-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 NA8BbqR5F2iFf+h/M6CbUJPolqU2KR1JfdPFTDJXpFuNy3b/bY6MfiSmqxLHa0/M
 wdJa+2Ksksvj60LDAxmGuA==

<SEC-DOCUMENT>0000930413-04-002500.txt : 20040510
<SEC-HEADER>0000930413-04-002500.hdr.sgml : 20040510
<ACCEPTANCE-DATETIME>20040510133704
ACCESSION NUMBER:		0000930413-04-002500
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20040229
FILED AS OF DATE:		20040510
EFFECTIVENESS DATE:		20040510

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NICHOLAS APPLEGATE CONVERTIBLE & INCOME FUND
		CENTRAL INDEX KEY:			0001214935
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			MA

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21284
		FILM NUMBER:		04792094

	MAIL ADDRESS:	
		STREET 1:		1345 AVE OF THE AMERICAS
		STREET 2:		47TH FL
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10105

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NICHOLAS APPLEGATE CONVERTIBLE INCOME FUND
		DATE OF NAME CHANGE:	20030121
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>c31442_n-csr.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM N-CSR


              CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
                              INVESTMENT COMPANIES


Investment Company Act file number 811-21284
                                   ---------

                  Nicholas-Applegate Convertible & Income Fund
                ------------------------------------------------

               (Exact name of registrant as specified in charter)


              1345 Avenue of the Americas, New York, New York 10105
              -----------------------------------------------------
               (Address of principal executive offices) (Zip code)


  Lawrence G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105
  -----------------------------------------------------------------------------
                    (Name and address of agent for service)


Registrant's telephone number, including area code: 212-739-3371
                                                    ------------

Date of fiscal year end: February 29
                         -----------

Date of reporting period: February 29
                          -----------

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.


A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.

<PAGE>


ITEM 1. Report To Shareholders


                                                           Annual Report
                                                                 2.29.04

        NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND


================================================================================

                      NCV
         ---------------------------
                    LISTED
         ---------------------------
                     NYSE
         THE NEW YORK STOCK EXCHANGE



                                CONTENTS

                                Letter to Shareholders ..................      1

                                Performance and Statistics ..............      2

                                Schedule of Investments .................    3-9

                                Statement of Assets and Liabilities .....     10

                                Statement of Operations .................     11

                                Statement of Changes in Net Assets ......     12

                                Notes to Financial Statements ...........  13-16

                                Financial Highlights ....................     17

                                Report of Independent Auditors ..........     18

                                Privacy Policy, Proxy Voting Policies
                                  and Procedures, Other Information .....     19

                                Dividend Reinvestment Plan ..............     20

                                Board of Trustees .......................     21



                                                           [PIMCO ADVISORS LOGO]

<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND LETTER TO SHAREHOLDERS




                                                                  April 12, 2004
Dear Shareholder:

We  are  pleased  to  provide  you  with  the  initial   annual  report  of  the
Nicholas-Applegate  Convertible  & Income Fund (the "Fund") for the period March
31, 2003 (commencement of operations) through February 29, 2004.

Please refer to the following  page for specific Fund  information.  If you have
any questions regarding the information provided,  please contact your financial
advisor or call our  shareholder  services area at  1-800-331-1710.  Please note
that a wide range of information  and resources can be accessed  through our Web
site, www.pimcoadvisors.com.

We at the Fund,  together with PIMCO  Advisors Fund  Management  LLC, the Fund's
investment  manager and  Nicholas-Applegate  Capital  Management LLC, the Fund's
sub-adviser,  thank you for  investing  with us. We remain  dedicated to serving
your investment needs.

Sincerely,


/s/ Stephen Treadway                          /s/ Brian S. Shlissel


Stephen Treadway                              Brian S. Shlissel
CHAIRMAN                                      PRESIDENT, CHIEF EXECUTIVE OFFICER



         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report  1
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND PERFORMANCE AND STATISTICS
February 29, 2004 (unaudited)


================================================================================
SYMBOL:
NCV

OBJECTIVE:

To provide total return through a combination of capital  appreciation  and high
current income.

PRIMARY INVESTMENTS:

At least 50% of total assets in convertible securities.

INCEPTION DATE:
3/31/03

TOTAL NET ASSETS(1):
$1,626.8 million

PORTFOLIO MANAGER:
Douglas Forsyth


TOTAL RETURN(2):                                         Market Price      NAV
- --------------------------------------------------------------------------------
Commencement of Operations (3/31/03) TO 2/29/04             18.98%        26.81%
- --------------------------------------------------------------------------------

COMMON SHARE PRICE PERFORMANCE:
Commencement of Operations (3/31/03) to 2/29/04
o NAV
o Market Price

MARKET PRICE/NET ASSET VALUE:
- ----------------------------------------
Market Price                     $16.38
- ----------------------------------------
Net Asset Value                  $16.67
- ----------------------------------------
Market Price Yield(3)             9.16%
- ----------------------------------------
Discount to Net Asset Value       1.74%
- ----------------------------------------

         [The data below represents a line chart in the printed report.]

3/31/03           14.31             15.01
                  14.33             15.05
                  14.21             15.06
                  14.39             15.1
                  14.58             15.02
                  14.78             15.1
                  14.79             14.99
                  14.89             15.15
                  14.63             14.99
                  14.89             15
                  15.24             15.34
                  15.18             15.3
                  15.23             15.1
                  15.11             14.99
                  15.16             15.15
                  15.33             15.34
                  15.24             15.1
                  15.31             15.15
                  14.96             14.95
                  14.67             14.75
                  14.64             14.58
                  15.06             14.69
                  15.39             14.71
                  15.62             14.98
                  15.5              14.95
                  15.77             15.05
                  15.42             14.92
                  15.81             15.1
                  15.97             15.33
                  16.02             15.6
                  15.84             15.66
                  16.03             15.73
                  16.15             15.99
                  15.96             15.96
                  15.86             15.63
                  16.19             16.09
                  16.3              16.32
                  16.25             16.27
                  16.41             16.44
                  16.46             16.36
                  16.55             16.69
                  17.03             16.75
                  17.07             16.78
                  17.14             16.98
                  16.84             16.69
                  16.75             16.88
                  16.77             16.9
                  16.66             16.39
2/29/04           16.67             16.38


(1)  Inclusive of net assets attributable to Preferred Shares outstanding.

(2)  PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return is
determined by subtracting  the initial  investment  from the value at the end of
the period and dividing the remainder by the initial  investment  and expressing
the result as a percentage.  The calculation  assumes that all income  dividends
and capital gain distributions have been reinvested at prices obtained under the
Fund's  dividend  reinvestment  plan.  Total  return  does  not  reflect  broker
commissions or sales charges. Total return for a period of less than one year is
not annualized.

An  investment  in the Fund  involves  risk,  including  the loss of  principal.
Investment return,  price, yield and net asset value will fluctuate with changes
in market  conditions.  This data is provided  for  information  only and is not
intended for trading purposes.  Closed-end funds, unlike open-end funds, are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3)  Market Price Yield is  determined  by dividing the  annualized  current per
share  dividend to common  shareholders  by the market price per common share at
February 29, 2004.


2  Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
    Principal
     Amount                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*           Value
===================================================================================================================
 CORPORATE BONDS & NOTES--44.8%
- -------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                                             <C>               <C>
                    AGRICULTURE--0.5%
    $ 6,750         Hines Nurseries, Inc., 10.25%, 10/1/11                            B3/B            $ 7,357,500
                                                                                                      ------------
                    AIRLINES--1.0%
      9,970         Continental Airlines, Inc., 8.00%, 12/15/05                     Caa2/CCC+           9,670,900
      7,500         Delta Airlines, Inc., 7.90%, 12/15/09                            Caa2/B-            5,512,500
        670         Northwest Airlines Corp., 9.875%, 3/15/07                        Caa1/B-              626,450
                                                                                                      ------------
                                                                                                       15,809,850
                                                                                                      ============
                    APPAREL--0.3%
      3,260         Oxford Industries, Inc., 8.875%, 6/1/11
                        (acquired 5/6/03, cost-$3,362,463) (a)                        B2/B              3,471,900
        175         Phillips-Van Heusen Corp., 8.125%, 5/1/13                        B2/BB-               184,625
        580         Warnaco, Inc., 8.875%, 6/15/13                                    B2/B                617,700
                                                                                                      ------------
                                                                                                        4,274,225
                                                                                                      ============
                    AUTOMOTIVE--0.5%
      2,325         Collins & Aikman Products Corp., 11.50%, 4/15/06                  B3/B-             2,220,375
      4,950         Collins & Aikman Products Corp., 10.75%, 12/31/11                 B2/B-             4,875,750
        385         HLI Operating Co. Inc., 10.50%, 6/15/10                           B1/B+               439,862
                                                                                                      ------------
                                                                                                        7,535,987
                                                                                                      ============
                    CHEMICALS--2.8%
      8,680         Applied Extrusion Technologies Inc., 10.75%, 7/1/11, Ser. B     Caa1/CCC            7,595,000
     11,500         Huntsman LLC., 11.625%, 10/15/10
                         (acquired 12/11/03, cost-$12,020,000) (a)                    B2/B             12,017,500
     13,555         Lyondell Chemical Co., 9.625%, 5/1/07, Ser. A                     B1/B+            14,232,750
        115         Lyondell Chemical Co., 10.875%, 5/1/09, Ser. A                    B3/B-               115,287
        560         Om Group Inc., 9.25%, 12/15/11                                   Caa1/B-              589,400
      9,545         PolyOne Corp., 10.625%, 5/15/10                                  B3/BB-             9,831,350
                                                                                                      ------------
                                                                                                       44,381,287
                                                                                                      ============
                    COMMERCIAL SERVICES--1.4%
        505         Integrated Electrical Services Inc., 9.375%, 2/1/09, Ser. C       B2/B+               530,250
     12,610         United Rentals, Inc., 9.00%, 4/1/09                               B2/B+            13,229,151
      3,335         United Rentals North America Inc., 7.00%, 2/15/14
                        (acquired 1/23/04, cost-$3,328,342) (a)                       B2/B+             3,184,925
      1,725         URS Corp., 12.25%, 5/1/09, Ser. B                                 B2/B              1,845,750
      3,500         Xerox Corp., 9.75%, 1/15/09                                       B1/B+             4,077,500
                                                                                                      ------------
                                                                                                       22,867,576
                                                                                                      ============
                    CONTAINERS--0.3%
      5,070         Owens-Illinois, Inc., 8.10%, 5/15/07                             Caa1/B             5,247,450
        170         Stone Container Corp., 8.375%, 7/1/12                             B2/B                184,663
                                                                                                      ------------
                                                                                                        5,432,113
                                                                                                      ============
                    ELECTRONICS--1.0%
        160         Imax Corp., 9.625%, 12/1/10
                         (acquired 2/3/04, cost-$172,900) (a)                         B3/B-               171,200
      5,350         Salton, Inc., 10.75%, 12/15/05                                   B3/CCC+            5,403,500
      7,150         Sanmina-SCI Corp., 10.375%, 1/15/10                              Ba2/BB-            8,329,750
      1,525         Stoneridge, Inc., 11.50%, 5/01/12                                 B2/B+             1,799,500
                                                                                                      ------------
                                                                                                       15,703,950
                                                                                                      ============
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
        | 2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 3
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
    Principal
     Amount                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*           Value
===================================================================================================================
<S>                 <C>                                                             <C>               <C>
                    ENERGY--1.4%
      $ 215         Calpine Corp., 8.50%, 7/15/10
                        (acquired 2/3/04, cost-$207,676) (a)                          NR/B             $  197,800
     13,500         Calpine Corp., 8.50%, 2/15/11                                   Caa1/CCC+          10,327,500
     11,000         Reliant Resources Inc., 9.50%, 7/15/13                            B1/B             11,935,000
                                                                                                      ------------
                                                                                                       22,460,300
                                                                                                      ============
                    ENTERTAINMENT--0.9%
      8,105         Alliance Atlantis Communications, Inc., 13.00%, 12/15/09          B1/B              9,118,125
        430         Gaylord Entertainment Co., 8.00%, 11/15/13
                         (acquired 2/3/04, cost-$454,994) (a)                         B3/B-               455,262
        245         Intrawest Corp., 10.50%, 2/1/10                                   B1/B+               269,500
      4,460         Penn National Gaming, Inc., 8.875%, 3/15/10                       B3/B              4,794,500
                                                                                                      ------------
                                                                                                       14,637,387
                                                                                                      ============
                    FINANCIAL SERVICES--2.4%
      5,000         Finova Group, Inc., 7.50%, 11/15/09                               NR/NR             3,137,500
        190         New ASAT Finance Ltd., 9.25%, 2/1/11
                        (acquired 2/3/04, cost-$200,094) (a)                          B3/B                202,825
     35,520         TRAC-X North America, 10.125%, 3/25/09
                        (acquired 1/26/04, cost-$37,039,600) (a) (b)                  NR/NR            35,564,400
                                                                                                      ------------
                                                                                                       38,904,725
                                                                                                      ============
                    FOOD PRODUCTS--0.7%
      7,820         Pilgrim's Pride Corp., 9.625%, 9/15/11                           B1/BB-             8,484,700
      2,370         PPC Escrow Corp., 9.25%, 11/15/13
                         (acquired 2/3/04, cost-$2,523,425) (a)                       B2/B+             2,500,350
                                                                                                      ------------
                                                                                                       10,985,050
                                                                                                      ============
                    HEALTHCARE--2.5%
     10,035         Extendicare Health Services, Inc., 9.35%, 12/15/07                B3/B-            10,386,225
      1,290         Genesis Healthcare Corp., 8.00%, 10/15/13
                         (acquired 2/3/04, cost-$1,359,894) (a)                       B3/B-             1,373,850
      4,410         Hanger Orthopedic Group, Inc., 10.375%, 2/15/09                   B2/B-             4,983,300
        265         Hanger Orthopedic Group, Inc., 11.25%, 6/15/09                    NR/B-               285,206
     12,000         Mariner Health Care, Inc., 8.25%, 12/15/13
                         (acquired 12/12/03, cost-$12,000,000) (a)                    B3/B-            12,240,000
      7,005         Select Medical Corp., 9.50%, 6/15/09                              B2/B              7,784,306
      2,365         Vicar Operating, Inc., 9.875%, 12/1/09                            B3/B-             2,625,150
                                                                                                      ------------
                                                                                                       39,678,037
                                                                                                      ============
                    HOME BUILDERS--1.1%
     12,325         Ryland Group, Inc., 9.125%, 6/15/11                              Ba2/BB+           13,958,063
      3,865         Standard-Pacific Corp., 9.50%, 9/15/10                           Ba2/BB             4,328,800
                                                                                                      ------------
                                                                                                       18,286,863
                                                                                                      ============
                    HOME FURNISHINGS--0.6%
      4,690         Central Garden & Pet Co., 9.125%, 2/1/13                          B2/B+             5,205,900
      3,460         Jarden Corp., 9.75%, 5/1/12                                       B2/B-             3,840,600
        300         Salton, Inc., 12.25%, 4/15/08                                    B3/CCC+              297,000
                                                                                                      ------------
                                                                                                        9,343,500
                                                                                                      ============
                    HOTELS/GAMING--1.7%
      8,500         Mandalay Resort Group, Inc., 10.25%, 8/1/07                      Ba3/BB-            9,923,750
      4,025         Penn National Gaming, Inc., 11.125%, 3/1/08                      B3/BB-             4,518,063
     10,970         Wynn Resorts Ltd., 12.00%, 11/1/10                               B3/CCC+           13,164,000
                                                                                                      ------------
                                                                                                       27,605,813
                                                                                                      ============
</TABLE>

4 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
    Principal
     Amount                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*           Value
===================================================================================================================
<S>                 <C>                                                             <C>               <C>
                    LEISURE--1.8%
                    Bally Total Fitness Holdings Corp.,
   $ 14,930             9.875%, 10/15/07, Ser. D                                      B3/B-           $ 12,093,300
      2,500             10.50%, 7/15/11                                               B2/B               2,312,500
      2,500         Equinox Holding Inc., 9.00%, 12/15/09
                         (acquired 2/3/04, cost-$2,612,813) (a)                       B3/B-              2,612,500
     10,320         Royal Caribbean Cruises, Inc., 8.75%, 02/2/11                    Ba2/BB+            11,893,800
                                                                                                      -------------
                                                                                                        28,912,100
                                                                                                      =============
                    MACHINERY--0.4%
      5,470         Case New Holland Inc., 9.25%, 8/1/11
                        (acquired 9/5/03, cost-$5,791,919) (a)                       Ba3/BB-             6,153,750
                                                                                                      =============
                    METALS/MINING--0.6%
     10,800         AK Steel Corp., 7.875%, 2/15/09                                   B3/B+              9,558,000
                                                                                                      =============
                    MULTI-MEDIA--4.1%
        875         CCO Holdings LLC., 8.75%, 11/15/13
                        (acquired 2/3/04, cost-$906,172) (a)                         B3/CCC-               899,062
     12,250         Charter Communications, Inc., 10.75%, 10/1/09                    Ca/CCC-            10,780,000
        485         CSC Holdings, Inc., 7.25%, 7/15/08                               B1/BB-                516,525
      8,460         CSC Holdings, Inc., 9.875%, 2/15/13                               B2/B+              8,787,825
     14,770         Echostar DBS Corp., 9.125%-10.375%, 10/1/07-1/15/09              Ba3/BB-            16,161,275
      2,430         Lodgenet Entertainment Corp., 9.50%, 6/15/13                      B3/B-              2,715,525
        440         Salem Communications Holding Corp., 9.00%, 7/1/11, Ser. B         B3/B-                480,150
      1,365         Sinclair Broadcast Group, Inc., 8.75%, 12/15/11                   B2/B               1,498,088
      6,705         Spanish Broadcasting System, 9.625%, 11/1/09                    Caa1/CCC+            7,090,538
      4,000         Vivendi Universal 9.25%, 4/15/10                                 Ba3/BB              4,710,000
     10,600         XM Satellite Radio Inc., 12.00%, 6/15/10                        Caa1/CCC+           11,872,000
                                                                                                      -------------
                                                                                                        65,510,988
                                                                                                      =============
                    OFFICE FURNISHINGS--0.6%
      5,375         Interface, Inc., 9.50%, 2/1/14
                        (acquired 1/26/04, cost-$5,375,000) (a)                     Caa3/CCC             5,348,125
      3,246         Tempur-Pedic Inc., 10.25%, 8/15/10
                        (acquired 8/8/03, cost-$3,246,000) (a)                        B3/B-              3,643,635
                                                                                                      -------------
                                                                                                         8,991,760
                                                                                                      =============
                    OIL & GAS--2.1%
        330         Energy Partners Ltd, 8.75%, 8/1/10                                B2/B+                351,450
     10,000         Petroleum Geo-Services ASA, 10.00%, 11/5/10                       NR/NR             10,850,000
     14,830         Sonat, Inc., 7.625%, 7/15/11                                    Caa1/CCC+           13,050,400
     10,000         Williams Cos., Inc., 9.25%, 3/15/04                               B3/B+             10,000,000
                                                                                                      -------------
                                                                                                        34,251,850
                                                                                                      =============
                    PAPER PRODUCTS--0.9%
        565         Buckeye Technologies, Inc., 9.25%, 9/15/08                       Caa1/B                570,650
     12,650         Georgia-Pacific Corp., 9.375%, 2/1/13                            Ba2/BB+            14,579,125
                                                                                                      -------------
                                                                                                        15,149,775
                                                                                                      =============
                    PHARMACEUTICALS--0.6%
      9,150         aaiPharma Inc., 11.00%, 4/1/10                                   Caa1/B-             9,927,750
                                                                                                      =============
                    REAL ESTATE--0.0%
        470         La Quinta Properties Inc., 8.875%, 3/15/11                       Ba3/BB-               525,812
                                                                                                      =============
</TABLE>

          2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 5
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
    Principal
     Amount                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*           Value
===================================================================================================================
<S>                 <C>                                                             <C>              <C>
                    RECYCLING--0.4%
    $ 6,700         Imco Recycling Inc., 10.375%, 10/15/10
                        (acquired 10/2/03, cost-$6,691,112) (a)                       B3/B-          $  7,001,500
                                                                                                     =============
                    RETAIL--2.4%
        790         CSK Auto Inc., 7.00%, 1/15/14
                        (acquired 2/3/04, cost-$786,568) (a)                          B2/B-               790,000
     10,410         Hollywood Entertainment Corp., 9.625%, 3/15/11                    B3/B-            10,566,150
      4,170         Michaels Stores, Inc., 9.25%, 7/1/09                             Ba1/BB+            4,613,062
        310         Mothers Work Inc., 11.25%, 8/1/10                                 B3/B+               334,800
     15,445         Rite Aid Corp., 11.25%, 7/1/08                                   Caa1/B-           16,950,888
      4,000         United Auto Group, Inc., 9.625%, 3/15/12                          B3/B              4,420,000
                                                                                                     -------------
                                                                                                       37,674,900
                                                                                                     =============
                    SEMICONDUCTORS--1.4%
     13,155         Amkor Technology, Inc., 10.50%, 5/1/09                           B3/CCC+           13,911,412
      7,195         Fairchild Semiconductor International, Inc., 10.50%, 2/1/09       B2/B              7,986,450
                                                                                                     -------------
                                                                                                       21,897,862
                                                                                                     =============
                    TELECOMMUNICATIONS--7.6%
     12,000         American Tower Corp., 9.375%, 2/1/09                            Caa1/CCC           12,720,000
     15,185         Crown Castle International, Inc., 9.00%-10.75%, 5/15/11-8/1/11   B3/CCC            16,852,200
      8,085         Millicom International Cellular S.A., 10.00%, 12/1/13
                        (acquired 11/19/03, cost-$8,574,191) (a)                      B3/B-             8,489,250
      8,805         Nextel Communications Inc., 6.00%-9.50%, 11/15/09- 6/1/11         B2/B+             9,753,744
     13,120         Nextel Partners Inc., 11.00%, 3/15/10                           Caa1/CCC+          14,530,400
      9,320         Nortel Networks Ltd., 6.125%, 2/15/06                             B3/B              9,646,200
      3,460         Primus Telecommunications Group., 8.00%, 1/15/14
                        (acquired 1/14/04, cost-$3,499,020) (a)                      B3/CCC             3,299,975
      4,500         Primus Telecommunications Group., 12.75%, 10/15/09              Caa2/CCC            4,950,000
     13,000         SBA Communications Corp., 10.25%, 2/1/09                         Caa2/CC           13,032,500
      15,825        Time Warner Telecom, Inc., 9.75%-10.125%, 7/15/08-2/1/11         B3/CCC+           14,913,775
     13,495         Triton PCS, Inc., 9.375%, 2/1/11                                  B3/B-            13,764,900
                                                                                                     -------------
                                                                                                      121,952,944
                                                                                                     =============
                    TEXTILES--0.9%
      7,491         Interface, Inc., 9.50%, 11/15/05                                Caa3/CCC            7,491,000
      6,490         Interface, Inc., 10.375%, 2/01/10                                Caa1/B-            7,268,800
                                                                                                     -------------
                                                                                                       14,759,800
                                                                                                     =============
                    UTILITIES--0.9%
     13,025         AES Corp., 9.50%, 6/1/09                                          B3/B-            14,197,250
                                                                                                     =============
                    WASTE DISPOSAL--0.9%
     12,715         Allied Waste, Inc., 10.00%, 8/1/09, Ser. B                        B2/B+            13,652,731
                                                                                                     =============
                    WIRE & CABLE PRODUCTS--0.1%
        140         General Cable Corp., 9.50%, 11/15/10
                        (acquired 2/3/04, cost-$153,037) (a)                          B2/B                154,700
                                                                                                     -------------

                     Total Corporate Bonds & Notes (cost-$688,924,505)                                715,537,635
                                                                                                     =============
</TABLE>

6 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
    Principal
     Amount                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*           Value
===================================================================================================================
 CONVERTIBLE BONDS & NOTES--29.5%
- -------------------------------------------------------------------------------------------------------------------
<S>                 <C>                                                             <C>              <C>
                    AEROSPACE--1.7%
    $ 8,568         GenCorp, Inc., 5.75%, 4/15/07                                     B3/B           $  8,782,200
     16,200         L-3 Communications Holdings Inc., 4.00%, 9/15/11                 Ba3/BB-           17,860,500
                                                                                                     -------------
                                                                                                       26,642,700
                                                                                                     =============
                    AIRLINES--2.6%
     20,572         Continental Airlines, Inc., 4.50%, 2/1/07                       Caa2/CCC+          18,360,510
      23,380        Northwest Airlines Corp., 6.625%-10.00%, 2/1/09-5/15/23          Caa1/B-           23,709,788
                                                                                                     -------------
                                                                                                       42,070,298
                                                                                                     =============
                    COMMERCIAL SERVICES--1.3%
      5,000         Bowne & Co., Inc., 5.00%, 10/1/33                                Caa1/B-            5,731,250
     14,824         Quebecor World Color Press, Inc., 6.00%, 10/1/07                 Ba1/BB+           15,268,720
                                                                                                     -------------
                                                                                                       20,999,970
                                                                                                     =============
                    ELECTRONICS--1.3%
     15,923         Cymer, Inc., 3.50%, 2/15/09                                       NR/B-            17,236,647
      4,500         Solectron Corp., .50%, 2/15/34
                         (acquired 2/9/04, cost-$4,500,000) (a)                       B1/B+             4,308,750
                                                                                                     -------------
                                                                                                       21,545,397
                                                                                                     =============
                    ENERGY--1.1%
     17,256         Calpine Corp., 4.00%, 12/26/06                                  Caa1/CCC+          17,299,140
                                                                                                     =============
                    HEALTHCARE--0.7%
      7,750         Advanced Medical Optics Inc., 3.50%, 4/15/23                      NR/B             10,404,375
                                                                                                     =============
                    INTERNET--2.5%
     18,000         E*Trade Group, Inc., 6.00%, 2/1/07                                NR/B-            18,472,500
      8,755         Symantec Corp., 3.00%, 11/1/06                                    NR/B             21,154,269
                                                                                                     -------------
                                                                                                       39,626,769
                                                                                                     =============
                    MANUFACTURING--1.1%
     12,236         Tyco International Group S.A., 3.125%, 1/15/23                  Ba2/BBB-           17,818,675
                                                                                                     =============
                    METALS/MINING--1.1%
     10,300         Freeport-McMoRan Cooper & Gold Inc., 7.00%, 2/11/11               NR/B-            17,522,875
                                                                                                     =============
                    MULTI-MEDIA--3.3%
     22,489         Charter Communications, Inc., 5.75%, 10/15/05                    Ca/CCC-           21,167,771
     14,245         Echostar Communications Corp., 5.75%, 5/15/08                     B2/B             15,010,669
     16,796         Liberty Media Corp., 3.25%, 3/15/31                             Baa3/BBB-          16,103,165
                                                                                                     -------------
                                                                                                       52,281,605
                                                                                                     =============
                    OIL & GAS--0.7%
      7,339         St. Mary Land & Exploration Corp., 5.75%, 3/15/22                 NR/NR            10,421,380
                                                                                                     =============
                    REAL ESTATE--1.0%
     14,828         EOP Operating LP, 7.25%, 11/15/08                               Baa1/BBB+          15,495,260
                                                                                                     =============
                    RETAIL--2.6%
     12,159         Gap, Inc., 5.75%, 3/15/09                                        Ba3/BB+           17,068,196
      7,100         Guitar Center, Inc., 4.00%, 7/15/13                               B1/B+             9,105,750
     15,708         Sonic Automotive, Inc., 5.25%, 5/7/09                             B3/B+            15,550,920
                                                                                                     -------------
                                                                                                       41,724,866
                                                                                                     =============
</TABLE>

          2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 7
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
    Principal
     Amount                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*           Value
===================================================================================================================
<S>                 <C>                                                             <C>               <C>
                    SEMICONDUCTORS--1.1%

   $ 17,742         Amkor Technology, Inc., 5.00%-5.75%, 6/1/06-3/15/07              B3/CCC+         $ 17,619,346
                    SOFTWARE--3.1%
     12,100         Computer Associates International, Inc., 5.00%, 3/15/07         Baa3/BBB+          15,200,625
     14,043         HNC Software, Inc., 5.25%, 9/1/08                                 NR/NR            16,465,417
     16,325         Network Associates, Inc., 5.25%, 8/15/06                          NR/NR            18,630,906
                                                                                                     -------------
                                                                                                       50,296,948
                                                                                                     =============
                    TELECOMMUNICATIONS--3.4%
     17,000         American Tower Corp., 5.00%, 2/15/10                            Caa1/CCC           16,851,250
     13,240         Crown Castle International, Inc., 4.00%, 7/15/10                 NR/CCC            18,900,100
     16,330         Nortel Networks Corp., 4.25%, 9/1/08                              B3/B             17,820,113
                                                                                                     -------------
                                                                                                       53,571,463
                                                                                                     =============
                    WASTE DISPOSAL--0.9%
     14,063         Waste Connections, Inc., 5.50%, 4/15/06                          B1/BB-            14,836,465
                                                                                                     =============

                    Total Convertible Bonds & Notes (cost-$427,095,782)                               470,177,532
                                                                                                     =============

- -------------------------------------------------------------------------------------------------------------------
 CONVERTIBLE PREFERRED STOCK--24.2%
- -------------------------------------------------------------------------------------------------------------------
     Shares
      (000)
     ------

                    AEROSPACE--1.8%
        137         Northrop Grumman Corp., 7.25%, 11/16/04                           NR/NR            14,474,532
        272         Raytheon, Co., 8.25%, 5/15/04                                     NR/BB            13,762,741
                                                                                                     -------------
                                                                                                       28,237,273
                                                                                                     =============
                    AUTOMOTIVE--2.5%
        326         Ford Motor Co Capital Trust II, 6.50%, 1/15/32                   Baa2/BB           17,402,930
        728         General Motors Corp., 6.25%, 7/15/33, Ser. C                    Baa1/BBB           22,318,176
                                                                                                     -------------
                                                                                                       39,721,106
                                                                                                     =============
                    BANKING--1.1%
        296         Washington Mutual, Inc., 5.375%, 5/1/41                         Baa1/BBB-          17,816,418
                                                                                                     =============
                    COMMERCIAL SERVICES--3.3%
        361         Cendant Corp., 7.75%, 8/17/04                                   Baa1/BBB           18,131,708
        412         United Rentals, Inc., 6.50%, 8/1/28                               B3/B             17,973,500
        197         Xerox Corp., 7.50%, 11/27/21
                         (acquired 3/31/03, cost-$12,452,023) (a)                     B3/B-            16,167,119
                                                                                                     -------------
                                                                                                       52,272,327
                                                                                                     =============
                    ELECTRONICS--1.1%
        972         Solectron Corp., 7.25%, 11/15/04                                  B3/B-            17,009,300
                                                                                                     =============
                    FINANCIAL SERVICES--2.4%
        376         Capital One Financial Corp., 6.25%, 5/17/05                     Baa3/BB+           19,595,050
        273         Prudential Financial, Inc., 6.75%, 11/15/04                       A3/A-            19,280,698
                                                                                                     -------------
                                                                                                       38,875,748
                                                                                                     =============
                    HEALTHCARE--1.0%
        161         Anthem, Inc., 6.00%, 11/15/04                                    NR/BBB-           16,231,515
                                                                                                     =============
                    INSURANCE--2.1%
        512         Platinum Underwriters Holdings, Ltd., 7.00%, 11/16/05             NR/NR            16,744,350
        660         The PMI Group Inc., 5.875%, 11/15/06                              A1/A+            17,358,000
                                                                                                     -------------
                                                                                                       34,102,350
                                                                                                     =============
                    OIL & GAS--1.2%
        260         Chesapeake Energy Corp., 6.00%, 12/31/49                          B3/B-            18,770,622
                                                                                                     =============
</TABLE>

8 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
February 29, 2004

<TABLE>
<CAPTION>
     Shares                                                                       Credit Rating
      (000)                                                                      (Moody's/S&P)*          Value
===================================================================================================================
<S>                 <C>                                                             <C>             <C>
                    METALS/MINING--2.1%
        228         Arch Coal, 5.00%, 12/31/49                                        B2/B+         $  18,435,052
        123         U.S. Steel Corp., 7.00%, 6/15/06, Ser. B                          NR/B-            15,089,582
                                                                                                    --------------
                                                                                                       33,524,634
                                                                                                    ==============
                    MULTI-MEDIA--1.0%
        580         Equity Securities Trust I, 6.50%, 11/15/04                        NR/NR            15,478,402
          **        Radio One, Inc., 6.50%, 7/15/05                                  B3/CCC+              156,220
                                                                                                    --------------
                                                                                                       15,634,622
                                                                                                    ==============
                    TELECOMMUNICATIONS--2.4%
         27         Corning, Inc., 7.00%, 8/16/05, Ser. C                            B1/BB-            17,652,793
          **        Nortel Networks Corp., 7.00%, 8/15/05                             NR/NR               137,562
      2,050         Sprint Corp. (FON Group), 7.125%, 8/17/04                         NR/NR            20,484,705
                                                                                                    --------------
                                                                                                       38,275,060
                                                                                                    ==============
                    UTILITIES--2.2%
         92         AES Trust III, 6.75%, 10/15/29                                   Ca/CCC+            3,861,300
        260         FPL Group, Inc., 8.00%, 02/16/06                                  NR/A-            14,933,309
        462         TXU Corp., 8.75%, 11/16/05, Ser. C                                NR/NR            17,327,004
                                                                                                    --------------
                                                                                                       36,121,613
                                                                                                    ==============

                        Total Convertible Preferred Stock (cost-$320,241,254)                         386,592,588

- -------------------------------------------------------------------------------------------------------------------
 COMMON STOCK--0.2%
- -------------------------------------------------------------------------------------------------------------------
                    AEROSPACE--0.0%
          **        L-3 Communications Holdings, Inc.                                                          54
                                                                                                    ==============
                    BUSINESS SERVICES--0.2%
         74         Affiliated Computer Services, Inc. (c)                                              3,590,158
                                                                                                    --------------
                    Total Common Stock (cost-$3,845,969)                                                3,590,212
                                                                                                    ==============

- -------------------------------------------------------------------------------------------------------------------
 U.S. GOVERNMENT SECURITIES--1.3%
- -------------------------------------------------------------------------------------------------------------------
    Principal
     Amount
      (000)
    ---------

    $ 18,000        United States Treasury Notes,
                        10.75%, 8/15/05, (cost-$20,358,403)                                            20,441,970
                                                                                                    --------------

                    TOTAL INVESTMENTS (cost-$1,460,465,913+)--100%                                  $1,596,339,937
                                                                                                    ==============
</TABLE>


================================================================================
NOTES TO SCHEDULE OF INVESTMENTS:

*    Unaudited.

**   Represents less than 500 shares.

+    The cost basis of portfolio  securities  for federal income tax purposes is
     $1,466,122,644.  Aggregate gross unrealized  appreciation for securities in
     which there is an excess of value over tax cost is $148,693,713;  aggregate
     gross unrealized depreciation for securities in which there is an excess of
     tax over value is  $18,476,420;  net  unrealized  appreciation  for federal
     income tax purposes is $130,217,293.

(a)  Security exempt from registration  under Rule 144A of the Securities Act of
     1933.  These   securities  may  be  resold  in  transactions   exempt  from
     registration,  typically to qualified institutional  investors. At February
     29, 2004, these securities amounted to $130,248,378 or 8.2% of investments.

     Private  Placement.  Restricted  as to  resale  and may not have a  readily
     available  market;  the  aggregate  cost and  value of such  securities  is
     $130,248,378 or 8.2% of investments.

(b)  Credit-linked trust certificate.

(c)  Non-income producing security.

GLOSSARY:

NR -- Not Rated
================================================================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
        | 2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 9
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND STATEMENT OF ASSETS AND LIABILITIES
February 29, 2004

ASSETS:
- ----------------------------------------------------------------- --------------
Investments, at value (cost-$1,460,465,913)                       $1,596,339,937
- ----------------------------------------------------------------- --------------
Cash                                                                  23,161,475
- ----------------------------------------------------------------- --------------
Interest and dividends receivable                                     22,663,396
- ----------------------------------------------------------------- --------------
Receivable for investments sold                                       20,137,372
- ----------------------------------------------------------------- --------------
Interest rate cap premium paid                                         5,131,875
- ----------------------------------------------------------------- --------------
Prepaid expenses                                                          15,170
- ----------------------------------------------------------------- --------------
Total Assets                                                       1,667,449,225
================================================================= ==============

LIABILITIES:
Payable for investments purchased                                     29,637,740
- ----------------------------------------------------------------- --------------
Dividends payable to common and preferred shareholders                 8,339,942
- ----------------------------------------------------------------- --------------
Unrealized depreciation on interest rate cap                           1,537,768
- ----------------------------------------------------------------- --------------
Investment management fees payable                                       906,364
- ----------------------------------------------------------------- --------------
Accrued expenses                                                         194,866
- ----------------------------------------------------------------- --------------
Total Liabilities                                                     40,616,680
- ----------------------------------------------------------------- --------------
PREFERRED SHARES ($0.00001 PAR VALUE; $25,000 NET ASSET
AND LIQUIDATION VALUE PER SHARE APPLICABLE TO 21,000 SHARES
ISSUED AND OUTSTANDING)                                              525,000,000
- ----------------------------------------------------------------- --------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS                      $1,101,832,545
================================================================= ==============

COMPOSITION OF NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Common Stock:
  Par value ($0.00001 per share applicable to 66,084,387 shares
    issued and outstanding)                                       $          661
- ----------------------------------------------------------------  --------------
Paid-in-capital in excess of par                                     940,152,695
- ----------------------------------------------------------------  --------------
Undistributed net investment income                                    3,151,554
- ----------------------------------------------------------------  --------------
Net realized gain on investments                                      24,191,379
- ----------------------------------------------------------------  --------------
Net unrealized appreciation of investments and
  interest rate cap                                                  134,336,256
- ----------------------------------------------------------------  --------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS                      $1,101,832,545
================================================================  ==============
NET ASSET VALUE PER COMMON SHARE                                          $16.67
================================================================  ==============

                                  SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
10 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04 |
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND STATEMENT OF OPERATIONS
For the period March 31, 2003* through February 29, 2004

================================================================= ==============
INVESTMENT INCOME:
Interest                                                          $ 70,748,121
- ----------------------------------------------------------------- --------------
Dividends                                                           24,325,253
- ----------------------------------------------------------------- --------------
  Total Investment Income                                           95,073,374
- ----------------------------------------------------------------- --------------

EXPENSES:
Investment management fees                                           9,418,786
- ----------------------------------------------------------------- --------------
Auction agent fees and commissions                                   1,032,199
- ----------------------------------------------------------------- --------------
Custodian and accounting agent fees                                    165,040
- ----------------------------------------------------------------- --------------
Shareholder reports                                                     83,763
- ----------------------------------------------------------------- --------------
Audit and tax services                                                  72,504
- ----------------------------------------------------------------- --------------
Trustees' fees and expenses                                             36,150
- ----------------------------------------------------------------- --------------
New York Stock Exchange listing fee                                     35,356
- ----------------------------------------------------------------- --------------
Investor relations                                                      26,393
- ----------------------------------------------------------------- --------------
Transfer agent fees                                                     25,908
- ----------------------------------------------------------------- --------------
Insurance expense                                                       20,495
- ----------------------------------------------------------------- --------------
Legal fees                                                              20,182
- ----------------------------------------------------------------- --------------
Miscellaneous                                                            1,224
- ----------------------------------------------------------------- --------------
  Total expenses                                                    10,938,000
- ----------------------------------------------------------------- --------------

NET INVESTMENT INCOME                                               84,135,374
================================================================= ==============

REALIZED AND UNREALIZED GAIN:
Net realized gain on investments                                    37,441,739
- ----------------------------------------------------------------- --------------
Net unrealized appreciation of investments and interest rate cap   134,336,256
- ----------------------------------------------------------------- --------------
Net realized and unrealized gain on investments                    171,777,995
- ----------------------------------------------------------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS    255,913,369
================================================================= ==============
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME            (4,746,936)
- ----------------------------------------------------------------- --------------
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
RESULTING FROM INVESTMENT OPERATIONS                              $251,166,433
================================================================= ==============

* Commencement of operations

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS |
         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 11
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND STATEMENT OF CHANGES IN NET ASSETS
                                              APPLICABLE TO COMMON SHAREHOLDERS

For the period March 31, 2003* through February 29, 2004

INVESTMENT OPERATIONS:
Net investment income                                           $   84,135,374
- --------------------------------------------------------------- ----------------
Net realized gain on investments                                    37,441,739
- --------------------------------------------------------------- ----------------
Net unrealized appreciation on investments and
  interest rate cap                                                134,336,256
- --------------------------------------------------------------- ----------------
Net increase in net assets resulting from investment operations    255,913,369
=============================================================== ================

DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME            (4,746,936)
- --------------------------------------------------------------- ----------------
Net increase in net assets applicable to common shareholders
  resulting from investment operations                             251,166,433
- --------------------------------------------------------------- ----------------

DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                              (87,505,712)
- --------------------------------------------------------------- ----------------
Net realized gains                                                  (1,981,532)
- --------------------------------------------------------------- ----------------
Total dividends and distributions to common shareholders           (89,487,244)
=============================================================== ================

CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock                         936,067,125
- --------------------------------------------------------------- ----------------
Preferred shares underwriting discount charged to paid-in
  capital in excess of par                                          (5,250,000)
- --------------------------------------------------------------- ----------------
Common stock and preferred shares offering costs charged
  to paid-in capital in excess of par                               (2,144,045)
- --------------------------------------------------------------- ----------------
Reinvestment of dividends and distributions                         11,380,273
- --------------------------------------------------------------- ----------------
Net increase from capital share transactions                       940,053,353
- --------------------------------------------------------------- ----------------
Total increase in net assets applicable to common shareholders   1,101,732,542
=============================================================== ================

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period                                                    100,003
- --------------------------------------------------------------- ----------------
End of period (including undistributed net investment
  income of $3,151,554)                                         $1,101,832,545
=============================================================== ================

COMMON SHARES ISSUED AND REINVESTED:
Issued                                                              65,345,000
- --------------------------------------------------------------- ----------------
Issued in reinvestment of dividends and distributions                  732,406
- --------------------------------------------------------------- ----------------
NET INCREASE                                                        66,077,406
=============================================================== ================

* Commencement of operations

                                | SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
12 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04

<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND NOTES TO FINANCIAL STATEMENTS
February 29, 2004

================================================================================

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Nicholas-Applegate  Convertible  & Income Fund (the  "Fund") was  organized as a
Massachusetts business trust on January 17, 2003. Prior to commencing operations
on March 31, 2003, the Fund had no operations other than matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment  Company Act of 1940, as amended,  and the sale and
issuance of 6,981 shares of beneficial  interest at an aggregate  purchase price
of $100,003 to Allianz  Dresdner  Asset  Management of America,  L.P.  ("ADAM").
PIMCO Advisors Fund  Management  LLC (the  "Investment  Manager")  serves as the
Fund's  investment  manager and is an indirect  wholly-owned  subsidiary of ADAM
which is an indirect,  majority-owned  subsidiary of Allianz AG. The Fund has an
unlimited amount of $0.00001 par value common stock authorized.

The Fund's investment objective is to provide total return through a combination
of capital  appreciation  and high current income.  The Fund attempts to achieve
this  objective  by  investing  in a portfolio  of  convertible  securities  and
non-convertible income-producing securities.

The Fund  issued  60,000,000  shares  of common  stock,  in its  initial  public
offering.  An additional  5,345,000  shares were issued in  connection  with the
exercise  of the  underwriters'  over-allotment  option.  These  shares were all
issued at $15.00 per share before an underwriting  discount of $0.675 per share.
Common offering costs of $1,642,062  (representing $0.025 per share) were offset
against the proceeds of the offering and have been charged to paid-in capital in
excess of par. The Investment  Manager  agreed to pay all common  offering costs
(other than the sales load) exceeding  $0.03 per share.  Because common offering
costs were less than $0.03 per share,  the Investment  Manager did not reimburse
any of these costs. In addition, the underwriters  commission and offering costs
associated  with the issuance of Preferred  Shares in the amounts of  $5,250,000
and $501,983,  respectively,  have been charged to  paid-in-capital in excess of
par.

The  preparation  of the  financial  statements in  accordance  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and  assumptions  that affect the reported  amounts
and  disclosures in the financial  statements.  Actual results could differ from
these estimates.

In the normal course of business,  the Fund enters into contracts that contain a
variety of representations  which provide general  indemnifications.  The Fund's
maximum  exposure  under  these  arrangements  is unknown as this would  involve
future claims that may be made against the Fund that have not yet been asserted.
However, the Fund expects the risk of any loss to be remote.

The following is a summary of significant  accounting  policies  followed by the
Fund.

(a)  VALUATION OF INVESTMENTS

Portfolio securities and other financial instruments for which market quotations
are readily  available are stated at market value.  The Fund's  investments  are
valued  daily  by an  independent  pricing  service  approved  by the  Board  of
Trustees,  dealer  quotations,  or are  valued  at the  last  sale  price on the
exchange that is the primary market for such securities,  or the last quoted bid
price for those securities for which the over-the-counter  market is the primary
market or for listed  securities in which there were no sales.  Prices  obtained
from an independent pricing service use information provided by market makers or
estimates of market values  obtained from yield data relating to  investments or
securities with similar  characteristics.  Short-term investments maturing in 60
days or less are valued at amortized  cost,  if their  original  maturity was 60
days or less, or by amortizing their value on the 61st day prior to maturity, if
the  original  term to maturity  exceeded 60 days.  Securities  for which market
quotations are not readily available or if a  development/event  occurs that may
significantly  impact the value of the security,  may be fair valued pursuant to
guidelines  established by the Board of Trustees. The prices used by the Fund to
value  securities  may  differ  from the value  that  would be  realized  if the
securities  were sold.  The Fund's net asset  value is  determined  daily at the
close of regular  trading  (normally,  4:00 p.m.  Eastern  time) on the New York
Stock Exchange.

(b)  INVESTMENT TRANSACTIONS AND INVESTMENT INCOME

Investment  transactions are accounted for on the trade date. Realized gains and
losses on  investments  are determined on the  identified  cost basis.  Interest
income is recorded on an accrual basis. Discounts or premiums on debt securities
purchased  are accreted or  amortized  to interest  income over the lives of the
respective  securities using the effective  interest method.  Dividend income is
recorded on the ex-dividend date.

(c)  FEDERAL INCOME TAXES

The Fund intends to comply with the requirements of the Internal Revenue Code of
1986, as amended, applicable to regulated investment companies.  Accordingly, no
provision  for  U.S.  federal  income  taxes  is  required.   In  addition,   by
distributing  substantially  all of its ordinary  income and  long-term  capital
gains,  if any, during each calendar year, the Fund intends not to be subject to
U.S. federal excise tax.

         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 13
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND NOTES TO FINANCIAL STATEMENTS
February 29, 2004

(d)  DIVIDENDS AND DISTRIBUTIONS--COMMON STOCK

The Fund  declares  dividends  from net  investment  income  monthly  to  common
shareholders.  Distributions  of net realized capital gains, if any, are paid at
least annually. The Fund records dividends and distributions to its shareholders
on the  ex-dividend  date.  The amount of dividends and  distributions  from net
investment  income and net realized  capital gains are  determined in accordance
with federal income tax  regulations,  which may differ from generally  accepted
accounting  principles.  These  "book-tax"  differences  are  either  considered
temporary or permanent in nature.  To the extent these differences are permanent
in nature,  such amounts are  reclassified  within the capital accounts based on
their  federal  income  tax  treatment;  temporary  differences  do not  require
reclassification.  To the extent these  dividends  and/or  distributions  exceed
current and  accumulated  earnings  and profits for federal  income tax purposes
they are reported as dividends and/or distributions of paid-in capital in excess
of par.

(e)  CREDIT-LINKED TRUST CERTIFICATES

Credit-linked  trust certificates
are  investments in a limited  purpose trust or other vehicle formed under state
law which,  in turn,  invests  in a basket of  derivative  instruments,  such as
credit  default  swaps,  interest rate swaps and other  securities,  in order to
provide exposure to the high yield or another fixed income market.

Similar  to  an  investment  in  a  bond,  investments  in  credit-linked  trust
certificates  represent the right to receive  periodic  income  payments (in the
form of  distributions)  and payment of  principal at the end of the term of the
certificate.  However,  these payments are conditioned on the trust's receipt of
payments from, and the trust's potential  obligations to, the  counterparties to
the derivative instruments and other securities in which the trust invests.

(f)  INTEREST RATE CAPS

In an  interest  rate cap,  one party pays a fee while the other  party pays the
excess,  if any, of a floating rate over a specified  fixed rate.  Interest rate
caps are intended to manage the Fund's exposure to changes in short-term  rates.
Owning interest rate caps reduces the Fund's duration,  making it less sensitive
to changes in  interest  rates from a market  value  perspective.  The effect on
income  involves  protection  from  rising  short-term  rates,  which  the  Fund
experiences  primarily  in the form of  leverage.  The Fund is exposed to credit
loss in the event of  non-performance  by the other party to the  interest  rate
cap.

(g)  CONCENTRATION OF RISK

It is the  Fund's  policy  to  invest a  significant  portion  of its  assets in
convertible securities.  Although convertible securities do derive part of their
value from that of the securities into which they are convertible,  they are not
considered  derivative  financial  instruments.  However,  certain of the Fund's
investments  include  features which render them more sensitive to price changes
in their underlying securities.  Consequently,  this exposes the Fund to greater
downside risk than traditional convertible securities,  but still less than that
of the underlying common stock.

2.   INVESTMENT MANAGER AND SUB-ADVISER

Pursuant to the Investment  Management  Agreement,  the Fund pays the Investment
Manager an annual  management fee, payable monthly,  at the annual rate of 0.70%
of the Fund's average daily total managed assets.  Total managed assets refer to
the total assets of the Fund  (including  assets  attributable  to any Preferred
Shares  or  other  forms of  leverage  that may be  outstanding)  minus  accrued
liabilities  (other than  liabilities  representing  leverage).  The  Investment
Manager has retained its affiliate,  Nicholas-Applegate  Capital  Management LLC
("NACM"or the "Sub-Adviser"), to manage the Fund's investments.

3.   INVESTMENT IN SECURITIES

For the period  ended  February 29, 2004,  purchases  and sales of  investments,
other  than  short-term  securities,  were  $2,497,777,272  and  $1,057,481,418,
respectively.  (a) Interest rate cap agreements outstanding at February 29, 2004
was as follows:

              Notional   Termination             Payments received   Unrealized
Counterparty   Amount       Date       Premium        by Fund       Depreciation
- --------------------------------------------------------------------------------
UBS AG      $525,000,000  1/15/2006  $5,131,875  1 month LIBOR-BBA   $1,537,768
                                                over 2% strike price ----------

4.   INCOME TAX INFORMATION

The tax character of dividends and  distributions  paid for the period March 31,
2003  (commencement of operations)  through February 29, 2004 of $94,234,180 was
comprised entirely of ordinary income.

At February 29, 2004, the tax character of distributable earnings of $41,031,578
was comprised entirely of ordinary income.

14 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND NOTES TO FINANCIAL STATEMENTS
February 29, 2004

================================================================================

5.   AUCTION PREFERRED SHARES

The Fund has issued 4,200 shares of Preferred  Shares  Series A, 4,200 shares of
Preferred  Shares  Series B, 4,200  shares of Preferred  Shares  Series C, 4,200
shares of Preferred Shares Series D, and 4,200 shares of Preferred Shares Series
E each with a net asset and liquidation  value of $25,000 per share plus accrued
dividends.

Dividends  are  accumulated   daily  at  an  annual  rate  set  through  auction
procedures.  Distributions  of net  realized  capital  gains,  if any,  are paid
annually.

For the period ended  February 29, 2004,  the  annualized  dividend  rate ranged
from:

                                             High           Low       At 2/29/04
- --------------------------------------------------------------------------------
Series A                                     1.50%          1.05%        1.10%
Series B                                     1.52%          1.03%        1.10%
Series C                                     1.49%          0.95%        1.10%
Series D                                     1.49%          1.00%        1.13%
Series E                                     1.50%          1.05%        1.10%

The Fund is subject to certain  limitations  and  restrictions  while  preferred
shares  are   outstanding.   Failure  to  comply  with  these   limitations  and
restrictions   could   preclude  the  Fund  from   declaring  any  dividends  or
distributions to common  shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of Preferred Shares at their liquidation value.

Preferred Shares, which are entitled to one vote per share,  generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.

6.   SUBSEQUENT COMMON DIVIDEND DECLARATIONS

On March 1,  2004,  a  dividend  of  $0.125  per share  was  declared  to common
shareholders payable April 1, 2004 to shareholders of record on March 12, 2004.

On April 1,  2004,  a  dividend  of  $0.125  per share  was  declared  to common
shareholders payable May 3, 2004 to shareholders of record on April 16, 2004.

7.   LEGAL PROCEEDINGS

On February 12, 2004, the staff of the Securities and Exchange  Commission  (the
"Commission") informed the Investment Manager that it intended to recommend that
the Commission  bring civil and  administrative  actions  against the Investment
Manager  and one of its  investment  advisory  affiliates  seeking  a  permanent
injunction  against  violations of certain  provisions of the federal securities
laws,  disgorgement plus prejudgment  interest and civil penalties in connection
with the Commission staff's investigation of "market timing" and related trading
activities in certain open-end  investment  companies  advised by the Investment
Manager (the "Subject Funds").

On February  17,  2004,  the  Attorney  General of New Jersey  filed a complaint
alleging, among other things, that
certain  affiliates of the Investment  Manager and the Sub-Adviser had failed to
disclose that they  improperly  allowed certain hedge funds to engage in "market
timing" in the Subject Funds and certain  other  affiliated  mutual  funds.  The
complaint seeks injunctive  relief,  civil monetary  penalties,  restitution and
disgorgement of profits.

The proceedings  described above do not allege that any  inappropriate  activity
took place in the Fund and the Fund is not named in the proceedings.

If the New  Jersey  Attorney  General or the  Commission  were to obtain a court
injunction against the Investment Manager or certain of its affiliates, they and
their affiliates  (including the Sub-Adviser) would, in the absence of exemptive
relief  granted by the  Commission,  be barred  from  serving  as an  investment
adviser/sub-adviser  or  principal  underwriter  for any  registered  investment
company,  including the Fund.  In such a case,  the  Investment  Manager and the
Sub-Adviser  would  in turn  seek  exemptive  relief  from  the  Commission,  as
contemplated by the Investment  Company Act, although there is no assurance that
such exemptive  relief would be granted.  The  Commission  also has the power by
order to prohibit the Investment  Manager,  the Sub-Adviser and certain of their
affiliates  from serving as investment  advisers and  underwriters,  although to
date it has not exercised such powers with respect to market timing arrangements
involving other mutual fund complexes.

         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 15
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND NOTES TO FINANCIAL STATEMENTS
February 29, 2004

================================================================================

Since  February 2004, the Investment  Manager,  the  Sub-Adviser  and certain of
their affiliates, various investment companies advised by the Investment Manager
and the  Sub-Adviser  and their boards of trustees have been named as defendants
in multiple  lawsuits filed in U.S.  District Court in the Southern  District of
New York, the Central District of California and the Districts of New Jersey and
Connecticut.  The  lawsuits  have been  commenced as putative  class  actions on
behalf of investors  who  purchased,  held or redeemed  shares of the  specified
funds  during  specified  periods  or as  derivative  actions  on  behalf of the
specified  funds.  The lawsuits  generally relate to the same facts that are the
subject  of the  regulatory  proceedings  discussed  above.  The  lawsuits  seek
unspecified  compensatory  damages plus  interest  and, in some cases,  punitive
damages,  the rescission of investment  advisory  contracts and/or the return of
fees paid under those contracts and restitution.

In November  2003,  the  Commission  settled an  enforcement  action  against an
unaffiliated  broker-dealer  relating  to the  undisclosed  receipt of fees from
certain mutual fund  companies in return for preferred  marketing of their funds
and announced that it would be investigating mutual funds and their distributors
generally  with  respect to  compensation  arrangements  relating to the sale of
mutual fund shares. In that connection,  the Investment Manager, the Sub-Adviser
and  certain  of their  affiliates  are under  investigation  by the  Commission
relating to revenue-sharing arrangements and the use of brokerage commissions to
recognize brokers effecting sales of the open-end  investment  companies advised
by the Investment  Manager,  the Sub-Adviser and their affiliates.  In addition,
the  Attorney  General of the State of  California  has  publicly  announced  an
investigation into the brokerage recognition and revenue-sharing arrangements of
these open-end investment companies.

The Investment  Manager and the Sub-Adviser  believe that other similar lawsuits
may be filed in  federal or state  courts  naming the  Investment  Manager,  the
Sub-Adviser,  various  investment  companies  they advise (which may include the
Fund), their boards of trustees and/or their affiliates.

Although it is not possible to predict what, if any,  effect the foregoing  will
have on the  market  for the  Fund's  shares,  the  Investment  Manager  and the
Sub-Adviser believe that these matters are not likely to have a material adverse
effect  on  the  operations  of the  Fund  or on the  Investment  Manager's,  or
Sub-Adviser's  ability to perform their respective  investment advisory services
to the Fund.


16 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04

<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND FINANCIAL HIGHLIGHTS

For a share of common stock  outstanding  for the period March 31, 2003* through
February 29, 2004

================================================================================
Net asset value, beginning of period                                   $14.33**
- ------------------------------------------------------------------ -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income                                                    1.28
- ------------------------------------------------------------------ -------------
Net realized and unrealized gain on investments and
  interest rate cap                                                      2.61
- ------------------------------------------------------------------ -------------
Total from investment operations                                         3.89
- ------------------------------------------------------------------ -------------
Dividends on Preferred Shares from Net investment income                (0.07)
- ------------------------------------------------------------------ -------------
Net increase in net assets applicable to common shareholders
  resulting from investment operations                                   3.82
- ------------------------------------------------------------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                                   (1.33)
- ------------------------------------------------------------------ -------------
Net realized gains                                                      (0.03)
- ------------------------------------------------------------------ -------------
Total dividends and distributions to common shareholders                (1.36)
- ------------------------------------------------------------------ -------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital
  in excess of par                                                      (0.03)
- ------------------------------------------------------------------ -------------
Preferred shares offering costs/underwriting discounts charged
  to paid-in capital in excess of par                                   (0.09)
- ------------------------------------------------------------------ -------------
Total capital share transactions                                        (0.12)
- ------------------------------------------------------------------ -------------
Net asset value, end of period                                         $16.67
- ------------------------------------------------------------------ -------------
Market price, end of period                                            $16.38
- ------------------------------------------------------------------ -------------
TOTAL INVESTMENT RETURN (1)                                             18.98%
- ------------------------------------------------------------------ -------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders, end of period (000)  $1,101,833
- ------------------------------------------------------------------ -------------
Ratio of expenses to average net assets (2)(3)                           1.17%
- ------------------------------------------------------------------ -------------
Ratio of net investment income to average net assets (2)(3)              8.97%
- ------------------------------------------------------------------ -------------
Preferred shares asset coverage per share                             $77,460
- ------------------------------------------------------------------ -------------
Portfolio turnover                                                         86%
- --------------------------------------------------------------------------------

*    Commencement of operations

**   Initial  public  offering  price of  $15.00  per  share  less  underwriting
     discount of $0.675 per share.

(1)  Total investment  return is calculated  assuming a purchase of common stock
     at the  current  market  price on the first day of the period and a sale at
     the current market price on the last day of the period reported.  Dividends
     and  distributions  are assumed,  for purposes of this  calculation,  to be
     reinvested at prices obtained under the Fund's dividend  reinvestment plan.
     Total  investment  return does not reflect  brokerage  commissions or sales
     charges.  Total investment return for a period of less than one year is not
     annualized.

(2)  Calculated  on the basis of income and expenses  applicable  to both common
     and  preferred  shares  relative  to  the  average  net  assets  of  common
     shareholders.

(3)  Annualized

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS |
         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 17
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND REPORT OF INDEPENDENT AUDITORS


================================================================================

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND

In our opinion, the accompanying statement of assets and liabilities,  including
the schedule of  investments,  and the related  statements of operations  and of
changes  in net  assets  applicable  to common  shareholders  and the  financial
highlights present fairly, in all material  respects,  the financial position of
Nicholas-Applegate  Convertible & Income Fund (the "Fund") at February 29, 2004,
and the results of its operations,  the changes in its net assets  applicable to
common  shareholders and the financial  highlights for the period March 31, 2003
(commencement  of  operations)  through  February 29, 2004, in  conformity  with
accounting principles generally accepted in the United States of America.  These
financial  statements  and  financial  highlights   (hereafter  referred  to  as
"financial  statements") are the  responsibility of the Fund's  management;  our
responsibility  is to express an opinion on these financial  statements based on
our audit.  We conducted our audit of these  financial  statements in accordance
with  auditing  standards  generally  accepted in the United  States of America,
which require that we plan and perform the audit to obtain reasonable  assurance
about whether the financial  statements  are free of material  misstatement.  An
audit includes examining,  on a test basis,  evidence supporting the amounts and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.  We believe that our audit,  which  included
confirmation  of  securities  at February  29, 2004 by  correspondence  with the
custodian and brokers, provides a reasonable basis for our opinion.





PricewaterhouseCoopers LLP
New York, New York
April 19, 2004


18 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND PRIVACY POLICY, PROXY VOTING
                               POLICIES AND PROCEDURES, OTHER INFORMATION
================================================================================

PRIVACY POLICY:

OUR COMMITMENT TO YOU

We consider customer privacy to be a fundamental aspect of our relationship with
clients.  We are committed to maintaining the  confidentiality,  integrity,  and
security of our current,  prospective and former clients' personal  information.
We have  developed  policies  designed to protect  this  confidentiality,  while
allowing client needs to be served.

OBTAINING PERSONAL INFORMATION

In the  course of  providing  you with  products  and  services,  we may  obtain
non-public  personal  information  about  you.  This  information  may come from
sources  such as account  applications  and other  forms,  from  other  written,
electronic or verbal correspondence, from your transactions, from your brokerage
or  financial  advisory  firm,  financial  adviser or  consultant,  and/or  from
information captured on our internet web sites.

RESPECTING YOUR PRIVACY

We do not  disclose  any  personal  or account  information  provided  by you or
gathered by us to non-affiliated third parties,  except as required or permitted
by law. As is common in the industry,  non-affiliated companies may from time to
time be  used to  provide  certain  services,  such  as  preparing  and  mailing
prospectuses,  reports,  account  statements and other  information,  conducting
research on client satisfaction,  and gathering shareholder proxies. We may also
retain  non-affiliated  companies  to  market  our  products  and enter in joint
marketing  agreements with other  companies.  These companies may have access to
your personal and account information,  but are permitted to use the information
solely to provide the specific service or as otherwise  permitted by law. We may
also  provide  your  personal  and  account  information  to your  brokerage  or
financial advisory firm and/or to your financial adviser or consultant.

SHARING INFORMATION WITH THIRD PARTIES

We  do  reserve  the  right  to  disclose  or  report  personal  information  to
non-affiliated  third parties in limited  circumstances where we believe in good
faith that disclosure is required under law, to cooperate with regulators or law
enforcement  authorities,  to protect our rights or property, or upon reasonable
request by any mutual fund in which you have chosen to invest.  In addition,  we
may disclose  information  about you or your accounts to a non-affiliated  third
party at your request or if you consent in writing to the disclosure.

SHARING INFORMATION WITH AFFILIATES

We may share client information with our affiliates in connection with servicing
your account or to provide you with information about products and services that
we believe may be of interest to you. The information we share may include,  for
example,  your  participation in our mutual funds or other investment  programs,
your ownership of certain types of accounts (such as IRAs),  or other data about
your  accounts.  Our  affiliates,  in turn,  are not  permitted  to  share  your
information  with  non-affiliated  entities,  except as required or permitted by
law.

IMPLEMENTATION OF PROCEDURES
We  take  seriously  the  obligation  to  safeguard  your  non-public   personal
information.  We have implemented procedures designed to restrict access to your
non-public  personal  information  to  our  personnel  who  need  to  know  that
information  to provide  products or  services to you. To guard your  non-public
personal  information,  physical,  electronic,  and procedural safeguards are in
place.

================================================================================

PROXY VOTING POLICIES AND PROCEDURES:

A  description  of the  policies  and  procedures  that the Fund has  adopted to
determine how to vote proxies relating to portfolio  securities is available (i)
without charge,  upon request, by calling the Fund at (800) 331-1710 (ii) on the
Fund's  website  at  www.pimcoadvisors.com,  and  (iii)  on the  Securities  and
Exchange Commission's website at www.sec.gov.

================================================================================

OTHER INFORMATION:

Since March 31,  2003,  there have been no: (i)  material  changes in the Fund's
investment  objectives  or  policies;  (ii)  changes  to the  Fund's  charter or
by-laws;  (iii) material  changes in the principal risk factors  associated with
investment in the Fund; or (iv) change in the person  primarily  responsible for
the day-to-day management of the Fund's portfolio.


         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 19

<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND DIVIDEND REINVESTMENT PLAN
(unaudited)

================================================================================

Pursuant  to the Fund's  Dividend  Reinvestment  Plan (the  "Plan"),  all Common
Shareholders  whose  shares  are  registered  in their own  names  will have all
dividends,  including any capital gain dividends,  reinvested  automatically  in
additional Common Shares by PFPC Inc., as agent for the Common Shareholders (the
"Plan  Agent"),  unless the  shareholder  elects to receive cash. An election to
receive cash may be revoked or reinstated at the option of the  shareholder.  In
the case of record  shareholders  such as banks,  brokers or other nominees that
hold Common Shares for others who are the beneficial owners, the Plan Agent will
administer  the Plan on the basis of the number of Common Shares  certified from
time to  time  by the  record  shareholder  as  representing  the  total  amount
registered  in such  shareholder's  name and held for the account of  beneficial
owners who are to participate in the Plan. Shareholders whose shares are held in
the name of a bank, broker or nominee should contact the bank, broker or nominee
for details.  All distributions to investors who elect not to participate in the
Plan (or whose broker or nominee  elects not to  participate  on the  investor's
behalf),  will be paid cash by check mailed, in the case of direct  shareholder,
to the record holder by PFPC Inc., as the Fund's dividend disbursement agent.

Unless you (or your broker or nominee)  elects not to  participate  in the Plan,
the number of Common Shares you will receive will be determined as follows:

(1)  If common  Shares are  trading at or above net asset  value on the  payment
     date,  the Fund will issue new  shares at the  greater of (i) the net asset
     value per Common  Share on the payment date or (ii) 95% of the market price
     per Common Share on the payment date; or

(2)  If  Common  Shares  are  trading  below net asset  value  (minus  estimated
     brokerage  commissions  that would be incurred  upon the purchase of Common
     Shares on the open market) on the payment date, the Plan Agent will receive
     the dividend or distribution in cash and will purchase Common Shares in the
     open  market,  on the  New  York  Stock  Exchange  or  elsewhere,  for  the
     participants' accounts. It is possible that the market price for the Common
     Shares may  increase  before the Plan Agent has  completed  its  purchases.
     Therefore,  the average purchase price per share paid by the Plan Agent may
     exceed the market price on the payment  date,  resulting in the purchase of
     fewer shares than if the dividend or  distribution  had been paid in Common
     Shares  issued by the  Fund.  The Plan  Agent  will use all  dividends  and
     distributions received in cash to purchase Common Shares in the open market
     on or  shortly  after the  payment  date,  but in no event  later  than the
     ex-dividend  date for the next  distribution.  Interest will not be paid on
     any uninvested cash payments.

You may withdraw  from the Plan at any time by giving  notice to the Plan Agent.
If you withdraw or the Plan is  terminated,  you will receive a certificate  for
each  whole  share in your  account  under the Plan and you will  receive a cash
payment for any fraction of a share in your account. If you wish, the Plan Agent
will sell your shares and send you the proceeds, minus brokerage commissions.

The Plan  Agent  maintains  all  shareholders'  accounts  in the Plan and  gives
written confirmation of all transactions in the accounts,  including information
you may need for tax  records.  The Plan Agent will also furnish each person who
buys Common  Shares with  written  instructions  detailing  the  procedures  for
electing not to participate in the Plan and to instead receive  distributions in
cash.  Common  Shares  in  your  account  will  be held  by the  Plan  Agent  in
non-certificated  form. Any proxy you receive will include all Common Shares you
have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions
in  Common  Shares.  However,  all  participants  will pay a pro  rata  share of
brokerage  commissions  incurred  by the Plan Agent  when it makes  open  market
purchases.

Automatically  reinvested  dividends  and  distributions  are  taxed in the same
manner as cash dividends and distributions.

The Fund and the Plan Agent  reserve the right to amend or  terminate  the Plan.
There is no direct service charge to participants in the Plan; however, the Fund
reserves the right to amend the Plan to include a service  charge payable by the
participants.  Additional  information  about the Plan may be obtained  from the
Fund's transfer agent,  PFPC Inc.,  P.O. Box 43027,  Providence,  RI 02940-3027,
telephone number 1-800-331-1710.

20 Nicholas-Applegate Convertible & Income Fund Annual Report | 2.29.04
<PAGE>


NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND BOARD OF TRUSTEES


================================================================================
                                     PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- --------------------------------------------------------------------------------
PAUL BELICA                          Director,   Student  Loan  Finance   Corp.,
1345 Avenue of the Americas          Education  Loans,  Inc.,  Goal  Funding  I,
New York, NY 10105                   Inc.,  Goal  Funding II,  Inc.,  and Surety
Age: 82                              Loan   Funding,   Inc.;   Formerly   senior
TRUSTEE SINCE: 2003                  executive  and member of the board of Smith
TERM OF OFFICE: EXPECTED TO STAND    Barney,  Harris Upham & Co.; and the CEO of
  FOR RE-ELECTION AT 2006 ANNUAL     five State of New York agencies.
  MEETING OF SHAREHOLDERS.
TRUSTEE OF 18 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE
  OF FUND COMPLEX


ROBERT E. CONNOR                     Corporate  Affairs  Consultant;   Formerly,
1345 Avenue of the Americas          Senior Vice  President,  Corporate  Office,
New York, NY 10105                   Smith Barney, Inc.
Age: 69
TRUSTEE SINCE: 2003
TERM OF OFFICE: EXPECTED TO STAND
  FOR RE-ELECTION AT 2004 ANNUAL
  MEETING OF SHAREHOLDERS.
TRUSTEE/DIRECTOR OF 18 FUNDS
  IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE
  OF FUND COMPLEX


JOHN J. DALESSANDRO II               President and Director, J.J. Dalessandro II
1345 Avenue of the Americas          Ltd. registered broker-dealer and member of
New York, NY 10105                   the New York Stock Exchange.
Age: 66
TRUSTEE SINCE: 2003
TERM OF OFFICE: EXPECTED TO STAND
  FOR RE-ELECTION AT 2005 ANNUAL
  MEETING OF SHAREHOLDERS.
TRUSTEE OF 15 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE
  OF FUND COMPLEX


HANS W. KERTESS                      President,   H  Kertess  &  Co.;  Formerly,
1345 Avenue of the Americas          Managing  Director,  Royal  Bank of  Canada
New York, NY 10105                   Capital Markets.
Age: 64
TRUSTEE SINCE: 2004
TERM OF OFFICE: EXPECTED TO STAND
  FOR RE-ELECTION AT 2004 ANNUAL
  MEETING OF SHAREHOLDERS.
TRUSTEE OF 15 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE
  OF FUND COMPLEX


         2.29.04 | Nicholas-Applegate Convertible & Income Fund Annual Report 21
<PAGE>



                      (THIS PAGE INTENTIONALLY LEFT BLANK)


<PAGE>



                      (THIS PAGE INTENTIONALLY LEFT BLANK)


<PAGE>



                      (THIS PAGE INTENTIONALLY LEFT BLANK)


<PAGE>


TRUSTEES AND PRINCIPAL OFFICERS

Stephen Treadway
  Chairman
Paul Belica
  Trustee
Robert E. Connor
  Trustee
John J. Dalessandro II
  Trustee
Hans W. Kertess
  Trustee
Brian S. Shlissel
  President & Chief Executive Officer
Newton B. Schott, Jr.
  Vice President & Secretary
Douglas Forsyth
  Vice President
Lawrence G. Altadonna
  Treasurer, Principal Financial & Accounting Officer
Jennifer A. Patula
  Assistant Secretary

INVESTMENT MANAGER

PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105

SUB-ADVISER

Nicholas-Applegate Capital Management LLC
600 West Broadway, 30th Flr
San Diego, California 92101

TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR

PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

LEGAL COUNSEL

Ropes & Gray LLP
One International Place
Boston, MA 02210-2624

This report,  including the financial  information herein, is transmitted to the
shareholders  of  Nicholas  Applegate   Convertible  &  Income  Fund  for  their
information. It is not a prospectus, circular or representation intended for use
in the  purchase  of  shares of the Funds or any  securities  mentioned  in this
report.

Notice  is hereby  given in  accordance  with  Section  23(c) of the  Investment
Company Act of 1940,  as amended,  that from time to time each Fund may purchase
shares of its common stock in the open market.

Daily  information  on the  Fund is  available  at  www.pimcoadvisors.com  or by
calling 1-800-331-1710.

<PAGE>


[PIMCO ADVISORS LOGO]

<PAGE>

ITEM 2. CODE OF ETHICS

As of the end of the period covered by this report, the registrant has adopted a
code of ethics (the "Section 406 Standards for  Investment  Companies -- Ethical
Standards for Principal  Executive and Financial  Officers") that applies to the
registrant's  Principal Executive Officer and Principal  Financial Officer;  the
registrant's Principal Financial Officer also serves as the Principal Accounting
Officer.  The registrant  undertakes to provide a copy of such code of ethics to
any person upon request, without charge, by calling 1-800-331-1710.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

The  registrant's  Board has  determined  that Mr. Paul Belica,  a member of the
Board's Audit Oversight  Committee is an "audit committee financial expert," and
that he is "independent," for purposes of this Item.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

        a)      Audit fees.  The aggregate  fees billed for each of the last two
                fiscal years (the "Reporting Periods") for professional services
                rendered  by  the   Registrant's   principal   accountant   (the
                "Auditor") for the audit of the  Registrant's  annual  financial
                statements,  or  services  that  are  normally  provided  by the
                Auditor in connection with the statutory and regulatory  filings
                or engagements  for the Reporting  Periods,  were $0 in 2003 and
                $51,000 in 2004.

        b)      Audit-Related  Fees.  The aggregate fees billed in the Reporting
                Periods  for  assurance  and related  services by the  principal
                accountant that are reasonably related to the performance of the
                audit  registrant's  financial  statements  and are not reported
                under  paragraph  (e) of this Item were 0 in 2003 and $48,000 in
                2004. These services consist of accounting consultations, agreed
                upon  procedure  reports  (inclusive  of annual  review of basic
                maintenance  testing  associated  with  the  Preferred  Shares),
                attestation reports and comfort letters.

        c)      Tax Fees. The aggregate fees billed in the Reporting Periods for
                professional   services   rendered   by  the   Auditor  for  tax
                compliance,  tax service and tax planning ("Tax  Services") were
                $0 in 2003 and  $2,600  in 2004.  These  services  consisted  of
                review or preparation of U.S. federal,  state,  local and excise
                tax returns.

        d)      All Other Fees. There were no other fees billed in the Reporting
                Periods for products and services provided by the Auditor to the
                Registrant.

        e)      1. Audit Committee  Pre-Approval  Policies and  Procedures.  The
                Registrant's  Audit  Committee  has  established   policies  and
                procedures  for   pre-approval  of  all  audit  and  permissible
                non-audit services by the Auditor for the Registrant, as well as
                the Auditor's engagements for non-audit services to the when the
                engagement  relates  directly to the  operations  and  financial
                reporting of the Registrant.  The Registrant's  policy is stated
                below.

                         PIMCO ADVISORS VIT (THE "FUND")

                        AUDIT OVERSIGHT COMMITTEE POLICY
                                       FOR
        PRE-APPROVAL OF SERVICES PROVIDED BY THE INDEPENDENT ACCOUNTANTS

The  Fund's  Audit  Oversight  Committee   ("Committee")  is  charged  with  the
responsibility of monitoring the independence of the Fund's accountants. As part
of  this   responsibility,   the  Committee  must  pre-approve  any  independent
accounting  firm's  engagement  to render  audit  and/or  permissible  non-audit
services,  as  required  by law.  In  evaluating  a proposed  engagement  by the
independent  accountants,   the  Committee  will  assess  the  effect  that  the
engagement   might   reasonably   be  expected  to  have  on  the   accountant's
independence.  The  Committee's  evaluation  will be based  on:

     a  review  of  the  nature  of the  professional  services  expected  to be
     provided,

     a review  of the  safeguards  put  into  place  by the  accounting  firm to
     safeguard independence, and

     periodic meetings with the accounting firm.

POLICY FOR AUDIT AND NON-AUDIT  SERVICES TO BE PROVIDED TO THE FUND

On an annual basis,  the Committee of the Fund will review and  pre-approve  the
scope  of the  audits  of the  Fund  and  proposed  audit  fees,  as well as the
audit-related  and  non-audit  services  that  may be  performed  by the  Fund's
independent accountants.  At least annually, the Committee will receive a report
of all audit and non-audit  services that were rendered in the previous calendar
year pursuant to this Policy.

In connection  with the Committee's  pre-approval  of services  pursuant to this
Policy,  the President or Treasurer of the Fund will confirm in writing that the
engagement of the independent accounting firm for any non-audit service provided
to the Fund for which the  Committee's  pre-approval  is being  sought  will not
adversely affect the firm's  independence.  All non-audit  services performed by
the independent accounting firm will be disclosed,  as required, in filings with
the Securities and Exchange Commission.

AUDIT SERVICES

The   categories  of  audit  services  and  related  fees  to  be  reviewed  and
pre-approved annually by the Committee are:

     Annual Fund financial statement audits
     Seed audits (related to new product filings, as required)
     SEC and regulatory filings and consents

AUDIT-RELATED SERVICES

The  following  categories  of  audit-related  services  are  considered  to  be
consistent  with the role of the Fund's  independent  accountants  and  services
falling under one of these  categories  will be pre-approved by the Committee on
an annual basis if the Committee  deems those services to be consistent with the
accounting firm's independence:

     Accounting consultations
     Fund merger support services
     Agreed upon procedure reports (inclusive of semiannual report review)
     Attestation reports
     Comfort letters
     Other internal control reports

Individual  audit-related  services that fall within one of these categories and
are not  presented to the Committee as part of the annual  pre-approval  process
described above, may be pre-approved,  if deemed  consistent with the accounting
firm's  independence,  by the Committee Chair (or any other Committee  member on
whom this  responsibility has been delegated) without a meeting of the Committee
so long as the estimated fee for those services does not exceed $75,000.

TAX SERVICES

The following  categories of tax services are  considered to be consistent  with
the role of the Fund's independent accountants and services falling under one of
these categories will be pre-approved by the Committee on an annual basis if the
Committee  deems those  services to be  consistent  with the  accounting  firm's
independence:

     Tax compliance services related to the filing or amendment of the
     following: Federal, state and local income tax compliance; and, Sales and
     use tax compliance

     Timely RIC qualification reviews
     Tax distribution analysis and planning
     Tax authority examination services
     Tax appeals support services
     Accounting methods studies
     Fund merger support services
     Other tax consulting services and related projects

Individual  tax services  that fall within one of these  categories  and are not
presented to the Committee as part of the annual pre-approval  process described
above,  may be  pre-approved,  if deemed  consistent with the accounting  firm's
independence, by the Committee Chair (or any other Committee member on whom this
responsibility has been delegated) without a meeting of the Committee so long as
the estimated fee for those services does not exceed $75,000.

PROSCRIBED SERVICES

The Fund's  independent  accountants  will not render  services in the following
categories of non-audit services:

     Bookkeeping or other services related to the accounting records or
     financial statements of the Fund
     Financial information systems design and implementation
     Appraisal or valuation services, fairness opinions, or contribution-in-kind
     reports
     Actuarial services
     Internal audit outsourcing services
     Management functions or human resources
     Broker or dealer, investment adviser or investment banking services
     Legal services and expert services unrelated to the audit
     Any other service that the Public Company Accounting Oversight Board
     determines, by regulation, is impermissible.

PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES WITHIN THE FUND
COMPLEX

The Committee will review at least annually  non-audit  services provided to the
Adviser and any of its  affiliates  that also  provide  ongoing  services to the
Fund. The only non-audit  services  provided to these entities that will require
pre-approval  are  those  related  directly  to  the  operations  and  financial
reporting of the Fund.  Although the Committee will not pre-approve all services
provided to the Adviser and its affiliates, the Committee will receive an annual
report from the Fund's  independent  accounting  firm showing the aggregate fees
for all services provided to the Adviser and its affiliates. Individual projects
that  are not  presented  to the  Committee  as part of the  annual  review  for
pre-approval for the ensuing year, may be individually  pre-approved,  if deemed
consistent with the accounting firm's  independence,  by the Committee  Chairman
(or any other Committee member on whom this  responsibility  has been delegated)
without  a  meeting  of the  Committee  so long as the  estimated  fee for those
services does not exceed $100,000.


        e)      2.  No  services  were  approved   pursuant  to  the  procedures
                contained  in  paragraph  (C)  (7)  (i)  (C)  of  Rule  2-01  of
                Registration S-X.

        f)      Not applicable


        g)      Non-audit  fees.  The  aggregate  non-audit  fees  billed by the
                Auditor for services rendered to the Registrant, and rendered to
                the  Adviser,  for the  Reporting  Periods  were $0 in 2003  and
                $3,698,180 in 2004.

<PAGE>

        h)      Auditor  Independence.  The  Registrant's  Audit  Committee  has
                considered whether the provision of non-audit services that were
                rendered  to  the  Adviser  which  were  not   pre-approved   is
                compatible with maintaining the Auditor's independence.


ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Disclosure requirement not currently effective.

ITEM 6. SCHEDULE OF INVESTMENTS

Schedule of Investments is included as part of the report to shareholders  filed
under item 1 of this form.

ITEM 7.  DISCLOSURE  OF PROXY VOTING  POLICIES  AND  PROCEDURES  FOR  CLOSED-END
MANAGEMENT INVESTMENT COMPANIES

The  registrant  has  delegated  the  voting of proxies  relating  to its voting
securities to its sub-adviser,  Nicholas  Applegate Capital  Management LLC (the
"Sub-Adviser").  The Proxy Voting Policies and Procedures of the Sub-Adviser are
included as an Exhibit 99.PROXYPOL hereto.

ITEM 8. DISCLOSURE REQUIREMENT CURRENTLY NOT EFFECTIVE

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

In  January  2004,  the  Registrant's  Board of  Trustees  adopted a  Nominating
Committee  Charter  governing  the affairs of the  Nominating  Committee  of the
Board,  which is posted on the PIMCO  Funds  website  at  www.pimcoadvisors.com.
Appendix  B  to  the  Nominating  Committee  Charter  includes  "Procedures  for
Shareholders to Submit Nominee  Candidates,"  which sets forth the procedures by
which shareholders may recommend nominees to the Registrant's Board of Trustees.
The Registrant has not yet held its first annual shareholders' meeting, so these
procedures  have yet to be  disclosed  in response to the  requirements  of Item
7(d)(2)(ii)(G)  of Schedule 14A, and this is the first Form N-CSR filing made by
the Registrant after Item 9 was added to the Form. Among other requirements, the
procedures   provide  that  the   recommending   shareholder   must  submit  any
recommendation in writing to the Registrant to the attention of the Registrant's
Secretary,  at the address of the principal  executive offices of the Registrant
and that such  submission must be received at such offices not less than 45 days
nor more than 75 days prior to the date of the Board or  shareholder  meeting at
which the nominee  would be elected.  Any  recommendation  must include  certain
biographical and other information  regarding the candidate and the recommending
shareholder,  and must include a written and signed  consent of the candidate to
be named as a  nominee  and to serve as a  Trustee  if  elected.  The  foregoing
description  of the  requirements  is only a  summary  and is  qualified  in its
entirety by reference to Appendix B of the Nominating Committee Charter.

ITEM 10. CONTROLS AND PROCEDURES

(a)  The  registrant's  President  and Chief  Executive  Officer  and  Principal
     Financial Officer have concluded that the registrant's  disclosure controls
     and procedures  (as defined in Rule 30a-3(c)  under the Investment  Company
     Act of 1940,  as amended are effective  based on their  evaluation of these

<PAGE>

     controls and  procedures  as of a date within 90 days of the filing date of
     this document.

(b)  There were no significant changes in the registrant's  internal controls or
     in factors that could affect these controls subsequent to the date of their
     evaluation,  including any  corrective  actions with regard to  significant
     deficiencies and material weaknesses.

ITEM 11. EXHIBITS

(a)(1)  Exhibit 99.CODE ETH - Code of Ethics

(a)(2)  Exhibit  99.CERT.  -  Certification  pursuant  to  Section  302  of  the
        Sarbanes-Oxley Act of 2002

(b)     Exhibit  99.906CERT.  -  Certification  pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002

<PAGE>


                                    Signature

Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Nicholas-Applegate Capital Management LLC

By /s/ Brian S. Shlissel
- ------------------------
President and Chief Executive Officer

Date May 10, 2004
- -----------------

By /s/ Lawrence G. Altadonna
- ----------------------------
Treasurer, Principal Financial & Accounting Officer

Date May 10, 2004
- -----------------

Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment  Company  Act of  1940,  this  report  has been  signed  below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

By /s/ Brian S. Shlissel
- ------------------------
President and Chief Executive Officer

Date May 10, 2004
- -----------------

By /s/ Lawrence G. Altadonna
- ----------------------------
Treasurer, Principal Financial & Accounting Officer

Date May 10, 2004
- -----------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>2
<FILENAME>c31442_ex99-code.txt
<TEXT>
                                                                  EX-99.CODE ETH


          CODE OF ETHICS PURSUANT TO SECTION 406 OF THE SARBANES-OXLEY
        ACT OF 2002 FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS

                               SEPTEMBER 16, 2003

I.   COVERED OFFICERS/PURPOSE OF THE CODE

     This Code of Ethics (this "Code") pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 has been adopted by the registered investment
companies (each a "Fund" and, collectively, the "Funds") listed on Exhibit A and
applies to each Fund's Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer (the "Covered Officers" each of whom is
identified in Exhibit B) for the purpose of promoting:

     o    honest and ethical conduct, including the ethical handling of actual
          or apparent conflicts of interest between personal and professional
          relationships;

     o    full, fair, accurate, timely and understandable disclosure in reports
          and documents that a Fund files with, or submits to, the Securities
          and Exchange Commission ("SEC") and in other public communications
          made by a Fund;

     o    compliance with applicable laws and governmental rules and
          regulations;

     o    the prompt internal reporting of violations of the Code to an
          appropriate person or persons identified in the Code; and

     o    accountability for adherence to the Code.

     Each Covered Officer should adhere to a high standard of business ethics
and should be sensitive to situations that may give rise to conflicts of
interest.

II.  COVERED OFFICERS SHOULD HANDLE ETHICALLY ANY ACTUAL OR APPARENT CONFLICTS
     OF INTEREST

     OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private
interest interferes with the interests of, or his service to, the relevant Fund.
For example, a conflict of interest would arise if a Covered Officer, or a
member of the Covered Officer's family, receives improper personal benefits as a
result of the Covered Officer's position with the relevant Fund.

     Certain conflicts of interest arise out of the relationships between
Covered Officers and the relevant Fund and already are subject to conflict of
interest provisions

<PAGE>


and procedures in the Investment Company Act of 1940 (including the regulations
thereunder, the "1940 Act") and the Investment Advisers Act of 1940 (including
the regulations thereunder, the "Investment Advisers Act"). Indeed, conflicts of
interest are endemic for certain registered management investment companies and
those conflicts are both substantially and procedurally dealt with under the
1940 Act. For example, Covered Officers may not engage in certain transactions
with a Fund because of their status as "affiliated persons" of such Fund. The
compliance program of each Fund and the compliance programs of its investment
advisers (including sub-advisers), principal underwriter and administrator or
sub-administrator (each a "Service Provider" and, collectively, the "Service
Providers") are reasonably designed to prevent, or identify and correct,
violations of many of those provisions, although they are not designed to
provide absolute assurance as to those matters. This Code does not, and is not
intended to, repeat or replace these programs and procedures, and such conflicts
fall outside of the parameters of this Code. See also Section V of this Code.

     Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual relationship
between a Fund and its Service Providers of which the Covered Officers are also
officers or employees. As a result, this Code recognizes that the Covered
Officers will, in the normal course of their duties (whether for the Funds or
for a Service Provider, or for both), be involved in establishing policies and
implementing decisions that will have different effects on the Service Providers
and the Funds. The participation of the Covered Officers in such activities is
inherent in the contractual relationships between the Funds and their Service
Providers and is consistent with the performance by the Covered Officers of
their duties as officers of the relevant Fund. Thus, if performed in conformity
with the provisions of the 1940 Act, the Investment Advisers Act, other
applicable law and the relevant Fund's constitutional documents, such activities
will be deemed to have been handled ethically. Frequently, the 1940 Act
establishes, as a mechanism for dealing with conflicts, disclosure to and
approval by the Directors/Trustees of a Fund who are not "interested persons" of
such Fund under the 1940 Act. In addition, it is recognized by the Funds' Boards
of Directors/Trustees ("Boards") that the Covered Officers may also be officers
or employees of one or more other investment companies covered by this or other
codes and that such service, by itself, does not give rise to a conflict of
interest.

     Other conflicts of interest are covered by the Code, even if such conflicts
of interest are not the subject of provisions of the 1940 Act and the Investment
Advisers Act. The following list provides examples of conflicts of interest
under the Code, but Covered Officers should bear in mind that these examples are
not exhaustive. The overarching principle is that the personal interest of a
Covered Officer should not be placed improperly before the interest of the
relevant Fund, unless the personal interest has been disclosed to and approved
by other officers of such Fund or such Fund's Board or a committee of such
Fund's Board that has no such personal interest.

            *                *                 *                 *


                                      -2-
<PAGE>


     Each Covered Officer must not:

     o    use his personal influence or personal relationships improperly to
          influence investment decisions or financial reporting by the relevant
          Fund whereby the Covered Officer would benefit personally to the
          detriment of such Fund;

     o    cause the relevant Fund to take action, or fail to take action, for
          the individual personal benefit of the Covered Officer rather than the
          benefit such Fund; or

     o    retaliate against any other Covered Officer or any employee of the
          Funds or their Service Providers for reports of potential violations
          that are made in good faith.

     There are some conflict of interest situations that should always be
approved by the President of the relevant Fund (or, with respect to activities
of the President, by the Chairman of the relevant Fund). These conflict of
interest situations are listed below:

     o    service on the board of directors or governing board of a publicly
          traded entity;

     o    acceptance of any investment opportunity or of any material gift or
          gratuity from any person or entity that does business, or desires to
          do business, with the relevant Fund. For these purposes, material
          gifts do not include (i) gifts from a single giver so long as their
          aggregate annual value does not exceed the equivalent of $100.00 or
          (ii) attending business meals, business related conferences, sporting
          events and other entertainment events at the expense of a giver, so
          long as the expense is reasonable and both the Covered Person and the
          giver are present.(1)

     o    any ownership interest in, or any consulting or employment
          relationship with, any entities doing business with the relevant Fund,
          other than a Service Provider or an affiliate of a Service Provider.
          This restriction shall not apply to or otherwise limit the ownership
          of publicly traded securities so long as the Covered Person's
          ownership does not exceed more than 2% of the outstanding securities
          of the relevant class.

     o    a direct or indirect financial interest in commissions, transaction
          charges or spreads paid by the relevant Fund for effecting portfolio
          transactions or for selling or redeeming shares other than an interest
          arising from the Covered Officer's employment with a Service Provider
          or its affiliate. This restriction shall not apply to or otherwise
          limit the ownership of

- ----------
     (1)  The $100.00 threshold was taken from the ADAMA Code of Ethics.

                                      -3-
<PAGE>


     publicly traded securities so long as the Covered Person's ownership does
     not exceed more than 2% of the particular class of security outstanding.

III. DISCLOSURE AND COMPLIANCE

     o    no Covered Officer should knowingly misrepresent, or cause others to
          misrepresent, facts about the relevant Fund to others, whether within
          or outside such Fund, including to such Fund's Board and auditors, and
          to governmental regulators and self-regulatory organizations;

     o    each Covered Officer should, to the extent appropriate within his area
          of responsibility, consult with other officers and employees of the
          Funds and the Service Providers or with counsel to the Funds with the
          goal of promoting full, fair, accurate, timely and understandable
          disclosure in the registration statements or periodic reports that the
          Funds file with, or submit to, the SEC (which, for sake of clarity,
          does not include any sales literature, omitting prospectuses, or
          "tombstone" advertising prepared by the relevant Fund's principal
          underwriter(s)); and

     o    it is the responsibility of each Covered Officer to promote compliance
          with the standards and restrictions imposed by applicable laws, rules
          and regulations.

IV.  REPORTING AND ACCOUNTABILITY

     Each Covered Officer must:

     o    upon adoption of the Code (or thereafter as applicable, upon becoming
          a Covered Officer), affirm in writing to the relevant Fund that he has
          received, read, and understands the Code;

     o    provide full and fair responses to all questions asked in any Trustee
          and Officer Questionnaire provided by the relevant Fund as well as
          with respect to any supplemental request for information; and

     o    notify the President of the relevant Fund promptly if he is convinced
          to a moral certainty that there has been a material violation of this
          Code (with respect to violations by a President, the Covered Officer
          shall report to the Chairman of the relevant Fund).

     The President of each Fund is responsible for applying this Code to
specific situations in which questions are presented under it and has the
authority to interpret this Code in any particular situation. However, any
approvals or waivers sought by the President will be considered by the Chairman
of the relevant Fund.

     The Funds will follow these procedures in investigating and enforcing this
Code:

                                      -4-
<PAGE>


     o    the President will take all appropriate action to investigate any
          potential material violations reported to him, which actions may
          include the use of internal or external counsel, accountants or other
          personnel;

     o    if, after such investigation, the President believes that no material
          violation has occurred, the President is not required to take any
          further action;

     o    any matter that the President believes is a material violation will be
          reported to the Committee;

     o    if the Committee concurs that a material violation has occurred, it
          will inform and make a recommendation to the Board, which will
          consider appropriate action, which may include review of, and
          appropriate modifications to applicable policies and procedures;
          notification to appropriate personnel of a Service Provider or its
          board; or a recommendation to dismiss the Covered Officer;

     o    the Committee will be authorized to grant waivers, as it deems
          appropriate; and

     o    any changes to or waivers of this Code will, to the extent required,
          be disclosed as provided by SEC rules.

V.   OTHER POLICIES AND PROCEDURES

     This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds or the Funds' Service Providers govern or
purport to govern the behavior or activities of the Covered Officers who are
subject to this Code, they are superseded by this Code to the extent that they
conflict with the provisions of this Code. The Funds' and their Service
Providers's codes of ethics under Rule 17j-1 under the 1940 Act and the Service
Providers's more detailed compliance policies and procedures are separate
requirements applying to the Covered Officers and others, and are not part of
this Code.

VI.  AMENDMENTS

     Any material amendments to this Code, other than amendments to Exhibit A,
must be approved or ratified by a majority vote of the Board.

VII. CONFIDENTIALITY

     All reports and records prepared or maintained pursuant to this Code will
be considered confidential and shall be maintained and protected accordingly.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone except as permitted by the Board.

                                      -5-
<PAGE>


VIII. INTERNAL USE

      The Code is intended solely for the internal use by the Funds and does not
constitute an admission, by or on behalf of any Fund, as to any fact,
circumstance, or legal conclusion.

Date:  September 16, 2003



                                      -6-
<PAGE>


EXHIBIT A

REGISTERED INVESTMENT COMPANIES
- -------------------------------

PIMCO Municipal Income Fund I/II/III

PIMCO California Municipal Income Fund I/II/III

PIMCO New York Municipal Income Fund I/II/III

PIMCO Corporate Income Fund

PIMCO Corporate Opportunity Fund

Nicholas-Applegate Convertible & Income Fund

PIMCO High Income Fund

Nicholas-Applegate Convertible & Income Fund II

PIMCO Floating Rate Income Fund

Municipal Advantage Fund Inc.

Fixed Income SHares



                                      -7-
<PAGE>


EXHIBIT B

PERSONS COVERED BY THIS CODE OF ETHICS
- --------------------------------------

- ---------------------- ------------------------------ --------------------------
 PRINCIPAL EXECUTIVE        PRINCIPAL FINANCIAL          PRINCIPAL ACCOUNTING
      OFFICER                     OFFICER                      OFFICER
- ---------------------- ------------------------------ --------------------------

- ---------------------- ------------------------------ --------------------------
Brian S. Shlissel           Lawrence G. Altadonna          Lawrence G. Altadonna
- ---------------------- ------------------------------ --------------------------

Note that the listed officers are "Covered  Officers" of each of the Fund listed
on Exhibit A.


                                      -8-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.PROXYPOL
<SEQUENCE>3
<FILENAME>c31442_ex99-proxypol.txt
<TEXT>
                                                                  EX-99.PROXYPOL

                           HOW THE FUNDS VOTE PROXIES


The Funds' Investment Adviser votes proxies on behalf of the Funds pursuant to
written Proxy Policy Guidelines and Procedures ("Proxy Guidelines") adopted by
the Funds. A summary of the Proxy Guidelines is provided below. To obtain
information on how your Fund's securities were voted, please contact your
account representative at 1-800-551-8043.

- --------------------------------------------------------------------------------
                      NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
                              PROXY VOTING SUMMARY
- --------------------------------------------------------------------------------
                                REVISED 10/10/03

Nicholas-Applegate Capital Management takes seriously the responsibility of
voting proxies on behalf of our clients. Our policies and procedures are
designed to meet all applicable fiduciary standards and to protect the rights
and enhance the economic welfare of those to whom we owe a fiduciary duty.

A Proxy Committee, including executive, investment, sales, marketing, compliance
and operations personnel, is responsible for establishing our policies and
procedures. The Committee reviews these policies and procedures on a regular
basis and makes such changes as it believes are necessary. Our guidelines and
voting actions are to a large extent aligned with the voting recommendations of
Institutional Shareholder Services ("ISS"), a third-party proxy voting service
to which we subscribe.

We review all proxies for which we have voting responsibility, and vote all
proxies according to our written guidelines, taking into account ISS
recommendations and/or investment team input. Our guidelines address such
general areas as elections of directors and auditors, corporate defenses,
corporate governance, mergers and acquisitions, corporate restructuring, state
of incorporation, proxy contest issues, executive compensation, employee
considerations and social issue proposals.

The guidelines contained herein reflect our normal voting position on certain
issues, and will not apply in every situation. The guidelines are intended to
generally cover both U.S. and international proxy voting, although due to
country differences and requirements, international proxy voting may differ
depending on individual facts and circumstances. Some issues require a
case-by-case analysis prior to voting and, in those situations, input from our
investment team will normally be solicited. Even when our guidelines specify how
we normally vote on particular issues, we may change the vote if it is
reasonably determined to be in our clients best interest. In addition, on client
request, we may vote proxies for that client in a particular manner overall,
such as union or labor sensitive.

To ensure that voting responsibilities are met, the Committee has established
operational procedures to have client proxies reconciled against client
holdings. The procedures are also intended to ensure that proxies are voted
consistent with voting guidelines, that the best proxy analysis is used for each
issue, and all votes are recorded

<PAGE>


and justified. Any variance from stated policy is carefully noted, including the
reason for the variance.

We maintain proxy voting records for all accounts and make these records
available to clients at their request.


                                       2
<PAGE>


- --------------------------------------------------------------------------------
                      NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
                             PROXY VOTING GUIDELINES
- --------------------------------------------------------------------------------
                                REVISED 10/10/03

- --------------------------------------------------------------------------------
I       EXTERNAL AUDITOR
- --------------------------------------------------------------------------------

A.      AUDITORS

VOTE FOR proposals to ratify auditors, unless there is a reason to believe the
auditing firm has a financial interest in or association with the company and
is, therefore, not independent; or there is reason to believe the auditor has
rendered an opinion that is neither accurate nor indicative of the company's
financial position.


- --------------------------------------------------------------------------------
II      BOARD OF DIRECTORS
- --------------------------------------------------------------------------------

A.      DIRECTOR NOMINEES

        Votes on director nominees are normally voted in accordance with ISS
        analysis and recommendation on each individual proposal. Evaluations are
        based on the following criteria (and any others that may be deemed
        relevant by ISS or Nicholas-Applegate):

                o   Long term corporate performance record based on increases in
                    shareholder wealth, earnings, financial strength

                o   Executive Compensation

                o   Director Compensation

                o   Corporate Governance Provisions and Takeover Activity

                o   Criminal Activity

                o   Investment in the Company

                o   Interlocking Directorships

                o   Inside, Outside, and Independent Directors

                o   Board Composition

                o   Number of Other Board Seats

                o   Any problems or issues that arose on Other Board assignments

                o   Support of majority-supported shareholder proposals.

                                       3
<PAGE>


B.      DIRECTOR INDEMNIFICATION AND LIABILITY PROTECTION

        1.      Proposals concerning director and officer indemnification and
                liability protection are normally voted in accordance with ISS
                analysis and recommendation on each individual proposal.

        2.      VOTE AGAINST proposals to limit or eliminate entirely the
                liability for monetary damages of directors and officers for
                violating the duty of care.

        3.      VOTE AGAINST indemnification proposals that would expand
                coverage beyond just legal expenses to acts like negligence,
                that are more serious violations of fiduciary obligation than
                mere carelessness.

        4.      VOTE FOR only those proposals providing such expanded coverage
                on cases when a director's or officer's legal defense was
                unsuccessful if: (i) the director was found to have acted in
                good faith and in a manner that he reasonably believed was in
                the best interest of the company, and (ii) if only the
                director's legal expenses would be covered.

C.      DIRECTOR DUTIES AND STAKEHOLDER LAWS

        VOTE AGAINST management or shareholder proposals to allow the board of
        directors to consider the interests of "stakeholders" or
        "non-shareholder constituents," unless these proposals make it clear
        that these interests are to be considered in the context of the
        prevailing commitment to shareholders.

D.      DIRECTOR NOMINATIONS

        VOTE FOR shareholder proposals asking that management allow large
        shareholders equal access to management's proxy to discuss and evaluate
        management's director nominees, and/or to nominate and discuss
        shareholder nominees to the board.

E.      INSIDE VERSUS INDEPENDENT DIRECTORS

        1.      Shareholder proposals asking that boards be comprised of a
                majority of independent directors are normally voted in
                accordance with ISS analysis and recommendation on each
                individual proposal.

        2.      VOTE FOR shareholder proposals asking that board audit,
                compensation and/or nominating committees be comprised
                exclusively of independent directors.

                                       4
<PAGE>


F.      STOCK OWNERSHIP REQUIREMENTS

        VOTE AGAINST shareholder proposals requiring directors to own a minimum
        amount of company stock in order to qualify as a director, or to remain
        on the board.

G.      TERM OF OFFICE

        VOTE AGAINST proposals to limit the tenure of outside directors.


- --------------------------------------------------------------------------------
III     PROXY CONTESTS AND CORPORATE DEFENSES
- --------------------------------------------------------------------------------

A.      PROXY CONTESTS FOR BOARD SEATS

        All votes in a contested election of directors are normally voted in
        accordance with ISS analysis and recommendation on each individual
        proposal.

B.      CLASSIFIED BOARDS

        1.      VOTE AGAINST proposals to classify the board.

        2.      VOTE FOR proposals to repeal a classified board, and to elect
                all directors annually.

C.      CUMULATIVE VOTING

        1.      VOTE FOR proposals to permit cumulative voting in the election
                of directors.

        2.      VOTE AGAINST proposals to eliminate cumulative voting in the
                election of directors.

D.      DIRECTOR NOMINATIONS

        VOTE AGAINST management proposals to limit shareholders' ability to
        nominate directors.

E.      SHAREHOLDERS' RIGHT TO CALL SPECIAL MEETINGS

        1.      VOTE AGAINST management proposals to restrict or prohibit
                shareholders' ability to call special meetings.

        2.      VOTE FOR shareholder proposals that remove restrictions on the
                right of shareholders to act independently of management.

                                       5
<PAGE>


F.      SHAREHOLDER ACTION BY WRITTEN CONSENT

        1.      VOTE AGAINST management proposals to restrict or prohibit
                shareholders' ability to take action by written consent.

        2.      VOTE FOR shareholder proposals to allow or make easier
                shareholder action by written consent.

G.      SIZE OF THE BOARD

        1.      VOTE FOR proposals that seek to fix the size of the Board.

        2.      VOTE AGAINST management proposals that give management the
                ability to alter the size of the Board without shareholder
                approval.

H.      SHAREHOLDERS' ABILITY TO REMOVE DIRECTORS

        1.      VOTE AGAINST proposals that state directors may be removed only
                for cause.

        2.      VOTE FOR proposals to restore shareholder ability to remove
                directors with or without cause.

        3.      VOTE AGAINST proposals that provide that only continuing
                directors may elect replacements to fill board vacancies.

        4.      VOTE FOR proposals that permit shareholders to elect directors
                to fill board vacancies.


- --------------------------------------------------------------------------------
IV      TENDER  OFFERS AND CORPORATE DEFENSES
- --------------------------------------------------------------------------------

A.      FAIR PRICE PROVISIONS

        1.      VOTE FOR management proposals to adopt a fair price provision,
                as long as the shareholder vote requirement imbedded in the
                provision is no more than a majority of the disinterested
                shares.

        2.      VOTE FOR shareholder proposals to lower the shareholder vote
                requirements imbedded in existing fair price provisions.

B.      GREENMAIL

        1.      VOTE FOR proposals to adopt anti-greenmail charter or bylaw
                amendments or otherwise restrict a company's ability to make
                greenmail payments.


                                       6
<PAGE>


        2.      Vote in accordance with ISS analysis and recommendation on each
                individual proposal regarding anti-greenmail proposals when they
                are bundled with other charter or bylaw amendments.

        3.      Vote on a CASE-BY-CASE basis regarding restructuring plans that
                involve the payment of pale greenmail.

C.      POISON PILLS

        1.      VOTE FOR shareholder proposals asking that a company submit its
                poison pill for shareholder ratification.

        2.      Shareholder proposals to redeem a company's poison pill are
                normally voted in accordance with ISS analysis and
                recommendation on each individual proposal.

        3.      Management proposals to ratify a poison pill are normally voted
                in accordance with ISS analysis and recommendation on each
                individual proposal.

D.      STAKEHOLDER PROVISIONS

         VOTE AGAINST management proposals allowing the board to consider
         stakeholders' (outside constituencies') interests when faced with a
         tender offer.

E.      SUPER-MAJORITY VOTE REQUIREMENT TO APPROVE MERGERS

        1.      VOTE FOR shareholder proposals to lower super-majority vote
                requirements for mergers and other business combinations.

        2.      VOTE AGAINST management proposals to require a super-majority
                shareholders' vote to approve mergers and other significant
                business combinations.

F.      SUPER-MAJORITY SHAREHOLDER VOTE REQUIREMENTS TO AMEND CHARTER OR BYLAWS

        1.      VOTE FOR shareholder proposals to lower super-majority vote
                requirements to amend any bylaw or charter provision.

        2.      VOTE AGAINST management proposals to require a super-majority
                vote to amend any bylaw or charter provision.


                                       7
<PAGE>


G.      UNEQUAL VOTING RIGHTS

        VOTE AGAINST proposals for dual class exchange offers and dual class
        recapitalizations.

H.      EXISTING DUAL CLASS COMPANIES

        1.      VOTE FOR shareholder proposals asking that a company report to
                shareholders on the financial impact of its dual class voting
                structure.

        2.      VOTE FOR shareholder proposals asking that a company submit its
                dual class voting structure for shareholder ratification.

I.      WHITE SQUIRE PLACEMENTS

        VOTE FOR shareholder proposals to require approval of blank check
        preferred stock issues for other than general corporation purposes.
        (e.g. raising capital or making acquisitions in the normal course of
        business).


- --------------------------------------------------------------------------------
V       MISCELLANEOUS CORPORATE GOVERNANCE PROVISIONS
- --------------------------------------------------------------------------------

A.      ABSTENTION VOTES

         VOTE FOR shareholder proposals recommending that votes to "abstain" not
         be considered votes "cast" at an annual or special meeting, unless that
         consideration is required by state law.

B.      ANNUAL MEETINGS

        1.      VOTE AGAINST management proposals asking for authority to vote
                at the meeting for "other matters".

        2.      VOTE AGAINST shareholder proposals to rotate the time or place
                of annual meetings.

C.      CONFIDENTIAL VOTING AND INDEPENDENT TABULATION AND INSPECTIONS

        VOTE FOR proposals to adopt a policy that comprises both confidential
        voting and the use of independent vote tabulators of elections.


                                       8
<PAGE>


D.      EQUAL ACCESS

        VOTE FOR shareholder proposals to allow significant company shareholders
        equal access to management's proxy material in order to evaluate and
        propose voting recommendations on proxy proposals and director nominees,
        and/or to nominate their own candidates to the board.

E.      BUNDLED PROPOSALS

        Bundled or "conditioned" proxy proposals are normally voted in
        accordance with ISS analysis and recommendation on each individual
        proposal. (e.g., management proposals to provide shareholders a special
        dividend that are bundled with other charter or bylaw changes).

F.      SHAREHOLDER ADVISORY COMMITTEE

        1.      Shareholder proposals to establish shareholder advisory
                committees are normally voted in accordance with ISS analysis
                and recommendation on each individual proposal.

        2.      Decisions on whether or not to join a shareholder advisory
                committee are normally voted in accordance with ISS analysis and
                recommendation on each individual proposal.

G.      DISCLOSURE PROPOSALS

        Shareholder proposals requesting fuller disclosure of company policies,
        plans or business practices are normally voted in accordance with ISS
        analysis and recommendation on each individual proposal.

H.      CONFLICT OF INTEREST

        When facing conflicts between our interests and the interests of our
        clients, Nicholas-Applegate will always act in the best interests of its
        clients. In proxy voting matters, conflicts of interest can arise in
        many ways. For example, a proxy issue could arise for one of our public
        clients that we also own in one or more client accounts. Or, a potential
        client battling a contentious shareholder proposal may ask for our vote
        in exchange for granting us an investment mandate. In these cases and
        other potential conflict scenarios, Nicholas-Applegate must exercise
        caution to ensure our clients' interests are not compromised.

        We believe a reasonable process to screen for potential conflicts that
        could influence our proxy voting is as follows:

                (i)     identify any situation where we DO NOT intend to vote in
                        accordance with our normal policy on any issue;

                                       9
<PAGE>


                (ii)    determine who is directing (portfolio manager, client,
                        etc) us to vote contrary to our normal policy;

                (iii)   review and analyze for potential conflict issues (e.g.,
                        may require PM to disclose any relationship with the
                        issuer via a written questionnaire);

                (iv)    Proxy Committee to review request to vote contrary to
                        policy, and potential conflict if any, prior to voting,
                        and will make final decision.

                (v)     pursuant to the request of the Board of Trustees of the
                        Nicholas-Applegate Institutional Funds, NACM will report
                        to the Board any conflict of interest matter and how the
                        Committee resolved it.

        The Proxy Committee will be responsible for implementing and following
        the above process, and has the flexibility to use its reasonable
        judgment in determining which steps are necessary under each set of
        circumstances.


                                       10
<PAGE>


- --------------------------------------------------------------------------------
VI      CAPITAL STRUCTURE
- --------------------------------------------------------------------------------

A.      COMMON STOCK AUTHORIZATION

        1.      Proposals to increase the number of shares of common stock the
                board is authorized to issue are normally voted in accordance
                with ISS analysis and recommendation on each individual
                proposal.

        2.      Proposals to increase the number of shares of common stock
                authorized for issue are normally voted in accordance with ISS
                analysis and recommendation on each individual proposal.

        3.      VOTE AGAINST proposed common share authorizations that increase
                existing authorization by more than 100 percent unless a clear
                need for the excess shares is presented by the company.

B.      STOCK DISTRIBUTIONS: SPLITS AND DIVIDENDS

        VOTE FOR management proposals to increase common share authorization for
        a stock split, provided that the increase in authorized shares following
        the split is not greater than 100 percent of existing authorized shares.

C.      REVERSE STOCK SPLITS

        VOTE FOR management proposals to implement a reverse stock split that
        also reduce the number of authorized common shares to a level that does
        not represent an increase of more than 100 percent of existing
        authorized common shares.

D.      BLANK CHECK PREFERRED STOCK

        1.      VOTE AGAINST management proposals authorizing the creation of
                new classes of preferred stock which have unspecified rights
                including voting, conversion or dividend distribution rights.

        2.      Management proposals to increase the number of authorized blank
                check preferred shares are normally voted in accordance with ISS
                analysis and recommendation on each individual proposal.

        3.      VOTE FOR shareholder proposals asking that any placement of
                blank check preferred stock be first approved by shareholders,
                unless the placement is for ordinary business purposes.

        4.      VOTE FOR proposals to create "blank check" preferred stock in
                cases when the company expressly states that the stock will not
                be used as a takeover defense or carry superior voting rights.


                                       11
<PAGE>


E.      ADJUSTMENTS TO PAR VALUE OF COMMON STOCK

        VOTE FOR management proposals to reduce the par value of common stock.

F.      PREEMPTIVE RIGHTS

        Proposals to provide shareholders with preemptive rights are normally
        voted in accordance with ISS analysis and recommendation on each
        individual proposal.

G.      DEBT RESTRUCTURING

        Proposals to increase common and/or preferred shares and to issue shares
        as part of a debt restructuring plan are normally voted in accordance
        with ISS analysis and recommendation on each individual proposal.

H.      SHARE REPURCHASE PROGRAMS

        VOTE FOR management proposals to institute open-market share repurchase
        plans in which all shareholders may participate on equal terms.


- --------------------------------------------------------------------------------
VII     EXECUTIVE COMPENSATION/EMPLOYEE CONSIDERATION
- --------------------------------------------------------------------------------

A.      INCENTIVE PLANS

         All proposals on incentive compensation plans (including option plans)
         for executives and directors are normally voted in accordance with ISS
         analysis and recommendation on each individual proposal. The evaluation
         is based on the following criteria (and any other that may be deemed
         relevant by ISS or Nicholas-Applegate):

                o   Necessity

                o   Reasonableness Test

                o   Participation

                o   Dilution

                o   Shares Available

                o   Exercise and Payment Terms

                o   Change-in-Control Provisions

                o   Types of Awards

                o   Company specific dilution cap calculated

                o   Present Value of all incentives, derivative awards,
                    cash/bonus compensation

                o   Shareholder wealth transfer (dollar amount of shareholders'
                    equity paid it's executives)


                                       12
<PAGE>


                o   Voting power dilution - Potential percent reduction in
                    relative voting power

                o   Criteria for awarding grants

                o   Process for determining pay levels

B.      SHAREHOLDER PROPOSALS TO LIMIT EXECUTIVE AND DIRECTOR COMPENSATION

        1.      Generally, VOTE FOR shareholder proposals that seek additional
                disclosure of executive and director compensation information.

        2.      All other shareholder proposals that seek to limit executive and
                director compensation are normally voted in accordance with ISS
                analysis and recommendation on each individual proposal.

C.      GOLDEN PARACHUTES

        1.      VOTE FOR shareholder proposals to have golden and tin parachutes
                submitted for shareholder ratification.

        2.      Proposals to ratify or cancel golden or tin parachutes are
                normally voted in accordance with ISS analysis and
                recommendation on each individual proposal.

D.      EMPLOYEE STOCK OWNERSHIP PLANS (ESOP)

        1.      VOTE FOR proposals requesting shareholder approval to implement
                Employee Stock Ownership Plans, or increase authorized shares
                for existing Employee Stock Ownership Plans except when the
                number of shares allocated to the ESOP is excessive (i.e.
                greater than 5% of outstanding shares).

        2.      Votes directly pertaining to the approval of an ESOP or a
                leveraged ESOP are normally voted in accordance with ISS
                analysis and recommendation on each individual proposal. Our
                evaluation is based on the following criteria (and any other
                that may be deemed relevant):

                o   Reasonableness Test
                o   Participation
                o   Administration
                o   Shares Available
                o   Exercise and Payment Terms
                o   Change-in-Control Provisions
                o   Types of Awards
                o   Dilution

                                       13
<PAGE>


E.      401(K) EMPLOYEE BENEFIT PLANS

        VOTE FOR proposals to implement a 401(k) savings plan for employees.

F.      DISCOUNTED OPTIONS/RESTRICTED STOCK

        VOTE AGAINST discounted options and restricted stock without performance
        criteria (except restricted stock in U.S.-style stock option plans,
        which are normally voted in accordance with ISS analysis and
        recommendation on each individual proposal.)

G.      PENSION FUND CREDITS

        VOTE FOR proposals that EXCLUDE pension fund credits from earnings when
        calculating executive compensation. In addition, VOTE AGAINST proposals
        that INCLUDE pension fund credits in earnings when calculating executive
        compensation.


- --------------------------------------------------------------------------------
VIII    STATE OF INCORPORATION
- --------------------------------------------------------------------------------

A.      RE-INCORPORATION PROPOSALS

        Proposals to change a corporation's state of incorporation are normally
        voted in accordance with ISS analysis and recommendation on each
        individual proposal.

B.      STATE TAKEOVER STATUTES

        Proposals to opt in or opt out of state takeover statutes are normally
        voted in accordance with ISS analysis and recommendation on each
        individual proposal.

C.      STATE FAIR PRICE PROVISIONS

        Proposals to opt out of S.F.P's are normally voted in accordance with
        ISS analysis and recommendation on each individual proposal.

D.      STAKEHOLDER LAWS

        VOTE FOR proposals to opt out of stakeholder laws (allowing directors to
        weigh the interest of constituencies other than shareholders in the
        process of corporate decision making).

E.      DISGORGEMENT PROVISIONS

        Proposals to opt out of disgorgement provisions are normally voted in
        accordance with ISS analysis and recommendation on each individual
        proposal.

                                       14
<PAGE>


- --------------------------------------------------------------------------------
IX      MERGERS AND CORPORATE RESTRUCTURINGS
- --------------------------------------------------------------------------------

A.      MERGERS AND ACQUISITIONS

        Votes on mergers and acquisitions are normally voted in accordance with
        ISS analysis and recommendation on each individual proposal. The voting
        decision depends on a number of factors, including:

                o   Anticipated financial and operating benefits
                o   Offer price (cost vs. premium)
                o   Prospects of the combined companies
                o   How the deal was negotiated
                o   Changes in corporate governance and their impact on
                    shareholder rights
                o   Other pertinent factors discussed below.

B.      CORPORATE RESTRUCTURINGS

        Votes on corporate restructuring proposals, including minority
        squeezeouts, leveraged buyouts, spin-offs, liquidations and asset sales,
        are normally voted in accordance with ISS analysis and recommendation on
        each individual proposal.

C.      SPIN-OFFS

        Votes on spin-offs are normally voted in accordance with ISS analysis
        and recommendation on each individual proposal, considering

                o   The tax and regulatory advantages
                o   Planned use of the sale proceeds
                o   Market focus
                o   Managerial incentives.


D.      ASSET SALES

        Votes on asset sales are normally voted in accordance with ISS analysis
        and recommendation on each individual proposal, considering

                o   The impact on the balance sheet/working capital
                o   The value received for the asset
                o   The potential elimination of diseconomies.

                                       15
<PAGE>


E.      LIQUIDATIONS

        Votes on liquidations normally voted in accordance with ISS analysis and
        recommendation on each individual proposal, after reviewing

                o   Management's efforts to pursue other alternatives
                o   The appraisal value of the assets
                o   The compensation plan for executives managing the
                    liquidation.

F.      RIGHTS OF APPRAISAL

        VOTE FOR shareholder proposals to provide rights of appraisal to
        dissenting shareholders.

G.      CHANGING CORPORATE NAME

        VOTE FOR changing the corporate name.

- --------------------------------------------------------------------------------
X       SOCIAL ISSUES PROPOSALS
- --------------------------------------------------------------------------------

A.      SOCIAL ISSUES PROPOSALS

        Vote to ABSTAIN on social issue proposals, unless the proposal is likely
        to affect shareholder value. If so, the issue is normally voted in
        accordance with ISS analysis and recommendation on each individual
        proposal, which is based on expected effect on shareholder value, and
        then voted accordingly.

        Generally, VOTE FOR disclosure reports that seek additional information.

- --------------------------------------------------------------------------------
XI      PROXIES NOT VOTED
- --------------------------------------------------------------------------------

A.      SHARES OUT ON LOAN

        Proxies are not available to be voted when shares are out on loan
        through client securities lending programs with their custodians.

B.      SHARE-BLOCKING

        Proxies are not voted for countries with "share-blocking", generally,
        voting would restrict ability to sell shares. A list of countries with
        "share-blocking" is available upon request.

C.      OTHER

        There may be circumstances, such as costs or other factors, where
        Nicholas-Applegate would in its reasonable discretion refrain from
        voting proxy shares.


                                       16

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>4
<FILENAME>c31442_99cert.txt
<TEXT>
                                                                      EX-99.CERT

                            FORM N-CSR CERTIFICATION

I, Brian S. Shlissel, certify that:

1.   I have reviewed this report on the Form N-CSR of the Nicholas-Applegate
     Convertible & Income Fund;

2.   Based on my knowledge, the report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by the report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations, changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement of cash flows) of the registrant as of, and for, the periods in
     this report:

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Rule 30a-3(c) under the Investment Company Act of 1940) and internal
     control over financial reporting (as defined in Rule 30a-3(d) under the
     Investment Company Act of 1940) for the registrant and have:

     (a)  Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared:

     (b)  Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles:

     (c)  Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of a date
          within 90 days prior to the filing date of this report based on such
          evaluation; and

     (d)  Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal half-year (the registrant's second fiscal half-year
          in the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

     (a)  All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize, and report financial information; and

     (b)  Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls over financial reporting.


Dated: May 10, 2004

 /s/ Brian S. Shlissel
- ----------------------
Brian S. Shlissel
President & Chief Executive Officer

<PAGE>


                            FORM N-CSR CERTIFICATION

I, Lawrence G. Altadonna, certify that:

1.   I have reviewed this report on the Form N-CSR of the Nicholas-Applegate
     Convertible & Income Fund ;

2.   Based on my knowledge, the report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by the report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations, changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement of cash flows) of the registrant as of, and for, the periods in
     this report:

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Rule 30a-3(c) under the Investment Company Act of 1940) and internal
     control over financial reporting (as defined in Rule 30a-3(d) under the
     Investment Company Act of 1940) for the registrant and have:

     (a)  Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared:

     (b)  Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles:

     (c)  Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of a date
          within 90 days prior to the filing date of this report based on such
          evaluation; and

     (d)  Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal half-year (the registrant's second fiscal half-year
          in the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

     (a)  All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize, and report financial information; and

     (b)  Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls over financial reporting.


Dated: May 10, 2004

 /s/ Lawrence G. Altadonna
- --------------------------
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906CERT
<SEQUENCE>5
<FILENAME>c31442_99-906cert.txt
<TEXT>
                                                                   EX-99.906CERT

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
(b) of section 1350, chapter 63 of title 18, United States Code), each of the
undersigned officer of Nicholas-Applegate Convertible & Income Fund (the
"Registrant"), do hereby certifies, to such officer's knowledge, that

     (1)  the Annual Report on the Form N-CSR for the period ended February 29,
          2004 (the "Form N-CSR") fully complies with the requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934: and

     (2)  The information contained in the Form N-CSR fairly presents, in all
          material respects, the financial condition and results of operations
          of the Registrant.

Dated: May 10, 2004

/s/ Brian S. Shlissel
- ---------------------
Brian S. Shlissel
President & Chief Executive Officer

A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the version of this written statement required by
Section 906, has been provided to Nicholas-Applegate Convertible & Income Fund
and furnished to the Securities and Exchange Commission or its staff upon
request.

This certification is being furnished solely pursuant to 18 U.S.C. ss 1350 and
is not being filed as part of the Report or as a separate disclosure document.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
(b) of section 1350, chapter 63 of title 18, United States Code), each of the
undersigned officer of Nicholas-Applegate Convertible & Income Fund (the
"Registrant"), do hereby certifies, to such officer's knowledge, that

     (3)  the Annual Report on the Form N-CSR for the period ended February 29,
          2004 (the "Form N-CSR") fully complies with the requirements of
          Section 13(a) or 15(d) of the Securities Exchange Act of 1934: and

     (4)  The information contained in the Form N-CSR fairly presents, in all
          material respects, the financial condition and results of operations
          of the Registrant.

Dated: May 10, 2004

/s/ Lawrence G. Altadonna
- -------------------------
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer

A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the version of this written statement required by
Section 906, has been provided to Nicholas Applegate Convertible & Income Fund,
and furnished to the Securities and Exchange Commission or its staff upon
request.

This certification is being furnished solely pursuant to 18 U.S.C. ss 1350 and
is not being filed as part of the Report or as a separate disclosure document.


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
