<PAGE>
[logo]
PIONEER
Pioneer
Tax-Free
Income Fund
SEMIANNUAL REPORT 6/30/00
<PAGE>
Table of Contents
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 22
Notes to Financial Statements 29
Trustees, Officers and Service Providers 33
Retirement Plans from Pioneer 34
Programs and Services for Pioneer Shareowners 36
</TABLE>
<PAGE>
Pioneer Tax-Free Income Fund
LETTER FROM THE CHAIRMAN 6/30/00
Dear Shareowner,
--------------------------------------------------------------------------------
For over a year, the Federal Reserve has been trying to suppress inflationary
pressures and restrain economic growth in the U.S. by raising short-term
interest rates. Because they represent increased costs, higher interest rates
cut into corporate profits.
With the possibility of a slowing economy and an uncertain profit outlook
overhanging the stock market, investors shifted from sector to sector in the
first half of 2000 looking for attractive opportunities. Heightened stock market
volatility was the result. Bonds also lost luster, because existing,
lower-paying issues could not compete with the higher rates that now prevail. By
summer, we began to see evidence that the Fed's tactics were having some impact,
as key statistics hinted at a contraction of the economy's growth rate.
Volatile markets should not sidetrack your plans for dealing with your essential
financial goals. Whatever your long-range needs may be - money for a child's
education, funding a comfortable retirement, or some other cherished objective -
those needs remain in place no matter what the market may do this week or next
month. For that reason, it makes sense to focus your investment strategy beyond
interim ups and downs.
Mid-year is a good time to talk to your financial representative to review what
has been happening and to make sure your strategy is intact. Part of that
discussion should be devoted to your portfolio's diversification. Do you have a
blend of stocks and bonds that you are comfortable with and that can help you
meet your goals? Or is it time to make adjustments? Be sure to include your IRAs
and other retirement vehicles when you evaluate your overall portfolio.
I hope you will take time to read the following discussion with Sherman Russ,
co-head of Pioneer's fixed-income team. It's an excellent way to understand the
Fund's performance during the past six months and to learn about expectations
for the months ahead. If you have questions or would like more information about
your fund, visit our web site at www.pioneerfunds.com.
Respectfully,
/S/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Tax-Free Income Fund
PORTFOLIO SUMMARY 6/30/00
Portfolio Quality
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[pie chart]
AAA 63.9%
AA 22.1%
A 11.9%
Commercial
Paper 2.1%
Portfolio Maturity
--------------------------------------------------------------------------------
(Effective life as a percentage of total investment portfolio)
[pie chart]
0-1 Years 2.1%
1-3 Years 6.1%
3-6 Years 27.2%
6-8 Years 13.2%
8-10 Years 15.3%
10+ Years 36.1%
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of debt holdings)
<TABLE>
<S> <C> <C>
1. Metropolitan Pier & Exposition Authority Dedicated State Tax
Revenue, 8.5%, 6/15/06 2.86%
2. McGee Creek Authority Water Revenue, 6.0%, 1/1/23 2.33
3. Hastings Electric System Revenue, 6.3%, 1/1/19 2.24
4. Will County, Illinois Environmental Revenue, 6.4%, 4/1/26 2.13
5. South East Public Service Authority, 5.0%, 7/1/15 1.79
6. Walled Lake School District General Obligation, Series I, 5.5%, 5/1/22 1.60
7. Massachusetts State General Obligation, Series B, 7.0%, 7/1/09 1.55
8. South Carolina Public Service Authority Revenue, 6.625%,
Prerefunded, 7/1/02 1.53
9. Grand Island Sanitation Sewer Revenue, 6.0%, 4/1/14 1.48
10. Illinois State General Obligation, 5.75%, 5/1/21 1.44
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Tax-Free Income Fund
PERFORMANCE UPDATE 6/30/00 CLASS A SHARES
Share Prices and Distributions
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 6/30/00 12/31/99
<S> <C> <C>
$ 11.18 $ 10.98
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(12/31/99 - 6/30/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ 0.258 - -
</TABLE>
Investment Returns
--------------------------------------------------------------------------------
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.
Average Annual Total Returns
(As of June 30, 2000)
<TABLE>
<CAPTION>
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
10 Years 6.57% 6.08%
5 Years 4.99 4.03
1 Year 1.95 -2.62
</TABLE>
* Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
Growth of $10,000
[mountain chart]
<TABLE>
<CAPTION>
Pioneer Tax-Free Lehman Brothers Municipal
Income Fund* Bond Index
<S> <C> <C>
6/30/90 9550 10000
6/30/91 10374 10901
11703 12186
13162 13643
6/30/94 13090 13667
14142 14872
14916 15859
6/30/97 16083 17171
17451 18657
17698 19146
6/30/00 18043 19765
</TABLE>
[end mountain chart]
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
PERFORMANCE UPDATE 6/30/00 CLASS B SHARES
Share Prices and Distributions
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 6/30/00 12/31/99
<S> <C> <C>
$ 11.10 $ 10.90
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(12/31/99 - 6/30/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ 0.219 - -
</TABLE>
Investment Returns
--------------------------------------------------------------------------------
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 June 30, 2000)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life of Fund
(4/28/95) 4.35% 4.20%
5 Years 4.19 4.03
1 Year 1.12 -2.76
</TABLE>
* 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.
Growth of $10,000
[mountain chart]
<TABLE>
<CAPTION>
Pioneer Tax-Free Lehman Brothers Municipal
Income Fund* Bond Index
<S> <C> <C>
4/95 10000 10000
6/95 10155 10229
10794 10957
6/96 10617 10908
11081 11443
6/97 11368 11811
11985 12497
6/98 12244 12832
12635 13307
6/99 12331 13169
12002 13013
6/00 12375 13595
</TABLE>
[end mountain chart]
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
PERFORMANCE UPDATE 6/30/00 CLASS C SHARES
Share Prices and Distributions
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Asset Value
per Share 6/30/00 12/31/99
<S> <C> <C>
$ 11.07 $ 10.91
</TABLE>
<TABLE>
<CAPTION>
Distributions per Share Income Short-Term Long-Term
(12/31/99 - 6/30/00) Dividends Capital Gains Capital Gains
<S> <C> <C> <C>
$ 0.247 - -
</TABLE>
Investment Returns
--------------------------------------------------------------------------------
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 June 30, 2000)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life of Fund
(1/31/96) 3.22% 3.22%
1 Year 1.10 1.10
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
Growth of $10,000
[mountain chart]
<TABLE>
<CAPTION>
Pioneer Tax-Free Lehman Brothers Municipal
Income Fund* Bond Index
<S> <C> <C>
1/96 10000 10000
9766 9805
9791 9880
10006 10107
10219 10364
10148 10340
6/97 10493 10697
10792 11020
11070 11309
11137 11449
11300 11623
11667 11980
12/98 11660 12052
11665 12142
11379 11928
11226 11880
11086 11787
11393 12130
6/30 11504 12313
</TABLE>
[end mountain chart]
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
PORTFOLIO MANAGEMENT DISCUSSION 6/30/00
The climate for fixed-income investments strayed far from the norm during the
first six months of 2000, yet offered attractive opportunities for municipal
bond investors. In the following conversation, Sherman B. Russ, co-head of
Pioneer's fixed-income management team, discusses some of the factors that
impacted the municipal bond market and your Fund.
Q. How did the Fund perform over the period?
A. Pioneer Tax-Free Income Fund rewarded shareholders with solid performance.
For the six months ended June 30, 2000, Class A shares generated a total
return of 4.23%, Class B shares 3.89% and Class C shares 3.78%, all at net
asset value. This performance is in line with the 3.95% average return for
the same period of the 277 general municipal debt funds tracked by Lipper,
Inc. (Lipper is an independent firm that tracks mutual fund performance.)
Your Fund also provided an attractive level of tax-free income while
maintaining high credit quality. (Quality ratings apply to underlying
portfolio securities, not Fund shares.) Class A shares delivered a 30-day
tax-free yield of 4.36%, as of June 30, 2000. This translates into a taxable
equivalent yield of 7.22% for investors in the 39.6% maximum federal tax
bracket.
Q. Despite a series of interest rate increases by the Federal Reserve Board,
the environment for municipal bonds was surprisingly favorable. Please
discuss how this affected tax-free bonds.
A. Concerned that the high rate of economic growth might be unhealthy and lead
to inflation, the Federal Reserve continued its program of tightening
monetary policy by raising short-term interest rates three times during the
first half of the year. Despite these rate hikes, however, fixed income
investments fared surprisingly well. (Most types of bonds tend to lose value
when interest rates rise.) The economy continued to prosper and inflation -
a major concern of the bond market - remained under control.
The fixed income market was also bolstered in the early part of the period
by the U.S. Treasury Department's announcement that it was buying back
long-term debt. This created a huge demand for long-term Treasuries, driving
up prices, and leading to an inverted
6
<PAGE>
Pioneer Tax-Free Income Fund
yield curve (where yields for short-term bonds are higher than those for
long-term bonds.) Because the municipal bond market is closely tied to the
Treasury bond market, as yields for long-term Treasuries fell, so too did
yields for long-term municipals. This drop in yields, and corresponding
increase in prices, meant that long-term municipal bonds, and to a lesser
degree intermediate-term bonds, performed well during the period.
In addition, the municipal bond market benefited from robust economic growth
and low inflation. Tax revenue continued to climb, increasing the cash flow
of many state and local governments and improving the fiscal health and
creditworthiness of many municipalities.
Q. What strategies did you use in managing the Fund?
A. During the period, we sought to improve the yield profile of the portfolio
without sacrificing total return potential. We reduced our exposure to
AAA-rated bonds, focusing instead on AA- or A-rated issues to boost the
Fund's income level.
We took steps to trim our position in prerefunded bonds in favor of higher
yielding issues. When a bond is prerefunded, it is retired prior to its
stated maturity date. New bonds pledged by high quality, liquid securities -
typically U.S. Treasuries - are issued to retire the existing ones. Often,
the bonds are upgraded to AAA to reflect the quality of the pledged
securities. But, because the bonds are AAA-rated, they offer less income
potential than bonds of slightly lower quality. (Ratings apply to underlying
portfolio securities, not Fund shares.)
We also kept a watchful eye on interest rates. As inflation fears heated up,
and it became clear that the Federal Reserve would maintain a tight rein on
rates, we adopted a defensive policy, gradually shortening the Fund's
duration. Duration is a measure of a bond's price sensitivity to interest
rate changes. In general, the shorter a bond's duration, the greater the
potential for price appreciation when interest rates rise, and conversely,
the greater the risk of price loss when interest rates fall.
7
<PAGE>
Pioneer Tax-Free Income Fund
PORTFOLIO MANAGEMENT DISCUSSION 6/30/00 (continued)
Finally, we avoided hospital and health care bonds entirely - which suffered
dramatically during the period. Your Fund also benefited from minimal
exposure to AMT (Alternative Minimum Tax) bonds, which underperformed early
in the year.
Q. What is your outlook for the municipal bond market and the Fund in the
months ahead?
A. Although the economy has shown some signs of slowing, the general consensus
is that growth has remained strong enough that the Federal Reserve will
raise interest rates at least once more this year. If this happens, we may
begin to see greater economic slowing - a positive for the bond market.
While the past couple of years have been less than exciting for fixed-income
investors, we believe that bonds deserve a place in a well diversified
portfolio. We don't believe that stocks can continue to deliver the generous
returns that investors have become accustomed to in recent years. Should the
stock market exhibit the volatility of the past several months, we believe
that bond investors will be rewarded for their patience. Now may be a good
time for investors to consider reallocating a portion of their assets to
fixed-income securities, including municipal bonds for those investors in
higher tax brackets.
In fact, at current prices and yields, the municipal bond market continues
to offer attractive long-term value. We believe your Fund is a wise choice
for investors seeking tax-advantaged income from a high quality portfolio of
municipal bonds.
8
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
TAX-EXEMPT OBLIGATIONS - 97.9%
Arizona - 3.4%
$1,000,000 AA/Aa Arizona State Transportation Board
Highway Revenue, 6.0%, 7/1/08 $ 1,070,740
1,500,000 AAA/Aaa Kyrene School District, 6.0%, 7/1/14 1,549,965
1,000,000 AAA/Aaa Maricopa County School District,
7.0%, 7/1/07 1,115,000
1,000,000 AAA/Aaa Maricopa County School District,
7.0%, 7/1/08 1,106,770
1,000,000 AA-/Aa Phoenix Civic Improvement
Corporation Water System
Revenue, 6.5%, 7/1/06 1,085,040
1,000,000 AA/Aa2 Salt River Project Agricultural
Improvement and Power District
Revenue, 5.75%, 1/1/07 1,047,410
2,400,000 AAA/Aaa Scottsdale Memorial Hospital, 5.5%,
9/1/12 2,472,888
2,200,000 AAA/Aaa Tempe School District, 7.0%, 7/1/08 2,499,706
-----------
$11,947,519
-----------
California - 0.3%
1,000,000 A+/Aa3 California State General Obligation,
6.0%, 9/1/09 $ 1,092,750
-----------
Colorado - 3.2%
425,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-3, 7.0%, 11/1/16 $ 451,958
470,000 NR/Aa2 Colorado Housing Finance Authority,
Series C-2, 7.45%, 6/1/17 499,727
1,555,000 NR/Aa2 Colorado Housing Finance Authority,
Series B-3, 6.55%, 5/1/25 1,629,795
2,590,000 NR/Aa2 Colorado Housing Finance Authority,
Series A-1, 7.4%, 11/1/27 2,832,787
1,050,000 NR/Aa2 Colorado Housing Finance Authority,
Series B-2, 7.45%, 11/1/27 1,111,100
500,000 NR/Aa2 Colorado Housing Finance Authority,
Series C-1, 7.55%, 11/1/27 519,935
3,575,000 AAA/Aaa Douglas County School District
Region 1, 7.0%, 12/15/13 4,165,697
-----------
$11,210,999
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Connecticut - 0.3%
$1,000,000 AA-/Aa3 Connecticut State General Obligation,
6.0%, 10/1/04 $1,049,500
----------
Delaware - 0.4%
1,350,000 NR/A1 State of Delaware Housing Authority
Revenue, 6.45%, 7/1/13 $1,368,724
----------
District of Columbia - 1.2%
4,550,000 AAA/Aaa District of Columbia Water & Sewer
Authority, 5.5%, 10/1/23+ $4,393,389
----------
Florida - 2.5%
1,275,000 A/NR Clearwater Housing Authority, 5.4%,
5/1/13 $1,219,168
1,000,000 AA/Aa3 Gainesville Florida Utilities System
Revenue, 5.75%, 10/1/06 1,049,060
4,370,000 AAA/Aaa Hillsborough County Revenue, 5.5%,
7/1/14 4,451,282
770,000 NR/Aaa Manatee County Housing Revenue,
7.2%, 5/1/28 834,487
1,500,000 NR/Aaa Martin County Florida Utilities, 5.0%,
10/1/18 1,392,945
----------
$8,946,942
----------
Illinois - 14.2%
5,000,000 AAA/Aaa Chicago Board of Education, 5.75%,
12/1/27 $4,902,400
3,830,000 AAA/Aaa Chicago Illinois Board of Education
School Reform Board, 5.25%
12/1/17 3,702,576
5,000,000 AAA/Aaa Chicago Illinois Public Building
Commercial Building Revenue,
5.25%, 12/1/15 4,886,150
1,490,000 NR/Aaa Chicago Illinois Single Family
Mortgage, 6.3%, 9/1/29 1,504,319
1,730,000 NR/Aaa Chicago Illinois Single Family
Mortgage, 6.45%, 9/1/29 1,755,898
1,500,000 AAA/Aaa Chicago Lakefront Millennium Parking
Facilities, 5.125%, 1/1/28 1,336,635
1,000,000 AA+/Aa1 Illinois Educational Facilities Authority,
Northwestern University Revenue,
5.5%, 12/1/13 1,015,820
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Illinois - (continued)
$1,145,000 A+/A1 Illinois Housing Development
Authority Revenue Multi-Family
Housing, 7.0%, Prerefunded,
7/1/21* $ 1,330,570
5,000,000 AAA/Aaa Illinois State General Obligation,
5.75%, 5/1/21 4,981,500
8,355,000 AAA/Aaa Metropolitan Pier & Exposition
Authority Dedicated State Tax
Revenue, 8.5%, 6/15/06 9,855,986
4,015,000 A+/Aaa Metropolitan Pier & Exposition
Authority Dedicated State Tax
Revenue, 6.5%, 6/15/27 4,275,413
3,000,000 AAA/Aaa University of Illinois Revenue, 5.75%,
1/15/16 3,046,110
7,185,000 AA/Aa2 Will County, Illinois Environmental
Revenue, 6.4%, 4/1/26 7,343,286
-----------
$49,936,663
-----------
Indiana - 4.3%
900,000 AAA/Aaa Goshen Multi-School Building Corp.,
5.6%, 1/15/16** $ 931,024
750,000 AAA/NR Indiana Bond Bank State Revolving
Fund, 6.75%, 2/1/17 812,220
965,000 NR/Aaa Indiana State Housing Finance
Authority, Single Family Mortgage
Revenue, 5.95%, 7/1/13 983,798
1,000,000 AAA/Aaa Indiana University Revenue, 5.8%,
11/15/10 1,050,030
1,400,000 A+/NR Indianapolis Local Public
Improvement Board Revenue,
6.75%, 2/1/14 1,571,080
3,400,000 AA/Aa Indianapolis Local Public
Improvement Board Revenue,
6.0%, 1/10/20 3,561,398
1,000,000 A+/A Lawrence Township Metropolitan
School District Revenue, 6.75%,
7/5/13 1,125,720
3,200,000 AA-/Aa2 Petersburg Indiana Pollution and
Control Revenue, 5.4%, 8/1/17 3,147,296
2,000,000 NR/Aaa Sarah Scott Middle School Revenue,
5.75%, 1/15/19 2,002,600
-----------
$15,185,166
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Kansas - 0.5%
$1,500,000 AA+/Aa2 Kansas State Department
Transportation Highway Revenue,
6.125%, 9/1/09 $1,621,635
----------
Kentucky - 0.3%
1,095,000 AAA/Aaa Kenton County Water District #1,
5.8%, 2/1/15 $1,127,073
----------
Louisiana - 0.9%
3,000,000 AAA/Aaa New Orleans Home Mortgage
Authority, 6.25%, 1/15/11+ $3,248,850
----------
Maine - 0.7%
1,305,000 AA/Aa2 Maine State Housing Authority,
6.05%, 11/15/20 $1,297,340
1,000,000 AAA/Aaa Maine State Turnpike Authority
Turnpike Revenue, 6.0%, 7/1/05 1,052,810
----------
$2,350,150
----------
Maryland - 0.6%
2,000,000 NR/Aa2 Maryland State Housing and
Community Department, 5.9%,
9/1/19 $1,986,200
----------
Massachusetts - 5.7%
1,500,000 AA-/Aa2 Massachusettes State Conservation
Loan, Series B, 6.0%, 6/1/14 $1,578,930
3,000,000 AAA/Aaa Massachusetts State General
Obligation, 6.5%, 11/1/07+ 3,226,560
4,750,000 AAA/Aaa Massachusetts State General
Obligation, Series B, 7.0%, 7/1/09 5,350,400
15,000 AAA/Aaa Massachusetts State Housing
Finance Agency, 5.95%, 7/1/18 15,109
1,000,000 AAA/Aaa Massachusetts State Water Pollution
Abatement Trust Sewer Revenue,
6.0%, 2/1/07 1,065,870
1,000,000 AAA/Aaa Plymouth County Massachusetts
Correctional Facility, 5.0%, 4/1/22 885,950
2,000,000 AAA/Aaa South Essex Massachusetts Sewer
District, Series B, 5.25%, 6/15/18 1,906,080
1,325,000 AAA/Aaa Worcester General Obligation, 6.15%,
5/1/09 1,422,348
1,440,000 AAA/Aaa Worcester General Obligation, 6.2%,
5/1/10 1,548,879
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Massachusetts - (continued)
$1,460,000 AAA/Aaa Worcester General Obligation, 6.25%,
5/1/11 $ 1,573,500
1,450,000 AAA/Aaa Worcester General Obligation, 6.3%,
5/1/12 1,565,826
-----------
$20,139,452
-----------
Michigan - 3.5%
1,000,000 AAA/Aaa Detroit Michigan Water Supply
Revenue, 5.75%, 7/1/11 $ 1,050,780
3,445,000 AAA/Aaa Jenison Michigan Public Schools,
5.25%, 5/1/16 3,372,276
2,500,000 AA+/Aa1 Michigan Municipal Bond Authority,
5.625%, 10/1/19 2,478,000
5,715,000 AAA/Aaa Walled Lake School District General
Obligation, Series I, 5.5%, 5/1/22 5,517,433
-----------
$12,418,489
-----------
Minnesota - 0.7%
1,360,000 AA+/Aa2 Minnesota State Housing Finance
Agency, 6.55%, 7/11/11+ $ 1,396,530
990,000 AA/Aa2 Minnesota State Housing Finance
Agency, 6.9%, 8/1/12 1,024,600
-----------
$ 2,421,130
-----------
Missouri - 3.4%
2,100,000 AAA/Aaa Missouri Environmental Improvement
and Energy Resources Authority,
6.05%, 7/1/16 $ 2,164,848
2,820,000 AAA/NR Missouri Housing Development,
Series B-2, 6.4%, 3/1/29+ 2,834,015
5,000,000 NR/Aaa Northwest Missouri University, 4.7%,
6/1/18 4,362,600
2,500,000 AAA/Aaa Poplar Bluff School District, 5.8%,
3/1/11 2,549,650
-----------
$11,911,113
-----------
Montana - 0.3%
1,250,000 NR/A2 Montana State Higher Education
Assistance Corporation Student
Loan Revenue, 5.5%, 12/1/31 $ 1,157,225
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Nebraska - 4.0%
$5,000,000 NR/A Grand Island Sanitation Sewer
Revenue, 6.0%, 4/1/14 $ 5,116,450
7,500,000 A/A Hastings Electric System Revenue,
6.3%, 1/1/19 7,717,050
1,325,000 AAA/Aaa Municipal Energy Agency of Nebraska
Revenue, 6.0%, 4/1/08 1,406,554
-----------
$14,240,054
-----------
Nevada - 0.5%
35,000 AA/Aa2 Nevada Housing Division Single
Family Program Revenue, 8.0%,
4/1/09 $ 35,104
1,970,000 AA/Aa2 Nevada State Colorado River, 5.25%,
9/15/22 1,826,229
-----------
$ 1,861,333
-----------
New Hampshire - 0.8%
1,000,000 NR/Aaa New Hampshire Higher Educational &
Health Facilities, 5.0%, 6/1/28 $ 888,590
1,800,000 NR/Aa3 New Hampshire State Housing
Finance Authority, 6.125%, 7/1/20 1,809,000
-----------
$ 2,697,590
-----------
New Jersey - 1.1%
1,000,000 AA+/Aa1 New Jersey Sales Tax General
Obligation, 5.8%, 2/15/07 $ 1,051,480
2,500,000 AAA/Aaa New Jersey Sales Tax Transit Corp.,
6.0%, 9/15/13 2,646,525
-----------
$ 3,698,005
-----------
New Mexico - 1.7%
2,600,000 AA/Aa Bernalillo County Gross Receipts Tax
Revenue, 5.75%, 4/1/21+ $ 2,708,082
1,190,000 AA/Aa1 New Mexico Mortgage Finance
Authority, 6.85%, 7/1/12+ 1,214,097
1,000,000 AAA/NR Rio Rancho New Mexico Water &
Wastewater System Revenue,
4.75%, 5/15/16 890,990
1,200,000 AAA/Aaa University of New Mexico Revenue,
6.55%, 8/15/25 1,298,340
-----------
$ 6,111,509
-----------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
New York - 1.2%
$2,000,000 AA/Aa3 New York City Transitional Financial
Authority Revenue, 5.25%,
11/15/12 $1,998,080
2,350,000 AA/Aa3 New York City Transitional Financial
Authority Revenue, 4.75%,
11/15/18 2,068,376
----------
$4,066,456
----------
North Carolina - 1.0%
1,250,000 AA/NR Charlotte Law Enforcement Project,
6.1%, 12/1/15 $1,289,625
970,000 AA/Aa3 Charlotte-Mecklenburg Hospital
Authority Revenue, 6.25%, 1/1/20 982,435
1,000,000 AAA/Aaa Franklin County Certificate
Participation, 6.625%, 6/1/14 1,081,430
----------
$3,353,490
----------
North Dakota - 1.0%
2,000,000 AAA/Aaa Grand Forks Health Care Systems,
5.6%, 8/15/17 $1,969,160
1,615,000 NR/Aa3 North Dakota State Housing Finance
Agency Revenue, 5.8%, 7/1/18+ 1,547,202
----------
$3,516,362
----------
Ohio - 1.9%
1,050,000 AAA/Aaa Bedford, Ohio County School District,
6.25%, 12/1/13 $1,098,258
2,870,000 AAA/Aaa Cleveland Ohio General Obligation,
5.75%, 8/1/13 3,007,215
500,000 AA-/Aa3 Ohio State Building Authority
Revenue, 6.0%, 10/1/08 534,820
1,000,000 AAA/Aaa Ohio State Turnpike Commision
Revenue, 5.5%, 2/15/16 1,011,450
1,000,000 AAA/Aaa Ohio State Water Development
Authority Revenue, 6.0%, 12/1/06 1,063,310
----------
$6,715,053
----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Oklahoma - 3.5%
$1,500,000 A-/A2 Grand River Dam Authority Revenue,
5.75%, 6/1/06 $ 1,564,755
2,520,000 AAA/Aaa Grand River Dam Authority Revenue,
6.25%, 6/1/11 2,758,014
7,700,000 AAA/Aaa McGee Creek Authority Water
Revenue, 6.0%, 1/1/23 8,042,650
-----------
$12,365,419
-----------
Oregon - 0.9%
2,860,000 A/NR Washington County Unified Sewer
Agency Revenue, 6.2%,
Prerefunded, 10/1/04* $ 3,016,614
-----------
Pennsylvania - 1.1%
1,500,000 AAA/Aaa Allegheny County Sanitary Authority
Revenue, 5.375%, 12/1/24 $ 1,419,090
1,300,000 AAA/Aaa Lycoming County General Obligation,
5.8%, 11/15/22+ 1,371,604
1,300,000 AA/Aa3 Pennsylvania State Higher Education,
4.5%, 7/15/16 1,115,283
-----------
$ 3,905,977
-----------
Puerto Rico - 0.8%
2,650,000 AAA/Aaa Puerto Rico Municipal Financial
Agency, 5.875%, 8/1/14 $ 2,798,638
-----------
Rhode Island - 0.6%
1,575,000 AA+/Aa1 Rhode Island Health & Education,
5.0%, 9/1/23 $ 1,406,192
850,000 AA+/Aa2 Rhode Island Housing & Mortgage
Finance, 6.75%, 10/1/17 864,424
-----------
$ 2,270,616
-----------
South Carolina - 4.6%
1,790,000 AAA/Aaa Beaufort Water & Sewer Revenue,
6.5%, 3/1/13 $ 1,875,902
2,200,000 AA/Aa1 Berkeley County South Carolina
School District, 5.375%, 4/1/14 2,210,582
1,000,000 AA/Aa3 Columbia Waterworks & Sewer
System Revenue, 5.5%, 2/1/09 1,033,810
2,400,000 A/A1 Fairfield County Pollution Control,
6.5%, 9/1/14 2,533,032
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
South Carolina - (continued)
$1,000,000 AA/Aa1 Greenville Waterworks Revenue,
6.0%, 2/1/08 $ 1,066,340
1,250,000 AAA/Aaa South Carolina Grand Strand Water &
Sewer Authority, 6.375%, 6/1/12 1,381,550
5,000,000 AAA/Aaa South Carolina Public Service
Authority Revenue, 6.625%,
Prerefunded, 7/1/02* 5,278,950
730,000 NR/Aa2 South Carolina State Housing
Finance & Development Authority
Revenue, 6.2%, 7/1/09 732,898
-----------
$16,113,064
-----------
South Dakota - 0.7%
1,235,000 NR/A1 South Dakota Conservancy District
Revenue, 5.625%, 8/1/17 $ 1,183,303
1,255,000 AAA/Aaa South Dakota State Lease Revenue,
8.0%, 9/1/05 1,425,743
-----------
$ 2,609,046
-----------
Tennessee - 0.5%
1,565,000 AAA/Aaa Metropolitan Government Nashville &
Davidson County Water & Sewer
Authority, 6.0%, 1/1/07 $ 1,657,194
-----------
Texas - 9.9%
2,600,000 AAA/Aaa Alief Texas Independent School
District, 5.25%, 2/15/17 $ 2,507,648
4,000,000 AAA/Aaa Brazos River Authority Texas
Revocable, 5.05%, 11/1/18 3,552,040
750,000 AAA/Aaa Carroll Texas Independent School
District, 6.75%, 8/15/21 844,950
850,000 AAA/Aaa Carroll Texas Independent School
District, 6.75%, 8/15/22 957,882
2,145,000 AAA/NR Castleberry Independent School
District General Obligation, 5.7%,
8/15/21 2,196,734
1,305,000 NR/Aaa Comal Independent School District
General Obligation, 7.0%, 2/1/07 1,432,760
1,615,000 AAA/Aaa El Paso Texas, 5.875%, 8/15/16 1,649,238
1,720,000 AAA/Aaa Grapevine-Colleyville Independent
School District, 0%, 8/15/12 880,434
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Texas - (continued)
$1,250,000 AAA/Aaa Lamar Texas Conservation
Independent School District,
4.75%, 2/15/20 $ 1,084,112
1,000,000 AA/Aa2 Port Houston Authority General
Obligation, 5.0%, 10/1/05 1,008,190
3,500,000 AAA/Aaa San Antonio Texas Water Revenue,
5.6%, 5/15/21 3,415,650
2,310,000 AAA/Aaa Texas Clear Creek Independent
School District General Obligation,
0%, 2/1/10 1,382,188
2,050,000 NR/Aaa Texas Keller Independent School
District General Obligation, 0%,
8/15/10 1,191,706
1,100,000 AAA/Aaa Texas North Forest School, 6.0%,
8/15/11 1,176,428
2,350,000 AAA/Aaa Texas Nueces River Authority Water
Supply Revenue, 5.5%, 3/1/27 2,251,018
3,000,000 AAA/Aaa Texas Public Finance Authority
Building Revenue, 0%, 2/1/07 2,131,140
5,500,000 AAA/Aaa Texas Public Finance Authority
Building Revenue, 0%, 2/1/08 3,695,725
2,750,000 AAA/Aaa Texas Public Finance Authority
Building Revenue, 0%, 2/1/10 1,645,462
1,500,000 AA/Aa2 Texas State General Obligation, 5.8%,
10/01/04 1,559,880
250,000 AAA/Aaa University of Texas Permanent
University Fund, 8.0%, 7/1/04+ 279,012
-----------
$34,842,197
-----------
Utah - 1.8%
$1,630,000 AAA/NR Utah State University Revenue, 4.7%,
12/1/12 $ 1,508,435
1,615,000 AAA/NR Utah State University Revenue, 4.8%,
12/1/13 1,492,728
3,480,000 AA/NR Weber County Municipal Building
Authority Revenue, 5.75%,
12/15/19 3,427,870
-----------
$ 6,429,033
-----------
Virginia - 5.1%
1,750,000 A+/A1 Chesapeake Water & Sewer System
Revenue, 6.5%, 7/1/12 $ 1,828,242
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Virginia - (continued)
$3,685,000 A+/A1 Chesapeake Water & Sewer System
Revenue, 6.4%, 7/1/17 $ 3,776,941
2,000,000 AAA/Aaa Metro Expressway Authority, 5.25%,
7/15/17 1,936,500
3,000,000 AAA/Aaa Metro Expressway Authority, 5.25%,
7/15/22 2,838,900
6,525,000 AAA/Aaa South East Public Service Authority,
5.0%, 7/1/15 6,188,245
1,500,000 AA+/Aa1 Virginia State Public Building
Authority, 5.75%, 8/1/20 1,505,610
-----------
$18,074,438
-----------
Washington - 7.0%
3,825,000 AAA/Aaa Central Puget Sound Regional
Transportation Authority, 5.25%,
2/1/16 $ 3,729,490
2,820,000 AAA/Aaa Clark County Public Utility District #1
Water Revenue, 5.5%, 1/1/15 2,817,208
5,000,000 AAA/Aaa Clark County School District #37
Vancouver, 5.25%, 12/1/14 4,954,900
1,655,000 AA+/Aa1 King County General Obligation,
6.625%, 12/1/15 1,821,179
1,000,000 AAA/Aaa Northshore School District, 5.75%,
12/1/14 1,014,800
2,250,000 AAA/Aaa Snohomish County Public Utility
District Revenue, 5.7%, 12/1/11+ 2,357,707
2,500,000 NR/Aaa Snohomish County Public Utility
District Revenue, 6.8%, 1/1/20+ 2,786,925
2,000,000 A/NR Vancouver Washington Housing
Authority, 5.5%, 3/1/28 1,772,480
1,000,000 AA+/Aa1 Washington State General Obligation,
6.0%, 5/01/02 1,023,780
2,500,000 AA+/Aa1 Washington State General Obligation,
5.75%, 5/1/13 2,534,925
-----------
$24,813,394
-----------
West Virginia - 1.1%
3,000,000 AAA/Aaa West Virginia State Building
Commission, 5.375%, 7/1/21 $ 2,888,580
1,000,000 AAA/Aaa West Virginia State Housing
Development, 7.05%, 11/1/24 1,039,910
-----------
$ 3,928,490
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Tax-Free Income Fund
SCHEDULE OF INVESTMENTS 6/30/00 (unaudited) (continued)
<TABLE>
<CAPTION>
S&P/
Principal Moody's
Amount Ratings Value
<S> <C> <C> <C>
Wisconsin - 0.7%
$1,430,000 AAA/Aaa Adams-Friendship School District,
6.5%, 4/1/16 $ 1,587,243
1,000,000 AA/Aa2 Wisconsin State General Obligation,
5.3%, 11/1/12 1,009,860
------------
$ 2,597,103
------------
TOTAL INVESTMENT IN TAX-EXEMPT
OBLIGATIONS
(Cost $342,131,981) (a) $345,194,044
------------
Shares
TAX-EXEMPT MONEY MARKET MUTUAL
FUND - 2.1%
7,498,806 Provident Institutional Municipal Fund $ 7,498,806
------------
TOTAL TAX-EXEMPT MONEY MARKET
MUTUAL FUND
(Cost $7,498,806) $ 7,498,806
------------
TOTAL INVESTMENT IN
SECURITIES - 100% $352,692,850
(Cost $349,630,787) (b)(c) ============
</TABLE>
20 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 is partially prerefunded.
NR Not rated.
+ Escrowed to maturity in U.S. government securities.
(a) The concentration of investments by type of obligation/market sector is as
follows:
<TABLE>
<S> <C>
Insured 47.4%
Escrowed in U.S. Government Securities 11.5
General Obligation 9.8
Revenue Bonds:
Education 2.2
Water & Sewer 4.3
Hospital 0.3
Housing 9.3
Pollution Control 3.2
Electric 3.1
Power 1.1
Transportation 1.5
Other 6.3
</TABLE>
(b) At June 30, 2000, the net unrealized gain on investments based on cost for
federal income tax purposes of $349,630,787 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which there
is an excess of value over tax cost $ 8,611,806
Aggregate gross unrealized loss for all investments in which there
is an excess of tax cost over value (5,549,743)
-----------
Net unrealized gain $ 3,062,063
===========
</TABLE>
(c) At December 31, 1999, the Fund had a capital loss carryforward of $1,220,892
which will expire in 2007 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended June 30, 2000, aggregated $30,932,170 and $63,961,529,
respectively.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Tax-Free Income Fund
BALANCE SHEET 6/30/00 (unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $7,498,806) (cost $349,630,787) $352,692,850
Receivables -
Investment securities sold 4,012,013
Fund shares sold 1,526,588
Interest 5,796,730
Other 1,309
------------
Total assets $364,029,490
------------
LIABILITIES:
Payables -
Investment securities purchased $ 3,838,629
Fund shares repurchased 1,235,927
Dividends 405,678
Due to affiliates 273,805
Accrued expenses 135,707
------------
Total liabilities $ 5,889,746
------------
NET ASSETS:
Paid-in capital $359,282,458
Accumulated undistributed net investment income 18,383
Accumulated net realized loss on investments (4,223,160)
Net unrealized gain on investments 3,062,063
------------
Total net assets $358,139,744
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $345,598,562/30,898,567 shares) $ 11.18
============
Class B (based on $11,030,736/993,603 shares) $ 11.10
============
Class C (based on $1,510,446/136,475 shares) $ 11.07
============
MAXIMUM OFFERING PRICE:
Class A $ 11.71
============
</TABLE>
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
STATEMENT OF OPERATIONS (unaudited)
For the Six Months Ended 6/30/00
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $10,286,397
-----------
EXPENSES:
Management fees $885,681
Transfer agent fees
Class A 239,834
Class B 8,751
Class C 2,190
Distribution fees
Class A 436,722
Class B 57,343
Class C 9,245
Administrative fees 49,868
Custodian fees 35,355
Registration fees 23,576
Professional fees 42,588
Printing 37,674
Fees and expenses of nonaffiliated trustees 12,922
Miscellaneous 11,417
--------
Total expenses $ 1,853,166
Less fees paid indirectly (62,752)
-----------
Net expenses $ 1,790,414
-----------
Net investment income $ 8,495,983
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $(1,785,921)
Change in net unrealized loss on investments 8,361,854
-----------
Net gain on investments $ 6,575,933
-----------
Net increase in net assets resulting from operations $15,071,916
===========
</TABLE>
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
Pioneer Tax-Free Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended 6/30/00 and the Year Ended 12/31/99
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended
(unaudited) 12/31/99
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 8,495,983 $ 18,414,343
Net realized loss on investments (1,785,921) (2,437,239)
Change in net unrealized gain or loss on investments 8,361,854 (32,832,549)
------------ -------------
Net increase (decrease) in net assets resulting
from operations $ 15,071,916 $ (16,855,445)
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ($0.26 and $0.51 per share, respectively) $ (8,222,977) $ (17,809,302)
Class B ($0.22 and $0.42 per share, respectively) (230,879) (473,569)
Class C ($0.25 and $0.43 per share, respectively) (41,559) (148,848)
Net realized gain
Class A ($0.00 and $0.02 per share, respectively) - (784,680)
Class B ($0.00 and $0.02 per share, respectively) - (26,846)
Class C ($0.00 and $0.02 per share, respectively) - (5,867)
------------ -------------
Total distributions to shareholders $ (8,495,415) $ (19,249,112)
------------ -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 30,834,355 $ 100,949,129
Reinvestment of distributions 5,911,831 13,627,470
Cost of shares repurchased (68,766,581) (102,330,723)
------------ -------------
Net increase (decrease) in net assets resulting
from fund share transactions $(32,020,395) $ 12,245,876
------------ -------------
Net decrease in net assets $(25,443,894) $ (23,858,681)
NET ASSETS:
Beginning of period 383,583,638 407,442,319
------------ -------------
End of period (including accumulated undistributed
net investment income of $18,383 and $17,815,
respectively) $358,139,744 $ 383,583,638
============ =============
</TABLE>
24 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
<TABLE>
<CAPTION>
'00 Shares '00 Amount
CLASS A (unaudited) (unaudited) '99 Shares '99 Amount
<S> <C> <C> <C> <C>
Shares sold 2,736,112 $ 30,090,387 7,543,435 $ 86,596,005
Reinvestment of distributions 521,737 5,756,428 1,153,857 13,267,232
Less shares repurchased (5,919,962) (65,161,173) (7,867,060) (90,109,075)
---------- ------------ ---------- ------------
Net increase (decrease) (2,662,113) $(29,314,358) 830,232 $ 9,754,162
========== ============ ========== ============
CLASS B
Shares sold 45,094 $ 492,698 629,429 $ 7,279,180
Reinvestment of distributions 12,403 135,828 26,899 306,603
Less shares repurchased (211,971) (2,316,824) (412,353) (4,707,059)
---------- ------------ ---------- ------------
Net increase (decrease) (154,474) $ (1,688,298) 243,975 $ 2,878,724
========== ============ ========== ============
CLASS C
Shares sold 23,000 $ 251,270 608,030 $ 7,073,944
Reinvestment of distributions 1,788 19,575 4,704 53,635
Less shares repurchased (118,003) (1,288,584) (656,171) (7,514,589)
---------- ------------ ---------- ------------
Net decrease (93,215) $ (1,017,739) (43,437) $ (387,010)
========== ============ ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements. 25
<PAGE>
Pioneer Tax-Free Income Fund
FINANCIAL HIGHLIGHTS 6/30/00
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended
(unaudited) 12/31/99
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 10.98 $ 12.02
-------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.26 $ 0.51
Net realized and unrealized gain (loss) on investments 0.20 (1.02)
-------- --------
Net increase (decrease) from investment operations $ 0.46 $ (0.51)
Distributions to shareholders:
Net investment income (0.26) (0.51)
Net realized gain - (0.02)
-------- --------
Net increase (decrease) in net asset value $ 0.20 $ (1.04)
-------- --------
Net asset value, end of period $ 11.18 $ 10.98
======== ========
Total return* 4.23% (4.29)%
Ratio of net expenses to average net assets+ 0.99%** 0.93%
Ratio of net investment income to average net assets+ 4.68%** 4.43%
Portfolio turnover rate 18%** 24%
Net assets, end of period (in thousands) $345,599 $368,559
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.95%** 0.92%
Net investment income 4.72%** 4.44%
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 12.17 $ 11.96 $ 12.36 $ 11.24
-------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.55 $ 0.59 $ 0.62 $ 0.64
Net realized and unrealized gain (loss) on investments 0.19 0.45 (0.21) 1.21
-------- -------- -------- --------
Net increase (decrease) from investment operations $ 0.74 $ 1.04 $ 0.41 $ 1.85
Distributions to shareholders:
Net investment income (0.55) (0.59) (0.62) (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
-------- -------- -------- --------
Net asset value, end of period $ 12.02 $ 12.17 $ 11.96 $ 12.36
======== ======== ======== ========
Total return* 6.20% 8.94% 3.57% 16.84%
Ratio of net expenses to average net assets+ 0.93% 0.93% 0.92% 0.91%
Ratio of net investment income to average net assets+ 4.48% 4.87% 5.16% 5.37%
Portfolio turnover rate 52% 22% 44% 35%
Net assets, end of period (in thousands) $393,390 $413,856 $441,733 $476,584
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 all 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.
+ Ratios assuming no reduction for fees paid indirectly.
26 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
FINANCIAL HIGHLIGHTS 6/30/00
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended Year Ended
(unaudited) 12/31/99 12/31/98
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 10.90 $ 11.93 $ 12.09
------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.22 $ 0.42 $ 0.46
Net realized and unrealized gain (loss) on investments 0.20 (1.01) 0.18
------- ------- -------
Net increase (decrease) from investment operations $ 0.42 $ (0.59) $ 0.64
Distributions to shareholders:
Net investment income (0.22) (0.42) (0.46)
In excess of net investment income - - -
Net realized gain - (0.02) (0.34)
------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (1.03) $ (0.16)
------- ------- --------
Net asset value, end of period $ 11.10 $ 10.90 $ 11.93
======= ======= ========
Total return* 3.89% (5.01)% 5.43%
Ratio of net expenses to average net assets+ 1.76%** 1.70% 1.64%
Ratio of net investment income to average net assets+ 3.92%** 3.66% 3.73%
Portfolio turnover rate 18%** 24% 52%
Net assets, end of period (in thousands) $11,031 $12,520 $10,790
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.74%** 1.69% 1.63%
Net investment income 3.94%** 3.67% 3.74%
<CAPTION>
Year Ended Year Ended 4/28/95 to
12/31/97 12/31/96 12/31/95
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $11.88 $12.31 $11.81
------ ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.50 $ 0.53 $ 0.35
Net realized and unrealized gain (loss) on investments 0.44 (0.22) 0.58
------ ------ ------
Net increase (decrease) from investment operations $ 0.94 $ 0.31 $ 0.93
Distributions to shareholders:
Net investment income (0.49) (0.53) (0.34)
In excess of net investment income - (0.02) -
Net realized gain (0.24) (0.19) (0.09)
------ ------ ------
Net increase (decrease) in net asset value $ 0.21 $(0.43) $ 0.50
------ ------ ------
Net asset value, end of period $12.09 $11.88 $12.31
====== ====== ======
Total return* 8.16% 2.66% 7.94%
Ratio of net expenses to average net assets+ 1.68% 1.67% 1.72%**
Ratio of net investment income to average net assets+ 4.12% 4.38% 4.38%**
Portfolio turnover rate 22% 44% 35%
Net assets, end of period (in thousands) $5,588 $4,792 $2,069
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.66% 1.65% 1.65%**
Net investment income 4.14% 4.40% 4.45%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 27
<PAGE>
Pioneer Tax-Free Income Fund
FINANCIAL HIGHLIGHTS 6/30/00
<TABLE>
<CAPTION>
Six Months
Ended
6/30/00 Year Ended Year Ended Year Ended 1/31/96 to
(unaudited) 12/31/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C>
CLASS C
Net asset value, beginning of period $10.91 $11.94 $12.11 $11.88 $12.32
------ ------ ------ ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.20 $ 0.43 $ 0.46 $ 0.49 $ 0.49
Net realized and unrealized gain (loss) on investments 0.21 (1.00) 0.17 0.47 (0.24)
------ ------ ------ ------ ------
Net increase (decrease) from investment operations $ 0.41 $(0.58) $ 0.63 $ 0.96 $ 0.25
Distributions to shareholders:
Net investment income (0.25) (0.43) (0.46) (0.49) (0.49)
In excess of net investment income - - - - (0.01)
Net realized gain - (0.02) (0.34) (0.24) (0.19)
------ ------ ------ ------ ------
Net increase (decrease) in net asset value $ 0.16 $(1.03) $(0.17) $ 0.23 $(0.44)
------ ------ ------ ------ ------
Net asset value, end of period $11.07 $10.91 $11.94 $12.11 $11.88
====== ====== ====== ====== ======
Total return* 3.78% (4.93)% 5.33% 8.32% 2.19%
Ratio of net expenses to average net assets+ 1.85%** 1.69% 1.63% 1.70% 1.71%**
Ratio of net investment income to average net assets+ 3.87%** 3.62% 3.72% 4.04% 4.34%**
Portfolio turnover rate 18%** 24% 52% 22% 44%
Net assets, end of period (in thousands) $1,510 $2,505 $3,262 $1,643 $ 383
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.82%** 1.65% 1.60% 1.67% 1.69%**
Net investment income 3.90%** 3.66% 3.75% 4.07% 4.36%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
+ Ratios assuming no reduction for fees paid indirectly.
28 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS 6/30/00 (unaudited)
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.
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 has exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B and Class C shareholders, 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 reporting 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 as of trade date. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings. Valuations may
be supplemented by dealers and other sources, as required. Market discount
is accreted daily on a straight-line basis. Original issue discount and
market premium are accreted or amortized daily into interest income on a
yield-to-maturity basis with a corresponding increase or decrease in the
cost basis of the security. Interest income is recorded on the accrual
basis. Temporary cash investments are valued at amortized cost.
29
<PAGE>
Pioneer Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS 6/30/00 (unaudited) (continued)
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 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 income 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.
C. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and an indirect subsidiary of The Pioneer Group, Inc. (PGI), earned
$5,416 in underwriting commissions on the sale of fund shares during the six
months ended June 30, 2000.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset values
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 net assets at the beginning
of the day.
30
<PAGE>
Pioneer Tax-Free Income Fund
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), 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 June 30, 2000, $152,954 was payable to PIM
related to management fees, administrative fees 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 $46,498 in transfer agent fees payable to PSC at June 30, 2000.
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 average daily net assets attributable to Class A
shares 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
31
<PAGE>
Pioneer Tax-Free Income Fund
NOTES TO FINANCIAL STATEMENTS 6/30/00 (unaudited) (continued)
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 $74,353
in distribution fees payable to PFD at June 30, 2000.
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 4.00%, 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 six months ended June 30, 2000, CDSCs in the amount of $36,698 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 six months ended June 30, 2000,
the Fund's expenses were reduced by $62,752 under such arrangements.
6. Line of Credit Facility
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 six months ended June 30, 2000, the Fund had no borrowings under
this agreement.
32
<PAGE>
Pioneer Tax-Free Income Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Eric W. Reckard, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
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)
An IRA is a tax-favored account that allows anyone under age 70-1/2 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
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and became
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $10,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees) - IRA Plan
Businesses with 100 or fewer eligible employees can establish the plan; it
resembles the traditional 401(k), but has no 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 certain 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 flexible, 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 for 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>
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment representative 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(SM) 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.
90-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.
36
<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 other 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 applicable
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.)
37
<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:
<TABLE>
<S> <C>
Account Information, including existing accounts,
new accounts, prospectuses, 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
</TABLE>
This report must be preceded or accompanied by a current Fund prospectus.
[logo]PIONEER
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
8641-00-0800
(Copyright) Pioneer Funds Distributor, Inc.
[recycle symbol] Printed on Recycled Paper
