Your Global Investment Authority pg Your Global Investment Authority © 2011 PIMCO advised funds are distributed by PIMCO Investments LLC. STEPPING OUT OF CASH Strategies for Putting Cash to Work

Your Global Investment Authority pg Agenda 2 This presentation was created by PIMCO Investments LLC and updated 8/31/11 unless otherwise indicated. It contains the current opinions of the presenter, which are subject to change without notice. This presentation does not represent a recommendation of any particular security, strategy or investment product. PIMCO advised funds are distributed by PIMCO Investments LLC, 1633 Broadway, New York, NY 10019, PIMCO. © Cash Balances on the Rise 2.The Risks of Over-Investing in Cash 3.Strategies for Putting Cash to Work 4.Taking Steps

Your Global Investment Authority pg 3 Cash Balances on the Rise  Growth Has Stalled  Market Volatility  Asset Levels

Your Global Investment Authority pg 1Q 20072Q 20073Q 20074Q 20071Q 20082Q 20083Q 20084Q 20081Q 20092Q 20093Q 20094Q 20091Q 20102Q 20103Q 20104Q 20101Q 20112Q 2011 Cash Balances on the Rise Growth Has Stalled 4 Source: Bureau of Economic Analysis. As of August QUARTER-OVER-QUARTER GROWTH IN REAL GDP Percent (%)

Your Global Investment Authority pg Cash Balances on the Rise Market Volatility 5 Source: CBOE Market Volatility (VIX) Index, Bloomberg. VOLATILITY HAS INCREASED RECENTLY

Your Global Investment Authority pg Cash Balances on the Rise Asset Levels 6 Source: Strategic Insight Research; Federal Reserve. INVESTORS TURN TO PERCEIVED SAFETY OF CASH MM MF assets Savings & MMDA CD’s over $100,000 CD’s below $100,000 Billions ($)

Your Global Investment Authority pg 7 The Risks of Over-Investing in Cash  Cash Returns Near All-time Low  Negative Real Returns  Low Yields Likely to Persist

Your Global Investment Authority pg The Risks of Over-Investing Cash Returns Near All-time Low 8 Past performance is no guarantee of future results. Source: U.S. Department of the Treasury. Month-end numbers unless otherwise noted. This chart is not indicative of the past or future performance of any PIMCO product. Treasury bills offer a fixed rate of return, with principal and interest payments government-guaranteed. 3-MONTH T-BILL YIELD NEAR ZERO 3-Month T-Bill Yield

Your Global Investment Authority pg The Risks of Over-Investing Negative Real Returns 9 Past performance is no guarantee of future results. Source: U.S. Department of the Treasury. Month-end numbers unless otherwise noted. This chart is not indicative of the past or future performance of any PIMCO product. Treasury bills offer a fixed rate of return, with principal and interest payments government-guaranteed. LOSING MONEY ON CASH AFTER INFLATION 3-Month T-Bill Yield 3-Month T-Bill Yield After Inflation

Your Global Investment Authority pg The Risks of Over-Investing Low Yields Likely to Persist 10 FINANCIAL REPRESSION KEEPS RATES DOWN Source: ISI Group. ISI composite is global developed short-term interest rates after inflation. Data through 5/31/11. Global Real Short Rates

Your Global Investment Authority pg The Risks of Over-Investing Low Yields Likely to Persist 11 “…Economic conditions... are likely to warrant exceptionally low levels for the federal funds rate at least through mid ” — Federal Open Market Committee (FOMC) Press Release 9 August 2011

Your Global Investment Authority pg SOURCE: SEC Investment Act of 1940, § 270.2a-7 Money Market Funds. Sec 2a-7 Money Market Fund Regulatory Reform was enacted on January 27, Money_market_phil_03  Weighted Average Maturity  Liquidity  Daily  Weekly  Weighted Average Life  Tier 2 Securities OldNew Maximum 90 Days N/A 5% Maximum, 13 Month Maximum Maturity Maximum 60 Days 10% Minimum 30% Minimum Maximum 120 Days 3% Maximum, 45 Day Maximum Maturity The Risks of Over-Investing Regulatory Reform Likely to Keep Money Market Yields Low REVISED 2A-7 RULES FOR MONEY MARKET FUNDS

Your Global Investment Authority pg 13 Strategies for Putting Cash to Work  Step In: Short-Term Bond Strategies  Step Up: Core Bond Strategies  Step Out: Income-Generating Bond Strategies  Step Further: Multi-Asset Strategies

Your Global Investment Authority pg Strategies for Putting Cash to Work Stepping Out on the Spectrum 14 POTENTIAL RISK POTENTIAL REWARD Cash Short-term bonds Core bonds Income potential THE RELATIONSHIP BETWEEN RISK AND REWARD Timely opportunities Potential Return Risk

Your Global Investment Authority pg 15 Strategy 1. Step InStrategy 2. Step UpStrategy 3. Step OutStrategy 4. Step Further  Goal: Use short-term bonds to take a small step up in return potential via a small step up in risk  Solution: Short-term bond strategies  Goal: Use investable assets to reestablish a core position  Solution: Core bond strategies  Goal: Use a portion of core assets to pursue income potential  Solution: Conservative multi-sector bond strategies  Goal: Use discretionary strategies that seek to capitalize on opportunities arising from today’s changing economic landscape  Solution: Actively managed multi-asset strategies Strategies for Putting Cash to Work Stepping Out on the Spectrum

Your Global Investment Authority pg Strategies for Putting Cash to Work Step In: Short-Term Bond Strategies 16 There is no guarantee that these objectives will be met. Pursue increased return potential over cash  Preserve some liquidity  Increase return potential over cash (for small increase in risk)  Seek lower volatility  High-quality focus

Your Global Investment Authority pg Strategies for Putting Cash to Work Step Up: Core Bond Strategies 17 Reestablish core holdings for longer-term return potential  For investable cash  Greater return potential (for moderate increase in risk)  High-quality focus  Reestablish bond market exposure There is no guarantee that these objectives will be met.

Your Global Investment Authority pg Strategies for Putting Cash to Work Step Out: Income-Generating Bond Strategies 18 Pursue income potential through a broad-based, total return approach  Allocate a portion of core assets  Consistent dividend income from diversified sources  Rigorous risk management  Maximize income potential There is no guarantee that these objectives will be met.

Your Global Investment Authority pg Strategies for Putting Cash to Work Step Further: Actively Managed Multi-Asset Strategies 19 Capitalize on sectors and asset classes that may benefit from the changing economy  Access broad range of asset classes  Active management in response to evolving risks and opportunities  Experience and expertise of recognized portfolio managers There is no guarantee that these objectives will be met.

Your Global Investment Authority pg 20 Taking Steps  Analyze Your Cash Position  Re-Allocate Excess Cash  Look for the Right Investment Manager −Active Management −Research and Resources −Experience and Innovation −A History of Risk-Managed Results

Your Global Investment Authority pg Important Information 21 The Standard & Poor’s 500 Index is an unmanaged market index generally considered representative of the stock market as a whole. The CBOE Volatility Index ® (VIX ® ) is a key measure of market expectations of near-term volatility conveyed by S&P 500 ® stock index option prices. One cannot invest directly in an index.