Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus, which may be obtained by contacting your PIMCO representative. Please read the prospectus carefully before you invest.
Net Asset Value (NAV) represents an ETF’s per-share value. The per-share value of an ETF is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of ETF shares outstanding. ETF shares are valued as of the close of regular trading on theNew York Stock Exchange (normally 4:00 P.M. Eastern Time) (The “NYSE Close”) on each business day.
The Fund’s Net Asset Value, shares outstanding and total net assets are calculated as of the close of regular trading on each day that the New York Stock Exchange is open, and do not reflect security transactions or Fund shares created or redeemed on the date stated. Such transactions are recorded on the next business day and reported on the website the following business day.
Returns are average annualized total returns, except for those periods of less than one year, which are cumulative. Market returns are based upon the midpoint of the bid/ask spread at 4:00 pm Eastern time (when NAV is normally determined for most Funds), and do not represent the returns you would receive if you traded shares at other times. The after-tax return calculation assumes a 35% tax rate.
ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for PIMCO ETF shares will develop or be maintained, or that their listing will continue or remain unchanged.
A word about risk:Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and current interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Certain U.S. Government securities are backed by the full faith of the government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss.
PIMCO Smart beta ETFs and index ETFs use an indexing approach and may be affected by a general decline in market segments or asset classes relating to its Underlying Index. The Fund invests in securities and instruments included in, or representative of, its Underlying Index regardless of the investment merits of the Underlying Index.
ETFs are subject to secondary market trading risks. Shares of an ETF will be listed for trading on an exchange, however, there can be no guarantee that an active trading market for such shares will develop or continue. There can be no guarantee that an ETF's exchange listing or ability to trade its shares will continue or remain unchanged. Shares of an ETF may trade on an exchange at prices at, above or below their most recent NAV. The per share NAV of an ETF is calculated at the end of each business day, and fluctuates with changes in the market value of the Fund’s holdings. The trading prices of an ETF's shares fluctuate continuously throughout the trading day based on market supply and demand, which may not correlate to NAV. The trading prices of an ETF's shares may differ significantly from NAV during periods of market volatility, which may, among other factors, lead to the Fund’s shares trading at a premium or discount to NAV.
Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. Shares of an ETF, traded on the secondary market, are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF’s prospectus.
Buying or selling ETF shares on an exchange may require the payment of fees, such as brokerage commissions, and other fees to financial intermediaries. In addition, an investor may incur costs attributed to the difference between the highest price a buyer is willing to pay to purchase shares of the Fund (bid) and the lowest price a seller is willing to accept for shares of the Fund (ask) when buying or selling shares in the secondary market (the bid-ask spread). Due to the costs inherent in buying or selling Fund shares, frequent trading may detract significantly from investment returns. Investment in Fund shares may not be advisable for investors who expect to engage in frequent trading.
Current holdings are subject to risk. Holdings are subject to change at any time. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield and Net Asset Value (NAV) will fluctuate with changes in market conditions. Investments may be worth more or less than the original cost when redeemed.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and the Market Price of the Fund on a given day, generally at the time the NAV is calculated. A premium is the amount that the Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that the Fund is trading below the reported NAV, expressed as a percentage of the NAV. A discount or premium could be significant. The daily premium/discount is the difference between the daily market price for shares of the Fund and the Fund's net asset value. For purposes of the premium/discount information, market price is determined using NYSE Arca’s or New York Stock Exchange’s, as applicable,Official Closing Price or if it more accurately reflects market price at the time as of which NAV is calculated, the midpoint between the national best bid and national best offer as of that time. Market price for purposes of other information is calculated as follows: (i) for time periods preceding December 17, 2020, the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund's NAV is calculated and (ii) for the time periods starting December 17, 2020, the NYSE Arca’sor New York Stock Exchange’s, as applicable, Official Closing Price or, if it more accurately reflects market price at the time as of which NAV is calculated, the midpoint between the national best bid and national best offer as of that time.
In order to provide additional information regarding the intra-day value of shares of the Fund, the NYSE Arca, Inc., New York Stock Exchange or a market data vendor disseminates every 15 seconds through the facilities of the Consolidated Tape Association or other widely disseminated means an updated Indicative NAV (“iNAV”) for the Fund as calculated by an information provider or market data vendor. The Fund is not involved in or responsible for any aspect of the calculation or dissemination of the iNAV and makes no representation or warranty as to the accuracy of the iNAV.
PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world. ©2023, PIMCO
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PIMCO Investments LLC , distributor, 1633 Broadway, New York, NY, 10019 is a company of PIMCO. ©2023, PIMCO.
As an enthusiast with a deep understanding of investment instruments and financial markets, I can assertively demonstrate my expertise in the context of the information provided. The content revolves around Exchange Traded Funds (ETFs), particularly those managed by PIMCO. My knowledge encompasses various concepts crucial for investors to comprehend before engaging in ETFs.
Firstly, the Net Asset Value (NAV) is a fundamental concept. It represents the per-share value of an ETF, calculated by dividing the total value of all securities in its portfolio by the number of outstanding shares. This value is determined at the close of regular trading on the New York Stock Exchange (NYSE) each business day.
Returns, mentioned in the article, are presented as average annualized total returns, except for periods less than one year, which are cumulative. It's essential to note that market returns are based on the bid/ask spread at 4:00 pm Eastern Time, reflecting the midpoint, and not necessarily the actual returns for individual investors.
The article highlights the risks associated with investing in the bond market, including market, interest rate, issuer, credit, inflation, and liquidity risks. Longer-duration bonds are more sensitive to interest rate changes, and reductions in bond counterparty capacity may affect market liquidity and increase price volatility.
PIMCO Smart beta ETFs and index ETFs follow an indexing approach, investing in securities representative of their Underlying Index. The ETFs are subject to market segment declines regardless of the Underlying Index's merits.
Secondary market trading risks for ETFs are emphasized, indicating that shares may trade at prices above or below their NAV. Additionally, the article mentions the potential development and maintenance challenges of an active trading market for PIMCO ETF shares.
Investors are warned about the various costs associated with ETFs, including brokerage commissions and bid-ask spreads. Frequent trading may significantly impact returns, making ETFs less advisable for investors engaging in frequent trading.
The article touches upon the concept of premiums or discounts, expressed as a percentage difference between the NAV and the Market Price of the Fund. This information is crucial for investors to understand the market dynamics surrounding ETF pricing.
In summary, this comprehensive discussion covers key concepts related to ETFs, including NAV, returns, risks associated with bond investments, indexing approaches, secondary market trading risks, costs, and premiums or discounts. Investors are urged to carefully consider the information in the prospectus and understand the intricacies of ETF trading before making investment decisions.
