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PIMCO Total Return Fund

PIMCO FUNDS | SUMMARY PROSPECTUS
SUMMARY PROSPECTUS
July 31, 2014
Share
Class: Inst P Admin D A B C R
Ticker: PTTRX PTTPX PTRAX PTTDX PTTAX PTTBX PTTCX PTRRX
Before you invest, you may want to review the Funds prospectus, which, as supplemented,
contains more information about the Fund and its risks. You can find the Funds prospectus
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 Funds prospectus and Statement of
Additional Information, both dated July 31, 2014, as supplemented, along with the financial
statements included in the Funds most recent annual report to shareholders dated March
31, 2014, are incorporated by reference into this Summary Prospectus.
Investment Objective
The Fund seeks maximum total return, consistent with preservation of
capital and prudent investment management.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund. You may qualify for sales charge discounts if you
and your family invest, or agree to invest in the future, at least $100,000 in
Class A shares of eligible funds offered by PIMCO Equity Series and PIMCO
Funds. More information about these and other discounts is available in the
Classes of Shares section on page 56 of the Funds prospectus or from
your financial advisor.
Shareholder Fees (fees paid directly from your investment):
Inst
Class Class P
Admin
Class Class D Class A Class B Class C Class R
Maximum Sales
Charge (Load)
Imposed on
Purchases (as a
percentage of
offering price)
None None None None 3.75% None None None
Maximum
Deferred Sales
Charge (Load)
(as a percentage
of the lower of
the original
purchase price or
redemption price)
None None None None 1.00% 3.50% 1.00% None
Annual Fund Operating Expenses (expenses that you pay each
year as a percentage of the value of your investment):
Inst
Class Class P
Admin
Class Class D Class A Class B Class C Class R
Management Fees 0.46% 0.56% 0.46% 0.50% 0.60% 0.60% 0.60% 0.60%
Distribution and/or
Service (12b-1)
Fees
N/A N/A 0.25% 0.25% 0.25% 1.00% 1.00% 0.50%
Total Annual
Fund Operating
Expenses
0.46% 0.56% 0.71% 0.75% 0.85% 1.60% 1.60% 1.10%
Example. The Example is intended to help you compare the cost of investing
in Institutional Class, Class P, Administrative Class, Class D, Class A, Class B,
Class C or Class R 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 Funds operating expenses remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
If you redeem your shares at the end of each period:
1 Year 3 Years 5 Years 10 Years
Institutional Class $47 $148 $258 $579
Class P $57 $179 $313 $701
Administrative Class $73 $227 $395 $883
Class D $77 $240 $417 $930
Class A $459 $636 $829 $1,385
Class B $513 $705 $921 $1,428
Class C $263 $505 $871 $1,900
Class R $112 $350 $606 $1,340
If you do not redeem your shares:
1 Year 3 Years 5 Years 10 Years
Institutional Class $47 $148 $258 $579
Class P $57 $179 $313 $701
Administrative Class $73 $227 $395 $883
Class D $77 $240 $417 $930
Class A $459 $636 $829 $1,385
Class B $163 $505 $871 $1,428
Class C $163 $505 $871 $1,900
Class R $112 $350 $606 $1,340
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 Funds
performance. During the most recent fiscal year, the Funds portfolio
turnover rate was 227% 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 65% of its total assets in a diversified
portfolio of Fixed Income Instruments of varying maturities, which may be
represented by forwards or derivatives such as options, futures contracts, or
swap agreements. 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 average portfolio duration of this Fund
normally varies within two years (plus or minus) of the portfolio duration of
the securities comprising the Barclays U.S. Aggregate Index, as calculated
PIMCO Total Return Fund
. SUMMARY PROSPECTUS | PIMCO FUNDS 2
by Pacific Investment Management Company LLC (PIMCO), which as
of June 30, 2014 was 5.25 years. Duration is a measure used to determine
the sensitivity of a securitys price to changes in interest rates. The longer a
securitys duration, the more sensitive it will be to changes in interest rates.
The Fund invests primarily in investment-grade debt securities, but may
invest up to 10% of its total assets in high yield securities (junk bonds)
rated B or higher by Moodys Investors Service, Inc. (Moodys), or
equivalently rated by Standard & Poors Ratings Services (S&P) or Fitch,
Inc. (Fitch), or, if unrated, determined by Pacific Investment Management
Company LLC (PIMCO) to be of comparable quality (except that within
such limitation, the Fund may invest in mortgage-related securities rated
below B). The Fund may invest up to 30% of its total assets in securities
denominated in foreign currencies, and may invest beyond this limit in U.S.
dollar-denominated securities of foreign issuers. The Fund may invest up to
15% of its total assets in securities and instruments that are economically
tied to emerging market countries. The Fund will normally limit its foreign
currency exposure (from non-U.S. dollar-denominated securities or
currencies) to 20% of its total assets.
The Fund may invest, without limitation, in derivative instruments, such as
options, futures contracts or swap agreements, or in mortgage- or asset-
backed securities, subject to applicable law and any other restrictions
described in the Funds prospectus or Statement of Additional Information.
The Fund may purchase or sell securities on a when-issued, delayed delivery
or forward commitment basis and may engage in short sales. The Fund may
invest up to 10% of its total assets in preferred stock, convertible securities
and other equity-related securities.
The Fund may, without limitation, seek to obtain market exposure to the
securities in which it primarily invests by entering into a series of purchase
and sale contracts or by using other investment techniques (such as buy
backs or dollar rolls). The total return sought by the Fund consists of
income earned on the Funds investments, plus capital appreciation, if
any, which generally arises from decreases in interest rates, foreign
currency appreciation, or improving credit fundamentals for a particular
sector or security.
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:
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 issuers
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 to meet its financial obligations
High Yield Risk: the risk that high yield securities and unrated securities of
similar credit quality (commonly known as junk bonds) are subject to
greater levels of credit, call and liquidity risks. High yield securities are
considered primarily speculative with respect to the issuers continuing
ability to make principal and interest payments, and may be more volatile
than higher-rated securities of similar maturity
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 issuers 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 securities 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 may be magnified in a rising interest
rate environment or other circumstances where investor redemptions from
fixed income mutual funds may be higher than normal, causing increased
supply in the market due to selling activity
Derivatives Risk: the risk of investing in derivative instruments (such as
futures, swaps and structured securities), including liquidity, interest rate,
market, credit and management risks, mispricing or valuation complexity.
Changes in the value of the derivative may not correlate perfectly with, and
may be more sensitive to market events than, the underlying asset, rate or
index, and the Fund could lose more than the principal amount invested.
The Funds use of derivatives may result in losses to the Fund, a reduction in
the Funds returns and/or increased volatility. Derivatives are also subject to
the risk that the other party in the transaction will not fulfill its contractual
obligations
Equity Risk: the risk that the value of equity or equity-related securities
may decline due to general market conditions which are not specifically
related to a particular company or to factors affecting a particular industry
or industries. Equity or equity-related securities generally have greater price
volatility than fixed income securities
Mortgage-Related and Other Asset-Backed Securities Risk: the
risk of investing in mortgage-related and other asset-backed securities,
including interest rate risk, extension risk, prepayment risk, and credit risk
Foreign (Non-U.S.) Investment Risk: the risk that investing in foreign
(non-U.S.) securities may result in the Fund experiencing more rapid and
extreme changes in value than a fund that invests exclusively in securities of
U.S. companies, due to smaller markets, differing reporting, accounting and
auditing standards, increased risk of delayed settlement of portfolio
transactions or loss of certificates of portfolio securities, and the risk of
unfavorable foreign government actions, including nationalization,
expropriation or confiscatory taxation, currency blockage, or political changes
Summary Prospectus
JULY 31, 2014| SUMMARY PROSPECTUS . 3
or diplomatic developments. Foreign securities may also be less liquid and
more difficult to value than securities of U.S. issuers
Emerging Markets Risk: the risk of investing in emerging market
securities, primarily increased foreign (non-U.S.) investment risk
Currency Risk: the risk that foreign currencies will decline in value relative
to the U.S. dollar and affect the Funds investments in foreign (non-U.S.)
currencies or in securities that trade in, and receive revenues in, or in
derivatives that provide exposure to, foreign (non-U.S.) currencies
Leveraging Risk: the risk that certain transactions of the Fund, such as
reverse repurchase agreements, loans of portfolio securities, and the use of
when-issued, delayed delivery or forward commitment transactions, or
derivative instruments, may give rise to leverage, magnifying gains and
losses and causing the Fund to be more volatile than if it had not been
leveraged. This means that leverage entails a heightened risk of loss
Management Risk: the risk that the investment techniques and risk
analyses applied by PIMCO will not produce the desired results and that
legislative, regulatory, or tax restrictions, policies or developments may
affect the investment techniques available to PIMCO and the individual
portfolio manager in connection with managing the Fund. There is no
guarantee that the investment objective of the Fund will be achieved
Short Sale Risk: the risk of entering into short sales, including the
potential loss of more money than the actual cost of the investment, and
the risk that the third party to the short sale may fail to honor its contract
terms, causing a loss to the Fund
Convertible Securities Risk: as convertible securities share both fixed
income and equity characteristics, they are subject to risks to which fixed
income and equity investments are subject. These risks include equity risk,
interest rate risk and credit risk
Please see Description of Principal Risks in the Funds 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 Funds average annual returns compare with the returns of a broad-
based securities market index and an index of similar funds. Absent any
applicable fee waivers and/or expense limitations, if any, performance
would have been lower. The bar chart shows performance of the Funds
Institutional Class shares. For periods prior to the inception date of Class P
shares (April 30, 2008), performance information shown in the table for
that class is based on the performance of the Funds Institutional Class
shares, adjusted to reflect the actual distribution and/or service (12b-1) fees
and other expenses paid by that class of shares. Performance for Class A,
Class B and Class C shares in the Average Annual Total Returns table
reflects the impact of sales charges. The Funds past performance, before
and after taxes, is not necessarily an indication of how the Fund will
perform in the future.
The Barclays U.S. Aggregate Index represents securities that are SEC-
registered, taxable, and dollar denominated. The index covers the U.S.
investment grade fixed rate bond market, with index components for
government and corporate securities, mortgage pass-through securities, and
asset-backed securities. These major sectors are subdivided into more
specific indices that are calculated and reported on a regular basis. Lipper
Core Plus Bond Funds Average is a total return performance average of
Funds tracked by Lipper, Inc. that invest at least 65% in domestic
investment-grade debt issues (rated in the top four grades) with any
remaining investment in non-benchmark sectors such as high-yield, global
and emerging market debt. These funds maintain dollar-weighted average
maturities of five to ten years.
Performance for the Fund is updated daily and quarterly and may be
obtained as follows: daily updates on the net asset value and performance
page at http://investments.pimco.com/DailyPerformance and quarterly
updates at http://investments.pimco.com/QuarterlyPerformance.
Calendar Year Total Returns Institutional Class*
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13
-5
0
5
10
15
20
5.14%
2.89%
3.99%
9.07%
4.81%
13.83%
8.83%
4.16%
10.36%
-1.92%
(
%
)
Years
*The year-to-date return as of June 30, 2014 is 3.70%. For the periods shown in the bar
chart, the highest quarterly return was 6.04% in the Q3 2009, and the lowest quarterly
return was -3.60% in the Q2 2013.
Average Annual Total Returns (for periods ended 12/31/13)
1 Year 5 Years 10 Years
Institutional Class Return Before Taxes -1.92% 6.91% 6.03%
Institutional Class Return After Taxes on Distributions
(1)
-3.11% 4.92% 4.10%
Institutional Class Return After Taxes on Distributions and
Sales of Fund Shares
(1)
-0.97% 4.73% 4.11%
Class P Return Before Taxes -2.02% 6.81% 5.93%
Administrative Class Return Before Taxes -2.17% 6.64% 5.77%
Class D Return Before Taxes -2.21% 6.60% 5.71%
Class A Return Before Taxes -5.97% 5.66% 5.16%
Class B Return Before Taxes -6.36% 5.60% 5.02%
Class C Return Before Taxes -3.98% 5.68% 4.78%
Class R Return Before Taxes -2.55% 6.21% 5.31%
Barclays U.S. Aggregate Index (reflects no deductions for
fees, expenses or taxes)
-2.02% 4.44% 4.55%
Lipper Core Plus Bond Funds Average (reflects no
deductions for taxes)
-1.01% 7.06% 4.87%
PIMCO Total Return Fund
. SUMMARY PROSPECTUS | PIMCO FUNDS 4
(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 investors 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.
Investment Adviser/Portfolio Manager
PIMCO serves as the investment adviser for the Fund. The
Funds portfolio is managed by William H. Gross. Mr. Gross
is a Managing Director, Chief Investment Officer and a
founding partner of PIMCO, and he has managed the
Fund since its inception in May 1987.
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 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, Class P, Administrative Class and Class D
The minimum initial investment for Institutional Class, Class P or
Administrative Class shares of the Fund is $1 million, except that the
minimum initial investment may be modified for certain financial firms that
submit orders on behalf of their customers.
The minimum initial investment for Class D shares of the Fund is $1,000,
except that the minimum initial investment may be modified for certain
financial firms that submit orders on behalf of their customers. The
minimum subsequent investment for Class D shares is $50.
You may sell (redeem) all or part of your Institutional Class, Class P,
Administrative Class and Class D shares of the Fund on any business day. 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 mail to:

PIMCO Funds c/o BFDS Midwest
330 W. 9th Street, Kansas City, MO 64105

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]

Class A, Class B, Class C and Class R
The minimum initial investment for Class A, Class B and Class C shares of
the Fund is $1,000. The minimum subsequent investment for Class A, Class
B and Class C shares is $50. The minimum initial investment may be
modified for certain financial firms that submit orders on behalf of their
customers. Effective November 1, 2009, Class B shares are no longer
available for purchase, except through exchanges and dividend
reinvestments as described in Purchasing Shares Class B in the Funds
prospectus. You may purchase or sell (redeem) all or part of your Class A,
Class B and Class C shares through a broker-dealer, or other financial firm,
or, if you are the registered owner of the shares on the books of the Fund,
by regular mail to PIMCO Funds, P.O. Box 55060, Boston, MA 02205-5060
or overnight mail to PIMCO Funds, c/o Boston Financial Data Services, Inc.,
30 Dan Road, Canton, MA 02021-2809. The Fund reserves the right to
require payment by wire or U.S. Bank check in connection with accounts
opened directly with the Fund by Account Application.
There is no minimum initial or minimum subsequent investment in Class R
shares because Class R shares may only be purchased through omnibus
accounts for specified benefit plans. Specified benefit plans that wish to
invest directly by mail should send a check payable to the PIMCO Family of
Funds, along with a completed Account Application, by regular mail to
PIMCO Funds, P.O. Box 55060, Boston, MA 02205-5060 or overnight mail
to PIMCO Funds, c/o Boston Financial Data Services, Inc., 30 Dan Road,
Canton, MA 02021-2809.
Tax Information
The Funds 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.
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 firms Web site for more information.
pimco.com/investments
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