<DOCUMENT>
<TYPE>EX-99.77D POLICIES
<SEQUENCE>3
<FILENAME>r77d.txt
<DESCRIPTION>AVERAGE PORTFOLIO DURATION
<TEXT>
Effective June 1, 2007, the Fund seeks to achieve its investment objective
by investing under normal circumstances at least 65% of its total assets in
commercial mortgage-backed securities (CMBS), which may be represented by
forwards or derivatives, such as options, futures contracts or swap
agreements. For purposes of applying the Funds investment policies and
restrictions, swap agreements are generally valued by the Fund at market value.
In the case of credit default swaps sold by the Fund (i.e. where the Fund is
selling credit default protection), the Fund will value the swap at its
notional amount. Prior to June 1, 2007, the Fund sought to achieve its
investment objective by investing under normal circumstances at least 80%
of its net assets plus the amount of borrowings for investment purposes
in CMBS.

Effective February 27, 2007, the Fund changed its investment policies to
permit investment in credit derivatives. This change permits the use of
credit derivatives, such as credit default swaps, and other derivative
instruments for gaining synthetic exposures.

Effective February 27, 2007, the Fund changed its policies so that it is
permitted to use Fitch, Inc. (Fitch) as a rating agency for purposes of credit
quality investment restrictions. Prior to February 27, 2007, the Fund used
ratings from Moody's Investors Service, Inc. ("Moody's") or Standard & Poors
Ratings Services ("S&P") or if unrated, PIMCO's determination of comparable
quality to a rated security. The Fund may now use Moodys, S&P or
Fitch ratings, or, if an issue is unrated, PIMCOs assessment of the
issues credit quality.
</TEXT>
</DOCUMENT>
