(PUB) Investing 2016

6

Data through September 30, 2016 FINRA members: For internal or institutional use only. PIMCO High Yield D

Ticker PHYDX

Yield 5.0%

SEC Yield 4.74%

Total Assets $10,733 mil

Mstar Category High Yield Bond

Benchmark 1: BofAML US HY Master II TR USD Benchmark 2: Barclays US Agg Bond TR USD Morningstar Analyst Rating 09-29-16 „

Investment Style Fixed Income

Historical Profile Return Risk Rating Average Average QQQ Neutral

6 6

12.5 15.0 17.5 20.0 22.5

Growth of $10,000

Investment Values of Fund Investment Values of Benchmark 1

Morningstar Pillars Process

∞ Positive ∞ Positive ∞ Positive ¶ Neutral ∞ Positive

10.0

Performance

People Parent

Performance Quartile (within Category)

) & * ( ( * ( ) & * ( 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 09-16 9.89 9.54 6.69 8.80 9.30 8.98 9.64 9.61 9.14 8.26 8.83 9.00 3.32 -23.98 43.56 13.84 3.64 14.15 5.40 2.95 -2.20 11.12 -2.77 1.12 2.41 -13.96 -1.35 -0.75 -1.43 -2.02 0.45 2.45 -4.20 4.67 -3.65 -29.22 37.63 7.30 -4.20 9.94 7.43 -3.02 -2.75 5.32 7.06 6.93 7.26 10.54 7.96 7.14 6.64 5.71 6.06 5.36 4.07 1.94 -3.61 -31.24 33.01 5.88 -3.50 7.51 -0.31 -3.11 -7.55 7.05 0.67 0.66 0.67 0.68 0.68 0.64 0.58 0.54 0.56 0.48 0.33 0.01 0.01 0.00 0.00 0.00 0.01 0.00 0.00 0.19 0.22 0.00 0.90 0.90 0.91 0.91 0.91 0.90 0.90 0.90 0.90 0.91 0.90 6.83 6.64 6.73 8.22 8.41 6.95 6.46 5.47 5.35 5.13 5.13 76 11 41 65 55 44 62 78 16 28 62

Price

History

Morningstar Analyst Rating Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ „ ´ ‰ Á

NAV

Total Return % +/- Bmark 1 +/- Bmark 2 Income Return % Capital Return % Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil Total Rtn % Rank Cat Income $

Pillar Spectrum ∞ Positive

§ Negative

¶ Neutral

Performance 09-30-16 1st Qtr 2nd Qtr

3rd Qtr

4th Qtr

Total

2012 2013 2014 2015 2016

5.02 1.37 4.00 3.10 14.15 2.14 -1.63 1.96 2.88 5.40 2.62 1.77 -1.75 0.33 2.95 2.38 -0.35 -3.58 -0.58 -2.20

105 427

75

187 458

354 657

129 788

36

50

39

25

39

32 .

374

704

779

649

396

318

Rating and Risk Time Period Load-Adj Return %

Portfolio Analysis 06-30-16

2.63 3.23 4.88

— —

Date of Maturity

Value $000

% Assets

Morningstar Rtn vs Cat

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

Total Fixed Income: 782

Amount 000

Trailing

Total Return%

+/- Bmark 1

+/- Bmark 2

%Rank Cat

Growth of $10,000

Cdx Hy25 5y Ice

12-20-20 08-15-21 05-15-22 12-20-19 02-15-22

183,150 190,736 1.89 80,000 73,000 0.72 83,000 68,683 0.68 48,500 51,607 0.51 40,750 46,435 0.46 40,900 42,229 0.42 40,000 41,996 0.42 43,000 41,979 0.42 40,000 41,285 0.41 36,675 40,067 0.40 42,550 40,848 0.40 38,000 38,523 0.38 37,000 37,231 0.37 37,250 36,971 0.37 35,000 35,945 0.36 36,000 35,910 0.36 40,000 35,200 0.35 34,000 35,381 0.35 32,400 33,696 0.33

1 Yr 3 Yr 5 Yr

10.47

3 Mo 6 Mo

4.88 -0.61 4.42 8.27 -3.42 5.59 10.47 -2.35 5.28 4.80 -0.47 0.78 7.41 -0.83 4.33 6.38 -1.21 1.59 7.11 -1.35 2.31

47 10,488 68 10,827 27 11,047 22 11,511 40 14,299 41 18,555 57 28,009

Renaissance Acquisition Crimson Merger Sub / Or Lloyds Bkg Grp Cv FRN

Avg QQQQ Avg QQQ Avg QQQ

4.80 7.41 6.38 6.01

+Avg

Avg Avg

1 Yr

— 60,150 58,947 0.58

10 Yr Incept

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

Cdx Hy23 5y Ice

Hca 7.5%

Argos Merger Sub 144A 7 03-15-23

Other Measures

Standard Index

Best Fit Index

Hd Sply 7.5%

07-15-20

Alpha

2.6

0.4

Numericable Grp Sa 144A 05-15-22

Beta

0.54

0.83

Tax Analysis

Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

Cdx Hy26 5y Ice

06-20-21

R-Squared

7

92

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

1.97 4.70 3.65

22 36 39

2.70 2.53 2.57

67 56 45

Mgm Resorts Intl 6.625% 12-15-21 Numericable Grp Sa 144A 05-15-24 Altice Sa 144A 7.75% 05-15-22 First Data Corp New 144 01-15-24

Standard Deviation

5.31 4.80 0.89

Mean

Sharpe Ratio

Potential Capital Gain Exposure: 0% of assets

Univision Comms 144A 5. Aercap Ireland Cap Limi Sabine Pass Liquefactio

02-15-25 05-15-21 05-15-24

Morningstar's Take by Sumit Desai, CFA 09-29-16 PIMCO High Yield has largely performed as expected through various market environments. Its deft navigation of the recent energy-sector troubles, along with a deep team and inexpensive price tag, support the fund’s upgrade to a Morningstar Analyst Rating of Silver. Since taking over in January 2010, lead manager Andrew Jessop has made this fund a straightforward high-yield offering. The fund uses the Bank of America Merrill Lynch U.S. High Yield BB-B Rated Constrained Index as its benchmark, which excludes bonds rated CCC or lower. Other broad-based high-yield bond indexes, like the BofAML U.S. High Yield Master II Index, tend to carry a nearly 15% allocation to CCC rated bonds. The fund’s higher-quality approach should minimize volatility over a full credit cycle relative to its high-yield bond peers that tend to take on more credit risk, but could lag during risk-on rallies. For example, the fund fell into the bottom half of the high-yield bond Morningstar Category in 2012 and 2013 when the CCC bonds it avoids rallied. On the other hand, Jessop and team were early to spot troubles in the energy and commodities sectors; its move to avoid these sectors and lower-rated bonds in

general put the fund in the top quintile of its category during the sell-off in 2014 and 2015. Since Jessop took overmanagementof the fundonJan.10,2010, the fund’s 7.2% annualized return through Aug. 31, 2016, was in the top third of the high-yield category on both an absolute and risk-adjusted basis (as measured by its Sharpe ratio). PIMCO boosted the management team of this fund with the recent addition of Hozef Arif as comanager in July 2016. Arif joined PIMCO in 2008 and has worked on the firm’s high-yield bond team for several years, first as a dedicated trader and then in a portfolio management capacity. Jessop and Arif are supported by a deep team of more than 50 credit analysts, supporting the fund’s Positive People rating. The 0.55% charge on the fund's Institutional shares is one of the cheapest in the category.

Gates Global 144A 6% 07-15-22

Hca 5.25%

06-15-26 04-01-24

Cco Hldgs Llc / Cco Hld

Current Investment Style

Sector Breakdown

% Assets

Government

0 0

Duration Ltd Mod Ext

Government Related

Quality High Med Low

Corporate

87

Agency MBS 0 Non-Agency Residential MBS 0 Commercial MBS 0 Covered Bond 0 Asset Backed 0 Municipal 0 Cash & Equivalents 10 Other 3

1 figure provided by fund

3.6 Yrs 5.5 Yrs

Avg Eff Duration 1 Avg Eff Maturity Avg Credit Quality Avg Wtd Coupon

—

6.15%

Avg Wtd Price

98.74% of par

Composition - Net Cash

Coupon Range

% of Bonds

5.9 Bonds 0.0 Other

92.1

0% PIK

0.0 3.2

Stocks

2.1

0% to 4% 4% to 6% 6% to 8% 8% to 10%

49.8 39.3

Special Securities Restricted/Illiquid Secs Emerging-Markets Secs Options/Futures/Warrants

43

6.0 1.7

0 0

More than 10%

Address:

PIMCO Investments LLC distributor

Minimum Purchase: Min Auto Inv Plan:

$1000 Add: $50 IRA: —

New York NY 10019

— Add: —

Credit Analysis

% bonds

888-877-4626

Sales Fees:

No-load

AAA

— BB — B

— —

Web Address:

www.pimco.com

Management Fee:

0.25%, 0.40%A

AA

Inception:

04-08-98

Actual Fees:

Mgt:0.65% Dist:0.25%

A

— Below B — — Not Rated —

Advisor:

Pacific Investment Management Co LLC

Expense Projections: 3Yr:$290 5Yr:$504 10Yr:$1120

BBB

Subadvisor:

None

Income Distribution:

Monthly

D

ß ® Mutual Funds

©2016Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, complete or timely. Past performance is no guarantee of future results.Access updated reports at www.morningstar.com . To order reprints, email reprints@morningstar.com