Fund Description: PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the, PIMCO ETF Trust an open-ended investment management company. FUND OBJECTIVE: PIMCO 25+ Year Zero Coupon U.S. Treasury Index Fund ETF seeks to provide total return that closely corresponds, before fees and expenses, to the total return of the BofA Merrill Lynch Long US Treasury Principal STRIPS Index. INDEX DESCRIPTION: The BofA Merrill Lynch Long US Treasury Principal STRIPS Index is an unmanaged index comprised of long maturity Separate Trading of Registered Interest and Principal of Securities (STRIPS) representing the final principal payment of U.S. Treasury bonds. The principal STRIPS comprising the Index must have 25 years or more remaining term to final maturity and must be stripped from U.S. Treasury bonds having at least $1 billion in outstanding face value. As of September 30, 2009, there were 10 issues in the Index. Index constituents are capitalization-weighted based on the security prices times an assumed face value of $1 billion per constituent security. FUND STRATEGY: The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its total assets (exclusive of collateral held from securities lending) in the component securities) of Index. The Fund may invest the remainder of its assets in Fixed Income Instruments that are not Component Securities, but which PIMCO believes will help the Fund track its Index, as well as in cash and investment grade, liquid short-term instruments, forwards or derivatives, such as options, futures contracts or swap agreements, and shares of affiliated bond funds. The average portfolio duration of this Fund will closely correspond to the duration of its Index, which as of September 30, 2009 was 25.84 years. An indexing approach in managing the Fund’s investments is used. The Fund employs a representative sampling strategy in seeking to achieve its investment objective. In using this strategy, investing in a combination of Component Securities and other instruments such that the combination effectively provides exposure to the Index. In using a representative sampling strategy, the Fund may not track its Index with the same degree of accuracy as a fund that replicates each of the Component Securities of the Index. Unlike many investment companies, the Fund does not attempt to outperform the Index the Fund tracks. An indexing approach may eliminate the chance that the Fund will substantially outperform its Index but also may reduce some of the risks of active management. Indexing seeks to achieve lower costs by keeping portfolio turnover low in comparison to actively managed investment companies. The Fund may invest in derivative instruments, such as options, futures contracts or swap agreements. The Fund may purchase and sell securities on a when-issued, delayed delivery or forward commitment basis. The Fund may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs). The total return sought by the Fund consists of income earned on the Fund’s investments, plus capital appreciation, if any, which generally arises from decreases in interest rates. FUND MANAGEMENT: PIMCO serves as the investment manager for the Fund and is responsible for managing the investment activities of the Fund, the Funds’ business affairs and other administrative matters, subject to the supervision of the Board of Trustees.