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[LOGO]
PIONEER
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Pioneer
Tax-Free
Income Fund
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ANNUAL REPORT 12/31/98
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<PAGE>
Table of Contents
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Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 20
Notes to Financial Statements 26
Report of Independent Public Accountants 30
Trustees, Officers and Service Providers 31
Programs and Services for Pioneer Shareowners 32
Retirement Plans from Pioneer 34
The Pioneer Family of Mutual Funds 36
<PAGE>
Pioneer Tax-Free Income Fund
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LETTER FROM THE CHAIRMAN 12/31/98
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Dear Shareowner,
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I am pleased to introduce this annual report for Pioneer Tax-Free Income Fund,
covering the year ended December 31, 1998. On behalf of your investment team, I
thank you for your interest and this opportunity to comment on today's investing
environment.
We recently changed, and we think strengthened, the structure of the Fund's
management team. Day-to-day management of the Fund is now the responsibility of
a team of fixed-income portfolio managers and analysts supervised by Sherman B.
Russ. Mr. Russ, who has over 36 years of investment experience, joined Pioneer
in 1983.
Economic news in the United States remained positive in 1998, with low
unemployment and no signs of inflation. The financial markets, and especially
U.S. government bonds, turned in impressive results through the end of year. The
yield on the 30-year Treasury bond fell to historic lows, which subsequently
pushed bond prices higher and increased total returns. Municipal bonds, and your
Fund, benefited from this environment and turned in solid performance.
Although bond returns were once again overshadowed by the returns of the overall
stock market, bonds do play a vital role in a well-balanced portfolio. Funds
that hold quality municipal securities, such as Pioneer Tax-Free Income Fund,
can cushion some of the stock market's volatility and often provide a good level
of income to a tax sensitive investor's portfolio. We suggest you discuss your
particular needs with your investment professional.
I encourage you to read the pages that follow, including the Portfolio
Management Discussion where Fund performance is reviewed. If you have questions,
please contact your investment professional, or Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.,
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Tax-Free Income Fund
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PORTFOLIO SUMMARY 12/31/98
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Portfolio Quality
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(As a percentage of total investment portfolio)
[The following table was depicted as a pie chart in the printed material.]
AAA 66%
AA 22%
A 11%
Short-Term Cash Equivalents 1%
Portfolio Maturity
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(Effective life as a percentage of total investment portfolio)
[The following table was depicted as a pie chart in the printed material.]
20+ Years 10%
10-20 Years 24%
7-10 Years 27%
5-7 Years 16%
2-5 Years 22%
0-2 Years 1%
10 Largest Holdings
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(As a percentage of debt holdings)
1. South Carolina Public Service Authority Revenue,
6.625%, Prerefunded, 7/1/02 2.79%
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2. Illinois Metropolitan Pier & Exposition Authority,
8.5%, 6/15/06 2.64
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3. Wyoming Community Development Authority Revenue,
Series B, 7.1%, 6/1/33 2.59
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4. Hastings Electric System Revenue, 6.3%, 1/1/19 2.02
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5. Will County, Illinois Environmental Revenue Bond, 6.4%, 4/1/26 1.99
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6. District of Columbia Water & Sewer Authority, 5.5%, 10/1/23 1.75
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7. South East Public Service Authority, 5.0%, 7/1/15 1.68
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8. Walled Lake School District General Obligation, Series I,
5.5%, 5/1/22 1.49
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9. McGee Creek Authority Water Revenue, 6.0%, 1/1/23 1.35
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10. Chicago Board of Education, 5.75%, 12/1/27 1.35 1.35
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Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Tax-Free Income Fund
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PERFORMANCE UPDATE 12/31/98 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/98 12/31/97
$12.02 $12.17
Distributions per Share Income Short-Term Long-Term
(12/31/97 - 12/31/98) Dividends Capital Gains Capital Gains
$0.548 $0.026 $0.312
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Tax-Free Income Fund at public offering price, compared to the growth of
the Lehman Brothers Municipal Bond Index.
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Average Annual Total Returns
(As of December 31, 1998)
Net Asset Public Offering
Period Value Price*
10 Years 7.91% 7.42%
5 Years 5.56 4.59
1 Year 6.20 1.44
- --------------------------------------------------------------------------------
* Reflects deduction of the maximum 4.5% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
[GRAPHIC OMITTED]
[The following table was depicted as a line chart in the printed material.]
Pioneer Tax-Free Class A Lehman Brothers
12/31/88 9,550 10,000
10,513 11,080
12/31/90 11,291 11,887
12,702 13,331
12/31/92 13,810 14,508
15,603 16,289
12/31/94 14,608 15,447
17,066 18,144
12/31/96 17,676 18,947
19,256 20,693
12/31/98 20,449 21,826
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
A portion of the Fund's income may be subject to the Alternative Minimum Tax
(AMT).
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
<PAGE>
Pioneer Tax-Free Income Fund
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PERFORMANCE UPDATE 12/31/98 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/98 12/31/97
$11.93 $12.09
Distributions per Share Income Short-Term Long-Term
(12/31/97 - 12/31/98) Dividends Capital Gains Capital Gains
$0.464 $0.026 $0.312
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Tax-Free Income Fund, compared to the growth of the Lehman Brothers
Municipal Bond Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of December 31, 1998)
If If
Period Held Redeemed*
Life-of-Fund 6.56% 5.87%
(4/28/95)
1 Year 5.43 1.48
- --------------------------------------------------------------------------------
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of
distributions. The maximum CDSC of 4% declines over six years.
[GRAPHIC OMITTED]
[The following table was depicted as a line chart in the printed material.]
Pioneer Tax-Free Class B Lehman Brothers
4/30/95 10,000 10,000
10,155 10,229
10,363 10,523
12/31/95 10,794 10,957
10,580 10,825
10,616 10,908
10,858 11,158
12/31/96 11,080 11,443
10,993 11,416
11,367 11,811
11,682 12,167
12/31/97 11,984 12,497
12,077 12,641
12,243 12,832
12,652 13,227
12/31/98 12,334 13,181
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
A portion of the Fund's income may be subject to the Alternative Minimum Tax
(AMT).
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
Pioneer Tax-Free Income Fund
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PERFORMANCE UPDATE 12/31/98 CLASS C SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/98 12/31/97
$11.94 $12.11
Distributions per Share Income Short-Term Long-Term
(12/31/97 - 12/31/98) Dividends Capital Gains Capital Gains
$0.464 $0.026 $0.312
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Tax-Free Income Fund, compared to the growth of the Lehman Brothers
Municipal Bond Index.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(As of December 31, 1998)
If If
Period Held Redeemed*
Life-of-Fund 5.40% 5.40%
(1/31/96)
1 Year 5.33 5.33
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* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
[GRAPHIC OMITTED]
[The following table was depicted as a line chart in the printed material.]
Pioneer Tax-Free Class C Lehman Brothers
1/31/96 10,000 10,000
9,766 9,805
9,791 9,880
10,006 10,107
12/31/96 10,219 10,364
10,148 10,340
10,493 10,697
10,792 11,020
12/31/97 11,070 11,319
11,137 11,449
11,300 11,623
11,667 11,980
12/31/98 11,660 11,939
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the past
five years and have a maturity of at least two years. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in the Index.
A portion of the Fund's income may be subject to the Alternative Minimum Tax
(AMT).
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
<PAGE>
Pioneer Tax-Free Income Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/98
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Pioneer Tax-Free Income Fund's fiscal year closed on December 31, 1998. It was a
good year for municipal bonds. As U.S. interest rates fell to historic lows,
municipal bonds produced solid returns. A healthy economic climate boosted tax
revenues and strengthened the creditworthiness of many municipalities, which
lifted bond prices.
Sherman B. Russ leads the investment team responsible for the Fund's daily
activities. In the following discussion, Mr. Russ reviews the environment and
strategies that influenced your Fund's performance and provides his outlook for
the first half of 1999.
Q: How did the Fund perform over the past 12 months?
A: The Fund posted strong results. All share classes outperformed the 5.32%
average total return for the 246 general municipal debt funds followed by
Lipper, Inc., an independent company that ranks mutual fund performance.
(Returns do not reflect sales charges.)
The Fund also generated a good level of tax-free income. On December 31,
for example, Class A shares offered a tax-free 30-day SEC yield of 3.68%.
That translates into a taxable equivalent yield of 6.09% for an investor
in the 39.6% maximum federal tax bracket.
Q: What was the environment like for municipal bonds?
A: It was a positive environment. Long-term interest rates fell to historic
lows, driving municipal bond prices higher. Many municipalities took
advantage of the lower rates by refinancing higher cost debt. A
combination of moderate-to-strong economic growth and low inflation
translated into increased tax revenues and greater cash flows for many
state and local governments. Healthier balance sheets also prompted many
municipalities to embark on major projects such as improving roads,
upgrading computer systems or paying long-standing liabilities.
6
<PAGE>
Pioneer Tax-Free Income Fund
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Periods of heavy bond issuance and limited investor buying curbed the rise
of municipal bond prices, however, keeping yields attractive particularly
compared to U.S. Treasurys. In the second half of the year, international
economies and financial markets grew increasingly fragile. The situation
prompted a "flight to quality" - extraordinary demand for the safety and
liquidity of Treasurys - and short-term interest rate cuts by the Federal
Reserve. The combination of these actions pushed Treasury prices
significantly higher - and yields so low that they mirrored municipal bond
yields. Typically AAA-rated municipal bonds provide about 85% of the yield
of Treasurys with comparable maturities. During this period the yields
were almost even.
Q: With investors focused on safety and liquidity, did the Fund's emphasis on
quality help performance?"
A: We believe it did, even though the municipal market never experienced as
dramatic a "flight-to-quality" as Treasurys. We also found that
higher-rated bonds provided better relative value, while lower-rated bonds
offered limited yield advantages, if any. In short, investors were not
being paid to take additional risk. On December 31, over 60% of the Fund
was invested in AAA-rated securities and the average quality of the
Portfolio was AA. (Ratings apply to underlying securities, not Fund
shares.) The Fund also stayed well-diversified, and now has 178 different
issues in 40 states.
Q: What strategies did you use in light of the changing interest rate
environment?
A: We adjusted the Fund's duration to increase total return potential.
Expressed in years, duration measures a portfolio's sensitivity to changes
in interest rates. We maintained a short duration early in the year, which
enhanced price stability when interest rates rose. Shortening duration
makes a fund less sensitive to changes in interest rates. Later in the
year, we extended duration - which enhanced price appreciation as interest
rates fell - and increased total return. On December 31, the Fund's
duration was 7.53 years.
7
<PAGE>
Pioneer Tax-Free Income Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/98 (continued)
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Q: What is your outlook for municipal bonds over the next six months?
A: We are cautiously optimistic. In our opinion, the municipal bond market
represents value and opportunity. Investors can secure the tax-advantages
of municipal bonds at levels that rival their taxable counterparts - and
also acquire the highest quality bonds available. We expect municipalities
to continue to take advantage of their stronger cash flows in this low
interest rate environment by issuing bonds to rebuild their
infrastructures and pursue other projects that may have been postponed.
These projects should ensure an ample supply of new bonds. In this
environment, municipal bond prices should remain stable and yields
attractive.
Early reports suggest a healthy domestic economy for the early months of
1999. As the year progresses, we expect economic growth to slow to a rate
of about 2.5% versus an estimated 4% in 1998, as a slowdown in
international economies - particularly Asia and Latin America - reduces
domestic economic strength. If the U.S. economy slows and inflation
remains negligible, we believe interest rates could gradually move lower -
especially short-term rates.
8
<PAGE>
Pioneer Tax-Free Income Fund
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SCHEDULE OF INVESTMENTS 12/31/98
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<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
TAX-EXEMPT OBLIGATIONS - 99.0%
Arizona - 3.1%
$ 1,500,000 AAA/Aaa Kyrene School District, 6.0%, 7/1/14 $ 1,632,135
2,765,000 AAA/Aaa Maricopa County Revenue, 5.5%, 1/1/18 2,972,181
1,000,000 AAA/Aaa Maricopa County School District, 7.0%, 7/1/07 1,188,000
1,000,000 AAA/Aaa Maricopa County School District, 7.0%, 7/1/08 1,183,040
2,000,000 AAA/Aaa Mesa Utility System Revenue, 4.5%, 7/1/18 1,894,240
1,000,000 AAA/AAA Sedona Arizona Wastewater Municipal Property
Corporate Excise Tax Revenue, 5.375%, 7/1/14 1,047,730
2,200,000 AAA/Aaa Tempe School District, 7.0%, 7/1/08 2,678,478
------------
$ 12,595,804
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Colorado - 3.1%
500,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-3, 7.0%, 11/1/16 $ 562,305
740,000 NR/Aa2 Colorado Housing Finance Authority,
Series C-2, 7.45%, 6/1/17 838,982
3,345,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-1, 7.4%, 11/1/27 3,807,446
1,500,000 NR/Aa2 Colorado Housing Finance Authority,
Series B-2, 7.45%, 11/1/27 1,724,790
500,000 NR/Aa2 Colorado Housing Finance Authority,
Series C-1, 7.55%, 11/1/27 569,415
500,000 AAA/AAA Denver Colorado City & County Airport
Revenue, Series B, 5.0%, 11/15/25 492,700
3,575,000 AAA/Aaa Douglas County School District Region 1,
7.0%, 12/15/13 4,499,781
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$ 12,495,419
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Delaware - 0.4%
1,580,000 NR/Aa3 State of Delaware Housing Authority Revenue,
6.45%, 7/1/13 $ 1,689,415
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District of Columbia - 1.7%
6,550,000 AAA/Aaa District of Columbia Water & Sewer Authority,
5.5%, 10/1/23 $ 7,013,478
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Florida - 3.6%
1,700,000 AAA/Aaa Clearwater Florida Water & Sewer,
0%, 12/1/12 $ 853,842
1,000,000 AAA/Aaa Clearwater Florida Water & Sewer,
0%, 12/1/13 471,110
1,275,000 A/NR Clearwater Housing Authority, 5.4%, 5/1/13 1,321,359
4,370,000 AAA/Aaa Hillsborough County Revenue, 5.5%, 7/1/14 4,774,531
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Tax-Free Income Fund
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SCHEDULE OF INVESTMENTS 12/31/98 (continued)
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<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Florida - (continued)
$ 770,000 NR/Aaa Manatee County Housing Revenue,
7.2%, 5/1/28 $ 875,813
1,500,000 NR/Aaa Martin County Florida Utilities, 5.0%, 10/1/18 1,506,450
1,025,000 AAA/Aaa Northern Palm Beach, 4.8%, 8/1/12 1,058,487
1,250,000 AAA/Aaa Northern Palm Beach, 4.9%, 8/1/13 1,294,050
2,310,000 AAA/AAA Titusville Florida Water & Sewer Revenue,
4.8%, 10/1/15 2,312,911
------------
$ 14,468,553
------------
Georgia - 1.4%
1,000,000 AA/Aa3 Clayton County Water & Sewer Authority
Revenue, 5.0%, 5/1/12 $ 1,051,410
4,660,000 AAA/Aaa Georgia Municipal Association Inc.,
Atlanta Detention Center, 4.5%, 12/1/11 4,642,199
------------
$ 5,693,609
------------
Idaho - 0.5%
750,000 AAA/Aaa ADA & Canyon Counties Idaho Joint School
District 2, 4.75%, 7/30/15 $ 752,700
1,240,000 AAA/NR Canyon County Idaho School District #131,
4.45%, 7/30/11 1,241,364
------------
$ 1,994,064
------------
Illinois - 10.0%
5,000,000 AAA/Aaa Chicago Board of Education, 5.75%, 12/1/27 $ 5,378,600
1,750,000 NR/Aaa Chicago Family Mortgage, 6.45%, 9/1/29 1,938,300
1,500,000 AAA/Aaa Chicago Lakefront Millennium Parking Facilities,
5.125%, 1/1/28 1,492,155
1,500,000 AAA/NR Chicago Illinois Single Family Mortgage,
6.3%, 9/1/29 1,648,095
1,145,000 A+/A1 Illinois Housing Development Authority Revenue
Multi-Family Housing, 7.0%, Prerefunded,
7/1/21* 1,445,230
4,015,000 A+/Aaa Illinois Metropolitan Pier & Exposition Authority
State Tax Revenue, 6.5%, 6/15/27 4,520,127
5,000,000 AAA/Aaa Illinois State General Obligation, 5.75%, 5/1/21 5,331,150
8,355,000 AA-/A1 Metropolitan Pier & Exposition Authority,
8.5%, 6/15/06 10,573,420
7,185,000 AA/Aa2 Will County, Illinois Environmental Revenue
6.4%, 4/1/26 7,955,088
------------
$ 40,282,165
------------
Indiana - 4.5%
1,000,000 AAA/Aaa Goshen Indiana Multi-School Building Corp.,
5.6%, 1/15/16** $ 1,060,000
750,000 AAA/NR Indiana Bond Bank State Revolving Fund,
6.75%, 2/1/17 852,060
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
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<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Indiana - (continued)
$ 3,500,000 AA/Aa3 Indiana Health Facilities Authority,
5.5%, 2/15/16 $ 3,651,620
1,000,000 NR/Aaa Indiana State Housing Finance Authority,
Single Family Mortgage Revenue,
5.95%, 7/1/13 1,056,310
1,400,000 AA/NR Indianapolis Local Public Improvement Board
Revenue, 6.75%, 2/1/14 1,687,532
1,000,000 A+/A Lawrence Township Metropolitan School
District Revenue, 6.75%, 7/5/13 1,211,760
2,300,000 A/NR Mishawaka School District, 5.625%, 1/15/23 2,398,946
3,200,000 AA-/AA2 Petersburg Indiana Pollution and Control
Revenue, 5.4%, 8/1/17 3,401,632
2,740,000 AAA/Aaa Sarah Scott Middle School Revenue,
5.75%, 1/15/19 2,929,608
------------
$ 18,249,468
------------
Iowa - 0.3%
1,000,000 NR/A Iowa Finance Authority Revenue,
Correctional Facility Program, 5.55%, 6/15/10 $ 1,083,380
------------
Kansas - 0.5%
1,600,000 AA-/A Kansas State Development Financial
Authority Revocable, 4.75%, 4/1/18 $ 1,537,040
500,000 AAA/NR Wellington Electric, 5.2%, 5/1/23 506,235
------------
$ 2,043,275
------------
Kentucky - 1.0%
1,095,000 AAA/Aaa Kenton County Water District #1, 5.8%, 2/1/15 $ 1,192,214
2,010,000 AAA/Aaa Kenton County Water District #1,
5.875%, 2/1/19 2,169,775
------------
$ 3,361,989
------------
Louisiana - 0.8%
3,000,000 AAA/Aaa New Orleans Home Mortgage Authority,
6.25%, 1/15/11 $ 3,470,880
------------
Maryland - 0.3%
1,060,000 AAA/Aaa Baltimore City Parking System Revenue,
5.25%, 7/1/17 $ 1,118,724
------------
Massachusetts - 4.1%
1,185,000 AAA/Aaa Massachusetts Housing Finance Agency,
5.95%, 7/1/18 $ 1,260,271
3,000,000 AAA/Aaa Massachusetts State General Obligation,
6.5%, 11/1/07 3,429,390
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Massachusetts - (continued)
$ 3,390,000 NR/Aaa Massachusetts State Turnpike Authority
Revenue, 5.0%, 1/1/20 $ 3,465,529
2,000,000 AAA/Aaa South Essex Massachusetts Sewer District,
Series B, 5.25%, 6/15/18 2,050,140
1,325,000 AAA/Aaa Worcester General Obligation, 6.15%, 5/1/09 1,505,372
1,440,000 AAA/Aaa Worcester General Obligation, 6.2%, 5/1/10 1,640,016
1,460,000 AAA/Aaa Worcester General Obligation, 6.25%, 5/1/11 1,666,853
1,450,000 AAA/Aaa Worcester General Obligation, 6.3%, 5/1/12 1,659,453
------------
$ 16,677,024
------------
Michigan - 3.6%
1,455,000 AAA/Aaa Grand Rapids Community College,
5.375%, 5/1/16 $ 1,513,360
2,175,000 AAA/Aaa Holly Michigan Area School District,
5.625%, 5/1/15 2,298,562
2,500,000 AA+/Aa1 Michigan Municipal Bond Authority,
5.63%, 10/1/19 2,667,800
2,400,000 AAA/Aaa Plymouth-Canton Michigan Community School
District, 4.63%, 5/1/23 2,245,128
5,715,000 AAA/Aaa Walled Lake School District General Obligation,
Series I, 5.5%, 5/1/22 5,962,802
------------
$ 14,687,652
------------
Minnesota - 1.2%
750,000 NR/A2 Minnesota State Higher Education Facilities
Authority Revenue, 5.625%, 10/1/16 $ 791,078
1,805,000 AA+/Aa2 Minnesota State Housing Finance Agency,
Series H, 6.55%, 7/1/11 1,932,415
990,000 AA/Aa2 Minnesota State Housing Finance Agency,
6.9%, 8/1/12 1,059,201
1,000,000 AA/Aa2 Minnesota University, 5.75%, 7/1/10 1,122,260
------------
$ 4,904,954
------------
Missouri - 3.2%
1,000,000 AAA/Aaa Bi State Development Agency Missouri & Illinois
Metropolitan Districts, 5.0%, 7/1/18 $ 996,920
1,010,000 AA/NR Lexington School District Revenue,
5.55%, 3/1/17 1,066,196
2,100,000 AAA/Aaa Missouri Environmental Improvement and
Energy Resources Authority, 6.05%, 7/1/16 2,318,085
1,000,000 AAA/NR Missouri Housing Development,
Series B-2, 6.4%, 3/1/29 1,109,700
5,000,000 NR/Aaa Northwest Missouri University, 4.7%, 6/1/18 4,837,700
2,500,000 AAA/Aaa Poplar Bluff School District, 5.8%, 3/1/11 2,697,975
------------
$ 13,026,576
------------
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Montana - 1.3%
$ 1,000,000 AAA/Aaa Montana State Health Facilities,
5.125%, 12/1/18 $ 1,006,860
2,000,000 A2/NR Montana State Higher Education Assistance
Corp. Student Loan Revenue, 5.5%, 12/1/31 2,005,100
2,200,000 AAA/Aaa University of Montana Revenue, Series C,
5.375%, 11/15/21 2,261,666
------------
$ 5,273,626
------------
Nebraska - 5.6%
2,350,000 AAA/NR Douglas County Hospital Authority Revenue,
5.1%, 9/1/11 $ 2,454,270
2,000,000 AAA/NR Douglas County Hospital Authority Revenue,
5.125%, 9/1/17 2,014,240
5,000,000 NR/A Grand Island Sanitation Sewer Revenue,
6.0%, 4/1/14 5,346,400
7,500,000 A/A Hastings Electric System Revenue,
6.3%, 1/1/19 8,088,900
1,325,000 AAA/Aaa Municipal Energy Agency of Nebraska Revenue,
6.0%, 4/1/08 1,438,513
1,690,000 A+/A1 Nebraska Public Power District Revenue,
6.125%, 1/1/15 1,866,267
1,460,000 AA/Aa1 Omaha Tax Allocation, 5.25%, 11/15/17 1,500,106
------------
$ 22,708,696
------------
New Hampshire - 0.5%
2,000,000 AAA/NR New Hampshire Higher Educational & Health
Facilities, 5.0%, 6/1/28 $ 1,954,720
------------
New Mexico - 2.6%
2,600,000 AA/Aa3 Bernalillo County Gross Receipts Tax Revenue,
5.75%, 4/1/21 $ 2,870,816
2,000,000 NR/Aaa Dona Ana County Revenue, 5.5%, 6/1/14 2,182,280
1,635,000 AA/Aa1 New Mexico Mortgage Finance Authority,
6.85%, 7/1/12 1,736,828
2,000,000 AAA/Aaa Santa Fe Gross Receipts, 5.75%, 6/1/21 2,134,760
1,200,000 AAA/Aaa University of New Mexico Revenue,
6.55%, 8/15/25 1,378,932
------------
$ 10,303,616
------------
New York - 0.3%
1,000,000 AAA/Aaa New York State Dormitory Authority,
5.25%, 7/1/22 $ 1,021,050
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
North Carolina - 1.8%
$ 1,250,000 AA/Aa1 Charlotte Law Enforcement Project,
6.1%, 12/1/15 $ 1,362,488
970,000 AA/Aa3 Charlotte-Mecklenburg Hospital Authority
Revenue, 6.25%, 1/1/20 1,042,915
1,000,000 AAA/Aaa Concord Utilities, 5.0%, 12/1/22 993,060
1,250,000 AAA/Aaa Cumberland County Civic Center Project,
6.4%, 12/1/24 1,435,113
1,000,000 AAA/Aaa Franklin County Certificate Participation,
6.625%, 6/1/14 1,125,150
1,300,000 AAA/AAA University of North Carolina Revocable,
4.5%, 10/1/18 1,231,906
------------
$ 7,190,632
------------
North Dakota - 1.2%
2,000,000 AAA/Aaa Grand Forks Health Care Systems,
5.6%, 8/15/17 $ 2,119,160
1,665,000 NR/Aa3 North Dakota State Housing Finance
Agency Revenue, 5.8%, 7/1/18 1,747,884
1,000,000 AAA/Aaa State Water Community Revenue,
5.75%, 7/1/27 1,069,410
------------
$ 4,936,454
------------
Ohio - 0.4%
1,050,000 AAA/Aaa Bedford, Ohio County School District,
6.25%, 12/1/13 $ 1,158,854
500,000 AA-/Aa3 Ohio State Building Authority Revenue,
6.0%, 10/1/08 569,640
------------
$ 1,728,494
------------
Oklahoma - 3.2%
2,520,000 AAA/Aaa Grand River Dam Authority Revenue,
6.25%, 6/1/11 $ 2,961,176
4,700,000 AAA/Aaa McGee Creek Authority Water Revenue,
6.0%, 1/1/23 5,395,882
1,250,000 AA/NR Oklahoma City Public Property Authority,
5.25%, 10/1/23 1,237,925
3,000,000 A+/A1 Oklahoma State Turnpike Authority Revenue,
6.125%, 1/1/20 3,240,090
------------
$ 12,835,073
------------
Oregon - 1.1%
1,000,000 A+/A1 Portland Sewer System, 6.2%, 6/1/12 $ 1,120,030
2,860,000 A/Aaa Washington County Unified Sewer Agency
Revenue, 6.2%, Prerefunded, 10/1/04* 3,201,169
------------
$ 4,321,199
------------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Pennsylvania - 4.4%
$ 2,750,000 AAA/Aaa Allegheny County Sanitary Authority Revenue,
5.375%, 12/1/24 $ 2,842,840
4,190,000 AAA/NR Butler Area School, 4.75%, 10/1/22 3,978,028
2,375,000 AAA/Aaa Cambria County General Obligation,
5.5%, 8/15/16 2,504,651
1,300,000 AAA/Aaa Lycoming County General Obligation,
5.8%, 11/15/22 1,461,174
1,000,000 AAA/Aaa New Kensington School District, 5.5%, 5/15/17 1,046,750
1,650,000 AAA/AAA Tyrone Pennsylvania Area School District,
4.85%, 9/15/14 1,656,105
2,095,000 AAA/AAA Wallenpaupack Area School District,
5.25%, 11/15/13 2,188,605
2,000,000 AAA/NR Wallingford-Swarthmore General Obligation,
5.25%, 5/15/17 2,051,080
------------
$ 17,729,233
------------
Rhode Island - 0.3%
945,000 AA+/Aa Rhode Island Housing & Mortgage Finance,
6.75%, 10/1/17 $ 1,011,452
------------
South Carolina - 4.5%
1,790,000 AAA/Aaa Beaufort Water & Sewer Revenue,
6.5%, 3/1/13 $ 1,953,427
2,400,000 A/A1 Fairfield County Pollution Control,
6.5%, 9/1/14 2,641,104
1,250,000 AAA/Aaa South Carolina Grand Strand Water &
Sewer Authority, 6.375%, 6/1/12 1,486,325
10,000,000 AAA/Aaa South Carolina Public Service Authority Revenue,
6.625%, Prerefunded, 7/1/02* 11,134,900
750,000 NR/Aa2 South Carolina State Housing Finance &
Development Authority Revenue,
6.2%, 7/1/09 793,703
------------
$ 18,009,459
------------
South Dakota - 0.7%
1,235,000 NR/Aa3 South Dakota Conservancy District Revenue,
5.625%, 8/1/17 $ 1,293,538
1,255,000 AAA/Aaa South Dakota State Lease Revenue,
8.0%, 9/1/05 1,529,443
------------
$ 2,822,981
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Tennessee - 1.2%
$ 2,000,000 AA/NR Chattanooga General Obligation,
5.25%, 9/1/17 $ 2,093,100
1,000,000 AAA/Aaa Metropolitan Government Nashville &
Davidson County Sports Authority,
5.75%, 7/1/17 1,075,080
1,565,000 AAA/Aaa Metropolitan Government Nashville &
Davidson County Water & Sewer Authority,
6.0%, 1/1/07 1,760,390
------------
$ 4,928,570
------------
Texas - 9.5%
1,000,000 AAA/Aaa Brazos River Authority Texas Revocable,
5.1%, 11/1/18 $ 998,940
2,145,000 AAA/Aaa Castleberry Independent School District
General Obligation, 5.7%, 8/15/21 2,262,696
2,310,000 AAA/Aaa Clear Creek Independent School District
General Obligation, 0%, 2/1/10 1,396,926
1,800,000 A/NR Collin County Texas Housing Financial Corp.,
5.13%, 6/1/18 1,755,612
1,305,000 NR/Aaa Comal Independent School District General
Obligation, 7.0%, 2/1/07 1,522,296
1,720,000 AAA/Aaa Grapevine-Colleyville Independent School
District, 0%, 8/15/12 902,586
1,500,000 A/NR Houston, Texas Housing Authority,
8.0%, 6/1/14 1,603,065
1,565,000 AAA/Aaa Katy Texas Independent School District,
4.5%, 2/15/20 1,448,173
2,050,000 NR/Aaa Keller Independent School District General
Obligation, 0%, 8/15/10 1,215,261
2,000,000 NR/Aaa Kingsbridge Utility Systems Revenue,
5.375%, 3/1/15 2,066,980
1,250,000 AAA/Aaa Lamar Texas Conservation Independent
School District, 4.75%, 2/15/20 1,193,763
1,320,000 AAA/NR Midland Texas Independent School District,
4.75%, 2/15/15 1,293,574
1,100,000 AAA/Aaa North Forest School, 6.0%, 8/15/11 1,261,403
2,350,000 AAA/Aaa Nueces River Authority Water Supply Revenue,
5.5%, 3/1/27 2,470,860
1,595,000 AAA/Aaa Port Lavaca Utility Systems Revenue,
5.75%, 2/15/22 1,697,160
1,000,000 AA+/AA San Antonio Texas Electric & Gas, 4.5%, 2/1/21 929,770
3,500,000 AAA/Aaa San Antonio Texas Water Revenue,
5.6%, 5/15/21 3,690,225
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Texas - (continued)
$2,000,000 AAA/Aaa Spring Texas Independent School District,
4.5%, 8/15/22 $ 1,850,180
3,000,000 AAA/Aaa Texas Public Finance Authority Building
Revenue, 0%, 2/1/07 2,116,920
5,500,000 AAA/Aaa Texas Public Finance Authority Building
Revenue, 0%, 2/1/08 3,700,730
2,750,000 AAA/Aaa Texas Public Finance Authority Building
Revenue, 0%, 2/1/10 1,663,008
1,400,000 AAA/Aaa Texas State General Obligation,
6.125%, 2/15/08 1,513,064
------------
$ 38,553,192
------------
Utah - 2.1%
2,500,000 AAA/Aaa St. George Water Revenue, 5.85%, 6/1/20 $ 2,680,700
255,000 NR/Aa1 Utah Housing Finance Agency Revenue,
5.95%, 7/1/11 260,015
3,480,000 AA/NR Weber County Municipal Building Authority
Revenue, 5.75%, 12/15/19 3,649,511
1,250,000 AAA/Aaa White County General Obligation,
5.85%, 2/1/26 1,344,850
455,000 NR/Aaa White County Water Revenue, 5.9%, 2/1/22 489,744
------------
$ 8,424,820
------------
Virginia - 5.8%
1,000,000 NR/Aa1 Arlington County Industrial Development
Revenue, 5.45%, 7/1/27 $ 1,043,060
2,100,000 AAA/AAA Augusta County Virginia Industrial Development
Authority Hospital, 5.25%, 9/1/11 2,224,530
1,750,000 A+/A1 Chesapeake Water & Sewer System Revenue,
6.5%, 7/1/12 1,902,828
3,685,000 A+/A1 Chesapeake Water & Sewer System Revenue,
6.4%, 7/1/17 4,006,294
2,000,000 AAA/Aaa Metro Expressway Authority, 5.25%, 7/15/17 2,105,860
3,000,000 AAA/Aaa Metro Expressway Authority, 5.25%, 7/15/22 3,139,200
2,500,000 AA/Aa2 Norfolk Virginia Industrial Development Revenue,
5.625%, 9/15/17 2,652,350
6,525,000 AAA/Aaa South East Public Service Authority, 5.0%,
7/1/15 6,706,395
------------
$ 23,780,517
------------
Washington - 4.5%
2,820,000 AAA/Aaa Clark County Public Utility District #1 Water
Revenue, 5.5%, 1/1/15 $ 2,953,668
1,655,000 AA+/AA1 King County General Obligation,
6.625%, 12/1/15 1,946,694
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/
Moody's
Principal Ratings
Amount (unaudited) Value
<S> <C> <C> <C>
Washington - (continued)
$1,000,000 NR/Aaa King & Snohomish Counties, Washington
School District, 5.75%, 12/1/14 $ 1,092,290
3,500,000 A+/Aaa Snohomish County Public Utility
District Revenue, 6.8%, 1/1/20 4,314,205
3,095,000 AAA/AAA Snohomish County School District 002 Everett,
5.5%, 12/1/10 3,402,240
2,250,000 AAA/Aaa Snohomish County School District General
Obligation, 5.7%, 12/1/11 2,533,635
2,000,000 A/NR Vancouver Housing, 5.5%, 3/1/28 2,030,040
------------
$ 18,272,772
------------
West Virginia - 1.1%
3,000,000 AAA/AAA West Virginia State Building Commission,
5.38%, 7/1/21 $ 3,165,570
1,000,000 A+/Aa1 West Virginia State Housing Development,
7.1%, 11/1/24 1,075,040
------------
$ 4,240,610
------------
Wisconsin - 0.4%
1,430,000 AAA/Aaa Adams-Friendship School District,
6.5%, 4/1/16 $ 1,708,736
------------
Wyoming - 3.2%
2,590,000 AA/NR Wyoming Cheyenne General Obligation,
5.25%, 12/1/11 $ 2,794,714
9,750,000 AA/Aa Wyoming Community Development Authority
Revenue, Series B, 7.1%, 6/1/33 10,360,643
------------
$ 13,155,357
------------
TOTAL INVESTMENT IN TAX-EXEMPT OBLIGATIONS
(Cost $372,234,930) (a) $399,767,688
------------
<CAPTION>
Shares
<S> <C> <C>
TAX-EXEMPT MONEY MARKET MUTUAL FUND - 1.0%
3,820,014 Lehman Brothers Munifund $ 3,820,014
------------
TOTAL TAX-EXEMPT MONEY MARKET MUTUAL FUND
(Cost $3,820,014) $ 3,820,014
------------
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $376,054,944) (b) $403,587,702
------------
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Prerefunded bonds have been collaterized by U.S. Treasury securities which
are held in escrow and used to pay principal and interest on the tax
exempt issue and to retire the bonds in full at the earliest refunding
date.
** A portion of this bond has been prerefunded.
NR Not rated.
(a) The concentration of investments by type of obligation/market sector is as
follows:
General Obligation 21.8%
Escrowed in U.S. Government Securities 12.4
Revenue Bonds:
Education Revenue 8.9
Water & Sewer Revenue 15.8
Hospital Revenue 3.6
Housing Revenue 11.2
Pollution Control Revenue 3.2
Power Revenue 5.7
Transportation Revenue 2.2
Other 15.2
(b) At December 31, 1998, the net unrealized gain on investments based on cost
for federal income tax purposes of $376,054,944 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 27,665,767
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (133,009)
------------
Net unrealized gain $ 27,532,758
------------
</TABLE>
Purchase and sales of securities (excluding temporary cash investments) for the
year ended December 31, 1998 aggregated $211,983,365 and $233,235,520,
respectively.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 12/31/98
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at value (including temporary cash
investment of $3,820,014) (cost $376,054,944) $403,587,702
Receivables -
Fund shares sold 282,112
Interest 6,233,119
Other 4,373
------------
Total assets $410,107,306
------------
LIABILITIES:
Payables -
Investment securities purchased $ 1,620,557
Fund shares repurchased 150,628
Dividends 453,717
Due to affiliates 358,014
Accrued expenses 82,071
------------
Total liabilities $ 2,664,987
------------
NET ASSETS:
Paid-in capital $379,056,977
Accumulated undistributed net investment income 35,920
Accumulated undistributed net realized gain on investments 816,664
Net unrealized gain on investments 27,532,758
------------
Total net assets $407,442,319
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $393,390,048/32,730,448 shares) $ 12.02
============
Class B (based on $10,790,373/904,102 shares) $ 11.93
============
Class C (based on $3,261,898/273,127 shares) $ 11.94
============
MAXIMUM OFFERING PRICE:
Class A $ 12.59
============
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 12/31/98
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 22,257,400
------------
EXPENSES:
Management fees $ 1,991,781
Transfer agent fees
Class A 459,820
Class B 5,848
Class C 1,560
Distribution fees
Class A 1,009,074
Class B 77,180
Class C 25,457
Accounting 107,217
Custodian fees 69,223
Registration fees 47,048
Professional fees 39,150
Printing 35,684
Fees and expenses of nonaffiliated trustees 19,560
Miscellaneous 21,660
------------
Total expenses $ 3,910,262
Less fees paid indirectly (54,197)
------------
Net expenses $ 3,856,065
------------
Net investment income $ 18,401,335
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 12,007,205
Change in net unrealized gain on investments (5,848,257)
------------
Net gain on investments $ 6,158,948
------------
Net increase in net assets resulting from operations $ 24,560,283
============
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 12/31/98 and 12/31/97
<TABLE>
<CAPTION>
Year Ended Year Ended
FROM OPERATIONS: 12/31/98 12/31/97
<S> <C> <C>
Net investment income $ 18,401,335 $ 20,868,412
Net realized gain on investments 12,007,205 5,728,646
Change in net unrealized gain on investments (5,848,257) 9,973,302
------------- -------------
Net increase in net assets resulting
from operations $ 24,560,283 $ 36,570,360
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ($0.55 and $0.59 per share, respectively) $ (17,980,683) $ (20,562,056)
Class B ($0.46 and $0.49 per share, respectively) (289,800) (207,988)
Class C ($0.46 and $0.49 per share, respectively) (94,932) (38,610)
Net realized gain
Class A ($0.34 and $0.24 per share, respectively) (10,813,748) (8,029,783)
Class B ($0.34 and $0.24 per share, respectively) (287,687) (108,291)
Class C ($0.34 and $0.24 per share, respectively) (86,889) (32,012)
------------- -------------
Total distributions to shareholders $ (29,553,739) $ (28,978,740)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 36,186,954 $ 37,149,298
Reinvestment of distributions 21,872,591 21,258,845
Cost of shares repurchased (66,710,982) (91,820,025)
------------- -------------
Net decrease in net assets resulting from
fund share transactions $ (8,651,437) $ (33,411,882)
------------- -------------
Net decrease in net assets $ (13,644,893) $ (25,820,262)
NET ASSETS:
Beginning of year 421,087,212 446,907,474
------------- -------------
End of year (including accumulated undistributed
net investment income of $35,920 and $0,
respectively) $ 407,442,319 $ 421,087,212
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
Class A '98 Shares '98 Amount '97 Shares '97 Amount
<S> <C> <C> <C> <C>
Shares sold 2,187,317 $ 26,771,233 2,922,958 $ 34,002,852
Reinvestment of distributions 1,762,278 21,391,471 1,653,875 20,992,773
Less shares repurchased (5,221,565) (63,854,984) (7,521,806) (90,352,716)
------------ ------------ ------------ ------------
Net decrease (1,271,970) $(15,692,280) (2,944,973) $(35,357,091)
============ ============ ============ ============
Class B
Shares sold 520,467 $ 6,346,574 161,072 $ 1,928,069
Reinvestment of distributions 34,208 411,417 17,761 213,098
Less shares repurchased (112,747) (1,381,673) (119,956) (1,440,745)
------------ ------------ ------------ ------------
Net increase 441,928 $ 5,376,318 58,877 $ 700,422
============ ============ ============ ============
Class C
Shares sold 252,146 $ 3,069,147 101,254 $ 1,218,377
Reinvestment of distributions 5,781 69,703 4,406 52,974
Less shares repurchased (120,497) (1,474,325) (2,176) (26,564)
------------ ------------ ------------ ------------
Net increase 137,430 $ 1,664,525 103,484 $ 1,244,787
============ ============ ============ ============
</TABLE>
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
CLASS A 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 12.17 $ 11.96 $ 12.36 $ 11.24 $ 12.68
--------- --------- -------- --------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.55 $ 0.59 $ 0.62 $ 0.64 $
0.64
Net realized and unrealized gain (loss) on investments 0.19 0.45 (0.21) 1.21 (1.44)
--------- --------- -------- --------- ---------
Net increase (decrease) from investment operations $ 0.74 $ 1.04 $ 0.41 $ 1.85 $ --
(0.80)
Distributions to shareholders:
Net investment income (0.55) (0.59) (0.62) (0.64) (0.64)
Net realized gain (0.34) (0.24) (0.19) (0.09) $ --
--------- --------- -------- --------- ---------
Net increase (decrease) in net asset value $ (0.15) $ 0.21 $ (0.40) $ 1.12 (1.44)
--------- --------- -------- --------- ---------
Net asset value, end of year $ 12.02 $ 12.17 $ 11.96 $ 12.36 $ 11.24
========= ========= ======== ========= =========
Total return* 6.20% 8.94% 3.57% 16.84% (6.38)%
Ratio of net expenses to average net assets 0.93%+ 0.93%+ 0.92%+ 0.91%+ 0.91%
Ratio of net investment income to average net assets 4.48%+ 4.87%+ 5.16%+ 5.37%+ 5.37%
Portfolio turnover rate 52% 22% 44% 35% 55%
Net assets, end of year (in thousands) $ 393,390 $ 413,856 $ 441,733 $ 476,584 $ 452,661
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.92% 0.91% 0.90% 0.89% --
Net investment income 4.49% 4.89% 5.18% 5.39% --
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year Year 4/28/95
Ended Ended Ended to
CLASS B 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.09 $ 11.88 $ 12.31 $ 11.81
---------- ---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.46 $ 0.50 $ 0.53 $ 0.35
Net realized and unrealized gain
(loss) on investments 0.18 0.44 (0.22) 0.58
---------- ---------- ---------- ----------
Net increase from investment operations $ 0.64 $ 0.94 $ 0.31 $ 0.93
Distributions to shareholders:
Net investment income (0.46) (0.49) (0.53) (0.34)
In excess of net investment income -- -- (0.02) --
Net realized gain (0.34) (0.24) (0.19) (0.09)
---------- ---------- ---------- ----------
Net increase (decrease) in net asset value $ (0.16) $ 0.21 $ (0.43) $ 0.50
---------- ---------- ---------- ----------
Net asset value, end of period $ 11.93 $ 12.09 $ 11.88 $ 12.31
========== ========== ========== ==========
Total return* 5.43% 8.16% 2.66% 7.94%
Ratio of net expenses to average net assets 1.64%+ 1.68%+ 1.67%+ 1.72%**+
Ratio of net investment income to
average net assets 3.73%+ 4.12%+ 4.38%+ 4.38%**+
Portfolio turnover rate 52% 22% 44% 35%
Net assets, end of period (in thousands) $ 10,790 $ 5,588 $ 4,792 $ 2,069
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.63% 1.66% 1.65% 1.65%**
Net investment income 3.74% 4.14% 4.40% 4.45%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
24 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year 1/31/96
Ended Ended to
CLASS C 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C>
Net asset value, beginning of period $ 12.11 $ 11.88 $ 12.32
--------- --------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.46 $ 0.49 $ 0.49
Net realized and unrealized gain
(loss) on investments 0.17 0.47 (0.24)
--------- --------- ---------
Net increase from investment
operations $ 0.63 $ 0.96 $ 0.25
Distributions to shareholders:
Net investment income (0.46) (0.49) (0.49)
In excess of net investment income -- -- (0.01)
Net realized gain (0.34) (0.24) (0.19)
--------- --------- ---------
Net increase (decrease) in net
asset value $ (0.17) $ 0.23 $ (0.44)
--------- --------- ---------
Net asset value, end of period $ 11.94 $ 12.11 $ 11.88
========= ========= =========
Total return* 5.33% 8.32% 2.19%
Ratio of net expenses to average
net assets 1.63%+ 1.70%+ 1.71%**+
Ratio of net investment income to
average net assets 3.72%+ 4.04%+ 4.34%**+
Portfolio turnover rate 52% 22% 44%
Net assets, end of period (in
thousands) $ 3,262 $ 1,643 $ 383
Ratios assuming reduction for
fees paid indirectly:
Net expenses 1.60% 1.67% 1.69%**
Net investment income 3.75% 4.07% 4.36%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly. The accompanying
notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements. 25
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/98
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Tax-Free Income Fund (the Fund) is a Delaware business trust registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek a high level
of income exempt from federal income tax, consistent with preservation of
capital.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
The shares of Class A, Class B and Class C each represent an interest in the
same portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidations, except that each class of shares can
bear different transfer agent and distribution fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B and Class C share-holders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to, among
other things, make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the report-ing periods. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund, which are in conformity with those generally
accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Securities are valued at
prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings, and
valuations may be supplemented by dealers and other sources, as required.
Market discount and premium are accreted or amortized daily on a
straight-line basis. Original issue discount is accreted daily into
interest income on a yield-to-maturity basis with a corresponding increase
in the cost basis of the security. Interest income is recorded on the
accrual basis. Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
It is the Fund's practice to first select for sale those securities
26
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
that have the highest cost and also qualify for long-term capital gain or
loss treatment for tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareholders. Therefore, no federal tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
In order to comply with federal income tax regulations, the Fund has
designated $10,764,915 as a capital gain dividend for the purposes of the
dividend paid deduction.
In order to comply with federal income tax regulations, the Fund has
designated $18,401,335 as tax-exempt interest dividends. For purposes of
the corporate dividend exclusion, none of the distributions per share
qualify for the exclusion.
C. Fund Shares
The Fund records sales and repurchases of shares on trade date. Net
losses, if any, as a result of cancellations, are absorbed by Pioneer
Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and
an indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned
$50,254 in underwriting commissions on the sale of fund shares during the
year ended December 31, 1998.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid
to the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each
class and the ratable allocation of related out-of-pocket expense (see
Note 3). Income, common expenses and realized and unrealized gains and
losses are calculated at the Fund level and allocated daily to each class
of shares based on the respective percentage of adjusted
27
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
net assets at the beginning of the day.
The Fund declares as daily dividends substantially all of its net
investment income. All dividends are paid on a monthly basis. Short-term
capital gain distributions, if any, may be declared with the daily
dividends. Distributions to shareholders are recorded as of the
ex-dividend date. Distributions paid by the Fund with respect to each
class of shares are calculated in the same manner, at the same time, and
in the same amount, except that Class A, Class B and Class C shares can
bear different transfer agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM) (formerly Pioneering Management
Corp.), the Fund's investment adviser, manages the Fund's portfolio and is a
wholly owned subsidiary of PGI. Management fees are calculated daily at the
annual rate of 0.50% of the Fund's average daily net assets up to $250 million;
0.48% of the next $50 million; and 0.45% of the excess over $300 million.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At December 31, 1998, $192,422 was payable to
PIM related to management fees, administrative and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer agent
and shareholder services to the Fund at negotiated rates. Included in due to
affiliates is $62,662 in transfer agent fees payable to PSC at December 31,
1998.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class C
shares. Included in due to affiliates is $102,930 in distribution fees payable
to PFD at December 31, 1998.
28
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Class B shares that are redeemed within six years of purchase are subject to a
CDSC at declining rates beginning at 4.0%, based on the lower of cost or market
value of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the year ended December 31, 1998, CDSCs in the amount of $20,659 were
paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended December 31, 1998,
the Fund's expenses were reduced by $54,197 under such arrangements.
6. Line of Credit Facility
Effective April 14, 1998, the Fund, along with certain other funds in the
Pioneer Family of Funds (the Funds), collectively participate in a $50 million
committed, unsecured revolving line of credit facility. Borrowings are used
solely for temporary or emergency purposes. The Fund may borrow up to the lesser
of $50 million or the limits set by its prospectus for borrowings. Interest on
collective borrowings of up to $25 million is payable at the Federal Funds Rate
plus 3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowing exceeds $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated among such
Funds based on their respective borrowing limits. For the period ended December
31, 1998, the Fund had no borrowings under this agreement.
7. Other
On December 31, 1998, the Fund filed a registration statement with the
Securities and Exchange Commission for the purpose of registering shares to be
issued in connection with a proposed tax-free reorganization between the Fund
and Pioneer Intermediate Tax-Free Fund. This proposed reorganization is subject
to approval by shareowners of Pioneer Intermediate Tax-Free Fund at a meeting in
March 1999. If approved, shares of the Fund will be issued in exchange for the
assets and liabilities of Pioneer Intermediate Tax-Free Fund.
29
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareowners and the Board of Trustees of Pioneer Tax-Free Income Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Tax-Free Income Fund as of December 31, 1998, and the
related statement of operations, the statements of changes in net assets and the
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1998, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Tax-Free Income Fund as of December 31, 1998, the results of its
operations, the changes in its net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 12, 1999
30
<PAGE>
Pioneer Tax-Free Income Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees
John F. Cogan, Jr.
Mary K. Bush
Richard H. Egdahl, M.D.
Margaret B.W. Graham
John W. Kendrick
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Officers
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
John A. Boynton, Treasurer
Joseph P. Barri, Secretary
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
31
<PAGE>
- --------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
9O-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as you
meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
32
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the funds you have
chosen. Over time, your investment will be shifted out of the original fund.
(Automatic Exchange is available for originating accounts with a balance of
$5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applica- ble
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month you want. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or more.)
33
<PAGE>
- --------------------------------------------------------------------------------
RETIREMENT PLANS FROM PIONEER
- --------------------------------------------------------------------------------
Pioneer has a long history of helping people work toward their retirement goals,
offering plans suited to the individual investor and businesses of all sizes.
For more information on Pioneer retirement plans, contact your investment
professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Account (IRA)
Traditional IRA
A Traditional IRA allows anyone under age 701/2 with earned income to contribute
up to $2,000 annually. Spouses may contribute up to $2,000 annually into a
separate IRA, for a total of $4,000 per year for a married couple. Earnings are
tax-deferred, and contributions may be tax-deductible.
Roth IRA
Contributions, up to $2,000 a year per person in earned income, are not
tax-deductible, but earnings are tax-free for qualified withdrawals. You can
contribute beyond age 701/2.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $9,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees)
401(k) or IRA Plan
Businesses with 100 or fewer eligible employees can establish either plan; both
resemble the traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and an
employer contribution is required.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
34
<PAGE>
403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their salary,
before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must contribute
the same percentage of pay for themselves and any eligible employees;
contributions are made directly to employees' IRAs. SEPs are easy to administer
and can be an especially good choice for firms with few or no employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and vesting
schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are flexi- ble,
but age-weighted plans allocate contributions based on both age and salary.
Age-weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit sharing plans, but allow or higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
35
<PAGE>
- --------------------------------------------------------------------------------
THE PIONEER FAMILY OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds
United States
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Cash Reserves Fund
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
International/Global
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust
Tax-Free
Pioneer Tax-Free Income Fund
Money Market Fund
Pioneer Cash Reserves Fund
36
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
<PAGE>
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, propectuses, applications
and service forms 1-800-225-6292
FactFone(sm) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current Fund prospectus.
- ------- Pioneer Investment Management, Inc.
[LOGO] 60 State Street
PIONEER Boston, Massachusetts 02109
- ------- www.pioneerfunds.com
0299-6035
(C) Pioneer Funds Distributor, Inc.
[LOGO] Printed on Recycled Paper
