Pacific Funds

As filed with the Securities and Exchange Commission on September 30, 2004
Registration No. 333-61366
811-10385

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. _______________ o

Post-Effective Amendment No. 34 x

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 o

Amendment No. 38 x

(Check appropriate box or boxes)

Pacific Funds

(Exact Name of Registrant as Specified in Charter)

700 Newport Center Drive, P.O. Box 7500, Newport Beach, CA 92660
(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code: (949) 219-6767

Robin S. Yonis
Vice President and Investment Counsel of
Pacific Life Insurance Company
700 Newport Center Drive
Post Office Box 9000
Newport Beach, CA 92660
(Name and Address of Agent for Service)

Copies to:

Jeffrey S. Puretz, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006-2401

It is proposed that this filing will become effective (check appropriate box)


o		immediately upon filing pursuant to paragraph (b)

o		on July 1, 2004 pursuant to paragraph (b)

o		60 days after filing pursuant to paragraph (a)(1)

o		on (date) pursuant to paragraph (a)(1)

x		75 days after filing pursuant to paragraph (a)(2)

o		on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:


o		this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

This prospectus is designed to help you make informed decisions about investments in Pacific Funds, including the Portfolio Optimization Funds. You should consult with your investment professional to determine which fund may be suited to your financial needs, investment time horizon, and risk comfort level. You should periodically review these factors to determine if you need to change your investment strategy.

Please read this prospectus carefully before investing or sending money, and keep it for future reference. You should read the complete description of the funds in this prospectus and be aware that any time you invest, there is a risk of loss of money.

You should be aware that the Securities and Exchange Commission (SEC) has not approved or disapproved of the securities or passed upon the accuracy or adequacy of the disclosure in this prospectus. It is a criminal offense to say otherwise.

This section is designed to help you understand the differences between the funds, including their investment goals, main investments and main risks. You should also read the complete description of each fund in Fund Overview.

Each fund is subject to regulation under the Investment Company Act of 1940 and intends to qualify as a regulated investment company under the Internal Revenue Code of 1986. Although some of the Pacific Funds may have names or investment objectives that resemble other mutual funds managed by the same manager, they may not have the same underlying holdings or performance as those other mutual funds. A fund’s stated investment goal cannot be changed without the approval of shareholders. The Pacific Funds board of trustees may change non-fundamental investment policies of the funds without shareholder approval.

The following table provides the main risks of each fund. These risks are described more fully on the following pages. Typically, the Portfolio Optimization Funds are exposed to the same risks as the underlying funds in direct proportion to the allocation of assets among those funds. Refer to Fund Overview for more information on the specific risks associated with each Portfolio Optimization Fund.

Risk is the chance that you’ll lose money on an investment, or that it will not earn as much as you expect. Every fund has some degree of risk depending on what it invests in and what strategies it uses. Each Portfolio Optimization Fund is subject to the risks of the underlying Pacific Funds in which it invests.

Managers’ investment techniques and strategies are discretionary – Each fund tries to meet its investment goal by using certain principal investments and strategies, and special focuses, which are applicable under normal circumstances. However, unless otherwise noted, managers may make decisions or shift assets in a way that causes the funds to not achieve their goals. Each fund may temporarily change its investment strategies if the manager believes economic conditions make it necessary to try to protect the fund from potential loss (e.g., if market conditions warrant, for redemptions, start-up of a fund, etc.). In that case, the funds (including funds with international holdings) may temporarily invest in U.S. government securities, high-quality corporate fixed income securities, mortgage-related and asset-backed securities or money market instruments. Likewise, funds that invest principally in small- to medium-sized companies may shift to preferred stocks and larger-capitalization stocks. These shifts may alter the risk/return characteristics of the funds and cause the funds to miss investment opportunities. Furthermore, investment decisions may not anticipate market trends successfully. For example, funds that invest too heavily in common stocks during a stock market decline may fail to preserve capital. Conversely, investing too heavily in fixed income securities during a period of stock market appreciation may result in lower total return.

Some funds have policies on the amount they can invest in certain kinds of securities. These policies apply at the time the investment is made. Some of these policies are in place due to the name of the particular fund (Name Policy). The Name Policy is applied to a fund’s net assets, plus the amount of any borrowings for investment purposes. A Fund may not change its Name Policy, if applicable, without notifying shareholders 60 days prior to the change. Other than for the Name Policy, if net assets are not specified, then percentage limits refer to total assets. Total assets are equal to the value of securities owned, cash, receivables, and other assets before deducting liabilities.

The following funds engage in active and frequent trading which could result in higher trading costs and reduce performance: PF Goldman Sachs Short Duration Bond Fund, PF Lazard International Value Fund, PF PIMCO Inflation Managed Fund, PF PIMCO Managed Bond Fund, and PF Van Kampen Mid-Cap Growth Fund. Many of the funds are underlying funds of the Portfolio Optimization Funds, and changes to the target allocations of the Portfolio Optimization Funds may result in the transfer of assets from one underlying fund to another, which may increase trading costs for the affected underlying funds. Also, each fund may lend up to 33 1/3% of its assets to seek additional income. All loans must be secured by collateral. In connection with such lending, there is a risk of delay in return of the securities loaned or possible loss of rights in collateral should the borrower become insolvent.

Performance of the funds will vary – Performance is affected by changes in the economy and financial markets. The value of a fund changes as its asset values go up or down. The value of your shares will fluctuate, and when redeemed, may be worth more or less than the original cost. The timing of your investment may also affect performance.

The funds are also affected by other kinds of risks, depending on the types of securities held by or strategies used by the funds, including:


•	Interest rate risk – the value of bonds and short-term money market instruments may fall when interest rates rise. Bonds with longer durations tend to be more sensitive to changes in interest rates, making them more volatile than bonds with shorter durations or money market instruments.


•	Changes in inflation rate risk – the value of interest payable on fixed income securities tends to be more sensitive to inflation than other types of assets. Conversely, the principal value of inflation-indexed bonds and/or interest payable on them tends to fall if the inflation index falls.

•	Price volatility risk – both fixed income and equity securities are exposed to potential price volatility. The prices of fixed income securities are affected by many factors, including prevailing interest rates and market conditions. Equity securities tend to go up or down in value, sometimes rapidly and unpredictably. The prices of equity securities change in response to many factors, including a company’s historical and prospective earnings, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. Large companies tend to have more stable prices than small- or medium-sized companies. Small- or medium-sized companies may be riskier and more susceptible to price swings. They may have fewer financial resources, limited product and market diversification, greater potential for volatility in earnings and business prospects, and greater dependency on a few key managers.

Additionally, companies that managers think have the potential for above average or rapid growth may give a fund a higher risk of price volatility than a fund that invests principally in equities that are “undervalued,” for example. Additionally, many faster-growing health care companies have limited operating histories, and their potential profitability may be dependent on regulatory approval of their products, which increases the volatility of these companies’ securities prices and could have an adverse impact upon the companies’ future growth and profitability. Investments in over-the-counter stocks, which trade less frequently and in smaller volume than exchange-listed stocks, may have more price volatility than that of exchange-listed stocks, and the investing fund may experience difficulty in establishing or closing out positions in these stocks at prevailing market prices.


•	Credit risk – a fixed income security’s issuer may not be able to meet its financial obligations and go bankrupt. High-yield/high-risk bonds, i.e., low credit ratings by Moody’s (Ba and lower) or Standard & Poor’s (BB and lower) or no rating, but are of comparable quality, are especially subject to credit risk during periods of economic uncertainty or during economic downturns and are considered to be mostly speculative in nature. Not all U.S. government securities are backed or guaranteed by the United States. Some are supported only by the credit of the issuing agency, which depend entirely on their own resources to repay their debt, and are subject to the risk of default.

•	Foreign investment risk – foreign investments may be riskier than U.S. investments for many reasons, including changes in currency exchange rates, unstable political and economic conditions, a lack of adequate and timely company information, differences in the way securities markets operate, relatively lower market liquidity, less stringent financial reporting and accounting standards and controls, less secure foreign banks or securities depositories than those in the U.S., foreign taxation issues and foreign controls on investment.

•	Emerging countries risk – investments in emerging market countries (such as many in Latin America, Asia, the Middle East, Eastern Europe and Africa) may be riskier than in developed markets for many reasons including smaller market capitalizations, greater price volatility, less liquidity, a higher degree of political and economic instability, less governmental regulation of the financial industry and markets, and less stringent financial reporting and accounting standards and controls. Such investments may also involve risk of loss resulting from problems in share registration and custody, especially in Eastern European countries such as Russia.

•	Derivatives, synthetics, forward commitments, repurchase agreements, and currency transactions risk – derivatives (such as futures and options contracts) derive their value from the value of an underlying security, a group of securities or an index. Synthetics are artificially created by using a collection of other assets whose combined features replicate the economic characteristics of a direct investment. A fund’s use of derivatives, synthetics, forward commitments and currency transactions could reduce returns, increase the fund’s volatility, may not be liquid, and may not correlate precisely to the


	underlying securities or index. All of these investments, including repurchase agreements, are particularly sensitive to counterparty risk.

•	Mortgage-related securities risk – mortgage-related securities can be paid off early if the owners of underlying mortgages pay off their mortgages sooner than scheduled. If interest rates are falling, funds investing in such securities will be forced to reinvest this money at lower yields. Conversely, if interest rates rise, the duration of such securities tends to extend, making them more sensitive to changes in interest rates. Stripped mortgage-related securities can be particularly sensitive to changes in interest rates. Stripped mortgage-related securities are made up of Interest Only (IO) and Principal Only (PO) components. IOs present a heightened risk of total loss of investment.

•	Real estate investment trusts (REITs) risk – REITs expose the fund to the risks of the real estate market. Some REITs may invest in a limited number of properties, in a narrow geographic area, or in a single property type, which increases the risk that the fund could be unfavorably affected by the poor performance of a single investment or investment type. Borrowers could default on or sell investments the REIT holds, which could reduce the cash flow needed to make distributions to investors. In addition, a REIT may not qualify for preferential tax treatments or exemptions. REITs require specialized management and pay management expenses.

•	Liquidity risk – liquidity is the ability to sell securities at about carrying cost within a reasonable time. High-yield/high-risk bonds may be less liquid (more difficult to sell) than higher quality investments, and investments in smaller companies have a greater risk of being or becoming less liquid than other equity securities.

•	Non-diversification risk – a non-diversified fund may invest in securities of a fewer number of issuers than diversified funds. This increases the risk that its value could go down because of the poor performance of a single investment or a small number of investments.

•	Geographic concentration risk – concentrating investments in a limited number of countries may increase the risk that economic, political and social conditions in those countries will have a significant impact on performance.


•	Real estate operating companies (REOCs) risk – REOCs expose the fund to the risks of the real estate market. Some REOCs may invest in a limited number of properties, in a narrow geographic area, or in a single property type, which increases the risk that the fund could be unfavorably affected by the poor performance of a single investment or investment type. Borrowers could default on or sell investments the REOC holds, which could reduce the cash flow needed to make distributions to investors. In addition, a REOC may not qualify for preferential tax treatments or exemptions. REOCs require special management and pay management expenses.

In addition, the Portfolio Optimization Funds are subject to the following risk:

Asset allocation is no guarantee against loss – Although asset allocation seeks to optimize returns given various levels of risk tolerance, you still may lose money and experience volatility. Market and asset class performance may differ in the future from the historical performance and assumptions used to build the funds. There’s a risk that you could achieve better returns by investing in an individual fund or funds representing a single asset class rather than using asset allocation.

Information on how the funds performed is presented in the bar charts that follow and in the table that begins on page 12. The bar charts reflect performance of Class A shares without deduction for sales loads or fees, and show how each fund’s performance has varied since its inception. If these amounts were deducted, returns would be lower. The table shows how each fund’s average annual returns compare to its benchmark index. The 1-year and since inception average annual total returns shown in the table reflect performance after deduction for sales loads or fees. The information presented in the bar charts and the table was prepared assuming reinvestment of dividends and distributions. Because the Portfolio Optimization Funds, the PF Goldman Sachs Short Duration Bond Fund, the PF Lazard Mid-Cap Value Fund, and the PF Van Kampen Real Estate Fund are new, there is no prior performance to show you.

Past performance is not necessarily an indication of how the funds will perform in the future. Performance reflects expense limitations that were in effect during the periods presented. If expense limitations were not in place, the funds’ performance would have been reduced.


¹	The after-tax returns (a) are calculated using the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; (b) are shown for Class A shares only and will vary for other classes; (c) depend on an investor’s tax situation and may differ from those shown; and (d) are not relevant to investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some instances, the return after taxes on distributions and sale of shares may be greater than return before taxes because the investor is assumed to be able to use the capital loss of the sale of fund shares to offset other taxable capital gains.

²	The Standard & Poor’s 500 Composite Stock Price Index is comprised of the stocks of approximately 500 large-capitalization companies traded in U.S. stock markets. Results include reinvested dividends.

³	The Russell Midcap Growth Index is an index that measures the performance of those securities in the Russell Midcap Index with a higher than average growth forecast. Results include reinvested dividends.


⁴	The Russell 2500 Growth Index is comprised of companies that have higher price-to-book ratios and higher forecasted growth values than those companies in the Russell 2500 Value Index. Results include reinvested dividends.



⁵	The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) Index is comprised of stocks from 21 countries (as of 12/03) in Europe, Australia, New Zealand and Asia. Results include reinvested dividends after deducting withholding taxes.



⁶	Effective January 1, 2004, the fund changed its name (from Global Growth), its investment focus and changed its benchmark from the MSCI All Country World Index Free to MSCI EAFE Index.



⁷	The MSCI All Country World Index Free is comprised of stocks from 23 developed markets and 26 emerging markets. Results include reinvested dividends, after deducting withholding taxes.



⁸	The Lehman Brothers Global Real: U.S. TIPS Index is comprised of all outstanding Treasury inflation protected securities issued by the U.S. government. Results include reinvested dividends.



⁹	The Lehman Brothers Government/ Credit Index is comprised of government and corporate fixed income securities. Results include reinvested dividends.



¹⁰	The Merrill Lynch 3-Month U.S. T-Bill Index is comprised of a single Treasury bill purchased at the beginning of the month and held for a full month then sold and rolled into a newly selected issue. Results include reinvested dividends.



¹¹	The Russell 1000 Value Index is comprised of companies with a less-than-average growth orientation. Companies in this index have lower price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth rates than companies in the Russell 1000 Growth Index. Results include reinvested dividends.



¹²	Van Kampen began managing the fund on May 1, 2003. Another firm managed the fund before that date.



¹³	This index is the fund’s primary benchmark index.

There are two types of fees and expenses you pay when you invest in mutual funds: (i) shareholder fees and (ii) operating expenses. Shareholder fees include sales charges you pay directly when you buy or sell shares. Operating expenses incurred annually by each fund are borne indirectly by shareholders. The Portfolio Optimization Funds directly bear their annual operating expenses and indirectly bear the annual operating expenses of the underlying funds in proportion to their allocations.

Pacific Funds pays for support, administrative, distribution and shareholder services, and the operational expenses of the funds, including custody, transfer agency, printing, legal, and auditing expenses. Pacific Funds also pays Pacific Life Insurance Company (“Pacific Life”) to provide investment adviser services. Pacific Life, in turn, pays part of its fee to the fund managers. Currently, the Portfolio Optimization Funds bear no direct operating expenses other than distribution and service (“12b-1”) fees and certain “other expenses” as specified in the table on page 15.

The following tables show the fees that you pay directly and the expenses paid by each fund.


¹	The sales charge is reduced for purchases of $50,000 or more. Class A shares of the PF Pacific Life Money Market Fund are sold without an initial sales charge.

²	There is a contingent deferred sales charge (CDSC) of 1% on redemptions of Class A shares within 1 year of purchase if the purchase was part of an investment of $1 million or more.

³	There is a CDSC on the sale of shares within 7 years from purchase. The CDSC decreases each year.

⁴	There is a CDSC on the sale of shares within 1 year from purchase.

⁵	For assets initially invested in the PF Pacific Life Money Market Fund, the CDSC period will begin when the assets are exchanged into another fund.

Operating expenses paid by the Portfolio Optimization Funds (as an annual percent of average daily net assets)





	Advisory		Distribution and						Other		Total Annual
Fund	Fees		Service Fees (12b-1) ¹						Expenses ^{2, 3}		Operating Expenses


Class			A		B		C				A		B		C


Model A		0.00%		0.50%		1.00%		1.00%		1.79%		2.29%		2.79%		2.79%

Model B		0.00%		0.50%		1.00%		1.00%		1.18%		1.68%		2.18%		2.18%

Model C		0.00%		0.50%		1.00%		1.00%		1.03%		1.53%		2.03%		2.03%

Model D		0.00%		0.50%		1.00%		1.00%		1.19%		1.69%		2.19%		2.19%

Model E		0.00%		0.50%		1.00%		1.00%		1.01%		1.51%		2.01%		2.01%

[Continued from above table, first column(s) repeated]





	Less: Waiver/Reimbursement						Direct Net Operating						Direct and Indirect
Fund	by Adviser/Distributor ⁴						Expenses						Net Operating Expenses ⁵


Class	A		B		C		A		B		C		A		B		C


Model A		(2.29%)		(2.29%)		(2.29%)		0.00%		0.50%		0.50%		1.49%		1.99%		1.99%

Model B		(1.68%)		(1.68%)		(1.68%)		0.00%		0.50%		0.50%		1.61%		2.11%		2.11%

Model C		(1.53%)		(1.53%)		(1.53%)		0.00%		0.50%		0.50%		1.72%		2.22%		2.22%

Model D		(1.69%)		(1.69%)		(1.69%)		0.00%		0.50%		0.50%		1.80%		2.30%		2.30%

Model E		(1.51%)		(1.51%)		(1.51%)		0.00%		0.50%		0.50%		1.85%		2.35%		2.35%


¹	Each share class of the funds is charged a distribution and service (12b-1) fee. Over time, distribution fees paid on an ongoing basis will increase the cost of your investment and may cost you more than paying other types of sales charges, and long-term shareholders may pay more than the equivalent of the maximum front-end sales charge allowable. Since the Portfolio Optimization Funds invest in Class A shares of other Pacific Funds (“underlying funds”), the fee for the Portfolio Optimization Funds will be reduced by 0.50%, for all share classes, to avoid duplication of fees. This reduction is reflected in the “Direct Net Operating Expenses” column.


²	Other expenses include the fee paid to Pacific Life for providing or procuring for the funds, administrative services, transfer agency services, and shareholder services, at an annual rate of 0.35% of each fund’s average daily net assets, plus custodial, legal, accounting and miscellaneous support services.


³	Expenses do not reflect non-recurring fees and expenses.


⁴	To help limit fund expenses, Pacific Life has contractually agreed to waive all of its administrative fees or otherwise reimburse each fund for its operating expenses (including organizational expenses, but not including; distribution and service (12b-1) fees; interest; taxes (including foreign taxes on dividends, interest and gains); brokerage commissions and other transactional expenses; extraordinary expenses such as litigation and other expenses not incurred in the ordinary course of each fund’s business) that exceed an annual rate based on a percentage of a fund’s average daily net assets. The expense cap for the PF Pacific Life Money Market Fund is 0.05% through 06/30/05 and 0.45% through 12/31/05. The expense cap is 0.00% for the Portfolio Optimization Funds and 0.45% for the remaining underlying funds through 12/31/05. Such waiver or reimbursement is subject to repayment to Pacific Life, for a period of time of 3 years from the end of the fiscal year in which the reimbursement took place (the recoupment period may be adjusted prospectively upon supplement or revision to this prospectus), to the extent such expenses fall below the expense cap. Any amounts repaid to Pacific Life will have the effect of increasing such expenses of the fund, but not above the expense cap. There is no guarantee that Pacific Life will continue to waive and/or reimburse expenses after 12/31/05. If it does not, the Portfolio Optimization Funds will bear the sum of the total annual operating expenses applicable to their fund and the total annual operating expenses attributable to the underlying funds in which their Portfolio Optimization Fund invests.


⁵	Since the Portfolio Optimization Funds invest in the underlying funds, in addition to their own net operating expenses, these funds also indirectly bear a portion of the expenses of the applicable underlying funds. The indirect portion of the net operating expenses is estimated based on the target allocation among the underlying funds and is provided to show you an estimate of the expenses attributable to each Portfolio Optimization Fund. The net operating expenses of the applicable underlying funds are based on the expenses provided in the chart on page 16. The net operating expense ratios will vary based on the actual allocation to the underlying funds. The net operating expense ratios reflect the current expense waivers in place for the Portfolio Optimization Funds and the underlying funds.

Direct annual operating expenses paid by each fund (as an annual percent of average daily net assets)


¹	Each share class of the funds is charged a distribution and service (12b-1) fee. Over time, distribution fees paid on an ongoing basis will increase the cost of your investment and may cost you more than paying other types of sales charges, and long-term shareholders may pay more than the equivalent of the maximum front-end sales charge allowable.

²	Other expenses include the fee paid to Pacific Life for providing or procuring for the funds’ administrative services, transfer agency services, and shareholder services, at an annual rate of 0.35% of each fund’s average daily net assets, plus custodial, legal, accounting and miscellaneous support services.

³	Expenses do not reflect non-recurring fees and expenses.


⁴	To help limit fund expenses, Pacific Life has contractually agreed to waive all or part of its investment advisory fees or administrative fees, or otherwise reimburse each fund for its operating expenses (including organizational expenses, but not including advisory fees; distribution and service (12b-1) fees; interest; taxes (including foreign taxes on dividends, interest and gains); brokerage commissions and other transactional expenses; extraordinary expenses such as litigation and other expenses not incurred in the ordinary course of each fund’s business) that exceed an annual rate based on a percentage of a fund’s average daily net assets. The expense cap for the PF Pacific Life Money Market Fund is 0.05% through 06/30/05 and 0.45% through 12/31/05. The expense cap is 0.45% for the remaining funds through 12/31/05. Such waiver or reimbursement is subject to repayment to Pacific Life, for a period of time of 3 years from the end of the fiscal year in which the reimbursement took place (the recoupment period may be adjusted prospectively upon supplement or revision to this prospectus), to the extent such expenses fall below the expense cap. Any amounts repaid to Pacific Life will have the effect of increasing such expenses of the fund, but not above the expense cap. There is no guarantee that Pacific Life will continue to waive and/or reimburse expenses after 12/31/05. If it does not, each fund will incur the total annual operating expenses applicable to the fund.

Examples – The examples that follow are intended to help you compare the cost of investing in Class A, Class B and Class C shares of each fund with the cost of investing in other mutual funds. Each example assumes that you invest $10,000 in the noted class of shares for the time periods indicated, your investment has an average annual return of 5%, all dividends and distributions are reinvested, and the funds’ annual operating expenses (data as of 3/31/04) remain the same. The examples reflect the contractual expense waivers currently in place for the Portfolio Optimization Funds and the underlying funds through 6/30/05. Although your actual costs may be higher or lower, the examples show what your costs would be based on these assumptions. Keep in mind that this is an estimate – actual expenses and performance may vary.


¹	Examples reflect the deduction of a 1% front-end sales charge, which has been eliminated effective 7/01/04.


²	Only 1-year and 3-year examples are shown for the Portfolio Optimization Funds, the PF Goldman Sachs Short Duration Bond Fund, the PF Lazard Mid-Cap Value Fund, and the PF Van Kampen Real Estate Fund, since these funds are new and there is not yet a full fiscal year of expenses. These funds will have expenses beyond year three.


¹	Examples reflect the deduction of a 1% front-end sales charge, which has been eliminated effective 7/01/04.


²	Only 1-year and 3-year examples are shown for the Portfolio Optimization Funds, the PF Goldman Sachs Short Duration Bond Fund, the PF Lazard Mid-Cap Value Fund, and the PF Van Kampen Real Estate Fund, since these funds are new and do not yet have a full fiscal year of expenses. These funds will have expenses beyond year three.

Each Portfolio Optimization Fund invests in the individual Pacific Funds, excluding other Portfolio Optimization Funds (the “underlying funds”). Each Portfolio Optimization Fund invests in Class A shares of the underlying funds, without payment of a front-end sales charge, based on its target allocation percentages. No contingent deferred sales charge (CDSC) is charged to the Portfolio Optimization Funds upon the sale of shares of the underlying funds. The table that follows provides more information regarding the Portfolio Optimization Funds.

Pacific Life uses an asset allocation process to determine the Portfolio Optimization Funds’ investment mix. The theory behind asset allocation is that diversification among asset classes, such as stocks, bonds and cash equivalents, can help reduce volatility over the long-term. The Portfolio Optimization Funds were developed through a two-step process:


(1)	An optimization analysis determines the asset class breakdown using forecasted returns, standard deviations and correlation coefficients of asset classes over the desired investing horizon. Analysis is performed by an asset allocation consulting firm retained by Pacific Life, which uses a statistical technique known as “mean-variance optimization.” The goal of mean variance optimization is to identify funds that maximize return for a given level of risk or minimize risk for a given level of return.

(2)	An evaluation of the underlying funds’ asset classes determines the appropriate mix of underlying funds to achieve the desired asset class breakdown. It includes historical returns-based style analysis, asset performance, regression and attribution analyses, and manager interviews. The underlying funds that are selected are believed to optimize returns, given each fund’s risk profile.

The Portfolio Optimization Funds will invest purchase proceeds and meet redemption needs using a monthly allocation percentage (“MAP”) methodology, which considers the value of the underlying funds and a sales forecast for the upcoming month. This methodology is intended to help maintain target allocations, although there is no guarantee that the Portfolio Optimization Funds will maintain their target allocations using this methodology. Actual holdings of the Portfolio Optimization Funds could vary from their target allocations due to actual cash flows and changes to the underlying funds’ asset values as a result of market movements and portfolio management decisions.

Annually, Pacific Life will evaluate each fund’s asset allocation strategy and rebalance the Portfolio Optimization Funds to reflect changes in the target allocations. Underlying funds may be added to or deleted from a Portfolio Optimization Fund. Pacific Life reserves the right to rebalance each Portfolio Optimization Fund’s investments in the underlying funds more frequently than annually. Pacific Life will use the MAP methodology to reallocate to new target allocations any time the target allocations change, such as when underlying funds are added to or deleted from Pacific Funds or each year when the target allocations are updated. Pacific Life may also use such MAP methodology for up to 90 days to try to minimize taxable distributions and/or to allocate to new funds, which may cause the funds to temporarily deviate from their target allocations.

Pacific Life may change the asset class allocations, underlying funds (including any funds organized in the future) or target allocations to each underlying fund without prior approval from shareholders as it determines necessary to pursue stated investment goals.

A team of Pacific Life investment professionals manages the asset allocation strategy for the Portfolio Optimization Funds. Each team member has joint responsibility for management of the funds.

Investment goal – seeks long-term growth of capital; current income is of secondary importance.

Main investments – invests at least 80% of its assets in the securities of blue chip companies, including equity securities, convertible securities, foreign securities, and synthetic instruments. Blue chip companies are large and medium-sized companies with market capitalizations in the range of the Russell 1000 Index that have leading market positions. The manager looks at companies with market capitalizations, at time of purchase, no smaller than the smallest capitalized company included in the Russell 1000 Index during the most recent 11-month period, based on month-end data, plus the most recent data during the current month. The fund may invest up to 25% of its assets in foreign securities and up to 15% of its assets in equity and/or debt real estate investment trusts. Derivative or synthetic instruments may include warrants, futures, options, exchange-traded funds and American Depositary Receipts (ADRs). Synthetic instruments are investments that have economic characteristics similar to direct investments.

The managers look for companies which possess strong financial characteristics and which they believe have leading market positions that are expected to be maintained or enhanced over time. The fund seeks to balance growth, value and quality when selecting stocks. Such companies generally have superior growth prospects compared to other companies in the same industry, proprietary technology which the managers believe have the potential to bring about major changes within an industry, leading sales within an industry, or the potential to become a market leader. The managers also look for companies that have faster earnings growth than their competitors and the market in general, higher profit margins relative to their competitors, strong cash flow relative to their competitors, and a balance sheet with relatively low debt and a high return on equity relative to their competitors.

The managers consider whether to sell a particular security when they believe the issuer of the security no longer is a market leader and/or it no longer has the characteristics described above. When the managers believe securities other than equity securities offer the opportunity for long-term growth of capital and current income, they may invest in U.S. government securities and high-quality debt securities.

Portfolio Manager – AIM Capital Management, Inc. The fund is managed by the Large Cap Growth Team at AIM, whose current members include:


	*Monika H. Degan,* CFA, is an investment officer and senior portfolio manager at AIM and has been associated with AIM and/or its affiliates since 1995. Ms. Degan has over 12 years of investment experience and a BA and an MBA from the University of Houston.
	*Kirk L. Anderson* is a portfolio manager at AIM and has been associated with AIM and/or its affiliates since 1994. Mr. Anderson has over 7 years of investment experience, a BA from Texas A&M University and an MS from the University of Houston.

Main investments – invests in common stocks of companies whose earnings the managers expect to grow at an above average rate (typically, more than 15% per year). The fund will invest in securities of small and medium-sized growth companies. The managers focus on companies they believe are likely to benefit from new and innovative products, services or processes as well as those that have experienced above-average, long-term growth in earnings and those the managers believe have excellent prospects for future growth. The managers normally consider whether to sell a particular security when any of these factors materially change.

The fund may invest up to 25% of its assets in equity and/or debt real estate investment trusts, although the manager generally does not expect to invest more than 15% of its assets at the present time. The fund may also invest up to 25% of its assets in foreign investments that are principally traded outside the U.S.

Portfolio Manager – AIM Capital Management, Inc. (AIM). The fund is managed by the Aggressive Growth Team at AIM, whose current members include:


	*Jay K. Rushin,* CFA, is a portfolio manager at AIM and has been associated with AIM and/or its affiliates since 1998. Mr. Rushin was associate equity analyst with Prudential Securities from 1996-1998 and has over 9 years of investment experience. Mr. Rushin has a BA from Florida State University.
	*Karl F. Farmer,* CFA, is a portfolio manager at AIM and has been associated with AIM and/or its affiliates since 1998. Before joining AIM, he was a pension actuary with William M. Mercer, Inc. Mr. Farmer has over 6 years of investment experience, a BS from Texas A&M University and an MBA from the University of Pennsylvania.

Investment goal – seeks current income; capital appreciation is of secondary importance.

Main investments – invests at least 80% of its assets in fixed income securities (including derivatives on such securities). Normally the fund will focus on high quality securities. The manager uses duration management as a fundamental part of the management for this fund. Generally, the manager expects to track duration of the Merrill Lynch 1-3 year Treasury Index (plus or minus a half-year) although the securities held may have short, intermediate, and long terms to maturity. The fund’s average duration will not likely exceed 3 years. Duration is a mathematical measure of the average life of a bond that includes its yield, coupon, final maturity and call features. It’s often used to measure the potential volatility of a bond’s price, and is considered a more accurate measure than maturity of a bond’s sensitivity to changes in market interest rates.

The manager intends to invest principally in government securities, mortgage-related securities, and derivatives thereof and repurchase agreements collateralized by government securities, all denominated in U.S. dollars. Government securities include U.S. treasury securities and securities issued by U.S. government agencies or instrumentalities. Mortgage-related securities include mortgage pass-through securities, asset-backed securities, mortgage certificates, collateralized mortgage obligations, stripped mortgage-backed securities, and mortgage dollar rolls. Mortgage-related securities may be government securities or non-government securities and may be based on or collateralized by fixed or adjustable rate mortgage loans or securities.

The fund may also invest in derivatives (such as options, futures contracts, and swap agreements), and forward commitments as a substitute for securities, to try to increase returns or to hedge against changes in interest rates or to otherwise achieve the fund’s goals. Total return is made up of coupon income plus any gains or losses in the value of portfolio securities.

Portfolio Manager – Goldman Sachs Asset Management, L.P. (Goldman Sachs) The fund is managed by a team, currently led by:


	*Jonathan A. Beinner* is a managing director and chief investment officer of Goldman Sachs. He joined the company in 1990 and became a portfolio manager in 1992.
	*James B. Clark* is a managing director of Goldman Sachs. He joined the company as a portfolio manager in 1994.
	*Christopher Sullivan* is a managing director of Goldman Sachs. He joined the company as a portfolio manager in 2001.

Investment goal – seeks long-term growth of capital in a manner consistent with the preservation of capital.

Main investments – invests in a large number of companies of any size, from small emerging growth to well-established companies. It principally invests in equity securities. The fund may invest up to 25% of its assets in foreign investments. Investing globally offers greater diversification because the fund can take advantage of investment opportunities that are not available in the U.S. The manager looks for companies that have high potential for earnings growth that may not be recognized by other investors. The manager generally does not limit security selection to any industry sector or use other defined selection procedures. The realization of income is not a significant factor in considering fund securities.

The manager applies a “bottom-up” approach in choosing investments. In other words, the manager looks for companies with earnings growth potential that may not be recognized by the market at large. If the manager is unable to find such investments, a significant portion of the fund’s assets may be in cash or similar investments.

Foreign securities are generally selected on a stock-by-stock basis without regard to any defined allocation among countries or geographic regions. However, certain factors such as expected levels of inflation, government policies influencing business conditions, the outlook for currency relationships, and prospects for economic growth among countries, regions or geographic areas may warrant greater consideration in selecting foreign securities.

The fund may also invest in debt securities and indexed/structured securities, purchase securities on a when issued, delayed delivery or forward commitment basis, and purchase high-yield (“junk”) bonds. The fund may invest up to 10% of its assets in lower-rated, high-yield (“junk”) bonds. The manager may use derivatives (such as options and futures contracts) and forward contracts to try to increase returns, to try to hedge against changes in interest rates or market declines, or to otherwise help achieve the fund’s investment goal.

The manager may also use forward foreign currency contracts or derivatives to hedge against changes in currency exchange rates.

The fund may invest in U.S. government securities, higher-quality corporate fixed income securities, money market instruments or repurchase agreements if the manager believes they have growth potential or cannot find equity investments that meet investment criteria.

Portfolio Manager – Janus Capital Management LLC (Janus)


	*David J. Corkins,* vice president of Janus, joined Janus in 1995 and is portfolio manager of similar funds managed by Janus. He has been the manager of various growth-oriented accounts since 1997. Mr. Corkins has a BA from Dartmouth College and an MBA with honors from Columbia University.

Main investments – invests at least 80% of its assets in the common stocks of U.S. companies with medium market capitalizations in the range of the Russell Midcap Index that are believed to be undervalued based

on their return on total capital or equity. The Russell Midcap Index is composed of selected common stocks of medium-sized U.S. companies.

The fund management team determines a company’s value by comparing its share price with its return on total capital or equity. Companies are considered undervalued when their share price is lower than their estimated worth or growth prospects.

The team attempts to identify undervalued securities using traditional measures of value, including low price to earnings ratio, high yield, unrecognized assets, potential for management change and the potential to improve profitability. The team’s global investment specialists apply both quantitative and qualitative analysis to securities selection. The team focuses on individual stock selection rather than on forecasting stock market trends.

The team may also invest in equity securities of larger capitalization companies, investment grade fixed income securities, and foreign equity and fixed income securities, including up to 15% of fund assets in foreign securities.

The team may use derivatives (such as options and futures contracts) to try to increase returns, to try to hedge against changes in interest rates or market declines, or to otherwise help achieve the fund’s investment goal. The manager may also use forward foreign currency contracts or derivatives to hedge against changes in currency exchange rates.

Portfolio Manager – Lazard Asset Management LLC (Lazard), a subsidiary of Lazard Frères & Co. LLC. The fund is managed by a team of portfolio managers at Lazard, whose current members include,

Investment goal – seeks long-term capital appreciation primarily through investment in equity securities of corporations domiciled in countries with developed economies and markets other than the U.S. Current income from dividends and interest will not be an important consideration.

Main investments – invests primarily in equity securities of relatively large non-U.S. companies with market capitalizations in the range of companies represented in the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Index that the manager believes are undervalued based on their earnings, cash flow or asset values. The fund may invest in American Depositary Receipts (ADRs) and Global Depository Receipts (GDRs). The fund may also invest in companies in developed countries that are not included in the MSCI EAFE Index.

The fund normally concentrates its investments in a core group of 30-45 issuers. The allocation of the fund’s assets among geographic sectors may shift from time to time based on the manager’s judgment and its analysis of market conditions. The manager currently intends to invest the fund’s assets primarily in established companies based in developed markets.

The manager may sell a stock when it believes the issuer is no longer considered a value company, appears less likely to benefit from the current market and economic environment, shows deteriorating fundamentals or falls short of the manager’s expectations.

The manager may use derivatives (such as options and futures contracts) to try to increase returns, to try to hedge against changes in interest rates or market declines, or to otherwise help achieve the fund’s investment goal. The manager may also use forward foreign currency contracts or derivatives to hedge against changes in currency exchange rates.

Portfolio Manager – Lazard Asset Management LLC (Lazard), a subsidiary of Lazard Frères & Co. LLC


	*John R. Reinsberg* is a deputy chairman of Lazard and has over 23 years of investment experience. He is responsible for international/global equity management and overseeing the day-to-day operations of Lazard’s international equity investment team. He joined Lazard in 1991. Mr. Reinsberg has a BA from the University of Pennsylvania and an MBA from Columbia University.
	*Michael A. Bennett* is a managing director and portfolio manager at Lazard and has over 17 years of investment experience. He joined Lazard in 1992. He is a portfolio manager for the international equity, international equity select, European equity select, and global equity teams. Mr. Bennett is a CPA, has a BS from New York University and an MBA from the University of Chicago.
	*Gabrielle Boyle* is a managing director of Lazard and has over 12 years of investment experience. She joined Lazard in 1993. She is a portfolio manager on Lazard’s international equity team and a member of the London-based European equity team. She has a BA with honors and an MA from University College, Dublin. Ms. Boyle is a member of the Institute of Investment Management and Research.
	*Gabriella Dixon*, CFA, is a managing director of Lazard and has over 14 years of investment experience. She joined Lazard in 1990. She is a portfolio manager for the international equity, international equity select and European equity teams. Ms. Dixon has a BA with honors from Wesleyan University.
	*Michael Powers* is a managing director of Lazard and has over 13 years of investment experience. He is a member of the international equity, international equity select, and European equity select teams. He joined Lazard in 1990. Mr. Powers has a BA from Brown University and an MBA from Long Island University.

Main investments – invests at least 80% of its assets in securities of companies with large market capitalizations located outside the U.S. A company’s “capitalization” is a measure of its size. Capitalization is calculated by multiplying the current share price by the number of shares held by investors. International Large-Cap companies have a market capitalization of $3 billion or more. The fund invests in common stocks and related securities, such as preferred stock, convertible securities, and depositary receipts of foreign issuers, including up to 25% in emerging market countries. The securities may be traded on an exchange or in over-the-counter (OTC) markets. The fund may also purchase securities on a when-issued basis.

The manager uses a bottom-up, as opposed to a top-down, investment style in managing this fund. This means that securities are selected based upon fundamental analysis (such as analysis of earnings, cash flows, competitive position and management abilities) performed by the manager, with input from its large team of equity research analysts. Since investments are determined based on individual analysis, without regard to country, the fund may invest a substantial amount of its assets in companies located in a single country or a limited number of countries. However, under normal market conditions, the fund expects to invest in at least three different countries.

A company’s principal activities are determined to be located in a particular country if the company (i) is organized under the law of, and maintains a principal office in, that country, (ii) has its principal securities trading market in that country, (iii) derives 50% of its total revenues from goods sold or services performed in that country, or (iv) has 50% or more of its assets in that country.

The manager focuses on foreign companies (including those of emerging market countries) it believes have above average growth potential. The manager looks particularly at companies that demonstrate a strong franchise, strong cash flows and a recurring revenue stream; a solid industry position where there is potential for high profit margins and substantial barriers to new entry in the industry; a strong management team with a clearly defined strategy; and a catalyst that may include accelerated growth.

The manager may use derivatives (such as options and futures contracts) for hedging purposes, as a substitute for securities, or to otherwise help achieve the fund’s investment goal. The manager may use foreign currency contracts such as forward foreign currency contracts or derivatives to hedge against changes in currency exchange rates.

Portfolio Manager – MFS Investment Management (MFS). The fund is managed by a team of portfolio managers at MFS including:


	*David R. Manheim* is a senior vice president at MFS. Mr. Manheim has been employed in the investment management area of MFS since 1988.
	*Marcus L. Smith* is a senior vice president at MFS. Mr. Smith has been employed in the investment management area of MFS since 1994.

Investment goal – seeks to maximize total return consistent with prudent investment management.

Main investments – invests its assets in fixed income securities. Normally, the fund focuses on investment in or exposure to inflation-indexed bonds such as Treasury Inflation Protection Securities (“TIPS”) which are issued by the U.S. government. It is expected that the amount invested in or exposed to inflation-indexed bonds (either through cash market purchases, forward commitments or derivative instruments) normally will be equivalent to at least 80% of the fund’s net assets. Inflation-indexed bonds are fixed income securities whose principal value or coupon payments are periodically adjusted according to an inflation index. If the index measuring inflation falls, the principal value of inflation-indexed bonds and/or interest payable on such bonds tends to fall.

Principal investments may include inflation-indexed bonds and other fixed income securities issued by the U.S. government or its subdivisions, agencies or government-sponsored enterprises, non-U.S. governments or their subdivisions, agencies or government-sponsored enterprises, and U.S. and foreign companies including mortgage-related securities, stripped mortgage-related securities; corporate bonds and notes; asset-backed securities; money market instruments; structured notes such as hybrid or “indexed” securities, event-linked bonds, and loan participations; delayed funding loans; revolving credit facilities; debt securities issued by states or local governments and their agencies, authorities and other government-sponsored enterprises; and obligations of international agencies or supranational entities; and derivative instruments and forward commitments relating to the previously mentioned securities. The fund may invest up to 10% of its assets in lower-rated, high-yield (“junk”) bonds and up to 30% of its assets in securities denominated in foreign currencies, including securities of issuers based in countries with developing or emerging market economies. The fund may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers.


•	*Decides what duration* to maintain. Duration is a mathematical measure of the average life of a bond that includes its yield, coupon, final maturity and call features. It’s often used to measure the potential


	volatility of a bond’s price, and is considered a more accurate measure than maturity of a bond’s sensitivity to changes in market (or nominal) interest rates. The manager uses duration management as a fundamental part of the management strategy for this fund. Generally, the manager expects the fund’s average duration to be within 3 years (plus or minus) of the fund’s benchmark index duration.

•	*Decides how to allocate* among short, intermediate and long duration issues and how much should be invested in U.S. government, corporate, mortgage-related, and foreign securities as well as derivative instruments relating to such securities. The manager uses analytical systems it has developed to help select securities that meet yield, duration, maturity, credit and other criteria.

•	*Chooses companies to invest in* by carrying out credit analysis of each potential investment, which may include meetings or periodic contact with the company’s management.

•	*Frequently uses derivatives (such as options, futures contracts and swap agreements) and forward commitments* as a substitute for securities, to try to increase returns or to hedge against changes in interest rates or to otherwise try to achieve the fund’s investment goal. The manager may also use foreign currency futures or options and foreign currency forward contracts to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. A substantial portion of the fund is expected to be invested in forward purchase commitments on inflation-indexed bonds.

The factors that will most influence the fund’s performance are actual and expected inflation rates, as well as changes in real and nominal interest rates. (A real interest rate is the nominal interest rate less expected inflation.) Total return is made up of coupon income plus any gains or losses in the value of the fund’s securities.

The use of derivatives and forward commitments may also create leverage risk. To mitigate leverage risk, the manager will segregate liquid assets or otherwise cover transactions that may give rise to such risk.

Portfolio Manager – Pacific Investment Management Company LLC (PIMCO)

John B. Brynjolfsson, CFA, managing director, joined PIMCO in 1989. He is the portfolio manager of similar funds advised by PIMCO. Mr. Brynjolfsson has over 18 years of investment experience and is coauthor of Inflation-Protection Bonds and co-editor of The Handbook of Inflation-Indexed Bonds. He has a bachelor’s degree from Columbia College and an MBA from the MIT Sloan School of Management.

Investment goal – seeks to maximize total return consistent with prudent investment management.

Main investments – invests at least 80% of its assets in fixed income securities with varying terms to maturity. The securities will principally be medium to high-quality, investment grade securities. These securities include principally: fixed income securities issued by the U.S. government, its subdivisions, agencies or government-sponsored enterprises, or derivatives on them or related indices; mortgage-related securities, including stripped mortgage-related securities; corporate bonds and notes and asset-backed securities; commercial paper and other money market instruments; and fixed income securities issued by foreign governments or their subdivisions, agencies and other government-sponsored enterprises and companies that are denominated in U.S. dollars or foreign currencies, some of which may be issued by governments in emerging market countries; other fixed income securities including structured notes such as hybrid or “indexed” securities, event-linked bonds, and loan participations; delayed funding loans; revolving credit facilities; debt securities issued by states or local governments and their agencies, authorities and other government-sponsored enterprises; and obligations of international agencies or supranational entities. The manager may also invest up to 10% of its assets in lower-rated, high-yield (“junk”) bonds and up to 30% of its assets in securities denominated in foreign currencies, including securities of issuers based in countries with developing or emerging market economies. The fund may invest beyond this limit in U.S. dollar-denominated securities of foreign issuers.


•	*Decides what duration* to maintain. Duration is a mathematical measure of the average life of a bond that includes its yield, coupon, final maturity and call features. It’s often used to measure the potential volatility of a bond’s price, and is considered a more accurate measure than maturity of a bond’s sensitivity to changes in market (or nominal) interest rates. Duration management is a fundamental part of the management strategy for this fund. The fund usually maintains an average duration of three to seven years, varying within this range based on the manager’s outlook on the economy and interest rates. The manager then decides what proportion of securities in the fund should have among short, intermediate and long duration issues.

•	*Decides how to allocate* among short, intermediate and long duration issues and how much should be invested in U.S. government, corporate, mortgage-related, and foreign securities as well as derivative instruments relating to such securities. The manager uses analytical systems it has developed to help select securities that meet yield, duration, maturity, credit and other criteria.

•	*Chooses companies to invest in* by carrying out a credit analysis of each potential investment, which may include meetings or periodic contact with the company’s management.

•	*Frequently uses derivatives (such as options, futures contracts and swap agreements) and forward commitments* as a substitute for securities, to try to increase returns or hedge against changes in interest rates or to otherwise try to achieve the fund’s investment goal. The manager may also use foreign currency futures or options and foreign currency forward contracts to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another.

Total return is made up of coupon income plus any gains or losses in the value of the fund’s securities.

Portfolio Manager – Pacific Investment Management Company LLC (PIMCO). The fund is managed by a team at PIMCO led by:


	*William H. Gross,* CFA, managing director and chief investment officer, was a founding partner of PIMCO in 1971. Mr. Gross has over 30 years of investment experience and is the author of Bill Gross on Investment. Mr. Gross has an MBA from UCLA Graduate School of Business.

Investment goal – seeks current income consistent with preservation of capital.

Main investments – invests in money market instruments that the manager believes have limited credit risk. These investments principally include commercial paper and U.S. government obligations. The fund may also invest in asset-backed money market instruments and foreign money market instruments denominated in U.S. dollars. The fund’s dollar-weighted average term to maturity will not exceed 90 days. The manager looks for money market instruments with the highest yields within the highest credit rating categories, based on the evaluation of credit risk and interest rates. The fund invests at least 95% of its assets in money market instruments that have been given the highest credit rating for short-term debt securities, or have not been rated, but are of comparable quality. An investment in the fund is not a bank deposit, and is not insured by the Federal Deposit Insurance Corporation or any other governmental agency. Although the fund is managed to maintain a stable net asset value (NAV) of $1.00 per share, it’s possible to lose money by investing in the fund.

Portfolio Manager – Pacific Life Insurance Company (Pacific Life)


	*Dale W. Patrick* is a portfolio manager and assistant vice president at Pacific Life. He joined the company in 1985. He is also responsible for managing short-term fixed income portfolios, and long-term fixed income advisory and general account portfolios. Mr. Patrick has a BA from the University of Colorado and an MBA from the University of California, Irvine.

Brendan L. Collins, CFA, is a portfolio manager and assistant vice president at Pacific Life. He joined the company in 1996 and has been with Pacific Life’s portfolio management group since 1998. He co-manages another money market fund, Pacific Life’s portfolios of publicly traded bonds and credit derivative investments for Pacific Life and its subsidiaries. Prior to joining Pacific Life, Mr. Collins spent 5 years with Pacific Investment Management Company LLC in their mortgage and corporate operations area. He has a BA from California State University, Fullerton.

Investment goal – seeks current income; capital growth is of secondary importance.

Main investments – invests primarily in common stocks of large U.S. companies, with a focus on value stocks that offer the potential for current income and may also offer the potential for capital growth. Value stocks are those that the manager believes are currently undervalued by the market. To determine whether to buy or sell investments, the manager will consider, among other factors, a company’s financial strength, competitive position in its industry, projected future earnings, cash flows and dividends. The fund will normally invest at least 80% of its assets in common stocks and other equity investments. The manager may invest up to 20% of its assets in foreign securities that are principally traded outside the U.S. including emerging market securities (American Depositary Receipts (ADRs) are excluded from this limit), preferred stocks, convertible securities, and fixed income securities including high yield (“junk”) bonds. The fund may invest up to 20% of its net assets in lower-rated high-yield (“junk”) bonds.

The manager may use derivatives (such as options, futures contracts, swaps and warrants) to try to increase returns, for hedging purposes, as a substitute for securities, or to otherwise help achieve the fund’s investment goal. The manager may use foreign currency contracts or derivatives to hedge against changes in currency exchange rates.

Portfolio Manager – Putnam Investment Management, LLC (Putnam). The fund is managed by the Large-Cap Value Team at Putnam, whose current members include:


	*Kevin M. Cronin* is a managing director of Putnam. He has been associated with Putnam since 1997.
	*Bartlett R. Geer* is a senior vice president of Putnam. He joined Putnam in 2000 and was previously associated with State Street Research & Management.
	*Jeanne L. Mockard* is a senior vice president of Putnam. She has been associated with Putnam since 1990.

Investment goal – seeks long-term growth of capital; current income is of secondary importance.

Main investments – invests at least 80% of its assets in common stocks of large companies. It tends to emphasize U.S. companies with a total market capitalization of more than $5 billion. To a lesser degree, the fund may also invest in foreign companies and fixed income securities and securities that can be converted into equity securities. A company’s “capitalization” is a measure of its size. Capitalization is calculated by multiplying the current share price by the number of shares held by investors.

The management team looks for companies that are undervalued or expected to grow. Undervalued companies are those the team believes may be fundamentally strong, but not fully recognized by investors. Their shares could be good investments because their prices do not reflect the true value of the company. The team employs fundamental analysis to analyze each company in detail, ranking its management, strategy and competitive market position.


•	share prices that appear to be temporarily oversold or do not reflect positive company developments.
•	companies that appear to be undervalued, particularly if all the parts of the company were valued separately and added together.
•	special situations including corporate events, changes in management, regulatory changes or turnaround situations.
•	company specific items such as competitive market position, competitive products and services, experienced management team and stable financial condition.

The team may use derivatives (such as options and futures contracts) to try to increase returns or to try to hedge against changes in interest rates or to otherwise try to achieve the fund’s investment goal. The team may also use derivatives to hedge changes in currency exchange rates. The fund may invest in fixed income securities for current income. The fund may also invest up to 20% of its assets in foreign securities.

Portfolio Manager – Salomon Brothers Asset Management Inc. (SaBAM). The fund is managed by a team at SaBAM, led by:

Main investments – invests its assets in equity securities. The manager generally expects to invest primarily in common stocks, preferred stocks and securities convertible into common and preferred stocks. The manager focuses primarily on the security’s potential for capital growth and income, emphasizing a value style of investing seeking well-established, undervalued companies, which may be small, medium or large-sized companies. The manager generally seeks to identify companies that are undervalued and have identifiable factors that might lead to improved valuations. This catalyst could come from within the company in the form of new management, operational enhancements, restructuring or reorganization. It could also be an external factor, such as an improvement in industry conditions or a regulatory change.

The manager may use derivatives (such as options, futures contracts, and options on futures contracts) to try to increase returns, earn income, facilitate fund management, and mitigate risks. The fund may invest up to 25% of its assets in securities of foreign issuers, including those in emerging market countries.

Portfolio Manager – Van Kampen. The fund is managed by the Multi-Cap Value Team at Van Kampen, whose current members include:


	*B. Robert Baker, Jr.* is a managing director of Van Kampen. He joined Van Kampen in 1991.
	*Jason S. Leder* is an executive director of Van Kampen. He joined Van Kampen in 1995.
	*Kevin C. Holt* is an executive director of Van Kampen. He joined Van Kampen in 1999.

Investment goal – seeks current income and long-term capital appreciation.

Main investments – invests at least 80% of its assets in equity securities of companies principally engaged in the U.S. real estate industry. The fund may invest up to 10% of its assets in foreign investments.

REITs and REOCs are entities that generally invest in portfolios of real estate. REITs and REOCs invest primarily in properties that produce income and in real-estate interests or loans. The fund focuses on real estate investment trusts (REITs), as well as real estate operating companies (REOCs), that invest in a variety of property types and regions which may include office and industrial buildings, apartments, manufactured homes and hotels.

The portfolio management team uses a combination of “bottom-up” and “top-down” investment processes. When selecting securities, the team uses a “bottom-up” process that emphasizes properties that produce income and underlying asset values, values per square foot and property yields. The “top-down” asset allocation or overlay is determined by focusing on key regional criteria that include demographic and macroeconomic factors like population, employment, household formation and income.

The team may use derivatives (such as options) to try to increase returns, and futures contracts, interest rate derivative products and structured notes to try to hedge against changes in interest rates.

Portfolio Manager – Van Kampen. The fund is managed by the Real Estate Team at Van Kampen, whose current members include:

Main investments – invests under normal circumstances at least 80% of its assets in common stocks and other equity securities of companies with medium market capitalization that the manager believes have above-average growth potential. A company’s “capitalization” is a measure of its size. Capitalization is calculated by multiplying the current share price by the number of shares held by investors. Medium market capitalization companies are companies with market capitalizations equaling or exceeding $250 million but not exceeding the top of the Russell Midcap Growth Index range at the time of the investment. Companies whose market capitalization falls below $250 million or exceeds the top of that index range after purchase continue to be considered medium capitalization companies for purposes of the fund’s 80% investment policy. These criteria are subject to change based on market conditions.

The manager invests in companies that it believes exhibit some or all of the following characteristics: (i) significant growth prospects, (ii) accelerating returns on invested capital, (iii) sustainable competitive advantages, and (iv) experienced and incentivized management teams.

The fund may use derivatives (such as options, futures contracts, and options on futures contracts) to protect against possible adverse changes in the market value of securities held in or to be purchased for the fund, protect the fund’s unrealized gains, facilitate the sale of certain securities for investment purposes, protect

against changes in currency exchange rates, or establish positions in the derivatives markets as a temporary substitute for purchasing or selling particular securities. The fund may also purchase securities on a when issued or delayed delivery basis. The fund may invest up to 25% of its assets in securities of foreign issuers, including emerging market countries.

Portfolio Manager – Van Kampen. The fund is managed by the Small/ Mid-Cap Growth Team at Van Kampen, whose current members include:


	*Dennis P. Lynch* is an executive director of Van Kampen. He joined Van Kampen in 1997.
	*David S. Cohen* is an executive director of Van Kampen. He joined Van Kampen in 1993.

You can invest in the funds through your registered representative, who can help you buy, sell, and exchange shares and maintain your account. They may charge for their services. The funds can be used in a variety of retirement plans, including individual retirement accounts (IRAs), Roth IRAs, SEP IRAs, SIMPLE IRAs, SARSEPs, 403(b)(7)s, other qualified retirement plans, 529 plans and Coverdell Education Savings Accounts (ESA).

For more information about the 529 plans available through Pacific Funds and to receive applicable documents and applications for all types of accounts, call (800) 722-2333.

To open an account, you must make a minimum initial investment of $1,000 for each fund and complete an Account Application, making sure to include your registered representative’s name. Pacific Funds may return applications that do not have a registered representative listed. Make your check payable to Pacific Funds and mail it with the application to P.O. Box 9768, Providence, RI 02940-9768.

To add to your account, send at least $50 for each additional investment. Complete the Add to Your Account form included with your quarterly account statement or submit a letter of instruction indicating your desired investment allocation. Make your check payable to Pacific Funds and remember to provide your account number and investment allocation with your check.

Assets drawn from a bank or credit union must be in the form of a personal check or bank draft (cashier’s check, official bank check, or treasury check). We will not accept cash, credit cards, traveler’s checks, third party checks, starter checks, credit card checks, money orders and checks or wires drawn on non-U.S. banks (even if payment may be effected through a U.S. bank). If your check does not clear, your purchase will be canceled and you will be liable for any losses and fees incurred by Pacific Funds or its transfer agent.

Accounts such as Traditional or Roth IRAs, Coverdell ESAs, and 529s have contribution limits that should not be exceeded. If your account is a SIMPLE IRA, SEP IRA, SARSEP or 403(b)(7), or if your account is owned by a qualified plan, contribution limits will also apply, and contributions by personal check may not be appropriate. Consult your tax adviser for additional information.

Wired funds – To open your account using wired funds, complete the Account Application, send it to Pacific Funds, and call (800) 722-2333 to obtain your new account number. Once the account is established, you can instruct your bank to wire the money in care of:


	Boston Safe Deposit & Trust Company
	ABA #: 011001234
	Account #: 043478
	FBO: Pacific Funds
	Shareholder Name and Account Number

Electronic Funds Transfer (EFT) – To transfer money from your bank account to your Pacific Funds account using EFT, call (800) 722-2333 and provide the fund name and share class, your Pacific Funds account number, the name(s) in which the Pacific Funds account is registered and the amount of the transfer. To set up EFT, complete the Financial Institution Information on the Account Application. If EFT is established after account set-up, complete the Account Maintenance form, which will require a medallion signature guarantee. EFT may take up to 20 calendar days to become active.

Preauthorized investment plan – You may make systematic investments through a preauthorized transfer from your bank or other financial institution to your Pacific Funds account ($50 minimum per fund, if the initial investment of $1,000 is met). A preauthorized investment plan may take up to 20 calendar days to establish and become active. If a start date is not provided, or occurs during the 20 day set-up period, systematic investments will begin one month from the date the program is set up.

Security and shareholder protection – To help fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify and record information identifying each person who opens an account and to determine whether such person’s name appears on any governmental agency list of suspected terrorists or terrorist organizations. Pacific Funds may report certain transaction activity to the government. When you open an account, you must provide your full name, date of birth, physical residential address (although post office boxes are still permitted for mailing purposes) and Social Security or tax identification number. You may also need to provide your driver’s license, passport or other identifying documents, and corporations and other non-natural persons may have to provide additional identifying information.

Not providing this information may result in incomplete orders and transactions, failure to open your account, delayed or unprocessed transactions or account closure. These requirements and procedures may change from time to time to comply with government regulations or guidance.

Sales charges may apply to all investments. Pacific Funds reserves the right to waive minimum investment amounts, including for certain types of retirement plans. Pacific Funds and Pacific Select Distributors, Inc. (“PSD”), Pacific Funds’ distributor, reserve the right to reject any request to buy shares.

You may sell shares by contacting your registered representative or Pacific Funds. To sell shares by mail, send a written, signed request specifying the fund name and share class, account number, name(s) registered on the account and the dollar value or number of shares you wish to sell. Where applicable, Federal income tax will be withheld from retirement assets, unless notified otherwise. Signatures of all shareholders are required and must match the account registration or the authorized signer on file. Refer to Medallion signature guarantee for additional redemption guidelines. You may sell shares up to $50,000 in value by telephone on all non-retirement accounts by calling (800) 722-2333. To disable this option, check the appropriate box on your Account Application. Corporate investors and other associations must have an appropriate certification on file authorizing redemptions.

Proceeds will be mailed to your address of record, or can be sent to a third party recipient if a letter of instruction, signed by all authorized shareholders, and a medallion signature guarantee accompany the request. Proceeds can also be wired to a predesignated bank account (subject to a minimum of $10,000), normally by the business day following receipt of your instructions. We do not assume responsibility for additional charges that the receiving institution may impose. To receive proceeds by wire, check the appropriate box on the Account Application and attach a voided check. We will not wire proceeds or account assets to a non-U.S. bank or financial institution.

Systematic withdrawal plan – You may set up automatic monthly, quarterly, semiannual or annual withdrawals if your account has a current value of at least $5,000 and you withdraw a fixed dollar amount (minimum $50), a fixed number of shares (five shares or more) or a fixed percentage of the value of your account. Systematic withdrawals will continue until you cancel them or the value of the designated fund falls below $500.

Electronic funds transfer – You can initiate an electronic funds transfer (EFT) for as little as $50 or as much as $50,000 from your Pacific Funds account to your bank account. To set up an EFT, you must complete the Financial Institution Information on the Account Application. If the EFT is established after account set-up, the Account Maintenance form is required (with a medallion signature guarantee).

Checkwriting – Checkwriting privileges are available for the PF Pacific Life Money Market Fund-Class A shares of non-retirement accounts only. Checks must be written for at least $250 and you must maintain an account minimum of $500.

Medallion signature guarantees – To protect against fraud and help verify the identity of the person authorizing a sale of shares from an account, a medallion signature guarantee is required:


•	For any redemption request for $50,000 or more.
•	If your address of record has changed within the past 30 days.
•	If you are requesting a form of payment other than a check mailed to the address of record and/or payable to the registered owner(s).
•	For requests to transfer between Pacific Funds accounts with different registrations, except where one or more of the account owners (or beneficial owners) are the same.
•	Under other circumstances as determined by the transfer agent.

Medallion signature guarantees are available from domestic banks or trust companies, brokers, dealers, clearing agencies, savings associations or other financial institutions that participate in either the Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) or the New York Stock Exchange, Inc. Medallion Signature Program (NYSE MSP). Other signature guarantees will not be accepted.

Depending on the class of shares you own, a contingent deferred sales charge (CDSC) may apply. Shareholders may be charged additional expenses for a Pacific Funds IRA, including an annual fee or fees to transfer an IRA account to another provider or to take a distribution. We may liquidate shares to cover transfer agent fees, including account, wire or overnight delivery fees, upon 30 days written notice. We may also close your account and sell your shares if your account value falls below $500 for any reason, without notice, whether as a result of a redemption, an account charge or a reduction in the market value of your account. This may result in a gain or loss for federal income tax purposes and the imposition of a CDSC.

You may exchange shares of one fund for shares of the same class of any other fund (within the same base account) if both funds maintain minimum balance requirements. Exchanges are considered sales and may result in a gain or loss for federal and state income tax purposes. There are currently no additional sales charges or fees for exchanges, except for Class A shares of the PF Pacific Life Money Market Fund, which

have a front-end sales charge when exchanged into another fund. Shares subject to a CDSC will continue to age from the date that you bought the original shares, except for shares initially invested in the PF Pacific Life Money Market Fund. To exchange shares, call (800) 722-2333 or submit your request in writing. To disable this option, check the appropriate box on your Account Application.

Dollar cost averaging – Dollar cost averaging may be used to buy shares in a series of regular purchases instead of in a single purchase. This allows you to average the price you pay for shares over time, and may permit a “smoothing” of abrupt peaks and drops in price. You may use dollar cost averaging to transfer amounts, either on a monthly, quarterly, semiannual or annual basis, from any fund with a value of at least $1,000 to one or more other funds. Each fund must maintain the fund minimum and each transfer must be for at least $50.

Market timing and exchange limitations – Pacific Funds is not intended to serve as a vehicle for frequent trading in response to short-term fluctuations in the market. Such trading can disrupt management of the funds, generate expenses and adversely affect performance. Accordingly, the funds’ board of trustees has adopted policies and procedures with respect to frequent purchases and redemptions of the funds shares. You can make no more than 12 exchanges out of each fund per calendar year, except when using the PF Pacific Life Money Market, PF PIMCO Inflation Managed, PF PIMCO Managed Bond or PF Goldman Sachs Short Duration Bond funds to dollar cost average into another fund. These limitations do not apply to transactions by the Portfolio Optimization Funds in the underlying funds.

Organizations and individuals that use market timing investment strategies and make frequent transfers should not invest in Pacific Funds. Pacific Funds maintains sole discretion to restrict or reject, without prior notice, any exchange instructions or preauthorized exchange forms from a market timing organization or individual authorized to give transfer instructions on behalf of multiple shareholders if the requested transactions would have a negative impact on remaining shareholders.

Pacific Funds may limit the size, number, and frequency of exchanges if they could be disruptive to the management of a fund. Pacific Funds may also restrict, suspend, or reject any exchange request that could be harmful to a fund or to other shareholders, or cancel the exchange privilege altogether.

Pacific Funds reserves the right to impose a transactional fee against future exchange amounts. Prior to imposing any transactional fee, we would supplement this prospectus and provide notice to shareholders.

The funds are unable to directly monitor the trading activity of beneficial owners of the funds’ shares who hold those shares through third-party 401(k) and other group retirement plans and omnibus account arrangements maintained by brokers and other intermediaries. Omnibus account arrangements permit multiple investors to aggregate their respective share ownership positions and purchase, redeem and exchange fund shares without the identity of the particular shareholder(s) being known to the funds. Accordingly, the ability of the funds to monitor and detect excessive share trading activity through omnibus accounts is very limited, and there is no guarantee that the funds will be able to identify shareholders who may be engaging in excessive trading activity through omnibus accounts or to curtail such trading.

Purchase and sale requests are executed at the next net asset value (NAV), plus or minus any applicable sales charges, determined after the transfer agent, or an authorized designee, receives the order in proper form. If you purchase by wire, the order will be deemed to be in proper form after the Account Application, telephone notification and the federal funds wire have been received. If an order or payment by wire is received after 4:00 p.m. Eastern time, the shares will not be credited until the next business day. You will receive a confirmation of each unscheduled transaction in your account. You may rely on these confirmations in lieu of certificates as evidence of your ownership. Certificates representing shares of the funds will not be issued.

Under normal conditions, we will pay redemption proceeds within three business days. However, we have the right to take up to seven days to pay redemption proceeds, and may postpone payment longer in the event of unusual circumstances as permitted by applicable law or an economic emergency as determined by the SEC. When you sell shares for which we have not received the investment, we will execute your request at the next determined NAV per share, but will not release the proceeds until your investment clears. This may take up to 15 days from the investment date. To reduce such delay, you should make investments by bank wire or federal funds. We normally will pay cash for all shares you sell. When making payment in cash becomes harmful to other shareholders or a fund, we may make some or all of the payment in securities at their then current market value equal to the redemption price minus any applicable charges. You will bear market risk while holding such securities and incur transaction costs upon converting securities to cash.

Telephone instructions – Procedures are in place to ensure that telephone instructions are genuine, including recording all telephone instructions, requiring the caller to give specific identifying information, and providing written confirmation to shareholders of record within five days of a telephone transaction. We will not be responsible for the authenticity of phone instructions or any losses resulting from unauthorized shareholder transactions if it is reasonably believed that the instructions were genuine. Proceeds from telephone transactions will only be mailed to your address of record.

Pacific Funds offers investors Class A, Class B, and Class C shares of each fund. Even though these classes represent ownership of the same fund, each class is subject to different types and levels of sales charges, and bears different levels of expenses. The class of shares that best corresponds with your financial goals depends upon several factors. When choosing among classes, you should consider the following questions:


•	How long do I plan to hold the shares?
•	How much money do I intend to invest?
•	Will I be purchasing more shares in the future?
•	What expenses will I pay for each class?
•	Do I qualify for any sales charge discounts?

You should also understand how the various fees, expenses, and charges would affect your investment over time. Once you understand the differences in the share classes, you can then make an informed decision and select a share class that matches your needs, resources, and investment timeline. Your registered representative can help you to determine which class of shares is right for you. Your registered representative will generally receive compensation no matter which share class you select. However, that compensation may vary between share classes and may vary with the size of your investment.

To pay for the cost of promoting the funds and servicing your account, each class of shares has adopted a Distribution and Servicing (Rule 12b-1) Plan. Because 12b-1 fees and expenses are paid out of the fund’s assets on an ongoing basis, they will increase the cost of your investment over time. Thus, higher ongoing 12b-1 fees may be less advantageous than paying a front-end sales charge. Higher 12b-1 fees mean a higher expense ratio, so Class B and Class C shares pay correspondingly lower dividends and may have a lower total return than Class A shares. The relative impact of a front-end sales charge and ongoing annual expenses will depend on various factors, including the length of time a share is held.

Certain share classes may be subject to a CDSC upon redemption, depending on the length of time shares are held. Information about calculation of applicable CDSC appears after the descriptions of each share class. CDSC waivers are available in certain circumstances. For information regarding available CDSC discounts, see “Ways You Can Minimize Sales Charges” following the CDSC calculation information.

Although the share class that you choose is ultimately your decision, you should seek to learn which share class is economically more attractive for your particular situation so that your decision is informed. For more information on share classes or other mutual fund investing topics, please refer to the websites of the NASD (www.nasd.com/investor/) and SEC (www.sec.gov/investor.shtml).

As noted in the table above, discounts (“Breakpoints”) are available for larger purchases. For information regarding available discounts, please see the heading “Ways You Can Minimize Sales Charges” immediately following the descriptions of share class sales charges and CDSC calculation information.

Class A shares of the PF Pacific Life Money Market Fund are sold at NAV without an initial sales charge. A front-end sales charge applies when you exchange PF Pacific Life Money Market Fund shares into Class A shares of another fund. Sales charges do not apply to reinvested dividends or capital gains distributions.

Annual 12b-1 fees are 0.50%. For the Portfolio Optimization Funds, the annual 12b-1 fees are 0% (after a waiver of 0.50%). However, the Portfolio Optimization Funds indirectly bear the annual 12b-1 fee of 0.50% charged at the underlying fund level.

If your account value, including the amount of your current investment, totals $1 million or more, you will not pay a front-end sales charge on the current investment amount. However, if you sell these shares (for which you did not pay a front-end sales charge) within one year of purchase, you will pay a CDSC of 1%. For assets initially invested in the PF Pacific Life Money Market Fund, the CDSC period will begin when the assets are exchanged into another fund.

Class B shares are offered at NAV without a front-end sales charge. Annual 12b-1 fees are 1.00%. For the Portfolio Optimization Funds, annual 12b-1 fees are 0.50% (after a waiver of 0.50%). However, the Portfolio Optimization Funds indirectly bear the annual 12b-1 fee of 0.50% charged at the underlying fund level, resulting in direct and indirect 12b-1 fees of 1.00%. Each purchase of Class B shares has its own CDSC period, and you may be charged a CDSC on shares that you sell within a certain period of time after you bought them. For assets initially invested in the PF Pacific Life Money Market Fund, the CDSC period will begin when the assets are exchanged into another fund. Sales charges do not apply to reinvested dividends or capital gains distributions. After eight years, Class B shares convert to Class A shares, thus reducing your future annual expenses.

Pacific Funds will not process requests to buy Class B shares that exceed $100,000. Generally, it is more advantageous for an investor that is considering an investment in Class B shares of more than $100,000 to invest in Class A shares instead.

Class C shares are offered at NAV without a front-end sales charge. Annual 12b-1 fees are 1.00%. For the Portfolio Optimization Funds, annual 12b-1 fees are 0.50% (after a waiver of 0.50%). However, the Portfolio Optimization Funds indirectly bear the annual 12b-1 fee of 0.50% charged at the underlying fund level, resulting in direct and indirect 12b-1 fees of 1.00%. Sales charges do not apply to reinvested dividends or capital gain distributions. You will also be charged a 1% CDSC on shares that you redeem within 1 year of purchase. For assets initially invested in the PF Pacific Life Money Market Fund, the CDSC period will begin when the assets are exchanged into another fund. There’s no conversion to Class A shares, so annual expenses continue at the higher Class C level throughout the life of your investment.

Requests to buy Class C shares that exceed $1 million will either be accepted and processed as requests to buy Class A shares, or declined.

Certain investments in Class A, Class B, and Class C shares may be subject to a CDSC. To keep your CDSC as low as possible, the amount of the CDSC will be based on the lesser of your purchase price or redemption price. We will first sell shares in your account that are not subject to a CDSC and then will redeem shares in the order in which they were purchased. All purchases made during a calendar month are counted as having been made as of the first day of that month. There is no CDSC on shares acquired through the reinvestment of dividends and capital gains distributions.

Reduction of Class A shares initial sales charge – You can reduce the initial sales charge of Class A shares by combining multiple purchases within Pacific Funds’ family of funds to take advantage of breakpoints in the sales charge schedule. Available reductions include:



•	Letter of Intent – Lets you commit to purchase Class A shares over a 13-month period and pay the same sales charge as if the shares had all been purchased at once. This includes purchases in all account types (e.g., IRA, non-retirement, 529 plan, etc.) and purchases by your immediate family members. “Immediate family members” are your parents, spouse, siblings, children, dependents, parents-in-law, brothers-in-law and sisters-in-law. Part of the Letter of Intent amount will be held in escrow to cover additional sales charges that may be incurred if the total investments (calculated at the offering price) over the 13-month period are insufficient to qualify for the sales charge reduction. Reinvested dividends and capital gain distributions do not count toward the Letter of Intent amount.



•	Rights of Accumulation – Lets you include the current value of all accounts you or members of your immediate family already owns in order to calculate the sales charge breakpoint for your next purchase at the offering price.



•	Combination Privilege – Lets you combine all current orders of your immediate family in a single transaction for a reduced sales charge.

If the account owner is an entity (e.g., a trust, a qualified plan, etc.), these privileges will apply to beneficial owners and trustees. To take advantage of these privileges, the account owner (or if applicable, the beneficial owner or trustee) through their registered representative, must provide Pacific Funds with account numbers or tax identification numbers for Pacific Funds accounts eligible for aggregation. These privileges are also available to investors who invest completely or partially through accounts at financial intermediaries, e.g., through accounts at other broker-dealers (rather than opening an account directly with Pacific Funds). In either situation, you must identify and provide information to Pacific Funds or the financial intermediary, as applicable, regarding shares of Pacific Funds held in all of your accounts (e.g., IRA, non-retirement, 529 plan, etc.) and the accounts of immediate family members (including siblings and parents-in-law) at Pacific Funds or at any other financial intermediary. Stated differently, you must identify to your registered representative the complete universe of eligible shareholder accounts in order to receive the maximum breakpoint discount possible.

Waiver of initial sales charges – Class A shares may be purchased without a front-end sales charge by:


•	Officers, directors, trustees, and employees of Pacific Funds, Pacific Life and their affiliates.
•	Registered representatives and employees of broker/dealers with a current distribution or selling agreement with Pacific Funds and their affiliates.
•	Investment professionals using Pacific Funds in fee-based investment products under a signed agreement with Pacific Funds.
•	Employees of designated asset management firms, other service providers and their affiliates.
•	Immediate family members of all such persons.
•	Certain qualified plans.

Reinstatement privilege – If you sell shares of a fund and withdraw your money from Pacific Funds, you may reinvest some or all of the proceeds in the same share class of any fund in Pacific Funds within 60 days without a sales charge. For purposes of the CDSC, if you paid a CDSC when you sold your shares, you will be credited with the amount of the CDSC proportional to the amount reinvested. Reinstated shares will continue to age from the date that you bought your original shares. For purposes of the front-end sales charge, if you paid a front-end sales charge when you originally purchased your shares, you will be able to reinvest without paying an additional front-end sales charge. This privilege can be used only once per calendar year. In order to use this privilege, all accounts must have the same owner or owners, although identical ownership registration is not required. Contact your registered representative or Pacific Funds customer service at (800) 722-2333 for additional information. You must identify and provide information to

Pacific Funds or your financial intermediary, as applicable, regarding your historical purchases and holdings; you should retain any records necessary to substantiate historical transactions and costs because Pacific Funds, its transfer agent, and financial intermediaries may not maintain this information.

The NAV Authorization form must be provided to Pacific Funds to receive any front-end sales charge waiver described above in the Waiver of initial sales charges and Reinstatement privilege sections.

CDSC waivers – The CDSC for each Class will be waived in the following cases:


•	Redemptions following the death or permanent disability (as defined by Section 72(m)(7) of the Internal Revenue Code) of a shareholder if made within one year of death or the initial determination of permanent disability. The waiver is available only for shares held at the time of death or initial determination of permanent disability.
•	Redemptions made through a Systematic Withdrawal Plan, limited to 10% per year of the account value at the time the plan is established and annually thereafter, provided all dividends and distributions are reinvested.
•	Minimum distributions from a tax-deferred retirement plan or an individual retirement account (IRA) as required under the Internal Revenue Code. The waiver of the CDSC for required distributions will be as a percentage of assets held in the funds.

If you think you may be eligible for a CDSC waiver, contact your registered representative. You must notify us at the time of the redemption request to receive the waiver.

Information on breakpoints and CDSC waivers may also be found on the website at www.pacificlife.com under “Mutual Funds,” then “Products & Prospectuses.”

Each fund is divided into shares. The price of a fund’s shares is called its net asset value (NAV) per share. The NAV forms the basis for all transactions involving buying, selling, exchanging or reinvesting shares. It is calculated by taking the total value of a fund’s assets, subtracting the liabilities, and then dividing by the number of shares outstanding. The value of a fund’s assets is based on the total market value of all of the securities it holds. The assets of each Portfolio Optimization Fund consist primarily of shares of the underlying funds, which are valued at their respective NAVs at the time of computation.

When you buy shares, you pay the NAV per share plus any applicable sales charge. When you sell shares, you receive the NAV per share minus any applicable CDSC. Exchange orders within the funds are affected at NAV, except for money initially invested in the PF Pacific Life Money Market Fund, Class A shares. For any transaction, we will use the next NAV calculated after Pacific Funds or its designee receives a request to buy, sell or exchange shares.

Each fund’s NAV per share is calculated once a day, every day the New York Stock Exchange (NYSE) is open. For purposes of calculating the NAV, the funds use pricing data as of the time of the close of the NYSE, which is usually 4 p.m. Eastern time, although it occasionally closes earlier. For purposes of calculating the NAV, the funds normally use pricing data for domestic equity securities received shortly after the NYSE close and do not normally take into account trading, clearances or settlements that take place after the NYSE close. Domestic fixed income and foreign securities are normally priced using data reflecting the closing of

the principal markets or market participants for those securities, which may be earlier than the NYSE close. Information that becomes known to us after the NAV has been calculated on a particular day will not normally be used to retroactively adjust the price of a security or the NAV determined earlier that day.

A delay in calculating the NAV may happen if the NYSE closes on a day other than a regular holiday or weekend, trading on the NYSE is restricted, an emergency exists as determined by the SEC, making securities sales or determinations of NAV not practicable, or the SEC permits a delay for the protection of shareholders.

Because foreign securities can be traded on weekends, U.S. holidays and other times when the NYSE is closed, changes in the market value of these securities during those periods are not always reflected in a fund’s NAV. It’s not possible to buy, sell, exchange or reinvest shares on days the NYSE is closed, even if there has been a change in the market value of these securities. For a list of holidays observed, call Pacific Funds customer service or refer to the SAI.

The value of each security is based on its actual market value or fair value. Pricing data is obtained from various sources approved by the fund’s board of trustees. The funds may value securities at fair value as estimated in good faith under procedures established by the board of trustees, based upon recommendations provided by the portfolio managers, in accordance with valuation services approved by the board of trustees, or otherwise as provided by Pacific Funds’ valuation procedures, which have been determined by the board in good faith to represent fair value. Fair valuation will be used when market quotations are not readily available or reliable, or if events significantly affecting the values of the fund’s foreign investments occur between the close of foreign markets and the close of regular trading on the NYSE. The estimated fair value of a security may differ from the value that would have been assigned to the security had other valuations (such as last trade price) been used.

Trading in securities on exchanges and over-the-counter markets in European and Pacific Basin countries is normally completed well before 4:00 p.m., Eastern time. In addition, European and Pacific Basin securities trading may not take place on all business days in New York. Furthermore, trading takes place in Japanese markets on certain Saturdays and in various foreign markets on days which are not business days in New York and on which the Pacific Funds’ NAV is not calculated. Quotations of foreign securities in foreign currencies are converted to U.S. dollar equivalents using a foreign exchange quotation from an approved source prior to calculating the NAV. The calculation of the NAV of any Fund which invests in foreign securities which are principally traded in a foreign market may not take place contemporaneously with the determination of the prices of portfolio securities of foreign issuers used in such calculation. Further, under the Pacific Funds’ procedures, the prices of foreign securities are determined using information derived from pricing services and other sources every day that Pacific Funds values its shares. Prices derived under these procedures will be used in determining NAV.

If events occur between the time of the determination of the closing price of a foreign security on an exchange or over-the-counter market and the time a Fund’s NAV is determined, or if, under the Pacific Funds’ procedures, the closing price of a foreign security is not deemed to be reliable, and there could be a material effect on a Fund’s NAV, the security would be valued at “fair market value” as determined in accordance with procedures and methodologies approved by Pacific Funds’ Board of Trustees. In determining the fair value of securities, Pacific Funds may consider available information including information that becomes known after the time of the close of the NYSE, and the values that are determined will be deemed to be the price as of the time of the close of the NYSE. Pacific Funds has retained a statistical research service to assist in determining the fair value of foreign securities. This service utilizes statistics and programs based on historical performance of markets and other economic data, and fair values determined with the assistance of the service will be based on the data utilized by the service. These fair values may not accurately reflect the price that a Fund could obtain for a foreign security if it were to dispose of the security as of the close of the NYSE.

Since securities that are primarily listed on foreign exchanges may trade on weekends or other days when a fund does not price its shares, the value of a fund’s securities (and thereby the net asset value of the fund) may change on days when shareholders will not be able to purchase or redeem shares.

The funds intend to distribute substantially all of their net investment income and realized capital gains to shareholders at least once a year, although distributions could occur more frequently. You can automatically reinvest dividends and capital gains distributions into additional shares of the same fund or into the same class of shares of another fund within the same account, if you meet that fund’s minimum balance requirement. No sales charge or CDSC will apply to the purchased shares.

Dividends are generally distributed according to the following schedule:


•	PF Pacific Life Money Market Fund – dividends declared daily and paid monthly (dividends are not paid until the day after issue).
•	PF Goldman Sachs Short Duration Bond Fund, PF PIMCO Inflation Managed Fund and PF PIMCO Managed Bond Fund – dividends declared and paid monthly.
•	All other funds – dividends declared and paid annually.

Dividends may be declared less frequently (e.g. semi-annually) if it is advantageous to the fund and to shareholders of the fund.

PSD, the distributor of the Pacific Funds and a broker-dealer and affiliate of Pacific Life, pays broker-dealers (including other Pacific Life affiliates) that sell shares of the funds various forms of sales compensation. PSD also may provide reimbursement for other expenses associated with the promotion and sale of fund shares.

In addition, PSD or an affiliate may pay from their own resources additional significant cash compensation, which may sometimes be referred to as “revenue sharing,” and provide other incentives in connection with the promotion and sale of fund shares by some but not all broker-dealers. Such additional compensation may give Pacific Funds greater access to registered representatives of the broker-dealers that receive such compensation or may otherwise influence the way that a broker-dealer and registered representative market fund shares.

In addition, Pacific Life and its affiliates may pay amounts from their own resources to compensate or reimburse administrators and other financial intermediaries (including 401(k) and other retirement plan administrators) for administrative and shareholder services provided to Pacific Funds and their shareholders.

The compensation described in this section and in the SAI and other compensation or benefits provided by Pacific Life, PSD or its affiliates may be more or less than the overall compensation on similar or other products and may influence your registered representative, broker-dealer, retirement plan administrator, or other intermediary to present or make available Pacific Funds over other investment options available in the marketplace. You may ask your registered representative about these differing and divergent interests and how he/she is personally compensated and how his/her broker-dealer is compensated for selling shares of Pacific Funds. Please refer to the SAI for additional details on Distribution and Servicing Arrangements and the differing and divergent interests that they may present.

Each fund will distribute substantially all of its income and realized capital gains to its shareholders every year. You will be taxed on fund distributions whether they are paid in cash or reinvested in additional fund shares. These distributions are taxed as either ordinary income or capital gains. Federal taxes on capital gains

distributions are determined by how long the fund owned the investments that generated the gains, not how long a shareholder has owned the shares. Funds with high portfolio turnover may realize gains at an earlier time than funds with a lower turnover and may not hold securities long enough to obtain the benefit of long-term capital gains tax rates.

The Portfolio Optimization Funds can have income, gains or losses from any distributions or redemptions in the underlying Pacific Funds. Distributions of the long-term capital gains of either the Portfolio Optimization Funds or underlying funds will generally be taxed as long-term capital gains. Other distributions, including short-term capital gains, will be taxed as ordinary income. The structure of the Portfolio Optimization Funds and the reallocation of investments among underlying funds could affect the amount, timing and character of distributions.

The maximum tax rate for individual taxpayers is generally 15% on long-term gains and qualifying dividends. This rate does not apply to corporate taxpayers. Distributions of earnings from non-qualifying dividends, interest income and short-term capital gains will be taxed at the taxpayer’s ordinary income tax rate. Distributions from funds investing in bonds and other debt instruments will not generally qualify for the lower rates. Funds that invest in companies not paying significant dividends on their stock will not generally derive enough qualifying dividend income to be eligible for the lower rate on qualifying dividends.

You will owe taxes on distributions paid from income or gains earned prior to your investment, which are included in the share price you pay. For example, if you buy shares on or just before the record date of a fund distribution, you will pay full price for the shares and may receive a portion of your investment back as a taxable distribution. If a fund declares a distribution in October, November or December but pays it in January, you may be taxed on the amount of the distribution as if you had received it in the previous year. Any gain resulting from selling or exchanging shares will generally be subject to federal income tax.

A Portfolio Optimization Fund cannot use gains distributed by one underlying fund to offset losses in another underlying fund. Redemptions of shares in an underlying fund, including those resulting from allocation changes, could also cause additional distributable gains to shareholders, a portion of which may be short-term capital gains distributable as ordinary income. Further, a portion of any losses on underlying fund share redemptions may be deferred under the “wash sale” rules. As a result of these factors, the Portfolio Optimization Funds’ “fund-of-funds” structure could affect the amount, timing and character of distributions to shareholders. The Portfolio Optimization Funds will also not be able to pass through from the underlying funds any potential benefit from the foreign tax credit or income from certain federal obligations (that may be exempt from state tax).

This discussion relates only to federal income tax. The consequences under other tax laws may differ. You should consult the SAI and your tax adviser regarding the possible application of foreign, state and local income tax laws to fund dividends and capital gains distributions.

This section pertains to anyone purchasing shares of the Pacific Funds for a 529 College Savings Plan account (for Arizona or Montana) and supplements or supercedes other information in the prospectus. Each account is subject to the terms and conditions of the applicable 529 Plan Description Handbook. You should contact your registered representative or Pacific Funds customer service at (800) 722-2333 for more information.

Minimum investment – You must make a minimum initial investment of $500 for each fund. The minimum initial investment does not need to be met before beginning a preauthorized investment plan or payroll deduction; both are available with a minimum contribution of $50 per month. If you want to contribute through payroll deduction, your payroll department must complete an Employer Authorization form before payroll deductions can begin.

Maximum contribution – Contributions may be made to an account for a designated beneficiary, unless the contribution would cause the balance of the account, together with all other Pacific Funds 529 accounts for that designated beneficiary, to exceed the current maximum allowable account balance limit. Once the maximum is reached, no further contributions will be accepted, but investment growth may continue. Excess contributions could result in adverse tax consequences. Refer to the applicable state’s Plan Description Handbook or the website for current maximum contribution limits.

Investment changes – You may only make one investment change per calendar year by using the Account Maintenance form. More frequent exchanges may result in income tax liability and tax penalties. The dollar cost averaging program described in the prospectus is not available, and other limitations also may apply. Investment changes by telephone are not currently available. You should consult with your tax adviser regarding possible tax consequences.

Distributions/withdrawals – You may sell shares to make a qualified distribution or take a nonqualified withdrawal by using the Distribution Request form. A separate Distribution Request form must be completed for each withdrawal. Withdrawals by telephone, systematic withdrawals, and checkwriting privileges are not currently available.

Montana 529 Plan – Generally, a $25 annual maintenance fee will be charged to each Montana 529 College Savings Plan account on the last Friday of April. This fee is waived for accounts with balances greater than $25,000, accounts with a current preauthorized investment plan or payroll deduction established, or accounts that purchase Class A shares at NAV. In addition, for Montana residents (including former Montana residents), a recapture tax may be applicable on withdrawals. Refer to the Plan Description Handbook for more information.

The CDSC for both the Arizona and Montana 529 plans will be waived for redemptions due to the receipt of scholarship by the designated beneficiary (up to the amount of the scholarship), transfers to the CollegeSure CD for each applicable state, and redemptions for the purpose of complying with the maximum account balance limitation across all 529 plan accounts, if the amount is rolled over to a Pacific Funds 529 Plan account for another designated beneficiary.

Class A shares may be purchased without a front-end sales charge by Arizona residents purchasing shares directly from Pacific Funds under the Arizona Family College Savings Program and Montana residents purchasing shares directly from Pacific Funds under the Montana Family Education Savings Program.

Dividends – All dividends and capital gains distributions are automatically reinvested; automatic dividend diversification is not available.

Pacific Funds is organized as a Delaware statutory trust. Its business and affairs are managed by its board of trustees. Each fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code. Funds that qualify do not have to pay income tax as long as they distribute sufficient taxable income and net capital gains. Pacific Funds may discontinue offering shares of any fund at any time or may offer shares of a new fund. If a fund is discontinued, any investment allocation to that fund will be allocated to another fund the trustees believe is suitable, as long as any required regulatory approvals are met.

To help reduce fund expenses and environmental waste, only one copy of the funds’ annual and semi-annual reports and prospectus will be mailed to shareholders having the same residential address.

Subject to availability, you may authorize us to provide prospectuses, statements, and other information (“Documents”) electronically by so indicating on the application, via telephone, or by sending us instructions in writing in a form acceptable to us to receive such Documents electronically. You must provide us with a current and active e-mail address and have Internet access to use this service. While we impose no additional charge for this service, there may be potential costs associated with electronic delivery, such as on-line charges. Documents will be available on our Internet Web site. You may access and print all Documents provided through this service. As Documents become available, we will notify you of this by sending you an e-mail message that will include instructions on how to retrieve the Documents. You are responsible for any e-mail filters that may prevent you from receiving e-mail notifications and for notifying Pacific Funds promptly in the event that your e-mail address changes. You may revoke your consent for electronic delivery at any time, provided that we are properly notified, and we will resume providing you with a paper copy of all required Documents. We will provide you with paper copies at any time upon request. Such a request will not constitute a revocation of your consent to receive required Documents electronically. We will continue to provide you copies of your annual statements by regular mail, even if you have chosen electronic delivery.

This section provides information about the firms that manage the Pacific Funds.

Pacific Life Insurance Company – 700 Newport Center Drive, Newport Beach, California 92660

In its role as investment adviser, Pacific Life supervises the management of Pacific Funds. Pacific Life manages six funds directly: the five Portfolio Optimization Funds and the PF Pacific Life Money Market Fund. For the other funds, it has retained other managers, many of which have a worldwide market presence and extensive research capabilities. Some of the funds’ manager team members could change from time to time. Pacific Life oversees and monitors the performance of these managers.

Pacific Life, subject to the review of the Pacific Funds’ board of trustees, has ultimate responsibility to oversee and monitor the performance of the other managers. Under an exemptive order from the SEC, Pacific Life and Pacific Funds can hire, terminate and replace the managers (except, as a general matter, managers affiliated with Pacific Life) without shareholder approval. Within 90 days of the hiring of any new manager, shareholders of the affected fund will be sent information about the change.

Goldman Sachs Asset Management, L.P. – 32 Old Slip, New York, New York 10005

Lazard Asset Management LLC, – 30 Rockefeller Plaza, New York, New York 10112

MFS Investment Management – 500 Boylston Street, Boston, Massachusetts 02116

Pacific Investment Management Company LLC – 840 Newport Center Drive, Newport Beach, California 92660

Founded in 1971, Pacific Investment Management Company LLC (PIMCO) has more than 500 clients, including some of the largest employee benefit plans, endowments and foundations in America. PIMCO had over $373 billion in assets under management as of December 31, 2003. PIMCO specializes in the management of fixed income portfolios. It has a long-term investment philosophy and uses a variety of techniques, including software programs it has developed, to help increase portfolio performance while controlling volatility. PIMCO is a subsidiary of Allianz Dresdner Asset Management of America L.P. (ADAM LP). Allianz Aktiengesellschaft (Allianz AG) is the indirect majority owner of ADAM LP. Allianz AG is a European-based, multinational insurance and financial services holding company. ADAM LP, including all advisory affiliates, had approximately $494 billion in assets under management as of December 31, 2003.

Pacific Life holds an indirect minority interest in ADAM LP. PIMCO manages the PF PIMCO Inflation Managed Fund and the PF PIMCO Managed Bond Fund.

Putnam Investment Management, LLC – One Post Office Square, Boston, Massachusetts 02109

Salomon Brothers Asset Management Inc – 399 Park Avenue, New York, New York 10022

Established in 1987, Salomon Brothers Asset Management Inc (SaBAM) has affiliates in London, Frankfurt, Tokyo and Hong Kong. Together, they provide a broad range of equity and fixed income investment management services to individuals and institutional clients around the world. SaBAM also provides investment advisory services to other investment companies. As of December 31, 2003, SaBAM had over $65.1 billion in assets under management. SaBAM is a wholly-owned subsidiary of Citigroup Inc. Citigroup businesses provide a broad range of financial services – asset management, banking and consumer finance, credit and charge cards, insurance, investments, investment banking and trading. SaBAM manages the PF Salomon Brothers Large-Cap Value Fund.

Morgan Stanley Investment Management Inc., doing business in certain instances (including in its role as sub-adviser to Pacific Funds) under the name Van Kampen, conducts a worldwide portfolio management business and provides a broad range of portfolio management services to customers in the U.S. and abroad. Morgan Stanley, the parent of Morgan Stanley Investment Management Inc., is a global financial services firm that maintains market positions in each of its three primary businesses – securities, asset management, and credit services. Morgan Stanley is a full service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing, and financial advisory services. Van Kampen and its institutional advisory affiliates managed approximately $421 billion in assets as of December 31, 2003. Van Kampen’s portfolio managers are supported by a network of experienced research professionals based in New York, London, Singapore and Tokyo. Van Kampen manages the PF Van Kampen Comstock Fund, the PF Van Kampen Real Estate Fund, and the PF Van Kampen Mid-Cap Growth Fund.

Generally, when there is a change in fund manager or a new fund is added to Pacific Funds, a comparable account presentation is shown in the prospectus for two years. Performance of comparable accounts shows you how a substantially similar account (or composite of substantially similar accounts), managed by the applicable manager, has performed in the past over a longer period of time. It does not show you how the funds have performed or will perform.

When showing comparable performance using a composite, the manager generally includes all of its accounts with substantially similar goals and policies. The managers shown have each represented, if applicable, that excluding or omitting any substantially similar account from the composites, individually or in the aggregate, would not cause the performance presentation to differ materially from a presentation that does include them. The manager, for example, may exclude accounts that are too small, have too short an investment time horizon to accurately reflect the manager’s performance or do not meet other established criteria for the published composite. Performance information has been provided by the applicable manager and is not within the control of and has not been independently verified by Pacific Life.

Van Kampen’s composite results are equal weighted and calculated monthly. All other composite results are asset weighted and calculated monthly. Quarterly and annual composite performance figures are computed by linking monthly returns. Performance figures for each account are calculated monthly. Monthly market values (or monthly returns in the case of Van Kampen), include income accruals.

When a mutual fund is included in a composite, performance figures in the footnotes (which reflect deduction of sales loads, if any) are calculated by assuming deduction of the maximum applicable sales load for each mutual fund at the time the fund (or class of shares of that fund imposing a sales load) was included in the composite or, if the fund (or class) was included in the composite more than 10 years ago, in the first year shown in the composite presentation.

The overall performance of, and sales loads charged by, the mutual funds and their expenses reflected in each presentation, other than those funds sponsored by the respective fund managers (non-proprietary funds), have been provided by the sponsors or administrators for such funds and are not within the control of and have not been independently verified by the fund manager or Pacific Life.

The chart below does not show you the performance of the PF PIMCO Inflation Managed Fund – it shows the performance of similar accounts managed by PIMCO.

The chart shows the historical performance of the PIMCO Real Return Full Authority Composite. The accounts in the composite have investment objectives, policies, and strategies that are substantially similar to those of the PF PIMCO Inflation Managed Fund. As of 12/31/03, the composite consisted of 12 advisory accounts, including 7 mutual funds ( and , respectively, as of 9/30/04).

The performance shows the historical track record of the portfolio manager and is not intended to imply how the PF PIMCO Inflation Managed Fund has performed or will perform. Total returns represent past performance of the composite and not the PF PIMCO Inflation Managed Fund.