Form 497K PIMCO FUNDS
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PIMCO National Municipal Intermediate
Value Fund
Summary Prospectus
July 30, 2021 (as supplemented April 29, 2022)
| Share Class: |
Inst |
| Ticker: |
GNMVX |
As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you
specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on the Fund’s website, pimco.com/literature, and you will be notified by mail each time a report
is posted and provided with a website link to access the report.
If you already elected to receive
shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by visiting pimco.com/edelivery or by contacting
your financial intermediary, such as a broker-dealer or bank.
You may elect to receive all future reports in paper free of charge. If you own these shares through a financial
intermediary, such as a broker-dealer or bank, you may contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can inform the Fund that you wish to continue
receiving paper copies of your shareholder reports by calling 888.87.PIMCO (888.877.4626). Your election to receive reports in paper will apply to all funds held with the fund complex if you invest directly with the Fund or to all funds held in your account if
you invest through a financial intermediary, such as a broker-dealer or bank.
Before you invest, you may want to review the Fund’s prospectus, which, as supplemented, contains more information about the Fund and its risks. You can find the Fund’s prospectus, reports to shareholders (once available) and other information about the Fund online at http:// investments.pimco.com/prospectuses. You can also get this information at no cost by calling 888.87.PIMCO or by sending an email request to [email protected]. The Fund’s prospectus and Statement of Additional Information, dated July 30, 2021, respectively, as supplemented, are incorporated by reference into this Summary Prospectus.
Investment Objective
The Fund seeks to provide current income exempt from regular federal income tax while seeking to preserve capital and liquidity.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. You
may pay other fees, such as commissions and other fees to financial intermediaries, which are not
reflected in the table and example below.
| Shareholder Fees (fees paid directly from your investment): |
None |
Annual Fund Operating Expenses (expenses that you pay each year as a
percentage of the value of your investment):
| |
Inst Class |
| Management Fees |
0.50% |
| Acquired Fund Fees and Expenses |
0.01% |
| Total Annual Fund Operating Expenses |
0.51% |
| Fee Waiver and/or Expense Reimbursement(1) |
(0.11%) |
| Total Annual Fund Operating Expenses After Fee Waiver and/or
Expense Reimbursement |
0.40% |
1
PIMCO has contractually agreed through July 31, 2022, to reduce its advisory fee by 0.11% of the average daily net assets of the Fund. This Fee Waiver Agreement renews annually unless terminated
by PIMCO upon at least 30 days’ prior notice to the end of the contract term. PIMCO may not recoup these waivers in future periods.
Example. The Example is intended to help you compare the cost of investing in Institutional Class shares of the Fund with the costs of investing in other mutual funds. The
Example assumes that you invest $10,000 in the noted class of shares for the time periods indicated, and then redeem all your shares at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| |
1 Year |
3 Years |
5 Years |
10 Years |
| Institutional Class |
$41 |
$152 |
$274 |
$630 |
Portfolio Turnover
The Fund pays transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Example tables, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was 23% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in debt securities whose interest is, in the opinion of bond
counsel for the issuer at the time of issuance, exempt from federal income tax (“Municipal Bonds”). Municipal Bonds generally are issued by or on behalf of states and local governments and their agencies,
authorities and other instrumentalities.
The Fund may invest in Fixed Income Instruments which
include bonds, debt securities and other similar instruments. The Fund may invest without
limitation in “private activity” bonds whose interest is a tax-preference item for purposes of the federal alternative minimum tax (“AMT”). For shareholders subject to the AMT, distributions derived from “private
activity” bonds must be included in their AMT calculations, and as such a portion of the Fund’s distribution may be subject to federal income tax. The dollar-weighted average portfolio maturity of the Fund, under normal circumstances, is
expected to range from 3 to 10 years. The Fund may invest in securities of any duration. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a
security’s duration, the more sensitive it will be to changes in interest rates.
The Fund invests in debt securities rated Ba3 or higher by Moody’s Investors Service, Inc.
(“Moody’s”), or equivalently rated by Standard & Poor’s Ratings Services (“S&P”) or Fitch, Inc. (“Fitch”), or, if
unrated, determined by PIMCO to be of comparable quality. In the event that ratings services
assign different ratings to the same security, PIMCO will use the highest rating as the credit rating for that security.
PIMCO Funds | Summary Prospectus
PIMCO
National Municipal Intermediate Value Fund
The Fund’s investments may include fixed or floating rate general obligation bonds and notes, lease revenue bonds, revenue bonds and notes, and zero coupon securities. The Fund
may buy securities on a when-issued, delayed delivery or forward commitment basis. The Fund may,
at times, invest more than 25% of its net assets in Municipal Bonds the principal and interest payments of which are paid by obligors located in a single state.
The Fund may
invest the remainder of its net assets in other municipal instruments, U.S. Government Securities and certain cash and cash equivalents, including cash sweep vehicles.
The Fund is non-diversified, which means that it may invest its assets in a smaller number of issuers than a
diversified fund.
Principal Risks
It is possible to lose money on an investment in the Fund. The principal risks of investing in the Fund, which could adversely affect its net asset value, yield and total return, are listed below.
Floating Rate Securities Risk: the risk of investing in floating rate notes, which generally carry lower yields than fixed notes of the same
maturity. Securities with variable or floating interest rates may be less sensitive to interest
rate changes than securities with fixed interest rates, but may decline in value if their interest rates do not rise as much, or at the same pace, as interest rates in general. The interest rate for a floating rate note occasionally
adjusts or resets by reference to a benchmark interest rate. Benchmark interest rates, such as London Interbank Offered Rate (“LIBOR”), may not precisely track market interest rates. In general,
securities with longer durations tend to be more sensitive to interest rate changes, which may make them more volatile than securities with shorter durations
General Obligation Bond Risk: the risk of investing in general obligation bonds, which are generally secured by the obligor’s pledge
of its full faith, credit and taxing power for the payment of principal and interest. However,
the taxing power of any governmental entity may be limited by provisions of state constitutions or laws and an entity’s credit will depend on many factors
Lease Revenue Bond Risk: the risk of investing in lease revenue bonds and other municipal lease obligations, which may be considered
less secure than a general obligation or revenue bond and may or may not include a debt service
reserve fund. There have also been certain legal challenges to the use of lease revenue bonds in various states
Revenue Bond
Risk: the risk of investing in revenue bonds, which are generally backed by and payable from the revenues derived from a specific facility or specific revenue source
or sources. As a result, the revenue bonds in which the Fund invests may entail greater credit risk
than the Fund’s investments in general obligation bonds
Zero Coupon Bond Risk: the risk of investing in zero coupon bonds, in which the market prices are more volatile than the market
prices of securities that pay interest on a regular basis. Since the Fund will not receive cash
payments earned on these securities on a current basis, the Fund may be required to make distributions from other sources. This
may result in higher portfolio turnover rates and the sale of
securities at a time that is less favorable
Taxation
Risk: the risk that to the extent that the Fund invests in securities the income from which is not tax-exempt, your share of income from such investments will be taxable
for state and/or federal income tax purposes. Although the Fund seeks to invest primarily in
securities that are not subject to regular federal income tax, the Fund may invest a portion of
its total assets in municipal securities subject to the federal alternative minimum tax
Tax-Exempt Status Risk: the risk that reclassifications or legislative or court actions could cause interest from a tax-exempt
security to become taxable, possibly retroactively, subjecting you to increased tax
liability
U.S. Treasury and Agency Securities Risk: the risk of investing in
securities issued or guaranteed by the U.S. Treasury or its agencies and instrumentalities, which
may be backed only by the credit of the agency or instrumentality and not by the full faith and credit of the United States. No assurance can be given that the U.S. government would provide financial support to its
agencies and instrumentalities
Interest Rate Risk: the risk that fixed income securities will decline in value because of an increase in interest rates; a fund with a longer average portfolio duration will be more
sensitive to changes in interest rates than a fund with a shorter average portfolio duration
Call
Risk: the risk that an issuer may exercise its right to redeem a fixed income security earlier than expected (a call). Issuers may call outstanding securities prior to their
maturity for a number of reasons (e.g., declining interest rates, changes in credit spreads and improvements in the issuer’s credit quality).
If an issuer calls a security that the Fund has invested in, the Fund may not recoup the full amount of its initial investment and may be forced to reinvest in lower-yielding securities, securities with greater
credit risks or securities with other, less favorable features
Credit
Risk: the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a derivative contract, is unable or unwilling, or
is perceived (whether by market participants, rating agencies, pricing services or otherwise) as unable or unwilling, to meet its financial obligations
Market
Risk: the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting securities markets generally
or particular industries
Issuer Risk: the risk that the value of a security may decline for a reason directly related to the issuer, such as management performance, financial leverage and reduced demand
for the issuer’s goods or services
Liquidity Risk: the risk that a particular investment may be difficult to purchase or sell and that the Fund may be unable to sell illiquid investments at an advantageous time or price
or achieve its desired level of exposure to a certain sector. Liquidity risk may result from the
lack of an active market, reduced number and capacity of traditional market participants to make
a market in fixed income securities, and
2 Summary Prospectus | PIMCO Funds
Summary
Prospectus
may be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income funds may be higher than normal, causing increased
supply in the market due to selling activity
Income
Risk: the risk that when interest rates fall, the Fund’s income may decline. This decline can occur because the Fund may invest in lower-yielding bonds as bonds in its
portfolio mature
Extension Risk: the risk that, in periods of rising interest rates, issuers of mortgage-related and other asset-backed
securities may pay principal later than expected, which may reduce the value of the Fund’s
investment in such securities and may prevent the Fund from receiving higher interest rates on
proceeds reinvested
Prepayment Risk: the risk that, in periods of declining interest rates, issuers of mortgage-related and other asset-backed securities may pay principal more quickly than expected,
which results in the Fund foregoing future interest income on the portion of the principal repaid
early and may result in the Fund being forced to reinvest investment proceeds at lower interest
rates
When-Issued Securities Risk: the risks related to municipal
securities issued on a when-issued basis, where payment and delivery take place at a future date
beyond the normal settlement date. Because the market price of the security may fluctuate during the time before payment and delivery, the Fund assumes the risk that the value of the security at delivery may be more or less
than the purchase price. In addition, interest is not generally paid on when-issued securities until settlement
Management
Risk: the risk that the investment techniques and risk analyses applied by PIMCO will not produce the desired results and that actual or potential conflicts of
interest, legislative, regulatory, or tax restrictions, policies or developments may affect the investment techniques available to PIMCO and the individual portfolio managers in connection with managing the Fund and
may cause PIMCO to restrict or prohibit participation in certain investments. There is no guarantee that the investment objective of the Fund will be achieved
Municipal Instruments Risk: the risk that the Fund may be affected significantly by the economic, regulatory or political developments
affecting the ability of issuers of municipal instruments to pay interest or repay
principal
Single State Municipal Securities Risk: the risk that because the
Fund may invest a significant portion of its assets in municipal securities of a particular
state, it may be more exposed to the impact of legislative, tax, and political changes within that state than a fund that invests more widely
Municipal
Project-Specific Risk: the risk that the Fund may be more sensitive to adverse economic, business or political developments if it invests a substantial portion of its
assets in the bonds of similar projects (such as those relating to education, health care, housing,
transportation, and utilities), industrial development bonds, or in bonds from issuers in a
single state
Issuer
Non-Diversification Risk: the risk of focusing investments in a small number of issuers, including being more susceptible to risks associated with a single economic,
political or regulatory occurrence than a more diversified portfolio might be. Funds that are
“non-diversified” may invest a greater percentage of their assets in the securities
of a single issuer (such as bonds issued by a particular state) than funds that are “diversified”
Please see “Description of Principal Risks” in the Fund's prospectus for a more detailed description of the risks of investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Performance Information
The performance information shows summary performance information for the Fund in a bar chart and an Average Annual Total Returns table. The information provides some
indication of the risks of investing in the Fund by showing changes in its performance from year to year and by showing how the Fund’s average annual returns compare with the returns of a primary and a secondary
broad-based securities market index.
A fund registered under the Investment Company Act of 1940 and managed by Gurtin Municipal Bond Management
(the “Predecessor Fund”) was reorganized into the Fund effective March 15, 2019. The
Predecessor Fund had an investment objective and strategies that were, in all materials respects,
the same as those of the Fund. The Fund’s performance for periods prior to the commencement of operations on March 18, 2019 is that of the Predecessor Fund. The performance of the Predecessor Fund has not been restated
to reflect the fees, estimated expenses and fee waivers and/or expense limitations applicable to the Fund. Absent any applicable fee waivers and/or expense limitations, performance would have been lower. If the
performance of the Predecessor Fund had been restated to reflect the applicable fees and expenses
of each class of shares of the Fund, the performance may have been higher or lower than the performance shown in the bar chart and Average Annual Total Returns table below. The Fund’s past performance, before and after taxes, is not necessarily an indication of
how the Fund will perform in the future.
The Fund’s primary benchmark is the Bloomberg Municipal Bond 1-10 Year Blend (1-12) Index. Bloomberg
Municipal Bond 1-10 Year Blend (1-12) Index is the 1-10 Year Blend (1-12) component of the Bloomberg Municipal Bond Index, which consists of a broad selection of investment-grade general obligation bonds and
revenue bonds of maturities ranging from one year to 30 years, and which is an unmanaged index
representative of the tax-exempt bond market. The Bloomberg Municipal Bond Index is made up of all investment grade municipal bonds issued after December 31, 1990 having a remaining maturity of at least one year. Lipper
Intermediate Municipal Debt Funds Average is a total return performance average of Funds tracked by
Lipper, Inc. that invest in municipal debt issues with dollar-weighted average maturities of five
to ten years.
July 30, 2021 (as supplemented April 29, 2022) | SUMMARY PROSPECTUS 3
PIMCO National Municipal Intermediate Value Fund
Performance for the Fund is updated daily and quarterly and
may be obtained as follows: daily and quarterly updates on the net asset value and performance
page at https://www.pimco.com/en-us/product-finder.
Calendar Year Total Returns — Institutional Class
| Best Quarter |
March 31, 2019 |
2.59% |
| Worst Quarter |
December 31, 2016 |
-3.43% |
| Year-to-Date |
June 30, 2021 |
0.52% |
Average Annual Total Returns (for periods ended 12/31/20)
| |
1 Year |
5 Years |
Since
Inception |
Inception Date |
| Institutional Class Return Before Taxes |
4.20% |
3.15% |
3.12% |
12/1/2015 |
| Institutional Class Return After Taxes on
Distributions(1) |
4.19% |
3.14% |
3.11% |
|
| Institutional Class Return After Taxes on
Distributions and Sales of Fund Shares(1) |
3.21% |
2.81% |
2.79% |
|
| Bloomberg Municipal Bond 1-10 Year
Blend (1-12) Index (reflects no
deductions for fees, expenses or taxes) |
4.23% |
2.96% |
2.95% |
|
| Lipper Intermediate Municipal Debt
Funds Average (reflects no deductions
for taxes) |
4.29% |
3.01% |
3.07%(2) |
|
1
After-tax returns are calculated using the highest historical individual federal
marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax
returns depend on an investor’s tax situation and may differ from those shown, and the
after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases the return after taxes may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period.After-tax returns are for Institutional Class shares only. After-tax returns for other classes will
vary.
2
The Lipper Average’s since inception return is determined from the nearest month-end following the
Fund’s inception date and not from the actual inception date of the Fund.
Investment Adviser/Portfolio Managers
PIMCO serves as the investment adviser for the Fund. The Fund is jointly and primarily managed by David
Hammer, Myles Grenier, Peter Gunther and Brian Hannibal. Mr. Hammer is a Managing Director of PIMCO, and Messrs. Grenier, Gunther and Hannibal are Vice Presidents of PIMCO. Messrs. Hammer, Gunther and Hannibal have
jointly and primarily managed the Fund since March 2022, and Mr. Grenier has jointly and
primarily managed the Fund since its inception in January 2019.
Purchase and Sale of Fund Shares
Fund shares may be purchased or sold (redeemed) on any business day (normally any day when the New York Stock
Exchange (“NYSE”) is open). Generally, purchase and redemption orders for Fund shares are processed at the net asset value next calculated after an order is received by the Fund.
Institutional Class
The minimum initial investment for Institutional Class shares of the Fund is $250,000. The Fund reserves the
right to waive the minimum initial investment if deemed appropriate by an officer of the Trust. There is no minimum subsequent investment for Institutional Class shares of the Fund.
You may sell (redeem) all or part of your Institutional Class shares of the Fund on any business day. You may also purchase or redeem Institutional Class shares of the Fund through your
financial firm. If you are the registered owner of the shares on the books of the Fund, depending
on the elections made on the Account Application, you may sell by:
◾
Sending a written request by regular mail to:PIMCO Funds
P.O. Box 219024, Kansas City, MO 64121-9024
or by overnight mail to:
PIMCO Funds c/o DST Asset Manager Solutions, Inc.
430 W 7th Street, STE 219024, Kansas City, MO 64105-1407
P.O. Box 219024, Kansas City, MO 64121-9024
or by overnight mail to:
PIMCO Funds c/o DST Asset Manager Solutions, Inc.
430 W 7th Street, STE 219024, Kansas City, MO 64105-1407
◾
Calling us at 888.87.PIMCO and a Shareholder Services associate will assist you
◾
Sending a fax to our Shareholder Services department at 816.421.2861
◾
Sending an e-mail to [email protected]
Tax Information
The Fund’s distributions are generally taxable to you as ordinary income, capital gains, or a combination of the two, unless you are investing through a tax-deferred arrangement, such
as a 401(k) plan or an individual retirement account, in which case distributions may be taxable
upon withdrawal.
4 Summary Prospectus | PIMCO Funds
Summary
Prospectus
Payments to Broker-Dealers and Other Financial Firms
If you purchase
shares of the Fund through a broker-dealer or other financial firm (such as a bank), the Fund and/or its related companies (including PIMCO) may pay the financial firm for the sale of those shares of the Fund and/or related services.
These payments may create a conflict of interest by influencing the broker-dealer or other financial firm and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your
financial firm’s website for more information.
PFG15052_042922
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