If you prefer to construct your own asset allocation, or supplement other options, you may select among the following fixed income/commodity funds:
|PIMCO Real Return|
PIMCO Real Return Fund
Investment Objective and Principal Strategies. This Fund's investment objective is to maximize real return, consistent with the preservation of real capital and prudent investment management. The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities, and corporations. The Fund invests primarily in investment grade debt securities, but may invest up to 10% of its assets in high yield securities ("junk bonds") rated B or higher by Moody's or S&P, or, if unrated, determined by the Fund to be of comparable quality. The Fund may also invest up to 30% of its assets in securities denominated in foreign currencies, and may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers. The Fund will normally hedge at least 75% of its exposure to foreign currency to reduce the risk of loss due to fluctuations in currency exchange rates. The Fund is non-diversified, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. The Fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. The Fund may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
Principal Risks. Among the principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are interest rate risk, credit risk, market risk, issuer risk, derivatives risk, liquidity risk, issuer non-diversification risk, foreign investment risk, currency risk, leveraging risk, management risk, and mortgage risk. Please see the section "Underlying Fund Risks" following the Underlying Fund Descriptions in the Plan Disclosure Statement for a description of these and other risks of investing in the Fund.