PIONEER TAX MANAGED FUND, N-1A, 1999-09-16

PIONEER TAX MANAGED FUND
N-1A, 1999-09-16

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File Nos. 33-
811-09585

As filed with the Securities and Exchange Commission on September 16, 1999

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
---

Pre-Effective Amendment No. __ /___/

Post-Effective Amendment No. __ /___/

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 / X /
---

Amendment No. __ /___/

(Check appropriate box or boxes)

PIONEER TAX-MANAGED EQUITY FUND
(Exact Name of Registrant as Specified in Charter)

60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (617) 742-7825

Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration statement under the Securities Act of 1933.

The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.

<PAGE>
Draft of 9/10/99

[Pioneer logo]

Preliminary prospectus dated September 16, 1999
Subject to completion

A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.

Pioneer
Tax-Managed Fund

Class A, Class B and Class C Shares
Prospectus, Novenber 18, 1999

Contents

Basic information about the fund 1
Management 6
Buying, exchanging and selling shares 8
Dividends, capital gains and taxes 26

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.

<PAGE>

[text box]
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.
[end text box]

[text box]
Contact your investment professional to discuss how the fund fits into your
portfolio.
[end text box]

<PAGE>

Basic information about the fund

Investment objective
Long-term capital growth.

Principal investment strategies
Normally, the fund invests at least 65% of its assets in equity securities,
primarily of U.S. issuers. For purposes of the fund's investment policies,
equity securities include common and preferred stocks, warrants and convertible
debt securities.

Pioneer Investment Management, Inc., the fund's investment adviser, uses a value
approach to select the fund's investments. Using this investment style, Pioneer
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
based on the company's assets and prospects for earnings growth. In making that
assessment, Pioneer employs fundamental research and due diligence. Pioneer
relies on the knowledge, experience and judgment of its own staff who have
access to a wide variety of research.
Factors Pioneer looks for in selecting investments include:
ss. Favorable expected returns relative to perceived risk
ss. Above average potential for earnings and revenue growth
ss. Low market valuations relative to earnings forecast, book value, cash flow
and sales ss. A sustainable competitive advantage, such as a brand name,
customer base, proprietary technology or
economies of scale

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The fund will not concentrate in any one
industry.

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Tax-managed investing
The fund seeks to minimize the impact of federal income tax on shareholder
returns.
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Tax management strategies
The fund may use these strategies:

o Investing primarily in capital growth-oriented stocks with no or a low
dividend yield. These stocks tend to generate lower current taxable income
than most fixed income securities and high-dividend stocks
o Avoiding sales of appreciated securities that result in capital gain, except
where there are compelling investment reasons for the sale
o Selling securities to realize capital losses that offset capital gains that
have or are expected to be recognized
o When selling a security, focusing on the highest cost lot of that security
first (which reduces the capital gain or increases the loss) realized by
the fund. The fund will also consider the short-term or long-term
characterization of a gain or loss and will attempt to offset short-term
gains with short-term losses

Principal risks of investing in the fund
Even though the fund seeks reasonable income and capital growth, you could lose
money on your investment or not make as much as if you invested elsewhere if:
o The stock market goes down (this risk may be greater in the short term)
o Value stocks fall out of favor with investors
o The fund's assets remain undervalued or do not have the potential value
originally expected

The fund uses tax management strategies with the objective of reducing the
amount of distributions subject to federal taxation. However, Pioneer will
follow tax management strategies only to the extent that they do not conflict
with the fund's goal of capital growth or the operation of the fund. The fund
may realize a short-term gain on the sale of a security:
o if Pioneer believes it will decline in value
o to increase diversification
o to raise cash to pay expenses or meet redemption requests.

In addition, some securities in the fund's portfolio will regularly generate
taxable income. At times, tax-managed funds are more volatile than other funds
because they tend to hold stocks longer to avoid realizing gain due to portfolio
turnover. In addition, compared to traditionally managed mutual funds, the
tax-managed strategies may cause a higher percentage of the fund's net asset
value to be represented by unrealized capital appreciation, which represents a
potential future tax liability to shareholders.

<PAGE>

The fund's performance
Since the fund is newly organized, it does not disclose any performance
information. The fund's performance will vary from year to year. Past
performance does not necessarily indicate how a fund will perform in the future.
As a shareowner, you may lose or make money on your investment.

Fees and expenses
These are the fees and expenses, based on estimated expenses for the current
fiscal year, you may pay if you invest in the fund.

Shareowner fees
paid directly from your investment Class A Class B Class C
- -----------------------------------------------------------------------

Maximum sales charge (load) when you buy shares
as a percentage of offering price 5.75% None None
.......................................................................
Redemption fee (or a percentage of amount
redeemed)(1) 2.0% 2.0% 2.0%

Exchange fee (or a percentage of amount
redeemed)(1) 2.0% 2.0% 2.0%

Maximum deferred sales charge (load) as a percentage of
offering price or the amount you receive when you sell
shares, whichever is less None(1) 4% 1%
- -----------------------------------------------------------------------

Annual fund operating expenses
paid from the assets of the fund
as a percentage of average daily net
assets Class A Class B Class C
- -----------------------------------------------------------------------
Management Fee(3) 0.75% 0.75% 0.75%
.......................................................................
Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00%
.......................................................................
Other Expenses(3) 0.50% 0.50% 0.50%
......................................................................
Total Annual Fund Operating Expenses 1.50% 2.25% 2.25%
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(1) The fund charges this fee on redemptions or exchanges of shares held less
than 90 days or purchase.
(2) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject to
a contingent deferred sales charge. See "Buying, exchanging and selling
shares."
(3) 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 Class A expenses to 1.75% of the average
daily net assets attributable to Class A shares; the portion of fund
expenses attributable to Class B and Class C shares will be reduced
only to the extent such expenses are reduced for Class A shares. This
agreement is voluntary and temporary and may be revised or terminated
at any time.

Example
This example helps you compare the costs 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:

If you sell your shares If you do not sell your shares
----------------------------------------------------------------------------
Number of years you own your shares
----------------------------------------------------------------------------
1 3 1 3
- ----------------------------------------------------------
Class A $596 $ 903 $1 $596 $903
..........................................................
Class B 628 1,003 228 703
..........................................................
Class C 328 703 228 703
- ----------------------------------------------------------

<PAGE>

Basic information about the fund

Other investment strategies
As discussed, the fund invests primarily in equity securities of U.S. companies
to seek long-term capital growth.

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).

Investments other than U.S. common stocks
The fund may invest up to 10% of its total assets (at the time of purchase) in
equity and debt securities of non-U.S. issuers. The fund will not invest more
than 5% of its total assets (at the time of purchase) 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.

The fund may invest the balance of its assets in debt securities of corporate
and government issuers. Generally the fund may acquire debt securities that are
investment grade, but the fund may invest up to 5% of its net assets (at the
time of purchase) in lower quality debt securities including convertible debt
securities. The fund invests in debt securities when Pioneer believes they are
consistent with the fund's investment objective and offer the potential for
capital growth, to diversify the fund's portfolio or for greater liquidity.

Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors that 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. The fund may invest the remainder of its assets in
securities with a remaining maturity of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, the fund may depart from its
principal investment strategies and invest part or all of its assets in these
securities. 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.

<PAGE>
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 purposes, including: ss. As a hedge against adverse
changes in stock market prices, interest rates or currency exchange rates ss. As
a substitute for purchasing or selling securities ss. 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.

<PAGE>

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,
1998, the firm had more than $23 billion in assets under management worldwide
including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual
fund investment history includes creating this fund 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
Day-to-day management of the fund's portfolio is the responsibility of John A.
Carey. Mr. Carey is a senior vice president of Pioneer. He joined Pioneer in and
has been an investment professional since 1979.

Mr. Carey is supported by a team of portfolio managers and analysts who
specialize in U.S. equity securities. This team provides research for the fund
and other Pioneer mutual funds with similar investment objectives or styles. Mr.
Carey and his team operate under the supervision of Theresa A. Hamacher. Ms.
Hamacher is chief investment officer of Pioneer. She joined Pioneer in 1997 and
has been an investment professional since 1984; most recently as chief
investment officer at another investment adviser.

<PAGE>
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 0.75% of the
fund's average daily net assets up to $500 million; 0.725% of the next $500
million; and 0.70% of the assets over $1 billion. 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.

Year 2000
Information technology experts are concerned about computer and other electronic
systems' ability to process date-related information on and after January 1,
2000. This scenario, commonly referred to as the "Year 2000 problem," could have
an adverse impact on the fund and the provision of services to its shareowners.
Pioneer is addressing the Year 2000 problem with respect to its systems and
those used by the distributor and transfer agent. During 1999, Pioneer expects
to finish addressing all material Year 2000 issues and to participate in
industry-wide testing. The fund has obtained assurances from its other service
providers that they are taking appropriate Year 2000 measures and Pioneer is
monitoring their efforts. Although the fund does not expect the Year 2000
problem to adversely impact it, the fund cannot guarantee that its, or the
fund's service providers', efforts will be successful.

<PAGE>

Buying, exchanging and selling shares

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 for each class of shares 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, adjusted for any applicable sales charge. When you buy Class A
shares, you pay an initial sales charge. When you sell Class B or Class C
shares, you may pay a contingent deferred sales charge depending on how long you
have owned your shares.

Choosing a class of shares

The fund offers three classes of shares through this prospectus. Each class has
different sales charges and expenses, allowing you to choose the class that best
meets your needs.

Factors you should consider include:
o How long you expect to own the shares
o The expenses paid by each class
o Whether you qualify for any reduction or waiver of sales charges

Your investment professional can help you determine which class meets your
goals. Your investment firm may receive different compensation depending upon
which class you choose. If you are not a U.S. citizen and are purchasing shares
outside the U.S., you may pay different sales charges under local laws and
business practices.

Distribution plans
The fund has adopted a distribution plan for each class of shares offered
through this prospectus in accordance with Rule 12b-1 under the Investment
Company Act of 1940. Under each 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 not subject to a distribution fee.

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Share price
The net asset value per share calculated on the day of your transaction,
adjusted for any applicable sales charge, is often referred to as the share
price. [end text box]

<PAGE>

Comparing classes of shares

Class A
Class B
Class C

Why you might prefer each class
Class A shares may be your best alternative if you prefer to pay an initial
sales charge and have lower annual expenses, or if you qualify for any reduction
or waiver of the initial sales charge. You may prefer Class B shares if you do
not want to pay an initial sales charge, or if you plan to hold your investment
for at least six years. Class B shares are not recommended if you are investing
$250,000 or more. You may prefer Class C shares if you do not wish to pay an
initial sales charge and you would rather pay higher annual expenses over time.
Initial sales charge Up to 5.75% of the offering price, which is reduced or
waived for large purchases and certain types of investors. At the time of your
purchase, your investment firm may receive a commission from the distributor of
up to 5%, declining as the size of your investment increases.

None

Contingent deferred sales charges
None, except in certain circumstances when the initial sales charge is waived.

Up to 4% is charged if you sell your shares. The charge is reduced over time and
not charged after six years. Your investment firm may receive a commission from
the distributor at the time of your purchase of up to 4%.A 1% charge if you sell
your shares within one year of purchase. Your investment firm may receive a
commission from the distributor at the time of your purchase of up to 1%.

Distribution and service fees Up to 0.25% of average daily net assets.

Up to 1% of average daily net assets.

Annual expenses (including distribution and service fees) Lower than Class B or
Class C.

Higher than Class A shares; Class B shares convert to Class A shares after eight
years.

Higher than Class A shares; Class C shares do not convert to any other class of
shares. You continue to pay higher annual expenses.
Exchange privilege
Class A shares of other Pioneer mutual funds.

Class B shares of other Pioneer mutual funds.

Class C shares of other Pioneer mutual funds.

<PAGE>

Buying, exchanging and selling shares

Sales charges: Class A shares

You pay the offering price when you buy Class A shares unless you qualify to
purchase shares at net asset value. You pay a lower sales charge as the size of
your investment increases. You do not pay a sales charge when you reinvest
dividends or distributions paid by the fund.

Investments of $1 million or more
You do not pay a sales charge when you purchase Class A shares if you are
investing $1 million or more, or you are a participant in certain group plans.
However, you pay a deferred sales charge if you sell your Class A shares within
one year of purchase. The sales charge is equal to 1% of your investment or your
sales proceeds, whichever is less.

Reduced sales charges
You may qualify for a reduced Class A sales charge if you own or are purchasing
shares of Pioneer mutual funds. If you or your investment professional notifies
the distributor of your eligibility for a reduced sales charge at the time of
your purchase, the distributor will credit you with the combined value (at the
current offering price) of all your Pioneer mutual fund shares and the shares of
your spouse and the shares of any children under 21. Certain trustees and
fiduciaries may also qualify for a reduced sales charge. For this purpose,
Pioneer mutual funds include any fund for which the distributor is principal
underwriter and, at the distributor's discretion, may include funds organized
outside the U.S. managed by Pioneer.

See "Qualifying for a reduced sales charge" for more information.

Sales charges for Class A shares
Sales charge as % of
------------------------
Offering Net amount
Amount of purchase price invested
- ----------------------------------------------------------------------
Less than $50,000 5.75 6.10
......................................................................
$50,000 but less than $100,000 4.50 4.71
......................................................................
$100,000 but less than $250,000 3.50 3.63
......................................................................
$250,000 but less than $500,000 2.50 2.56
......................................................................
$500,000 but less than $1 million 2.00 2.04
......................................................................
$1 million or more -0- -0-
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Offering price
The net asset value per share plus any initial sales charge.
[end text box]

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Sales charges: Class B shares

You buy Class B shares at net asset value per share without paying an initial
sales charge. However, you will pay a contingent deferred sales charge to the
distributor if you sell your Class B shares within six years of purchase. The
contingent deferred sales charge decreases as the number of years since your
purchase increases.

Contingent deferred sales charge
- ---------------------------------------------
On shares sold As a % of
before the dollar amount subject
end of year to the sales charge
- ---------------------------------------------
1 4
.............................................
2 4
.............................................
3 3
.............................................
4 3
.............................................
5 2
.............................................
6 1
.............................................
7+ -0-
- ---------------------------------------------

Conversion to Class A shares
Class B shares automatically convert into Class A shares. This helps you because
Class A shares pay lower expenses.

Your Class B shares will convert to Class A shares at the beginning of the
calendar month (calendar quarter for shares purchased before October 1, 1998)
that is eight years after the date of purchase except that: ss. Shares bought by
reinvesting dividends and capital gains will convert to Class A shares at the
same time
as shares on which the dividend or distribution was paid
ss. Shares purchased by exchanging shares from another fund will convert on the
date that the shares originally acquired would have converted into Class A
shares

Currently, the Internal Revenue Service permits the conversion of shares to take
place without imposing a federal tax. Conversion may not occur if the Internal
Revenue Service deems it a taxable event for federal tax purposes.

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Paying the contingent deferred sales charge (CDSC)

Several rules apply for Class B shares so that you pay the lowest CDSC.
o The CDSC is calculated on the current market value, or the original cost,
of the shares you are selling, whichever is less
o You do not pay a CDSC on reinvested dividends or distributions
o In determining the number of years since your purchase, all purchases are
considered to have been made on the first day of that month (quarter for
shares purchased before October 1, 1998)
o If you sell only some of your shares, the transfer agent will first sell
your shares that are not subject to any CDSC and then the shares that you
have owned the longest
o You may qualify for a waiver of the CDSC normally charged. See "Qualifying
for a reduced sales charge"
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Contingent deferred sales charge
A sales charge that may be deducted from your sale proceeds. [end text box]

<PAGE>

Buying, exchanging and selling shares

Sales charges: Class C shares

You buy Class C shares at net asset value per share without paying an initial
sales charge. However, if you sell your Class C shares within one year of
purchase, you will pay to the distributor a contingent deferred sales charge of
1% of the current market value, or the original cost, of the shares you are
selling, whichever is less.

[text box]
Paying the contingent deferred sales charge (CDSC)

Several rules apply for Class C shares which result in your paying the lowest
CDSC.
o The CDSC is calculated on the current market value, or the original cost,
of the shares you are selling, whichever is less
o You do not pay a CDSC on reinvested dividends or distributions
o In determining the number of years since your purchase, all purchases are
considered to have been made on the first day of that month (quarter for
shares purchased before October 1, 1998)
o If you sell only some of your shares, the transfer agent will first sell
your shares that are not subject to any CDSC and then the shares that you
have bought most recently
o You may qualify for a waiver of the CDSC normally charged. See "Qualifying
for a reduced sales charge"
[end text box]

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Contingent deferred sales charge
A sales charge that may be deducted from your sale proceeds. [end text box]

<PAGE>

Qualifying for a reduced sales charge

Initial Class A sales charge waivers
You may purchase Class A shares at net asset value (without a sales charge) or
with a reduced initial sales charge as follows. If you believe you qualify for
any of the waivers discussed below, contact the distributor. You are required to
provide written confirmation of your eligibility. You may not resell these
shares except to or on behalf of the fund.

Class A purchases at net asset value are available to:
o Current or former trustees and officers of the fund;
o Current or former partners and employees of legal counsel to the fund;
o Current or former directors, officers, employees or sales representatives
of The Pioneer Group, Inc. and its affiliates;
o Current or former directors, officers, employees or sales representatives
of any subadviser or a predecessor adviser (or their affiliates) to any
investment company for whom Pioneer serves as investment adviser;
o Current or former officers, partners, employees or registered
representatives of broker-dealers whom have entered into sales agreements
with the distributor;
o Members of the immediate families of any of the persons above;
o Any trust, custodian, pension, profit sharing or other benefit plan of
the foregoing persons;
o Insurance company separate accounts;
o Certain "wrap accounts" for the benefit of clients of financial planners
adhering to standards established by the distributor;
o Other funds and accounts for which Pioneer or any of its affiliates serve
as investment adviser or manager;
o In connection with certain reorganization, liquidation or acquisition
transactions involving other investment companies or personal holding
companies;
o Certain unit investment trusts;
o Employer-sponsored retirement plans with 100 or more eligible employees or
at least $500,000 in plan assets;
o Participants in Optional Retirement Programs if (i) your employer has
authorized a limited number of mutual funds to participate in the program,
(ii) all participating mutual funds sell shares to program participants at
net asset value, (iii) your employer has agreed in writing to actively
promote Pioneer mutual funds to program participants and (iv) the program
provides for a matching contribution for each participant contribution.

<PAGE>

Buying, exchanging and selling shares

Class A purchases at a reduced initial sales charge or net asset value are also
available to: Group Plans if the sponsoring organization ss. recommends
purchases of Pioneer mutual funds to, ss. permits solicitation of, or ss.
facilitates purchases by its employees, members or participants.

Letter of intent (Class A)
You can use a letter of intent to qualify for reduced sales charges in two
situations:
o If you plan to invest at least $50,000 (excluding any reinvestment of
dividends and capital gain distributions) in the fund's Class A shares
during the next 13 months
o If you include in your letter of intent the value -- at the current
offering price -- of all of your Class A shares of the fund and all other
Pioneer mutual fund shares held of record in the amount used to determine
the applicable sales charge for the fund shares you plan to buy.

Completing a letter of intent does not obligate you to purchase additional
shares, but if you do not buy enough shares to qualify for the projected level
of sales charges by the end of the 13-month period (or when you sell your
shares, if earlier), the distributor will recalculate your sales charge. You
must pay the additional sales charge within 20 days after you are notified of
the recalculation or it will be deducted from your account (or your sale
proceeds). For more information regarding letters of intent, please contact your
investment professional or obtain and read the statement of additional
information.

Reinvestment (Class A)
If you sold shares of another mutual fund within the past 60 days, you may be
able to reinvest the sale proceeds from that fund in Class A shares of the fund
at net asset value without a sales charge.

To qualify:
o Your investment firm must have a sales agreement with the distributor;
o You must demonstrate that the amount invested is from the proceeds of the
sale of shares from another mutual fund that occurred within 60 days
immediately preceding your purchase;
o You paid a sales charge on the original purchase of the shares sold; and
o The mutual fund whose shares were sold also offers net asset value
purchases to shareowners that sell shares of a Pioneer mutual fund.

<PAGE>

Waiver or reduction of contingent deferred sales charges (CDSC)

Class A shares that are subject to a CDSC
Purchases of Class A shares of $1 million or more, or by participants in a Group
Plan which were not subject to an initial sales charge, may be subject to a CDSC
upon redemption. A CDSC is payable to the distributor in the event of a share
redemption within 12 months following the share purchase, at the rate of 1% of
the lesser of the value of the shares redeemed (exclusive of reinvested dividend
and capital gain distributions) or the total cost of such shares. However, the
CDSC is waived for redemptions of Class A shares purchased by an
employer-sponsored retirement plan qualified under Section 401 of the Internal
Revenue Code that has 1,000 or more eligible employees or at least $10 million
in plan assets.

Class A, Class B and Class C shares
The distributor may waive or reduce the CDSC for Class A shares that are subject
to a CDSC or for Class B or Class C shares if:
o The distribution results from the death of all registered account owners or
a participant in an employer-sponsored plan. For UGMAs, UTMAs and trust
accounts, the waiver applies only upon the death of all beneficial owners;
o The distribution results from a total and permanent disability (as defined
by Section 72 of the Internal Revenue Code) occurring after the purchase of
the shares being sold. For UGMAs, UTMAs and trust accounts, the waiver only
applies upon the disability of all beneficial owners;
o The distribution is made in connection with limited automatic redemptions
as described in "Systematic withdrawal plans" (limited in any year to 10%
of the value of the account in the fund at the time the withdrawal plan is
established);
o The distribution is from any type of IRA, 403(b) or employer-sponsored plan
and one of the following applies:
- It is part of a series of substantially equal periodic payments made
over the life expectancy of the participant or the joint life
expectancy of the participant and his or her beneficiary (limited in
any year to 10% of the value of the participant's account at
the time the distribution amount is established);
- It is a required minimum distribution due to the attainment of age
70-1/2, in which case the distribution amount may exceed 10% (based
solely on plan assets held in Pioneer mutual funds);

<PAGE>

Buying, exchanging and selling shares

- It is rolled over to or reinvested in another Pioneer fund in the same
class of shares, which will be subject to the CDSC of the shares
originally held;
- It is in the form of a loan to a participant in a plan that permits
loans (each repayment will be subject to a CDSC as though a new
purchase);
o The distribution is to a participant in an employer[-]sponsored retirement
plan qualified under section 401 of the Internal Revenue Code and is:
- A return of excess employee deferrals or contributions;
- A qualifying hardship distribution as defined by the Internal Revenue
Code. For Class B shares, waiver is granted only on payments of up to
10% of total plan assets held by Pioneer for all participants, reduced
by the total of any prior distributions made in that calendar year;
- Due to retirement or termination of employment. For Class B shares,
waiver is granted only on payments of up to 10% of total plan assets
held in a Pioneer mutual fund for all participants, reduced by the
total of any prior distributions made in the same calendar year;
- From a qualified defined contribution plan and represents a
participant's directed transfer, provided that this privilege has been
preauthorized through a prior agreement with the distributor regarding
participant directed transfers (not available to Class B shares);
o The distribution is made pursuant to the fund's right to liquidate or
involuntarily redeem shares in a shareholder's account;
o The selling broker elects, with the distributor's approval, to waive
receipt of the commission normally paid at the time of the sale.

<PAGE>

Opening your account

If your shares are held in your investment firm's name, the options and services
available to you may be different from those discussed in this prospectus. Ask
your investment professional for more information.

Account options
Use your account application to select options and privileges for your account.
You can change your selections at any time by sending a completed account
options form to the transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.

Call or write to the fund's transfer agent for account applications, account
options forms and other account information:

Pioneering Services Corporation
P.O. Box 9014
Boston, Massachusetts 02205-9014
Telephone 1-800-225-6292

Telephone transaction privileges
If your account is registered in your name, you can buy, exchange or sell fund
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.

When you request a telephone transaction the transfer agent will try to confirm
that the request is genuine. The transfer agent records the call, requires the
caller to provide the personal identification number for the account and sends
you a written confirmation. The fund may implement other confirmation procedures
from time to time. Different procedures may apply if you have a non-U.S. account
or if your account is registered in the name of an institution, broker-dealer or
other third party.

[text box: telephone icon]
By phone
If you want to place your telephone transaction by speaking to a shareowner
services representative, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m.
Eastern time on any weekday that the New York Stock Exchange is open. You may
use FactFoneSM at any time. [end text box]

<PAGE>

Buying, exchanging and selling shares

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
You may buy fund shares from any investment firm that has a sales agreement with
the distributor. If you do not have an investment firm, please call
1-800-225-6292 for information on how to locate an investment professional in
your area.

You can buy fund shares at the offering price. The distributor may reject any
order until it has confirmed the order in writing and received payment. The fund
reserves the right to stop offering any class of shares.

Minimum investment amounts
Your initial investment must be at least $50 for Class A shares and $1,000 for
Class B and Class C shares. Additional investments must be at least $50 for
Class A shares and $500 for Class B or Class C shares. You may qualify for lower
initial or subsequent investment minimums if you are opening a retirement plan
account, establishing an automatic investment plan or placing your trade through
your investment firm. If you have a Class A share account, you must maintain a
minimum account balance of $500. You will have at least 24 months from the date
you opened your account to achieve the $500 balance.

[text box]
Retirement plan accounts

You can purchase fund shares through tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations.

Your initial investment for most types of retirement plan accounts must be at
least $250. Additional investments for most types of retirement plans must be at
least $100.

You may not use the account application accompanying this prospectus to
establish a Pioneer retirement plan. You can obtain retirement plan applications
from your investment firm or by calling the Retirement Plans Department at
1-800-622-0176. [end text box]

[text box: questionmark icon]
Consult your investment professional to learn more about buying, exchanging or
selling fund shares. [end text box]

<PAGE>

Exchanging
Up to twice each year, you may exchange your shares for shares of the same class
of another Pioneer mutual 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. Shares you acquire as part of
an exchange will continue to be subject to any contingent deferred sales charge
that applies to the shares you originally purchased. When you ultimately sell
your shares, the date of your original purchase will determine your contingent
deferred sales charge.

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.

If the shares you are selling are subject to a deferred sales charge, it will be
deducted from the sale proceeds. 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.

If you are selling shares from a nonretirement account or certain IRAs, you may
use any of the methods described below. If you are selling shares from a
retirement account other than an IRA, you must make your request in writing.

[text box]
Good order means that:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o If you have any fund share certificates, you submit them and they are
signed by each record owner exactly as the shares are registered
o 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
[end text box]

[text box: capital icon]
You may have to pay federal income taxes on a sale or an exchange.
[end text box]

<PAGE>

Buying, exchanging and selling shares

Buying shares
Exchanging shares

Through your investment firm
Normally, your investment firm will send your purchase request to the fund's
transfer agent. 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
non-retirement account or certain IRAs. You can purchase additional fund shares
by phone if:
ss. You established your bank account of record at least 30 days ago ss. Your
bank information has not changed for at least 30 days ss. You are not purchasing
more than $25,000 worth of shares per account per day ss. 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. After you establish your fund
account, you can exchange fund shares by phone if: ss. You are using the
exchange to establish a new account, provided the new account has a registration
identical to the original account
ss. The fund into which you are exchanging offers the same class of shares ss.
You are not exchanging more than $500,000 worth of shares per account per day
ss. You can provide the proper account identification information

In writing, by mail or by fax
You can purchase fund shares for an existing fund account 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: ss. The
names, social security number and signatures of all registered owners ss. A
signature guarantee for each registered owner if the amount of the exchange is
more than $500,000 ss. The name of the fund out of which you are exchanging and
the name of the fund into which you are exchanging
o The class of shares you are exchanging
o The dollar amount or number of shares you are exchanging

<PAGE>

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:

o By check, provided the check is made payable exactly as your account is
registered
o 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, the fund's name, your social security number, 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 not sell more than $100,000 per account per day by fax.

[text box]
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 request a transaction using FactFoneSM call 1-800-225-4321
Telecommunications Device for the Deaf (TDD) 1-800-225-1997

By mail [graphic icon: envelope]
Send your written instructions to:
Pioneering Services Corporation
P.O. Box 9014
Boston, Massachusetts 02205-9014

By fax [graphic icon: fax machine]
Fax your exchange and sale requests to:
1-800-225-4240
[end text box]

[text box]
Exchange privilege
You may purchase shares of this fund by exchanging shares from another Pioneer
mutual fund two times each calendar year. 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. [end text box]

[text box]
Redemption fee
If you sell or exchange fund shares within 90 days of purchase, the proceeds are
subject to a 2% fee.
[end text box]

<PAGE>

Buying, exchanging and selling shares

Account options
See the account application form for more details on each of the following
options.

Automatic investment plans
You can make regular periodic investments in the fund by setting up monthly bank
drafts, government allotments, payroll deduction, a Pioneer Investomatic Plan
and other similar automatic investment plans. You may use an automatic
investment plan to establish a Class A share account with a small initial
investment. If you have a Class B or Class C share account and your balance is
at least $1,000, you may establish an automatic investment plan.

Pioneer Investomatic Plan
If you establish a Pioneer Investomatic Plan, the transfer agent will make a
periodic investment in fund shares by means of a preauthorized electronic funds
transfer from your bank account. Your plan investments are voluntary. You may
discontinue your plan at any time or change the plan's dollar amount, frequency
or investment date by calling or writing to the transfer agent. You should allow
up to 30 days for the transfer agent to establish your plan.

Automatic exchanges
You can automatically exchange your fund shares for shares of the same class 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 use automatic exchange: ss. You must select
exchanges on a monthly or quarterly basis ss. Both the originating and receiving
accounts must have identical registrations ss. The originating account has 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.

<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:
o Your account must have a total value of at least $10,000 when you establish
your plan
o You must request a periodic withdrawal of at least $50
o You may not request a periodic withdrawal of more than 10% of the value of
any Class B or Class C share account (valued at the time the plan is
implemented)

Systematic sales of fund shares may be taxable transactions for you. If you
purchase Class A shares while you are making systematic withdrawals from your
account, you may pay unnecessary sales charges.

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.

Reinstatement privilege for Class A shares
You may qualify for the reinstatement privilege if you recently sold all or part
of your Class A shares.

<PAGE>

Buying, exchanging and selling shares

Shareowner services

FactFoneSM 1-800-225-4321 You can use FactFoneSM to:
o Obtain current information on your Pioneer mutual fund accounts
o Inquire about the prices and yields of all publicly available Pioneer
mutual funds
o Make computer-assisted telephone purchases, exchanges and redemptions for
your fund accounts
o 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.

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.

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: ss. Your current account information ss.
Prices, returns and yields of all publicly available Pioneer mutual funds ss.
Prospectuses for all the Pioneer funds

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.

<PAGE>

Shareowner account policies

Signature guarantees and other requirements You are required to obtain a
signature guarantee when you are: ss. Requesting certain types of exchanges or
sales of fund shares ss. Redeeming shares for which you hold a share certificate
ss. 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.

Redemption fee
The redemption fee is intended to discourage short-term trading in the fund's
shares which can increase the expenses incurred by the fund and make portfolio
management less efficient. The fee is payable to the fund and is not a deferred
sales charge or commission. The fee is in addition to any sales charge you may
pay on the shares sold or exchanged. When you request a sale or an exchange, the
fund will first process any shares that are not subject to the fee and then the
shares you have owned the longest. The fee does not apply to shares purchased by
reinvesting dividend or capital gain distributions, systematic withdrawal plan
transactions or automatic exchange transactions. The fee is waived for all
shares purchased through IRA or SEP-IRA accounts and employer-sponsored
retirement plans, including 401(k) plans, 403(b) plans, 457 plans,
profit-sharing and employee benefit plans. In addition, the fee may not apply to
shares purchased through an omnibus account for fund shares maintained by a
broker or a financial intermediary or recordkeeper.

Exchange limitation
Because the Pioneer mutual funds are designed for long-term investors, you may
not make more than four exchange purchases per account per year for any Pioneer
fund (certain funds, including this fund, are limited to two exchange
purchases). In determining whether the exchange purchase limit has been reached,
Pioneer may aggregate fund accounts if the accounts appear to be under common
ownership or control. The exchange limitation does not apply to automatic
exchange transactions or to exchanges made through IRA or SEP-IRA accounts or
employer-sponsored retirement plans, including 401(k) plans, 403(b) plans, 457
plans, profit-sharing and employee benefit plans. In addition, the exchange
limitation may not apply to exchanges made through an omnibus account for fund
shares maintained by a broker or a financial intermediary or recordkeeper.

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. 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 Class A shares only. 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.

<PAGE>

Dividends, capital gains and taxes

Dividends and capital gains
The fund generally pays distributions of income and net short-term and long-term
capital gains in November. The fund may also pay dividends and 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 capital gains
distribution, generally you will pay a higher price per share and you will pay
taxes on the amount of the capital gains 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. You may also
have tax consequences (generally, a capital gain or loss) when you sell or
exchange fund shares. Each year the fund will mail to you information about your
dividends and distributions for, and the 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, sales proceeds and any other payments to
you.

You should ask your own tax adviser about any federal or 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]

Pioneer Tax-Managed Equity 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. or by calling 1-800-SEC-0330 to request a
copy. The Commission charges a fee for this service. You can get the same
information free from the Commission's Internet website (http://www.sec.gov).

(Investment Company Act file no. 811-XXXXX)

[Pioneer
logo] Pioneer Funds Distributor, Inc.
60 State Street
Boston, MA 02109 7124-1199
www.pioneerfunds.com (C) Pioneer Funds Distributor, Inc.
<PAGE>
g:\edgar\filings\taxman\tmy10999p.doc

[Pioneer logo]

Preliminary prospectus dated September 16, 1999
Subject to completion

PIONEER TAX-MANAGED FUND

CLASS Y SHARES
Prospectus, November 18, 1999

CONTENTS

Basic information about the fund 1
Management 6
Buying, exchanging and selling shares 8
Dividends, capital gains and taxes 16

<PAGE>

[text box]
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.
[end text box]

[text box]
CONTACT YOUR INVESTMENT PROFESSIONAL TO DISCUSS HOW THE FUND FITS INTO YOUR
PORTFOLIO.
[end text box]

<PAGE>

BASIC INFORMATION ABOUT THE FUND

INVESTMENT OBJECTIVE Long-term capital growth.

PRINCIPAL INVESTMENT STRATEGIES
Normally, the fund invests at least 65% of its assets in equity securities,
primarily of U.S. issuers. For purposes of the fund's investment policies,
equity securities include common and preferred stocks, warrants and convertible
debt securities.

Pioneer Investment Management, Inc., the fund's investment adviser, uses a value
approach to select the fund's investments. Using this investment style, Pioneer
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
based on the company's assets and prospects for earnings growth. In making that
assessment, Pioneer employs fundamental research and due diligence. Pioneer
relies on the knowledge, experience and judgment of its own staff who have
access to a wide variety of research.
Factors Pioneer looks for in selecting investments include:
o Favorable expected returns relative to perceived risk
o Above average potential for earnings and revenue growth
o Low market valuations relative to earnings forecast, book value, cash flow
and sales
o A sustainable competitive advantage, such as a brand name,
customer base, proprietary technology or economies of scale

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The fund will not concentrate in any one
industry.

[begin sidebar]
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[graphic icon: magnifying glass]

TAX-MANAGED INVESTING
The fund seeks to minimize the impact of federal income tax on shareholder
returns.
- -----------------------------------------------------------------------
[end sidebar]

TAX MANAGEMENT STRATEGIES
The fund may use these strategies:
o Investing primarily in capital growth-oriented stocks with no or a low
dividend yield. These stocks tend to generate lower current taxable income
than most fixed income securities and high-dividend stocks
o Avoiding sales of appreciated securities that result in capital gain,
except where there are compelling investment reasons for the sale
o Selling securities to realize capital losses that offset capital gains that
have or are expected to be recognized
o When selling a security, focusing on the highest cost lot of that security
first (which reduces the capital gain or increases the loss) realized by
the fund. The fund will also consider the short-term or long-term
characterization of a gain or loss and will attempt to offset short-term
gains with short-term losses

<PAGE>

PRINCIPAL RISKS OF INVESTING IN THE FUND
Even though the fund seeks reasonable income and capital growth, you could lose
money on your investment or not make as much as if you invested elsewhere if:
ss. The stock market goes down (this risk may be greater in the short term) ss.
Value stocks fall out of favor with investors ss. The fund's assets remain
undervalued or do not have the potential value originally expected

The fund uses tax management strategies with the objective of reducing the
amount of distributions subject to federal taxation. However, Pioneer will
follow tax management strategies only to the extent that they do not conflict
with the fund's goal of capital growth or the operation of the fund. The fund
may realize a short-term gain on the sale of a security: o if Pioneer believes
it will decline in value o to increase diversification o to raise cash to pay
expenses or meet redemption requests.

<PAGE>

THE FUND'S PERFORMANCE
Since the fund is newly organized, it does not disclose any performance
information. The fund's performance will vary from year to year. Past
performance does not necessarily indicate how a fund will perform in the future.
As a shareowner, you may lose or make money on your investment.

FEES AND EXPENSES
These are the fees and expenses, based on estimated expenses for the current
fiscal year, you may pay if you invest in the fund.

SHAREOWNER FEES
PAID DIRECTLY FROM YOUR INVESTMENT CLASS Y
- -------------------------------------------------------------

Maximum sales charge (load) when you buy shares None

Redemption fee (or a percentage of amount
redeemed)(1) 2.0%

Exchange fee (or a percentage of amount
redeemed)(1) 2.0%

Maximum deferred sales charge (load) None
- -------------------------------------------------------------

- -----------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES
PAID FROM THE ASSETS OF THE FUND
as a percentage of average daily net assets CLASS Y
- -------------------------------------------------------------

Management Fee(2) 0.75%
.............................................................
Distribution and Service (12b-1) Fee 0.00%
.............................................................
Other Expenses(2) 0.50%
.............................................................
Total Annual Fund Operating Expenses 1.25%
- -------------------------------------------------------------
- -----------------------------------------------------------------------

(1) The fund charges this fee on redemptions or exchanges of shares held less
than 90 days or purchase.
(2) 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 Class A expenses to 1.75% of the average daily net assets
attributable to Class A shares; the portion of fund expenses attributable to
Class Y shares will be reduced only to the extent such expenses are reduced for
Class A shares. This agreement is voluntary and temporary and may be revised
or terminated at any time.

EXAMPLE
This example helps you compare the costs 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
- -------------------------------------------------------------
Class Y $127 $397
- -------------------------------------------------------------

<PAGE>

BASIC INFORMATION ABOUT THE FUND

OTHER INVESTMENT STRATEGIES
As discussed, the fund invests primarily in equity securities of U.S. companies
to seek long-term capital growth.

INVESTMENTS OTHER THAN U.S. COMMON STOCKS
The fund may invest up to 10% of its total assets (at the time of purchase) in
equity and debt securities of non-U.S. issuers. The fund will not invest more
than 5% of its total assets (at the time of purchase) 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.

TEMPORARY INVESTMENTS
Normally, the fund invests substantially all of its assets to meet its
investment objective. The fund may invest the remainder of its assets in
securities with a remaining maturity of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, the fund may depart from its
principal investment strategies and invest part or all of its assets in these
securities. 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.

<PAGE>

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 purposes, including: ss. As a hedge against adverse
changes in stock market prices, interest rates or currency exchange rates ss. As
a substitute for purchasing or selling securities ss. To increase the fund's
return as a non-hedging strategy that may be considered speculative

<PAGE>

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,
1998, the firm had more than $23 billion in assets under management worldwide
including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual
fund investment history includes creating this fund 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
Day-to-day management of the fund's portfolio is the responsibility of John A.
Carey. Mr. Carey is a senior vice president of Pioneer. He joined Pioneer in and
has been an investment professional since 1979.

<PAGE>

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 0.75% of the
fund's average daily net assets up to $500 million; 0.725% of the next $500
million; and 0.70% of the assets over $1 billion. 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.

YEAR 2000
Information technology experts are concerned about computer and other electronic
systems' ability to process date-related information on and after January 1,
2000. This scenario, commonly referred to as the "Year 2000 problem," could have
an adverse impact on the fund and the provision of services to its shareowners.
Pioneer is addressing the Year 2000 problem with respect to its systems and
those used by the distributor and transfer agent. During 1999, Pioneer expects
to finish addressing all material Year 2000 issues and to participate in
industry-wide testing. The fund has obtained assurances from its other service
providers that they are taking appropriate Year 2000 measures and Pioneer is
monitoring their efforts. Although the fund does not expect the Year 2000
problem to adversely impact it, the fund cannot guarantee that its, or the
fund's service providers', efforts will be successful.

<PAGE>

BUYING, EXCHANGING AND SELLING SHARES

NET ASSET VALUE

You buy or sell Class Y shares at the net asset value per share calculated on
the day of your transaction.

DISTRIBUTION OF CLASS Y SHARES

The distributor incurs the expenses of distributing the fund's Class Y shares,
none of which are reimbursed or paid for by the fund or the Class Y shareowners.
Distribution expenses include fees paid to broker-dealers which have sales
agreements with the distributor and other parties, advertising expenses and the
cost of printing and mailing prospectuses to potential investors.

The distributor or its affiliates may make payments out of its own resources to
dealers and other persons who distribute Class Y shares. Such payments may be
based upon the value of Class Y shares sold. The distributor may impose
conditions on the payment of such fees.

<PAGE>

OPENING YOUR ACCOUNT

If you are an individual or other non-institutional investor, open your Class Y
share account by completing an account application and sending it to the
transfer agent by mail or by fax. If you are any other type of investor, please
call the transfer agent to obtain a Class Y share account set-up kit and an
account number.

The transfer agent must receive your account application before you send your
initial check or federal funds wire. In addition, you must provide a bank wire
address of record when you establish your account.

ACCOUNT OPTIONS
Use your account application to select options and privileges for your account.
You can change your selections at any time by sending a completed account
options form to the transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.

Call or write to the fund's transfer agent for account applications, account
options forms and other account information:

PIONEERING SERVICES CORPORATION
P.O. Box 9014
Boston, Massachusetts 02205-9014
Telephone 1-888-294-4480

TELEPHONE TRANSACTION PRIVILEGES
If your account is registered in your name, you can exchange or sell Class Y
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.

[text box: telephone icon]
BY PHONE
If you want to place your telephone transaction by speaking to a shareowner
services representative, call 1-888-294-4480 between 9:00 a.m. and 6:00 p.m.
Eastern time on any weekday that the New York Stock Exchange is open. [end text
box]

<PAGE>

BUYING, EXCHANGING AND SELLING SHARES

GENERAL RULES ON BUYING, EXCHANGING AND SELLING YOUR FUND SHARES

SHARE PRICE
When you place an order to purchase, exchange or sell Class Y shares it must be
received in good order by the transfer agent or by your broker-dealer by the
close of regular trading on the New York Stock Exchange (currently 4:00 p.m.
Eastern time) in order to purchase shares at the price determined on that day.

If you place your order through a broker-dealer, you must place the order before
the close of regular trading on the New York Stock Exchange and your
broker-dealer must submit the order to the distributor prior to the
distributor's close of business (usually 5:30 p.m. Eastern time) for your share
price to be determined at the close of regular trading on the date your order is
received. Your broker-dealer is responsible for transmitting your order to the
distributor. In all other cases except as described below for wire transfers,
your share price will be calculated at the close of the New York Stock Exchange
after the distributor receives your order.

BUYING
You can buy Class Y shares at net asset value per share. The fund does not
impose any initial, contingent deferred or asset based sales charge on Class Y
shares. The distributor may reject any order until it has confirmed it in
writing and received payment.

MINIMUM INVESTMENT AMOUNT
Your initial Class Y share investment must be at least $5 million. This amount
may be invested in one or more of the Pioneer mutual funds that currently offer
Class Y shares. There is no minimum additional investment amount.

WAIVERS OF THE MINIMUM INVESTMENT AMOUNT
The fund will accept an initial investment of less than $5 million if:

(a) The investment is made by a trust company or bank trust department
which is initially investing at least $1 million in any of the Pioneer
mutual funds and, at the time of the purchase, such assets are held in
a fiduciary, advisory, custodial or similar capacity over which the
trust company or bank trust department has full or shared investment
discretion; or

(b) The investment is made by an employer-sponsored retirement plan that
meets the requirements of Sections 401, 403 or 457 of the Internal
Revenue Code, provided that[ ]the number of employees covered by the
plan is 5,000 or more, or the plan has assets of $25 million or more;
or

(c) The investment is at least $1 million in any of the Pioneer mutual
funds and the purchaser is an insurance company separate account; or

(d) The investment is made by an employer-sponsored retirement plan
established for the benefit of (1) employees of The Pioneer Group, Inc.
or employees of its affiliates, or (2) employees or the affiliates of
broker-dealers who have a Class Y shares sales agreement with the
distributor.

<PAGE>

EXCHANGING
You may exchange your Class Y shares for the Class Y shares of another Pioneer
mutual 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
Class Y shares at net asset value without charging you either an initial or
contingent deferred sales charge.

Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus.

SELLING
Your Class Y shares will be sold at net asset value per share next calculated
after the fund receives your request in good order. If a signature guarantee is
required, you must submit your request in writing.

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 purchased the shares being sold, the fund may delay payment of the sale
proceeds until your payment has cleared. This may take up to 15 calendar days
from the purchase date.

[text box]
GOOD ORDER MEANS THAT:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o If you have any fund share certificates, you submit them and they are signed
by each record owner exactly as the shares are registered
o Your request includes a signature guarantee if you:
- Are selling over $100,000 worth of shares and
o Want the sale proceeds sent to an address other than your bank
account of record or
o Want the sale proceeds made payable to someone other than the
account's record owners or ss. The account registration, address
of record or bank account of record has changed within the last
30 days
- Are selling or exchanging over $5 million worth of shares
- Are transferring the sale proceeds to a Pioneer mutual fund account with
a different registration [end text box]

[text box: capital icon]
You may have to pay federal income taxes on a sale or an exchange.
[end text box]

<PAGE>

BUYING, EXCHANGING AND SELLING SHARES

BUYING SHARES
EXCHANGING SHARES

IN WRITING, BY MAIL OR BY FAXYou can purchase Class Y shares 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.

If you are registering an account in the name of a corporation or other
fiduciary, you must send your completed account set-up forms to the transfer
agent prior to making your initial purchase.

You can exchange Class Y 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 $5 million. Include in your letter: ss. The names and
signatures of all registered owners ss. A signature guarantee for each
registered owner if the amount of the exchange is more than $5 million ss. The
name of the fund out of which you are exchanging and the name of the fund into
which you are
exchanging
ss. The dollar amount or number of Class Y shares you are exchanging

BY PHONE OR WIREBY WIRE
If you have an existing Class Y account, you MAY WIRE FUNDS TO PURCHASE CLASS Y
SHARES. Note, however, that:
o State Street Bank must receive your wire no later than 11:00 a.m.
Eastern time on the business day after the fund receives your request to
purchase shares
o If State Street Bank does not receive your wire by 11:00 a.m. Eastern time
on the next business day, your transaction will be canceled at your expense
and risk
o Wire transfers normally take two or more hours to complete and a fee may be
charged by the sending bank
o Wire transfers may be restricted on holidays and at certain other times

INSTRUCT YOUR BANK TO WIRE FUNDS TO:Receiving Bank:
State Street Bank
and Trust Company
225 Franklin Street
Boston, MA 02101
ABA Routing No. 011000028
For further credit to: Shareholder Name
Existing Pioneer Account No.
Pioneer Tax-Managed Fund
BY PHONE After you establish your Class Y account, YOU CAN EXCHANGE FUND
SHARES BY PHONE IF:
o You are using the exchange to establish a new account, provided the new
account has a registration identical to the original account
o The fund into which you are exchanging offers Class Y shares
o You are not exchanging more than $5 million worth of shares per account per
day
o You can provide the proper account identification information

THROUGH YOUR INVESTMENT FIRM
CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION.

CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION ABOUT EXCHANGING YOUR
SHARES.

<PAGE>

SELLING SHARES
You can sell some or all of your Class Y shares by WRITING DIRECTLY TO THE FUND
only if your account is registered in your name. Include in your request your
name, the fund's name, your fund account number, the dollar amount or number of
Class Y shares to be sold and any other applicable requirements as described
below.
o The transfer agent will send the sale proceeds to your address of
record unless you provide other instructions
o Your request must be signed by all registered owners
o The transfer agent will not process your request until it is received in
good order

BY FAX
o You may sell up to $5 million per account per day if the proceeds are
directed to your bank account of record
o You may sell up to $100,000 per account per day if the proceeds are not
directed to your bank account of record

BY PHONE
o You may sell up to $5 million per account per day if the proceeds are
directed to your bank account of record
o You may sell up to $100,000 per account per day if the proceeds are not
directed to your bank account of record

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:
o By check, provided the check is made payable exactly as your account is
registered
o By bank wire or by electronic funds transfer, provided the sale
proceeds are being sent to your bank address of record

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.

[text box]
HOW TO CONTACT US

BY PHONE [telephone icon]
For information or to request a telephone transaction between 9:00 a.m. to 6:00
p.m. (Eastern time) by speaking with a shareholder services representative call
1-888-294-4480
To use FactFoneSM call
1-800-225-4321

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:
1-888-294-4485
[end text box]

[text box]
EXCHANGE PRIVILEGE
You may purchse shares of this fund by exchanging shares from anouther Pioneer
mutual fund two times each calendar year. 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. [end text box]

[text box]
REDEMPTION FEE
If you sell or exchange fund shares within 90 days of purchase, the
proceeds are subject to a 2% fee.
[end text box]

[text box]
OTHER REQUIREMENTS
If you must use a written request to exchange or sell your Class Y shares and
your account is registered in the name of a corporation or other fiduciary you
must include the name of an authorized person and a certified copy of a current
corporate resolution, certificate of incumbency or similar legal document
showing that the named individual is authorized to act on behalf of the record
owner. [end text box]

<PAGE>

BUYING, EXCHANGING AND SELLING SHARES

ACCOUNT OPTIONS

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.

SHAREOWNER SERVICES

FACTFONESM 1-800-225-4321 You can use FactFoneSM to:
ss. Obtain current information on your Pioneer mutual fund accounts ss. Inquire
about the prices and yields of all publicly available Pioneer mutual funds ss.
Request account statements

If your account is registered in the name of a broker-dealer or other third
party, you may not be able to use FactFoneSM to obtain account information.

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.

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: ss. Your current account information ss.
Prices, returns and yields of all publicly available Pioneer mutual funds ss.
Prospectuses for all the Pioneer funds

<PAGE>

SHAREOWNER ACCOUNT POLICIES

SIGNATURE GUARANTEES AND OTHER REQUIREMENTS You are required to obtain a
signature guarantee when you are: ss. Requesting certain types of exchanges or
sales of fund shares ss. Redeeming shares for which you hold a share certificate
ss. Requesting certain types of changes for your existing account

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. 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.

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 stop offering Class Y shares.

<PAGE>

DIVIDENDS, CAPITAL GAINS AND TAXES

DIVIDENDS AND CAPITAL GAINS
The fund generally pays distributions of income and net short-term and long-term
capital gains in November. The fund may also pay dividends and 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 capital gains
distribution, generally you will pay a higher price per share and you will pay
taxes on the amount of the capital gains 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. You may also
have tax consequences (generally, a capital gain or loss) when you sell or
exchange fund shares. Each year the fund will mail to you information about your
dividends and distributions for, and the shares you sold in, the previous
calendar year.

[text box: capital icon]
Sales and exchanges may be taxable transactions to shareowners.
[end text box]

<PAGE>

PIONEER TAX MANAGED 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 1-888-294-4480.

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

(Investment Company Act file no. 811-xxxxx)

[Pioneer
logo] Pioneer Funds Distributor, Inc.
60 State Street
Boston, MA 02109 7125-1199
www.pioneerfunds.com (C) Pioneer Funds Distributor, Inc.
<PAGE>

Preliminary statement of additional information dated September 16, 1999
Subject to completion

A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This statement of additional
information shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state.

PIONEER TAX-MANAGED EQUITY FUND
60 State Street
Boston, Massachusetts 02109

STATEMENT OF ADDITIONAL INFORMATION

Class A, Class B, Class C and Class Y Shares

November 18, 1999

This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class B and Class C shares prospectus,
dated November 18, 1999, and its Class Y shares prospectus, dated November 18,
1999, 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 fund's Class A, Class B and Class C
shares prospectus from our website at: www.pioneerfunds.com.
TABLE OF CONTENTS
Page

1. Fund History....................................................... 2
2. Investment Policies, Risks and Restrictions........................ 2
3. Management of the Fund............................................. 17
4. Investment Adviser................................................. 20
5. Principal Underwriter and Distribution Plans....................... 22
6. Shareholder Servicing/Transfer Agent............................... 25
7. Custodian.......................................................... 26
8. Independent Public Accountants..................................... 26
9. Portfolio Transactions............................................. 26
10. Description of Shares.............................................. 27
11. Sales Charges...................................................... 29
12. Redeeming Shares................................................... 32
13. Telephone Transactions............................................. 33
14. Pricing of Shares.................................................. 34
15. Tax Status......................................................... 34
16. Investment Results................................................. 38
17. Financing Statements............................................... 40
18. Appendix A - Annual Fee, Expense and Other Information............. 46
19. Appendix B - Description of Short-Term Debt, Corporate Bond
and Preferred Stock Ratings........................................ 48
20. Appendix C - Performance Statistics................................ 54
21. Appendix D - Other Pioneer Information............................. 66

<PAGE>

1. FUND HISTORY

The fund is a [diversified] open-end management investment company. The fund was
organized as a Delaware business trust on August 3, 1999.

2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS

The prospectuses present the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectuses and provides additional information on the fund's investment
policies and 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. 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 65% of its assets in
equity securities. The fund may also invest in debt securities and cash
equivalent instruments.

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.

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.

Municipal Obligations

The fund may purchase municipal obligations when Pioneer believes that they
offer favorable rates of income or capital gain potential when compared to a
taxable investment. The term "municipal obligations" generally is understood to
include debt obligations issued by municipalities to obtain funds for various
public purposes, the interest on which is, in the opinion of bond counsel to the
issuer, excluded from gross income for federal income tax purposes. In addition,
if the proceeds from private activity bonds are used for the construction,
repair or improvement of privately operated industrial or commercial facilities,
the interest paid on such bonds may be excluded from gross income for federal
income tax purposes, although current federal tax laws place substantial
limitations on the size of these issues. The fund's distributions of any
interest it earns on municipal obligations will be taxable to shareholders as
ordinary income.

The two principal classifications of municipal obligations are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit, and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenues derived from
a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source, but not from the
general taxing power. Sizable investments in these obligations could involve an
increased risk to the fund should any of the related facilities experience
financial difficulties. Private activity bonds are in most cases revenue bonds
and do not generally carry the pledge of the credit of the issuing municipality.
There are, of course, variations in the security of municipal obligations, both
within a particular classification and between classifications.

Debt Securities Rating Criteria

Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's"), the equivalent rating of other
national statistical 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 national statistical rating
organizations. See Appendix B for a description of rating categories.

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, which is concentrated in
relatively few market makers, 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 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.

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.

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 non-U.S. 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.

Foreign 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 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 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 accurately price its portfolio securities 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 non-U.S. 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 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 in the region 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 non-U.S. 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 non-U.S. 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 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
international 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.

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 non-U.S. 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"). Debt securities issued by REITs, for the most part, are general and
unsecured obligations and are subject to risks associated with REITs.

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 foreign 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.

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.

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 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 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.

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.

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 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 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
segregated 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 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 foreign
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.

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, foreign 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 foreign 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 foreign 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
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or foreign 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
foreign 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.

Equity, Swaps, Caps, Floors and Collars. The fund may enter into equity swaps,
caps, floors and collars to hedge assets or liabilities or to seek to increase
total return. Equity swaps involve the exchange by a fund with another party of
their respective commitments to make or receive payments based on notional
equity securities. The purchase of an equity cap entitles the purchaser, to the
extent that the market value of a specified equity security or benchmark exceeds
a predetermined level, to receive payments of a contractually-based amount from
the party selling the cap. The purchase of an equity floor entitles the
purchaser, to the extent that the market value of a specified equity security or
benchmark falls below a predetermined level, to receive payments of a
contractually-based amount from the party selling the floor. A collar is a
combination of a cap and a floor that preserves a certain return within a
predetermined range of values. Investments in swaps, caps, floors and collars
are highly specialized activities which involve investment techniques and risks
different from those associated with ordinary portfolio transactions. If Pioneer
is incorrect in its forecast of market values, these investments could
negatively impact fund's performance. These investments also are subject to
default risk of the counterparty and may be less liquid than other portfolio
securities. Moreover, investments in swaps, caps, floors and collars may involve
greater transaction costs than investments in other equity securities.

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 quoted or 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 foreign
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 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 30% of the value of the fund's total assets.

Investment Restrictions

Fundamental Investment Restrictions. The fund has adopted certain investment
restrictions which, along with the fund's investment objective, 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.
Statements in italics are not part of the restriction. 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. (ii) more than 50% of the outstanding shares of the fund.

The fund may not:

(1) Issue senior securities, except as permitted by the 1940 Act and the rules
and interpretive positions of the SEC thereunder. Senior securities that the
fund may issue in accordance with the 1940 Act include borrowing, futures,
when-issued and delayed delivery securities and forward foreign currency
exchange transactions.

(2) Borrow money, except the fund may: (a) borrow from banks or through reverse
repurchase agreements in an amount up to 33 1/3% of the fund's total assets
(including the amount borrowed); (b) to the extent permitted by applicable law,
borrow up to an additional 5% of the fund's assets for temporary purposes; (c)
obtain such short-term credits as are necessary for the clearance of portfolio
transactions; (d) the fund may purchase securities on margin to the extent
permitted by applicable law; and (e) engage in transactions in mortgage dollar
rolls that are accounted for as financings.

(3) Invest in real estate, 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, securities of real estate
investment trusts and mortgage-backed securities.

(4) Make loans, except by the purchase of debt obligations, by entering into
repurchase agreements or through the lending of portfolio securities.

(5) Invest in commodities or commodity contracts, except that the fund may
invest in currency instruments and contracts and financial instruments and
contracts that might be deemed to be commodities and commodity contracts. A
futures contract, for example, may be deemed to be a commodity contract.

(6) 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.

(7) Act as an underwriter, except as it may be deemed to be an underwriter in a
sale of restricted securities held in its portfolio.

It is the fundamental policy of the fund not to concentrate its investments in
securities of companies in any particular industry. In the opinion of the SEC,
investments are 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.

Non-Fundamental Investment Restrictions. The following restriction has been
designated as non-fundamental and may be changed by a vote of the fund's Board
of Trustees without approval of shareholders.

The fund may not:

(a) Purchase securities while borrowings are in excess of 5% of total assets.

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 Pioneering
Services Corporation ("PSC"), Pioneer Real Estate Advisors, Inc. ("PREA"),
Pioneer Forest, Inc., Pioneer Explorer, Inc., Pioneer Management (Ireland) Ltd.
("PMIL"), Pioneer First Investment Fund and Closed Joint-Stock Company
"Forest-Starma"; President and Director of Pioneer Metals and Technology, Inc.,
Pioneer International Corp. ("PIntl"), Pioneer First Russia, Inc. and Pioneer
Omega, Inc. ("Pioneer Omega"); Chairman of the Supervisory Board of Pioneer
Fonds Marketing, GmbH, Pioneer First Polish Investment Fund Joint Stock Company,
S.A. ("Pioneer First Polish") and Pioneer Czech Investment Company, A.S.
("Pioneer Czech"); Member of the Supervisory Board of 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 and Pioneer U.S.
Growth Fund Plc, Pioneer America Fund Plc, Pioneer Greater Asia Fund Plc
(collectively, the "Irish Funds"); and Partner, 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, Novecon Management Company,
Hoover Institution, Folger Shakespeare Library, March of Dimes, Project 2000,
Inc. (not-for-profit educational organization), Wilberforce University and
Texaco, Inc.; Advisory Board Member, Washington Mutual Investors Fund
(registered investment company); and Trustee of all 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, CORE (management of
workers' compensation and disability costs Nasdaq National Market), and
WellSpace (provider of complementary health care); Trustee, Boston Medical
Center; Honorary Trustee, Franciscan Children's Hospital; and Trustee of all of
the Pioneer mutual funds.

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;
Professor of Operations Management and Management of Technology and Associate
Dean, Boston University School of Management, from 1989 to 1993; and Trustee of
all 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; Adjunct Scholar, American Enterprise Institute;
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 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, Kleinwort Benson
Australian Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc.
since 1995 (mutual funds), AMVESCAP PLC (investment managers) since 1997 and
American Insurance Holdings, Inc; Trustee, The Winthrop Focus Funds (mutual
funds); 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.

JOHN A. BOYNTON, Treasurer, DOB: January 1954
Executive Vice President, Treasurer and Chief Financial Officer of PGI;
Treasurer of Pioneer, PFD, PSC, PIntl, PREA, Pioneer Omega and all of the
Pioneer mutual funds. Prior to joining PGI in November 1998, Mr. Boynton was a
Senior Vice President of The Quaker Oats Company.

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.

ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Vice President-Corporate Finance of PGI since February 1999; Manager of Business
Planning and Internal Audit of PGI since September 1996; Manager of Fund
Accounting of Pioneer since May 1994; Manager of Auditing, Compliance and
Business Analysis for PGI prior to May 1994; and Assistant Treasurer of all of
the Pioneer mutual funds.

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; Assistant Clerk of PFD and PSC; and junior partner of
Hale and Dorr LLP prior to 1995.

JOHN A. CAREY, Vice President, DOB: May 1949
Senior Vice President of Pioneer, Pioneer Fund, Pioneer Equity-Income Fund and
the Equity-Income Portfolio and Growth and Income Portfolio of Pioneer Variable
Contracts Trust.

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.
<TABLE>
<S> <C> <C>
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Investment Adviser Principal
Fund Name Underwriter
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Pioneer International Growth Fund Pioneer PFD
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Pioneer Europe Fund Pioneer PFD
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Pioneer World Equity Fund Pioneer PFD
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Pioneer Emerging Markets Fund Pioneer PFD
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Pioneer Indo-Asia Fund Pioneer PFD
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Pioneer Capital Growth Fund Pioneer PFD
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Pioneer Mid-Cap Fund Pioneer PFD
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Pioneer Growth Shares Pioneer PFD
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Pioneer Small Company Fund Pioneer PFD
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Pioneer Independence Fund Pioneer Note 1
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Pioneer Micro-Cap Fund Pioneer PFD
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Pioneer Gold Shares Pioneer PFD
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Pioneer Balanced Fund Pioneer PFD
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Pioneer Equity-Income Fund Pioneer PFD
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Pioneer Fund Pioneer PFD
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Pioneer Tax-Managed Fund Pioneer PFD
Pioneer II Pioneer PFD
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Pioneer Real Estate Shares Pioneer PFD
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Pioneer Short-Term Income Trust Pioneer PFD
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Pioneer America Income Trust Pioneer PFD
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Pioneer Bond Fund Pioneer PFD
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Pioneer Tax-Free Income Fund Pioneer PFD
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Pioneer Cash Reserves Fund Pioneer PFD
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Pioneer Strategic Income Fund Pioneer PFD
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Pioneer Interest Shares Pioneer Note 2
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Pioneer Variable Contracts Trust Pioneer Note 3
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</TABLE>
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 12 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 any class 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.

Sales Loads. Current and former Trustees and officers of the fund and other
qualifying persons may purchase the fund's Class A shares without an initial
sales charge.

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
paid by the fund: (a) charges and expenses for fund accounting, pricing and
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) 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 all 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 equal to 0.75% of the fund's average daily net assets up to $500 million;
0.725% of the next $500 million; and 0.70% of the assets over $1 billion. The
fee is normally computed daily and paid monthly.

See the table in Appendix A for management fees paid to Pioneer during recently
completed fiscal years.

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.

Expense Limit. Pioneer has agreed to waive all or part of its management fee or
to reimburse the fund for other expenses (other than extraordinary expenses) to
the extent the fund's expenses exceed 1.75% of average daily net assets until
such time as the net assets of the fund exceed $75 million. This agreement may
be terminated at any time by Pioneer. If Pioneer waives any fee or reimburses
any expenses, and the expenses of the fund are subsequently less than 1.75% of
the average daily net assets, the fund will reimburse Pioneer for such waived
fees or reimbursed expenses provided that such reimbursement does not cause the
fund's expenses to exceed 1.75% of the average daily net assets.

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. 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 fund or 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. In an effort to avoid conflicts of interest
with the fund, the fund and Pioneer have adopted a code of ethics that is
designed to maintain a high standard of personal conduct by directing that all
personnel defer to the interests of the fund and its shareholders in making
personal securities transactions.

5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS

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 plans (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
foreign countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.

See "Class A Share Sales Charges" for the schedule of initial sales charge
reallowed to dealers as a percentage of the offering price of the fund's Class A
shares.

See the tables in Appendix A for commissions retained by PFD and reallowed to
dealers in connection with PFD's offering of the fund's Class A shares during
recently completed fiscal years.

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 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 Plans

The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan"), a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans"), pursuant to which certain distribution and service fees
are paid to PFD. The fund has not adopted a plan of distribution with respect to
its Class Y shares. Because of the Plans, 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.

Class A Plan. Pursuant to the Class A Plan the fund reimburses PFD for its
actual expenditures to finance any activity primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares,
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 Class A 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 attributable to Class A shares;
(ii) reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the fund's Class A shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations (such as banks and trust companies) in their efforts to
provide such services. Banks are currently prohibited under the Glass-Steagall
Act from providing certain underwriting or distribution services. If a bank is
prohibited from acting in any capacity or providing any of the described
services, management will consider what action, if any, would be appropriate.
The expenses of the fund pursuant to the Class A 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 Class A shares. Distribution expenses of PFD are
expected to substantially exceed the distribution fees paid by the fund in a
given year.

The Class A 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 Class A 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 Class A 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 attributable to
Class A shares 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.

Class B Plan. Commissions on the sale of Class B shares equal to 3.75% of the
amount invested are paid to broker-dealers who have sales agreements with PFD.
PFD may also advance to dealers the first-year service fee payable under the
Class B Plan at a rate up to 0.25% of the purchase price of such shares. As
compensation for such advance of the service fee, PFD may retain the service fee
paid by the fund with respect to such shares for the first year after purchase.

The Class B Plan provides that the fund shall pay PFD, as the fund's distributor
for its Class B shares, a daily distribution fee equal on an annual basis to
0.75% of the fund's average daily net assets attributable to Class B shares and
will pay PFD a service fee equal to 0.25% of the fund's average daily net assets
attributable to Class B shares (which PFD will in turn pay to securities dealers
which enter into a sales agreement with PFD at a rate of up to 0.25% of the
fund's average daily net assets attributable to Class B shares owned by
investors for whom that securities dealer is the holder or dealer of record).
This service fee is intended to be in consideration of personal services and/or
account maintenance services rendered by the dealer with respect to Class B
shares. Commencing in the 13th month following the purchase of Class B shares,
dealers will become eligible for additional annual service fees of up to 0.25%
of the net asset value of such shares. Dealers may from time to time be required
to meet certain other criteria in order to receive service fees. PFD or its
affiliates are entitled to retain all service fees payable under the Class B
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.

The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services with respect to Class B shares of
the fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class B Plan also provides that PFD will receive all contingent
deferred sales charges ("CDSCs") attributable to Class B shares. When a
broker-dealer sells Class B shares and elects, with PFD's approval, to waive its
right to receive the commission normally paid at the time of the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
the broker-dealer.

The Class B Plan and underwriting agreement were amended effective September 30,
1998 to permit PFD to sell its right to receive distribution fees under the
Class B Plan and CDSCs to third parties. PFD enters into such transactions to
finance the payment of commissions to brokers at the time of sale and other
distribution-related expenses. In connection with such amendments, the fund has
agreed that the distribution fee will not be terminated or modified (including a
modification by change in the rules relating to the conversion of Class B shares
into Class A shares) with respect to Class B shares (a) issued prior to the date
of any termination or modification or (b) attributable to Class B shares issued
through one or a series of exchanges of shares of another investment company for
which PFD acts as principal underwriter which were initially issued prior to the
date of such termination or modification or (c) issued as a dividend or
distribution upon Class B shares initially issued or attributable to Class B
shares issued prior to the date of any such termination or modification except:

(i) to the extent required by a change in the 1940 Act, the rules or
regulations under the 1940 Act, the Conduct Rules of the NASD or an
order of any court or governmental agency, in each case enacted,
issued or promulgated after September 30, 1998;

(ii) in connection with a Complete Termination (as defined in the Class B
Plan); or

(iii) on a basis, determined by the Board of Trustees acting in good
faith, so long as from and after the effective date of such
modification or termination: neither the fund, the adviser nor
certain affiliates pay, directly or indirectly, a fee to any person
for the provision of personal and account maintenance services (as
such terms are used in the Conduct Rules of the NASD) to the
holders of Class B shares of the fund and the termination or
modification of the distribution fee applies with equal effect to
all Class B shares outstanding from time to time.

The Class B Plan also provides that PFD shall be deemed to have performed all
services required to be performed in order to be entitled to receive the
distribution fee, if any, payable with respect to Class B shares sold through
PFD upon the settlement date of the sale of such Class B shares or in the case
of Class B shares issued through one or a series of exchanges of shares of
another investment company for which PFD acts as principal underwriter or issued
as a dividend or distribution upon Class B shares, on the settlement date of the
first sale on a commission basis of a Class B share from which such Class B
share was derived.

In the amendments to the underwriting agreement, the fund agreed that subsequent
to the issuance of a Class B share, it would not take any action to waive or
change any CDSC (including a change in the rules applicable to conversion of
Class B shares into another class) in respect of such Class B shares, except (i)
as provided in the fund's prospectus or statement of additional information in
effect on September 30, 1998, or (ii) as required by a change in the 1940 Act
and the rules and regulations thereunder, the Conduct Rules of the NASD or any
order of any court or governmental agency enacted, issued or promulgated after
September 30, 1998.

Class C Plan. Commissions on the sale of Class C shares of up to 0.75% of the
amount invested in Class C shares are paid to broker-dealers who have sales
agreements with PFD. PFD may also advance to dealers the first-year service fee
payable under the Class C Plan at a rate up to 0.25% of the purchase price of
such shares. As compensation for such advance of the service fee, PFD may retain
the service fee paid by the fund with respect to such shares for the first year
after purchase.

The Class C Plan provides that the fund will pay PFD, as the fund's distributor
for its Class C shares, a distribution fee accrued daily and paid quarterly,
equal on an annual basis to 0.75% of the fund's average daily net assets
attributable to Class C shares and will pay PFD a service fee equal to 0.25% of
the fund's average daily net assets attributable to Class C shares. PFD will in
turn pay to securities dealers which enter into a sales agreement with PFD a
distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the fund with respect to such shares for the
first year after purchase. Commencing in the 13th month following the purchase
of Class C shares, dealers will become eligible for additional annual
distribution fees and service fees of up to 0.75% and 0.25%, respectively, of
the net asset value of such shares. Dealers may from time to time be required to
meet certain other criteria in order to receive service fees. PFD or its
affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.

The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to Class C shares of
the fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. When a broker-dealer sells Class C shares and
elects, with PFD's approval, to waive its right to receive the commission
normally paid at the time of the sale, PFD may cause all or a portion of the
distribution fees described above to be paid to the broker-dealer.

General

In accordance with the terms of each 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 Plans, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plans provide.

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 Plans except to the extent that PFD and 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 Plans by the fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.

Each 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 Plans will benefit the fund and its current and
future shareholders. The Plans 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 Plans must also be approved by
the Trustees as provided in Rule 12b-1.

See Appendix A for fund expenses under the Class A Plan, Class B Plan and Class
C Plan and CDSCs paid to PFD for the most recently completed fiscal year.

Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares and Class C shares may be subject to a 1% CDSC.

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 Class A, Class B, Class C and
Class Y 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. 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.

8. INDEPENDENT PUBLIC ACCOUNTANTS

[ ], is the fund's independent public accountants, providing audit services, tax
return review, and assistance and consultation with respect to the preparation
of filings with the SEC.

9. 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 foreign equity securities are executed by
broker-dealers in foreign countries in which commission rates are fixed and,
therefore, are not 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.

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.

10. 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 less
any applicable CDSC. See "Sales Charges." 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 Class A share
certificates; certificates will not be issued for Class B, Class C or Class Y
shares.

The fund's Agreement and Declaration of Trust, dated August 3, 1999 (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.
Pursuant thereto, the Trustees have authorized the issuance of four classes of
shares of the fund, designated as Class A shares, Class B shares, Class C shares
and Class Y shares. 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.

The shares of each class represent an interest in the same portfolio of
investments of the fund. Each class has equal rights as to voting, redemption,
dividends and liquidation, except that each class bears different distribution
and transfer agent fees and may bear other expenses properly attributable to the
particular class. Class A, Class B and Class C shareholders have exclusive
voting rights with respect to the Rule 12b-1 Plans adopted by holders of those
shares in connection with the distribution of shares.

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.

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
except that under certain circumstances Class B shares may convert to Class A
shares.

As a Delaware business trust, the fund's operations are governed by the
Declaration. 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 subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.

The Declaration provides that any Trustee who is not an "interested person" of
Pioneer shall be considered to be independent for purposes of Delaware law
notwithstanding the fact that such Trustees receive compensation for serving as
a Trustee of the fund or other investment companies for which Pioneer acts as
investment adviser.

11. SALES CHARGES

The fund continuously offers four classes of shares designated as Class A, Class
B, Class C and Class Y shares as described in the prospectus.

Class A Share Sales Charges

You may buy Class A shares at the public offering price, including a sales
charge, as follows:

Sales Charge as a % of
Offering Net Amount Dealer
Amount of Purchase Price Invested Reallowance

Less than $50,000 5.75 6.10 5.00
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 see below

The schedule of sales charges above is applicable to purchases of Class A shares
of the fund by (i) an individual, (ii) an individual and his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a trust
estate or fiduciary account or related trusts or accounts including pension,
profit-sharing and other employee benefit trusts qualified under Sections 401 or
408 of the Code although more than one beneficiary is involved. The sales
charges applicable to a current purchase of Class A shares of the fund by a
person listed above is determined by adding the value of shares to be purchased
to the aggregate value (at the then current offering price) of shares of any of
the other Pioneer mutual funds previously purchased and then owned, provided PFD
is notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of Pioneer, may be included for this purpose.

No sales charge is payable at the time of purchase on investments of $1 million
or more, or for purchases by participants in certain group plans described below
subject to a CDSC of 1% which may be imposed in the event of a redemption of
Class A shares within 12 months of purchase. PFD may, in its discretion, pay a
commission to broker-dealers who initiate and are responsible for such purchases
as follows: 1% on the first $5 million invested; 0.50% on the next $45 million
invested; and 0.25% on the excess over $50 million invested. These commissions
shall not be payable if the purchaser is affiliated with the broker-dealer or if
the purchase represents the reinvestment of a redemption made during the
previous 12 calendar months. Broker-dealers who receive a commission in
connection with Class A share purchases at net asset value by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets will be required to return any commissions paid or a pro
rata portion thereof if the retirement plan redeems its shares within 12 months
of purchase. Contingent upon the achievement of certain sales objectives, PFD
may pay to Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of any
sales commission on sales of the fund's Class A shares through such dealer. From
time to time, PFD may elect to reallow the entire initial sales charge to
participating dealers for all Class A sales with respect to which orders are
placed during a particular period. Dealers to whom substantially the entire
sales charge is reallowed may be deemed to be underwriters under the federal
securities laws.

Letter of Intent ("LOI"). Reduced sales charges are available for purchases of
$50,000 or more of Class A shares (excluding any reinvestments of dividends and
capital gains distributions) made within a 13-month period pursuant to an LOI
which may be established by completing the Letter of Intent section of the
Account Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to PSC within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PSC, registered in your name, until the terms of the
LOI are fulfilled. When you sign the Account Application, you agree to
irrevocably appoint PSC your attorney-in-fact to surrender for redemption any or
all shares held in escrow with full power of substitution. An LOI is not a
binding obligation upon the investor to purchase, or the fund to sell, the
amount specified in the LOI.

If the total purchases, less redemptions, exceed the amount specified under the
LOI and are in an amount which would qualify for a further quantity discount,
all transactions will be recomputed on the expiration date of the LOI to effect
the lower sales charge. Any difference in the sales charge resulting from such
recomputation will be either delivered to you in cash or invested in additional
shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.

If the total purchases, less redemptions, are less than the amount specified
under the LOI, you must remit to PFD any difference between the sales charge on
the amount actually purchased and the amount originally specified in the LOI.
When the difference is paid, the shares held in escrow will be deposited to your
account. If you do not pay the difference in sales charge within 20 days after
written request from PFD or your dealer, PSC, after receiving instructions from
PFD, will redeem the appropriate number of shares held in escrow to realize the
difference and release any excess.

Class B Shares

You may buy Class B shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class B shares redeemed within six years of purchase will be subject to
a CDSC at the rates shown in the table below. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial purchase price, including shares derived from
the reinvestment of dividends or capital gains distributions.

The amount of the CDSC, if any, will vary depending on the number of years from
the time of purchase until the time of redemption of Class B shares. For the
purpose of determining the number of years from the time of any purchase after
September 30, 1998, all payments during a month will be aggregated and deemed to
have been made on the first day of that month. For the purpose of determining
the number of years from the time of any purchase made prior to October 1, 1998,
all payments during a quarter will be aggregated and deemed to have been made on
the first day of that quarter. In processing redemptions of Class B shares, the
fund will first redeem shares not subject to any CDSC and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.

The CDSC for Class B shares subject to a CDSC upon redemption will be determined
as follows:

CDSC as a % of Dollar
Year Since Purchase Amount Subject to CDSC

First 4.0
Second 4.0
Third 3.0
Fourth 3.0
Fifth 2.0
Sixth 1.0
Seventh and thereafter 0.0

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.

Class B shares will automatically convert into Class A shares at the beginning
of the calendar month (or the calendar quarter for purchases made prior to
October 1, 1998) that is eight years after the purchase date, except as noted
below. Class B shares acquired by exchange from Class B shares of another
Pioneer mutual fund will convert into Class A shares based on the date of the
initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the date
of the initial purchase to which such shares relate. For this purpose, Class B
shares acquired through reinvestment of distributions will be attributed to
particular purchases of Class B shares in accordance with such procedures as the
Trustees may determine from time to time. The conversion of Class B shares to
Class A shares is subject to the continuing availability of a ruling from the
Internal Revenue Service (the "IRS") or an opinion of counsel that such
conversions will not constitute taxable events for federal tax purposes. The
conversion of Class B shares to Class A shares will not occur if such ruling or
opinion is not available and, therefore, Class B shares would continue to be
subject to higher expenses than Class A shares for an indeterminate period.

Class C Shares

You may buy Class C shares at net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class C shares redeemed within one year of purchase will be subject to
a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of
the current market value or the original purchase cost of the shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gains distributions. Class C shares do not convert to any
other class of fund shares.

For the purpose of determining the time of any purchase after September 30,
1998, all payments during a month will be aggregated and deemed to have been
made on the first day of that month. For the purpose of determining the time of
any purchase made prior to October 1, 1998, all payments during a calendar
quarter will be aggregated and deemed to have been made on the first day of that
quarter. In processing redemptions of Class C shares, the fund will first redeem
shares not subject to any CDSC and then shares held for the shortest period of
time during the one-year period. As a result, you will pay the lowest possible
CDSC.

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.

12. REDEEMING SHARES

Redemptions may be suspended or payment postponed during any period in which any
of the following conditions exist: the Exchange is closed or trading on the
Exchange is restricted; an emergency exists as a result of which disposal by the
fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the fund to fairly determine the value of the net
assets of its portfolio; or the SEC, by order, so permits.

Redemptions and repurchases are taxable transactions for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.

Redemption fee. In addition to any applicable sales charge, shares of the fund
are subject to a redemption fee of 2% of the proceeds if redeemed or exchanged
within 90 days of purchase. This fee is payable to the fund and is intended to
discourage short-term trading in the fund's shares. Short-term trading can
increase the expense incurred by the fund and make portfolio management less
efficient. The fee will not be imposed on retirement accounts or omnibus
accounts maintained by financial intermediaries for their clients.

Systematic Withdrawal Plan(s) ("SWP") (Class A, Class B and Class C Shares). A
SWP is designed to provide a convenient method of receiving fixed payments at
regular intervals from fund share accounts having a total value of not less than
$10,000. You must also be reinvesting all dividends and capital gains
distributions to use the SWP option.

Periodic payments of $50 or more will be deposited monthly, quarterly,
semiannually or annually directly into a bank account designated by the
applicant or will be sent by check to the applicant, or any person designated by
the applicant. Payments can be made either by check or electronic funds transfer
to a bank account designated by you. Class B accounts must meet the minimum
initial investment requirement prior to establishing a SWP. Withdrawals from
Class B and Class C share accounts are limited to 10% of the value of the
account at the time the SWP is established. See "Qualifying for a reduced sales
charge" in the prospectus. If you direct that withdrawal payments be paid to
another person, want to change the bank where payments are sent or designate an
address that is different from the account's address of record after you have
opened your account, a signature guarantee must accompany your instructions.
Withdrawals under the SWP are redemptions that may have tax consequences for
you.

Purchases of Class A shares of the fund at a time when you have a SWP in effect
may result in the payment of unnecessary sales charges and may, therefore, be
disadvantageous. SWP redemptions reduce and may ultimately exhaust the number of
shares in your account. 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. Withdrawals under the
SWP are redemptions that may have tax consequences for you.

A 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 in the shareholder's account have
been redeemed.

You may obtain additional information by calling PSC at 1-800-225-6292.

Reinstatement Privilege (Class A Shares). If you redeem all or part of your
Class A shares of the fund, you may reinvest all or part of the redemption
proceeds without a sales charge in Class A shares of the fund if you send a
written request to PSC not more than 90 days after your shares were redeemed.
Your redemption proceeds will be reinvested at the next determined net asset
value of the Class A shares of the fund after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes as
a result of the redemption, and special tax rules may apply if a reinstatement
occurs. For example, if a redemption resulted in a loss and an investment is
made in shares of the fund within 30 days before or after the redemption, you
may not be able to recognize the loss for federal income tax purposes. Subject
to the provisions outlined in the prospectus, you may also reinvest in Class A
shares of other Pioneer mutual funds; in this case you must meet the minimum
investment requirements for each fund you enter.

The 90-day reinstatement period may be extended by PFD for periods of up to one
year for shareholders living in areas that have experienced a natural disaster,
such as a flood, hurricane, tornado or earthquake.

13. TELEPHONE TRANSACTIONS

You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone. Class Y shares may not be purchased by telephone. See the prospectus
for more information. For personal assistance, call 1-800-225-6292 between 8:00
a.m. and 9:00 p.m. (Class Y account holders should contact Pioneer's Group Plans
Department at 1-888-294-4480 between 9:00 a.m. and 6:00 p.m.) Eastern time on
weekdays. Computer-assisted transactions may be available to shareholders who
have prerecorded certain bank information (see "FactFoneSM"). You are strongly
urged to consult with your investment professional 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 purchase, exchange or redemption. You should
communicate with the fund in writing if you are unable to reach the fund by
telephone.

FactFoneSM. FactFoneSM is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFoneSM allows shareholder access to current information on Pioneer mutual
fund accounts and to the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFoneSM to make computer-assisted
telephone purchases, exchanges or redemptions from your Pioneer mutual fund
accounts, access your account balances and last three transactions and order a
duplicate statement if you have activated your PIN. Telephone purchases or
redemptions require the establishment of a bank account of record.
Computer-assisted Class Y share telephone purchases, exchanges and redemptions
and certain other FactFoneSM features for Class Y shareholders are not currently
available through FactFoneSM. You are strongly urged to consult with your
investment professional prior to requesting any telephone transaction.
Shareholders whose accounts are registered in the name of a broker-dealer or
other third party may not be able to use FactFoneSM. Call PSC for assistance.

FactFoneSM allows shareholders to hear the following recorded fund information:

o net asset value prices for all Pioneer mutual funds;

o annualized 30-day yields on Pioneer's fixed income funds;

o annualized 7-day yields and 7-day effective (compound) yields for
Pioneer's money market fund; and

o dividends and capital gains distributions on all Pioneer mutual funds.

Yields are calculated in accordance with SEC mandated standard formulas.

All performance numbers communicated through FactFoneSM represent past
performance, and figures include the maximum applicable sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. The value of Class A, Class B, Class C and Class Y shares (except
for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost.

14. PRICING OF SHARES

The net asset value per share of each class 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 each
class 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 foreign
currencies are converted to U.S. dollars utilizing foreign exchange rates
employed by the fund's independent pricing services. Generally, trading in
foreign 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 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 each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the fund are accrued daily and taken into account.
The fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. Class B, Class C
and Class Y shares are offered at net asset value without the imposition of an
initial sales charge (Class B and Class C shares may be subject to a CDSC).

15. 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 federal income tax on income and capital gains distributed to
shareholders as required under the Code. If the fund did not qualify as a
regulated investment company, it would be treated as a U.S. corporation subject
to 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 pays distributions of net long-term capital gains in
November. The fund generally pays dividends from any net investment income or
distributions of net short-term capital gains quarterly during March, June,
September and 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 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, income the fund earns from equity interests in certain entities
that are not treated as corporations (e.g., are treated as partnerships or
trusts) for U.S. tax purposes will generally have the same character for the
fund as in the hands of such entities. 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 federal
income tax purposes, all dividends are taxable as described below 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 federal income tax purposes without
regard to the length of time shares of the fund have been held. The federal
income tax status of all distributions will be reported to shareholders
annually.

Any dividend declared by the fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for 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
need 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 proposed 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 hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), the fund could be subject to federal income tax and additional
interest charges on "excess distributions" received from such companies or 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 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
income, to shareholders to qualify as a regulated investment company under the
Code and avoid 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 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 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 on 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.

In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1) in the case of a reinvestment in the fund or another mutual
fund at net asset value pursuant to the reinvestment privilege, or (2) in the
case of an exchange, all or a portion of the sales charge paid on such shares is
not included in their tax basis under the Code, to the extent a sales charge
that would otherwise apply to the shares received is reduced pursuant to the
reinvestment or exchange privilege. In either case, the portion of the sales
charge not included in the tax basis of the shares redeemed or surrendered in an
exchange is included in the tax basis of the shares acquired in the reinvestment
or exchange. 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 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 as long-term or short-term of some capital gains and losses
realized by the fund. Certain options, futures and forward contracts relating to
foreign currency may be subject to Section 988, as described above, and
accordingly produce 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 no corresponding cash
amounts may concurrently be received, 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 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 may be treated as qualifying dividends. 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 qualifying 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 (including exchanges) or repurchases of fund shares paid
to shareholders who have not complied with IRS regulations. In order to 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 possible 30% non-resident alien U.S. withholding tax (or
non-resident alien withholding tax 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.

16. 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's
classes may be compared to averages or rankings prepared by Lipper, Inc., a
widely recognized independent service which monitors mutual fund performance;
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; or the Russell U.S. Equity Indexes
or the Wilshire Total Market Value Index, which are recognized unmanaged indexes
of broad-based common stocks.

In addition, the performance of the classes 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 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 one or more classes of 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 a class 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 a class of the
fund, over any period up to the lifetime of that class 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 each of its classes 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 each class of shares are computed by
finding the average annual compounded rates of return that would cause a
hypothetical investment in the class 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:
n
P(1+T) = ERV

Where:

P = a hypothetical initial payment of $1,000, less the
maximum sales load of $57.50 for Class A shares or
the deduction of the CDSC for Class B and Class C
shares at the end of the period; for Class Y shares,
no sales load or CDSC applies

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 of a
particular class of shares 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 class's
mean account size.

See Appendix A for the annual total returns for each class of fund shares as of
the most recently completed fiscal year.

17. FINANCIAL STATEMENTS

[To be filed by amendment.]

To the extent permitted by the SEC, if members of the same family hold shares of
the fund and have the same address of record, the fund will only send one copy
of its shareholders report to such address, unless the shareholders at same
address request otherwise.
18. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION

Portfolio Turnover

Not applicable.1

Share Ownership

Not applicable.1

Compensation of Officers and Trustees

The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
<TABLE>
<S> <C> <C> <C>
Pension or Retirement Total Compensation from
Benefits Accrued as the Fund and Other
Aggregate Part of Fund Expenses Pioneer Mutual Funds**
Compensation from
Name of Trustee Fund*

John F. Cogan, Jr.*** $0 $0 $ 18,750.00
Mary K. Bush 0 0 77,125.00
Richard H. Egdahl, M.D. 0 0 79,125.00
Margaret B.W. Graham 0 0 81,750.00
John W. Kendrick 0 0 65,900.00
Marguerite A. Piret 0 0 98,750.00
David D. Tripple** 0 0 18,750.00
Stephen K. West 0 0 85,050.00
John Winthrop ___0___ 0 85,875.00
------- - ---------
$ $0 $611,075.00
</TABLE>
- ------------------------
* Estimated for the fiscal year ended December 31, 1999.
** For the calendar year ended December 31, 1998. The fund did not pay
any compensation during 1998 because it had not yet been organized.
*** Under the management contract, Pioneer reimburses the fund for any
Trustees fees paid by the fund.

Approximate Management Fees the Fund Paid or Owed Pioneer

Not applicable.1

Carryover of Distribution Plan Expenses

Not applicable.1

- ------------------------
1 As of the date of this statement of additional information, the fund had
not yet completed a fiscal year.

Approximate Net Underwriting Commissions Retained by PFD

Not applicable.1

Approximate Commissions Reallowed to Dealers

Not applicable.1

Fund Expenses under the Distribution Plans

Not applicable.1

CDSCs

Not applicable.1

Approximate Brokerage and Underwriting Commissions (Portfolio Transactions)

Not applicable.1

Capital Loss Carryforwards

Not applicable.1

Average Annual Total Returns

Not applicable.1

- ------------------------
1 As of the date of this statement of additional information, the fund had
not yet completed a fiscal year.

<PAGE>

19. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND
AND PREFERRED STOCK RATINGS1

Moody's Investors Service, Inc. ("Moody's") 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.

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.
- --------
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.

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.

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 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
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.

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.

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.

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 has been 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 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 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.

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.

<PAGE>

20. APPENDIX C - PERFORMANCE STATISTICS

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.

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 45 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 1,700 securities in 28 emerging markets and 2,600
securities in 23 developed markets, totalling over $15 trillion in market
capitalization.

Countries in the MSCI EAFE Index are: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and United
Kingdom.

Countries in the MSCI Emerging Markets Free Index are: Argentina, Brazil, Chile,
China Free, Colombia, Czech Republic, Greece, Hungary, India, Indonesia Free,
Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Singapore, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela.

MSCI All Country (AC) Asia Free ex Japan: This index is made up of the following
12 countries: China Free, Hong Kong, India, Indonesia Free, Korea @50%, Malaysia
Free, Pakistan, Philippines Free, Singapore Free, Sri Lanka, Taiwan @50% and
Thailand Free.

MSCI All Country (AC) Asia Pacific Free ex Japan: This index is made up of the
following 14 countries: Australia, China Free, Hong Kong, India, Indonesia Free,
Korea @50%, Malaysia Free, New Zealand, Pakistan, Philippines Free, Singapore
Free, Sri Lanka, Taiwan @50% and Thailand Free.

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.

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.

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 $3.7 billion. The Russell 2500TM
Index measures performance of the 2,500 smallest companies in the Russell 3000.
The average market capitalization is approximately $931 million, and the largest
company in the index has an approximate market capitalization of $3.7 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 $1.4 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 $9.9 billion. The smallest
company in the index has an approximate market capitalization of $1.4 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 $10.3 billion.

The Russell indexes are reconstituted annually as of July 1, based on May 31
market capitalization rankings.

Wilshire Real Estate Securities Index. The Wilshire Real Estate Securities Index
is a market capitalization weighted index of 119 publicly traded real estate
securities, such as REITs, real estate operating companies ("REOCs") and
partnerships.

The index contains performance data on five major categories of property:
office, retail, industrial, apartment and miscellaneous. The companies in the
index are 94.11% equity and hybrid REITs and 5.89% 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 Balanced Funds Index. This index represents equally weighted performance,
adjusted for capital gains distributions and income dividends, of approximately
30 of the largest funds with a primary objective of conserving principal by
maintaining at all times a balanced portfolio of stocks and bonds. Typically,
the stock/bond ratio ranges around 60%/40%.

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.

Sources: Ibbotson Associates, Towers Data Systems, Lipper, Inc. and PGI

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
Dow S&P/ S&P/
Jones U.S. Small BARRA BARRA Merrill Lynch
S&P Industrial Stock U.S. 500 500 Micro-Cap
500 Average Index Inflation Growth Value Index
- ----------------------------------------------------------------------------------------------------------------------
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>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
Dow S&P/ S&P/
Jones U.S. Small BARRA 500 BARRA Merrill Lynch
S&P Industrial Stock U.S. Growth 500 Micro-Cap
500 Average Index Inflation Value Index
- ----------------------------------------------------------------------------------------------------------------------
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 18.15 -7.31 1.80 42.16 14.67 -6.15
</TABLE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
Long- Intermediate- MSCI Long-
Term Term U.S. EAFE 6- Term U.S. U.S.
U.S. Gov't Government (Net of Month Corporate T-Bill
Bonds Bonds Taxes) CDs Bonds (30-Day)
- -------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
Long- Intermediate- MSCI Long-
Term Term U.S. EAFE 6- Term U.S. U.S.
U.S. Gov't Government (Net of Month Corporate T-Bill
Bonds Bonds Taxes) CDs Bonds (30-Day)
- -------------------------------------------------------------------------------------------------------
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26
Dec 1998 13.06 10.21 20.00 5.34 10.76 4.86
</TABLE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
NAREIT Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities 400 Index Free Index Account
- -----------------------------------------------------------------------------------------------------------------------
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>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
NAREIT Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities 400 Index Free Index Account
- -----------------------------------------------------------------------------------------------------------------------
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 22.20 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 -17.63 19.12 15.09 -25.34 4.63
</TABLE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C>
MSCI All Country
MSCI All Country (AC) (AC) Asia Pacific Lehman Brothers
Asia Free ex Japan Free ex Japan Aggregate Bond Index
- ----------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A
Dec 1926 N/A N/A N/A
Dec 1927 N/A N/A N/A
Dec 1928 N/A N/A N/A
Dec 1929 N/A N/A N/A
Dec 1930 N/A N/A N/A
Dec 1931 N/A N/A N/A
Dec 1932 N/A N/A N/A
Dec 1933 N/A N/A N/A
Dec 1934 N/A N/A N/A
Dec 1935 N/A N/A N/A
Dec 1936 N/A N/A N/A
Dec 1937 N/A N/A N/A
Dec 1938 N/A N/A N/A
Dec 1939 N/A N/A N/A
Dec 1940 N/A N/A N/A
Dec 1941 N/A N/A N/A
Dec 1942 N/A N/A N/A
Dec 1943 N/A N/A N/A
Dec 1944 N/A N/A N/A
Dec 1945 N/A N/A N/A
Dec 1946 N/A N/A N/A
Dec 1947 N/A N/A N/A
Dec 1948 N/A N/A N/A
Dec 1949 N/A N/A N/A
Dec 1950 N/A N/A N/A
Dec 1951 N/A N/A N/A
Dec 1952 N/A N/A N/A
Dec 1953 N/A N/A N/A
Dec 1954 N/A N/A N/A
Dec 1955 N/A N/A N/A
Dec 1956 N/A N/A N/A
Dec 1957 N/A N/A N/A
Dec 1958 N/A N/A N/A
Dec 1959 N/A N/A N/A
Dec 1960 N/A N/A N/A
Dec 1961 N/A N/A N/A

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C>
MSCI All Country
MSCI All Country (AC) (AC) Asia Pacific Lehman Brothers
Asia Free ex Japan Free ex Japan Aggregate Bond Index
- ----------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A
Dec 1963 N/A N/A N/A
Dec 1964 N/A N/A N/A
Dec 1965 N/A N/A N/A
Dec 1966 N/A N/A N/A
Dec 1967 N/A N/A N/A
Dec 1968 N/A N/A N/A
Dec 1969 N/A N/A N/A
Dec 1970 N/A N/A N/A
Dec 1971 N/A N/A N/A
Dec 1972 N/A N/A N/A
Dec 1973 N/A N/A N/A
Dec 1974 N/A N/A N/A
Dec 1975 N/A N/A N/A
Dec 1976 N/A N/A 15.62
Dec 1977 N/A N/A 3.05
Dec 1978 N/A N/A 1.39
Dec 1979 N/A N/A 1.94
Dec 1980 N/A N/A 2.70
Dec 1981 N/A N/A 6.23
Dec 1982 N/A N/A 32.62
Dec 1983 N/A N/A 8.37
Dec 1984 N/A N/A 15.14
Dec 1985 N/A N/A 22.11
Dec 1986 N/A N/A 15.29
Dec 1987 N/A N/A 2.75
Dec 1988 30.00 30.45 7.89
Dec 1989 32.13 21.43 14.53
Dec 1990 -6.54 -11.86 8.95
Dec 1991 30.98 32.40 16.00
Dec 1992 21.81 9.88 7.40
Dec 1993 103.39 84.94 9.75
Dec 1994 -16.94 -12.59 -2.92
Dec 1995 4.00 10.00 18.48
Dec 1996 10.05 8.08 3.61
Dec 1997 -40.31 -34.20 9.68
Dec 1998 -7.79 -4.42 8.67
</TABLE>
Source: Lipper, Inc.

<PAGE>

21. 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 June 30, 1998, Pioneer employed a professional investment staff of 75.

Total assets of all Pioneer mutual funds at December 31, 1998, were
approximately $22 billion representing 1,363,446 shareholder accounts, 890,148
non-retirement accounts and 473,298 retirement accounts.

silva/legal/71976.114/tx_mgd/sai_1.doc

<PAGE>

PART C - OTHER INFORMATION

Item 23. Exhibits

(a)(1) Agreement and Declaration of Trust.(1)
(a)(2) Certificate of Trust.(1)
(b) By-Laws.(1)
(c) None.
(d) Form of Management Contract with Pioneer Investment
Management, Inc.(1)
(e)(1) Form of Underwriting Agreement with Pioneer Funds
Distributor, Inc.(1)
(e)(2) Form of Dealer Sales Agreement.(2)
(f) None.
(g) Form of Custodian Agreement with Brown Brothers
Harriman & Co.(2)
(h)(1) Form of Investment Company Service Agreement with
Pioneering Services Corporation.(2)
(h)(2) Administration Agreement with Pioneer Investment
Management, Inc. (formerly Pioneering Management
Corporation).(2)
(h)(3) Expense Limitation Agreement.(2)
(i) Opinion of Counsel.(2)
(j) Consent of Independent Public Accountants.(2)
(k) None.
(l) Initial Capital Agreement.(2)
(m)(1) Form of Class A Distribution Plan.(1)
(m)(2) Form of Class B Distribution Plan.(1)
(m)(3) Form of Class C Distribution Plan.(1)
(n) Financial Data Schedule.(2)
(o) Form of Multiple Class Plan Pursuant to Rule 18f-3.(1)
N/A Powers of Attorney.(1)

- -------------------------

(1) Filed herewith.

(2) To be filed by amendment.

Item 24. Persons Controlled by or Under Common Control with the Fund

None.

Item 25. Indemnification

Except for the Agreement and Declaration of Trust, dated August 3, 1999
the "Declaration"), establishing the Fund as a business trust under
Delaware law, there is no contract, arrangement or statute under which any
Trustee, officer, underwriter or affiliated person of the Fund is insured or
indemnified. The Declaration provides that no Trustee or officer will be
indemnified against any liability to which the Fund 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 "1933 Act"), may be available to Trustees, officers
and controlling persons of the Fund pursuant to the foregoing provisions, or
otherwise, the Fund has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund of expenses incurred or
paid by a Trustee, officer or controlling person of the Fund in the successful

C-1
<PAGE>

defense of any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being registered, the
Fund 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 1933 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. Senior Partner, 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

Margaret D. Patel Senior Vice President and Portfolio Manager,
EQSF Advisers, Inc., 767 Third Avenue, New
York, New York 10017-2023

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

Stephen W. Long Director and Executive
Vice President None

Robert L. Butler Executive Vice President None

Steven M. Graziano Executive Vice President None

William A. Misata Senior Vice President None

Constance D. Spiros Senior Vice President None

C-2

<PAGE>

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

Roy P. Rossi Assistant Treasurer None

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.

Item 28. Location of Accounts and Records

The accounts and records are maintained at the Fund's office at
60 State Street, Boston, Massachusetts 02109; contact the Treasurer.

Item 29. Management Services

Not applicable.

Item 30. 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 Fund 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 16th day of
September 1999.

PIONEER TAX-MANAGED EQUITY 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) )
)
)
/s/ Eric W. Reckard Chief Financial Officer )
Eric W. Reckard and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
/s/ John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl* )
Richard H. Egdahl )
)
)
Margaret BW Graham* )
Margaret B. W. Graham )
)
)
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 )
)
)
*By: /s/ John F. Cogan, Jr. Dated: September 16, 1999)
John F. Cogan, Jr.
Attorney-in-fact

<PAGE>

EXHIBIT INDEX

Exhibit
Number Document Title

(a)(1) Agreement and Declaration of Trust.
(a)(2) Certificate of Trust.
(b) By-Laws.
(d) Form of Management Contract with Pioneer Investment
Management, Inc.
(e)(1) Form of Underwriting Agreement with Pioneer Funds
Distributor, Inc.
(m)(1) Form of Class A Distribution Plan.
(m)(2) Form of Class B Distribution Plan.
(m)(3) Form of Class C Distribution Plan.
(o) Form of Multiple Class Plan Pursuant to Rule 18f-3.
N/A Powers of Attorney.

PINONEER TAX-MANAGED EQUITY FUND

AGREEMENT AND
DECLARATION OF TRUST

This AGREEMENT AND DECLARATION OF TRUST is made on August 3, 1999 by
the undersigned trustees (together with all other persons from time to time duly
elected, qualified and serving as Trustees in accordance with the provisions of
Article II hereof, the "Trustees");

NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.

ARTICLE I

NAME AND DEFINITIONS

Section 1. NAME. The name of the Trust created by this Agreement and
Declaration of Trust is "Pioneer Tax-Managed Equity Fund."

Section 2. DEFINITIONS. Unless otherwise provided or required by the context:

(a) "ADMINISTRATOR" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.

(b) "BY-LAWS" means the By-laws of the Trust adopted by the Trustees,
as amended from time to time, which By-laws are expressly herein incorporated by
reference as part of the "governing instrument" within the meaning of the
Delaware Act.

(d) "COMMISSION," "INTERESTED PERSON" and "PRINCIPAL UNDERWRITER" have
the meanings provided in the 1940 Act. Except as such term may be otherwise
defined by the Trustees in conjunction with the establishment of any Series of
Shares, the term "VOTE OF A MAJORITY OF THE SHARES OUTSTANDING AND ENTITLED TO
VOTE" SHALL HAVE THE SAME MEANING AS IS ASSIGNED TO THE TERM "VOTE OF A MAJORITY
OF THE OUTSTANDING VOTING SECURITIES" in the 1940 Act.

(e) "COVERED PERSON" means a person so defined in Article IV, Section
2.

<PAGE>

(f) "CUSTODIAN" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).

(g) "DECLARATION" shall mean this Agreement and Declaration of Trust,
as amended or restated from time to time. Reference in this Declaration of Trust
to "Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer
to this Declaration rather than exclusively to the article or section in which
such words appear.

(h) "DELAWARE ACT" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.

(i) "DISTRIBUTOR" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.

(j) "HIS" shall include the feminine and neuter, as well as the
masculine, genders.

(k) "INVESTMENT ADVISER" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.

(l) "NET ASSET VALUE" means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.

(m) "PERSON" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
and governments and agencies and political subdivisions, thereof, whether
domestic or foreign.

(n) "SERIES" means a series of Shares established pursuant to Article
V.

(o) "SHAREHOLDER" means a record owner of Outstanding Shares;

(p) "SHARES" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as
then issued and outstanding, but does not include Shares which have been
repurchased or redeemed by the Trust and which are held in the treasury of the
Trust.

(q) "TRANSFER AGENT" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.

(r) "TRUST" means Pioneer Tax-Managed Equity Fund established hereby,
and reference to the Trust, when applicable to one or more Series, refers to
that Series.

<PAGE>

(s) "TRUSTEES" means the person who has signed this Declaration of
Trust, so long as he shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified and
serving as Trustees in accordance with Article II, in all cases in their
capacities as Trustees hereunder.

(t) "TRUST PROPERTY" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any Series
or the Trustees on behalf of the Trust or any Series.

(u) The "1940 ACT" means the Investment Company Act of 1940, as amended
from time to time.

ARTICLE II

THE TRUSTEES

Section 1. MANAGEMENT OF THE TRUST. The business and affairs of the
Trust shall be managed by or under the direction of the Trustees, and they shall
have all powers necessary or desirable to carry out that responsibility. The
Trustees may execute all instruments and take all action they deem necessary or
desirable to promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.

Section 2. POWERS. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to
execute any contracts and instruments that they may consider necessary or
desirable in the management of the Trust. The Trustees shall not in any way be
bound or limited by current or future laws or customs applicable to trust
investments, but shall have full power and authority to make any investments
which they, in their sole discretion, deem proper to accomplish the purposes of
the Trust. The Trustees may exercise all of their powers without recourse to any
court or other authority. Subject to any applicable limitation herein or in the
By-laws or resolutions of the Trust, the Trustees shall have power and
authority, without limitation:

(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.

(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidence of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable

<PAGE>

or non-negotiable instruments; government securities, including securities
of any state, municipality or other political subdivision thereof, or any
governmental or quasi-governmental agency or instrumentality; and money market
instruments including bank certificates of deposit, finance paper, commercial
paper, bankers' acceptances and all kinds of repurchase agreements, of any
corporation, company, trust, association, firm or other business organization
however established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which the
Trust or any of its Series shall be authorized to invest.

(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.

(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.

(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.

(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.

(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.

<PAGE>

(h) To adopt By-laws not inconsistent with this Declaration providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.

(i) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate.

(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.

(k) To retain one or more transfer agents and shareholder servicing
agents, or both.

(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind.

(m) To set record dates in the manner provided for herein or in the
By-laws.

(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.

(o) To hold any security or other property (i) in a form not indicating
any trust, whether in bearer, book entry, unregistered or other negotiable form,
or (ii) either in the Trust's or Trustees' own name or in the name of a
custodian or a nominee or nominees, subject to safeguards according to the usual
practice of business trusts or investment companies.

(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.

(q) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular Series
and assets, liabilities and expenses to a particular Class or to apportion the
same between or among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series or Class as provided
for in Article V, Section 4.

(r) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are held
by

<PAGE>

the Trust; to consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern; and to pay calls or subscriptions with
respect to any security held in the Trust.

(s) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes.

(t) To make distributions of income, capital gains, returns of capital
(if any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.

(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper, including a
committee consisting of fewer than all of the Trustees then in office, which may
act for and bind the Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any legal action,
suit or proceeding, pending or threatened.

(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption, cancellation,
retirement, acquisition, holding, resale, reissuance, disposition of or dealing
in Shares; and, subject to Articles V and VI, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust or of the particular Series with respect to which such
Shares are issued.

(w) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.

(x) To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to take
every other action incidental to the foregoing business or purposes, objects or
powers.

(y) To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.

(z) To enter into joint ventures, partnerships and other combinations
and associations.

<PAGE>

(aa) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such Committee, depositary or trustee as the Trustees shall deem
proper;

(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;

(cc) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;

(dd) To enter into contracts of any kind and description;

(ee) To interpret the investment policies, practices or limitations
of any Series or Class; and

(ff) To guarantee indebtedness and contractual obligations of
others.

The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.

<PAGE>

Section 3. CERTAIN TRANSACTIONS. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.

Section 4. INITIAL TRUSTEES; ELECTION AND NUMBER OF TRUSTEES. The
initial Trustees shall be the persons initially signing this Declaration. The
number of Trustees (other than the initial Trustees) shall be fixed from time to
time by a majority of the Trustees; provided, that there shall be at least one
(1) Trustee and no more than fifteen (15). The Shareholders shall elect the
Trustees (other than the initial Trustees) on such dates as the Trustees may fix
from time to time.

Section 5. TERM OF OFFICE OF TRUSTEES. Each Trustee shall hold office
for life or until his successor is elected or the Trust terminates; except that
(a) any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.

Section 6. VACANCIES; APPOINTMENT OF TRUSTEES. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, the Trustees in office, regardless of
their number, shall

<PAGE>

have all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by the Declaration. The death, declination to
serve, resignation, retirement, removal or incapacity of one or more Trustees,
or all of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of Trust.

Section 7. TEMPORARY VACANCY OR ABSENCE. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate in, the affairs of the Trust during
such absence), or is physically or mentally incapacitated, the remaining
Trustees shall have all the powers hereunder and their certificate as to such
vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power
of attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.

Section 8. CHAIRMAN. The Trustees shall appoint one of their number to
be Chairman of the Board of Trustees. The Chairman shall preside at all meetings
of the Trustees, shall be responsible for the execution of policies established
by the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.

Section 9. ACTION BY THE TRUSTEES. (a) The Trustees shall act by
majority vote at a meeting duly called at which a quorum is present, including a
meeting held by conference telephone, teleconference or other electronic media
or communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.

(b) A Trustee who with respect to the Trust is not an Interested Person
shall be deemed to be independent and disinterested when making any
determinations or taking any action as a Trustee, whether pursuant to the 1940
Act, the Delaware Act or otherwise.

Section 10. OWNERSHIP OF TRUST PROPERTY. The Trust Property of the
Trust and of each Series shall be held

<PAGE>

separate and apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any successor Trustees. Legal
title in and beneficial ownership of all of the assets of the Trust shall at all
times be considered as vested in the Trust, except that the Trustees may cause
legal title in and beneficial ownership of any Trust Property to be held by, or
in the name of one or more of the Trustees acting for and on behalf of the
Trust, or in the name of any person as nominee acting for and on behalf of the
Trust. No Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or of any Series or any right of partition or
possession thereof, but each Shareholder shall have, as provided in Article V, a
proportionate undivided beneficial interest in the Trust or Series or Class
thereof represented by Shares. The Shares shall be personal property giving only
the rights specifically set forth in this Trust Instrument. The Trust, or at the
determination of the Trustees one or more of the Trustees or a nominee acting
for and on behalf of the Trust, shall be deemed to hold legal title and
beneficial ownership of any income earned on securities of the Trust issued by
any business entities formed, organized, or existing under the laws of any
jurisdiction, including the laws of any foreign country. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute
and deliver such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or the remaining Trustees any Trust Property
held in the name of the resigning or removed Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall execute and deliver on his
behalf such documents as the remaining Trustees shall require as provided in the
preceding sentence.

Section 11. EFFECT OF TRUSTEES NOT SERVING. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.

Section 12. TRUSTEES, ETC. AS SHAREHOLDERS. Subject to any restrictions
in the By-laws, any Trustee, officer, agent or independent contractor of the
Trust may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.

Section 13. SERIES TRUSTEES. In connection with the establishment of
one or more Series or Classes, the Trustees establishing such Series or Class
may appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders only shall entitle the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to

<PAGE>

the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees affects all Series of the Trust or
two or more Series represented by different Trustees.

ARTICLE III

CONTRACTS WITH SERVICE PROVIDERS

Section 1. UNDERWRITING CONTRACT. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive distribution contract
or contracts providing for the sale of the Shares whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.

Section 2. ADVISORY OR MANAGEMENT CONTRACT. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.

Section 3. ADMINISTRATION AGREEMENT. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each

<PAGE>

Series or Class, whereby the other party to such agreement shall undertake
to manage the business affairs of the Trust or of a Series or Class thereof of
the Trust and furnish the Trust or a Series or a Class thereof with office
facilities, and shall be responsible for the ordinary clerical, bookkeeping and
recordkeeping services at such office facilities, and other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine.

Section 4. SERVICE AGREEMENT. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.

Section 5. TRANSFER AGENT. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.

Section 6. CUSTODIAN. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians, including such foreign banks and
securities depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon between the
Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.

<PAGE>

Section 7. AFFILIATIONS OF TRUSTEES OR OFFICERS, ETC. The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust
or any Series thereof is a shareholder, director, officer, partner,
trustee, employee, manager, adviser or distributor of or for any
partnership, corporation, trust, association or other organization or
of or for any parent or affiliate of any organization, with which a
contract of the character described in this Article III or for services
as Custodian, Transfer Agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that

(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE IV

COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION

Section 1. COMPENSATION. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.

Section 2. LIMITATION OF LIABILITY. All persons contracting with or
having any claim against the Trust or a particular Series shall look only to the
assets of all Series or such particular Series for payment under such contract
or claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them

<PAGE>

or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

Section 3. INDEMNIFICATION. (a) Subject to the exceptions and
limitations contained in subsection (b) below:

(i) every person who is, or has been, a Trustee or an officer, employee
or agent of the Trust (including any individual who serves at its
request as director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor or
otherwise) ("Covered Person") shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him
in connection with any claim, action, suit or proceeding in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Covered Person and against amounts paid or incurred by
him in the settlement thereof; and

(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened,
and the words "liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered Person:

(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office, or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or

(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office; (A) by the court or other
body approving the settlement; (B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily available facts
(as opposed to a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily available
facts (as opposed to a full trial-type inquiry) or (D) by a vote of a
majority of the Outstanding Shares entitled to vote

<PAGE>

(excluding any Outstanding Shares owned of record or beneficially by
such individual).

(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors
and administrators of a Covered Person.

(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.

(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or By-laws
inconsistent with this Article, shall be prospective only, to the extent that
such repeal, or modification would, if applied retrospectively, adversely affect
any limitation on the liability of any Covered Person or indemnification
available to any Covered Person with respect to any act or omission which
occurred prior to such repeal, modification or adoption.

Section 3. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the applicable Series to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust, on behalf
of the affected Series, shall, upon request by such Shareholder, assume the
defense of any claim made against such Shareholder for any act or obligation of
the Series and satisfy any judgment thereon from the assets of the Series.

Section 4. NO BOND REQUIRED OF TRUSTEES. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.

<PAGE>

Section 5. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.

Section 6. RELIANCE ON EXPERTS, ETC. Each Trustee, officer or employee
of the Trust or a Series thereof shall, in the performance of his duties, powers
and discretions hereunder be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee.

<PAGE>

ARTICLE V

SERIES; CLASSES; SHARES

Section 1. ESTABLISHMENT OF SERIES OR CLASS. The Trust shall consist of
one or more Series. Without limiting the authority of the Trustees to establish
and designate any further Series, the Trustees hereby establish a single Series
which shall be designated Pioneer Tax-Managed Equity Fund. Each additional
Series shall be established and is effective upon the adoption of a resolution
of a majority of the Trustees or any alternative date specified in such
resolution. The Trustees may designate the relative rights and preferences of
the Shares of each Series. The Trustees may divide the Shares of any Series into
Classes. Without limiting the authority of the Trustees to establish and
designate any further Classes, the Trustees hereby establish four Classes of
Shares which shall be designated Class A, Class B, Class C and Class Y Shares.
The Classes of Shares of the existing Series herein established and designated
and any Shares of any further Series and Classes that may from time to time be
established and designated by the Trustees shall be established and designated,
and the variations in the relative rights and preferences as between the
different Series shall be fixed and determined, by the Trustees; provided, that
all Shares shall be identical except for such variations as shall be fixed and
determined between different Series or Classes by the Trustees in establishing
and designating such Class or Series. In connection therewith with respect to
the existing Classes, the purchase price, the method of determining the net
asset value, and the relative dividend rights of holders shall be as set forth
in the Trust's Registration Statement on Form N-1A under the Securities Act of
1933 and/or the 1940 Act and as in effect at the time of issuing Shares of the
existing Classes.

All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require. The Trust
shall maintain separate and distinct records for each Series and hold and
account for the assets thereof separately from the other assets of the Trust or
of any other Series. A Series may issue any number of Shares or any Class
thereof and need not issue Shares. Each Share of a Series shall represent an
equal beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or a Class thereof shall be entitled to receive his pro rata
share of all distributions made with respect to such Series or Class. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series. The Trustees may adopt and change the name of any
Series or Class.

Section 2. SHARES. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and

<PAGE>

authority, in their sole discretion and without obtaining Shareholder
approval, to issue original or additional Shares at such times and on such terms
and conditions as they deem appropriate; to issue fractional Shares and Shares
held in the treasury; to establish and to change in any manner Shares of any
Series or Classes with such preferences, terms of conversion, voting powers,
rights and privileges as the Trustees may determine (but the Trustees may not
change Outstanding Shares in a manner materially adverse to the Shareholders of
such Shares); to divide or combine the Shares of any Series or Classes into a
greater or lesser number; to classify or reclassify any unissued Shares of any
Series or Classes into one or more Series or Classes of Shares; to abolish any
one or more Series or Classes of Shares; to issue Shares to acquire other assets
(including assets subject to, and in connection with, the assumption of
liabilities) and businesses; and to take such other action with respect to the
Shares as the Trustees may deem desirable. Shares held in the treasury shall not
confer any voting rights on the Trustees and shall not be entitled to any
dividends or other distributions declared with respect to the Shares.

Section 3. INVESTMENT IN THE TRUST. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class, (b) issue fractional
Shares, (c) determine the Net Asset Value per Share of the initial capital
contribution or (d) authorize the issuance of Shares at a price other than Net
Asset Value to the extent permitted by the 1940 Act or any rule, order or
interpretation of the Commission thereunder. The Trustees shall have the right
to refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.

Section 4. ASSETS AND LIABILITIES OF SERIES. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof (including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may
be), shall be held and accounted for separately from the assets of every other
Series and are referred to as "assets belonging to" that Series. The assets
belonging to a Series shall belong only to that Series for all purposes, and to
no other Series, subject only to the rights of creditors of that Series. Any
assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Trustees between and among one or more Series as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes, and such assets,
earnings, income, profits or funds, or

<PAGE>

payments and proceeds thereof shall be referred to as assets belonging to
that Series. The assets belonging to a Series shall be so recorded upon the
books of the Trust, and shall be held by the Trustees in trust for the benefit
of the Shareholders of that Series. The assets belonging to a Series shall be
charged with the liabilities of that Series and all expenses, costs, charges and
reserves attributable to that Series, except that liabilities and expenses
allocated solely to a particular Class shall be borne by that Class. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series or Class shall be
allocated and charged by the Trustees between or among any one or more of the
Series or Classes in such manner as the Trustees deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Shareholders of all
Series or Classes for all purposes.

Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of any other Series. Notice of this contractual limitation on liabilities
among Series may, in the Trustees' discretion, be set forth in the certificate
of trust of the Trust (whether originally or by amendment) as filed or to be
filed in the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act, and upon the giving of such notice in the certificate of
trust, the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under Section
3804 of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.

Section 5. OWNERSHIP AND TRANSFER OF SHARES. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of

<PAGE>

Shares shall be deemed to be the holder of such Shares for all purposes
hereunder and neither the Trustees nor the Trust, nor any transfer agent or
registrar or any officer, employee or agent of the Trust, shall be affected by
any notice of a proposed transfer.

Section 6. STATUS OF SHARES; LIMITATION OF SHAREHOLDER LIABILITY.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any such Shareholder
to an accounting or to take any action in court or elsewhere against the Trust
or the Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything, other than as
agreed by the Shareholder. Shareholders shall have the same limitation of
personal liability as is extended to shareholders of a private corporation for
profit incorporated in the State of Delaware. Every written obligation of the
Trust or any Series shall contain a statement to the effect that such obligation
may only be enforced against the assets of the appropriate Series or all Series;
however, the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.

ARTICLE VI

DISTRIBUTIONS AND REDEMPTIONS

Section 1. DISTRIBUTIONS. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated

<PAGE>

as income and which items as capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The amount and
payment of dividends or distributions and their form, whether they are in cash,
Shares or other Trust Property, shall be determined by the Trustees. Dividends
and other distributions may be paid pursuant to a standing resolution adopted
once or more often as the Trustees determine. All dividends and other
distributions on Shares of a particular Series shall be distributed pro rata to
the Shareholders of that Series in proportion to the number of Shares of that
Series they held on the record date established for such payment, except that
such dividends and distributions shall appropriately reflect expenses allocated
to a particular Class of such Series. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
similar plans as the Trustees deem appropriate.

Section 2. REDEMPTIONS. Each Shareholder of a Series shall have the
right at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.

Section 3. DETERMINATION OF NET ASSET VALUE. The Trustees shall cause
the Net Asset Value of Shares of each Series or Class to be determined from time
to time in a manner consistent with applicable laws and regulations. The
Trustees may delegate the power and duty to determine Net Asset Value per Share
to one or more Trustees or officers of the Trust or to a custodian, depository
or other agent appointed for such

<PAGE>

purpose. The Net Asset Value of Shares shall be determined separately for
each Series or Class at such times as may be prescribed by the Trustees or, in
the absence of action by the Trustees, as of the close of regular trading on the
New York Stock Exchange on each day for all or part of which such Exchange is
open for unrestricted trading.

Section 4. SUSPENSION OF RIGHT OF REDEMPTION. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.

Section 5. REPURCHASE BY AGREEMENT. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.

ARTICLE VII

SHAREHOLDERS' VOTING POWERS AND MEETINGS

Section 1. VOTING POWERS. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.

On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. As determined by the
Trustees without the vote or consent of shareholders, on any matter submitted to
a vote of Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be

<PAGE>

entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. Without limiting the power of the Trustees
in any way to designate otherwise in accordance with the preceding sentence, the
Trustees hereby establish that each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative voting
in the election of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the By-laws. The By-laws may provide that proxies may be
given by any electronic or telecommunications device or in any other manner, but
if a proposal by anyone other than the officers or Trustees is submitted to a
vote of the Shareholders of any Series or Class, or if there is a proxy contest
or proxy solicitation or proposal in opposition to any proposal by the officers
or Trustees, Shares may be voted only in person or by written proxy. Until
Shares of a Series are issued, as to that Series the Trustees may exercise all
rights of Shareholders and may take any action required or permitted to be taken
by Shareholders by law, this Declaration or the By-laws. Meetings of
Shareholders shall be called and notice thereof and record dates therefor shall
be given and set as provided in the By-laws.

Section 2. QUORUM; REQUIRED VOTE. One-third of the Outstanding Shares
of each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.

Section 3. RECORD DATES. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for

<PAGE>

distribution purposes close the register or transfer books for one or more
Series (or Classes) any time prior to the payment of a distribution. Nothing in
this Section shall be construed as precluding the Trustees from setting
different record dates for different Series (or Classes).

Section 4. ADDITIONAL PROVISIONS. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.

ARTICLE VIII

EXPENSES OF THE TRUST AND SERIES

Section 1. PAYMENT OF EXPENSES BY THE TRUST. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall reimburse the
Trustees from the assets belonging to all Series or the particular Series, for
their expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust or a
Series (or a Trustee or officer of the Trust acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
each such Series, prior to any rights or interests of the Shareholders thereto,
for the reimbursement to them of such expenses, disbursements, losses and
liabilities.

Section 2. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by

<PAGE>

reducing the number of Shares in the account of such Shareholder by that
number of full and/or fractional Shares which represents the outstanding amount
of such charges due from such Shareholder.

ARTICLE IX

MISCELLANEOUS

Section 1. TRUST NOT A PARTNERSHIP. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.

Section 2. TRUSTEE ACTION. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.

Section 3. RECORD DATES. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.

Section 4. TERMINATION OF THE TRUST. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares
outstanding and entitled to vote of the Trust or of each Series to be affected,
the Trustees may

(i) sell and convey all or substantially all of the assets of all
Series or any affected Series to another Series or to another entity
which is an open-end investment company as defined in the 1940 Act, or
is a series thereof, for adequate consideration, which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series, and which
may include shares of or interests in such Series, entity, or series
thereof; or

(ii) at any time sell and convert into money all or substantially all
of the assets of all Series or any affected Series.

Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees

<PAGE>

shall distribute the remaining proceeds or assets (as the case may be)
ratably among the Shareholders of all Series or any affected Series; however,
the payment to any particular Class of such Series may be reduced by any fees,
expenses or charges allocated to that Class.

(b) The Trustees may take any of the actions specified in subsection
(a) (i) and (ii) above without obtaining the vote of a majority of the Shares
Outstanding and entitled to vote of the Trust or any Series if a majority of the
Trustees determines that the continuation of the Trust or Series is not in the
best interests of the Trust, such Series, or their respective Shareholders as a
result of factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable manner.
Such factors and events may include the inability of the Trust or a Series to
maintain its assets at an appropriate size, changes in laws or regulations
governing the Trust or the Series or affecting assets of the type in which the
Trust or Series invests, or economic developments or trends having a significant
adverse impact on the business or operations of the Trust or such Series.

(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.

Section 5. REORGANIZATION. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.

(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.

<PAGE>

(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classes thereof.

Section 6. DECLARATION OF TRUST. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.

Section 7. APPLICABLE LAW. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.

<PAGE>

Section 8. AMENDMENTS. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon and no such
amendment shall effect the right to indemnification of any person who is no
longer a Trustee, officer, employee or agent at the time of such amendment.

Section 9. DERIVATIVE ACTIONS. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:

(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, 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 to 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 Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.

Section 10. FISCAL YEAR. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.

Section 11. SEVERABILITY. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration

<PAGE>

or render invalid or improper any action taken or omitted prior to such
determination. If any provision hereof shall be held invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
this Declaration.

<PAGE>

IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust
have executed this instrument as of the date first written above.

/s/ Mary K. Bush
Mary K. Bush As Trustee and not individually

/s/ John F. Cogan, Jr.
John F. Cogan, Jr. As Trustee and not individually

/s/ Richard H. Egdahl
Richard H. Egdahl As Trustee and not individually

/s/ Margaret BW Graham
Margaret B. W. Graham As Trustee and not individually

/s/ John W. Kendrick
John W. Kendrick As Trustee and not individually

/s/ Marguerite A. Piret
Marguerite A. Piret As Trustee and not individually

/s/ David D. Tripple
David D. Tripple As Trustee and not individually

/s/ Stephen K. West
Stephen K. West As Trustee and not individually

/s/ John Winthrop
John Winthrop As Trustee and not individually

The address of each Trustee is
c/o Pioneer Tax-Managed Equity Fund
60 State Street, Boston, Massachusetts 02109

phelan/71976.114/tmanaged/dt.doc

CERTIFICATE OF TRUST

THIS Certificate of Trust of Pioneer Tax-Managed Equity Fund (the

"Trust"), dated August 3, 1999, is being duly executed and filed by the

undersigned trustees, to form a business trust under the Delaware Business Trust

Act (12 Del. C. ' 3801, et seq).

1. NAME. The name of the business trust formed hereby is Pioneer

Tax-Managed Equity Fund.

2. REGISTERED AGENT. The business address of the registered

office of the Trust in the State of Delaware is 1201 North Market Street in the

City of Wilmington, County of New Castle, 19801. The name of the Trust's

registered agent at such address is Delaware Corporation Organizers, Inc.

3. EFFECTIVE DATE. This Certificate of Trust shall be effective

upon the date and time of filing.

4. SERIES TRUST. Notice is hereby given that pursuant to

Section 3804 of the Delaware Business Trust Act, the debts, liabilities,

obligations and expenses incurred, contracted for or otherwise existing with

respect to a particular series of the Trust shall be enforceable against the

assets of such series only and not against the assets of the Trust generally.

The Trust is a registered investment company under the Investment Company Act

of 1940, as amended.

<PAGE>

IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust

have executed this instrument as of the date first written above.

/s/ Mary K. Bush
Mary K. Bush As Trustee and not individually

/s/ John F. Cogan, Jr.
John F. Cogan, Jr. As Trustee and not individually

/s/ Richard H. Egdahl
Richard H. Egdahl As Trustee and not individually

/s/ Margaret BW Graham
Margaret B.W. Graham As Trustee and not individually

/s/ John W. Kendrick
John W. Kendrick As Trustee and not individually

/s/ Marguerite A. Piret
Marguerite A. Piret As Trustee and not individually

/s/ David D. Tripple
David D. Tripple As Trustee and not individually

/s/ Stephen K. West
Stephen K. West As Trustee and not individually

/s/ John Winthrop
John Winthrop As Trustee and not individually

/netuser12/phelan/op/71976.114/Tmanaged/cert.wpf

BY-LAWS

PIONEER TAX-MANAGED EQUITY FUND

ARTICLE I

DEFINITIONS

All capitalized terms have the respective meanings given them in the
Agreement and Declaration of Trust of Pioneer Tax-Managed Equity Fund dated
August 3, 1999, as amended or restated from time to time.

ARTICLE II

OFFICES

SECTION 1. PRINCIPLES OFFICE. Until changed by the Trustees, the
principal office of the Trust shall be in Boston, Massachusetts.

SECTION 2. OTHER OFFICES. The Trust may have offices in such other
places without as well as within the State of Delaware as the Trustees may from
time to time determine.

SECTION 3. REGISTERED OFFICE AND REGISTERED AGENT. The Board of
Trustees shall establish a registered office in the State of Delaware and shall
appoint as the Trust's registered agent for service of process in the State of
Delaware an individual resident of the State of Delaware or a Delaware
corporation or a corporation authorized to transact business in the State of
Delaware; in each case the business office of such registered agent for service
of process shall be identical with the registered Delaware office of the Trust.

ARTICLE III

SHAREHOLDERS

SECTION 1. MEETINGS. Meetings of the Shareholders of the Trust or a
Series or Class thereof shall be held as provided in the Declaration of Trust at
such place within or without the State of Delaware as the Trustee shall
designate. The holders of one-third of the Outstanding Shares of the Trust or a
Series or Class thereof present in person or by proxy and entitled to vote shall
constitute a quorum at any meeting of the Shareholders of the Trust or a Series
or Class thereof.

<PAGE>

SECTION 2. NOTICE OF MEETINGS. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail or telegraphic or electronic means to each
Shareholder at his address as recorded on the register of the Trust mailed at
least (10) days and not more than ninety (90) days before the meeting, PROVIDED,
HOWEVER, that notice of a meeting need not be given to a Shareholder to whom
such notice need not be given under the proxy rules of the Commission under the
1940 Act and the Securities Exchange Act of 1934, as amended. Only the business
stated in the notice of the meeting shall be considered at such meeting. Any
adjourned meeting may be held a adjourned without further notice. No notice need
be given to any Shareholder who shall have failed to inform the Trust of his
current address or if a written waiver of notice, executed before or after the
meeting by the Shareholder who shall have failed to inform the Trust of his
current address or if a written waiver of notice, executed before or after the
meeting by the Shareholder or his attorney thereunto authorized, is filed with
the records of the meeting.

SECTION 3. RECORD DATE FOR MEETINGS AND OTHER PURPOSES. For the purpose
of determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes, except for
dividend payments which shall be governed by the Declaration of Trust.

SECTION 4. PROXIES. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy,
(whether by manual signature, typewriting, telegraphic transmission, facsimile,
other electronic means or otherwise) by the Shareholder or the Shareholder's
attorney-in-fact. Proxies may be given by any electronic or telecommunication
device except as otherwise provided in the Declaration of Trust. Proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust. Only Shareholders of record shall be entitled to vote. As determined
by the Trustees without the vote or consent of Shareholders, on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of net asset value (number of Shares owned times net asset value per
Share of such Series or Class, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
their power to designate otherwise in accordance~with the preceding sentence,
the Trustees have established in the Declaration of Trust that each whole

<PAGE>

share shall be entitled to one vote as to any matter on which it is
entitled by the Declaration of Trust to vote and fractional shares shall be
entitled to a proportionate fractional vote. When any Share is held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Share, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the holder
of any such share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.

SECTION 5. ABSTENTIONS AND BROKER NON-VOTES. Outstanding Shares
represented in person or by proxy (including Shares which abstain or do not vote
with respect to one or more of any proposals presented for Shareholder approval)
will be counted for purposes of determining whether a quorum is present at a
meeting. Abstentions will be treated as Shares that are present and entitled to
vote for purposes of determining the number of Shares that are present and
entitled to vote with respect to any particular proposal, but will not be
counted as a vote in favor of such proposal. If a broker or nominee holding
Shares in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to a particular proposal, those Shares will
not be considered as present and entitled to vote with respect to such proposal.

SECTION 6. INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Delaware business corporation.

SECTION 7. ACTION WITHOUT MEETING. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.

ARTICLE IV

TRUSTEES

SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the president,
the Chairman or by any one

<PAGE>

of the Trustees, at the time being in office. Notice of the time and place
of each meeting other than regular or stated meetings shall be given by the
Secretary or an Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days before the
meeting, or shall be given by telephone, cable, wireless, facsimile or other
electronic mechanism to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such notice may, however,
be waived by any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. A notice or waiver of notice need not specify the purpose of any meeting.
The Trustees may meet by means of a telephone conference circuit or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall be deemed to have been held at a place designated by the Trustees at the
meeting. participation in a telephone conference meeting shall constitute
presence in person at such meeting. Any action required or permitted to be taken
at any meeting of the Trustees may be taken by the Trustees without a meeting if
a majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.

SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration of Trust or these By-laws)
the act of a majority of the Trustees present at any such meeting, at which a
quorum is present, shall be the act of the Trustees. In the absence of a quorum,
a majority of the Trustees present may adjourn the meeting from time to time
until a quorum shall be present. Notice of an adjourned meeting need not be
given.

ARTICLE V

COMMITTEES

SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than three (3) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may delegate to them, from time to
time, except those powers which by law, the Declaration of Trust or these
By-laws they are prohibited from delegating. The Trustees may also elect from
their own number other Committees from time to time; the number composing such

<PAGE>

Committees, the powers conferred upon the same (subject to the same limitations
as with respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the Committee
may elect its own Chairman.

SECTION 2. MEETINGS QUORUM AND MANNER OF ACTING. The Trustees may (1)
provide for stated meetings of any Committee, (2) specify the manner of calling
and notice required for special meetings of any Committee, (3) specify the
number of members of a Committee required to constitute a quorum and the number
of members of a Committee required to exercise specified powers delegated to
such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.

The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.

ARTICLE VI

OFFICERS

SECTION 1. GENERAL PROVISIONS. The officers of the Trust shall be a
President, a Treasurer and a Secretary, who shall be elected by the Trustees.
The Trustees may elect or appoint such other officers or agents as the business
of the Trust may require, including one or more Vice Presidents, one or more
Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may
delegate to any officer or committee the power to appoint any subordinate
officers or agents.

SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise
provided by law, the Declaration of Trust or these Bylaws, the President, the
Treasurer, the Secretary and any other officer shall each hold office at the
pleasure of the Board of Trustees or until his successor shall have been duly
elected and qualified. The Secretary and the Treasurer may be the same person. A
Vice President and the Treasurer or a Vice President and the Secretary may be
the same person, but the offices of Vice President, Secretary and Treasurer
shall not be held by the same person. The President shall hold no other office,
however, the President may also serve as Chairman. Except as above provided, any
two offices may be held by the same person. Any officer may be but none need be
a Trustee or Shareholder.

SECTION 3. REMOVAL. The Trustees, at any regular or special meeting of
the Trustees, may remove any officer with or without cause, by a vote of a
majority of the

<PAGE>

Trustees then in office. Any officer or agent appointed by an
officer or committee may be removed with or without cause by such appointing
officer or committee.

SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The Trustees may, but
need not, appoint from among their number a Chairman. When present he shall
preside at the meetings of the Shareholders and of the Trustees. He may call
meetings of the Trustees and of any committee thereof whenever he deems it
necessary. He shall be an executive officer of the Trust and shall have, with
the President, general supervision over the business and policies of the Trust,
subject to the limitations imposed upon the President, as provided in Section 5
of this Article VI.

SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control of
the Trustees and to the control of any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust or any Series or Class
thereof and to employ such subordinate officers, agents, clerks and employees as
he may find necessary to transact the business of the Trust or any Series or
Class thereof. He shall also have the power to grant, issue, execute or sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Trust or any Series thereof.
The President shall have such other powers and duties, as from time to time may
be conferred upon or assigned to him by the Trustees.

SECTION 6. POWERS AND DUTIES OF VICE PRESIDENTS. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.

SECTION 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall be
the principal financial and accounting officer of the Trust. He shall deliver
all funds of the Trust or any Series or Class thereof which may come into his
hands to such Custodian as the Trustees may employ. He shall render a statement
of condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.

SECTION 8. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall keep
the minutes of all meetings of the Trustees and of the Shareholders in proper
books

<PAGE>

provided for that purpose; he shall have custody of the seal of the Trust;
he shall have charge of the Share transfer books, lists and records unless the
same are in the charge of a transfer agent. He shall attend to the giving and
serving of all notices by the Trust in accordance with the provisions of these
By-laws and as required by law; and subject to these By-laws, he shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Trustees.

SECTION 9. POWERS AND DUTIES OF ASSISTANT OFFICERS. In the absence or
disability of the Treasurer, any officer designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Treasurer.
Each officer shall perform such other duties as from time to time may be
assigned to him by the Trustees. Each officer performing the duties and
exercising the powers of the Treasurer, if any, and any Assistant Treasurer,
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.

SECTION 10. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In the absence
or disability of the Secretary, any Assistant Secretary designated by the
Trustees shall perform all the duties, and may exercise any of the powers, of
the Secretary. Each Assistant Secretary shall perform such other duties as from
time to time may be assigned to him by the Trustees.

SECTION 11. COMPENSATION OF OFFICERS AND TRUSTEES AND MEMBERS OF THE
ADVISORY BOARD. Subject to any applicable provisions of the Declaration of
Trust, the compensation of the officers and Trustees and members of an advisory
board shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.

ARTICLE VII

FISCAL YEAR

The fiscal year of the Trust shall begin on the first day of January in
each year and shall end on the last day of December in each year, provided,
however, that the Trustees may from time to time change the fiscal year. The
taxable year of each Series of the Trust shall be as determined by the Trustees
from time to time.

<PAGE>

ARTICLE VIII

SEAL

The Trustees may adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe.

ARTICLE IX

SUFFICIENCY AND WAIVERS OF NOTICE

Whenever any notice whatever is required to be given by law, the
Declaration of Trust or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. A notice shall be deemed to
have been sent by mail, telegraph, cable, wireless, facsimile or other
electronic means for the purposes of these By-laws when it has been delivered to
a representative of any company holding itself out as capable of sending notice
by such means with instructions that it be so sent.

ARTICLE X

AMENDMENTS

These By-laws, or any of them, may be altered, amended or repealed, or
new By-laws may be adopted by (a) vote of a majority of the Outstanding Shares
voting in person or by proxy at a meeting of Shareholders and entitled to vote
or (b) by the Trustees, provided, however, that no By-law may be amended,
adopted or repealed by the Trustees- if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of
the Shareholders.

END OF BY-LAWS

MANAGEMENT CONTRACT

THIS AGREEMENT dated this ___ day of December, 1999 between Pioneer
Tax-Managed Fund, a Delaware business trust (the "Trust"), and Pioneer
Investment Management, Inc., a Delaware corporation (the "Manager").

WITNESSETH

WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),

WHEREAS, the Trust currently issues only one series of shares (the
"Portfolio").

WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Portfolio.

NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Manager do hereby agree as follows:

(1) The Manager will regularly provide the Trust with investment research,
advice and supervision and will furnish continuously an investment program for
the Portfolio, consistent with the investment objectives and policies of the
Portfolio. The Manager will determine from time to time what securities shall be
purchased for the Portfolio, what securities shall be held or sold by the
Portfolio and what portion of the Portfolio's assets shall be held uninvested as
cash, subject always to the provisions of the Trust's Certificate of Trust,
Agreement and Declaration of Trust, By-Laws and its registration statements
under the 1940 Act and under the 1933 Act covering the Trust's shares, as filed
with the Securities and Exchange Commission, and to the investment objectives,
policies and restrictions of the Portfolio, as each of the same shall be from
time to time in effect, and subject, further, to such policies and instructions
as the Board of Trustees of the Trust may from time to time establish. To carry
out such determinations, the Manager will exercise full discretion and act for
the Portfolio in the same manner and with the same force and effect as the Trust
itself might or could do with respect to purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.

<PAGE>

(2) The Manager will, to the extent reasonably required in the conduct of the
business of the Portfolio and upon the Trust's request, furnish to the Portfolio
research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Trust shall at the time have any investment in such industries,
businesses, corporations or securities. The Manager will use its best efforts in
the preparation of such reports and will endeavor to consult the persons and
sources believed by it to have information available with respect to such
industries, businesses, corporations or entities.

(3) The Manager will maintain all books and records with respect to the
Portfolio's securities transactions required by subparagraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust with respect to the Portfolio) and preserve such records for the periods
prescribed therefor by Rule 31a-2 under the 1940 Act. The Manager will also
provide to the Board of Trustees such periodic and special reports as the Board
may reasonably request.

(4) The Manager recognizes that the fund may from time to time create additional
investment portfolios, that this agreement relates only to the management of the
assets of the Portfolio, and that the management of the assets of any additional
portfolio of the Fund are subject, or will be subject, to one or more separate
investment management agreements.

(5) Except as otherwise provided herein, the Manager, at its own expense, shall
furnish to the Trust office space in the offices of the Manager or in such other
place as may be agreed upon from time to time, and all necessary office
facilities, equipment and personnel for managing the Portfolio's affairs and
investments, and shall arrange, if desired by the Trust, for members of the
Manager's organization to serve as officers or agents of the Trust.

(6) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or "interested
persons" (as defined in the 1940 Act) of, the Manager and all officers of the
Trust as such; and (ii) all expenses not hereinafter specifically assumed by the
Trust or the Portfolio where such expenses are incurred by the Manager or by the
Trust or the Portfolio in connection with the management of the affairs of, and
the investment and reinvestment of the assets of, the Portfolio.

(7) The Trust shall assume and shall pay: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of the Manager, or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust with respect to the Portfolio; (iv) issue
and transfer taxes chargeable to the Trust in

<PAGE>

connection with securities transactions to which the Trust is a party; (v)
insurance premiums, interest charges, dues and fees for membership in trade
associations and all taxes and corporate fees payable by the Trust to federal,
state or other governmental agencies; (vi) fees and expenses involved in
registering and maintaining registrations of the Trust and/or its shares with
the Commission, state or blue sky securities agencies and foreign countries,
including the preparation of Prospectuses and Statements of Additional
Information for filing with the Commission; (vii) 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; (viii) charges and expenses of legal counsel to the Trust and the
Trustees; (ix) any distribution fees paid by the Trust in accordance with Rule
12b-1 promulgated by the Commission pursuant to the 1940 Act; (x) compensation
of those Trustees of the Trust who are not affiliated with or interested persons
of the Manager, the Trust (other than as Trustees), The Pioneer Group, Inc. or
Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing share
certificates; and (xii) interest on borrowed money, if any.

(8) In addition to the expenses described in Section 7 above, the Trust shall
pay all brokers' and underwriting commissions chargeable to the Trust in
connection with securities transactions to which the Trust is a party.

(9) The Fund shall pay to the Manager, as compensation for the Manger's
services hereunder, a fee equal on an annual basis to the following
percentage of the Fund's average daily net assets:

First $500 million 0.750%
$500 million up to $1 billion 0.725%
Over $1 billion 0.700%

(10) The management fee payable hereunder shall be computed daily and paid
monthly in arrears. In the event of termination of this Agreement, the fee
provided in this Section shall be computed on the basis of the period ending on
the last business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.

(11) The Manager may from time to time agree not to impose all or a portion of
its fee otherwise payable hereunder (in advance of the time such fee or a
portion thereof would otherwise accrue) and/or undertake to pay or reimburse the
Trust for all or a portion of its expenses not otherwise required to be borne or
reimbursed by the Manager. Any such fee reduction or undertaking may be
discontinued or modified by the Manager at any time.

(12) The Manager 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 security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager

<PAGE>

against any liability to the Trust, the Portfolio or its shareholders 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 this Agreement.

(13) Nothing in this Agreement will in any way limit or restrict the Manager or
any of its officers, directors, or employees from buying, selling or trading in
any securities for its or their own accounts or other accounts. The Manager may
act as an investment advisor to any other person, firm or corporation, and may
perform management and any other services for any other person, association,
corporation, firm or other entity pursuant to any contract or otherwise, and
take any action or do any thing in connection therewith or related thereto; and
no such performance of management or other services or taking of any such action
or doing of any such thing shall be in any manner restricted or otherwise
affected by any aspect of any relationship of the Manager to or with the Trust
or deemed to violate or give rise to any duty or obligation of the Manager to
the Trust except as otherwise imposed by law. The Trust recognizes that the
Manager, in effecting transactions for its various accounts, may not always be
able to take or liquidate investment positions in the same security at the same
time and at the same price.

(14) In connection with purchases or sales of securities for the account of the
Portfolio, neither the Manager nor any of its Directors, officers or employees
will act as a principal or agent or receive any commission except as permitted
by the 1940 Act. The Manager shall arrange for the placing of all orders for the
purchase and sale of securities for the Portfolio's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers and
the placing of such orders, the Manager is directed at all times to seek for the
Portfolio the most favorable execution and net price available except as
described herein. It is also understood that it is desirable for the Portfolio
that the Manager have access to supplemental investment and market research and
security and economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Portfolio than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
efficient execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Portfolio with such brokers, subject
to review by the Trust's Trustees from time to time with respect to the extent
and continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Manager in connection with its or its
affiliates' services to other clients. In addition, subject to the Manager's
obligation to seek the most favorable execution and net price available, the
Manager may consider the sale of Portfolio shares in selecting brokers and
dealers.

(15) On occasions when the Manager deems the purchase or sale of a security to
be in the best interest of the Portfolio as well as other clients, the Manager,
to the extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Manager in the manner it

<PAGE>

considers to be the most equitable and consistent with its fiduciary
obligations to the Portfolio and to such clients.

(16) This Agreement shall become effective on the date hereof -and shall remain
in force until June 30, 2001 and from year to year thereafter, but only so long
as its continuance is approved annually by a vote of the Trustees of the Trust
voting in person, including a majority of its Trustees who are not parties to
this Agreement or "interested persons" (as defined in the 1940 Act) of any such
parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Portfolio, subject to the right of the Trust and
the Manager to terminate this contract as provided in Section 8 hereof.

(17) Either party hereto may, without penalty, terminate this Agreement by vote
of its Board of Trustees or Directors, as the case may be, or by vote of a
"majority of its outstanding voting securities" (as defined in the 1940 Act) of
the Portfolio and the giving of 60 days' written notice to the other party.

(18) This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.

(19) The Manager is an independent contractor and not an -employee of the Trust
for any purpose. If any occasion should arise in which the Manager gives any
advice to its clients concerning the shares of the Portfolio, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust or any series thereof.

(20) This Agreement states the entire agreement of the parties hereto, and is
intended to be the complete and exclusive statement of the terms hereof. It may
not be added to or changed orally, and may not be modified or rescinded except
by a writing signed by the parties hereto and in accordance with the 1940 Act,
when applicable.

(21) This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.

(22) Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms or provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.

(23) This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.

ATTEST: PIONEER TAX-MANAGED FUND

By:
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President

ATTEST: PIONEER INVESTMENT
MANAGEMENT, INC.

By:
Joseph P. Barri David D. Tripple
Secretary President

UNDERWRITING AGREEMENT

THIS UNDERWRITING AGREEMENT, dated this day of November __, 1999 by and
between Pioneer Tax-Managed Fund, a Delaware business trust ("Trust"), and
Pioneer Funds Distributor, Inc., a Massachusetts corporation (the
"Underwriter").

WITNESSETH

WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") for the purpose of registering shares of beneficial interest for
public offering under the Securities Act of 1933, as amended;

WHEREAS, the Underwriter engages in the purchase and sale of securities
both as a broker and a dealer and is registered as a broker-dealer with the
Commission and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD");

WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale to the public of the shares of beneficial interest of the securities
portfolio of each series of the Trust which the Trustees may establish from time
to time (individually, a "Portfolio" and collectively, the "Portfolios"); and

NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Underwriter do hereby agree as follows:

1. The Trust hereby grant to the Underwriter the right and option to purchase
shares of beneficial interest of each class of each Portfolio of the Trust (the
"Shares") for sale to investors either directly or indirectly through other
broker-dealers. The Underwriter is not required to purchase any specified number
of Shares, but will purchase from the Trust only a sufficient number of Shares
as may be necessary to fill unconditional orders received from time to time by
the Underwriter from investors and dealers.

2. The Underwriter shall offer Shares to the public at an offering price based
upon the net asset value of the Shares, to be calculated for each class of
shares as

<PAGE>

described in the Registration Statement, including the Prospectus,
filed with the Commission and in effect at the time of the offering, plus sales
charges as approved by the Underwriter and the Trustees of the Trust and as
further outlined in Pioneer's Prospectus. The offering price shall be subject to
any provisions set forth in the Prospectus from time to time with respect
thereto, including, without limitation, rights of accumulation, letters of
intention, exchangeability of shares, reinstatement privileges, net asset value
purchases by certain persons and reinvestments of dividends and capital gain
distributions.

3. In the case of all Shares sold to investors through other broker-dealers, a
portion of applicable sales charges will be reallowed to such broker-dealers who
are members of the NASD or, in the case of certain sales by banks or certain
sales to foreign nationals, to brokers or dealers exempt from registration with
the Commission. The concession reallowed to broker-dealers shall be set forth in
a written sales agreement and shall be generally the same for broker-dealers
providing comparable levels of sales and service.

4. This Agreement shall terminate on any anniversary hereof if its terms and
renewal have not been approved by a majority vote of the Trustees of the Trust
voting in person, including a majority of its Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Underwriting Agreement (the "Qualified Trustees"), at a
meeting of Trustees called for the purpose of voting on such approval. This
Agreement may also be terminated at any time, without payment of any penalty, by
the Trust or 60 days' written notice to the Underwriter, or by the Underwriter
upon similar notice to Pioneer. This Agreement may also be terminated by a party
upon five (5) days' written notice to the other party in the event that the
Commission has issued an order or obtained an injunction or other court order
suspending effectiveness of the Registration Statement covering these Shares of
Pioneer. Finally, this Agreement may also be terminated by the Trust upon five
(5) days' written notice to the Underwriter provided either of the following
events has occurred: (i) the NASD has expelled the Underwriter or suspended its
membership in that organization; or (ii) the qualification, registration,
license or right of the Underwriter to sell Shares in a particular state has
been suspended or cancelled in a state in which sales of the Shares of the Trust
during the most recent 12 month period exceeded 10% of all Shares of the Trusts
old by the Underwriter during such period.

5. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be:

With respect to Class A shares (i) that part of the sales charge which
is retained by the Underwriter after allowance of discounts to dealers
as set forth, if required, in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the
offering, as amended, and (ii)

<PAGE>

those amounts payable to the Underwriter as reimbursement of expenses
pursuant to any distribution plan for the Trust which may be in effect.

With respect to Class B shares (i) the Underwriter's Allocable Portion
(as defined in Section 9) of the Distribution Fee, if any, payable from
time to time to the Underwriter under the Pioneer's Class B
Distribution Plan and (ii) the contingent deferred sales charge payable
with respect to Class B shares of the Trust sold through the
Underwriter as set forth in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the
sale of such Class B shares.

With respect to Class C shares (i) the Distribution Fee, if any,
payable from time to time to the Underwriter under the Pioneer's Class
C Distribution Plan and (ii) the contingent deferred sales charge
payable with respect to Class C shares of the Trust sold through the
Underwriter as set forth in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the
sale so such Class C shares.

With respect to Class Y shares, the Underwriter shall not be entitled
to any compensation.

With respect to any future class of shares, the Underwriter shall be
entitled to such consideration as the Trust and the Underwriter shall
agree at the time such class of shares is established.

Notwithstanding anything to the contrary herein, subsequent to the issuance of a
Class B Share the Trust agrees not to take any action to waive or change any
contingent deferred sales charge (including, without limitation, by change in
the rules applicable to conversion of Class B Shares into another class) in
respect of such Class B Shares, except (i) as provided in the Trust's prospectus
or statement of additional information in effect on ___________________________,
1999, or (ii) as required by a change in the 1940 Act and the rules and
regulations thereunder, the Conduct Rules of the NASD or any order of any court
or governmental agency enacted, issued or promulgated after
___________________________, 1999. Neither the termination of the Underwriter's
role as principal underwriter of the Class B Shares nor the termination of this
Agreement nor the termination or modification of the Class B Distribution Plan
shall terminate the Underwriter's right to the contingent deferred sales charge
with respect to Class B Shares sold through said Underwriter or Class B Shares
issued through one or a series of exchanges of shares of another investment
company for which the Underwriter acts as principal underwriter, in each case
with respect to Class B Shares or their predecessors initially issued prior to
such termination or modification ("Pre-Amendment Class B Shares"). Except as
provided in the preceding sentences and notwithstanding any other provisions of
the Agreement or the Class B Distribution Plan, the Underwriter is entitled to
its Allocable Portion of the contingent deferred sales charge payable in respect
of the Pre-Amendment Class B Shares shall be absolute and

<PAGE>

unconditional and shall not be subject to dispute, offset, counterclaim or
any defense whatsoever, at law or equity, including, without limitation, any of
the foregoing based on the insolvency or bankruptcy of such Underwriter.

6. Notwithstanding anything to the contrary set forth in the Distribution Plan
or this Agreement, the Trust agrees to comply with respect to pre-amendment
shares (as such term is defined in the Distribution Plan) with the provision of
Sections 1(b), (d), (g) and (h) and Section 4 and Section 6 of the Trust's
Amended and Restated Class B Distribution Plan as though such provision were set
forth in this Agreement.

7. Nothing contained herein shall relieve the Trust of any obligation under its
management contract or any other contract with any affiliate of the Underwriter.

8. Notwithstanding anything to the contrary set forth in the Class B
Distribution Plan or this Agreement, the Trust acknowledges that the Underwriter
may assign, sell or pledge (collectively, "Transfer") its rights to Distribution
Fees and contingent deferred sales charges with respect to Class B shares. Upon
receipt of notice of such Transfer, the Trust shall pay to the assignee,
purchaser or pledgee (collectively with their subsequent transferees,
"Transferees"), as third party beneficiaries, such portion of the Distribution
Fees and contingent deferred sales charges payable to the Underwriter as
provided in written instructions (the "Allocation Instructions") from the
Underwriter to the Trust and shall pay the balance, if any, to the Underwriter.
In the absence of Allocation Instructions, the Trust shall have no obligations
to a Transferee.

9. Payments of the Distribution Fee and contingent deferred sales charges with
respect to Class B shares shall be allocated between the Underwriter (or its
Transferee) and such co- or successor principal underwriter (each an "Allocable
Portion"), as provided in the Allocation Procedures attached hereto.

10. The parties to this Agreement acknowledge and agree that all liabilities
arising hereunder, whether direct or indirect, of any nature whatsoever,
including without limitation, liabilities arising in connection with any
agreement of the Trust or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of the Trust and that no Trustee, officer or holder of shares of
beneficial interest of the Trust shall be personally liable for any of the
foregoing liabilities. Pioneer's Certificate of Trust, as amended from time to
time, is on file in the Office of the Secretary of State of the State of
Delaware.

11. This Agreement shall automatically terminate in the event of its assignment
(as that term is defined in the 1940 Act).

12. In the event of any dispute between the parties, this Agreement shall be
construed according to the laws of The Commonwealth of Massachusetts.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers and their seal to be hereto
affixed as of the day and year first above written.

ATTEST: PIONEER TAX-MANAGED FUND

By:
Joseph P. Barri John F. Cogan, Jr.
Secretary President

ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.

By:
Joseph P. Barri
Clerk President

CLASS A SHARES DISTRIBUTION PLAN
TAX-MANAGED FUND

CLASS A SHARES DISTRIBUTION PLAN, dated as of September __, 1999, of
PIONEER TAX-MANAGED FUND, a Delaware business trust (the "Trust")

WITNESSETH

WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");

WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class A Shares") of each series of the Trust ("Portfolio") in accordance
with Rule 12b-l promulgated by the Securities and Exchange Commission under the
1940 Act ("Rule 12b- 1"), and desires to adopt this Class A distribution plan
(the "Class A Plan") as a plan of distribution pursuant to such Rule;

WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class A Shares in connection with the Class A Plan;

WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
A Shares (the "Underwriting Agreement");

WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class A Shares in connection with the
offering of Class A Shares, (b) PFD may compensate any Dealer that sells Class A
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class A
Shares, its profits or any other source available to it;

WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class A Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and

<PAGE>

WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class A Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class A Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class A Plan will
benefit the Trust and its Class A shareholders;

NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class A Plan for the Trust as a plan of distribution of Class A Shares in
accordance with Rule 12b-l, on the following terms and conditions:

1. The Trust may expend pursuant to this Class A Plan amounts not to
exceed 0.25% of the average daily net assets attributable to Class A Shares of
each Portfolio per annum.

2. Subject to the limit in paragraph 1, the Trust shall reimburse PFD
for amounts expended by PFD to finance any activity which is primarily intended
to result in the sale of Class A Shares of the Trust or the provision of
services to Class A shareholders of the Trust, including but not limited to
commissions or other payments to Dealers and salaries and other expenses of PFD
relating to selling or servicing efforts, PROVIDED, that the Board of Trustees
of the Trust shall approve categories of expenses for which reimbursement shall
be made pursuant to this paragraph 2 and, without limiting the generality of the
foregoing, the initial categories of such expenses shall be (i) a service fee to
be paid to qualified broker-dealers in an amount not to exceed 0.25% per annum
of each Portfolio's daily net assets attributable to Class A Shares; (ii)
reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the Trust's Class A Shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations, such as banks and trust companies, in their efforts to
provide such services (any addition of such categories shall be subject to the
approval of the Qualified Trustees, as defined below, of the Trust). Such
reimbursement shall be paid ten (10) days after the end of the month or quarter,
as the case may be, in which such expenses are incurred. The Trust acknowledges
that PFD will charge an initial sales load or a contingent sales load in
connection with certain sales of Class A Shares of the Trust and that PFD will
real low to Dealers all or a portion of such sales loads, as described in the
Trust's Prospectus from time to time. Nothing contained herein is intended to
have any effect whatsoever on PFD's ability to charge any such sales loads or to
reallow all or any portion thereof to Dealers.

3. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class A
Shares and the provision of services to Class A shareholders of the Trust.
Nothing in this Class A Plan shall be construed as requiring the Trust to make
any payment to any Dealer or

<PAGE>

to have any obligations to any Dealer in connection with services as a
dealer of the Class A Shares. PFD shall agree and undertake that any agreement
entered into between PFD and any Dealer shall provide that such Dealer shall
look solely to PFD for compensation for its services thereunder and that in no
event shall such Dealer seek any payment from the Trust.

4. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust or By-Laws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Trust.

5. This Class A Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class A of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class A Plan or in any agreement
related to the Class A Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class A Plan.

6. This Class A Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class A Plan shall
expire on ___________ , 2000. This Class A Plan shall automatically terminate
upon assignment. In the event of termination or non-continuance of this Class A
Plan, each Portfolio has twelve months to reimburse any expense which it incurs
prior to such termination or non-continuance, PROVIDED that payments by such
Portfolio during such twelve-month period shall not exceed 0.25% of each
Portfolio's average daily net assets attributable to Class A Shares during such
period.

7. This Class A Plan may be amended at any time by the Board of
Trustees, PROVIDED that this Class A Plan may not be amended to increase
materially the limitation on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class A of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. Any amendment of this Class A Plan to increase or modify the
expense categories initially designated by the Trustees in paragraph 2 above
shall only require approval of a majority of the Trustees and the Qualified
Trustees if such amendment does not include an increase in the expense
limitation set forth in paragraph 1 above. This Class A Plan may be terminated
at any time by a vote of a majority of the Qualified Trustees or by a vote of
the holders of a "majority of the outstanding voting securities" of the Trust.

<PAGE>

8. In the event of termination or expiration of this Class A Plan, the
Trust may nevertheless, within twelve months of such termination or expiration
reimburse any expense which it incurs prior to such termination or expiration,
provided that payments by the Trust during such twelve-month period shall not
exceed 0.25% of the Trust's average daily net assets attributable to Class A
Shares during such period and provided further that such payments are
specifically approved by the Board of Trustees, including a majority of the
Qualified Trustees.

9. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class A Plan and the purposes for which such
expenditures were made.

10. While this Class A Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.

11. For the purposes of this Class A Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.

12. The Trust shall preserve copies of this Class A Plan, and each
agreement related hereto and each report referred to in paragraph 9 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.

13. This Class A Plan shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act.

14. If any provision of this Class A Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.

CLASS B SHARES DISTRIBUTION PLAN

PIONEER TAX-MANAGED FUND

CLASS B SHARES DISTRIBUTION PLAN, dated as of September __, 1999 of
PIONEER TAX-MANAGED FUND, a Delaware business trust (the "Trust")

WITNESSETH

WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class B Shares") of the Trust in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B Shares distribution plan (the "Class B Plan") as a
plan of distribution pursuant to such Rule;

WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD") or such other persons as may be appointed
principal underwriter from time to time, provide certain distribution services
for the Trust's Class B Shares in connection with the Class B Plan (PFD and any
successor principal underwriter of the Trust's shares being referred to as an
"Underwriter");

WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with the Underwriter, whereby the Underwriter provides facilities
and personnel and renders services to the Trust in connection with the offering
and distribution of Class B Shares (the "Underwriting Agreement");

WHEREAS, the Trust also recognizes and agrees that (a) the Underwriter
may retain the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class B Shares in connection with the
offering of Class B Shares, (b) the Underwriter may compensate any Dealer that
sells Class B Shares in the manner and at the rate or rates to be set forth in
an agreement between the Underwriter and such Dealer and (c) the Underwriter may
make such payments to the Dealers for distribution services out of the fee paid
to the Underwriter hereunder, any deferred sales charges imposed by the
Underwriter in connection with the repurchase of Class B Shares, its profits or
any other source available to it;

<PAGE>

WHEREAS, the Trust recognizes and agrees that the Underwriter may
impose certain deferred sales charges in connection with the repurchase of Class
B Shares by the Trust, and the Underwriter may retain (or receive from the
Trust, as the case may be) all such deferred sales charges; and

WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class B Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Trust and its Class B shareholders;

NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class B Plan for the Trust as a plan of distribution of Class B Shares in
accordance with Rule 12b-1, on the following terms and conditions:

1. The Trust is authorized to compensate the Underwriter for (1) distribution
services and (2) personal and account maintenance services performed and
expenses incurred by the Underwriter in connection with the Trust's Class B
Shares. Such compensation shall be calculated and accrued daily and paid monthly
or at such other intervals as the Board of Trustees may determine.

(a) The amount of compensation payable to the Underwriter
during any one year for distribution services with respect to
Class B Shares shall be its Allocable Portion (as defined in
Section 14 below) of .75% of the Trust's average daily net
assets attributable to Class B Shares for such year (the
"Distribution Fee"). Notwithstanding anything to the contrary
set forth in this Distribution Plan or any Underwriting
Agreement, the Distribution Fee shall not be terminated or
modified (including a modification by change in the rules
relating to the conversion of Class B Shares into Class A
shares of the Trust) with respect to Class B shares (or the
assets of the Trust attributable to such Class B Shares)
either (x) issued prior to the date of any termination or
modification or (y) attributable to Class B shares issued
through one or a series of exchanges of shares of another
investment company for which the Underwriter acts as principal
underwriter which were initially issued prior to the date of
such termination or modification or (z) issued as a dividend
or distribution upon Class B Shares initially issued or
attributable to Class B Shares issued prior to the date of any
such termination or modification (the "Pre-Amendment Class B
Shares") except:

(i) to the extent required by a change in the
Investment Company Act of 1940 (the "Act"), the rules
or regulations under the Act, the

<PAGE>

Conduct Rules of the National Association
of Securities Dealers, Inc., (the "NASD") or an
order of any court or governmental agency,
in each case enacted, issued or promulgated
after September 30, 1998,

(ii) in connection with a "Complete Termination" of
this Plan. For purposes of this Plan, a "Complete
Termination" shall have occurred if: (x) this Plan
and the distribution plan for Class B Shares of any
successor trust or fund or any trust or fund
acquiring substantially all of the assets of the
Trust (collectively, the "Affected Funds") is
terminated with respect to all Class B Shares of the
Trust and each Affected Fund then outstanding or
subsequently issued, (y) the payment by the Trust of
Distribution Fees with respect to all Class B Shares
of the Trust and each Affected Fund is terminated and
(z) neither the Trust nor any Affected Fund
establishes concurrently with or subsequent to such
termination of this Plan another class of shares
which has substantially similar characteristics to
the current Class B Shares of the Trust, including
the manner of payment and amount of contingent
deferred sales charge paid directly or indirectly by
the holders of such shares (all of such classes of
shares "Class B Shares"), or

(iii) on a basis, determined by the Board of
Trustees, including a majority of the Qualified
Trustees (as hereinafter defined), acting in good
faith, so long as from and after the effective date
of such modification or termination: (x) neither (1)
the Trust, (2) any Affected Fund nor (3) the
investment advisor or any other sponsor entity (or
their affiliates) of the Trust or any Affected Fund
pay, directly or indirectly, a fee, a trailer fee, or
expense reimbursement to any person for the provision
of personal and account maintenance services (as such
terms is used in the Conduct Rules of the NASD) to
the holder of Class B Shares of the Trust or any
Affected Fund (but the forgoing shall not prevent
payments for transfer agency or subaccounting
services), and (y) the termination or modification of
the Distribution Fee applies with equal effect to
both Pre-Amendment Class B Shares and Post-Amendment
Class B Shares (as defined in Section 7) outstanding
from time to time of the Trust and all Affected
Funds.

(b) Distribution services and expenses for which an
Underwriter may be compensated pursuant to this Plan include,
without limitation: compensation to and expenses (including
allocable overhead, travel and telephone expenses) of (i)
Dealers, brokers and other dealers who are members of the NASD
or their officers, sales representatives

<PAGE>

and employees, (ii)
the Underwriter and any of its affiliates and any of their
respective officers, sales representatives and employees,
(iii) banks and their officers, sales representatives and
employees, who engage in or support distribution of the
Trust's Class B Shares; printing of reports and prospectuses
for other than existing shareholders; and preparation,
printing and distribution of sales literature and advertising
materials.

(c) The Underwriter shall be deemed to have performed all
services required to be performed in order to be entitled to
receive it Allocable Portion of the Distribution Fee, if any,
payable with respect to Class B Shares sold through such
Underwriter upon the settlement date of the sale of such Class
B Share or in the case of Class B Shares issued through one or
a series of exchanges of shares of another investment company
for which the Underwriter acts as principal underwriter or
issued as a dividend or distribution upon Class B Shares, on
the settlement date of the first sale on a commission basis of
a Class B Share from which such Class B share was derived. The
Trust's obligation to pay an Underwriter its Allocable Portion
of the Distribution Fees payable in respect of the Class B
Shares shall be absolute and unconditional and shall not be
subject to dispute, offset, counterclaim or any defense
whatsoever, at law or equity, including, without limitation,
any of the foregoing based on the insolvency or bankruptcy of
such Underwriter. The foregoing provisions of this Section
1(d) shall not limit the rights of the Trust to modify or
terminate payments under this Class B Plan as provided in
Section 1(b) with respect to Pre-Amendment Class B Shares or
Section 7 with respect to Post-Amendment Class B Shares.

(d) The amount of compensation paid during any one year for
personal and account maintenance services and expenses (the
"Service Fee") shall be .25% of the Trust's average daily net
assets attributable to Class B Shares for such year. As
partial consideration for personal services and/or account
maintenance services provided by the Underwriter to the Class
B Shares, the Underwriter shall be entitled to be paid any
fees payable under this clause (e) with respect to Class B
Shares for which no dealer of record exists, where less than
all consideration has been paid to a dealer of record or where
qualification standards have not been met.

(e) Personal and account maintenance services for which the
Underwriter or any of its affiliates, banks or Dealers may be
compensated pursuant to this Plan include, without limitation:
payments made to or on account of the Underwriter or any of
its affiliates, banks, other brokers and dealers who are
members of the NASD, or their officers, sales representatives
and employees, who respond to inquiries of, and furnish
assistance to, shareholders regarding their ownership of Class
B Shares or

<PAGE>

their accounts or who provide similar services not
otherwise provided by or on behalf of the Trust.

(f) The Underwriter may impose certain deferred sales charges
in connection with the repurchase of Class B Shares by the
Trust and the Underwriter may retain (or receive from the
Trust as the case may be) all such deferred sales charges.

(g) The Trust has agreed in the Underwriting Agreement to
certain restrictions on the Trust's ability to modify or waive
certain terms of the Trust's Class B Shares or the contingent
deferred sales charge with respect to Pre-Amendment Class B
Shares.

(h) Appropriate adjustments to payments made pursuant to
clauses (b) and (d) of this paragraph 1 shall be made whenever
necessary to ensure that no payment is made by the Trust in
excess of the applicable maximum cap imposed on asset based,
front-end and deferred sales charges by Section 2830(d) the
Conduct Rules of the NASD.

2 The Trust understands that agreements between the Underwriter and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class B
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class B Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. The Underwriter shall agree and
undertake that any agreement entered into between the Underwriter and any Dealer
shall provide that such Dealer shall look solely to the Underwriter for
compensation for its services thereunder and that in no event shall such Dealer
seek any payment from the Trust.

3. Notwithstanding anything to the contrary in this Distribution Plan or any
Underwriting Agreement, the Underwriter may assign, sell or pledge
(collectively, "Transfer") its rights to its Allocable Portion of any
Distribution Fees under this Plan. Upon receipt of notice of such Transfer, the
Trust shall pay to the assignee, purchaser or pledgee (collectively with their
subsequent transferees, "Transferees"), as third party beneficiaries, such
portion of the Distribution Fees payable to the Underwriter as provided in
written instructions (the "Allocation Instructions") from the Underwriter and
said Transferee to the Trust. In the absence of Allocation Instructions, the
Trust shall have no obligations to a Transferee.

4. Nothing herein contained shall be deemed to require the Trust to take any
action contrary to its Declaration of Trust, as it may be amended or restated
from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust; it being

<PAGE>

understood that actions taken pursuant to Section 1(b) shall not be
considered such an action described above.

5. This Class B Plan shall become effective upon approval by a vote of the Board
of Trustees, including a majority of the Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Class B Plan or in any agreements related to the Class B
Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting
called for the purpose of voting on this Class B Plan.

6. All of the terms of this Distribution Plan are intended to apply in respect
of all Pre-Amendment Class B Shares and to the Distribution Fees payable in
respect of any thereof. This Class B Plan will remain in effect indefinitely,
provided that such continuance is "specifically approved at least annually" by a
vote of both a majority of the Trustees of the Trust and a majority of the
Qualified Trustees. If such annual approval is not obtained, this Class B Plan
shall expire on the annual anniversary of the adoption of this Plan following
the last such approval.

7. Subject to the limitation set forth in Section 1(b) with respect to
Pre-Amendment Class B shares, this Class B Plan may be amended at any time by
the Board of Trustees with respect to Class B Shares (and the assets
attributable to such Class B Shares) which are not Pre-Amendment Class B Shares
("Post-Amendment Class B Shares"); PROVIDED that this Class B Plan may not be
amended to increase materially the limitations on the annual percentage of
average net assets which may be expended hereunder without the approval of
holders of a "majority of the outstanding voting securities" of Class B of the
Trust and may not be materially amended in any case without a vote of a majority
of both the Trustees and the Qualified Trustees. This Class B Plan may be
terminated at any time, subject to Section 1(b), by a vote of a majority of the
Qualified Trustees or by a vote of the holders of a "majority of the outstanding
voting securities" of Class B of the Trust.

8. The Trust and the Underwriter shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class B Plan and the purposes for which such
expenditures were made.

9. While this Class B Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.

10. For the purposes of this Class B Plan, the terms "interested persons,"
"majority of the outstanding voting securities" and "specifically approved at
least annually" are used as defined in the 1940 Act.

<PAGE>

11. The Trust shall preserve copies of this Class B Plan, and each agreement
related hereto and each report referred to in Paragraph 7 hereof (collectively,
the "Records"), for a period of not less than six (6) years from the end of the
fiscal year in which such Records were made and, for a period of two (2) years,
each of such Records shall be kept in an easily accessible place.

12. This Class B Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.

13. If any provision of this Class B Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Class B Plan
shall not be affected thereby.

14. Payments under this Class B Plan shall be allocated between PFD and any
successor Underwriter or co-Underwriter (each an Underwriter's "Allocable
Portion) as provided in the Allocation Procedures appended hereto.

phelan/719.76.114/TManaged/classb2.doc.

CLASS C SHARES DISTRIBUTION PLAN

PIONEER TAX-MANAGED FUND

CLASS C SHARES DISTRIBUTION PLAN, dated as of September __, 1999 of
PIONEER TAX-MANAGED FUND, a Delaware business trust (the "Trust").

WITNESSETH

WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class C Shares") of the Trust in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class C Shares distribution plan (the "Class C Plan") as a
plan of distribution pursuant to such Rule;

WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class C Shares in connection with the Class C Plan;

WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class C Shares in connection with the
offering of Class C Shares, (b) PFD may compensate any Dealer that sells Class C
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class C
shares, its profits or any other source available to it;

WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class C Shares by
the Trust, and PFD may retain (or receive from the Trust,

<PAGE>

as the case may be) all such deferred sales charges; and

WHEREAS, the Board of Trustees of the Trust, in considering whether
the Trust should adopt and implement this Class C Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class C Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class C Plan will
benefit the Trust and its Class C shareholders;

NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class C Plan for the Trust as a plan of distribution of Class C Shares in
accordance with Rule 12b-l, on the following terms and conditions:

1. (a) The Trust is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection
with the Trust's Class C Shares. Such compensation shall be
calculated and accrued daily and paid monthly or at such other
intervals as the Board of Trustees may determine.

(b) The amount of compensation paid during any one year for
distribution services with respect to Class C Shares shall be
.75% of the Trust's average daily net assets attributable to
Class C Shares for such year.

(c) Distribution services and expenses for which PFD may be
compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead,
travel and telephone expenses) of (i) Dealers, brokers and
other dealers who are members of the National Association of
Securities Dealers, Inc. ("NASD") or their officers, sales
representatives and employees, (ii) PFD and any of its
affiliates and any of their respective officers, sales
representatives and employees, (iii) banks and their officers,
sales representatives and employees, who engage in or support
distribution of the Trust's Class C Shares; printing of
reports and prospectuses for other than existing shareholders;
and preparation, printing and distribution of sales literature
and advertising materials.

(d) The amount of compensation paid during any one year for
personal and account maintenance services and expenses shall
be .25% of the Trust's average daily net assets attributable
to Class C Shares for such year. As partial consideration for
personal services and/or account maintenance services provided
by PFD to the Class C Shares, PFD shall be entitled to be paid
any fees payable under this clause (d) with respect

<PAGE>

to Class C shares for which no dealer of record exists, where
less than all consideration has been paid to a dealer of
record or where qualification standards have not been met.

(e) Personal and account maintenance services for which PFD or
any of its affiliates, banks or Dealers may be compensated
pursuant to this Plan include, without limitation: payments
made to or on account of PFD or any of its affiliates, banks,
other brokers and dealers who are members of the NASD, or
their officers, sales representatives and employees, who
respond to inquiries of, and furnish assistance to,
shareholders regarding their ownership of Class C Shares or
their accounts or who provide similar services not otherwise
provided by or on behalf of the Trust.

(f) PFD may impose certain deferred sales charges in
connection with the repurchase of Class C Shares by the Trust
and PFD may retain (or receive from the Trust as the case may
be) all such deferred sales charges.

(g) Appropriate adjustments to payments made pursuant to
clauses (b) and (d) of this paragraph 1 shall be made whenever
necessary to ensure that no payment is made by the Trust in
excess of the applicable maximum cap imposed on asset based,
front-end and deferred sales charges by subsection (d) of
Section 26 of Article III of the Rules of Fair Practice of the
NASD.

2. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class C
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class C Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class C Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.

3. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.

4. This Class C Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class C of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class C Plan or in any agreements
related to the Class C Plan (the "Qualified Trustees"),

<PAGE>

such votes with respect to (ii) and (iii) above to be cast in person at a
meeting called for the purpose of voting on this Class C Plan.

5. This Class C Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class C Plan shall
expire on ________________, 2000.

6. This Class C Plan may be amended at any time by the Board of
Trustees, PROVIDED that this Class C Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class C of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class C Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class C of the Trust.

7. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class C Plan and the purposes for which such
expenditures were made.

8. While this Class C Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.

9. For the purposes of this Class C Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.

10. The Trust shall preserve copies of this Class C Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.

11. This Class C Plan shall be construed in accordance with the laws
of The Commonwealth of Massachusetts and the applicable provisions of the 1940
Act.

12. If any provision of this Class C Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Class C Plan shall not be affected thereby.

PIONEER TAX-MANAGED FUND

Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares, Class C Shares and Class Y Shares
September 7, 1999

Each class of shares of Pioneer Tax-Managed Fund (the "Fund") will have
the same relative rights and privileges and be subject to the same sales
charges, fees and expenses, except as set forth below. The Board of Trustees may
determine in the future that other distribution arrangements, allocations of
expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Plan accordingly without the
approval of shareholders of any class. Except as set forth in the Fund's
prospectus(es), shares may be exchanged only for shares of the same class of
another Pioneer mutual fund.

Article I. Class A Shares

Class A Shares are sold at net asset value and subject to the initial
sales charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
Shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A Shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A Shares.

The initial purchase date for Class A Shares acquired through (i)
reinvestment of dividends on Class A Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class A
shares were purchased.

Article II. Class B Shares

Class B Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class B Shares redeemed within a
specified number of years of purchase will be subject to a CDSC as set forth in
the Fund's prospectus. Class B Shares are sold subject to the minimum purchase
requirements set forth in the Fund's prospectus. Class B Shares shall be
entitled to the shareholder services set forth from time to time in the Fund's
prospectus with respect to Class B Shares. Class B Shares are subject to fees
calculated as a stated percentage of the net assets attributable to Class B
Shares under the Class B Rule 12b-1 Distribution Plan as set

<PAGE>

forth in such Distribution Plan. The Class B Shareholders of the Fund have
exclusive voting rights, if any, with respect to the Fund's Class B Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class B Shares on a per
account basis except to the extent, if any, such an allocation would cause the
Fund to fail to satisfy any requirement necessary to obtain or rely on a private
letter ruling from the IRS relating to the issuance of multiple classes of
shares. Class B Shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class B Shares.

Class B Shares will automatically convert to Class A Shares of the Fund
at the end of a specified number of years after the initial purchase date of
Class B Shares, except as provided in the Fund's prospectus. Such conversion
will occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.

The initial purchase date for Class B Shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.

Article III. Class C Shares

Class C Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class C Shares redeemed within
one year of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Class C Shares are sold subject to the minimum purchase requirements
set forth in the Fund's prospectus. Class C Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class C Shares. Class C Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class C Shares under the
Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class C Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class C Shares on a per account basis except to the extent, if
any, such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class C Shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class C Shares.

The initial purchase date for Class C Shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.

-2-

<PAGE>

Article IV. Class Y Shares

Class Y Shares are sold at net asset value per share without the
imposition of an initial sales charge. Class Y Shares are not subject to a CDSC
upon redemption regardless of the length of the period of time such shares are
held. Class Y Shares are sold subject to the minimum purchase requirements set
forth in the Fund's prospectus. Class Y Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class Y Shares.

Class Y Shares are not subject to fees payable under a distribution or
other plan adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "Act"). The Class Y Shareholders of the Fund have
exclusive voting rights, if any, with respect to the Fund's possible future
adoption of a Class Y Rule 12b-1 Distribution Plan. Transfer agency fees are
allocated to Class Y Shares on a per account basis except to the extent, if any,
such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class Y Shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class Y Shares.

The initial purchase date for Class Y Shares acquired through (i)
reinvestment of dividends on Class Y Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class Y
shares were purchased.

Article V. Approval by Board of Trustees

This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Act) of (a) all of the Trustees of the Fund
and (b) those of the Trustees who are not "interested persons" (as such term may
be from time to time defined under the Act) of the Fund.

Article VI. Amendments

No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article V.

-3-

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