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N-2 - USD ($)
 3 Months Ended
Apr. 14, 2025
Mar. 31, 2025
Mar. 31, 2025
Dec. 31, 2024
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Cover [Abstract]                          
Entity Central Index Key 0001219360                        
Amendment Flag false                        
Entity Inv Company Type N-2                        
Securities Act File Number 333-000000                        
Investment Company Act File Number 811-21311                        
Document Type N-2ASR                        
Document Registration Statement true                        
Pre-Effective Amendment false                        
Post-Effective Amendment false                        
Investment Company Act Registration true                        
Investment Company Registration Amendment true                        
Investment Company Registration Amendment Number 9                        
Entity Registrant Name PIMCO High Income Fund                        
Entity Address, Address Line One 1633 Broadway                        
Entity Address, City or Town New York                        
Entity Address, State or Province NY                        
Entity Address, Postal Zip Code 10019                        
City Area Code 888                        
Local Phone Number 877-4626                        
Approximate Date of Commencement of Proposed Sale to Public From time to time after the effective date of this Registration Statement.                        
Dividend or Interest Reinvestment Plan Only false                        
Delayed or Continuous Offering true                        
Primary Shelf [Flag] true                        
Effective Upon Filing, 462(e) true                        
Additional Securities Effective, 413(b) false                        
Effective when Declared, Section 8(c) false                        
New Effective Date for Previous Filing false                        
Additional Securities. 462(b) false                        
No Substantive Changes, 462(c) false                        
Exhibits Only, 462(d) false                        
Registered Closed-End Fund [Flag] true                        
Business Development Company [Flag] false                        
Interval Fund [Flag] false                        
Primary Shelf Qualified [Flag] true                        
Entity Well-known Seasoned Issuer Yes                        
Entity Emerging Growth Company false                        
New CEF or BDC Registrant [Flag] false                        
Fee Table [Abstract]                          
Shareholder Transaction Expenses [Table Text Block]
Shareholder Transaction Expenses:
 
Sales Load (as a percentage of offering price)
(1)
[ ]
%
Offering Expenses Borne by Common Shareholders (as a percentage of offering
price)
(2)
[ ]
%
Dividend Reinvestment Plan Fees
(3)
None
(1)
In the event that the Common Shares to which this prospectus relates are sold to or
through underwriters or dealer managers, a corresponding prospectus supplement will
disclose the applicable sales load and/or commission.
(2)
The related prospectus supplement will disclose the estimated amount of offering
expenses, the offering price and the offering expenses borne by the Fund and indirectly
by all of its Common Shareholders as a percentage of the offering price.
(3)
You will pay brokerage charges if you direct your broker or the plan agent to sell your
Common Shares that you acquired pursuant to a dividend reinvestment plan. You may
also pay a pro rata share of brokerage commissions incurred in connection with
open-market purchases pursuant to the Fund’s Dividend Reinvestment Plan. See
“Dividend Reinvestment Plan.”
                        
Sales Load [Percent] [1] 0.00%                        
Dividend Reinvestment and Cash Purchase Fees [2] $ 0                        
Other Transaction Expenses [Abstract]                          
Other Transaction Expenses [Percent] [3] 0.00%                        
Annual Expenses [Table Text Block]
Annual Expenses
 
Annual Expenses
Percentage of
Net Assets Attributable to Common
Shares (reflecting leverage
attributable to preferred shares and reverse
repurchase agreements)
Management Fees
(1)
0.80%
Dividend Cost on Preferred Shares
(2)
0.01%
Interest Payments on Borrowed Funds
(3)
2.06%
Other Expenses
(4)
0.05%
Total Annual Expenses
(5)
2.92%
(1)
Management Fees include fees payable to the Investment Manager for advisory
services and for supervisory, administrative and other services. The Fund pays for the
advisory, supervisory and administrative services it requires under what is essentially
an all-in fee structure (the “unified management fee”). Pursuant to an investment
management agreement, PIMCO is paid a Management Fee of 0.76% of the Fund’s
average daily net assets (including daily net assets attributable to any preferred shares
of the Fund that may be outstanding). The Fund (and not PIMCO) will be responsible
for certain fees and expenses, which are reflected in the table above, that are not
covered by the unified management fee under the investment management
agreement. Please see “Management of the Fund–Investment Management
Agreement” for an explanation of the unified management fee and definition of “net
assets.”
(2)
Reflects the Fund’s preferred shares averaged over the fiscal year ended June 30,
2024, which represented 0.21% of the Fund’s total average managed assets
(including the liquidation preference of outstanding Preferred Shares and assets
attributable to reverse repurchase agreements) as of that date, at an annual dividend
cost to the Fund of 4.26%. The Fund purchased the bulk of its preferred shares in a
tender offer completed in April 2024 and redeemed its remaining preferred shares
between November 4, 2024 and November 8, 2024. The Fund has no preferred shares
outstanding as of the date of this prospectus.
(3)
Reflects the Fund’s use of leverage in the form of reverse repurchase agreements
averaged over the fiscal year ended June 30, 2024, which represented 14.59% of the
Fund’s average total managed assets, (including assets attributable to reverse
repurchase agreements), at an annual interest rate cost to the Fund of 5.80%, which is
the weighted average interest rate cost during the fiscal year ended June 30, 2024.
See “Use of Leverage—Effects of Leverage.” The actual amount of interest expense
borne by the Fund will vary over time in accordance with the level of the Fund’s use of
reverse repurchase agreements, dollar rolls and/or borrowings and variations in market
interest rates. Borrowing expense is required to be treated as an expense of the Fund
for accounting purposes. Any associated income or gains (or losses) realized from
leverage obtained through such instruments is not reflected in the Annual Expenses
table above, but would be reflected in the Fund’s performance results.
(4)
“Other Expenses” are estimated for the Fund’s current fiscal year ending June 30,
2025.
(5)
“Dividend Cost on Preferred Shares”, including distributions on Preferred Shares, and
“Interest Payments on Borrowed Funds” are borne by the Fund separately from
management fees paid to PIMCO. Excluding these expenses, Total Annual Fund
Operating Expenses are 0.85%. Excluding only distributions on Preferred Shares of
0.01%, Total Annual Fund Operating Expenses are 2.91%.
                        
Management Fees [Percent] [4] 0.80%                        
Interest Expenses on Borrowings [Percent] [5] 2.06%                        
Dividend Expenses on Preferred Shares [Percent] [6] 0.01%                        
Other Annual Expenses [Abstract]                          
Other Annual Expenses [Percent] [7] 0.05%                        
Total Annual Expenses [Percent] [8] 2.92%                        
Expense Example [Table Text Block]
Example
The following example illustrates the expenses that you would pay on a
$1,000 investment in Common Shares of the Fund, assuming (1) that
the Fund’s net assets do not increase or decrease, (2) that the Fund
incurs total annual expenses of 2.92% of net assets attributable to
Common Shares in years 1 through 10 (assuming outstanding Preferred
Shares and assets attributable to reverse repurchase agreements
representing 14.80% of the Fund's average total managed assets) and
(3) a 5% annual return
(1)
:
 
 
1 Year
3 Years
5 Years
10 Years
Total Expenses Incurred
$30
$90
$154
$324
(1)
The example above should not be considered a representation of future
expenses. Actual expenses may be higher or lower than those shown.
The
example assumes that the estimated Interest Payments on Borrowed Funds, Dividend
Cost on Preferred Shares and Other Expenses set forth in the Annual Expenses table
are accurate, that the rate listed under Total Annual Expenses remains the same each
year and that all dividends and distributions are reinvested at NAV. Actual expenses
may be greater or less than those assumed. Moreover, the Fund’s actual rate of return
may be greater or less than the hypothetical 5% annual return shown in the example.
The example does not include commissions or estimated offering expenses, which
would cause the expenses shown in the example to increase. In connection with an
offering of Common Shares, the prospectus supplement will set forth an example
including sales load and estimated offering costs.
                        
Expense Example, Year 01 [9] $ 30                        
Expense Example, Years 1 to 3 [9] 90                        
Expense Example, Years 1 to 5 [9] 154                        
Expense Example, Years 1 to 10 [9] $ 324                        
Purpose of Fee Table , Note [Text Block]
The following table is intended to assist investors in understanding the
fees and expenses (annualized) that an investor in Common Shares of
the Fund would bear, directly or indirectly, as a result of an offering. The
table reflects the use of leverage attributable to the Fund's outstanding
preferred shares and reverse repurchase agreements averaged over the
fiscal year ended June 30, 2024 in an amount equal to 14.80% of the
Fund's average total managed assets, including the assets attributable
to such leverage (or 17.37% of the Fund's average net assets
attributable to Common Shares), and shows Fund expenses as a
percentage of net assets attributable to Common Shares. The
percentage above and information below do not reflect the Fund’s use
of other forms of economic leverage, such as credit default swaps or
other derivative instruments. The table and example below are based on
the Fund’s capital structure as of June 30, 2024. The extent of the
Fund’s assets attributable to leverage following an offering, and the
Fund’s associated expenses, are likely to vary (perhaps significantly)
from these assumptions.
                        
Basis of Transaction Fees, Note [Text Block] as a percentage of offering price                        
Other Transaction Fees, Note [Text Block]
The related prospectus supplement will disclose the estimated amount of offering
expenses, the offering price and the offering expenses borne by the Fund and indirectly
by all of its Common Shareholders as a percentage of the offering price.
                        
Other Expenses, Note [Text Block]
“Other Expenses” are estimated for the Fund’s current fiscal year ending June 30,
2025.
                        
Management Fee not based on Net Assets, Note [Text Block]
Management Fees include fees payable to the Investment Manager for advisory
services and for supervisory, administrative and other services. The Fund pays for the
advisory, supervisory and administrative services it requires under what is essentially
an all-in fee structure (the “unified management fee”). Pursuant to an investment
management agreement, PIMCO is paid a Management Fee of 0.76% of the Fund’s
average daily net assets (including daily net assets attributable to any preferred shares
of the Fund that may be outstanding). The Fund (and not PIMCO) will be responsible
for certain fees and expenses, which are reflected in the table above, that are not
covered by the unified management fee under the investment management
agreement. Please see “Management of the Fund–Investment Management
Agreement” for an explanation of the unified management fee and definition of “net
assets.”
                        
General Description of Registrant [Abstract]                          
Investment Objectives and Practices [Text Block]
Investment Objectives and Policies
When used in this prospectus, the term “invest” includes both direct
investing and indirect investing and the term “investments” includes
both direct investments and indirect investments. For example, the Fund
may invest indirectly by investing in derivatives or through its
wholly-owned subsidiaries (each, a “Subsidiary” and collectively, the
Subsidiaries). References herein to the Fund include, as appropriate,
Subsidiaries through which the Fund may gain exposure to investments.
The Fund may be exposed to the different types of investments
described below through its investments in its Subsidiaries. The
allocation of the Fund’s assets to a Subsidiary will vary over time and
will likely not include all of the different types of investments described
herein at any given time.
The Fund seeks high current income as a primary objective and capital
appreciation as a secondary objective. The Fund's investment objectives
are considered non-fundamental and may be changed by the Board
without shareholder approval. The Fund seeks to achieve its investment
objectives by utilizing a dynamic asset allocation strategy among
multiple fixed income sectors in the global credit markets, which may
include corporate debt (including, among other things, fixed-, variable-
and floating-rate bonds, loans (including, but not limited to, bank
and/or other syndicated loans and non-syndicated (private direct)
loans), convertible securities and stressed debt securities issued by
U.S. or foreign (non-U.S.) corporations or other business entities,
including emerging market issuers), mortgage-related and other
asset-backed securities, government and sovereign debt, taxable
municipal bonds and other fixed-, variable- and floating-rate
income-producing securities of U.S. and foreign issuers, including
emerging market issuers. Aiming to identify securities that provide high
current income and/or capital appreciation, the Fund focuses on
duration management, credit quality analysis, risk management
techniques and broad diversification among issuers, industries and
sectors as well as other risk management techniques designed to
manage default risk. The Fund may invest in investment grade debt
securities and below investment grade debt securities (commonly
referred to as “high yield” securities or “junk bonds”), including
securities of stressed, distressed or defaulted issuers. The types of
securities and instruments in which the Fund may invest are described
under “Portfolio Contents—Principal Investments” below. The Fund
cannot assure you that it will achieve its investment objectives or that
the Fund’s investment program will be successful, and you could lose all
of your investment in the Fund.
Other Strategy Information.
 
Portfolio securities may be sold at any
time. By way of example, sales may occur when PIMCO determines to
take advantage of what it considers to be a better investment
opportunity, when the portfolio managers believe the portfolio
securities no longer represent relatively attractive investment
opportunities, when the portfolio managers perceive deterioration in the
credit fundamentals of an issuer, or when an individual security has
reached the portfolio managers’ sell target. PIMCO may engage in
active and frequent trading of the Fund’s portfolio investments. To the
extent that it does so, the Fund may incur greater transaction costs and
may make greater distributions of income and gains, which will be
taxable to shareholders who do not hold their shares through a
tax-advantaged or tax-deferred account.
                        
Risk Factors [Table Text Block]
Principal Risks of the Fund
The Fund is subject to the principal risks noted below, whether through
the Fund’s direct investments, investments by its Subsidiaries or
derivatives positions.
Market Discount Risk
The price of the Fund’s Common Shares will fluctuate with market
conditions and other factors. If you sell your Common Shares, the price
received may be more or less than your original investment. The
Common Shares are designed for long-term investors and should not be
treated as trading vehicles. Shares of closed-end management
investment companies frequently trade at a discount from their NAV. The
Common Shares may trade at a price that is less than the offering price
for Common Shares issued pursuant to an offering. This risk may be
greater for investors who sell their Common Shares relatively shortly
after completion of an offering. The sale of Common Shares by the Fund
(or the perception that such sales may occur), particularly if sold at a
discount to the then current market price of the Common Shares, may
have an adverse effect on the market price of the Common Shares.
Market Risk
The market price of securities owned by the Fund may go up or down,
sometimes rapidly or unpredictably. Securities may decline in value due
to factors affecting securities markets generally or particular industries
or companies represented in the securities markets. The value of a
security may decline due to general market conditions that are not
specifically related to a particular company, such as real or perceived
adverse economic conditions, changes in the general outlook for
corporate earnings, changes in inflation, interest or currency rates,
financial system instability, adverse changes to credit markets or
adverse investor sentiment generally. The value of a security may also
decline due to factors that affect a particular industry or industries, such
as labor shortages or increased production costs and competitive
conditions within an industry. During a general downturn in the
securities markets, multiple asset classes may decline in value
simultaneously even if the performance of those asset classes is not
otherwise historically correlated. Investments may also be negatively
impacted by market disruptions and by attempts by other market
participants to manipulate the prices of particular investments. Equity
securities generally have greater price volatility than fixed income
securities. Credit ratings downgrades may also negatively affect
securities held by the Fund. Even when markets perform well, there is no
assurance that the investments held by the Fund will increase in value
along with the broader market.
In addition, market risk includes the risk that geopolitical and other
events will disrupt the economy on a national or global level. For
instance, war, terrorism, social unrest, recessions, supply chain
disruptions, market manipulation, government defaults, government
shutdowns, political changes, diplomatic developments or the
imposition of sanctions and other similar measures, public health
emergencies (such as the spread of infectious diseases, pandemics and
epidemics), natural/environmental disasters, climate-change and climate
related events can all negatively impact the securities markets, which
could cause the Fund to lose value. These events could reduce consumer
demand or economic output, result in market closures, changes in
interest rates, inflation/deflation, travel restrictions or quarantines, and
significantly adversely impact the economy.
As computing technology and data analytics continually advance there
has been an increasing trend towards machine driven and artificially
intelligent trading systems, particularly providing such systems with
increasing levels of autonomy in trading decisions. Regulators of
financial markets have become increasingly focused on the potential
impact of artificial intelligence on investment activities and may issue
regulations that are intended to affect the use of artificial technology in
trading activities. Any such regulations may not have the intended affect
on financial markets. Moreover, advancements in artificial intelligence
and other technologies may suffer from the introduction of errors,
defects or security vulnerabilities which can go undetected. The
potential speed of such trading and technologies may exacerbate the
impact of any such flaws, particularly where such flaws are exploited by
other artificially intelligent systems and may act to impair or prevent the
intervention of a human control.
The current contentious domestic political environment, as well as
political and diplomatic events within the United States and abroad,
such as the U.S. government’s inability at times to agree on a long-term
budget and deficit reduction plan, has in the past resulted, and may in
the future result, in a government shutdown or otherwise adversely
affect the U.S. regulatory landscape, the general market environment
and/or investor sentiment, which could have an adverse impact on the
Fund’s investments and operations. Additional and/or prolonged
U.S. federal government shutdowns may affect investor and consumer
confidence and may adversely impact financial markets and the broader
economy, perhaps suddenly and to a significant degree. Governmental
and quasi-governmental authorities and regulators throughout the
world have previously responded to serious economic disruptions with a
variety of significant fiscal and monetary policy changes, including but
not limited to, direct capital infusions into companies, new monetary
programs and dramatically lower interest rates. An unexpected or
sudden reversal of these policies, or the ineffectiveness of these policies,
could increase volatility in securities markets, which could adversely
affect the Fund’s investments. Any market disruptions could also prevent
the Fund from executing advantageous investment decisions in a timely
manner. Funds that have focused their investments in a region enduring
geopolitical market disruption will face higher risks of loss, although the
increasing interconnectivity between global economies and financial
markets can lead to events or conditions in one country, region or
financial market adversely impacting a different country, region or
financial market. Thus, investors should closely monitor current market
conditions to determine whether the Fund meets their individual
financial needs and tolerance for risk.
During inflationary price movements, fixed income securities markets
may experience heightened levels of interest rate, volatility and liquidity
risk. Interest rate increases in the future could cause the value of a fund
that invests in fixed income securities to decrease.
Interest rate increases and other market events have the potential to
adversely impact real estate values and real estate-related asset prices,
which could, by extension, adversely impact the value of other
investments, such as loans, securitized debt and other fixed income
securities. Such an impact could materialize in one real estate sector and
not another, or in a different manner in different real estate sectors.
Examples of the current risks faced by real estate-related assets include:
tenant vacancy rates; increase in tenant turnover and tenant
concentration; headwinds, delinquencies and difficulties in collecting
rents and other payments faced by owners of real estate (which
increases the risk of owners being unable to pay or otherwise defaulting
on their own borrowings and obligations); decline in property values;
increase in inflation, upkeep costs and other expenses; lowered rent for
many properties; and concentrated ownership of certain types of
properties.
Exchanges and securities markets may close early, close late or issue
trading halts on specific securities, which may result in, among other
things, the Fund being unable to buy or sell certain securities or financial
instruments at an advantageous time or accurately price its portfolio
investments.
Asset Allocation Risk
The Fund’s investment performance depends upon how its assets are
allocated and reallocated. A principal risk of investing in the Fund is that
PIMCO may make less than optimal or poor asset allocation decisions.
PIMCO employs an active approach to allocation among multiple fixed
income sectors within the Fund's investment objectives and strategies,
but there is no guarantee that such allocation techniques will produce
the desired results. It is possible that PIMCO will focus on an investment
that performs poorly or underperforms other investments under various
market conditions, or underperforms as compared to funds with similar
investment objectives and strategies. You could lose money on your
investment in the Fund as a result of these allocation decisions.
Management Risk
The Fund is subject to management risk because it is an actively
managed investment portfolio. PIMCO and each individual portfolio
manager will apply investment techniques and risk analysis in making
investment decisions for the Fund, but there can be no guarantee that
these decisions will produce the desired results. Certain securities or
other instruments in which the Fund seeks to invest may not be
available in the quantities desired, including in circumstances where
other funds for which PIMCO acts as investment adviser, including funds
with names, investment objectives and policies, and/or portfolio
management teams, similar to the Fund, are seeking to invest in the
same or similar securities or instruments. In addition, regulatory
restrictions, actual or potential conflicts of interest or other
considerations may cause PIMCO to restrict or prohibit participation in
certain investments. In such circumstances, PIMCO or the individual
portfolio managers may determine to purchase other securities or
instruments as substitutes. Such substitute securities or instruments may
not perform as intended, which could result in losses to the Fund. To the
extent the Fund employs strategies targeting perceived pricing
inefficiencies, arbitrage strategies or similar strategies, it is subject to the
risk that the pricing or valuation of the securities and instruments
involved in such strategies may change unexpectedly, which may result
in reduced returns or losses to the Fund. The Fund is also subject to the
risk that deficiencies in the internal systems or controls of PIMCO or
another service provider will cause losses for the Fund or hinder Fund
operations. For example, trading delays or errors (both human and
systemic) could prevent the Fund from purchasing a security expected to
appreciate in value. Please refer to “Portfolio Managers – Conflicts of
Interest” in the SAI for further information. Additionally, actual or
perceived conflicts of interest, legislative, regulatory, or tax restrictions,
policies or developments may affect the investment techniques available
to PIMCO and each individual portfolio manager in connection with
managing the Fund and may also adversely affect the ability of the Fund
to achieve its investment objectives. There also can be no assurance that
all of the personnel of PIMCO will continue to be associated with
PIMCO for any length of time. The loss of services of one or more key
employees of PIMCO could have an adverse impact on the Fund’s ability
to realize its investment objectives.
In addition, the Fund may rely on various third-party sources to calculate
its NAV. As a result, the Fund is subject to certain operational risks
associated with reliance on service providers and service providers’ data
sources. In particular, errors or systems failures and other technological
issues may adversely impact the Fund’s calculations of its NAV, and such
NAV calculation issues may result in inaccurately calculated NAVs,
delays in NAV calculation and/or the inability to calculate NAV over
extended periods. The Fund may be unable to recover any losses
associated with such failures.
Issuer Risk
The value of a security may decline for a number of reasons that directly
relate to the issuer, such as management performance, major litigation,
investigations or other controversies, changes in the issuer’s financial
condition or credit rating, changes in government regulations affecting
the issuer or its competitive environment and strategic initiatives such
as mergers, acquisitions or dispositions and the market response to any
such initiatives, financial leverage, reputation or reduced demand for the
issuer’s goods or services, as well as the historical and prospective
earnings of the issuer and the value of its assets. A change in the
financial condition of a single issuer may affect one or more other
issuers or securities markets as a whole. These risks can apply to the
Common Shares issued by the Fund and to the issuers of securities and
other instruments in which the Fund invests.
Interest Rate Risk
Interest rate risk is the risk that fixed income securities and other
instruments in the Fund’s portfolio will fluctuate in value because of a
change in interest rates. For example, as nominal interest rates rise, the
value of certain fixed income securities held by the Fund is likely to
decrease. A nominal interest rate can be described as the sum of a real
interest rate and an expected inflation rate. Interest rate changes can be
sudden and unpredictable, and the Fund may lose money as a result of
movements in interest rates. The Fund may not be able to effectively
hedge against changes in interest rates or may choose not to do so for
cost or other reasons.
A wide variety of factors can cause interest rates or yields of
U.S. Treasury securities (or yields of other types of bonds) to rise,
including but not limited to central bank monetary policies, changing
inflation or real growth rates, general economic conditions, increasing
bond issuances or reduced market demand for low yielding investments.
Risks associated with rising interest rates may be heightened under
recent market conditions, including because the U.S. Federal Reserve
(the “Federal Reserve”) has, in the recent past, raised interest rates from
historically low levels. In addition, changes in monetary policy may
exacerbate the risks associated with changing interest rates. Further, in
market environments where interest rates are higher or rising, issuers
may be less willing or able to make principal and interest payments on
fixed income investments when due. Actions by governments and
central banking authorities can result in increases or decreases in
interest rates. Periods of higher inflation could cause such authorities to
raise interest rates, which may adversely affect the Fund and its
investments.
Further, fixed income securities with longer durations tend to be more
sensitive to changes in interest rates, usually making them more volatile.
Duration is a measure used to determine the sensitivity of a security’s
price to changes in interest rates that incorporates a security’s yield,
coupon, final maturity and call features, among other characteristics.
Duration is useful primarily as a measure of the sensitivity of a fixed
income security’s market price to interest rate (i.e., yield) movements. All
other things remaining equal, for each one percentage point increase in
interest rates, the value of a portfolio of fixed income investments would
generally be expected to decline by one percent for every year of the
portfolio’s average duration above zero. For example, the value of a
portfolio of fixed income securities with an average duration of eight
years would generally be expected to decline by approximately 8% if
interest rates rose by one percentage point.
Dividend-paying equity securities, particularly those whose market price
is closely related to their yield, may be more sensitive to changes in
interest rates. During periods of rising interest rates, the values of such
securities may decline and may result in losses to the Fund. Variable and
floating rate securities may decline in value if their interest rates do not
rise as much, or as quickly, as interest rates in general. Conversely,
floating rate securities will not generally increase in value if interest
rates decline. Inverse floating rate securities may decrease in value if
interest rates increase. Inverse floating rate securities may also exhibit
greater price volatility than a fixed rate obligation with similar credit
quality. When the Fund holds variable or floating rate securities, a
decrease (or, in the case of inverse floating rate securities, an increase)
in market interest rates will adversely affect the income received from
such securities and the NAV of the Fund’s shares.
During periods of very low or negative interest rates, the Fund may be
unable to maintain positive returns. Very low or negative interest rates
may magnify interest rate risk. Changing interest rates, including rates
that fall below zero, may have unpredictable effects on markets, may
result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates.
Measures such as average duration may not accurately reflect the true
interest rate sensitivity of the Fund. This is especially the case if the Fund
consists of securities with widely varying durations. Therefore, if the
Fund has an average duration that suggests a certain level of interest
rate risk, the Fund may in fact be subject to greater interest rate risk
than the average would suggest. This risk is greater to the extent the
Fund uses leverage or derivatives in connection with the management
of the Fund.
Convexity is an additional measure used to understand a security's or
Fund's interest rate sensitivity. Convexity measures the rate of change of
duration in response to changes in interest rates. With respect to a
security’s price, a larger convexity (positive or negative) may imply more
dramatic price changes in response to changing interest rates. Convexity
may be positive or negative. Negative convexity implies that interest
rate increases result in increased duration and that interest rate
decreases result in declining duration (i.e., increased sensitivity in prices
in response to rising and/or declining interest rates). Thus, securities
with negative convexity, which may include bonds with traditional call
features and certain mortgage-backed securities, may experience
greater losses in periods of rising interest rates. Accordingly, if the Fund
holds such securities, the Fund may be subject to a greater risk of losses
in periods of rising interest rates.
Rising interest rates may result in periods of volatility and a decline in
value of the Fund’s fixed income investments. Also, when interest rates
rise, issuers are less likely to refinance existing debt securities, causing
the average life of such securities to extend. Further, while U.S. bond
markets have steadily grown over the past three decades, dealer
“market making” ability has remained relatively stagnant. As a result,
dealer inventories of certain types of bonds and similar instruments,
which provide a core indication of the ability of financial intermediaries
to “make markets,” are at or near historic lows in relation to market
size. Because market makers provide stability to a market through their
intermediary services, a significant reduction in dealer inventories could
potentially lead to decreased liquidity and increased volatility in the
fixed income markets. Such issues may be exacerbated during periods of
economic uncertainty. All of these factors, collectively and/or
individually, could cause the Fund to lose value.
Credit Risk
The Fund could lose money if the issuer or guarantor of a fixed income
security (including a security purchased with securities lending
collateral), the counterparty to a derivatives contract, or the issuer or
guarantor of collateral, repurchase agreement or a loan of portfolio
securities is unable or unwilling, or is perceived (whether by market
participants, rating agencies, pricing services or otherwise) as unable or
unwilling, to make timely principal and/or interest payments, or to
otherwise honor its financial obligations. The risk that such issuer,
guarantor or counterparty is less willing or able to do so is heightened
in market environments where interest rates are changing, notably
when rates are rising. The downgrade of the credit rating of a security or
of the issuer of a security held by the Fund may decrease its value.
Measures such as average credit quality may not accurately reflect the
true credit risk of the Fund. This is especially the case if the Fund
consists of securities with widely varying credit ratings. This risk is
greater to the extent the Fund uses leverage or derivatives. Rising or
high interest rates may deteriorate the credit quality of an issuer or
counterparty, particularly if an issuer or counterparty faces challenges
rolling or refinancing its obligations. The Fund's investments may be
adversely affected if any of the issuers it is invested in are subject to an
actual or perceived (whether by market participants, rating agencies,
pricing services or otherwise) deterioration to their credit quality.
Credit risk includes credit spread risk, which is the risk that credit
spreads (i.e., the difference in yield between securities that is due to
differences in their actual or perceived credit quality) may increase when
the market believes that investments generally have a greater risk of
default. Increasing credit spreads may reduce the market values of the
Fund's investments. Credit spreads often increase more for lower rated
and unrated securities than for investment grade securities. In addition,
when credit spreads increase, reductions in market value will generally
be greater for longer-maturity securities. Further, credit spread duration
(a measure of credit spread risk) can vary significantly from interest rate
duration (e.g., for floating rate debt securities, credit spread duration
typically will be higher than interest rate duration). The Fund may add
credit spread duration to its portfolio, for example through the use of
derivatives (e.g., credit default swaps), even while it has lower interest
rate duration. The credit spread duration of the Fund’s portfolio may
vary, in some cases significantly, from its interest rate duration. All
descriptions of duration in this prospectus refer to interest rate duration
unless otherwise noted.
Mortgage-Related and Other Asset-Backed Instruments Risk
The mortgage-related assets in which the Fund may invest include, but
are not limited to, any security, instrument or other asset that is related
to U.S. or non-U.S. mortgages, including those issued by private
originators or issuers, or issued or guaranteed as to principal or interest
by the U.S. government or its agencies or instrumentalities or by
non-U.S. governments or authorities, such as, without limitation, assets
representing interests in, collateralized or backed by, or whose values
are determined in whole or in part by reference to any number of
mortgages or pools of mortgages or the payment experience of such
mortgages or pools of mortgages, including REMICs, which could
include Re-REMICs, mortgage pass-through securities, inverse floaters,
CMOs, CLOs, multi-class pass-through securities, private mortgage
pass-through securities, stripped mortgage securities (generally
interest-only and principal-only securities), mortgage-related asset
backed securities and mortgage-related loans (including through
participations, assignments, originations and whole loans), including
commercial and residential mortgage loans. Exposures to
mortgage-related assets through derivatives or other financial
instruments will be considered investments in mortgage-related assets.
The Fund may also invest in other types of ABS, including CDOs, CBOs
and CLOs and other similarly structured securities. See “Investment
Objectives and Policies—Portfolio Contents—Mortgage-Related and
Other Asset-Backed Instruments” in this prospectus and “Investment
Objectives and Policies—Mortgage-Related and Other Asset-Backed
Instruments” in the Statement of Additional Information for a
description of the various mortgage-related and other asset-backed
instruments in which the Fund may invest and their related risks.
Mortgage-related and other asset-backed instruments represent
interests in “pools” of mortgages or other assets such as consumer
loans or receivables held in trust and often involve risks that are
different from or possibly more acute than risks associated with other
types of debt instruments.
Generally, rising interest rates tend to extend the duration of fixed rate
mortgage-related assets, making them more sensitive to changes in
interest rates. Compared to other fixed income investments with similar
maturity and credit, mortgage-related securities may increase in value to
a lesser extent when interest rates decline and may decline in value to a
similar or greater extent when interest rates rise. As a result, in a period
of rising interest rates, the Fund may exhibit additional volatility since
individual mortgage holders are less likely to exercise prepayment
options, thereby putting additional downward pressure on the value of
these securities and potentially causing the Fund to lose money. This is
known as extension risk. Mortgage-backed securities can be highly
sensitive to rising interest rates, such that even small movements can
cause the Fund to lose value. Mortgage-backed securities, and in
particular those not backed by a government guarantee, are subject to
credit risk. When interest rates decline, borrowers may pay off their
mortgages sooner than expected. This can reduce the returns of the
Fund because the Fund may have to reinvest that money at the lower
prevailing interest rates.
In addition, the creditworthiness, servicing practices, and financial
viability of the servicers of the underlying mortgage pools present
significant risks. For instance, a servicer may be required to make
advances in respect of delinquent loans underlying the
mortgage-related securities; however, servicers experiencing financial
difficulties may not be able to perform these obligations. Additionally,
both mortgage-related securities and asset-backed securities are subject
to risks associated with fraud or negligence by, or defalcation of, their
servicers. These securities are also subject to the risks of the underlying
loans. In some circumstances, a servicer’s or originator’s mishandling of
documentation related to the underlying collateral (e.g., failure to
properly document a security interest in the underlying collateral) may
affect the rights of security holders in and to the underlying collateral. In
addition, the underlying loans may have been extended pursuant to
inappropriate underwriting guidelines, to no underwriting guidelines at
all, or to fraudulent origination practices. The owner of a
mortgage-backed security’s ability to recover against the sponsor,
servicer or originator is uncertain and is often limited.
The Fund’s investments in other asset-backed instruments are subject to
risks similar to those associated with mortgage-related assets, as well
as additional risks associated with the nature of the assets and the
servicing of those assets. Payment of principal and interest on
asset-backed instruments may be largely dependent upon the cash
flows generated by the assets backing the instruments, and
asset-backed instruments may not have the benefit of any security
interest in the related assets.
Subordinate mortgage-backed or asset-backed instruments are paid
interest only to the extent that there are funds available to make
payments. To the extent the collateral pool includes a large percentage
of delinquent loans, there is a risk that interest payments on
subordinate mortgage-backed or asset-backed instruments will not be
fully paid.
There are multiple tranches of mortgage-backed and asset-backed
instruments, offering investors various maturity and credit risk
characteristics. For example, tranches may be categorized as senior,
mezzanine, and subordinated/equity or “first loss.” The most senior
tranche of a mortgage-backed or asset-backed instrument generally has
the greatest collateralization and generally pays the lowest interest rate.
If there are defaults or the collateral otherwise underperforms,
scheduled payments to senior tranches generally take precedence over
those of mezzanine tranches, and scheduled payments to mezzanine
tranches take precedence over those to subordinated/equity tranches.
Lower tranches represent lower degrees of credit quality and pay higher
interest rates intended to compensate for the attendant risks. The return
on the lower tranches is especially sensitive to the rate of defaults in the
collateral pool. The lowest tranche (i.e., the “equity” or “residual”
tranche) generally specifically receives the residual interest payments
(i.e., money that is left over after the higher tranches have been paid
and expenses of the issuing entities have been paid) rather than a fixed
interest rate. The Fund may also invest in the residual or equity tranches
of mortgage-related and other asset-backed instruments, which may be
referred to as subordinate mortgage-backed or asset-backed
instruments and interest-only mortgage-backed or asset-backed
instruments. The Fund expects that investments in subordinate
mortgage-backed and other asset-backed instruments will be subject to
risks arising from delinquencies and foreclosures, thereby exposing its
investment portfolio to potential losses. Subordinate securities of
mortgage-backed and other asset-backed instruments are also subject
to greater credit risk than those mortgage-backed or other asset-backed
instruments that are more highly rated.
The mortgage markets in the United States and in various foreign
countries have experienced extreme difficulties in the past that
adversely affected the performance and market value of certain of the
Fund’s mortgage-related investments. Delinquencies and losses on
residential and commercial mortgage loans (especially subprime and
second-lien mortgage loans) may increase, and a decline in or flattening
of housing and other real property values may exacerbate such
delinquencies and losses. In addition, reduced investor demand for
mortgage loans and mortgage-related securities and increased investor
yield requirements have caused limited liquidity in the secondary market
for mortgage-related securities, which can adversely affect the market
value of mortgage-related securities. It is possible that such limited
liquidity in such secondary markets could continue or worsen.
With respect to risk retention tranches (i.e., eligible residual interests
initially held by the sponsors of CMBS and other eligible securitizations
pursuant to the U.S. Risk Retention Rules), a third-party purchaser, such
as the Fund, must hold its retained interest, unhedged, for at least five
years following the closing of the CMBS transaction, after which it is
entitled to transfer its interest in the securitization to another person
that meets the requirements for a third-party purchaser. Even after the
required holding period has expired, due to the generally illiquid nature
of such investments, no assurance can be given as to what, if any, exit
strategies will ultimately be available for any given position.
In addition, there is limited guidance on the application of the final
U.S. Risk Retention Rules to specific securitization structures. There can
be no assurance that the applicable federal agencies charged with the
implementation of the final U.S. Risk Retention Rules (e.g., the FDIC, the
Comptroller of the Currency, the Federal Reserve Board, the SEC, the
Department of Housing and Urban Development, and the Federal
Housing Finance Agency) could not take positions in the future that
differ from the interpretation of such rules taken or embodied in such
securitizations, or that the final U.S. Risk Retention Rules will not
change.
Furthermore, in situations where the Fund invests in risk retention
tranches of securitizations structured by third parties, the Fund may be
required to execute one or more letters or other agreements, the exact
form and nature of which will vary (each, a “Risk Retention
Agreement”) under which it will make certain undertakings designed to
ensure such securitization complies with the U.S. Risk Retention Rules.
Such Risk Retention Agreements may include a variety of
representations, warranties, covenants and other indemnities, each of
which may run to various transaction parties. If the Fund breaches any
undertakings in any Risk Retention Agreement, it will be exposed to
claims by the other parties thereto, including for any losses incurred as a
result of such breach, which could be significant and exceed the value of
the Fund’s investments.
Mortgage-Related Derivative Instruments Risk
The Fund may engage in derivative transactions related to
mortgage-backed securities, including purchasing and selling
exchange-listed and OTC put and call options, futures and forwards on
mortgages and mortgage-backed securities. The Fund may also invest in
mortgage-backed securities credit default swaps, which include swaps
the reference obligation for which is a mortgage-backed security or
related index, such as the CMBX Index (a tradeable index referencing a
basket of commercial mortgage-backed securities) or the ABX (a
tradeable index referencing a basket of sub-prime mortgage-backed
securities). The Fund may invest in newly developed mortgage related
derivatives that may hereafter become available.
Derivative mortgage-backed securities (such as principal-only (“POs”),
interest-only (“IOs”) or inverse floating rate securities) are particularly
exposed to call and extension risks. Small changes in mortgage
prepayments can significantly impact the cash flows and the market
value of these derivative instruments. In general, the risk of faster than
anticipated prepayments adversely affects IOs, super floaters and
premium priced mortgage-backed securities. The risk of slower than
anticipated prepayments generally affects POs, floating-rate securities
subject to interest rate caps, support tranches and discount priced
mortgage-backed securities. In addition, particular derivative
instruments may be leveraged such that their exposure (i.e., price
sensitivity) to interest rate and/or prepayment risk is magnified.
Mortgage-related derivative instruments involve risks associated with
mortgage-related and other asset-backed instruments, privately-issued
mortgage-related securities, the mortgage market, the real estate
industry, derivatives and credit default swaps. See “Mortgage-Related
and Other Asset-Backed Instruments Risk,” “Privately-Issued
Mortgage-Related Securities Risk,” “Derivatives Risk,” and “Credit
Default Swaps Risk.”
Mortgage-related derivative instruments involve risks associated with
mortgage-related and other asset-backed instruments, privately-issued
mortgage-related securities, the mortgage market, the real estate
industry, derivatives and credit default swaps. See “Mortgage-Related
and Other Asset-Backed Instruments Risk,” “Privately-Issued
Mortgage-Related Securities Risk,” “Derivatives Risk,” and “Credit
Default Swaps Risk.”
Privately-Issued Mortgage-Related Securities Risk
There are no direct or indirect government or agency guarantees of
payments in pools created by non-governmental issuers. Privately-issued
mortgage-related securities are also not subject to the same
underwriting requirements for the underlying mortgages that are
applicable to those mortgage-related securities that have a government
or government sponsored entity guarantee.
Privately-issued mortgage-related securities are not traded on an
exchange and there may be a limited market for the securities, especially
when there is a perceived weakness in the mortgage and real estate
market sectors. Without an active trading market, mortgage-related
securities held in the Fund’s portfolio may be particularly difficult to
value because of the complexities involved in assessing the value of the
underlying mortgage loans.
High Yield Securities Risk
To the extent that the Fund invests in high yield securities and unrated
securities of similar credit quality (commonly known as “high yield
securities” or “junk bonds”), the Fund may be subject to greater levels
of credit risk, call risk and liquidity risk than funds that do not invest in
such securities, which could have a negative effect on the NAV and
market price of the Fund’s Common Shares or Common Share
dividends. These securities are considered predominantly speculative
with respect to an issuer’s continuing ability to make principal and
interest payments, and may be more volatile than other types of
securities. An economic downturn or individual corporate developments
could adversely affect the market for these securities and reduce the
Fund’s ability to sell these securities at an advantageous time or price.
An economic downturn could also generally lead to a higher
non-payment rate and, a high yield security may lose significant market
value before a default occurs. The Fund may purchase distressed
securities that are in default or the issuers of which are in bankruptcy,
which involve heightened risks.
High yield securities structured as zero-coupon bonds or pay-in-kind
securities tend to be especially volatile as they are particularly sensitive
to downward pricing pressures from rising interest rates or widening
spreads and may require the Fund to make taxable distributions of
imputed income without receiving the actual cash currency. Issuers of
high yield securities may have the right to “call” or redeem the issue
prior to maturity, which may result in the Fund having to reinvest the
proceeds in other high yield securities or similar instruments that may
pay lower interest rates. The Fund may also be subject to greater levels
of liquidity risk than funds that do not invest in high yield securities.
Consequently, transactions in high yield securities may involve greater
costs than transactions in more actively traded securities. A lack of
publicly-available information, irregular trading activity and wide
bid/ask spreads among other factors, may, in certain circumstances,
make high yield debt more difficult to sell at an advantageous time or
price than other types of securities or instruments. These factors may
result in the Fund being unable to realize full value for these securities
and/or may result in the Fund not receiving the proceeds from a sale of
a high yield security for an extended period after such sale, each of
which could result in losses to the Fund. Because of such risks involved
in investing in high yield securities, an investment in the Fund should be
considered speculative.
In general, lower rated debt securities carry a greater degree of risk that
the issuer will lose its ability to make interest and principal payments,
which could have a negative effect on the Fund. Securities of below
investment grade quality are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal and are commonly referred to as “high yield” securities
or “junk bonds.” High yield securities involve a greater risk of default
and their prices are generally more volatile and sensitive to actual or
perceived negative developments. Debt securities in the lowest
investment grade category also may be considered to possess some
speculative characteristics by certain rating agencies. The Fund may
purchase stressed or distressed securities that are in default or the
issuers of which are in bankruptcy, which involve heightened risks.
An economic downturn could severely affect the ability of issuers
(particularly those that are highly leveraged) to service or repay their
debt obligations. Lower-rated securities are generally less liquid than
higher-rated securities, which may have an adverse effect on the Fund’s
ability to dispose of them. For example, under adverse market or
economic conditions, the secondary market for below investment grade
securities could contract further, independent of any specific adverse
changes in the condition of a particular issuer, and certain securities in
the Fund’s portfolio may become illiquid or less liquid. As a result, the
Fund could find it more difficult to sell these securities or may be able to
sell these securities only at prices lower than if such securities were
widely traded. To the extent the Fund focuses on below investment
grade debt obligations, PIMCO’s capabilities in analyzing credit quality
and associated risks will be particularly important, and there can be no
assurance that PIMCO will be successful in this regard. Due to such risks
involved in investing in high yield securities, an investment in the Fund
should be considered speculative.
The Fund’s credit quality policies apply only at the time a security is
purchased, and the Fund is not required to dispose of a security in the
event that a rating agency or PIMCO downgrades its assessment of the
credit characteristics of a particular issue. In determining whether to
retain or sell such a security, PIMCO may consider factors including, but
not limited to, PIMCO's assessment of the credit quality of the issuer of
such security, the price at which such security could be sold and the
rating, if any, assigned to such security by other rating agencies. Analysis
of creditworthiness may be more complex for issuers of high yield
securities than that for issuers of higher quality debt securities.
See “Investment Objectives and Policies-Portfolio Contents-High Yield
Securities” for additional information.
To the extent that the Fund invests in high yield securities and unrated
securities of similar credit quality (commonly known as “high yield
securities” or “junk bonds”), the Fund may be subject to greater levels
of credit risk, call risk and liquidity risk than funds that do not invest in
such securities, which could have a negative effect on the NAV and
market price of the Fund’s Common Shares or Common Share
dividends. These securities are considered predominantly speculative
with respect to an issuer’s continuing ability to make principal and
interest payments, and may be more volatile than other types of
securities. An economic downturn or individual corporate developments
could adversely affect the market for these securities and reduce the
Fund’s ability to sell these securities at an advantageous time or price.
An economic downturn could also generally lead to a higher
non-payment rate and, a high yield security may lose significant market
value before a default occurs. The Fund may purchase distressed
securities that are in default or the issuers of which are in bankruptcy,
which involve heightened risks.
High yield securities structured as zero-coupon bonds or pay-in-kind
securities tend to be especially volatile as they are particularly sensitive
to downward pricing pressures from rising interest rates or widening
spreads and may require the Fund to make taxable distributions of
imputed income without receiving the actual cash currency. Issuers of
high yield securities may have the right to “call” or redeem the issue
prior to maturity, which may result in the Fund having to reinvest the
proceeds in other high yield securities or similar instruments that may
pay lower interest rates. The Fund may also be subject to greater levels
of liquidity risk than funds that do not invest in high yield securities.
Consequently, transactions in high yield securities may involve greater
costs than transactions in more actively traded securities. A lack of
publicly-available information, irregular trading activity and wide
bid/ask spreads among other factors, may, in certain circumstances,
make high yield debt more difficult to sell at an advantageous time or
price than other types of securities or instruments. These factors may
result in the Fund being unable to realize full value for these securities
and/or may result in the Fund not receiving the proceeds from a sale of
a high yield security for an extended period after such sale, each of
which could result in losses to the Fund. Because of such risks involved
in investing in high yield securities, an investment in the Fund should be
considered speculative.
In general, lower rated debt securities carry a greater degree of risk that
the issuer will lose its ability to make interest and principal payments,
which could have a negative effect on the Fund. Securities of below
investment grade quality are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal and are commonly referred to as “high yield” securities
or “junk bonds.” High yield securities involve a greater risk of default
and their prices are generally more volatile and sensitive to actual or
perceived negative developments. Debt securities in the lowest
investment grade category also may be considered to possess some
speculative characteristics by certain rating agencies. The Fund may
purchase stressed or distressed securities that are in default or the
issuers of which are in bankruptcy, which involve heightened risks.
An economic downturn could severely affect the ability of issuers
(particularly those that are highly leveraged) to service or repay their
debt obligations. Lower-rated securities are generally less liquid than
higher-rated securities, which may have an adverse effect on the Fund’s
ability to dispose of them. For example, under adverse market or
economic conditions, the secondary market for below investment grade
securities could contract further, independent of any specific adverse
changes in the condition of a particular issuer, and certain securities in
the Fund’s portfolio may become illiquid or less liquid. As a result, the
Fund could find it more difficult to sell these securities or may be able to
sell these securities only at prices lower than if such securities were
widely traded. To the extent the Fund focuses on below investment
grade debt obligations, PIMCO’s capabilities in analyzing credit quality
and associated risks will be particularly important, and there can be no
assurance that PIMCO will be successful in this regard. Due to such risks
involved in investing in high yield securities, an investment in the Fund
should be considered speculative.
The Fund’s credit quality policies apply only at the time a security is
purchased, and the Fund is not required to dispose of a security in the
event that a rating agency or PIMCO downgrades its assessment of the
credit characteristics of a particular issue. In determining whether to
retain or sell such a security, PIMCO may consider factors including, but
not limited to, PIMCO's assessment of the credit quality of the issuer of
such security, the price at which such security could be sold and the
rating, if any, assigned to such security by other rating agencies. Analysis
of creditworthiness may be more complex for issuers of high yield
securities than that for issuers of higher quality debt securities.
See “Investment Objectives and Policies-Portfolio Contents-High Yield
Securities” for additional information.
Distressed and Defaulted Securities Risk
Investments in the securities of financially distressed issuers involve
substantial risks, including the risk of default. Distressed securities
generally trade significantly below “par” or full value because
investments in such securities and debt of distressed issuers or issuers in
default are considered speculative and involve substantial risks in
addition to the risks of investing in high-yield bonds. Such investments
may be in default at the time of investment. In addition, these securities
may fluctuate more in price, and are typically less liquid. The Fund also
will be subject to significant uncertainty as to when, and in what
manner, and for what value obligations evidenced by securities of
financially distressed issuers will eventually be satisfied. Defaulted
obligations might be repaid only after lengthy workout or bankruptcy
proceedings, during which the issuer might not make any interest or
other payments. In any such proceeding relating to a defaulted
obligation, the Fund may lose its entire investment or may be required
to accept cash or securities with a value substantially less than its
original investment. Moreover, any securities received by the Fund upon
completion of a workout or bankruptcy proceeding may be less liquid,
speculative or restricted as to resale. Similarly, if the Fund participates in
negotiations with respect to any exchange offer or plan of
reorganization with respect to the securities of a distressed issuer, the
Fund may be restricted from disposing of such securities. To the extent
that the Fund becomes involved in such proceedings, the Fund may
have a more active participation in the affairs of the issuer than that
assumed generally by an investor. The Fund may incur additional
expenses to the extent it is required to seek recovery upon a default in
the payment of principal or interest on its portfolio holdings.
Also among the risks inherent in investments in a troubled issuer is that
it frequently may be difficult to obtain information as to the true
financial condition of such issuer. PIMCO's judgments about the credit
quality of a financially distressed issuer and the relative value of its
securities may prove to be wrong.
Inflation-Indexed Security Risk
Inflation-indexed debt securities are subject to the effects of actual or
anticipated changes in market interest rates caused by factors other
than inflation (real interest rates). In general, the value of an
inflation-indexed security, including Treasury Inflation-Protected
Securities (“TIPS”), tends to decrease when real interest rates increase
and can increase when real interest rates decrease. Thus generally,
during periods of rising inflation, the value of inflation-indexed
securities will tend to increase and during periods of deflation, their
value will tend to decrease. Interest payments on inflation-indexed
securities are unpredictable and will fluctuate as the principal and
interest are adjusted for inflation. There can be no assurance that the
inflation index used (
i.e.,
the CPI) will accurately measure the real rate of
inflation in the prices of goods and services. Increases in the principal
value of TIPS due to inflation are considered taxable ordinary income for
the amount of the increase in the calendar year. Any increase in the
principal amount of an inflation-indexed debt security will be considered
taxable ordinary income, even though the Fund will not receive the
principal until maturity. Additionally, a CPI swap can potentially lose
value if the realized rate of inflation over the life of the swap is less than
the fixed market implied inflation rate (fixed breakeven rate) that the
investor agrees to pay at the initiation of the swap. With municipal
inflation-indexed securities, the inflation adjustment is integrated into
the coupon payment, which is federally tax exempt (and may be state
tax exempt). For municipal inflation-indexed securities, there is no
adjustment to the principal value. Because municipal inflation-indexed
securities are a small component of the municipal bond market, they
may be less liquid than conventional municipal bonds.
Senior Debt Risk
The Fund may be subject to greater levels of credit risk than funds that
do not invest in below investment grade senior debt. The Fund may also
be subject to greater levels of liquidity risk than funds that do not invest
in senior debt. Restrictions on transfers in loan agreements, a lack of
publicly available information and other factors may, in certain
instances, make senior debt more difficult to sell at an advantageous
time or price than other types of securities or instruments. Additionally,
if the issuer of senior debt prepays, the Fund will have to consider
reinvesting the proceeds in other senior debt or similar instruments that
may pay lower interest rates.
Loans and Other Indebtedness; Loan Acquisitions,
Participations and Assignments Risk
Loan interests may take the form of (i) direct interests acquired during a
primary distribution or other purchase of a loan or (ii) assignments of,
novations of or participations in all or a portion of a loan acquired in
secondary markets. In addition to credit risk and interest rate risk, the
Fund’s exposure to loan interests may be subject to additional risks. For
example, purchasers of loans and other forms of direct indebtedness
depend primarily upon the creditworthiness of the borrower for
payment of principal and interest. Loans are subject to the risk that
scheduled interest or principal payments will not be made in a timely
manner or at all, either of which may adversely affect the value of the
loan. If the Fund does not receive scheduled interest or principal
payments on such indebtedness, the Fund’s share price and yield could
be adversely affected. Loans that are fully secured may offer the Fund
more protection than an unsecured loan in the event of non-payment of
scheduled interest or principal if the Fund is able to access and
monetize the collateral. However, the collateral underlying a loan, if any,
may be unavailable or insufficient to satisfy a borrower’s obligation. If
the Fund becomes owner, whole or in part, of any collateral after a loan
is foreclosed, the Fund may incur costs associated with owning and/or
monetizing its ownership of the collateral.
During periods of deteriorating economic conditions, such as recessions
or periods of rising unemployment, or changing interest rates (notably
increases), delinquencies and losses generally increase, sometimes
dramatically, with respect to obligations under such loans. An economic
downturn or individual corporate developments could adversely affect
the market for these instruments and reduce a Fund’s ability to sell
these instruments at an advantageous time or price. An economic
downturn could also generally lead to a higher nonpayment rate and, a
loan may lose significant market value before a default occurs.
Investments in loans through a purchase of a loan or a direct
assignment of a financial institution’s interests with respect to a loan
may involve additional risks to the Fund. For example, if a loan is
foreclosed, the Fund could become owner, in whole or in part, of any
collateral, which could include, among other assets, real estate or other
real or personal property, and would bear the costs and liabilities
associated with owning and holding or disposing of the collateral. The
purchaser of an assignment typically succeeds to all the rights and
obligations under the loan agreement with the same rights and
obligations as the assigning lender. Assignments may, however, be
arranged through private negotiations between potential assignees and
potential assignors, and the rights and obligations acquired by the
purchaser of an assignment may differ from, and be more limited than,
those held by the assigning lender.
In connection with purchasing loan participations, the Fund generally
will have no right to enforce compliance by the borrower with the terms
of the loan agreement relating to the loan, nor any rights of set-off
against the borrower, and the Fund may not directly benefit from any
collateral supporting the loan in which it has purchased the loan
participation. As a result, the Fund will be subject to the credit risk of
both the borrower and the lender that is selling the participation. In the
event of the insolvency of the lender selling a participation, the Fund
may be treated as a general creditor of the lender and may not benefit
from any set-off between the lender and the borrower. Certain loan
participations may be structured in a manner designed to prevent
purchasers of participations from being subject to the credit risk of the
lender, but even under such a structure, in the event of the lender’s
insolvency, the lender’s servicing of the participation may be delayed
and the assignability of the participation impaired.
The Fund may have difficulty disposing of loans and loan participations.
Because there is no liquid market for many such investments, the Fund
anticipates that such investments could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market may have
an adverse impact on the value of such investments and the Fund’s
ability to dispose of particular loans and loan participations when that
would be desirable, including in response to a specific economic event
such as a deterioration in the creditworthiness of the borrower. The lack
of a liquid secondary market for loans and loan participations also may
make it more difficult for the Fund to assign a value to these securities
for purposes of valuing the Fund’s portfolio. Investments in loans may
include participations in bridge loans, which are loans taken out by
borrowers for a short period (typically less than one year) pending
arrangement of more permanent financing through, for example, the
issuance of bonds, frequently high yield bonds issued for the purpose of
acquisitions.
Investments in loans may include acquisitions of, or participation in,
delayed draw and delayed funding loans and revolving credit facilities.
These commitments may have the effect of requiring the Fund to
increase its investment in a borrower at a time when it might not
otherwise decide to do so (including at a time when the company’s
financial condition makes it unlikely that such amounts will be repaid).
Delayed draw and delayed funding loans and revolving credit facilities
may be subject to restrictions on transfer, and only limited opportunities
may exist to resell such instruments. As a result, a Fund may be unable
to sell such investments at an opportune time or may have to resell
them at less than fair market value. Further, the Fund may need to hold
liquid assets in order to provide funding for these types of
commitments, meaning the Fund may not be able to invest in other
attractive investments, or the Fund may need to liquidate existing assets
in order to provide such funding.
The Fund may invest in loans used to finance the cost of construction,
acquisition, development, and/ or rehabilitation of a property, including,
but not limited to, development of single-family for-sale homes,
multi-family rentals and/or commercial facilities. Such construction
lending may expose the Fund to increased risk of non-payment and loss
because the loan is not backed by a finished project. Such risk may
depend on the nature of the construction and the relevant counterparty
or counterparties, which may include, but not be limited to,
homebuilders, private developers and/or entities with limited capital.
Repayment of these types of loans may depend on the borrower’s ability
to secure permanent “take-out” financing, which requires the successful
completion of the project, or operation of the property with an income
stream sufficient to meet operating and loan expenses. In addition,
these types of loans are subject to the risk of errors in estimations of the
property’s value at completion of construction and the estimated cost of
construction, as well as the risk that the projects may not be completed
and have limited liquidity.
To the extent the Fund invests in loans, including, but not limited to,
bank loans, non-syndicated loans, the residual or equity tranches of
mortgage-related and other asset-backed securities, which may be
referred to as subordinate mortgage-backed or asset-backed securities
and interest-only mortgage-backed or asset-backed securities, and other
investments, the Fund may be subject to greater levels of credit risk, call
risk, settlement risk and liquidity risk. These instruments are considered
predominantly speculative with respect to an issuer’s continuing ability
to make principal and interest payments and may be more volatile than
other types of securities.
The Fund may also be subject to greater levels of liquidity risk than
funds that do not invest in loans. In addition, the loans in which the
Fund invests may not be listed on any exchange and a secondary market
for such loans may be comparatively illiquid relative to markets for other
more liquid fixed income securities. Consequently, transactions in loans
may involve greater costs than transactions in more actively traded
securities. In connection with certain loan transactions, transaction costs
that are borne by the Fund may include the expenses of third parties
that are retained to assist with reviewing and conducting diligence,
negotiating, structuring and servicing a loan transaction, and/or
providing other services in connection therewith. Furthermore, the Fund
may incur such costs in connection with loan transactions that are
pursued by the Fund but not ultimately consummated (so-called
“broken deal costs”).
Restrictions on transfers in loan agreements, a lack of publicly available
information, irregular trading activity and wide bid/ask spreads, among
other factors, may, in certain circumstances, make loans more difficult to
sell at an advantageous time or price than other types of securities or
instruments. These factors may result in the Fund being unable to realize
full value for the loans and/or may result in the Fund not receiving the
proceeds from a sale of a loan for an extended period after such sale,
each of which could result in losses to the Fund. Some loans may have
extended trade settlement periods, including settlement periods of
greater than seven days, which may result in cash not being
immediately available to the Fund. If an issuer of a loan prepays or
redeems the loan prior to maturity, the Fund may have to reinvest the
proceeds in other loans or similar instruments that may pay lower
interest rates. Because of such risks involved in investing in loans, an
investment in the Fund should be considered speculative.
The Fund’s investments in subordinated and unsecured loans generally
are subject to similar risks as those associated with investments in
secured loans. Subordinated or unsecured loans are lower in priority of
payment to secured loans and are subject to the additional risk that the
cash flow of the borrower and property securing the loan or debt, if any,
may be insufficient to meet scheduled payments after giving effect to
the senior secured obligations of the borrower. This risk is generally
higher for subordinated unsecured loans or debt, which are not backed
by a security interest in any specific collateral. Subordinated and
unsecured loans generally have greater price volatility than secured
loans and may be less liquid. There is also a possibility that originators
will not be able to sell participations in subordinated or unsecured
loans, which would create greater credit risk exposure for the holders of
such loans. Subordinate and unsecured loans share the same risks as
other below investment grade securities.
There may be less readily available information about most loans and
the underlying borrowers than is the case for many other types of
securities. Loans may be issued by companies that are not subject to
SEC reporting requirements and therefore may not be required to file
reports with the SEC or may file reports that are not required to comply
with SEC form requirements. In addition, such companies may be
subject to a less stringent liability disclosure regime than companies
subject to SEC reporting requirements. Loans may not be considered
“securities,” and purchasers, such as the Fund, therefore may not be
entitled to rely on the anti-fraud protections of the federal securities
laws. Because there is limited public information available regarding
loan investments, the Fund is particularly dependent on the analytical
abilities of the Fund’s portfolio managers.
Economic exposure to loan interests through the use of derivative
transactions may involve greater risks than if the Fund had invested in
the loan interest directly during a primary distribution, through direct
originations or through assignments of, novations of or participations in
a loan acquired in secondary markets since, in addition to the risks
described above, certain derivative transactions may be subject to
leverage risk and greater illiquidity risk, counterparty risk, valuation risk
and other risks.
“Covenant-lite” Obligations Risk
Covenant-lite obligations contain fewer maintenance covenants than
other obligations, or no maintenance covenants, and may not include
terms that allow the lender to monitor the performance of the borrower
and declare a default if certain criteria are breached. Covenant-lite
loans carry a risk that the borrower could transfer or encumber its
assets, which could reduce the amount of assets that can be used to
satisfy debts and result in losses for debtholders. Covenant-lite loans
may carry more risk than traditional loans as they allow individuals and
corporations to engage in activities that would otherwise be difficult or
impossible under a covenant-heavy loan agreement. In the event of
default, covenant-lite loans may exhibit diminished recovery values as
the lender may not have the opportunity to negotiate with the borrower
prior to default.
Subprime Risk
Loans, and debt instruments collateralized by loans (including Alt
Lending ABS), acquired by the Fund may be subprime in quality, or may
become subprime in quality. Although there is no specific legal or
market definition of “subprime,” subprime loans are generally
understood to refer to loans made to borrowers that display poor credit
histories and other characteristics that correlate with a higher default
risk. Accordingly, subprime loans, and debt instruments secured by such
loans including Alt Lending ABS), have speculative characteristics and
are subject to heightened risks, including the risk of nonpayment of
interest or repayment of principal, and the risks associated with
investments in high yield securities. In addition, these instruments could
be subject to increased regulatory scrutiny. The Fund is not restricted by
any particular borrower credit risk criteria and/or qualifications when
acquiring loans or debt instruments collateralized by loans.
Privacy and Data Security Risk
The GLBA and other laws limit the disclosure of certain non-public
personal information about a consumer to non- affiliated third parties
and require financial institutions to disclose certain privacy policies and
practices with respect to information sharing with both affiliates and
non-affiliated third parties. Many states and a number of
non-U.S. jurisdictions have enacted privacy and data security laws
requiring safeguards on the privacy and security of consumers’
personally identifiable information. Other laws deal with obligations to
safeguard and dispose of private information in a manner designed to
avoid its dissemination. Privacy rules adopted by the U.S. Federal Trade
Commission and SEC implement GLBA and other requirements and
govern the disclosure of consumer financial information by certain
financial institutions, ranging from banks to private investment funds.
U.S. platforms following certain models generally are required to have
privacy policies that conform to these GLBA and other requirements. In
addition, such platforms typically have policies and procedures intended
to maintain platform participants’ personal information securely and
dispose of it properly.
The Fund generally does not intend to obtain or hold borrowers’
non-public personal information, and the Fund has implemented
procedures reasonably designed to prevent the disclosure of borrowers’
non-public personal information to the Fund. However, service providers
to the Fund, including their custodians and the platforms acting as loan
servicers for the Fund, may obtain, hold or process such information. The
Fund cannot guarantee the security of non-public personal information
in the possession of such a service provider and cannot guarantee that
service providers have been and will continue to comply with the GLBA,
other data security and privacy laws and any other related regulatory
requirements. Violations of GLBA and other laws could subject the Fund
to litigation and/or fines, penalties or other regulatory action, which,
individually or in the aggregate, could have an adverse effect on the
Fund. The Fund may also face regulations related to privacy and data
security in the other jurisdictions in which the Fund invests.
Platform Risk
The Alt Lending ABS in which the Fund may invest are typically not listed
on any securities exchange and not registered under the Securities Act.
In addition, the Fund anticipates that these instruments may only be
sold to a limited number of investors and may have a limited or
non-existent secondary market. Accordingly, the Fund currently expects
that certain of the investments it may make in Alt Lending ABS will face
heightened levels of liquidity risk. Although currently there is generally
no reliable, active secondary market for certain Alt Lending ABS, a
secondary market for these Alt Lending ABS may develop. If the Fund
purchases Alt Lending ABS on an alternative lending platform, the Fund
will have the right to receive principal and interest payments due on
loans underlying the Alt Lending ABS only if the platform servicing the
loans receives the borrower’s payments on such loans and passes such
payments through to the Fund. If a borrower is unable or fails to make
payments on a loan for any reason, the Fund may be greatly limited in
its ability to recover any outstanding principal or interest due, as (among
other reasons) the Fund may not have direct recourse against the
borrower or may otherwise be limited in its ability to directly enforce its
rights under the loan, whether through the borrower or the platform
through which such loan was originated, the loan may be unsecured or
under-collateralized and/or it may be impracticable to commence a legal
proceeding against the defaulting borrower.
The Fund may have limited knowledge about the underlying loans and
is dependent upon the platform for information regarding underlying
loans. Although PIMCO may conduct diligence on the platforms, the
Fund generally does not have the ability to independently verify the
information provided by the platforms, other than payment information
regarding loans underlying the Alt Lending ABS owned by the Fund,
which the Fund observes directly as payments are received. With respect
to Alt Lending ABS that the Fund purchases in the secondary market
(i.e., not directly from an alternative lending platform), the Fund may not
perform the same level of diligence on such platform or at all. The Fund
may not review the particular characteristics of the loans collateralizing
an Alt Lending ABS, but rather negotiate in advance with platforms the
general criteria of the underlying loans. As a result, the Fund is
dependent on the platforms’ ability to collect, verify and provide
information to the Fund about each loan and borrower.
The Fund relies on the borrower’s credit information, which is provided
by the platforms. However, such information may be out of date,
incomplete or inaccurate and may, therefore, not accurately reflect the
borrower’s actual creditworthiness. Platforms may not have an
obligation to update borrower information, and, therefore, the Fund
may not be aware of any impairment in a borrower’s creditworthiness
subsequent to the making of a particular loan. The platforms’ credit
decisions and scoring models may be based on algorithms that could
potentially contain programming or other errors or prove to be
ineffective or otherwise flawed. This could adversely affect loan pricing
data and approval processes and could cause loans to be mispriced or
misclassified, which could ultimately have a negative impact on the
Fund’s performance.
In addition, the underlying loans, in some cases, may be affected by the
success of the platforms through which they are facilitated. Therefore,
disruptions in the businesses of such platforms may also negatively
impact the value of the Fund’s investments. In addition, disruption in the
business of a platform could limit or eliminate the ability of the Fund to
invest in loans originated by that platform, and therefore the Fund could
lose some or all of the benefit of its diligence effort with respect to that
platform.
Platforms are for-profit businesses that, as a general matter, generate
revenue by collecting fees on funded loans from borrowers and by
assessing a loan servicing fee on investors, which may be a fixed annual
amount or a percentage of the loan or amounts collected. This business
could be disrupted in multiple ways; for example, a platform could file
for bankruptcy or a platform might suffer reputational harm from
negative publicity about the platform or alternative lending more
generally and the loss of investor confidence in the event that a loan
facilitated through the platform is not repaid and the investor loses
money on its investment. Many platforms and/or their affiliates have
incurred operating losses since their inception and may continue to
incur net losses in the future, particularly as their businesses grow and
they incur additional operating expenses Platforms may also be forced
to defend legal action taken by regulators or governmental bodies.
Alternative lending is a newer industry operating in an evolving legal
environment. Platforms may be subject to risk of litigation alleging
violations of law and/or regulations, including, for example, consumer
protection laws, whether in the United States or in foreign jurisdictions.
Platforms may be unsuccessful in defending against such lawsuits or
other actions and, in addition to the costs incurred in fighting any such
actions, platforms may be required to pay money in connection with the
judgments, settlements or fines or may be forced to modify the terms of
its borrower loans, which could cause the platform to realize a loss or
receive a lower return on a loan than originally anticipated. Platforms
may also be parties to litigation or other legal action in an attempt to
protect or enforce their rights or those of affiliates, including intellectual
property rights, and may incur similar costs in connection with any such
efforts.
The Fund’s investments in Alt Lending ABS may expose the Fund to the
credit risk of the issuer. Generally, such instruments are unsecured
obligations of the issuer; an issuer that becomes subject to bankruptcy
proceedings may be unable to make full and timely payments on its
obligations to the Fund, even if the payments on the underlying loan or
loans continue to be made timely and in full. In addition, when the Fund
owns Alt Lending ABS, the Fund and its custodian generally does not
have a contractual relationship with, or personally identifiable
information regarding, individual borrowers, so the Fund will not be
able to enforce underlying loans directly against borrowers and may not
be able to appoint an alternative servicing agent in the event that a
platform or third-party servicer, as applicable, ceases to service the
underlying loans. Therefore, the Fund is more dependent on the platform
for servicing than if the Fund had owned whole loans through the
platform. Where such interests are secured, the Fund relies on the
platform to perfect the Fund’s security interest. In addition, there may be
a delay between the time the Fund commits to purchase an instrument
issued by a platform, its affiliate or a special purpose entity sponsored
by the platform or its affiliate and the issuance of such instrument and,
during such delay, the funds committed to such an investment will not
earn interest on the investment nor will they be available for investment
in other alternative lending-related instruments, which will reduce the
effective rate of return on the investment. The Fund’s investments in Alt
Lending ABS may be illiquid.
Risk Retention Investment Risk
The Fund may invest in risk retention tranches of commercial
mortgage-backed securities (“CMBS”) or other eligible securitizations, if
any (“risk retention tranches”), which are eligible residual interests
typically held by the sponsors of such securitizations pursuant to
the final rules implementing the credit risk retention requirements of
Section 941 of the Dodd-Frank Act (the “U.S. Risk Retention Rules”). In
the case of CMBS transactions, for example, the U.S. Risk Retention
Rules permit all or a portion of the retained credit risk associated with
certain securitizations (i.e., retained risk) to be held by an unaffiliated
“third party purchaser,” such as the Fund, if, among other requirements,
the third-party purchaser holds its retained interest, unhedged, for at
least five years following the closing of the CMBS transaction, after
which it is entitled to transfer its interest in the securitization to another
person that meets the requirements for a third-party purchaser. Even
after the required holding period has expired, due to the generally
illiquid nature of such investments, no assurance can be given as to
what, if any, exit strategies will ultimately be available for any given
position.
In addition, there is limited guidance on the application of the final
U.S. Risk Retention Rules to specific securitization structures. There can
be no assurance that the applicable federal agencies charged with the
implementation of the final U.S. Risk Retention Rules (the Federal
Deposit Insurance Corporation, the Comptroller of the Currency, the
Federal Reserve Board, the SEC, the Department of Housing and Urban
Development, and the Federal Housing Finance Agency) could not take
positions in the future that differ from the interpretation of such rules
taken or embodied in such securitizations, or that the final U.S. Risk
Retention Rules will not change.
Furthermore, in situations where the Fund invests in risk retention
tranches of securitizations structured by third parties, the Fund may be
required to execute one or more letters or other agreements, the exact
form and nature of which will vary (each, a “Risk Retention
Agreement”) under which it will make certain undertakings designed to
ensure such securitization complies with the final U.S. Risk Retention
Rules. Such Risk Retention Agreements may include a variety of
representations, warranties, covenants and other indemnities, each of
which may run to various transaction parties. If the Fund breaches any
undertakings in any Risk Retention Agreement, it will be exposed to
claims by the other parties thereto, including for any losses incurred as a
result of such breach, which could be significant and exceed the value of
the Fund’s investments.
Reinvestment Risk
Income from the Fund’s portfolio will decline if and when the Fund
invests the proceeds from matured, traded or called debt obligations at
market interest rates that are below the portfolio’s current earnings rate.
 For instance, during periods of declining interest rates, an issuer of debt
obligations may exercise an option to redeem securities prior to
maturity, forcing the Fund to invest in lower-yielding securities. The Fund
also may choose to sell higher yielding portfolio securities and to
purchase lower yielding securities to achieve greater portfolio
diversification, because the portfolio managers believe the current
holdings are overvalued or for other investment-related reasons. A
decline in income received by the Fund from its investments is likely to
have a negative effect on dividend levels and the market price, NAV
and/or overall return of the Common Shares.
Securities Lending Risk
For the purpose of achieving income, the Fund may lend its portfolio
securities to brokers, dealers, and other financial institutions provided a
number of conditions are satisfied, including that the loan is fully
collateralized. Please see “Investment Objectives and Policies—Loans of
Portfolio Securities” in the Statement of Additional Information for more
details. When the Fund lends portfolio securities, its investment
performance will continue to reflect changes in the value of the
securities loaned, and the Fund will also receive a fee or interest on the
collateral. Securities lending involves the risk of loss of rights in the
collateral or delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. The Fund may pay
lending fees to a party arranging the loan, which may be an affiliate of
the Fund. Cash collateral received by the Fund in securities lending
transactions may be invested in short-term liquid fixed income
instruments or in money market or short-term mutual funds, or similar
investment vehicles, including affiliated money market or short-term
mutual funds. The Fund bears the risk of such investments.
Call Risk
Call risk refers to the possibility that an issuer may exercise its right to
redeem a fixed income security earlier than expected. 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 in
which the Fund has invested, the Fund may not recoup the full amount
of its initial investment or may not realize the full anticipated earnings
from the investment and may be forced to reinvest in lower-yielding
securities, securities with greater credit risks or securities with other, less
favorable features.
Foreign (Non-U.S.) Investment Risk
Foreign (non-U.S.) securities may experience more rapid and extreme
changes in value than securities of U.S. issuers or securities that trade
exclusively in U.S. markets. The securities markets of many foreign
countries are relatively small, with a limited number of companies
representing a small number of industries. Additionally, issuers of
foreign (non-U.S.) securities are usually not subject to the same degree
of regulation as U.S. issuers. Reporting, legal, accounting, auditing and
custody standards of foreign countries differ, in some cases significantly,
from U.S. standards. Global economies and financial markets are
becoming increasingly interconnected, and conditions and events in one
country, region or financial market may adversely impact issuers in a
different country, region or financial market. Foreign (non-U.S.) market
trading hours, clearance and settlement procedures, and holiday
schedules may limit the Fund’s ability to buy and sell securities.
Investments in foreign (non-U.S.) markets may also be adversely
affected by governmental actions such as the imposition of capital
controls, nationalization of companies or industries, expropriation of
assets or the imposition of punitive taxes. The governments of certain
countries may prohibit or impose substantial restrictions on foreign
(non-U.S.) investing in their capital markets or in certain sectors or
industries. In addition, a foreign (non-U.S.) government may limit or
cause delay in the convertibility or repatriation of its currency which
would adversely affect the U.S. dollar value and/or liquidity of
investments denominated in that currency. Certain foreign (non-U.S.)
investments may become less liquid in response to market
developments or adverse investor perceptions, or become illiquid after
purchase by the Fund, particularly during periods of market turmoil. A
reduction in trading in securities of issuers located in countries whose
economies are heavily dependent upon trading with key partners may
have an adverse impact on a Fund’s investments.
Also, nationalization, expropriation or confiscatory taxation, unstable
governments, decreased market liquidity, currency blockage, market
disruptions, political changes, security suspensions or diplomatic
developments or the imposition of sanctions or other similar measures
could adversely affect the Fund’s investments in a foreign (non-U.S.)
country. In the event of nationalization, expropriation or other
confiscation, the Fund could lose its entire investment in foreign
(non-U.S.) securities. The type and severity of sanctions and other similar
measures, including counter sanctions and other retaliatory actions, that
may be imposed could vary broadly in scope, and their impact is difficult
to ascertain. These types of measures may include, but are not limited
to, banning a sanctioned country or certain persons or entities
associated with such country from global payment systems that
facilitate cross-border payments, restricting the settlement of securities
transactions by certain investors, and freezing the assets of particular
countries, entities or persons. The imposition of sanctions and other
similar measures could, among other things, result in a decline in the
value and/or liquidity of securities issued by the sanctioned country or
companies located in or economically tied to the sanctioned country,
downgrades in the credit ratings of the sanctioned country's securities
or those of companies located in or economically tied to the sanctioned
country, currency devaluation or volatility, and increased market
volatility and disruption in the sanctioned country and throughout the
world. Sanctions and other similar measures could directly or indirectly
limit or prevent a Fund from buying and selling securities (in the
sanctioned country and other markets), significantly delay or prevent the
settlement of securities transactions, and adversely impact a Fund's
liquidity and performance. Adverse conditions in a certain region can
adversely affect securities of other countries whose economies appear
to be unrelated. To the extent that the Fund invests a significant portion
of its assets in a specific geographic region or in securities denominated
in a particular foreign (non-U.S.) currency, the Fund will generally have
more exposure to regional economic risks, including weather
emergencies and natural disasters, associated with foreign (non-U.S.)
investments. Foreign (non-U.S.) securities may also be less liquid
(particularly during market closures due to local holidays or other
reasons) and more difficult to value than securities of U.S. issuers.
The Fund may invest in securities and instruments that are economically
tied to Russia. Investments in Russia are subject to various risks such as,
but not limited to political, economic, legal, market and currency risks.
The risks include uncertain political and economic policies, short term
market volatility, poor accounting standards, corruption and crime, an
inadequate regulatory system, regional armed conflict and
unpredictable taxation. Investments in Russia are particularly subject to
the risk that further economic sanctions, export and import controls, and
other similar measures may be imposed by the United States and/or
other countries. Other similar measures may include, but are not limited
to, banning or expanding bans on Russia or certain persons or entities
associated with Russia from global payment systems that facilitate
cross-border payments, restricting the settlement of securities
transactions by certain investors, and freezing Russian assets or those of
particular countries, entities or persons with ties to Russia (e.g. Belarus).
Such sanctions and other similar measures — which may impact
companies in many sectors, including energy, financial services,
technology, accounting, quantum computing, shipping, aviation, metals
and mining, defense, architecture, engineering, construction,
manufacturing and transportation, among others — and Russia’s
countermeasures may negatively impact the Fund’s performance and/or
ability to achieve its investment objectives. For example, certain
investments may be prohibited and/or existing investments may become
illiquid (e.g., in the event that transacting in certain existing investments
is prohibited, securities markets close, or market participants cease
transacting in certain investments in light of geopolitical events,
sanctions or related considerations), which could render any such
securities held by the Fund unmarketable for an indefinite period of time
and/or cause the Fund to sell other portfolio holdings at a
disadvantageous time or price or to continue to hold investments that
the Fund no longer seeks to hold. In addition, such sanctions or other
similar measures, and the Russian government's response, could result
in a downgrade of Russia's credit rating or of securities of issuers
located in or economically tied to Russia, devaluation of Russia's
currency and/or increased volatility with respect to Russian securities
and the ruble. Moreover, disruptions caused by Russian military action
or other actions (including cyberattacks, espionage or other asymmetric
measures) or resulting actual or threatened responses to such activity
may impact Russia's economy and Russian and other issuers of
securities in which the Fund is invested. Such resulting actual or
threatened responses may include, but are not limited to, purchasing
and financing restrictions, withdrawal of financial intermediaries,
boycotts or changes in consumer or purchaser preferences, sanctions,
export and import controls, tariffs or cyberattacks on the Russian
government, Russian companies or Russian individuals, including
politicians. Any actions by Russia made in response to such sanctions or
retaliatory measures could further impair the value and liquidity of Fund
investments. Sanctions and other similar measures have resulted in
defaults on debt obligations by certain corporate issuers and the
Russian Federation that could lead to cross-defaults or
cross-accelerations on other obligations of these issuers.
The Russian securities market is characterized by limited volume of
trading, resulting in difficulty in obtaining accurate prices and trading.
These issues can be magnified as a result of sanctions and other similar
measures that may be imposed and the Russian government's response.
The Russian securities market, as compared to U.S. markets, has
significant price volatility, less liquidity, a smaller market capitalization
and a smaller number of traded securities. There may be little publicly
available information about issuers. Settlement, clearing and
registration of securities transactions are subject to risks. Prior to the
implementation of the National Settlement Depository (“NSD”), a
recognized central securities depository, there was no central
registration system for equity share registration in Russia, and
registration was carried out by either the issuers themselves or by
registrars located throughout Russia. Title to Russian equities held
through the NSD is now based on the records of the NSD and not the
registrars. Although the implementation of the NSD has enhanced the
efficiency and transparency of the Russian securities market, issues
resulting in loss can still occur. In addition, sanctions by the European
Union against the NSD, as well as the potential for sanctions by other
governments, could make it more difficult to conduct or confirm
transactions involving Russian securities. Ownership of securities issued
by Russian companies that are not held through depositories such as
the NSD may be recorded by companies themselves and by registrars. In
such cases, the risk is increased that the Fund could lose ownership
rights through fraud, negligence or oversight. While applicable Russian
regulations impose liability on registrars for losses resulting from their
errors, it may be difficult for the Fund to enforce any rights it may have
against the registrar or issuer of the securities in the event of loss of
share registration. In addition, issuers and registrars are still prominent
in the validation and approval of documentation requirements for
corporate action processing in Russia. Because the documentation
requirements and approval criteria vary between registrars and issuers,
there remain unclear and inconsistent market standards in the Russian
market with respect to the completion and submission of corporate
action elections. In addition, sanctions or Russian countermeasures may
prohibit or limit a Fund’s ability to participate in corporate actions, and
therefore require the Fund to forego voting on or receiving funds that
would otherwise be beneficial to the Fund. To the extent that the Fund
suffers a loss relating to title or corporate actions relating to its portfolio
securities, it may be difficult for the Fund to enforce its rights or
otherwise remedy the loss. Russian securities laws may not recognize
foreign nominee accounts held with a custodian bank, and therefore the
custodian may be considered the ultimate owner of securities they hold
for their clients. Adverse currency exchange rates are a risk and there
may be a lack of available currency hedging instruments. Investments in
Russia may be subject to the risk of nationalization or expropriation of
assets. Oil, natural gas, metals, minerals and timber account for a
significant portion of Russia’s exports, leaving the country vulnerable to
swings in world prices and to sanctions or other actions that may be
directed at the Russian economy as a whole or at Russian oil, natural
gas, metals, minerals or timber industries.
Emerging Markets Risk
Foreign (non-U.S.) investment risk may be particularly high to the extent
that the Fund invests in securities of issuers based in or doing business
in emerging market countries or invests in securities denominated in the
currencies of emerging market countries. Investing in securities of
issuers based in or doing business in emerging markets entails all of the
risks of investing in foreign securities noted above, but to a heightened
degree.
Investments in emerging market countries pose a greater degree of
systemic risk (i.e., the risk of a cascading collapse of multiple institutions
within a country, and even multiple national economies). The
inter-relatedness of economic and financial institutions within and
among emerging market economies has deepened over the years, with
the effect that institutional failures and/or economic difficulties that are
of initially limited scope may spread throughout a country, a region or
all or most emerging market countries. This may undermine any attempt
by the Fund to reduce risk through geographic diversification of its
portfolio.
There is a heightened possibility of imposition of withholding or other
taxes on interest or dividend income or capital gains generated from
emerging market securities. Governments of emerging market countries
may engage in confiscatory taxation or expropriation of income and/or
assets to raise revenues or to pursue a domestic political agenda. In the
past, emerging market countries have nationalized assets, companies
and even entire sectors, including the assets of foreign investors (like
the Fund), with inadequate or no compensation to the prior owners.
There can be no assurance that the Fund will not suffer a loss of any or
all of its investments, or interest or dividends thereon, due to adverse
fiscal or other policy changes in emerging market countries.
There is also a greater risk that an emerging market government may
take action that impedes or prevents the Fund from taking income
and/or capital gains earned in the local currency and converting into
U.S. dollars (i.e., “repatriating” local currency investments or profits).
Certain emerging market countries have sought to maintain foreign
exchange reserves and/or address the economic volatility and
dislocations caused by the large international capital flows by
controlling or restricting the conversion of the local currency into other
currencies. This risk tends to become more acute when economic
conditions otherwise worsen. There can be no assurance that if the Fund
earns income or capital gains in an emerging market currency or PIMCO
otherwise seeks to withdraw the Fund’s investments from a given
emerging market country, capital controls imposed by such country will
not prevent, or cause significant expense, or delay in, doing so.
Bankruptcy law and creditor reorganization processes may differ
substantially from those in the United States, resulting in greater
uncertainty as to the rights of creditors, the enforceability of such rights,
reorganization timing and the classification, seniority and treatment of
claims. In certain emerging market countries, although bankruptcy laws
have been enacted, the process for reorganization remains highly
uncertain. In addition, it may be impossible to seek legal redress against
an issuer that is a sovereign state.
Emerging market countries typically have less established regulatory,
disclosure, legal, accounting, recordkeeping and financial reporting
systems than those in more developed markets, which may increase the
potential for market manipulation or reduce the scope or quality of
financial information available to investors. Governments in emerging
market countries are often less stable and more likely to take extra-legal
action with respect to companies, industries, assets, or foreign
ownership than those in more developed markets. Moreover, it can be
more difficult for investors to bring litigation or enforce judgments
against issuers in emerging markets or for U.S. regulators to bring
enforcement actions, or obtain information needed to pursue or enforce
such judgments, against such issuers. In addition, foreign companies
with securities listed on U.S. exchanges may be delisted if they do not
meet U.S. accounting standards and auditor oversight requirements,
which may decrease the liquidity and value of the securities. The Fund
may also be subject to emerging markets risk if it invests in derivatives
or other securities or instruments whose value or return are related to
the value or returns of emerging markets securities.
Other heightened risks associated with emerging markets investments
include, without limitation: (i) risks due to less social, political and
economic stability; (ii) the smaller size of the market for such securities
and a lower volume of trading, resulting in a lack of liquidity and in
price volatility; (iii) certain national policies which may restrict the Fund’s
investment opportunities, including sanctions and restrictions on
investing in issuers or industries deemed sensitive to relevant national
interests and requirements that government approval be obtained prior
to investment by foreign persons; (iv) certain national policies that may
restrict the Fund’s repatriation of investment income, capital or the
proceeds of sales of securities, including temporary restrictions on
foreign capital remittances; (v) the lack of uniform accounting and
auditing standards and/or standards that may be significantly different
from the standards required in the United States; (vi) less publicly
available financial and other information regarding issuers; (vii)
potential difficulties in enforcing contractual obligations; and (viii)
higher rates of inflation, higher interest rates and other economic
concerns. The Fund may invest to a substantial extent in emerging
market securities that are denominated in local currencies, subjecting
the Fund to a greater degree of foreign currency risk. Also, investing in
emerging market countries may entail purchases of securities of issuers
that are insolvent, bankrupt or otherwise of questionable ability to
satisfy their payment obligations as they become due, subjecting the
Fund to a greater amount of credit risk and/or high yield risk. The
economy of some emerging markets may be particularly exposed to or
affected by a certain industry or sector, and therefore issuers and/or
securities of such emerging markets may be more affected by the
performance of such industries or sectors.
Currency Risk
If the Fund invests directly in foreign (non-U.S.) currencies or in
securities that trade in, and receive revenues in, foreign (non-U.S.)
currencies, or in derivatives or other instruments that provide exposure
to foreign (non-U.S.) currencies, it will be subject to the risk that those
currencies will decline in value relative to the U.S. dollar, or, in the case
of hedging positions, that the U.S. dollar will decline in value relative to
the currency being hedged. Although the Fund may attempt to hedge its
currency exposure into the U.S. dollar, it may not be successful in
reducing the effects of currency fluctuations. The Fund may also hedge
from one foreign currency to another. In addition, the Fund's use of
currency hedging may not be successful and the use of such strategies
may lower the Fund's potential returns.
Investments denominated in foreign (non-U.S.) currencies or that trade
in and receive revenues in, foreign (non-U.S.) currencies, derivatives or
other instruments that provide exposure to foreign (non-U.S.)
currencies, are subject to the risk that those currencies will decline in
value relative to the U.S. dollar, or, in the case of hedging positions, that
the U.S. dollar will decline in value relative to the currency being
hedged.
Currency rates in foreign (non-U.S.) countries may fluctuate significantly
over short periods of time for a number of reasons, including changes in
interest rates, rates of inflation, balance of payments and governmental
surpluses or deficits, intervention (or the failure to intervene) by U.S. or
foreign (non-U.S.) governments, central banks or supranational entities
such as the International Monetary Fund, or by the imposition of
currency controls or other political developments in the United States or
abroad. These fluctuations may have a significant adverse impact on the
value of the Fund’s portfolio and/or the level of Fund distributions made
to Common Shareholders. There is no assurance that a hedging strategy,
if used, will be successful. Moreover, currency hedging techniques may
be unavailable with respect to emerging market currencies.
The local emerging market currencies in which the Fund may be
invested from time to time may experience substantially greater
volatility against the U.S. dollar than the major convertible currencies of
developed countries. Some of the local currencies in which the Fund
may invest are neither freely convertible into one of the major currencies
nor internationally traded. The local currencies may be convertible into
other currencies only inside the relevant emerging market where the
limited availability of such other currencies may tend to inflate their
values relative to the local currency in question. Such internal exchange
markets can therefore be said to be neither liquid nor competitive. In
addition, many of the currencies of emerging market countries in which
the Fund may invest have experienced steady devaluation relative to
freely convertible currencies.
Continuing uncertainty as to the status of the euro and the European
Monetary Union (“EMU”) has created significant volatility in currency
and financial markets generally. Any partial or complete dissolution of
the EMU could have significant adverse effects on currency and financial
markets, and on the values of the Fund’s portfolio investments. If one or
more EMU countries were to stop using the euro as its primary currency,
the Fund’s investments in such countries may be redenominated into a
different or newly adopted currency. As a result, the value of those
investments could decline significantly and unpredictably. In addition,
securities or other investments that are redenominated may be subject
to foreign currency risk, liquidity risk and valuation risk to a greater
extent than similar investments currently denominated in euros. To the
extent a currency used for redenomination purposes is not specified in
respect of certain EMU-related investments, or should the euro cease to
be used entirely, the currency in which such investments are
denominated may be unclear, making such investments particularly
difficult to value or dispose of. The Fund may incur additional expenses
to the extent it is required to seek judicial or other clarification of the
denomination or value of such securities.
There can be no assurance that if the Fund earns income or capital gains
in a non-U.S. country or PIMCO otherwise seeks to withdraw the Fund’s
investments from a given country, capital controls imposed by such
country will not prevent, or cause significant expense in, doing so.
U.S. Government Securities Risk
Certain U.S. government securities, such as U.S. Treasury bills, notes,
bonds and mortgage-related securities guaranteed by the GNMA, are
supported by the full faith and credit of the United States; others, such
as those of FHLBs or the FHLMC, are supported by the right of the issuer
to borrow from the U.S. Treasury; others, such as those of the FNMA, are
supported by the discretionary authority of the U.S. government to
purchase the agency’s obligations; and still others are supported only by
the credit of the agency, instrumentality or corporation. U.S. government
securities are subject to market risk, interest rate risk and credit risk.
Although legislation has been enacted to support certain government
sponsored entities, including the FHLBs, FHLMC and FNMA, there is no
assurance that the obligations of such entities will be satisfied in full, or
that such obligations will not decrease in value or default. It is difficult,
if not impossible, to predict the future political, regulatory or economic
changes that could impact the government sponsored entities and the
values of their related securities or obligations. In addition, certain
governmental entities, including FNMA and FHLMC, have been subject
to regulatory scrutiny regarding their accounting policies and practices
and other concerns that may result in legislation, changes in regulatory
oversight and/or other consequences that could adversely affect the
credit quality, availability or investment character of securities issued by
these entities. Yields available from U.S. government debt securities are
generally lower than the yields available from other debt securities. The
values of U.S. government securities change as interest rates fluctuate.
Periodically, uncertainty regarding the status of negotiations in the
U.S. government to increase the statutory debt ceiling could increase the
risk that the U.S. government may default on payments on certain
U.S. government securities, cause the credit rating of the
U.S. government to be downgraded, increase volatility in the stock and
bond markets, result in higher interest rates, reduce prices of
U.S. Treasury and other securities, and/or increase the costs of various
kinds of debt. If a government-sponsored entity is negatively impacted
by legislative or regulatory action (or lack thereof), is unable to meet its
obligations, or its creditworthiness declines, the performance of a fund
that holds securities of the entity will be adversely impacted.
Convertible Securities Risk
Convertible securities are fixed income securities, preferred securities or
other securities that are convertible into or exercisable for common
stock of the issuer (or cash or securities of equivalent value) at either a
stated price or a stated rate. Convertible debt securities pay interest and
convertible preferred stocks pay dividends until they mature or are
converted, exchanged or redeemed. The market values of convertible
securities may decline as interest rates increase and, conversely, may
increase as interest rates decline. A convertible security’s market value,
however, tends to reflect the market price of the common stock of the
issuing company when that stock price approaches or is greater than
the convertible security’s “conversion price.” The conversion price is
defined as the predetermined price at which the convertible security
could be exchanged for the associated stock. Certain types of
convertible securities may decline in value or lose their value entirely in
the event the issuer’s financial condition becomes significantly impaired.
As the market price of the underlying common stock declines, the price
of the convertible security tends to be influenced more by the yield of
the convertible security. Thus, it may not decline in price to the same
extent as the underlying common stock. In the event of a liquidation of
the issuing company, holders of convertible securities may be paid
before the company’s common stockholders but after holders of any
senior debt obligations of the company. Consequently, the issuer’s
convertible securities generally entail less risk than its common stock
but more risk than its other debt obligations. Convertible securities are
often rated below investment grade or not rated.
Synthetic Convertible Securities Risk
Synthetic convertible securities involve the combination of separate
securities that possess the two principal characteristics of a traditional
convertible security (i.e., an income-producing component and a right to
acquire an equity security). Synthetic convertible securities are often
achieved, in part, through investments in warrants or options to buy
common stock (or options on a stock index), and therefore are subject
to the risks associated with derivatives. The value of a synthetic
convertible security will respond differently to market fluctuations than
a traditional convertible security because a synthetic convertible is
composed of two or more separate securities or instruments, each with
its own market value. Because the convertible component is typically
achieved by investing in warrants or options to buy common stock at a
certain exercise price, or options on a stock index, synthetic convertible
securities are subject to the risks associated with derivatives. In
addition, if the value of the underlying common stock or the level of the
index involved in the convertible component falls below the exercise
price of the warrant or option, the warrant or option may lose all value.
Contingent Convertible Securities Risk
CoCos have no stated maturity, have fully discretionary coupons and are
typically issued in the form of subordinated debt instruments. CoCos
generally either convert into equity or have their principal written down
(including potentially to zero) upon the occurrence of certain triggering
events linked to regulatory capital thresholds or regulatory actions
relating to the issuer’s continued viability. As a result, an investment by
the Fund in CoCos is subject to the risk that coupon (i.e., interest)
payments or the entire principal may be cancelled by the issuer or a
regulatory authority in order to help the issuer absorb losses and the
risk of total loss. If such an event occurs, an investor may not have any
rights to repayment of the principal amount of the securities.
Additionally, an investor may not be able to collect interest payments or
dividends on such securities. An investment by the Fund in CoCos is also
subject to the risk that, in the event of the liquidation, dissolution or
winding-up of an issuer prior to a trigger event, the Fund’s rights and
claims will generally rank junior to the claims of holders of the issuer’s
other debt obligations and CoCos may also be treated as junior to an
issuer’s other obligations and securities. In addition, if CoCos held by
the Fund are converted into the issuer’s underlying equity securities
following a trigger event, the Fund’s holding may be further
subordinated due to the conversion from a debt to equity instrument.
Further, the value of an investment in CoCos is unpredictable and could
be influenced by many factors and risks, including interest rate risk,
credit risk, market risk and liquidity risk. An investment by the Fund in
CoCos may result in losses to the Fund.
Valuation Risk
Certain securities in which the Fund invests may be less liquid and more
difficult to value than other types of securities. Investments for which
market quotations are not readily available are valued at fair value as
determined in good faith pursuant to Rule 2a-5 under the 1940 Act. Fair
value pricing may require subjective determinations about the value of a
security or other asset. As a result, there can be no assurance that fair
value pricing will result in adjustments to the prices of securities or other
assets or that fair value pricing will reflect actual market value, and it is
possible that the fair value determined for a security or other asset will
be materially different from quoted or published prices, from the prices
used by others for the same security or other asset and/or from the
value that actually could be or is realized upon the sale of that security
or other asset.
Real Estate Risk
To the extent that the Fund invests directly or indirectly in real estate
investments, including investments in equity or debt securities issued by
private and public REITs, real estate operating companies (“REOCs”),
private or public real estate-related loans and real estate-linked
derivative instruments, it will be subject to the risks associated with
owning real estate and with the real estate industry generally. These
investments carry increased risks, which include, but are not limited to:
the burdens of ownership of real property; general and local economic
conditions (such as an oversupply of space or a reduction in demand for
space); the supply and demand for properties (including competition
based on rental rates); energy and supply shortages; fluctuations in
average occupancy and room rates; the attractiveness, type and location
of the properties and changes in the relative popularity of commercial
properties as an investment; the financial condition and resources of
tenants, buyers and sellers of properties; increased mortgage defaults;
the quality of maintenance, insurance and management services;
changes in the availability of debt financing which may render the sale
or refinancing of properties difficult or impracticable; changes in
building, environmental and other laws and/or regulations (including
those governing usage and improvements), fiscal policies and zoning
laws; changes in real property tax rates; changes in interest rates and
the availability of mortgage funds which may render the sale or
refinancing of properties difficult or impracticable; changes in operating
costs and expenses; energy and supply shortages; uninsured losses or
delays from casualties or condemnation; negative developments in the
economy that depress travel or leasing activity; environmental liabilities;
contingent liabilities on disposition of assets; uninsured or uninsurable
casualties; acts of God, including earthquakes, hurricanes and other
natural disasters; social unrest and civil disturbances, epidemics,
pandemics or other public crises; terrorist attacks and war; risks and
operating problems arising out of the presence of certain construction
materials, structural or property level latent defects, work stoppages,
shortages of labor, strikes, union relations and contracts, fluctuating
prices and supply of labor and/or other labor-related factors; and other
factors which are beyond the control of PIMCO and its affiliates. In
addition, the Fund’s investments will be subject to various risks which
could cause fluctuations in occupancy, rental rates, operating income
and expenses or which could render the sale or financing of its
properties difficult or unattractive. For example, following the
termination or expiration of a tenant’s lease, there may be a period of
time before receiving rental payments under a replacement lease.
During that period, the Fund would continue to bear fixed expenses
such as interest, real estate taxes, maintenance and other operating
expenses. In addition, declining economic conditions may impair the
ability to attract replacement tenants and achieve rental rates equal to
or greater than the rents paid under previous leases. Increased
competition for tenants may require capital improvements to properties
which would not have otherwise been planned.
Ultimately, to the extent it is not possible to renew leases or re-let space
as leases expire, decreased cash flow from tenants will result, which
could adversely impact the Fund’s operating results.
Real estate values have historically been cyclical. As the general
economy grows, demand for real estate increases and occupancies and
rents may increase. As occupancies and rents increase, property values
increase, and new development occurs. As development may occur,
occupancies, rents and property values may decline. Because leases are
usually entered into for long periods and development activities often
require extended times to complete, the real estate value cycle often
lags the general business cycle. Because of this cycle, real estate
companies may incur large swings in their profits and the prices of their
securities. Developments following the onset of COVID-19 have
adversely impacted certain commercial real estate markets, causing the
deferral of mortgage payments, renegotiated commercial mortgage
loans, commercial real estate vacancies or outright mortgage defaults,
and potential acceleration of macro trends such as work-from-home
and online shopping which may negatively impact certain industries,
such as brick-and-mortar retail.
The total returns available from investments in real estate generally
depend on the amount of income and capital appreciation generated by
the related properties. The performance of real estate, and thereby the
Fund, will be reduced by any related expenses, such as expenses paid
directly at the property level and other expenses that are capitalized or
otherwise embedded into the cost basis of the real estate.
Separately, certain service providers to the Fund and/or its Subsidiaries,
as applicable, with respect to its real estate or real estate-related
investments may be owned by, employed by, or otherwise related to,
PIMCO, Allianz SE, their affiliates and/or their respective employees,
consultants and other personnel. PIMCO may, in its sole discretion,
determine to provide, or engage or recommend an affiliate of PIMCO to
provide, certain services to the Fund, instead of engaging or
recommending one or more third parties to provide such services.
Subject to the governance requirements of a particular fund and
applicable law, PIMCO or its affiliates, as applicable, will receive
compensation in connection with the provision of such services. As a
result, PIMCO faces a conflict of interest when selecting or
recommending service providers for the Fund. Fees paid to an affiliated
service provider will be determined in PIMCO's commercially reasonable
discretion. Although PIMCO has adopted various policies and
procedures intended to mitigate or otherwise manage conflicts of
interest with respect to affiliated service providers, there can be no
guarantee that such policies and procedures (which may be modified or
terminated at any time in PIMCO's sole discretion) will be successful.
Leverage Risk
The Fund’s use of leverage (as described under “Use of Leverage” in the
body of this prospectus) creates the opportunity for increased Common
Share net income, but also creates special risks for Common
Shareholders (including an increased risk of loss). To the extent used,
there is no assurance that the Fund’s leveraging strategies will be
successful. Leverage is a speculative technique that may expose the
Fund to greater risk and increased costs. The Fund’s assets attributable
to leverage, if any, will be invested in accordance with the Fund’s
investment objectives and policies. Interest expense payable by the Fund
with respect to derivatives and other forms of leverage, and dividends
payable with respect to any preferred shares outstanding, if any, will
generally be based on shorter-term interest rates that would be
periodically reset. So long as the Fund’s portfolio investments provide a
higher rate of return (net of applicable Fund expenses) than the interest
expenses and other costs to the Fund of such leverage, the investment
of the proceeds thereof will generate more income than will be needed
to pay the costs of the leverage. If so, and all other things being equal,
the excess may be used to pay higher dividends to Common
Shareholders than if the Fund were not so leveraged. There can be no
assurance these circumstances will occur. If, however, shorter-term
interest rates rise relative to the rate of return on the Fund’s portfolio,
the interest and other costs to the Fund of leverage could exceed the
rate of return on the debt obligations and other investments held by the
Fund, thereby reducing return to Common Shareholders. Leveraging
transactions pursued by the Fund may increase its duration and
sensitivity to interest rate movements. In addition, fees and expenses of
any form of leverage used by the Fund will be borne entirely by the
Common Shareholders (and not by preferred shareholders, if any) and
will reduce the investment return of the Common Shares. Therefore,
there can be no assurance that the Fund’s use of leverage will result in a
higher yield on the Common Shares, and it may result in losses. In
addition, any preferred shares issued by the Fund are expected to pay
cumulative dividends, which may tend to increase leverage risk.
Leverage creates several major types of risks for Common Shareholders,
including:
■
the likelihood of greater volatility of NAV and market price of
Common Shares, and of the investment return to Common
Shareholders, than a comparable portfolio without leverage;
■
the possibility either that Common Share dividends will fall if the
interest and other costs of leverage rise, or that dividends paid on
Common Shares will fluctuate because such costs vary over time;
and
■
the effects of leverage in a declining market or a rising interest
rate environment, as leverage is likely to cause a greater decline in
the NAV of the Common Shares than if the Fund were not
leveraged.
In addition, the counterparties to the Fund’s leveraging transactions and
any preferred shareholders of the Fund will have priority of payment
over the Fund’s Common Shareholders.
Reverse repurchase agreements involve the risks that the interest
income earned on the investment of the proceeds will be less than the
interest expense and Fund expenses associated with the repurchase
agreement, that the market value of the securities sold by the Fund may
decline below the price at which the Fund is obligated to repurchase
such securities and that the securities may not be returned to the Fund.
There is no assurance that reverse repurchase agreements can be
successfully employed. Dollar roll/buyback transactions involve the risk
that the market value of the securities the Fund is required to purchase
may decline below the agreed upon purchase price of those securities.
Successful use of dollar rolls/buybacks may depend upon the Investment
Manager’s ability to correctly predict interest rates and prepayments.
There is no assurance that dollar rolls/buybacks can be successfully
employed. In connection with reverse repurchase agreements and dollar
rolls/buybacks, the Fund will also be subject to counterparty risk with
respect to the purchaser of the securities. If the broker/dealer to whom
the Fund sells securities becomes insolvent, the Fund’s right to purchase
or repurchase securities may be restricted.
The Fund may engage in total return swaps, reverse repurchases, loans
of portfolio securities, short sales and when-issued, delayed delivery and
forward commitment transactions, credit default swaps, basis swaps
and other swap agreements, purchases or sales of futures and forward
contracts (including foreign currency exchange contracts), call and put
options or other derivatives. The Fund’s use of such transactions gives
rise to associated leverage risks described above, and may adversely
affect the Fund’s income, distributions and total returns to Common
Shareholders. To the extent that any offsetting positions do not behave
in relation to one another as expected, the Fund may perform as if it is
leveraged through use of these derivative strategies.
Any total return swaps, reverse repurchases, loans of portfolio securities,
short sales and when-issued, delayed delivery and forward commitment
transactions, credit default swaps, basis swaps and other swap
agreements, purchases or sales of futures and forward contracts
(including foreign currency exchange contracts), call and put options or
other derivatives by the Fund or counterparties to the Fund’s other
leveraging transactions, if any, would have seniority over the Fund’s
Common Shares.
Because the fees received by the Investment Manager may increase
depending on the types of leverage utilized by the Fund, the Investment
Manager has a financial incentive for the Fund to use certain forms of
leverage, which may create a conflict of interest between the Investment
Manager, on the one hand, and the Common Shareholders, on the other
hand.
Short Exposure Risk
The Fund’s short sales and short positions, if any, are subject to special
risks. A short sale involves the sale by the Fund of a security that it does
not own with the hope of purchasing the same security at a later date at
a lower price. The Fund may also enter into a short position through a
forward commitment or a short derivative position through a futures
contract or swap agreement. If the price of the security or derivative has
increased during this time, then the Fund will incur a loss equal to the
increase in price from the time that the short sale was entered into plus
any transaction costs (i.e., premiums and interest) paid to the
broker-dealer to borrow securities. Therefore, short sales involve the risk
that losses may be exaggerated, potentially losing more money than the
actual cost of the investment. By contrast, a loss on a long position
arises from decreases in the value of the security and is limited by the
fact that a security’s value cannot decrease below zero. By investing the
proceeds received from selling securities short, the Fund could be
deemed to be employing a form of leverage, which creates special risks.
The use of leverage may increase the Fund’s exposure to long security
positions and make any change in the Fund’s NAV greater than it would
be without the use of leverage. This could result in increased volatility of
returns. There is no guarantee that any leveraging strategy the Fund
employs will be successful during any period in which it is employed.
In times of unusual or adverse market, economic, regulatory,
environmental or political conditions, the Fund may not be able, fully or
partially, to implement its short selling strategy. Periods of unusual or
adverse market, economic, environmental, regulatory or political
conditions generally may exist for long periods of time. In response to
market events, the SEC and regulatory authorities in other jurisdictions
may adopt (and in certain cases, have adopted) bans on, and/or
reporting requirements for, short sales of certain securities, including
short positions on such securities acquired through swaps. Also, there is
the risk that the third party to the short sale or short position will not
fulfill its contractual obligations, causing a loss to the Fund.
Smaller Company Risk
The general risks associated with debt instruments or equity securities
are particularly pronounced for securities issued by companies with
small market capitalizations. Small capitalization companies involve
certain special risks. They are more likely than larger companies to have
limited product lines, markets or financial resources, or to depend on a
small, inexperienced management group. Securities of smaller
companies may trade less frequently and in lesser volume than more
widely held securities and their values may fluctuate more sharply than
other securities. They may also have limited liquidity. These securities
may therefore be more vulnerable to adverse developments than
securities of larger companies, and the Fund may have difficulty
purchasing or selling securities positions in smaller companies at
prevailing market prices. Also, there may be less publicly available
information about smaller companies or less market interest in their
securities as compared to larger companies. Companies with
medium-sized market capitalizations may have risks similar to those of
smaller companies.
Derivatives Risk
The Fund may, but is not required to, utilize a variety of derivative
instruments (both long and short positions) for investment or risk
management purposes. Derivatives or other similar instruments (referred
to collectively as “derivatives”) are financial contracts whose value
depends on, or is derived from, the value of an underlying asset,
reference rate or index. For example, the Fund may use derivative
instruments for purposes of increasing liquidity, providing efficient
portfolio management, broadening investment opportunities (including
taking short or negative positions), implementing a tax or cash
management strategy, gaining exposure to a particular security or
segment of the market, modifying the effective duration of the Fund’s
portfolio investments and/or enhancing total return. Investments in
derivatives may take the form of buying and/or writing (selling)
derivatives, and/or the Fund may otherwise become an obligor under a
derivatives transaction. These transactions may produce current income
in the form of premiums or other returns for the Fund (which may
support, constitute and/or increase the distributions paid by, or the yield
of, the Fund) but create the risk of losses that can significantly exceed
such current income or other returns. For example, the premium received
for writing a put option may be dwarfed by the losses the Fund may
incur if the put option is exercised, and derivative transactions where
the Fund is an obligor can produce an up-front benefit, but the potential
for leveraged losses. The distributions, or distribution rate, paid by the
Fund should not be viewed as the total returns or overall performance
of the Fund. These strategies may also produce adverse tax
consequences (for example, the Fund’s income and gain-generating
strategies may generate current income and gains taxable as ordinary
income) and limit the Fund’s opportunity to profit or otherwise benefit
from certain gains. The Fund may enter into opposing derivative
transactions, or otherwise take opposing positions. Such transactions
can generate distributable gains (which, as noted elsewhere, may be
taxed as ordinary income) and create the risk of losses and NAV
declines.
The Fund may engage in investment strategies, including the use of
derivatives, to, among other things, generate current, distributable
income, even if such strategies could potentially result in declines in the
Fund’s net asset value. The Fund’s income and gain-generating
strategies, including certain derivatives strategies, may generate current
income and gains taxable as ordinary income sufficient to support
distributions, even in situations when the Fund has experienced a
decline in net assets due to, for example, adverse changes in the broad
U.S. or non-U.S. securities markets or the Fund’s portfolio of
investments, or arising from its use of derivatives. Consequently, Fund
shareholders may receive distributions subject to tax at ordinary income
rates at a time when their investment in the Fund has declined in value,
which may be economically similar to a taxable return of capital.
The use of derivatives involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional investments. Derivatives may increase market exposure and
are subject to a number of risks, including leverage risk, liquidity risk
(which may be heightened for highly-customized derivatives), interest
rate risk, market risk, counterparty (including credit) risk, operational
risk (such as documentation issues, settlement issues and systems
failures), legal risk (such as insufficient documentation, insufficient
capacity or authority of a counterparty, and issues with the legality or
enforceability of a contract), counterparty risk, tax risk and management
risk, as well as risks arising from changes in applicable requirements,
risks arising from margin requirements and risks arising from mispricing
or valuation complexity. They also involve the risk that changes in the
value of a derivative instrument may not correlate perfectly with the
underlying asset, rate or index. By investing in a derivative instrument,
the Fund could lose more than the initial amount invested, and
derivatives may increase the volatility of the Fund, especially in unusual
or extreme market conditions. Certain derivatives have the potential for
unlimited loss, regardless of the size of the initial investment. The 1940
Act and related rules no longer require asset segregation for derivatives
transactions, however asset segregation and posting of collateral may
still be utilized for risk management or other purposes. The Fund may be
required to hold additional cash or sell other investments in order to
obtain cash to close out a position and changes in the value of a
derivative may also create margin delivery or settlement payment
obligations for the Fund. Also, suitable derivative transactions may not
be available in all circumstances and there can be no assurance that the
Fund will engage in these transactions to reduce exposure to other risks
when that would be beneficial or that, if used, such strategies will be
successful. The Fund’s use of derivatives may increase or accelerate the
amount of taxes payable by Common Shareholders.
Non-centrally-cleared over-the counter (“OTC”) derivatives are also
subject to the risk that a counterparty to the transaction will not fulfill
its contractual obligations to the other party, as many of the protections
afforded to centrally-cleared derivative transactions might not be
available for non-centrally-cleared OTC derivatives. The primary credit
risk on derivatives that are exchange-traded or traded through a central
clearing counterparty resides with the Fund’s clearing broker, or the
clearinghouse itself.
Participation in the markets for derivative instruments also involves
investment risks and transaction costs to which the Fund may not be
subject absent the use of these strategies. The skills needed to
successfully execute derivative strategies may be different from those
needed for other types of transactions. If the Fund incorrectly forecasts
the value and/or credit-worthiness of securities, currencies, interest
rates, counterparties or other economic factors involved in a derivative
transaction, the Fund might have been in a better position if the Fund
had not entered into such derivative transaction. In evaluating the risks
and contractual obligations associated with particular derivative
instruments, it is important to consider that certain derivative
transactions may be modified or terminated only by mutual consent of
the Fund and its counterparty.
Therefore, it may not be possible for the Fund to modify, terminate, or
offset the Fund’s obligations or the Fund’s exposure to the risks
associated with a derivative transaction prior to its scheduled
termination or maturity date, which may create a possibility of increased
volatility and/or decreased liquidity to the Fund. Hedges are sometimes
subject to imperfect matching between the derivative and the
underlying instrument, and there can be no assurance that the Fund’s
hedging transactions will be effective. Derivatives used for hedging or
risk management may not operate as intended and may expose the
Fund to additional risks. In such case, the Fund may lose money.
Because the markets for certain derivative instruments (including
markets located in foreign countries) are relatively new and still
developing, appropriate derivative transactions may not be available in
all circumstances for risk management or other purposes. Upon the
expiration of a particular contract, the Fund may wish to retain the
Fund’s position in the derivative instrument by entering into a similar
contract, but may be unable to do so if the counterparty to the original
contract is unwilling to enter into the new contract and no other
appropriate counterparty can be found. When such markets are
unavailable, the Fund will be subject to increased liquidity and
investment risk.
The Fund may enter into opposite sides of interest rate swap and other
derivatives for the principal purpose of generating distributable gains on
the one side (characterized as ordinary income for tax purposes) that
are not part of the Fund’s duration or yield curve management
strategies (“paired swap transactions”), and with a substantial
possibility that the Fund will experience a corresponding capital loss
and decline in NAV with respect to the opposite side transaction (to the
extent it does not have corresponding offsetting capital gains).
Consequently, Common Shareholders may receive distributions and owe
tax on amounts that are effectively a taxable return of the shareholder’s
investment in the Fund, at a time when their investment in the Fund has
declined in value, which tax may be at ordinary income rates. The tax
treatment of certain derivatives in which the Fund invests may be
unclear and thus subject to recharacterization. Any recharacterization of
payments made or received by the Fund pursuant to derivatives
potentially could affect the amount, timing or character of Fund
distributions. In addition, the tax treatment of such investment
strategies may be changed by regulation or otherwise.
When a derivative is used as a hedge against a position that the Fund
holds, any loss generated by the derivative generally should be
substantially offset by gains on the hedged investment, and vice versa.
Although hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. Hedges are sometimes subject to imperfect matching
between the derivative and the underlying instrument, and there can be
no assurance that the Fund’s hedging transactions will be effective.
Derivatives used for hedging or risk management may not operate as
intended or may expose the Fund to additional risks. In addition,
derivatives used for hedging may partially protect the Fund from the
risks they were intended to hedge yet not fully mitigate the impact of
such risks. The regulation of the derivatives markets has increased over
the past several years, and additional future regulation of the derivatives
markets may make derivatives more costly, may limit the availability or
reduce the liquidity of derivatives, or may otherwise adversely affect the
value or performance of derivatives. Any such adverse future
developments could impair the effectiveness or raise the costs of the
Fund’s derivative transactions, impede the employment of the Fund’s
derivatives strategies, or adversely affect the Fund’s performance and
cause the Fund to lose value.
Credit Default Swaps Risk
Credit default swap agreements may involve greater risks than if the
Fund had invested in the reference obligation directly since, in addition
to general market risks, credit default swaps are subject to leverage risk,
illiquidity risk, counterparty risk and credit risk. A buyer generally also
will lose its investment and recover nothing should no credit event occur
and the swap is held to its termination date. If a credit event were to
occur, the value of any deliverable obligation received by the seller (if
any), coupled with the upfront or periodic payments previously received,
may be less than the full notional value it pays to the buyer, resulting in
a loss of value to the seller. When the Fund acts as a seller of a credit
default swap, it is exposed to many of the same risks of leverage. As the
seller, the Fund would receive a stream of payments over the term of the
swap agreement provided that no event of default has occurred with
respect to the referenced debt obligation upon which the swap is based.
The Fund would effectively add leverage to its portfolio because, if a
default occurs, the stream of payments may stop and the Fund may be
obligated to pay the buyer the full notional value of the reference
obligation.
Although the Fund may seek to realize gains by selling credit default
swaps that increase in value, to realize gains on selling credit default
swaps, an active secondary market for such instruments must exist or
the Fund must otherwise be able to close out these transactions at
advantageous times. In addition to the risk of losses described above, if
no such secondary market exists or the Fund is otherwise unable to
close out these transactions at advantageous times, selling credit
default swaps may not be profitable for the Fund.
The market for credit default swaps has become more volatile as the
creditworthiness of certain counterparties has been questioned and/or
downgraded. The Fund will be subject to credit risk with respect to the
counterparties to the credit default swap contract (whether a clearing
corporation or another third party). If a counterparty’s credit becomes
significantly impaired, multiple requests for collateral posting in a short
period of time could increase the risk that the Fund may not receive
adequate collateral. The Fund may exit its obligations under a credit
default swap only by terminating the contract and paying applicable
breakage fees, or by entering into an offsetting credit default swap
position, which may cause the Fund to incur more losses.
Counterparty Risk
The Fund will be subject to credit risk with respect to the counterparties
to the derivative contracts and other instruments entered into by the
Fund or held by special purpose or structured vehicles in which the Fund
invests. For example, if a bank at which the Fund or issuer has an
account fails, any cash or other assets in bank or custody accounts,
which may be substantial in size, could be temporarily inaccessible or
permanently lost by the Fund or issuer. In the event that the Fund enters
into a derivative transaction with a counterparty that subsequently
becomes insolvent or becomes the subject of a bankruptcy case, the
derivative transaction may be terminated in accordance with its terms
and the Fund’s ability to realize its rights under the derivative
instrument and its ability to distribute the proceeds could be adversely
affected. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in obtaining any
recovery (including recovery of any collateral it has provided to the
counterparty) in a dissolution, assignment for the benefit of creditors,
liquidation, winding-up, bankruptcy or other analogous proceeding. In
addition, in the event of the insolvency of a counterparty to a derivative
transaction, the derivative transaction would typically be terminated at
its fair market value. If the Fund is owed this fair market value in the
termination of the derivative transaction and its claim is unsecured, the
Fund will be treated as a general creditor of such counterparty and will
not have any claim with respect to any underlying security or asset. The
Fund may obtain only a limited recovery or may obtain no recovery in
such circumstances. Counterparty credit risk also includes the related
risk of having concentrated exposure to a single counterparty, which
may increase potential losses if the counterparty were to become
insolvent. While the Fund may seek to manage its counterparty risk by
transacting with a number of counterparties, concerns about the
solvency of, or a default by, one large market participant could lead to
significant impairment of liquidity and other adverse consequences for
other counterparties.
Equity Securities and Related Market Risk
The market price of common stocks and other equity securities may go
up or down, sometimes rapidly or unpredictably. Equity securities may
decline in value due to factors affecting equity securities markets
generally, particular industries represented in those markets, or the
issuer itself. The values of equity securities may decline due to real or
perceived adverse economic conditions, changes in the general outlook
for corporate earnings, changes in interest or currency rates or adverse
investor sentiment generally. They may also decline due to labor
shortages or increased production costs and competitive conditions
within an industry. Equity securities generally have greater price
volatility than bonds and other debt securities.
Different types of equity securities provide different voting and dividend
rights and priority in the event of the bankruptcy and/or insolvency of
the issuer. In addition to common stock, equity securities may include
preferred securities, convertible securities and warrants. Equity securities
other than common stock are subject to many of the same risks as
common stock, although possibly to different degrees. The risks of
equity securities are generally magnified in the case of equity
investments in distressed companies.
Preferred Securities Risk
In addition to equity securities risk, credit risk and possibly high yield
risk, investment in preferred securities involves certain other risks.
Certain preferred securities contain provisions that allow an issuer
under certain conditions to skip or defer distributions. If the Fund owns
a preferred security that is deferring its distribution, the Fund may be
required to include the amount of the deferred distribution in its taxable
income for tax purposes although it does not currently receive such
amount in cash. In order to receive the special treatment accorded to
RICs and their shareholders under the Code and to avoid U.S. federal
income and/or excise taxes at the Fund level, the Fund may be required
to distribute this income to shareholders in the tax year in which the
income is recognized (without a corresponding receipt of cash by the
Fund). Therefore, the Fund may be required to pay out as an income
distribution in any such tax year an amount greater than the total
amount of cash income the Fund actually received and to sell portfolio
securities, including at potentially disadvantageous times or prices, to
obtain cash needed for these income distributions. Preferred securities
often are subject to legal provisions that allow for redemption in the
event of certain tax or legal changes or at the issuer’s call. In the event
of redemption, the Fund may not be able to reinvest the proceeds at
comparable rates of return. Preferred securities are subordinated to
bonds and other debt securities in an issuer’s capital structure in terms
of priority for corporate income and liquidation payments, and therefore
will be subject to greater credit risk than those debt securities. Preferred
securities may trade less frequently and in a more limited volume and
may be subject to more abrupt or erratic price movements than many
other securities.
Insurance-Linked and Other Instruments Risk
The Fund may invest in insurance-linked instruments and similar
investments (which may include, for example, exposure to reinsurance
contracts (through sidecars or otherwise), event-linked bonds, such as
catastrophe and resilience bonds, and securities relating to life
insurance policies, annuity contracts and premium finance loans). The
Fund could lose a portion or all of the principal it has invested in these
types of investments, and the right to additional interest and/or dividend
payments with respect to the investments, upon the occurrence of one
or more trigger events, as defined within the terms of an investment.
Trigger events may include natural or other perils of a specific size or
magnitude that occur in a designated geographic region during a
specified time period, and/or that involve losses or other metrics that
exceed a specific amount. The Fund may also invest in insurance-linked
instruments that are subject to “indemnity triggers.” An indemnity
trigger is a mechanism where the payout to the investor is based on the
actual losses incurred by the insurer and come into play when losses
from a specified event exceed a designated level. Insurance-linked
instruments subject to indemnity triggers are often regarded as being
subject to potential moral hazard, since such insurance-linked
investments are triggered by actual losses of the ceding sponsor and the
ceding sponsor may have an incentive to take actions and/or risks that
would have an adverse effect on the Fund. There is no way to accurately
predict whether a trigger event will occur and, accordingly,
insurance-linked instruments and similar investments carry significant
risk. In addition to the specified trigger events, these types of
investments may expose the Fund to other risks, including but not
limited to issuer (credit) default, adverse regulatory or jurisdictional
interpretations and adverse tax consequences.
The Fund may also gain exposure to reinsurance contracts (through
insurance-linked securities, sidecars or otherwise). This exposure may
include “excess of loss” contracts, wherein liability arises only if and
when losses exceed a specified amount, and proportional reinsurance,
wherein a pro rata portion of the premiums and liabilities of the cedant
associated with a specified business or a portfolio if insurance contracts
are linked to the investment. Investments linked to reinsurance
transactions may involve significant insurance brokerage fees, fronting
fees and other transaction costs.
A series of major triggering events could cause the failure of a reinsurer.
Similarly, to the extent the Fund invests in reinsurance-related securities
for which a triggering event occurs, losses associated with such event
will result in losses to the Fund and a series of major triggering events
affecting a large portion of the reinsurance-related securities held by the
Fund may result in substantial losses to the Fund. In addition,
unexpected events such as natural disasters or terrorist attacks could
lead to government intervention. Political, judicial and legal
developments affecting the reinsurance industry could also create new
and expanded theories of liability or regulatory or other requirements;
such changes could have a material adverse effect on the Fund. In
addition, the litigation environment in catastrophe-exposed states or
regions could impact the frequency and severity of insurance claims, and
litigation costs could decrease the value of the Fund’s investment in
products linked to reinsurance contracts. In recent years, capital market
participants have been increasingly active in the reinsurance market and
markets for related risks. Increased competition could result in fewer
submissions, lower premium rates and less favorable policy terms and
conditions.
Certain insurance-linked instruments and similar investments may have
limited liquidity, or may be illiquid. The Fund has limited transparency
into the individual contracts underlying certain insurance-linked
instruments and similar investments, which may make the risk
assessment of them more difficult. These types of investments may be
difficult to value.
The aforementioned instruments may include longevity and mortality
investments, including indirect investment in pools of insurance-related
longevity and mortality investments, including life insurance policies,
annuity contracts and premium finance loans. Such investments are
subject to “longevity risk” and/or “mortality risk.” Longevity risk is the
risk that members of a reference population will live longer, on average,
than anticipated. Mortality risk is the risk that members of a reference
population will live shorter, on average, than anticipated. Changes in
these rates can significantly affect the liabilities and cash needs of life
insurers, annuity providers and pension funds. The terms of a longevity
bond typically provide that the investor in the bond will receive less than
the bond’s par amount at maturity if the actual average longevity (life
span) of a specified population of people observed over a specified
period of time (typically measured by a longevity index) is higher than a
specified level. If longevity is higher than expected, the bond will return
less than its par amount at maturity. A mortality bond, in contrast to a
longevity bond, typically provides that the investor in the bond will
receive less than the bond’s par amount at maturity if the mortality rate
of a specified population of people observed over a specified period of
time (typically measured by a mortality index) is higher than a specified
level.
During their term, both longevity bonds and mortality bonds typically
pay a floating rate of interest to investors. Longevity and mortality
investments purchased by the Fund involve the risk of incorrectly
predicting the actual level of longevity or mortality, as applicable, for the
reference population of people. With respect to mortality investments
held by the Fund, there is also the risk that an epidemic or other
catastrophic event could strike the reference population, resulting in
mortality rates exceeding expectations. The Fund may also gain this type
of exposure through event-linked derivative instruments, such as swaps,
that are contingent on or formulaically related to longevity or mortality
risk.
Confidential Information Access Risk
In managing the Fund (and other PIMCO clients), PIMCO may from time
to time have the opportunity to receive material, non-public information
(“Confidential Information”) about the issuers of certain investments,
including, without limitation, senior floating rate loans, other loans and
related investments being considered for acquisition by the Fund or held
in the Fund’s portfolio. For example, an issuer of privately placed loans
considered by the Fund may offer to provide PIMCO with financial
information and related documentation regarding the issuer that is not
publicly available. Pursuant to applicable policies and procedures,
PIMCO may (but is not required to) seek to avoid receipt of Confidential
Information from the issuer so as to avoid possible restrictions on its
ability to purchase and sell investments on behalf of the Fund and other
clients to which such Confidential Information relates. In such
circumstances, the Fund (and other PIMCO clients) may be
disadvantaged in comparison to other investors, including with respect
to the price the Fund pays or receives when it buys or sells an
investment. Further, PIMCO’s and the Fund’s abilities to assess the
desirability of proposed consents, waivers or amendments with respect
to certain investments may be compromised if they are not privy to
available Confidential Information. PIMCO may also determine to
receive such Confidential Information in certain circumstances under its
applicable policies and procedures. If PIMCO intentionally or
unintentionally comes into possession of Confidential Information, it
may be unable, potentially for a substantial period of time, to purchase
or sell investments to which such Confidential Information relates.
Private Placements and Restricted Securities Risk
A private placement involves the sale of securities that have not been
registered under the Securities Act or relevant provisions of applicable
non-U.S. law to certain institutional and qualified individual purchasers,
such as the Fund. In addition to the general risks to which all securities
are subject, securities received in a private placement generally are
subject to strict restrictions on resale, and there may be no liquid
secondary market or ready purchaser for such securities. See “Principal
Risks of the Fund – Liquidity Risk.” Therefore, the Fund may be unable
to dispose of such securities when it desires to do so, or at the most
favorable time or price. Private placements may also raise valuation
risks. See “Principal Risks of the Fund – Valuation Risk.” Restricted
securities are often purchased at a discount from the market price of
unrestricted securities of the same issuer reflecting the fact that such
securities may not be readily marketable without some time delay. Such
securities are often more difficult to value and the sale of such securities
often requires more time and results in higher brokerage charges or
dealer discounts and other selling expenses than does the sale of liquid
securities trading on national securities exchanges or in the
over-the-counter markets. Until the Fund can sell such securities into the
public markets, its holdings may be less liquid and any sales will need to
be made pursuant to an exemption under the Securities Act.
Inflation/Deflation Risk
Inflation risk is the risk that the value of assets or income from the
Fund’s investments will be worth less in the future as inflation decreases
the value of payments at future dates. As inflation increases, the real
value of the Fund’s portfolio could decline. Inflation rates may change
frequently and significantly as a result of various factors, including
unexpected shifts in the domestic or global economy or changes in fiscal
or monetary policies. Deflation risk is the risk that prices throughout the
economy decline over time. Deflation may have an adverse effect on the
creditworthiness of issuers and may make issuer default more likely,
which may result in a decline in the value of the Fund’s portfolio and
Common Shares.
Regulatory Changes Risk
Financial entities, such as investment companies and investment
advisers, are generally subject to extensive government regulation and
intervention. Government regulation and/or intervention may change
the way the Fund is regulated, affect the expenses incurred directly by
the Fund and the value of its investments, and limit and/or preclude the
Fund’s ability to achieve its investment objectives. Government
regulation may change frequently and may have significant adverse
consequences. The Fund and the Investment Manager have historically
been eligible for exemptions from certain regulations. However, there is
no assurance that the Fund and the Investment Manager will continue
to be eligible for such exemptions.
Moreover, government regulation may have unpredictable and
unintended effects. Legislative or regulatory actions to address
perceived liquidity or other issues in fixed income markets generally, or
in particular markets such as the municipal securities market, may alter
or impair the Fund’s ability to pursue its investment objectives or utilize
certain investment strategies and techniques. While there continues to
be uncertainty about the full impact of these and other regulatory
changes, it is the case that the Fund will be subject to a more complex
regulatory framework, and may incur additional costs to comply with
new requirements as well as to monitor for compliance in the future.
Current rules related to credit risk retention requirements for ABS may
increase the cost to originators, securitizers and, in certain cases, asset
managers of SPEs in which the Fund may invest. The impact of the risk
retention rules on the securitization markets is uncertain. These
requirements may increase the costs to originators, securitizers, and, in
certain cases, collateral managers of SPEs in which the Fund may invest,
which costs could be passed along to the Fund as an investor in such
vehicles. In addition, the costs imposed by the risk retention rules on
originators, securitizers and/or collateral managers may result in a
reduction of the number of new offerings of ABS and thus in fewer
investment opportunities for the Fund. A reduction in the number of
new securitizations could also reduce liquidity in the markets for certain
types of financial assets, which in turn could negatively affect the
returns on the Fund’s investment.
Actions by governmental entities may also impact certain instruments in
which the Fund invests and reduce market liquidity and resiliency.
Regulatory Risk—Commodity Pool Operator
The CFTC has adopted regulations that subject registered investment
companies and their investment advisers to regulation by the CFTC if
the registered investment company invests more than a prescribed level
of its liquidation value in futures, options on futures or commodities,
swaps, or other financial instruments regulated under the CEA and the
rules thereunder (“commodity interests”), or if the Fund markets itself
as providing investment exposure to such instruments.  The Investment
Manager is registered with the CFTC as a CPO. However, with respect to
the Fund, the Investment Manager has claimed an exclusion from
registration as a CPO pursuant to CFTC Rule 4.5. For the Investment
Manager to remain eligible for this exclusion, the Fund must comply
with certain limitations, including limits on its ability to use any
commodity interests and limits on the manner in which the Fund holds
out its use of such commodity interests. These limitations may restrict
the Fund’s ability to pursue its investment objectives and strategies
increase the costs of implementing its strategies, result in higher
expenses for the Fund, and/or adversely affect the Fund’s total return. To
the extent the Investment Manager becomes ineligible for this exclusion
from CFTC regulation, the Investment Manager may consider steps in
order to continue to qualify for exemption from CFTC regulation, or may
determine to operate the Fund subject to CFTC regulation.
Investments in REITs Risk
REITs are pooled investment vehicles that own, and usually operate,
income-producing real estate. Some REITs also finance real estate. If a
REIT meets certain requirements, including distributing to shareholders
substantially all of its taxable income (other than net capital gains), then
it is not typically taxed on the income distributed to shareholders.
REITs are sometimes informally characterized as: equity REITs, mortgage
REITs and hybrid REITs. Equity REITs invest the majority of their assets
directly in real property. They derive their income primarily from rents
received and any profits on the sale of their properties. Equity REITs can
also realize capital gains by selling properties that have appreciated in
value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive most of their income from mortgage interest
payments. As its name suggests, hybrid REITs combine characteristics of
both equity REITs and mortgage REITs.
An investment in a REIT, or in a real estate linked derivative instrument
linked to the value of a REIT, is subject to the risks that impact the value
of the underlying properties of the REIT. These risks include loss to
casualty or condemnation, and changes in supply and demand, interest
rates, zoning laws, regulatory limitations on rents, property taxes and
operating expenses. Real estate income and values may also be affected
by demographic trends, such as population shifts or changing tastes,
preferences (such as remote work arrangements) and social values.
Other factors that may adversely affect REITs include poor performance
by management of the REIT, changes to the tax laws, or failure by the
REIT to qualify for favorable tax treatment. The securities of REITs
involve greater risks than those associated with larger, more established
companies and may be subject to more abrupt or erratic price
movements because of interest rate changes, economic conditions and
real estate market conditions (such as oversupply of real estate for rent
or sale or vacancies, potentially for extended periods), reduced demand
for commercial and office space as well as increased maintenance or
tenant improvement costs and costs to convert properties for other
uses, and default risk and credit quality of tenants and borrowers and
other factors. For example, the value of these securities may decline
when interest rates rise and will also be affected by the real estate
market and by the management or development of the underlying
properties. The underlying properties may be subject to mortgage loans,
which may also be subject to the risks of default. REITs are also subject
to default by borrowers and self-liquidation, and are heavily dependent
on cash flow. Some REITs lack diversification because they invest in a
limited number of properties, a narrow geographic area, or a single type
of property. Mortgage REITs may be impacted by the quality of the
credit extended.
Liquidity Risk
Liquidity risk exists when particular investments are difficult to purchase
or sell. Illiquid investments are investments that the Fund reasonably
expects cannot be sold or disposed of in current market conditions in
seven calendar days or less without the sale or disposition significantly
changing the market value of the investment. Illiquid investments may
become harder to value, especially in changing markets. The Fund’s
investments in illiquid investments may reduce the returns of the Fund
because it may be unable to sell the illiquid investments at an
advantageous time or price or possibly require the Fund to dispose of
other investments at unfavorable times or prices in order to satisfy its
obligations, which could prevent the Fund from taking advantage of
other investment opportunities. Additionally, the market for certain
investments may become illiquid under adverse market or economic
conditions independent of any specific adverse changes in the
conditions of a particular issuer. Bond markets have consistently grown
over the past three decades while the capacity for traditional dealer
counterparties to engage in fixed income trading has not kept pace and
in some cases has decreased. As a result, dealer inventories of corporate
bonds, which provide a core indication of the ability of financial
intermediaries to “make markets,” are at or near historic lows in
relation to market size. Because market makers seek to provide stability
to a market through their intermediary services, a significant reduction
in dealer inventories could potentially lead to decreased liquidity and
increased volatility in the fixed income markets. Such issues may be
exacerbated during periods of economic uncertainty. To the extent that
the Fund’s principal investment strategies involve securities of
companies with smaller market capitalizations, foreign (non-U.S.)
securities, Rule 144A securities, illiquid sectors of fixed income
securities, derivatives or securities with substantial market and/or credit
risk, the Fund will tend to have greater exposure to liquidity risk.
Further fixed income securities with longer durations until maturity face
heightened levels of liquidity risk as compared to fixed income securities
with shorter durations until maturity. The risks associated with illiquid
instruments may be particularly acute in situations in which the Fund’s
operations require cash (such as in connection with repurchase offers)
and could result in the Fund borrowing to meet its short-term needs or
incurring losses on the sale of illiquid instruments. It may also be the
case that other market participants may be attempting to liquidate fixed
income holdings at the same time as the Fund, causing increased supply
in the market and contributing to liquidity risk and downward pricing
pressure. See “Principal Risks of the Fund - Valuation Risk.”
Liquidity risk also refers to the risk that the Fund may be required to
hold additional cash or sell other investments in order to obtain cash to
close out derivatives or meet the liquidity demands that derivatives can
create to make payments of margin, collateral, or settlement payments
to counterparties. The Fund may have to sell a security at a
disadvantageous time or price to meet such obligations.
The current direction of governments and regulators may have the effect
of reducing market liquidity, market resiliency and money supply, such
as through higher rates, tighter financial regulations and proposals
related to open-end fund liquidity that may prevent mutual funds and
exchange-traded funds from participating in certain markets.
The Alt Lending ABS in which the Fund invests are typically not listed on
any securities exchange and not registered under the Securities Act. In
addition, the Fund anticipates that these instruments may only be sold
to a limited number of investors and may have a limited or non-existent
secondary market. Accordingly, the Fund currently expects that certain
of its investments in Alt Lending ABS will face heightened levels of
liquidity risk. Although currently, there is generally no reliable, active
secondary market for certain Alt Lending ABS, a secondary market for
these alternative lending-related instruments may develop.
Tax Risk
The Fund has elected to be treated as a “regulated investment
company” (a “RIC”) under Subchapter M of the Code and intends each
year to qualify and be eligible to be treated as such, so that it generally
will not be subject to U.S. federal income tax on its net investment
income or net short-term or long-term capital gains that are distributed
(or deemed distributed, as described below) to shareholders. In order to
qualify and be eligible for such treatment, the Fund must meet certain
asset diversification tests, derive at least 90% of its gross income for
such year from certain types of qualifying income, and distribute to its
shareholders at least 90% of the sum of its “investment company
taxable income” as that term is defined in the Code (which includes,
among other things, dividends, taxable interest and the excess of any
net short-term capital gains over net long-term capital losses, as
reduced by certain deductible expenses) and net tax-exempt income, for
such year.
The Fund’s investment strategy will potentially be limited by its intention
to continue qualifying for treatment as a RIC, and can limit the Fund’s
ability to continue qualifying as such. The tax treatment of certain of the
Fund’s investments under one or more of the qualification or
distribution tests applicable to RICs is uncertain. An adverse
determination or future guidance by the IRS or a change in law might
affect the Fund’s ability to qualify or be eligible for treatment as a RIC.
Income and gains from certain of the Fund’s activities, including fees
received in connection with the origination of loans, may not constitute
qualifying income to a RIC for purposes of the 90% gross income test. If
the Fund were to treat income or gain from a particular investment or
activity as qualifying income and the income or gain were later
determined not to constitute qualifying income and, together with any
other nonqualifying income, caused the Fund’s nonqualifying income to
exceed 10% of its gross income in any taxable year, the Fund would fail
to qualify as a RIC unless it is eligible to and does pay a tax at the Fund
level. Income and gains from certain of the Fund’s activities may not
constitute qualifying income to a RIC for purposes of the 90% gross
income test. If the Fund were to treat income or gain from a particular
investment or activity as qualifying income and the income or gain were
later determined not to constitute qualifying income and, together with
any other nonqualifying income, caused the Fund’s nonqualifying
income to exceed 10% of its gross income in any taxable year, the Fund
would fail to qualify as a RIC unless it is eligible to and does pay a tax at
the Fund level.
If, in any year, the Fund were to fail to qualify for treatment as a RIC
under the Code, and were ineligible to or did not otherwise cure such
failure, the Fund would be subject to tax on its taxable income at
corporate rates and, when such income is distributed, shareholders
would be subject to further tax, on such distributions to the extent of
the Fund’s current or accumulated earnings and profits.
The value of the Fund’s investments and its net asset value may be
adversely affected by changes in tax rates and policies. Because interest
income from municipal securities is normally not subject to regular
federal in-come taxation, the attractiveness of municipal securities in
relation to other investment alternatives is affected by changes in
federal income tax rates or changes in the tax-exempt status of interest
income from municipal securities. Any proposed or actual changes in
such rates or exempt status, therefore, can significantly affect the
demand for and supply, liquidity and marketability of municipal
securities. This could in turn affect the Fund’s net asset value and ability
to acquire and dispose of municipal securities at desirable yield and
price levels. Additionally, the Fund is not a suitable investment for
individual retirement accounts, for other tax-exempt or tax-deferred
accounts or for investors who are not sensitive to the federal income tax
consequences of their investments.
Subsidiary Risk
To the extent the Fund invests through one or more of its wholly-owned
Subsidiaries, the Fund would be exposed to the risks associated with
such Subsidiary’s investments. Such Subsidiaries would likely not be
registered as investment companies under the 1940 Act and, except as
noted in this prospectus, would not be subject to all of the investor
protections of the 1940 Act. Changes in the laws of the United States
and/or the jurisdiction in which a Subsidiary is organized could result in
the inability of the Fund and/or the Subsidiary to operate as intended
and could adversely affect the Fund.
Portfolio Turnover Risk
The Investment Manager manages the Fund without regard generally to
restrictions on portfolio turnover. The use of futures contracts and other
derivative instruments with relatively short maturities may tend to
exaggerate the portfolio turnover rate for the Fund. Trading in fixed
income securities does not generally involve the payment of brokerage
commissions, but does involve indirect transaction costs. The use of
futures contracts and other derivative instruments may involve the
payment of commissions to futures commission merchants or other
intermediaries. Higher portfolio turnover involves correspondingly
greater expenses to the Fund, including brokerage commissions or
dealer mark-ups and other transaction costs on the sale of securities
and reinvestments in other securities. The higher the rate of portfolio
turnover of the Fund, the higher these transaction costs borne by the
Fund generally will be. Such sales may result in realization of taxable
capital gains (including short-term capital gains, which are generally
taxed to shareholders at ordinary income tax rates when distributed net
of short-term capital losses and net long-term capital losses), and may
adversely impact the Fund’s after-tax returns. See “Tax Matters.”
Operational Risk
An investment in the Fund, like any fund, can involve operational risks
arising from factors such as processing errors, human errors, inadequate
or failed internal or external processes, failures in systems and
technology, changes in personnel and errors caused by third-party
service providers. The occurrence of any of these failures, errors or
breaches could result in a loss of information, regulatory scrutiny,
reputational damage or other events, any of which could have a
material adverse effect on the Fund. While the Fund seeks to minimize
such events through controls and oversight, there may still be failures
that could cause losses to the Fund.
Other Investment Companies Risk
When investing in an investment company, the Fund will generally bear
its ratable share of that investment company’s expenses and would
remain subject to payment of the Fund’s investment management fees
and other expenses with respect to assets so invested. Common
Shareholders would therefore be subject to duplicative expenses to the
extent the Fund invests in other investment companies. In addition,
these other investment companies may utilize leverage, in which case
an investment would subject a Fund to additional risks associated with
leverage. Due to its own financial interest or other business
considerations, the Investment Manager may choose to invest a portion
of a Fund’s assets in investment companies sponsored or managed by
the Investment Manager or its related parties in lieu of investments by a
Fund directly in portfolio securities, or may choose to invest in such
investment companies over investment companies sponsored or
managed by others. Participation in a cash sweep program where the
Fund's uninvested cash balance is used to purchase shares of affiliated
or unaffiliated money market funds or cash management pooled
investment vehicles at the end of each day subjects the Fund to the risks
associated with the underlying money market funds or cash
management pooled investment vehicles, including liquidity risk. As a
shareholder of a money market fund or cash management pooled
investment vehicle, the Fund would indirectly bear the fees and
expenses of the underlying fund or account which are in addition to the
fees the Fund pays its service providers. Applicable law may limit a
Fund’s ability to invest in other investment companies.
Cyber Security Risk
As the use of technology, including cloud-based technology, has
become more prevalent in the course of business, the Fund is potentially
more susceptible to operational and information security risks resulting
from breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional cyber events from outside threat actors or
internal resources that may, among other things, cause the Fund to lose
proprietary information, suffer data corruption and/or destruction, lose
operational capacity, result in the unauthorized release or other misuse
of confidential information, or otherwise disrupt normal business
operations. Geopolitical tensions can increase the scale and
sophistication of deliberate cyber security attacks, particularly those
from nation-states or from entities with nation-state backing, who may
desire to use cyber security attacks to cause damage or create leverage
against geopolitical rivals. Cyber security breaches may involve
unauthorized access to the Fund’s digital information systems (e.g.,
through “hacking” or malicious software coding), and may come from
multiple sources, including outside attacks such as denial-of-service
attacks (i.e., efforts to make network services unavailable to intended
users) or cyber extortion, including exfiltration of data held for ransom
and/or “ransomware” attacks that renders systems inoperable until
ransom is paid, or insider actions (e.g., intentionally or unintentionally
harmful acts of PIMCO personnel). In addition, cyber security breaches
involving the Fund’s third party service providers (including but not
limited to advisers, sub-advisers, administrators, transfer agents,
custodians, vendors, suppliers, distributors and other third parties),
trading counterparties or issuers in which the Fund invests can also
subject the Fund to many of the same risks associated with direct cyber
security breaches or extortion of company data. PIMCO's use of
cloud-based service providers could heighten or change these risks. In
addition, work-from-home arrangements by the Fund, the Investment
Manager or their service providers could increase all of the above risks,
create additional data and information accessibility concerns, and make
the Fund, the Investment Manager or their service providers susceptible
to operational disruptions, any of which could adversely impact their
operations.
Cyber security failures or breaches may result in financial losses to the
Fund and its shareholders. For example, cyber security failures or
breaches involving trading counterparties or issuers in which the Fund
invests could adversely impact such counterparties or issuers and cause
the Fund’s investment to lose value. These failures or breaches may also
result in disruptions to business operations, potentially resulting in
financial losses; interference with the Fund’s ability to calculate its NAV,
process shareholder transactions or otherwise transact business with
shareholders; impediments to trading; violations of applicable privacy
and other laws; regulatory fines; penalties; third-party claims in
litigation; reputational damage; reimbursement or other compensation
costs; additional compliance and cyber security risk management costs
and other adverse consequences. In addition, substantial costs may be
incurred in order to prevent any cyber incidents in the future.
Like with operational risk in general, the Fund has established business
continuity plans and risk management systems designed to reduce the
risks associated with cyber security. However, there are inherent
limitations in these plans and systems, including that certain risks may
not have been identified, in large part because different or unknown
threats may emerge in the future. As such, there is no guarantee that
such efforts will succeed, especially because the Fund does not directly
control the cyber security systems of issuers in which the Fund may
invest, trading counterparties or third-party service providers to the
Fund. Such entities have experienced cyber attacks and other attempts
to gain unauthorized access to systems from time to time, and there is
no guarantee that efforts to prevent or mitigate the effects of such
attacks or other attempts to gain unauthorized access will be successful.
There is also a risk that cyber security breaches may not be detected. The
Fund and its shareholders may suffer losses as a result of a cyber
security breach related to the Fund, its service providers, trading
counterparties or the issuers in which the Fund invests.
Potential Conflicts of Interest Risk—Allocation of Investment
Opportunities
The Investment Manager and its affiliates are involved worldwide with a
broad spectrum of financial services and asset management activities
and may engage in the ordinary course of business in activities in which
their interests or the interests of their clients may conflict with those of
the Fund. The Investment Manager may provide investment
management services to other funds and discretionary managed
accounts that follow an investment program similar to that of the Fund.
Subject to the requirements of the 1940 Act, the Investment Manager
intends to engage in such activities and may receive compensation from
third parties for its services. The results of the Fund’s investment
activities may differ from those of the the Fund’s affiliates, or another
account managed by the Investment Manager or its affiliates, and it is
possible that the Fund could sustain losses during periods in which one
or more of the Fund’s affiliates and/or other accounts managed by the
Investment Manager or its affiliates, including proprietary accounts,
achieve profits on their trading.
Repurchase Agreements Risk
The Fund may enter into repurchase agreements, in which the Fund
purchases a security from a bank or broker-dealer, which agrees to
repurchase the security at the Fund’s cost plus interest within a specified
time. If the party agreeing to repurchase should default, the Fund would
seek to sell the securities which it holds. This could involve costs or
delays in addition to a loss on the securities if their value should fall
below their repurchase price. The security subject to a repurchase
agreement may be or become illiquid. These events could also trigger
adverse tax consequences for the Fund.
Special Purpose Acquisition Companies (“SPACs”) Risk
The Fund may invest in securities of SPACs or similar special purpose
entities that pool funds to seek potential acquisition opportunities.
Unless and until an acquisition is completed, a SPAC generally invests its
assets (less a portion retained to cover expenses) in U.S. government
securities, money market securities or holds cash. If an acquisition that
meets the requirements for the SPAC is not completed within a
pre-established period of time, the invested funds are returned to the
entity’s shareholders unless shareholders approve alternative options.
Because SPACs and similar entities are in essence blank check
companies without operating history or ongoing business other than
seeking acquisitions, the value of their securities is particularly
dependent on the ability of the entity’s management to identify and
complete a profitable acquisition. A SPAC’s structure may result in
significant dilution of a shareholder's share value immediately upon the
completion of a business combination due to, among other reasons,
interests held by the SPAC sponsor, conversion of warrants into
additional shares, shares issued in connection with a business
combination and/or certain embedded costs. There is no guarantee that
the SPACs in which the Fund invests will complete an acquisition or that
any acquisitions that are completed will be profitable. Some SPACs may
pursue acquisitions only within certain industries or regions, which may
increase the volatility of their prices. In addition, these securities, which
are typically traded in the over-the-counter market, may be considered
illiquid and/or be subject to restrictions on resale.
Structured Investments Risk
Holders of structured products, including structured notes, credit-linked
notes and other types of structured products, bear the risks of the
underlying investments, index or reference obligation and are subject to
counterparty risk. The Fund may have the right to receive payments only
from the structured product, and generally does not have direct rights
against the issuer or the entity that sold the assets to be securitized.
While certain structured products enable the investor to acquire
interests in a pool of securities without the brokerage and other
expenses associated with directly holding the same securities, investors
in structured products generally pay their share of the structured
product’s administrative and other expenses. Although it is difficult to
predict whether the prices of indices and securities underlying
structured products will rise or fall, these prices (and, therefore, the
prices of structured products) are generally influenced by the same types
of political and economic events that affect issuers of securities and
capital markets generally. If the issuer of a structured product uses
shorter term financing to purchase longer term securities, the issuer may
be forced to sell its securities at below market prices if it experiences
difficulty in obtaining such financing, which may adversely affect the
value of the structured products owned by the Fund. Structured
products generally entail risks associated with derivative instruments.
Collateralized Bond Obligations, Collateralized Loan
Obligations and Collateralized Debt Obligations Risk
CBOs, CLOs and CDOs may charge management fees and
administrative expenses. For CBOs, CLOs and CDOs, the cash flows from
the trust are split into two or more portions, called tranches, varying in
risk and yield. The riskiest portion is the equity tranche which generally
bears losses in connection with the first defaults, if any, on the bonds or
loans in the trust. A senior tranche from a CLO, CBO and CDO trust
typically has higher credit ratings and lower yields than the underlying
securities. CLO tranches, CBO, and CDO, even senior ones, can
experience substantial losses due to actual defaults, increased sensitivity
to defaults due to collateral default and disappearance of protecting
tranches, market anticipation of defaults and aversion to CLO, CBO or
other CDO securities. The risks of an investment in a CBO, CLO or other
CDO vary depending on the type of collateral securities and the class of
the instrument in which the Fund invests, among other factors.
Normally, CLOs, CBOs and other CDOs are privately offered and sold,
and thus are not registered under the securities laws. Investments in
CLOs, CBOs and CDOs may be or become illiquid. In addition to the
normal risks associated with debt instruments (e.g., interest rate risk
and credit risk), CLOs, CBOs and CDOs carry additional risks including,
but not limited to: (i) the possibility that distributions from the collateral
will not be adequate to make interest or other payments; (ii) the risk
that the quality of the collateral may decline in value or default; (iii) the
risk that the Fund may invest in CBOs, CLOs or other CDOs that are
subordinate to other classes; and (iv) the risk that the complex structure
of the security may not be fully understood at the time of investment
and may produce disputes with the issuer or others and may produce
unexpected investment results.
Market Disruptions Risk
The Fund is subject to investment and operational risks associated with
financial, economic and other global market developments and
disruptions, including those arising from war, military conflicts, terrorism,
social unrest, recessions, supply chain disruptions, market manipulation,
government interventions, defaults and shutdowns, political changes or
diplomatic developments, public health emergencies (such as the spread
of infectious diseases, pandemics and epidemics), bank failures,
natural/environmental disasters, climate change and climate related
events which can all negatively impact the securities markets, interest
rates, auctions, secondary trading, ratings, credit risk, inflation, deflation
and other factors relating to the Fund’s investments or the Investment
Manager’s operations and the value of an investment in the Fund, its
distributions and its returns. These events can also impair the
technology and other operational systems upon which the Fund’s
service providers, including PIMCO as the Fund’s investment adviser,
rely, and could otherwise disrupt the Fund’s service providers’ ability to
fulfill their obligations to the Fund. Furthermore, events involving limited
liquidity, defaults, non-performance or other adverse developments that
affect financial institutions or the financial services industry generally, or
concerns or rumors about any events of these kinds or other similar
risks, have in the past and may in the future lead to market-wide
liquidity problems.
Geopolitical Conflicts
The occurrence of geopolitical conflicts, war or terrorist activities could
have adverse impacts on markets in various and unpredictable ways. For
example, following Russia’s large-scale invasion of Ukraine in February
2022, Russia, and other countries, persons and entities that were
viewed as having provided material aid to Russia’s aggression against
Ukraine, became the subject of economic sanctions and import and
export controls imposed by countries throughout the world, including
the United States. Such measures have had and may continue to have
an adverse effect on the Russian, Belarusian and other securities and
economies. Additional examples include, but are not limited to,
heightened concerns of trade disputes, which could result in increased
tariffs, trade restrictions or other retaliatory countermeasures. The
extent, duration and impact of geopolitical conflicts and related market
impacts are difficult to ascertain, but could be significant and could
have significant adverse effects on regional and global economies and
the markets for certain securities and commodities, such as oil, natural
gas, steel and aluminum, as well as other sectors, and on the Fund’s
investments.
Focused Investment Risk
To the extent that the Fund focuses its investments in a particular sector,
it may be susceptible to loss due to adverse developments affecting that
sector, including (but not limited to): governmental regulation; inflation;
rising interest rates; cost increases in raw materials, fuel and other
operating expenses; technological innovations that may render existing
products and equipment obsolete; competition from new entrants; high
research and development costs; increased costs associated with
compliance with environmental or other governmental regulations; and
other economic, business or political developments specific to that
sector. Furthermore, the Fund may invest a substantial portion of its
assets in companies in related sectors that may share common
characteristics, are often subject to similar business risks and regulatory
burdens, and whose securities may react similarly to the types of
developments described above, which will subject the Fund to greater
risk. The Fund also will be subject to focused investment risk to the
extent that it invests a substantial portion of its assets in a particular
issuer, market, asset class, country or geographic region. See “Principal
Risks of the Fund—Foreign (Non-U.S.) Investment Risk,” “Principal
Risks of the Fund—Emerging Markets Risk” and “Principal Risks of the
Fund—Currency Risk.”
Zero-Coupon Bonds, Step-Ups and Payment-In-Kind Securities
Risk
The market prices of zero-coupon, step-ups and payment-in-kind
securities are generally more volatile than the prices of securities that
pay interest periodically and in cash, and are likely to respond to
changes in interest rates to a greater degree than other types of debt
securities with similar maturities and credit quality. Because
zero-coupon securities bear no interest, their prices are especially
volatile. And because zero-coupon bondholders do not receive interest
payments, the prices of zero-coupon securities generally fall more
dramatically than those of bonds that pay interest on a current basis
when interest rates rise. The market for zero-coupon and
payment-in-kind securities may suffer decreased liquidity. In addition, as
these securities may not pay cash interest, the Fund’s investment
exposure to these securities and their risks, including credit risk, will
increase during the time these securities are held in the Fund’s portfolio.
Further, to maintain its qualification for treatment as a RIC and to avoid
Fund-level U.S. federal income and/or excise taxes, the Fund is required
to distribute to its shareholders any income it is deemed to have
received in respect of such investments, notwithstanding that cash has
not been received currently, and the value of paid-in-kind interest.
Consequently, the Fund may have to dispose of portfolio securities
under disadvantageous circumstances to generate the cash, or may
have to leverage itself by borrowing the cash to satisfy this distribution
requirement. The required distributions, if any, would result in an
increase in the Fund’s exposure to these securities. Zero coupon bonds,
step-ups and payment-in-kind securities allow an issuer to avoid or
delay the need to generate cash to meet current interest payments and,
as a result, may involve greater credit risk than bonds that pay interest
currently or in cash. The Fund would be required to distribute the
income on these instruments as it accrues, even though the Fund will
not receive the income on a current basis or in cash. Thus, the Fund may
sell other investments, including when it may not be advisable to do so,
to make income distributions to its shareholders.
Debt Securities Risk
Debt securities are generally subject to the risks described below and
further herein:
Issuer risk.
 
The value of fixed income securities may decline for a
number of reasons that directly relate to the issuer, such as
management performance, financial leverage, reduced demand for the
issuer’s goods and services, historical and prospective earnings of the
issuer and the value of the assets of the issuer. A change in the financial
condition of a single issuer may affect securities markets as a whole.
These risks can apply to the Common Shares issued by the Fund and to
the issuers of securities and other instruments in which the Fund
invests.
Interest rate risk.
 
The market value of debt securities changes in
response to interest rate changes and other factors. Interest rate risk is
the risk that prices of debt securities will increase as interest rates fall
and decrease as interest rates rise, which would be reflected in the
Fund’s NAV. The Fund may lose money if short-term or long-term
interest rates rise sharply in a manner not anticipated by the Fund’s
management. Moreover, because rates on certain floating rate debt
securities typically reset only periodically, changes in prevailing interest
rates (and particularly sudden and significant changes) can be expected
to cause some fluctuations in the NAV of the Fund to the extent that it
invests in floating rate debt securities.
Prepayment risk.
 
During periods of declining interest rates, borrowers
may prepay principal. This may force the Fund to reinvest in lower
yielding securities, resulting in a possible decline in the Fund’s income
and distributions.
Credit risk.
 
Credit risk is the risk that one or more debt securities in
the Fund’s portfolio will decline in price or fail to pay interest or
principal when due because the issuer of the security experiences a
decline in its financial status. Credit risk is increased when a portfolio
security is downgraded or the perceived creditworthiness of the issuer
deteriorates.
Reinvestment risk.
 
Reinvestment risk is the risk that income from the
Fund’s portfolio will decline if the Fund invests the proceeds from
matured, traded or called fixed income securities at market interest rates
that are below the portfolio’s current earnings rate.
Duration and maturity risk.
 
The Fund may seek to adjust the
duration or maturity of its investments in debt securities based on its
assessment of current and projected market conditions. The Fund may
incur costs in seeking to adjust the average duration or maturity of its
portfolio of debt securities. There can be no assurances that the Fund’s
assessment of current and projected market conditions will be correct or
that any strategy to adjust duration or maturity will be successful.
In addition, from time to time, uncertainty regarding the status of
negotiations in the U.S. government to increase the statutory debt
ceiling could impact the creditworthiness of the United States and could
impact the liquidity and value of U.S. Government and other securities
and ultimately the Fund.
Sovereign Debt Risk
In addition to the other risks applicable to debt investments, sovereign
debt may decline in value as a result of default or other adverse credit
event resulting from an issuer’s inability or unwillingness to make
principal or interest payments in a timely fashion. A sovereign entity’s
failure to make timely payments on its debt can result from many
factors, including, without limitation, insufficient foreign (non-U.S.)
currency reserves or an inability to sufficiently manage fluctuations in
relative currency valuations, an inability or unwillingness to satisfy the
demands of creditors and/or relevant supranational entities regarding
debt service or economic reforms, the size of the debt burden relative to
economic output and tax revenues, cash flow difficulties, and other
political and social considerations. The risk of loss to the Fund in the
event of a sovereign debt default or other adverse credit event is
heightened by the unlikelihood of any formal recourse or means to
enforce its rights as a holder of the sovereign debt. In addition,
sovereign debt restructurings, which may be shaped by entities and
factors beyond the Fund’s control, may result in a loss in value of the
Fund’s sovereign debt holdings.
Certain Affiliations
Certain broker-dealers may be considered to be affiliated persons of the
Fund and/or the Investment Manager due to their possible affiliations
with Allianz SE, the ultimate parent of the Investment Manager, or
another Allianz entity. Allianz Asset Management of America LP merged
with Allianz Asset Management of America LLC (“Allianz Asset
Management”), with the latter being the surviving entity, effective
January 1, 2023. Following the merger, Allianz Asset Management is
PIMCO’s managing member and direct parent entity. Absent an
exemption from the SEC or other regulatory relief, the Fund is generally
precluded from effecting certain principal transactions with affiliated
brokers, and its ability to purchase securities being underwritten by an
affiliated broker or a syndicate including an affiliated broker, or to utilize
affiliated brokers for agency transactions, is subject to restrictions. This
could limit the Fund’s ability to engage in securities transactions and
take advantage of market opportunities.
The 1940 Act imposes significant limits on co-investment with affiliates
of the Fund. The Fund has received exemptive relief from the SEC that,
to the extent a fund relies on such relief, permits it to (among other
things) co-invest alongside certain other persons in privately negotiated
investments, including certain affiliates of the Investment Manager and
certain public or private funds managed by the Investment Manager and
its affiliates, subject to certain terms and conditions. The exemptive relief
from the SEC with respect to co-investments imposes a number of
conditions on any co-investments made in reliance on such relief that
may limit or restrict a fund’s ability to participate in an investment or
require it to participate in an investment to a lesser extent, which could
negatively impact a fund’s ability to execute its desired investment
strategy and its returns. Subject to applicable law, the Fund may also
invest alongside other PIMCO managed funds and accounts, including
private funds and affiliates of the Investment Manager, without relying
on the exemptive relief. Pursuant to co-investment exemptive relief, to
the extent a fund relies on such relief, the fund will be able to invest in
opportunities in which PIMCO and/or its affiliates has an investment,
and PIMCO and/or its affiliates will be able to invest in opportunities in
which a fund has made an investment.
Anti-Takeover Provisions
The Declaration and the Bylaws include provisions that could limit the
ability of other entities or persons to acquire control of the Fund or to
convert the Fund to open-end status.  These provisions in the
Declaration and the Bylaws could have the effect of depriving the
Common Shareholders of opportunities to sell their Common Shares at
a premium over the then-current market price of the Common Shares or
at NAV.
Distribution Rate Risk
Although the Fund may seek to maintain level distributions, the Fund’s
distribution rates may be affected by numerous factors, including but
not limited to changes in realized and projected market returns,
fluctuations in market interest rates, Fund performance, and other
factors. The Fund’s distributions may be comprised of a return of capital.
In general terms, a return of capital would occur where a Fund
distribution (or portion thereof) represents a return of a portion of your
investment, rather than net income or capital gains generated from your
investment during a particular period. There can be no assurance that a
change in market conditions or other factors will not result in a change
in the Fund’s distribution rate or that the rate will be sustainable in the
future.
For instance, during periods of low or declining interest rates, the Fund’s
distributable income and dividend levels may decline for many reasons.
For example, the Fund may have to deploy uninvested assets (whether
from sales of Fund shares, proceeds from matured, traded or called debt
obligations or other sources) in new, lower yielding instruments.
Additionally, payments from certain instruments that may be held by the
Fund (such as variable and floating rate securities) may be negatively
impacted by declining interest rates, which may also lead to a decline in
the Fund’s distributable income and dividend levels.
                        
Effects of Leverage [Text Block]
Effects of Leverage
The following table is furnished in response to requirements of the SEC.
It is designed to illustrate the effects of leverage through the use of
senior securities, as that term is defined under Section 18 of the 1940
Act, on Common Share total return, assuming investment portfolio total
returns (consisting of income and changes in the value of investments
held in the Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. Although
the Fund does not currently have a class of senior securities
outstanding, the table below reflects the Fund’s continued use of
reverse repurchase agreements averaged over the fiscal year ended
June 30, 2024 representing approximately 14.59% of the Fund’s
average total managed assets (including assets attributable to reverse
repurchase agreements) at an estimated annual effective interest
expense rate of 5.80% payable by the Fund on such instruments (based
on market conditions averaged over the fiscal year ended June 30,
2024). Based on such estimated annual effective interest expense rate,
the annual return that the Fund’s portfolio must experience (net of
expenses) in order to cover such costs of the reverse repurchase
agreements is 0.86%. The information below does not reflect the Fund’s
use of certain other forms of economic leverage achieved through the
use of other instruments or transactions not considered to be senior
securities under the 1940 Act, such as credit default swaps or other
derivative instruments.
The assumed investment portfolio returns in the table below are
hypothetical figures and are not necessarily indicative of the investment
portfolio returns experienced or expected to be experienced by the
Fund. Your actual returns may be greater or less than those appearing
below. In addition, the actual borrowing expenses associated with
reverse repurchase agreements (or dollar rolls/buybacks or borrowings,
if any) used by the Fund may vary frequently and may be significantly
higher or lower than the rate used for the example below.
 
Assumed Portfolio Total Return
(
10.00
)%
(5.00
)%
0.00
%
5.00%
10.00
%
Common Share Total Return
(12.74
)%
(6.87)%
(1.00)%
4.86%
10.73%
Common Share total return is composed of two elements — the
Common Share dividends paid by the Fund (the amount of which is
largely determined by the net investment income of the Fund after
paying dividend payments on any preferred shares issued by the Fund
and expenses on any forms of leverage outstanding) and gains or losses
on the value of the securities and other instruments the Fund owns. As
required by SEC rules, the table assumes that the Fund is more likely to
suffer capital losses than to enjoy capital appreciation. For example, to
assume a portfolio total return of 0%, the Fund must assume that the
income it receives on its investments is entirely offset by losses in the
value of those investments. This table reflects hypothetical performance
of the Fund’s portfolio and not the actual performance of the Fund’s
Common Shares, the value of which is determined by market forces and
other factors.
Should the Fund elect to add additional leverage to its portfolio
following an offering, any benefits of such additional leverage cannot
be fully achieved until the proceeds resulting from the use of such
leverage have been received by the Fund and invested in accordance
with the Fund’s investment objectives and policies. As noted above, the
Fund’s willingness to use additional leverage, and the extent to which
leverage is used at any time, will depend on many factors, including,
among other things, PIMCO’s assessment of the yield curve
environment, interest rate trends, market conditions and other factors.
                        
Effects of Leverage [Table Text Block]
Assumed Portfolio Total Return
(
10.00
)%
(5.00
)%
0.00
%
5.00%
10.00
%
Common Share Total Return
(12.74
)%
(6.87)%
(1.00)%
4.86%
10.73%
                        
Return at Minus Ten [Percent] (12.74%)                        
Return at Minus Five [Percent] (6.87%)                        
Return at Zero [Percent] (1.00%)                        
Return at Plus Five [Percent] 4.86%                        
Return at Plus Ten [Percent] 10.73%                        
Share Price [Table Text Block]
The following table sets forth, for each of the periods indicated, the high and low closing market prices of the Fund’s Common Shares on the NYSE,
the high and low NAV per Common Share and the high and low premium/discount to NAV per Common Share. See “Net Asset Value” for information
as to how the Fund’s NAV is determined.
 
 
Common share
market price
(1)
Common share
net asset value
Premium (discount) as
a % of net asset value
Quarter
High
Low
High
Low
High
Low
Quarter ended March 31, 2025
$4.98
$4.85
$4.73
$4.65
5.52%
2.97%
Quarter ended December 31, 2024
$5.16
$4.85
$4.76
$4.69
8.63%
2.97%
Quarter ended September 30, 2024
$5.00
$4.76
$4.75
$4.55
6.81%
3.46%
Quarter ended June 30, 2024
$5.00
$4.63
$4.66
$4.55
7.53%
1.54%
Quarter ended March 31, 2024
$5.01
$4.79
$4.68
$4.58
8.24%
4.59%
Quarter ended December 31, 2023
$4.99
$4.16
$4.65
$4.26
7.54%
(2.35)%
Quarter ended September 30, 2023
$5.13
$4.42
$4.52
$4.38
14.51%
0.91%
Quarter ended June 30, 2023
$5.00
$4.64
$4.59
$4.49
10.38%
3.11%
Quarter ended March 31, 2023
$5.35
$4.71
$4.81
$4.54
12.53%
1.94%
Quarter ended December 31, 2022
$5.05
$4.58
$4.71
$4.55
7.91%
0.44%
Quarter ended September 30, 2022
$5.37
$4.64
$4.96
$4.63
9.40%
(0.22)%
1
Such prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
The Fund’s NAV per Common Share at the close of business on March 31, 2025 was $4.65 and the last reported sale price of a Common Share on
the NYSE on that day was $4.89, representing a 5.16% premium to such NAV.
                        
Lowest Price or Bid [10]     $ 4.85 $ 4.85 $ 4.76 $ 4.63 $ 4.79 $ 4.16 $ 4.42 $ 4.64 $ 4.71 $ 4.58 $ 4.64
Highest Price or Bid [10]     4.98 5.16 5 5 5.01 4.99 5.13 5 5.35 5.05 5.37
Lowest Price or Bid, NAV     4.65 4.69 4.55 4.55 4.58 4.26 4.38 4.49 4.54 4.55 4.63
Highest Price or Bid, NAV     $ 4.73 $ 4.76 $ 4.75 $ 4.66 $ 4.68 $ 4.65 $ 4.52 $ 4.59 $ 4.81 $ 4.71 $ 4.96
Highest Price or Bid, Premium (Discount) to NAV [Percent]     5.52% 8.63% 6.81% 7.53% 8.24% 7.54% 14.51% 10.38% 12.53% 7.91% 9.40%
Lowest Price or Bid, Premium (Discount) to NAV [Percent]     2.97% 2.97% 3.46% 1.54% 4.59% (2.35%) 0.91% 3.11% 1.94% 0.44% (0.22%)
Share Price   $ 4.89 $ 4.89                    
NAV Per Share   $ 4.65 $ 4.65                    
Latest Premium (Discount) to NAV [Percent]   5.16%                      
Capital Stock, Long-Term Debt, and Other Securities [Abstract]                          
Capital Stock [Table Text Block]
Description of Capital Structure
The following is a brief description of the capital structure of the Fund. This description does not purport to be complete and is subject to and qualified
in its entirety by reference to the Declaration and the Fund’s Bylaws, as amended and restated through the date hereof (the “Bylaws”). The
Declaration and Bylaws are each exhibits to the registration statement of which this prospectus is a part.
The Fund is an unincorporated voluntary association with transferable shares of beneficial interest (commonly referred to as a “Massachusetts
business trust”) established under the laws of the Commonwealth of Massachusetts by the Declaration. The Declaration provides that the Board may
authorize separate classes of shares of beneficial interest. However, as of the date of this prospectus, the Fund does not have any shares outstanding
other than the Common Shares.
The following table shows the amount of Common Shares authorized and outstanding as of March 31, 2025.
 
Title of Class
Amount Authorized
Amount Outstanding
Common Shares
Unlimited
171,030,439
The Common Shares of the Fund commenced trading on the NYSE in April 2003, under the trading or “ticker” symbol “PHK.” As of the close of
trading on the NYSE on March 31, 2025, the NAV per Common Share was $4.65, and the closing price per Common Share on the NYSE was $4.89.
Common Shareholders are entitled to share equally in dividends declared by the Board to Common Shareholders and in the net assets of the Fund
available for distribution to Common Shareholders after payment of the preferential amounts payable to holders of any outstanding preferred shares
of beneficial interest.
All Common Shares of the Fund have equal rights to the payment of dividends and the distribution of assets upon liquidation.
Common Shares of the Fund are fully paid and, subject to matters discussed in “Anti-Takeover and Other Provisions in the Declaration of Trust and
Bylaws,” non-assessable, and have no pre-emptive or conversion rights or rights to cumulative voting, and have no right to cause the Fund to redeem
their shares. Upon liquidation of the Fund, after paying or adequately providing for the payment of all liabilities of the Fund and the liquidation
preference with respect to any outstanding preferred shares of beneficial interest, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may distribute the remaining assets of the Fund among the Fund’s Common
Shareholders.
Shareholders of each class are entitled to one vote for each share held. Common Shareholders will vote with the holders of any outstanding preferred
shares as a single class on each matter submitted to a vote of holders of Common Shares, except as otherwise provided by the Declaration, the
Bylaws or applicable law.
The Fund will send unaudited reports at least semiannually and audited financial statements annually to all of its shareholders.
                        
Security Dividends [Text Block]
Common Shareholders are entitled to share equally in dividends declared by the Board to Common Shareholders and in the net assets of the Fund
available for distribution to Common Shareholders after payment of the preferential amounts payable to holders of any outstanding preferred shares
of beneficial interest.
                        
Security Voting Rights [Text Block]
Shareholders of each class are entitled to one vote for each share held. Common Shareholders will vote with the holders of any outstanding preferred
shares as a single class on each matter submitted to a vote of holders of Common Shares, except as otherwise provided by the Declaration, the
Bylaws or applicable law.
                        
Security Liquidation Rights [Text Block] All Common Shares of the Fund have equal rights to the payment of dividends and the distribution of assets upon liquidation.                        
Outstanding Securities [Table Text Block]
The following table shows the amount of Common Shares authorized and outstanding as of March 31, 2025.
 
Title of Class
Amount Authorized
Amount Outstanding
Common Shares
Unlimited
171,030,439
                        
Private Placements and Restricted Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Private Placements and Restricted Securities Risk
A private placement involves the sale of securities that have not been
registered under the Securities Act or relevant provisions of applicable
non-U.S. law to certain institutional and qualified individual purchasers,
such as the Fund. In addition to the general risks to which all securities
are subject, securities received in a private placement generally are
subject to strict restrictions on resale, and there may be no liquid
secondary market or ready purchaser for such securities. See “Principal
Risks of the Fund – Liquidity Risk.” Therefore, the Fund may be unable
to dispose of such securities when it desires to do so, or at the most
favorable time or price. Private placements may also raise valuation
risks. See “Principal Risks of the Fund – Valuation Risk.” Restricted
securities are often purchased at a discount from the market price of
unrestricted securities of the same issuer reflecting the fact that such
securities may not be readily marketable without some time delay. Such
securities are often more difficult to value and the sale of such securities
often requires more time and results in higher brokerage charges or
dealer discounts and other selling expenses than does the sale of liquid
securities trading on national securities exchanges or in the
over-the-counter markets. Until the Fund can sell such securities into the
public markets, its holdings may be less liquid and any sales will need to
be made pursuant to an exemption under the Securities Act.
                        
Cyber Security Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Cyber Security Risk
As the use of technology, including cloud-based technology, has
become more prevalent in the course of business, the Fund is potentially
more susceptible to operational and information security risks resulting
from breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional cyber events from outside threat actors or
internal resources that may, among other things, cause the Fund to lose
proprietary information, suffer data corruption and/or destruction, lose
operational capacity, result in the unauthorized release or other misuse
of confidential information, or otherwise disrupt normal business
operations. Geopolitical tensions can increase the scale and
sophistication of deliberate cyber security attacks, particularly those
from nation-states or from entities with nation-state backing, who may
desire to use cyber security attacks to cause damage or create leverage
against geopolitical rivals. Cyber security breaches may involve
unauthorized access to the Fund’s digital information systems (e.g.,
through “hacking” or malicious software coding), and may come from
multiple sources, including outside attacks such as denial-of-service
attacks (i.e., efforts to make network services unavailable to intended
users) or cyber extortion, including exfiltration of data held for ransom
and/or “ransomware” attacks that renders systems inoperable until
ransom is paid, or insider actions (e.g., intentionally or unintentionally
harmful acts of PIMCO personnel). In addition, cyber security breaches
involving the Fund’s third party service providers (including but not
limited to advisers, sub-advisers, administrators, transfer agents,
custodians, vendors, suppliers, distributors and other third parties),
trading counterparties or issuers in which the Fund invests can also
subject the Fund to many of the same risks associated with direct cyber
security breaches or extortion of company data. PIMCO's use of
cloud-based service providers could heighten or change these risks. In
addition, work-from-home arrangements by the Fund, the Investment
Manager or their service providers could increase all of the above risks,
create additional data and information accessibility concerns, and make
the Fund, the Investment Manager or their service providers susceptible
to operational disruptions, any of which could adversely impact their
operations.
Cyber security failures or breaches may result in financial losses to the
Fund and its shareholders. For example, cyber security failures or
breaches involving trading counterparties or issuers in which the Fund
invests could adversely impact such counterparties or issuers and cause
the Fund’s investment to lose value. These failures or breaches may also
result in disruptions to business operations, potentially resulting in
financial losses; interference with the Fund’s ability to calculate its NAV,
process shareholder transactions or otherwise transact business with
shareholders; impediments to trading; violations of applicable privacy
and other laws; regulatory fines; penalties; third-party claims in
litigation; reputational damage; reimbursement or other compensation
costs; additional compliance and cyber security risk management costs
and other adverse consequences. In addition, substantial costs may be
incurred in order to prevent any cyber incidents in the future.
Like with operational risk in general, the Fund has established business
continuity plans and risk management systems designed to reduce the
risks associated with cyber security. However, there are inherent
limitations in these plans and systems, including that certain risks may
not have been identified, in large part because different or unknown
threats may emerge in the future. As such, there is no guarantee that
such efforts will succeed, especially because the Fund does not directly
control the cyber security systems of issuers in which the Fund may
invest, trading counterparties or third-party service providers to the
Fund. Such entities have experienced cyber attacks and other attempts
to gain unauthorized access to systems from time to time, and there is
no guarantee that efforts to prevent or mitigate the effects of such
attacks or other attempts to gain unauthorized access will be successful.
There is also a risk that cyber security breaches may not be detected. The
Fund and its shareholders may suffer losses as a result of a cyber
security breach related to the Fund, its service providers, trading
counterparties or the issuers in which the Fund invests.
                        
Real Estate Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Real Estate Risk
To the extent that the Fund invests directly or indirectly in real estate
investments, including investments in equity or debt securities issued by
private and public REITs, real estate operating companies (“REOCs”),
private or public real estate-related loans and real estate-linked
derivative instruments, it will be subject to the risks associated with
owning real estate and with the real estate industry generally. These
investments carry increased risks, which include, but are not limited to:
the burdens of ownership of real property; general and local economic
conditions (such as an oversupply of space or a reduction in demand for
space); the supply and demand for properties (including competition
based on rental rates); energy and supply shortages; fluctuations in
average occupancy and room rates; the attractiveness, type and location
of the properties and changes in the relative popularity of commercial
properties as an investment; the financial condition and resources of
tenants, buyers and sellers of properties; increased mortgage defaults;
the quality of maintenance, insurance and management services;
changes in the availability of debt financing which may render the sale
or refinancing of properties difficult or impracticable; changes in
building, environmental and other laws and/or regulations (including
those governing usage and improvements), fiscal policies and zoning
laws; changes in real property tax rates; changes in interest rates and
the availability of mortgage funds which may render the sale or
refinancing of properties difficult or impracticable; changes in operating
costs and expenses; energy and supply shortages; uninsured losses or
delays from casualties or condemnation; negative developments in the
economy that depress travel or leasing activity; environmental liabilities;
contingent liabilities on disposition of assets; uninsured or uninsurable
casualties; acts of God, including earthquakes, hurricanes and other
natural disasters; social unrest and civil disturbances, epidemics,
pandemics or other public crises; terrorist attacks and war; risks and
operating problems arising out of the presence of certain construction
materials, structural or property level latent defects, work stoppages,
shortages of labor, strikes, union relations and contracts, fluctuating
prices and supply of labor and/or other labor-related factors; and other
factors which are beyond the control of PIMCO and its affiliates. In
addition, the Fund’s investments will be subject to various risks which
could cause fluctuations in occupancy, rental rates, operating income
and expenses or which could render the sale or financing of its
properties difficult or unattractive. For example, following the
termination or expiration of a tenant’s lease, there may be a period of
time before receiving rental payments under a replacement lease.
During that period, the Fund would continue to bear fixed expenses
such as interest, real estate taxes, maintenance and other operating
expenses. In addition, declining economic conditions may impair the
ability to attract replacement tenants and achieve rental rates equal to
or greater than the rents paid under previous leases. Increased
competition for tenants may require capital improvements to properties
which would not have otherwise been planned.
Ultimately, to the extent it is not possible to renew leases or re-let space
as leases expire, decreased cash flow from tenants will result, which
could adversely impact the Fund’s operating results.
Real estate values have historically been cyclical. As the general
economy grows, demand for real estate increases and occupancies and
rents may increase. As occupancies and rents increase, property values
increase, and new development occurs. As development may occur,
occupancies, rents and property values may decline. Because leases are
usually entered into for long periods and development activities often
require extended times to complete, the real estate value cycle often
lags the general business cycle. Because of this cycle, real estate
companies may incur large swings in their profits and the prices of their
securities. Developments following the onset of COVID-19 have
adversely impacted certain commercial real estate markets, causing the
deferral of mortgage payments, renegotiated commercial mortgage
loans, commercial real estate vacancies or outright mortgage defaults,
and potential acceleration of macro trends such as work-from-home
and online shopping which may negatively impact certain industries,
such as brick-and-mortar retail.
The total returns available from investments in real estate generally
depend on the amount of income and capital appreciation generated by
the related properties. The performance of real estate, and thereby the
Fund, will be reduced by any related expenses, such as expenses paid
directly at the property level and other expenses that are capitalized or
otherwise embedded into the cost basis of the real estate.
Separately, certain service providers to the Fund and/or its Subsidiaries,
as applicable, with respect to its real estate or real estate-related
investments may be owned by, employed by, or otherwise related to,
PIMCO, Allianz SE, their affiliates and/or their respective employees,
consultants and other personnel. PIMCO may, in its sole discretion,
determine to provide, or engage or recommend an affiliate of PIMCO to
provide, certain services to the Fund, instead of engaging or
recommending one or more third parties to provide such services.
Subject to the governance requirements of a particular fund and
applicable law, PIMCO or its affiliates, as applicable, will receive
compensation in connection with the provision of such services. As a
result, PIMCO faces a conflict of interest when selecting or
recommending service providers for the Fund. Fees paid to an affiliated
service provider will be determined in PIMCO's commercially reasonable
discretion. Although PIMCO has adopted various policies and
procedures intended to mitigate or otherwise manage conflicts of
interest with respect to affiliated service providers, there can be no
guarantee that such policies and procedures (which may be modified or
terminated at any time in PIMCO's sole discretion) will be successful.
                        
Credit Default Swaps Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Credit Default Swaps Risk
Credit default swap agreements may involve greater risks than if the
Fund had invested in the reference obligation directly since, in addition
to general market risks, credit default swaps are subject to leverage risk,
illiquidity risk, counterparty risk and credit risk. A buyer generally also
will lose its investment and recover nothing should no credit event occur
and the swap is held to its termination date. If a credit event were to
occur, the value of any deliverable obligation received by the seller (if
any), coupled with the upfront or periodic payments previously received,
may be less than the full notional value it pays to the buyer, resulting in
a loss of value to the seller. When the Fund acts as a seller of a credit
default swap, it is exposed to many of the same risks of leverage. As the
seller, the Fund would receive a stream of payments over the term of the
swap agreement provided that no event of default has occurred with
respect to the referenced debt obligation upon which the swap is based.
The Fund would effectively add leverage to its portfolio because, if a
default occurs, the stream of payments may stop and the Fund may be
obligated to pay the buyer the full notional value of the reference
obligation.
Although the Fund may seek to realize gains by selling credit default
swaps that increase in value, to realize gains on selling credit default
swaps, an active secondary market for such instruments must exist or
the Fund must otherwise be able to close out these transactions at
advantageous times. In addition to the risk of losses described above, if
no such secondary market exists or the Fund is otherwise unable to
close out these transactions at advantageous times, selling credit
default swaps may not be profitable for the Fund.
The market for credit default swaps has become more volatile as the
creditworthiness of certain counterparties has been questioned and/or
downgraded. The Fund will be subject to credit risk with respect to the
counterparties to the credit default swap contract (whether a clearing
corporation or another third party). If a counterparty’s credit becomes
significantly impaired, multiple requests for collateral posting in a short
period of time could increase the risk that the Fund may not receive
adequate collateral. The Fund may exit its obligations under a credit
default swap only by terminating the contract and paying applicable
breakage fees, or by entering into an offsetting credit default swap
position, which may cause the Fund to incur more losses.
                        
Management Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Management Risk
The Fund is subject to management risk because it is an actively
managed investment portfolio. PIMCO and each individual portfolio
manager will apply investment techniques and risk analysis in making
investment decisions for the Fund, but there can be no guarantee that
these decisions will produce the desired results. Certain securities or
other instruments in which the Fund seeks to invest may not be
available in the quantities desired, including in circumstances where
other funds for which PIMCO acts as investment adviser, including funds
with names, investment objectives and policies, and/or portfolio
management teams, similar to the Fund, are seeking to invest in the
same or similar securities or instruments. In addition, regulatory
restrictions, actual or potential conflicts of interest or other
considerations may cause PIMCO to restrict or prohibit participation in
certain investments. In such circumstances, PIMCO or the individual
portfolio managers may determine to purchase other securities or
instruments as substitutes. Such substitute securities or instruments may
not perform as intended, which could result in losses to the Fund. To the
extent the Fund employs strategies targeting perceived pricing
inefficiencies, arbitrage strategies or similar strategies, it is subject to the
risk that the pricing or valuation of the securities and instruments
involved in such strategies may change unexpectedly, which may result
in reduced returns or losses to the Fund. The Fund is also subject to the
risk that deficiencies in the internal systems or controls of PIMCO or
another service provider will cause losses for the Fund or hinder Fund
operations. For example, trading delays or errors (both human and
systemic) could prevent the Fund from purchasing a security expected to
appreciate in value. Please refer to “Portfolio Managers – Conflicts of
Interest” in the SAI for further information. Additionally, actual or
perceived conflicts of interest, legislative, regulatory, or tax restrictions,
policies or developments may affect the investment techniques available
to PIMCO and each individual portfolio manager in connection with
managing the Fund and may also adversely affect the ability of the Fund
to achieve its investment objectives. There also can be no assurance that
all of the personnel of PIMCO will continue to be associated with
PIMCO for any length of time. The loss of services of one or more key
employees of PIMCO could have an adverse impact on the Fund’s ability
to realize its investment objectives.
In addition, the Fund may rely on various third-party sources to calculate
its NAV. As a result, the Fund is subject to certain operational risks
associated with reliance on service providers and service providers’ data
sources. In particular, errors or systems failures and other technological
issues may adversely impact the Fund’s calculations of its NAV, and such
NAV calculation issues may result in inaccurately calculated NAVs,
delays in NAV calculation and/or the inability to calculate NAV over
extended periods. The Fund may be unable to recover any losses
associated with such failures.
                        
Market Disruptions Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Market Disruptions Risk
The Fund is subject to investment and operational risks associated with
financial, economic and other global market developments and
disruptions, including those arising from war, military conflicts, terrorism,
social unrest, recessions, supply chain disruptions, market manipulation,
government interventions, defaults and shutdowns, political changes or
diplomatic developments, public health emergencies (such as the spread
of infectious diseases, pandemics and epidemics), bank failures,
natural/environmental disasters, climate change and climate related
events which can all negatively impact the securities markets, interest
rates, auctions, secondary trading, ratings, credit risk, inflation, deflation
and other factors relating to the Fund’s investments or the Investment
Manager’s operations and the value of an investment in the Fund, its
distributions and its returns. These events can also impair the
technology and other operational systems upon which the Fund’s
service providers, including PIMCO as the Fund’s investment adviser,
rely, and could otherwise disrupt the Fund’s service providers’ ability to
fulfill their obligations to the Fund. Furthermore, events involving limited
liquidity, defaults, non-performance or other adverse developments that
affect financial institutions or the financial services industry generally, or
concerns or rumors about any events of these kinds or other similar
risks, have in the past and may in the future lead to market-wide
liquidity problems.
                        
Investments in REITs Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Investments in REITs Risk
REITs are pooled investment vehicles that own, and usually operate,
income-producing real estate. Some REITs also finance real estate. If a
REIT meets certain requirements, including distributing to shareholders
substantially all of its taxable income (other than net capital gains), then
it is not typically taxed on the income distributed to shareholders.
REITs are sometimes informally characterized as: equity REITs, mortgage
REITs and hybrid REITs. Equity REITs invest the majority of their assets
directly in real property. They derive their income primarily from rents
received and any profits on the sale of their properties. Equity REITs can
also realize capital gains by selling properties that have appreciated in
value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive most of their income from mortgage interest
payments. As its name suggests, hybrid REITs combine characteristics of
both equity REITs and mortgage REITs.
An investment in a REIT, or in a real estate linked derivative instrument
linked to the value of a REIT, is subject to the risks that impact the value
of the underlying properties of the REIT. These risks include loss to
casualty or condemnation, and changes in supply and demand, interest
rates, zoning laws, regulatory limitations on rents, property taxes and
operating expenses. Real estate income and values may also be affected
by demographic trends, such as population shifts or changing tastes,
preferences (such as remote work arrangements) and social values.
Other factors that may adversely affect REITs include poor performance
by management of the REIT, changes to the tax laws, or failure by the
REIT to qualify for favorable tax treatment. The securities of REITs
involve greater risks than those associated with larger, more established
companies and may be subject to more abrupt or erratic price
movements because of interest rate changes, economic conditions and
real estate market conditions (such as oversupply of real estate for rent
or sale or vacancies, potentially for extended periods), reduced demand
for commercial and office space as well as increased maintenance or
tenant improvement costs and costs to convert properties for other
uses, and default risk and credit quality of tenants and borrowers and
other factors. For example, the value of these securities may decline
when interest rates rise and will also be affected by the real estate
market and by the management or development of the underlying
properties. The underlying properties may be subject to mortgage loans,
which may also be subject to the risks of default. REITs are also subject
to default by borrowers and self-liquidation, and are heavily dependent
on cash flow. Some REITs lack diversification because they invest in a
limited number of properties, a narrow geographic area, or a single type
of property. Mortgage REITs may be impacted by the quality of the
credit extended.
                        
Other Investment Companies Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Other Investment Companies Risk
When investing in an investment company, the Fund will generally bear
its ratable share of that investment company’s expenses and would
remain subject to payment of the Fund’s investment management fees
and other expenses with respect to assets so invested. Common
Shareholders would therefore be subject to duplicative expenses to the
extent the Fund invests in other investment companies. In addition,
these other investment companies may utilize leverage, in which case
an investment would subject a Fund to additional risks associated with
leverage. Due to its own financial interest or other business
considerations, the Investment Manager may choose to invest a portion
of a Fund’s assets in investment companies sponsored or managed by
the Investment Manager or its related parties in lieu of investments by a
Fund directly in portfolio securities, or may choose to invest in such
investment companies over investment companies sponsored or
managed by others. Participation in a cash sweep program where the
Fund's uninvested cash balance is used to purchase shares of affiliated
or unaffiliated money market funds or cash management pooled
investment vehicles at the end of each day subjects the Fund to the risks
associated with the underlying money market funds or cash
management pooled investment vehicles, including liquidity risk. As a
shareholder of a money market fund or cash management pooled
investment vehicle, the Fund would indirectly bear the fees and
expenses of the underlying fund or account which are in addition to the
fees the Fund pays its service providers. Applicable law may limit a
Fund’s ability to invest in other investment companies.
                        
Risk Retention Investment Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Risk Retention Investment Risk
The Fund may invest in risk retention tranches of commercial
mortgage-backed securities (“CMBS”) or other eligible securitizations, if
any (“risk retention tranches”), which are eligible residual interests
typically held by the sponsors of such securitizations pursuant to
the final rules implementing the credit risk retention requirements of
Section 941 of the Dodd-Frank Act (the “U.S. Risk Retention Rules”). In
the case of CMBS transactions, for example, the U.S. Risk Retention
Rules permit all or a portion of the retained credit risk associated with
certain securitizations (i.e., retained risk) to be held by an unaffiliated
“third party purchaser,” such as the Fund, if, among other requirements,
the third-party purchaser holds its retained interest, unhedged, for at
least five years following the closing of the CMBS transaction, after
which it is entitled to transfer its interest in the securitization to another
person that meets the requirements for a third-party purchaser. Even
after the required holding period has expired, due to the generally
illiquid nature of such investments, no assurance can be given as to
what, if any, exit strategies will ultimately be available for any given
position.
In addition, there is limited guidance on the application of the final
U.S. Risk Retention Rules to specific securitization structures. There can
be no assurance that the applicable federal agencies charged with the
implementation of the final U.S. Risk Retention Rules (the Federal
Deposit Insurance Corporation, the Comptroller of the Currency, the
Federal Reserve Board, the SEC, the Department of Housing and Urban
Development, and the Federal Housing Finance Agency) could not take
positions in the future that differ from the interpretation of such rules
taken or embodied in such securitizations, or that the final U.S. Risk
Retention Rules will not change.
Furthermore, in situations where the Fund invests in risk retention
tranches of securitizations structured by third parties, the Fund may be
required to execute one or more letters or other agreements, the exact
form and nature of which will vary (each, a “Risk Retention
Agreement”) under which it will make certain undertakings designed to
ensure such securitization complies with the final U.S. Risk Retention
Rules. Such Risk Retention Agreements may include a variety of
representations, warranties, covenants and other indemnities, each of
which may run to various transaction parties. If the Fund breaches any
undertakings in any Risk Retention Agreement, it will be exposed to
claims by the other parties thereto, including for any losses incurred as a
result of such breach, which could be significant and exceed the value of
the Fund’s investments.
                        
Platform Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Platform Risk
The Alt Lending ABS in which the Fund may invest are typically not listed
on any securities exchange and not registered under the Securities Act.
In addition, the Fund anticipates that these instruments may only be
sold to a limited number of investors and may have a limited or
non-existent secondary market. Accordingly, the Fund currently expects
that certain of the investments it may make in Alt Lending ABS will face
heightened levels of liquidity risk. Although currently there is generally
no reliable, active secondary market for certain Alt Lending ABS, a
secondary market for these Alt Lending ABS may develop. If the Fund
purchases Alt Lending ABS on an alternative lending platform, the Fund
will have the right to receive principal and interest payments due on
loans underlying the Alt Lending ABS only if the platform servicing the
loans receives the borrower’s payments on such loans and passes such
payments through to the Fund. If a borrower is unable or fails to make
payments on a loan for any reason, the Fund may be greatly limited in
its ability to recover any outstanding principal or interest due, as (among
other reasons) the Fund may not have direct recourse against the
borrower or may otherwise be limited in its ability to directly enforce its
rights under the loan, whether through the borrower or the platform
through which such loan was originated, the loan may be unsecured or
under-collateralized and/or it may be impracticable to commence a legal
proceeding against the defaulting borrower.
The Fund may have limited knowledge about the underlying loans and
is dependent upon the platform for information regarding underlying
loans. Although PIMCO may conduct diligence on the platforms, the
Fund generally does not have the ability to independently verify the
information provided by the platforms, other than payment information
regarding loans underlying the Alt Lending ABS owned by the Fund,
which the Fund observes directly as payments are received. With respect
to Alt Lending ABS that the Fund purchases in the secondary market
(i.e., not directly from an alternative lending platform), the Fund may not
perform the same level of diligence on such platform or at all. The Fund
may not review the particular characteristics of the loans collateralizing
an Alt Lending ABS, but rather negotiate in advance with platforms the
general criteria of the underlying loans. As a result, the Fund is
dependent on the platforms’ ability to collect, verify and provide
information to the Fund about each loan and borrower.
The Fund relies on the borrower’s credit information, which is provided
by the platforms. However, such information may be out of date,
incomplete or inaccurate and may, therefore, not accurately reflect the
borrower’s actual creditworthiness. Platforms may not have an
obligation to update borrower information, and, therefore, the Fund
may not be aware of any impairment in a borrower’s creditworthiness
subsequent to the making of a particular loan. The platforms’ credit
decisions and scoring models may be based on algorithms that could
potentially contain programming or other errors or prove to be
ineffective or otherwise flawed. This could adversely affect loan pricing
data and approval processes and could cause loans to be mispriced or
misclassified, which could ultimately have a negative impact on the
Fund’s performance.
In addition, the underlying loans, in some cases, may be affected by the
success of the platforms through which they are facilitated. Therefore,
disruptions in the businesses of such platforms may also negatively
impact the value of the Fund’s investments. In addition, disruption in the
business of a platform could limit or eliminate the ability of the Fund to
invest in loans originated by that platform, and therefore the Fund could
lose some or all of the benefit of its diligence effort with respect to that
platform.
Platforms are for-profit businesses that, as a general matter, generate
revenue by collecting fees on funded loans from borrowers and by
assessing a loan servicing fee on investors, which may be a fixed annual
amount or a percentage of the loan or amounts collected. This business
could be disrupted in multiple ways; for example, a platform could file
for bankruptcy or a platform might suffer reputational harm from
negative publicity about the platform or alternative lending more
generally and the loss of investor confidence in the event that a loan
facilitated through the platform is not repaid and the investor loses
money on its investment. Many platforms and/or their affiliates have
incurred operating losses since their inception and may continue to
incur net losses in the future, particularly as their businesses grow and
they incur additional operating expenses Platforms may also be forced
to defend legal action taken by regulators or governmental bodies.
Alternative lending is a newer industry operating in an evolving legal
environment. Platforms may be subject to risk of litigation alleging
violations of law and/or regulations, including, for example, consumer
protection laws, whether in the United States or in foreign jurisdictions.
Platforms may be unsuccessful in defending against such lawsuits or
other actions and, in addition to the costs incurred in fighting any such
actions, platforms may be required to pay money in connection with the
judgments, settlements or fines or may be forced to modify the terms of
its borrower loans, which could cause the platform to realize a loss or
receive a lower return on a loan than originally anticipated. Platforms
may also be parties to litigation or other legal action in an attempt to
protect or enforce their rights or those of affiliates, including intellectual
property rights, and may incur similar costs in connection with any such
efforts.
The Fund’s investments in Alt Lending ABS may expose the Fund to the
credit risk of the issuer. Generally, such instruments are unsecured
obligations of the issuer; an issuer that becomes subject to bankruptcy
proceedings may be unable to make full and timely payments on its
obligations to the Fund, even if the payments on the underlying loan or
loans continue to be made timely and in full. In addition, when the Fund
owns Alt Lending ABS, the Fund and its custodian generally does not
have a contractual relationship with, or personally identifiable
information regarding, individual borrowers, so the Fund will not be
able to enforce underlying loans directly against borrowers and may not
be able to appoint an alternative servicing agent in the event that a
platform or third-party servicer, as applicable, ceases to service the
underlying loans. Therefore, the Fund is more dependent on the platform
for servicing than if the Fund had owned whole loans through the
platform. Where such interests are secured, the Fund relies on the
platform to perfect the Fund’s security interest. In addition, there may be
a delay between the time the Fund commits to purchase an instrument
issued by a platform, its affiliate or a special purpose entity sponsored
by the platform or its affiliate and the issuance of such instrument and,
during such delay, the funds committed to such an investment will not
earn interest on the investment nor will they be available for investment
in other alternative lending-related instruments, which will reduce the
effective rate of return on the investment. The Fund’s investments in Alt
Lending ABS may be illiquid.
                        
Regulatory Risk Commodity Pool Operator [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Regulatory Risk—Commodity Pool Operator
The CFTC has adopted regulations that subject registered investment
companies and their investment advisers to regulation by the CFTC if
the registered investment company invests more than a prescribed level
of its liquidation value in futures, options on futures or commodities,
swaps, or other financial instruments regulated under the CEA and the
rules thereunder (“commodity interests”), or if the Fund markets itself
as providing investment exposure to such instruments.  The Investment
Manager is registered with the CFTC as a CPO. However, with respect to
the Fund, the Investment Manager has claimed an exclusion from
registration as a CPO pursuant to CFTC Rule 4.5. For the Investment
Manager to remain eligible for this exclusion, the Fund must comply
with certain limitations, including limits on its ability to use any
commodity interests and limits on the manner in which the Fund holds
out its use of such commodity interests. These limitations may restrict
the Fund’s ability to pursue its investment objectives and strategies
increase the costs of implementing its strategies, result in higher
expenses for the Fund, and/or adversely affect the Fund’s total return. To
the extent the Investment Manager becomes ineligible for this exclusion
from CFTC regulation, the Investment Manager may consider steps in
order to continue to qualify for exemption from CFTC regulation, or may
determine to operate the Fund subject to CFTC regulation.
                        
Call Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Call Risk
Call risk refers to the possibility that an issuer may exercise its right to
redeem a fixed income security earlier than expected. 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 in
which the Fund has invested, the Fund may not recoup the full amount
of its initial investment or may not realize the full anticipated earnings
from the investment and may be forced to reinvest in lower-yielding
securities, securities with greater credit risks or securities with other, less
favorable features.
                        
Derivatives Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Derivatives Risk
The Fund may, but is not required to, utilize a variety of derivative
instruments (both long and short positions) for investment or risk
management purposes. Derivatives or other similar instruments (referred
to collectively as “derivatives”) are financial contracts whose value
depends on, or is derived from, the value of an underlying asset,
reference rate or index. For example, the Fund may use derivative
instruments for purposes of increasing liquidity, providing efficient
portfolio management, broadening investment opportunities (including
taking short or negative positions), implementing a tax or cash
management strategy, gaining exposure to a particular security or
segment of the market, modifying the effective duration of the Fund’s
portfolio investments and/or enhancing total return. Investments in
derivatives may take the form of buying and/or writing (selling)
derivatives, and/or the Fund may otherwise become an obligor under a
derivatives transaction. These transactions may produce current income
in the form of premiums or other returns for the Fund (which may
support, constitute and/or increase the distributions paid by, or the yield
of, the Fund) but create the risk of losses that can significantly exceed
such current income or other returns. For example, the premium received
for writing a put option may be dwarfed by the losses the Fund may
incur if the put option is exercised, and derivative transactions where
the Fund is an obligor can produce an up-front benefit, but the potential
for leveraged losses. The distributions, or distribution rate, paid by the
Fund should not be viewed as the total returns or overall performance
of the Fund. These strategies may also produce adverse tax
consequences (for example, the Fund’s income and gain-generating
strategies may generate current income and gains taxable as ordinary
income) and limit the Fund’s opportunity to profit or otherwise benefit
from certain gains. The Fund may enter into opposing derivative
transactions, or otherwise take opposing positions. Such transactions
can generate distributable gains (which, as noted elsewhere, may be
taxed as ordinary income) and create the risk of losses and NAV
declines.
The Fund may engage in investment strategies, including the use of
derivatives, to, among other things, generate current, distributable
income, even if such strategies could potentially result in declines in the
Fund’s net asset value. The Fund’s income and gain-generating
strategies, including certain derivatives strategies, may generate current
income and gains taxable as ordinary income sufficient to support
distributions, even in situations when the Fund has experienced a
decline in net assets due to, for example, adverse changes in the broad
U.S. or non-U.S. securities markets or the Fund’s portfolio of
investments, or arising from its use of derivatives. Consequently, Fund
shareholders may receive distributions subject to tax at ordinary income
rates at a time when their investment in the Fund has declined in value,
which may be economically similar to a taxable return of capital.
The use of derivatives involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional investments. Derivatives may increase market exposure and
are subject to a number of risks, including leverage risk, liquidity risk
(which may be heightened for highly-customized derivatives), interest
rate risk, market risk, counterparty (including credit) risk, operational
risk (such as documentation issues, settlement issues and systems
failures), legal risk (such as insufficient documentation, insufficient
capacity or authority of a counterparty, and issues with the legality or
enforceability of a contract), counterparty risk, tax risk and management
risk, as well as risks arising from changes in applicable requirements,
risks arising from margin requirements and risks arising from mispricing
or valuation complexity. They also involve the risk that changes in the
value of a derivative instrument may not correlate perfectly with the
underlying asset, rate or index. By investing in a derivative instrument,
the Fund could lose more than the initial amount invested, and
derivatives may increase the volatility of the Fund, especially in unusual
or extreme market conditions. Certain derivatives have the potential for
unlimited loss, regardless of the size of the initial investment. The 1940
Act and related rules no longer require asset segregation for derivatives
transactions, however asset segregation and posting of collateral may
still be utilized for risk management or other purposes. The Fund may be
required to hold additional cash or sell other investments in order to
obtain cash to close out a position and changes in the value of a
derivative may also create margin delivery or settlement payment
obligations for the Fund. Also, suitable derivative transactions may not
be available in all circumstances and there can be no assurance that the
Fund will engage in these transactions to reduce exposure to other risks
when that would be beneficial or that, if used, such strategies will be
successful. The Fund’s use of derivatives may increase or accelerate the
amount of taxes payable by Common Shareholders.
Non-centrally-cleared over-the counter (“OTC”) derivatives are also
subject to the risk that a counterparty to the transaction will not fulfill
its contractual obligations to the other party, as many of the protections
afforded to centrally-cleared derivative transactions might not be
available for non-centrally-cleared OTC derivatives. The primary credit
risk on derivatives that are exchange-traded or traded through a central
clearing counterparty resides with the Fund’s clearing broker, or the
clearinghouse itself.
Participation in the markets for derivative instruments also involves
investment risks and transaction costs to which the Fund may not be
subject absent the use of these strategies. The skills needed to
successfully execute derivative strategies may be different from those
needed for other types of transactions. If the Fund incorrectly forecasts
the value and/or credit-worthiness of securities, currencies, interest
rates, counterparties or other economic factors involved in a derivative
transaction, the Fund might have been in a better position if the Fund
had not entered into such derivative transaction. In evaluating the risks
and contractual obligations associated with particular derivative
instruments, it is important to consider that certain derivative
transactions may be modified or terminated only by mutual consent of
the Fund and its counterparty.
Therefore, it may not be possible for the Fund to modify, terminate, or
offset the Fund’s obligations or the Fund’s exposure to the risks
associated with a derivative transaction prior to its scheduled
termination or maturity date, which may create a possibility of increased
volatility and/or decreased liquidity to the Fund. Hedges are sometimes
subject to imperfect matching between the derivative and the
underlying instrument, and there can be no assurance that the Fund’s
hedging transactions will be effective. Derivatives used for hedging or
risk management may not operate as intended and may expose the
Fund to additional risks. In such case, the Fund may lose money.
Because the markets for certain derivative instruments (including
markets located in foreign countries) are relatively new and still
developing, appropriate derivative transactions may not be available in
all circumstances for risk management or other purposes. Upon the
expiration of a particular contract, the Fund may wish to retain the
Fund’s position in the derivative instrument by entering into a similar
contract, but may be unable to do so if the counterparty to the original
contract is unwilling to enter into the new contract and no other
appropriate counterparty can be found. When such markets are
unavailable, the Fund will be subject to increased liquidity and
investment risk.
The Fund may enter into opposite sides of interest rate swap and other
derivatives for the principal purpose of generating distributable gains on
the one side (characterized as ordinary income for tax purposes) that
are not part of the Fund’s duration or yield curve management
strategies (“paired swap transactions”), and with a substantial
possibility that the Fund will experience a corresponding capital loss
and decline in NAV with respect to the opposite side transaction (to the
extent it does not have corresponding offsetting capital gains).
Consequently, Common Shareholders may receive distributions and owe
tax on amounts that are effectively a taxable return of the shareholder’s
investment in the Fund, at a time when their investment in the Fund has
declined in value, which tax may be at ordinary income rates. The tax
treatment of certain derivatives in which the Fund invests may be
unclear and thus subject to recharacterization. Any recharacterization of
payments made or received by the Fund pursuant to derivatives
potentially could affect the amount, timing or character of Fund
distributions. In addition, the tax treatment of such investment
strategies may be changed by regulation or otherwise.
When a derivative is used as a hedge against a position that the Fund
holds, any loss generated by the derivative generally should be
substantially offset by gains on the hedged investment, and vice versa.
Although hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. Hedges are sometimes subject to imperfect matching
between the derivative and the underlying instrument, and there can be
no assurance that the Fund’s hedging transactions will be effective.
Derivatives used for hedging or risk management may not operate as
intended or may expose the Fund to additional risks. In addition,
derivatives used for hedging may partially protect the Fund from the
risks they were intended to hedge yet not fully mitigate the impact of
such risks. The regulation of the derivatives markets has increased over
the past several years, and additional future regulation of the derivatives
markets may make derivatives more costly, may limit the availability or
reduce the liquidity of derivatives, or may otherwise adversely affect the
value or performance of derivatives. Any such adverse future
developments could impair the effectiveness or raise the costs of the
Fund’s derivative transactions, impede the employment of the Fund’s
derivatives strategies, or adversely affect the Fund’s performance and
cause the Fund to lose value.
                        
Valuation Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Valuation Risk
Certain securities in which the Fund invests may be less liquid and more
difficult to value than other types of securities. Investments for which
market quotations are not readily available are valued at fair value as
determined in good faith pursuant to Rule 2a-5 under the 1940 Act. Fair
value pricing may require subjective determinations about the value of a
security or other asset. As a result, there can be no assurance that fair
value pricing will result in adjustments to the prices of securities or other
assets or that fair value pricing will reflect actual market value, and it is
possible that the fair value determined for a security or other asset will
be materially different from quoted or published prices, from the prices
used by others for the same security or other asset and/or from the
value that actually could be or is realized upon the sale of that security
or other asset.
                        
Market Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Market Risk
The market price of securities owned by the Fund may go up or down,
sometimes rapidly or unpredictably. Securities may decline in value due
to factors affecting securities markets generally or particular industries
or companies represented in the securities markets. The value of a
security may decline due to general market conditions that are not
specifically related to a particular company, such as real or perceived
adverse economic conditions, changes in the general outlook for
corporate earnings, changes in inflation, interest or currency rates,
financial system instability, adverse changes to credit markets or
adverse investor sentiment generally. The value of a security may also
decline due to factors that affect a particular industry or industries, such
as labor shortages or increased production costs and competitive
conditions within an industry. During a general downturn in the
securities markets, multiple asset classes may decline in value
simultaneously even if the performance of those asset classes is not
otherwise historically correlated. Investments may also be negatively
impacted by market disruptions and by attempts by other market
participants to manipulate the prices of particular investments. Equity
securities generally have greater price volatility than fixed income
securities. Credit ratings downgrades may also negatively affect
securities held by the Fund. Even when markets perform well, there is no
assurance that the investments held by the Fund will increase in value
along with the broader market.
In addition, market risk includes the risk that geopolitical and other
events will disrupt the economy on a national or global level. For
instance, war, terrorism, social unrest, recessions, supply chain
disruptions, market manipulation, government defaults, government
shutdowns, political changes, diplomatic developments or the
imposition of sanctions and other similar measures, public health
emergencies (such as the spread of infectious diseases, pandemics and
epidemics), natural/environmental disasters, climate-change and climate
related events can all negatively impact the securities markets, which
could cause the Fund to lose value. These events could reduce consumer
demand or economic output, result in market closures, changes in
interest rates, inflation/deflation, travel restrictions or quarantines, and
significantly adversely impact the economy.
As computing technology and data analytics continually advance there
has been an increasing trend towards machine driven and artificially
intelligent trading systems, particularly providing such systems with
increasing levels of autonomy in trading decisions. Regulators of
financial markets have become increasingly focused on the potential
impact of artificial intelligence on investment activities and may issue
regulations that are intended to affect the use of artificial technology in
trading activities. Any such regulations may not have the intended affect
on financial markets. Moreover, advancements in artificial intelligence
and other technologies may suffer from the introduction of errors,
defects or security vulnerabilities which can go undetected. The
potential speed of such trading and technologies may exacerbate the
impact of any such flaws, particularly where such flaws are exploited by
other artificially intelligent systems and may act to impair or prevent the
intervention of a human control.
The current contentious domestic political environment, as well as
political and diplomatic events within the United States and abroad,
such as the U.S. government’s inability at times to agree on a long-term
budget and deficit reduction plan, has in the past resulted, and may in
the future result, in a government shutdown or otherwise adversely
affect the U.S. regulatory landscape, the general market environment
and/or investor sentiment, which could have an adverse impact on the
Fund’s investments and operations. Additional and/or prolonged
U.S. federal government shutdowns may affect investor and consumer
confidence and may adversely impact financial markets and the broader
economy, perhaps suddenly and to a significant degree. Governmental
and quasi-governmental authorities and regulators throughout the
world have previously responded to serious economic disruptions with a
variety of significant fiscal and monetary policy changes, including but
not limited to, direct capital infusions into companies, new monetary
programs and dramatically lower interest rates. An unexpected or
sudden reversal of these policies, or the ineffectiveness of these policies,
could increase volatility in securities markets, which could adversely
affect the Fund’s investments. Any market disruptions could also prevent
the Fund from executing advantageous investment decisions in a timely
manner. Funds that have focused their investments in a region enduring
geopolitical market disruption will face higher risks of loss, although the
increasing interconnectivity between global economies and financial
markets can lead to events or conditions in one country, region or
financial market adversely impacting a different country, region or
financial market. Thus, investors should closely monitor current market
conditions to determine whether the Fund meets their individual
financial needs and tolerance for risk.
During inflationary price movements, fixed income securities markets
may experience heightened levels of interest rate, volatility and liquidity
risk. Interest rate increases in the future could cause the value of a fund
that invests in fixed income securities to decrease.
Interest rate increases and other market events have the potential to
adversely impact real estate values and real estate-related asset prices,
which could, by extension, adversely impact the value of other
investments, such as loans, securitized debt and other fixed income
securities. Such an impact could materialize in one real estate sector and
not another, or in a different manner in different real estate sectors.
Examples of the current risks faced by real estate-related assets include:
tenant vacancy rates; increase in tenant turnover and tenant
concentration; headwinds, delinquencies and difficulties in collecting
rents and other payments faced by owners of real estate (which
increases the risk of owners being unable to pay or otherwise defaulting
on their own borrowings and obligations); decline in property values;
increase in inflation, upkeep costs and other expenses; lowered rent for
many properties; and concentrated ownership of certain types of
properties.
Exchanges and securities markets may close early, close late or issue
trading halts on specific securities, which may result in, among other
things, the Fund being unable to buy or sell certain securities or financial
instruments at an advantageous time or accurately price its portfolio
investments.
                        
Confidential Information Access Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Confidential Information Access Risk
In managing the Fund (and other PIMCO clients), PIMCO may from time
to time have the opportunity to receive material, non-public information
(“Confidential Information”) about the issuers of certain investments,
including, without limitation, senior floating rate loans, other loans and
related investments being considered for acquisition by the Fund or held
in the Fund’s portfolio. For example, an issuer of privately placed loans
considered by the Fund may offer to provide PIMCO with financial
information and related documentation regarding the issuer that is not
publicly available. Pursuant to applicable policies and procedures,
PIMCO may (but is not required to) seek to avoid receipt of Confidential
Information from the issuer so as to avoid possible restrictions on its
ability to purchase and sell investments on behalf of the Fund and other
clients to which such Confidential Information relates. In such
circumstances, the Fund (and other PIMCO clients) may be
disadvantaged in comparison to other investors, including with respect
to the price the Fund pays or receives when it buys or sells an
investment. Further, PIMCO’s and the Fund’s abilities to assess the
desirability of proposed consents, waivers or amendments with respect
to certain investments may be compromised if they are not privy to
available Confidential Information. PIMCO may also determine to
receive such Confidential Information in certain circumstances under its
applicable policies and procedures. If PIMCO intentionally or
unintentionally comes into possession of Confidential Information, it
may be unable, potentially for a substantial period of time, to purchase
or sell investments to which such Confidential Information relates.
                        
Liquidity Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Liquidity Risk
Liquidity risk exists when particular investments are difficult to purchase
or sell. Illiquid investments are investments that the Fund reasonably
expects cannot be sold or disposed of in current market conditions in
seven calendar days or less without the sale or disposition significantly
changing the market value of the investment. Illiquid investments may
become harder to value, especially in changing markets. The Fund’s
investments in illiquid investments may reduce the returns of the Fund
because it may be unable to sell the illiquid investments at an
advantageous time or price or possibly require the Fund to dispose of
other investments at unfavorable times or prices in order to satisfy its
obligations, which could prevent the Fund from taking advantage of
other investment opportunities. Additionally, the market for certain
investments may become illiquid under adverse market or economic
conditions independent of any specific adverse changes in the
conditions of a particular issuer. Bond markets have consistently grown
over the past three decades while the capacity for traditional dealer
counterparties to engage in fixed income trading has not kept pace and
in some cases has decreased. As a result, dealer inventories of corporate
bonds, which provide a core indication of the ability of financial
intermediaries to “make markets,” are at or near historic lows in
relation to market size. Because market makers seek to provide stability
to a market through their intermediary services, a significant reduction
in dealer inventories could potentially lead to decreased liquidity and
increased volatility in the fixed income markets. Such issues may be
exacerbated during periods of economic uncertainty. To the extent that
the Fund’s principal investment strategies involve securities of
companies with smaller market capitalizations, foreign (non-U.S.)
securities, Rule 144A securities, illiquid sectors of fixed income
securities, derivatives or securities with substantial market and/or credit
risk, the Fund will tend to have greater exposure to liquidity risk.
Further fixed income securities with longer durations until maturity face
heightened levels of liquidity risk as compared to fixed income securities
with shorter durations until maturity. The risks associated with illiquid
instruments may be particularly acute in situations in which the Fund’s
operations require cash (such as in connection with repurchase offers)
and could result in the Fund borrowing to meet its short-term needs or
incurring losses on the sale of illiquid instruments. It may also be the
case that other market participants may be attempting to liquidate fixed
income holdings at the same time as the Fund, causing increased supply
in the market and contributing to liquidity risk and downward pricing
pressure. See “Principal Risks of the Fund - Valuation Risk.”
Liquidity risk also refers to the risk that the Fund may be required to
hold additional cash or sell other investments in order to obtain cash to
close out derivatives or meet the liquidity demands that derivatives can
create to make payments of margin, collateral, or settlement payments
to counterparties. The Fund may have to sell a security at a
disadvantageous time or price to meet such obligations.
The current direction of governments and regulators may have the effect
of reducing market liquidity, market resiliency and money supply, such
as through higher rates, tighter financial regulations and proposals
related to open-end fund liquidity that may prevent mutual funds and
exchange-traded funds from participating in certain markets.
The Alt Lending ABS in which the Fund invests are typically not listed on
any securities exchange and not registered under the Securities Act. In
addition, the Fund anticipates that these instruments may only be sold
to a limited number of investors and may have a limited or non-existent
secondary market. Accordingly, the Fund currently expects that certain
of its investments in Alt Lending ABS will face heightened levels of
liquidity risk. Although currently, there is generally no reliable, active
secondary market for certain Alt Lending ABS, a secondary market for
these alternative lending-related instruments may develop.
                        
Mortgage Related Derivative Instruments Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Mortgage-Related Derivative Instruments Risk
The Fund may engage in derivative transactions related to
mortgage-backed securities, including purchasing and selling
exchange-listed and OTC put and call options, futures and forwards on
mortgages and mortgage-backed securities. The Fund may also invest in
mortgage-backed securities credit default swaps, which include swaps
the reference obligation for which is a mortgage-backed security or
related index, such as the CMBX Index (a tradeable index referencing a
basket of commercial mortgage-backed securities) or the ABX (a
tradeable index referencing a basket of sub-prime mortgage-backed
securities). The Fund may invest in newly developed mortgage related
derivatives that may hereafter become available.
Derivative mortgage-backed securities (such as principal-only (“POs”),
interest-only (“IOs”) or inverse floating rate securities) are particularly
exposed to call and extension risks. Small changes in mortgage
prepayments can significantly impact the cash flows and the market
value of these derivative instruments. In general, the risk of faster than
anticipated prepayments adversely affects IOs, super floaters and
premium priced mortgage-backed securities. The risk of slower than
anticipated prepayments generally affects POs, floating-rate securities
subject to interest rate caps, support tranches and discount priced
mortgage-backed securities. In addition, particular derivative
instruments may be leveraged such that their exposure (i.e., price
sensitivity) to interest rate and/or prepayment risk is magnified.
Mortgage-related derivative instruments involve risks associated with
mortgage-related and other asset-backed instruments, privately-issued
mortgage-related securities, the mortgage market, the real estate
industry, derivatives and credit default swaps. See “Mortgage-Related
and Other Asset-Backed Instruments Risk,” “Privately-Issued
Mortgage-Related Securities Risk,” “Derivatives Risk,” and “Credit
Default Swaps Risk.”
Mortgage-related derivative instruments involve risks associated with
mortgage-related and other asset-backed instruments, privately-issued
mortgage-related securities, the mortgage market, the real estate
industry, derivatives and credit default swaps. See “Mortgage-Related
and Other Asset-Backed Instruments Risk,” “Privately-Issued
Mortgage-Related Securities Risk,” “Derivatives Risk,” and “Credit
Default Swaps Risk.”
                        
Senior Debt Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Senior Debt Risk
The Fund may be subject to greater levels of credit risk than funds that
do not invest in below investment grade senior debt. The Fund may also
be subject to greater levels of liquidity risk than funds that do not invest
in senior debt. Restrictions on transfers in loan agreements, a lack of
publicly available information and other factors may, in certain
instances, make senior debt more difficult to sell at an advantageous
time or price than other types of securities or instruments. Additionally,
if the issuer of senior debt prepays, the Fund will have to consider
reinvesting the proceeds in other senior debt or similar instruments that
may pay lower interest rates.
                        
Reinvestment Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Reinvestment Risk
Income from the Fund’s portfolio will decline if and when the Fund
invests the proceeds from matured, traded or called debt obligations at
market interest rates that are below the portfolio’s current earnings rate.
 For instance, during periods of declining interest rates, an issuer of debt
obligations may exercise an option to redeem securities prior to
maturity, forcing the Fund to invest in lower-yielding securities. The Fund
also may choose to sell higher yielding portfolio securities and to
purchase lower yielding securities to achieve greater portfolio
diversification, because the portfolio managers believe the current
holdings are overvalued or for other investment-related reasons. A
decline in income received by the Fund from its investments is likely to
have a negative effect on dividend levels and the market price, NAV
and/or overall return of the Common Shares.
                        
Anti Takeover Provisions [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Anti-Takeover Provisions
The Declaration and the Bylaws include provisions that could limit the
ability of other entities or persons to acquire control of the Fund or to
convert the Fund to open-end status.  These provisions in the
Declaration and the Bylaws could have the effect of depriving the
Common Shareholders of opportunities to sell their Common Shares at
a premium over the then-current market price of the Common Shares or
at NAV.
                        
Structured Investments Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Structured Investments Risk
Holders of structured products, including structured notes, credit-linked
notes and other types of structured products, bear the risks of the
underlying investments, index or reference obligation and are subject to
counterparty risk. The Fund may have the right to receive payments only
from the structured product, and generally does not have direct rights
against the issuer or the entity that sold the assets to be securitized.
While certain structured products enable the investor to acquire
interests in a pool of securities without the brokerage and other
expenses associated with directly holding the same securities, investors
in structured products generally pay their share of the structured
product’s administrative and other expenses. Although it is difficult to
predict whether the prices of indices and securities underlying
structured products will rise or fall, these prices (and, therefore, the
prices of structured products) are generally influenced by the same types
of political and economic events that affect issuers of securities and
capital markets generally. If the issuer of a structured product uses
shorter term financing to purchase longer term securities, the issuer may
be forced to sell its securities at below market prices if it experiences
difficulty in obtaining such financing, which may adversely affect the
value of the structured products owned by the Fund. Structured
products generally entail risks associated with derivative instruments.
                        
Zero Coupon Bonds Step Ups and Payment In Kind Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Zero-Coupon Bonds, Step-Ups and Payment-In-Kind Securities
Risk
The market prices of zero-coupon, step-ups and payment-in-kind
securities are generally more volatile than the prices of securities that
pay interest periodically and in cash, and are likely to respond to
changes in interest rates to a greater degree than other types of debt
securities with similar maturities and credit quality. Because
zero-coupon securities bear no interest, their prices are especially
volatile. And because zero-coupon bondholders do not receive interest
payments, the prices of zero-coupon securities generally fall more
dramatically than those of bonds that pay interest on a current basis
when interest rates rise. The market for zero-coupon and
payment-in-kind securities may suffer decreased liquidity. In addition, as
these securities may not pay cash interest, the Fund’s investment
exposure to these securities and their risks, including credit risk, will
increase during the time these securities are held in the Fund’s portfolio.
Further, to maintain its qualification for treatment as a RIC and to avoid
Fund-level U.S. federal income and/or excise taxes, the Fund is required
to distribute to its shareholders any income it is deemed to have
received in respect of such investments, notwithstanding that cash has
not been received currently, and the value of paid-in-kind interest.
Consequently, the Fund may have to dispose of portfolio securities
under disadvantageous circumstances to generate the cash, or may
have to leverage itself by borrowing the cash to satisfy this distribution
requirement. The required distributions, if any, would result in an
increase in the Fund’s exposure to these securities. Zero coupon bonds,
step-ups and payment-in-kind securities allow an issuer to avoid or
delay the need to generate cash to meet current interest payments and,
as a result, may involve greater credit risk than bonds that pay interest
currently or in cash. The Fund would be required to distribute the
income on these instruments as it accrues, even though the Fund will
not receive the income on a current basis or in cash. Thus, the Fund may
sell other investments, including when it may not be advisable to do so,
to make income distributions to its shareholders.
                        
Inflation Deflation Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Inflation/Deflation Risk
Inflation risk is the risk that the value of assets or income from the
Fund’s investments will be worth less in the future as inflation decreases
the value of payments at future dates. As inflation increases, the real
value of the Fund’s portfolio could decline. Inflation rates may change
frequently and significantly as a result of various factors, including
unexpected shifts in the domestic or global economy or changes in fiscal
or monetary policies. Deflation risk is the risk that prices throughout the
economy decline over time. Deflation may have an adverse effect on the
creditworthiness of issuers and may make issuer default more likely,
which may result in a decline in the value of the Fund’s portfolio and
Common Shares.
                        
Geopolitical Conflicts [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Geopolitical Conflicts
The occurrence of geopolitical conflicts, war or terrorist activities could
have adverse impacts on markets in various and unpredictable ways. For
example, following Russia’s large-scale invasion of Ukraine in February
2022, Russia, and other countries, persons and entities that were
viewed as having provided material aid to Russia’s aggression against
Ukraine, became the subject of economic sanctions and import and
export controls imposed by countries throughout the world, including
the United States. Such measures have had and may continue to have
an adverse effect on the Russian, Belarusian and other securities and
economies. Additional examples include, but are not limited to,
heightened concerns of trade disputes, which could result in increased
tariffs, trade restrictions or other retaliatory countermeasures. The
extent, duration and impact of geopolitical conflicts and related market
impacts are difficult to ascertain, but could be significant and could
have significant adverse effects on regional and global economies and
the markets for certain securities and commodities, such as oil, natural
gas, steel and aluminum, as well as other sectors, and on the Fund’s
investments.
                        
Collateralized Bond Obligations Collateralized Loan Obligations And Collateralized Debt Obligations Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Collateralized Bond Obligations, Collateralized Loan
Obligations and Collateralized Debt Obligations Risk
CBOs, CLOs and CDOs may charge management fees and
administrative expenses. For CBOs, CLOs and CDOs, the cash flows from
the trust are split into two or more portions, called tranches, varying in
risk and yield. The riskiest portion is the equity tranche which generally
bears losses in connection with the first defaults, if any, on the bonds or
loans in the trust. A senior tranche from a CLO, CBO and CDO trust
typically has higher credit ratings and lower yields than the underlying
securities. CLO tranches, CBO, and CDO, even senior ones, can
experience substantial losses due to actual defaults, increased sensitivity
to defaults due to collateral default and disappearance of protecting
tranches, market anticipation of defaults and aversion to CLO, CBO or
other CDO securities. The risks of an investment in a CBO, CLO or other
CDO vary depending on the type of collateral securities and the class of
the instrument in which the Fund invests, among other factors.
Normally, CLOs, CBOs and other CDOs are privately offered and sold,
and thus are not registered under the securities laws. Investments in
CLOs, CBOs and CDOs may be or become illiquid. In addition to the
normal risks associated with debt instruments (e.g., interest rate risk
and credit risk), CLOs, CBOs and CDOs carry additional risks including,
but not limited to: (i) the possibility that distributions from the collateral
will not be adequate to make interest or other payments; (ii) the risk
that the quality of the collateral may decline in value or default; (iii) the
risk that the Fund may invest in CBOs, CLOs or other CDOs that are
subordinate to other classes; and (iv) the risk that the complex structure
of the security may not be fully understood at the time of investment
and may produce disputes with the issuer or others and may produce
unexpected investment results.
                        
Market Discount Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Market Discount Risk
The price of the Fund’s Common Shares will fluctuate with market
conditions and other factors. If you sell your Common Shares, the price
received may be more or less than your original investment. The
Common Shares are designed for long-term investors and should not be
treated as trading vehicles. Shares of closed-end management
investment companies frequently trade at a discount from their NAV. The
Common Shares may trade at a price that is less than the offering price
for Common Shares issued pursuant to an offering. This risk may be
greater for investors who sell their Common Shares relatively shortly
after completion of an offering. The sale of Common Shares by the Fund
(or the perception that such sales may occur), particularly if sold at a
discount to the then current market price of the Common Shares, may
have an adverse effect on the market price of the Common Shares.
                        
Counterparty Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Counterparty Risk
The Fund will be subject to credit risk with respect to the counterparties
to the derivative contracts and other instruments entered into by the
Fund or held by special purpose or structured vehicles in which the Fund
invests. For example, if a bank at which the Fund or issuer has an
account fails, any cash or other assets in bank or custody accounts,
which may be substantial in size, could be temporarily inaccessible or
permanently lost by the Fund or issuer. In the event that the Fund enters
into a derivative transaction with a counterparty that subsequently
becomes insolvent or becomes the subject of a bankruptcy case, the
derivative transaction may be terminated in accordance with its terms
and the Fund’s ability to realize its rights under the derivative
instrument and its ability to distribute the proceeds could be adversely
affected. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in obtaining any
recovery (including recovery of any collateral it has provided to the
counterparty) in a dissolution, assignment for the benefit of creditors,
liquidation, winding-up, bankruptcy or other analogous proceeding. In
addition, in the event of the insolvency of a counterparty to a derivative
transaction, the derivative transaction would typically be terminated at
its fair market value. If the Fund is owed this fair market value in the
termination of the derivative transaction and its claim is unsecured, the
Fund will be treated as a general creditor of such counterparty and will
not have any claim with respect to any underlying security or asset. The
Fund may obtain only a limited recovery or may obtain no recovery in
such circumstances. Counterparty credit risk also includes the related
risk of having concentrated exposure to a single counterparty, which
may increase potential losses if the counterparty were to become
insolvent. While the Fund may seek to manage its counterparty risk by
transacting with a number of counterparties, concerns about the
solvency of, or a default by, one large market participant could lead to
significant impairment of liquidity and other adverse consequences for
other counterparties.
                        
Emerging Markets Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Emerging Markets Risk
Foreign (non-U.S.) investment risk may be particularly high to the extent
that the Fund invests in securities of issuers based in or doing business
in emerging market countries or invests in securities denominated in the
currencies of emerging market countries. Investing in securities of
issuers based in or doing business in emerging markets entails all of the
risks of investing in foreign securities noted above, but to a heightened
degree.
Investments in emerging market countries pose a greater degree of
systemic risk (i.e., the risk of a cascading collapse of multiple institutions
within a country, and even multiple national economies). The
inter-relatedness of economic and financial institutions within and
among emerging market economies has deepened over the years, with
the effect that institutional failures and/or economic difficulties that are
of initially limited scope may spread throughout a country, a region or
all or most emerging market countries. This may undermine any attempt
by the Fund to reduce risk through geographic diversification of its
portfolio.
There is a heightened possibility of imposition of withholding or other
taxes on interest or dividend income or capital gains generated from
emerging market securities. Governments of emerging market countries
may engage in confiscatory taxation or expropriation of income and/or
assets to raise revenues or to pursue a domestic political agenda. In the
past, emerging market countries have nationalized assets, companies
and even entire sectors, including the assets of foreign investors (like
the Fund), with inadequate or no compensation to the prior owners.
There can be no assurance that the Fund will not suffer a loss of any or
all of its investments, or interest or dividends thereon, due to adverse
fiscal or other policy changes in emerging market countries.
There is also a greater risk that an emerging market government may
take action that impedes or prevents the Fund from taking income
and/or capital gains earned in the local currency and converting into
U.S. dollars (i.e., “repatriating” local currency investments or profits).
Certain emerging market countries have sought to maintain foreign
exchange reserves and/or address the economic volatility and
dislocations caused by the large international capital flows by
controlling or restricting the conversion of the local currency into other
currencies. This risk tends to become more acute when economic
conditions otherwise worsen. There can be no assurance that if the Fund
earns income or capital gains in an emerging market currency or PIMCO
otherwise seeks to withdraw the Fund’s investments from a given
emerging market country, capital controls imposed by such country will
not prevent, or cause significant expense, or delay in, doing so.
Bankruptcy law and creditor reorganization processes may differ
substantially from those in the United States, resulting in greater
uncertainty as to the rights of creditors, the enforceability of such rights,
reorganization timing and the classification, seniority and treatment of
claims. In certain emerging market countries, although bankruptcy laws
have been enacted, the process for reorganization remains highly
uncertain. In addition, it may be impossible to seek legal redress against
an issuer that is a sovereign state.
Emerging market countries typically have less established regulatory,
disclosure, legal, accounting, recordkeeping and financial reporting
systems than those in more developed markets, which may increase the
potential for market manipulation or reduce the scope or quality of
financial information available to investors. Governments in emerging
market countries are often less stable and more likely to take extra-legal
action with respect to companies, industries, assets, or foreign
ownership than those in more developed markets. Moreover, it can be
more difficult for investors to bring litigation or enforce judgments
against issuers in emerging markets or for U.S. regulators to bring
enforcement actions, or obtain information needed to pursue or enforce
such judgments, against such issuers. In addition, foreign companies
with securities listed on U.S. exchanges may be delisted if they do not
meet U.S. accounting standards and auditor oversight requirements,
which may decrease the liquidity and value of the securities. The Fund
may also be subject to emerging markets risk if it invests in derivatives
or other securities or instruments whose value or return are related to
the value or returns of emerging markets securities.
Other heightened risks associated with emerging markets investments
include, without limitation: (i) risks due to less social, political and
economic stability; (ii) the smaller size of the market for such securities
and a lower volume of trading, resulting in a lack of liquidity and in
price volatility; (iii) certain national policies which may restrict the Fund’s
investment opportunities, including sanctions and restrictions on
investing in issuers or industries deemed sensitive to relevant national
interests and requirements that government approval be obtained prior
to investment by foreign persons; (iv) certain national policies that may
restrict the Fund’s repatriation of investment income, capital or the
proceeds of sales of securities, including temporary restrictions on
foreign capital remittances; (v) the lack of uniform accounting and
auditing standards and/or standards that may be significantly different
from the standards required in the United States; (vi) less publicly
available financial and other information regarding issuers; (vii)
potential difficulties in enforcing contractual obligations; and (viii)
higher rates of inflation, higher interest rates and other economic
concerns. The Fund may invest to a substantial extent in emerging
market securities that are denominated in local currencies, subjecting
the Fund to a greater degree of foreign currency risk. Also, investing in
emerging market countries may entail purchases of securities of issuers
that are insolvent, bankrupt or otherwise of questionable ability to
satisfy their payment obligations as they become due, subjecting the
Fund to a greater amount of credit risk and/or high yield risk. The
economy of some emerging markets may be particularly exposed to or
affected by a certain industry or sector, and therefore issuers and/or
securities of such emerging markets may be more affected by the
performance of such industries or sectors.
                        
Distribution Rate Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Distribution Rate Risk
Although the Fund may seek to maintain level distributions, the Fund’s
distribution rates may be affected by numerous factors, including but
not limited to changes in realized and projected market returns,
fluctuations in market interest rates, Fund performance, and other
factors. The Fund’s distributions may be comprised of a return of capital.
In general terms, a return of capital would occur where a Fund
distribution (or portion thereof) represents a return of a portion of your
investment, rather than net income or capital gains generated from your
investment during a particular period. There can be no assurance that a
change in market conditions or other factors will not result in a change
in the Fund’s distribution rate or that the rate will be sustainable in the
future.
For instance, during periods of low or declining interest rates, the Fund’s
distributable income and dividend levels may decline for many reasons.
For example, the Fund may have to deploy uninvested assets (whether
from sales of Fund shares, proceeds from matured, traded or called debt
obligations or other sources) in new, lower yielding instruments.
Additionally, payments from certain instruments that may be held by the
Fund (such as variable and floating rate securities) may be negatively
impacted by declining interest rates, which may also lead to a decline in
the Fund’s distributable income and dividend levels.
                        
Short Exposure Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Short Exposure Risk
The Fund’s short sales and short positions, if any, are subject to special
risks. A short sale involves the sale by the Fund of a security that it does
not own with the hope of purchasing the same security at a later date at
a lower price. The Fund may also enter into a short position through a
forward commitment or a short derivative position through a futures
contract or swap agreement. If the price of the security or derivative has
increased during this time, then the Fund will incur a loss equal to the
increase in price from the time that the short sale was entered into plus
any transaction costs (i.e., premiums and interest) paid to the
broker-dealer to borrow securities. Therefore, short sales involve the risk
that losses may be exaggerated, potentially losing more money than the
actual cost of the investment. By contrast, a loss on a long position
arises from decreases in the value of the security and is limited by the
fact that a security’s value cannot decrease below zero. By investing the
proceeds received from selling securities short, the Fund could be
deemed to be employing a form of leverage, which creates special risks.
The use of leverage may increase the Fund’s exposure to long security
positions and make any change in the Fund’s NAV greater than it would
be without the use of leverage. This could result in increased volatility of
returns. There is no guarantee that any leveraging strategy the Fund
employs will be successful during any period in which it is employed.
In times of unusual or adverse market, economic, regulatory,
environmental or political conditions, the Fund may not be able, fully or
partially, to implement its short selling strategy. Periods of unusual or
adverse market, economic, environmental, regulatory or political
conditions generally may exist for long periods of time. In response to
market events, the SEC and regulatory authorities in other jurisdictions
may adopt (and in certain cases, have adopted) bans on, and/or
reporting requirements for, short sales of certain securities, including
short positions on such securities acquired through swaps. Also, there is
the risk that the third party to the short sale or short position will not
fulfill its contractual obligations, causing a loss to the Fund.
                        
Subprime Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Subprime Risk
Loans, and debt instruments collateralized by loans (including Alt
Lending ABS), acquired by the Fund may be subprime in quality, or may
become subprime in quality. Although there is no specific legal or
market definition of “subprime,” subprime loans are generally
understood to refer to loans made to borrowers that display poor credit
histories and other characteristics that correlate with a higher default
risk. Accordingly, subprime loans, and debt instruments secured by such
loans including Alt Lending ABS), have speculative characteristics and
are subject to heightened risks, including the risk of nonpayment of
interest or repayment of principal, and the risks associated with
investments in high yield securities. In addition, these instruments could
be subject to increased regulatory scrutiny. The Fund is not restricted by
any particular borrower credit risk criteria and/or qualifications when
acquiring loans or debt instruments collateralized by loans.
                        
Operational Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Operational Risk
An investment in the Fund, like any fund, can involve operational risks
arising from factors such as processing errors, human errors, inadequate
or failed internal or external processes, failures in systems and
technology, changes in personnel and errors caused by third-party
service providers. The occurrence of any of these failures, errors or
breaches could result in a loss of information, regulatory scrutiny,
reputational damage or other events, any of which could have a
material adverse effect on the Fund. While the Fund seeks to minimize
such events through controls and oversight, there may still be failures
that could cause losses to the Fund.
                        
Tax Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Tax Risk
The Fund has elected to be treated as a “regulated investment
company” (a “RIC”) under Subchapter M of the Code and intends each
year to qualify and be eligible to be treated as such, so that it generally
will not be subject to U.S. federal income tax on its net investment
income or net short-term or long-term capital gains that are distributed
(or deemed distributed, as described below) to shareholders. In order to
qualify and be eligible for such treatment, the Fund must meet certain
asset diversification tests, derive at least 90% of its gross income for
such year from certain types of qualifying income, and distribute to its
shareholders at least 90% of the sum of its “investment company
taxable income” as that term is defined in the Code (which includes,
among other things, dividends, taxable interest and the excess of any
net short-term capital gains over net long-term capital losses, as
reduced by certain deductible expenses) and net tax-exempt income, for
such year.
The Fund’s investment strategy will potentially be limited by its intention
to continue qualifying for treatment as a RIC, and can limit the Fund’s
ability to continue qualifying as such. The tax treatment of certain of the
Fund’s investments under one or more of the qualification or
distribution tests applicable to RICs is uncertain. An adverse
determination or future guidance by the IRS or a change in law might
affect the Fund’s ability to qualify or be eligible for treatment as a RIC.
Income and gains from certain of the Fund’s activities, including fees
received in connection with the origination of loans, may not constitute
qualifying income to a RIC for purposes of the 90% gross income test. If
the Fund were to treat income or gain from a particular investment or
activity as qualifying income and the income or gain were later
determined not to constitute qualifying income and, together with any
other nonqualifying income, caused the Fund’s nonqualifying income to
exceed 10% of its gross income in any taxable year, the Fund would fail
to qualify as a RIC unless it is eligible to and does pay a tax at the Fund
level. Income and gains from certain of the Fund’s activities may not
constitute qualifying income to a RIC for purposes of the 90% gross
income test. If the Fund were to treat income or gain from a particular
investment or activity as qualifying income and the income or gain were
later determined not to constitute qualifying income and, together with
any other nonqualifying income, caused the Fund’s nonqualifying
income to exceed 10% of its gross income in any taxable year, the Fund
would fail to qualify as a RIC unless it is eligible to and does pay a tax at
the Fund level.
If, in any year, the Fund were to fail to qualify for treatment as a RIC
under the Code, and were ineligible to or did not otherwise cure such
failure, the Fund would be subject to tax on its taxable income at
corporate rates and, when such income is distributed, shareholders
would be subject to further tax, on such distributions to the extent of
the Fund’s current or accumulated earnings and profits.
The value of the Fund’s investments and its net asset value may be
adversely affected by changes in tax rates and policies. Because interest
income from municipal securities is normally not subject to regular
federal in-come taxation, the attractiveness of municipal securities in
relation to other investment alternatives is affected by changes in
federal income tax rates or changes in the tax-exempt status of interest
income from municipal securities. Any proposed or actual changes in
such rates or exempt status, therefore, can significantly affect the
demand for and supply, liquidity and marketability of municipal
securities. This could in turn affect the Fund’s net asset value and ability
to acquire and dispose of municipal securities at desirable yield and
price levels. Additionally, the Fund is not a suitable investment for
individual retirement accounts, for other tax-exempt or tax-deferred
accounts or for investors who are not sensitive to the federal income tax
consequences of their investments.
                        
Inflation Indexed Security Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Inflation-Indexed Security Risk
Inflation-indexed debt securities are subject to the effects of actual or
anticipated changes in market interest rates caused by factors other
than inflation (real interest rates). In general, the value of an
inflation-indexed security, including Treasury Inflation-Protected
Securities (“TIPS”), tends to decrease when real interest rates increase
and can increase when real interest rates decrease. Thus generally,
during periods of rising inflation, the value of inflation-indexed
securities will tend to increase and during periods of deflation, their
value will tend to decrease. Interest payments on inflation-indexed
securities are unpredictable and will fluctuate as the principal and
interest are adjusted for inflation. There can be no assurance that the
inflation index used (
i.e.,
the CPI) will accurately measure the real rate of
inflation in the prices of goods and services. Increases in the principal
value of TIPS due to inflation are considered taxable ordinary income for
the amount of the increase in the calendar year. Any increase in the
principal amount of an inflation-indexed debt security will be considered
taxable ordinary income, even though the Fund will not receive the
principal until maturity. Additionally, a CPI swap can potentially lose
value if the realized rate of inflation over the life of the swap is less than
the fixed market implied inflation rate (fixed breakeven rate) that the
investor agrees to pay at the initiation of the swap. With municipal
inflation-indexed securities, the inflation adjustment is integrated into
the coupon payment, which is federally tax exempt (and may be state
tax exempt). For municipal inflation-indexed securities, there is no
adjustment to the principal value. Because municipal inflation-indexed
securities are a small component of the municipal bond market, they
may be less liquid than conventional municipal bonds.
                        
Equity Securities and Related Market Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Equity Securities and Related Market Risk
The market price of common stocks and other equity securities may go
up or down, sometimes rapidly or unpredictably. Equity securities may
decline in value due to factors affecting equity securities markets
generally, particular industries represented in those markets, or the
issuer itself. The values of equity securities may decline due to real or
perceived adverse economic conditions, changes in the general outlook
for corporate earnings, changes in interest or currency rates or adverse
investor sentiment generally. They may also decline due to labor
shortages or increased production costs and competitive conditions
within an industry. Equity securities generally have greater price
volatility than bonds and other debt securities.
Different types of equity securities provide different voting and dividend
rights and priority in the event of the bankruptcy and/or insolvency of
the issuer. In addition to common stock, equity securities may include
preferred securities, convertible securities and warrants. Equity securities
other than common stock are subject to many of the same risks as
common stock, although possibly to different degrees. The risks of
equity securities are generally magnified in the case of equity
investments in distressed companies.
                        
High Yield Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
High Yield Securities Risk
To the extent that the Fund invests in high yield securities and unrated
securities of similar credit quality (commonly known as “high yield
securities” or “junk bonds”), the Fund may be subject to greater levels
of credit risk, call risk and liquidity risk than funds that do not invest in
such securities, which could have a negative effect on the NAV and
market price of the Fund’s Common Shares or Common Share
dividends. These securities are considered predominantly speculative
with respect to an issuer’s continuing ability to make principal and
interest payments, and may be more volatile than other types of
securities. An economic downturn or individual corporate developments
could adversely affect the market for these securities and reduce the
Fund’s ability to sell these securities at an advantageous time or price.
An economic downturn could also generally lead to a higher
non-payment rate and, a high yield security may lose significant market
value before a default occurs. The Fund may purchase distressed
securities that are in default or the issuers of which are in bankruptcy,
which involve heightened risks.
High yield securities structured as zero-coupon bonds or pay-in-kind
securities tend to be especially volatile as they are particularly sensitive
to downward pricing pressures from rising interest rates or widening
spreads and may require the Fund to make taxable distributions of
imputed income without receiving the actual cash currency. Issuers of
high yield securities may have the right to “call” or redeem the issue
prior to maturity, which may result in the Fund having to reinvest the
proceeds in other high yield securities or similar instruments that may
pay lower interest rates. The Fund may also be subject to greater levels
of liquidity risk than funds that do not invest in high yield securities.
Consequently, transactions in high yield securities may involve greater
costs than transactions in more actively traded securities. A lack of
publicly-available information, irregular trading activity and wide
bid/ask spreads among other factors, may, in certain circumstances,
make high yield debt more difficult to sell at an advantageous time or
price than other types of securities or instruments. These factors may
result in the Fund being unable to realize full value for these securities
and/or may result in the Fund not receiving the proceeds from a sale of
a high yield security for an extended period after such sale, each of
which could result in losses to the Fund. Because of such risks involved
in investing in high yield securities, an investment in the Fund should be
considered speculative.
In general, lower rated debt securities carry a greater degree of risk that
the issuer will lose its ability to make interest and principal payments,
which could have a negative effect on the Fund. Securities of below
investment grade quality are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal and are commonly referred to as “high yield” securities
or “junk bonds.” High yield securities involve a greater risk of default
and their prices are generally more volatile and sensitive to actual or
perceived negative developments. Debt securities in the lowest
investment grade category also may be considered to possess some
speculative characteristics by certain rating agencies. The Fund may
purchase stressed or distressed securities that are in default or the
issuers of which are in bankruptcy, which involve heightened risks.
An economic downturn could severely affect the ability of issuers
(particularly those that are highly leveraged) to service or repay their
debt obligations. Lower-rated securities are generally less liquid than
higher-rated securities, which may have an adverse effect on the Fund’s
ability to dispose of them. For example, under adverse market or
economic conditions, the secondary market for below investment grade
securities could contract further, independent of any specific adverse
changes in the condition of a particular issuer, and certain securities in
the Fund’s portfolio may become illiquid or less liquid. As a result, the
Fund could find it more difficult to sell these securities or may be able to
sell these securities only at prices lower than if such securities were
widely traded. To the extent the Fund focuses on below investment
grade debt obligations, PIMCO’s capabilities in analyzing credit quality
and associated risks will be particularly important, and there can be no
assurance that PIMCO will be successful in this regard. Due to such risks
involved in investing in high yield securities, an investment in the Fund
should be considered speculative.
The Fund’s credit quality policies apply only at the time a security is
purchased, and the Fund is not required to dispose of a security in the
event that a rating agency or PIMCO downgrades its assessment of the
credit characteristics of a particular issue. In determining whether to
retain or sell such a security, PIMCO may consider factors including, but
not limited to, PIMCO's assessment of the credit quality of the issuer of
such security, the price at which such security could be sold and the
rating, if any, assigned to such security by other rating agencies. Analysis
of creditworthiness may be more complex for issuers of high yield
securities than that for issuers of higher quality debt securities.
See “Investment Objectives and Policies-Portfolio Contents-High Yield
Securities” for additional information.
To the extent that the Fund invests in high yield securities and unrated
securities of similar credit quality (commonly known as “high yield
securities” or “junk bonds”), the Fund may be subject to greater levels
of credit risk, call risk and liquidity risk than funds that do not invest in
such securities, which could have a negative effect on the NAV and
market price of the Fund’s Common Shares or Common Share
dividends. These securities are considered predominantly speculative
with respect to an issuer’s continuing ability to make principal and
interest payments, and may be more volatile than other types of
securities. An economic downturn or individual corporate developments
could adversely affect the market for these securities and reduce the
Fund’s ability to sell these securities at an advantageous time or price.
An economic downturn could also generally lead to a higher
non-payment rate and, a high yield security may lose significant market
value before a default occurs. The Fund may purchase distressed
securities that are in default or the issuers of which are in bankruptcy,
which involve heightened risks.
High yield securities structured as zero-coupon bonds or pay-in-kind
securities tend to be especially volatile as they are particularly sensitive
to downward pricing pressures from rising interest rates or widening
spreads and may require the Fund to make taxable distributions of
imputed income without receiving the actual cash currency. Issuers of
high yield securities may have the right to “call” or redeem the issue
prior to maturity, which may result in the Fund having to reinvest the
proceeds in other high yield securities or similar instruments that may
pay lower interest rates. The Fund may also be subject to greater levels
of liquidity risk than funds that do not invest in high yield securities.
Consequently, transactions in high yield securities may involve greater
costs than transactions in more actively traded securities. A lack of
publicly-available information, irregular trading activity and wide
bid/ask spreads among other factors, may, in certain circumstances,
make high yield debt more difficult to sell at an advantageous time or
price than other types of securities or instruments. These factors may
result in the Fund being unable to realize full value for these securities
and/or may result in the Fund not receiving the proceeds from a sale of
a high yield security for an extended period after such sale, each of
which could result in losses to the Fund. Because of such risks involved
in investing in high yield securities, an investment in the Fund should be
considered speculative.
In general, lower rated debt securities carry a greater degree of risk that
the issuer will lose its ability to make interest and principal payments,
which could have a negative effect on the Fund. Securities of below
investment grade quality are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal and are commonly referred to as “high yield” securities
or “junk bonds.” High yield securities involve a greater risk of default
and their prices are generally more volatile and sensitive to actual or
perceived negative developments. Debt securities in the lowest
investment grade category also may be considered to possess some
speculative characteristics by certain rating agencies. The Fund may
purchase stressed or distressed securities that are in default or the
issuers of which are in bankruptcy, which involve heightened risks.
An economic downturn could severely affect the ability of issuers
(particularly those that are highly leveraged) to service or repay their
debt obligations. Lower-rated securities are generally less liquid than
higher-rated securities, which may have an adverse effect on the Fund’s
ability to dispose of them. For example, under adverse market or
economic conditions, the secondary market for below investment grade
securities could contract further, independent of any specific adverse
changes in the condition of a particular issuer, and certain securities in
the Fund’s portfolio may become illiquid or less liquid. As a result, the
Fund could find it more difficult to sell these securities or may be able to
sell these securities only at prices lower than if such securities were
widely traded. To the extent the Fund focuses on below investment
grade debt obligations, PIMCO’s capabilities in analyzing credit quality
and associated risks will be particularly important, and there can be no
assurance that PIMCO will be successful in this regard. Due to such risks
involved in investing in high yield securities, an investment in the Fund
should be considered speculative.
The Fund’s credit quality policies apply only at the time a security is
purchased, and the Fund is not required to dispose of a security in the
event that a rating agency or PIMCO downgrades its assessment of the
credit characteristics of a particular issue. In determining whether to
retain or sell such a security, PIMCO may consider factors including, but
not limited to, PIMCO's assessment of the credit quality of the issuer of
such security, the price at which such security could be sold and the
rating, if any, assigned to such security by other rating agencies. Analysis
of creditworthiness may be more complex for issuers of high yield
securities than that for issuers of higher quality debt securities.
See “Investment Objectives and Policies-Portfolio Contents-High Yield
Securities” for additional information.
                        
Loans and Other Indebtedness Loan Acquisitions Participations and Assignments Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Loans and Other Indebtedness; Loan Acquisitions,
Participations and Assignments Risk
Loan interests may take the form of (i) direct interests acquired during a
primary distribution or other purchase of a loan or (ii) assignments of,
novations of or participations in all or a portion of a loan acquired in
secondary markets. In addition to credit risk and interest rate risk, the
Fund’s exposure to loan interests may be subject to additional risks. For
example, purchasers of loans and other forms of direct indebtedness
depend primarily upon the creditworthiness of the borrower for
payment of principal and interest. Loans are subject to the risk that
scheduled interest or principal payments will not be made in a timely
manner or at all, either of which may adversely affect the value of the
loan. If the Fund does not receive scheduled interest or principal
payments on such indebtedness, the Fund’s share price and yield could
be adversely affected. Loans that are fully secured may offer the Fund
more protection than an unsecured loan in the event of non-payment of
scheduled interest or principal if the Fund is able to access and
monetize the collateral. However, the collateral underlying a loan, if any,
may be unavailable or insufficient to satisfy a borrower’s obligation. If
the Fund becomes owner, whole or in part, of any collateral after a loan
is foreclosed, the Fund may incur costs associated with owning and/or
monetizing its ownership of the collateral.
During periods of deteriorating economic conditions, such as recessions
or periods of rising unemployment, or changing interest rates (notably
increases), delinquencies and losses generally increase, sometimes
dramatically, with respect to obligations under such loans. An economic
downturn or individual corporate developments could adversely affect
the market for these instruments and reduce a Fund’s ability to sell
these instruments at an advantageous time or price. An economic
downturn could also generally lead to a higher nonpayment rate and, a
loan may lose significant market value before a default occurs.
Investments in loans through a purchase of a loan or a direct
assignment of a financial institution’s interests with respect to a loan
may involve additional risks to the Fund. For example, if a loan is
foreclosed, the Fund could become owner, in whole or in part, of any
collateral, which could include, among other assets, real estate or other
real or personal property, and would bear the costs and liabilities
associated with owning and holding or disposing of the collateral. The
purchaser of an assignment typically succeeds to all the rights and
obligations under the loan agreement with the same rights and
obligations as the assigning lender. Assignments may, however, be
arranged through private negotiations between potential assignees and
potential assignors, and the rights and obligations acquired by the
purchaser of an assignment may differ from, and be more limited than,
those held by the assigning lender.
In connection with purchasing loan participations, the Fund generally
will have no right to enforce compliance by the borrower with the terms
of the loan agreement relating to the loan, nor any rights of set-off
against the borrower, and the Fund may not directly benefit from any
collateral supporting the loan in which it has purchased the loan
participation. As a result, the Fund will be subject to the credit risk of
both the borrower and the lender that is selling the participation. In the
event of the insolvency of the lender selling a participation, the Fund
may be treated as a general creditor of the lender and may not benefit
from any set-off between the lender and the borrower. Certain loan
participations may be structured in a manner designed to prevent
purchasers of participations from being subject to the credit risk of the
lender, but even under such a structure, in the event of the lender’s
insolvency, the lender’s servicing of the participation may be delayed
and the assignability of the participation impaired.
The Fund may have difficulty disposing of loans and loan participations.
Because there is no liquid market for many such investments, the Fund
anticipates that such investments could be sold only to a limited number
of institutional investors. The lack of a liquid secondary market may have
an adverse impact on the value of such investments and the Fund’s
ability to dispose of particular loans and loan participations when that
would be desirable, including in response to a specific economic event
such as a deterioration in the creditworthiness of the borrower. The lack
of a liquid secondary market for loans and loan participations also may
make it more difficult for the Fund to assign a value to these securities
for purposes of valuing the Fund’s portfolio. Investments in loans may
include participations in bridge loans, which are loans taken out by
borrowers for a short period (typically less than one year) pending
arrangement of more permanent financing through, for example, the
issuance of bonds, frequently high yield bonds issued for the purpose of
acquisitions.
Investments in loans may include acquisitions of, or participation in,
delayed draw and delayed funding loans and revolving credit facilities.
These commitments may have the effect of requiring the Fund to
increase its investment in a borrower at a time when it might not
otherwise decide to do so (including at a time when the company’s
financial condition makes it unlikely that such amounts will be repaid).
Delayed draw and delayed funding loans and revolving credit facilities
may be subject to restrictions on transfer, and only limited opportunities
may exist to resell such instruments. As a result, a Fund may be unable
to sell such investments at an opportune time or may have to resell
them at less than fair market value. Further, the Fund may need to hold
liquid assets in order to provide funding for these types of
commitments, meaning the Fund may not be able to invest in other
attractive investments, or the Fund may need to liquidate existing assets
in order to provide such funding.
The Fund may invest in loans used to finance the cost of construction,
acquisition, development, and/ or rehabilitation of a property, including,
but not limited to, development of single-family for-sale homes,
multi-family rentals and/or commercial facilities. Such construction
lending may expose the Fund to increased risk of non-payment and loss
because the loan is not backed by a finished project. Such risk may
depend on the nature of the construction and the relevant counterparty
or counterparties, which may include, but not be limited to,
homebuilders, private developers and/or entities with limited capital.
Repayment of these types of loans may depend on the borrower’s ability
to secure permanent “take-out” financing, which requires the successful
completion of the project, or operation of the property with an income
stream sufficient to meet operating and loan expenses. In addition,
these types of loans are subject to the risk of errors in estimations of the
property’s value at completion of construction and the estimated cost of
construction, as well as the risk that the projects may not be completed
and have limited liquidity.
To the extent the Fund invests in loans, including, but not limited to,
bank loans, non-syndicated loans, the residual or equity tranches of
mortgage-related and other asset-backed securities, which may be
referred to as subordinate mortgage-backed or asset-backed securities
and interest-only mortgage-backed or asset-backed securities, and other
investments, the Fund may be subject to greater levels of credit risk, call
risk, settlement risk and liquidity risk. These instruments are considered
predominantly speculative with respect to an issuer’s continuing ability
to make principal and interest payments and may be more volatile than
other types of securities.
The Fund may also be subject to greater levels of liquidity risk than
funds that do not invest in loans. In addition, the loans in which the
Fund invests may not be listed on any exchange and a secondary market
for such loans may be comparatively illiquid relative to markets for other
more liquid fixed income securities. Consequently, transactions in loans
may involve greater costs than transactions in more actively traded
securities. In connection with certain loan transactions, transaction costs
that are borne by the Fund may include the expenses of third parties
that are retained to assist with reviewing and conducting diligence,
negotiating, structuring and servicing a loan transaction, and/or
providing other services in connection therewith. Furthermore, the Fund
may incur such costs in connection with loan transactions that are
pursued by the Fund but not ultimately consummated (so-called
“broken deal costs”).
Restrictions on transfers in loan agreements, a lack of publicly available
information, irregular trading activity and wide bid/ask spreads, among
other factors, may, in certain circumstances, make loans more difficult to
sell at an advantageous time or price than other types of securities or
instruments. These factors may result in the Fund being unable to realize
full value for the loans and/or may result in the Fund not receiving the
proceeds from a sale of a loan for an extended period after such sale,
each of which could result in losses to the Fund. Some loans may have
extended trade settlement periods, including settlement periods of
greater than seven days, which may result in cash not being
immediately available to the Fund. If an issuer of a loan prepays or
redeems the loan prior to maturity, the Fund may have to reinvest the
proceeds in other loans or similar instruments that may pay lower
interest rates. Because of such risks involved in investing in loans, an
investment in the Fund should be considered speculative.
The Fund’s investments in subordinated and unsecured loans generally
are subject to similar risks as those associated with investments in
secured loans. Subordinated or unsecured loans are lower in priority of
payment to secured loans and are subject to the additional risk that the
cash flow of the borrower and property securing the loan or debt, if any,
may be insufficient to meet scheduled payments after giving effect to
the senior secured obligations of the borrower. This risk is generally
higher for subordinated unsecured loans or debt, which are not backed
by a security interest in any specific collateral. Subordinated and
unsecured loans generally have greater price volatility than secured
loans and may be less liquid. There is also a possibility that originators
will not be able to sell participations in subordinated or unsecured
loans, which would create greater credit risk exposure for the holders of
such loans. Subordinate and unsecured loans share the same risks as
other below investment grade securities.
There may be less readily available information about most loans and
the underlying borrowers than is the case for many other types of
securities. Loans may be issued by companies that are not subject to
SEC reporting requirements and therefore may not be required to file
reports with the SEC or may file reports that are not required to comply
with SEC form requirements. In addition, such companies may be
subject to a less stringent liability disclosure regime than companies
subject to SEC reporting requirements. Loans may not be considered
“securities,” and purchasers, such as the Fund, therefore may not be
entitled to rely on the anti-fraud protections of the federal securities
laws. Because there is limited public information available regarding
loan investments, the Fund is particularly dependent on the analytical
abilities of the Fund’s portfolio managers.
Economic exposure to loan interests through the use of derivative
transactions may involve greater risks than if the Fund had invested in
the loan interest directly during a primary distribution, through direct
originations or through assignments of, novations of or participations in
a loan acquired in secondary markets since, in addition to the risks
described above, certain derivative transactions may be subject to
leverage risk and greater illiquidity risk, counterparty risk, valuation risk
and other risks.
                        
Potential Conflicts of Interest Risk Allocation of Investment Opportunities [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Potential Conflicts of Interest Risk—Allocation of Investment
Opportunities
The Investment Manager and its affiliates are involved worldwide with a
broad spectrum of financial services and asset management activities
and may engage in the ordinary course of business in activities in which
their interests or the interests of their clients may conflict with those of
the Fund. The Investment Manager may provide investment
management services to other funds and discretionary managed
accounts that follow an investment program similar to that of the Fund.
Subject to the requirements of the 1940 Act, the Investment Manager
intends to engage in such activities and may receive compensation from
third parties for its services. The results of the Fund’s investment
activities may differ from those of the the Fund’s affiliates, or another
account managed by the Investment Manager or its affiliates, and it is
possible that the Fund could sustain losses during periods in which one
or more of the Fund’s affiliates and/or other accounts managed by the
Investment Manager or its affiliates, including proprietary accounts,
achieve profits on their trading.
                        
Foreign Non US Investment Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Foreign (Non-U.S.) Investment Risk
Foreign (non-U.S.) securities may experience more rapid and extreme
changes in value than securities of U.S. issuers or securities that trade
exclusively in U.S. markets. The securities markets of many foreign
countries are relatively small, with a limited number of companies
representing a small number of industries. Additionally, issuers of
foreign (non-U.S.) securities are usually not subject to the same degree
of regulation as U.S. issuers. Reporting, legal, accounting, auditing and
custody standards of foreign countries differ, in some cases significantly,
from U.S. standards. Global economies and financial markets are
becoming increasingly interconnected, and conditions and events in one
country, region or financial market may adversely impact issuers in a
different country, region or financial market. Foreign (non-U.S.) market
trading hours, clearance and settlement procedures, and holiday
schedules may limit the Fund’s ability to buy and sell securities.
Investments in foreign (non-U.S.) markets may also be adversely
affected by governmental actions such as the imposition of capital
controls, nationalization of companies or industries, expropriation of
assets or the imposition of punitive taxes. The governments of certain
countries may prohibit or impose substantial restrictions on foreign
(non-U.S.) investing in their capital markets or in certain sectors or
industries. In addition, a foreign (non-U.S.) government may limit or
cause delay in the convertibility or repatriation of its currency which
would adversely affect the U.S. dollar value and/or liquidity of
investments denominated in that currency. Certain foreign (non-U.S.)
investments may become less liquid in response to market
developments or adverse investor perceptions, or become illiquid after
purchase by the Fund, particularly during periods of market turmoil. A
reduction in trading in securities of issuers located in countries whose
economies are heavily dependent upon trading with key partners may
have an adverse impact on a Fund’s investments.
Also, nationalization, expropriation or confiscatory taxation, unstable
governments, decreased market liquidity, currency blockage, market
disruptions, political changes, security suspensions or diplomatic
developments or the imposition of sanctions or other similar measures
could adversely affect the Fund’s investments in a foreign (non-U.S.)
country. In the event of nationalization, expropriation or other
confiscation, the Fund could lose its entire investment in foreign
(non-U.S.) securities. The type and severity of sanctions and other similar
measures, including counter sanctions and other retaliatory actions, that
may be imposed could vary broadly in scope, and their impact is difficult
to ascertain. These types of measures may include, but are not limited
to, banning a sanctioned country or certain persons or entities
associated with such country from global payment systems that
facilitate cross-border payments, restricting the settlement of securities
transactions by certain investors, and freezing the assets of particular
countries, entities or persons. The imposition of sanctions and other
similar measures could, among other things, result in a decline in the
value and/or liquidity of securities issued by the sanctioned country or
companies located in or economically tied to the sanctioned country,
downgrades in the credit ratings of the sanctioned country's securities
or those of companies located in or economically tied to the sanctioned
country, currency devaluation or volatility, and increased market
volatility and disruption in the sanctioned country and throughout the
world. Sanctions and other similar measures could directly or indirectly
limit or prevent a Fund from buying and selling securities (in the
sanctioned country and other markets), significantly delay or prevent the
settlement of securities transactions, and adversely impact a Fund's
liquidity and performance. Adverse conditions in a certain region can
adversely affect securities of other countries whose economies appear
to be unrelated. To the extent that the Fund invests a significant portion
of its assets in a specific geographic region or in securities denominated
in a particular foreign (non-U.S.) currency, the Fund will generally have
more exposure to regional economic risks, including weather
emergencies and natural disasters, associated with foreign (non-U.S.)
investments. Foreign (non-U.S.) securities may also be less liquid
(particularly during market closures due to local holidays or other
reasons) and more difficult to value than securities of U.S. issuers.
The Fund may invest in securities and instruments that are economically
tied to Russia. Investments in Russia are subject to various risks such as,
but not limited to political, economic, legal, market and currency risks.
The risks include uncertain political and economic policies, short term
market volatility, poor accounting standards, corruption and crime, an
inadequate regulatory system, regional armed conflict and
unpredictable taxation. Investments in Russia are particularly subject to
the risk that further economic sanctions, export and import controls, and
other similar measures may be imposed by the United States and/or
other countries. Other similar measures may include, but are not limited
to, banning or expanding bans on Russia or certain persons or entities
associated with Russia from global payment systems that facilitate
cross-border payments, restricting the settlement of securities
transactions by certain investors, and freezing Russian assets or those of
particular countries, entities or persons with ties to Russia (e.g. Belarus).
Such sanctions and other similar measures — which may impact
companies in many sectors, including energy, financial services,
technology, accounting, quantum computing, shipping, aviation, metals
and mining, defense, architecture, engineering, construction,
manufacturing and transportation, among others — and Russia’s
countermeasures may negatively impact the Fund’s performance and/or
ability to achieve its investment objectives. For example, certain
investments may be prohibited and/or existing investments may become
illiquid (e.g., in the event that transacting in certain existing investments
is prohibited, securities markets close, or market participants cease
transacting in certain investments in light of geopolitical events,
sanctions or related considerations), which could render any such
securities held by the Fund unmarketable for an indefinite period of time
and/or cause the Fund to sell other portfolio holdings at a
disadvantageous time or price or to continue to hold investments that
the Fund no longer seeks to hold. In addition, such sanctions or other
similar measures, and the Russian government's response, could result
in a downgrade of Russia's credit rating or of securities of issuers
located in or economically tied to Russia, devaluation of Russia's
currency and/or increased volatility with respect to Russian securities
and the ruble. Moreover, disruptions caused by Russian military action
or other actions (including cyberattacks, espionage or other asymmetric
measures) or resulting actual or threatened responses to such activity
may impact Russia's economy and Russian and other issuers of
securities in which the Fund is invested. Such resulting actual or
threatened responses may include, but are not limited to, purchasing
and financing restrictions, withdrawal of financial intermediaries,
boycotts or changes in consumer or purchaser preferences, sanctions,
export and import controls, tariffs or cyberattacks on the Russian
government, Russian companies or Russian individuals, including
politicians. Any actions by Russia made in response to such sanctions or
retaliatory measures could further impair the value and liquidity of Fund
investments. Sanctions and other similar measures have resulted in
defaults on debt obligations by certain corporate issuers and the
Russian Federation that could lead to cross-defaults or
cross-accelerations on other obligations of these issuers.
The Russian securities market is characterized by limited volume of
trading, resulting in difficulty in obtaining accurate prices and trading.
These issues can be magnified as a result of sanctions and other similar
measures that may be imposed and the Russian government's response.
The Russian securities market, as compared to U.S. markets, has
significant price volatility, less liquidity, a smaller market capitalization
and a smaller number of traded securities. There may be little publicly
available information about issuers. Settlement, clearing and
registration of securities transactions are subject to risks. Prior to the
implementation of the National Settlement Depository (“NSD”), a
recognized central securities depository, there was no central
registration system for equity share registration in Russia, and
registration was carried out by either the issuers themselves or by
registrars located throughout Russia. Title to Russian equities held
through the NSD is now based on the records of the NSD and not the
registrars. Although the implementation of the NSD has enhanced the
efficiency and transparency of the Russian securities market, issues
resulting in loss can still occur. In addition, sanctions by the European
Union against the NSD, as well as the potential for sanctions by other
governments, could make it more difficult to conduct or confirm
transactions involving Russian securities. Ownership of securities issued
by Russian companies that are not held through depositories such as
the NSD may be recorded by companies themselves and by registrars. In
such cases, the risk is increased that the Fund could lose ownership
rights through fraud, negligence or oversight. While applicable Russian
regulations impose liability on registrars for losses resulting from their
errors, it may be difficult for the Fund to enforce any rights it may have
against the registrar or issuer of the securities in the event of loss of
share registration. In addition, issuers and registrars are still prominent
in the validation and approval of documentation requirements for
corporate action processing in Russia. Because the documentation
requirements and approval criteria vary between registrars and issuers,
there remain unclear and inconsistent market standards in the Russian
market with respect to the completion and submission of corporate
action elections. In addition, sanctions or Russian countermeasures may
prohibit or limit a Fund’s ability to participate in corporate actions, and
therefore require the Fund to forego voting on or receiving funds that
would otherwise be beneficial to the Fund. To the extent that the Fund
suffers a loss relating to title or corporate actions relating to its portfolio
securities, it may be difficult for the Fund to enforce its rights or
otherwise remedy the loss. Russian securities laws may not recognize
foreign nominee accounts held with a custodian bank, and therefore the
custodian may be considered the ultimate owner of securities they hold
for their clients. Adverse currency exchange rates are a risk and there
may be a lack of available currency hedging instruments. Investments in
Russia may be subject to the risk of nationalization or expropriation of
assets. Oil, natural gas, metals, minerals and timber account for a
significant portion of Russia’s exports, leaving the country vulnerable to
swings in world prices and to sanctions or other actions that may be
directed at the Russian economy as a whole or at Russian oil, natural
gas, metals, minerals or timber industries.
                        
Issuer Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Issuer Risk
The value of a security may decline for a number of reasons that directly
relate to the issuer, such as management performance, major litigation,
investigations or other controversies, changes in the issuer’s financial
condition or credit rating, changes in government regulations affecting
the issuer or its competitive environment and strategic initiatives such
as mergers, acquisitions or dispositions and the market response to any
such initiatives, financial leverage, reputation or reduced demand for the
issuer’s goods or services, as well as the historical and prospective
earnings of the issuer and the value of its assets. A change in the
financial condition of a single issuer may affect one or more other
issuers or securities markets as a whole. These risks can apply to the
Common Shares issued by the Fund and to the issuers of securities and
other instruments in which the Fund invests.
                        
Certain Affiliations [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Certain Affiliations
Certain broker-dealers may be considered to be affiliated persons of the
Fund and/or the Investment Manager due to their possible affiliations
with Allianz SE, the ultimate parent of the Investment Manager, or
another Allianz entity. Allianz Asset Management of America LP merged
with Allianz Asset Management of America LLC (“Allianz Asset
Management”), with the latter being the surviving entity, effective
January 1, 2023. Following the merger, Allianz Asset Management is
PIMCO’s managing member and direct parent entity. Absent an
exemption from the SEC or other regulatory relief, the Fund is generally
precluded from effecting certain principal transactions with affiliated
brokers, and its ability to purchase securities being underwritten by an
affiliated broker or a syndicate including an affiliated broker, or to utilize
affiliated brokers for agency transactions, is subject to restrictions. This
could limit the Fund’s ability to engage in securities transactions and
take advantage of market opportunities.
The 1940 Act imposes significant limits on co-investment with affiliates
of the Fund. The Fund has received exemptive relief from the SEC that,
to the extent a fund relies on such relief, permits it to (among other
things) co-invest alongside certain other persons in privately negotiated
investments, including certain affiliates of the Investment Manager and
certain public or private funds managed by the Investment Manager and
its affiliates, subject to certain terms and conditions. The exemptive relief
from the SEC with respect to co-investments imposes a number of
conditions on any co-investments made in reliance on such relief that
may limit or restrict a fund’s ability to participate in an investment or
require it to participate in an investment to a lesser extent, which could
negatively impact a fund’s ability to execute its desired investment
strategy and its returns. Subject to applicable law, the Fund may also
invest alongside other PIMCO managed funds and accounts, including
private funds and affiliates of the Investment Manager, without relying
on the exemptive relief. Pursuant to co-investment exemptive relief, to
the extent a fund relies on such relief, the fund will be able to invest in
opportunities in which PIMCO and/or its affiliates has an investment,
and PIMCO and/or its affiliates will be able to invest in opportunities in
which a fund has made an investment.
                        
Portfolio Turnover Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Portfolio Turnover Risk
The Investment Manager manages the Fund without regard generally to
restrictions on portfolio turnover. The use of futures contracts and other
derivative instruments with relatively short maturities may tend to
exaggerate the portfolio turnover rate for the Fund. Trading in fixed
income securities does not generally involve the payment of brokerage
commissions, but does involve indirect transaction costs. The use of
futures contracts and other derivative instruments may involve the
payment of commissions to futures commission merchants or other
intermediaries. Higher portfolio turnover involves correspondingly
greater expenses to the Fund, including brokerage commissions or
dealer mark-ups and other transaction costs on the sale of securities
and reinvestments in other securities. The higher the rate of portfolio
turnover of the Fund, the higher these transaction costs borne by the
Fund generally will be. Such sales may result in realization of taxable
capital gains (including short-term capital gains, which are generally
taxed to shareholders at ordinary income tax rates when distributed net
of short-term capital losses and net long-term capital losses), and may
adversely impact the Fund’s after-tax returns. See “Tax Matters.”
                        
US Government Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
U.S. Government Securities Risk
Certain U.S. government securities, such as U.S. Treasury bills, notes,
bonds and mortgage-related securities guaranteed by the GNMA, are
supported by the full faith and credit of the United States; others, such
as those of FHLBs or the FHLMC, are supported by the right of the issuer
to borrow from the U.S. Treasury; others, such as those of the FNMA, are
supported by the discretionary authority of the U.S. government to
purchase the agency’s obligations; and still others are supported only by
the credit of the agency, instrumentality or corporation. U.S. government
securities are subject to market risk, interest rate risk and credit risk.
Although legislation has been enacted to support certain government
sponsored entities, including the FHLBs, FHLMC and FNMA, there is no
assurance that the obligations of such entities will be satisfied in full, or
that such obligations will not decrease in value or default. It is difficult,
if not impossible, to predict the future political, regulatory or economic
changes that could impact the government sponsored entities and the
values of their related securities or obligations. In addition, certain
governmental entities, including FNMA and FHLMC, have been subject
to regulatory scrutiny regarding their accounting policies and practices
and other concerns that may result in legislation, changes in regulatory
oversight and/or other consequences that could adversely affect the
credit quality, availability or investment character of securities issued by
these entities. Yields available from U.S. government debt securities are
generally lower than the yields available from other debt securities. The
values of U.S. government securities change as interest rates fluctuate.
Periodically, uncertainty regarding the status of negotiations in the
U.S. government to increase the statutory debt ceiling could increase the
risk that the U.S. government may default on payments on certain
U.S. government securities, cause the credit rating of the
U.S. government to be downgraded, increase volatility in the stock and
bond markets, result in higher interest rates, reduce prices of
U.S. Treasury and other securities, and/or increase the costs of various
kinds of debt. If a government-sponsored entity is negatively impacted
by legislative or regulatory action (or lack thereof), is unable to meet its
obligations, or its creditworthiness declines, the performance of a fund
that holds securities of the entity will be adversely impacted.
                        
Currency Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Currency Risk
If the Fund invests directly in foreign (non-U.S.) currencies or in
securities that trade in, and receive revenues in, foreign (non-U.S.)
currencies, or in derivatives or other instruments that provide exposure
to foreign (non-U.S.) currencies, it will be subject to the risk that those
currencies will decline in value relative to the U.S. dollar, or, in the case
of hedging positions, that the U.S. dollar will decline in value relative to
the currency being hedged. Although the Fund may attempt to hedge its
currency exposure into the U.S. dollar, it may not be successful in
reducing the effects of currency fluctuations. The Fund may also hedge
from one foreign currency to another. In addition, the Fund's use of
currency hedging may not be successful and the use of such strategies
may lower the Fund's potential returns.
Investments denominated in foreign (non-U.S.) currencies or that trade
in and receive revenues in, foreign (non-U.S.) currencies, derivatives or
other instruments that provide exposure to foreign (non-U.S.)
currencies, are subject to the risk that those currencies will decline in
value relative to the U.S. dollar, or, in the case of hedging positions, that
the U.S. dollar will decline in value relative to the currency being
hedged.
Currency rates in foreign (non-U.S.) countries may fluctuate significantly
over short periods of time for a number of reasons, including changes in
interest rates, rates of inflation, balance of payments and governmental
surpluses or deficits, intervention (or the failure to intervene) by U.S. or
foreign (non-U.S.) governments, central banks or supranational entities
such as the International Monetary Fund, or by the imposition of
currency controls or other political developments in the United States or
abroad. These fluctuations may have a significant adverse impact on the
value of the Fund’s portfolio and/or the level of Fund distributions made
to Common Shareholders. There is no assurance that a hedging strategy,
if used, will be successful. Moreover, currency hedging techniques may
be unavailable with respect to emerging market currencies.
The local emerging market currencies in which the Fund may be
invested from time to time may experience substantially greater
volatility against the U.S. dollar than the major convertible currencies of
developed countries. Some of the local currencies in which the Fund
may invest are neither freely convertible into one of the major currencies
nor internationally traded. The local currencies may be convertible into
other currencies only inside the relevant emerging market where the
limited availability of such other currencies may tend to inflate their
values relative to the local currency in question. Such internal exchange
markets can therefore be said to be neither liquid nor competitive. In
addition, many of the currencies of emerging market countries in which
the Fund may invest have experienced steady devaluation relative to
freely convertible currencies.
Continuing uncertainty as to the status of the euro and the European
Monetary Union (“EMU”) has created significant volatility in currency
and financial markets generally. Any partial or complete dissolution of
the EMU could have significant adverse effects on currency and financial
markets, and on the values of the Fund’s portfolio investments. If one or
more EMU countries were to stop using the euro as its primary currency,
the Fund’s investments in such countries may be redenominated into a
different or newly adopted currency. As a result, the value of those
investments could decline significantly and unpredictably. In addition,
securities or other investments that are redenominated may be subject
to foreign currency risk, liquidity risk and valuation risk to a greater
extent than similar investments currently denominated in euros. To the
extent a currency used for redenomination purposes is not specified in
respect of certain EMU-related investments, or should the euro cease to
be used entirely, the currency in which such investments are
denominated may be unclear, making such investments particularly
difficult to value or dispose of. The Fund may incur additional expenses
to the extent it is required to seek judicial or other clarification of the
denomination or value of such securities.
There can be no assurance that if the Fund earns income or capital gains
in a non-U.S. country or PIMCO otherwise seeks to withdraw the Fund’s
investments from a given country, capital controls imposed by such
country will not prevent, or cause significant expense in, doing so.
                        
Regulatory Changes Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Regulatory Changes Risk
Financial entities, such as investment companies and investment
advisers, are generally subject to extensive government regulation and
intervention. Government regulation and/or intervention may change
the way the Fund is regulated, affect the expenses incurred directly by
the Fund and the value of its investments, and limit and/or preclude the
Fund’s ability to achieve its investment objectives. Government
regulation may change frequently and may have significant adverse
consequences. The Fund and the Investment Manager have historically
been eligible for exemptions from certain regulations. However, there is
no assurance that the Fund and the Investment Manager will continue
to be eligible for such exemptions.
Moreover, government regulation may have unpredictable and
unintended effects. Legislative or regulatory actions to address
perceived liquidity or other issues in fixed income markets generally, or
in particular markets such as the municipal securities market, may alter
or impair the Fund’s ability to pursue its investment objectives or utilize
certain investment strategies and techniques. While there continues to
be uncertainty about the full impact of these and other regulatory
changes, it is the case that the Fund will be subject to a more complex
regulatory framework, and may incur additional costs to comply with
new requirements as well as to monitor for compliance in the future.
Current rules related to credit risk retention requirements for ABS may
increase the cost to originators, securitizers and, in certain cases, asset
managers of SPEs in which the Fund may invest. The impact of the risk
retention rules on the securitization markets is uncertain. These
requirements may increase the costs to originators, securitizers, and, in
certain cases, collateral managers of SPEs in which the Fund may invest,
which costs could be passed along to the Fund as an investor in such
vehicles. In addition, the costs imposed by the risk retention rules on
originators, securitizers and/or collateral managers may result in a
reduction of the number of new offerings of ABS and thus in fewer
investment opportunities for the Fund. A reduction in the number of
new securitizations could also reduce liquidity in the markets for certain
types of financial assets, which in turn could negatively affect the
returns on the Fund’s investment.
Actions by governmental entities may also impact certain instruments in
which the Fund invests and reduce market liquidity and resiliency.
                        
Leverage Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Leverage Risk
The Fund’s use of leverage (as described under “Use of Leverage” in the
body of this prospectus) creates the opportunity for increased Common
Share net income, but also creates special risks for Common
Shareholders (including an increased risk of loss). To the extent used,
there is no assurance that the Fund’s leveraging strategies will be
successful. Leverage is a speculative technique that may expose the
Fund to greater risk and increased costs. The Fund’s assets attributable
to leverage, if any, will be invested in accordance with the Fund’s
investment objectives and policies. Interest expense payable by the Fund
with respect to derivatives and other forms of leverage, and dividends
payable with respect to any preferred shares outstanding, if any, will
generally be based on shorter-term interest rates that would be
periodically reset. So long as the Fund’s portfolio investments provide a
higher rate of return (net of applicable Fund expenses) than the interest
expenses and other costs to the Fund of such leverage, the investment
of the proceeds thereof will generate more income than will be needed
to pay the costs of the leverage. If so, and all other things being equal,
the excess may be used to pay higher dividends to Common
Shareholders than if the Fund were not so leveraged. There can be no
assurance these circumstances will occur. If, however, shorter-term
interest rates rise relative to the rate of return on the Fund’s portfolio,
the interest and other costs to the Fund of leverage could exceed the
rate of return on the debt obligations and other investments held by the
Fund, thereby reducing return to Common Shareholders. Leveraging
transactions pursued by the Fund may increase its duration and
sensitivity to interest rate movements. In addition, fees and expenses of
any form of leverage used by the Fund will be borne entirely by the
Common Shareholders (and not by preferred shareholders, if any) and
will reduce the investment return of the Common Shares. Therefore,
there can be no assurance that the Fund’s use of leverage will result in a
higher yield on the Common Shares, and it may result in losses. In
addition, any preferred shares issued by the Fund are expected to pay
cumulative dividends, which may tend to increase leverage risk.
Leverage creates several major types of risks for Common Shareholders,
including:
■
the likelihood of greater volatility of NAV and market price of
Common Shares, and of the investment return to Common
Shareholders, than a comparable portfolio without leverage;
■
the possibility either that Common Share dividends will fall if the
interest and other costs of leverage rise, or that dividends paid on
Common Shares will fluctuate because such costs vary over time;
and
■
the effects of leverage in a declining market or a rising interest
rate environment, as leverage is likely to cause a greater decline in
the NAV of the Common Shares than if the Fund were not
leveraged.
In addition, the counterparties to the Fund’s leveraging transactions and
any preferred shareholders of the Fund will have priority of payment
over the Fund’s Common Shareholders.
Reverse repurchase agreements involve the risks that the interest
income earned on the investment of the proceeds will be less than the
interest expense and Fund expenses associated with the repurchase
agreement, that the market value of the securities sold by the Fund may
decline below the price at which the Fund is obligated to repurchase
such securities and that the securities may not be returned to the Fund.
There is no assurance that reverse repurchase agreements can be
successfully employed. Dollar roll/buyback transactions involve the risk
that the market value of the securities the Fund is required to purchase
may decline below the agreed upon purchase price of those securities.
Successful use of dollar rolls/buybacks may depend upon the Investment
Manager’s ability to correctly predict interest rates and prepayments.
There is no assurance that dollar rolls/buybacks can be successfully
employed. In connection with reverse repurchase agreements and dollar
rolls/buybacks, the Fund will also be subject to counterparty risk with
respect to the purchaser of the securities. If the broker/dealer to whom
the Fund sells securities becomes insolvent, the Fund’s right to purchase
or repurchase securities may be restricted.
The Fund may engage in total return swaps, reverse repurchases, loans
of portfolio securities, short sales and when-issued, delayed delivery and
forward commitment transactions, credit default swaps, basis swaps
and other swap agreements, purchases or sales of futures and forward
contracts (including foreign currency exchange contracts), call and put
options or other derivatives. The Fund’s use of such transactions gives
rise to associated leverage risks described above, and may adversely
affect the Fund’s income, distributions and total returns to Common
Shareholders. To the extent that any offsetting positions do not behave
in relation to one another as expected, the Fund may perform as if it is
leveraged through use of these derivative strategies.
Any total return swaps, reverse repurchases, loans of portfolio securities,
short sales and when-issued, delayed delivery and forward commitment
transactions, credit default swaps, basis swaps and other swap
agreements, purchases or sales of futures and forward contracts
(including foreign currency exchange contracts), call and put options or
other derivatives by the Fund or counterparties to the Fund’s other
leveraging transactions, if any, would have seniority over the Fund’s
Common Shares.
Because the fees received by the Investment Manager may increase
depending on the types of leverage utilized by the Fund, the Investment
Manager has a financial incentive for the Fund to use certain forms of
leverage, which may create a conflict of interest between the Investment
Manager, on the one hand, and the Common Shareholders, on the other
hand.
                        
Covenant lite Obligations Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
“Covenant-lite” Obligations Risk
Covenant-lite obligations contain fewer maintenance covenants than
other obligations, or no maintenance covenants, and may not include
terms that allow the lender to monitor the performance of the borrower
and declare a default if certain criteria are breached. Covenant-lite
loans carry a risk that the borrower could transfer or encumber its
assets, which could reduce the amount of assets that can be used to
satisfy debts and result in losses for debtholders. Covenant-lite loans
may carry more risk than traditional loans as they allow individuals and
corporations to engage in activities that would otherwise be difficult or
impossible under a covenant-heavy loan agreement. In the event of
default, covenant-lite loans may exhibit diminished recovery values as
the lender may not have the opportunity to negotiate with the borrower
prior to default.
                        
Sovereign Debt Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Sovereign Debt Risk
In addition to the other risks applicable to debt investments, sovereign
debt may decline in value as a result of default or other adverse credit
event resulting from an issuer’s inability or unwillingness to make
principal or interest payments in a timely fashion. A sovereign entity’s
failure to make timely payments on its debt can result from many
factors, including, without limitation, insufficient foreign (non-U.S.)
currency reserves or an inability to sufficiently manage fluctuations in
relative currency valuations, an inability or unwillingness to satisfy the
demands of creditors and/or relevant supranational entities regarding
debt service or economic reforms, the size of the debt burden relative to
economic output and tax revenues, cash flow difficulties, and other
political and social considerations. The risk of loss to the Fund in the
event of a sovereign debt default or other adverse credit event is
heightened by the unlikelihood of any formal recourse or means to
enforce its rights as a holder of the sovereign debt. In addition,
sovereign debt restructurings, which may be shaped by entities and
factors beyond the Fund’s control, may result in a loss in value of the
Fund’s sovereign debt holdings.
                        
Repurchase Agreements Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Repurchase Agreements Risk
The Fund may enter into repurchase agreements, in which the Fund
purchases a security from a bank or broker-dealer, which agrees to
repurchase the security at the Fund’s cost plus interest within a specified
time. If the party agreeing to repurchase should default, the Fund would
seek to sell the securities which it holds. This could involve costs or
delays in addition to a loss on the securities if their value should fall
below their repurchase price. The security subject to a repurchase
agreement may be or become illiquid. These events could also trigger
adverse tax consequences for the Fund.
                        
Debt Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Debt Securities Risk
Debt securities are generally subject to the risks described below and
further herein:
Issuer risk.
 
The value of fixed income securities may decline for a
number of reasons that directly relate to the issuer, such as
management performance, financial leverage, reduced demand for the
issuer’s goods and services, historical and prospective earnings of the
issuer and the value of the assets of the issuer. A change in the financial
condition of a single issuer may affect securities markets as a whole.
These risks can apply to the Common Shares issued by the Fund and to
the issuers of securities and other instruments in which the Fund
invests.
Interest rate risk.
 
The market value of debt securities changes in
response to interest rate changes and other factors. Interest rate risk is
the risk that prices of debt securities will increase as interest rates fall
and decrease as interest rates rise, which would be reflected in the
Fund’s NAV. The Fund may lose money if short-term or long-term
interest rates rise sharply in a manner not anticipated by the Fund’s
management. Moreover, because rates on certain floating rate debt
securities typically reset only periodically, changes in prevailing interest
rates (and particularly sudden and significant changes) can be expected
to cause some fluctuations in the NAV of the Fund to the extent that it
invests in floating rate debt securities.
Prepayment risk.
 
During periods of declining interest rates, borrowers
may prepay principal. This may force the Fund to reinvest in lower
yielding securities, resulting in a possible decline in the Fund’s income
and distributions.
Credit risk.
 
Credit risk is the risk that one or more debt securities in
the Fund’s portfolio will decline in price or fail to pay interest or
principal when due because the issuer of the security experiences a
decline in its financial status. Credit risk is increased when a portfolio
security is downgraded or the perceived creditworthiness of the issuer
deteriorates.
Reinvestment risk.
 
Reinvestment risk is the risk that income from the
Fund’s portfolio will decline if the Fund invests the proceeds from
matured, traded or called fixed income securities at market interest rates
that are below the portfolio’s current earnings rate.
Duration and maturity risk.
 
The Fund may seek to adjust the
duration or maturity of its investments in debt securities based on its
assessment of current and projected market conditions. The Fund may
incur costs in seeking to adjust the average duration or maturity of its
portfolio of debt securities. There can be no assurances that the Fund’s
assessment of current and projected market conditions will be correct or
that any strategy to adjust duration or maturity will be successful.
In addition, from time to time, uncertainty regarding the status of
negotiations in the U.S. government to increase the statutory debt
ceiling could impact the creditworthiness of the United States and could
impact the liquidity and value of U.S. Government and other securities
and ultimately the Fund.
                        
Credit Risks [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Credit Risk
The Fund could lose money if the issuer or guarantor of a fixed income
security (including a security purchased with securities lending
collateral), the counterparty to a derivatives contract, or the issuer or
guarantor of collateral, repurchase agreement or a loan of portfolio
securities is unable or unwilling, or is perceived (whether by market
participants, rating agencies, pricing services or otherwise) as unable or
unwilling, to make timely principal and/or interest payments, or to
otherwise honor its financial obligations. The risk that such issuer,
guarantor or counterparty is less willing or able to do so is heightened
in market environments where interest rates are changing, notably
when rates are rising. The downgrade of the credit rating of a security or
of the issuer of a security held by the Fund may decrease its value.
Measures such as average credit quality may not accurately reflect the
true credit risk of the Fund. This is especially the case if the Fund
consists of securities with widely varying credit ratings. This risk is
greater to the extent the Fund uses leverage or derivatives. Rising or
high interest rates may deteriorate the credit quality of an issuer or
counterparty, particularly if an issuer or counterparty faces challenges
rolling or refinancing its obligations. The Fund's investments may be
adversely affected if any of the issuers it is invested in are subject to an
actual or perceived (whether by market participants, rating agencies,
pricing services or otherwise) deterioration to their credit quality.
Credit risk includes credit spread risk, which is the risk that credit
spreads (i.e., the difference in yield between securities that is due to
differences in their actual or perceived credit quality) may increase when
the market believes that investments generally have a greater risk of
default. Increasing credit spreads may reduce the market values of the
Fund's investments. Credit spreads often increase more for lower rated
and unrated securities than for investment grade securities. In addition,
when credit spreads increase, reductions in market value will generally
be greater for longer-maturity securities. Further, credit spread duration
(a measure of credit spread risk) can vary significantly from interest rate
duration (e.g., for floating rate debt securities, credit spread duration
typically will be higher than interest rate duration). The Fund may add
credit spread duration to its portfolio, for example through the use of
derivatives (e.g., credit default swaps), even while it has lower interest
rate duration. The credit spread duration of the Fund’s portfolio may
vary, in some cases significantly, from its interest rate duration. All
descriptions of duration in this prospectus refer to interest rate duration
unless otherwise noted.
                        
Convertible Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Convertible Securities Risk
Convertible securities are fixed income securities, preferred securities or
other securities that are convertible into or exercisable for common
stock of the issuer (or cash or securities of equivalent value) at either a
stated price or a stated rate. Convertible debt securities pay interest and
convertible preferred stocks pay dividends until they mature or are
converted, exchanged or redeemed. The market values of convertible
securities may decline as interest rates increase and, conversely, may
increase as interest rates decline. A convertible security’s market value,
however, tends to reflect the market price of the common stock of the
issuing company when that stock price approaches or is greater than
the convertible security’s “conversion price.” The conversion price is
defined as the predetermined price at which the convertible security
could be exchanged for the associated stock. Certain types of
convertible securities may decline in value or lose their value entirely in
the event the issuer’s financial condition becomes significantly impaired.
As the market price of the underlying common stock declines, the price
of the convertible security tends to be influenced more by the yield of
the convertible security. Thus, it may not decline in price to the same
extent as the underlying common stock. In the event of a liquidation of
the issuing company, holders of convertible securities may be paid
before the company’s common stockholders but after holders of any
senior debt obligations of the company. Consequently, the issuer’s
convertible securities generally entail less risk than its common stock
but more risk than its other debt obligations. Convertible securities are
often rated below investment grade or not rated.
                        
Contingent Convertible Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Contingent Convertible Securities Risk
CoCos have no stated maturity, have fully discretionary coupons and are
typically issued in the form of subordinated debt instruments. CoCos
generally either convert into equity or have their principal written down
(including potentially to zero) upon the occurrence of certain triggering
events linked to regulatory capital thresholds or regulatory actions
relating to the issuer’s continued viability. As a result, an investment by
the Fund in CoCos is subject to the risk that coupon (i.e., interest)
payments or the entire principal may be cancelled by the issuer or a
regulatory authority in order to help the issuer absorb losses and the
risk of total loss. If such an event occurs, an investor may not have any
rights to repayment of the principal amount of the securities.
Additionally, an investor may not be able to collect interest payments or
dividends on such securities. An investment by the Fund in CoCos is also
subject to the risk that, in the event of the liquidation, dissolution or
winding-up of an issuer prior to a trigger event, the Fund’s rights and
claims will generally rank junior to the claims of holders of the issuer’s
other debt obligations and CoCos may also be treated as junior to an
issuer’s other obligations and securities. In addition, if CoCos held by
the Fund are converted into the issuer’s underlying equity securities
following a trigger event, the Fund’s holding may be further
subordinated due to the conversion from a debt to equity instrument.
Further, the value of an investment in CoCos is unpredictable and could
be influenced by many factors and risks, including interest rate risk,
credit risk, market risk and liquidity risk. An investment by the Fund in
CoCos may result in losses to the Fund.
                        
Synthetic Convertible Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Synthetic Convertible Securities Risk
Synthetic convertible securities involve the combination of separate
securities that possess the two principal characteristics of a traditional
convertible security (i.e., an income-producing component and a right to
acquire an equity security). Synthetic convertible securities are often
achieved, in part, through investments in warrants or options to buy
common stock (or options on a stock index), and therefore are subject
to the risks associated with derivatives. The value of a synthetic
convertible security will respond differently to market fluctuations than
a traditional convertible security because a synthetic convertible is
composed of two or more separate securities or instruments, each with
its own market value. Because the convertible component is typically
achieved by investing in warrants or options to buy common stock at a
certain exercise price, or options on a stock index, synthetic convertible
securities are subject to the risks associated with derivatives. In
addition, if the value of the underlying common stock or the level of the
index involved in the convertible component falls below the exercise
price of the warrant or option, the warrant or option may lose all value.
                        
Special Purpose Acquisition Companies SPACs Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Special Purpose Acquisition Companies (“SPACs”) Risk
The Fund may invest in securities of SPACs or similar special purpose
entities that pool funds to seek potential acquisition opportunities.
Unless and until an acquisition is completed, a SPAC generally invests its
assets (less a portion retained to cover expenses) in U.S. government
securities, money market securities or holds cash. If an acquisition that
meets the requirements for the SPAC is not completed within a
pre-established period of time, the invested funds are returned to the
entity’s shareholders unless shareholders approve alternative options.
Because SPACs and similar entities are in essence blank check
companies without operating history or ongoing business other than
seeking acquisitions, the value of their securities is particularly
dependent on the ability of the entity’s management to identify and
complete a profitable acquisition. A SPAC’s structure may result in
significant dilution of a shareholder's share value immediately upon the
completion of a business combination due to, among other reasons,
interests held by the SPAC sponsor, conversion of warrants into
additional shares, shares issued in connection with a business
combination and/or certain embedded costs. There is no guarantee that
the SPACs in which the Fund invests will complete an acquisition or that
any acquisitions that are completed will be profitable. Some SPACs may
pursue acquisitions only within certain industries or regions, which may
increase the volatility of their prices. In addition, these securities, which
are typically traded in the over-the-counter market, may be considered
illiquid and/or be subject to restrictions on resale.
                        
Mortgage Related and Other Asset Backed Instruments Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Mortgage-Related and Other Asset-Backed Instruments Risk
The mortgage-related assets in which the Fund may invest include, but
are not limited to, any security, instrument or other asset that is related
to U.S. or non-U.S. mortgages, including those issued by private
originators or issuers, or issued or guaranteed as to principal or interest
by the U.S. government or its agencies or instrumentalities or by
non-U.S. governments or authorities, such as, without limitation, assets
representing interests in, collateralized or backed by, or whose values
are determined in whole or in part by reference to any number of
mortgages or pools of mortgages or the payment experience of such
mortgages or pools of mortgages, including REMICs, which could
include Re-REMICs, mortgage pass-through securities, inverse floaters,
CMOs, CLOs, multi-class pass-through securities, private mortgage
pass-through securities, stripped mortgage securities (generally
interest-only and principal-only securities), mortgage-related asset
backed securities and mortgage-related loans (including through
participations, assignments, originations and whole loans), including
commercial and residential mortgage loans. Exposures to
mortgage-related assets through derivatives or other financial
instruments will be considered investments in mortgage-related assets.
The Fund may also invest in other types of ABS, including CDOs, CBOs
and CLOs and other similarly structured securities. See “Investment
Objectives and Policies—Portfolio Contents—Mortgage-Related and
Other Asset-Backed Instruments” in this prospectus and “Investment
Objectives and Policies—Mortgage-Related and Other Asset-Backed
Instruments” in the Statement of Additional Information for a
description of the various mortgage-related and other asset-backed
instruments in which the Fund may invest and their related risks.
Mortgage-related and other asset-backed instruments represent
interests in “pools” of mortgages or other assets such as consumer
loans or receivables held in trust and often involve risks that are
different from or possibly more acute than risks associated with other
types of debt instruments.
Generally, rising interest rates tend to extend the duration of fixed rate
mortgage-related assets, making them more sensitive to changes in
interest rates. Compared to other fixed income investments with similar
maturity and credit, mortgage-related securities may increase in value to
a lesser extent when interest rates decline and may decline in value to a
similar or greater extent when interest rates rise. As a result, in a period
of rising interest rates, the Fund may exhibit additional volatility since
individual mortgage holders are less likely to exercise prepayment
options, thereby putting additional downward pressure on the value of
these securities and potentially causing the Fund to lose money. This is
known as extension risk. Mortgage-backed securities can be highly
sensitive to rising interest rates, such that even small movements can
cause the Fund to lose value. Mortgage-backed securities, and in
particular those not backed by a government guarantee, are subject to
credit risk. When interest rates decline, borrowers may pay off their
mortgages sooner than expected. This can reduce the returns of the
Fund because the Fund may have to reinvest that money at the lower
prevailing interest rates.
In addition, the creditworthiness, servicing practices, and financial
viability of the servicers of the underlying mortgage pools present
significant risks. For instance, a servicer may be required to make
advances in respect of delinquent loans underlying the
mortgage-related securities; however, servicers experiencing financial
difficulties may not be able to perform these obligations. Additionally,
both mortgage-related securities and asset-backed securities are subject
to risks associated with fraud or negligence by, or defalcation of, their
servicers. These securities are also subject to the risks of the underlying
loans. In some circumstances, a servicer’s or originator’s mishandling of
documentation related to the underlying collateral (e.g., failure to
properly document a security interest in the underlying collateral) may
affect the rights of security holders in and to the underlying collateral. In
addition, the underlying loans may have been extended pursuant to
inappropriate underwriting guidelines, to no underwriting guidelines at
all, or to fraudulent origination practices. The owner of a
mortgage-backed security’s ability to recover against the sponsor,
servicer or originator is uncertain and is often limited.
The Fund’s investments in other asset-backed instruments are subject to
risks similar to those associated with mortgage-related assets, as well
as additional risks associated with the nature of the assets and the
servicing of those assets. Payment of principal and interest on
asset-backed instruments may be largely dependent upon the cash
flows generated by the assets backing the instruments, and
asset-backed instruments may not have the benefit of any security
interest in the related assets.
Subordinate mortgage-backed or asset-backed instruments are paid
interest only to the extent that there are funds available to make
payments. To the extent the collateral pool includes a large percentage
of delinquent loans, there is a risk that interest payments on
subordinate mortgage-backed or asset-backed instruments will not be
fully paid.
There are multiple tranches of mortgage-backed and asset-backed
instruments, offering investors various maturity and credit risk
characteristics. For example, tranches may be categorized as senior,
mezzanine, and subordinated/equity or “first loss.” The most senior
tranche of a mortgage-backed or asset-backed instrument generally has
the greatest collateralization and generally pays the lowest interest rate.
If there are defaults or the collateral otherwise underperforms,
scheduled payments to senior tranches generally take precedence over
those of mezzanine tranches, and scheduled payments to mezzanine
tranches take precedence over those to subordinated/equity tranches.
Lower tranches represent lower degrees of credit quality and pay higher
interest rates intended to compensate for the attendant risks. The return
on the lower tranches is especially sensitive to the rate of defaults in the
collateral pool. The lowest tranche (i.e., the “equity” or “residual”
tranche) generally specifically receives the residual interest payments
(i.e., money that is left over after the higher tranches have been paid
and expenses of the issuing entities have been paid) rather than a fixed
interest rate. The Fund may also invest in the residual or equity tranches
of mortgage-related and other asset-backed instruments, which may be
referred to as subordinate mortgage-backed or asset-backed
instruments and interest-only mortgage-backed or asset-backed
instruments. The Fund expects that investments in subordinate
mortgage-backed and other asset-backed instruments will be subject to
risks arising from delinquencies and foreclosures, thereby exposing its
investment portfolio to potential losses. Subordinate securities of
mortgage-backed and other asset-backed instruments are also subject
to greater credit risk than those mortgage-backed or other asset-backed
instruments that are more highly rated.
The mortgage markets in the United States and in various foreign
countries have experienced extreme difficulties in the past that
adversely affected the performance and market value of certain of the
Fund’s mortgage-related investments. Delinquencies and losses on
residential and commercial mortgage loans (especially subprime and
second-lien mortgage loans) may increase, and a decline in or flattening
of housing and other real property values may exacerbate such
delinquencies and losses. In addition, reduced investor demand for
mortgage loans and mortgage-related securities and increased investor
yield requirements have caused limited liquidity in the secondary market
for mortgage-related securities, which can adversely affect the market
value of mortgage-related securities. It is possible that such limited
liquidity in such secondary markets could continue or worsen.
With respect to risk retention tranches (i.e., eligible residual interests
initially held by the sponsors of CMBS and other eligible securitizations
pursuant to the U.S. Risk Retention Rules), a third-party purchaser, such
as the Fund, must hold its retained interest, unhedged, for at least five
years following the closing of the CMBS transaction, after which it is
entitled to transfer its interest in the securitization to another person
that meets the requirements for a third-party purchaser. Even after the
required holding period has expired, due to the generally illiquid nature
of such investments, no assurance can be given as to what, if any, exit
strategies will ultimately be available for any given position.
In addition, there is limited guidance on the application of the final
U.S. Risk Retention Rules to specific securitization structures. There can
be no assurance that the applicable federal agencies charged with the
implementation of the final U.S. Risk Retention Rules (e.g., the FDIC, the
Comptroller of the Currency, the Federal Reserve Board, the SEC, the
Department of Housing and Urban Development, and the Federal
Housing Finance Agency) could not take positions in the future that
differ from the interpretation of such rules taken or embodied in such
securitizations, or that the final U.S. Risk Retention Rules will not
change.
Furthermore, in situations where the Fund invests in risk retention
tranches of securitizations structured by third parties, the Fund may be
required to execute one or more letters or other agreements, the exact
form and nature of which will vary (each, a “Risk Retention
Agreement”) under which it will make certain undertakings designed to
ensure such securitization complies with the U.S. Risk Retention Rules.
Such Risk Retention Agreements may include a variety of
representations, warranties, covenants and other indemnities, each of
which may run to various transaction parties. If the Fund breaches any
undertakings in any Risk Retention Agreement, it will be exposed to
claims by the other parties thereto, including for any losses incurred as a
result of such breach, which could be significant and exceed the value of
the Fund’s investments.
                        
Asset Allocation Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Asset Allocation Risk
The Fund’s investment performance depends upon how its assets are
allocated and reallocated. A principal risk of investing in the Fund is that
PIMCO may make less than optimal or poor asset allocation decisions.
PIMCO employs an active approach to allocation among multiple fixed
income sectors within the Fund's investment objectives and strategies,
but there is no guarantee that such allocation techniques will produce
the desired results. It is possible that PIMCO will focus on an investment
that performs poorly or underperforms other investments under various
market conditions, or underperforms as compared to funds with similar
investment objectives and strategies. You could lose money on your
investment in the Fund as a result of these allocation decisions.
                        
Subsidiary Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Subsidiary Risk
To the extent the Fund invests through one or more of its wholly-owned
Subsidiaries, the Fund would be exposed to the risks associated with
such Subsidiary’s investments. Such Subsidiaries would likely not be
registered as investment companies under the 1940 Act and, except as
noted in this prospectus, would not be subject to all of the investor
protections of the 1940 Act. Changes in the laws of the United States
and/or the jurisdiction in which a Subsidiary is organized could result in
the inability of the Fund and/or the Subsidiary to operate as intended
and could adversely affect the Fund.
                        
Focused Investment Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Focused Investment Risk
To the extent that the Fund focuses its investments in a particular sector,
it may be susceptible to loss due to adverse developments affecting that
sector, including (but not limited to): governmental regulation; inflation;
rising interest rates; cost increases in raw materials, fuel and other
operating expenses; technological innovations that may render existing
products and equipment obsolete; competition from new entrants; high
research and development costs; increased costs associated with
compliance with environmental or other governmental regulations; and
other economic, business or political developments specific to that
sector. Furthermore, the Fund may invest a substantial portion of its
assets in companies in related sectors that may share common
characteristics, are often subject to similar business risks and regulatory
burdens, and whose securities may react similarly to the types of
developments described above, which will subject the Fund to greater
risk. The Fund also will be subject to focused investment risk to the
extent that it invests a substantial portion of its assets in a particular
issuer, market, asset class, country or geographic region. See “Principal
Risks of the Fund—Foreign (Non-U.S.) Investment Risk,” “Principal
Risks of the Fund—Emerging Markets Risk” and “Principal Risks of the
Fund—Currency Risk.”
                        
Securities Lending Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Securities Lending Risk
For the purpose of achieving income, the Fund may lend its portfolio
securities to brokers, dealers, and other financial institutions provided a
number of conditions are satisfied, including that the loan is fully
collateralized. Please see “Investment Objectives and Policies—Loans of
Portfolio Securities” in the Statement of Additional Information for more
details. When the Fund lends portfolio securities, its investment
performance will continue to reflect changes in the value of the
securities loaned, and the Fund will also receive a fee or interest on the
collateral. Securities lending involves the risk of loss of rights in the
collateral or delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. The Fund may pay
lending fees to a party arranging the loan, which may be an affiliate of
the Fund. Cash collateral received by the Fund in securities lending
transactions may be invested in short-term liquid fixed income
instruments or in money market or short-term mutual funds, or similar
investment vehicles, including affiliated money market or short-term
mutual funds. The Fund bears the risk of such investments.
                        
Preferred Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Preferred Securities Risk
In addition to equity securities risk, credit risk and possibly high yield
risk, investment in preferred securities involves certain other risks.
Certain preferred securities contain provisions that allow an issuer
under certain conditions to skip or defer distributions. If the Fund owns
a preferred security that is deferring its distribution, the Fund may be
required to include the amount of the deferred distribution in its taxable
income for tax purposes although it does not currently receive such
amount in cash. In order to receive the special treatment accorded to
RICs and their shareholders under the Code and to avoid U.S. federal
income and/or excise taxes at the Fund level, the Fund may be required
to distribute this income to shareholders in the tax year in which the
income is recognized (without a corresponding receipt of cash by the
Fund). Therefore, the Fund may be required to pay out as an income
distribution in any such tax year an amount greater than the total
amount of cash income the Fund actually received and to sell portfolio
securities, including at potentially disadvantageous times or prices, to
obtain cash needed for these income distributions. Preferred securities
often are subject to legal provisions that allow for redemption in the
event of certain tax or legal changes or at the issuer’s call. In the event
of redemption, the Fund may not be able to reinvest the proceeds at
comparable rates of return. Preferred securities are subordinated to
bonds and other debt securities in an issuer’s capital structure in terms
of priority for corporate income and liquidation payments, and therefore
will be subject to greater credit risk than those debt securities. Preferred
securities may trade less frequently and in a more limited volume and
may be subject to more abrupt or erratic price movements than many
other securities.
                        
Privately Issued Mortgage Related Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Privately-Issued Mortgage-Related Securities Risk
There are no direct or indirect government or agency guarantees of
payments in pools created by non-governmental issuers. Privately-issued
mortgage-related securities are also not subject to the same
underwriting requirements for the underlying mortgages that are
applicable to those mortgage-related securities that have a government
or government sponsored entity guarantee.
Privately-issued mortgage-related securities are not traded on an
exchange and there may be a limited market for the securities, especially
when there is a perceived weakness in the mortgage and real estate
market sectors. Without an active trading market, mortgage-related
securities held in the Fund’s portfolio may be particularly difficult to
value because of the complexities involved in assessing the value of the
underlying mortgage loans.
                        
Smaller Company Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Smaller Company Risk
The general risks associated with debt instruments or equity securities
are particularly pronounced for securities issued by companies with
small market capitalizations. Small capitalization companies involve
certain special risks. They are more likely than larger companies to have
limited product lines, markets or financial resources, or to depend on a
small, inexperienced management group. Securities of smaller
companies may trade less frequently and in lesser volume than more
widely held securities and their values may fluctuate more sharply than
other securities. They may also have limited liquidity. These securities
may therefore be more vulnerable to adverse developments than
securities of larger companies, and the Fund may have difficulty
purchasing or selling securities positions in smaller companies at
prevailing market prices. Also, there may be less publicly available
information about smaller companies or less market interest in their
securities as compared to larger companies. Companies with
medium-sized market capitalizations may have risks similar to those of
smaller companies.
                        
Insurance Linked and Other Instruments Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Insurance-Linked and Other Instruments Risk
The Fund may invest in insurance-linked instruments and similar
investments (which may include, for example, exposure to reinsurance
contracts (through sidecars or otherwise), event-linked bonds, such as
catastrophe and resilience bonds, and securities relating to life
insurance policies, annuity contracts and premium finance loans). The
Fund could lose a portion or all of the principal it has invested in these
types of investments, and the right to additional interest and/or dividend
payments with respect to the investments, upon the occurrence of one
or more trigger events, as defined within the terms of an investment.
Trigger events may include natural or other perils of a specific size or
magnitude that occur in a designated geographic region during a
specified time period, and/or that involve losses or other metrics that
exceed a specific amount. The Fund may also invest in insurance-linked
instruments that are subject to “indemnity triggers.” An indemnity
trigger is a mechanism where the payout to the investor is based on the
actual losses incurred by the insurer and come into play when losses
from a specified event exceed a designated level. Insurance-linked
instruments subject to indemnity triggers are often regarded as being
subject to potential moral hazard, since such insurance-linked
investments are triggered by actual losses of the ceding sponsor and the
ceding sponsor may have an incentive to take actions and/or risks that
would have an adverse effect on the Fund. There is no way to accurately
predict whether a trigger event will occur and, accordingly,
insurance-linked instruments and similar investments carry significant
risk. In addition to the specified trigger events, these types of
investments may expose the Fund to other risks, including but not
limited to issuer (credit) default, adverse regulatory or jurisdictional
interpretations and adverse tax consequences.
The Fund may also gain exposure to reinsurance contracts (through
insurance-linked securities, sidecars or otherwise). This exposure may
include “excess of loss” contracts, wherein liability arises only if and
when losses exceed a specified amount, and proportional reinsurance,
wherein a pro rata portion of the premiums and liabilities of the cedant
associated with a specified business or a portfolio if insurance contracts
are linked to the investment. Investments linked to reinsurance
transactions may involve significant insurance brokerage fees, fronting
fees and other transaction costs.
A series of major triggering events could cause the failure of a reinsurer.
Similarly, to the extent the Fund invests in reinsurance-related securities
for which a triggering event occurs, losses associated with such event
will result in losses to the Fund and a series of major triggering events
affecting a large portion of the reinsurance-related securities held by the
Fund may result in substantial losses to the Fund. In addition,
unexpected events such as natural disasters or terrorist attacks could
lead to government intervention. Political, judicial and legal
developments affecting the reinsurance industry could also create new
and expanded theories of liability or regulatory or other requirements;
such changes could have a material adverse effect on the Fund. In
addition, the litigation environment in catastrophe-exposed states or
regions could impact the frequency and severity of insurance claims, and
litigation costs could decrease the value of the Fund’s investment in
products linked to reinsurance contracts. In recent years, capital market
participants have been increasingly active in the reinsurance market and
markets for related risks. Increased competition could result in fewer
submissions, lower premium rates and less favorable policy terms and
conditions.
Certain insurance-linked instruments and similar investments may have
limited liquidity, or may be illiquid. The Fund has limited transparency
into the individual contracts underlying certain insurance-linked
instruments and similar investments, which may make the risk
assessment of them more difficult. These types of investments may be
difficult to value.
The aforementioned instruments may include longevity and mortality
investments, including indirect investment in pools of insurance-related
longevity and mortality investments, including life insurance policies,
annuity contracts and premium finance loans. Such investments are
subject to “longevity risk” and/or “mortality risk.” Longevity risk is the
risk that members of a reference population will live longer, on average,
than anticipated. Mortality risk is the risk that members of a reference
population will live shorter, on average, than anticipated. Changes in
these rates can significantly affect the liabilities and cash needs of life
insurers, annuity providers and pension funds. The terms of a longevity
bond typically provide that the investor in the bond will receive less than
the bond’s par amount at maturity if the actual average longevity (life
span) of a specified population of people observed over a specified
period of time (typically measured by a longevity index) is higher than a
specified level. If longevity is higher than expected, the bond will return
less than its par amount at maturity. A mortality bond, in contrast to a
longevity bond, typically provides that the investor in the bond will
receive less than the bond’s par amount at maturity if the mortality rate
of a specified population of people observed over a specified period of
time (typically measured by a mortality index) is higher than a specified
level.
During their term, both longevity bonds and mortality bonds typically
pay a floating rate of interest to investors. Longevity and mortality
investments purchased by the Fund involve the risk of incorrectly
predicting the actual level of longevity or mortality, as applicable, for the
reference population of people. With respect to mortality investments
held by the Fund, there is also the risk that an epidemic or other
catastrophic event could strike the reference population, resulting in
mortality rates exceeding expectations. The Fund may also gain this type
of exposure through event-linked derivative instruments, such as swaps,
that are contingent on or formulaically related to longevity or mortality
risk.
                        
Distressed and Defaulted Securities Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Distressed and Defaulted Securities Risk
Investments in the securities of financially distressed issuers involve
substantial risks, including the risk of default. Distressed securities
generally trade significantly below “par” or full value because
investments in such securities and debt of distressed issuers or issuers in
default are considered speculative and involve substantial risks in
addition to the risks of investing in high-yield bonds. Such investments
may be in default at the time of investment. In addition, these securities
may fluctuate more in price, and are typically less liquid. The Fund also
will be subject to significant uncertainty as to when, and in what
manner, and for what value obligations evidenced by securities of
financially distressed issuers will eventually be satisfied. Defaulted
obligations might be repaid only after lengthy workout or bankruptcy
proceedings, during which the issuer might not make any interest or
other payments. In any such proceeding relating to a defaulted
obligation, the Fund may lose its entire investment or may be required
to accept cash or securities with a value substantially less than its
original investment. Moreover, any securities received by the Fund upon
completion of a workout or bankruptcy proceeding may be less liquid,
speculative or restricted as to resale. Similarly, if the Fund participates in
negotiations with respect to any exchange offer or plan of
reorganization with respect to the securities of a distressed issuer, the
Fund may be restricted from disposing of such securities. To the extent
that the Fund becomes involved in such proceedings, the Fund may
have a more active participation in the affairs of the issuer than that
assumed generally by an investor. The Fund may incur additional
expenses to the extent it is required to seek recovery upon a default in
the payment of principal or interest on its portfolio holdings.
Also among the risks inherent in investments in a troubled issuer is that
it frequently may be difficult to obtain information as to the true
financial condition of such issuer. PIMCO's judgments about the credit
quality of a financially distressed issuer and the relative value of its
securities may prove to be wrong.
                        
Privacy and Data Security Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Privacy and Data Security Risk
The GLBA and other laws limit the disclosure of certain non-public
personal information about a consumer to non- affiliated third parties
and require financial institutions to disclose certain privacy policies and
practices with respect to information sharing with both affiliates and
non-affiliated third parties. Many states and a number of
non-U.S. jurisdictions have enacted privacy and data security laws
requiring safeguards on the privacy and security of consumers’
personally identifiable information. Other laws deal with obligations to
safeguard and dispose of private information in a manner designed to
avoid its dissemination. Privacy rules adopted by the U.S. Federal Trade
Commission and SEC implement GLBA and other requirements and
govern the disclosure of consumer financial information by certain
financial institutions, ranging from banks to private investment funds.
U.S. platforms following certain models generally are required to have
privacy policies that conform to these GLBA and other requirements. In
addition, such platforms typically have policies and procedures intended
to maintain platform participants’ personal information securely and
dispose of it properly.
The Fund generally does not intend to obtain or hold borrowers’
non-public personal information, and the Fund has implemented
procedures reasonably designed to prevent the disclosure of borrowers’
non-public personal information to the Fund. However, service providers
to the Fund, including their custodians and the platforms acting as loan
servicers for the Fund, may obtain, hold or process such information. The
Fund cannot guarantee the security of non-public personal information
in the possession of such a service provider and cannot guarantee that
service providers have been and will continue to comply with the GLBA,
other data security and privacy laws and any other related regulatory
requirements. Violations of GLBA and other laws could subject the Fund
to litigation and/or fines, penalties or other regulatory action, which,
individually or in the aggregate, could have an adverse effect on the
Fund. The Fund may also face regulations related to privacy and data
security in the other jurisdictions in which the Fund invests.
                        
Interest Rate Risk [Member]                          
General Description of Registrant [Abstract]                          
Risk [Text Block]
Interest Rate Risk
Interest rate risk is the risk that fixed income securities and other
instruments in the Fund’s portfolio will fluctuate in value because of a
change in interest rates. For example, as nominal interest rates rise, the
value of certain fixed income securities held by the Fund is likely to
decrease. A nominal interest rate can be described as the sum of a real
interest rate and an expected inflation rate. Interest rate changes can be
sudden and unpredictable, and the Fund may lose money as a result of
movements in interest rates. The Fund may not be able to effectively
hedge against changes in interest rates or may choose not to do so for
cost or other reasons.
A wide variety of factors can cause interest rates or yields of
U.S. Treasury securities (or yields of other types of bonds) to rise,
including but not limited to central bank monetary policies, changing
inflation or real growth rates, general economic conditions, increasing
bond issuances or reduced market demand for low yielding investments.
Risks associated with rising interest rates may be heightened under
recent market conditions, including because the U.S. Federal Reserve
(the “Federal Reserve”) has, in the recent past, raised interest rates from
historically low levels. In addition, changes in monetary policy may
exacerbate the risks associated with changing interest rates. Further, in
market environments where interest rates are higher or rising, issuers
may be less willing or able to make principal and interest payments on
fixed income investments when due. Actions by governments and
central banking authorities can result in increases or decreases in
interest rates. Periods of higher inflation could cause such authorities to
raise interest rates, which may adversely affect the Fund and its
investments.
Further, fixed income securities with longer durations tend to be more
sensitive to changes in interest rates, usually making them more volatile.
Duration is a measure used to determine the sensitivity of a security’s
price to changes in interest rates that incorporates a security’s yield,
coupon, final maturity and call features, among other characteristics.
Duration is useful primarily as a measure of the sensitivity of a fixed
income security’s market price to interest rate (i.e., yield) movements. All
other things remaining equal, for each one percentage point increase in
interest rates, the value of a portfolio of fixed income investments would
generally be expected to decline by one percent for every year of the
portfolio’s average duration above zero. For example, the value of a
portfolio of fixed income securities with an average duration of eight
years would generally be expected to decline by approximately 8% if
interest rates rose by one percentage point.
Dividend-paying equity securities, particularly those whose market price
is closely related to their yield, may be more sensitive to changes in
interest rates. During periods of rising interest rates, the values of such
securities may decline and may result in losses to the Fund. Variable and
floating rate securities may decline in value if their interest rates do not
rise as much, or as quickly, as interest rates in general. Conversely,
floating rate securities will not generally increase in value if interest
rates decline. Inverse floating rate securities may decrease in value if
interest rates increase. Inverse floating rate securities may also exhibit
greater price volatility than a fixed rate obligation with similar credit
quality. When the Fund holds variable or floating rate securities, a
decrease (or, in the case of inverse floating rate securities, an increase)
in market interest rates will adversely affect the income received from
such securities and the NAV of the Fund’s shares.
During periods of very low or negative interest rates, the Fund may be
unable to maintain positive returns. Very low or negative interest rates
may magnify interest rate risk. Changing interest rates, including rates
that fall below zero, may have unpredictable effects on markets, may
result in heightened market volatility and may detract from Fund
performance to the extent the Fund is exposed to such interest rates.
Measures such as average duration may not accurately reflect the true
interest rate sensitivity of the Fund. This is especially the case if the Fund
consists of securities with widely varying durations. Therefore, if the
Fund has an average duration that suggests a certain level of interest
rate risk, the Fund may in fact be subject to greater interest rate risk
than the average would suggest. This risk is greater to the extent the
Fund uses leverage or derivatives in connection with the management
of the Fund.
Convexity is an additional measure used to understand a security's or
Fund's interest rate sensitivity. Convexity measures the rate of change of
duration in response to changes in interest rates. With respect to a
security’s price, a larger convexity (positive or negative) may imply more
dramatic price changes in response to changing interest rates. Convexity
may be positive or negative. Negative convexity implies that interest
rate increases result in increased duration and that interest rate
decreases result in declining duration (i.e., increased sensitivity in prices
in response to rising and/or declining interest rates). Thus, securities
with negative convexity, which may include bonds with traditional call
features and certain mortgage-backed securities, may experience
greater losses in periods of rising interest rates. Accordingly, if the Fund
holds such securities, the Fund may be subject to a greater risk of losses
in periods of rising interest rates.
Rising interest rates may result in periods of volatility and a decline in
value of the Fund’s fixed income investments. Also, when interest rates
rise, issuers are less likely to refinance existing debt securities, causing
the average life of such securities to extend. Further, while U.S. bond
markets have steadily grown over the past three decades, dealer
“market making” ability has remained relatively stagnant. As a result,
dealer inventories of certain types of bonds and similar instruments,
which provide a core indication of the ability of financial intermediaries
to “make markets,” are at or near historic lows in relation to market
size. Because market makers provide stability to a market through their
intermediary services, a significant reduction in dealer inventories could
potentially lead to decreased liquidity and increased volatility in the
fixed income markets. Such issues may be exacerbated during periods of
economic uncertainty. All of these factors, collectively and/or
individually, could cause the Fund to lose value.
                        
Business Contact [Member]                          
Cover [Abstract]                          
Entity Address, Address Line One 650 Newport Center Drive                        
Entity Address, City or Town Newport Beach                        
Entity Address, State or Province CA                        
Entity Address, Postal Zip Code 92660                        
Contact Personnel Name Ryan G. Leshaw                        
Common Shares [Member]                          
Capital Stock, Long-Term Debt, and Other Securities [Abstract]                          
Outstanding Security, Title [Text Block]   Common Shares                      
Outstanding Security, Held [Shares]   171,030,439                      
[1] In the event that the Common Shares to which this prospectus relates are sold to or through underwriters or dealer managers, a corresponding prospectus supplement will disclose the applicable sales load and/or commission.
[2] You will pay brokerage charges if you direct your broker or the plan agent to sell your Common Shares that you acquired pursuant to a dividend reinvestment plan. You may also pay a pro rata share of brokerage commissions incurred in connection with open-market purchases pursuant to the Fund’s Dividend Reinvestment Plan. See “Dividend Reinvestment Plan.”
[3] The related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by the Fund and indirectly by all of its Common Shareholders as a percentage of the offering price.
[4] Management Fees include fees payable to the Investment Manager for advisory services and for supervisory, administrative and other services. The Fund pays for the advisory, supervisory and administrative services it requires under what is essentially an all-in fee structure (the “unified management fee”). Pursuant to an investment management agreement, PIMCO is paid a Management Fee of 0.76% of the Fund’s average daily net assets (including daily net assets attributable to any preferred shares of the Fund that may be outstanding). The Fund (and not PIMCO) will be responsible for certain fees and expenses, which are reflected in the table above, that are not covered by the unified management fee under the investment management agreement. Please see “Management of the Fund–Investment Management Agreement” for an explanation of the unified management fee and definition of “net assets.”
[5] Reflects the Fund’s use of leverage in the form of reverse repurchase agreements averaged over the fiscal year ended June 30, 2024, which represented 14.59% of the Fund’s average total managed assets, (including assets attributable to reverse repurchase agreements), at an annual interest rate cost to the Fund of 5.80%, which is the weighted average interest rate cost during the fiscal year ended June 30, 2024. See “Use of Leverage—Effects of Leverage.” The actual amount of interest expense borne by the Fund will vary over time in accordance with the level of the Fund’s use of reverse repurchase agreements, dollar rolls and/or borrowings and variations in market interest rates. Borrowing expense is required to be treated as an expense of the Fund for accounting purposes. Any associated income or gains (or losses) realized from leverage obtained through such instruments is not reflected in the Annual Expenses table above, but would be reflected in the Fund’s performance results
[6] Reflects the Fund’s preferred shares averaged over the fiscal year ended June 30, 2024, which represented 0.21% of the Fund’s total average managed assets (including the liquidation preference of outstanding Preferred Shares and assets attributable to reverse repurchase agreements) as of that date, at an annual dividend cost to the Fund of 4.26%. The Fund purchased the bulk of its preferred shares in a tender offer completed in April 2024 and redeemed its remaining preferred shares between November 4, 2024 and November 8, 2024. The Fund has no preferred shares outstanding as of the date of this prospectus.
[7] “Other Expenses” are estimated for the Fund’s current fiscal year ending June 30, 2025.
[8] “Dividend Cost on Preferred Shares”, including distributions on Preferred Shares, and “Interest Payments on Borrowed Funds” are borne by the Fund separately from management fees paid to PIMCO. Excluding these expenses, Total Annual Fund Operating Expenses are 0.85%. Excluding only distributions on Preferred Shares of 0.01%, Total Annual Fund Operating Expenses are 2.91%.
[9] The example above should not be considered a representation of future expenses. Actual expenses may be higher or lower than those shown. The example assumes that the estimated Interest Payments on Borrowed Funds, Dividend Cost on Preferred Shares and Other Expenses set forth in the Annual Expenses table are accurate, that the rate listed under Total Annual Expenses remains the same each year and that all dividends and distributions are reinvested at NAV. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual rate of return may be greater or less than the hypothetical 5% annual return shown in the example. The example does not include commissions or estimated offering expenses, which would cause the expenses shown in the example to increase. In connection with an offering of Common Shares, the prospectus supplement will set forth an example including sales load and estimated offering costs.
[10] Such prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.