Strategy. Under normal circumstances, this Fund invests at least 80% of its assets in a combination of? (1) derivatives that provide exposure to bonds and (2) bonds. Pacific Life Fund Advisors LLC (PLFA), the investment adviser of the Fund, and Fidelity Diversifying Solutions LLC (FDS), sub-adviser to a portion of the Fund, manage the Fund as described further below. The term bond in the Funds name refers to debt securities and derivatives that provide exposure to debt securities. PLFA and FDS normally invest the Funds assets across different groups of industries/sectors, but may invest a significant percentage of the Funds assets in issuers in a single sector at their investment discretion in seeking the investment goal of the Fund. As of … Show more… Under normal circumstances, this Fund invests at least 80% of its assets in a combination of? (1) derivatives that provide exposure to bonds and (2) bonds. Pacific Life Fund Advisors LLC (PLFA), the investment adviser of the Fund, and Fidelity Diversifying Solutions LLC (FDS), sub-adviser to a portion of the Fund, manage the Fund as described further below. The term bond in the Funds name refers to debt securities and derivatives that provide exposure to debt securities. PLFA and FDS normally invest the Funds assets across different groups of industries/sectors, but may invest a significant percentage of the Funds assets in issuers in a single sector at their investment discretion in seeking the investment goal of the Fund. As of December 31, 2024, a significant portion of the Fund is represented by companies in the Financial sector. PLFA managed portion: For the PLFA managed portion of the Fund, PLFA seeks to gain exposure to debt securities using derivatives in a notional amount approximately equal to the Funds net assets. Because fewer assets are generally required to gain investment exposure using derivatives than with securities directly, PLFA allocates the remaining assets to FDS to manage as described under the FDS managed portion. These derivatives are total return swap agreements and futures contracts. PLFA seeks to achieve the Funds investment goal in this portion of the Fund by gaining exposure to debt securities through total return swap agreements and futures contracts on the Bloomberg US Aggregate Bond Index (the Index), a debt securities index that represents the investment grade, U.S. dollar-denominated, fixed rate taxable bond market. PLFA may also enter into total return swap agreements on exchange traded funds (ETFs) that seek to track the performance of the Index. Using derivatives such as total return swap agreements and futures contracts on the Index or total return swap agreements on ETFs that track the performance of the Index is a way to obtain investment exposure to debt securities, as represented by the Index, and seek the returns of the Index without purchasing all of the securities in the Index. PLFA may also invest in U.S. Treasury futures contracts to gain exposure to debt securities that approximate key risk factors and performance attributes of the Index, such as duration. PLFA will also seek to achieve additional gains above the Index by making specific investment decisions for the Fund as it sees investment opportunities (incremental alpha). To seek incremental alpha, PLFA may use futures contracts and swap agreements (including total return swaps, interest rate swaps and credit default swaps) to implement its investment views on risk factors or performance attributes within the debt securities market, as represented by the Index. This could involve, for example, PLFA selling short U.S. Treasury futures contracts to express an investment view for lower duration relative to the Index, or doing the opposite. FDS managed portion: FDS manages its portion of the Fund to seek to contribute to returns in excess of the Index returns (or alpha), to earn income to offset the cost of the Funds derivatives investments, and to maintain collateral for the Funds derivatives exposure. This portion of the Fund will be invested primarily in investment grade debt securities, including U.S. debt and U.S. dollar-denominated debt issued by foreign entities in developed markets, and repurchase agreements for those securities. Under normal circumstances, this portion of the Fund is expected to maintain an average credit quality of A- or higher and a weighted average duration that is between 0 and 2.75 years. Duration is often used to measure a bonds sensitivity to interest rates. The longer this portion of the Funds duration, the more sensitive it is to interest rate risk. The shorter this portion of the Funds duration, the less sensitive it is to interest rate risk. When selecting investments for this portion of the Fund, FDS evaluates sectors of the bond market and individual securities within these sectors. FDS selects U.S. dollar-denominated bonds from several sectors including: U.S. and foreign developed market government securities (including agencies); investment grade corporate bonds; mortgage-related securities; asset-backed securities; and cash equivalents. In addition, FDS may use derivatives, including buying or selling options or futures contracts on a debt security or an index of debt securities, or entering into credit default swaps and interest rate swaps, including options thereon ( i.e. , swaptions), primarily to manage risks of the debt security investments by increasing or decreasing the exposure to risk factors associated with those investments or as a substitute for investing in the debt securities directly. For example, FDS could use Treasury futures contracts to manage interest rate risk or credit default swaps to manage credit risk of corporate bonds or gain exposure to debt security investments in a certain sector. This portion of the Fund may also invest in debt securities issued pursuant to Rule 144A under the Securities Act of 1933 (Rule 144A securities). FDS may purchase or sell investments for this portion of the Fund for a variety of reasons, such as to adjust the Funds average maturity, duration, or credit quality or to shift assets into and out of higher yielding or lower yielding securities or different sectors. This portion of the Fund may lend its portfolio holdings to certain financial institutions. Show less