<TABLE>
PIONEER BOND FUND
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
<S> <C> <C>
LOGO
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
SHERMAN B. RUSS, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
TRUSTEES
JOHN F. COGAN, JR. MARGUERITE A. PIRET PIONEER
RICHARD H. EGDAHL, M.D. DAVID D. TRIPPLE BOND FUND
MARGARET B.W. GRAHAM STEPHEN K. WEST
JOHN W. KENDRICK JOHN WINTHROP
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
SEMIANNUAL REPORT
PRINCIPAL UNDERWRITER DECEMBER 31, 1995
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
- -----------------------------------------------------------
Please call Pioneer for information on:
Existing accounts, new accounts,
prospectuses, applications, and
service forms....................... 1-800-225-6292
Fund yields and prices.............. 1-800-225-4321
Toll-free fax....................... 1-800-225-4240
Retirement plans.................... 1-800-622-0176
Telecommunications Device for the
Deaf (TDD).......................... 1-800-225-1997
- -----------------------------------------------------------
When distributed to persons who are not shareowners of
the Fund, this report must be accompanied by an official
prospectus, which discusses the objectives, policies, sales
charges and other information about the Fund.
0296-2992
[COPYRIGHT]Pioneer Funds Distributor, Inc.
</TABLE>
<PAGE>
DEAR FELLOW SHAREOWNERS,
- --------------------------------------------------------------------------------
Pioneer Bond Fund completed the first half of its 18th fiscal year on December
31, 1995. The favorable investing climate that began early in 1995 continued
during the past six months, translating into continued solid performance for
bonds. Your Fund, too, performed well as it provided shareowners with current
income and capital appreciation.
HOW YOUR FUND PERFORMED
For the six months ended December 31, 1995, we are pleased to report the
following results for Pioneer Bond Fund:
- -- CLASS A SHARES -- The Fund paid shareowners daily dividends totaling
$0.32 per share. The Fund's 30-day yield was 5.12% on December 31,
1995.1 Net asset value stood at $9.62 per share, versus $9.35 six months
ago. The Fund's total return was 6.48% based on net asset value and 1.69%
based on maximum public offering price. Total return reflects the change in
share price and assumes the reinvestment of all distributions at net asset
value.
- -- CLASS B SHARES -- The Fund paid shareowners a total of $0.30 per share in
daily dividends. On December 31, 1995, the Fund's 30-day yield was 4.46%.1
Net asset value stood at $9.56 per share, versus $9.31 six months earlier.
The Fund's total return was 6.02% assuming shares were held throughout the
period and 2.02% if shares were redeemed. Total return reflects the change in
share price and assumes all distributions were reinvested.
<TABLE>
The accompanying chart shows the Fund's total returns for longer time periods.
- --------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(as of December 31, 1995)
<CAPTION>
CLASS A SHARES NET ASSET VALUE PUBLIC OFFERING PRICE*
- -------------- --------------- ----------------------
<S> <C> <C>
Life of Fund
(10/31/78) 9.61% 9.31%
10 Years 8.72 8.22
5 Years 9.47 8.47
1 Year 18.16 12.87
CLASS B SHARES IF HELD IF REDEEMED**
- --------------- ------- -------------
Life of Fund
(4/4/94) 9.10% 6.93%
1 Year 17.10 13.10
- --------------------------------------------------------------
</TABLE>
IMPRESSIVE RESULTS FROM THE BOND MARKET
The United States bond market continued its strong performance over the
six-month period, making 1995 an especially rewarding year for investors.
Weakening economic fundamentals and low inflation provided the backdrop for
long-term interest rates to move down to 5.95% at December 31, versus 6.62% on
June 30. Compared to 1994, when concerns about inflation and the pace of
economic growth caused interest rates to shoot up, conditions in 1995 vastly
improved, helping long-term rates decline.
During the semiannual period, the Federal Reserve (the Fed) lowered the federal
funds rate by 0.25 percentage points on two different occasions -- July 6 and
December 19. The Fed's decision to lower short-term rates was based on mixed
signals about the economy's strength; a number of important economic indicators
pointed toward an economic slowdown, prompting the Fed to act. Investors viewed
the Fed's actions favorably, which added positive momentum to the bond market.
The period was not without interim volatility, however, due primarily to the
ongoing debate about the federal budget. While events in Washington, DC show
promise for a balanced budget, concerns surfaced about how soon an agreement
might be reached, triggering periods of market declines.
OUR STRATEGY FOCUSES ON QUALITY
Your Fund's objective is to provide current income by investing in U.S.
government securities and high-quality corporate bonds. The Fund's portfolio
holds only securities issued by the U.S. government or its agencies and
corporate bonds rated AAA to BBB. At least 85% of the portfolio must be bonds
rated A or better. At the close of the fiscal period, 39% of the portfolio was
invested in government and agency securities, and the Fund's portfolio
maintained an average quality of AA.
Pioneer Bond Fund remains diversified across many industries. Over the six
months, we kept the Fund heavily weighted in the industrial sector, an area that
continues to benefit from a generally low level of regulation. We have been
pleased with the Fund's holdings; many companies have maintained strong earnings
growth, and some show the potential
1 Yield is based on a standard formula prescribed by the Securities and
Exchange Commission.
* Reflects deduction of the maximum 4.50% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
** Reflects deduction of the maximum 4.0% contingent deferred sales charge at
the end of the period and assumes reinvestment of all distributions.
Past performance does not guarantee future results. Return and principal
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
<PAGE>
- --------------------------------------------------------------------------------
for credit upgrades. Of course, we view all of the Fund's investments in terms
of quality and strength and expect they will continue to perform solidly.
Examples include: Time Warner, GEICO, Supervalu, and Coastal. The accompanying
chart shows the portfolio's diversification at the end of the period.
PORTFOLIO DIVERSIFICATION
(as of December 31, 1995)
U.S. Government/Agency 39%
Industrial 24%
Banks 15%
Financial 8%
International 7%
Utilities 5%
Short-Term Cash Equivalents 2%
As of December 31, 71% of the Fund's holdings had an average effective life of
less than 10 years, versus 66% six months ago. The most significant increase
occurred in bonds with less than five years to maturity, which totaled 46% of
the portfolio at the period's end, compared to 34% six months ago. Given the
uncertainty of the direction of interest rates, we expect the Fund's
shorter-term issues to add a degree of price stability, in addition to providing
yields that are highly comparable to those of longer-maturity bonds.
Long-term securities continue to play an important role for the Fund, 29% of the
portfolio on December 31. While the weighting decreased from 34% at June 30, we
are comfortable with the current position since it gives the portfolio
participation in the long-term bond market's strength, without subjecting the
Fund to the added risk that can occur with a heavier concentration in long-term
bonds. As of December 31, the portfolio's average life was 9.6 years, down
slightly from 11 years six months ago. In our view, the Fund's combination of
short-and long-term maturities should offer shareowners the conservative -- yet
competitive -- mix needed for income and capital preservation.
EFFECTIVE PORTFOLIO MATURITY
(as of December 31, 1995)
0-2 years 15%
2-5 years 31%
5-7 years 15%
7-10 years 10%
10-20 years 6%
20+ years 23%
LOOKING AHEAD
The bond market's strong results in 1995 came as a huge relief to investors who
had been in the market in 1994. While the past two years' extreme results --
both negative and positive -- are unusual, they nonetheless illustrate how
long-term investing can help one ride out market turbulence. Moving into 1996,
we see concerns about the ability of politicians to put together and pass a
credible balanced budget. In addition, commodity prices of late have been
creeping steadily upward -- an indicator used by many to gauge potential future
inflation. However, with slow economic growth anticipated over the near term and
Fed monetary policy still relatively restrictive (giving rise to the possibility
of another decrease in short-term interest rates), the overall bond market still
looks quite healthy to us.
Naturally, we will monitor budget progress and other events that may affect the
bond market. While these issues undoubtedly will create short-term fluctuations,
they should not hinder the long-term performance we think the bond market can
deliver. We believe the Fund's conservative positioning, coupled with generally
positive investing conditions, should offer shareowners solid long-term results.
Please read on through the following pages, which provide the Fund's audited
Schedule of Investments as of December 31, 1995. If you have any questions about
your investment in Pioneer Bond Fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
- -----------------------
John F. Cogan, Jr.
Chairman and President,
Pioneer Bond Fund
2
<PAGE>
Please turn page for
Schedule of Investments.
3
<PAGE>
<TABLE>
PIONEER BOND FUND
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1995
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT IN SECURITIES--97.6%
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--38.6%
$ 95,111 Federal Home Loan Mortgage Corp., 10.0%, 2002........................... $ 99,093
163,349 Federal Home Loan Mortgage Corp., 10.5%, 2019........................... 180,398
202,683 Federal Home Loan Mortgage Corp., REMIC Series 1988-24B,
9.5%, 2005............................................................ 213,290
1,000,000 Federal National Mortgage Association, 8.8%, 1997....................... 1,052,340
1,000,000 Federal National Mortgage Association, 9.2%, 1997....................... 1,052,810
1,500,000 Federal National Mortgage Association, 9.2%, 2000....................... 1,719,135
124,175 Federal National Mortgage Association, 10.0%, 2019...................... 136,475
1,000,000 Federal National Mortgage Association, 10.35%, 2015..................... 1,452,810
860,986 Federal National Mortgage Association, 11.0%, 2019...................... 971,563
1,758,899 Federal National Mortgage Association, REMIC Series 1989-72D,
8.9%, 2019............................................................ 1,831,453
766,506 Federal National Mortgage Association, REMIC Series 1989-19A,
10.3%, 2019........................................................... 845,004
7,751 Federal National Mortgage Association, REMIC Series 1989-19B,
10.3%, 2019........................................................... 9,401
562,256 Government National Mortgage Association, Midget, 10.0%,
2004 to 2006.......................................................... 593,354
261,675 Government National Mortgage Association, 9.5%, 2020.................... 280,472
888,929 Government National Mortgage Association, 10.0%, 2018 to 2020........... 980,538
1,000,000 Resolution Trust Corp., Series 1992-5A6, 9.24%, 2026.................... 1,010,000
4,000,000 U.S. Treasury Bonds, 7.25%, 2022........................................ 4,626,240
2,000,000 U.S. Treasury Bonds, 8.0%, 2021......................................... 2,502,500
4,000,000 U.S. Treasury Bonds, 8.75%, 2008........................................ 4,771,240
2,500,000 U.S. Treasury Bonds, 8.75%, 2020........................................ 3,352,350
4,500,000 U.S. Treasury Notes, 7.5%, 2005......................................... 5,100,480
5,250,000 U.S. Treasury Notes, 8.25%, 1998........................................ 5,619,128
2,565,000 U.S. Treasury Notes, 8.5%, 1997......................................... 2,683,368
4,000,000 U.S. Treasury Notes, 8.5%, 2000......................................... 4,457,480
1,300,000 U.S. Treasury Notes, 8.625%, 1997....................................... 1,368,250
-----------
Total U.S. Government and Agency Obligations
(Cost $44,563,709).............................................. $46,909,172
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
PIONEER BOND FUND
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1995 (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
STANDARD &
POOR'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INDUSTRIALS--23.8%
$1,000,000 A-/A2 Alcan Aluminum, Ltd., Deb., 9.625%, 2019................................ $ 1,153,560
1,000,000 A/A3 Arco Chemical Co., Deb., 9.8%, 2020..................................... 1,356,190
500,000 A/A2 Atlantic Richfield Co., Deb., 9.875%, 2016.............................. 675,795
1,500,000 A/A2 Caterpillar Inc., 9.75%, 2019........................................... 1,743,150
1,200,000 BBB/Baa3 Centex Corp., Deb., 8.75%, 2007......................................... 1,338,540
1,500,000 BB+/Baa3 Coastal Corp., Deb., 9.625%, 2012....................................... 1,801,935
2,000,000 A-/A3 General Motors Corp., Notes, 9.4%, 2021................................. 2,596,960
1,000,000 BBB-/Baa2 Georgia - Pacific Corp., Deb., 9.5%, 2022............................... 1,163,880
1,000,000 A+/A1 J.C. Penney Company, Inc., Deb., 9.75%, 2021............................ 1,208,120
2,000,000 BBB/Ba1 Joy Technologies Co., Sen. Notes, 10.25%, 2003.......................... 2,240,000
1,000,000 AA/Aa3 Norfolk Southern Corp., Notes, 9.0%, 2021............................... 1,286,870
2,000,000 BBB/Baa1 Phillips Petroleum Co., Deb., 9.18%, 2021............................... 2,342,040
1,500,000 AA/Aa2 Procter & Gamble Co., Notes, 9.36%, 2021................................ 1,916,250
1,000,000 BBB+/A3 Supervalu, Inc., Notes, 8.875%, 2022.................................... 1,158,090
1,500,000 BBB-/Baa2 Tenneco, Inc., Notes, 9.875%, 2001...................................... 1,744,710
1,250,000 A+/A1 Texaco Capital Corp., Gtd. Deb., 9.75%, 2020............................ 1,713,212
2,000,000 BBB-/Ba1 Time Warner Inc., Deb., 9.15%, 2023..................................... 2,268,080
1,000,000 BB+/Baa3 USX Corp. - U.S. Steel Group, Deb., 9.375%, 2012........................ 1,155,240
-----------
Total Industrials (Cost $26,013,910)............................... $28,862,622
-----------
FINANCIALS--7.6%
1,500,000 AA/Aa2 GEICO Corp., Deb., 9.15%, 2021.......................................... $ 1,780,380
1,000,000 A-/A3 Household Finance Corp., Sr. Sub. Notes, 10.125%, 1996.................. 1,018,730
2,000,000 AAA/Aaa Standard Credit Card Master Trust Series 1991-3A, 8.875%, 1998.......... 2,152,500
2,000,000 AAA/Aaa Standard Credit Card Trust Series 1990-6A, 9.375%, 1997................. 2,105,620
1,000,000 A/A2 Transamerica Corp., Notes, 9.875%, 1998................................. 1,080,270
1,000,000 A+/A3 W.R. Berkley, Deb., 8.7%, 2022.......................................... 1,162,310
-----------
Total Financials (Cost $8,932,867)................................. $ 9,299,810
-----------
BANKS--15.5%
1,000,000 A+/A1 Banc One Corp., Sub. Notes, 10.0%, 2010................................. $ 1,285,000
1,000,000 A/A3 BankAmerica, Sub. Notes, 9.375%, 2001................................... 1,134,060
1,000,000 AA-/Aa3 Barclays North American Capital Corp., Gtd. Sub. Cap. Notes,
9.75%, 2021........................................................... 1,188,920
1,000,000 A-/A2 Chemical Banking Corp., Sub. Notes, 8.5%, 2002.......................... 1,122,720
1,000,000 A-/A2 Chemical NY Corp., Sub. Notes, 9.75%, 1999.............................. 1,117,980
898,000 A/A3 Citicorp, Sub. Notes, 10.75%, 2015...................................... 943,969
1,250,000 A-/A3 Comerica Inc., Sub. Deb., 10.125%, 1998................................. 1,367,538
1,550,000 A-/A2 CoreStates Capital Corp., Gtd. Sub. Notes, 9.375%, 2003................. 1,835,324
1,500,000 A/A2 First Chicago Corp., Sub. Notes, 10.25%, 2001........................... 1,777,545
2,000,000 BBB+/A3 First Interstate Bancorp, Sub. Notes, 9.0%, 2004........................ 2,243,120
1,500,000 BBB+/A3 Fleet/Norstar Financial Group, Sub. Notes, 9.9%, 2001................... 1,755,300
1,000,000 A-/A3 Mellon Financial, Sub. Deb., 9.75%, 2001................................ 1,169,890
1,000,000 AA-/Aa3 National Westminster Bancorp Inc., Gtd. Cap. Notes, 9.375%, 2003........ 1,196,890
500,000 AA-/A1 Republic New York Corp., Sub. Notes, 9.3%, 2021......................... 646,460
-----------
Total Banks (Cost $17,146,014)..................................... $18,784,716
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
PIONEER BOND FUND
SCHEDULE OF INVESTMENTS--DECEMBER 31, 1995 (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
STANDARD &
POOR'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UTILITIES--ELECTRIC--2.7%
$ 500,000 AAA/Aaa Cajun Electric Power, Cooperative Utility Trust, 10.125%, 2019.......... $ 564,545
2,000,000 BBB/Baa2 Commonwealth Edison, First Mortgage Bonds, 9.75%, 2020.................. 2,311,520
364,000 A+/A1 Mississippi Power Co., First Mortgage Bonds, 9.25%, 2021................ 389,054
------------
$ 3,265,119
------------
UTILITIES--NATURAL GAS--1.0%
1,000,000 A-/A3 ONEOK Inc., Deb., 9.7%, 2019............................................ $ 1,182,880
------------
UTILITIES--TELEPHONE--1.0%
1,000,000 BBB+/Baa1 GTE Corp., Deb., 10.3%, 2017............................................ $ 1,214,940
------------
Total Utilities (Cost $5,166,487).................................. $ 5,662,939
------------
CANADIAN--2.0%
500,000 AA+/Aa1 British Columbia Hydro Power, Bonds, 15.5%, 2011........................ $ 573,495
500,000 AA-/Aa3 Province of Ontario, Deb., 15.75%, 2012................................. 584,110
1,000,000 BBB+/A2 Province of Saskatchewan, Deb., 9.375%, 2020............................ 1,298,720
------------
Total Canadian (Cost $2,264,250)................................... $ 2,456,325
------------
SOVEREIGNS AND SUPRANATIONALS--5.4%
2,000,000 AAA/Aaa British Telecom Finance., Deb., 9.625%, 2019............................ $ 2,282,960
1,000,000 AAA/Aaa Inter-American Development Bank, Notes, 9.45%, 1998..................... 1,097,630
2,000,000 AAA/Aaa International Bank for Reconstruction and Development, Deb.,
9.25% 2017............................................................ 2,656,000
500,000 AAA/Aaa Tokyo (Metropolis of), Gtd. Bonds, 10.375%, 1997........................ 540,295
------------
Total Sovereigns and Supranationals (Cost $6,119,086).............. $ 6,576,885
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $110,206,323) (a)(b)............................................ $118,552,469
------------
TEMPORARY CASH INVESTMENT--2.4%
2,878,000 Household Finance Corp., 5.7%, 1/2/96................................... $ 2,879,368
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $2,878,000)..................................................... $ 2,879,368
------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY
CASH INVESTMENT - 100% (Cost $113,084,323).............................. $121,431,837
============
<FN>
(a) At December 31, 1995, the net unrealized gain on investments based on cost for federal income tax purposes of
$110,206,323 was as follows:
Aggregrate gross unrealized gain for all investments in which there is an excess of value over tax
cost............................................................................................... $ 8,794,635
Aggregrate gross unrealized loss of all investments in which there is an excess of tax cost over
value.............................................................................................. (448,489)
------------
Net unrealized gain.................................................................................. $ 8,346,146
============
(b) At June 30, 1995, the Fund had a net capital loss carryforward of approximately $2,956,000 which will expire
between 1998 and 2003 if not utilized.
Note: The Fund's investments in mortgage-backed securities of the Government National Mortgage Association (GNMA) are
interests in separate pools of mortgages. All separate investments in this issuer which have the same coupon
rate have been aggregated for the purpose of presentation in this schedule of investments.
Purchases and sales of securities (excluding temporary cash investments) for the six months ended December 31, 1995
aggregated approximately $30,260,000 and $29,426,000, respectively.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<TABLE>
PIONEER BOND FUND
BALANCE SHEET--DECEMBER 31, 1995
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash investments of $2,879)
(cost $113,084; see Schedule of Investments and Note 1)................................ $121,432
Receivables--
Interest............................................................................... 2,604
Trust shares sold...................................................................... 394
Investment securities sold............................................................. 5
Other.................................................................................... 9
--------
Total assets........................................................................ $124,444
--------
LIABILITIES:
Payables--
Trust shares repurchased............................................................... $ 77
Dividends.............................................................................. 182
Due to affiliates (Notes 2, 3 and 4)..................................................... 113
Accrued expenses......................................................................... 23
--------
Total liabilities................................................................... $ 395
--------
NET ASSETS:
Paid-in capital (Note 1)................................................................. $119,177
Accumulated undistributed net investment income.......................................... 24
Accumulated net realized loss on investments............................................. (3,498)
Net unrealized gain on investments....................................................... 8,346
--------
Total net assets.................................................................... $124,049
========
NET ASSET VALUE PER SHARE:
Class A--(based on $110,583/11,495,208 shares of beneficial interest
outstanding--unlimited number of shares authorized with no par value)............... $ 9.62
========
Class B--(based on $13,466/1,408,170 shares of beneficial interest outstanding--
unlimited number of shares authorized with no par value)............................ $ 9.56
========
MAXIMUM OFFERING PRICE:
Class A............................................................................. $ 10.07
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
<TABLE>
PIONEER BOND FUND
STATEMENT OF OPERATIONS--FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 1):
Interest............................................................................ $4,674
------
EXPENSES:
Management fees (Note 2)............................................................ $292
Transfer agent fees (Note 3)
Class A........................................................................... 129
Class B........................................................................... 9
Distribution fees (Note 4)
Class A........................................................................... 114
Class B........................................................................... 48
Accounting (Note 2)................................................................. 43
Professional fees................................................................... 39
Registration fees................................................................... 20
Custodian fees...................................................................... 13
Printing............................................................................ 8
Fees and expenses of nonaffiliated trustees......................................... 7
Miscellaneous....................................................................... 10
----
Total expenses................................................................. $732
Less fees paid indirectly (Note 5)............................................. (9)
----
Net expenses................................................................... $ 723
------
Net investment income...................................................... $3,951
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (Note 1)........................................... $ (542)
Change in net unrealized gain on investments........................................ 3,992
------
Net gain on investments........................................................ $3,450
------
Net increase in net assets resulting from operations....................... $7,401
======
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<TABLE>
PIONEER BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND THE YEAR ENDED JUNE 30, 1995
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1995 JUNE 30, 1995
----------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income............................................................ $ 3,951 $ 8,154
Net realized loss on investments................................................. (542) (2,542)
Change in net unrealized gain on investments..................................... 3,992 6,452
-------- ---------
Net increase in net assets resulting from operations........................ $ 7,401 $ 12,064
-------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ($0.32 and $0.68 per share, respectively).............................. $ (3,687) $ (7,889)
Class B ($0.30 and $0.62 per share, respectively).............................. (307) (258)
-------- ---------
$ (3,994) $ (8,147)
-------- ---------
FROM TRUST SHARE TRANSACTIONS:
Net proceeds from sale of shares................................................. $ 18,772 $ 26,148
Net asset value of shares issued to shareholders in
reinvestment of dividends...................................................... 2,919 6,063
Cost of shares repurchased....................................................... (18,545) (26,503)
-------- ---------
Increase in net assets resulting from trust share transactions................. $ 3,146 $ 5,708
-------- ---------
Net increase in net assets.................................................. $ 6,553 $ 9,625
NET ASSETS:
Beginning of period.............................................................. 117,496 107,871
-------- ---------
End of period (including accumulated undistributed net
investment income of $24 and $67, respectively)................................ $124,049 $ 117,496
======== =========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1995 JUNE 30,1995
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................................. 1,229,875 $ 11,536 2,143,981 $ 19,180
Shares issued to shareholders in
reinvestment of distributions............. 288,156 2,707 654,382 5,880
Less shares repurchased..................... (1,807,152) (16,884) (2,814,975) (25,231)
---------- -------- ---------- --------
Net decrease................................ (289,121) $ (2,641) (16,612) $ (171)
========== ======== ========== ========
CLASS B
Shares sold................................. 774,181 $ 7,236 773,773 $ 6,968
Shares issued to shareholders in
reinvestment of distributions............. 22,676 212 20,268 183
Less shares repurchased..................... (177,180) (1,661) (139,897) (1,272)
---------- -------- ---------- --------
Net increase................................ 619,677 $ 5,787 654,144 $ 5,879
========== ======== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
<TABLE>
PIONEER BOND FUND
FINANCIAL HIGHLIGHTS--SELECTED DATA FOR A SHARE OUTSTANDING FOR THE PERIODS PRESENTED
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS FOR THE YEARS ENDED JUNE 30,
ENDED ----------------------------------------------------------------------------------------------
DECEMBER 31,
1995 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
------------ -------- -------- -------- -------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Net asset value,
beginning of
period............... $ 9.35 $ 9.04 $ 9.81 $ 9.37 $ 8.99 $ 8.92 $ 9.18 $ 9.04 $ 9.22 $ 9.62 $ 9.25
-------- -------- -------- -------- -------- ------- ------- ------- ------- ------- -------
INCREASE (DECREASE)
FROM INVESTMENT
OPERATIONS:
Net investment
income............. $ 0.32 $ 0.68 $ 0.67 $ 0.70 $ 0.74 $ 0.79 $ 0.81 $ 0.81 $ 0.81 $ 0.83 $ 0.94
Net realized and
unrealized gain
(loss) on
investments........ 0.27 0.31 (0.77) 0.44 0.39 0.07 (0.26) 0.14 (0.18) (0.40) 0.41
-------- -------- -------- -------- -------- ------- ------- ------- ------- ------- -------
Total increase
(decrease) from
investment
operations:...... $ 0.59 $ 0.99 $ (0.10) $ 1.14 $ 1.13 $ 0.86 $ 0.55 $ 0.95 $ 0.63 $ 0.43 $ 1.35
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income............. (0.32) (0.68) (0.67) (0.70) (0.75) (0.79) (0.81) (0.81) ( 0.81) (0.83) (0.98)
-------- -------- -------- -------- -------- ------- ------- ------- ------- ------- -------
Net increase
(decrease) in net
asset value......... $ 0.27 $ 0.31 $ (0.77) $ 0.44 $ 0.38 $ 0.07 $ (0.26) $ 0.14 $ (0.18) $ (0.40) $ 0.37
-------- -------- -------- -------- -------- ------- ------- ------- ------- ------- -------
Net asset value, end
of period............ $ 9.62 $ 9.35 $ 9.04 $ 9.81 $ 9.37 $ 8.99 $ 8.92 $ 9.18 $ 9.04 $ 9.22 $ 9.62
======== ======== ======== ======== ======== ======= ======= ======= ======= ======= =======
Total return*.......... 6.48% 11.48% (1.26)% 12.67% 13.03% 10.13% 6.24% 11.17% 7.16% 4.57% 15.33%
Ratio of net
operating expenses to
average net assets... 1.19%**+ 1.14% 1.05% 1.10% 1.09% 1.02% 0.88% 0.86% 0.88% 0.86% 1.00%
Ratio of net
investment income to
average net assets... 6.77%**+ 7.55% 6.93% 7.37% 8.04% 8.82% 9.01% 8.99% 8.90% 8.45% 10.27%
Portfolio turnover
rate................. 51%** 37% 39% 37% 17% 20% 34% 34% 20% 19% 27%
Net assets, end of
period (in
thousands)........... $110,583 $110,158 $106,659 $112,900 $102,503 $76,476 $74,137 $64,261 $53,090 $50,909 $29,923
RATIOS ASSUMING
REDUCTION FOR FEES
PAID INDIRECTLY:
Net operating
expenses........... 1.18%** -- -- -- -- -- -- -- -- -- --
Net investment
income............. 6.78%** -- -- -- -- -- -- -- -- -- --
<FN>
- ------------
+ Ratios assuming no reduction for fees paid indirectly.
* 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.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
PIONEER BOND FUND
FINANCIAL HIGHLIGHTS--SELECTED DATA FOR A SHARE OUTSTANDING FOR THE PERIODS PRESENTED
- -------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS YEAR APRIL 4,
ENDED ENDED 1994 TO
DECEMBER 31, 1995 JUNE 30, 1995 JUNE 30, 1994
------------------ ------------- -------------
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of
period............................... $ 9.31 $ 9.02 $ 9.23
------- ------ ------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS:
Net investment income.............. $ 0.30 $ 0.60 $ 0.14
Net realized and unrealized gain
(loss) on investments............. 0.25 0.31 (0.21)
------- ------ ------
Total increase (decrease) from
investment
operations:.................... $ 0.55 $ 0.91 $(0.07)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.............. (0.30) (0.62) (0.14)
------- ------ ------
Net increase (decrease) in net asset
value................................ $ 0.25 $ 0.29 $(0.21)
------- ------ ------
Net asset value, end of period........ $ 9.56 $ 9.31 $ 9.02
======= ====== ======
Total return*......................... 6.02% 10.57% (0.73)%
Ratio of net operating expenses to
average net assets................... 1.88%**+ 1.97% 1.92%**
Ratio of net investment income to
average net assets................... 6.00%**+ 6.60% 6.09%**
Portfolio turnover rate............... 51%** 37% 39%
Net assets, end of period (in
thousands)........................... $13,466 $7,338 $1,212
RATIOS ASSUMING REDUCTION FOR FEES
PAID INDIRECTLY:
Net operating expenses............. 1.86%** -- --
Net investment income.............. 6.02%** -- --
<FN>
- ------------
+ Ratios assuming no reduction for fees paid indirectly.
* 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.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PIONEER BOND FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1995
- --------------------------------------------------------------------------------
1. Pioneer Bond Fund (the Fund) is a Massachusetts 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
current income from a high quality portfolio. The Fund offers two classes of
shares -- Class A shares and Class B shares.
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 on trade
date. Securities are valued based on valuations furnished by an independent
pricing service that utilizes a matrix system. This matrix system reflects such
factors as security prices, yields, maturities and ratings, and is supplemented
by dealer and exchange quotations and fair market value information from other
sources, as required. Principal amounts of mortgage-backed securities are
adjusted for monthly paydowns. Premium and discount related to certain
mortgage-backed securities are amortized or accreted in proportion to the
underlying monthly paydowns. Temporary cash investments are valued at amortized
cost plus accrued interest, which approximates value. Interest income is
recorded on the accrual basis.
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. Trust Shares -- The Fund records sales and repurchases of its trust
shares on trade date. Shares are sold and redeemed on a continuous basis at net
asset value per share. 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 approximately $20,000 in underwriting commissions on the sale of trust
shares during the six months ended December 31, 1995. 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 paid by the Fund, if any,
with respect to each class of shares are
12
<PAGE>
PIONEER BOND FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1995 (CONTINUED)
- --------------------------------------------------------------------------------
calculated in the same manner, at the same time, on the same day and in the same
amount, except that Class A and Class B shares bear different transfer agent and
distribution fees.
D. Class Allocations -- Distribution fees are calculated based on the
average daily net asset value attributable to Class A and Class B shares of the
Fund, respectively. Shareholders of Class A and Class B share all expenses and
fees paid to the transfer agent, Pioneering Services Corporation (PSC), for
their services, which are allocated based on number of accounts in each class
and the ratable allocation of related out-of-pocket expenses (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.
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio, and is a wholly owned subsidiary of PGI.
Management fees are calculated at the annual rate of 0.50% of the Fund's average
daily net assets.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in due to affiliates is approximately $10,000 and
$15,000 in management and accounting fees, respectively, payable to PMC at
December 31, 1995.
3. 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 approximately $32,000 in transfer agent fees
payable to PSC at December 31, 1995.
4. The Fund adopted a Plan of Distribution for Class A shares (Class A
Plan) and Class B shares (Class B Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. These plans allow for Class A shares and Class B
shares to reimburse and compensate, respectively, PFD for providing varying
levels of distribution services and other account maintenance services. The
Class A Plan and Class B Plan provide for reimbursement of PFD's distribution
services in an amount up to 0.25% and 0.75%, respectively, of the average daily
net assets of the respective classes of shares. The Fund may also compensate PFD
for additional services in an amount up to 0.25% of the Fund's average daily net
assets attributable to Class B shares. Included in due to affiliates is
approximately $56,000 in distribution fees payable to PFD at December 31, 1995.
In addition, Class B shares that are redeemed within six years of
purchase are subject to a contingent deferred sales charge (CDSC) at declining
rates beginning at 4.0% based on the lower of cost or market value of shares
being redeemed. Proceeds from the CDSC are paid to PFD. For the six months
ended December 31, 1995, CDSC in the amount of approximately $12,000 was paid
to PFD.
5. The Fund has entered into certain expense offset arrangements
resulting in a reduction in the Fund's total expenses. For the six months
ended December 31, 1995, the Fund's expenses were reduced by approximately
$9,000 under such arrangements.
13
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER BOND FUND:
We have audited the accompanying balance sheet of Pioneer Bond Fund, including
the schedule of investments, as of December 31, 1995, and the related statement
of operations, statements of changes in net assets and 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, 1995 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 Bond Fund as of December 31, 1995, the results of its operations, the
changes in its net assets and financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
Boston, Massachusetts ARTHUR ANDERSEN LLP
February 2, 1996
14
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