WHAT'S THE RELATIONSHIP BETWEEN RISK AND REWARD? Choose from individual funds from nationally recognized money managers. The more risk you are willing to take, the higher your potential reward becomes. Of course, the safer your investment, the less it can potentially earn. Pacific Life Funds enables you to create a diversified portfolio among 15 funds that fall along the risk/reward spectrum. Each corresponds with a particular asset class or style category.  PACIFIC LIFE FUNDS BY VOLATILITY HIGHER RISK, HIGHER REWARD POTENTIAL LOWER RISK, LOWER REWARD POTENTIAL The potential for long-term risk and reward characteristics of each fund are based on analysis by Ibbotson Associates Inc., a wholly owned subsidiary of Morningstar, Inc., 2003.  ASSET CLASS / STYLE GLOSSARY Investments may have differences in fluctuation of principal and/or return, tax, features, etc. Sector Funds Sector funds focus on stocks of companies in a particular industry and may be subject to greater price volatility than more diversified stock funds. International/Global Funds International funds generally invest about two-thirds of their assets in stocks of companies located outside the United States. Global funds may hold both international and domestic stocks. Keep in mind that international investing is subject to currency fluctuation and political change. Growth Funds Growth managers choose stocks of companies that have a history of rapidly growing earnings. Value Funds Value managers select stocks of companies whose market valuations may not reflect the underlying value of their assets or potential earnings growth. Fixed Income Funds Bond funds hold securities that make interest payments and return principal on maturity. Bond prices will fluctuate inversely with changes in interest rates. Cash Equivalent Funds Money market funds hold debt securities that mature in about one year. These include Treasury bills and commercial paper. Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund.

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