File Nos. 333-42105 and 811-08547
As filed with the Securities and Exchange Commission on May 1, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ----
Post-Effective Amendment No. 3 X
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REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 4 X
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(Check appropriate box or boxes)
PIONEER INDEPENDENCE FUND
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
X immediately upon filing pursuant to paragraph (b)
---
___ on [date] pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on [date] pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on [date] pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
___This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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[Pioneer logo]
PIONEER
INDEPENDENCE FUND
Prospectus, May 1, 2000
CONTENTS
Basic information about the fund 1
Management 6
Buying, exchanging and selling shares 7
Dividends, capital gains and taxes 16
Financial highlights 17
Shares of the fund are offered to the general public only through investments in
Pioneer Independence Plans. The creation and sales charges for these plans may
amount to 50% of the first 12 investments made. The accompanying Pioneer
Independence Plans prospectus includes details of Pioneer Independence Plans,
including creation and sales charges. Please read it and retain for future
reference.
Neither the Securities and Exchange Commission nor any state securities agency
has approved the fund's shares or determined whether this prospectus is accurate
or complete. Any representation to the contrary is a crime.
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AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
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CONTACT YOUR INVESTMENT PROFESSIONAL TO DISCUSS HOW THE FUND FITS INTO YOUR
PORTFOLIO.
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BASIC INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE
Capital growth.
PRINCIPAL INVESTMENT STRATEGIES
The fund invests at least 80% of its assets in common stocks. The fund considers
securities that trade like common stocks, such as depositary receipts,
convertible debt, warrants, interests in real estate investment trusts (REITs)
and preferred stocks, to be common stocks.
Pioneer Investment Management, Inc., the fund's investment adviser, seeks
securities selling at reasonable prices or substantial discounts to their
underlying values and then holds these securities until the market values
reflect their intrinsic values. Pioneer evaluates a security's potential value,
including the attractiveness of its market valuation, based on the company's
assets and prospects for earnings and revenue growth. In making that assessment,
Pioneer employs due diligence and fundamental research, an evaluation of the
issuer based on its financial statements and operations. Pioneer relies on the
knowledge, experience and judgment of its staff who have access to a wide
variety of research. Pioneer focuses on the quality and price of individual
issuers, not on economic sector or market-timing strategies. Factors Pioneer
looks for in selecting investments include:
|X| Estimated private market value in excess of current stock price. Private
market value is the price an independent investor would pay to own the
entire company
|X| Above average potential for earnings and revenue growth
|X| Management with demonstrated ability and commitment to the company
|X| Low market valuations relative to earnings forecast, book value, cash
flow and sales
PRINCIPAL RISKS OF INVESTING IN THE FUND
Even though the fund seeks capital growth, you could lose money on your
investment or not make as much as if you invested elsewhere if:
|X| The stock market goes down (this risk may be greater in the short term)
|X| Value stocks fall out of favor with investors
|X| The fund's investments do not have the growth potential originally
expected
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BASIC INFORMATION ABOUT THE FUND
THE FUND'S PAST PERFORMANCE
The bar chart and table indicate the risks of investing in the fund by showing
how the fund has performed in the past. The fund's performance will vary from
year to year.
The fund's past performance does not necessarily indicate how it will perform in
the future. As a shareowner, you may lose or make money on your investment.
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FUND PERFORMANCE
The chart shows the performance of the fund's shares for each full calendar year
since the fund's inception on March 16, 1998. The chart does not reflect any
creation and sales charge you may pay when you buy fund shares. The creation and
sales charge will reduce your return.
THE FUND'S HIGHEST CALENDAR QUARTERLY RETURN WAS 15.33% (9/30/99 TO 12/31/99)
THE FUND'S LOWEST CALENDAR QUARTERLY RETURN WAS 7.07% (6/30/99 TO 9/30/99)
FOR THE CALENDAR QUARTER ENDED MARCH 31, 2000, THE FUND'S TOTAL RETURN WAS
12.76%
ANNUAL RETURN
(Year ended December 31)
'99 22.88%
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COMPARISON WITH THE RUSSELL 1000(R) INDEX
The table shows the average annual total returns for the fund over time and
compares these returns to the returns of the Russell 1000(R) Index. This index
is a recognized measure of the performance of U.S. common stocks. Unlike the
fund, the index is not managed and does not incur expenses. The table:
|X| Assumes that you sell your shares at the end of the period
|X| Assumes that you reinvest all of your dividends and distributions
AVERAGE ANNUAL TOTAL RETURN (%)
(for periods ended December 31, 1999)
SINCE INCEPTION
1 YEAR INCEPTION DATE
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Fund 22.88 10.38 3/16/98
........................................
Russell 1000
Index 20.91 18.94 -
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FEES AND EXPENSES
These are the fees and expenses, based on the fund's latest fiscal year, you may
pay if you invest directly in the fund.
SHAREOWNER FEES
PAID DIRECTLY FROM YOUR INVESTMENT
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Maximum sales charge (load) when you buy shares
as a percentage of offering price None
.......................................................................
Maximum deferred sales charge (load) as a
percentage of offering price or the
amount you receive when you sell shares,
whichever is less None
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ANNUAL FUND OPERATING EXPENSES
PAID FROM THE ASSETS OF THE FUND
as a percentage of average daily net assets(1)
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Management Fee 0.75%
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Distribution and Service (12b-1) Fee 0.25%
.......................................................................
Other Expenses 5.41%
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Total Annual Fund Operating Expenses 6.41%
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(1) Pioneer has agreed not to impose all or a portion of its management fee
and, if necessary, to limit other operating expenses of the fund to the
extent required to reduce expenses to 1.50% of the average daily net
assets of the fund. This agreement is voluntary and temporary and may
be revised or terminated at any time. Actual management fees,
distribution and service fees, other expenses and total fund operating
expenses paid by the fund for the fiscal year ended December 31, 1999
were:
Management Fee 0.00%
Distribution and Service (12b-1) Fee 0.02%
Other Expenses 1.48%
Total Annual Fund Operating Expenses 1.50%
EXAMPLE
This example helps you compare the cost of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
NUMBER OF YEARS YOU OWN YOUR SHARES
-----------------------------------
1 3 5 10
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$636 $1,883 $6,094 $5,976
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BASIC INFORMATION ABOUT THE FUND
OTHER INVESTMENT STRATEGIES
As discussed, the fund invests primarily in common stock.
This section describes additional investments that the fund may make or
strategies that it may pursue to a lesser degree to achieve the fund's goal.
Some of the fund's secondary investment policies also entail risks. To learn
more about these investments and risks, you should obtain and read the statement
of additional information (SAI).
MORE ON PRINCIPAL INVESTMENTS
The fund may invest up to 25% of its total assets (at the time of purchase) in
real estate investment trusts. Real estate investment trusts are pooled
investment vehicles that invest primarily in real estate or real estate related
loans. Investing in real estate investment trusts involves unique risks. They
are significantly affected by the market for real estate and are dependent upon
management skills and cash flow.
INVESTMENTS IN INITIAL PUBLIC OFFERINGS
To the extent consistent with its investment objective, the fund may invest in
initial public offerings of equity securities. The market for such securities
may be more volatile and entail greater risk of loss than investments in more
established companies. Investments in initial public offerings represent a
significant portion of the fund's past investment performance. The fund cannot
assure that investments in initial public offerings will continue to be
available to the fund or, if available, will continue to result in positive
investment performance. In addition, as the fund grows in size, the impact of
investments in initial public offerings on the overall performance of the fund's
portfolio is likely to decrease.
INVESTMENTS OTHER THAN U.S. COMMON STOCKS
The fund may invest up to 25% of its total assets (at the time of purchase)
in equity and debt securities of non-U.S. corporate issuers and debt securities
of non-U.S. corporate and government issuers, including up to 10% of its assets
in the securities of emerging markets issuers. The fund invests in non-U.S.
securities to diversify its portfolio when they offer similar or greater
potential for capital appreciation compared to U.S. securities. Investing in
non-U.S. issuers may involve unique risks compared to investing in securities of
U.S. issuers. Some of these risks do not apply to the larger, more developed
non-U.S. countries. However, these risks are more pronounced for issuers of
securities in emerging markets. These risks may include:
|X| Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure and accounting standards or regulatory
practices
|X| Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the fund's portfolio
securities in amounts and at prices it considers reasonable
|X| Adverse effect of currency exchange rates or controls on the value of
the fund's investments
|X| Political, economic and social developments that adversely affect the
securities markets
|X| Withholding and other non-U.S. taxes may decrease the fund's return
The fund may invest up to 20% of its total assets (at the time of purchase) in
debt securities of corporate and government issuers. Generally the fund acquires
debt securities that are investment grade, but the fund may invest up to 5% of
its total assets (at the time of purchase) in below investment grade debt
securities. The fund invests in debt securities when Pioneer believes they are
consistent with the fund's investment objective, to diversify the fund's
portfolio or for greater liquidity.
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Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors which could
contribute to a decline in the market value of debt securities in the fund's
portfolio include rising interest rates or a reduction in the perceived
creditworthiness of the issuer of the securities. A debt security is investment
grade if it is rated in one of the top four categories by a nationally
recognized securities rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are
commonly referred to as "junk bonds" and are considered speculative. Below
investment grade debt securities involve greater risk of loss, are subject to
greater price volatility and are less liquid, especially during periods of
economic uncertainty or change, than higher quality debt securities.
TEMPORARY INVESTMENTS
Normally, the fund invests substantially all of its assets to meet its
investment objective. For temporary defensive purposes, the fund may depart from
its principal investment strategies and invest part or all of its assets in
securities with remaining maturities of less than one year or may hold cash or
cash equivalents. During such periods, the fund may not be able to achieve its
investment objective. The fund intends to adopt a defensive strategy only when
Pioneer believes common stocks have extraordinary risks due to political or
economic factors.
SHORT-TERM TRADING
The fund usually does not trade for short-term profits. The fund will sell an
investment, however, even if it has only been held for a short time, if it no
longer meets the fund's investment criteria. If the fund does a lot of trading,
it may incur additional operating expenses, which would reduce performance, and
could cause shareowners to incur a higher level of taxable income or capital
gains.
DERIVATIVES
The fund may use futures, options and other derivatives. A derivative is a
security or instrument whose value is determined by reference to the value or
the change in value of one or more securities, currencies, indices or other
financial instruments. The fund does not use derivatives as a primary investment
technique and generally limits their use to hedging. However, the fund may use
derivatives for a variety of non-principal purposes, including:
|X| As a hedge against adverse changes in stock market prices, interest
rates or currency exchange rates
|X| As a substitute for purchasing or selling securities
|X| To increase the fund's return as a non-hedging strategy that may be
considered speculative
Even a small investment in derivatives can have a significant impact on the
fund's exposure to stock market values, interest rates or currency exchange
rates. If changes in a derivative's value do not correspond to changes in the
value of the fund's other investments, the fund may not fully benefit from or
could lose money on the derivative position. In addition, some derivatives
involve risk of loss if the person who issued the derivative defaults on its
obligation. Certain derivatives may be less liquid and more difficult to value.
PORTFOLIO TURNOVER
The fund's annual portfolio turnover rate has exceeded 100% in recent years. A
high portfolio turnover rate may result in high transaction costs that are borne
by the fund and its shareholders. See "Financial highlights" for actual annual
turnover rates.
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MANAGEMENT
PIONEER, THE FUND'S INVESTMENT ADVISER,
selects the fund's investments and oversees the fund's operations.
PIONEER GROUP
The Pioneer Group, Inc. and its subsidiaries are engaged in financial
services businesses in the United States and many foreign countries. As of
December 31, 1999, the firm had more than $24 billion in assets under management
worldwide including more than $23 billion in U.S. mutual funds. The firm's U.S.
mutual fund investment history includes creating in 1928 one of the first mutual
funds. John F. Cogan, chairman of the board and president of The Pioneer Group,
Inc., owns approximately 14% of the firm. He is also an officer and director of
each of the Pioneer mutual funds.
INVESTMENT ADVISER
Pioneer manages a family of U.S. and international stock funds, bond funds
and money market funds. Pioneer is a subsidiary of The Pioneer Group, Inc. Its
main office is at 60 State Street, Boston, Massachusetts 02109.
PORTFOLIO MANAGER
Since March 2000, day-to-day management of the fund's portfolio has been the
responsibility of a team of portfolio managers and analysts supervised by
Theresa A. Hamacher (who previously co-managed the fund's investments) and
including the fund's assistant portfolio manager since April 2000, Michael P.
Bradshaw. This team meets to discuss holdings, prospective investments and
portfolio composition and manages and provides research for the fund and other
Pioneer mutual funds with similar investment objectives or styles.
Ms. Hamacher, chief investment officer of Pioneer has general
responsibility for Pioneer's investment operations. Ms. Hamacher joined Pioneer
in 1997 and has been an investment professional since 1984, most recently as
chief investment officer at another investment adviser. Mr. Bradshaw, a vice
president of Pioneer, joined Pioneer in 1997 and has been an investment
professional since 1994. Prior to joining Pioneer, Mr. Bradshaw was a research
associate for CIBC Wood Gundy Securities, Inc. from 1995 to 1997 and a financial
analyst for Canadian Imperial Bank of Commerce from 1994 to 1995.
MANAGEMENT FEE
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to 0.75%
of the fund's average daily net assets. The fee is normally computed daily and
paid monthly.
DISTRIBUTOR AND TRANSFER AGENT
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneering
Services Corporation is the fund's transfer agent. The fund compensates the
distributor and transfer agent for their services. The distributor and the
transfer agent are subsidiaries of The Pioneer Group, Inc.
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BUYING, EXCHANGING AND SELLING SHARES DIRECTLY OWNED
NET ASSET VALUE
The fund's net asset value is the value of its portfolio of securities plus any
other assets minus its operating expenses and any other liabilities. The fund
calculates a net asset value per share every day the New York Stock Exchange is
open when regular trading closes (normally 4:00 p.m. Eastern time).
The fund generally values its portfolio securities based on market prices or
quotations. When market prices are not available or are considered by Pioneer to
be unreliable, the fund may use an asset's fair value. Fair value is determined
in accordance with procedures approved by the fund's trustees. International
securities markets may be open on days when the U.S. markets are closed. For
this reason, the values of any international securities owned by the fund could
change on a day when you cannot buy or sell shares of the fund.
You buy or sell shares at the net asset value per share calculated on the day of
your transaction.
DISTRIBUTION PLAN
The fund has adopted a distribution plan for shares offered through this
prospectus in accordance with Rule 12b-1 under the Investment Company Act of
1940. Under the plan the fund pays distribution and service fees to the
distributor. Because these fees are an ongoing expense, over time they increase
the cost of your investment and your shares may cost more than shares that are
subject to other types of sales charges.
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SHARE PRICE
The net asset value per share calculated on the day of your transaction.
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BUYING, EXCHANGING AND SELLING SHARES DIRECTLY OWNED
GENERAL RULES ON BUYING, EXCHANGING AND SELLING YOUR FUND SHARES
SHARE PRICE
If you place an order with your investment firm before the New York Stock
Exchange closes and your investment firm submits the order to the distributor
prior to the distributor's close of business (usually 5:30 p.m. Eastern time),
your share price will be calculated that day. Otherwise, your price per share
will be calculated at the close of the New York Stock Exchange after the
distributor receives your order. Your investment firm is responsible for
submitting your order to the distributor.
BUYING
The accompanying plan prospectus describes the methods of buying fund shares
through Pioneer Independence Plans.
You may buy shares of the fund directly from the fund's transfer agent (at net
asset value) only through one of the following:
|X| an employer-sponsored retirement plan established for the benefit of
employees of The Pioneer Group Inc. or employees of its affiliates; or
|X| an employer-sponsored retirement plan established for the benefit of
employees or affiliates of dealers which have entered into agreements
with the distributor to sell Pioneer Independence Plans
There is no minimum initial or minimum subsequent investment amount.
The fund has entered into an agreement with the distributor under which the fund
issues shares at the net asset value per share to State Street Bank and Trust
Company as custodian for the plans. The plan custodian will generally hold all
shares of the fund on behalf of the plan owners in accordance with the terms of
the applicable plan prospectus. A plan owner may own fund shares directly:
|X| if the plan owner has completed or terminated a plan or
|X| as a result of a partial withdrawal from a plan causing fund shares to
be transferred into a non-contributory account
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DIRECT PURCHASES OF THE FUND
The fund will sell its shares to the general public only through Pioneer
Independence Plans.
You may exchange and sell shares of the fund only if you hold them directly.
Otherwise, please consult the accompanying Pioneer Independence Plans
prospectus.
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Consult your investment professional to learn more about buying, exchanging or
selling fund shares.
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EXCHANGING
You may exchange your shares for Class A shares of another Pioneer mutual fund.
Fund shares exchanged for shares of another Pioneer mutual fund may not be
exchanged back to Pioneer Independence Fund.
Your exchange request must be for at least $1,000 unless the fund you are
exchanging into has a different minimum. The fund allows you to exchange your
shares at net asset value without charging you either an initial or contingent
deferred sales charge at the time of the exchange.
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus.
SELLING
Your shares will be sold at net asset value per share next calculated after the
fund receives your request in good order.
The fund generally will send your sale proceeds by check, bank wire or
electronic funds transfer. Normally you will be paid within seven days. If you
recently sent a check to purchase the shares being sold, the fund may delay
payment of the sale proceeds until your check has cleared. This may take up to
15 calendar days from the purchase date.
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GOOD ORDER MEANS THAT:
|X| You have provided adequate instructions
|X| There are no outstanding claims against your account
|X| There are no transaction limitations on your account
|X| If you have any fund share certificates, you submit them and they are
signed by each record owner exactly as the shares are registered
|X| Your request includes a signature guarantee if you:
- Are selling over $100,000 or exchanging over $500,000 worth of
shares
- Changed your account registration or address within the last 30
days
- Instruct the transfer agent to mail the check to an address
different from the one on your account
- Want the check paid to someone other than the account owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund
account with a different registration
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You may have to pay income taxes on a sale or an exchange.
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BUYING, EXCHANGING AND SELLING SHARES DIRECTLY OWNED
BUYING SHARES
EXCHANGING SHARES
THROUGH YOUR INVESTMENT FIRM
You can buy fund shares only through Pioneer Independence Plans. CONSULT YOUR
INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your investment firm may receive a
commission from the distributor for your purchase of fund shares. The
distributor or its affiliates may pay additional compensation, out of their own
assets, to certain investment firms or their affiliates based on objective
criteria established by the distributor.
Normally, your investment firm will send your exchange request to the fund's
transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION ABOUT
EXCHANGING YOUR SHARES.
BY PHONE
YOU CAN USE THE TELEPHONE PURCHASE PRIVILEGE IF you have an existing
employer-sponsored retirement account established outside Pioneer Independence
Plans. You can purchase additional fund shares by phone if:
|X| You established your bank account of record at least 30 days ago
|X| Your bank information has not changed for at least 30 days
|X| You are not purchasing more than $25,000 worth of shares per account
per day
|X| You can provide the proper account identification information
When you request a telephone purchase, the transfer agent will electronically
debit the amount of the purchase from your bank account of record. The transfer
agent will purchase fund shares for the amount of the debit at the offering
price determined after the transfer agent receives your telephone purchase
instruction and good funds. It usually takes three business days for the
transfer agent to receive notification from your bank that good funds are
available in the amount of your investment.
YOU CAN EXCHANGE FUND SHARES BY PHONE IF:
|X| You are using the exchange to establish a new account, provided the
new account has a registration identical to the original account
|X| You are exchanging into Class A shares of another Pioneer mutual fund
|X| You are not exchanging more than $500,000 worth of shares per account
per day
|X| You can provide the proper account identification number
IN WRITING, BY MAIL OR
BY FAX
You can purchase fund shares for an existing employer-sponsored retirement
account established outside Pioneer Independence Plans by MAILING A CHECK TO
THE TRANSFER AGENT. Make your check payable to the fund. Neither initial nor
subsequent investments should be made by third party check. Your check must be
in U.S. dollars and drawn on a U.S. bank. Include in your purchase request the
fund's name, the account number and the name or names in the account
registration.
You can exchange fund shares by MAILING OR FAXING A LETTER OF INSTRUCTION TO THE
TRANSFER AGENT. You can exchange fund shares directly through the fund only if
your account is registered in your name. However, you may not fax an exchange
request for more than $500,000. Include in your letter:
|X| The name, social security number and signature of all registered owners
|X| A signature guarantee for each registered owner if the amount of the
exchange is more than $500,000
|X| The name of the fund out of which you are exchanging and the name of
the fund into which you are exchanging
|X| The class of shares you are exchanging
|X| The dollar amount or number of shares you are exchanging
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SELLING SHARES
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE
INFORMATION. The fund has authorized the distributor to act as its agent in the
repurchase of fund shares from qualified investment firms. The fund reserves the
right to terminate this procedure at any time.
YOU MAY SELL UP TO $100,000 PER ACCOUNT PER DAY. You may sell fund shares held
in a retirement plan account by phone only if your account is an IRA. You may
not sell your shares by phone if you have changed your address (for checks) or
your bank information (for wires and transfers) in the last 30 days.
You may receive your sale proceeds:
|X| By check, provided the check is made payable exactly as your account is
registered
|X| By bank wire or by electronic funds transfer, provided the sale
proceeds are being sent to your bank address of record
You can sell some or all of your fund shares by WRITING DIRECTLY TO THE FUND
only if your account is registered in your name. Include in your request your
name, your social security number, the fund's name, your fund account number,
the class of shares to be sold, the dollar amount or number of shares to be sold
and any other applicable requirements as described below. The transfer agent
will send the sale proceeds to your address of record unless you provide other
instructions. Your request must be signed by all registered owners and be in
good order. The transfer agent will not process your request until it is
received in good order. You may sell up to $100,000 per account per day by fax.
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HOW TO CONTACT US
BY PHONE [telephone icon]
For information or to request a telephone transaction between 8:00 a.m. and 9:00
p.m. (Eastern time) by speaking with a shareholder services representative call
1-800-225-6292
To use FactFoneSM call 1-800-225-4321
Telecommunications Device for the Deaf (TDD)
1-800-225-1997
BY MAIL [envelope icon]
Send your written instructions to:
PIONEERING SERVICES CORPORATION
P.O. Box 9014
Boston, Massachusetts 02205-9014
BY FAX [fax icon]
Fax your exchange and sale requests to:
1-800-225-4240
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EXCHANGE PRIVILEGE
The fund and the distributor reserve the right to refuse any exchange request or
restrict, at any time without notice, the number and/or frequency of exchanges
to prevent abuses of the exchange privilege. Abuses include frequent trading in
response to short-term market fluctuations and a pattern of trading that appears
to be an attempt to "time the market." In addition, the fund and the distributor
reserve the right, at any time without notice, to charge a fee for exchanges or
to modify, limit or suspend the exchange privilege. The fund will provide 60
days' notice of material amendments to or termination of the privilege.
FUND SHARES EXCHANGED FOR SHARES OF ANOTHER PIONEER MUTUAL FUND MAY NOT BE
EXCHANGED BACK TO PIONEER INDEPENDENCE FUND.
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BUYING, EXCHANGING AND SELLING SHARES DIRECTLY OWNED
ACCOUNT OPTIONS
These options are available only if you hold fund shares directly. Otherwise,
please consult the accompanying prospectus.
AUTOMATIC EXCHANGES
You can automatically exchange your fund shares for Class A shares of another
Pioneer mutual fund. The automatic exchange will begin on the day you select
when you complete the appropriate section of your account application or an
account options form. In order to establish automatic exchange:
|X| You must select exchanges on a monthly or quarterly basis
|X| Both the originating and receiving accounts must have identical
registrations
|X| The originating account must have a minimum balance of $5,000
DISTRIBUTION OPTIONS
The fund offers three distribution options. Any fund shares you buy by
reinvesting distributions will be priced at the applicable net asset value per
share.
(1) Unless you indicate another option on your account application, any
dividends and capital gain distributions paid to you by the fund will
automatically be invested in additional fund shares.
(2) You may elect to have the amount of any dividends paid to you in cash and
any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital gain
distributions paid to you in cash.
Options (2) or (3) are not available to retirement plan accounts or accounts
with a current value of less than $500.
If your distribution check is returned to the transfer agent or you do not cash
the check for six months or more, the transfer agent may reinvest the amount of
the check in your account and automatically change the distribution option on
your account to option (1) until you request a different option in writing.
These additional shares will be purchased at the then current net asset value.
12
<PAGE>
DIRECTED DIVIDENDS
You can invest the dividends paid by one of your Pioneer mutual fund accounts in
a second Pioneer mutual fund account. The value of your second account must be
at least $1,000 ($500 for Pioneer Fund or Pioneer II). You may direct the
investment of any amount of dividends. There are no fees or charges for directed
dividends. If you have a retirement plan account, you may only direct dividends
to accounts with identical registrations.
SYSTEMATIC WITHDRAWAL PLANS
When you establish a systematic withdrawal plan for your account, the transfer
agent will sell the number of fund shares you specify on a periodic basis and
the proceeds will be paid to you or to any person you select. You must obtain a
signature guarantee to direct payments to another person after you have
established your systematic withdrawal plan. Payments can be made either by
check or by electronic transfer to a bank account you designate.
To establish a systematic withdrawal plan:
|X| Your account must have a total value of at least $10,000 when you
establish your plan
|X| You must request a periodic withdrawal of at least $50
Systematic sales of fund shares may be taxable transactions for you.
DIRECT DEPOSIT
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
VOLUNTARY TAX WITHHOLDING
You may have the transfer agent withhold 28% of the dividends and capital gain
distributions paid from your fund account (before any reinvestment) and forward
the amount withheld to the Internal Revenue Service as a credit against your
federal income taxes. Voluntary tax withholding is not available for retirement
plan accounts or for accounts subject to backup withholding.
13
<PAGE>
BUYING, EXCHANGING AND SELLING SHARES DIRECTLY OWNED
SHAREOWNER SERVICES
These options are available only if you hold fund shares directly. Otherwise,
please consult the accompanying prospectus.
PIONEER WEBSITE
WWW.PIONEERFUNDS.COM
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
|X| Your current account information
|X| Prices, returns and yields of all publicly available Pioneer mutual
funds
|X| Prospectuses for all the Pioneer mutual funds
FACTFONESM 1-800-225-4321
You can use FactFoneSM to:
|X| Obtain current information on your Pioneer mutual fund accounts
|X| Inquire about the prices and yields of all publicly available Pioneer
mutual funds
|X| Make computer-assisted telephone purchases, exchanges and redemptions
for your fund accounts
|X| Request account statements
If you plan to use FactFoneSM to make telephone purchases and redemptions, first
you must activate your personal identification number and establish your bank
account of record. If your account is registered in the name of a broker-dealer
or other third party, you may not be able to use FactFoneSM.
HOUSEHOLD DELIVERY OF FUND DOCUMENTS
With your consent, Pioneer may send a single prospectus and shareholder report
to your residence for you and any other member of your household who has an
account with the fund. If you wish to revoke your consent to this practice, you
may do so by notifying Pioneer, by phone or in writing (see "How to contact
us"). Pioneer will begin mailing separate prospectuses and shareholder reports
to you within 30 days after receiving your notice.
CONFIRMATION STATEMENTS
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
TAX INFORMATION
In January of each year, the fund will mail you information about the tax status
of the dividends and distributions paid to you by the fund.
TDD 1-800-225-1997
If you have a hearing disability and access to TDD keyboard equipment, you can
contact our telephone representatives with questions about your account by
calling our TDD number between 8:30 a.m. and 5:30 p.m. Eastern time any weekday
that the New York Stock Exchange is open.
14
<PAGE>
SHAREOWNER ACCOUNT POLICIES
THESE POLICIES APPLY ONLY IF YOU HOLD FUND SHARES DIRECTLY. OTHERWISE, PLEASE
CONSULT THE ACCOMPANYING PROSPECTUS.
SIGNATURE GUARANTEES AND OTHER REQUIREMENTS You are required to obtain a
signature guarantee when you are:
|X| Requesting certain types of exchanges or sales of fund shares
|X| Redeeming shares for which you hold a share certificate
|X| Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
Fiduciaries and corporations are required to submit additional documents to sell
fund shares.
MINIMUM ACCOUNT SIZE
The fund requires that you maintain a minimum account value of $500. If you hold
less than the minimum in your account because you have sold or exchanged some of
your shares, the fund will notify you of its intent to sell your shares and
close your account. You may avoid this by increasing the value of your account
to at least the minimum within six months of the notice from the fund.
TELEPHONE ACCESS
You may have difficulty contacting the fund by telephone during times of market
volatility or disruption in telephone service. On New York Stock Exchange
holidays or on days when the exchange closes early, the telephone center will
adjust its hours accordingly. If you are unable to reach the fund by telephone,
you should communicate with the fund in writing.
SHARE CERTIFICATES
Normally, your shares will remain on deposit with the transfer agent and
certificates will not be issued. If you are legally required to obtain a
certificate, you may request one for your shares. A fee may be charged for this
service.
OTHER POLICIES
The fund may suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when an emergency exists that makes it
impracticable for the fund to sell or value its portfolio securities or with the
permission of the Securities and Exchange Commission.
The fund or the distributor may revise, suspend or terminate the account options
and services available to shareowners at any time.
The fund reserves the right to redeem in kind by delivering portfolio securities
to a redeeming shareowner, provided that the fund must pay redemptions in cash
if a shareowner's aggregate redemptions in a 90-day period are less than
$250,000 or 1% of the fund's net assets.
15
<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
DIVIDENDS AND CAPITAL GAINS
The fund generally pays any distributions of net short- and long-term capital
gains in November. The fund generally pays dividends from any net investment
income in December. The fund may also pay dividends and capital gain
distributions at other times if necessary for the fund to avoid federal income
or excise tax. If you invest in the fund close to the time that the fund makes a
distribution, generally you will pay a higher price per share and you will pay
taxes on the amount of the distribution whether you reinvest the distribution or
receive it as cash.
TAXES
For federal income tax purposes, your distributions from the fund's net
long-term capital gains are considered long-term capital gains and may be
taxable to you at different maximum rates depending upon their source and other
factors. Dividends and short-term capital gain distributions are taxable as
ordinary income. Dividends and distributions are taxable, whether you take
payment in cash or reinvest them to buy additional fund shares. When you sell or
exchange fund shares you will generally recognize a capital gain or capital loss
in an amount equal to the difference between the net amount of sale proceeds
(or, in the case of an exchange, the fair market value of the shares) that you
receive and your tax basis for the shares that you sell or exchange. In January
of each year the fund will mail to you information about your dividends,
distributions and any shares you sold in the previous calendar year.
You must provide your social security number or other taxpayer identification
number to the fund along with the certifications required by the Internal
Revenue Service when you open an account. If you do not or if it is otherwise
legally required to do so, the fund will withhold 31% "backup withholding" tax
from your dividends and distributions, sale proceeds and any other payments to
you.
You should ask your own tax adviser about any federal and state tax
considerations, including possible additional withholding taxes for non-U.S.
shareholders. You may also consult the fund's statement of additional
information for a more detailed discussion of federal income tax considerations
that may affect the fund and its shareowners.
[text box: capital icon]
Sales and exchanges may be taxable transactions to shareowners.
[end text box]
16
<PAGE>
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE HELPS YOU UNDERSTAND THE FUND'S FINANCIAL
PERFORMANCE SINCE ITS INCEPTION.
Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate that you would have earned on an
investment in the fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by Arthur Andersen LLP, whose report is
included in the fund's annual report along with the fund's financial statements.
The annual report is available upon request.
<TABLE>
<CAPTION>
PIONEER INDEPENDENCE FUND
FOR THE YEAR ENDED
DECEMBER 31, 1999 MARCH 16, 1998 TO
DECEMBER 31,
1998(A)
<S> <C> <C>
Net asset value, beginning of period $ 9.63 $ 10.00
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.01) $ (0.01)
Net realized and unrealized gain (loss) on investments 2.19 (0.27)
------- -------
Net increase (decrease) from investment operations $ 2.18 $ (0.28)
Distributions to shareholders:
Net investment income (0.01) (0.09)
Net realized gain (0.44) --
------- -------
Net increase (decrease) in net asset value $ 1.73 $ (0.37)
------- -------
Net asset value, end of period $ 11.36 $ 9.63
======= =======
Total return* 22.88% (2.78)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets+ 1.58% 1.68%**
Ratio of net investment income (loss) to average net assets+ (0.11)% (0.30)%**
Portfolio turnover rate 106% 118%**
Net assets, end of period (in thousands) $12,018 $ 3,335
Ratios assuming no waiver of management fees and assumption of
expenses by Pioneer and no reduction for fees paid indirectly:
Net expenses 6.18% 17.26%**
Net investment income (loss) (4.71)% (15.88)%**
Ratios assuming waiver of management fees and assumption of
expenses by Pioneer and reduction for fees paid indirectly:
Net expenses 1.50% 1.50%**
Net investment income (loss) (0.03)% (0.12)%**
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at each end of the period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
</TABLE>
17
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
PIONEER
INDEPENDENCE FUND
YOU CAN OBTAIN MORE FREE INFORMATION about the fund from your investment firm or
by writing to Pioneering Services Corporation, 60 State Street, Boston,
Massachusetts 02109. You may also call 1-800-225-6292.
SHAREOWNER REPORTS
Annual and semiannual reports to shareowners provide information about the
fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected the fund's performance during its last
fiscal year.
STATEMENT OF ADDITIONAL INFORMATION
The statement of additional information provides more detailed information about
the fund. It is incorporated by reference into this prospectus.
VISIT OUR WEBSITE
www.pioneerfunds.com
You can also review the fund's shareowner reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. Call 1-202-942-8090 for information. The
Commission charges a fee for copies. You can get the same information free from
the Commission's EDGAR database on the Internet (http://www.sec.gov). You may
also e-mail requests for these documents to [email protected] or make a request
in writing to the Commission's Public Reference Section, Washington, D.C.
20549-0102.
(Investment Company Act file no. 811-08547)
[Pioneer
logo] Pioneer Funds Distributor, Inc.
60 State Street
Boston, MA 02109 8338-00-0400
www.pioneerfunds.com (C) Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER INDEPENDENCE FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
May 1, 2000
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's prospectus and the Pioneer Independence Plans
prospectus, each dated May 1, 2000, as supplemented or revised from time to
time. A copy of each prospectus can be obtained free of charge by calling
Shareholder Services at 1-800-225-6292 or by written request to the fund at 60
State Street, Boston, Massachusetts 02109. You can also obtain a copy of the
prospectuses from our website at: www.pioneerfunds.com. The fund's financial
statements for the fiscal year ended December 31, 1999 are incorporated into
this statement of additional information by reference. The most recent annual
report to shareholders is attached to this statement of additional information.
Shares of the fund are offered to the general public only through investments in
Pioneer Independence Plans. The Pioneer Independence Plans prospectus includes
details of Pioneer Independence Plans, including creation and sales charges.
TABLE OF CONTENTS
Page
----
1. Fund History.............................................................2
2. Investment Policies, Risks and Restrictions..............................2
3. Management of the Fund..................................................20
4. Investment Adviser......................................................23
5. Principal Underwriter and Distribution Plan.............................25
6. Shareholder Servicing/Transfer Agent....................................27
7. Plan Custodian..........................................................27
8. Custodian...............................................................27
9. Independent Public Accountants..........................................28
10. Portfolio Transactions..................................................28
11. Description of Shares...................................................29
12. Sales Charges...........................................................31
13. Redeeming Shares........................................................31
14. Exchanging Shares.......................................................32
15. Pricing of Shares.......................................................34
16. Tax Status..............................................................35
17. Investment Results......................................................39
18. Financial Statements....................................................41
19. Appendix A - Annual Fee, Expense and Other Information..................42
20. Appendix B - Description of Short-Term Debt, Corporate Bond
and Preferred Stock Ratings.............................................45
21. Appendix C - Performance Statistics.....................................52
22. Appendix D - Other Pioneer Information..................................67
<PAGE>
1. FUND HISTORY
The fund is a diversified open-end management investment company organized as a
Delaware business trust on December 8, 1997.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectus presents the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectus and provides additional information on the fund's investment
policies or restrictions. Restrictions or policies stated as a maximum
percentage of the fund's assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable (other than the
limitations on borrowing and illiquid securities). Accordingly, any later
increase or decrease resulting from a change in values, net assets or other
circumstances will not be considered in determining whether the investment
complies with the fund's restrictions and policies.
Primary Investments
Under normal circumstances, the fund invests at least 80% of its total assets in
common stocks and other equity investments described in the prospectuses.
Illiquid Securities
The fund will not invest more than 15% of its net assets in illiquid and other
securities that are not readily marketable. Repurchase agreements maturing in
more than seven days will be included for purposes of the foregoing limit.
Securities subject to restrictions on resale under the Securities Act of 1933,
as amended (the "1933 Act"), are considered illiquid unless they are eligible
for resale pursuant to Rule 144A or another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Pioneer
Investment Management, Inc. ("Pioneer"), the fund's investment adviser. Pioneer
determines the liquidity of Rule 144A and other restricted securities according
to procedures adopted by the Board of Trustees. The Board of Trustees monitors
Pioneer's application of these guidelines and procedures. The inability of the
fund to dispose of illiquid investments readily or at reasonable prices could
impair the fund's ability to raise cash for redemptions or other purposes. If
the fund sold restricted securities other than pursuant to an exception from
registration under the 1933 Act such as Rule 144A, it may be deemed to be acting
as an underwriter and subject to liability under the 1933 Act.
Debt Securities Selection
In selecting fixed income securities for the fund, Pioneer gives primary
consideration to the fund's investment objective, the attractiveness of the
market for debt securities given Pioneer's outlook for the equity markets and
the fund's liquidity requirements. Once Pioneer determines to allocate a portion
of the fund's assets to debt securities, Pioneer generally focuses on short-term
instruments to provide liquidity and may invest in a range of fixed income
securities if the fund is investing in such instruments for income or capital
gains. Pioneer selects individual securities based on broad economic factors and
issuer specific factors including the terms of the securities (such as yields
compared to U.S. Treasuries or comparable issues), liquidity and rating, sector
and issuer diversification.
2
<PAGE>
Convertible Debt Securities
The fund may invest in convertible debt securities which are debt obligations
convertible at a stated exchange rate or formula into common stock or other
equity securities of or owned by the issuer. Convertible securities rank senior
to common stocks in an issuer's capital structure and consequently may be of
higher quality and entail less risk than the issuer's common stock. As with all
debt securities, the market values of convertible securities tend to increase
when interest rates decline and, conversely, tend to decline when interest rates
increase.
Short-Term Investments
For temporary defensive or cash management purposes, the fund may invest in all
types of short-term investments including, but not limited to, corporate
commercial paper and other short-term commercial obligations issued by domestic
companies; obligations (including certificates of deposit, time deposits, demand
deposits and bankers' acceptances) of banks located in the U.S.; obligations
issued or guaranteed by the U.S. government or its agencies or
instrumentalities; and repurchase agreements.
Debt Securities Rating Criteria
Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other
nationally recognized securities rating organizations. Debt securities rated BBB
are considered medium grade obligations with speculative characteristics, and
adverse economic conditions or changing circumstances may weaken the issuer's
ability to pay interest and repay principal. If the rating of an investment
grade debt security falls below investment grade, Pioneer will consider if any
action is appropriate in light of the fund's investment objective and policies.
Below investment grade debt securities are those rated "BB" and below by
Standard & Poor's or the equivalent rating of other nationally recognized
securities rating organizations. See Appendix B for a description of rating
categories. The fund may invest in debt securities rated "C" or better.
Below investment grade debt securities or comparable unrated securities are
commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments.
Changes in economic conditions are more likely to lead to a weakened capacity to
make principal payments and interest payments. The amount of junk bond
securities outstanding has proliferated as an increasing number of issuers have
used junk bonds for corporate financing. An economic downturn could severely
affect the ability of highly leveraged issuers to service their debt obligations
or to repay their obligations upon maturity. Factors having an adverse impact on
the market value of lower quality securities will have an adverse effect on the
fund's net asset value to the extent that it invests in such securities. In
addition, the fund may incur additional expenses to the extent it is required to
seek recovery upon a default in payment of principal or interest on its
portfolio holdings.
The secondary market for junk bond securities may not be as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the fund's ability to dispose of a particular security when
necessary to meet its liquidity needs. Under adverse market or economic
conditions, the secondary market for junk bond securities could contract
further, independent of any specific adverse changes in the condition of a
particular issuer. As a result, the fund could find it more
3
<PAGE>
difficult to sell these securities or may be able to sell the securities only at
prices lower than if such securities were widely traded. Prices realized upon
the sale of such lower rated or unrated securities, under these circumstances,
may be less than the prices used in calculating the fund's net asset value.
Since investors generally perceive that there are greater risks associated with
lower quality debt securities of the type in which the fund may invest a portion
of its assets, the yields and prices of such securities may tend to fluctuate
more than those for higher rated securities. In the lower quality segments of
the debt securities market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced manner than do changes in
higher quality segments of the debt securities market, resulting in greater
yield and price volatility.
Lower rated and comparable unrated debt securities tend to offer higher yields
than higher rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers. However, lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities. Pioneer will attempt to reduce these risks through portfolio
diversification and by analysis of each issuer and its ability to make timely
payments of income and principal, as well as broad economic trends and corporate
developments.
Risks of Non-U.S. Investments
To the extent that the fund invests in the securities of non-U.S. issuers, those
investments involve considerations and risks not typically associated with
investing in the securities of issuers in the U.S. These risks are heightened
with respect to investments in countries with emerging markets and economies.
The risks of investing in securities of non-U.S. issuers or issuers with
significant exposure to non-U.S. markets may be related, among other things, to
(i) differences in size, liquidity and volatility of, and the degree and manner
of regulation of, the securities markets of certain non-U.S. markets compared to
the securities markets in the U.S.; (ii) economic, political and social factors;
and (iii) foreign exchange matters, such as restrictions on the repatriation of
capital, fluctuations in exchange rates between the U.S. dollar and the
currencies in which the fund's portfolio securities are quoted or denominated,
exchange control regulations and costs associated with currency exchange. The
political and economic structures in certain countries, particularly emerging
markets, are expected to undergo significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of more developed countries. Unanticipated political or social
developments may affect the values of the fund's investments in such countries.
The economies and securities and currency markets of many emerging markets have
experienced significant disruption and declines. There can be no assurances that
these economic and market disruptions will not continue.
Non-U.S. Securities Markets and Regulations. There may be less publicly
available information about non-U.S. markets and issuers than is available with
respect to U.S. securities and issuers. Non-U.S. companies generally are not
subject to accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The trading
markets for most non-U.S. securities are generally less liquid and subject to
greater price volatility than the markets for comparable securities in the U.S.
The markets for securities in certain emerging markets are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in certain non-U.S. markets, including emerging market countries, may
not be able to absorb, without price disruptions, a significant increase in
trading volume or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and arbitrage activities are
generally less extensive in such
4
<PAGE>
markets, which may contribute to increased volatility and reduced liquidity. The
less liquid a market, the more difficult it may be for the fund to price its
portfolio securities accurately or to dispose of such securities at the times
determined by Pioneer to be appropriate. The risks associated with reduced
liquidity may be particularly acute in situations in which the fund's operations
require cash, such as in order to meet redemptions and to pay its expenses.
Economic, Political and Social Factors. Certain countries, including emerging
markets, may be subject to a greater degree of economic, political and social
instability than is the case in the U.S. and Western European countries. Such
instability may result from, among other things: (i) authoritarian governments
or military involvement in political and economic decision making; (ii) popular
unrest associated with demands for improved economic, political and social
conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial disaffection and conflict. Such
economic, political and social instability could significantly disrupt the
financial markets in such countries and the ability of the issuers in such
countries to repay their obligations. Investing in emerging market countries
also involves the risk of expropriation, nationalization, confiscation of assets
and property or the imposition of restrictions on foreign investments and on
repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation in any emerging country, the fund could
lose its entire investment in that country.
Certain emerging market countries restrict or control foreign investment in
their securities markets to varying degrees. These restrictions may limit the
fund's investment in those markets and may increase the expenses of the fund. In
addition, the repatriation of both investment income and capital from certain
markets is subject to restrictions such as the need for certain governmental
consents. Even where there is no outright restriction on repatriation of
capital, the mechanics of repatriation may affect certain aspects of the fund's
operation.
Economies in individual countries may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross domestic product, rates of
inflation, currency valuation, capital reinvestment, resource self-sufficiency
and balance of payments positions. Many countries have experienced substantial,
and in some cases extremely high, rates of inflation for many years. Inflation
and rapid fluctuations in inflation rates have had, and may continue to have,
very negative effects on the economies and securities markets of certain
emerging countries.
Economies in emerging market countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, affected adversely by economic conditions in the countries with
which they trade.
Currency Risks. The value of the securities quoted or denominated in non-U.S.
currencies may be adversely affected by fluctuations in the relative currency
exchange rates and by exchange control regulations. The fund's investment
performance may be negatively affected by a devaluation of a currency in which
the fund's investments are quoted or denominated. Further, the fund's investment
performance may be significantly affected, either positively or negatively, by
currency exchange rates because the U.S. dollar value of securities quoted or
denominated in another currency will increase or decrease in response to changes
in the value of such currency in relation to the U.S. dollar.
5
<PAGE>
Custodian Services and Related Investment Costs. Custodial services and other
costs relating to investment in international securities markets generally are
more expensive than in the U.S. Such markets have settlement and clearance
procedures that differ from those in the U.S. In certain markets there have been
times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the fund to make intended securities purchases due to settlement
problems could cause the fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the fund due to a subsequent decline in value of the
portfolio security or could result in possible liability to the fund. In
addition, security settlement and clearance procedures in some emerging
countries may not fully protect the fund against loss or theft of its assets.
Withholding and Other Taxes. The fund will be subject to taxes, including
withholding taxes, on income (possibly including, in some cases, capital gains)
that are or may be imposed by certain countries with respect to the fund's
investments in such countries. These taxes will reduce the return achieved by
the fund. Treaties between the U.S. and such countries may not be available to
reduce the otherwise applicable tax rates.
Economic Monetary Union (EMU). On January 1, 1999, 11 European countries
adopted a single currency - the Euro. The conversion to the Euro is being phased
in over a three-year period. During this time, valuation, systems and other
operational problems may occur in connection with the fund's investments quoted
in the Euro. For participating countries, EMU will mean sharing a single
currency and single official interest rate and adhering to agreed upon limits on
government borrowing. Budgetary decisions will remain in the hands of each
participating country but will be subject to each country's commitment to avoid
"excessive deficits" and other more specific budgetary criteria. A European
Central Bank is responsible for setting the official interest rate to maintain
price stability within the Euro zone.
EMU is driven by the expectation of a number of economic benefits, including
lower transaction costs, reduced exchange risk, greater competition, and a
broadening and deepening of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty may increase the
volatility of European markets.
Real Estate Investment Trusts ("REITs") and Associated Risk Factors
REITs are pooled investment vehicles which invest primarily in income producing
real estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have appreciated
in value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive income from the collection of interest payments. REITs are
not taxed on income distributed to shareholders provided they comply with the
applicable requirements of the Internal Revenue Code of 1986, as amended (the
"Code"). The fund will indirectly bear its proportionate share of any management
and other expenses paid by REITs in which it invests in addition to the expenses
paid by the fund. Debt securities issued by REITs, for the most part, are
general and unsecured obligations and are subject to risks associated with
REITs.
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Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. An equity REIT
may be affected by changes in the value of the underlying properties owned by
the REIT. A mortgage REIT may be affected by changes in interest rates and the
ability of the issuers of its portfolio mortgages to repay their obligations.
REITs are dependent upon the skills of their managers and are not diversified.
REITs are generally dependent upon maintaining cash flows to repay borrowings
and to make distributions to shareholders and are subject to the risk of default
by lessees or borrowers. REITs whose underlying assets are concentrated in
properties used by a particular industry, such as health care, are also subject
to risks associated with such industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. If the REIT invests in adjustable rate mortgage loans the interest
rates on which are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in market interest
rates. This causes the value of such investments to fluctuate less dramatically
in response to interest rate fluctuations than would investments in fixed rate
obligations.
REITs may have limited financial resources, may trade less frequently and in a
limited volume and may be subject to more abrupt or erratic price movements than
larger company securities. Historically REITs have been more volatile in price
than the larger capitalization stocks included in Standard & Poor's 500 Stock
Index (the "S&P 500").
Other Investment Companies
The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may not acquire the
securities of other domestic or non-U.S. investment companies if, as a result,
(i) more than 10% of the fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the fund, or (iii) more than 5% of the fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The fund will not invest in other investment companies for
which Pioneer or any of its affiliates act as an investment adviser or
distributor.
The fund, as a holder of the securities of other investment companies, will bear
its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
fund's own operations.
Investments in Depositary Receipts. The fund may hold securities of non-U.S.
issuers in the form of American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other
similar instruments or other securities convertible into securities eligible
issuers. Generally, ADRs in registered form are designed for use in U.S.
securities markets, and EDRs and GDRs and other similar global instruments in
bearer form are designed for use in non-U.S. securities markets.
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ADRs are denominated in U.S. dollars and represent an interest in the right to
receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent
bank. ADRs do not eliminate all the risk inherent in investing in the securities
of non-U.S. issuers. However, by investing in ADRs rather than directly in
equity securities of non-U.S. issuers, the fund will avoid currency risks during
the settlement period for either purchases or sales. EDRs and GDRs are not
necessarily denominated in the same currency as the underlying securities which
they represent. For purposes of the fund's investment policies, investments in
ADRs, GDRs and similar instruments will be deemed to be investments in the
underlying equity securities of non-U.S. issuers. The fund may acquire
depositary receipts from banks that do not have a contractual relationship with
the issuer of the security underlying the depositary receipt to issue and secure
such depositary receipt. To the extent the fund invests in such unsponsored
depositary receipts there may be an increased possibility that the fund may not
become aware of events affecting the underlying security and thus the value of
the related depositary receipt. In addition, certain benefits (i.e., rights
offerings) which may be associated with the security underlying the depositary
receipt may not inure to the benefit of the holder of such depositary receipt.
Repurchase Agreements
The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with the difference being income to the fund. The Board of
Trustees reviews and monitors the creditworthiness of any institution which
enters into a repurchase agreement with the fund. The counterparty's obligations
under the repurchase agreement are collateralized with U.S. Treasury and/or
agency obligations with a market value of not less than 100% of the obligations,
valued daily. Collateral is held by the fund's custodian in a segregated,
safekeeping account for the benefit of the fund. Repurchase agreements afford
the fund an opportunity to earn income on temporarily available cash at low
risk. In the event of commencement of bankruptcy or insolvency proceedings with
respect to the seller of the security before repurchase of the security under a
repurchase agreement, the fund may encounter delay and incur costs before being
able to sell the security. Such a delay may involve loss of interest or a
decline in price of the security. If the court characterizes the transaction as
a loan and the fund has not perfected a security interest in the security, the
fund may be required to return the security to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, the
fund would be at risk of losing some or all of the principal and interest
involved in the transaction.
Short Sales Against the Box
The fund may sell securities "short against the box." A short sale involves the
fund borrowing securities from a broker and selling the borrowed securities. The
fund has an obligation to return securities identical to the borrowed securities
to the broker. In a short sale against the box, the fund at all times owns an
equal amount of the security sold short or securities convertible into or
exchangeable for, with or without payment of additional consideration, an equal
amount of the security sold short. The fund intends to use short sales against
the box to hedge. For example, when the fund believes that the price of a
current portfolio security may decline, the fund may use a short sale against
the box to lock in a sale price for a security rather than selling the security
immediately. In such a case, any future losses in the fund's long position
should be offset by a gain in the short position and, conversely, any gain in
the long position should be reduced by a loss in the short position.
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If the fund effects a short sale against the box at a time when it has an
unrealized gain on the security, it may be required to recognize that gain as if
it had actually sold the security (a "constructive sale") on the date it effects
the short sale. However, such constructive sale treatment may not apply if the
fund closes out the short sale with securities other than the appreciated
securities held at the time of the short sale provided that certain other
conditions are satisfied. Uncertainty regarding certain tax consequences of
effecting short sales may limit the extent to which the fund may make short
sales against the box.
Asset Segregation
The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the fund's
portfolio. If the fund enters into a transaction requiring segregation, such as
a forward commitment, the custodian or Pioneer will segregate liquid assets in
an amount required to comply with the 1940 Act. Such segregated assets will be
valued at market daily. If the aggregate value of such segregated assets
declines below the aggregate value required to satisfy the 1940 Act, additional
liquid assets will be segregated.
When-Issued and Delayed Delivery Securities
The fund may purchase securities, including U.S. government securities, on a
when-issued basis or may purchase or sell securities for delayed delivery. In
such transactions, delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The fund will
not earn income on these securities until delivered. The purchase of securities
on a when-issued or delayed delivery basis involves the risk that the value of
the securities purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices available in
the market on the delivery date may be greater than those obtained in the sale
transaction. When-issued and delayed delivery transactions will be fully
collateralized by segregated liquid assets. See "Asset Segregation."
Portfolio Turnover
It is the policy of the fund not to engage in trading for short-term profits
although portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the fund. See Appendix A for the fund's
annual portfolio turnover rate.
Foreign Currency Transactions
The fund may engage in foreign currency transactions. These transactions may be
conducted at the prevailing spot rate for purchasing or selling currency in the
foreign exchange market. The fund also has authority to enter into forward
foreign currency exchange contracts involving currencies of the different
countries in which the fund invests as a hedge against possible variations in
the foreign exchange rates between these currencies and the U.S. dollar. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the contract.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the fund, accrued
in connection with the purchase and sale of its portfolio securities quoted in
foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the fund will be engaged in
hedging activities when adverse exchange rate movements
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occur. The fund will not attempt to hedge all of its foreign portfolio positions
and will enter into such transactions only to the extent, if any, deemed
appropriate by Pioneer.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the fund to hedge against a devaluation that is so generally
anticipated that the fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency, if Pioneer determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include entering
into a forward transaction involving two foreign currencies, using one foreign
currency as a proxy for the U.S. dollar to hedge against variations in the other
foreign currency, if Pioneer determines that there is a pattern of correlation
between the proxy currency and the U.S. dollar.
The cost to the fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the size of the contract, the length of
the contract period, differences in interest rates between the two currencies
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward contracts to
protect the value of the fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which the fund can
achieve at some future point in time. The precise projection of short-term
currency market movements is not possible, and short-term hedging provides a
means of fixing the U.S. dollar value of only a portion of the fund's foreign
assets.
While the fund will enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. While
the fund may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the fund than if it had
not engaged in any such transactions. Moreover, there may be imperfect
correlation between the fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by the
fund. Such imperfect correlation may cause the fund to sustain losses which will
prevent the fund from achieving a complete hedge or expose the fund to risk of
foreign exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer
less protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the fund of unrealized profits or force the fund to cover its
commitments for purchase or resale, if any, at the current market price.
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If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
Options on Foreign Currencies
The fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that of transactions in forward contracts. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are quoted or denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains constant. In an
attempt to protect against such decreases in the value of portfolio securities,
the fund may purchase put options on the foreign currency. If the value of the
currency declines, the fund will have the right to sell such currency for a
fixed amount of dollars which exceeds the market value of such currency. This
would result in a gain that may offset, in whole or in part, the negative effect
of currency depreciation on the value of the fund's securities quoted or
denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected for those
securities to be acquired, thereby increasing the cost of such securities, the
fund may purchase call options on such currency. If the value of such currency
increases, the purchase of such call options would enable the fund to purchase
currency for a fixed amount of dollars which is less than the market value of
such currency. Such a purchase would result in a gain that may offset, at least
partially, the effect of any currency related increase in the price of
securities the fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
The fund may also write options on foreign currencies for hedging purposes. For
example, if the fund anticipated a decline in the dollar value of securities
quoted or denominated in a foreign currency because of declining exchange rates,
it could, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
partially offset by the amount of the premium received by the fund.
Similarly, the fund could write a put option on the relevant currency, instead
of purchasing a call option, to hedge against an anticipated increase in the
dollar cost of securities to be acquired. If exchange rates move in the manner
projected, the put option will expire unexercised and allow the fund to offset
such increased cost up to the amount of the premium. However, as in the case of
other types of options transactions, the writing of a foreign currency option
will constitute only a partial hedge up to the amount of the premium, only if
rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the fund would be required
to purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the premium. As a result of writing options on foreign
currencies, the fund also may be required to forego all or a portion of the
benefits which might otherwise have been obtained from favorable movements in
currency exchange rates.
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A call option written on foreign currency by the fund is "covered" if the fund
owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency without additional
cash consideration. A call option is also covered if the fund holds a call on
the same foreign currency for the same principal amount as the call written
where the exercise price of the call held is (a) equal to or less than the
exercise price of the call written or (b) greater than the exercise price of the
call written if the amount of the difference is maintained by the fund in cash
or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the
option it has purchased or entering into an offsetting option. An
exchange-traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series. Although the
fund will generally purchase or write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time. For some options no secondary market on an exchange may exist. In such
event, it might not be possible to effect closing transactions in particular
options, with the result that the fund would have to exercise its options in
order to realize any profit and would incur transaction costs upon the sale of
underlying currencies pursuant to the exercise of put options. If the fund as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying currency (or
security quoted or denominated in that currency) until the option expires or it
delivers the underlying currency upon exercise.
The fund may also use options on currencies to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates of a different currency with a pattern of correlation. Cross
hedging may also include using a foreign currency as a proxy for the U.S.
dollar, if Pioneer determines that there is a pattern of correlation between
that currency and the U.S. dollar.
The fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by the fund.
Options on Securities and Securities Indices
The fund may purchase put and call options on any security in which it may
invest or options on any securities index based on securities in which it may
invest. The fund would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options it has purchased.
Writing Call and Put Options on Securities. A call option written by the fund
obligates the fund to sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the expiration
date. All call options written by the fund are covered, which means that the
fund will own the securities subject to the options as long as the options are
outstanding, or the fund will use the other methods described below. The fund's
purpose in writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, the fund may
forego the opportunity to profit from an increase in the market price of the
underlying security.
A put option written by the fund would obligate the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by the
fund would be covered, which means that the fund would have segregated assets
with a
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value at least equal to the exercise price of the put option. The purpose
of writing such options is to generate additional income for the fund. However,
in return for the option premium, the fund accepts the risk that it may be
required to purchase the underlying security at a price in excess of its market
value at the time of purchase.
Call and put options written by the fund will also be considered to be covered
to the extent that the fund's liabilities under such options are wholly or
partially offset by its rights under call and put options purchased by the fund.
In addition, a written call option or put may be covered by entering into an
offsetting forward contract and/or by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise, reduces the
fund's net exposure on its written option position.
Writing Call and Put Options on Securities Indices. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
The fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional consideration if cash in such
amount is segregated) upon conversion or exchange of other securities in its
portfolio. The fund may cover call and put options on a securities index by
segregating assets with a value equal to the exercise price.
Purchasing Call and Put Options. The fund would normally purchase call options
in anticipation of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle the fund, in
return for the premium paid, to purchase specified securities at a specified
price during the option period. The fund would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of the fund's securities. Put
options may also be purchased by the fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.
The fund may terminate its obligations under an exchange-traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated
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only by entering into an offsetting transaction with the counterparty to such
option. Such purchases are referred to as "closing purchase transactions."
Risks of Trading Options. There is no assurance that a liquid secondary market
on an options exchange will exist for any particular exchange-traded option, or
at any particular time. If the fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not be
able to sell the underlying securities or dispose of its segregated assets until
the options expire or are exercised. Similarly, if the fund is unable to effect
a closing sale transaction with respect to options it has purchased, it will
have to exercise the options in order to realize any profit and will incur
transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that exchange, if any, that had been issued by the OCC as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms.
The fund may purchase and sell both options that are traded on U.S. and non-U.S.
exchanges and options traded over the counter with broker-dealers who make
markets in these options. The ability to terminate over-the-counter options is
more limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations. Until such time as the staff of the Securities and Exchange
Commission (the "SEC") changes its position, the fund will treat purchased
over-the-counter options and all assets used to cover written over-the-counter
options as illiquid securities, except that with respect to options written with
primary dealers in U.S. government securities pursuant to an agreement requiring
a closing purchase transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the formula.
Transactions by the fund in options on securities and indices will be subject to
limitations established by each of the exchanges, boards of trade or other
trading facilities governing the maximum number of options in each class which
may be written or purchased by a single investor or group of investors acting in
concert. Thus, the number of options which the fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
Pioneer. An exchange, board of trade or other trading facility may order the
liquidations of positions found to be in excess of these limits, and it may
impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on Pioneer's ability to predict future
price fluctuations and the degree of correlation between the options and
securities markets.
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The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that cannot be reflected in the options
markets.
In addition to the risks of imperfect correlation between the fund's portfolio
and the index underlying the option, the purchase of securities index options
involves the risk that the premium and transaction costs paid by the fund in
purchasing an option will be lost. This could occur as a result of unanticipated
movements in the price of the securities comprising the securities index on
which the option is based.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or currency exchange rates or to
seek to increase total return, the fund may purchase and sell various kinds of
futures contracts, and purchase and write (sell) call and put options on any of
such futures contracts. The fund may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. government
securities), securities indices, non-U.S. currencies and other financial
instruments and indices. The fund will engage in futures and related options
transactions for bona fide hedging and non-hedging purposes as described below.
All futures contracts entered into by the fund are traded on U.S. exchanges or
boards of trade that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC") or on non-U.S. exchanges.
Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The fund can
purchase futures contracts on a non-U.S. currency to establish the price in U.S.
dollars of a security denominated in such currency that the fund has acquired or
expects to acquire.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities or currency will usually be
liquidated in this manner, the fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
Hedging Strategies. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the fund owns or proposes to
acquire. The fund may, for example, take a "short" position in the futures
15
<PAGE>
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or non-U.S. currency rates
that would adversely affect the value of the fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by the fund or securities with characteristics similar to those of the
fund's portfolio securities. Similarly, the fund may sell futures contracts in a
non-U.S. currency in which its portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of Pioneer, there is
a sufficient degree of correlation between price trends for the fund's portfolio
securities and futures contracts based on other financial instruments,
securities indices or other indices, the fund may also enter into such futures
contracts as part of its hedging strategies. Although under some circumstances
prices of securities in the fund's portfolio may be more or less volatile than
prices of such futures contracts, Pioneer will attempt to estimate the extent of
this volatility difference based on historical patterns and compensate for any
such differential by having the fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against price
changes affecting the fund's portfolio securities. When hedging of this
character is successful, any depreciation in the value of portfolio securities
will be substantially offset by appreciation in the value of the futures
position. On the other hand, any unanticipated appreciation in the value of the
fund's portfolio securities would be substantially offset by a decline in the
value of the futures position.
On other occasions, the fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
Options on Futures Contracts. The acquisition of put and call options on futures
contracts will give the fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of the fund's assets. By writing a call
option, the fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that the fund intends to purchase. However, the fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The fund will incur transaction costs in connection
with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
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Other Considerations. The fund will engage in futures and related options
transactions only for bona fide hedging or non-hedging purposes in accordance
with CFTC regulations which permit principals of an investment company
registered under the 1940 Act to engage in such transactions without registering
as commodity pool operators. The fund will determine that the price fluctuations
in the futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the fund or
which the fund expects to purchase. Except as stated below, the fund's futures
transactions will be entered into for traditional hedging purposes--i.e.,
futures contracts will be sold to protect against a decline in the price of
securities (or the currency in which they are denominated) that the fund owns,
or futures contracts will be purchased to protect the fund against an increase
in the price of securities (or the currency in which they are denominated) it
intends to purchase. As evidence of this hedging intent, the fund expects that
on 75% or more of the occasions on which it takes a long futures or option
position (involving the purchase of futures contracts), the fund will have
purchased, or will be in the process of purchasing, equivalent amounts of
related securities or assets denominated in the related currency in the cash
market at the time when the futures or option position is closed out. However,
in particular cases, when it is economically advantageous for the fund to do so,
a long futures position may be terminated or an option may expire without the
corresponding purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the fund to elect to comply with a different test, under
which the sum of the amounts of initial margin deposits on the fund's existing
non-hedging futures contracts and premiums paid for options on futures entered
into for non-hedging purposes (net of the amount the positions are "in the
money") would not exceed 5% of the market value of the fund's total assets. The
fund will engage in transactions in futures contracts and related options only
to the extent such transactions are consistent with the requirements of the Code
for maintaining its qualification as a regulated investment company for federal
income tax purposes.
Futures contracts and related options involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the fund to
purchase securities or currencies, require the fund to segregate assets to cover
such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and the
fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of non-U.S.
securities because currency movements impact the value of different securities
in differing degrees.
Warrants
The fund may invest in warrants, which are securities permitting, but not
obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer. As a result, an investment in
warrants may be considered more speculative than
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certain other types of investments. In addition, the value of a warrant does not
necessarily change with the value of the underlying securities, and a warrant
expires worthless if it is not exercised on or prior to its expiration date.
Preferred Shares
The fund may invest in preferred shares of beneficial interest of trust
instruments. Preferred shares are equity securities, but they have many
characteristics of fixed income securities, such as a fixed dividend payment
rate and/or a liquidity preference over the issuer's common shares. However,
because preferred shares are equity securities, they may be more susceptible to
risks traditionally associated with equity investments than the fund's fixed
income securities.
Lending of Portfolio Securities
The fund may lend portfolio securities to member firms of the New York Stock
Exchange (the "Exchange") under agreements which require that the loans be
secured continuously by collateral in cash, cash equivalents or U.S. Treasury
bills maintained on a current basis at an amount at least equal to the market
value of the securities loaned. The fund continues to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned as well as
the benefit of an increase and the detriment of any decrease in the market value
of the securities loaned and would also receive compensation based on investment
of the collateral. The fund would not, however, have the right to vote any
securities having voting rights during the existence of the loan, but would call
the loan in anticipation of an important vote to be taken among holders of the
securities or of the giving or withholding of consent on a material matter
affecting the investment.
As with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The fund will lend portfolio securities only to firms that have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 33 1/3% of the value of the fund's total assets.
Investment Restrictions
The fund does not intend to enter into any reverse repurchase agreements or
dollar rolls, lend portfolio securities or invest in securities index put and
call warrants, as described in fundamental investment restrictions (1), (2) and
(6), during the current fiscal year. In addition, the fund will not purchase
securities during the current fiscal year at any time that outstanding
borrowings exceed 5% of the fund's total assets.
Fundamental Investment Restrictions. The fund has adopted certain additional
investment restrictions which may not be changed without the affirmative vote of
the holders of a "majority of the outstanding voting securities" (as defined in
the 1940 Act) of the fund. For this purpose, a majority of the outstanding
shares of the fund means the vote of the lesser of:
1. 67% or more of the shares represented at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or by proxy, or
2. more than 50% of the outstanding shares of the fund.
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The fund may not:
(1) Issue senior securities, except as permitted by the fund's borrowing,
lending and commodity restrictions and, for purposes of this restriction, the
issuance of shares of beneficial interest in multiple classes or series, the
purchase or sale of options, futures contracts and options on futures contracts,
forward commitments, forward foreign exchange contracts, repurchase agreements,
fully covered reverse repurchase agreements, dollar rolls, swaps and any other
financial transaction entered into pursuant to the fund's investment policies as
described in the prospectus and this statement of additional information and in
accordance with applicable SEC pronouncements, as well as the pledge, mortgage
or hypothecation of the fund's assets within the meaning of the fundamental
investment restriction regarding pledging, are not deemed to be senior
securities.
(2) Borrow money, except from banks as a temporary measure to facilitate the
meeting of redemption requests or for extraordinary emergency purposes and
except pursuant to reverse repurchase agreements and dollar rolls and then only
in amounts not to exceed 33 1/3 of the fund's total assets (including the amount
borrowed) taken at market value. The fund will not use leverage to attempt to
increase income.
(3) Guarantee the securities of any other company, or mortgage, pledge,
hypothecate or assign or otherwise encumber as security for indebtedness its
securities or receivables in an amount exceeding the amount of the borrowing
thereby secured.
(4) Act as an underwriter, except as it may be deemed to be an underwriter in a
sale of restricted securities held in its portfolio.
(5) Invest in real estate, commodities or commodity contracts, except that the
fund may invest in securities of issuers that invest in real estate or interests
therein, securities that are secured by real estate or interests therein,
financial futures contracts and related options and in any other financial
instruments which may be deemed to be commodities or commodity contracts in
which the fund is not prohibited from investing by the Commodity Exchange Act
and the rules and regulations thereunder.
(6) Make loans, except by the purchase of debt obligations in which the fund may
invest consistent with its investment policies, by entering into repurchase
agreements or through the lending of portfolio securities, in each case only to
the extent permitted by the prospectus and this statement of additional
information.
(7) With respect to 75% of its total assets, purchase securities of an issuer
(other than the U.S. government, its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the fund's total assets,
taken at market value, to be invested in the securities of such issuer, or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund.
It is the fundamental policy of the fund not to concentrate its investments in
securities of companies in any particular industry. Following the current
opinion of the staff of the SEC, the fund's investments are
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concentrated in a particular industry if such investments aggregate 25% or more
of the fund's total assets. The fund's policy does not apply to investments in
U.S. government securities.
3. MANAGEMENT OF THE FUND
The fund's Board of Trustees provides broad supervision over the affairs of the
fund. The officers of the fund are responsible for the fund's operations. The
Trustees and executive officers of the fund are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the fund within the meaning of the
1940 Act.
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group, Inc.
("PGI"); Chairman and a Director of Pioneer, Pioneer Funds Distributor, Inc.
("PFD"), Pioneer Goldfields Limited, Teberebie Goldfields Limited, Closed
Joint-Stock Company "Amgun-Forest," Closed Joint-Stock Company "Udinskoye" and
Closed Joint-Stock Company "Tas-Yurjah" Mining Company; Director of Pioneer Real
Estate Advisors, Inc. ("PREA"), Pioneer Forest, Inc., Pioneer Management
(Ireland) Ltd. ("PMIL"), Pioneer First Investment Fund and Closed Joint-Stock
Company "Forest-Starma"; President and Director of Pioneer International Corp.
("PIntl"), Pioneer First Russia, Inc. and Pioneer Omega, Inc. ("Pioneer Omega");
Member of the Supervisory Board of Pioneer Fonds Marketing, GmbH, Pioneer First
Polish Investment Fund Joint Stock Company, S.A. ("Pioneer First Polish"),
Pioneer Czech Investment Company, A.S. ("Pioneer Czech") and Pioneer Universal
Pension Fund Company; Chairman, President and Trustee of all of the Pioneer
mutual funds; Director of Pioneer Global Equity Fund Plc, Pioneer Global Bond
Fund Plc, Pioneer Euro Reserve Fund Plc, Pioneer European Equity Fund Plc,
Pioneer Emerging Europe Fund Plc, Pioneer US Real Estate Fund Plc, Pioneer U.S.
Growth Fund Plc, Pioneer Diversified Income Fund Plc and Pioneer America Fund
Plc (collectively, the "Irish Funds"); and Of Counsel, Hale and Dorr LLP
(counsel to PGI and the fund).
MARY K. BUSH, Trustee, DOB: April 1948
4201 Cathedral Avenue, NW, Washington, DC 20016
President, Bush & Co. (international financial advisory firm); Director and/or
Trustee of Mortgage Guaranty Insurance Corporation, Hoover Institution, March of
Dimes, Wilberforce University, Texaco, Inc., Building One Services Corporation
and R.J. Reynolds Tobacco Holdings, Inc.; Advisory Board Member, Washington
Mutual Investors Fund (registered investment company); and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Road, Boston, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; University Professor, Boston
University; Director, Boston University Health Policy Institute, Boston
University Program for Health Care Entrepreneurship; Trustee, Boston Medical
Center; and Trustee of all of the Pioneer mutual funds.
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MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110, Little Deer Isle, ME 04650
Founding Director, The Winthrop Group, Inc. (consulting firm); Manager of
Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
formerly Professor of Operations Management and Management of Technology and
Associate Dean, Boston University School of Management; and Trustee of all of
the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus, George Washington University; Director, American
Productivity and Quality Center; Economic Consultant; and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, 26th Floor, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm); Trustee of
Boston Medical Center; Member of the Board of Governors of the Investment
Company Institute; Director, Organogenesis Inc. (tissue engineering company);
and Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President and a Director of
Pioneer and PFD; Director of Pioneering Services Corporation ("PSC"), PIntl,
PREA, Pioneer Omega, PMIL, Pioneer First Investment Fund and the Irish Funds;
Member of the Supervisory Board of Pioneer First Polish and Pioneer Czech; and
Executive Vice President and Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Of Counsel, Sullivan & Cromwell (law firm); Director, Dresdner RCM Global
Strategic Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc.
since 1995 (investment companies), AMVESCAP PLC (investment managers) since 1997
and ING American Insurance Holdings, Inc; Trustee, The Winthrop Focus Funds
(investment companies); and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of NUI
Corp. (energy sales, services and distribution); and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
ERIC W. RECKARD, Treasurer, DOB: June 1956
Executive Vice President, Chief Financial Officer and Treasurer of PGI since
June 1999; Treasurer of Pioneer, PFD, PSC, PIntl, PREA and Pioneer Omega since
June 1999; Vice President-Corporate Finance of PGI from February 1999 to June
1999; Manager of Business Planning and Internal Audit of PGI since September
1996; Manager of Fund Accounting of Pioneer since May 1994; and Treasurer of all
of the Pioneer mutual funds (Assistant Treasurer prior to June 1999).
JOSEPH P. BARRI, Secretary, DOB: August 1946
Corporate Secretary of PGI and most of its subsidiaries; Secretary of all of the
Pioneer mutual funds; and Partner, Hale and Dorr LLP.
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VINCENT NAVE, Assistant Treasurer, DOB: June 1945
Vice President-Fund Accounting, Administration and Custody Services of Pioneer
(Manager from September 1996 to February 1999); and Assistant Treasurer of all
of the Pioneer mutual funds since June 1999.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
Senior Vice President, General Counsel and Assistant Secretary of PGI since
1995; Assistant Secretary of Pioneer, certain other PGI subsidiaries and all of
the Pioneer mutual funds; and Assistant Clerk of PFD and PSC.
The business address of all officers is 60 State Street, Boston, Massachusetts
02109.
All of the outstanding capital stock of PFD, Pioneer and PSC is owned, directly
or indirectly, by PGI, a publicly owned Delaware corporation. Pioneer, the
fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds and manages the investments of certain institutional accounts.
The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.
Principal
Fund Name Investment Adviser Underwriter
Pioneer International Growth Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer World Equity Fund Pioneer PFD
Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Indo-Asia Fund Pioneer PFD
Pioneer Mid-Cap Value Fund Pioneer PFD
Pioneer Mid-Cap Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
Pioneer Small Company Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Micro-Cap Fund Pioneer PFD
Pioneer Balanced Fund Pioneer PFD
Pioneer Equity-Income Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer II Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Limited Maturity Bond Fund Pioneer PFD
Pioneer America Income Trust Pioneer PFD
Pioneer Bond Fund Pioneer PFD
Pioneer Tax-Free Income Fund Pioneer PFD
Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Strategic Income Fund Pioneer PFD
Pioneer Tax-Managed Fund Pioneer PFD
Pioneer High Yield Fund Pioneer PFD
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Pioneer Science & Technology Fund Pioneer PFD
Pioneer Interest Shares Pioneer Note 2
Pioneer Variable Contracts Trust Pioneer Note 3
Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of 15 separate portfolios designed to provide investment
vehicles for the variable annuity and variable life insurance contracts of
various insurance companies or for certain qualified pension plans.
Share Ownership
See Appendix A for annual information on the ownership of fund shares by the
Trustees, the fund's officers and owners in excess of 5% of shares of the fund.
Compensation of Officers and Trustees
The fund pays no salaries or compensation to any of its officers. The fund
compensates each Trustee who is not affiliated with PGI, Pioneer, PFD or PSC
with a base fee, a variable fee calculated on the basis of average net assets of
the fund, per meeting fees, and annual committee participation fees for each
committee member or chairperson that are based on percentages of his or her
aggregate annual fee. See the fee table in Appendix A.
4. INVESTMENT ADVISER
The fund has contracted with Pioneer to act as its investment adviser. Pioneer
is a wholly owned subsidiary of PGI. PGI is engaged in the financial services
business in the U.S. and other countries. Certain Trustees or officers of the
fund are also directors and/or officers of PGI and its subsidiaries (see
management biographies above).
As the fund's investment adviser, Pioneer provides the fund with investment
research, advice and supervision and furnishes an investment program for the
fund consistent with the fund's investment objective and policies, subject to
the supervision of the fund's Trustees. Pioneer determines what portfolio
securities will be purchased or sold, arranges for the placing of orders for the
purchase or sale of portfolio securities, selects brokers or dealers to place
those orders, maintains books and records with respect to the fund's securities
transactions, and reports to the Trustees on the fund's investments and
performance.
Under the terms of its contract with the fund, Pioneer pays all the operating
expenses, including executive salaries and the rental of office space, relating
to its services for the fund, with the exception of the following, which are to
be paid by the fund: (a) charges and expenses for fund accounting, pricing and
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appraisal services and related overhead, including, to the extent such services
are performed by personnel of Pioneer, or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed by
the fund; (d) issue and transfer taxes chargeable to the fund in connection with
securities transactions to which the fund is a party; (e) insurance premiums,
interest charges, dues and fees for membership in trade associations and all
taxes and corporate fees payable by the fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the fund and/or its shares with the SEC, state or
blue sky securities agencies and foreign countries, including the preparation of
prospectuses and statements of additional information for filing with the SEC;
(g) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies; (h) charges and expenses
of legal counsel to the fund and the Trustees; (i) any distribution fees paid by
the fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the
1940 Act; (j) compensation of those Trustees of the fund who are not affiliated
with or interested persons of Pioneer, the fund (other than as Trustees), PGI or
PFD; (k) the cost of preparing and printing share certificates; and (l) interest
on borrowed money, if any. In addition, the fund shall pay brokers' and
underwriting commissions chargeable to the fund in connection with securities
transactions to which the fund is a party. The Trustees' approval of and the
terms, continuance and termination of the management contract are governed by
the 1940 Act and the Investment Advisers Act of 1940, as applicable. Pursuant to
the management contract, Pioneer will not be liable for any error of judgment or
mistake of law or for any loss sustained by reason of the adoption of any
investment policy or the purchase, sale or retention of any securities on the
recommendation of Pioneer. Pioneer, however, is not protected against liability
by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under the management contract.
Advisory Fee. As compensation for its management services, the fund pays Pioneer
a fee at the annual rate of 0.75% of the fund's average daily net assets. This
fee is normally computed and accrued daily and paid monthly.
Administration Agreement. The fund has entered into an administration agreement
with Pioneer pursuant to which certain accounting and legal services which are
expenses payable by the fund under the management contract are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services. See Appendix A for fees the fund paid to Pioneer for
administration and related services.
Potential Conflict of Interest. The fund is managed by Pioneer which also serves
as investment adviser to other Pioneer mutual funds and private accounts with
investment objectives identical or similar to those of the fund. Securities
frequently meet the investment objectives of the fund, the other Pioneer mutual
funds and such private accounts. In such cases, the decision to recommend a
purchase to one fund or account rather than another is based on a number of
factors. The determining factors in most cases are the amount of securities of
the issuer then outstanding, the value of those securities and the market for
them. Other factors considered in the investment recommendations include other
investments which each fund or account presently has in a particular industry
and the availability of investment funds in each fund or account.
It is possible that at times identical securities will be held by more than one
fund and/or account.
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However, positions in the same issue may vary and the length of time that any
fund or account may choose to hold its investment in the same issue may likewise
vary. To the extent that more than one of the Pioneer mutual funds or a private
account managed by Pioneer seeks to acquire the same security at about the same
time, the fund may not be able to acquire as large a position in such security
as it desires or it may have to pay a higher price for the security. Similarly,
the fund may not be able to obtain as large an execution of an order to sell or
as high a price for any particular portfolio security if Pioneer decides to sell
on behalf of another account the same portfolio security at the same time. On
the other hand, if the same securities are bought or sold at the same time by
more than one fund or account, the resulting participation in volume
transactions could produce better executions for the fund. In the event more
than one account purchases or sells the same security on a given date, the
purchases and sales will normally be made as nearly as practicable on a pro rata
basis in proportion to the amounts desired to be purchased or sold by each
account. Although the other Pioneer mutual funds may have the same or similar
investment objectives and policies as the fund, their portfolios do not
generally consist of the same investments as the fund or each other, and their
performance results are likely to differ from those of the fund.
Personal Securities Transactions. The fund, Pioneer and PFD have adopted a code
of ethics under Rule 17j-1 of the 1940 Act which is applicable to officers,
trustees/directors and designated employees. The code permits such persons to
engage in personal securities transactions for their own accounts, including
securities that may be purchased or held by the fund, and is designed to
prescribe means reasonably necessary to prevent conflicts of interest from
arising in connection with personal securities transactions. The code is on
public file with and available from the SEC.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLAN
Principal Underwriter
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is an
indirect wholly owned subsidiary of PGI.
The fund entered into an underwriting agreement with PFD which provides that PFD
will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed or compensated by the fund
under the distribution plan (discussed below). PFD bears all expenses it incurs
in providing services under the underwriting agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution-related services performed for the fund. PFD also pays certain
expenses in connection with the distribution of the fund's shares, including the
cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
non-U.S. countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.
The fund will not generally issue fund shares for consideration other than cash.
At the fund's sole discretion, however, it may issue fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.
The redemption price of shares of beneficial interest of the fund may, at
Pioneer's discretion, be paid in cash or portfolio securities. The fund has,
however, elected to be governed by Rule 18f-1 under the
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1940 Act pursuant to which the fund is obligated to redeem shares solely in cash
up to the lesser of $250,000 or 1% of the fund's net asset value during any
90-day period for any one shareholder. Should the amount of redemptions by any
shareholder exceed such limitation, the fund will have the option of redeeming
the excess in cash or portfolio securities. In the latter case, the securities
are taken at their value employed in determining the fund's net asset value. A
shareholder whose shares are redeemed in-kind may incur brokerage charges in
selling the securities received in-kind. The selection of such securities will
be made in such manner as the Board of Trustees deems fair and reasonable.
Distribution Plan
The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to distribution of its shares (the "Plan"), pursuant to
which certain distribution and service fees are paid to PFD. Because of the
Plan, long-term shareholders may pay more than the economic equivalent of the
maximum sales charge permitted by the National Association of Securities
Dealers, Inc. (the "NASD") regarding investment companies.
Pursuant to the Plan the fund reimburses PFD for its actual expenditures to
finance any activity primarily intended to result in the sale of shares or to
provide services to shareholders of the Pioneer Independence Plans, provided the
categories of expenses for which reimbursement is made are approved by the Board
of Trustees. The Board of Trustees has approved the following categories of
expenses that may be reimbursed under the Plan: (i) a service fee to be paid to
qualified broker-dealers in an amount not to exceed 0.25% per annum of the
fund's daily net assets; and (ii) reimbursement to PFD for expenses incurred in
providing services to shareholders, including the Pioneer Independence Plans,
and supporting broker-dealers in their efforts to provide such services. The
expenses of the fund pursuant to the Plan are accrued daily at a rate which may
not exceed the annual rate of 0.25% of the fund's average daily net assets
attributable to shares that have been outstanding for more than 12 months.
Distribution expenses of PFD are expected to substantially exceed the
distribution fees paid by the fund in a given year. Service fees are not paid to
dealers on assets of the fund that are not acquired through the purchase of a
Pioneer Independence Plan.
The Plan does not provide for the carryover of reimbursable expenses beyond 12
months from the time the fund is first invoiced for an expense. The limited
carryover provision in the Plan may result in an expense invoiced to the fund in
one fiscal year being paid in the subsequent fiscal year and thus being treated
for purposes of calculating the maximum expenditures of the fund as having been
incurred in the subsequent fiscal year. In the event of termination or
non-continuance of the Plan, the fund has 12 months to reimburse any expense
which it incurs prior to such termination or non-continuance, provided that
payments by the fund during such 12-month period shall not exceed 0.25% of the
fund's average daily net assets during such period. See Appendix A for the
amount, if any, of carryover of distribution expenses as of the end of the most
recent calendar year.
In accordance with the terms of the Plan, PFD provides to the fund for review by
the Trustees a quarterly written report of the amounts expended under the Plan
and the purposes for which such expenditures were made. In the Trustees'
quarterly review of the Plan, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plan provides.
No interested person of the fund, nor any Trustee of the fund who is not an
interested person of the fund, has any direct or indirect financial interest in
the operation of the Plan except to the extent that PFD and
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certain of its employees may be deemed to have such an interest as a result of
receiving a portion of the amounts expended under the Plan by the fund and
except to the extent certain officers may have an interest in PFD's ultimate
parent, PGI.
The Plan's adoption, terms, continuance and termination are governed by Rule
12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plan will benefit the fund and its current and
future shareholders. The Plan may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the fund
affected thereby, and material amendments of the Plan must also be approved by
the Trustees as provided in Rule 12b-1.
See Appendix A for fund expenses under the Plan for the most recently completed
fiscal year.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PSC, 60 State Street, Boston, Massachusetts 02109,
to act as shareholder servicing and transfer agent for the fund.
Under the terms of its contract with the fund, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the fund; (ii) distributing dividends and capital gains
associated with the fund's portfolio; and (iii) maintaining account records and
responding to shareholder inquiries.
PSC receives an annual fee of $25.25 for each shareholder account from the fund
as compensation for the services described above. PSC is also reimbursed by the
fund for its cash out-of-pocket expenditures. The fund may compensate entities
which have agreed to provide certain sub-accounting services such as specific
transaction processing and recordkeeping services. Any such payments by the fund
would be in lieu of the per account fee which would otherwise be paid by the
fund to PSC.
7. PLAN CUSTODIAN
Shares of the fund are offered to the general public and may only be acquired by
the general public through investments in Pioneer Independence Plans (the
"Plans"). The fund will voluntarily pay certain custodial fees to State Street
Bank and Trust Company, custodian for the Plans, which would otherwise be
charged to the Plans or the Planholders, or deducted from fund dividends and/or
distributions. Although there is no current intention to do so, the fund and the
sponsor of the Plans, PFD, have reserved the future right to cause deductions
against the Plans, the Planholders, and fund dividends and/or distributions to
compensate State Street Bank and Trust Company for its custodial services to the
Plans.
8. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is
the custodian of the fund's assets. The custodian's responsibilities include
safekeeping and controlling the fund's cash and securities, handling the receipt
and delivery of securities, and collecting interest and dividends on the fund's
investments.
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9. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110, the
fund's independent public accountants, provides audit services, tax return
review, and assistance and consultation with respect to the preparation of
filings with the SEC.
10. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the fund by Pioneer pursuant to authority contained in the fund's management
contract. Pioneer seeks to obtain the best execution on portfolio trades. The
price of securities and any commission rate paid are always factors, but
frequently not the only factors, in judging best execution. In selecting brokers
or dealers, Pioneer considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security to be purchased or sold; the execution efficiency,
settlement capability and financial condition of the dealer; the dealer's
execution services rendered on a continuing basis; and the reasonableness of any
dealer spreads. Transactions in non-U.S. equity securities are executed by
broker-dealers in non-U.S. countries in which commission rates may not be
negotiable (as such rates are in the U.S.).
Pioneer may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts managed
by Pioneer. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Pioneer determines in good faith that the
amount of commissions charged by a broker-dealer is reasonable in relation to
the value of the brokerage and research services provided by such broker, the
fund may pay commissions to such broker-dealer in an amount greater than the
amount another firm may charge. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analyses, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). Pioneer maintains a listing of broker-dealers who provide such
services on a regular basis. However, because many transactions on behalf of the
fund and other investment companies or accounts managed by Pioneer are placed
with broker-dealers (including broker-dealers on the listing) without regard to
the furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such dealers solely because such services were
provided. Pioneer believes that no exact dollar value can be calculated for such
services.
The research received from broker-dealers may be useful to Pioneer in rendering
investment management services to the fund as well as other investment companies
or other accounts managed by Pioneer, although not all such research may be
useful to the fund. Conversely, such information provided by brokers or dealers
who have executed transaction orders on behalf of such other accounts may be
useful to Pioneer in carrying out its obligations to the fund. The receipt of
such research has not reduced Pioneer's normal independent research activities;
however, it enables Pioneer to avoid the additional expenses which might
otherwise be incurred if it were to attempt to develop comparable information
through its own staff.
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In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the fund as well as shares of other investment companies managed by Pioneer.
This policy does not imply a commitment to execute all portfolio transactions
through all broker-dealers that sell shares of the fund.
The Pioneer funds have entered into third-party brokerage and/or expense offset
arrangements to reduce the funds' total operating expenses. Pursuant to
third-party brokerage arrangements, certain of the funds that invest primarily
in U.S. equity securities may incur lower custody fees by directing brokerage to
third-party broker-dealers. Pursuant to expense offset arrangements, the funds
incur lower transfer agency expenses by maintaining their cash balances with the
custodian. See "Financial highlights" in the prospectus.
See the table in Appendix A for aggregate brokerage and underwriting commissions
paid by the fund in connection with its portfolio transactions during recently
completed fiscal years. The Board of Trustees periodically reviews Pioneer's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the fund.
11. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon the
demand of any shareholder at the next determined net asset value per share. When
issued and paid for in accordance with the terms of the prospectus and statement
of additional information, shares of the fund are fully paid and non-assessable.
Shares will remain on deposit with the fund's transfer agent and certificates
will not normally be issued. The fund reserves the right to charge a fee for the
issuance of share certificates.
The fund's Agreement and Declaration of Trust, dated December 8, 1997 (the
"Declaration"), permits the Board of Trustees to authorize the issuance of an
unlimited number of full and fractional shares of beneficial interest which may
be divided into such separate series as the Trustees may establish. Currently,
the fund consists of only one series. The Trustees may, however, establish
additional series of shares and may divide or combine the shares into a greater
or lesser number of shares without thereby changing the proportionate beneficial
interests in the fund. The Declaration further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Currently, the Trustees have authorized only one series. Each share of a class
of the fund represents an equal proportionate interest in the assets of the fund
allocable to that class. Upon liquidation of the fund, shareholders of each
class of the fund are entitled to share pro rata in the fund's net assets
allocable to such class available for distribution to shareholders. The fund
reserves the right to create and issue additional series or classes of shares,
in which case the shares of each class of a series would participate equally in
the earnings, dividends and assets allocable to that class of the particular
series.
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The fund is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.
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The shares of each series of the fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the fund vote together as a
class on matters that affect all series of the fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of the fund's shares. Shares have no preemptive or conversion rights.
As a Delaware business trust, the fund's operations are governed by the
Declaration. A copy of the fund's Certificate of Trust, dated December 8, 1997,
is on file with the office of the Secretary of State of Delaware. Generally,
Delaware business trust shareholders are not personally liable for obligations
of the Delaware business trust under Delaware law. The Delaware Business Trust
Act (the "Delaware Act") provides that a shareholder of a Delaware business
trust shall be entitled to the same limitation of liability extended to
shareholders of private for-profit corporations. The Declaration expressly
provides that the fund is organized under the Delaware Act and that the
Declaration is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the fund's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of the fund and provides that
notice of such disclaimer may be given in each agreement, obligation or
instrument entered into or executed by the fund or its Trustees, (ii) provides
for the indemnification out of fund property of any shareholders held personally
liable for any obligations of the fund or any series of the fund and (iii)
provides that the fund shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the fund
itself would be unable to meet its obligations. In light of Delaware law, the
nature of the fund's business and the nature of its assets, the risk of personal
liability to a fund shareholder is remote.
In addition to the requirements under Delaware law, the Declaration provides
that a shareholder of the fund may bring a derivative action on behalf of the
fund only if the following conditions are met: (a) shareholders eligible to
bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.
The Declaration further provides that the fund shall indemnify each of its
Trustees and officers against liabilities and expenses reasonably incurred by
them in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the fund.
The Declaration does not authorize the fund to indemnify any Trustee or officer
against any liability to which he or she would otherwise be
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subject by reason of or for willful misfeasance, bad faith, gross negligence or
reckless disregard of such person's duties.
12. SALES CHARGES
Shares of the fund are offered to the general public only through investments in
Pioneer Independence Plans. Although you do not pay any direct sales charges on
purchases or sales of fund shares, Pioneer Independence Plans may charge
creation and sales charges, the details of which are included in the Plans'
prospectus.
The Letter of Intent ("LOI") procedure may not be used for shares of the fund.
An LOI may, however, be used in connection with the purchases of shares of other
Pioneer mutual funds. Please consult the prospectus of the Pioneer mutual fund
whose shares you wish to purchase pursuant to an LOI for more information.
13. REDEEMING SHARES
The following information is applicable only if you own fund shares directly. To
withdraw or redeem shares from a Pioneer Independence Plan, see the Plans'
prospectus.
You can arrange to sell (redeem) fund shares on any day the Exchange is open by
selling either some or all of your shares to the fund.
You may sell your shares either through your broker-dealer or directly to the
fund. Please note the following:
o If you are selling shares from a retirement account, other than an IRA,
you must make your request in writing (except for exchanges to other
Pioneer mutual funds which can be requested by phone or in writing). Call
1-800-225-6541 for more information.
o If you are selling shares from a non-retirement account or IRA, you may
use any of the methods described below.
In Writing. As described in the prospectus, you may sell your shares by
delivering a written request, signed by all registered owners, in good order to
PSC, however, you must use a written request, including a signature guarantee,
to sell your shares if any of the following situations applies:
o you wish to sell over $100,000 worth of shares,
o your account registration or address has changed within the last 30 days,
o the check is not being mailed to the address on your account (address of
record),
o the check is not being made out to the account owners, or
o the sale proceeds are being transferred to a Pioneer mutual fund account
with a different registration.
By Telephone or Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone redemption. The telephone redemption option is not available
to retirement plan accounts, except IRAs. A maximum of $100,000 per account per
day may
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be redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last 30
days. To receive the proceeds by bank wire or electronic funds transfer: the
proceeds must be sent to the bank wire address of record which must have been
properly pre-designated either on your Account Application or on an Account
Options Form and which must not have changed in the last 30 days. To redeem by
fax, send your redemption request to 1-800-225-6541. You may always elect to
deliver redemption instructions to PSC by mail. See "Telephone Transactions"
below. Telephone redemptions will be priced as described above. You are strongly
urged to consult with your financial representative prior to requesting a
telephone redemption.
Selling Shares Through Your Broker-Dealer. The fund has authorized PFD to act as
its agent in the repurchase of shares of the fund from qualified broker-dealers
and reserves the right to terminate this procedure at any time. Your
broker-dealer must receive your request before the close of business on the
Exchange and transmit it to PFD before PFD's close of business to receive that
day's redemption price. Your broker-dealer is responsible for providing all
necessary documentation to PFD and may charge you for its services.
Systematic Withdrawal Plan. The use of a Systematic Withdrawal Plan ("SWP") will
be limited for this fund because you may not purchase additional fund shares
except through the Plans. A SWP is designed to provide a convenient method of
receiving fixed payments at regular intervals from shares of a Pioneer mutual
fund deposited by the applicant under the SWP. The applicant must deposit or
purchase for deposit with PSC shares of the Pioneer mutual fund having a total
value of not less than $10,000. Periodic checks of $50 or more will be deposited
monthly or quarterly directly into a bank account designated by the applicant or
will be sent by check to the applicant, or any person designated by him monthly
or quarterly.
Any income dividends or capital gains distributions on shares under the SWP will
be credited to the SWP account on the payment date in full and fractional shares
at the net asset value per share in effect on the record date. SWP payments are
made from the proceeds of the redemption of shares deposited under the SWP in a
SWP account. To the extent that such redemptions for periodic withdrawals exceed
dividend income reinvested in the SWP account, such redemptions will reduce and
may ultimately exhaust the number of shares deposited in the SWP account.
Redemptions are taxable transactions to shareholders. In addition, the amounts
received by a shareholder cannot be considered as yield or income on his or her
investment because part of such payments may be a return of his or her
investment.
The SWP may be terminated at any time (1) by written notice to PSC or from PSC
to the shareholder; (2) upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3) when all shares under the SWP have been redeemed.
14. EXCHANGING SHARES
The following information is applicable only if you own shares directly.
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the
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class of shares to be exchanged and the dollar amount or number of shares to be
exchanged. Written exchange requests must be signed by all record owner(s)
exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone exchange. Telephone exchanges may not exceed $500,000 per
account per day. Each voice-requested or FactFone(SM) telephone exchange request
will be recorded. You are strongly urged to consult with your financial
representative prior to requesting a telephone exchange. See "Telephone
Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
mutual fund account for shares of the same class in another Pioneer mutual fund
account on a monthly or quarterly basis. The accounts must have identical
registrations and the originating account must have a minimum balance of $5,000.
The exchange will be effective on the day of the month designated on your
Account Application or Account Options Form.
General. Exchanges must be at least $1,000. You may exchange your investment
from one class of fund shares at net asset value, without a sales charge, for
shares of the same class of any other Pioneer mutual fund. Not all Pioneer
mutual funds offer more than one class of shares. A new Pioneer mutual fund
account opened through an exchange must have a registration identical to that on
the original account.
Shares which would normally be subject to a CDSC upon redemption will not be
charged the applicable CDSC at the time of an exchange. Shares acquired in an
exchange will be subject to the CDSC of the shares originally held. For purposes
of determining the amount of any applicable CDSC, the length of time you have
owned shares acquired by exchange will be measured from the date you acquired
the original shares and will not be affected by any subsequent exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern time will be
effective on that day if the requirements above have been met, otherwise, they
will be effective on the next business day. PSC will process exchanges only
after receiving an exchange request in good order. There are currently no fees
or sales charges imposed at the time of an exchange. An exchange of shares may
be made only in states where legally permitted. For federal and (generally)
state income tax purposes, an exchange is considered to be a sale of the shares
of the fund exchanged and a purchase of shares in another Pioneer mutual fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making any
exchange. For the protection of the fund's performance and shareholders, the
fund and PFD reserve the right to refuse any exchange request or restrict, at
any time without notice, the number and/or frequency of exchanges to prevent
abuses of the exchange privilege. Such abuses may arise from frequent trading in
response to short-term market fluctuations, a pattern of trading by an
individual or group that appears to be an attempt to "time the market," or any
other exchange request which, in the view of management, will have a detrimental
effect on the fund's portfolio management strategy or its operations. In
addition, the fund and PFD reserve the right to charge a fee for exchanges or to
modify, limit, suspend or discontinue the exchange privilege with notice to
shareholders as required by law.
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Telephone Transactions
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange fund shares by telephone. For
personal assistance, call 1-800-225-6541 between 8:00 a.m. and 9:00 p.m. Eastern
time on weekdays. Computer-assisted transactions are available to shareholders
who have pre-recorded certain bank information (see "FactFone(SM)"). You are
strongly urged to consult with your financial representative prior to requesting
any telephone transaction.
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
the personal identification number ("PIN") for the account and send you a
written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the fund may be liable for any loss due to unauthorized or
fraudulent instructions. The fund may implement other procedures from time to
time. In all other cases, neither the fund, PSC nor PFD will be responsible for
the authenticity of instructions received by telephone; therefore, you bear the
risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of severe
weather or a natural disaster, it may be difficult to contact the fund by
telephone to institute a redemption or exchange. You should communicate with the
fund in writing if you are unable to reach the fund by telephone.
15. PRICING OF SHARES
The net asset value per share of the fund is determined as of the close of
regular trading on the Exchange (normally 4:00 p.m. Eastern time) on each day on
which the Exchange is open for trading. As of the date of this statement of
additional information, the Exchange is open for trading every weekday except
for the following holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share of the fund is
also determined on any other day on which the level of trading in its portfolio
securities is sufficiently high that the current net asset value per share might
be materially affected by changes in the value of its portfolio securities. The
fund is not required to determine its net asset value per share on any day on
which no purchase orders in good order for fund shares are received and no
shares are tendered and accepted for redemption.
Securities are valued at the last sale price on the principal exchange or market
where they are traded. Securities which have not traded on the date of valuation
or securities for which sales prices are not generally reported are valued at
the mean between the current bid and asked prices. Securities quoted in non-U.S.
currencies are converted to U.S. dollars utilizing non-U.S. exchange rates
employed by the fund's independent pricing services. Generally, trading in
non-U.S. securities is substantially completed each day at various times prior
to the close of regular trading on the Exchange. The values of such securities
used in computing the net asset value of the fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of regular trading on the Exchange. Occasionally, events which
affect the values of such securities and such exchange rates may occur between
the times at which they are determined and the close of regular trading on the
Exchange and will therefore not be reflected in the computation of the fund's
net asset value. If events materially
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affecting the value of such securities occur during such period, then these
securities may be valued at their fair value as determined in good faith by the
Trustees. All assets of the fund for which there is no other readily available
valuation method are valued at their fair value as determined in good faith by
the Trustees, although the actual computations may be made by persons acting
pursuant to the direction of the Board of Trustees.
The net asset value per share of the fund is computed by taking the value of all
of the fund's assets, less the fund's liabilities, and dividing the result by
the number of outstanding shares of the fund. For purposes of determining net
asset value, expenses of the fund are accrued daily and taken into account.
16. TAX STATUS
The fund has elected to be treated, has qualified and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Code so that
it will not pay U.S. federal income tax on income and capital gains distributed
to shareholders. If the fund did not qualify as a regulated investment company,
it would be treated as a U.S. corporation subject to U.S. federal income tax.
Under the Code, the fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The fund intends to make distributions in a timely manner and accordingly
does not expect to be subject to the excise tax.
The fund generally distributes any net short- and long-term capital gains in
November. The fund generally pays dividends from any net investment income in
December. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the fund to avoid U.S. federal income or
excise tax.
In order to qualify as a regulated investment company under Subchapter M, the
fund must, among other things, derive at least 90% of its gross income for each
taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including gains from options, futures and forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "90% income test") and satisfy certain annual
distribution and quarterly diversification requirements. For purposes of the 90%
income test, the character of income earned by certain entities in which the
fund invests that are not treated as corporations (e.g., partnerships or trusts)
for U.S. tax purposes will generally pass through to the fund. Consequently, the
fund may be required to limit its equity investments in such entities that earn
fee income, rental income or other nonqualifying income.
Unless shareholders specify otherwise, all distributions will be automatically
reinvested in additional full and fractional shares of the fund. For U.S.
federal income tax purposes, all dividends are taxable whether a shareholder
takes them in cash or reinvests them in additional shares of the fund. Dividends
from investment company taxable income, which includes net investment income,
net short-term capital gain in excess of net long-term capital loss and certain
net foreign exchange gains, are taxable as ordinary income. Dividends from net
long-term capital gain in excess of net short-term capital loss ("net capital
gain"), if any, are taxable to the fund's shareholders as long-term capital
gains for U.S. federal income tax purposes without regard to the length of time
the shareholder has held shares of the fund. The U.S. federal income tax status
of all distributions will be reported to shareholders annually.
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Any dividend declared by the fund as of a record date in October, November or
December and paid during the following January will be treated for U.S. federal
income tax purposes as received by shareholders on December 31 of the calendar
year in which it is declared.
Foreign exchange gains and losses realized by the fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Under future regulations, any such transactions that are not
directly related to the fund's investments in stock or securities (or its
options contracts or futures contracts with respect to stock or securities) may
have to be limited in order to enable the fund to satisfy the 90% income test.
If the net foreign exchange loss for a year were to exceed the fund's investment
company taxable income (computed without regard to such loss), the resulting
ordinary loss for such year would not be deductible by the fund or its
shareholders in future years.
If the fund acquires any equity interest (under future regulations, generally
including not only stock but also an option to acquire stock such as is inherent
in a convertible bond) in certain foreign corporations that receive at least 75%
of their annual gross income from passive sources (such as interest, dividends,
certain rents and royalties, or capital gains) or that hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), the fund could be subject to U.S. federal income tax and
additional interest charges on "excess distributions" received from such
companies or on gain from the sale of stock in such companies, even if all
income or gain actually received by the fund is timely distributed to its
shareholders. The fund would not be able to pass through to its shareholders any
credit or deduction for such a tax. An election may generally be available that
would ameliorate these adverse tax consequences, but any such election could
require the fund to recognize taxable income or gain (subject to tax
distribution requirements) without the concurrent receipt of cash. These
investments could also result in the treatment of associated capital gains as
ordinary income. The fund may limit and/or manage its holdings in passive
foreign investment companies to limit its tax liability or maximize its return
from these investments.
The fund may invest to a limited extent in debt obligations that are in the
lowest rating categories or are unrated, including debt obligations of issuers
not currently paying interest or who are in default. Investments in debt
obligations that are at risk of or in default present special tax issues for the
fund. Tax rules are not entirely clear about issues such as when the fund may
cease to accrue interest, original issue discount or market discount, when and
to what extent deductions may be taken for bad debts or worthless securities,
how payments received on obligations in default should be allocated between
principal and income and whether exchanges of debt obligations in a workout
context are taxable. These and other issues will be addressed by the fund, in
the event it invests in such securities, in order to seek to ensure that it
distributes sufficient income to preserve its status as a regulated investment
company and does not become subject to U.S. federal income or excise tax.
If the fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount if the fund elects to include market
discount in income currently), the fund must accrue income on such investments
for each taxable year, which generally will be prior to the receipt of the
corresponding cash payments. However, the fund must distribute, at least
annually, all or substantially all of its net income, including such accrued
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<PAGE>
income, to shareholders to qualify as a regulated investment company under the
Code and avoid U.S. federal income and excise taxes. Therefore, the fund may
have to dispose of its portfolio securities under disadvantageous circumstances
to generate cash, or may have to leverage itself by borrowing the cash, to
satisfy distribution requirements.
For U.S. federal income tax purposes, the fund is permitted to carry forward a
net capital loss for any year to offset its capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in U.S. federal income
tax liability to the fund and are not expected to be distributed as such to
shareholders. See Appendix A for the fund's available capital loss
carryforwards.
At the time of an investor's purchase of fund shares, a portion of the purchase
price may be attributable to realized or unrealized appreciation in the fund's
portfolio or undistributed taxable income of the fund. Consequently, subsequent
distributions by the fund with respect to these shares from such appreciation or
income may be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events for shareholders that are subject
to tax. Shareholders should consult their own tax advisers with reference to
their individual circumstances to determine whether any particular transaction
in fund shares is properly treated as a sale for tax purposes, as the following
discussion assumes, and the tax treatment of any gains or losses recognized in
such transactions. Any loss realized by a shareholder upon the redemption,
exchange or other disposition of shares with a tax holding period of six months
or less will be treated as a long-term capital loss to the extent of any amounts
treated as distributions of long-term capital gain with respect to such shares.
Losses on redemptions or other dispositions of shares may be
disallowed under "wash sale" rules in the event of other investments in the fund
(including those made pursuant to reinvestment of dividends and/or capital gain
distributions) within a period of 61 days beginning 30 days before and ending 30
days after a redemption or other disposition of shares. In such a case, the
disallowed portion of any loss generally would be included in the federal tax
basis of the shares acquired in the other investments.
Options written or purchased and futures contracts entered into by the fund on
certain securities, indices and foreign currencies, as well as certain forward
foreign currency contracts, may cause the fund to recognize gains or losses from
marking-to-market even though such options may not have lapsed, been closed out,
or exercised, or such futures or forward contracts may not have been performed
or closed out. The tax rules applicable to these contracts may affect the
characterization of some capital gains and losses realized by the fund as
long-term or short-term. Certain options, futures and forward contracts relating
to foreign currency may be subject to Section 988, as described above, and
accordingly may produce
37
<PAGE>
ordinary income or loss. Additionally, the fund may be required to recognize
gain if an option, futures contract, forward contract, short sale or other
transaction that is not subject to the mark-to-market rules is treated as a
"constructive sale" of an "appreciated financial position" held by the fund
under Section 1259 of the Code. Any net mark-to-market gains and/or gains from
constructive sales may also have to be distributed to satisfy the distribution
requirements referred to above even though the fund may receive no corresponding
cash amounts, possibly requiring the disposition of portfolio securities or
borrowing to obtain the necessary cash. Losses on certain options, futures or
forward contracts and/or offsetting positions (portfolio securities or other
positions with respect to which the fund's risk of loss is substantially
diminished by one or more options, futures or forward contracts) may also be
deferred under the tax straddle rules of the Code, which may also affect the
characterization of capital gains or losses from straddle positions and certain
successor positions as long-term or short-term. Certain tax elections may be
available that would enable the fund to ameliorate some adverse effects of the
tax rules described in this paragraph. The tax rules applicable to options,
futures, forward contracts and straddles may affect the amount, timing and
character of the fund's income and capital gains or losses and hence of its
distributions to shareholders.
For purposes of the 70% dividends-received deduction generally available to
corporations under the Code, dividends received by the fund from U.S.
corporations in respect of any share of stock with a tax holding period of at
least 46 days (91 days in the case of certain preferred stock) extending before
and after each dividend held in an unleveraged position and distributed and
designated by the fund (except for capital gain dividends received from a
regulated investment company) may be eligible for the 70% dividends-received
deduction generally available to corporations under the Code. Any corporate
shareholder should consult its tax adviser regarding the possibility that its
tax basis in its shares may be reduced, for federal income tax purposes, by
reason of "extraordinary dividends" received with respect to the shares and, to
the extent such basis would be reduced below zero, current recognition of income
may be required. In order to qualify for the deduction, corporate shareholders
must meet the minimum holding period requirement stated above with respect to
their fund shares, taking into account any holding period reductions from
certain hedging or other transactions or positions that diminish their risk of
loss with respect to their fund shares, and, if they borrow to acquire or
otherwise incur debt attributable to fund shares, they may be denied a portion
of the dividends-received deduction. The entire dividend, including the
otherwise deductible amount, will be included in determining the excess, if any,
of a corporation's adjusted current earnings over its alternative minimum
taxable income, which may increase a corporation's alternative minimum tax
liability.
The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains
with respect to its investments in those countries, which would, if imposed,
reduce the yield on or return from those investments. Tax conventions between
certain countries and the U.S. may reduce or eliminate such taxes in some cases.
The fund does not expect to satisfy the requirements for passing through to its
shareholders their pro rata shares of qualified foreign taxes paid by the fund,
with the result that shareholders will not include such taxes in their gross
incomes and will not be entitled to a tax deduction or credit for such taxes on
their own tax returns.
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
Federal law requires that the fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain distributions and the
proceeds of redemptions and exchanges or repurchases of fund shares, paid to
shareholders who have not complied with IRS regulations. In order to
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<PAGE>
avoid this withholding requirement, shareholders must certify on their Account
Applications, or on separate IRS Forms W-9, that the Social Security Number or
other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. The fund may nevertheless be required to
withhold if it receives notice from the IRS or a broker that the number provided
is incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.
If, as anticipated, the fund continues to qualify as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes or any Delaware corporation income tax.
The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e.,
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a non-resident alien U.S. withholding tax at the rate of 30% or at a
lower treaty rate on amounts treated as ordinary dividends from the fund and,
unless an effective IRS Form W-8, Form W-8BEN, or other authorized withholding
certificate is on file, to 31% backup withholding on certain other payments from
the fund. Shareholders should consult their own tax advisers on these matters
and on state, local and other applicable tax laws.
17. INVESTMENT RESULTS
Quotations, Comparisons and General Information
From time to time, in advertisements, in sales literature or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives and
to stock or other relevant indices. For example, total return of the fund may be
compared to averages or rankings prepared by Lipper, Inc., a widely recognized
independent service which monitors mutual fund performance; the Russell 1000(R)
Index, a measure of the performance of the 1,000 largest companies in the
Russell 3000(R) Index; the S&P 500, an index of unmanaged groups of common
stock; the Dow Jones Industrial Average, a recognized unmanaged index of common
stocks of 30 industrial companies listed on the Exchange; other Russell U.S.
Equity Indexes or the Wilshire Total Market Value Index, which are recognized
unmanaged indexes of broad-based common stocks; or any other appropriate index.
In addition, the performance of the fund may be compared to alternative
investment or savings vehicles and/or to indices or indicators of economic
activity, e.g., inflation or interest rates. The fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the fund's shares. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, The Wall Street Journal and Worth, may also be cited (if the fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund
39
<PAGE>
Almanac, Ibbotson Associates, Investment Company Data, Inc., Johnson's Charts,
Kanon Bloch Carre and Co., Lipper, Inc., Micropal, Inc., Morningstar, Inc.,
Schabacker Investment Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to shareholders of the fund.
The fund may also present, from time to time, historical information depicting
the value of a hypothetical account in the fund since inception.
In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of the fund is "total
return." Total return will normally represent the percentage change in value of
an account, or of a hypothetical investment in the fund, over any period up to
the lifetime of the fund. Total return calculations will usually assume the
reinvestment of all dividends and capital gain distributions and will be
expressed as a percentage increase or decrease from an initial value for the
entire period or for one or more specified periods within the entire period.
Total return percentages for periods of less than one year will usually be
annualized; total return percentages for periods longer than one year will
usually be accompanied by total return percentages for each year within the
period and/or by the average annual compounded total return for the period. The
income and capital components of a given return may be separated and portrayed
in a variety of ways in order to illustrate their relative significance.
Performance may also be portrayed in terms of cash or investment values without
percentages. Past performance cannot guarantee any particular future result.
The fund's average annual total return quotations for the fund as that
information may appear in the fund's prospectus, this statement of additional
information or in advertising are calculated by standard methods prescribed by
the SEC.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for the fund's shares are computed by
finding the average annual compounded rates of return that would cause a
hypothetical investment in the fund made on the first day of a designated period
(assuming all dividends and distributions are reinvested) to equal the ending
redeemable value of such hypothetical investment on the last day of the
designated period in accordance with the following formula:
P(1+T)^n = ERV
Where:
P = a hypothetical initial payment of $1,000
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<PAGE>
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 initial
payment made at the beginning of the designated period (or
fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts are taken
into consideration. For any account fees that vary with the size of the account,
the account fee used for purposes of the above computation is assumed to be the
fee that would be charged to a mean account size.
See Appendix A for the annual total returns for the fund's shares as of the most
recently completed fiscal year.
18. FINANCIAL STATEMENTS
The fund's audited financial statements for the fiscal year ended December 31,
1999 from the fund's annual report filed with the SEC on February 25, 2000
(Accession No. 0001051010-00-000003) are incorporated by reference into this
statement of additional information. Those financial statements, including the
financial highlights in the prospectus, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
to the financial statements and are included in reliance upon the authority of
Arthur Andersen LLP as experts in accounting and auditing in giving their
report.
The fund's annual report includes the financial statements referenced above and
is available without charge upon request by calling Shareholder Services at
1-800-225-6292.
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<PAGE>
19. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION
Portfolio Turnover
The fund's annual portfolio turnover rate was 106% for the fiscal year ended
December 31, 1999.
Share Ownership
As of March 31, 2000, the Trustees and officers of the fund owned beneficially
in the aggregate less than 1% of the outstanding shares of the fund. The
following is a list of the holders of 5% or more of the fund's outstanding
shares as of March 31, 2000:
Record Holder Number of Shares % of Fund
Boston Financial Data Services, Inc. 1,217,989 92.59
ATTN: Jeanie Ross
Two Heritage Drive
Quincy, MA 02171-2119
Compensation of Officers and Trustees
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
<TABLE>
<CAPTION>
Pension or
Retirement Total Compensation
Aggregate Benefits Accrued from the Fund and
Compensation from as Part of Fund Other Pioneer Mutual
Name of Trustee Fund* Expenses Funds**
<S> <C> <C> <C>
John F. Cogan, Jr.*** $ 750.00 $0 $18,000.00
Mary K. Bush 2,758.00 0 93,500.00
Richard H. Egdahl, M.D. 2,758.00 0 95,500.00
Margaret B.W. Graham 2,761.00 0 102,000.00
John W. Kendrick 2,357.00 0 82,500.00
Marguerite A. Piret 2,863.00 0 116,750.00
David D. Tripple*** 750.00 0 18,000.00
Stephen K. West 2,861.00 0 108,250.00
John Winthrop 2,859.00 0 98,400.00
---------- -- -----------
$20,717.00 $0 $732,900.00
</TABLE>
* For the fiscal year ended December 31, 1999.
** For the calendar year ended December 31, 1999.
*** Under the management contract, Pioneer reimburses the fund for any
Trustees fees paid by the fund.
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<PAGE>
Management Fees the Fund Paid or Owed Pioneer
For the Fiscal Years Ended December 31,
1999 1998
None* None*
- ----------
*An expense limitation was in effect during the years ended December 31, 1999
and 1998. In the absence of the expense limitation, the fund would have paid
$53,227 and $8,494, respectively, in management fees.
Fees the Fund Paid to Pioneer under the Administration Agreement effective
October 9, 1998
For the Fiscal Year Ended December 31,
1999
$31,652
Carryover of Distribution Expenses
As of December 31, 1999 there was no carryover of distribution expenses under
the fund's distribution plan.
Approximate Net Underwriting Commissions Retained by PFD
For the Fiscal Years Ended December 31,
1999 1998
None None
Approximate Commissions Reallowed to Dealers
For the Fiscal Years Ended December 31,
1999 1998
None None
Fund Expenses under the Distribution Plan
For the Fiscal Year Ended December 31, 1999
$1,278
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<PAGE>
Approximate Brokerage and Underwriting Commissions (Portfolio Transactions)
For the Fiscal Years Ended December 31,
1999 1998
$15,000 $4,000
Capital Loss Carryforwards as of December 31, 1999
As of the end of its most recent taxable year, the fund had no capital loss
carryforwards.
Average Annual Total Returns (December 31, 1999)
Average Annual Total Return (%)
One Five Ten Since Inception
Year Years Years Inception Date
22.88 N/A N/A 10.38 03/16/98
44
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20. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED
STOCK RATINGS(1)
Moody's Investors Service, Inc. ("Moody's") Short-Term Prime Rating System
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch
obligations are rated at the lower of the bank's rating or Moody's Sovereign
Rating for Bank Deposits for the country in which the branch is located.
- --------
(1) The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the fund's fiscal year-end.
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<PAGE>
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.
Moody's Debt Ratings
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
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<PAGE>
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's bond ratings, where specified, are applicable to financial contracts,
senior bank obligations and insurance company senior policyholder and claims
obligations with an original maturity in excess of one year. Obligations relying
upon support mechanisms such as letters-of-credit and bonds of indemnity are
excluded unless explicitly rated. Obligations of a branch of a bank are
considered to be domiciled in the country in which the branch is located.
Unless noted as an exception, Moody's rating on a bank's ability to repay senior
obligations extends only to branches located in countries which carry a Moody's
Sovereign Rating for Bank Deposits. Such branch obligations are rated at the
lower of the bank's rating or Moody's Sovereign Rating for the Bank Deposits for
the country in which the branch is located. When the currency in which an
obligation is denominated is not the same as the currency of the country in
which the obligation is domiciled, Moody's ratings do not incorporate an opinion
as to whether payment of the obligation will be affected by the actions of the
government controlling the currency of denomination. In addition, risk
associated with bilateral conflicts between an investor's home country and
either the issuer's home country or the country where an issuer branch is
located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the 1933 Act or issued in
conformity with any other applicable law or regulation. Nor does Moody's
represent any specific bank or insurance company obligation is legally
enforceable or a valid senior obligation of a rated issuer.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
Moody's Preferred Stock Ratings
Because of the fundamental differences between preferred stocks and bonds, a
variation of Moody's familiar bond rating symbols is used in the quality ranking
of preferred stock. The symbols, presented below, are designed to avoid
comparison with bond quality in absolute terms. It should always be borne in
mind that preferred stock occupies a junior position to bonds within a
particular capital structure and that these securities are rated within the
universe of preferred stocks.
aaa: An issue which is rated aaa is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
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<PAGE>
aa: An issue which is rated aa is considered a high-grade preferred stock. This
rating indicates that there is a reasonable assurance the earnings and asset
protection will remain relatively well maintained in the foreseeable future.
a: An issue which is rated a is considered to be an upper-medium grade preferred
stock. While risks are judged to be somewhat greater then in the aaa and aa
classification, earnings and asset protection are, nevertheless, expected to be
maintained at adequate levels.
baa: An issue which is rated baa is considered to be a medium-grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.
ba: An issue which is rated ba is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.
b: An issue which is rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small.
caa: An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payments.
ca: An issue which is rated ca is speculative in a high degree and is likely to
be in arrears on dividends with little likelihood of eventual payments.
c: This is the lowest rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
Standard & Poor's Short-Term Issue Credit Ratings
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
48
<PAGE>
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
Standard & Poor's Long-Term Issue Credit Ratings
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;
Nature of and provisions of the obligation;
Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws
of bankruptcy and other laws affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
49
<PAGE>
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: A subordinated debt or preferred stock obligation rated C is currently highly
vulnerable to nonpayment. The C rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action taken, but payments on this
obligation are being continued. A C also will be assigned to a preferred stock
issue in arrears on dividends or sinking fund payments but that is currently
paying.
D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
Plus (+) or Minus (-): The rating from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major rating
categories.
r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk, such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.
50
<PAGE>
Local Currency and Foreign Currency Risks
Country risk considerations are a standard part of Standard & Poor's analysis
for credit ratings on any issuer or issue. Currency of repayment is a key factor
in this analysis. An obligor's capacity to repay foreign currency obligations
may be lower than its capacity to repay obligations in its local currency due to
the sovereign government's own relatively lower capacity to repay external
versus domestic debt. These sovereign risk considerations are incorporated in
the debt ratings assigned to specific issues. Foreign currency issuer ratings
are also distinguished from local currency issuer ratings to identify those
instances where sovereign risks make them different for the same issuer.
51
<PAGE>
21. APPENDIX C - PERFORMANCE STATISTICS.
Pioneer Independence Fund
<TABLE>
<CAPTION>
Net Asset
Initial Sales Charge Shares Value per Initial Net
Date Investment Offering Price Included Purchased Share Asset Value
<S> <C> <C> <C> <C> <C> <C>
03/16/98 $10,000 $10.000 0% 1,000.00 $10.00 $10,000
</TABLE>
Value of Shares
(Dividends and Capital Gains Reinvested)
<TABLE>
<CAPTION>
From Capital Gains From Dividends
Date From Investment Reinvested Reinvested Total Value
<S> <C> <C> <C> <C>
12/31/98 $9,630 $0 $92 $9,722
12/31/99 $11,360 $466 $120 $11,946
</TABLE>
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
52
<PAGE>
Comparative Performance Index Descriptions
The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the fund may refer to these
indices or may present comparisons between the performance of the fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the fund, do not reflect past
performance and do not guarantee future results.
S&P 500. This index is a readily available, carefully constructed, market value
weighted benchmark of common stock performance. Currently, the S&P 500 includes
500 of the largest stocks (in terms of stock market value) in the U.S.
Dow Jones Industrial Average. This is a total return index based on the
performance of stocks of 30 blue chip companies widely held by individuals and
institutional investors. The 30 stocks represent about a fifth of the $8
trillion-plus market value of all U.S. stocks and about a fourth of the value of
stocks listed on the New York Stock Exchange (NYSE).
U.S. Small Stock Index. This index is a market value weighted index of the ninth
and tenth deciles of the NYSE, plus stocks listed on the American Stock Exchange
and over the counter with the same or less capitalization as the upper bound of
the NYSE ninth decile.
U.S. Inflation. The Consumer Price Index for All Urban Consumers (CPI-U), not
seasonally adjusted, is used to measure inflation, which is the rate of change
of consumer goods prices. Unfortunately, the inflation rate as derived by the
CPI is not measured over the same period as the other asset returns. All of the
security returns are measured from one month-end to the next month-end. CPI
commodity prices are collected during the month. Thus, measured inflation rates
lag the other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA Indexes. The S&P/BARRA Growth and Value Indexes are constructed by
dividing the stocks in the S&P 500 according to price-to-book ratios. The Growth
Index contains stocks with higher price-to-book ratios, and the Value Index
contains stocks with lower price-to-book ratios. Both indexes are market
capitalization weighted.
Merrill Lynch Micro-Cap Index. The Merrill Lynch Micro-Cap Index represents the
performance of 1,980 stocks ranging in market capitalization from $50 million to
$125 million. Index returns are calculated monthly.
Merrill Lynch High Yield Master II Index. This index is a market capitalization
weighted total return index covering U.S. dollar-denominated high-yield bonds.
Qualifying bonds must have at least $100 million par amount outstanding, a
remaining term to maturity greater than or equal to one year, and a credit
rating less than BBB3 but not in default (based on the composite of Moody's and
Standard & Poor's). The index includes deferred interest and pay-in-kind bonds,
but excludes structured notes, floating rate notes and other variable coupon
securities. The index also excludes emerging markets debt (issuers domiciled in
below investment grade rated countries). Index constituents are rebalanced
monthly on the last calendar day of the month. Index values are calculated
daily.
53
<PAGE>
Merrill Lynch Index of Convertible Bonds (Speculative Quality). This is a market
capitalization weighted index including all mandatory and non-mandatory domestic
corporate convertible securities with at least an original par of $50 million or
a $50 million market value; securities dropping below a market value of $40
million are excluded. Returns are calculated weekly based on Thursday's closing
prices and are linked monthly. All securities must be convertible to common
stock only. Quality range is D3-BB1 based on composite Moody's and Standard
&Poor's ratings.
Long-Term U.S. Government Bonds. The total returns on long-term government bonds
after 1977 are constructed with data from The Wall Street Journal and are
calculated as the change in the flat price or and-interest price. From 1926 to
1976, data are obtained from the government bond file at the Center for Research
in Security Prices (CRSP), Graduate School of Business, University of Chicago.
Each year, a one-bond portfolio with a term of approximately 20 years and a
reasonably current coupon was used and whose returns did not reflect potential
tax benefits, impaired negotiability or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates minus the current date. The
bond was "held" for the calendar year and returns were computed.
Intermediate-Term U.S. Government Bonds. Total returns of intermediate-term
government bonds after 1987 are calculated from The Wall Street Journal prices,
using the change in flat price. Returns from 1934 to 1986 are obtained from the
CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five years, and this bond is
"held" for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds
with maturities near five years were partially or fully tax-exempt and were
selected using the rules described above. Personal tax rates were generally low
in that period, so that yields on tax-exempt bonds were similar to yields on
taxable bonds. From 1926 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
Morgan Stanley Capital International ("MSCI"). These indices are in U.S. dollar
terms with gross dividends reinvested and measure the performance of developed
and emerging stock markets around the world. MSCI All Country indices represent
both the developed and the emerging markets for a particular region. These
indices are unmanaged. The free indices exclude shares which are not readily
purchased by non-local investors. MSCI covers over 1,500 securities in 28
emerging markets and 2,300 securities in 23 developed markets, totaling over $20
trillion in market capitalization. Several Pioneer mutual funds that invest in
international securities compare their performance to various MSCI indices.
6-Month CDs. Data sources include the Federal Reserve Bulletin and The Wall
Street Journal.
Long-Term U.S. Corporate Bonds. Since 1969, corporate bond total returns are
represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index.
As most large corporate bond transactions take place over the counter, a major
dealer is the natural source of these data. The index includes nearly all Aaa-
and Aa-rated bonds with at least 10 years to maturity. If a bond is downgraded
during a particular month, its return for the month is included in the index
before removing the bond from future portfolios.
54
<PAGE>
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. Capital appreciation returns were calculated from
yields assuming (at the beginning of each monthly holding period) a 20-year
maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
coupon and a 20-year maturity. The conventional present-value formula for bond
price for the beginning and end-of-month prices was used. (This formula is
presented in Ross, Stephen A., and Westerfield, Randolph W., Corporate Finance,
Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly
income return was assumed to be one-twelfth the coupon.
Lehman Brothers Government/Corporate Bond Index - Intermediate. This index is
comprised of securities with one to ten years to maturity. It includes Treasury
and government agency securities, investment-grade corporate bonds and Yankee
bonds.
U.S. (30-Day) Treasury Bills. For the U.S. Treasury Bill Index, data from The
Wall Street Journal are used after 1977; the CRSP government bond file is the
source until 1976. Each month a one-bill portfolio containing the shortest-term
bill having not less than one month to maturity is constructed. (The bill's
original term to maturity is not relevant.) To measure holding period returns
for the one-bill portfolio, the bill is priced as of the last trading day of the
previous month-end and as of the last trading day of the current month.
National Association of Real Estate Investment Trusts ("NAREIT") Equity REIT
Index. All of the data are based upon the last closing price of the month for
all tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighting at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
Russell U.S. Equity Indexes. The Russell 3000(R) Index (the "Russell 3000") is
comprised of the 3,000 largest U.S. companies as determined by market
capitalization representing approximately 98% of the U.S. equity market. The
average market capitalization is approximately $4.4 billion. The Russell 2500TM
Index measures performance of the 2,500 smallest companies in the Russell 3000.
The average market capitalization is approximately $876 million, and the largest
company in the index has an approximate market capitalization of $3.8 billion.
The Russell 2000(R) Index measures performance of the 2,000 smallest stocks in
the Russell 3000; the largest company in the index has a market capitalization
of approximately $1.3 billion. The Russell 1000(R) Index (the "Russell 1000")
measures the performance of the 1,000 largest companies in the Russell 3000. The
average market capitalization is approximately $12.1 billion. The smallest
company in the index has an approximate market capitalization of $1.3 billion.
The Russell MidcapTM Index measures performance of the 800 smallest companies in
the Russell 1000. The largest company in the index has an approximate market
capitalization of $11.2 billion. The Russell 1000(R) Growth Index measures the
performance of those Russell 1000 companies with higher price-to-
55
<PAGE>
book ratios and higher forecasted growth values. The Russell 1000(R) Value Index
measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values.
The Russell indexes are reconstituted annually as of June 30, based on May 31
market capitalizations.
Wilshire Real Estate Securities Index. The Wilshire Real Estate Securities Index
is a broad measure of the performance of publicly traded real estate securities,
such as REITs and real estate operating companies ("REOCs"). The index is
capitalization-weighted. As of March 31, 1999, 119 companies were included in
the index, with a total market cap of $116.97 billion. At September 30, 1999,
the companies in the index were 92.31% equity and hybrid REITs and 7.69% REOCs.
Standard & Poor's MidCap 400 Index. The S&P 400 is a
market-capitalization-weighted index. The performance data for the index were
calculated by taking the stocks presently in the index and tracking them
backwards in time as long as there were prices reported. No attempt was made to
determine what stocks "might have been" in the S&P 400 five or ten years ago had
it existed. Dividends are reinvested on a monthly basis prior to June 30, 1991,
and are reinvested daily thereafter.
Lipper Indexes. These indexes represent equally weighted performance, adjusted
for capital gain distributions and income dividends, of mutual funds that are
considered peers of the Pioneer mutual funds. Lipper, Inc. is an independent
firm that tracks mutual fund performance.
Lehman Brothers Aggregate Bond Index. The Lehman Brothers Aggregate Bond Index
is composed of the Lehman Brothers Government/Corporate Index, the Lehman
Brothers Mortgage-Backed Securities Index and the Lehman Brothers Asset-Backed
Securities Index. The index includes fixed rate debt issues rated investment
grade or higher by Moody's Investors Service, Standard & Poor's Corporation or
Fitch Investors Service, in that order. All issues have at least one year to
maturity with intermediate indices including bonds with maturities up to ten
years and long-term indices composed of bonds with maturities longer than ten
years. All returns are market value weighted inclusive of accrued interest.
Bank Savings Account. Data sources include the U.S. League of Savings
Institutions Sourcebook; average annual yield on savings deposits in FSLIC
[FDIC] insured savings institutions for the years 1963 to 1987; and The Wall
Street Journal thereafter.
Nasdaq Composite Index. The Nasdaq Composite Index measures all Nasdaq domestic
and non-U.S. based common stocks listed on The Nasdaq Stock Market. The index is
market-value weighted. The Nasdaq Composite includes over 5,000 companies and is
one of the most widely followed and quoted major market indices because it is so
broad-based.
Sources: Ibbotson Associates, Towers Data Systems, Lipper, Inc. and PGI
56
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
Dow S&P/ S&P/ Merrill
Jones U.S. Small BARRA BARRA Lynch
S&P Industrial Stock U.S. 500 500 Micro-Cap
500 Average Index Inflation Growth Value Index
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.34 -49.02 -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A N/A
Dec 1933 53.99 73.72 142.87 0.51 N/A N/A N/A
Dec 1934 -1.44 8.08 24.22 2.03 N/A N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A N/A
Dec 1942 20.34 14.13 44.51 9.29 N/A N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A N/A
</TABLE>
57
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
Dow S&P/ S&P/ Merrill
Jones U.S. Small BARRA BARRA Lynch
S&P Industrial Stock U.S. 500 500 Micro-Cap
500 Average Index Inflation Growth Value Index
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53 36.62
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64 1.81
Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99 30.70
Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99 13.88
Dec 1997 33.36 24.88 22.78 1.70 36.52 29.98 24.61
Dec 1998 28.58 18.14 -7.31 1.61 42.16 14.67 -6.15
Dec 1999 21.04 27.22 29.79 2.81 28.25 12.72 40.04
</TABLE>
58
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
Long- Intermediate- MSCI Long- Lehman
Term Term U.S. EAFE 6- Term U.S. Bros. U.S.
U.S. Gov't Government (Net of Month Corporate Gov't/Corp T-Bill
Bonds Bonds Taxes) CDs Bonds Intermediate (30-Day)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 N/A 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 N/A 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 N/A 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 N/A 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 N/A 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 N/A 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 N/A 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 N/A 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 N/A 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 N/A 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 N/A 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 N/A 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 N/A -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 N/A 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 N/A 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 N/A 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 N/A 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 N/A 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 N/A 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 N/A 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 N/A 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 N/A 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 N/A 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 N/A 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 N/A 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 N/A 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 N/A 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 N/A 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 N/A 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 N/A 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 N/A 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 N/A 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 N/A 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 N/A 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 N/A 2.66
</TABLE>
59
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
Long- Intermediate- MSCI Long- Lehman
Term Term U.S. EAFE 6- Term U.S. Bros. U.S.
U.S. Gov't Government (Net of Month Corporate Gov't/Corp T-Bill
Bonds Bonds Taxes) CDs Bonds Intermediate (30-Day)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1961 0.97 1.85 N/A N/A 4.82 N/A 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 N/A 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 N/A 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 N/A 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 N/A 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 N/A 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 N/A 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 N/A 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 N/A 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 N/A 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 N/A 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 N/A 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 3.34 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 5.88 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 9.50 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 12.34 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 3.31 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 2.13 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 6.00 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 6.41 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 10.50 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 26.10 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.61 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 14.38 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 18.05 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 13.12 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 3.67 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.78 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 12.76 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 9.17 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 14.63 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 7.17 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 8.73 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 -1.95 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 15.31 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 4.06 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 7.87 5.26
Dec 1998 13.06 10.21 20.00 5.34 10.76 8.42 4.86
Dec 1999 -8.96 -1.77 26.96 5.43 -7.45 0.39 4.68
</TABLE>
60
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
NAREIT Wilshire Lipper MSCI
Equity Russell Real Estate Balanced Emerging Bank
REIT 2000(R) Securities S&P Fund Markets Savings
Index Index Index 400 Index Free Index Account
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
</TABLE>
61
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
NAREIT Wilshire Lipper MSCI
Equity Russell Real Estate Balanced Emerging Bank
REIT 2000(R) Securities S&P Fund Markets Savings
Index Index Index 400 Index Free Index Account
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 20.14 35.58 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92
Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 -7.32 4.96
Dec 1995 15.27 28.44 13.65 30.94 24.89 -5.21 5.24
Dec 1996 35.26 16.49 36.87 19.20 13.05 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.26 20.30 -11.59 5.17
Dec 1998 -17.51 -2.55 -17.43 19.12 15.09 -25.34 4.63
Dec 1999 -4.62 21.26 14.72 14.72 8.98 66.41 5.29
</TABLE>
62
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
MSCI MSCI All Merrill Lynch
All Country (AC) Merrill Index of Lipper
Country Asia Lehman Lynch Convertible Lipper Growth &
(AC) Asia Pacific Brothers High Yield Bonds Russell Growth Income
Free Free Aggregate Master II (Speculative 1000(R) Fund Fund
ex Japan ex Japan Bond Index Index Quality) Index Index Index
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1931 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1932 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1933 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1934 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1935 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1936 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1937 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1938 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1939 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1940 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1941 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1942 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1943 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1944 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1945 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1946 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1947 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1948 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1949 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1950 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1951 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1952 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1953 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1954 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1955 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1956 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1957 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1958 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1959 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1960 N/A N/A N/A N/A N/A N/A 6.36 3.04
Dec 1961 N/A N/A N/A N/A N/A N/A 30.16 26.00
</TABLE>
63
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
MSCI MSCI All Merrill Lynch
All Country (AC) Merrill Index of Lipper
Country Asia Lehman Lynch Convertible Lipper Growth &
(AC) Asia Pacific Brothers High Yield Bonds Russell Growth Income
Free Free Aggregate Master II (Speculative 1000(R) Fund Fund
ex Japan ex Japan Bond Index Index Quality) Index Index Index
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dec 1962 N/A N/A N/A N/A N/A N/A -16.84 -11.87
Dec 1963 N/A N/A N/A N/A N/A N/A 22.43 19.10
Dec 1964 N/A N/A N/A N/A N/A N/A 14.99 15.23
Dec 1965 N/A N/A N/A N/A N/A N/A 26.61 19.00
Dec 1966 N/A N/A N/A N/A N/A N/A -1.80 -6.04
Dec 1967 N/A N/A N/A N/A N/A N/A 45.31 27.59
Dec 1968 N/A N/A N/A N/A N/A N/A 15.34 15.29
Dec 1969 N/A N/A N/A N/A N/A N/A -10.62 -11.80
Dec 1970 N/A N/A N/A N/A N/A N/A -8.57 1.10
Dec 1971 N/A N/A N/A N/A N/A N/A 26.17 13.77
Dec 1972 N/A N/A N/A N/A N/A N/A 18.08 12.87
Dec 1973 N/A N/A N/A N/A N/A N/A -24.75 -14.27
Dec 1974 N/A N/A N/A N/A N/A N/A -30.73 -20.85
Dec 1975 N/A N/A N/A N/A N/A N/A 32.83 34.62
Dec 1976 N/A N/A 15.60 N/A N/A N/A 20.07 25.66
Dec 1977 N/A N/A 3.04 N/A N/A N/A -2.62 -3.64
Dec 1978 N/A N/A 1.39 N/A N/A N/A 12.53 7.99
Dec 1979 N/A N/A 1.93 N/A N/A 22.31 29.29 23.87
Dec 1980 N/A N/A 2.71 N/A N/A 31.88 38.67 28.27
Dec 1981 N/A N/A 6.25 N/A N/A -5.10 -6.82 -1.39
Dec 1982 N/A N/A 32.62 N/A N/A 20.30 24.04 24.17
Dec 1983 N/A N/A 8.36 N/A N/A 22.13 21.35 22.76
Dec 1984 N/A N/A 15.15 N/A N/A 4.75 -3.60 4.29
Dec 1985 N/A N/A 22.10 N/A N/A 32.27 30.14 28.55
Dec 1986 N/A N/A 15.26 N/A N/A 17.87 15.59 17.63
Dec 1987 N/A N/A 2.76 4.47 N/A 2.94 3.25 2.64
Dec 1988 30.00 30.45 7.89 13.36 16.19 17.23 14.13 18.35
Dec 1989 32.13 21.43 14.53 2.31 9.82 30.42 27.47 23.73
Dec 1990 -6.54 -11.86 8.96 -4.36 -8.61 -4.16 -5.41 -5.99
Dec 1991 30.98 32.40 16.00 39.17 37.53 33.03 36.33 27.75
Dec 1992 21.81 9.88 7.40 17.44 24.06 9.04 7.63 9.63
Dec 1993 103.39 84.94 9.75 16.69 19.37 10.15 11.98 14.62
Dec 1994 -16.94 -12.59 -2.92 -1.03 -6.91 0.38 -1.57 -0.41
Dec 1995 4.00 10.00 18.47 20.46 25.14 37.77 32.65 31.14
Dec 1996 10.05 8.08 3.63 11.27 15.29 22.45 17.53 20.67
Dec 1997 -40.31 -34.20 9.65 13.27 16.76 32.85 28.03 26.88
Dec 1998 -7.79 -4.42 8.69 2.95 12.62 27.02 25.69 13.58
Dec 1999 64.67 49.83 -0.82 2.51 38.91 20.91 27.96 11.86
</TABLE>
64
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
MSCI All Lipper
Country Science
World Russell and
MSCI MSCI Free ex 1000(R) Technology Nasdaq
Europe World U.S. Growth Fund Composite
Index Index Index Index Index Index
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A
Dec 1931 N/A N/A N/A N/A N/A N/A
Dec 1932 N/A N/A N/A N/A N/A N/A
Dec 1933 N/A N/A N/A N/A N/A N/A
Dec 1934 N/A N/A N/A N/A N/A N/A
Dec 1935 N/A N/A N/A N/A N/A N/A
Dec 1936 N/A N/A N/A N/A N/A N/A
Dec 1937 N/A N/A N/A N/A N/A N/A
Dec 1938 N/A N/A N/A N/A N/A N/A
Dec 1939 N/A N/A N/A N/A N/A N/A
Dec 1940 N/A N/A N/A N/A N/A N/A
Dec 1941 N/A N/A N/A N/A N/A N/A
Dec 1942 N/A N/A N/A N/A N/A N/A
Dec 1943 N/A N/A N/A N/A N/A N/A
Dec 1944 N/A N/A N/A N/A N/A N/A
Dec 1945 N/A N/A N/A N/A N/A N/A
Dec 1946 N/A N/A N/A N/A N/A N/A
Dec 1947 N/A N/A N/A N/A N/A N/A
Dec 1948 N/A N/A N/A N/A N/A N/A
Dec 1949 N/A N/A N/A N/A N/A N/A
Dec 1950 N/A N/A N/A N/A N/A N/A
Dec 1951 N/A N/A N/A N/A N/A N/A
Dec 1952 N/A N/A N/A N/A N/A N/A
Dec 1953 N/A N/A N/A N/A N/A N/A
Dec 1954 N/A N/A N/A N/A N/A N/A
Dec 1955 N/A N/A N/A N/A N/A N/A
Dec 1956 N/A N/A N/A N/A N/A N/A
Dec 1957 N/A N/A N/A N/A N/A N/A
Dec 1958 N/A N/A N/A N/A N/A N/A
Dec 1959 N/A N/A N/A N/A N/A N/A
Dec 1960 N/A N/A N/A N/A N/A N/A
Dec 1961 N/A N/A N/A N/A 20.30 N/A
</TABLE>
65
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
MSCI All Lipper
Country Science
World Russell and
MSCI MSCI Free ex 1000(R) Technology Nasdaq
Europe World U.S. Growth Fund Composite
Index Index Index Index Index Index
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dec 1962 N/A N/A N/A N/A -17.43 N/A
Dec 1963 N/A N/A N/A N/A 17.69 N/A
Dec 1964 N/A N/A N/A N/A 11.08 N/A
Dec 1965 N/A N/A N/A N/A 33.54 N/A
Dec 1966 N/A N/A N/A N/A -6.70 N/A
Dec 1967 N/A N/A N/A N/A 32.26 N/A
Dec 1968 N/A N/A N/A N/A 20.26 N/A
Dec 1969 N/A N/A N/A N/A -15.96 N/A
Dec 1970 -10.64 -3.09 N/A N/A -9.81 N/A
Dec 1971 26.33 18.36 N/A N/A 19.72 N/A
Dec 1972 14.40 22.48 N/A N/A 9.94 17.18
Dec 1973 -8.77 -15.24 N/A N/A -24.53 -31.06
Dec 1974 -24.07 -25.47 N/A N/A -28.16 -35.11
Dec 1975 41.45 32.80 N/A N/A 32.45 29.76
Dec 1976 -7.80 13.40 N/A N/A 18.85 26.10
Dec 1977 21.90 0.68 N/A N/A 0.01 7.33
Dec 1978 21.88 16.52 N/A N/A 17.80 12.31
Dec 1979 12.31 10.95 N/A 23.91 29.47 28.11
Dec 1980 11.90 25.67 N/A 39.57 42.48 33.88
Dec 1981 -12.46 -4.79 N/A -11.31 -11.08 -3.21
Dec 1982 3.97 9.71 N/A 20.46 34.46 18.67
Dec 1983 20.96 21.93 N/A 15.98 34.25 19.87
Dec 1984 0.62 4.72 N/A -0.95 -10.13 -11.22
Dec 1985 78.93 40.56 N/A 32.85 22.20 31.36
Dec 1986 43.85 41.89 N/A 15.36 6.44 7.36
Dec 1987 3.66 16.16 N/A 5.31 4.05 -5.26
Dec 1988 15.81 23.29 27.90 11.27 4.87 15.41
Dec 1989 28.51 16.61 12.03 35.92 20.70 19.26
Dec 1990 -3.85 -17.02 -22.74 -0.26 0.87 -17.80
Dec 1991 13.11 18.28 13.96 41.16 50.18 56.84
Dec 1992 -4.71 -5.23 -10.97 5.00 14.31 15.45
Dec 1993 29.28 22.50 34.90 2.90 25.58 14.75
Dec 1994 2.28 5.08 6.63 2.66 13.04 -3.20
Dec 1995 21.62 20.72 9.94 37.19 42.38 39.92
Dec 1996 21.09 13.48 6.68 23.12 19.92 22.71
Dec 1997 23.80 15.76 2.04 30.49 10.90 21.64
Dec 1998 28.53 24.34 14.46 38.71 52.66 39.63
Dec 1999 15.89 24.93 30.91 33.16 134.99 85.59
</TABLE>
Source: Lipper, Inc.
66
<PAGE>
22. APPENDIX D - OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the U.S.
As of December 31, 1999, Pioneer employed a professional investment staff of 82.
Total assets of all Pioneer mutual funds at December 31, 1999, were
approximately $23 billion representing 1,392,828 shareholder accounts, including
881,091 non-retirement accounts and 511,737 retirement accounts.
67
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
Amended Form N-1A
Exhibit Reference:
(a) 1(a). Agreement and Declaration of Trust(1)
(a) 1(b). Certificate of Trust(1)
(b) 2. By-Laws(2)
(c) 4. Not Applicable
(d) 5. Form of Management Contract(1)
(e) 6(a). Form of Underwriting Agreement(2)
(e) 6(b). Form of Sales Agreement(1)
(f) 7. None
(g) 8(a). Form of Custodian Agreement with Brown
Brothers Harriman & Co.(2)
(h) 9. Form of Investment Company
Service Agreement(4)
(h) 9.1 Administration Agreement(3)
(i) 10. Opinion of Legal Counsel(1)
11. Consent of Independent Public Accountants(5)
(k) 12. None
(l) 13. Form of Share Purchase Agreement(1)
(m) 15. Form of Distribution Plan(2)
(n) 17. Not Applicable
(o) 18. Not Applicable
(p) 20. Code of Ethics(5)
N/A 21. Powers of Attorney(5)
- ---------------
(1) Previously filed. Incorporated by reference from the exhibits filed with
Pre-Effective Amendment No. 1 to the Registration Statement (File No.
333-42105) as filed electronically with the Securities and Exchange
Commission ("SEC") on March 12, 1998 (Accession No. 0001051010-99-000047).
(2) Previously filed. Incorporated by reference from the exhibits filed with
Registrant's Registration Statement (File No.333-42105) as filed
electronically with the SEC on December 12, 1997 (Accession No.
0001051010-97-000012).
(3) Previously filed. Incorporated by reference from the exhibit filed with
Post-Effective Amendment No. 1 to the Registration Statement (File No.
333-42105) as filed electronically with the SEC on February 24, 1999
(Accession No. 0001051010-99-000004).
(4) Previously filed. Incorporated by reference from the exhibit filed with
Post-Effective Amendment No. 2 to the Registration Statement (File No.
333-42105) as filed electronically with the SEC on April 30, 1999
(Accession No. 0001051010-99-000008).
(5) Filed herewith.
Item 24. Persons Controlled By or Under
Common Control With Registrant
None.
Item 25. Indemnification
Except for the Agreement and Declaration of Trust, dated December 8,
1997, establishing the Registrant as a trust under Delaware law, there is no
C-1
<PAGE>
contract, arrangement or statute under which any director, officer, underwriter
or affiliated person of the Registrant is insured or indemnified. The
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability of which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act"), may be available to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment of the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 26. Business and other Connections of Investment Adviser
Pioneer Investment Management, Inc. ("Pioneer Investments") is a
registered investment adviser under the Investment Advisers Act of 1940, as
amended, and is a wholly owned subsidiary of The Pioneer Group, Inc.
("Pioneer"). Pioneer Investments manages investment companies, pension and
profit sharing plans, trusts, estates or charitable organizations and other
corporations or business entities.
To the knowledge of the Fund, none of Pioneer Investments' directors
or executive officers is or has been during their employment with Pioneer
Investments engaged in any other business, profession, vocation or employment
of a substantial nature for the past two fiscal years, except as noted below.
Certain directors and officers, however, may hold or may have held various
positions with, and engage or have engaged in business for, the investment
companies that Pioneer Investments manages, Pioneer and/or other Pioneer
subsidiaries.
OTHER BUSINESS, PROFESSION, VOCATION OR
EMPLOYMENT OF SUBSTANTIAL NATURE WITHIN LAST TWO
NAME OF DIRECTOR/OFFICER FISCAL YEARS
John F. Cogan, Jr. Of Counsel, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
Joseph P. Barri Senior Partner, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
Item 27. Principal Underwriters
(a) See "Management of the Fund" in the Statement of Additional
Information.
(b) Directors and officers of Pioneer Funds Distributor, Inc.:
POSITIONS AND OFFICES WITH POSITIONS AND OFFICES WITH
NAME UNDERWRITER FUND
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
David D. Tripple Director and President Executive Vice President and
Trustee
C-2
<PAGE>
Steven M. Graziano Director and Executive
Vice President None
William A. Misata Senior Vice President None
Constance D. Spiros Senior Vice President None
Marcy L. Supovitz Senior Vice President None
Mark R. Kiniry Vice President, Regional
Director, Sales None
Barry G. Knight Vice President None
William H. Spencer Vice President, Regional
Director, Sales None
Elizabeth A. Watson Vice President, Compliance None
Steven R. Berke Assistant Vice President,
Blue Sky None
Eric W. Reckard Treasurer Treasurer
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 28. Location of Accounts and Records
The accounts and records are maintained at the Registrant's office at
60 State Street, Boston, Massachusetts; contact the Treasurer.
Item 29. Management Services
Not applicable.
Item 32. Undertakings
Not Applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this registration statement under Rule
485(b) under the Securities Act of 1933 and has duly caused this registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Boston and The Commonwealth of Massachusetts, on the 28th day of April,
2000.
PIONEER INDEPENDENCE FUND
By: /s/John F. Cogan, Jr.
---------------------
John F. Cogan, Jr.
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title
/s/John F. Cogan, Jr.
- ----------------------- Chairman of the Board )
John F. Cogan, Jr. and President; Principal )
Executive Officer; and )
Trustee )
)
/s/Eric W. Reckard
- ----------------------- Treasurer and )
Eric W. Reckard Principal Financial )
and Accounting Officer )
Trustees: )
)
)
)
/s/John F. Cogan, Jr. )
- ----------------------- )
John F. Cogan, Jr. )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
Robert H. Egdahl, M.D.* )
Robert H. Egdahl, M.D. )
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
David D. Tripple* )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
Margaret B. W. Graham* )
Margaret B. W. Graham )
*By: /s/John F. Cogan, Jr. April 28, 2000
---------------------------
John F. Cogan, Jr.
Attorney-in-Fact
<PAGE>
Exhibit Number Exhibit
(j) 11. Consent of Arthur Andersen LLP
(p) 20. Code of Ethics
N/A 21. Powers of Attorney
[logo]
Arthur Andersen
Consent of Independent Public Accountants
To the Shareholders and Trustees of
Pioneer Independence Fund
As independent public accountants, we hereby consent to the use of our
report on Pioneer Independence Fund dated February 4, 2000 (and to all
references to our firm) included in or made a part of Post-Effective Amendment
No. 3 and Amendment No. 4 to Registration Statement File Nos. 333-42105 and
811-08547, respectively.
/s/ Arthur Andersen LLP
Boston, Massachusetts
April 27, 2000
THE PIONEER COMPLEX OF FUNDS
- --------------------------------------------------------------------------------
CODE OF ETHICS
- --------------------------------------------------------------------------------
INTRODUCTION
This Code of Ethics (the "Code") has been adopted by each registered investment
company (individually an "Investment Company" and collectively the "Investment
Companies") for which Pioneer Investment Management, Inc. ("Pioneer
Investments") serves as an investment adviser or for which Pioneer Funds
Distributor, Inc. ("PFD") serves as principal underwriter, Pioneer Investments
and PFD. The Code is applicable to Access Persons, including Independent
Trustees, of the Investment Companies, as well as Access Persons of Pioneer
Investments and PFD. Pioneer Investments, PFD and the Investment Companies are
sometimes together referred to herein as "Pioneer."
Pioneer and its affiliated entities are committed to maintaining the highest
ethical standards in connection with the management of investment companies and
institutional accounts. Dishonesty, self-dealing, conflicts of interest and
trading on material non-public information will not be tolerated.
The Code reflects Pioneer's views on dishonesty, self-dealing and conflicts of
interest. Every person who has been designated by Pioneer as an "Access Person"
is required to read the Code annually and to certify that he/she has complied
with its provisions and with the reporting requirements. In addition, every
employee of Pioneer is subject to Pioneer's Policies and Procedures to Prevent
Insider Trading.
Any person who has any question regarding the applicability of the Code or
Pioneer's Policies and Procedures to Prevent Insider Trading or the related
prohibitions, restrictions and procedures or the propriety of any action, is
urged to contact the Office of the General Counsel.
SECTION 1
STATEMENT OF POLICY
Section 17(j) of the Investment Company Act of 1940 (the "1940 Act") provides,
among other things, that it is unlawful for any Access Person of Pioneer to
engage in any act, practice or course of business in connection with the
purchase or sale, directly or indirectly, by such Access Person of any Covered
Security held or to be acquired by an Investment Company in contravention of
such rules and regulations as the Securities and Exchange Commission (the
"Commission") may adopt to define and prescribe means reasonably necessary to
prevent such acts, practices or courses of business as are fraudulent, deceptive
or manipulative.
It is the policy of Pioneer that no Access Person shall engage in any act,
practice or course of conduct that would violate the provisions of Section 17(j)
and the rules thereunder. The fundamental position of Pioneer is, and has been,
that each Access Person shall place at all times the interests of the Investment
Companies and their shareholders and the Institutional Accounts ahead of his/her
private Covered Securities transactions. Accordingly, private Covered Securities
transactions by Access Persons must be conducted in a manner consistent with
this Code so as to avoid any actual or potential conflict of interest or any
abuse of an Access Person's position of trust and responsibility. Further,
Access Persons should not take inappropriate advantage of their positions with
or relationships to any Investment Company, any Institutional Account or
Pioneer.
<PAGE>
Without limiting in any manner the fiduciary duty owed by Access Persons or the
provisions of this Code, it should be noted that Pioneer considers it proper
that purchases and sales be made by its Access Persons in the marketplace of
Covered Securities owned by the Investment Companies or Institutional Accounts;
PROVIDED, HOWEVER, that such personal Covered Securities transactions comply
with the spirit of, and the specific restrictions and limitations set forth in,
this Code. Such personal Covered Securities transactions also should be made in
amounts consistent with the normal investment practice of the Access Person
involved and with an investment, rather than a trading, outlook. Not only does
this policy encourage investment freedom and result in establishing investment
experience, but it also fosters a continuing personal interest in such
investments by those responsible for the continuous supervision of the
portfolios of the Investment Companies and Institutional Accounts. In making
personal investment decisions with respect to any Covered Security, extreme care
must be exercised by Access Persons to ensure that the prohibitions of this Code
are not violated. Further, personal investing by Access Persons should be
conducted in such a manner so as to eliminate the possibility that the Access
Person's time and attention is being devoted to his/her personal investments at
the expense of time and attention that should be devoted to management of an
Investment Company's or Institutional Account's portfolio. It should be
emphasized that technical compliance with the procedures, prohibitions and
limitations of this Code will not automatically insulate from scrutiny personal
Covered Securities transactions by an Access Person which show a pattern of
abuse of his/her fiduciary duty to any Investment Company or Institutional
Account.
SECTION 2
DEFINITIONS
2.1 ACCESS PERSON. The term "Access Person" shall mean the following:
o The term "Access Person" with respect to an Investment Company
shall mean any Trustee, officer or Advisory Person of such
Investment Company.
o The term "Access Person" with respect to Pioneer Investments shall
mean any general partner, director, officer or Advisory Person of
Pioneer Investments.
o The term "Access Person" with respect to PFD shall mean any
director or officer of PFD who in the ordinary course of business
makes, participates in or obtains information regarding the
purchase or sale of Covered Securities for an Investment Company
for which PFD acts, or whose functions or duties, in the ordinary
course of business, relate to the making of any recommendation to
an Investment Company or Institutional Account regarding the
purchase or sale of Covered Securities.
2.2 ADVISORY PERSON. The term "Advisory Person" shall mean (i) every
employee of an Investment Company, Pioneer Investments, PFD or The
Pioneer Group, Inc. ("PGI") (or any other company in a Control
relationship with Pioneer Investments) who, in connection with his or
her regular functions or duties, makes, participates in, or obtains
information regarding, the purchase or sale of a Covered Security by an
Investment Company or Institutional Account, or whose functions relate
to the making of any recommendations with respect to such purchases or
sales, (ii) every natural person in a Control relationship to an
Investment Company, Pioneer Investments, PFD or
2
<PAGE>
PGI who obtains
information concerning recommendations made to an Investment Company or
Institutional Account with regard to the purchase or sale of a Covered
Security and (iii) any other employee or independent contractor of any
Investment Company, Pioneer Investments, PFD or PGI designated as an
Advisory Person by the Review Officer. Advisory Person shall not
include directors of PGI who are not also officers or employees of
Pioneer Investments, PFD, PGI or an Investment Company.
2.3 BENEFICIAL OWNERSHIP "Beneficial Ownership" of a security shall mean
having or sharing an opportunity, either directly or indirectly,
through any contract, arrangement, understanding, relationship or
otherwise, to profit or share in any profit derived from a transaction
in a security. Indirect opportunities to profit or share in any profit
would be deemed to exist as a result of, but not limited to, the
following:
o securities held by members of an Access Person's immediate family
sharing the same household (I.E., any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, sister-in-law, including adoptive relationships)
or any other individual(s) sharing the same household;
o a general partner's proportionate interest in securities held by
a general or limited partnership;
o a performance-related fee, other than an asset-based fee, received
by any broker, dealer, bank, insurance company, investment
company, investment adviser, investment manager, trustee or person
or entity performing a similar function;
o the right to dividends which is separate or separable from the
underlying security;
o an Access Person's interest in securities held by a trust; or
o an Access Person's right to acquire securities through the
exercise or conversion of any derivative security.
2.4 CONSIDERED FOR PURCHASE OR SALE. A Covered Security is being
"Considered for Purchase or Sale" by an Investment Company or
Institutional Account during any period in which Pioneer Investments
is: (i) actively trading or attempting to trade in the Covered Security
for an Investment Company or Institutional Account; (ii) passively
interested in trading in the Covered Security for an Investment Company
or Institutional Account, I.E., would buy or sell the Security within a
price range communicated to Pioneer Investments' trading department; or
(iii) considering, within an Investment Committee of Pioneer
Investments, the implementation of a trading program for the Covered
Security (including any period during which the Investment Committee is
in receipt of a recommendation with respect to which it has not yet
made a decision). With respect to a Pioneer Investments analyst, the
foregoing period shall commence on the day that he/she decides to
recommend the purchase or sale of the Covered Security to the
Investment Committee of Pioneer Investments and shall continue for a
period of three months after such date.
2.5 CONTROL. The term "Control" shall mean the power to exercise a
controlling influence over the management or policies of Pioneer
Investments, PFD or PGI, unless such power is solely the result of an
official position with Pioneer Investments, PFD or PGI, all as
determined in accordance with Section 2(a)(9) of the 1940 Act.
2.6 COVERED SECURITY. The term "Covered Security" shall have the meaning
set forth in Section 2(a)(36) of the 1940 Act and also shall include
other derivative financial instruments
3
<PAGE>
(including, but not limited to, options, futures contracts and options
on futures contracts) except that it shall not include:
o Direct obligations of the government of the United States;
o Bankers' acceptances;
o Bank certificates of deposit;
o Commercial paper;
o High quality short-term debt instruments, including repurchase
agreements (I.E., any instrument that has a maturity at issuance
of fewer than 366 days and that is rated in one of the two highest
rating categories by a Nationally Recognized Statistical Rating
Organization); or
o Shares of registered open-end investment companies, including the
Investment Companies.
(For reporting purposes, transactions in shares of Pioneer Interest
Shares must be reported.)
2.7 FIDUCIARY ACCOUNT. "Fiduciary Account" is an account with respect to
which an Access Person is an investment adviser, trustee or other
fiduciary and in which the Access Person does not otherwise have any
Beneficial Ownership interest.
2.8 INDEPENDENT TRUSTEE. "Independent Trustee" shall mean any Trustee of
an Investment Company who is not an "interested person" (within the
meaning of Section 2(a)(19) of the 1940 Act) of the Investment
Company, Pioneer Investments or PFD.
2.9 INITIAL PUBLIC OFFERING. "Initial Public Offering" shall mean an
offering of securities registered under the Securities Act of 1933, the
issuer of which, immediately before registration, was not subject to
the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934.
2.10 INSTITUTIONAL ACCOUNT. "Institutional Account" refers to any account,
other than an Investment Company, to which Pioneer Investments provides
investment advice.
2.11 INVESTMENT COMPANY. "Investment Company" refers to any U.S. registered
investment company for which Pioneer Investments serves as an
investment adviser or subadviser or for which PFD serves as principal
underwriter. "Investment Companies" refers to all such companies.
2.12 LIMITED OFFERING. "Limited Offering" shall mean an offering of
securities that is exempt from registration under the Securities Act of
1933 pursuant to Section 4(2) or Section 4(6) or pursuant to Rules 504,
505 or 506 under the Securities Act of 1933.
2.13 MATERIAL NON-PUBLIC INFORMATION. "Material Non-Public Information" with
respect to an issuer is information, not yet released to the public,
that would have a substantial likelihood of affecting a reasonable
investor's decision to buy or sell any Covered Securities of such
issuer.
4
<PAGE>
2.14 PORTFOLIO MANAGER. "Portfolio Manager" shall mean every person who is
responsible for the day-to-day management of an Investment Company or
an Institutional Account, or every person who shares such
responsibility with another Portfolio Manager.
2.15. PRECLEARANCE OFFICER. "Preclearance Officer" shall mean the officer of
Pioneer Investments designated from time to time by the Chairman of
Pioneer Investments to provide written prior approval of purchases and
sales by Access Persons. The term "Alternative Preclearance Officer"
shall mean the officer designated from time to time by the Chairman of
Pioneer Investments to provide written prior approval of purchases and
sales by the Preclearance Officer, as well as Access Persons when the
Preclearance Officer is not available, and who shall act in all
respects in the manner prescribed herein for the Preclearance Officer.
2.16 REVIEW OFFICER. "Review Officer" shall mean the officer of Pioneer
Investments designated from time to time by the Chairman of Pioneer
Investments to receive and review reports of purchases and sales by
Access Persons. The term "Alternative Review Officer" shall mean the
officer designated from time to time by the Chairman of Pioneer
Investments to receive and review the reports of purchases and sales by
the Review Officer, as well as Access Persons when the Review Officer
is not available, and who shall act in all respects in the manner
prescribed herein for the Review Officer.
SECTION 3
PROHIBITED ACTIVITIES
While the scope of actions which may violate the Statement of Policy set forth
above cannot be exactly defined, such actions would always include at least the
following prohibited activities:
3.1 Except on behalf of Fiduciary Accounts with respect to such Access
Person, no ACCESS PERSON who is not an Independent Trustee shall enter
an order for the purchase or sale of a Covered Security which an
Investment Company or Institutional Account is purchasing or selling or
considering for purchase or sale until the later of (i) the day after
the Investment Company's or Institutional Account's transaction in that
Covered Security is completed or (ii) after the Investment Company or
Institutional Account is no longer considering the Covered Security for
purchase or sale, unless the Review Officer determines, after
disclosure and review of all material information, that it is clear
that, in view of the nature of the Covered Security and the market for
such Covered Security, the order of the Access Person will not
adversely affect the price paid or received by the Investment Company
or Institutional Account and that the order of the Access Person will
not be advantaged by the transaction by the Investment Company or
Institutional Account. Any Covered Securities transactions by an Access
Person in violation of this Subsection 3.1 shall, at the discretion of
the Chairman of Pioneer Investments, be reversed, any profits disgorged
to the affected Investment Company or Institutional Account or to
charity or other appropriate sanctions imposed.
Except on behalf of Fiduciary Accounts as to which the Independent
Trustee is a fiduciary, no Independent Trustee shall enter an order for
the purchase or sale of a Covered Security if he/ she knew or, in the
ordinary course of fulfilling his/ her official duties as an
Independent Trustee, should have known, that during the 15-day period
immediately before or after the entry of such order, such Covered
Security was purchased or sold by an Investment Company, or such
Covered Security was considered by Pioneer Investments for purchase or
sale by an Investment Company.
5
<PAGE>
3.2 No ACCESS PERSON shall, directly or indirectly, purchase or sell any
Covered Security in which he/she has, or by reason of such purchase
acquires, any Beneficial Ownership interest within a period of seven
calendar days before and after any Investment Company or Institutional
Account advised by Pioneer Investments has purchased or sold such
Covered Security or within seven calendar days of the Covered Security
being recommended for purchase or sale by Pioneer Investments. Any
Covered Security transaction by an Access Person in violation of this
Subsection 3.2 shall, at the discretion of the Chairman of Pioneer
Investments, be reversed, any profits disgorged to the affected
Investment Company or Institutional Account or to charity or other
appropriate sanctions imposed. The provisions of this Subsection 3.2
are subject to a DE MINIMUS exception for Access Persons other than
Advisory Persons at the discretion of the Preclearance Officer.
3.3 No ACCESS PERSON shall purchase or sell, or cause to be purchased or
sold, any Covered Security for a Fiduciary Account as to which he/she
is a fiduciary if any such purchase or sale may, to the reasonable
knowledge of such Access Person, adversely affect the interest of an
Investment Company or Institutional Account in purchasing or selling
such Covered Security or use the transaction by an Investment Company
or Institutional Account to advantage such Fiduciary Account. Covered
Securities transactions for a Fiduciary Account which may adversely
affect an Investment Company or Institutional Account include (i)
purchases that put upward pressure on the price of a Covered Security
being purchased or considered for purchase or (ii) sales that put
downward pressure on the price of a Covered Security being sold or
considered for sale by an Investment Company or Institutional Account.
No Access Person shall be in violation of this Subsection 3.3 with
respect to:
o a transaction in a Covered Security for Fiduciary Accounts if the
aggregate number of shares included in all such transactions on
any trading day does not exceed the lesser of (x) 1% of the
outstanding shares of the Covered Security or (y) the average
weekly trading volume of shares of such Covered Security during
the four previous calendar weeks; or
o the sale of a Covered Security on behalf of a Fiduciary Account by
an Access Person acting in good faith in fulfillment of his/her
fiduciary duty to sell the Covered Security.
3.4 No ACCESS PERSON shall, directly or indirectly, without first obtaining
approval of the President of Pioneer Investments, communicate to any
person any Material Non-Public Information relating to any issuer of
any Covered Security owned by an Investment Company or Institutional
Account. No Access Person shall, directly or indirectly, without first
obtaining approval of the President of Pioneer Investments, communicate
to any person who is not an Access Person any Material Non-Public
Information relating to an Investment Company or Institutional Account,
including, without limitation, the purchase or sale or the considered
purchase or sale of a Covered Security on behalf of such Investment
Company or Institutional Account, except to the extent necessary to
effect Covered Securities transactions on behalf of such Investment
Company or Institutional Account. No Access Person shall trade on or
otherwise use any Material Non-Public Information for his /her personal
benefit or for the benefit of any other person or entity or otherwise
act in a manner detrimental to the Covered Securities transactions of
an Investment Company or Institutional Account.
3.5 No ACCESS PERSON shall engage in, or permit anyone within his /her
Control to engage in, any act, practice or course of conduct which
would operate as a fraud or deceit upon, or constitute a manipulative
practice with respect to, an Investment Company or Institutional
Account or any
6
<PAGE>
issuer of any Covered Security owned by an Investment
Company or Institutional Account or which would violate Pioneer's
Policies and Procedures to Prevent Insider Trading Violations.
3.6 No ADVISORY PERSON shall, directly or indirectly, purchase any security
pursuant to an Initial Public Offering. Access Persons (other than
Advisory Persons) shall not directly or indirectly purchase any
security pursuant to an Initial Public Offering without obtaining prior
written approval from the Preclearance Officer, after disclosure to and
review by the Preclearance Officer of all material information. Any
approval will take into account whether the investment opportunity
should be reserved for an Investment Company or Institutional Account
and whether the opportunity is being offered to Access Person by virtue
of his /her position with or relationship to an Investment Company or
Institutional Account.
3.7 No ADVISORY PERSON shall, directly or indirectly, purchase any security
sold in a Limited Offering without obtaining prior written approval
from the Preclearance Officer, after disclosure to and review by the
Preclearance Officer of all material information. Any approval will
take into account whether the investment opportunity should be reserved
for an Investment Company or Institutional Account and whether the
opportunity is being offered to such Advisory Person by virtue of his
/her position with or relationship to an Investment Company or
Institutional Account.
3.8 No ADVISORY PERSON shall accept any gift or personal benefit valued in
excess of a DE MINIMUS value (as established from time to time by the
Preclearance Officer). Any solicitation of gifts or gratuities is
unprofessional and is strictly prohibited.
3.9 No ADVISORY PERSON shall serve on the board of directors of any
publicly traded company, absent prior written authorization by the
President of Pioneer Investments and determination by the President of
Pioneer Investments that the board service would be consistent with the
interests of the Investment Companies and the Institutional Accounts.
An Advisory Person who serves on the board of directors of a publicly
traded company may not participate in the decision to purchase or sell
any Covered Securities of such company by or on behalf of any
Investment Company or Institutional Account.
3.10 No ADVISORY PERSON shall recommend any Covered Securities transaction
for any Investment Company or Institutional Account without having
previously disclosed any interest in such Covered Securities or the
issuer thereof to the President of Pioneer Investments, including
without limitation:
o his/her Beneficial Ownership of any Covered Securities of such
issuer;
o any contemplated transaction by such person in such Covered
Securities;
o any position with such issuer or its affiliates; and
o any present or proposed business relationship between such issuer
or its affiliates and such person or any party in which such
person has a significant interest.
Such interested Advisory Person may not participate in the decision by
Pioneer Investments on behalf of any Investment Company or
Institutional Account to purchase and sell Covered Securities of such
issuer.
7
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SECTION 4
EXEMPT TRANSACTIONS AND CONDUCT
The prohibitions of Section 3 of this Code (other than Subsections 3.4 and 3.5)
shall not be deemed to be violated by any of the following transactions:
4.1 Purchases or sales of Covered Securities for an account over which the
Access Person has no direct or indirect influence or Control;
4.2 Purchases or sales of Covered Securities which are non-volitional on
the part of the Access Person;
4.3 Purchases or sales of Covered Securities pursuant to an automatic
dividend reinvestment, cash purchase or withdrawal plan provided that
no adjustment is made by the Access Person to the rate at which Covered
Securities are purchased or sold, as the case may be, under such a plan
during any period in which the Covered Security is being considered for
purchase or sale by any Investment Company or Institutional Account;
4.4 Purchases of Covered Securities effected upon the exercise of rights
issued by an issuer pro rata to all holders of a class of its Covered
Securities, to the extent such rights were acquired by the Access
Person from the issuer, and sales of such rights so acquired;
4.5 Purchases or sales of Covered Securities which receive the prior
approval of the Review Officer, after disclosure to and review by the
Review Officer of all material information and provided that such prior
approval is based on the reasonable conclusion that the proposed
purchase or sale would not be in violation of the spirit of this Code
or would not cause any injury to any Investment Company or
Institutional Account;
4.6 Purchases or sales of Covered Securities made in good faith on behalf
of another Investment Company or Institutional Account, it being
understood by, and disclosed to, the Investment Companies and
Institutional Accounts that Pioneer may make contemporaneous investment
decisions and cause to be effected contemporaneous executions on behalf
of one or more Investment Companies and Institutional Accounts and that
such executions may increase or decrease the price at which Covered
Securities are purchased or sold for the Investment Companies and
Institutional Accounts;
4.7 Tenders of Covered Securities pursuant to tender offers which are
expressly conditioned on the tender offer's acquisition of all of the
Covered Securities of the same class; and
4.8 Except as otherwise provided in Section 3.3, purchases or sales of
Covered Securities for a Fiduciary Account as to which the Access
Person is a fiduciary.
SECTION 5
POLICIES AND PROCEDURES TO PREVENT INSIDER TRADING VIOLATIONS
All employees of Pioneer or any affiliate, including Access Persons other than
Independent Trustees, are subject to Pioneer's Policies and Procedures to
Prevent Insider Trading Violations, in addition to the
8
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requirements of this Code. Any violation of the Insider Trading Policy
which adversely affects any Investment Company or Institutional Account shall be
deemed to be a violation of this Code.
SECTION 6
CONFIDENTIALITY
All information obtained from any Access Person hereunder shall be kept in
strict confidence by Pioneer, except that reports of Covered Securities
transactions hereunder will be made available to the Investment Companies and
Institutional Accounts and to the Commission or any other regulatory or
self-regulatory organization to the extent required by law or regulation or to
the extent Pioneer considers necessary or advisable in cooperating with an
investigation or inquiry by the Commission or any other regulatory or
self-regulatory organization.
SECTION 7
INTERPRETATION
The Board of Trustees, on behalf of an Investment Company, as well as Pioneer,
may from time to time adopt such interpretations of this Code as it deems
appropriate.
SECTION 8
EXCEPTIONS TO THE CODE
Although exceptions to the Code will rarely, if ever, be granted, Pioneer
Investments' Chairman, after consultation with the Review Officer, may make
exceptions on a case by case basis, to any of the provisions of this Code upon a
determination that the conduct at issue involves a negligible opportunity for
abuse or otherwise merits an exemption from the Code. All such exceptions must
be received in writing by the Access Person before becoming effective. The
Review Officer shall report the exception to the Board of Trustees of the
Investment Companies at the next regularly scheduled Board meeting.
SECTION 9
ADOPTION OF PROCEDURES TO ADMINISTER THE CODE
Pioneer has adopted procedures to administer the Code of Ethics and Pioneer's
Policies and Procedures to Prevent Insider Trading. Pioneer shall administer
such procedures in accordance with applicable rules and regulations adopted by
the Commission, and all Access Persons are required to comply with such
procedures.
Approved: March 7, 2000
Effective: March 7, 2000
9
POWER OF ATTORNEY
I, the undersigned officer or trustee of the Pioneer mutual funds
listed on Annex A, do hereby constitute and appoint John F. Cogan, Jr., David D.
Tripple, Joseph P. Barri and Eric W. Reckard, and each of them acting singly, to
be my true, sufficient and lawful attorneys, with full power to each of them and
each of them acting singly, to sign for me, in my name and the capacities
indicated below, any Registration Statement on Form N-1A, Form N-14 or any other
applicable registration form and any and all amendments thereto filed by any of
the Pioneer mutual funds of which I am now or on the date of such filing a
Trustee (each a "Trust") under the Investment Company Act of 1940, as amended,
and under the Securities Act of 1933, as amended, with respect to the offering
of its shares of beneficial interest, and any and all other documents and papers
relating thereto, and generally to do all such things in my name and on behalf
of me in the capacities indicated to enable the Trust to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933, as
amended, and thereunder, hereby ratifying and confirming my signature as it may
be signed by said attorneys or each of them to any and all Registration
Statements and amendments to said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 7th day of
September, 1999.
/s/ Mary K. Bush
Mary K. Bush
/s/ Blake Eagle
Blake Eagle
/s/ Richard H. Egdahl
Richard H. Egdahl, M.D.
/s/ Margaret BW Graham
Margaret B.W. Graham
/s/ Stephen G. Kasnet
Stephen G. Kasnet
/s/ John W. Kendrick
John W. Kendrick
/s/ Marguerite A. Piret
Marguerite A. Piret
/s/ Fred N. Pratt, Jr.
Fred N. Pratt, Jr.
/s/ Stephen K. West
Stephen K. West
/s/ John Winthrop
John Winthrop
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
/s/ David D. Tripple
David D. Tripple
/s/ Eric W. Reckard
Eric W. Reckard
<PAGE>
Power of Attorney
Annex A
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer World Equity Fund
Pioneer Emerging Markets Fund
Pioneer Indo-Asia Fund
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Independence Fund
Pioneer Micro-Cap Fund
Pioneer Gold Shares
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Pioneer Short-Term Income Trust/
Pioneer Limited Maturity Bond Fund
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Tax-Free Income Fund
Pioneer Money Market Trust
Pioneer Strategic Income Fund
Pioneer Tax-Managed Equity Fund/
Pioneer Tax-Managed Fund
Pioneer High Yield Fund
Pioneer Interest Shares
Pioneer Variable Contracts Trust
