ltd. | 10,618 | 185 | ||||||||||
Nippon Sheet Glass Co. Ltd. (a) | 58,000 | 37 | ||||||||||
Nitto Denko Corp. | 800 | 51 | ||||||||||
Oji Holdings Corp. | 28,000 | 107 | ||||||||||
Shin-Etsu Chemical Co. Ltd. | 1,400 | 82 | ||||||||||
Showa Denko KK | 2,000 | 19 | ||||||||||
Sumitomo Chemical Co. Ltd. | 47,000 | 194 | ||||||||||
Sumitomo Metal Mining Co. Ltd. | 12,000 | 122 | ||||||||||
Taiheiyo Cement Corp. | 17,000 | 40 | ||||||||||
Teijin Ltd. | 53,000 | 176 | ||||||||||
Tokuyama Corp. (a) | 17,000 | 47 | ||||||||||
Ube Industries Ltd. | 75,000 | 124 | ||||||||||
|
| |||||||||||
2,674 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 1.2% | ||||||||||||
KDDI Corp. | 10,700 | 325 | ||||||||||
Nippon Telegraph & Telephone Corp. | 39,100 | 1,833 | ||||||||||
NTT DOCOMO, Inc. | 27,400 | 739 | ||||||||||
SoftBank Group Corp. | 3,300 | 187 | ||||||||||
|
| |||||||||||
3,084 | ||||||||||||
|
| |||||||||||
UTILITIES 0.8% | ||||||||||||
Chubu Electric Power Co., Inc. | 48,000 | 683 | ||||||||||
Chugoku Electric Power Co., Inc. | 4,400 | 56 | ||||||||||
Electric Power Development Co. Ltd. | 2,100 | 49 | ||||||||||
Hokkaido Electric Power Co., Inc. | 2,400 | 20 | ||||||||||
Hokuriku Electric Power Co. | 12,788 | 159 | ||||||||||
Kansai Electric Power Co., Inc. (a) | 40,800 | 397 | ||||||||||
Kyushu Electric Power Co., Inc. | 3,200 | 32 | ||||||||||
Osaka Gas Co. Ltd. | 5,000 | 19 | ||||||||||
Tohoku Electric Power Co., Inc. | 27,500 | 347 | ||||||||||
Tokyo Electric Power Co., Inc. (a) | 15,300 | 65 | ||||||||||
Tokyo Gas Co. Ltd. | 10,000 | 41 | ||||||||||
|
| |||||||||||
1,868 | ||||||||||||
|
| |||||||||||
Total Japan | 30,295 | |||||||||||
|
| |||||||||||
LUXEMBOURG 0.3% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
RTL Group S.A. | 1,991 | 162 | ||||||||||
|
| |||||||||||
MATERIALS 0.2% | ||||||||||||
ArcelorMittal | 124,141 | 566 |
SHARES | MARKET VALUE (000S) | |||||||||||
Tenaris S.A. | 6,066 | $ | 88 | |||||||||
|
| |||||||||||
654 | ||||||||||||
|
| |||||||||||
Total Luxembourg | 816 | |||||||||||
|
| |||||||||||
MACAU 0.0% | ||||||||||||
CONSUMER DISCRETIONARY 0.0% | ||||||||||||
Sands China Ltd. | 9,600 | 32 | ||||||||||
Wynn Macau Ltd. | 50,000 | 73 | ||||||||||
|
| |||||||||||
105 | ||||||||||||
|
| |||||||||||
Total Macau | 105 | |||||||||||
|
| |||||||||||
NETHERLANDS 4.2% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Wolters Kluwer NV | 3,370 | 136 | ||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.6% | ||||||||||||
Heineken Holding NV | 3,201 | 259 | ||||||||||
Heineken NV | 3,282 | 301 | ||||||||||
Koninklijke Ahold NV | 43,086 | 952 | ||||||||||
|
| |||||||||||
1,512 | ||||||||||||
|
| |||||||||||
ENERGY 2.4% | ||||||||||||
Fugro NV | 13,670 | 240 | ||||||||||
Royal Dutch Shell PLC ‘A’ | 210,199 | 5,766 | ||||||||||
|
| |||||||||||
6,006 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.4% | ||||||||||||
Aegon NV | 37,042 | 147 | ||||||||||
Delta Lloyd NV | 27,926 | 98 | ||||||||||
ING Groep NV - Dutch Certificate | 51,154 | 529 | ||||||||||
NN Group NV | 7,644 | 211 | ||||||||||
|
| |||||||||||
985 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.3% | ||||||||||||
Boskalis Westminster | 1,109 | 38 | ||||||||||
Koninklijke BAM Groep NV | 8,076 | 29 | ||||||||||
Koninklijke Philips NV | 20,150 | 501 | ||||||||||
PostNL NV (a) | 43,417 | 177 | ||||||||||
Randstad Holding NV | 551 | 22 | ||||||||||
|
| |||||||||||
767 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.0% | ||||||||||||
NXP Semiconductor NV (a) | 785 | 62 | ||||||||||
|
| |||||||||||
MATERIALS 0.2% | ||||||||||||
Akzo Nobel NV | 3,594 | 223 | ||||||||||
Koninklijke DSM NV | 2,250 | 130 | ||||||||||
|
| |||||||||||
353 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.2% | ||||||||||||
Koninklijke KPN NV | 111,270 | 396 | ||||||||||
VimpelCom Ltd. SP - ADR | 39,368 | 153 | ||||||||||
|
| |||||||||||
549 | ||||||||||||
|
| |||||||||||
Total Netherlands | 10,370 | |||||||||||
|
| |||||||||||
NEW ZEALAND 0.2% | ||||||||||||
MATERIALS 0.1% | ||||||||||||
Fletcher Building Ltd. | 21,047 | 129 | ||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Spark New Zealand Ltd. | 145,885 | $ | 371 | |||||||||
|
| |||||||||||
Total New Zealand | 500 | |||||||||||
|
| |||||||||||
NORWAY 1.1% | ||||||||||||
CONSUMER STAPLES 0.1% | ||||||||||||
Marine Harvest ASA | 6,991 | 118 | ||||||||||
Orkla ASA | 12,893 | 115 | ||||||||||
|
| |||||||||||
233 | ||||||||||||
|
| |||||||||||
ENERGY 0.8% | ||||||||||||
Statoil ASA | 116,990 | 2,021 | ||||||||||
TGS Nopec Geophysical Co. ASA | 3,523 | 58 | ||||||||||
|
| |||||||||||
2,079 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.1% | ||||||||||||
DNB ASA | 16,173 | 193 | ||||||||||
Gjensidige Forsikring ASA | 3,759 | 63 | ||||||||||
|
| |||||||||||
256 | ||||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Norsk Hydro ASA | 32,401 | 119 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.0% | ||||||||||||
Telenor ASA | 6,970 | 115 | ||||||||||
|
| |||||||||||
Total Norway | 2,802 | |||||||||||
|
| |||||||||||
PORTUGAL 0.1% | ||||||||||||
ENERGY 0.0% | ||||||||||||
Galp Energia SGPS S.A. | 3,057 | 42 | ||||||||||
|
| |||||||||||
FINANCIALS 0.0% | ||||||||||||
Banco Espirito Santo S.A. | 59,573 | 1 | ||||||||||
|
| |||||||||||
UTILITIES 0.1% | ||||||||||||
EDP - Energias de Portugal S.A. | 87,551 | 268 | ||||||||||
|
| |||||||||||
Total Portugal | 311 | |||||||||||
|
| |||||||||||
SINGAPORE 0.9% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Jardine Cycle & Carriage Ltd. | 3,300 | 90 | ||||||||||
Singapore Press Holdings Ltd. | 22,900 | 68 | ||||||||||
|
| |||||||||||
158 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Keppel Corp. Ltd. | 89,500 | 369 | ||||||||||
Wilmar International Ltd. | 45,100 | 110 | ||||||||||
|
| |||||||||||
479 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.3% | ||||||||||||
CapitaLand Ltd. | 61,900 | 142 | ||||||||||
DBS Group Holdings Ltd. | 33,310 | 393 | ||||||||||
Oversea-Chinese Banking Corp. Ltd. | 12,800 | 83 | ||||||||||
United Overseas Bank Ltd. | 11,500 | 159 | ||||||||||
|
| |||||||||||
777 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.1% | ||||||||||||
ComfortDelGro Corp. Ltd. | 35,600 | 73 | ||||||||||
Sembcorp Industries Ltd. | 55,400 | 117 |
44 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
Singapore Airlines Ltd. | 31,067 | $ | 247 | |||||||||
|
| |||||||||||
437 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Broadcom Ltd. | 946 | 147 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.1% | ||||||||||||
Singapore Telecommunications Ltd. | 79,500 | 245 | ||||||||||
|
| |||||||||||
Total Singapore | 2,243 | |||||||||||
|
| |||||||||||
SOUTH AFRICA 0.1% | ||||||||||||
FINANCIALS 0.0% | ||||||||||||
Investec PLC | 12,968 | 81 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Mondi PLC | 6,306 | 118 | ||||||||||
|
| |||||||||||
Total South Africa | 199 | |||||||||||
|
| |||||||||||
SPAIN 2.8% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Inditex S.A. | 5,652 | 190 | ||||||||||
Promotora de Informaciones S.A. ‘A’ (a) | 5,384 | 30 | ||||||||||
|
| |||||||||||
220 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.0% | ||||||||||||
Distribuidora Internacional de Alimentacion S.A. | 16,515 | 96 | ||||||||||
|
| |||||||||||
ENERGY 0.1% | ||||||||||||
Repsol S.A. | 15,984 | 205 | ||||||||||
|
| |||||||||||
FINANCIALS 1.1% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 62,960 | 361 | ||||||||||
Banco de Sabadell S.A. | 30,247 | 40 | ||||||||||
Banco Santander S.A. | 550,114 | 2,135 | ||||||||||
Mapfre S.A. | 60,974 | 134 | ||||||||||
|
| |||||||||||
2,670 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.3% | ||||||||||||
Abengoa S.A. ‘B’ (a) | 446,104 | 121 | ||||||||||
Abertis Infraestructuras S.A. | 6,666 | 99 | ||||||||||
Acciona S.A. | 1,714 | 125 | ||||||||||
ACS Actividades de Construccion y Servicios S.A. | 5,268 | 144 | ||||||||||
Ferrovial S.A. | 9,551 | 187 | ||||||||||
Fomento de Construcciones y Contratas S.A. | 22,455 | 190 | ||||||||||
|
| |||||||||||
866 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Amadeus IT Holding S.A. ‘A’ | 1,396 | 62 | ||||||||||
Indra Sistemas S.A. (a) | 6,256 | 66 | ||||||||||
|
| |||||||||||
128 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.6% | ||||||||||||
Telefonica S.A. | 157,605 | 1,496 | ||||||||||
|
| |||||||||||
UTILITIES 0.5% | ||||||||||||
Endesa S.A. | 39,468 | 792 | ||||||||||
Gas Natural SDG S.A. | 6,249 | 124 |
SHARES | MARKET VALUE (000S) | |||||||||||
Iberdrola S.A. | 53,986 | $ | 369 | |||||||||
|
| |||||||||||
1,285 | ||||||||||||
|
| |||||||||||
Total Spain | 6,966 | |||||||||||
|
| |||||||||||
SWEDEN 1.9% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Bonava AB ‘B’ (a) | 2,591 | 31 | ||||||||||
Electrolux AB ‘B’ | 4,497 | 123 | ||||||||||
Hennes & Mauritz AB ‘B’ | 4,016 | 118 | ||||||||||
|
| |||||||||||
272 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.2% | ||||||||||||
Svenska Cellulosa AB S.C.A. ‘B’ | 8,146 | 262 | ||||||||||
Swedish Match AB | 4,555 | 159 | ||||||||||
|
| |||||||||||
421 | ||||||||||||
|
| |||||||||||
FINANCIALS 0.5% | ||||||||||||
Nordea Bank AB | 22,644 | 192 | ||||||||||
Skandinaviska Enskilda Banken AB | 30,195 | 264 | ||||||||||
Svenska Handelsbanken AB ‘A’ | 25,204 | 306 | ||||||||||
Swedbank AB ‘A’ | 18,843 | 396 | ||||||||||
|
| |||||||||||
1,158 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.0% | ||||||||||||
Meda AB ‘A’ | 1,128 | 20 | ||||||||||
|
| |||||||||||
INDUSTRIALS 0.5% | ||||||||||||
Assa Abloy AB ‘B’ | 4,746 | 98 | ||||||||||
Atlas Copco AB ‘A’ | 5,046 | 131 | ||||||||||
NCC AB ‘B’ | 2,591 | 60 | ||||||||||
Sandvik AB | 21,568 | 216 | ||||||||||
Securitas AB ‘B’ | 9,344 | 144 | ||||||||||
Skanska AB ‘B’ | 4,758 | 100 | ||||||||||
SKF AB ‘B’ | 6,787 | 109 | ||||||||||
Volvo AB ‘B’ | 36,385 | 361 | ||||||||||
|
| |||||||||||
1,219 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
Telefonaktiebolaget LM Ericsson ‘B’ | 26,638 | 205 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Boliden AB | 9,275 | 181 | ||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.4% | ||||||||||||
Tele2 AB ‘B’ | 67,006 | 588 | ||||||||||
TeliaSonera AB | 118,478 | 561 | ||||||||||
1,149 | ||||||||||||
|
| |||||||||||
Total Sweden | 4,625 | |||||||||||
|
| |||||||||||
SWITZERLAND 4.4% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Cie Financiere Richemont S.A. | 2,842 | 166 | ||||||||||
Garmin Ltd. | 1,910 | 81 | ||||||||||
Swatch Group AG | 271 | 79 | ||||||||||
|
| |||||||||||
326 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 0.5% | ||||||||||||
Coca-Cola HBC AG | 309 | 6 | ||||||||||
Nestle S.A. | 14,366 | 1,113 | ||||||||||
|
| |||||||||||
1,119 | ||||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
ENERGY 0.2% | ||||||||||||
Transocean Ltd. | 32,218 | $ | 383 | |||||||||
Weatherford International PLC (a) | 8,724 | 49 | ||||||||||
|
| |||||||||||
432 | ||||||||||||
|
| |||||||||||
FINANCIALS 1.4% | ||||||||||||
Allied World Assurance Co. Holdings AG | 2,583 | 91 | ||||||||||
Baloise Holding AG | 1,416 | 158 | ||||||||||
Credit Suisse Group AG | 38,923 | 414 | ||||||||||
Helvetia Holding AG | 236 | 123 | ||||||||||
Swiss Life Holding AG | 1,738 | 402 | ||||||||||
Swiss Re AG | 12,834 | 1,121 | ||||||||||
UBS Group AG | 12,353 | 160 | ||||||||||
Zurich Insurance Group AG | 4,354 | 1,077 | ||||||||||
|
| |||||||||||
3,546 | ||||||||||||
|
| |||||||||||
HEALTH CARE 1.4% | ||||||||||||
Lonza Group AG | 245 | 41 | ||||||||||
Novartis AG | 18,912 | 1,561 | ||||||||||
Roche Holding AG | 7,100 | 1,873 | ||||||||||
|
| |||||||||||
3,475 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.2% | ||||||||||||
ABB Ltd. | 11,423 | 226 | ||||||||||
Adecco S.A. | 1,565 | 79 | ||||||||||
SGS S.A. | 18 | 41 | ||||||||||
Wolseley PLC | 2,490 | 129 | ||||||||||
|
| |||||||||||
475 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
STMicroelectronics NV | 20,444 | 120 | ||||||||||
TE Connectivity Ltd. | 4,088 | 234 | ||||||||||
|
| |||||||||||
354 | ||||||||||||
|
| |||||||||||
MATERIALS 0.5% | ||||||||||||
Clariant AG | 5,018 | 85 | ||||||||||
Givaudan S.A. | 49 | 98 | ||||||||||
Glencore PLC | 282,351 | 582 | ||||||||||
Syngenta AG (a) | 906 | 348 | ||||||||||
|
| |||||||||||
1,113 | ||||||||||||
|
| |||||||||||
Total Switzerland | 10,840 | |||||||||||
|
| |||||||||||
UNITED KINGDOM 14.0% | ||||||||||||
CONSUMER DISCRETIONARY 1.1% | ||||||||||||
Compass Group PLC | 21,239 | 404 | ||||||||||
Fiat Chrysler Automobiles NV | 64,933 | 397 | ||||||||||
GKN PLC | 19,972 | 72 | ||||||||||
Home Retail Group PLC | 125,899 | 258 | ||||||||||
Inchcape PLC | 4,252 | 36 | ||||||||||
Informa PLC | 3,244 | 32 | ||||||||||
Kingfisher PLC | 73,638 | 316 | ||||||||||
Marks & Spencer Group PLC | 39,844 | 171 | ||||||||||
Mitchells & Butlers PLC | 9,591 | 30 | ||||||||||
Next PLC | 990 | 65 | ||||||||||
Pearson PLC | 15,030 | 195 | ||||||||||
RELX NV | 7,379 | 128 | ||||||||||
RELX PLC | 5,014 | 92 | ||||||||||
Sky PLC | 6,801 | 77 | ||||||||||
Thomas Cook Group PLC (a) | 75,815 | 64 | ||||||||||
WPP PLC | 25,799 | 538 | ||||||||||
|
| |||||||||||
2,875 | ||||||||||||
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 45 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
CONSUMER STAPLES 2.9% | ||||||||||||
British American Tobacco PLC | 29,461 | $ | 1,910 | |||||||||
Diageo PLC | 14,240 | 398 | ||||||||||
Imperial Brands PLC | 18,934 | 1,027 | ||||||||||
J Sainsbury PLC | 57,492 | 179 | ||||||||||
Reckitt Benckiser Group PLC | 5,705 | 572 | ||||||||||
SABMiller PLC | 9,445 | 551 | ||||||||||
Tate & Lyle PLC | 15,031 | 134 | ||||||||||
Tesco PLC (a) | 244,720 | 574 | ||||||||||
Unilever NV - Dutch Certificate | 17,974 | 836 | ||||||||||
Unilever PLC | 9,222 | 442 | ||||||||||
WM Morrison Supermarkets PLC | 230,968 | 580 | ||||||||||
|
| |||||||||||
7,203 | ||||||||||||
|
| |||||||||||
ENERGY 1.7% | ||||||||||||
BP PLC | 637,286 | 3,731 | ||||||||||
John Wood Group PLC | 6,771 | 62 | ||||||||||
Petrofac Ltd. | 18,662 | 194 | ||||||||||
Subsea 7 S.A. | 13,255 | 130 | ||||||||||
Tullow Oil PLC (a) | 66,086 | 233 | ||||||||||
|
| |||||||||||
4,350 | ||||||||||||
|
| |||||||||||
FINANCIALS 3.7% | ||||||||||||
Aberdeen Asset Management PLC | 12,515 | 47 | ||||||||||
Admiral Group PLC | 2,737 | 74 | ||||||||||
Aviva PLC | 45,579 | 240 | ||||||||||
Barclays PLC | �� | 561,398 | 1,044 | |||||||||
Direct Line Insurance Group PLC | 8,747 | 41 | ||||||||||
HSBC Holdings PLC | 692,778 | 4,292 | ||||||||||
ICAP PLC | 16,112 | 91 | ||||||||||
Lancashire Holdings Ltd. | 2,502 | 20 | ||||||||||
Legal & General Group PLC | 28,107 | 72 | ||||||||||
Lloyds Banking Group PLC | 668,464 | 484 | ||||||||||
Man Group PLC | 110,177 | 171 | ||||||||||
Old Mutual PLC | 323,133 | 873 | ||||||||||
Prudential PLC | 8,250 | 140 | ||||||||||
Royal Bank of Scotland Group PLC (a) | 181,409 | 411 | ||||||||||
RSA Insurance Group PLC | 9,862 | 66 | ||||||||||
Standard Chartered PLC | 138,052 | 1,047 | ||||||||||
Standard Life PLC | 13,299 | 53 | ||||||||||
|
| |||||||||||
9,166 | ||||||||||||
|
| |||||||||||
HEALTH CARE 1.1% | ||||||||||||
AstraZeneca PLC | 17,254 | 1,032 | ||||||||||
GlaxoSmithKline PLC | 73,922 | 1,587 | ||||||||||
Smith & Nephew PLC | 5,711 | 97 | ||||||||||
|
| |||||||||||
2,716 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 0.9% | ||||||||||||
Aggreko PLC | 2,478 | 42 | ||||||||||
BAE Systems PLC | 71,917 | 504 | ||||||||||
Bunzl PLC | 1,963 | 60 | ||||||||||
Capita PLC | 5,233 | 68 | ||||||||||
Carillion PLC | 15,236 | 48 | ||||||||||
CNH Industrial NV | 41,137 | 298 | ||||||||||
easyJet PLC | 3,302 | 48 | ||||||||||
Firstgroup PLC (a) | 18,075 | 24 | ||||||||||
International Consolidated Airlines Group S.A. | 24,580 | 122 | ||||||||||
National Express Group PLC | 14,508 | 57 | ||||||||||
QinetiQ Group PLC | 13,681 | 41 | ||||||||||
Rentokil Initial PLC | 44,234 | 114 | ||||||||||
Rolls-Royce Holdings PLC | 31,641 | 302 |
SHARES | MARKET VALUE (000S) | |||||||||||
Royal Mail PLC | 42,275 | $ | 284 | |||||||||
Smiths Group PLC | 3,876 | 60 | ||||||||||
Stagecoach Group PLC | 23,191 | 72 | ||||||||||
Weir Group PLC | 2,443 | 47 | ||||||||||
|
| |||||||||||
2,191 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 0.1% | ||||||||||||
ARM Holdings PLC | 2,156 | 33 | ||||||||||
Sage Group PLC | 9,314 | 80 | ||||||||||
Serco Group PLC (a) | 44,386 | 66 | ||||||||||
|
| |||||||||||
179 | ||||||||||||
|
| |||||||||||
MATERIALS 1.0% | ||||||||||||
Anglo American PLC | 95,190 | 933 | ||||||||||
KAZ Minerals PLC (a) | 61,312 | 109 | ||||||||||
Rio Tinto Ltd. | 15,010 | 519 | ||||||||||
Rio Tinto PLC | 29,284 | 910 | ||||||||||
|
| |||||||||||
2,471 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 0.8% | ||||||||||||
BT Group PLC | 63,311 | 348 | ||||||||||
Vodafone Group PLC | 505,723 | 1,542 | ||||||||||
|
| |||||||||||
1,890 | ||||||||||||
|
| |||||||||||
UTILITIES 0.7% | ||||||||||||
Centrica PLC | 113,060 | 342 | ||||||||||
Drax Group PLC | 23,071 | 100 | ||||||||||
National Grid PLC | 60,016 | 882 | ||||||||||
Severn Trent PLC | 5,587 | 182 | ||||||||||
SSE PLC | 3,297 | 69 | ||||||||||
United Utilities Group PLC | 11,377 | 158 | ||||||||||
|
| |||||||||||
1,733 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 34,774 | |||||||||||
|
| |||||||||||
UNITED STATES 0.2% | ||||||||||||
CONSUMER DISCRETIONARY 0.1% | ||||||||||||
Carnival PLC | 3,211 | 142 | ||||||||||
Thomson Reuters Corp. | 3,411 | 138 | ||||||||||
|
| |||||||||||
280 | ||||||||||||
|
| |||||||||||
HEALTH CARE 0.0% | ||||||||||||
Shire PLC | 1,513 | 94 | ||||||||||
|
| |||||||||||
MATERIALS 0.1% | ||||||||||||
Domtar Corp. | 4,929 | 173 | ||||||||||
|
| |||||||||||
Total United States | 547 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $199,633) |
| 211,531 | ||||||||||
|
| |||||||||||
PREFERRED STOCKS 0.5% | ||||||||||||
GERMANY 0.5% | ||||||||||||
INDUSTRIALS 0.5% | ||||||||||||
Henkel AG & Co. KGaA | 2,796 | 342 | ||||||||||
Porsche Automobil Holding SE | 3,017 | 139 | ||||||||||
Volkswagen AG | 6,733 | 816 | ||||||||||
|
| |||||||||||
1,297 | ||||||||||||
|
| |||||||||||
MATERIALS 0.0% | ||||||||||||
FUCHS PETROLUB SE | 1,007 | 40 | ||||||||||
|
| |||||||||||
Total Preferred Stocks (Cost $1,307) |
| 1,337 | ||||||||||
|
|
SHARES | MARKET VALUE (000S) | |||||||||||
REAL ESTATE INVESTMENT TRUSTS 0.8% | ||||||||||||
AUSTRALIA 0.4% | ||||||||||||
FINANCIALS 0.4% | ||||||||||||
Dexus Property Group | 15,573 | $ | 106 | |||||||||
Mirvac Group | 114,960 | 175 | ||||||||||
Scentre Group | 81,200 | 301 | ||||||||||
Stockland | 100,575 | 356 | ||||||||||
Westfield Corp. | 17,338 | 139 | ||||||||||
|
| |||||||||||
1,077 | ||||||||||||
|
| |||||||||||
Total Australia | 1,077 | |||||||||||
|
| |||||||||||
CANADA 0.1% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Cominar Real Estate Investment Trust | 2,714 | 35 | ||||||||||
Dream Office Real Estate Investment Trust | 5,125 | 74 | ||||||||||
H&R Real Estate Investment Trust | 3,961 | 69 | ||||||||||
RioCan Real Estate Investment Trust | 1,231 | 28 | ||||||||||
Smart Real Estate Investment Trust | 1,264 | 37 | ||||||||||
|
| |||||||||||
243 | ||||||||||||
|
| |||||||||||
Total Canada | 243 | |||||||||||
|
| |||||||||||
FRANCE 0.1% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Unibail-Rodamco SE | 917 | 237 | ||||||||||
|
| |||||||||||
Total France | 237 | |||||||||||
|
| |||||||||||
HONG KONG 0.1% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Link REIT | 18,500 | 127 | ||||||||||
|
| |||||||||||
Total Hong Kong | 127 | |||||||||||
|
| |||||||||||
UNITED KINGDOM 0.1% | ||||||||||||
FINANCIALS 0.1% | ||||||||||||
Land Securities Group PLC | 4,852 | 68 | ||||||||||
Segro PLC | 19,743 | 109 | ||||||||||
|
| |||||||||||
177 | ||||||||||||
|
| |||||||||||
Total United Kingdom | 177 | |||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts |
| 1,861 | ||||||||||
|
| |||||||||||
RIGHTS 0.0% | ||||||||||||
SPAIN 0.0% | ||||||||||||
INDUSTRIALS 0.0% | ||||||||||||
ACS Actividades de Construccion y Servicios S.A. | 10,163 | 7 | ||||||||||
|
| |||||||||||
Total Rights (Cost $8) | 7 | |||||||||||
|
| |||||||||||
LIMITED PARTNERSHIPS 0.0% | ||||||||||||
BERMUDA 0.0% | ||||||||||||
Brookfield Business Partners LP | 155 | 3 | ||||||||||
|
| |||||||||||
Total Limited Partnerships (Cost $4) | 3 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $202,653) | 214,739 | |||||||||||
Total Investments 86.4% (Cost $202,653) | $ | 214,739 | ||||||||||
Other Assets and Liabilities, net 13.6% | 33,830 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 248,569 | ||||||||||
|
|
46 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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 | ||||||||||||
Canadian Imperial Bank of Commerce | 06/30/2005 - 06/28/2016 | $ | 999 | $ | 989 | 0.40 | % | |||||||||
Great-West Lifeco, Inc. | 12/18/2008 - 12/04/2015 | 160 | 164 | 0.06 | ||||||||||||
PrairieSky Royalty Ltd. | 06/01/2016 - 06/03/2016 | 47 | 47 | 0.02 | ||||||||||||
|
|
|
|
|
| |||||||||||
$ | 1,206 | $ | 1,200 | 0.48 | % | |||||||||||
|
|
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, 2016:
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 | $ | 30 | $ | 0 | $ | 30 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Australia | ||||||||||||||||
Consumer Discretionary | $ | 0 | $ | 537 | $ | 0 | $ | 537 | ||||||||
Consumer Staples | 0 | 1,143 | 0 | 1,143 | ||||||||||||
Energy | 0 | 613 | 0 | 613 | ||||||||||||
Financials | 0 | 7,786 | 0 | 7,786 | ||||||||||||
Health Care | 0 | 733 | 0 | 733 | ||||||||||||
Industrials | 0 | 1,443 | 0 | 1,443 | ||||||||||||
Materials | 0 | 5,041 | 0 | 5,041 | ||||||||||||
Telecommunication Services | 0 | 350 | 0 | 350 | ||||||||||||
Utilities | 0 | 684 | 0 | 684 | ||||||||||||
Austria | ||||||||||||||||
Energy | 0 | 568 | 0 | 568 | ||||||||||||
Financials | 0 | 454 | 0 | 454 | ||||||||||||
Industrials | 0 | 28 | 0 | 28 | ||||||||||||
Materials | 0 | 231 | 0 | 231 | ||||||||||||
Utilities | 0 | 45 | 0 | 45 | ||||||||||||
Belgium | ||||||||||||||||
Consumer Discretionary | 0 | 28 | 0 | 28 | ||||||||||||
Consumer Staples | 0 | 1,115 | 0 | 1,115 | ||||||||||||
Financials | 0 | 522 | 0 | 522 | ||||||||||||
Health Care | 0 | 41 | 0 | 41 | ||||||||||||
Materials | 0 | 116 | 0 | 116 | ||||||||||||
Telecommunication Services | 0 | 170 | 0 | 170 | ||||||||||||
Canada | ||||||||||||||||
Consumer Discretionary | 754 | 0 | 0 | 754 | ||||||||||||
Consumer Staples | 304 | 0 | 0 | 304 | ||||||||||||
Energy | 6,474 | 0 | 0 | 6,474 | ||||||||||||
Financials | 7,564 | 0 | 0 | 7,564 | ||||||||||||
Industrials | 1,377 | 0 | 0 | 1,377 | ||||||||||||
Information Technology | 287 | 0 | 0 | 287 | ||||||||||||
Materials | 4,848 | 0 | 0 | 4,848 | ||||||||||||
Telecommunication Services | 1,438 | 0 | 0 | 1,438 | ||||||||||||
Utilities | 639 | 0 | 0 | 639 | ||||||||||||
Denmark | ||||||||||||||||
Consumer Staples | 0 | 310 | 0 | 310 | ||||||||||||
Energy | 0 | 30 | 0 | 30 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financials | $ | 0 | $ | 250 | $ | 0 | $ | 250 | ||||||||
Health Care | 0 | 588 | 0 | 588 | ||||||||||||
Industrials | 0 | 1,075 | 0 | 1,075 | ||||||||||||
Telecommunication Services | 0 | 424 | 0 | 424 | ||||||||||||
Finland | ||||||||||||||||
Consumer Discretionary | 0 | 30 | 0 | 30 | ||||||||||||
Consumer Staples | 0 | 89 | 0 | 89 | ||||||||||||
Energy | 0 | 104 | 0 | 104 | ||||||||||||
Financials | 0 | 113 | 0 | 113 | ||||||||||||
Health Care | 0 | 124 | 0 | 124 | ||||||||||||
Industrials | 0 | 98 | 0 | 98 | ||||||||||||
Information Technology | 0 | 193 | 0 | 193 | ||||||||||||
Materials | 0 | 442 | 0 | 442 | ||||||||||||
Telecommunication Services | 0 | 44 | 0 | 44 | ||||||||||||
Utilities | 0 | 242 | 0 | 242 | ||||||||||||
France | ||||||||||||||||
Consumer Discretionary | 0 | 3,089 | 0 | 3,089 | ||||||||||||
Consumer Staples | 0 | 2,095 | 0 | 2,095 | ||||||||||||
Energy | 0 | 3,201 | 0 | 3,201 | ||||||||||||
Financials | 0 | 3,868 | 0 | 3,868 | ||||||||||||
Health Care | 0 | 1,933 | 0 | 1,933 | ||||||||||||
Industrials | 0 | 4,019 | 0 | 4,019 | ||||||||||||
Information Technology | 0 | 629 | 0 | 629 | ||||||||||||
Materials | 0 | 609 | 0 | 609 | ||||||||||||
Telecommunication Services | 0 | 2,338 | 0 | 2,338 | ||||||||||||
Utilities | 0 | 2,816 | 0 | 2,816 | ||||||||||||
Germany | ||||||||||||||||
Consumer Discretionary | 0 | 2,627 | 0 | 2,627 | ||||||||||||
Consumer Staples | 0 | 1,239 | 0 | 1,239 | ||||||||||||
Financials | 0 | 3,146 | 0 | 3,146 | ||||||||||||
Health Care | 0 | 1,612 | 0 | 1,612 | ||||||||||||
Industrials | 0 | 3,918 | 0 | 3,918 | ||||||||||||
Information Technology | 0 | 815 | 0 | 815 | ||||||||||||
Materials | 0 | 2,729 | 0 | 2,729 | ||||||||||||
Telecommunication Services | 0 | 1,266 | 0 | 1,266 | ||||||||||||
Utilities | 0 | 2,081 | 0 | 2,081 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 47 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental International Fund (Cont.)
June 30, 2016
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Hong Kong | ||||||||||||||||
Consumer Discretionary | $ | 0 | $ | 157 | $ | 0 | $ | 157 | ||||||||
Consumer Staples | 0 | 744 | 0 | 744 | ||||||||||||
Financials | 0 | 1,326 | 0 | 1,326 | ||||||||||||
Industrials | 0 | 242 | 0 | 242 | ||||||||||||
Telecommunication Services | 0 | 60 | 0 | 60 | ||||||||||||
Utilities | 0 | 332 | 0 | 332 | ||||||||||||
Ireland | ||||||||||||||||
Energy | 0 | 53 | 0 | 53 | ||||||||||||
Health Care | 544 | 0 | 0 | 544 | ||||||||||||
Industrials | 0 | 193 | 0 | 193 | ||||||||||||
Materials | 0 | 549 | 0 | 549 | ||||||||||||
Israel | ||||||||||||||||
Financials | 0 | 487 | 0 | 487 | ||||||||||||
Health Care | 726 | 0 | 0 | 726 | ||||||||||||
Materials | 0 | 194 | 0 | 194 | ||||||||||||
Telecommunication Services | 0 | 196 | 0 | 196 | ||||||||||||
Italy | ||||||||||||||||
Consumer Discretionary | 89 | 118 | 0 | 207 | ||||||||||||
Energy | 0 | 2,520 | 0 | 2,520 | ||||||||||||
Financials | 0 | 1,078 | 0 | 1,078 | ||||||||||||
Industrials | 0 | 161 | 0 | 161 | ||||||||||||
Materials | 213 | 0 | 0 | 213 | ||||||||||||
Telecommunication Services | 0 | 350 | 0 | 350 | ||||||||||||
Utilities | 0 | 2,287 | 0 | 2,287 | ||||||||||||
Japan | ||||||||||||||||
Consumer Discretionary | 0 | 4,296 | 0 | 4,296 | ||||||||||||
Consumer Staples | 0 | 3,041 | 0 | 3,041 | ||||||||||||
Energy | 0 | 324 | 0 | 324 | ||||||||||||
Financials | 58 | 5,058 | 0 | 5,116 | ||||||||||||
Health Care | 0 | 1,300 | 0 | 1,300 | ||||||||||||
Industrials | 0 | 5,166 | 0 | 5,166 | ||||||||||||
Information Technology | 0 | 3,426 | 0 | 3,426 | ||||||||||||
Materials | 0 | 2,674 | 0 | 2,674 | ||||||||||||
Telecommunication Services | 0 | 3,084 | 0 | 3,084 | ||||||||||||
Utilities | 0 | 1,868 | 0 | 1,868 | ||||||||||||
Luxembourg | ||||||||||||||||
Consumer Discretionary | 0 | 162 | 0 | 162 | ||||||||||||
Materials | 0 | 654 | 0 | 654 | ||||||||||||
Macau | ||||||||||||||||
Consumer Discretionary | 0 | 105 | 0 | 105 | ||||||||||||
Netherlands | ||||||||||||||||
Consumer Discretionary | 0 | 136 | 0 | 136 | ||||||||||||
Consumer Staples | 0 | 1,512 | 0 | 1,512 | ||||||||||||
Energy | 240 | 5,766 | 0 | 6,006 | ||||||||||||
Financials | 0 | 985 | 0 | 985 | ||||||||||||
Industrials | 0 | 767 | 0 | 767 | ||||||||||||
Information Technology | 62 | 0 | 0 | 62 | ||||||||||||
Materials | 0 | 353 | 0 | 353 | ||||||||||||
Telecommunication Services | 153 | 396 | 0 | 549 | ||||||||||||
New Zealand | ||||||||||||||||
Materials | 0 | 129 | 0 | 129 | ||||||||||||
Telecommunication Services | 0 | 371 | 0 | 371 | ||||||||||||
Norway | ||||||||||||||||
Consumer Staples | 0 | 233 | 0 | 233 | ||||||||||||
Energy | 0 | 2,079 | 0 | 2,079 | ||||||||||||
Financials | 0 | 256 | 0 | 256 | ||||||||||||
Materials | 0 | 119 | 0 | 119 | ||||||||||||
Telecommunication Services | 0 | 115 | 0 | 115 | ||||||||||||
Portugal | ||||||||||||||||
Energy | 0 | 42 | 0 | 42 | ||||||||||||
Financials | 0 | 0 | 1 | 1 | ||||||||||||
Utilities | 0 | 268 | 0 | 268 | ||||||||||||
Singapore | ||||||||||||||||
Consumer Discretionary | 0 | 158 | 0 | 158 | ||||||||||||
Consumer Staples | 0 | 479 | 0 | 479 | ||||||||||||
Financials | 0 | 777 | 0 | 777 | ||||||||||||
Industrials | 0 | 437 | 0 | 437 | ||||||||||||
Information Technology | 147 | 0 | 0 | 147 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Telecommunication Services | $ | 0 | $ | 245 | $ | 0 | $ | 245 | ||||||||
South Africa | ||||||||||||||||
Financials | 0 | 81 | 0 | 81 | ||||||||||||
Materials | 0 | 118 | 0 | 118 | ||||||||||||
Spain | ||||||||||||||||
Consumer Discretionary | 30 | 190 | 0 | 220 | ||||||||||||
Consumer Staples | 0 | 96 | 0 | 96 | ||||||||||||
Energy | 0 | 205 | 0 | 205 | ||||||||||||
Financials | 0 | 2,670 | 0 | 2,670 | ||||||||||||
Industrials | 121 | 745 | 0 | 866 | ||||||||||||
Information Technology | 0 | 128 | 0 | 128 | ||||||||||||
Telecommunication Services | 0 | 1,496 | 0 | 1,496 | ||||||||||||
Utilities | 0 | 1,285 | 0 | 1,285 | ||||||||||||
Sweden | ||||||||||||||||
Consumer Discretionary | 31 | 241 | 0 | 272 | ||||||||||||
Consumer Staples | 0 | 421 | 0 | 421 | ||||||||||||
Financials | 0 | 1,158 | 0 | 1,158 | ||||||||||||
Health Care | 0 | 20 | 0 | 20 | ||||||||||||
Industrials | 0 | 1,219 | 0 | 1,219 | ||||||||||||
Information Technology | 0 | 205 | 0 | 205 | ||||||||||||
Materials | 0 | 181 | 0 | 181 | ||||||||||||
Telecommunication Services | 0 | 1,149 | 0 | 1,149 | ||||||||||||
Switzerland | ||||||||||||||||
Consumer Discretionary | 81 | 245 | 0 | 326 | ||||||||||||
Consumer Staples | 0 | 1,119 | 0 | 1,119 | ||||||||||||
Energy | 432 | 0 | 0 | 432 | ||||||||||||
Financials | 91 | 3,455 | 0 | 3,546 | ||||||||||||
Health Care | 0 | 3,475 | 0 | 3,475 | ||||||||||||
Industrials | 0 | 475 | 0 | 475 | ||||||||||||
Information Technology | 234 | 120 | 0 | 354 | ||||||||||||
Materials | 0 | 1,113 | 0 | 1,113 | ||||||||||||
United Kingdom | ||||||||||||||||
Consumer Discretionary | 427 | 2,448 | 0 | 2,875 | ||||||||||||
Consumer Staples | 836 | 6,367 | 0 | 7,203 | ||||||||||||
Energy | 0 | 4,350 | 0 | 4,350 | ||||||||||||
Financials | 0 | 9,166 | 0 | 9,166 | ||||||||||||
Health Care | 0 | 2,716 | 0 | 2,716 | ||||||||||||
Industrials | 0 | 2,191 | 0 | 2,191 | ||||||||||||
Information Technology | 0 | 179 | 0 | 179 | ||||||||||||
Materials | 0 | 2,471 | 0 | 2,471 | ||||||||||||
Telecommunication Services | 0 | 1,890 | 0 | 1,890 | ||||||||||||
Utilities | 0 | 1,733 | 0 | 1,733 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 138 | 142 | 0 | 280 | ||||||||||||
Health Care | 0 | 94 | 0 | 94 | ||||||||||||
Materials | 173 | 0 | 0 | 173 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Germany | ||||||||||||||||
Industrials | 0 | 1,297 | 0 | 1,297 | ||||||||||||
Materials | 0 | 40 | 0 | 40 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
Australia | ||||||||||||||||
Financials | 0 | 1,077 | 0 | 1,077 | ||||||||||||
Canada | ||||||||||||||||
Financials | 243 | 0 | 0 | 243 | ||||||||||||
France | ||||||||||||||||
Financials | 0 | 237 | 0 | 237 | ||||||||||||
Hong Kong | ||||||||||||||||
Financials | 0 | 127 | 0 | 127 | ||||||||||||
United Kingdom | ||||||||||||||||
Financials | 0 | 177 | 0 | 177 | ||||||||||||
Rights | ||||||||||||||||
Spain | ||||||||||||||||
Industrials | 7 | 0 | 0 | 7 | ||||||||||||
Limited Partnerships | ||||||||||||||||
Bermuda | 3 | 0 | 0 | 3 | ||||||||||||
|
| |||||||||||||||
Total Investments | $ | 28,764 | $ | 185,974 | $ | 1 | $ | 214,739 | ||||||||
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
48 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||
INVESTMENTS IN SECURITIES 99.4% | ||||||||||
COMMON STOCKS 98.4% | ||||||||||
IRELAND 0.4% | ||||||||||
FINANCIALS 0.0% | ||||||||||
XL Group PLC | 2,489 | $ | 83 | |||||||
|
| |||||||||
INFORMATION TECHNOLOGY 0.4% | ||||||||||
Accenture PLC ‘A’ | 15,364 | 1,740 | ||||||||
|
| |||||||||
Total Ireland | 1,823 | |||||||||
|
| |||||||||
UNITED KINGDOM 0.1% | ||||||||||
CONSUMER STAPLES 0.1% | ||||||||||
Coca-Cola European Partners | 17,988 | 642 | ||||||||
|
| |||||||||
Total United Kingdom | 642 | |||||||||
|
| |||||||||
UNITED STATES 97.9% | ||||||||||
CONSUMER DISCRETIONARY 12.7% | ||||||||||
Aaron’s, Inc. | 14,424 | 316 | ||||||||
Abercrombie & Fitch Co. ‘A’ | 42,864 | 763 | ||||||||
Advance Auto Parts, Inc. | 351 | 57 | ||||||||
Amazon.com, Inc. (a) | 4,730 | 3,385 | ||||||||
American Eagle Outfitters, Inc. | 26,648 | 424 | ||||||||
Apollo Education Group, Inc. (a) | 37,202 | 339 | ||||||||
Aramark | 2,689 | 90 | ||||||||
Ascena Retail Group, Inc. (a) | 2,925 | 20 | ||||||||
AutoNation, Inc. (a) | 4,781 | 225 | ||||||||
AutoZone, Inc. (a) | 498 | 395 | ||||||||
Bed Bath & Beyond, Inc. | 32,873 | 1,421 | ||||||||
Best Buy Co., Inc. | 23,327 | 714 | ||||||||
Big Lots, Inc. | 16,449 | 824 | ||||||||
Bloomin’ Brands, Inc. | 14,340 | 256 | ||||||||
Bob Evans Farms, Inc. | 3,486 | 132 | ||||||||
Boyd Gaming Corp. (a) | 3,956 | 73 | ||||||||
Brinker International, Inc. | 6,147 | 280 | ||||||||
Burlington Stores, Inc. (a) | 3,201 | 214 | ||||||||
Cabela’s, Inc. (a) | 1,679 | 84 | ||||||||
Caesars Entertainment Corp. (a) | 21,689 | 167 | ||||||||
Carnival Corp. | 16,655 | 736 | ||||||||
Carter’s, Inc. | 539 | 57 | ||||||||
CBS Corp. ‘B’ | 19,241 | 1,047 | ||||||||
Charter Communications, Inc. (a) | 281 | 64 | ||||||||
Chico’s FAS, Inc. | 33,754 | 362 | ||||||||
Cinemark Holdings, Inc. | 6,274 | 229 | ||||||||
Coach, Inc. | 31,682 | 1,291 | ||||||||
Comcast Corp. ‘A’ | 53,703 | 3,501 | ||||||||
Cooper Tire & Rubber Co. | 1,923 | 57 | ||||||||
Cracker Barrel Old Country Store, Inc. | 770 | 132 | ||||||||
CST Brands, Inc. | 1,237 | 53 | ||||||||
Dana Holding Corp. | 10,584 | 112 | ||||||||
DeVry Education Group, Inc. | 8,573 | 153 | ||||||||
Dick’s Sporting Goods, Inc. | 3,002 | 135 | ||||||||
Dillard’s, Inc. ‘A’ | 8,902 | 539 | ||||||||
Discovery Communications, Inc. ‘A’ (a) | 7,825 | 197 | ||||||||
Dollar General Corp. | 5,077 | 477 | ||||||||
Dollar Tree, Inc. (a) | 2,943 | 277 | ||||||||
Domino’s Pizza, Inc. | 744 | 98 | ||||||||
Expedia, Inc. | 2,371 | 252 | ||||||||
Express, Inc. (a) | 4,410 | 64 | ||||||||
Foot Locker, Inc. | 2,538 | 139 | ||||||||
Ford Motor Co. | 55,149 | 693 |
SHARES | MARKET VALUE (000S) | |||||||||
Fossil Group, Inc. (a) | 15,819 | $ | 451 | |||||||
GameStop Corp. ‘A’ | 23,636 | 628 | ||||||||
Gannett Co., Inc. | 6,562 | 91 | ||||||||
Gap, Inc. | 48,219 | 1,023 | ||||||||
General Motors Co. | 13,266 | 375 | ||||||||
Genesco, Inc. (a) | 3,690 | 237 | ||||||||
Genuine Parts Co. | 2,058 | 208 | ||||||||
GNC Holdings, Inc. ‘A’ | 13,021 | 316 | ||||||||
Goodyear Tire & Rubber Co. | 6,659 | 171 | ||||||||
Graham Holdings Co. ‘B’ | 423 | 207 | ||||||||
Guess?, Inc. | 19,723 | 297 | ||||||||
Harley-Davidson, Inc. | 4,180 | 189 | ||||||||
Hasbro, Inc. | 5,841 | 491 | ||||||||
Home Depot, Inc. | 32,642 | 4,168 | ||||||||
International Game Technology PLC | 10,986 | 206 | ||||||||
Interpublic Group of Cos., Inc. | 26,300 | 608 | ||||||||
JC Penney Co., Inc. (a) | 34,523 | 307 | ||||||||
Johnson Controls, Inc. | 2,224 | 98 | ||||||||
Kohl’s Corp. | 44,042 | 1,670 | ||||||||
L Brands, Inc. | 5,959 | 400 | ||||||||
Las Vegas Sands Corp. | 3,806 | 166 | ||||||||
Leggett & Platt, Inc. | 2,389 | 122 | ||||||||
Liberty Interactive Corp. ‘A’ (a) | 19,003 | 482 | ||||||||
Lowe’s Cos., Inc. | 34,812 | 2,756 | ||||||||
Macy’s, Inc. | 24,315 | 817 | ||||||||
Mattel, Inc. | 32,882 | 1,029 | ||||||||
McDonald’s Corp. | 35,535 | 4,276 | ||||||||
MGM Resorts International (a) | 9,350 | 212 | ||||||||
Murphy USA, Inc. (a) | 2,421 | 180 | ||||||||
News Corp. ‘A’ | 7,912 | 90 | ||||||||
NIKE, Inc. ‘B’ | 28,290 | 1,562 | ||||||||
Nordstrom, Inc. | 9,373 | 357 | ||||||||
Norwegian Cruise Line Holdings Ltd. (a) | 2,955 | 118 | ||||||||
O’Reilly Automotive, Inc. (a) | 2,324 | 630 | ||||||||
Omnicom Group, Inc. | 15,595 | 1,271 | ||||||||
Outerwall, Inc. | 5,792 | 243 | ||||||||
Panera Bread Co. ‘A’ (a) | 847 | 180 | ||||||||
Pier 1 Imports, Inc. | 9,192 | 47 | ||||||||
Ralph Lauren Corp. | 5,654 | 507 | ||||||||
Regal Entertainment Group ‘A’ | 13,872 | 306 | ||||||||
Rent-A-Center, Inc. | 18,012 | 221 | ||||||||
Ross Stores, Inc. | 4,466 | 253 | ||||||||
Royal Caribbean Cruises Ltd. | 3,057 | 205 | ||||||||
Safeway Casa Ley CVR | 38,866 | 5 | ||||||||
Safeway PDC LLC CVR | 38,866 | 2 | ||||||||
Sally Beauty Holdings, Inc. (a) | 5,416 | 159 | ||||||||
Scripps Networks Interactive, Inc. ‘A’ | 1,596 | 99 | ||||||||
Sears Holdings Corp. (a) | 16,695 | 227 | ||||||||
SeaWorld Entertainment, Inc. | 20,386 | 292 | ||||||||
Service Corp. International | 1,838 | 50 | ||||||||
Six Flags Entertainment Corp. | 1,512 | 88 | ||||||||
Staples, Inc. | 82,144 | 708 | ||||||||
Starbucks Corp. | 15,249 | 871 | ||||||||
Starwood Hotels & Resorts Worldwide, Inc. | 1,327 | 98 | ||||||||
Target Corp. | 36,701 | 2,562 | ||||||||
Tenneco, Inc. (a) | 4,690 | 219 | ||||||||
Time Warner, Inc. | 35,080 | 2,580 | ||||||||
Time, Inc. | 29,036 | 478 | ||||||||
TJX Cos., Inc. | 6,889 | 532 | ||||||||
Tractor Supply Co. | 1,863 | 170 | ||||||||
Tribune Media Co. ‘A’ | 10,205 | 400 | ||||||||
Tupperware Brands Corp. | 8,346 | 470 | ||||||||
Urban Outfitters, Inc. (a) | 8,430 | 232 |
SHARES | MARKET VALUE (000S) | |||||||||
VF Corp. | 1,739 | $ | 107 | |||||||
Viacom, Inc. ‘B’ | 51,579 | 2,139 | ||||||||
Visteon Corp. | 2,624 | 173 | ||||||||
Walt Disney Co. | 18,767 | 1,836 | ||||||||
Weight Watchers International, Inc. (a) | 38,060 | 443 | ||||||||
Wendy’s Co. | 14,267 | 137 | ||||||||
Whirlpool Corp. | 594 | 99 | ||||||||
Williams-Sonoma, Inc. | 1,201 | 63 | ||||||||
Wyndham Worldwide Corp. | 9,490 | 676 | ||||||||
Wynn Resorts Ltd. | 7,997 | 725 | ||||||||
Yum! Brands, Inc. | 5,398 | 448 | ||||||||
|
| |||||||||
66,103 | ||||||||||
|
| |||||||||
CONSUMER STAPLES 9.3% | ||||||||||
Altria Group, Inc. | 40,250 | 2,776 | ||||||||
Avery Dennison Corp. | 2,730 | 204 | ||||||||
Avon Products, Inc. | 164,488 | 622 | ||||||||
Brown-Forman Corp. | 1,022 | 102 | ||||||||
Bunge Ltd. | 5,080 | 300 | ||||||||
Campbell Soup Co. | 2,720 | 181 | ||||||||
Casey’s General Stores, Inc. | 1,510 | 199 | ||||||||
Clorox Co. | 518 | 72 | ||||||||
Coca-Cola Co. | 71,846 | 3,257 | ||||||||
Colgate-Palmolive Co. | 12,512 | 916 | ||||||||
ConAgra Foods, Inc. | 11,067 | 529 | ||||||||
Costco Wholesale Corp. | 4,298 | 675 | ||||||||
CVS Health Corp. | 20,638 | 1,976 | ||||||||
Dr Pepper Snapple Group, Inc. | 9,928 | 959 | ||||||||
Estee Lauder Cos., Inc. ‘A’ | 3,133 | 285 | ||||||||
General Mills, Inc. | 16,413 | 1,170 | ||||||||
Herbalife Ltd. (a) | 17,926 | 1,049 | ||||||||
HRG Group, Inc. (a) | 7,246 | 99 | ||||||||
Ingredion, Inc. | 1,223 | 158 | ||||||||
JM Smucker Co. | 2,929 | 446 | ||||||||
Kellogg Co. | 6,131 | 501 | ||||||||
Kimberly-Clark Corp. | 3,252 | 447 | ||||||||
Kraft Heinz Co. | 3,685 | 326 | ||||||||
Kroger Co. | 47,497 | 1,747 | ||||||||
Leucadia National Corp. | 5,590 | 97 | ||||||||
McCormick & Co., Inc. | 1,922 | 205 | ||||||||
Molson Coors Brewing Co. ‘B’ | 1,391 | 141 | ||||||||
Mondelez International, Inc. ‘A’ | 39,714 | 1,807 | ||||||||
Nu Skin Enterprises, Inc. ‘A’ | 9,742 | 450 | ||||||||
PepsiCo, Inc. | 37,508 | 3,974 | ||||||||
Philip Morris International, Inc. | 62,173 | 6,324 | ||||||||
Procter & Gamble Co. | 65,053 | 5,508 | ||||||||
Reynolds American, Inc. | 20,319 | 1,096 | ||||||||
Rite Aid Corp. (a) | 92,963 | 696 | ||||||||
SUPERVALU, Inc. (a) | 14,115 | 67 | ||||||||
Sysco Corp. | 20,785 | 1,055 | ||||||||
Universal Corp. | 4,035 | 233 | ||||||||
Wal-Mart Stores, Inc. | 88,861 | 6,489 | ||||||||
Walgreens Boots Alliance, Inc. | 15,095 | 1,257 | ||||||||
Whole Foods Market, Inc. | 8,312 | 266 | ||||||||
|
| |||||||||
48,661 | ||||||||||
|
| |||||||||
ENERGY 11.2% | ||||||||||
Anadarko Petroleum Corp. | 14,359 | 765 | ||||||||
Apache Corp. | 15,142 | 843 | ||||||||
Archrock, Inc. | 2,527 | 24 | ||||||||
Baker Hughes, Inc. | 8,788 | 397 | ||||||||
Bill Barrett Corp. (a) | 31,894 | 204 | ||||||||
Bristow Group, Inc. | 4,117 | 47 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 49 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||
California Resources Corp. | 26,164 | $ | 319 | |||||||
Chesapeake Energy Corp. (a) | 216,979 | 929 | ||||||||
Chevron Corp. | 119,372 | 12,514 | ||||||||
ConocoPhillips | 128,570 | 5,606 | ||||||||
CONSOL Energy, Inc. | 22,998 | 370 | ||||||||
Continental Resources, Inc. (a) | 1,478 | 67 | ||||||||
Denbury Resources, Inc. | 41,881 | 150 | ||||||||
Devon Energy Corp. | 7,264 | 263 | ||||||||
Diamond Offshore Drilling, Inc. | 12,305 | 299 | ||||||||
Energen Corp. | 6,072 | 293 | ||||||||
EOG Resources, Inc. | 4,180 | 349 | ||||||||
EP Energy Corp. ‘A’ (a) | 10,416 | 54 | ||||||||
Exterran Corp. (a) | 1,263 | 16 | ||||||||
Exxon Mobil Corp. | 179,263 | 16,804 | ||||||||
Halliburton Co. | 27,176 | 1,231 | ||||||||
Helmerich & Payne, Inc. | 1,487 | 100 | ||||||||
Hess Corp. | 25,979 | 1,561 | ||||||||
HollyFrontier Corp. | 21,810 | 518 | ||||||||
Kinder Morgan, Inc. | 14,542 | 272 | ||||||||
Marathon Oil Corp. | 126,132 | 1,893 | ||||||||
Marathon Petroleum Corp. | 26,588 | 1,009 | ||||||||
MRC Global, Inc. (a) | 7,943 | 113 | ||||||||
Murphy Oil Corp. | 32,683 | 1,038 | ||||||||
Nabors Industries Ltd. | 13,410 | 135 | ||||||||
National Oilwell Varco, Inc. | 31,320 | 1,054 | ||||||||
Newfield Exploration Co. (a) | 6,982 | 308 | ||||||||
Noble Energy, Inc. | 2,974 | 107 | ||||||||
NOW, Inc. (a) | 6,450 | 117 | ||||||||
Oasis Petroleum, Inc. (a) | 19,104 | 178 | ||||||||
Occidental Petroleum Corp. | 30,215 | 2,283 | ||||||||
Oceaneering International, Inc. | 3,082 | 92 | ||||||||
ONEOK, Inc. | 3,036 | 144 | ||||||||
Patterson-UTI Energy, Inc. | 12,083 | 258 | ||||||||
PBF Energy, Inc. ‘A’ | 3,036 | 72 | ||||||||
Phillips 66 | 8,737 | 693 | ||||||||
Rowan Cos. PLC ‘A’ | 4,292 | 76 | ||||||||
Schlumberger Ltd. | 22,814 | 1,804 | ||||||||
SEACOR Holdings, Inc. (a) | 3,339 | 193 | ||||||||
SM Energy Co. | 3,148 | 85 | ||||||||
Southwestern Energy Co. (a) | 7,154 | 90 | ||||||||
Spectra Energy Corp. | 10,674 | 391 | ||||||||
Stone Energy Corp. (a) | 3,375 | 41 | ||||||||
Superior Energy Services, Inc. | 13,884 | 256 | ||||||||
Targa Resources Corp. | 3,964 | 167 | ||||||||
Tesoro Corp. | 2,896 | 217 | ||||||||
Unit Corp. (a) | 12,100 | 188 | ||||||||
Valero Energy Corp. | 18,833 | 960 | ||||||||
Whiting Petroleum Corp. (a) | 21,230 | 197 | ||||||||
WPX Energy, Inc. (a) | 38,569 | 359 | ||||||||
|
| |||||||||
58,513 | ||||||||||
|
| |||||||||
FINANCIALS 11.5% | ||||||||||
Aflac, Inc. | 6,319 | 456 | ||||||||
Aircastle Ltd. | 3,879 | 76 | ||||||||
Allstate Corp. | 17,270 | 1,208 | ||||||||
Ally Financial, Inc. (a) | 27,343 | 467 | ||||||||
Ambac Financial Group, Inc. (a) | 8,673 | 143 | ||||||||
American Equity Investment Life Holding Co. | 5,879 | 84 | ||||||||
American Express Co. | 25,192 | 1,531 | ||||||||
American Financial Group, Inc. | 4,410 | 326 | ||||||||
American International Group, Inc. | 76,527 | 4,047 | ||||||||
Ameriprise Financial, Inc. | 2,863 | 257 | ||||||||
Assurant, Inc. | 8,635 | 745 |
SHARES | MARKET VALUE (000S) | |||||||||
Automatic Data Processing, Inc. | 3,870 | $ | 356 | |||||||
Bank of America Corp. | 287,879 | 3,820 | ||||||||
Bank of New York Mellon Corp. | 11,200 | 435 | ||||||||
BB&T Corp. | 13,967 | 497 | ||||||||
Berkshire Hathaway, Inc. ‘B’ (a) | 4,477 | 648 | ||||||||
BGC Partners, Inc. ‘A’ | 16,829 | 147 | ||||||||
BlackRock, Inc. | 277 | 95 | ||||||||
Booz Allen Hamilton Holding Corp. | 21,145 | 627 | ||||||||
Capital One Financial Corp. | 25,479 | 1,618 | ||||||||
Capitol Federal Financial, Inc. | 11,022 | 154 | ||||||||
CIT Group, Inc. | 7,580 | 242 | ||||||||
Citigroup, Inc. | 94,637 | 4,012 | ||||||||
Citizens Financial Group, Inc. | 19,359 | 387 | ||||||||
CME Group, Inc. | 5,241 | 510 | ||||||||
CNO Financial Group, Inc. | 10,064 | 176 | ||||||||
Comerica, Inc. | 2,208 | 91 | ||||||||
CoreLogic, Inc. (a) | 6,377 | 245 | ||||||||
Discover Financial Services | 12,994 | 696 | ||||||||
E*TRADE Financial Corp. (a) | 8,824 | 207 | ||||||||
Fifth Third Bancorp | 40,721 | 716 | ||||||||
First Horizon National Corp. | 19,910 | 274 | ||||||||
First Niagara Financial Group, Inc. | 31,236 | 304 | ||||||||
FNF Group | 4,561 | 171 | ||||||||
Franklin Resources, Inc. | 5,495 | 183 | ||||||||
Genworth Financial, Inc. ‘A’ (a) | 60,684 | 157 | ||||||||
Global Payments, Inc. | 4,213 | 301 | ||||||||
Goldman Sachs Group, Inc. | 8,742 | 1,299 | ||||||||
Great Western Bancorp, Inc. | 5,957 | 188 | ||||||||
Hartford Financial Services Group, Inc. | 15,897 | 705 | ||||||||
JPMorgan Chase & Co. | 134,933 | 8,385 | ||||||||
Kemper Corp. | 3,257 | 101 | ||||||||
KeyCorp | 7,716 | 85 | ||||||||
Legg Mason, Inc. | 12,907 | 381 | ||||||||
Lincoln National Corp. | 4,643 | 180 | ||||||||
Loews Corp. | 15,789 | 649 | ||||||||
Marsh & McLennan Cos., Inc. | 1,679 | 115 | ||||||||
Mastercard, Inc. ‘A’ | 12,484 | 1,099 | ||||||||
MetLife, Inc. | 16,945 | 675 | ||||||||
NASDAQ, Inc. | 4,121 | 266 | ||||||||
Navient Corp. | 29,814 | 356 | ||||||||
New York Community Bancorp, Inc. | 21,095 | 316 | ||||||||
Northwest Bancshares, Inc. | 7,457 | 111 | ||||||||
OneMain Holdings, Inc. (a) | 3,675 | 84 | ||||||||
People’s United Financial, Inc. | 27,991 | 410 | ||||||||
PHH Corp. (a) | 17,761 | 237 | ||||||||
PNC Financial Services Group, Inc. | 14,341 | 1,167 | ||||||||
Primerica, Inc. | 1,945 | 111 | ||||||||
Progressive Corp. | 8,434 | 283 | ||||||||
Prudential Financial, Inc. | 1,330 | 95 | ||||||||
Regions Financial Corp. | 49,357 | 420 | ||||||||
Reinsurance Group of America, Inc. | 4,165 | 404 | ||||||||
S&P Global, Inc. | 2,257 | 242 | ||||||||
Santander Consumer USA Holdings, Inc. (a) | 28,443 | 294 | ||||||||
SLM Corp. (a) | 73,462 | 454 | ||||||||
State Street Corp. | 3,817 | 206 | ||||||||
SunTrust Banks, Inc. | 11,656 | 479 | ||||||||
Synchrony Financial (a) | 31,415 | 794 | ||||||||
Total System Services, Inc. | 1,430 | 76 | ||||||||
Travelers Cos., Inc. | 33,231 | 3,956 | ||||||||
Trustmark Corp. | 7,418 | 184 | ||||||||
U.S. Bancorp | 11,761 | 474 | ||||||||
Unum Group | 7,838 | 249 | ||||||||
Visa, Inc. ‘A’ | 29,389 | 2,180 |
SHARES | MARKET VALUE (000S) | |||||||||
Voya Financial, Inc. | 20,293 | $ | 502 | |||||||
Wells Fargo & Co. | 78,556 | 3,718 | ||||||||
Western Union Co. | 53,812 | 1,032 | ||||||||
White Mountains Insurance Group Ltd. | 249 | 210 | ||||||||
WR Berkley Corp. | 1,263 | 76 | ||||||||
|
| |||||||||
59,657 | ||||||||||
|
| |||||||||
HEALTH CARE 11.3% | ||||||||||
Abbott Laboratories | 21,170 | 832 | ||||||||
AbbVie, Inc. | 21,305 | 1,319 | ||||||||
Aetna, Inc. | 14,430 | 1,762 | ||||||||
Alere, Inc. (a) | 2,478 | 103 | ||||||||
Alexion Pharmaceuticals, Inc. (a) | 826 | 96 | ||||||||
AmerisourceBergen Corp. | 2,109 | 167 | ||||||||
Amgen, Inc. | 18,128 | 2,758 | ||||||||
Anthem, Inc. | 22,853 | 3,002 | ||||||||
Baxter International, Inc. | 15,817 | 715 | ||||||||
Becton Dickinson and Co. | 5,947 | 1,009 | ||||||||
Bio-Rad Laboratories, Inc. ‘A’ (a) | 2,282 | 326 | ||||||||
Biogen, Inc. (a) | 1,811 | 438 | ||||||||
Boston Scientific Corp. (a) | 28,663 | 670 | ||||||||
Bristol-Myers Squibb Co. | 30,847 | 2,269 | ||||||||
Cardinal Health, Inc. | 4,942 | 386 | ||||||||
Celgene Corp. (a) | 8,334 | 822 | ||||||||
Centene Corp. (a) | 2,613 | 186 | ||||||||
Charles River Laboratories International, Inc. (a) | 999 | 82 | ||||||||
Cigna Corp. | 1,167 | 149 | ||||||||
Community Health Systems, Inc. (a) | 27,688 | 334 | ||||||||
CR Bard, Inc. | 2,501 | 588 | ||||||||
DaVita HealthCare Partners, Inc. (a) | 1,553 | 120 | ||||||||
Edwards Lifesciences Corp. (a) | 2,385 | 238 | ||||||||
Eli Lilly & Co. | 24,626 | 1,939 | ||||||||
Envision Healthcare Holdings, Inc. (a) | 13,782 | 350 | ||||||||
Express Scripts Holding Co. (a) | 11,126 | 843 | ||||||||
Gilead Sciences, Inc. | 14,081 | 1,175 | ||||||||
Halyard Health, Inc. (a) | 3,995 | 130 | ||||||||
HCA Holdings, Inc. (a) | 34,276 | 2,640 | ||||||||
Henry Schein, Inc. (a) | 1,213 | 214 | ||||||||
Hologic, Inc. (a) | 2,541 | 88 | ||||||||
Humana, Inc. | 3,988 | 717 | ||||||||
Illumina, Inc. (a) | 719 | 101 | ||||||||
Intuitive Surgical, Inc. (a) | 246 | 163 | ||||||||
Johnson & Johnson | 54,895 | 6,659 | ||||||||
Kindred Healthcare, Inc. | 13,767 | 155 | ||||||||
Laboratory Corp. of America Holdings (a) | 580 | 76 | ||||||||
LifePoint Health, INC. (a) | 5,999 | 392 | ||||||||
Magellan Health, Inc. (a) | 4,799 | 316 | ||||||||
Mallinckrodt PLC (a) | 1,214 | 74 | ||||||||
McKesson Corp. | 3,383 | 631 | ||||||||
MEDNAX, Inc. (a) | 704 | 51 | ||||||||
Merck & Co., Inc. | 88,685 | 5,109 | ||||||||
Mylan NV (a) | 2,977 | 129 | ||||||||
Owens & Minor, Inc. | 5,199 | 194 | ||||||||
Patterson Cos., Inc. | 4,792 | 229 | ||||||||
Pfizer, Inc. | 275,074 | 9,685 | ||||||||
Quest Diagnostics, Inc. | 16,725 | 1,362 | ||||||||
Quintiles Transnational Holdings, Inc. (a) | 1,168 | 76 | ||||||||
Regeneron Pharmaceuticals, Inc. (a) | 545 | 190 | ||||||||
Select Medical Holdings Corp. (a) | 7,502 | 82 |
50 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||
St Jude Medical, Inc. | 9,986 | $ | 779 | |||||||
Stryker Corp. | 3,872 | 464 | ||||||||
Tenet Healthcare Corp. (a) | 12,538 | 347 | ||||||||
Thermo Fisher Scientific, Inc. | 2,843 | 420 | ||||||||
United Therapeutics Corp. (a) | 610 | 65 | ||||||||
UnitedHealth Group, Inc. | 24,310 | 3,433 | ||||||||
Universal Health Services, Inc. ‘B’ | 1,418 | 190 | ||||||||
Varian Medical Systems, Inc. (a) | 1,196 | 98 | ||||||||
VCA, Inc. (a) | 1,043 | 71 | ||||||||
WellCare Health Plans, Inc. (a) | 1,757 | 188 | ||||||||
Zimmer Biomet Holdings, Inc. | 2,483 | 299 | ||||||||
Zoetis, Inc. | 4,646 | 221 | ||||||||
|
| |||||||||
58,716 | ||||||||||
|
| |||||||||
INDUSTRIALS 8.5% | ||||||||||
3M Co. | 11,465 | 2,008 | ||||||||
AGCO Corp. | 8,617 | 406 | ||||||||
Alaska Air Group, Inc. | 4,271 | 249 | ||||||||
Armstrong Flooring, Inc. (a) | 6,727 | 114 | ||||||||
Avis Budget Group, Inc. (a) | 13,530 | 436 | ||||||||
Boeing Co. | 8,749 | 1,136 | ||||||||
Brink’s Co. | 4,303 | 123 | ||||||||
Caterpillar, Inc. | 28,657 | 2,173 | ||||||||
CH Robinson Worldwide, Inc. | 1,324 | 98 | ||||||||
Cintas Corp. | 1,350 | 132 | ||||||||
Clean Harbors, Inc. (a) | 1,848 | 96 | ||||||||
CSX Corp. | 42,529 | 1,109 | ||||||||
Cummins, Inc. | 4,030 | 453 | ||||||||
Danaher Corp. | 8,564 | 865 | ||||||||
Deere & Co. | 23,876 | 1,935 | ||||||||
Delta Air Lines, Inc. | 3,251 | 118 | ||||||||
Dover Corp. | 6,766 | 469 | ||||||||
Emerson Electric Co. | 31,662 | 1,652 | ||||||||
Equifax, Inc. | 1,083 | 139 | ||||||||
Essendant, Inc. | 2,232 | 68 | ||||||||
FedEx Corp. | 988 | 150 | ||||||||
Flowserve Corp. | 5,085 | 230 | ||||||||
Fluor Corp. | 9,757 | 481 | ||||||||
FTI Consulting, Inc. (a) | 3,531 | 144 | ||||||||
GATX Corp. | 5,611 | 247 | ||||||||
General Dynamics Corp. | 6,038 | 841 | ||||||||
General Electric Co. | 234,708 | 7,389 | ||||||||
Harsco Corp. | 9,544 | 63 | ||||||||
HD Supply Holdings, Inc. (a) | 2,680 | 93 | ||||||||
Hertz Global Holdings, Inc. (a) | 59,146 | 655 | ||||||||
Honeywell International, Inc. | 10,153 | 1,181 | ||||||||
Illinois Tool Works, Inc. | 12,019 | 1,252 | ||||||||
Ingersoll-Rand PLC | 5,285 | 337 | ||||||||
JetBlue Airways Corp. (a) | 13,903 | 230 | ||||||||
Joy Global, Inc. | 5,910 | 125 | ||||||||
KBR, Inc. | 17,699 | 234 | ||||||||
Kirby Corp. (a) | 1,434 | 89 | ||||||||
KLX, Inc. (a) | 7,383 | 229 | ||||||||
L-3 Communications Holdings, Inc. | 5,593 | 820 | ||||||||
Lockheed Martin Corp. | 5,883 | 1,460 | ||||||||
ManpowerGroup, Inc. | 2,734 | 176 | ||||||||
Mettler-Toledo International, Inc. (a) | 235 | 86 | ||||||||
Norfolk Southern Corp. | 13,784 | 1,173 | ||||||||
Northrop Grumman Corp. | 11,906 | 2,646 | ||||||||
Owens Corning | 4,557 | 235 | ||||||||
PACCAR, Inc. | 3,132 | 162 | ||||||||
Parker-Hannifin Corp. | 2,737 | 296 | ||||||||
Raytheon Co. | 12,384 | 1,684 |
SHARES | MARKET VALUE (000S) | |||||||||
Republic Services, Inc. | 13,960 | $ | 716 | |||||||
Rexnord Corp. (a) | 3,930 | 77 | ||||||||
Rockwell Collins, Inc. | 1,819 | 155 | ||||||||
RR Donnelley & Sons Co. | 27,360 | 463 | ||||||||
Ryder System, Inc. | 3,092 | 189 | ||||||||
SkyWest, Inc. | 6,733 | 178 | ||||||||
Snap-on, Inc. | 465 | 73 | ||||||||
Southwest Airlines Co. | 1,168 | 46 | ||||||||
SPX Corp. | 3,968 | 59 | ||||||||
SPX FLOW, Inc. (a) | 3,164 | 83 | ||||||||
Stanley Black & Decker, Inc. | 971 | 108 | ||||||||
Textron, Inc. | 2,596 | 95 | ||||||||
Timken Co. | 6,558 | 201 | ||||||||
TransDigm Group, Inc. (a) | 679 | 179 | ||||||||
Trinity Industries, Inc. | 3,139 | 58 | ||||||||
Triumph Group, Inc. | 1,718 | 61 | ||||||||
Tyco International PLC | 2,302 | 98 | ||||||||
Union Pacific Corp. | 15,831 | 1,381 | ||||||||
United Continental Holdings, Inc. (a) | 3,382 | 139 | ||||||||
United Parcel Service, Inc. ‘B’ | 1,181 | 127 | ||||||||
United Technologies Corp. | 14,145 | 1,451 | ||||||||
Waste Management, Inc. | 19,509 | 1,293 | ||||||||
WESCO International, Inc. (a) | 1,665 | 86 | ||||||||
WW Grainger, Inc. | 1,285 | 292 | ||||||||
YRC Worldwide, Inc. (a) | 3,065 | 27 | ||||||||
|
| |||||||||
44,122 | ||||||||||
|
| |||||||||
INFORMATION TECHNOLOGY 18.7% | ||||||||||
Activision Blizzard, Inc. | 42,702 | 1,692 | ||||||||
Advanced Micro Devices, Inc. (a) | 48,801 | 251 | ||||||||
Alphabet, Inc. ‘A’ (a) | 870 | 612 | ||||||||
Alphabet, Inc. ‘C’ (a) | 11,700 | 8,098 | ||||||||
Amdocs Ltd. | 7,067 | 408 | ||||||||
Analog Devices, Inc. | 1,107 | 63 | ||||||||
Anixter International, Inc. (a) | 4,360 | 232 | ||||||||
Apple, Inc. | 96,087 | 9,186 | ||||||||
Applied Materials, Inc. | 9,604 | 230 | ||||||||
Arrow Electronics, Inc. (a) | 11,167 | 691 | ||||||||
Avnet, Inc. | 16,657 | 675 | ||||||||
Broadridge Financial Solutions, Inc. | 2,440 | 159 | ||||||||
Brocade Communications Systems, Inc. | 23,897 | 219 | ||||||||
CA, Inc. | 34,097 | 1,119 | ||||||||
CACI International, Inc. ‘A’ (a) | 2,398 | 217 | ||||||||
CDW Corp. | 1,196 | 48 | ||||||||
Cerner Corp. (a) | 1,342 | 79 | ||||||||
Cisco Systems, Inc. | 188,180 | 5,399 | ||||||||
Citrix Systems, Inc. (a) | 3,041 | 243 | ||||||||
Cognizant Technology Solutions Corp. ‘A’ (a) | 5,146 | 294 | ||||||||
CommScope Holding Co., Inc. (a) | 2,797 | 87 | ||||||||
Computer Sciences Corp. | 1,983 | 98 | ||||||||
Convergys Corp. | 8,549 | 214 | ||||||||
Corning, Inc. | 74,416 | 1,524 | ||||||||
CSRA, Inc. | 2,760 | 65 | ||||||||
Diebold, Inc. | 3,544 | 88 | ||||||||
DST Systems, Inc. | 839 | 98 | ||||||||
Dun & Bradstreet Corp. | 3,191 | 389 | ||||||||
eBay, Inc. (a) | 7,803 | 183 | ||||||||
EchoStar Corp. ‘A’ (a) | 1,835 | 73 | ||||||||
Electronic Arts, Inc. (a) | 4,332 | 328 | ||||||||
EMC Corp. | 82,341 | 2,237 | ||||||||
Energizer Holdings, Inc. | 2,098 | 108 | ||||||||
Facebook, Inc. ‘A’ (a) | 5,641 | 645 |
SHARES | MARKET VALUE (000S) | |||||||||
Fairchild Semiconductor International, Inc. (a) | 5,415 | $ | 107 | |||||||
Fidelity National Information Services, Inc. | 6,773 | 499 | ||||||||
Fiserv, Inc. (a) | 4,659 | 507 | ||||||||
Flextronics International Ltd. (a) | 22,711 | 268 | ||||||||
FLIR Systems, Inc. | 2,643 | 82 | ||||||||
Harris Corp. | 4,242 | 354 | ||||||||
Hewlett Packard Enterprise Co. | 242,755 | 4,435 | ||||||||
HP, Inc. | 224,887 | 2,822 | ||||||||
Ingram Micro, Inc. ‘A’ | 19,252 | 670 | ||||||||
Intel Corp. | 243,498 | 7,987 | ||||||||
InterActiveCorp | 8,477 | 477 | ||||||||
International Business Machines Corp. | 84,313 | 12,797 | ||||||||
Intuit, Inc. | 4,008 | 447 | ||||||||
Jabil Circuit, Inc. | 23,388 | 432 | ||||||||
Juniper Networks, Inc. | 34,557 | 777 | ||||||||
Keysight Technologies, Inc. (a) | 8,260 | 240 | ||||||||
KLA-Tencor Corp. | 4,129 | 302 | ||||||||
Lam Research Corp. | 603 | 51 | ||||||||
Leidos Holdings, Inc. | 8,117 | 389 | ||||||||
Lexmark International, Inc. ‘A’ | 16,143 | 609 | ||||||||
Maxim Integrated Products, Inc. | 12,765 | 456 | ||||||||
Micron Technology, Inc. (a) | 42,639 | 587 | ||||||||
Microsoft Corp. | 175,142 | 8,962 | ||||||||
Motorola Solutions, Inc. | 20,616 | 1,360 | ||||||||
NCR Corp. (a) | 8,422 | 234 | ||||||||
NetApp, Inc. | 28,592 | 703 | ||||||||
NeuStar, Inc. ‘A’ (a) | 9,570 | 225 | ||||||||
Nuance Communications, Inc. (a) | 5,222 | 82 | ||||||||
NVIDIA Corp. | 8,760 | 412 | ||||||||
Oracle Corp. | 85,335 | 3,493 | ||||||||
Paychex, Inc. | 4,173 | 248 | ||||||||
Pitney Bowes, Inc. | 29,248 | 521 | ||||||||
Polycom, Inc. (a) | 24,001 | 270 | ||||||||
QLogic Corp. (a) | 14,485 | 213 | ||||||||
Qorvo, Inc. (a) | 1,030 | 57 | ||||||||
QUALCOMM, Inc. | 27,760 | 1,487 | ||||||||
Red Hat, Inc. (a) | 970 | 70 | ||||||||
Rovi Corp. (a) | 8,122 | 127 | ||||||||
Seagate Technology PLC | 50,334 | 1,226 | ||||||||
Skyworks Solutions, Inc. | 738 | 47 | ||||||||
Symantec Corp. | 61,859 | 1,271 | ||||||||
SYNNEX Corp. | 583 | 55 | ||||||||
Synopsys, Inc. (a) | 2,860 | 155 | ||||||||
Take-Two Interactive Software, Inc. (a) | 2,513 | 95 | ||||||||
Tech Data Corp. (a) | 7,425 | 533 | ||||||||
Teradata Corp. (a) | 18,585 | 466 | ||||||||
Teradyne, Inc. | 5,069 | 100 | ||||||||
Texas Instruments, Inc. | 22,417 | 1,404 | ||||||||
Unisys Corp. (a) | 12,089 | 88 | ||||||||
VeriSign, Inc. (a) | 1,120 | 97 | ||||||||
Vishay Intertechnology, Inc. | 19,187 | 238 | ||||||||
West Corp. | 4,381 | 86 | ||||||||
Western Digital Corp. | 3,505 | 166 | ||||||||
Xerox Corp. | 97,666 | 927 | ||||||||
Xilinx, Inc. | 2,112 | 97 | ||||||||
Yahoo!, Inc. (a) | 4,417 | 166 | ||||||||
Zynga, Inc. ‘A’ (a) | 31,008 | 77 | ||||||||
|
| |||||||||
97,105 | ||||||||||
|
| |||||||||
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 51 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||
MATERIALS 2.4% | ||||||||||
Air Products & Chemicals, Inc. | 2,167 | $ | 308 | |||||||
Alcoa, Inc. | 27,985 | 259 | ||||||||
AptarGroup, Inc. | 1,286 | 102 | ||||||||
Armstrong World Industries, Inc. (a) | 13,455 | 527 | ||||||||
Ashland, Inc. | 1,557 | 179 | ||||||||
Ball Corp. | 3,547 | 256 | ||||||||
Bemis Co., Inc. | 4,594 | 237 | ||||||||
Berry Plastics Group, Inc. (a) | 2,199 | 85 | ||||||||
Celanese Corp. | 1,531 | 100 | ||||||||
CF Industries Holdings, Inc. | 17,411 | 420 | ||||||||
Chemours Co. | 35,278 | 291 | ||||||||
Chemtura Corp. (a) | 3,567 | 94 | ||||||||
Commercial Metals Co. | 3,881 | 66 | ||||||||
Domtar Corp. | 7,340 | 257 | ||||||||
Dow Chemical Co. | 25,493 | 1,267 | ||||||||
E.I. du Pont de Nemours & Co. | 14,493 | 939 | ||||||||
Freeport-McMoRan, Inc. | 60,507 | 674 | ||||||||
Greif, Inc. ‘A’ | 2,357 | 88 | ||||||||
Huntsman Corp. | 5,506 | 74 | ||||||||
International Paper Co. | 6,255 | 265 | ||||||||
LyondellBasell Industries NV ‘A’ | 13,051 | 971 | ||||||||
Monsanto Co. | 7,327 | 758 | ||||||||
Mosaic Co. | 28,463 | 745 | ||||||||
Newmont Mining Corp. | 49,125 | 1,922 | ||||||||
Owens-Illinois, Inc. (a) | 13,911 | 251 | ||||||||
PPG Industries, Inc. | 2,058 | 214 | ||||||||
Praxair, Inc. | 3,400 | 382 | ||||||||
Reliance Steel & Aluminum Co. | 2,811 | 216 | ||||||||
Sherwin-Williams Co. | 1,043 | 306 | ||||||||
Sonoco Products Co. | 1,511 | 75 | ||||||||
U.S. Steel Corp. | 2,899 | 49 | ||||||||
|
| |||||||||
12,377 | ||||||||||
|
| |||||||||
TELECOMMUNICATION SERVICES 5.7% | ||||||||||
AT&T, Inc. | 395,272 | 17,080 | ||||||||
CenturyLink, Inc. | 91,468 | 2,654 | ||||||||
Contra Leap Wireless | 22,373 | 45 | ||||||||
Frontier Communications Corp. | 207,926 | 1,027 | ||||||||
T-Mobile US, Inc. (a) | 8,648 | 374 | ||||||||
Telephone & Data Systems, Inc. | 13,279 | 394 | ||||||||
Verizon Communications, Inc. | 133,813 | 7,472 |
SHARES | MARKET VALUE (000S) | |||||||||
Windstream Holdings, Inc. | 42,281 | $ | 392 | |||||||
|
| |||||||||
29,438 | ||||||||||
|
| |||||||||
UTILITIES 6.6% | ||||||||||
AES Corp. | 52,769 | 659 | ||||||||
AGL Resources, Inc. | 4,823 | 318 | ||||||||
Alliant Energy Corp. | 2,768 | 110 | ||||||||
Ameren Corp. | 22,757 | 1,219 | ||||||||
American Electric Power Co., Inc. | 26,765 | 1,876 | ||||||||
American Water Works Co., Inc. | 1,484 | 125 | ||||||||
Atmos Energy Corp. | 3,085 | 251 | ||||||||
Avista Corp. | 6,248 | 280 | ||||||||
Calpine Corp. (a) | 52,942 | 781 | ||||||||
CenterPoint Energy, Inc. | 36,430 | 874 | ||||||||
CMS Energy Corp. | 16,059 | 736 | ||||||||
Consolidated Edison, Inc. | 27,248 | 2,192 | ||||||||
Dominion Resources, Inc. | 6,404 | 499 | ||||||||
DTE Energy Co. | 10,946 | 1,085 | ||||||||
Duke Energy Corp. | 22,114 | 1,897 | ||||||||
Edison International | 15,660 | 1,216 | ||||||||
El Paso Electric Co. | 4,094 | 194 | ||||||||
Entergy Corp. | 28,446 | 2,314 | ||||||||
Eversource Energy | 1,978 | 119 | ||||||||
Exelon Corp. | 48,982 | 1,781 | ||||||||
FirstEnergy Corp. | 30,958 | 1,081 | ||||||||
Great Plains Energy, Inc. | 14,194 | 432 | ||||||||
MDU Resources Group, Inc. | 30,620 | 735 | ||||||||
National Fuel Gas Co. | 1,807 | 103 | ||||||||
NextEra Energy, Inc. | 8,835 | 1,152 | ||||||||
NiSource, Inc. | 8,998 | 239 | ||||||||
NRG Energy, Inc. | 13,137 | 197 | ||||||||
ONE Gas, Inc. | 4,293 | 286 | ||||||||
PG&E Corp. | 23,051 | 1,473 | ||||||||
Pinnacle West Capital Corp. | 9,931 | 805 | ||||||||
PNM Resources, Inc. | 9,144 | 324 | ||||||||
Portland General Electric Co. | 4,788 | 211 | ||||||||
PPL Corp. | 30,897 | 1,166 | ||||||||
Public Service Enterprise Group, Inc. | 31,993 | 1,491 | ||||||||
SCANA Corp. | 5,559 | 421 | ||||||||
Sempra Energy | 4,513 | 515 | ||||||||
Southern Co. | 38,196 | 2,048 | ||||||||
Southwest Gas Corp. | 4,410 | 347 | ||||||||
TECO Energy, Inc. | 26,971 | 746 |
SHARES | MARKET VALUE (000S) | |||||||||
UGI Corp. | 4,133 | $ | 187 | |||||||
Vectren Corp. | 7,049 | 371 | ||||||||
Westar Energy, Inc. | 9,700 | 544 | ||||||||
WGL Holdings, Inc. | 1,921 | 136 | ||||||||
Xcel Energy, Inc. | 23,680 | 1,060 | ||||||||
|
| |||||||||
34,596 | ||||||||||
|
| |||||||||
Total United States | 509,288 | |||||||||
|
| |||||||||
Total Common Stocks (Cost $418,743) | 511,753 | |||||||||
|
| |||||||||
REAL ESTATE INVESTMENT TRUSTS 1.0% | ||||||||||
UNITED STATES 1.0% | ||||||||||
FINANCIALS 1.0% | ||||||||||
American Capital Agency Corp. | 18,139 | 360 | ||||||||
Annaly Capital Management, Inc. | 123,863 | 1,371 | ||||||||
Chimera Investment Corp. | 6,398 | 100 | ||||||||
Columbia Property Trust, Inc. | 8,964 | 192 | ||||||||
Corrections Corp. of America | 9,408 | 329 | ||||||||
Digital Realty Trust, Inc. | 1,472 | 160 | ||||||||
Hatteras Financial Corp. | 15,441 | 253 | ||||||||
Hospitality Properties Trust | 3,812 | 110 | ||||||||
Iron Mountain, Inc. | 23,062 | 919 | ||||||||
Mack-Cali Realty Corp. | 6,008 | 162 | ||||||||
MFA Financial, Inc. | 15,120 | 110 | ||||||||
New Residential Investment Corp. | 8,581 | 119 | ||||||||
Outfront Media, Inc. | 9,449 | 228 | ||||||||
Piedmont Office Realty Trust, Inc. ‘A’ | 10,291 | 222 | ||||||||
Public Storage | 754 | 193 | ||||||||
Simon Property Group, Inc. | 1,203 | 261 | ||||||||
Two Harbors Investment Corp. | 6,265 | 54 | ||||||||
|
| |||||||||
5,143 | ||||||||||
|
| |||||||||
Total Real Estate Investment Trusts (Cost $4,719) | 5,143 | |||||||||
|
| |||||||||
Total Investments in Securities (Cost $423,462) | 516,896 | |||||||||
Total Investments 99.4% (Cost $423,462) | $ | 516,896 | ||||||||
Other Assets and Liabilities, net 0.6% | 3,061 | |||||||||
|
| |||||||||
Net Assets 100.0% | $ | 519,957 | ||||||||
|
|
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. |
52 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Common Stocks | ||||||||||||||||
Ireland | ||||||||||||||||
Financials | $ | 83 | $ | 0 | $ | 0 | $ | 83 | ||||||||
Information Technology | 1,740 | 0 | 0 | 1,740 | ||||||||||||
United Kingdom | ||||||||||||||||
Consumer Staples | 642 | 0 | 0 | 642 | ||||||||||||
United States | ||||||||||||||||
Consumer Discretionary | 66,096 | 0 | 7 | 66,103 | ||||||||||||
Consumer Staples | 48,661 | 0 | 0 | 48,661 | ||||||||||||
Energy | 58,513 | 0 | 0 | 58,513 | ||||||||||||
Financials | 59,657 | 0 | 0 | 59,657 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Health Care | $ | 58,716 | $ | 0 | $ | 0 | $ | 58,716 | ||||||||
Industrials | 44,122 | 0 | 0 | 44,122 | ||||||||||||
Information Technology | 97,105 | 0 | 0 | 97,105 | ||||||||||||
Materials | 12,377 | 0 | 0 | 12,377 | ||||||||||||
Telecommunication Services | 29,393 | 0 | 45 | 29,438 | ||||||||||||
Utilities | 34,596 | 0 | 0 | 34,596 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
United States | ||||||||||||||||
Financials | 5,143 | 0 | 0 | 5,143 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 516,844 | $ | 0 | $ | 52 | $ | 516,896 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 53 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 99.3% | ||||||||||||
COMMON STOCKS 92.7% | ||||||||||||
UNITED KINGDOM 0.0% | ||||||||||||
HEALTH CARE 0.0% | ||||||||||||
LivaNova PLC (a) | 806 | $ | 41 | |||||||||
|
| |||||||||||
Total United Kingdom | 41 | |||||||||||
|
| |||||||||||
UNITED STATES 92.7% | ||||||||||||
CONSUMER DISCRETIONARY 19.6% | ||||||||||||
1-800-Flowers.com, Inc. ‘A’ (a) | 2,526 | 23 | ||||||||||
AMC Entertainment Holdings, Inc. ‘A’ | 7,094 | 196 | ||||||||||
America’s Car-Mart, Inc. (a) | 2,324 | 66 | ||||||||||
American Axle & Manufacturing Holdings, Inc. (a) | 4,891 | 71 | ||||||||||
American Public Education, Inc. (a) | 5,486 | 154 | ||||||||||
Arctic Cat, Inc. | 4,820 | 82 | ||||||||||
Asbury Automotive Group, Inc. (a) | 2,108 | 111 | ||||||||||
Ascena Retail Group, Inc. (a) | 5,678 | 40 | ||||||||||
Ascent Capital Group, Inc. ‘A’ (a) | 3,447 | 53 | ||||||||||
Barnes & Noble Education, Inc. (a) | 2,810 | 28 | ||||||||||
Barnes & Noble, Inc. | 27,934 | 317 | ||||||||||
Bassett Furniture Industries, Inc. | 2,218 | 53 | ||||||||||
Big 5 Sporting Goods Corp. | 6,842 | 63 | ||||||||||
Biglari Holdings, Inc. (a) | 120 | 48 | ||||||||||
BJ’s Restaurants, Inc. (a) | 2,492 | 109 | ||||||||||
Bloomin’ Brands, Inc. | 806 | 14 | ||||||||||
Blue Nile, Inc. | 965 | 26 | ||||||||||
Bob Evans Farms, Inc. | 1,498 | 57 | ||||||||||
Boot Barn Holdings, Inc. (a) | 2,049 | 18 | ||||||||||
Boyd Gaming Corp. (a) | 18,990 | 349 | ||||||||||
Bravo Brio Restaurant Group, Inc. (a) | 4,890 | 40 | ||||||||||
Bridgepoint Education, Inc. (a) | 4,771 | 35 | ||||||||||
Bright Horizons Family Solutions, Inc. (a) | 1,193 | 79 | ||||||||||
Buckle, Inc. | 8,596 | 223 | ||||||||||
Build-A-Bear Workshop, Inc. (a) | 735 | 10 | ||||||||||
Cable One, Inc. | 132 | 67 | ||||||||||
CalAtlantic Group, Inc. | 532 | 20 | ||||||||||
Caleres, Inc. | 8,181 | 198 | ||||||||||
Callaway Golf Co. | 8,510 | 87 | ||||||||||
Capella Education Co. | 4,069 | 214 | ||||||||||
Career Education Corp. (a) | 12,913 | 77 | ||||||||||
Carmike Cinemas, Inc. (a) | 506 | 15 | ||||||||||
Carrols Restaurant Group, Inc. (a) | 12,771 | 152 | ||||||||||
Cash America International, Inc. | 7,249 | 309 | ||||||||||
Cato Corp. ‘A’ | 4,283 | 162 | ||||||||||
Cheesecake Factory, Inc. | 1,670 | 80 | ||||||||||
Chegg, Inc. (a) | 2,341 | 12 | ||||||||||
Children’s Place, Inc. | 5,077 | 407 | ||||||||||
Choice Hotels International, Inc. | 3,646 | 174 | ||||||||||
Churchill Downs, Inc. | 391 | 49 | ||||||||||
Citi Trends, Inc. | 4,807 | 75 | ||||||||||
Clear Channel Outdoor Holdings, Inc. ‘A’ | 6,698 | 42 | ||||||||||
ClubCorp Holdings, Inc. | 4,158 | 54 | ||||||||||
Columbia Sportswear Co. | 2,454 | 141 | ||||||||||
Conn’s, Inc. (a) | 4,013 | 30 | ||||||||||
Container Store Group, Inc. (a) | 9,593 | 51 | ||||||||||
Cooper Tire & Rubber Co. | 707 | 21 | ||||||||||
Cooper-Standard Holding, Inc. (a) | 3,375 | 267 | ||||||||||
Core-Mark Holding Co., Inc. | 4,290 | 201 | ||||||||||
Crocs, Inc. (a) | 24,347 | 275 | ||||||||||
CSS Industries, Inc. | 1,334 | 36 | ||||||||||
CST Brands, Inc. | 340 | 15 | ||||||||||
Cumulus Media, Inc. ‘A’ (a) | 11,787 | 4 |
SHARES | MARKET VALUE (000S) | |||||||||||
Dana Holding Corp. | 5,505 | $ | 58 | |||||||||
Dave & Buster’s Entertainment, Inc. (a) | 2,623 | 123 | ||||||||||
Deckers Outdoor Corp. (a) | 305 | 18 | ||||||||||
Del Frisco’s Restaurant Group, Inc. (a) | 495 | 7 | ||||||||||
Denny’s Corp. (a) | 11,133 | 119 | ||||||||||
Destination Maternity Corp. | 2,654 | 16 | ||||||||||
Destination XL Group, Inc. (a) | 4,606 | 21 | ||||||||||
DeVry Education Group, Inc. | 4,007 | 71 | ||||||||||
Diamond Resorts International, Inc. (a) | 3,173 | 95 | ||||||||||
DineEquity, Inc. | 1,723 | 146 | ||||||||||
Dorman Products, Inc. (a) | 210 | 12 | ||||||||||
DreamWorks Animation SKG, Inc. ‘A’ (a) | 2,021 | 83 | ||||||||||
Drew Industries, Inc. | 605 | 51 | ||||||||||
DSW, Inc. | 2,909 | 62 | ||||||||||
El Pollo Loco Holdings, Inc. (a) | 1,684 | 22 | ||||||||||
Eldorado Resorts, Inc. (a) | 890 | 13 | ||||||||||
Entercom Communications Corp. ‘A’ | 3,387 | 46 | ||||||||||
Entravision Communications Corp. ‘A’ | 1,933 | 13 | ||||||||||
Eros International PLC (a) | 5,051 | 82 | ||||||||||
Ethan Allen Interiors, Inc. | 3,023 | 100 | ||||||||||
EW Scripps Co. ‘A’ (a) | 1,838 | 29 | ||||||||||
Express, Inc. (a) | 6,172 | 90 | ||||||||||
Extended Stay America, Inc. | 4,438 | 66 | ||||||||||
Ezcorp, Inc. ‘A’ (a) | 11,225 | 85 | ||||||||||
Federal-Mogul Holdings Corp. (a) | 1,869 | 16 | ||||||||||
Fiesta Restaurant Group, Inc. (a) | 1,787 | 39 | ||||||||||
Finish Line, Inc. ‘A’ | 15,961 | 322 | ||||||||||
First Cash Financial Services, Inc. | 1,505 | 77 | ||||||||||
Five Below, Inc. (a) | 793 | 37 | ||||||||||
Flexsteel Industries, Inc. | 727 | 29 | ||||||||||
Francesca’s Holdings Corp. (a) | 4,025 | 44 | ||||||||||
Fred’s, Inc. ‘A’ | 8,667 | 140 | ||||||||||
FTD Cos., Inc. (a) | 3,273 | 82 | ||||||||||
G-III Apparel Group Ltd. (a) | 805 | 37 | ||||||||||
Gannett Co., Inc. | 3,695 | 51 | ||||||||||
Genesco, Inc. (a) | 692 | 44 | ||||||||||
Gentherm, Inc. (a) | 283 | 10 | ||||||||||
GoPro, Inc. ‘A’ (a) | 773 | 8 | ||||||||||
Grand Canyon Education, Inc. (a) | 605 | 24 | ||||||||||
Gray Television, Inc. (a) | 1,196 | 13 | ||||||||||
Group 1 Automotive, Inc. | 252 | 12 | ||||||||||
Groupon, Inc. (a) | 55,966 | 182 | ||||||||||
Harte-Hanks, Inc. | 10,286 | 16 | ||||||||||
Haverty Furniture Cos., Inc. | 3,993 | 72 | ||||||||||
Hibbett Sports, Inc. (a) | 4,672 | 163 | ||||||||||
Hooker Furniture Corp. | 1,200 | 26 | ||||||||||
HSN, Inc. | 2,174 | 106 | ||||||||||
Hyatt Hotels Corp. ‘A’ (a) | 2,493 | 122 | ||||||||||
Iconix Brand Group, Inc. (a) | 9,869 | 67 | ||||||||||
Installed Building Products, Inc. (a) | 468 | 17 | ||||||||||
International Speedway Corp. ‘A’ | 4,359 | 146 | ||||||||||
Interval Leisure Group, Inc. | 2,902 | 46 | ||||||||||
Isle of Capri Casinos, Inc. (a) | 8,474 | 155 | ||||||||||
Jack in the Box, Inc. | 218 | 19 | ||||||||||
Jamba, Inc. (a) | 2,765 | 28 | ||||||||||
Jindal Steel & Power Ltd. (a) | 15,356 | 121 | ||||||||||
John Wiley & Sons, Inc. | 663 | 35 | ||||||||||
Johnson Outdoors, Inc. ‘A’ | 189 | 5 | ||||||||||
K12, Inc. (a) | 9,255 | 116 | ||||||||||
Kirkland’s, Inc. (a) | 2,629 | 39 | ||||||||||
La Quinta Holdings, Inc. (a) | 2,976 | 34 | ||||||||||
La-Z-Boy, Inc. | 2,220 | 62 |
SHARES | MARKET VALUE (000S) | |||||||||||
Lands’ End, Inc. (a) | 11,479 | $ | 188 | |||||||||
LGI Homes, Inc. (a) | 645 | 21 | ||||||||||
Libbey, Inc. | 4,543 | 72 | ||||||||||
Liberty TripAdvisor Holdings, Inc. ‘A’ (a) | 8,772 | 192 | ||||||||||
LifeLock, Inc. (a) | 3,219 | 51 | ||||||||||
Lifetime Brands, Inc. | 380 | 6 | ||||||||||
Loral Space & Communications, Inc. (a) | 1,474 | 52 | ||||||||||
Lumber Liquidators Holdings, Inc. (a) | 11,826 | 182 | ||||||||||
M/I Homes, Inc. (a) | 865 | 16 | ||||||||||
Marcus Corp. | 3,345 | 71 | ||||||||||
Marriott Vacations Worldwide Corp. | 2,652 | 182 | ||||||||||
Mattress Firm Holding Corp. (a) | 854 | 29 | ||||||||||
MDC Holdings, Inc. | 1,206 | 29 | ||||||||||
Meritage Homes Corp. (a) | 2,526 | 95 | ||||||||||
Metaldyne Performance Group, Inc. | 1,469 | 20 | ||||||||||
Michaels Cos., Inc. (a) | 7,238 | 206 | ||||||||||
Modine Manufacturing Co. (a) | 6,440 | 57 | ||||||||||
Monarch Casino & Resort, Inc. (a) | 718 | 16 | ||||||||||
Monro Muffler Brake, Inc. | 1,538 | 98 | ||||||||||
Monster Worldwide, Inc. (a) | 47,111 | 113 | ||||||||||
Movado Group, Inc. | 3,614 | 78 | ||||||||||
MSG Networks, Inc. ‘A’ (a) | 956 | 15 | ||||||||||
Murphy USA, Inc. (a) | 425 | 31 | ||||||||||
NACCO Industries, Inc. ‘A’ | 810 | 45 | ||||||||||
National CineMedia, Inc. | 11,757 | 182 | ||||||||||
Nautilus, Inc. (a) | 1,100 | 20 | ||||||||||
New York Times Co. | 1,254 | 15 | ||||||||||
Nexstar Broadcasting Group, Inc. ‘A’ | 894 | 43 | ||||||||||
Noodles & Co. (a) | 2,362 | 23 | ||||||||||
Nutrisystem, Inc. | 4,588 | 116 | ||||||||||
Outerwall, Inc. | 2,145 | 90 | ||||||||||
Overstock.com, Inc. (a) | 682 | 11 | ||||||||||
Oxford Industries, Inc. | 1,842 | 104 | ||||||||||
Papa John’s International, Inc. | 2,169 | 147 | ||||||||||
Papa Murphy’s Holdings, Inc. (a) | 1,654 | 11 | ||||||||||
Party City Holdco, Inc. (a) | 2,748 | 38 | ||||||||||
Penn National Gaming, Inc. (a) | 26,123 | 364 | ||||||||||
Perry Ellis International, Inc. (a) | 3,803 | 76 | ||||||||||
PetMed Express, Inc. | 3,765 | 71 | ||||||||||
Pier 1 Imports, Inc. | 45,335 | 233 | ||||||||||
Pinnacle Entertainment, Inc. (a) | 1,339 | 15 | ||||||||||
Popeyes Louisiana Kitchen, Inc. (a) | 620 | 34 | ||||||||||
Potbelly Corp. (a) | 7,563 | 95 | ||||||||||
Reading International, Inc. ‘A’ (a) | 2,287 | 29 | ||||||||||
Red Robin Gourmet Burgers, Inc. (a) | 949 | 45 | ||||||||||
Regis Corp. (a) | 14,837 | 185 | ||||||||||
Ruby Tuesday, Inc. (a) | 5,942 | 21 | ||||||||||
Ruth’s Hospitality Group, Inc. | 2,962 | 47 | ||||||||||
Scholastic Corp. | 5,723 | 227 | ||||||||||
Sears Hometown and Outlet Stores, Inc. (a) | 6,157 | 41 | ||||||||||
SeaWorld Entertainment, Inc. | 2,253 | 32 | ||||||||||
Select Comfort Corp. (a) | 6,955 | 149 | ||||||||||
Shoe Carnival, Inc. | 2,645 | 66 | ||||||||||
Shutterfly, Inc. (a) | 926 | 43 | ||||||||||
Sinclair Broadcast Group, Inc. ‘A’ | 903 | 27 | ||||||||||
Sizmek, Inc. (a) | 2,731 | 6 | ||||||||||
Smith & Wesson Holding Corp. (a) | 9,345 | 254 | ||||||||||
Sonic Automotive, Inc. ‘A’ | 7,147 | 122 | ||||||||||
Sonic Corp. | 2,176 | 59 | ||||||||||
Sotheby’s | 4,380 | 120 | ||||||||||
Speedway Motorsports, Inc. | 2,331 | 41 | ||||||||||
Sportsman’s Warehouse Holdings, Inc. (a) | 2,960 | 24 |
54 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
Stage Stores, Inc. | 8,731 | $ | 43 | |||||||||
Standard Motor Products, Inc. | 1,518 | 60 | ||||||||||
Stein Mart, Inc. | 7,745 | 60 | ||||||||||
Steven Madden Ltd. (a) | 2,675 | 91 | ||||||||||
Stoneridge, Inc. (a) | 3,052 | 46 | ||||||||||
Strayer Education, Inc. (a) | 5,576 | 274 | ||||||||||
Sturm Ruger & Co., Inc. | 2,624 | 168 | ||||||||||
Superior Industries International, Inc. | 3,494 | 94 | ||||||||||
Taylor Morrison Home Corp. ‘A’ (a) | 935 | 14 | ||||||||||
Texas Roadhouse, Inc. | 5,440 | 248 | ||||||||||
Tile Shop Holdings, Inc. (a) | 3,000 | 60 | ||||||||||
Tilly’s, Inc. ‘A’ (a) | 3,947 | 23 | ||||||||||
TopBuild Corp. (a) | 432 | 16 | ||||||||||
Tower International, Inc. | 2,649 | 54 | ||||||||||
Townsquare Media, Inc. ‘A’ (a) | 506 | 4 | ||||||||||
TravelCenters of America LLC (a) | 3,141 | 26 | ||||||||||
tronc, Inc. | 2,756 | 38 | ||||||||||
Tuesday Morning Corp. (a) | 6,030 | 42 | ||||||||||
Tumi Holdings, Inc. (a) | 1,194 | 32 | ||||||||||
Vera Bradley, Inc. (a) | 7,267 | 103 | ||||||||||
Vince Holding Corp. (a) | 5,062 | 28 | ||||||||||
Vitamin Shoppe, Inc. (a) | 6,345 | 194 | ||||||||||
VOXX International Corp. (a) | 2,663 | 7 | ||||||||||
Wendy’s Co. | 3,870 | 37 | ||||||||||
West Marine, Inc. (a) | 3,105 | 26 | ||||||||||
Weyco Group, Inc. | 68 | 2 | ||||||||||
Wolverine World Wide, Inc. | 3,012 | 61 | ||||||||||
World Wrestling Entertainment, Inc. ‘A’ | 4,462 | 82 | ||||||||||
ZAGG, Inc. (a) | 1,857 | 10 | ||||||||||
Zumiez, Inc. (a) | 2,008 | 29 | ||||||||||
|
| |||||||||||
16,553 | ||||||||||||
|
| |||||||||||
CONSUMER STAPLES 4.1% | ||||||||||||
Alliance One International, Inc. (a) | 2,555 | 39 | ||||||||||
Andersons, Inc. | 1,028 | 37 | ||||||||||
B&G Foods, Inc. | 2,769 | 133 | ||||||||||
Blue Buffalo Pet Products, Inc. (a) | 580 | 14 | ||||||||||
Boston Beer Co., Inc. ‘A’ (a) | 367 | 63 | ||||||||||
Cal-Maine Foods, Inc. | 2,347 | 104 | ||||||||||
Central Garden & Pet Co. ‘A’ (a) | 15,188 | 330 | ||||||||||
Coca-Cola Bottling Co. Consolidated | 994 | 147 | ||||||||||
Coty, Inc. ‘A’ | 3,068 | 80 | ||||||||||
Darling Ingredients, Inc. (a) | 1,476 | 22 | ||||||||||
Dean Foods Co. | 1,373 | 25 | ||||||||||
Elizabeth Arden, Inc. (a) | 10,722 | 147 | ||||||||||
Fresh Del Monte Produce, Inc. | 5,700 | 310 | ||||||||||
HRG Group, Inc. (a) | 16,609 | 228 | ||||||||||
Ingles Markets, Inc. ‘A” | 6,363 | 237 | ||||||||||
Inter Parfums, Inc. | 2,844 | 81 | ||||||||||
J&J Snack Foods Corp. | 476 | 57 | ||||||||||
John B Sanfilippo & Son, Inc. | 634 | 27 | ||||||||||
Lancaster Colony Corp. | 362 | 46 | ||||||||||
Medifast, Inc. | 2,687 | 89 | ||||||||||
National Beverage Corp. (a) | 1,650 | 104 | ||||||||||
Nutraceutical International Corp. (a) | 789 | 18 | ||||||||||
Omega Protein Corp. (a) | 4,935 | 99 | ||||||||||
Performance Food Group Co. (a) | 588 | 16 | ||||||||||
PriceSmart, Inc. | 1,095 | 102 | ||||||||||
Revlon, Inc. ‘A’ (a) | 397 | 13 | ||||||||||
Sanderson Farms, Inc. | 383 | 33 | ||||||||||
Seaboard Corp. (a) | 18 | 52 | ||||||||||
Smart & Final Stores, Inc. (a) | 4,615 | 69 | ||||||||||
Snyder’s-Lance, Inc. | 2,065 | 70 |
SHARES | MARKET VALUE (000S) | |||||||||||
SpartanNash Co. | 6,085 | $ | 186 | |||||||||
United Natural Foods, Inc. (a) | 416 | 19 | ||||||||||
USANA Health Sciences, Inc. (a) | 501 | 56 | ||||||||||
Vector Group Ltd. | 7,896 | 177 | ||||||||||
Village Super Market, Inc. ‘A’ | 646 | 19 | ||||||||||
WD-40 Co. | 802 | 94 | ||||||||||
Weis Markets, Inc. | 2,243 | 113 | ||||||||||
|
| |||||||||||
3,456 | ||||||||||||
|
| |||||||||||
ENERGY 5.5% | ||||||||||||
Aceto Corp. | 361 | 8 | ||||||||||
Alon USA Energy, Inc. | 5,077 | 33 | ||||||||||
Antero Resources Corp. (a) | 1,617 | 42 | ||||||||||
Archrock, Inc. | 12,488 | 118 | ||||||||||
Atwood Oceanics, Inc. | 5,505 | 69 | ||||||||||
Basic Energy Services, Inc. (a) | 8,917 | 15 | ||||||||||
Bill Barrett Corp. (a) | 5,186 | 33 | ||||||||||
Bonanza Creek Energy, Inc. (a) | 16,663 | 33 | ||||||||||
Bristow Group, Inc. | 1,722 | 20 | ||||||||||
C&J Energy Services Ltd. (a) | 3,454 | 2 | ||||||||||
CARBO Ceramics, Inc. | 9,443 | 124 | ||||||||||
Carrizo Oil & Gas, Inc. (a) | 3,843 | 138 | ||||||||||
Clayton Williams Energy, Inc. (a) | 2,361 | 65 | ||||||||||
Clean Energy Fuels Corp. (a) | 5,924 | 21 | ||||||||||
Cobalt International Energy, Inc. (a) | 6,000 | 8 | ||||||||||
Contango Oil & Gas Co. (a) | 2,327 | 28 | ||||||||||
CVR Energy, Inc. | 4,011 | 62 | ||||||||||
Delek U.S. Holdings, Inc. | 4,578 | 60 | ||||||||||
Eclipse Resources Corp. (a) | 9,756 | 33 | ||||||||||
Enbridge Energy Management LLC (a) | 2,625 | 60 | ||||||||||
Enbridge Energy Management LLC | 58,437 | 0 | ||||||||||
EP Energy Corp. ‘A’ (a) | 41,853 | 217 | ||||||||||
Era Group, Inc. (a) | 6,139 | 58 | ||||||||||
EXCO Resources, Inc. (a) | 22,654 | 29 | ||||||||||
Fairmount Santrol Holdings, Inc. (a) | 17,795 | 137 | ||||||||||
Flotek Industries, Inc. (a) | 6,469 | 85 | ||||||||||
Forum Energy Technologies, Inc. (a) | 11,531 | 200 | ||||||||||
FutureFuel Corp. | 5,442 | 59 | ||||||||||
Geospace Technologies Corp. (a) | 6,226 | 102 | ||||||||||
Green Plains, Inc. | 2,872 | 57 | ||||||||||
Gulf Island Fabrication, Inc. | 1,821 | 13 | ||||||||||
Gulfmark Offshore, Inc. ‘A’ (a) | 11,772 | 37 | ||||||||||
Hallador Energy Co. | 3,301 | 15 | ||||||||||
Helix Energy Solutions Group, Inc. (a) | 41,352 | 280 | ||||||||||
Kosmos Energy Ltd. (a) | 9,492 | 52 | ||||||||||
Laredo Petroleum, Inc. (a) | 20,192 | 212 | ||||||||||
Matador Resources Co. (a) | 3,795 | 75 | ||||||||||
Matrix Service Co. (a) | 1,641 | 27 | ||||||||||
McDermott International, Inc. (a) | 22,906 | 113 | ||||||||||
Memorial Resource Development Corp. (a) | 1,767 | 28 | ||||||||||
MRC Global, Inc. (a) | 2,944 | 42 | ||||||||||
Natural Gas Services Group, Inc. (a) | 1,413 | 32 | ||||||||||
Newpark Resources, Inc. (a) | 23,504 | 136 | ||||||||||
Northern Oil and Gas, Inc. (a) | 35,043 | 162 | ||||||||||
NOW, Inc. (a) | 1,027 | 19 | ||||||||||
Oasis Petroleum, Inc. (a) | 4,233 | 39 | ||||||||||
Oil States International, Inc. (a) | 503 | 16 | ||||||||||
Pacific Drilling S.A. (a) | 2,062 | 15 | ||||||||||
Panhandle Oil and Gas, Inc. ‘A’ | 720 | 12 | ||||||||||
Parker Drilling Co. (a) | 40,174 | 92 | ||||||||||
Parsley Energy, Inc. ‘A’ (a) | 821 | 22 | ||||||||||
PDC Energy, Inc. (a) | 1,070 | 62 | ||||||||||
PHI, Inc. (a) | 1,325 | 24 |
SHARES | MARKET VALUE (000S) | |||||||||||
Pioneer Energy Services Corp. (a) | 9,905 | $ | 46 | |||||||||
Renewable Energy Group, Inc. (a) | 4,471 | 39 | ||||||||||
REX American Resources Corp. (a) | 541 | 32 | ||||||||||
Rice Energy, Inc. (a) | 1,937 | 43 | ||||||||||
Rowan Cos. PLC ‘A’ | 1,674 | 30 | ||||||||||
RPC, Inc. | 7,521 | 117 | ||||||||||
RSP Permian, Inc. (a) | 1,258 | 44 | ||||||||||
Sanchez Energy Corp. (a) | 16,906 | 119 | ||||||||||
SEACOR Holdings, Inc. (a) | 440 | 25 | ||||||||||
SemGroup Corp. ‘A’ | 1,622 | 53 | ||||||||||
SM Energy Co. | 1,075 | 29 | ||||||||||
SunCoke Energy, Inc. | 33,860 | 197 | ||||||||||
Synergy Resources Corp. (a) | 1,593 | 11 | ||||||||||
Tesco Corp. | 10,212 | 68 | ||||||||||
TETRA Technologies, Inc. (a) | 16,685 | 106 | ||||||||||
Thermon Group Holdings, Inc. (a) | 2,151 | 41 | ||||||||||
U.S. Silica Holdings, Inc. | 1,733 | 60 | ||||||||||
Unit Corp. (a) | 5,496 | 85 | ||||||||||
W&T Offshore, Inc. (a) | 40,741 | 94 | ||||||||||
Westmoreland Coal Co. (a) | 1,664 | 16 | ||||||||||
|
| |||||||||||
4,696 | ||||||||||||
|
| |||||||||||
FINANCIALS 12.4% | ||||||||||||
1st Source Corp. | 1,575 | 51 | ||||||||||
Access National Corp. | 646 | 13 | ||||||||||
Aircastle Ltd. | 4,437 | 87 | ||||||||||
Alexander & Baldwin, Inc. | 349 | 13 | ||||||||||
Ambac Financial Group, Inc. (a) | 2,269 | 37 | ||||||||||
American Equity Investment Life Holding Co. | 6,020 | 86 | ||||||||||
AMERISAFE, Inc. | 622 | 38 | ||||||||||
Arrow Financial Corp. | 1,100 | 33 | ||||||||||
Artisan Partners Asset Management, Inc. ‘A’ | 460 | 13 | ||||||||||
Associated Banc-Corp | 2,277 | 39 | ||||||||||
Astoria Financial Corp. | 9,834 | 151 | ||||||||||
Baldwin & Lyons, Inc. ‘B’ | 926 | 23 | ||||||||||
BancFirst Corp. | 489 | 29 | ||||||||||
Bancorp, Inc. (a) | 4,261 | 26 | ||||||||||
BancorpSouth, Inc. | 2,005 | 45 | ||||||||||
Bank Mutual Corp. | 3,005 | 23 | ||||||||||
Bank of Marin Bancorp | 35 | 2 | ||||||||||
Beneficial Bancorp, Inc. (a) | 2,592 | 33 | ||||||||||
Berkshire Hills Bancorp, Inc. | 2,089 | 56 | ||||||||||
Blackhawk Network Holdings, Inc. (a) | 2,969 | 99 | ||||||||||
BNC Bancorp | 710 | 16 | ||||||||||
BOK Financial Corp. | 3,194 | 200 | ||||||||||
Brookline Bancorp, Inc. | 8,677 | 96 | ||||||||||
Bryn Mawr Bank Corp. | 997 | 29 | ||||||||||
C1 Financial, Inc. (a) | 921 | 21 | ||||||||||
Calamos Asset Management, Inc. ‘A’ | 3,240 | 24 | ||||||||||
Camden National Corp. | 1,222 | 51 | ||||||||||
Capital Bank Financial Corp. ‘A’ | 2,672 | 77 | ||||||||||
Capitol Federal Financial, Inc. | 4,197 | 59 | ||||||||||
Cardtronics, Inc. (a) | 2,835 | 113 | ||||||||||
Cass Information Systems, Inc. | 204 | 11 | ||||||||||
Cathay General Bancorp | 334 | 9 | ||||||||||
Charter Financial Corp. | 1,765 | 23 | ||||||||||
Chemical Financial Corp. | 1,779 | 66 | ||||||||||
Citizens & Northern Corp. | 745 | 15 | ||||||||||
City Holding Co. | 1,537 | 70 | ||||||||||
CNA Financial Corp. | 4,310 | 135 | ||||||||||
Columbia Banking System, Inc. | 584 | 16 | ||||||||||
Community Bank System, Inc. | 1,548 | 64 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 55 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
Community Trust Bancorp, Inc. | 2,291 | $ | 79 | |||||||||
Consumer Portfolio Services, Inc. (a) | 5,056 | 19 | ||||||||||
Cowen Group, Inc. ‘A’ (a) | 8,092 | 24 | ||||||||||
Crawford & Co. ‘B’ | 2,484 | 21 | ||||||||||
Credit Acceptance Corp. (a) | 885 | 164 | ||||||||||
Customers Bancorp, Inc. (a) | 972 | 24 | ||||||||||
Dime Community Bancshares, Inc. | 4,373 | 74 | ||||||||||
Eagle Bancorp, Inc. (a) | 560 | 27 | ||||||||||
eHealth, Inc. (a) | 6,474 | 91 | ||||||||||
Ellie Mae, Inc. (a) | 654 | 60 | ||||||||||
EMC Insurance Group, Inc. | 792 | 22 | ||||||||||
Employers Holdings, Inc. | 5,021 | 146 | ||||||||||
Encore Capital Group, Inc. (a) | 692 | 16 | ||||||||||
Enova International, Inc. (a) | 13,131 | 97 | ||||||||||
Enterprise Financial Services Corp. | 1,357 | 38 | ||||||||||
Evercore Partners, Inc. ‘A’ | 292 | 13 | ||||||||||
Everi Holdings, Inc. (a) | 10,159 | 12 | ||||||||||
FBL Financial Group, Inc. ‘A’ | 2,005 | 122 | ||||||||||
FBR & Co. | 1,789 | 27 | ||||||||||
FCB Financial Holdings, Inc. ‘A’ (a) | 1,364 | 46 | ||||||||||
Federal Agricultural Mortgage Corp. ‘C’ | 515 | 18 | ||||||||||
Fidelity & Guaranty Life | 5,243 | 122 | ||||||||||
Fidelity Southern Corp. | 2,631 | 41 | ||||||||||
Financial Institutions, Inc. | 1,679 | 44 | ||||||||||
First Bancorp | 1,664 | 29 | ||||||||||
First Busey Corp. | 2,773 | 59 | ||||||||||
First Business Financial Services, Inc. | 706 | 17 | ||||||||||
First Commonwealth Financial Corp. | 6,128 | 56 | ||||||||||
First Community Bancshares, Inc. | 1,829 | 41 | ||||||||||
First Connecticut Bancorp, Inc. | 1,446 | 24 | ||||||||||
First Defiance Financial Corp. | 1,350 | 52 | ||||||||||
First Financial Bancorp | 8,181 | 159 | ||||||||||
First Financial Bankshares, Inc. | 580 | 19 | ||||||||||
First Financial Corp. | 2,071 | 76 | ||||||||||
First Interstate BancSystem, Inc. ‘A’ | 1,662 | 47 | ||||||||||
First Midwest Bancorp, Inc. | 1,397 | 25 | ||||||||||
First NBC Bank Holding Co. (a) | 820 | 14 | ||||||||||
First of Long Island Corp. | 982 | 28 | ||||||||||
Flagstar Bancorp, Inc. (a) | 1,399 | 34 | ||||||||||
Flushing Financial Corp. | 4,312 | 86 | ||||||||||
FNB Corp. | 1,954 | 24 | ||||||||||
Forestar Group, Inc. (a) | 3,040 | 36 | ||||||||||
Forrester Research, Inc. | 638 | 23 | ||||||||||
Fulton Financial Corp. | 1,070 | 14 | ||||||||||
GAIN Capital Holdings, Inc. | 4,716 | 30 | ||||||||||
German American Bancorp, Inc. | 593 | 19 | ||||||||||
Great Southern Bancorp, Inc. | 1,485 | 55 | ||||||||||
Great Western Bancorp, Inc. | 3,713 | 117 | ||||||||||
Greenhill & Co., Inc. | 3,115 | 50 | ||||||||||
GSV Capital Corp. | 3,952 | 20 | ||||||||||
Hackett Group, Inc. | 2,236 | 31 | ||||||||||
Hancock Holding Co. | 1,599 | 42 | ||||||||||
Heartland Financial USA, Inc. | 1,497 | 53 | ||||||||||
Heritage Financial Corp. | 1,841 | 32 | ||||||||||
Heritage Insurance Holdings, Inc. | 1,428 | 17 | ||||||||||
HFF, Inc. ‘A’ | 1,518 | 44 | ||||||||||
Hilltop Holdings, Inc. (a) | 6,131 | 129 | ||||||||||
HomeStreet, Inc. (a) | 2,410 | 48 | ||||||||||
HomeTrust Bancshares, Inc. (a) | 2,190 | 40 | ||||||||||
Horace Mann Educators Corp. | 694 | 23 | ||||||||||
Horizon Bancorp | 1,141 | 29 | ||||||||||
Houlihan Lokey, Inc. | 968 | 22 | ||||||||||
IBERIABANK Corp. | 244 | 15 | ||||||||||
Independent Bank Corp. | 657 | 30 |
SHARES | MARKET VALUE (000S) | |||||||||||
Independent Bank Group, Inc. | 495 | $ | 21 | |||||||||
Infinity Property & Casualty Corp. | 1,719 | 139 | ||||||||||
International Bancshares Corp. | 2,198 | 57 | ||||||||||
INTL. FCStone, Inc. (a) | 2,615 | 71 | ||||||||||
Investment Technology Group, Inc. | 2,635 | 44 | ||||||||||
Janus Capital Group, Inc. | 6,513 | 91 | ||||||||||
KCG Holdings, Inc. ‘A’ (a) | 22,295 | 296 | ||||||||||
Lakeland Bancorp, Inc. | 2,678 | 30 | ||||||||||
Lakeland Financial Corp. | 330 | 15 | ||||||||||
LegacyTexas Financial Group, Inc. | 785 | 21 | ||||||||||
LendingTree, Inc. (a) | 260 | 23 | ||||||||||
LPL Financial Holdings, Inc. | 2,436 | 55 | ||||||||||
MainSource Financial Group, Inc. | 1,815 | 40 | ||||||||||
Marlin Business Services Corp. | 2,080 | 34 | ||||||||||
MB Financial, Inc. | 324 | 12 | ||||||||||
MBIA, Inc. (a) | 9,267 | 63 | ||||||||||
Mercury General Corp. | 2,671 | 142 | ||||||||||
Meridian Bancorp, Inc. | 1,763 | 26 | ||||||||||
Meta Financial Group, Inc. | 1,414 | 72 | ||||||||||
MoneyGram International, Inc. (a) | 10,478 | 72 | ||||||||||
Morningstar, Inc. | 1,550 | 127 | ||||||||||
National Bank Holdings Corp. ‘A’ | 5,608 | 114 | ||||||||||
National Bankshares, Inc. | 59 | 2 | ||||||||||
National General Holdings Corp. | 919 | 20 | ||||||||||
National Western Life Group, Inc. ‘A’ | 212 | 41 | ||||||||||
Nationstar Mortgage Holdings, Inc. (a) | 1,396 | 16 | ||||||||||
Navigators Group, Inc. | 932 | 86 | ||||||||||
NBT Bancorp, Inc. | 5,287 | 151 | ||||||||||
Nelnet, Inc. ‘A’ | 5,346 | 186 | ||||||||||
NMI Holdings, Inc. ‘A’ (a) | 5,138 | 28 | ||||||||||
Northfield Bancorp, Inc. | 6,447 | 96 | ||||||||||
Northrim BanCorp, Inc. | 1,035 | 27 | ||||||||||
Northwest Bancshares, Inc. | 12,428 | 184 | ||||||||||
OceanFirst Financial Corp. | 971 | 18 | ||||||||||
Old National Bancorp | 5,021 | 63 | ||||||||||
OneBeacon Insurance Group Ltd. ‘A’ | 6,020 | 83 | ||||||||||
Oppenheimer Holdings, Inc. ‘A’ | 621 | 10 | ||||||||||
Oritani Financial Corp. | 3,506 | 56 | ||||||||||
Pacific Premier Bancorp, Inc. (a) | 1,680 | 40 | ||||||||||
Park National Corp. | 1,260 | 116 | ||||||||||
PennyMac Financial Services, Inc. ‘A’ (a) | 1,300 | 16 | ||||||||||
Pinnacle Financial Partners, Inc. | 1,056 | 52 | ||||||||||
Piper Jaffray Cos. (a) | 1,886 | 71 | ||||||||||
PRA Group, Inc. (a) | 564 | 14 | ||||||||||
Preferred Bank | 591 | 17 | ||||||||||
Primerica, Inc. | 740 | 42 | ||||||||||
ProAssurance Corp. | 500 | 27 | ||||||||||
Provident Financial Services, Inc. | 5,649 | 111 | ||||||||||
RE/MAX Holdings, Inc. ‘A’ | 1,822 | 73 | ||||||||||
Regional Management Corp. (a) | 3,933 | 58 | ||||||||||
Renasant Corp. | 1,078 | 35 | ||||||||||
Republic Bancorp, Inc. ‘A’ | 1,061 | 29 | ||||||||||
RLI Corp. | 1,168 | 80 | ||||||||||
RMR Group, Inc. ‘A’ | 98 | 3 | ||||||||||
S&T Bancorp, Inc. | 888 | 22 | ||||||||||
Safety Insurance Group, Inc. | 1,732 | 107 | ||||||||||
Sandy Spring Bancorp, Inc. | 1,335 | 39 | ||||||||||
Selective Insurance Group, Inc. | 1,535 | 59 | ||||||||||
ServisFirst Bancshares, Inc. | 1,165 | 58 | ||||||||||
Sierra Bancorp | 129 | 2 | ||||||||||
Simmons First National Corp. ‘A’ | 426 | 20 | ||||||||||
South State Corp. | 309 | 21 | ||||||||||
State Bank Financial Corp. | 1,842 | 37 |
SHARES | MARKET VALUE (000S) | |||||||||||
Stewart Information Services Corp. | 894 | $ | 37 | |||||||||
Stock Yards Bancorp, Inc. | 1,059 | 30 | ||||||||||
Stonegate Bank | 836 | 27 | ||||||||||
Suffolk Bancorp | 845 | 26 | ||||||||||
Talmer Bancorp, Inc. ‘A’ | 8,027 | 154 | ||||||||||
TCF Financial Corp. | 5,881 | 74 | ||||||||||
Territorial Bancorp, Inc. | 1,546 | 41 | ||||||||||
Tompkins Financial Corp. | 1,045 | 68 | ||||||||||
Towne Bank | 553 | 12 | ||||||||||
TriCo Bancshares | 605 | 17 | ||||||||||
TriState Capital Holdings, Inc. (a) | 3,098 | 43 | ||||||||||
TrustCo Bank Corp. | 13,385 | 86 | ||||||||||
Union Bankshares Corp. | 593 | 15 | ||||||||||
United Bankshares, Inc. | 685 | 26 | ||||||||||
United Fire Group, Inc. | 1,227 | 52 | ||||||||||
Universal Insurance Holdings, Inc. | 2,104 | 39 | ||||||||||
Univest Corp. of Pennsylvania | 1,904 | 40 | ||||||||||
Valley National Bancorp | 9,495 | 87 | ||||||||||
Waddell & Reed Financial, Inc. | 4,580 | 79 | ||||||||||
Walker & Dunlop, Inc. (a) | 2,099 | 48 | ||||||||||
Washington Trust Bancorp, Inc. | 696 | 26 | ||||||||||
Waterstone Financial, Inc. | 3,532 | 54 | ||||||||||
Westamerica Bancorporation | 2,371 | 117 | ||||||||||
Westwood Holdings Group, Inc. | 385 | 20 | ||||||||||
World Acceptance Corp. (a) | 9,896 | 451 | ||||||||||
WSFS Financial Corp. | 847 | 27 | ||||||||||
Yadkin Financial Corp. | 710 | 18 | ||||||||||
|
| |||||||||||
10,543 | ||||||||||||
|
| |||||||||||
HEALTH CARE 8.1% | ||||||||||||
Abaxis, Inc. | 883 | 42 | ||||||||||
Acceleron Pharma, Inc. (a) | 485 | 16 | ||||||||||
Acorda Therapeutics, Inc. (a) | 2,083 | 53 | ||||||||||
Addus HomeCare Corp. (a) | 594 | 10 | ||||||||||
Adeptus Health, Inc. (a) | 219 | 11 | ||||||||||
Air Methods Corp. (a) | 1,680 | 60 | ||||||||||
Akorn, Inc. (a) | 769 | 22 | ||||||||||
Alliance HealthCare Services, Inc. (a) | 1,410 | 9 | ||||||||||
Almost Family, Inc. (a) | 1,946 | 83 | ||||||||||
AMAG Pharmaceuticals, Inc. (a) | 1,222 | 29 | ||||||||||
Amedisys, Inc. (a) | 6,197 | 313 | ||||||||||
AMN Healthcare Services, Inc. (a) | 2,274 | 91 | ||||||||||
Amphastar Pharmaceuticals, Inc. (a) | 1,363 | 22 | ||||||||||
Analogic Corp. | 1,264 | 100 | ||||||||||
AngioDynamics, Inc. (a) | 6,815 | 98 | ||||||||||
Anika Therapeutics, Inc. (a) | 780 | 42 | ||||||||||
Array BioPharma, Inc. (a) | 3,295 | 12 | ||||||||||
BioScrip, Inc. (a) | 12,765 | 33 | ||||||||||
BioTelemetry, Inc. (a) | 1,423 | 23 | ||||||||||
Bruker Corp. | 7,913 | 180 | ||||||||||
Cambrex Corp. (a) | 2,058 | 106 | ||||||||||
Cantel Medical Corp. | 1,842 | 127 | ||||||||||
Capital Senior Living Corp. (a) | 847 | 15 | ||||||||||
Cardiovascular Systems, Inc. (a) | 484 | 9 | ||||||||||
Chemed Corp. | 1,371 | 187 | ||||||||||
Chimerix, Inc. (a) | 1,250 | 5 | ||||||||||
Civitas Solutions, Inc. (a) | 2,253 | 47 | ||||||||||
CONMED Corp. | 3,694 | 176 | ||||||||||
CorVel Corp. (a) | 358 | 15 | ||||||||||
Cross Country Healthcare, Inc. (a) | 624 | 9 | ||||||||||
Cynosure, Inc. ‘A’ (a) | 1,768 | 86 | ||||||||||
Depomed, Inc. (a) | 3,059 | 60 | ||||||||||
Diplomat Pharmacy, Inc. (a) | 330 | 12 |
56 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
Emergent BioSolutions, Inc. (a) | 3,974 | $ | 112 | |||||||||
Ensign Group, Inc. | 1,471 | 31 | ||||||||||
Exactech, Inc. (a) | 1,752 | 47 | ||||||||||
Exelixis, Inc. (a) | 1,677 | 13 | ||||||||||
Five Star Quality Care, Inc. (a) | 9,172 | 21 | ||||||||||
Genomic Health, Inc. (a) | 987 | 26 | ||||||||||
Globus Medical, Inc. ‘A’ (a) | 5,118 | 122 | ||||||||||
Haemonetics Corp. (a) | 3,809 | 110 | ||||||||||
Halyard Health, Inc. (a) | 2,136 | 69 | ||||||||||
HealthEquity, Inc. (a) | 772 | 23 | ||||||||||
Healthways, Inc. (a) | 5,012 | 58 | ||||||||||
HeartWare International, Inc. (a) | 550 | 32 | ||||||||||
HMS Holdings Corp. (a) | 7,313 | 129 | ||||||||||
ICU Medical, Inc. (a) | 1,175 | 132 | ||||||||||
Impax Laboratories, Inc. (a) | 578 | 17 | ||||||||||
INC Research Holdings, Inc. ‘A’ (a) | 416 | 16 | ||||||||||
Inogen, Inc. (a) | 299 | 15 | ||||||||||
Insulet Corp. (a) | 1,714 | 52 | ||||||||||
Integer Holdings Corp. (a) | 2,069 | 64 | ||||||||||
Integra LifeSciences Holdings Corp. (a) | 3,298 | 263 | ||||||||||
Intrexon Corp. (a) | 396 | 10 | ||||||||||
Invacare Corp. | 6,918 | 84 | ||||||||||
K2M Group Holdings, Inc. (a) | 1,067 | 17 | ||||||||||
Landauer, Inc. | 386 | 16 | ||||||||||
Lannett Co., Inc. (a) | 915 | 22 | ||||||||||
LDR Holding Corp. (a) | 868 | 32 | ||||||||||
LeMaitre Vascular, Inc. | 1,777 | 25 | ||||||||||
LHC Group, Inc. (a) | 1,776 | 77 | ||||||||||
Ligand Pharmaceuticals, Inc. (a) | 654 | 78 | ||||||||||
Luminex Corp. (a) | 2,086 | 42 | ||||||||||
Magellan Health, Inc. (a) | 503 | 33 | ||||||||||
Masimo Corp. (a) | 6,662 | 350 | ||||||||||
Medicines Co. (a) | 3,794 | 128 | ||||||||||
Meridian Bioscience, Inc. | 3,468 | 68 | ||||||||||
Merit Medical Systems, Inc. (a) | 5,650 | 112 | ||||||||||
Molina Healthcare, Inc. (a) | 458 | 23 | ||||||||||
Momenta Pharmaceuticals, Inc. (a) | 505 | 5 | ||||||||||
Myriad Genetics, Inc. (a) | 3,699 | 113 | ||||||||||
National HealthCare Corp. | 755 | 49 | ||||||||||
Natus Medical, Inc. (a) | 2,432 | 92 | ||||||||||
Nektar Therapeutics (a) | 5,123 | 73 | ||||||||||
Neogen Corp. (a) | 1,988 | 112 | ||||||||||
NuVasive, Inc. (a) | 1,650 | 99 | ||||||||||
Nuvectra Corp. (a) | 689 | 5 | ||||||||||
NxStage Medical, Inc. (a) | 2,683 | 58 | ||||||||||
OraSure Technologies, Inc. (a) | 2,054 | 12 | ||||||||||
Owens & Minor, Inc. | 820 | 31 | ||||||||||
Pacira Pharmaceuticals, Inc. (a) | 667 | 22 | ||||||||||
PDL BioPharma, Inc. | 87,340 | 274 | ||||||||||
PharMerica Corp. (a) | 5,110 | 126 | ||||||||||
Phibro Animal Health Corp. ‘A’ | 927 | 17 | ||||||||||
PRA Health Sciences, Inc. (a) | 589 | 25 | ||||||||||
Premier, Inc. ‘A’ (a) | 1,632 | 53 | ||||||||||
Providence Service Corp. (a) | 765 | 34 | ||||||||||
Quidel Corp. (a) | 1,536 | 27 | ||||||||||
RadNet, Inc. (a) | 13,688 | 73 | ||||||||||
Repligen Corp. (a) | 1,587 | 43 | ||||||||||
Rigel Pharmaceuticals, Inc. (a) | 7,648 | 17 | ||||||||||
RTI Surgical, Inc. (a) | 6,556 | 24 | ||||||||||
Sagent Pharmaceuticals, Inc. (a) | 538 | 8 | ||||||||||
SciClone Pharmaceuticals, Inc. (a) | 3,900 | 51 | ||||||||||
Select Medical Holdings Corp. (a) | 25,512 | 277 | ||||||||||
Spectrum Pharmaceuticals, Inc. (a) | 9,374 | 62 | ||||||||||
Surgical Care Affiliates, Inc. (a) | 5,969 | 285 |
SHARES | MARKET VALUE (000S) | |||||||||||
SurModics, Inc. (a) | 2,540 | $ | 60 | |||||||||
U.S. Physical Therapy, Inc. | 554 | 33 | ||||||||||
Universal American Corp. | 10,504 | 80 | ||||||||||
Vascular Solutions, Inc. (a) | 286 | 12 | ||||||||||
VWR Corp. (a) | 1,074 | 31 | ||||||||||
Zeltiq Aesthetics, Inc. (a) | 996 | 27 | ||||||||||
|
| |||||||||||
6,882 | ||||||||||||
|
| |||||||||||
INDUSTRIALS 15.9% | ||||||||||||
AAON, Inc. | 1,340 | 37 | ||||||||||
AAR Corp. | 5,513 | 129 | ||||||||||
ABM Industries, Inc. | 7,596 | 277 | ||||||||||
ACCO Brands Corp. (a) | 16,499 | 170 | ||||||||||
Actuant Corp. ‘A’ | 10,721 | 242 | ||||||||||
Advanced Drainage Systems, Inc. | 2,612 | 71 | ||||||||||
Advisory Board Co. (a) | 1,392 | 49 | ||||||||||
Aegion Corp. (a) | 1,073 | 21 | ||||||||||
Aerovironment, Inc. (a) | 2,194 | 61 | ||||||||||
Air Transport Services Group, Inc. (a) | 8,943 | 116 | ||||||||||
Alamo Group, Inc. | 733 | 48 | ||||||||||
Albany International Corp. ‘A’ | 2,874 | 115 | ||||||||||
Allegiant Travel Co. | 235 | 36 | ||||||||||
Altra Industrial Motion Corp. | 1,985 | 54 | ||||||||||
AMERCO | 90 | 34 | ||||||||||
American Science & Engineering, Inc. | 2,713 | 102 | ||||||||||
American Woodmark Corp. (a) | 324 | 22 | ||||||||||
Apogee Enterprises, Inc. | 1,916 | 89 | ||||||||||
Applied Industrial Technologies, Inc. | 6,884 | 311 | ||||||||||
ARC Document Solutions, Inc. (a) | 6,138 | 24 | ||||||||||
ArcBest Corp. | 516 | 8 | ||||||||||
Astec Industries, Inc. | 1,536 | 86 | ||||||||||
Astronics Corp. (a) | 513 | 17 | ||||||||||
Atlas Air Worldwide Holdings, Inc. (a) | 1,130 | 47 | ||||||||||
AZZ, Inc. | 640 | 38 | ||||||||||
Babcock & Wilcox Enterprises, Inc. (a) | 2,145 | 32 | ||||||||||
Barnes Group, Inc. | 3,487 | 115 | ||||||||||
Barrett Business Services, Inc. | 501 | 21 | ||||||||||
Beacon Roofing Supply, Inc. (a) | 4,323 | 197 | ||||||||||
BMC Stock Holdings, Inc. (a) | 1,309 | 23 | ||||||||||
Brady Corp. ‘A’ | 11,074 | 338 | ||||||||||
Briggs & Stratton Corp. | 10,570 | 224 | ||||||||||
Brink’s Co. | 1,840 | 52 | ||||||||||
Builders FirstSource, Inc. (a) | 2,013 | 23 | ||||||||||
BWX Technologies, Inc. | 2,779 | 99 | ||||||||||
CAI International, Inc. (a) | 5,023 | 38 | ||||||||||
Casella Waste Systems, Inc. ‘A’ (a) | 9,598 | 75 | ||||||||||
CBIZ, Inc. (a) | 10,551 | 110 | ||||||||||
CDI Corp. | 3,591 | 22 | ||||||||||
Chart Industries, Inc. (a) | 9,231 | 223 | ||||||||||
CIRCOR International, Inc. | 384 | 22 | ||||||||||
Clean Harbors, Inc. (a) | 627 | 33 | ||||||||||
Columbus McKinnon Corp. | 2,861 | 40 | ||||||||||
Comfort Systems USA, Inc. | 3,006 | 98 | ||||||||||
Commercial Vehicle Group, Inc. (a) | 2,825 | 15 | ||||||||||
Continental Building Products, Inc. (a) | 906 | 20 | ||||||||||
Covanta Holding Corp. | 2,244 | 37 | ||||||||||
Covenant Transportation Group, Inc. ‘A’ (a) | 982 | 18 | ||||||||||
CRA International, Inc. (a) | 1,825 | 46 | ||||||||||
Cubic Corp. | 2,043 | 82 | ||||||||||
Dorian LPG Ltd. (a) | 1,028 | 7 | ||||||||||
Douglas Dynamics, Inc. | 2,393 | 62 |
SHARES | MARKET VALUE (000S) | |||||||||||
Ducommun, Inc. (a) | 2,465 | $ | 49 | |||||||||
DXP Enterprises, Inc. (a) | 3,449 | 52 | ||||||||||
Dycom Industries, Inc. (a) | 1,608 | 144 | ||||||||||
Dynamic Materials Corp. | 1,204 | 13 | ||||||||||
Eagle Bulk Shipping, Inc. (a) | 835 | 0 | ||||||||||
Echo Global Logistics, Inc. (a) | 1,402 | 31 | ||||||||||
Encore Wire Corp. | 1,218 | 45 | ||||||||||
EnerSys | 433 | 26 | ||||||||||
Ennis, Inc. | 6,257 | 120 | ||||||||||
EnPro Industries, Inc. | 2,534 | 112 | ||||||||||
ESCO Technologies, Inc. | 1,998 | 80 | ||||||||||
Essendant, Inc. | 944 | 29 | ||||||||||
Esterline Technologies Corp. (a) | 715 | 44 | ||||||||||
Exponent, Inc. | 1,273 | 74 | ||||||||||
Forward Air Corp. | 510 | 23 | ||||||||||
Franklin Covey Co. (a) | 758 | 12 | ||||||||||
Franklin Electric Co., Inc. | 499 | 17 | ||||||||||
G&K Services, Inc. ‘A’ | 1,398 | 107 | ||||||||||
GATX Corp. | 1,608 | 71 | ||||||||||
Generac Holdings, Inc. (a) | 990 | 35 | ||||||||||
General Cable Corp. | 4,330 | 55 | ||||||||||
Gibraltar Industries, Inc. (a) | 1,468 | 46 | ||||||||||
Global Brass & Copper Holdings, Inc. | 8,481 | 231 | ||||||||||
GP Strategies Corp. (a) | 418 | 9 | ||||||||||
Granite Construction, Inc. | 1,757 | 80 | ||||||||||
Great Lakes Dredge & Dock Corp. (a) | 10,591 | 46 | ||||||||||
Greenbrier Cos., Inc. | 2,194 | 64 | ||||||||||
Griffon Corp. | 9,487 | 160 | ||||||||||
H&E Equipment Services, Inc. | 7,931 | 151 | ||||||||||
Harsco Corp. | 12,464 | 83 | ||||||||||
Hawaiian Holdings, Inc. (a) | 4,756 | 181 | ||||||||||
Healthcare Services Group, Inc. | 544 | 23 | ||||||||||
Heartland Express, Inc. | 3,417 | 59 | ||||||||||
Heidrick & Struggles International, Inc. | 3,860 | 65 | ||||||||||
Herman Miller, Inc. | 372 | 11 | ||||||||||
Hill International, Inc. (a) | 10,367 | 42 | ||||||||||
Hillenbrand, Inc. | 3,689 | 111 | ||||||||||
HNI Corp. | 2,311 | 107 | ||||||||||
Hornbeck Offshore Services, Inc. (a) | 1,807 | 15 | ||||||||||
Hub Group, Inc. ‘A’ (a) | 677 | 26 | ||||||||||
Hurco Cos., Inc. | 651 | 18 | ||||||||||
Huron Consulting Group, Inc. (a) | 1,429 | 86 | ||||||||||
Hyster-Yale Materials Handling, Inc. | 833 | 50 | ||||||||||
ICF International, Inc. (a) | 2,840 | 116 | ||||||||||
Insperity, Inc. | 1,860 | 144 | ||||||||||
Interface, Inc. | 2,335 | 36 | ||||||||||
John Bean Technologies Corp. | 1,362 | 83 | ||||||||||
Kadant, Inc. | 1,201 | 62 | ||||||||||
Kaman Corp. | 4,718 | 201 | ||||||||||
KBR, Inc. | 1,011 | 13 | ||||||||||
Kelly Services, Inc. ‘A’ | 5,991 | 114 | ||||||||||
Kennametal, Inc. | 2,593 | 57 | ||||||||||
Kforce, Inc. | 4,766 | 81 | ||||||||||
Kimball International, Inc. ‘B’ | 3,960 | 45 | ||||||||||
KLX, Inc. (a) | 1,079 | 33 | ||||||||||
Knight Transportation, Inc. | 3,172 | 84 | ||||||||||
Knoll, Inc. | 4,467 | 108 | ||||||||||
Korn/Ferry International | 5,981 | 124 | ||||||||||
Kratos Defense & Security Solutions, Inc. (a) | 18,645 | 76 | ||||||||||
Layne Christensen Co. (a) | 2,776 | 22 | ||||||||||
LB Foster Co. ‘A’ | 1,260 | 14 | ||||||||||
Lindsay Corp. | 687 | 47 | ||||||||||
LSI Industries, Inc. | 2,743 | 30 |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 57 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund (Cont.)
SHARES | MARKET VALUE (000S) | |||||||||||
Lydall, Inc. (a) | 480 | $ | 19 | |||||||||
Manitowoc Co., Inc. | 1,162 | 6 | ||||||||||
Manitowoc Foodservice, Inc. (a) | 1,162 | 20 | ||||||||||
Marten Transport Ltd. | 2,166 | 43 | ||||||||||
Masonite International Corp. (a) | 199 | 13 | ||||||||||
MasTec, Inc. (a) | 9,561 | 213 | ||||||||||
Matson, Inc. | 2,115 | 68 | ||||||||||
Matthews International Corp. ‘A’ | 2,183 | 121 | ||||||||||
McGrath RentCorp | 5,072 | 155 | ||||||||||
Meritor, Inc. (a) | 2,043 | 15 | ||||||||||
Milacron Holdings Corp. (a) | 1,112 | 16 | ||||||||||
Miller Industries, Inc. | 1,335 | 27 | ||||||||||
Mistras Group, Inc. (a) | 1,665 | 40 | ||||||||||
Mobile Mini, Inc. | 4,104 | 142 | ||||||||||
Moog, Inc. (a) | 516 | 28 | ||||||||||
MSA Safety, Inc. | 481 | 25 | ||||||||||
Mueller Industries, Inc. | 2,149 | 69 | ||||||||||
Multi-Color Corp. | 249 | 16 | ||||||||||
MYR Group, Inc. (a) | 2,051 | 49 | ||||||||||
National Presto Industries, Inc. | 1,202 | 113 | ||||||||||
Navigant Consulting, Inc. (a) | 8,225 | 133 | ||||||||||
Navistar International Corp. (a) | 4,685 | 55 | ||||||||||
Nortek, Inc. (a) | 1,216 | 72 | ||||||||||
On Assignment, Inc. (a) | 419 | 15 | ||||||||||
PAM Transportation Services, Inc. (a) | 410 | 7 | ||||||||||
PGT, Inc. (a) | 942 | 10 | ||||||||||
Ply Gem Holdings, Inc. (a) | 1,709 | 25 | ||||||||||
Powell Industries, Inc. | 545 | 21 | ||||||||||
Primoris Services Corp. | 2,506 | 47 | ||||||||||
Quad/Graphics, Inc. | 6,476 | 151 | ||||||||||
Quanex Building Products Corp. | 2,216 | 41 | ||||||||||
Raven Industries, Inc. | 1,844 | 35 | ||||||||||
RBC Bearings, Inc. (a) | 1,100 | 80 | ||||||||||
Regal Beloit Corp. | 645 | 36 | ||||||||||
Resources Connection, Inc. | 8,695 | 129 | ||||||||||
Rexnord Corp. (a) | 856 | 17 | ||||||||||
Roadrunner Transportation Systems, Inc. (a) | 2,687 | 20 | ||||||||||
RPX Corp. (a) | 6,117 | 56 | ||||||||||
Rush Enterprises, Inc. ‘A’ (a) | 5,824 | 126 | ||||||||||
Saia, Inc. (a) | 1,476 | 37 | ||||||||||
Simpson Manufacturing Co., Inc. | 3,002 | 120 | ||||||||||
SkyWest, Inc. | 4,240 | 112 | ||||||||||
SPX Corp. | 10,300 | 153 | ||||||||||
SPX FLOW, Inc. (a) | 3,080 | 80 | ||||||||||
Standex International Corp. | 255 | 21 | ||||||||||
Steelcase, Inc. ‘A’ | 10,223 | 139 | ||||||||||
Sun Hydraulics Corp. | 725 | 22 | ||||||||||
Swift Transportation Co. (a) | 2,174 | 34 | ||||||||||
TAL International Group, Inc. | 16,645 | 223 | ||||||||||
TASER International, Inc. (a) | 2,647 | 66 | ||||||||||
Team, Inc. (a) | 1,367 | 34 | ||||||||||
Tennant Co. | 559 | 30 | ||||||||||
Terex Corp. | 2,544 | 52 | ||||||||||
Tetra Tech, Inc. | 2,006 | 62 | ||||||||||
Textainer Group Holdings Ltd. | 1,850 | 21 | ||||||||||
Tidewater, Inc. | 13,512 | 60 | ||||||||||
Titan International, Inc. | 16,027 | 99 | ||||||||||
Titan Machinery, Inc. (a) | 2,031 | 23 | ||||||||||
TransUnion (a) | 473 | 16 | ||||||||||
TriMas Corp. (a) | 5,462 | 98 | ||||||||||
TriNet Group, Inc. (a) | 1,112 | 23 | ||||||||||
Triumph Group, Inc. | 1,919 | 68 | ||||||||||
TrueBlue, Inc. (a) | 925 | 18 | ||||||||||
Tutor Perini Corp. (a) | 3,589 | 85 |
SHARES | MARKET VALUE (000S) | |||||||||||
U.S. Ecology, Inc. | 575 | $ | 26 | |||||||||
UniFirst Corp. | 677 | 78 | ||||||||||
Universal Forest Products, Inc. | 1,339 | 124 | ||||||||||
USA Truck, Inc. (a) | 2,081 | 36 | ||||||||||
Veritiv Corp. (a) | 2,283 | 86 | ||||||||||
Viad Corp. | 581 | 18 | ||||||||||
Vicor Corp. (a) | 1,303 | 13 | ||||||||||
Virgin America, Inc. (a) | 267 | 15 | ||||||||||
Watts Water Technologies, Inc. ‘A” | 2,510 | 146 | ||||||||||
Werner Enterprises, Inc. | 8,280 | 190 | ||||||||||
Wesco Aircraft Holdings, Inc. (a) | 7,906 | 106 | ||||||||||
WESCO International, Inc. (a) | 889 | 46 | ||||||||||
Xerium Technologies, Inc. (a) | 2,686 | 17 | ||||||||||
YRC Worldwide, Inc. (a) | 1,635 | 14 | ||||||||||
|
| |||||||||||
13,454 | ||||||||||||
|
| |||||||||||
INFORMATION TECHNOLOGY 17.0% | ||||||||||||
2U, Inc. (a) | 357 | 10 | ||||||||||
3D Systems Corp. (a) | 1,874 | 26 | ||||||||||
A10 Networks, Inc. (a) | 2,424 | 16 | ||||||||||
ACI Worldwide, Inc. (a) | 1,000 | 20 | ||||||||||
Actua Corp. (a) | 1,746 | 16 | ||||||||||
Acxiom Corp. (a) | 6,772 | 149 | ||||||||||
ADTRAN, Inc. | 17,231 | 321 | ||||||||||
Advanced Energy Industries, Inc. (a) | 2,602 | 99 | ||||||||||
Alpha & Omega Semiconductor Ltd. (a) | 1,644 | 23 | ||||||||||
American Software, Inc. ‘A’ | 1,649 | 17 | ||||||||||
Amkor Technology, Inc. (a) | 36,571 | 210 | ||||||||||
Applied Micro Circuits Corp. (a) | 2,542 | 16 | ||||||||||
Avid Technology, Inc. (a) | 16,005 | 93 | ||||||||||
AVX Corp. | 8,268 | 112 | ||||||||||
Axcelis Technologies, Inc. (a) | 5,822 | 16 | ||||||||||
Bankrate, Inc. (a) | 7,858 | 59 | ||||||||||
Bel Fuse, Inc. ‘B’ | 1,137 | 20 | ||||||||||
Belden, Inc. | 886 | 53 | ||||||||||
Benchmark Electronics, Inc. (a) | 11,377 | 241 | ||||||||||
Black Box Corp. | 3,714 | 49 | ||||||||||
Blackbaud, Inc. | 441 | 30 | ||||||||||
Blucora, Inc. (a) | 10,462 | 108 | ||||||||||
Bottomline Technologies de, Inc. (a) | 353 | 8 | ||||||||||
Brooks Automation, Inc. | 6,637 | 74 | ||||||||||
Cabot Microelectronics Corp. | 5,725 | 242 | ||||||||||
CACI International, Inc. ‘A’ (a) | 445 | 40 | ||||||||||
CalAmp Corp. (a) | 909 | 13 | ||||||||||
Calix, Inc. (a) | 7,095 | 49 | ||||||||||
Callidus Software, Inc. (a) | 676 | 14 | ||||||||||
CEVA, Inc. (a) | 758 | 21 | ||||||||||
Ciber, Inc. (a) | 11,446 | 17 | ||||||||||
Ciena Corp. (a) | 1,928 | 36 | ||||||||||
Cirrus Logic, Inc. (a) | 7,266 | 282 | ||||||||||
Coherent, Inc. (a) | 2,354 | 216 | ||||||||||
Cohu, Inc. | 2,777 | 30 | ||||||||||
CommVault Systems, Inc. (a) | 1,860 | 80 | ||||||||||
Computer Programs & Systems, Inc. | 978 | 39 | ||||||||||
comScore, Inc. (a) | 1,526 | 36 | ||||||||||
Comtech Telecommunications Corp. | 5,139 | 66 | ||||||||||
Control4 Corp. (a) | 2,285 | 19 | ||||||||||
Cray, Inc. (a) | 1,118 | 33 | ||||||||||
Cree, Inc. (a) | 2,125 | 52 | ||||||||||
CSG Systems International, Inc. | 5,024 | 203 | ||||||||||
CTS Corp. | 983 | 18 | ||||||||||
Cypress Semiconductor Corp. | 2,015 | 21 | ||||||||||
Daktronics, Inc. | 5,753 | 36 |
SHARES | MARKET VALUE (000S) | |||||||||||
Datalink Corp. (a) | 4,743 | $ | 36 | |||||||||
DHI Group, Inc. (a) | 11,733 | 73 | ||||||||||
Diebold, Inc. | 3,635 | 90 | ||||||||||
Digi International, Inc. (a) | 3,309 | 36 | ||||||||||
Digimarc Corp. (a) | 293 | 9 | ||||||||||
DigitalGlobe, Inc. (a) | 3,150 | 67 | ||||||||||
Diodes, Inc. (a) | 6,546 | 123 | ||||||||||
Dolby Laboratories, Inc. ‘A’ | 5,635 | 270 | ||||||||||
DSP Group, Inc. (a) | 3,024 | 32 | ||||||||||
DTS, Inc. (a) | 431 | 11 | ||||||||||
EarthLink Holdings Corp. | 51,177 | 328 | ||||||||||
Eastman Kodak Co. (a) | 1,765 | 28 | ||||||||||
Ebix, Inc. | 3,202 | 153 | ||||||||||
Electro Rent Corp. | 3,393 | 52 | ||||||||||
Electro Scientific Industries, Inc. (a) | 1,240 | 7 | ||||||||||
Electronics For Imaging, Inc. (a) | 3,182 | 137 | ||||||||||
Energizer Holdings, Inc. | 1,296 | 67 | ||||||||||
Engility Holdings, Inc. (a) | 631 | 13 | ||||||||||
Entegris, Inc. (a) | 9,236 | 134 | ||||||||||
Epiq Systems, Inc. | 4,421 | 65 | ||||||||||
ePlus, Inc. (a) | 742 | 61 | ||||||||||
ExlService Holdings, Inc. (a) | 3,152 | 165 | ||||||||||
Extreme Networks, Inc. (a) | 35,765 | 121 | ||||||||||
Fairchild Semiconductor International, Inc. (a) | 5,572 | 111 | ||||||||||
FARO Technologies, Inc. (a) | 1,741 | 59 | ||||||||||
Finisar Corp. (a) | 5,472 | 96 | ||||||||||
FormFactor, Inc. (a) | 1,563 | 14 | ||||||||||
Harmonic, Inc. (a) | 22,038 | 63 | ||||||||||
HC2 Holdings, Inc. (a) | 6,481 | 28 | ||||||||||
II-VI, Inc. (a) | 5,811 | 109 | ||||||||||
Infoblox, Inc. (a) | 1,213 | 23 | ||||||||||
InnerWorkings, Inc. (a) | 2,647 | 22 | ||||||||||
Inovalon Holdings, Inc. ‘A’ (a) | 857 | 15 | ||||||||||
Insight Enterprises, Inc. (a) | 8,892 | 231 | ||||||||||
Interactive Intelligence Group, Inc. (a) | 1,048 | 43 | ||||||||||
InterDigital, Inc. | 5,624 | 313 | ||||||||||
Internap Corp. (a) | 6,582 | 14 | ||||||||||
Intersil Corp. ‘A’ | 22,271 | 302 | ||||||||||
Intralinks Holdings, Inc. (a) | 9,505 | 62 | ||||||||||
Itron, Inc. (a) | 4,849 | 209 | ||||||||||
Ixia (a) | 13,267 | 130 | ||||||||||
IXYS Corp. | 3,273 | 34 | ||||||||||
KEYW Holding Corp. (a) | 4,732 | 47 | ||||||||||
Knowles Corp. (a) | 1,898 | 26 | ||||||||||
Lattice Semiconductor Corp. (a) | 10,542 | 56 | ||||||||||
Limelight Networks, Inc. (a) | 13,914 | 21 | ||||||||||
Lionbridge Technologies, Inc. (a) | 5,175 | 20 | ||||||||||
Liquidity Services, Inc. (a) | 14,075 | 110 | ||||||||||
Littelfuse, Inc. | 708 | 84 | ||||||||||
LivePerson, Inc. (a) | 3,732 | 24 | ||||||||||
LogMeIn, Inc. (a) | 1,078 | 68 | ||||||||||
Lumentum Holdings, Inc. (a) | 575 | 14 | ||||||||||
MACOM Technology Solutions Holdings, Inc. (a) | 1,063 | 35 | ||||||||||
ManTech International Corp. ‘A’ | 6,470 | 245 | ||||||||||
Maxwell Technologies, Inc. (a) | 5,780 | 31 | ||||||||||
Mentor Graphics Corp. | 701 | 15 | ||||||||||
Methode Electronics, Inc. | 935 | 32 | ||||||||||
MicroStrategy, Inc. ‘A’ (a) | 564 | 99 | ||||||||||
MKS Instruments, Inc. | 4,430 | 191 | ||||||||||
Monolithic Power Systems, Inc. | 309 | 21 | ||||||||||
Monotype Imaging Holdings, Inc. | 1,582 | 39 | ||||||||||
MTS Systems Corp. | 1,914 | 84 |
58 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
Multi-Fineline Electronix, Inc. (a) | 3,122 | $ | 72 | |||||||||
Nanometrics, Inc. (a) | 461 | 10 | ||||||||||
NETGEAR, Inc. (a) | 8,241 | 392 | ||||||||||
NetScout Systems, Inc. (a) | 1,459 | 32 | ||||||||||
NeuStar, Inc. ‘A’ (a) | 645 | 15 | ||||||||||
NIC, Inc. | 3,522 | 77 | ||||||||||
Novanta, Inc. (a) | 2,570 | 39 | ||||||||||
Omnicell, Inc. (a) | 2,167 | 74 | ||||||||||
OSI Systems, Inc. (a) | 1,648 | 96 | ||||||||||
Park Electrochemical Corp. | 2,725 | 40 | ||||||||||
PC Connection, Inc. | 1,986 | 47 | ||||||||||
Pegasystems, Inc. | 2,058 | 55 | ||||||||||
Perficient, Inc. (a) | 1,550 | 31 | ||||||||||
Photronics, Inc. (a) | 13,170 | 117 | ||||||||||
Plantronics, Inc. | 3,108 | 137 | ||||||||||
Plexus Corp. (a) | 4,096 | 177 | ||||||||||
Polycom, Inc. (a) | 2,958 | 33 | ||||||||||
Power Integrations, Inc. | 913 | 46 | ||||||||||
Progress Software Corp. (a) | 12,643 | 347 | ||||||||||
QLogic Corp. (a) | 8,166 | 120 | ||||||||||
Quality Systems, Inc. | 11,126 | 133 | ||||||||||
Qualys, Inc. (a) | 950 | 28 | ||||||||||
Quantum Corp. (a) | 31,595 | 13 | ||||||||||
QuinStreet, Inc. (a) | 4,935 | 18 | ||||||||||
Rackspace Hosting, Inc. (a) | 1,788 | 37 | ||||||||||
Rambus, Inc. (a) | 2,346 | 28 | ||||||||||
RealNetworks, Inc. (a) | 5,104 | 22 | ||||||||||
RealPage, Inc. (a) | 1,557 | 35 | ||||||||||
RetailMeNot, Inc. (a) | 8,286 | 64 | ||||||||||
RingCentral, Inc. ‘A’ (a) | 1,863 | 37 | ||||||||||
Rofin-Sinar Technologies, Inc. (a) | 2,431 | 78 | ||||||||||
Rogers Corp. (a) | 1,160 | 71 | ||||||||||
Rovi Corp. (a) | 7,501 | 117 | ||||||||||
Rudolph Technologies, Inc. (a) | 3,031 | 47 | ||||||||||
Sanmina Corp. (a) | 4,680 | 125 | ||||||||||
ScanSource, Inc. (a) | 4,008 | 149 | ||||||||||
Science Applications International Corp. | 3,270 | 191 | ||||||||||
Seachange International, Inc. (a) | 7,810 | 25 | ||||||||||
Semtech Corp. (a) | 4,435 | 106 | ||||||||||
ShoreTel, Inc. (a) | 4,749 | 32 | ||||||||||
Shutterstock, Inc. (a) | 492 | 23 | ||||||||||
Sigma Designs, Inc. (a) | 7,656 | 49 | ||||||||||
Silicon Graphics International Corp. (a) | 9,646 | 49 | ||||||||||
Silicon Laboratories, Inc. (a) | 2,221 | 108 | ||||||||||
Sonus Networks, Inc. (a) | 10,969 | 95 | ||||||||||
Stamps.com, Inc. (a) | 388 | 34 | ||||||||||
Stratasys Ltd. (a) | 777 | 18 | ||||||||||
SunEdison Semiconductor Ltd. (a) | 9,932 | 59 | ||||||||||
Super Micro Computer, Inc. (a) | 1,352 | 34 | ||||||||||
Sykes Enterprises, Inc. (a) | 8,409 | 244 | ||||||||||
Synchronoss Technologies, Inc. (a) | 1,558 | 50 | ||||||||||
Syntel, Inc. (a) | 875 | 40 | ||||||||||
Take-Two Interactive Software, Inc. (a) | 475 | 18 | ||||||||||
Tangoe, Inc. (a) | 2,310 | 18 | ||||||||||
TechTarget, Inc. (a) | 2,152 | 17 | ||||||||||
Telenav, Inc. (a) | 4,458 | 23 | ||||||||||
TeleTech Holdings, Inc. | 3,528 | 96 | ||||||||||
TESSCO Technologies, Inc. | 1,446 | 20 | ||||||||||
Tessera Technologies, Inc. | 1,568 | 48 | ||||||||||
TiVo, Inc. (a) | 6,848 | 68 | ||||||||||
TTM Technologies, Inc. (a) | 26,005 | 196 | ||||||||||
Ultra Clean Holdings, Inc. (a) | 5,694 | 32 | ||||||||||
Unisys Corp. (a) | 7,160 | 52 | ||||||||||
United Online, Inc. (a) | 4,901 | 54 |
SHARES | MARKET VALUE (000S) | |||||||||||
VASCO Data Security International, Inc. (a) | 1,068 | $ | 17 | |||||||||
Veeco Instruments, Inc. (a) | 2,007 | 33 | ||||||||||
Veeva Systems, Inc. ‘A’ (a) | 2,166 | 74 | ||||||||||
Viavi Solutions, Inc. (a) | 15,743 | 104 | ||||||||||
Virtusa Corp. (a) | 398 | 11 | ||||||||||
Vishay Intertechnology, Inc. | 5,828 | 72 | ||||||||||
Vishay Precision Group, Inc. (a) | 1,678 | 23 | ||||||||||
Web.com Group, Inc. (a) | 1,660 | 30 | ||||||||||
WebMD Health Corp. (a) | 6,270 | 364 | ||||||||||
West Corp. | 5,401 | 106 | ||||||||||
Xcerra Corp. (a) | 3,071 | 18 | ||||||||||
XO Group, Inc. (a) | 2,769 | 48 | ||||||||||
Xura, Inc. (a) | 3,330 | 81 | ||||||||||
Zedge, Inc. ‘B’ (a) | 669 | 3 | ||||||||||
Zix Corp. (a) | 3,937 | 15 | ||||||||||
Zynga, Inc. ‘A’ (a) | 13,824 | 34 | ||||||||||
|
| |||||||||||
14,358 | ||||||||||||
|
| |||||||||||
MATERIALS 5.2% | ||||||||||||
A Schulman, Inc. | 3,966 | 97 | ||||||||||
AEP Industries, Inc. | 905 | 73 | ||||||||||
AK Steel Holding Corp. (a) | 9,103 | 42 | ||||||||||
Allegheny Technologies, Inc. | 3,562 | 45 | ||||||||||
American Vanguard Corp. | 4,849 | 73 | ||||||||||
Ampco-Pittsburgh Corp. | 1,614 | 18 | ||||||||||
Axiall Corp. | 1,679 | 55 | ||||||||||
Balchem Corp. | 885 | 53 | ||||||||||
Boise Cascade Co. (a) | 2,406 | 55 | ||||||||||
Calgon Carbon Corp. | 2,913 | 38 | ||||||||||
Carpenter Technology Corp. | 4,068 | 134 | ||||||||||
Century Aluminum Co. (a) | 2,210 | 14 | ||||||||||
Chemtura Corp. (a) | 3,739 | 99 | ||||||||||
Clearwater Paper Corp. (a) | 2,291 | 150 | ||||||||||
Cliffs Natural Resources, Inc. (a) | 15,533 | 88 | ||||||||||
Coeur Mining, Inc. (a) | 8,376 | 89 | ||||||||||
Commercial Metals Co. | 2,302 | 39 | ||||||||||
Core Molding Technologies, Inc. (a) | 1,960 | 27 | ||||||||||
Greif, Inc. ‘A’ | 4,108 | 153 | ||||||||||
Hawkins, Inc. | 648 | 28 | ||||||||||
Haynes International, Inc. | 700 | 22 | ||||||||||
HB Fuller Co. | 2,991 | 132 | ||||||||||
Headwaters, Inc. (a) | 2,401 | 43 | ||||||||||
Hecla Mining Co. | 6,546 | 33 | ||||||||||
Innophos Holdings, Inc. | 4,669 | 197 | ||||||||||
Innospec, Inc. | 1,537 | 71 | ||||||||||
Intrepid Potash, Inc. (a) | 5,885 | 9 | ||||||||||
Kaiser Aluminum Corp. | 2,674 | 242 | ||||||||||
KapStone Paper and Packaging Corp. | 2,254 | 29 | ||||||||||
Koppers Holdings, Inc. (a) | 5,788 | 178 | ||||||||||
Kraton Performance Polymers, Inc. (a) | 4,611 | 129 | ||||||||||
Louisiana-Pacific Corp. (a) | 2,344 | 41 | ||||||||||
LSB Industries, Inc. (a) | 1,136 | 14 | ||||||||||
Materion Corp. | 2,406 | 60 | ||||||||||
Minerals Technologies, Inc. | 1,643 | 93 | ||||||||||
Myers Industries, Inc. | 4,943 | 71 | ||||||||||
Neenah Paper, Inc. | 1,041 | 75 | ||||||||||
Olympic Steel, Inc. | 351 | 10 | ||||||||||
OMNOVA Solutions, Inc. (a) | 5,868 | 43 | ||||||||||
PH Glatfelter Co. | 3,970 | 78 | ||||||||||
Platform Specialty Products Corp. (a) | 12,762 | 113 | ||||||||||
Quaker Chemical Corp. | 446 | 40 | ||||||||||
Rayonier Advanced Materials, Inc. | 2,148 | 29 | ||||||||||
Royal Gold, Inc. | 337 | 24 |
SHARES | MARKET VALUE (000S) | |||||||||||
Ryerson Holding Corp. (a) | 4,606 | $ | 81 | |||||||||
Schnitzer Steel Industries, Inc. ‘A’ | 5,741 | 101 | ||||||||||
Schweitzer-Mauduit International, Inc. | 2,989 | 105 | ||||||||||
Stepan Co. | 2,371 | 141 | ||||||||||
Stillwater Mining Co. (a) | 2,222 | 26 | ||||||||||
Summit Materials, Inc. ‘A’ (a) | 2,315 | 47 | ||||||||||
TimkenSteel Corp. | 6,338 | 61 | ||||||||||
Tredegar Corp. | 2,047 | 33 | ||||||||||
Trinseo S.A. (a) | 1,990 | 85 | ||||||||||
Tronox Ltd. ‘A’ | 46,751 | 206 | ||||||||||
U.S. Concrete, Inc. (a) | 417 | 25 | ||||||||||
Univar, Inc. (a) | 5,819 | 110 | ||||||||||
Westlake Chemical Corp. | 641 | 28 | ||||||||||
Worthington Industries, Inc. | 4,458 | 189 | ||||||||||
|
| |||||||||||
4,384 | ||||||||||||
|
| |||||||||||
TELECOMMUNICATION SERVICES 2.3% | ||||||||||||
ATN International, Inc. | 703 | 55 | ||||||||||
Boingo Wireless, Inc. (a) | 1,156 | 10 | ||||||||||
Cogent Communications Holdings, Inc. | 1,653 | 66 | ||||||||||
Consolidated Communications Holdings, Inc. | 8,893 | 242 | ||||||||||
FairPoint Communications, Inc. (a) | 4,561 | 67 | ||||||||||
General Communication, Inc. ‘A’ (a) | 9,505 | 150 | ||||||||||
Hawaiian Telcom Holdco, Inc. (a) | 1,323 | 28 | ||||||||||
IDT Corp. ‘B’ | 2,006 | 29 | ||||||||||
Inteliquent, Inc. | 6,340 | 126 | ||||||||||
Iridium Communications, Inc. (a) | 34,952 | 310 | ||||||||||
Lumos Networks Corp. (a) | 2,001 | 24 | ||||||||||
RigNet, Inc. (a) | 928 | 13 | ||||||||||
Shenandoah Telecommunications Co. | 3,557 | 139 | ||||||||||
Spok Holdings, Inc. | 3,721 | 71 | ||||||||||
U.S. Cellular Corp. (a) | 3,290 | 129 | ||||||||||
Vonage Holdings Corp. (a) | 53,899 | 329 | ||||||||||
Windstream Holdings, Inc. | 14,449 | 134 | ||||||||||
|
| |||||||||||
1,922 | ||||||||||||
|
| |||||||||||
UTILITIES 2.6% | ||||||||||||
ALLETE, Inc. | 246 | 16 | ||||||||||
Ameresco, Inc. ‘A’ (a) | 2,000 | 9 | ||||||||||
American States Water Co. | 4,401 | 193 | ||||||||||
Artesian Resources Corp. ‘A’ | 475 | 16 | ||||||||||
Avista Corp. | 1,191 | 53 | ||||||||||
California Water Service Group | 7,463 | 261 | ||||||||||
Chesapeake Utilities Corp. | 971 | 64 | ||||||||||
Connecticut Water Service, Inc. | 686 | 39 | ||||||||||
Dynegy, Inc. (a) | 2,283 | 39 | ||||||||||
Empire District Electric Co. | 10,407 | 354 | ||||||||||
EnerNOC, Inc. (a) | 7,586 | 48 | ||||||||||
MGE Energy, Inc. | 3,052 | 172 | ||||||||||
Middlesex Water Co. | 1,391 | 60 | ||||||||||
Northwest Natural Gas Co. | 5,973 | 387 | ||||||||||
Otter Tail Corp. | 4,546 | 152 | ||||||||||
PNM Resources, Inc. | 2,159 | 77 | ||||||||||
SJW Corp. | 2,285 | 90 | ||||||||||
South Jersey Industries, Inc. | 537 | 17 | ||||||||||
Spark Energy, Inc.‘A’ | 450 | 15 | ||||||||||
Unitil Corp. | 3,266 | 139 | ||||||||||
York Water Co. | 589 | 19 | ||||||||||
|
| |||||||||||
2,220 | ||||||||||||
|
| |||||||||||
Total United States | 78,468 | |||||||||||
|
| |||||||||||
Total Common Stocks (Cost $68,423) |
| 78,509 | ||||||||||
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 59 |
Table of Contents
Schedule of Investments PIMCO RAE Fundamental US Small Fund (Cont.)
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
REAL ESTATE INVESTMENT TRUSTS 6.6% | ||||||||||||
UNITED STATES 6.6% | ||||||||||||
FINANCIALS 6.6% | ||||||||||||
AG Mortgage Investment Trust, Inc. | 5,356 | $ | 77 | |||||||||
Agree Realty Corp. | 1,006 | 49 | ||||||||||
American Assets Trust, Inc. | 1,120 | 48 | ||||||||||
American Capital Mortgage Investment Corp. | 10,906 | 172 | ||||||||||
Anworth Mortgage Asset Corp. | 38,997 | 183 | ||||||||||
Apollo Commercial Real Estate Finance, Inc. | 3,133 | 50 | ||||||||||
Apollo Residential Mortgage, Inc. | 5,700 | 76 | ||||||||||
Ares Commercial Real Estate Corp. | 1,261 | 15 | ||||||||||
Armada Hoffler Properties, Inc. | 1,887 | 26 | ||||||||||
ARMOUR Residential REIT, Inc. | 6,787 | 136 | ||||||||||
Ashford Hospitality Prime, Inc. | 1,807 | 26 | ||||||||||
Ashford Hospitality Trust, Inc. | 9,583 | 51 | ||||||||||
Brandywine Realty Trust | 4,582 | 77 | ||||||||||
Capstead Mortgage Corp. | 20,016 | 194 | ||||||||||
Care Capital Properties, Inc. | 1,568 | 41 | ||||||||||
CBL & Associates Properties, Inc. | 10,001 | 93 | ||||||||||
Cedar Realty Trust, Inc. | 4,441 | 33 | ||||||||||
Chatham Lodging Trust | 461 | 10 | ||||||||||
Chesapeake Lodging Trust | 995 | 23 | ||||||||||
Colony Capital, Inc. ‘A’ | 2,511 | 39 | ||||||||||
Colony Starwood Homes | 1,175 | 36 | ||||||||||
Columbia Property Trust, Inc. | 3,561 | 76 | ||||||||||
CoreSite Realty Corp. | 1,350 | 120 | ||||||||||
Corporate Office Properties Trust | 1,916 | 57 | ||||||||||
Cousins Properties, Inc. | 1,398 | 15 | ||||||||||
CyrusOne, Inc. | 1,237 | 69 | ||||||||||
CYS Investments, Inc. | 22,348 | 187 | ||||||||||
DiamondRock Hospitality Co. | 5,347 | 48 | ||||||||||
DuPont Fabros Technology, Inc. | 3,808 | 181 | ||||||||||
Dynex Capital, Inc. | 16,519 | 115 | ||||||||||
EastGroup Properties, Inc. | 650 | 45 |
SHARES | MARKET VALUE (000S) | |||||||||||
Equity One, Inc. | 1,880 | $ | 60 | |||||||||
First Potomac Realty Trust | 5,743 | 53 | ||||||||||
Franklin Street Properties Corp. | 9,991 | 123 | ||||||||||
Getty Realty Corp. | 1,851 | 40 | ||||||||||
Gladstone Commercial Corp. | 1,856 | 31 | ||||||||||
Global Net Lease, Inc. | 1,830 | 15 | ||||||||||
Government Properties Income Trust | 5,427 | 125 | ||||||||||
Gramercy Property Trust | 7,605 | 70 | ||||||||||
Healthcare Realty Trust, Inc. | 2,979 | 104 | ||||||||||
Hersha Hospitality Trust | 846 | 15 | ||||||||||
Invesco Mortgage Capital, Inc. | 4,735 | 65 | ||||||||||
Investors Real Estate Trust | 12,132 | 78 | ||||||||||
LaSalle Hotel Properties | 2,764 | 65 | ||||||||||
Lexington Realty Trust | 15,651 | 158 | ||||||||||
LTC Properties, Inc. | 287 | 15 | ||||||||||
Mack-Cali Realty Corp. | 3,151 | 85 | ||||||||||
MFA Financial, Inc. | 6,762 | 49 | ||||||||||
Monmouth Real Estate Investment Corp. | 2,055 | 27 | ||||||||||
National Storage Affiliates Trust | 915 | 19 | ||||||||||
New Residential Investment Corp. | 6,496 | 90 | ||||||||||
New Senior Investment Group, Inc. | 4,180 | 45 | ||||||||||
NorthStar Realty Finance Corp. | 3,179 | 36 | ||||||||||
Parkway Properties Inc/Md | 862 | 14 | ||||||||||
Pennsylvania Real Estate Investment Trust | 1,720 | 37 | ||||||||||
PennyMac Mortgage Investment Trust | 5,066 | 82 | ||||||||||
Piedmont Office Realty Trust, Inc. ‘A’ | 1,719 | 37 | ||||||||||
Potlatch Corp. | 1,636 | 56 | ||||||||||
Preferred Apartment Communities, Inc. ‘A’ | 1,680 | 25 | ||||||||||
PS Business Parks, Inc. | 850 | 90 | ||||||||||
QTS Realty Trust, Inc. ‘A’ | 1,695 | 95 | ||||||||||
RAIT Financial Trust | 4,782 | 15 | ||||||||||
Ramco-Gershenson Properties Trust | 838 | 16 | ||||||||||
Redwood Trust, Inc. | 15,711 | 217 |
SHARES | MARKET VALUE (000S) | |||||||||||
Resource Capital Corp. | 3,686 | $ | 47 | |||||||||
Retail Opportunity Investments Corp. | 1,439 | 31 | ||||||||||
Rexford Industrial Realty, Inc. | 1,373 | 29 | ||||||||||
RLJ Lodging Trust | 1,634 | 35 | ||||||||||
Rouse Properties, Inc. | 1,207 | 22 | ||||||||||
Ryman Hospitality Properties, Inc. | 4,360 | 221 | ||||||||||
Sabra Health Care REIT, Inc. | 2,134 | 44 | ||||||||||
Select Income REIT | 3,049 | 79 | ||||||||||
Silver Bay Realty Trust Corp. | 1,946 | 33 | ||||||||||
STORE Capital Corp. | 613 | 18 | ||||||||||
Summit Hotel Properties, Inc. | 4,835 | 64 | ||||||||||
Sunstone Hotel Investors, Inc. | 3,547 | 43 | ||||||||||
Tier REIT, Inc. | 2,320 | 36 | ||||||||||
Two Harbors Investment Corp. | 9,460 | 81 | ||||||||||
United Development Funding | 3,661 | 0 | ||||||||||
Urstadt Biddle Properties, Inc. ‘A’ | 1,199 | 30 | ||||||||||
Washington Real Estate Investment Trust | 4,263 | 134 | ||||||||||
Western Asset Mortgage Capital Corp. | 5,278 | 50 | ||||||||||
Winthrop Realty Trust | 1,167 | 10 | ||||||||||
WP Glimcher, Inc. | 7,138 | 80 | ||||||||||
Xenia Hotels & Resorts, Inc. | 3,458 | 58 | ||||||||||
|
| |||||||||||
5,565 | ||||||||||||
|
| |||||||||||
Total Real Estate Investment Trusts (Cost $5,090) | 5,565 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $73,513) | 84,074 | |||||||||||
Total Investments 99.3% (Cost $73,513) | $ | 84,074 | ||||||||||
Other Assets and Liabilities, net 0.7% | 554 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 84,628 | ||||||||||
|
|
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, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value | ||||||||||||||||
Common Stocks | ||||||||||||||||
United Kingdom | ||||||||||||||||
Health Care | $ | 41 | $ | 0 | $ | 0 | $ | 41 | ||||||||
United States | ||||||||||||||||
Consumer Discretionary | 16,553 | 0 | 0 | 16,553 | ||||||||||||
Consumer Staples | 3,456 | 0 | 0 | 3,456 | ||||||||||||
Energy | 4,696 | 0 | 0 | 4,696 | ||||||||||||
Financials | 10,543 | 0 | 0 | 10,543 | ||||||||||||
Health Care | 6,882 | 0 | 0 | 6,882 |
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Industrials | $ | 13,454 | $ | 0 | $ | 0 | $ | 13,454 | ||||||||
Information Technology | 14,358 | 0 | 0 | 14,358 | ||||||||||||
Materials | 4,384 | 0 | 0 | 4,384 | ||||||||||||
Telecommunication Services | 1,922 | 0 | 0 | 1,922 | ||||||||||||
Utilities | 2,220 | 0 | 0 | 2,220 | ||||||||||||
Real Estate Investment Trusts | ||||||||||||||||
United States | ||||||||||||||||
Financials | 5,565 | 0 | 0 | 5,565 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 84,074 | $ | 0 | $ | 0 | $ | 84,074 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
60 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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. 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 are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies are recorded as dividend income. Long-term capital gain distributions received from registered investment companies 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 (see Financial Derivative Instruments, if any). 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.
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(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 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) Dividends and Distributions to Shareholders The following table shows the anticipated frequency of dividends from net investment income, if any, for each Fund.
Declared and Paid Annually: |
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 realized capital gains earned by each Fund, if any, will be distributed no less frequently than once each year.
Income dividends 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. Examples of events that give rise to timing differences include wash sales, straddles and capital loss carryforwards. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. Examples of transactions that may cause character differences include the treatment of paydowns on mortgage-backed securities, swaps, foreign currency transactions and contingent debt instruments. As a result, income dividends 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.
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 financial accounting to tax characterizations of dividend distributions.
(e) New Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”), ASU 2014-11, that expanded secured borrowing accounting for certain repurchase agreements. The ASU also sets forth additional disclosure requirements for certain transactions accounted for as sales in order to provide financial statement users with information to compare to similar transactions accounted for as secured borrowings. The ASU became effective prospectively for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. The Funds have adopted the ASU. The financial statements have been modified to provide enhanced disclosures surrounding secured borrowing transactions, if any. See the Notes to Schedules of Investments for additional details.
In August 2014, the FASB issued 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. At this time, management is evaluating the implications of these changes on the 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. At this time, management is evaluating the implications of these changes on the 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 attributable to that Fund or class, less any liabilities, 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.
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Each Fund reserves the right to change the time 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. 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 or other pricing sources. With respect to any portion of a Fund’s assets that are invested in one or more
open-end management investment companies (other than
exchange-traded funds (“ETFs”)), the Fund’s NAV will be calculated based upon 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 non-U.S. securities. Foreign
(non-U.S.) 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
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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 the 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:
n | Level 1 — Inputs using (unadjusted) quoted prices in active markets or exchanges for identical assets and liabilities. |
n | 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. |
n | 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. |
Any assets or liabilities categorized as Level 1 or 2 as of period end that have been transferred between Levels 1 and 2 since the prior period are due to changes in the method utilized in valuing the investments. Transfers from Level 1 to Level 2 are a result of a change, in the normal course of business, from the use of an exchange traded price or a trade price on the initial purchase date (Level 1) to methods used by Pricing Services including valuation adjustments 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 close of the NYSE (Level 2). 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 timing recognition 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 Schedules 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
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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.
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.
The validity of fair value is reviewed by the Adviser on a periodic basis and may be amended in accordance with the Trust’s valuation procedures.
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 Global Fund and Global ex-US Fund. Each Fund may also invest in the PIMCO Short-Term Floating NAV Portfolio III (“Central Fund”) to the extent permitted by the Act and rules thereunder. The Central Fund is a registered investment company 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 Fund are money market and short maturity fixed income instruments. The Central Fund may incur expenses related to its investment activities, but does not pay Investment Advisory Fees or Supervisory and Administrative Fees to the Adviser. The Central Fund is considered to be affiliated with the Funds. The tables below show the Funds’ transactions in and earnings from investments in these affiliated Funds for the period ended June 30, 2016 (amounts in thousands†):
PIMCO RAE Fundamental Global Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
RAE Fundamental Emerging Markets Fund | $ | 4,767 | $ | 27,862 | $ | (2,813 | ) | $ | (963 | ) | $ | 2121 | $ | 30,974 | $ | 401 | $ | 0 | ||||||||||||||||||
PIMCO RAE Fundamental International Fund | 13,546 | 100,286 | (1,674 | ) | (265 | ) | (5,886 | ) | 106,007 | 642 | 1,284 | |||||||||||||||||||||||||
PIMCO RAE Fundamental U.S. Fund | 19,847 | 138,464 | (13,538 | ) | (413 | ) | 1,543 | 145,903 | 1,284 | 2,600 | ||||||||||||||||||||||||||
Totals | $ | 38,160 | $ | 266,612 | $ | (18,025 | ) | $ | (1,641 | ) | $ | (2,222 | ) | $ | 282,884 | $ | 2,327 | $ | 3,884 |
† | 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. See Note 2(d) in the Notes to Financial Statements for more information. |
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PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
RAE Fundamental Emerging Markets Fund | $ | 18,231 | $ | 1,983 | $ | (3,467 | ) | $ | (969 | ) | $ | (1,504 | ) | $ | 14,274 | $ | 265 | $ | 0 | |||||||||||||||||
PIMCO RAE Fundamental International Fund | 51,806 | 5,586 | (1,772 | ) | (265 | ) | (6,506 | ) | 48,849 | 427 | 853 | |||||||||||||||||||||||||
Totals | $ | 70,037 | $ | 7,569 | $ | (5,239 | ) | $ | (1,234 | ) | $ | (8,010 | ) | $ | 63,123 | $ | 692 | $ | 853 |
† | 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. See Note 2(d) in the Notes to Financial Statements for more information. |
(b) Investments in Securities
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, 2016 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 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
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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 (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 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.
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.
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 (or Acquired Funds) 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 an increase in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by a Fund (or Acquired Funds) 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 (or Acquired Funds) may lose money if these changes are not anticipated by the Fund’s (or Acquired Funds’) management. A Fund (or Acquired Funds) 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
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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.). At present, the U.S. and many parts of the world, including certain European countries, are experiencing near historically low interest rates. 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. 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 (or Acquired Funds) to lose value. If a Fund (or Acquired Funds) lost enough value, the Fund (or Acquired Funds) could face increased shareholder redemptions, which could force the Fund to liquidate investments at disadvantageous times or prices, thereby adversely affecting the Fund.
To the extent that a Fund (or Acquired Fund) may invest in securities and instruments that are economically tied to Russia, the Fund (or Acquired 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 (or Acquired 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 (or Acquired Funds) 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 Acquired Funds), or, in the case of hedging positions, that the Fund’s (or Acquired Funds’) 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 (or Acquired Funds’) investments in foreign
currency-denominated securities may reduce the Fund’s (or Acquired Funds’) returns.
A Fund’s (or Acquired Fund’s) investments in commodity-linked financial derivative instruments may subject the Fund (or Acquired Fund) to greater market price volatility than investments in traditional securities. The value of commodity-linked financial derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments.
Credit and Counterparty Risks A Fund (or Acquired Funds) will be exposed to credit risk to parties with whom it trades and will also bear the risk of settlement default. A Fund (or Acquired Funds) 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 financial derivative instruments traded on exchanges or clearinghouses, the primary credit risk is the creditworthiness of a Fund’s clearing broker or the exchange or clearinghouse itself. A Fund (or Acquired Funds) 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 (or Acquired Funds) may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund (or Acquired Funds) has unsettled or open transactions will default. PIMCO, as the Adviser, minimizes counterparty risks to the Funds (or Acquired 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
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owed to a Fund (or Acquired Funds) exceed a predetermined threshold, such counterparty shall advance collateral to the Fund (or Acquired Funds) in the form of cash or securities equal in value to the unpaid amount owed to the Fund (or Acquired Funds). A Fund (or Acquired Funds) 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 (or Acquired Funds) subsequently decreases, the Fund (or Acquired Funds) 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 (or Acquired Funds) 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.
Master Netting 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 To-Be-Announced 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
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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.
7. 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:
Investment Advisory Fee | Supervisory and Administrative Fee | |||||||||||||||||||||||
Fund Name | All Classes | Institutional Class | Class P | A and C Classes | ||||||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 0.50% | 0.45% | 0.55% | 0.55% | ||||||||||||||||||||
PIMCO RAE Fundamental Global Fund | 0.40% | 0.30% | 0.40% | 0.40% | ||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0.40% | 0.35% | 0.45% | 0.45% | ||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 0.30% | 0.30% | 0.40% | 0.40% | ||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 0.25% | 0.25% | 0.35% | 0.40% | ||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 0.35% | 0.25% | 0.35% | 0.40% |
(c) Distribution and Servicing Fees PIMCO Investments LLC (“PI”), 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, Class C and Class R shares of the Trust pursuant to Rule 12b-1 under the Act. In connection with the distribution of Class C and Class R shares of the Trust, the Distributor receives distribution fees from the Trust of up to 0.75% for Class C shares and 0.25% for Class R shares, and in connection with personal services rendered to Class A, Class C 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,
Class C 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.
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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 set forth 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, 2016, the Distributor retained $184,988 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, which include service fees payable with respect to the Administrative Class 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 PIMCO has agreed to waive a portion of the Funds’ Supervisory and Administrative Fees in each Fund’s first fiscal year, to the extent that the payment of each Fund’s pro rata share of organizational expenses and Trustee Fees cause the actual expense ratio to rise above the rates disclosed in the then-current prospectus plus 0.0049%, the “Expense Limit” (calculated as a percentage of each Fund’s average daily net assets attributable to each class).
PIMCO has contractually agreed to waive a portion of the Investment Advisory Fee as set forth in the following table (calculated as a percentage of each Fund’s average daily net assets).
Fund Name | Fee Waiver | Expiration Date | ||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 0.20% | 10/31/2016 | ||||||||||
PIMCO RAE Fundamental Global Fund | 0.20% | 10/31/2016 | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0.20% | 10/31/2016 | ||||||||||
PIMCO RAE Fundamental International Fund | 0.10% | 10/31/2016 | ||||||||||
PIMCO RAE Fundamental US Fund | 0.10% | 10/31/2016 | ||||||||||
PIMCO RAE Fundamental US Small Fund | 0.10% | 10/31/2016 |
Under the Fee Limitation Agreement, PIMCO is entitled to reimbursement by each Fund of any portion of the Supervisory and Administrative Fee and/or Investment Advisory Fee waived, reduced or reimbursed pursuant to the Fee Limitation Agreement or the Expense Limitation Agreement, respectively (the “Reimbursement Amount”) during the previous three years, provided that such amount paid to PIMCO will not: 1) together with any recoupment of organizational expenses and pro rata Trustees’ fees pursuant to the Expense Limitation Agreement, exceed the Expense Limit; 2) exceed the total Reimbursement Amount; or 3) include any amounts previously reimbursed to PIMCO. The Fee 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.
PIMCO may be reimbursed for these waived amounts in future periods, not to exceed thirty-six months after the waiver. Expenses that have been
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waived may still be reimbursed by the Administrator, to the extent the Fund’s annualized total portfolio operating expenses plus the amount reimbursed does not exceed the Expense Limit. The recoverable amounts to PIMCO at June 30, 2016, were as follows (amounts in thousands):
Fund Name | Recoverable Amounts | |||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 899 | ||||||
PIMCO RAE Fundamental Global Fund | 1,019 | |||||||
PIMCO RAE Fundamental Global ex-US Fund | 568 | |||||||
PIMCO RAE Fundamental International Fund | 257 | |||||||
PIMCO RAE Fundamental US Fund | 577 | |||||||
PIMCO RAE Fundamental US Small Fund | 152 |
(f) Acquired Fund Fees and Expenses The Underlying Fund expenses for the Funds are based upon an allocation of a Fund’s assets among the Underlying Funds and upon the total annual operating expenses of the Institutional Class shares of these Underlying Funds. The Underlying Fund expenses incurred by a Fund will vary with changes in the expenses of the Underlying Funds, as well as the allocation of the Fund’s assets.
PIMCO has contractually agreed, through October 31, 2016, 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 US Fund, PIMCO RAE Fundamental International Fund and PIMCO RAE Fundamental Emerging Markets 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, 2016, 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 International Fund and PIMCO RAE Fundamental Emerging Markets 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, 2016, the Funds below waived the following fees (amounts in thousands):
Fund Name | Waived Fees | |||||||
PIMCO RAE Fundamental Global Fund | $ | 656 | ||||||
PIMCO RAE Fundamental Global ex-US Fund | 346 |
8. RELATED PARTY TRANSACTIONS
The Adviser, Administrator, and Distributor are related parties. Fees payable to these parties are disclosed in Note 7, Fees and Expenses and the accrued related party fee amounts are disclosed on the Statements of Assets and Liabilities.
9. 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.
10. 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.
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Purchases and sales of securities (excluding short-term investments) for the period ended June 30, 2016, 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 | $ | 1,244,349 | $ | 135,268 | ||||||||||||
PIMCO RAE Fundamental Global Fund | 0 | 0 | 266,612 | 18,025 | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0 | 0 | 7,569 | 5,239 | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 0 | 0 | 158,675 | 68,966 | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 0 | 0 | 238,904 | 196,076 | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 0 | 0 | 72,762 | 85,465 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
11. 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 RAE Fundamental Emerging Markets Fund | PIMCO RAE Fundamental Global Fund | PIMCO RAE Fundamental Global ex-US Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 145,199 | $ | 1,158,870 | 193 | $ | 2,417 | 26,449 | $ | 244,485 | 2 | $ | 26 | 91 | $ | 769 | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
Class P | 544 | 4,321 | 1 | 10 | 5 | 49 | 1 | 10 | 0 | 0 | 1 | 10 | ||||||||||||||||||||||||||||||||||||||
Class A | 76 | 655 | 2 | 19 | 32 | 295 | 1 | 10 | 9 | 82 | 1 | 10 | ||||||||||||||||||||||||||||||||||||||
Class C | 12 | 100 | 1 | 10 | 75 | 678 | 2 | 17 | 41 | 350 | 1 | 10 | ||||||||||||||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 422 | 3,228 | 0 | 0 | 234 | 2,108 | 0 | 0 | 84 | 720 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class P | 8 | 60 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class A | 0 | 1 | 0 | 0 | 0 | 2 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class C | 0 | 0 | 0 | 0 | 0 | 3 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Issued in reorganization^ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 0 | 0 | 19,842 | 198,415 | 0 | 0 | 3,869 | 38,691 | 0 | 0 | 7,106 | 71,057 | ||||||||||||||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | (7,631 | ) | (57,799 | ) | 0 | 0 | (265 | ) | (2,360 | ) | 0 | 0 | (43 | ) | (340 | ) | 0 | 0 | ||||||||||||||||||||||||||||||||
Class P | (343 | ) | (2,532 | ) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||
Class A | (61 | ) | (504 | ) | 0 | 0 | (2 | ) | (22 | ) | 0 | 0 | (9 | ) | (81 | ) | 0 | 0 | ||||||||||||||||||||||||||||||||
Class C | (2 | ) | (13 | ) | 0 | 0 | (5 | ) | (40 | ) | 0 | 0 | (1 | ) | (4 | ) | 0 | 0 | ||||||||||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 138,224 | $ | 1,106,387 | 20,039 | $ | 200,871 | 26,523 | $ | 245,198 | 3,875 | $ | 38,754 | 172 | $ | 1,496 | 7,109 | $ | 71,087 |
ANNUAL REPORT | JUNE 30, 2016 | 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 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 17,278 | $ | 152,235 | 6 | $ | 210 | 19,612 | $ | 190,056 | 63 | $ | 615 | 10,568 | $ | 96,202 | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
Class P | 189 | 1,661 | 1 | 10 | 403 | 3,819 | 1 | 10 | 171 | 1,524 | 1 | 10 | ||||||||||||||||||||||||||||||||||||||
Class A | 4 | 40 | 1 | 10 | 445 | 4,174 | 1 | 14 | 216 | 1,945 | 1 | 10 | ||||||||||||||||||||||||||||||||||||||
Class C | 41 | 339 | 1 | 10 | 199 | 1,851 | 1 | 10 | 29 | 255 | 1 | 10 | ||||||||||||||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 595 | 5,154 | 0 | 0 | 1,786 | 16,713 | 0 | 0 | 200 | 1,786 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class P | 3 | 25 | 0 | 0 | 7 | 64 | 0 | 0 | 0 | 3 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 5 | 46 | 0 | 0 | 1 | 5 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Class C | 0 | 2 | 0 | 0 | 1 | 9 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
Issued in reorganization^ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | 0 | 0 | 15,659 | 156,592 | 0 | 0 | 45,448 | 454,480 | 0 | 0 | 4,677 | 46,771 | ||||||||||||||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||||||||||||||||||
Institutional Class | (4,401 | ) | (37,347 | ) | (257 | ) | (2,540 | ) | (14,734 | ) | (138,985 | ) | (71 | ) | (701 | ) | (6,719 | ) | (57,926 | ) | 0 | 0 | ||||||||||||||||||||||||||||
Class P | (71 | ) | (585 | ) | 0 | 0 | (67 | ) | (636 | ) | 0 | 0 | (15 | ) | (136 | ) | 0 | 0 | ||||||||||||||||||||||||||||||||
Class A | 0 | (4 | ) | 0 | 0 | (146 | ) | (1,397 | ) | 0 | 0 | (35 | ) | (310 | ) | 0 | 0 | |||||||||||||||||||||||||||||||||
Class C | (6 | ) | (45 | ) | 0 | 0 | (19 | ) | (167 | ) | 0 | 0 | (3 | ) | (28 | ) | 0 | 0 | ||||||||||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 13,632 | $ | 121,475 | 15,411 | $ | 154,292 | 7,492 | $ | 75,547 | 45,443 | $ | 454,428 | 4,413 | $ | 43,320 | 4,680 | $ | 46,801 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
^ | On June 5, 2015, each Fund acquired substantially all of the assets and assumed certain liabilities of a corresponding privately offered fund managed by Research Affiliates in exchange for Institutional Class shares of each Fund pursuant to the terms and conditions of an Agreement and Plan of Reorganization and Exchange. |
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% | 84% | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 2 | 0 | 99% | 0% | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 0 | 2 | 0% | 71% | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 0 | 1 | 0% | 28% | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 2 | 0 | 63% | 0% |
* | Related parties 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. |
12. 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.
PIMCO has received a Wells Notice from the staff of the U.S. Securities and Exchange Commission (“SEC”) that relates to the PIMCO Total Return Active Exchange-Traded Fund (“BOND”), a series of PIMCO ETF Trust. The notice indicates the staff’s preliminary determination to recommend that the SEC commence a civil action against PIMCO stemming from a non-public investigation relating to BOND. A Wells Notice is neither a formal allegation of wrongdoing nor a finding that any law was violated.
This matter principally pertains to the valuation of smaller sized positions in non-agency mortgage-backed securities purchased by
BOND between its inception on February 29, 2012 and June 30, 2012, BOND’s performance disclosures for that period, and PIMCO’s compliance policies and procedures related to these matters.
The Wells process provides PIMCO with the opportunity to demonstrate to the SEC staff why it believes its conduct was appropriate, in keeping with industry standards, and that no action should be taken. PIMCO believes that this matter is unlikely to have a material adverse effect on any Fund or on PIMCO’s ability to provide investment management services to any Fund.
The foregoing speaks only as of the date of this report.
13. 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
74 | PIMCO EQUITY SERIES |
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June 30, 2016
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, 2016, 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 2013-2015, 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, 2016, 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 | $ | 13,886 | $ | 0 | $ | 67,245 | $ | (19 | ) | $ | (13,134 | ) | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO RAE Fundamental Global Fund | 0 | 3,545 | (4,166 | ) | (6 | ) | 0 | 0 | (41 | ) | ||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0 | 0 | (9,145 | ) | (3 | ) | (225 | ) | 0 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 4,304 | 0 | 1,304 | (8 | ) | 0 | (5,633 | ) | 0 | |||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 5,550 | 13,299 | 87,554 | (21 | ) | 0 | 0 | 0 | ||||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 445 | 0 | 6,587 | (4 | ) | 0 | (3,918 | ) | 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), and real estate investment trusts (REITs). |
(3) | Represents differences in income tax regulations and financial accounting principles generally accepted in the United States of America, mainly for organizational expenditures and accrued foreign tax expense. |
(4) | Capital losses available to offset future net capital gains expire in varying amounts in the years shown below. |
(5) | Capital losses realized during the period November 1, 2015 through June 30, 2016 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, 2015 through June 30, 2016 and Ordinary losses realized during the period January 1, 2016 through June 30, 2016, 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, 2016, 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* | $ | 3,517 | $ | 9,617 | ||||||||
PIMCO RAE Fundamental Global Fund | 0 | 0 | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 225 | 0 | ||||||||||
PIMCO RAE Fundamental International Fund | 0 | 0 | ||||||||||
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 under IRC 382-383, which is carried forward to future years to offset future realized gain subject to certain limitations |
ANNUAL REPORT | JUNE 30, 2016 | 75 |
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Notes to Financial Statements (Cont.)
June 30, 2016
As of June 30, 2016, 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 | $ | 1,300,045 | $ | 89,818 | $ | (21,620 | ) | $ | 68,198 | |||||||||||
PIMCO RAE Fundamental Global Fund | 287,049 | 3,353 | (7,518 | ) | (4,165 | ) | ||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 72,267 | 0 | (9,144 | ) | (9,144 | ) | ||||||||||||||
PIMCO RAE Fundamental International Fund | 213,244 | 12,344 | (10,849 | ) | 1,495 | |||||||||||||||
PIMCO RAE Fundamental US Fund | 429,342 | 103,164 | (15,610 | ) | 87,554 | |||||||||||||||
PIMCO RAE Fundamental US Small Fund | 77,486 | 10,572 | (3,984 | ) | 6,588 |
† | 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), and real estate investment trusts (REITs) for federal income tax purposes. |
For the fiscal years ended June 30, 2016 and June 30, 2015, respectively, the Funds made the following tax basis distributions (amounts in thousands†):
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||||||||
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 | $ | 3,915 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO RAE Fundamental Global Fund | 2,315 | 85 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 692 | 0 | 28 | 0 | 0 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental International Fund | 1,761 | 3,524 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental US Fund | 5,484 | 11,422 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 622 | 1,173 | 0 | 0 | 0 | 0 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
(9) | Includes short-term capital gains distributed, if any. |
(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 |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of PIMCO Equity Series®:
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 PIMCO RAE Fundamental US Fund, PIMCO RAE Fundamental US Small Fund, PIMCO RAE Fundamental International Fund, PIMCO RAE Fundamental Emerging Markets Fund, PIMCO RAE Fundamental Global Fund, and PIMCO RAE Fundamental Global ex-US Fund (six series of PIMCO Equity Series®, hereafter referred to as the “Funds”) at June 30, 2016, the results of each of their operations for the year then ended, and the changes in each of their net assets and the financial highlights for the year then ended and for the period June 5, 2015 (commencement of operations) through June 30, 2015, 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 at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 22, 2016
ANNUAL REPORT | JUNE 30, 2016 | 77 |
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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 | ZAR | South African Rand | |||||
Other Abbreviations: | ||||||||||
ADR | American Depositary Receipt | REIT | Real Estate Investment Trust | SP - GDR | Sponsored Global Depositary Receipt | |||||
GDR | Global Depositary Receipt | SP - ADR | Sponsored American Depositary Receipt |
78 | 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 2016 ordinary income dividend that qualifies for the corporate dividend received deduction is set forth 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 2016:
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, 2016 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, 2016 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.
Dividend Received Deduction % | Qualified Dividend Income % | Qualified Interest Income (000s† ) | Qualified Short-Term Capital Gain (000s†) | |||||||||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | 0.00% | 10.07% | $ | 0 | $ | 0 | ||||||||||||||
PIMCO RAE Fundamental Global Fund | 55.31% | 84.50% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 0.31% | 65.51% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental International Fund | 0.50% | 100.00% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental US Fund | 100.00% | 100.00% | 0 | 0 | ||||||||||||||||
PIMCO RAE Fundamental US Small Fund | 100.00% | 100.00% | 0 | 95 |
† | 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 Income | Foreign Taxes Pass Through | |||||||||||
PIMCO RAE Fundamental Emerging Markets Fund | $ | 21,176,461 | $ | 2,057,833 | ||||||||
PIMCO RAE Fundamental Global Fund | 2,290,849 | 42,903 | ||||||||||
PIMCO RAE Fundamental Global ex-US Fund | 1,521,484 | 28,496 | ||||||||||
PIMCO RAE Fundamental International Fund | 7,263,524 | 673,425 | ||||||||||
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. |
Shareholders are advised to consult their own tax advisor with respect to the tax consequences of their investment in the Trust. In January 2017, 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 2016.
ANNUAL REPORT | JUNE 30, 2016 | 79 |
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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 | Principal Occupation(s) During Past 5 Years | Number of Funds in Fund Complex | Other Public Company and Investment Company Directorships Held by Trustee During the Past 5 Years | ||||
Interested Trustees* | ||||||||
Brent R. Harris (1959) Chairman of the Board | 03/2010 to present | Managing Director, PIMCO. Formerly, member of Executive Committee, PIMCO. | 169 | Chairman and Trustee, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT; Director, StocksPLUS® Management, Inc; and member of Board of Governors, Investment Company Institute. | ||||
Independent Trustees | ||||||||
E. Philip Cannon (1940) Trustee | 03/2010 to present | Private Investor. Formerly, President, Houston Zoo. | 169 | Trustee, PIMCO Equity Series VIT; Lead Independent Trustee, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. Formerly, Trustee, Allianz Funds (formerly, PIMCO Funds: Multi-Manager Series). | ||||
Jennifer Holden Dunbar (1963) Trustee | 02/2016 to present | Managing Director, Dunbar Partners, LLC (business consulting and investments). | 169 | 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. | 169 | 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). | 169 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. |
* | 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 |
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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, PIMCO. President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust and PIMCO 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. | ||
Douglas M. Hodge (1957) Senior Vice President | 02/2014 to present
President 05/2013 to 02/2014 | Managing Director, Chief Executive Officer, PIMCO (since 2/14); Chief Operating Officer, PIMCO (7/09 - 2/14); Member of Executive Committee and Head of PIMCO’s Asia Pacific region. Member Global Executive Committee, Allianz Asset Management. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Kevin M. Broadwater (1964) Vice President - Senior Counsel | 05/2012 to present | Executive Vice President and Deputy General Counsel, PIMCO. Vice President - Senior Counsel, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
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 and PIMCO 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 and PIMCO 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 | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust and PIMCO 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 and PIMCO Closed-End Funds. Formerly, Vice President, Fidelity Investments. | ||
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 and PIMCO 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. | ||
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 and PIMCO 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 and PIMCO Closed-End Funds. | ||
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 and PIMCO Closed-End Funds. Formerly, Head of Mutual Fund Reporting, GMO and Assistant Treasurer, GMO Trust and GMO Series Trust Funds. |
* | 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 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 address of these officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
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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.
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.
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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 May 13, 2015.
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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A special meeting of shareholders of the series of the Trust was held on February 5, 2016. The special meeting was held for the purpose of electing two (2) Trustees to the Board. Shareholders of all series of the Trust voted together on the proposal, and elected two (2) Trustees at the special meeting. The results of the proxy solicitation on this matter are available in the Funds’ Semi-Annual Report to shareholders for the period ended December 31, 2015.
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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_063016
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PIMCO Equity Series®
Annual Report
June 30, 2016
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
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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 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, 2016. 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.
Outside of the reporting period, PIMCO announced on July 19, 2016 that the firm’s Managing Directors have selected Emmanuel (Manny) Roman as PIMCO’s next Chief Executive Officer. PIMCO’s current CEO Douglas Hodge will assume a new role as Managing Director and Senior Advisor when Mr. Roman joins PIMCO on November 1st.
The announcement of Mr. Roman as PIMCO’s CEO is the culmination of a process undertaken by the firm to hire a senior executive who would add leadership and strategic insights combined with a deep appreciation of PIMCO’s diversified global businesses, investment process and focus on superior investment performance and client-service. Mr. Roman’s appointment has the full support of the firm’s leadership including Mr. Hodge, PIMCO’s President Jay Jacobs, the firm’s Executive Committee and its Managing Directors. Mr. Roman has nearly 30 years of experience in the investment industry, with expertise in fixed income and proven executive leadership, most recently as CEO of Man Group PLC, one of the world’s largest publicly-traded alternative asset managers and a leader in liquid, high-alpha investment strategies.
Highlights of the financial markets during the twelve-month reporting period include:
n | The first half of the reporting period through mid-February 2016 was marked by ongoing concerns over the global impact of a slowdown in the Chinese economy, which drove commodity prices and inflation expectations generally lower. By March, a recovery in the price of oil and expectations of lower interest rates for longer supported a rally in risk assets. The Bank of Japan (“BOJ”) and the People’s Bank of China, for example, indicated their intent for further policy easing, with the BOJ resorting to a negative interest rate policy in February 2016. The European Central Bank (“ECB”) also resorted to unconventional monetary policy with additional easing measures and an expansion of its quantitative easing program by shifting its focus toward domestic credit, pushing government yields into negative territory. In June 2016, the ECB began purchasing corporate bonds to help invigorate economic growth and stimulate inflation in the region. |
n | In the U.S., concerns regarding the global impact of tightening financial conditions and renewed U.S. dollar strength kept the Federal Reserve (“Fed”) on hold at their June 2016 meeting, after slightly raising interest rates at their December 2015 meeting. In addition, the U.S. dollar appreciated against most European and emerging market currencies, while falling against the Japanese yen. The U.S. interest rate yield curve flattened as the ten-year U.S. Treasury yield rallied to all-time lows and short-term rates rose with the initial December 2015 Fed rate hike. Revised first quarter 2016 U.S. gross domestic product (“GDP”) data released in late June was marginally stronger as retail sales, housing and consumer sentiment data indicated an improving economy. |
n | Market movements and news headlines at the end of the reporting period were dominated by the unexpected outcome of the U.K. referendum on June 23, 2016. Initial investor reaction to the Brexit vote was largely “risk-off” as various assets re-priced to the surprise outcome, with U.S. Treasuries, the Japanese yen and gold headlining a safe-haven rally. However, aside from the Pound Sterling and European and Japanese equities, most asset classes recovered in the ensuing week as investors reassessed the impact of the Brexit vote on global growth expectations. |
n | Global developed market equities experienced weak performance amid a period marked by economic uncertainty, increased volatility and geopolitical concerns. U.S. equities, as represented by the S&P 500 Index, were a bright spot, returning 3.99% over the reporting period. International equity markets (developed ex-U.S.), as represented by the MSCI EAFE Net Dividend Index (USD Hedged) declined 9.90% over the reporting period and the MSCI EAFE Net Dividend Index (USD Unhedged) declined 10.16% over the reporting period. Japanese equities, as represented by the Nikkei 225 Index in JPY, declined 21.86% over the reporting period, and European equities, as represented by the MSCI Europe Index in EUR, declined 10.96% over the reporting period. During the first eight months of the |
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reporting period, declining commodities prices and China’s economic deceleration drove concerns of slowing global growth, which weighed on equity returns. However, in the last third of the reporting period, developed market equities began to rebound from previous lows as global central banks resorted to increasingly unconventional monetary policy. However, late in the reporting period in June, global equities were pressured once again due to Britain’s decision to leave the European Union. |
n | Emerging market (“EM”) equities, as represented by the MSCI Emerging Markets Index (Net Dividends in USD), declined 12.05% over the reporting period. Concerns over slower economic growth in China, a bear market in commodities, political corruption in Latin America and several attempts by the People’s Bank of China to support the domestic equity market added to fears of slowing global growth. Late in the reporting period, emerging market equities experienced a strong rebound following February 2016 lows, with cyclicals and commodity-linked markets leading the rally. |
n | U.S. Treasuries, as represented by the Barclays U.S. Treasury Index, returned 6.22% for the reporting period. Yields beyond one-year maturities declined across the U.S. Treasury yield curve as a more dovish tone from the Fed after its June 2016 meeting, coupled with the surprise result of the U.K. referendum, pushed expectations for policy normalization further into the future. Investors also looked to U.S. Treasuries for their perceived safety and as a source of high-quality yield. The benchmark ten-year U.S. Treasury note yielded 1.49% at the end of the reporting period, down from 2.35% on June 30, 2015. The Barclays U.S. Aggregate Index, a widely used index of U.S. investment-grade bonds, returned 6.00% 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 have placed 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 22, 2016
|
Past performance is no guarantee of future results. Unless otherwise noted, index returns reflect the reinvestment of income dividends 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.
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Important Information About the Funds
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 substantially all of their assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Fund 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 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 and has begun, and may continue, to raise interest rates. 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 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. 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.
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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 (i) 18 months after purchase for purchases made prior to August 10, 2015 and (ii) 12 months after purchase for purchases made on or after August 10, 2015. The Cumulative Returns chart reflects only Institutional Class performance. Performance for Class P, Administrative Class, Class D, Class A, Class C and Class R shares, if applicable, are typically lower than Institutional Class performance due to the lower expenses paid by Institutional Class shares. Performance shown is net of fees and expenses. A Fund’s total annual operating expense ratios on each individual Fund Summary page are as of the currently effective prospectus, as supplemented to date. The minimum initial investment amount for Institutional Class, Class P and Administrative Class shares is $1,000,000. The minimum initial investment amount for Class A, Class C and Class D shares is $1,000. There is no minimum initial investment for Class R shares. Each Fund measures its performance against a 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.
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Important Information About the Funds (Cont.)
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 | Administrative Class | Class D | Class A | Class C | 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 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.
PIMCO Equity Series files a complete schedule of each Fund’s portfolio 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 will also be 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, 2016 | 7 |
Table of Contents
PIMCO RealPath™ Blend 2020 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2020 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2020 Fund Institutional Class | 2.77% | 1.97% | ||||||||
PIMCO RealPath™ Blend 2020 Fund Administrative Class | 2.45% | 1.68% | ||||||||
PIMCO RealPath™ Blend 2020 Fund Class A | 2.29% | 1.50% | ||||||||
PIMCO RealPath™ Blend 2020 Fund Class A (adjusted) | (3.33)% | (2.25)% | ||||||||
S&P Target Date 2020 Index± | 1.77% | 2.38% | ||||||||
Real Return Target 2020 Index* | 2.68% | 2.10% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2020 Index. Real Return Target 2020 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, is 0.37% for the Institutional Class shares, 0.62% for the Administrative Class shares and 0.87% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus. For performance current to the most recent month-end, visit www.pimco.com.
8 | PIMCO EQUITY SERIES |
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Institutional Class - PBZNX | Administrative Class - PBZDX | Class A - PBZAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 21.7% | |||||||
PIMCO Income Fund | 12.7% | |||||||
PIMCO Real Return Fund | 10.5% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 10.1% | |||||||
PIMCO Real Return Asset Fund | 9.8% | |||||||
PIMCO High Yield Fund | 7.9% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 7.2% | |||||||
PIMCO Long Duration Total Return Fund | 4.9% | |||||||
PIMCO Long-Term Credit Fund | 4.9% | |||||||
PIMCO Total Return Fund | 4.8% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 9 |
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PIMCO RealPath™ Blend 2025 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2025 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2025 Fund Institutional Class | 2.10% | 1.66% | ||||||||
PIMCO RealPath™ Blend 2025 Fund Administrative Class | 1.81% | 1.40% | ||||||||
PIMCO RealPath™ Blend 2025 Fund Class A | 1.50% | 1.12% | ||||||||
PIMCO RealPath™ Blend 2025 Fund Class A (adjusted) | (4.07)% | (2.62)% | ||||||||
S&P Target Date 2025 Index± | 1.36% | 2.27% | ||||||||
Real Return Target 2025 Index* | 2.35% | 1.92% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2025 Index. Real Return Target 2025 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, is 0.33% for the Institutional Class shares, 0.58% for the Administrative Class shares and 0.83% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus. For performance current to the most recent month-end, visit www.pimco.com.
10 | PIMCO EQUITY SERIES |
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Institutional Class - PPZRX | Administrative Class - PPZDX | Class A - PPZAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 25.8% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 12.3% | |||||||
PIMCO Real Return Asset Fund | 10.6% | |||||||
PIMCO Income Fund | 9.9% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 9.2% | |||||||
PIMCO High Yield Fund | 7.9% | |||||||
PIMCO Real Return Fund | 6.4% | |||||||
PIMCO Long-Term Credit Fund | 5.3% | |||||||
PIMCO Long Duration Total Return Fund | 5.3% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4.0% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments, and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 11 |
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PIMCO RealPath™ Blend 2030 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2030 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2030 Fund Institutional Class | 1.67% | 1.45% | ||||||||
PIMCO RealPath™ Blend 2030 Fund Administrative Class | 1.52% | 1.26% | ||||||||
PIMCO RealPath™ Blend 2030 Fund Class A | 1.15% | 0.94% | ||||||||
PIMCO RealPath™ Blend 2030 Fund Class A (adjusted) | (4.40)% | (2.79)% | ||||||||
S&P Target Date 2030 Index± | 0.98% | 2.16% | ||||||||
Real Return Target 2030 Index* | 1.80% | 1.63% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2030 Index. Real Return Target 2030 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
12 | PIMCO EQUITY SERIES |
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Institutional Class - PBPNX | Administrative Class - PBPRX | Class A - PBPAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 29.5% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 13.8% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 9.9% | |||||||
PIMCO Income Fund | 8.7% | |||||||
PIMCO Real Return Asset Fund | 7.7% | |||||||
PIMCO High Yield Fund | 7.6% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4.1% | |||||||
PIMCO Long-Term Credit Fund | 3.8% | |||||||
PIMCO Long Duration Total Return Fund | 3.8% | |||||||
PIMCO Real Return Fund | 2.6% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 13 |
Table of Contents
PIMCO RealPath™ Blend 2035 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2035 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2035 Fund Institutional Class | 0.64% | 1.02% | ||||||||
PIMCO RealPath™ Blend 2035 Fund Administrative Class | 0.34% | 0.74% | ||||||||
PIMCO RealPath™ Blend 2035 Fund Class A | 0.21% | 0.57% | ||||||||
PIMCO RealPath™ Blend 2035 Fund Class A (adjusted) | (5.27)% | (3.15)% | ||||||||
S&P Target Date 2035 Index± | 0.61% | 2.05% | ||||||||
Real Return Target 2035 Index* | 1.03% | 1.23% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2035 Index. Real Return Target 2035 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
14 | PIMCO EQUITY SERIES |
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Institutional Class - PDGZX | Administrative Class - PDGDX | Class A - PDGAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 33.4% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 16.1% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 11.1% | |||||||
PIMCO Income Fund | 7.9% | |||||||
PIMCO High Yield Fund | 6.9% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4.9% | |||||||
PIMCO Real Return Asset Fund | 3.1% | |||||||
PIMCO Long Duration Total Return Fund | 2.4% | |||||||
PIMCO Long-Term Credit Fund | 2.4% | |||||||
PIMCO Real Return Fund | 2.0% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 15 |
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PIMCO RealPath™ Blend 2040 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2040 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2040 Fund Institutional Class | 0.48% | 1.12% | ||||||||
PIMCO RealPath™ Blend 2040 Fund Administrative Class | 0.14% | 0.81% | ||||||||
PIMCO RealPath™ Blend 2040 Fund Class A | (0.10)% | 0.58% | ||||||||
PIMCO RealPath™ Blend 2040 Fund Class A (adjusted) | (5.63)% | (3.14)% | ||||||||
S&P Target Date 2040 Index± | 0.32% | 1.95% | ||||||||
Real Return Target 2040 Index* | 0.20% | 0.80% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2040 Index. Real Return Target 2040 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
16 | PIMCO EQUITY SERIES |
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Institutional Class - PVPNX | Administrative Class - PVPRX | Class A - PVPAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 36.2% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 17.6% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 12.4% | |||||||
PIMCO Income Fund | 6.1% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5.2% | |||||||
PIMCO High Yield Fund | 5.1% | |||||||
PIMCO Real Return Asset Fund | 2.1% | |||||||
PIMCO Real Return Fund | 2.1% | |||||||
PIMCO Emerging Local Bond Fund | 2.0% | |||||||
PIMCO Long Duration Total Return Fund | 1.7% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 17 |
Table of Contents
PIMCO RealPath™ Blend 2045 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2045 Fund seeks to maximize total return, consistent with prudent investment management by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2045 Fund Institutional Class | (0.45)% | 0.69% | ||||||||
PIMCO RealPath™ Blend 2045 Fund Administrative Class | (0.63)% | 0.46% | ||||||||
PIMCO RealPath™ Blend 2045 Fund Class A | (0.81)% | 0.23% | ||||||||
PIMCO RealPath™ Blend 2045 Fund Class A (adjusted) | (6.29)% | (3.48)% | ||||||||
S&P Target Date 2045 Index± | 0.06% | 1.86% | ||||||||
Real Return Target 2045 Index* | (0.47)% | 0.47% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2045 Index. Real Return Target 2045 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
18 | PIMCO EQUITY SERIES |
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Institutional Class - PVQNX | Administrative Class - PVQDX | Class A - PVQAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 38.3% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 18.6% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 13.4% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5.1% | |||||||
PIMCO Income Fund | 4.1% | |||||||
PIMCO High Yield Fund | 3.0% | |||||||
PIMCO Real Return Asset Fund | 2.1% | |||||||
PIMCO Emerging Local Bond Fund | 2.1% | |||||||
PIMCO Real Return Fund | 2.1% | |||||||
PIMCO Long-Term Credit Fund | 1.6% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 19 |
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PIMCO RealPath™ Blend 2050 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2050 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2050 Fund Institutional Class | (0.40)% | 0.79% | ||||||||
PIMCO RealPath™ Blend 2050 Fund Administrative Class | (0.60)% | 0.53% | ||||||||
PIMCO RealPath™ Blend 2050 Fund Class A | (0.89)% | 0.27% | ||||||||
PIMCO RealPath™ Blend 2050 Fund Class A (adjusted) | (6.36)% | (3.44)% | ||||||||
S&P Target Date 2050 Index± | (0.18)% | 1.77% | ||||||||
Real Return Target 2050 Index* | (0.98)% | 0.26% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 2050 Index. Real Return Target 2050 Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
20 | PIMCO EQUITY SERIES |
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Institutional Class - PPQZX | Administrative Class - PPQDX | Class A - PPQAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 38.7% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 18.4% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 13.3% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5.2% | |||||||
PIMCO Income Fund | 3.6% | |||||||
PIMCO High Yield Fund | 2.6% | |||||||
PIMCO Emerging Local Bond Fund | 2.1% | |||||||
PIMCO Real Return Fund | 2.0% | |||||||
PIMCO Long Duration Total Return Fund | 1.6% | |||||||
PIMCO Long-Term Credit Fund | 1.6% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 21 |
Table of Contents
PIMCO RealPath™ Blend 2055 Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend 2055 Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend 2055 Fund Institutional Class | (0.47)% | 0.74% | ||||||||
PIMCO RealPath™ Blend 2055 Fund Administrative Class | (0.77)% | 0.46% | ||||||||
PIMCO RealPath™ Blend 2055 Fund Class A | (0.94)% | 0.22% | ||||||||
PIMCO RealPath™ Blend 2055 Fund Class A (adjusted) | (6.41)% | (3.49)% | ||||||||
S&P Target Date 2055+ Index± | (0.38)% | 1.67% | ||||||||
Real Return Target 40+ Index* | (1.30)% | 0.11% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target 40+ Index. Real Return Target 40+ Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, 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. For performance current to the most recent month-end, visit www.pimco.com.
22 | PIMCO EQUITY SERIES |
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Institutional Class - PRQZX | Administrative Class - PRQDX | Class A - PRQAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 39.6% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 18.8% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 13.6% | |||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5.2% | |||||||
PIMCO Income Fund | 3.6% | |||||||
PIMCO High Yield Fund | 2.6% | |||||||
PIMCO Emerging Local Bond Fund | 2.2% | |||||||
PIMCO Real Return Fund | 2.1% | |||||||
PIMCO Long-Term Credit Fund | 1.6% | |||||||
PIMCO Long Duration Total Return Fund | 1.5% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 23 |
Table of Contents
PIMCO RealPath™ Blend Income Fund
Cumulative Returns Through June 30, 2016
$1,000,000 invested at the end of the month when the Fund’s Institutional Class commenced operations.
Investment Objective and Strategy Overview
» | PIMCO RealPathTM Blend Income Fund seeks to maximize total return, consistent with prudent investment management, by investing under normal circumstances substantially all of its assets in Institutional Class or Class M shares of any funds of the PIMCO Equity Series (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 Investment Company Act of 1940 (the “1940 Act”) (collectively, “Acquired Funds”). The Fund may also invest substantially all of its assets in 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. |
Average Annual Total Return for the period ended June 30, 2016 | ||||||||||
1 Year | Fund Inception (12/31/14) | |||||||||
PIMCO RealPath™ Blend Income Fund Institutional Class | 3.33% | 2.20% | ||||||||
PIMCO RealPath™ Blend Income Fund Administrative Class | 3.08% | 1.90% | ||||||||
PIMCO RealPath™ Blend Income Fund Class A | 2.75% | 1.68% | ||||||||
PIMCO RealPath™ Blend Income Fund Class A (adjusted) | (2.91)% | (2.08)% | ||||||||
S&P Target Date Retirement Income Index± | 3.07% | 2.58% | ||||||||
Real Return Target Today Index* | 2.82% | 2.17% |
All Fund returns are net of fees and expenses.
* Prior to June 30, 2016, the Fund’s primary benchmark was the Real Return Target Today Index. Real Return Target Today Index is a composite of other indices. The sub-indices represent stocks, bonds, TIPs, commodities and real estate securities. The component asset classes are weighted within each index to reflect a targeted level of risk at the beginning and end of the investment horizon. Over time, the weights are adjusted based on predetermined formulas to systematically reduce the level of potential risk as the index’s maturity date approaches.
± 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. The adjusted returns take into account the maximum sales charge of 5.50% on Class A shares.
The Fund’s total annual operating expense ratio as stated in the Fund’s current prospectus, as supplemented to date, is 0.37% for the Institutional Class shares, 0.62% for the Administrative Class shares and 0.87% for the Class A shares. Details regarding any Fund’s operating expenses can be found in the Fund’s prospectus. For performance current to the most recent month-end, visit www.pimco.com.
24 | PIMCO EQUITY SERIES |
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Institutional Class - PBRNX | Administrative Class - PBRDX | Class A - PBRAX |
Top 10 Holdings as of 06/30/20161§
Vanguard 500 Index Fund ‘Admiral’ | 19.2% | |||||||
PIMCO Income Fund | 16.6% | |||||||
PIMCO Real Return Fund | 10.1% | |||||||
PIMCO Total Return Fund | 9.1% | |||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 8.1% | |||||||
PIMCO High Yield Fund | 7.5% | |||||||
PIMCO Real Return Asset Fund | 7.0% | |||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 6.1% | |||||||
PIMCO Long-Term Credit Fund | 3.6% | |||||||
PIMCO Long Duration Total Return Fund | 3.5% |
1 % of Investments, at value.
§ Top 10 Holdings and % of Investments excludes securities sold short, financial derivative instruments and short-term instruments, if any.
Fund Insights
Following are key factors impacting the Fund’s performance during the reporting period:
» | Exposure to Real Estate Investment Trusts (“REITs”) benefited absolute performance, as REITs posted positive returns. |
» | Exposure to long-term Treasuries benefited absolute performance, as long-term Treasuries posted positive returns. |
» | Exposure to U.S. large-cap equities benefited absolute performance, as U.S. large-cap equities posted positive returns. |
» | Exposure to emerging markets equities detracted from absolute performance, as emerging markets equities posted negative returns. |
» | Exposure to developed ex-U.S. equities detracted from absolute performance, as developed ex-U.S. equities posted negative returns. |
» | Exposure to commodities detracted from absolute performance, as commodities posted negative returns. |
ANNUAL REPORT | JUNE 30, 2016 | 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, 2016 to June 30, 2016 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 column for your share class, in the column titled “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 (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2020 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,064.40 | $ | 0.15 | $ | 1,000.00 | $ | 1,024.31 | $ | 0.15 | 0.03 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,063.10 | 1.41 | 1,000.00 | 1,023.08 | 1.39 | 0.28 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,062.00 | 2.67 | 1,000.00 | 1,021.86 | 2.62 | 0.53 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2025 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,062.50 | $ | 0.15 | $ | 1,000.00 | $ | 1,024.31 | $ | 0.15 | 0.03 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,061.30 | 1.41 | 1,000.00 | 1,023.08 | 1.39 | 0.28 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,059.10 | 2.67 | 1,000.00 | 1,021.86 | 2.62 | 0.53 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,066.40 | $ | 0.20 | $ | 1,000.00 | $ | 1,024.26 | $ | 0.20 | 0.04 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,066.50 | 1.47 | 1,000.00 | 1,023.04 | 1.43 | 0.29 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,064.00 | 2.73 | 1,000.00 | 1,021.81 | 2.67 | 0.54 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,063.20 | $ | 0.25 | $ | 1,000.00 | $ | 1,024.21 | $ | 0.25 | 0.05 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,062.00 | 1.51 | 1,000.00 | 1,022.99 | 1.48 | 0.30 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,060.90 | 2.77 | 1,000.00 | 1,021.76 | 2.72 | 0.55 |
26 | PIMCO EQUITY SERIES |
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Actual | Hypothetical (5% return before expenses) | |||||||||||||||||||||||||||||||||||||||
Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Beginning Account Value (01/01/16) | Ending Account Value (06/30/16) | Expenses Paid During Period* | Net Annualized Expense Ratio** | ||||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,059.40 | $ | 0.25 | $ | 1,000.00 | $ | 1,024.21 | $ | 0.25 | 0.05 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,057.20 | 1.51 | 1,000.00 | 1,022.99 | 1.48 | 0.30 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,056.00 | 2.77 | 1,000.00 | 1,021.76 | 2.72 | 0.55 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,055.60 | $ | 0.25 | $ | 1,000.00 | $ | 1,024.21 | $ | 0.25 | 0.05 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,054.50 | 1.51 | 1,000.00 | 1,022.99 | 1.48 | 0.30 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,053.20 | 2.76 | 1,000.00 | 1,021.76 | 2.72 | 0.55 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,053.80 | $ | 0.25 | $ | 1,000.00 | $ | 1,024.21 | $ | 0.25 | 0.05 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,052.50 | 1.51 | 1,000.00 | 1,022.99 | 1.48 | 0.30 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,051.70 | 2.76 | 1,000.00 | 1,021.76 | 2.72 | 0.55 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,053.60 | $ | 0.25 | $ | 1,000.00 | $ | 1,024.21 | $ | 0.25 | 0.05 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,052.40 | 1.51 | 1,000.00 | 1,022.99 | 1.48 | 0.30 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,052.40 | 2.76 | 1,000.00 | 1,021.76 | 2.72 | 0.55 | |||||||||||||||||||||||||||||||||
PIMCO RealPath™ Blend Income Fund | ||||||||||||||||||||||||||||||||||||||||
Institutional Class | $ | 1,000.00 | $ | 1,061.50 | $ | 0.15 | $ | 1,000.00 | $ | 1,024.31 | $ | 0.15 | 0.03 | % | ||||||||||||||||||||||||||
Administrative Class | 1,000.00 | 1,060.30 | 1.41 | 1,000.00 | 1,023.08 | 1.39 | 0.28 | |||||||||||||||||||||||||||||||||
Class A | 1,000.00 | 1,058.20 | 2.67 | 1,000.00 | 1,021.86 | 2.62 | 0.53 |
* 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 179/366 (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 can be found in Note 7 in the Notes to Financial Statements.
ANNUAL REPORT | JUNE 30, 2016 | 27 |
Table of Contents
Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total from Investment Operations | Dividends from Net Investment Income | Distributions from Net Realized Capital Gains | Tax Basis Return of Capital | Total Distributions(b) | ||||||||||||||||||||||||
PIMCO RealPath™ Blend 2020 Fund | ||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ) | |||||||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | ||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ) |
28 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets Excluding Waivers | Ratio of Expenses to Average Net Assets Excluding Interest Expense | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Waivers | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | ||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 |
ANNUAL REPORT | JUNE 30, 2016 | 29 |
Table of Contents
Financial Highlights (Cont.)
Selected Per Share Data for the Year or Period Ended: | Net Asset Value Beginning of Year or Period | Net Investment Income(a) | Net Realized/ Unrealized Gain (Loss) | Total from Investment Operations | Dividends from Net Investment Income | Distributions from Net Realized Capital Gains | Tax Basis Return of Capital | Total Distributions(b) | ||||||||||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | ||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | $ | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ) | ||||||||||||||||||||||
PIMCO RealPath™ Blend Income Fund | ||||||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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 | ||||||||||||||||||||||||||||||||
06/30/2016 | 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(c) in the Notes to Financial Statements for more information. |
30 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Net Asset Value End of Year or Period | Total Return | Net Assets End of Year or Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets Excluding Waivers | Ratio of Expenses to Average Net Assets Excluding Interest Expense | Ratio of Expenses to Average Net Assets Excluding Interest Expense and Waivers | Ratio of Net Investment Income to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 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 | ||||||||||||||||||||
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 | ||||||||||||||||||||
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, 2016 | 31 |
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 | $ | 1,676 | $ | 1,660 | $ | 3,643 | $ | 3,807 | ||||||||
Investments in Affiliates | 2,303 | 1,575 | 2,717 | 2,004 | ||||||||||||
Financial Derivative Instruments | ||||||||||||||||
Exchange-traded or centrally cleared | 5 | 5 | 0 | 1 | ||||||||||||
Over the counter | 7 | 8 | 22 | 28 | ||||||||||||
Cash | 190 | 193 | 84 | 164 | ||||||||||||
Receivable for investments sold | 8 | 9 | 20 | 24 | ||||||||||||
Receivable for investments in Affiliates sold | 24 | 24 | 30 | 16 | ||||||||||||
Receivable for Fund shares sold | 1 | 1 | 0 | 1 | ||||||||||||
Dividends receivable from Affiliates | 6 | 5 | 8 | 6 | ||||||||||||
Total Assets | 4,220 | 3,480 | 6,524 | 6,051 | ||||||||||||
Liabilities: | ||||||||||||||||
Financial Derivative Instruments | ||||||||||||||||
Exchange-traded or centrally cleared | $ | 1 | $ | 1 | $ | 0 | $ | 1 | ||||||||
Payable for investments purchased | 36 | 36 | 71 | 66 | ||||||||||||
Payable for investments in Affiliates purchased | 11 | 5 | 8 | 6 | ||||||||||||
Other liabilities | 0 | 0 | 0 | 0 | ||||||||||||
Total Liabilities | 48 | 42 | 79 | 73 | ||||||||||||
Net Assets | $ | 4,172 | $ | 3,438 | $ | 6,445 | $ | 5,978 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Paid in capital | $ | 4,138 | $ | 3,499 | $ | 6,181 | $ | 5,819 | ||||||||
Undistributed (overdistributed) net investment income | 0 | (7 | ) | 32 | 25 | |||||||||||
Accumulated undistributed net realized (loss) | (25 | ) | (60 | ) | (28 | ) | (37 | ) | ||||||||
Net unrealized appreciation (depreciation) | 59 | 6 | 260 | 171 | ||||||||||||
Net Assets | $ | 4,172 | $ | 3,438 | $ | 6,445 | $ | 5,978 | ||||||||
Net Assets: | ||||||||||||||||
Institutional Class | $ | 4,152 | $ | 3,395 | $ | 6,409 | $ | 5,958 | ||||||||
Administrative Class | 10 | 16 | 23 | 10 | ||||||||||||
Class A | 10 | 27 | 13 | 10 | ||||||||||||
Shares Issued and Outstanding: | ||||||||||||||||
Institutional Class | 419 | 344 | 650 | 606 | ||||||||||||
Administrative Class | 1 | 2 | 2 | 1 | ||||||||||||
Class A | 1 | 3 | 1 | 1 | ||||||||||||
Net Asset Value Per Share Outstanding: | ||||||||||||||||
Institutional Class | $ | 9.90 | $ | 9.85 | $ | 9.87 | $ | 9.83 | ||||||||
Administrative Class | 9.90 | 9.85 | 9.88 | 9.83 | ||||||||||||
Class A | 9.91 | 9.85 | 9.87 | 9.88 | ||||||||||||
Cost of investments in securities | $ | 1,668 | $ | 1,673 | $ | 3,488 | $ | 3,708 | ||||||||
Cost of investments in Affiliates | $ | 2,255 | $ | 1,559 | $ | 2,630 | $ | 1,956 | ||||||||
Cost or premiums of financial derivative instruments, net | $ | 8 | $ | 9 | $ | 4 | $ | 5 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
32 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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 | ||||||||||||||
$ | 2,440 | $ | 2,498 | $ | 2,992 | $ | 2,555 | $ | 1,242 | |||||||||
977 | 815 | 962 | 756 | 2,167 | ||||||||||||||
1 | 1 | 1 | 1 | 5 | ||||||||||||||
17 | 17 | 20 | 17 | 4 | ||||||||||||||
165 | 152 | 80 | 151 | 50 | ||||||||||||||
15 | 15 | 21 | 15 | 5 | ||||||||||||||
0 | 4 | 4 | 0 | 9 | ||||||||||||||
1 | 5 | 11 | 10 | 1 | ||||||||||||||
3 | 2 | 2 | 2 | 6 | ||||||||||||||
3,619 | 3,509 | 4,093 | 3,507 | 3,489 | ||||||||||||||
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1 | |||||||||
41 | 43 | 33 | 46 | 31 | ||||||||||||||
3 | 2 | 2 | 2 | 20 | ||||||||||||||
0 | 0 | 1 | 0 | 0 | ||||||||||||||
44 | 45 | 36 | 48 | 52 | ||||||||||||||
$ | 3,575 | $ | 3,464 | $ | 4,057 | $ | 3,459 | $ | 3,437 | |||||||||
$ | 3,599 | $ | 3,521 | $ | 4,075 | $ | 3,513 | $ | 3,450 | |||||||||
10 | 11 | 17 | 12 | (5 | ) | |||||||||||||
(24 | ) | (33 | ) | (29 | ) | (30 | ) | (9 | ) | |||||||||
(10 | ) | (35 | ) | (6 | ) | (36 | ) | 1 | ||||||||||
$ | 3,575 | $ | 3,464 | $ | 4,057 | $ | 3,459 | $ | 3,437 | |||||||||
$ | 3,509 | $ | 3,415 | $ | 3,934 | $ | 3,388 | $ | 3,317 | |||||||||
36 | 39 | 13 | 11 | 50 | ||||||||||||||
30 | 10 | 110 | 60 | 70 | ||||||||||||||
356 | 349 | 401 | 346 | 335 | ||||||||||||||
4 | 4 | 1 | 1 | 5 | ||||||||||||||
3 | 1 | 11 | 6 | 7 | ||||||||||||||
$ | 9.84 | $ | 9.79 | $ | 9.82 | $ | 9.80 | $ | 9.92 | |||||||||
9.83 | 9.79 | 9.82 | 9.80 | 9.92 | ||||||||||||||
9.83 | 9.80 | 9.80 | 9.79 | 9.91 | ||||||||||||||
$ | 2,470 | $ | 2,548 | $ | 3,018 | $ | 2,603 | $ | 1,255 | |||||||||
$ | 971 | $ | 814 | $ | 958 | $ | 758 | $ | 2,153 | |||||||||
$ | 4 | $ | 4 | $ | 4 | $ | 4 | $ | 8 |
ANNUAL REPORT | JUNE 30, 2016 | 33 |
Table of Contents
Year Ended June 30, 2016 | ||||||||||||||||
(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 | $ | 36 | $ | 46 | $ | 71 | $ | 80 | ||||||||
Dividends from Investments in Affiliates | 76 | 68 | 65 | 50 | ||||||||||||
Total Income | 112 | 114 | 136 | 130 | ||||||||||||
Expenses: | ||||||||||||||||
Investment advisory fees | 0 | 1 | 1 | 2 | ||||||||||||
Supervisory and administrative fees | 1 | 1 | 1 | 1 | ||||||||||||
Total Expenses | 1 | 2 | 2 | 3 | ||||||||||||
Net Investment Income | 111 | 112 | 134 | 127 | ||||||||||||
Net Realized Gain (Loss): | ||||||||||||||||
Investments in securities | (1 | ) | (31 | ) | (8 | ) | (19 | ) | ||||||||
Investments in Affiliates | (52 | ) | (57 | ) | (39 | ) | (34 | ) | ||||||||
Net capital gain distributions received from Affiliate investments | 27 | 25 | 15 | 11 | ||||||||||||
Exchange-traded or centrally cleared financial derivative instruments | (5 | ) | (6 | ) | (7 | ) | (6 | ) | ||||||||
Over the counter financial derivative instruments | (8 | ) | (13 | ) | (2 | ) | (7 | ) | ||||||||
Net Realized (Loss) | (39 | ) | (82 | ) | (41 | ) | (55 | ) | ||||||||
Net Change in Unrealized Appreciation (Depreciation): | ||||||||||||||||
Investments in securities | (3 | ) | (23 | ) | 146 | 82 | ||||||||||
Investments in Affiliates | 90 | 54 | 126 | 84 | ||||||||||||
Exchange-traded or centrally cleared financial derivative instruments | (3 | ) | (3 | ) | (3 | ) | (3 | ) | ||||||||
Over the counter financial derivative instruments | 5 | 6 | 20 | 26 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) | 89 | 34 | 289 | 189 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 161 | $ | 64 | $ | 382 | $ | 261 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
34 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
PIMCO RealPath™ Blend 2040 Fund | PIMCO Fund | PIMCO RealPath™ Blend 2050 Fund | PIMCO RealPath™ Blend 2055 Fund | PIMCO RealPath™ Blend Income Fund | ||||||||||||||
$ | 60 | $ | 64 | $ | 69 | $ | 64 | $ | 28 | |||||||||
32 | 25 | 24 | 23 | 79 | ||||||||||||||
92 | 89 | 93 | 87 | 107 | ||||||||||||||
1 | 1 | 1 | 1 | 1 | ||||||||||||||
1 | 1 | 1 | 1 | 1 | ||||||||||||||
2 | 2 | 2 | 2 | 2 | ||||||||||||||
90 | 87 | 91 | 85 | 105 | ||||||||||||||
(12 | ) | (25 | ) | (22 | ) | (23 | ) | 8 | ||||||||||
(26 | ) | (20 | ) | (18 | ) | (18 | ) | (43 | ) | |||||||||
10 | 8 | 8 | 8 | 25 | ||||||||||||||
(4 | ) | (5 | ) | (6 | ) | (6 | ) | (5 | ) | |||||||||
(11 | ) | (11 | ) | (10 | ) | (11 | ) | (11 | ) | |||||||||
(43 | ) | (53 | ) | (48 | ) | (50 | ) | (26 | ) | |||||||||
(51 | ) | (76 | ) | (52 | ) | (74 | ) | (19 | ) | |||||||||
34 | 26 | 26 | 21 | 56 | ||||||||||||||
(2 | ) | (1 | ) | (1 | ) | (1 | ) | (3 | ) | |||||||||
15 | 15 | 18 | 15 | 2 | ||||||||||||||
(4 | ) | (36 | ) | (9 | ) | (39 | ) | 36 | ||||||||||
$ | 43 | $ | (2 | ) | $ | 34 | $ | (4 | ) | $ | 115 |
ANNUAL REPORT | JUNE 30, 2016 | 35 |
Table of Contents
Statements of Changes in Net Assets
PIMCO RealPath™ Blend 2020 | PIMCO RealPath™ Blend 2025 | PIMCO RealPath™ Blend 2030 | PIMCO RealPath™ Blend 2035 | |||||||||||||||||||||||||||||
(Amounts in thousands†) | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | ||||||||||||||||||||||||
Increase in Net Assets from: | ||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 111 | $ | 33 | $ | 112 | $ | 36 | $ | 134 | $ | 39 | $ | 127 | $ | 38 | ||||||||||||||||
Net realized gain (loss) | (39 | ) | 4 | (82 | ) | 5 | (41 | ) | 5 | (55 | ) | 6 | ||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 89 | (30 | ) | 34 | (28 | ) | 289 | (29 | ) | 189 | (18 | ) | ||||||||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 161 | 7 | 64 | 13 | 382 | 15 | 261 | 26 | ||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||
Institutional Class | (110 | ) | (15 | ) | (115 | ) | (15 | ) | (109 | ) | (15 | ) | (104 | ) | (15 | ) | ||||||||||||||||
Administrative Class | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | ||||||||||||||||
Class A | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | ||||||||||||||||
From net realized capital gains | ||||||||||||||||||||||||||||||||
Institutional Class | (7 | ) | 0 | (7 | ) | 0 | (9 | ) | 0 | (10 | ) | 0 | ||||||||||||||||||||
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) | (117 | ) | (15 | ) | (122 | ) | (15 | ) | (118 | ) | (15 | ) | (114 | ) | (15 | ) | ||||||||||||||||
Portfolio Share Transactions: | ||||||||||||||||||||||||||||||||
Net increase resulting from Fund share transactions** | 1,101 | 3,035 | 444 | 3,054 | 3,146 | 3,035 | 2,772 | 3,048 | ||||||||||||||||||||||||
Total Increase in Net Assets | 1,145 | 3,027 | 386 | 3,052 | 3,410 | 3,035 | 2,919 | 3,059 | ||||||||||||||||||||||||
Net Assets: | ||||||||||||||||||||||||||||||||
Beginning of year or period | 3,027 | 0 | 3,052 | 0 | 3,035 | 0 | 3,059 | 0 | ||||||||||||||||||||||||
End of year or period* | $ | 4,172 | $ | 3,027 | $ | 3,438 | $ | 3,052 | $ | 6,445 | $ | 3,035 | $ | 5,978 | $ | 3,059 | ||||||||||||||||
* Including undistributed (overdistributed) net investment income of: | $ | 0 | $ | 13 | $ | (7 | ) | $ | 16 | $ | 32 | $ | 17 | $ | 25 | $ | 16 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
** | See Note 11 in the Notes to Financial Statements. |
(a) | The tax characterization of distributions is determined in accordance with federal income tax regulations. See Note 2(c) in the Notes to Financial Statements for more information. |
36 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
PIMCO RealPath™ Blend 2040 | PIMCO RealPath™ Blend 2045 | PIMCO RealPath™ Blend 2050 | PIMCO RealPath™ Blend 2055 | PIMCO RealPath™ Blend Income | ||||||||||||||||||||||||||||||||||
Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | Year Ended June 30, 2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||
$ | 90 | $ | 37 | $ | 87 | $ | 36 | $ | 91 | $ | 37 | $ | 85 | $ | 37 | $ | 105 | $ | 31 | |||||||||||||||||||
(43 | ) | 5 | (53 | ) | 6 | (48 | ) | 6 | (50 | ) | 6 | (26 | ) | 1 | ||||||||||||||||||||||||
| (4 | ) | (6 | ) | (36 | ) | 1 | (9 | ) | 3 | (39 | ) | 3 | 36 | (35 | ) | ||||||||||||||||||||||
| 43 | | 36 | (2 | ) | 43 | 34 | 46 | (4 | ) | 46 | 115 | (3 | ) | ||||||||||||||||||||||||
(77 | ) | (15 | ) | (73 | ) | (15 | ) | (72 | ) | (15 | ) | (71 | ) | (15 | ) | (103 | ) | (15 | ) | |||||||||||||||||||
(1 | ) | (0 | ) | (1 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | (0 | ) | |||||||||||||||||||
(1 | ) | (0 | ) | (0 | ) | (0 | ) | (2 | ) | (0 | ) | (1 | ) | (0 | ) | (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 | ) | 0 | ||||||||||||||||||||||||||||
(88 | ) | (15 | ) | (83 | ) | (15 | ) | (82 | ) | (15 | ) | (81 | ) | (15 | ) | (113 | ) | (15 | ) | |||||||||||||||||||
| 561 | | 3,038 | 456 | 3,065 | 1,030 | 3,044 | 419 | 3,094 | 313 | 3,140 | |||||||||||||||||||||||||||
516 | 3,059 | 371 | 3,093 | 982 | 3,075 | 334 | 3,125 | 315 | 3,122 | |||||||||||||||||||||||||||||
3,059 | 0 | 3,093 | 0 | 3,075 | 0 | 3,125 | 0 | 3,122 | 0 | |||||||||||||||||||||||||||||
$ | 3,575 | $ | 3,059 | $ | 3,464 | $ | 3,093 | $ | 4,057 | $ | 3,075 | $ | 3,459 | $ | 3,125 | $ | 3,437 | $ | 3,122 | |||||||||||||||||||
$ | 10 |
| $ | 15 | $ | 11 | $ | 15 | $ | 17 | $ | 15 | $ | 12 | $ | 16 | $ | (5 | ) | $ | 11 |
ANNUAL REPORT | JUNE 30, 2016 | 37 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2020 Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 40.2% | ||||||||||||
MUTUAL FUNDS 40.2% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 4,456 | $ | 863 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 35,413 | 402 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 9,747 | 285 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 2,279 | 126 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $1,668) |
| 1,676 | ||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $1,668) | 1,676 | |||||||||||
|
| |||||||||||
INVESTMENTS IN AFFILIATES 55.2% | ||||||||||||
MUTUAL FUNDS (a) 55.2% | ||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 8,803 | 92 | ||||||||||
PIMCO High Yield Fund | 36,750 | 313 |
SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Income Fund | 42,405 | $ | 504 | |||||||||
PIMCO Long Duration Total Return Fund | 16,399 | 196 | ||||||||||
PIMCO Long-Term Credit Fund | 16,285 | 196 | ||||||||||
PIMCO Real Return Asset Fund | 46,062 | 392 | ||||||||||
PIMCO Real Return Fund | 37,676 | 418 | ||||||||||
PIMCO Total Return Fund | 18,608 | 192 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,255) | 2,303 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $2,255) | 2,303 | |||||||||||
Total Investments 95.4% (Cost $3,923) | $ | 3,979 | ||||||||||
Financial Derivative (Cost or Premiums, net $8) | 11 | |||||||||||
Other Assets and Liabilities, net 4.3% | 182 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 4,172 | ||||||||||
|
|
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 Index | 1,750.000 | 09/16/2016 | 1 | $ | 8 | $ | 1 | |||||||||||||
Put - CBOE S&P 500 Index | 1,700.000 | 12/16/2016 | 1 | 2 | 2 | |||||||||||||||
Put - CBOE S&P 500 Index | 1,750.000 | 12/16/2016 | 1 | 2 | 2 | |||||||||||||||
|
|
|
| |||||||||||||||||
$ | 12 | $ | 5 | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 12 | $ | 5 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,500.000 | 09/16/2016 | 1 | $ | (3 | ) | $ | 0 | ||||||||||||
Put - CBOE S&P 500 Index | 1,500.000 | 12/16/2016 | 1 | (1 | ) | (1 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
$ | (4 | ) | $ | (1 | ) | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (4 | ) | $ | (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, 2016:
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 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
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|
|
38 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 3 | 3 | (3 | ) | (1 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (9 | ) | $ | (6 | ) | $ | 8 | $ | 3 | $ | 0 | $ | (4 | ) |
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 12 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 110 | $ | 0 | $ | 7 | $ | 7 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 341 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 61 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 132 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 23 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
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|
| |||||||||||||||||||||||||
$ | 0 | $ | 7 | $ | 7 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 7 | $ | 7 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 7 | $ | 7 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 7 | $ | 0 | $ | 7 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 0 | $ | 0 | $ | 7 | $ | 0 | $ | 0 | $ | 7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 12 | $ | 0 | $ | 0 | $ | 12 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 39 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2020 Fund (Cont.)
June 30, 2016
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (12 | ) | $ | 0 | $ | 0 | $ | (12 | ) | ||||||||||
Written Options | 0 | 0 | 7 | 0 | 0 | 7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (5 | ) | $ | 0 | $ | 0 | $ | (5 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (8 | ) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | (8 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (8 | ) | $ | 0 | $ | (5 | ) | $ | 0 | $ | 0 | $ | (13 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (2 | ) | $ | 0 | $ | 7 | $ | 0 | $ | 0 | $ | 5 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (2 | ) | $ | 0 | $ | 4 | $ | 0 | $ | 0 | $ | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 1,676 | $ | 0 | $ | 0 | $ | 1,676 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,676 | $ | 0 | $ | 0 | $ | 1,676 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | $ | 2,303 | $ | 0 | $ | 0 | $ | 2,303 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,979 | $ | 0 | $ | 0 | $ | 3,979 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 5 | $ | 0 | $ | 5 | ||||||||
Over the counter | 0 | 7 | 0 | 7 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 12 | $ | 0 | �� | $ | 12 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,979 | $ | 11 | $ | 0 | $ | 3,990 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
40 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2025 Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 48.3% | ||||||||||||
MUTUAL FUNDS 48.3% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 4,310 | $ | 835 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 35,233 | 399 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 10,150 | 297 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 2,322 | 129 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $1,673) | 1,660 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $1,673) | 1,660 | |||||||||||
|
| |||||||||||
INVESTMENTS IN AFFILIATES 45.8% | ||||||||||||
MUTUAL FUNDS (a) 45.8% | ||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 3,979 | 41 | ||||||||||
PIMCO High Yield Fund | 29,974 | 256 |
SHARES | MARKET VALUE (000S) | |||||||||||
PIMCO Income Fund | 27,016 | $ | 321 | |||||||||
PIMCO Long Duration Total Return Fund | 14,366 | 171 | ||||||||||
PIMCO Long-Term Credit Fund | 14,266 | 172 | ||||||||||
PIMCO Real Return Asset Fund | 40,350 | 343 | ||||||||||
PIMCO Real Return Fund | 18,431 | 205 | ||||||||||
PIMCO Total Return Fund | 6,403 | 66 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $1,559) | 1,575 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $1,559) | 1,575 | |||||||||||
Total Investments 94.1% (Cost $3,232) | $ | 3,235 | ||||||||||
Financial Derivative (Cost or Premiums, net $9) | 12 | |||||||||||
Other Assets and Liabilities, net 5.6% | 191 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 3,438 | ||||||||||
|
|
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 Index | 1,600.000 | 09/16/2016 | 3 | $ | 14 | $ | 1 | |||||||||||||
Put - CBOE S&P 500 Index | 1,700.000 | 12/16/2016 | 1 | 2 | 2 | |||||||||||||||
Put - CBOE S&P 500 Index | 1,750.000 | 12/16/2016 | 1 | 3 | 2 | |||||||||||||||
|
|
|
| |||||||||||||||||
$ | 19 | $ | 5 | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 19 | $ | 5 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,450.000 | 09/16/2016 | 3 | $ | (9 | ) | $ | 0 | ||||||||||||
Put - CBOE S&P 500 Index | 1,500.000 | 12/16/2016 | 1 | (1 | ) | (1 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
$ | (10 | ) | $ | (1 | ) | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (10 | ) | $ | (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, 2016:
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 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 41 |
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, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 4 | 5 | (3 | ) | (2 | ) | 0 | 4 | ||||||||||||||||
Premiums | $ | (10 | ) | $ | (13 | ) | $ | 8 | $ | 5 | $ | 0 | $ | (10 | ) |
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 13 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 119 | $ | 0 | $ | 8 | $ | 8 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 349 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 63 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 41 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 7 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 8 | $ | 8 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 8 | $ | 8 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 8 | $ | 8 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 8 | $ | 0 | $ | 8 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 0 | $ | 0 | $ | 8 | $ | 0 | $ | 0 | $ | 8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 13 | $ | 0 | $ | 0 | $ | 13 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
42 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (14 | ) | $ | 0 | $ | 0 | $ | (14 | ) | ||||||||||
Written Options | 0 | 0 | 8 | 0 | 0 | 8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (6 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (12 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (13 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (12 | ) | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (19 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (8 | ) | $ | 0 | $ | 0 | $ | (8 | ) | ||||||||||
Written Options | 0 | 0 | 5 | 0 | 0 | 5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (2 | ) | $ | 0 | $ | 8 | $ | 0 | $ | 0 | $ | 6 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (2 | ) | $ | 0 | $ | 5 | $ | 0 | $ | 0 | $ | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 1,660 | $ | 0 | $ | 0 | $ | 1,660 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,660 | $ | 0 | $ | 0 | $ | 1,660 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | $ | 1,575 | $ | 0 | $ | 0 | $ | 1,575 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,235 | $ | 0 | $ | 0 | $ | 3,235 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 5 | $ | 0 | $ | 5 | ||||||||
Over the counter | 0 | 8 | 0 | 8 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 13 | $ | 0 | $ | 13 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,235 | $ | 12 | $ | 0 | $ | 3,247 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 43 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2030 Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 56.5% | ||||||||||||
MUTUAL FUNDS 56.5% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 9,677 | $ | 1,874 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 77,400 | 878 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 21,672 | 633 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 4,657 | 258 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $3,488) | 3,643 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $3,488) | 3,643 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 42.2% | ||||||||||||
MUTUAL FUNDS (a) 35.9% | ||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 6,134 | $ | 64 | |||||||||
PIMCO High Yield Fund | 56,533 | 482 | ||||||||||
PIMCO Income Fund | 46,457 | 553 | ||||||||||
PIMCO Long Duration Total Return Fund | 20,455 | 244 | ||||||||||
PIMCO Long-Term Credit Fund | 20,312 | 245 | ||||||||||
PIMCO Real Return Asset Fund | 57,457 | 489 | ||||||||||
PIMCO Real Return Fund | 14,800 | 164 | ||||||||||
PIMCO Total Return Fund | 6,826 | 70 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,224) |
| 2,311 | ||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 6.3% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 6.3% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 41,076 | $ | 406 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $406) | 406 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $2,630) | 2,717 | |||||||||||
Total Investments 98.7% (Cost $6,118) | $ | 6,360 | ||||||||||
Financial Derivative (Cost or Premiums, net $4) | 22 | |||||||||||
Other Assets and Liabilities, net 1.0% | 63 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 6,445 | ||||||||||
|
|
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 Index | 1,550.000 | 09/16/2016 | 2 | $ | 8 | $ | 0 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 8 | $ | 0 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,350.000 | 09/16/2016 | 2 | $ | (4 | ) | $ | 0 | ||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (4 | ) | $ | 0 | |||||||||||||||
|
|
|
|
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 4 | 4 | (3 | ) | (3 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (10 | ) | $ | (9 | ) | $ | 7 | $ | 8 | $ | 0 | $ | (4 | ) |
44 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 37 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 339 | $ | 0 | $ | 22 | $ | 22 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 202 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 35 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 529 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 91 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 22 | $ | 22 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 22 | $ | 22 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 22 | $ | 22 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 22 | $ | 0 | $ | 22 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 22 | $ | 0 | $ | 0 | $ | 22 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | 10 | 0 | 0 | 10 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (7 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 1 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 1 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (9 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 45 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2030 Fund (Cont.)
June 30, 2016
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (2 | ) | ||||||||||
Written Options | 0 | 0 | (1 | ) | 0 | 0 | (1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (2 | ) | $ | 0 | $ | 22 | $ | 0 | $ | 0 | $ | 20 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (2 | ) | $ | 0 | $ | 19 | $ | 0 | $ | 0 | $ | 17 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 3,643 | $ | 0 | $ | 0 | $ | 3,643 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,643 | $ | 0 | $ | 0 | $ | 3,643 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 2,311 | 0 | 0 | 2,311 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 406 | 0 | 0 | 406 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,717 | $ | 0 | $ | 0 | $ | 2,717 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 6,360 | $ | 0 | $ | 0 | $ | 6,360 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Over the counter | $ | 0 | $ | 22 | $ | 0 | $ | 22 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 6,360 | $ | 22 | $ | 0 | $ | 6,382 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
46 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2035 Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 63.7% | ||||||||||||
MUTUAL FUNDS 63.7% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 10,023 | $ | 1,941 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 82,297 | 933 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 22,140 | 647 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 5,144 | 286 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $3,708) | 3,807 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $3,708) | 3,807 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 33.5% | ||||||||||||
MUTUAL FUNDS (a) 26.8% | ||||||||||||
PIMCO Emerging Local Bond Fund | 6,955 | $ | 50 | |||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 5,750 | 60 | ||||||||||
PIMCO High Yield Fund | 46,710 | 399 | ||||||||||
PIMCO Income Fund | 38,548 | 458 | ||||||||||
PIMCO Long Duration Total Return Fund | 11,478 | 137 | ||||||||||
PIMCO Long-Term Credit Fund | 11,397 | 137 | ||||||||||
PIMCO Real Return Asset Fund | 21,504 | 183 | ||||||||||
PIMCO Real Return Fund | 10,672 | 119 | ||||||||||
PIMCO Total Return Fund | 5,765 | 60 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $1,555) |
| 1,603 | ||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 6.7% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 6.7% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 40,582 | $ | 401 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $401) | 401 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $1,956) | 2,004 | |||||||||||
Total Investments 97.2% (Cost $5,664) | $ | 5,811 | ||||||||||
Financial Derivative Instruments (b)(c) 0.5% (Cost or Premiums, net $5) | 28 | |||||||||||
Other Assets and Liabilities, net 2.3% | 139 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 5,978 | ||||||||||
|
|
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 Index | 1,650.000 | 09/16/2016 | 3 | $ | 17 | $ | 1 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 17 | $ | 1 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,550.000 | 09/16/2016 | 3 | $ | (12 | ) | $ | (1 | ) | |||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (12 | ) | $ | (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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 4 | 6 | (3 | ) | (4 | ) | 0 | 3 | ||||||||||||||||
Premiums | $ | (10 | ) | $ | (19 | ) | $ | 7 | $ | 10 | $ | 0 | $ | (12 | ) |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 47 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2035 Fund (Cont.)
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 47 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 431 | $ | 0 | $ | 28 | $ | 28 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 347 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 62 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 334 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 59 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 28 | $ | 28 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 28 | $ | 28 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 28 | $ | 28 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 28 | $ | 0 | $ | 28 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 28 | $ | 0 | $ | 0 | $ | 28 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 29 | $ | 0 | $ | 0 | $ | 29 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
48 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (18 | ) | $ | 0 | $ | 0 | $ | (18 | ) | ||||||||||
Written Options | 0 | 0 | 12 | 0 | 0 | 12 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (6 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (3 | ) | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (7 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (3 | ) | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (13 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (10 | ) | $ | 0 | $ | 0 | $ | (10 | ) | ||||||||||
Written Options | 0 | 0 | 7 | 0 | 0 | 7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (1 | ) | $ | 0 | $ | 27 | $ | 0 | $ | 0 | $ | 26 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (1 | ) | $ | 0 | $ | 24 | $ | 0 | $ | 0 | $ | 23 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 3,807 | $ | 0 | $ | 0 | $ | 3,807 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 3,807 | $ | 0 | $ | 0 | $ | 3,807 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 1,603 | 0 | 0 | 1,603 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 401 | 0 | 0 | 401 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,004 | $ | 0 | $ | 0 | $ | 2,004 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 5,811 | $ | 0 | $ | 0 | $ | 5,811 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 1 | $ | 0 | $ | 1 | ||||||||
Over the counter | 0 | 28 | 0 | 28 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 29 | $ | 0 | $ | 29 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 5,811 | $ | 28 | $ | 0 | $ | 5,839 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 49 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2040 Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 68.3% | ||||||||||||
MUTUAL FUNDS 68.3% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 6,398 | $ | 1,239 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 52,980 | 601 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 14,459 | 422 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 3,219 | 178 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,470) | 2,440 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $2,470) | 2,440 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 27.3% | ||||||||||||
MUTUAL FUNDS (a) 21.7% | ||||||||||||
PIMCO Emerging Local Bond Fund | 9,130 | $ | 67 | |||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 3,254 | 34 | ||||||||||
PIMCO High Yield Fund | 20,413 | 174 | ||||||||||
PIMCO Income Fund | 17,485 | 208 | ||||||||||
PIMCO Long Duration Total Return Fund | 4,899 | 59 | ||||||||||
PIMCO Long-Term Credit Fund | 4,685 | 56 | ||||||||||
PIMCO Real Return Asset Fund | 8,597 | 73 | ||||||||||
PIMCO Real Return Fund | 6,409 | 71 | ||||||||||
PIMCO Total Return Fund | 3,258 | 34 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $771) | 776 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 5.6% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 5.6% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 20,285 | $ | 201 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $200) | 201 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $971) | 977 | |||||||||||
Total Investments 95.6% (Cost $3,441) | $ | 3,417 | ||||||||||
Financial Derivative Instruments (b)(c) 0.5% (Cost or Premiums, net $4) | 18 | |||||||||||
Other Assets and Liabilities, net 3.9% | 140 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 3,575 | ||||||||||
|
|
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 Index | 1,600.000 | 09/16/2016 | 2 | $ | 10 | $ | 1 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 10 | $ | 1 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,450.000 | 09/16/2016 | 2 | $ | (6 | ) | $ | 0 | ||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (6 | ) | $ | 0 | |||||||||||||||
|
|
|
|
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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 5 | 5 | (4 | ) | (4 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (11 | ) | $ | (14 | ) | $ | 9 | $ | 10 | $ | 0 | $ | (6 | ) |
50 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 29 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 266 | $ | 0 | $ | 17 | $ | 17 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 393 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 70 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
JPM | Receive | BCOMTR Index | 20 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 3 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 17 | $ | 17 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 17 | $ | 17 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 17 | $ | 17 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 17 | $ | 0 | $ | 17 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 17 | $ | 0 | $ | 0 | $ | 17 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 18 | $ | 0 | $ | 0 | $ | 18 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | 13 | 0 | 0 | 13 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (4 | ) | $ | 0 | $ | 0 | $ | (4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (9 | ) | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (11 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (9 | ) | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (15 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 51 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2040 Fund (Cont.)
June 30, 2016
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | ||||||||||
Written Options | 0 | 0 | 1 | 0 | 0 | 1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (2 | ) | $ | 0 | $ | 0 | $ | (2 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (2 | ) | $ | 0 | $ | 17 | $ | 0 | $ | 0 | $ | 15 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (2 | ) | $ | 0 | $ | 15 | $ | 0 | $ | 0 | $ | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 2,440 | $ | 0 | $ | 0 | $ | 2,440 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,440 | $ | 0 | $ | 0 | $ | 2,440 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 776 | 0 | 0 | 776 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 201 | 0 | 0 | 201 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 977 | $ | 0 | $ | 0 | $ | 977 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,417 | $ | 0 | $ | 0 | $ | 3,417 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 1 | $ | 0 | $ | 1 | ||||||||
Over the counter | 0 | 17 | 0 | 17 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 18 | $ | 0 | $ | 18 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,417 | $ | 18 | $ | 0 | $ | 3,435 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
52 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2045 Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 72.1% | ||||||||||||
MUTUAL FUNDS 72.1% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 6,548 | $ | 1,268 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 54,315 | 616 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 15,176 | 443 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 3,079 | 171 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,548) | 2,498 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $2,548) | 2,498 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 23.5% | ||||||||||||
MUTUAL FUNDS (a) 17.7% | ||||||||||||
PIMCO Emerging Local Bond Fund | 9,365 | $ | 69 | |||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 3,070 | 32 | ||||||||||
PIMCO High Yield Fund | 11,758 | 100 | ||||||||||
PIMCO Income Fund | 11,397 | 136 | ||||||||||
PIMCO Long Duration Total Return Fund | 4,342 | 52 | ||||||||||
PIMCO Long-Term Credit Fund | 4,490 | 54 | ||||||||||
PIMCO Real Return Asset Fund | 8,250 | 70 | ||||||||||
PIMCO Real Return Fund | 6,248 | 69 | ||||||||||
PIMCO Total Return Fund | 3,073 | 32 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $613) |
| 614 | ||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 5.8% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 5.8% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 20,285 | $ | 201 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $201) | 201 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $814) | 815 | |||||||||||
Total Investments 95.6% (Cost $3,362) | $ | 3,313 | ||||||||||
Financial Derivative (Cost or Premiums, net $4) | 18 | |||||||||||
Other Assets and Liabilities, net 3.9% | 133 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 3,464 | ||||||||||
|
|
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 Index | 1,600.000 | 09/16/2016 | 2 | $ | 10 | $ | 1 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 10 | $ | 1 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,450.000 | 09/16/2016 | 2 | $ | (6 | ) | $ | 0 | ||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (6 | ) | $ | 0 | |||||||||||||||
|
|
|
|
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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 6 | 5 | (4 | ) | (5 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (14 | ) | $ | (13 | ) | $ | 9 | $ | 12 | $ | 0 | $ | (6 | ) |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 53 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2045 Fund (Cont.)
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 28 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 257 | $ | 0 | $ | 17 | $ | 17 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 398 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 71 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 17 | $ | 17 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 17 | $ | 17 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 17 | $ | 17 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 17 | $ | 0 | $ | 17 | ||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 17 | $ | 0 | $ | 0 | $ | 17 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 18 | $ | 0 | $ | 0 | $ | 18 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (20 | ) | $ | 0 | $ | 0 | $ | (20 | ) | ||||||||||
Written Options | 0 | 0 | 15 | 0 | 0 | 15 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (5 | ) | $ | 0 | $ | 0 | $ | (5 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (10 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (11 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (10 | ) | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (16 | ) | ||||||||||
|
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|
|
|
|
|
|
|
|
|
|
54 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
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 | $ | (1 | ) | $ | 0 | $ | 16 | $ | 0 | $ | 0 | $ | 15 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (1 | ) | $ | 0 | $ | 15 | $ | 0 | $ | 0 | $ | 14 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 2,498 | $ | 0 | $ | 0 | $ | 2,498 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,498 | $ | 0 | $ | 0 | $ | 2,498 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 614 | 0 | 0 | 614 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 201 | 0 | 0 | 201 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 815 | $ | 0 | $ | 0 | $ | 815 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,313 | $ | 0 | $ | 0 | $ | 3,313 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 1 | $ | 0 | $ | 1 | ||||||||
Over the counter | 0 | 17 | 0 | 17 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 18 | $ | 0 | $ | 18 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,313 | $ | 18 | $ | 0 | $ | 3,331 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 55 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2050 Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 73.8% | ||||||||||||
MUTUAL FUNDS 73.8% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 7,912 | $ | 1,532 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 64,255 | 729 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 18,031 | 527 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 3,681 | 204 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $3,018) | 2,992 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $3,018) | 2,992 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 23.7% | ||||||||||||
MUTUAL FUNDS (a) 16.3% | ||||||||||||
PIMCO Emerging Local Bond Fund | 10,954 | $ | 81 | |||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 3,937 | 41 | ||||||||||
PIMCO High Yield Fund | 11,822 | 101 | ||||||||||
PIMCO Income Fund | 11,930 | 142 | ||||||||||
PIMCO Long Duration Total Return Fund | 5,295 | 63 | ||||||||||
PIMCO Long-Term Credit Fund | 5,236 | 63 | ||||||||||
PIMCO Real Return Asset Fund | 5,774 | 49 | ||||||||||
PIMCO Real Return Fund | 7,289 | 81 | ||||||||||
PIMCO Total Return Fund | 3,940 | 40 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $657) | 661 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 7.4% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 7.4% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 30,411 | $ | 301 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $301) | 301 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $958) | 962 | |||||||||||
Total Investments 97.5% (Cost $3,976) | $ | 3,954 | ||||||||||
Financial Derivative (Cost or Premiums, net $4) | 21 | |||||||||||
Other Assets and Liabilities, net 2.0% | 82 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 4,057 | ||||||||||
|
|
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 Index | 1,600.000 | 09/16/2016 | 2 | $ | 10 | $ | 1 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 10 | $ | 1 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,450.000 | 09/16/2016 | 2 | $ | (6 | ) | $ | 0 | ||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (6 | ) | $ | 0 | |||||||||||||||
|
|
|
|
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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 6 | 5 | (4 | ) | (5 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (15 | ) | $ | (13 | ) | $ | 9 | $ | 13 | $ | 0 | $ | (6 | ) |
56 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 33 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 302 | $ | 0 | $ | 19 | $ | 19 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 465 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 83 | 0 | 1 | 1 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 20 | $ | 20 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements |
| $ | 0 | $ | 20 | $ | 20 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 19 | $ | 19 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 19 | $ | 0 | $ | 19 | ||||||||||||||||||||||||||
CBK | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 1 | 0 | 1 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total Over the Counter | $ | 0 | $ | 0 | $ | 20 | $ | 20 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 1 | $ | 0 | $ | 19 | $ | 0 | $ | 0 | $ | 20 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 1 | $ | 0 | $ | 20 | $ | 0 | $ | 0 | $ | 21 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (22 | ) | $ | 0 | $ | 0 | $ | (22 | ) | ||||||||||
Written Options | 0 | 0 | 16 | 0 | 0 | 16 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (6 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (9 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (10 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (9 | ) | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (16 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 57 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2050 Fund (Cont.)
June 30, 2016
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
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 | $ | (1 | ) | $ | 0 | $ | 19 | $ | 0 | $ | 0 | $ | 18 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (1 | ) | $ | 0 | $ | 18 | $ | 0 | $ | 0 | $ | 17 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value | ||||||||||||||||
Mutual Funds | $ | 2,992 | $ | 0 | $ | 0 | $ | 2,992 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,992 | $ | 0 | $ | 0 | $ | 2,992 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value | ||||||||||||||||
Mutual Funds | 661 | 0 | 0 | 661 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 301 | 0 | 0 | 301 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 962 | $ | 0 | $ | 0 | $ | 962 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,954 | $ | 0 | $ | 0 | $ | 3,954 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 1 | $ | 0 | $ | 1 | ||||||||
Over the counter | 0 | 20 | 0 | 20 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 21 | $ | 0 | $ | 21 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,954 | $ | 21 | $ | 0 | $ | 3,975 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
58 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2055 Fund
June 30, 2016
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 73.8% | ||||||||||||
MUTUAL FUNDS 73.8% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 6,778 | $ | 1,313 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 54,760 | 621 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 15,367 | 449 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 3,117 | 172 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,603) | 2,555 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $2,603) | 2,555 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 21.9% | ||||||||||||
MUTUAL FUNDS (a) 16.1% | ||||||||||||
PIMCO Emerging Local Bond Fund | 9,770 | $ | 72 | |||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 3,334 | 35 | ||||||||||
PIMCO High Yield Fund | 10,014 | 85 | ||||||||||
PIMCO Income Fund | 10,104 | 120 | ||||||||||
PIMCO Long Duration Total Return Fund | 4,254 | 51 | ||||||||||
PIMCO Long-Term Credit Fund | 4,436 | 53 | ||||||||||
PIMCO Real Return Asset Fund | 4,147 | 35 | ||||||||||
PIMCO Real Return Fund | 6,173 | 69 | ||||||||||
PIMCO Total Return Fund | 3,344 | 35 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $558) | 555 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 5.8% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 5.8% | ||||||||||||
PIMCO Short-Term | 20,285 | $ | 201 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $200) | 201 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $758) |
| 756 | ||||||||||
Total Investments 95.7% (Cost $3,361) | $ | 3,311 | ||||||||||
Financial Derivative Instruments (b)(c) 0.5% (Cost or Premiums, net $4) | 18 | |||||||||||
Other Assets and Liabilities, net 3.8% | 130 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 3,459 | ||||||||||
|
|
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 Index | 1,600.000 | 09/16/2016 | 2 | $ | 10 | $ | 1 | |||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 10 | $ | 1 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,450.000 | 09/16/2016 | 2 | $ | (6 | ) | $ | 0 | ||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (6 | ) | $ | 0 | |||||||||||||||
|
|
|
|
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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 6 | 5 | (4 | ) | (5 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (15 | ) | $ | (13 | ) | $ | 9 | $ | 13 | $ | 0 | $ | (6 | ) |
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 59 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend 2055 Fund (Cont.)
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 28 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 257 | $ | 0 | $ | 17 | $ | 17 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 394 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 70 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 17 | $ | 17 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 17 | $ | 17 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 17 | $ | 17 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 17 | $ | 0 | $ | 17 | ||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | 0 | $ | 0 | $ | 17 | $ | 0 | $ | 0 | $ | 17 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 18 | $ | 0 | $ | 0 | $ | 18 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (23 | ) | $ | 0 | $ | 0 | $ | (23 | ) | ||||||||||
Written Options | 0 | 0 | 17 | 0 | 0 | 17 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (6 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (10 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (11 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (10 | ) | $ | 0 | $ | (7 | ) | $ | 0 | $ | 0 | $ | (17 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
60 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
Derivatives not accounted for as hedging instruments | ||||||||||||||||||||||||
Commodity Contracts | Credit Contracts | Equity Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Total | |||||||||||||||||||
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 | $ | (1 | ) | $ | 0 | $ | 16 | $ | 0 | $ | 0 | $ | 15 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (1 | ) | $ | 0 | $ | 15 | $ | 0 | $ | 0 | $ | 14 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 2,555 | $ | 0 | $ | 0 | $ | 2,555 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,555 | $ | 0 | $ | 0 | $ | 2,555 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 555 | 0 | 0 | 555 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 201 | 0 | 0 | 201 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 756 | $ | 0 | $ | 0 | $ | 756 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,311 | $ | 0 | $ | 0 | $ | 3,311 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 1 | $ | 0 | $ | 1 | ||||||||
Over the counter | 0 | 17 | 0 | 17 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 18 | $ | 0 | $ | 18 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,311 | $ | 18 | $ | 0 | $ | 3,329 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 61 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend Income Fund
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN SECURITIES 36.1% | ||||||||||||
MUTUAL FUNDS 36.1% | ||||||||||||
Vanguard 500 Index Fund ‘Admiral’ | 3,386 | $ | 656 | |||||||||
Vanguard Developed Markets Index Fund ‘Admiral’ | 24,315 | 276 | ||||||||||
Vanguard Emerging Markets Stock Index Fund ‘Admiral’ | 7,087 | 207 | ||||||||||
Vanguard Small-Cap Index Fund ‘Admiral’ | 1,857 | 103 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $1,255) | 1,242 | |||||||||||
|
| |||||||||||
Total Investments in Securities (Cost $1,255) | 1,242 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
INVESTMENTS IN AFFILIATES 63.1% | ||||||||||||
MUTUAL FUNDS (a) 60.0% | ||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 9,800 | $ | 102 | |||||||||
PIMCO High Yield Fund | 29,958 | 256 | ||||||||||
PIMCO Income Fund | 47,647 | 567 | ||||||||||
PIMCO Long Duration Total Return Fund | 10,063 | 120 | ||||||||||
PIMCO Long-Term Credit Fund | 10,248 | 123 | ||||||||||
PIMCO Real Return Asset Fund | 28,265 | 240 | ||||||||||
PIMCO Real Return Fund | 30,944 | 343 | ||||||||||
PIMCO Total Return Fund | 29,931 | 309 | ||||||||||
|
| |||||||||||
Total Mutual Funds (Cost $2,046) | 2,060 | |||||||||||
|
| |||||||||||
SHARES | MARKET VALUE (000S) | |||||||||||
SHORT-TERM INSTRUMENTS 3.1% | ||||||||||||
CENTRAL FUNDS USED FOR CASH MANAGEMENT PURPOSES 3.1% | ||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 10,841 | $ | 107 | |||||||||
|
| |||||||||||
Total Short-Term Instruments (Cost $107) | 107 | |||||||||||
|
| |||||||||||
Total Investments in Affiliates (Cost $2,153) | 2,167 | |||||||||||
Total Investments 99.2% (Cost $3,408) | $ | 3,409 | ||||||||||
Financial Derivative (Cost or Premiums, net $8) | 8 | |||||||||||
Other Assets and Liabilities, net 0.6% | 20 | |||||||||||
|
| |||||||||||
Net Assets 100.0% | $ | 3,437 | ||||||||||
|
|
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 Index | 1,750.000 | 09/16/2016 | 1 | $ | 8 | $ | 1 | |||||||||||||
Put - CBOE S&P 500 Index | 1,700.000 | 12/16/2016 | 1 | 2 | 2 | |||||||||||||||
Put - CBOE S&P 500 Index | 1,750.000 | 12/16/2016 | 1 | 2 | 2 | |||||||||||||||
|
|
|
| |||||||||||||||||
$ | 12 | $ | 5 | |||||||||||||||||
|
|
|
| |||||||||||||||||
Total Purchased Options | $ | 12 | $ | 5 | ||||||||||||||||
|
|
|
|
WRITTEN OPTIONS:
OPTIONS ON INDICES
Description | Strike Value | Expiration Date | # of Contracts | Premiums (Received) | Market Value | |||||||||||||||
Put - CBOE S&P 500 Index | 1,500.000 | 09/16/2016 | 1 | $ | (3 | ) | $ | 0 | ||||||||||||
Put - CBOE S&P 500 Index | 1,500.000 | 12/16/2016 | 1 | (1 | ) | (1 | ) | |||||||||||||
|
|
|
| |||||||||||||||||
$ | (4 | ) | $ | (1 | ) | |||||||||||||||
|
|
|
| |||||||||||||||||
Total Written Options | $ | (4 | ) | $ | (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, 2016:
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 | $ | (1) | $ | 0 | $ | 0 | $ | (1) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
(c) FINANCIAL DERIVATIVE INSTRUMENTS: OVER THE COUNTER
WRITTEN OPTIONS:
TRANSACTIONS IN WRITTEN CALL AND PUT OPTIONS FOR THE PERIOD ENDED JUNE 30, 2016:
Balance at Beginning of Period | Sales | Closing Buys | Expirations | Exercised | Balance at End of Period | |||||||||||||||||||
# of Contracts | 2 | 3 | (2 | ) | (1 | ) | 0 | 2 | ||||||||||||||||
Premiums | $ | (8 | ) | $ | (7 | ) | $ | 6 | $ | 5 | $ | 0 | $ | (4 | ) |
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 | |||||||||||||||||||||||||||||||
BOA | Receive | DWRTFT Index | 7 | 1-Month USD-LIBOR plus a specified spread | 04/06/2017 | $ 64 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | ||||||||||||||||||
CBK | Receive | BCOMTR Index | 388 | 3-Month U.S. Treasury Bill rate plus a specified spread | 08/15/2016 | 69 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 0 | $ | 4 | $ | 4 | $ | 0 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total Swap Agreements | $ | 0 | $ | 4 | $ | 4 | $ | 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. |
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 (received)/pledged as of June 30, 2016:
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 (Received)/ Pledged | Net Exposure (2) | |||||||||||||||||||||||||||||||||||||
BOA | $ | 0 | $ | 0 | $ | 4 | $ | 4 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 4 | $ | 0 | $ | 4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 6, Principal Risks, 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, 2016:
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 | $ | 0 | $ | 0 | $ | 4 | $ | 0 | $ | 0 | $ | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | 9 | $ | 0 | $ | 0 | $ | 9 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Written Options | $ | 0 | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See Accompanying Notes | ANNUAL REPORT | JUNE 30, 2016 | 63 |
Table of Contents
Schedule of Investments PIMCO RealPath™ Blend Income Fund (Cont.)
June 30, 2016
The effect of Financial Derivative Instruments on the Statements of Operations for the period ended June 30, 2016:
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 | $ | (12 | ) | $ | 0 | $ | 0 | $ | (12 | ) | ||||||||||
Written Options | 0 | 0 | 7 | 0 | 0 | 7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 0 | $ | 0 | $ | (5 | ) | $ | 0 | $ | 0 | $ | (5 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (10 | ) | $ | 0 | $ | (1 | ) | $ | 0 | $ | 0 | $ | (11 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (10 | ) | $ | 0 | $ | (6 | ) | $ | 0 | $ | 0 | $ | (16 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Financial Derivative Instruments |
| |||||||||||||||||||||||
Exchange-traded or centrally cleared | ||||||||||||||||||||||||
Purchased Options | $ | 0 | $ | 0 | $ | (3 | ) | $ | 0 | $ | 0 | $ | (3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Over the counter | ||||||||||||||||||||||||
Swap Agreements | $ | (2 | ) | $ | 0 | $ | 4 | $ | 0 | $ | 0 | $ | 2 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | (2 | ) | $ | 0 | $ | 1 | $ | 0 | $ | 0 | $ | (1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
FAIR VALUE MEASUREMENTS
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund’s assets and liabilities:
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Investments in Securities, at Value |
| |||||||||||||||
Mutual Funds | $ | 1,242 | $ | 0 | $ | 0 | $ | 1,242 | ||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,242 | $ | 0 | $ | 0 | $ | 1,242 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Investments in Affiliates, at Value |
| |||||||||||||||
Mutual Funds | 2,060 | 0 | 0 | 2,060 | ||||||||||||
Short-Term Instruments | ||||||||||||||||
Central Funds Used for Cash Management Purposes | 107 | 0 | 0 | 107 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 2,167 | $ | 0 | $ | 0 | $ | 2,167 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 3,409 | $ | 0 | $ | 0 | $ | 3,409 | ||||||||
|
|
|
|
|
|
|
|
Category and Subcategory | Level 1 | Level 2 | Level 3 | Fair Value at 06/30/2016 | ||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | 5 | $ | 0 | $ | 5 | ||||||||
Over the counter | 0 | 4 | 0 | 4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 0 | $ | 9 | $ | 0 | $ | 9 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||
Exchange-traded or centrally cleared | $ | 0 | $ | (1 | ) | $ | 0 | $ | (1 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Totals | $ | 3,409 | $ | 8 | $ | 0 | $ | 3,417 | ||||||||
|
|
|
|
|
|
|
|
There were no significant transfers between Levels 1, 2, or 3 during the period ended June 30, 2016.
64 | PIMCO EQUITY SERIES | See Accompanying Notes |
Table of Contents
June 30, 2016
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. 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. Income or short-term capital gain distributions received from registered investment companies are recorded as dividend income. Long-term capital gain distributions received from registered investment companies 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 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) Dividends and Distributions to Shareholders The following table shows the anticipated frequency of dividends from net investment income, if any, for each Fund.
Declared and Paid Quarterly: |
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 |
Net realized capital gains earned by each Fund, if any, will be distributed no less frequently than once each year.
Income dividends 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. Examples of events that give rise to timing differences include wash sales, straddles and capital loss carryforwards. Further, the character of investment income and capital gains may be different for certain transactions under the two methods of accounting. Examples of transactions that may cause character differences include the treatment of paydowns on mortgage-backed securities, swaps, foreign currency transactions and contingent debt instruments. As a result, income dividends 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.
ANNUAL REPORT | JUNE 30, 2016 | 65 |
Table of Contents
Notes to Financial Statements (Cont.)
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 financial accounting to tax characterizations of dividend distributions.
(d) New Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”), ASU 2014-11, that expanded secured borrowing accounting for certain repurchase agreements. The ASU also sets forth additional disclosure requirements for certain transactions accounted for as sales in order to provide financial statement users with information to compare to similar transactions accounted for as secured borrowings. The ASU became effective prospectively for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. The Funds have adopted the ASU. The financial statements have been modified to provide enhanced disclosures surrounding secured borrowing transactions, if any. See the Notes to Schedules of Investments for additional details.
In August 2014, the FASB issued 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. At this time, management is evaluating the implications of these changes on the 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. At this time, management is evaluating the implications of these changes on the 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 attributable to that Fund or class, less any liabilities, 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 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. 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 or other pricing sources. With respect to any portion of a Fund’s assets that are invested in one or more open-end management investment companies (other than exchange-traded funds (“ETFs”)), the Fund’s NAV will be calculated based upon 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
66 | PIMCO EQUITY SERIES |
Table of Contents
June 30, 2016
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 non-U.S. securities. Foreign (non-U.S.) 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 the 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
ANNUAL REPORT | JUNE 30, 2016 | 67 |
Table of Contents
Notes to Financial Statements (Cont.)
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:
n | Level 1 — Inputs using (unadjusted) quoted prices in active markets or exchanges for identical assets and liabilities. |
n | 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. |
n | 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 timing recognition 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 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.
68 | PIMCO EQUITY SERIES |
Table of Contents
June 30, 2016
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. Investments in privately held investment funds with significant restrictions on redemption where the inputs to the NAVs are observable will be valued based upon the NAVs of such investments and are categorized as Level 2 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 of such short-term debt instrument is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. Prior to July 31, 2015, short-term debt investments having a maturity of 60 days or less and repurchase agreements were generally valued at amortized cost which approximates fair value. Short-term debt instruments having a remaining maturity of 60 days or less are categorized as Level 2 of the fair value hierarchy.
Equity exchange-traded options and over the counter financial derivative instruments, such as forward foreign currency contracts, options contracts, or swap agreements, derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. Other than swap agreements, which are
valued using a broker-dealer bid quotation or on market-based prices provided by Pricing Services or other pricing sources, 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 listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange (if available). For centrally cleared credit default swaps, the clearing facility requires its members to provide actionable price levels across complete term structures. These levels along with external third-party prices are used to produce daily settlement prices. These securities are categorized as Level 2 of the fair value hierarchy. Centrally cleared interest rate swaps are valued using a pricing model that references the underlying rates including the overnight index swap rate and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price. These securities are categorized as Level 2 of the fair value hierarchy.
The validity of fair value is reviewed by the Adviser on a periodic basis and may be amended in accordance with the Trust’s valuation procedures.
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 (“Central Fund”) to the extent permitted by the Act and rules thereunder. The Central Fund is a registered investment company 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 Fund are money market and short maturity fixed income instruments. The Central Fund may incur expenses related to its investment activities, but does not pay Investment Advisory Fees or Supervisory and Administrative Fees to the Adviser. The Central Fund is 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, 2016 (amounts in thousands†):
ANNUAL REPORT | JUNE 30, 2016 | 69 |
Table of Contents
Notes to Financial Statements (Cont.)
PIMCO RealPath™ Blend 2020 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 75 | $ | 36 | $ | (108 | ) | $ | (8 | ) | $ | 5 | $ | 0 | $ | 3 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 226 | 113 | (243 | ) | (13 | ) | 9 | 92 | 18 | 1 | ||||||||||||||||||||||||||
PIMCO High Yield Fund | 153 | 185 | (20 | ) | (1 | ) | (4 | ) | 313 | 11 | 4 | |||||||||||||||||||||||||
PIMCO Income Fund | 0 | 499 | 0 | 0 | 5 | 504 | 7 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 224 | 99 | (139 | ) | (8 | ) | 20 | 196 | 13 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 192 | (7 | ) | 0 | 11 | 196 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 301 | 112 | (44 | ) | (2 | ) | 25 | 392 | 5 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 304 | 151 | (50 | ) | 0 | 13 | 418 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 459 | 183 | (436 | ) | (20 | ) | 6 | 192 | 13 | 16 | ||||||||||||||||||||||||||
Totals | $ | 1,742 | $ | 1,570 | $ | (1,047 | ) | $ | (52 | ) | $ | 90 | $ | 2,303 | $ | 76 | $ | 27 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
PIMCO RealPath™ Blend 2025 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 76 | $ | 37 | $ | (106 | ) | $ | (12 | ) | $ | 5 | $ | 0 | $ | 3 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 153 | 72 | (178 | ) | (10 | ) | 4 | 41 | 14 | 1 | ||||||||||||||||||||||||||
PIMCO High Yield Fund | 232 | 129 | (87 | ) | (7 | ) | (11 | ) | 256 | 15 | 7 | |||||||||||||||||||||||||
PIMCO Income Fund | 0 | 318 | 0 | 0 | 3 | 321 | 5 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 226 | 107 | (169 | ) | (10 | ) | 17 | 171 | 13 | 7 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 170 | (7 | ) | 0 | 9 | 172 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 304 | 128 | (103 | ) | (5 | ) | 19 | 343 | 6 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 230 | 92 | (122 | ) | (1 | ) | 6 | 205 | 2 | 0 | ||||||||||||||||||||||||||
PIMCO Total Return Fund | 233 | 106 | (263 | ) | (12 | ) | 2 | 66 | 7 | 10 | ||||||||||||||||||||||||||
Totals | $ | 1,454 | $ | 1,159 | $ | (1,035 | ) | $ | (57 | ) | $ | 54 | $ | 1,575 | $ | 68 | $ | 25 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
PIMCO RealPath™ Blend 2030 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 154 | $ | 178 | $ | (332 | ) | $ | (10 | ) | $ | 10 | $ | 0 | $ | 6 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 76 | 127 | (141 | ) | (3 | ) | 5 | 64 | 6 | 0 | ||||||||||||||||||||||||||
PIMCO High Yield Fund | 230 | 306 | (55 | ) | (4 | ) | 5 | 482 | 18 | 6 | ||||||||||||||||||||||||||
PIMCO Income Fund | 0 | 548 | 0 | 0 | 5 | 553 | 8 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 225 | 296 | (298 | ) | (13 | ) | 34 | 244 | 14 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 239 | (7 | ) | 0 | 13 | 245 | 3 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 303 | 381 | (233 | ) | (6 | ) | 44 | 489 | 5 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 76 | 155 | (75 | ) | 0 | 8 | 164 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 1,001 | (595 | ) | 0 | 0 | 406 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 77 | 159 | (165 | ) | (3 | ) | 2 | 70 | 3 | 3 | ||||||||||||||||||||||||||
Totals | $ | 1,141 | $ | 3,390 | $ | (1,901 | ) | $ | (39 | ) | $ | 126 | $ | 2,717 | $ | 65 | $ | 15 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
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PIMCO RealPath™ Blend 2035 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 155 | $ | 153 | $ | (256 | ) | $ | (17 | ) | $ | 15 | $ | 50 | $ | 8 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 0 | 59 | (1 | ) | 0 | 2 | 60 | 0 | 0 | |||||||||||||||||||||||||||
PIMCO High Yield Fund | 156 | 265 | (21 | ) | (1 | ) | 0 | 399 | 13 | 4 | ||||||||||||||||||||||||||
PIMCO Income Fund | 0 | 453 | 0 | 0 | 5 | 458 | 6 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 228 | 229 | (332 | ) | (13 | ) | 25 | 137 | 13 | 7 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 136 | (6 | ) | 0 | 7 | 137 | 2 | 0 | |||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 305 | 281 | (426 | ) | (3 | ) | 26 | 183 | 6 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 0 | 117 | (1 | ) | 0 | 3 | 119 | 0 | 0 | |||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 1,301 | (900 | ) | 0 | 0 | 401 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 0 | 60 | (1 | ) | 0 | 1 | 60 | 1 | 0 | |||||||||||||||||||||||||||
Totals | $ | 844 | $ | 3,054 | $ | (1,944 | ) | $ | (34 | ) | $ | 84 | $ | 2,004 | $ | 50 | $ | 11 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
PIMCO RealPath™ Blend 2040 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 77 | $ | 37 | $ | (45 | ) | $ | (7 | ) | $ | 5 | $ | 67 | $ | 4 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 0 | 33 | 0 | 0 | 1 | 34 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO High Yield Fund | 156 | 41 | (14 | ) | (1 | ) | (8 | ) | 174 | 9 | 4 | |||||||||||||||||||||||||
PIMCO Income Fund | 0 | 206 | 0 | 0 | 2 | 208 | 3 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 228 | 45 | (218 | ) | (13 | ) | 17 | 59 | 11 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 53 | 0 | 0 | 3 | 56 | 1 | 0 | ||||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 229 | 51 | (215 | ) | (5 | ) | 13 | 73 | 4 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 0 | 70 | 0 | 0 | 1 | 71 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 201 | 0 | 0 | 0 | 201 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Total Return Fund | 0 | 34 | 0 | 0 | 0 | 34 | 0 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 690 | $ | 771 | $ | (492 | ) | $ | (26 | ) | $ | 34 | $ | 977 | $ | 32 | $ | 10 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
PIMCO RealPath™ Blend 2045 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 78 | $ | 20 | $ | (25 | ) | $ | (3 | ) | $ | (1 | ) | $ | 69 | $ | 4 | $ | 0 | |||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 0 | 31 | 0 | 0 | 1 | 32 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO High Yield Fund | 79 | 33 | (8 | ) | 0 | (4 | ) | 100 | 5 | 2 | ||||||||||||||||||||||||||
PIMCO Income Fund | 0 | 135 | 0 | 0 | 1 | 136 | 2 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 230 | 34 | (213 | ) | (14 | ) | 15 | 52 | 11 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 51 | 0 | 0 | 3 | 54 | 1 | 0 | ||||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 154 | 32 | (122 | ) | (3 | ) | 9 | 70 | 2 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 0 | 68 | 0 | 0 | 1 | 69 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 201 | 0 | 0 | 0 | 201 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Total Return Fund | 0 | 31 | 0 | 0 | 1 | 32 | 0 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 541 | $ | 636 | $ | (368 | ) | $ | (20 | ) | $ | 26 | $ | 815 | $ | 25 | $ | 8 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
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Notes to Financial Statements (Cont.)
PIMCO RealPath™ Blend 2050 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 77 | $ | 30 | $ | (24 | ) | $ | (3 | ) | $ | 1 | $ | 81 | $ | 4 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 0 | 40 | 0 | 0 | 1 | 41 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO High Yield Fund | 77 | 33 | (5 | ) | 0 | (4 | ) | 101 | 5 | 2 | ||||||||||||||||||||||||||
PIMCO Income Fund | 0 | 141 | 0 | 0 | 1 | 142 | 2 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 229 | 52 | (222 | ) | (13 | ) | 17 | 63 | 11 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 60 | 0 | 0 | 3 | 63 | 1 | 0 | ||||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 77 | 34 | (65 | ) | (2 | ) | 5 | 49 | 1 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 0 | 80 | 0 | 0 | 1 | 81 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 301 | 0 | 0 | 0 | 301 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Total Return Fund | 0 | 39 | 0 | 0 | 1 | 40 | 0 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 460 | $ | 810 | $ | (316 | ) | $ | (18 | ) | $ | 26 | $ | 962 | $ | 24 | $ | 8 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
PIMCO RealPath™ Blend 2055 Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 78 | $ | 19 | $ | (21 | ) | $ | (3 | ) | $ | (1 | ) | $ | 72 | $ | 4 | $ | 0 | |||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 0 | 34 | 0 | 0 | 1 | 35 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO High Yield Fund | 79 | 18 | (7 | ) | (1 | ) | (4 | ) | 85 | 4 | 2 | |||||||||||||||||||||||||
PIMCO Income Fund | 0 | 119 | 0 | 0 | 1 | 120 | 2 | 0 | ||||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 233 | 29 | (214 | ) | (13 | ) | 16 | 51 | 11 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 50 | 0 | 0 | 3 | 53 | 1 | 0 | ||||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 78 | 7 | (53 | ) | (1 | ) | 4 | 35 | 1 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 0 | 68 | 0 | 0 | 1 | 69 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 0 | 202 | 0 | 0 | 0 | 201 | 0 | 0 | ||||||||||||||||||||||||||||
PIMCO Total Return Fund | 0 | 34 | 0 | 0 | 0 | 35 | 0 | 0 | ||||||||||||||||||||||||||||
Totals | $ | 468 | $ | 580 | $ | (295 | ) | $ | (18 | ) | $ | 21 | $ | 756 | $ | 23 | $ | 8 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
PIMCO RealPath™ Blend Income Fund | ||||||||||||||||||||||||||||||||||||
Underlying PIMCO Funds | Market Value 06/30/2015 | Purchases at Cost | Proceeds from Sales | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Market Value 06/30/2016 | Dividend Income (1) | Realized Net Capital Gain Distributions (1) | ||||||||||||||||||||||||||||
PIMCO Emerging Local Bond Fund | $ | 76 | $ | 16 | $ | (87 | ) | $ | (10 | ) | $ | 5 | $ | 0 | $ | 3 | $ | 0 | ||||||||||||||||||
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) | 309 | 54 | (254 | ) | (13 | ) | 6 | 102 | 24 | 1 | ||||||||||||||||||||||||||
PIMCO High Yield Fund | 77 | 183 | (2 | ) | 0 | (2 | ) | 256 | 7 | 2 | ||||||||||||||||||||||||||
PIMCO Income Fund | 0 | 567 | (5 | ) | 0 | 5 | 567 | 8 | 0 | |||||||||||||||||||||||||||
PIMCO Long Duration Total Return Fund | 228 | 45 | (159 | ) | (9 | ) | 15 | 120 | 12 | 6 | ||||||||||||||||||||||||||
PIMCO Long-Term Credit Fund | 0 | 116 | 0 | 0 | 7 | 123 | 2 | 0 | ||||||||||||||||||||||||||||
PIMCO Real Return Asset Fund | 229 | 35 | (37 | ) | (1 | ) | 14 | 240 | 4 | 0 | ||||||||||||||||||||||||||
PIMCO Real Return Fund | 466 | 51 | (183 | ) | (1 | ) | 10 | 343 | 4 | 0 | ||||||||||||||||||||||||||
PIMCO Short-Term Floating NAV Portfolio III | 100 | 57 | (50 | ) | 0 | 0 | 107 | 1 | 0 | |||||||||||||||||||||||||||
PIMCO Total Return Fund | 467 | 73 | (218 | ) | (9 | ) | (4 | ) | 309 | 14 | 16 | |||||||||||||||||||||||||
Totals | $ | 1,952 | $ | 1,197 | $ | (995 | ) | $ | (43 | ) | $ | 56 | $ | 2,167 | $ | 79 | $ | 25 |
† | 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 received from underlying funds are determined at the end of the fiscal year and include a return of capital. See Note 2(c) in the Notes to Financial Statements for more information. |
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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) 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 they own or in which they 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.
(b) 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
ANNUAL REPORT | JUNE 30, 2016 | 73 |
Table of Contents
Notes to Financial Statements (Cont.)
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 (see below), however, 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 reflects a Fund’s actual economic exposure during the term of the credit default swap agreement. 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.
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 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.
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.
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 (or Acquired Funds) 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.
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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 an increase in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by a Fund (or Acquired Funds) 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 (or Acquired Funds) may lose money if these changes are not anticipated by the Fund’s (or Acquired Funds’) management. A Fund (or Acquired Funds) 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.). At present, the U.S. and many parts of the world, including certain European countries, are experiencing near historically low interest rates. 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. 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 (or Acquired Funds) to lose value. If a Fund (or Acquired Funds) lost enough value, the Fund (or Acquired Funds) could face increased shareholder redemptions, which could force the Fund to liquidate investments at disadvantageous times or prices, thereby adversely affecting the Fund.
To the extent that a Fund (or Acquired Fund) may invest in securities and instruments that are economically tied to Russia, the Fund (or Acquired 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 (or Acquired 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 (or Acquired Funds) 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 Acquired Funds), or, in the case of hedging positions, that the Fund’s (or Acquired Funds’) 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
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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 (or Acquired Funds’) investments in foreign currency-denominated securities may reduce the Fund’s (or Acquired Funds’) returns.
A Fund’s (or Acquired Fund’s) investments in commodity-linked financial derivative instruments may subject the Fund (or Acquired Fund) to greater market price volatility than investments in traditional securities. The value of commodity-linked financial derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments.
Credit and Counterparty Risks A Fund (or Acquired Funds) will be exposed to credit risk to parties with whom it trades and will also bear the risk of settlement default. A Fund (or Acquired Funds) 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 financial derivative instruments traded on exchanges or clearinghouses, the primary credit risk is the creditworthiness of a Fund’s clearing broker or the exchange or clearinghouse itself. A Fund (or Acquired Funds) 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 (or Acquired Funds) may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund (or Acquired Funds) has unsettled or open transactions will default. PIMCO, as the Adviser, minimizes counterparty risks to the Funds (or Acquired 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 (or Acquired Funds) exceed a predetermined threshold, such counterparty shall advance collateral to the Fund (or Acquired Funds) in the form of cash or securities equal in value to the unpaid amount owed to the Fund (or
Acquired Funds). A Fund (or Acquired Funds) 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 (or Acquired Funds) subsequently decreases, the Fund (or Acquired Funds) 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 (or Acquired Funds) 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.
Master Netting 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
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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 To-Be-Announced 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.
7. 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:
Investment Advisory Fee | Supervisory and Administrative Fee | |||||||||||||||||||||||
Fund Name | All Classes | Institutional Class | Administrative Class | Class A | ||||||||||||||||||||
PIMCO RealPath™ Blend 2020 Fund | 0.01% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2025 Fund | 0.01% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 0.02% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 0.03% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 0.03% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 0.03% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 0.03% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 0.03% | 0.02% | 0.02% | 0.27% | ||||||||||||||||||||
PIMCO RealPath™ Blend Income Fund | 0.01% | 0.02% | 0.02% | 0.27% |
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(c) Distribution and Servicing Fees PIMCO Investments LLC (“PI”), 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, Class C and Class R shares of the Trust pursuant to Rule 12b-1 under the Act. In connection with the distribution of Class C and Class R shares of the Trust, the Distributor receives distribution fees from the Trust of up to 0.75% for Class C shares and 0.25% for Class R shares, and in connection with personal services rendered to Class A, Class C 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, Class C 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 set forth 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 A | — | 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, 2016, the Distributor retained $184,988 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, which include service fees payable with respect to the Administrative Class 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 PIMCO has agreed to waive a portion of the Funds’ Supervisory and Administrative Fees in each Fund’s first fiscal year, to the extent that the payment of each Fund’s pro rata share of organizational expenses and Trustee Fees cause the actual expense
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ratio to rise above the rates disclosed in the then-current prospectus plus 0.0049%, the “Expense Limit” (calculated as a percentage of each Fund’s average daily net assets attributable to each class).
PIMCO may be reimbursed for these waived amounts in future periods, not to exceed thirty-six months after the waiver. Expenses that have been waived may still be reimbursed by the Administrator, to the extent the Fund’s annualized total portfolio operating expenses plus the amount reimbursed does not exceed the Expense Limit. The recoverable amounts to PIMCO at June 30, 2016, were as follows (amounts in thousands):
Fund Name | Recoverable Amounts | |||||||
PIMCO RealPath™ Blend 2020 Fund | $ | 17 | ||||||
PIMCO RealPath™ Blend 2025 Fund | 17 | |||||||
PIMCO RealPath™ Blend 2030 Fund | 17 | |||||||
PIMCO RealPath™ Blend 2035 Fund | 17 | |||||||
PIMCO RealPath™ Blend 2040 Fund | 17 | |||||||
PIMCO RealPath™ Blend 2045 Fund | 17 | |||||||
PIMCO RealPath™ Blend 2050 Fund | 17 | |||||||
PIMCO RealPath™ Blend 2055 Fund | 17 | |||||||
PIMCO RealPath™ Blend Income Fund | 17 |
(f) Acquired Fund Fees and Expenses The Underlying PIMCO Fund expenses for the Funds are based upon an allocation of a Fund’s assets among the Underlying PIMCO Funds and upon the total annual operating expenses of the Institutional Class or Class M shares, as applicable, of these Underlying PIMCO Funds. The 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.
8. RELATED PARTY TRANSACTIONS
The Adviser, Administrator, and Distributor are related parties. Fees payable to these parties are disclosed in Note 7, Fees and Expenses and the accrued related party fee amounts are disclosed on the Statements of Assets and Liabilities.
9. 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.
10. 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, 2016, 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 | $ | 2,493 | $ | 1,494 | ||||||||||||
PIMCO RealPath™ Blend 2025 Fund | 0 | 0 | 2,255 | 1,936 | ||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 0 | 0 | 5,458 | 2,684 | ||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 0 | 0 | 4,588 | 2,274 | ||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 0 | 0 | 1,585 | 1,294 | ||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 0 | 0 | 1,405 | 1,212 | ||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 0 | 0 | 1,895 | 1,171 | ||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 0 | 0 | 1,261 | 1,099 | ||||||||||||||||
PIMCO RealPath™ Blend Income Fund | 0 | 0 | 1,672 | 1,214 | ||||||||||||||||
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
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11. 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 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 106 | $ | 988 | 300 | $ | 3,000 | 109 | $ | 1,070 | 302 | $ | 3,013 | ||||||||||||||||||||||
Administrative Class | 0 | 0 | 1 | 10 | 1 | 0 | 1 | 15 | ||||||||||||||||||||||||||
Class A | 0 | 0 | 1 | 10 | 2 | 15 | 1 | 11 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 12 | 117 | 1 | 15 | 13 | 122 | 1 | 15 | ||||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | 0 | (4 | ) | 0 | 0 | (81 | ) | (762 | ) | 0 | 0 | |||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 0 | (1 | ) | 0 | 0 | |||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 118 | $ | 1,101 | 303 | $ | 3,035 | 44 | $ | 444 | 305 | $ | 3,054 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | PIMCO RealPath™ Blend 2035 Fund | |||||||||||||||||||||||||||||||||
Year Ended 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 403 | $ | 3,640 | 300 | $ | 3,000 | 297 | $ | 2,716 | 301 | $ | 3,000 | ||||||||||||||||||||||
Administrative Class | 1 | 12 | 1 | 10 | 0 | 0 | 1 | 10 | ||||||||||||||||||||||||||
Class A | 0 | 3 | 1 | 10 | 2 | 16 | 2 | 23 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 12 | 118 | 1 | 15 | 12 | 114 | 1 | 15 | ||||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (66 | ) | (627 | ) | 0 | 0 | (5 | ) | (47 | ) | 0 | 0 | ||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 0 | 0 | 0 | (3 | ) | (27 | ) | 0 | 0 | ||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 350 | $ | 3,146 | 303 | $ | 3,035 | 303 | $ | 2,772 | 305 | $ | 3,048 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | PIMCO RealPath™ Blend 2045 Fund | |||||||||||||||||||||||||||||||||
Year Ended 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 45 | $ | 433 | 301 | $ | 3,000 | 44 | $ | 422 | 300 | $ | 3,000 | ||||||||||||||||||||||
Administrative Class | 3 | 23 | 1 | 12 | 0 | 0 | 4 | 40 | ||||||||||||||||||||||||||
Class A | 2 | 20 | 1 | 11 | 0 | 0 | 1 | 10 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 9 | 86 | 1 | 15 | 9 | 82 | 1 | 15 | ||||||||||||||||||||||||||
Administrative Class | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | 0 | 0 | 0 | 0 | (5 | ) | (49 | ) | 0 | 0 | ||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | (3 | ) | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 59 | $ | 561 | 304 | $ | 3,038 | 48 | $ | 456 | 306 | $ | 3,065 | ||||||||||||||||||||||
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PIMCO RealPath™ Blend 2050 Fund | PIMCO RealPath™ Blend 2055 Fund | |||||||||||||||||||||||||||||||||
Year Ended 06/30/2016 | Inception date through June 30, 2015 | Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Receipts for shares sold | ||||||||||||||||||||||||||||||||||
Institutional Class | 95 | $ | 900 | 301 | $ | 3,001 | 39 | $ | 358 | 300 | $ | 3,001 | ||||||||||||||||||||||
Administrative Class | 0 | 0 | 1 | 14 | 0 | 0 | 1 | 11 | ||||||||||||||||||||||||||
Class A | 11 | 99 | 1 | 15 | 0 | 5 | 7 | 67 | ||||||||||||||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||||||||||||||||||
Institutional Class | 8 | 80 | 1 | 15 | 8 | 79 | 1 | 15 | ||||||||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | 0 | 2 | 0 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||
Cost of shares redeemed | ||||||||||||||||||||||||||||||||||
Institutional Class | (4 | ) | (42 | ) | 0 | (1 | ) | (2 | ) | (15 | ) | 0 | 0 | |||||||||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Class A | (1 | ) | (9 | ) | 0 | 0 | (1 | ) | (9 | ) | 0 | 0 | ||||||||||||||||||||||
Net increase (decrease) resulting from Fund share transactions | 109 | $ | 1,030 | 304 | $ | 3,044 | 44 | $ | 419 | 309 | $ | 3,094 | ||||||||||||||||||||||
PIMCO RealPath™ Blend Income Fund | ||||||||||||||||||
Year Ended 06/30/2016 | Inception date through June 30, 2015 | |||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||
Receipts for shares sold | ||||||||||||||||||
Institutional Class | 24 | $ | 231 | 304 | $ | 3,037 | ||||||||||||
Administrative Class | 3 | 39 | 2 | 14 | ||||||||||||||
Class A | 2 | 12 | 7 | 74 | ||||||||||||||
Issued as reinvestment of distributions | ||||||||||||||||||
Institutional Class | 12 | 111 | 1 | 15 | ||||||||||||||
Administrative Class | 0 | 0 | 0 | 0 | ||||||||||||||
Class A | 0 | 2 | 0 | 0 | ||||||||||||||
Cost of shares redeemed | ||||||||||||||||||
Institutional Class | (6 | ) | (61 | ) | 0 | 0 | ||||||||||||
Administrative Class | 0 | (4 | ) | 0 | 0 | |||||||||||||
Class A | (2 | ) | (17 | ) | 0 | 0 | ||||||||||||
Net increase (decrease) resulting from Fund share transactions | 33 | $ | 313 | 314 | $ | 3,140 | ||||||||||||
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 | 0 | 1 | 0% | 74% | ||||||||||||||||
PIMCO RealPath™ Blend 2025 Fund | 0 | 1 | 0% | 89% | ||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 0 | 1 | 0% | 48% | ||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 0 | 1 | 0% | 51% | ||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 0 | 1 | 0% | 85% | ||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 0 | 1 | 0% | 88% | ||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 1 | 1 | 13% | 75% | ||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 0 | 1 | 0% | 88% | ||||||||||||||||
PIMCO RealPath™ Blend Income Fund | 0 | 1 | 0% | 90% |
* | Related parties 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. |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
ANNUAL REPORT | JUNE 30, 2016 | 81 |
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Notes to Financial Statements (Cont.)
12. 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.
PIMCO has received a Wells Notice from the staff of the U.S. Securities and Exchange Commission (“SEC”) that relates to the PIMCO Total Return Active Exchange-Traded Fund (“BOND”), a series of PIMCO ETF Trust. The notice indicates the staff’s preliminary determination to recommend that the SEC commence a civil action against PIMCO stemming from a non-public investigation relating to BOND. A Wells Notice is neither a formal allegation of wrongdoing nor a finding that any law was violated.
This matter principally pertains to the valuation of smaller sized positions in non-agency mortgage-backed securities purchased by BOND between its inception on February 29, 2012 and June 30, 2012, BOND’s performance disclosures for that period, and PIMCO’s compliance policies and procedures related to these matters.
The Wells process provides PIMCO with the opportunity to demonstrate to the SEC staff why it believes its conduct was appropriate, in keeping with industry standards, and that no action should be taken. PIMCO believes that this matter is unlikely to have a material adverse effect on any Fund or on PIMCO’s ability to provide investment management services to any Fund.
The foregoing speaks only as of the date of this report.
13. 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, 2016, 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 2013-2015, 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, 2016, 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 | $ | 8 | $ | 0 | $ | 46 | $ | 0 | $ | (20 | ) | $ | 0 | $ | 0 | |||||||||||||||||
PIMCO RealPath™ Blend 2025 Fund | 2 | 0 | (12 | ) | 0 | (51 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 54 | 0 | 216 | 0 | (6 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 53 | 0 | 135 | 0 | (29 | ) | 0 | 0 | ||||||||||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 28 | 0 | (32 | ) | 0 | (20 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 28 | 0 | (59 | ) | 0 | (26 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 37 | 0 | (28 | ) | 0 | (27 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 29 | 0 | (53 | ) | 0 | (30 | ) | 0 | 0 | |||||||||||||||||||||||
PIMCO RealPath™ Blend Income Fund | 0 | 0 | (3 | ) | 0 | (10 | ) | 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 in the years shown below. |
(5) | Capital losses realized during the period November 1, 2015 through June 30, 2016 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, 2015 through June 30, 2016 and Ordinary losses realized during the period January 1, 2016 through June 30, 2016, which the Funds elected to defer to the following taxable year pursuant to income tax regulations. |
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June 30, 2016
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, 2016, 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 | $ | 20 | ||||||||
PIMCO RealPath™ Blend 2025 Fund | 37 | 14 | ||||||||||
PIMCO RealPath™ Blend 2030 Fund | 0 | 6 | ||||||||||
PIMCO RealPath™ Blend 2035 Fund | 0 | 29 | ||||||||||
PIMCO RealPath™ Blend 2040 Fund | 2 | 18 | ||||||||||
PIMCO RealPath™ Blend 2045 Fund | 7 | 19 | ||||||||||
PIMCO RealPath™ Blend 2050 Fund | 6 | 21 | ||||||||||
PIMCO RealPath™ Blend 2055 Fund | 10 | 20 | ||||||||||
PIMCO RealPath™ Blend Income Fund | 0 | 10 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
As of June 30, 2016, 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 RealPath™ Blend 2020 Fund | $ | 3,932 | $ | 77 | $ | (30 | ) | $ | 47 | |||||||||||
PIMCO RealPath™ Blend 2025 Fund | 3,247 | 54 | (66 | ) | (12 | ) | ||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 6,145 | 216 | (1 | ) | 215 | |||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 5,676 | 153 | (18 | ) | 135 | |||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 3,448 | 48 | (79 | ) | (31 | ) | ||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 3,372 | 39 | (98 | ) | (59 | ) | ||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 3,981 | 55 | (82 | ) | (27 | ) | ||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 3,364 | 37 | (90 | ) | (53 | ) | ||||||||||||||
PIMCO RealPath™ Blend Income Fund | 3,412 | 39 | (42 | ) | (3 | ) |
† | 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. |
For the fiscal years ended June 30, 2016 and June 30, 2015, respectively, the Funds made the following tax basis distributions (amounts in thousands†):
June 30, 2016 | June 30, 2015 | |||||||||||||||||||||||||||
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 | $ | 117 | $ | 0 | $ | 0 | $ | 15 | $ | 0 | $ | 0 | ||||||||||||||||
PIMCO RealPath™ Blend 2025 Fund | 122 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 118 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 114 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 88 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 83 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 82 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 81 | 0 | 0 | 15 | 0 | 0 | ||||||||||||||||||||||
PIMCO RealPath™ Blend Income Fund | 110 | 0 | 3 | 15 | 0 | 0 |
† | A zero balance may reflect actual amounts rounding to less than one thousand. |
(8) | Includes short-term capital gains distributed, if any. |
(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. |
ANNUAL REPORT | JUNE 30, 2016 | 83 |
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of PIMCO Equity Series®:
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of 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 series of PIMCO Equity Series®, hereafter referred to as the “Funds”) at June 30, 2016, the results of each of their operations for the year then ended, and the changes in each of their net assets and the financial highlights for the year then ended and for the period December 31, 2014 (commencement of operations) through June 30, 2015, 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 at June 30, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Kansas City, Missouri
August 22, 2016
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Glossary: (abbreviations that may be used in the preceding statements)
(Unaudited)
Counterparty Abbreviations: | ||||||||||
BOA | Bank of America N.A. | CBK | Citibank N.A. | JPM | JPMorgan Chase Bank N.A. | |||||
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 | |||||||
Other Abbreviations: | ||||||||||
LIBOR | London Interbank Offered Rate |
ANNUAL REPORT | JUNE 30, 2016 | 85 |
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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 2016 ordinary income dividend that qualifies for the corporate dividend received deduction is set forth 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 2016:
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, 2016 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, 2016 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.
Dividend Received Deduction % | Qualified Dividend Income % | Qualified Interest Income (000s† ) | Qualified Short-Term Capital Gain (000s†) | |||||||||||||||||
PIMCO RealPath™ Blend 2020 Fund | 0.00% | 0.26% | $ | 0 | $ | 7 | ||||||||||||||
PIMCO RealPath™ Blend 2025 Fund | 0.00% | 0.25% | 0 | 7 | ||||||||||||||||
PIMCO RealPath™ Blend 2030 Fund | 0.00% | 0.23% | 0 | 9 | ||||||||||||||||
PIMCO RealPath™ Blend 2035 Fund | 0.00% | 0.27% | 0 | 10 | ||||||||||||||||
PIMCO RealPath™ Blend 2040 Fund | 0.00% | 0.32% | 0 | 9 | ||||||||||||||||
PIMCO RealPath™ Blend 2045 Fund | 0.00% | 0.40% | 0 | 9 | ||||||||||||||||
PIMCO RealPath™ Blend 2050 Fund | 0.00% | 0.43% | 0 | 8 | ||||||||||||||||
PIMCO RealPath™ Blend 2055 Fund | 0.00% | 0.43% | 0 | 9 | ||||||||||||||||
PIMCO RealPath™ Blend Income Fund | 0.00% | 0.27% | 0 | 4 |
† | 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 2017, 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 2016.
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(Unaudited)
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 Trustees* | ||||||||
Brent R. Harris (1959) Chairman of the Board and Trustee | 03/2010 to present | Managing Director, PIMCO. Formerly, member of Executive Committee, PIMCO. | 169 | Chairman and Trustee, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT; Director, StocksPLUS® Management, Inc; and member of Board of Governors, Investment Company Institute. | ||||
Independent Trustees | ||||||||
E. Philip Cannon (1940) Trustee | 03/2010 to present | Private Investor. Formerly, President, Houston Zoo. | 169 | Trustee, PIMCO Equity Series VIT; Lead Independent Trustee, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. Formerly, Trustee, Allianz Funds (formerly, PIMCO Funds: Multi-Manager Series). | ||||
Jennifer Holden Dunbar (1963) Trustee | 02/2016 to present | Managing Director, Dunbar Partners, LLC (business consulting and investments). | 169 | 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. | 169 | 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). | 169 | Trustee, PIMCO Equity Series VIT, PIMCO Funds, PIMCO Variable Insurance and PIMCO ETF Trust. |
* | 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. |
ANNUAL REPORT | JUNE 30, 2016 | 87 |
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Management of the Trust (Cont.)
(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, PIMCO. President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust and PIMCO 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. | ||
Douglas M. Hodge (1957) Senior Vice President | 02/2014 to present
President 05/2013 to 02/2014 | Managing Director, Chief Executive Officer, PIMCO (since 2/14); Chief Operating Officer, PIMCO (7/09 - 2/14); Member of Executive Committee and Head of PIMCO’s Asia Pacific region. Member Global Executive Committee, Allianz Asset Management. Senior Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
Kevin M. Broadwater (1964) Vice President - Senior Counsel | 05/2012 to present | Executive Vice President and Deputy General Counsel, PIMCO. Vice President - Senior Counsel, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust and PIMCO Equity Series VIT. | ||
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 and PIMCO 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 and PIMCO 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 | Senior Vice President, PIMCO. Vice President, PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust and PIMCO 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 and PIMCO Closed-End Funds. Formerly, Vice President, Fidelity Investments. | ||
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 and PIMCO 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. | ||
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 and PIMCO 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 and PIMCO Closed-End Funds. | ||
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 and PIMCO Closed-End Funds. Formerly, Head of Mutual Fund Reporting, GMO and Assistant Treasurer, GMO Trust and GMO Series Trust Funds. |
* | 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 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 address of these officers is Pacific Investment Management Company LLC, 1633 Broadway, New York, New York 10019. |
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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.
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Privacy Policy1 (Cont.)
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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 May 13, 2015.
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”).
90 | PIMCO EQUITY SERIES |
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A special meeting of shareholders of the series of the Trust was held on February 5, 2016. The special meeting was held for the purpose of electing two (2) Trustees to the Board. Shareholders of all series of the Trust voted together on the proposal, and elected two (2) Trustees at the special meeting. The results of the proxy solicitation on this matter are available in the Funds’ Semi-Annual Report to shareholders for the period ended December 31, 2015.
ANNUAL REPORT | JUNE 30, 2016 | 91 |
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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_063016
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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. McCarthy 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, 2016 | $432,388 | |||||||
June 30, 2015 | $483,201 | |||||||
(b) | Fiscal Year Ended | Audit-Related Fees(1) | ||||||
June 30, 2016 | $5,500 | |||||||
June 30, 2015 | $410,500 | |||||||
(c) | Fiscal Year Ended | Tax Fees | ||||||
June 30, 2016 | $— | |||||||
June 30, 2015 | $24,650 | |||||||
(d) | Fiscal Year Ended | All Other Fees (2) | ||||||
June 30, 2016 | $— | |||||||
June 30, 2015 | $— |
“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 Oversight Committee has adopted pre-approval policies and procedures (the “Procedures”) to govern the Audit Oversight 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 Oversight 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 Oversight 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 Oversight 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 Oversight Committee if it is to be provided by the independent accountant. The Procedures also permit the Audit Oversight 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 Oversight Committee, subject to the ratification by the full Audit Oversight 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 Oversight 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, 2016 | June 30, 2015 | ||||||
PIMCO Equity Series Trust | $ | 5,500 | $ | 435,150 | ||||
Pacific Investment Management Company LLC (“PIMCO”) | 7,767,308 | 9,815,893 | ||||||
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Totals | $ | 8,772,808 | $ | 10,251,043 | ||||
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(h) | The Registrant’s Audit Oversight 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:
E. Philip Cannon
Jennifer Holden Dunbar
Peter B. McCarthy
Ronald C. Parker
Item 6. | Schedule of Investments. |
The Schedule of Investments is included as part of the reports to shareholders under Item 1.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
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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, 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 26, 2016 |
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 26, 2016 | ||
By: | /s/ Trent W. Walker
| |
Trent W. Walker | ||
Treasurer (Principal Financial & Accounting Officer) | ||
Date: August 26, 2016 |