File No. 2-62436
As Filed with the Securities and Exchange Commission on August 30, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
-----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. ___ /____/
Post-Effective Amendment No. 24 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 23 /_X _/
(Check appropriate box or boxes)
PIONEER BOND FUND
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
_X_ on August 30, 1996 pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on [date] pursuant to paragraph (a)(1) of Rule 485
Registrant has registered an indefinite amount of securities under the
Securities Act of 1993 pursuant to Section 24(f) of the Investment Company Act
of 1940. The Registrant will file the notice required by Rule 24f-2 for its most
recent fiscal year on or about August 30, 1996.
<PAGE>
PIONEER BOND FUND
CLASS A, CLASS B AND CLASS C SHARES
Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of
Information Required by Items of the Registration Form
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
1. Cover Page............................Prospectus - Cover Page
2. Synopsis..............................Prospectus - Expense Information
3. Condensed Financial Information.......Prospectus - Financial Highlights
4. General Description of Registrant.....Prospectus - Investment Objectives
and Policies; Management of the Fund;
The Fund
5. Management of the Fund................Prospectus - Management of the Fund
6. Capital Stock and Other Securities....Prospectus - Investment Objectives
and Policies; The Fund
7. Purchase of Securities Being Offered..Prospectus - Fund Share Alternatives;
How to Buy Fund Shares; Shareholder
Services; Distribution Plans
8. Redemption or Repurchase..............Prospectus - Fund Share Alternatives;
How to Sell Fund Shares; Shareholder
Services
9. Pending Legal Proceedings.............Not Applicable
10. Cover Page............................Statement of Additional Information
- Cover Page
<PAGE>
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
11. Table of Contents.....................Statement of Additional Information
- Cover Page
12. General Information and History.......Statement of Additional Information
- Cover Page; Description of Shares
13. Investment Objectives and Policies....Statement of Additional Information
- Investment Policies and Restrictions
14. Management of the Fund................Statement of Additional Information
- Management of the Fund; Investment
Adviser
15. Control Persons and Principal Holders
of Securities.....................Statement of Additional Information
- Management of the Fund
16. Investment Advisory and Other
Services..........................Statement of Additional Information
- Management of the Fund; Investment
Adviser; Underwriting Agreement and
Distribution Plans; Shareholder
Servicing/Transfer Agent; Custodian;
Independent Public Accountants
17. Brokerage Allocation and Other
Practices.........................Statement of Additional Information
- Portfolio Transactions
18. Capital Stock and Other Securities....Statement of Additional Information
- Description of Shares; Certain
Liabilities
<PAGE>
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
19. Purchase Redemption and Pricing of
Securities Being Offered..........Statement of Additional Information
- Determination of Net Asset Value;
Systematic Withdrawal Plan; Letter
of Intention
20. Tax Status............................Statement of Additional Information
- Tax Status
21. Underwriters..........................Statement of Additional Information
- Principal Underwriter; Underwriting
Agreement and Distribution Plans
22. Calculation of Performance Data.......Statement of Additional Information
- Investment Results
23. Financial Statements..................Statement of Additional Information
- Financial Statements
<PAGE>
Pioneer [Pioneer logo]
Bond
Fund
Class A, Class B and Class C Shares
Prospectus
August 30, 1996
Pioneer Bond Fund (the "Fund") seeks current income from a high quality
portfolio with due regard to preservation of capital and prudent investment
risk. Consistent therewith, the Fund also seeks to maintain dividend payments
at a relatively stable level. At least 85% of the Fund's total assets must be
invested in debt securities issued or guaranteed by the United States
("U.S.") Government or its agencies or instrumentalities, debt securities
(including convertible securities) rated within the three highest grades by
the major recognized bond services and comparably rated commercial paper and
cash and cash equivalents. The Fund may invest the balance (up to 15%) of its
total assets in debt securities that are rated in the fourth highest grade by
the major recognized bond services and in commercial paper that is of
comparable quality.
FUND RETURNS AND SHARE PRICES FLUCTUATE AND THE VALUE OF YOUR ACCOUNT, UPON
REDEMPTION, MAY BE MORE OR LESS THAN THE VALUE OF YOUR ORIGINAL INVESTMENT.
SHARES IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK OR DEPOSITORY INSTITUTION, AND THE SHARES ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
This Prospectus provides the information about the Fund that you should know
before investing in the Fund. Please read and retain it for your future
reference. More information about the Fund is included in the Statement of
Additional Information dated August 30, 1996, which is incorporated into this
Prospectus by reference. A copy of the Statement of Additional Information
may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109. Other information about the Fund has been filed with the
Securities and Exchange Commission (the "SEC") and is available upon request
and without charge.
TABLE OF CONTENTS PAGE
- -------- ------------------------------------------------- -------
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 2
III. INVESTMENT OBJECTIVES AND POLICIES 4
IV. MANAGEMENT OF THE FUND 5
V. FUND SHARE ALTERNATIVES 6
VI. SHARE PRICE 7
VII. HOW TO BUY FUND SHARES 7
VIII. HOW TO SELL FUND SHARES 10
IX. HOW TO EXCHANGE FUND SHARES 11
X. DISTRIBUTION PLANS 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 13
XII. SHAREHOLDER SERVICES 14
Account and Confirmation Statements 14
Additional Investments 14
Automatic Investment Plans 14
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 14
Direct Deposit 14
Voluntary Tax Withholding 14
Telephone Transactions and Related Liabilities 14
FactFone(SM) 15
Retirement Plans 15
Telecommunications Device for the Deaf (TDD) 15
Systematic Withdrawal Plans 15
Reinstatement Privilege (Class A Shares Only) 15
XIII. THE FUND 15
XIV. INVESTMENT RESULTS 16
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
1
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects annual operating expenses based upon actual
expenses of the Class A and Class B shares for the fiscal year ended June 30,
1996. For Class C shares, operating expenses are based on estimated expenses
that would have been incurred if Class C shares had been outstanding for the
entire fiscal year ended June 30, 1996.
Class A Class B Class C+
-------- -------- ----------
Shareholder Transaction Expenses
Maximum Initial Sales Charge on
Purchases (as a percentage of
offering price) 4.50%1 None None
Maximum Sales Charge on Reinvestment of
Dividends None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase
price or redemption proceeds, as
applicable) None(1) 4.00% 1.00%
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Operating Expenses
(as a percentage of average net assets):
Management Fee 0.50% 0.50% 0.50%
12b-1 Fees 0.24% 1.00% 1.00%
Other Expenses (including accounting
and transfer agent fees, custodian
fees and printing expenses) 0.44% 0.44% 0.63%
------ ------ --------
Total Operating Expenses 1.18% 1.94% 2.13%
====== ====== ========
+ Class C shares were first offered on January 31, 1996.
(1) Purchases of $1 million or more and certain purchases by participants in
a group plan are not subject to an initial sales charge but may be
subject to a contingent deferred sales charge ("CDSC") as further
described under "How to Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return, with or without redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
-------- -------- -------- ----------
Class A Shares $56 $81 $107 $182
Class B Shares
- Assuming
complete
redemption at
end of period $60 $91 $125 $207*
- Assuming no
redemption $20 $61 $105 $207*
Class C shares**
- Assuming
complete
redemption at
end of period $31 $67 $115 $247
- Assuming no
redemption $22 $67 $115 $247
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject
to a 1% CDSC.
The example above assumes the reinvestment of all dividends and distributions
and that the percentage amounts listed under "Annual Operating Expenses"
remain the same each year.
The example is designed for informational purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, see "Management of the Fund," "Distribution Plans" and
"How to Buy Fund Shares" in this Prospectus and "Management of the Fund" and
"Underwriting Agreement and Distribution Plans" in the Statement of
Additional Information. The Fund's payment of a 12b-1 fee may result in
long-term shareholders indirectly paying more than the economic equivalent of
the maximum sales charge permitted under the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified amounts
of Class A shares and the value of Class A shares owned in other Pioneer
mutual funds is taken into account in determining the applicable initial
sales charge. See "How to Buy Fund Shares." No sales charge is applied to
exchanges of shares of other publicly available Pioneer mutual funds. See
"How to Exchange Fund Shares."
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of June 30, 1996 appears in the Fund's Annual Report,
which is incorporated by reference in the Statement of Additional
Information. The information listed below should be read in conjunction with
financial statements contained in the Fund's Annual Report. The Annual Report
includes more information about the Fund's performance and is available free
of charge by calling Shareholder Services at 1-800-225-6292.
2
<PAGE>
PIONEER BOND FUND
Selected Data for a Class A Share Outstanding Throughout Each Period:
For the Year Ended June 30,
------------------------------------------
1996 1995 1994 1993
------- ------- ------- ---------
Net asset value, beginning of
period $ 9.35 $ 9.04 $ 9.81 $ 9.37
----- ----- ----- -------
Increase (decrease) from
investment operations:
Net investment income $ 0.64 $ 0.68 $ 0.67 $ 0.70
Net realized and unrealized gain
(loss) on investments (0.27) 0.31 (0.77) 0.44
----- ----- ----- -------
Net increase (decrease) from
investment operations $ 0.37 $ 0.99 $(0.10) $ 1.14
Distributions to shareholders
from:
Net investment income (0.64) (0.68) (0.67) (0.70)
----- ----- ----- -------
Net increase (decrease) in net
asset value $(0.27) $ 0.31 $(0.77) $ 0.44
----- ----- ----- -------
Net asset value, end of period $ 9.08 $ 9.35 $ 9.04 $ 9.81
===== ===== ===== =======
Total return* 4.02% 11.48% (1.26)% 12.67%
Net assets, end of period
(in thousands) $101,957 $110,158 $106,659 $112,900
Ratio of net expenses to average
net assets 1.19%+ 1.14% 1.05% 1.10%
Ratio of net investment income to
average net assets 6.80%+ 7.55% 6.93% 7.37%
Portfolio turnover rate 39% 37% 39% 37%
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.18%
Net investment income (loss) 6.81%
<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987
------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 8.99 $ 8.92 $ 9.18 $ 9.04 $ 9.22 $ 9.62
----- ---- ---- ---- ---- ------
Increase (decrease) from
investment operations:
Net investment income $ 0.74 $ 0.79 $ 0.81 $ 0.81 $ 0.81 $ 0.83
Net realized and unrealized gain
(loss) on investments 0.39 0.07 (0.26) 0.14 (0.18) (0.40)
----- ---- ---- ---- ---- ------
Net increase (decrease) from
investment operations $ 1.13 $ 0.86 $ 0.55 $ 0.95 $ 0.63 $ 0.43
Distributions to shareholders
from:
Net investment income (0.75) (0.79) (0.81) (0.81) (0.81) (0.83)
----- ---- ---- ---- ---- ------
Net increase (decrease) in net
asset value $ 0.38 $ 0.07 $(0.26) $ 0.14 $(0.18) $(0.40)
----- ---- ---- ---- ---- ------
Net asset value, end of period $ 9.37 $ 8.99 $ 8.92 $ 9.18 $ 9.04 $ 9.22
===== ==== ==== ==== ==== ======
Total return* 13.03% 10.13% 6.24% 11.17% 7.16% 4.57%
Net assets, end of period
(in thousands) $102,503 $76,476 $74,137 $64,261 $53,090 $50,909
Ratio of net expenses to average
net assets 1.09% 1.02% 0.88% 0.86% 0.88% 0.86%
Ratio of net investment income to
average net assets 8.04% 8.82% 9.01% 8.99% 8.90% 8.45%
Portfolio turnover rate 17% 20% 34% 34% 20% 19%
Ratios assuming reduction for fees
paid indirectly:
Net expenses
Net investment income (loss)
</TABLE>
Selected Data for a Class B Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year
Ended June 30,
---------------
April 4, 1994
to June 30,
1996 1995 1994
------ ----- ---------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.31 $ 9.02 $ 9.23
Increase (decrease) from investment operations:
Net investment income $ 0.57 $ 0.60 $ 0.14
Net realized and unrealized gain (loss) on
investments (0.28) 0.31 (0.21)
---- ---
Net increase (decrease) from investment operations $ 0.29 $ 0.91 $(0.07)
Distributions to shareholders:
From net investment income (0.57) (0.62) (0.14)
In excess of net investment income (0.01) -- --
Net increase (decrease) in net asset value $(0.29) $ 0.29 $(0.21)
---- ---
Net asset value, end of period $ 9.02 $ 9.31 $ 9.02
==== ===
Total return* 3.15% 10.57% (0.73)%
Net assets, end of period (in thousands) $14,843 $7,338 $1,212
Ratio of net expenses to average net assets 1.96%+ 1.97% 1.92%**
Ratio of net investment income to average net assets 6.01%+ 6.60% 6.09%**
Portfolio turnover rate 39% 37% 39%
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.94%
Net investment income (loss) 6.03%
</TABLE>
+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.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER BOND FUND
Selected Data for a Class C Share Outstanding Throughout Each Period:***
January 31,
1996
to
June 30, 1996
--------------
Net asset value, beginning of period $ 9.54
Increase (decrease) from investment operations:
Net investment income $ 0.23
Net realized and unrealized gain (loss) on
investments (0.52)
Net increase (decrease) from investment operations $(0.29)
Distributions to shareholders:
From net investment income (0.22)
In excess of net investment income (0.01)
------------
Net increase (decrease) in net asset value $(0.52)
Net asset value, end of period $ 9.02
Total return* (3.00)%
Net assets, end of period (in thousands) $343
Ratio of net expenses to average net assets 2.18%**+
Ratio of net investment income to average net assets 5.79%**+
Portfolio turnover rate 39%
Ratios assuming a reduction for fees paid indirectly:
Net expenses 2.13%**
Net investment income (loss) 5.84%**
+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.
***Class C shares were first publicly offered on January 31, 1996.
III. INVESTMENT OBJECTIVES AND POLICIES
The Fund's primary objective is to provide current income from a high quality
portfolio with due regard to preservation of capital and prudent investment
risk. The Fund has a secondary objective of maintaining a relatively stable
level of dividends; however, the level of dividends will be maintained only
if consistent with preserving the high quality of the Fund's portfolio.
At least 85% of the Fund's total assets must be invested in (a) debt
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, (b) investment-grade securities, that is, debt securities,
including convertible securities, that are rated "A" or higher by the major
recognized bond services (for a description of ratings see the Appendix to
the Statement of Additional Information), and comparably rated commercial
paper and (c) cash and cash equivalents (such as certificates of deposit,
repurchase agreements maturing in one week or less and bankers' acceptances).
The Fund may also invest up to 15% of its total assets in debt securities,
including convertible securities, which are rated in the fourth highest grade
by the major recognized bond services and commercial paper which is
comparable. Securities in the fourth highest grade (i.e., rated Baa by
Moody's Investor Services, Inc. or BBB by Standard & Poor's Ratings Group)
are considered medium grade, neither highly protected nor poorly secured,
with some elements of uncertainty over any great length of time and certain
speculative characteristics as well.
None of the Fund's portfolio may be invested in debt securities which are
rated below the fourth highest grade or are unrated, except that the Fund may
hold debt securities the ratings of which are reduced subsequent to purchase.
The Fund may not invest in preferred or common stocks.
The Fund may invest in the following mortgage-backed securities.
Collateralized mortgage obligations ("CMOs") are obligations fully
collateralized by a portfolio of mortgages or mortgage-related securities.
Payments of principal and interest on the mortgages are passed to a special
purpose entity, then through to the holders of the CMOs on the same schedule
as they are received, although certain classes of CMOs have priority over
others with respect to the receipt of prepayments on the mortgages.
Therefore, depending on the type of CMOs in which the Fund invests, the
investment may be subject to a greater or lesser risk of prepayment than
other types of mortgage-related securities. A real estate mortgage investment
conduit ("REMIC") is a form of CMO that qualifies for special tax treatment
under the Internal Revenue Code of 1986, as amended (the "Code"). The Fund
may acquire "regular" interests in REMICs but does not intend, under current
tax law, to acquire residual interests in REMICs. Mortgage-backed securities
are derivative securities and provide for payments based on or derived from
the performance of the underlying mortgage
4
<PAGE>
assets. Risks associated with mortgage-backed securities include the failure
of a counter-party to meet its commitments, adverse interest rate changes and
the effects of prepayments on mortgage cash flows. When interest rates
decline, the value of an investment in debt obligations can be expected to
rise. Conversely, when interest rates rise the value of an investment in debt
obligations can be expected to decline. Like other debt obligations, when
interest rates rise the value of a mortgage-backed security generally will
decline; however, when interest rates are declining, the value of
mortgage-backed securities with prepayment features may not increase as much
as that of other debt obligations. Mortgage-backed securities may be less
effective than traditional debt obligations of similar maturity at
maintaining yields during periods of declining interest rates.
Not more than 15% of the Fund's assets may be invested in foreign securities
and not more than 5% of its total assets may be invested in foreign
securities that are not listed on a recognized foreign or domestic exchange,
provided that purchases of Canadian securities are not subject to the
limitations in this paragraph. Investments in foreign securities may be
subject to risks including, but not limited to, foreign taxes and
restrictions, illiquidity and fluctuations in currency values. In addition,
the financial information available on issuers of foreign debt securities is
frequently not as accurate or complete as would be available for a comparable
domestic issuer. See "Other Policies and Risks" in the Statement of
Additional Information.
The Fund's portfolio will be fully managed by purchasing and selling
securities, as well as holding selected securities to maturity. The Fund's
investment manager employs "cycle analysis" in the management of the Fund's
portfolio. Cycle analysis is the process of managing the Fund's portfolio by
analyzing the business and credit cycles of the economy to identify and
monitor trends in interest rates and to identify fixed-income securities with
characteristics most likely to meet the Fund's objectives at given stages in
the cycles. Relying on analysis of economic indicators, as well as price,
yield and maturity data of individual securities, this process requires
ongoing adjustments to the portfolio based on the relative values or
maturities of individual debt securities or changes in the creditworthiness
or overall investment merit of an issue.
Any such change in the portfolio may result in increases or decreases in the
Fund's current income available for distribution to shareholders and in its
holding of debt securities which sell at moderate to substantial premiums or
discounts from face value. If the Fund's expectations of changes in interest
rates or its evaluation of the normal yield relationships between two
securities prove to be incorrect, the Fund's income, net asset value and
potential capital gain may be reduced or its potential capital loss may be
increased. An increase in interest rates will generally reduce the value of
portfolio investments (and, therefore, the net asset value of the shares of
the Fund), and a decline in interest rates will generally increase their
value.
It is the policy of the Fund not to engage in trading for short-term profits.
The Fund will engage in portfolio trading if it believes a transaction net of
costs (including custodian's fees) will contribute to the achievement of its
investment objective. See "Financial Highlights" for actual portfolio
turnover rates.
The foregoing objectives and investment policies (other than the discussion
of "cycle analysis") may not be changed without shareholder approval.
Government securities include U.S. Treasury obligations such as bills, bonds
and notes which principally differ in their interest rates, maturities and
times of issuance, and obligations issued or guaranteed by U.S. Government
agencies or instrumentalities supported by the full faith and credit of the
U.S. Treasury (securities of the Government National Mortgage Association,
"GNMA"), the authority of the U.S. Government to purchase certain obligations
of the issuer (securities of the Federal National Mortgage Association,
"FNMA"), the limited authority of the issuer to borrow from the U.S. Treasury
(securities of the Student Loan Marketing Association) or only the credit of
the issuer. No assurance can be given that the U.S. Government will provide
financial support to U.S. Government agencies or instrumentalities in the
future, other than as set forth above, since it is not legally obligated to
do so. Interest payments of U.S. Treasury obligations are generally fixed.
Other investment policies and restrictions on investment are described in the
Statement of Additional Information, including a policy on lending portfolio
securities. Since all investments are subject to inherent market risks and
fluctuations in value due to earnings, economic conditions and other factors,
the Fund, of course, cannot assure that its investment objectives will be
achieved.
IV. MANAGEMENT OF THE FUND
The Fund's Board of Trustees has overall responsibility for management and
supervision of the Fund. There are currently eight Trustees, six of whom are
not "interested persons" of the Fund as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"). The Board meets at least quarterly. By
virtue of the functions performed by PMC as investment adviser, the Fund
requires no employees other than its executive officers, all of whom receive
their compensation from PMC or other sources. The Statement of Additional
Information contains the names and general background of each Trustee and
executive officer of the Fund.
Each domestic fixed income portfolio managed by PMC, including the Fund, is
overseen by the Domestic Fixed Income Portfolio Management Committee, which
consists of PMC's most senior domestic fixed income professionals, and a
Portfolio Management Committee, which consists of PMC's fixed income
portfolio managers. Both committees are chaired by Mr. David Tripple, PMC's
President and Chief Investment Officer and Executive Vice President of each
of the Pioneer mutual funds. Mr. Tripple joined PMC in 1974 and has had
general responsibility for PMC's investment operations and specific portfolio
assignments for over five years. Fixed income investments at PMC, including
those made on behalf of the Fund, are under the general supervision of Mr.
Sherman Russ, a Senior Vice President of PMC. Mr. Russ joined PMC in 1983 and
has been responsible for the day-to-day management of the Fund since March
1988.
5
<PAGE>
Investment advisory services are provided to the Fund by PMC pursuant to a
management contract between PMC and the Fund. PMC is responsible for the
overall management of the Fund's business affairs, subject only to the
authority of the Board of Trustees. PMC is a wholly-owned subsidiary of The
Pioneer Group, Inc. ("PGI"), a Delaware corporation. Pioneer Funds
Distributor, Inc. ("PFD"), an indirect wholly-owned subsidiary of PGI, is
the principal underwriter of shares of the Fund.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109. In an effort to avoid conflicts of
interest with the Fund, the Fund and PMC have adopted a Code of Ethics that
is designed to maintain a high standard of personal conduct by directing that
all personnel defer to the interests of the Fund and its shareholders in
making personal securities transactions.
Under the terms of its contract with the Fund, PMC assists in the management
of the Fund and is authorized in its discretion to buy and sell securities
for the account of the Fund. PMC pays all the ordinary operating expenses,
including executive salaries and the rental of certain office space, related
to its services for the Fund with the exception of the following which are to
be paid by the Fund: (a) charges and expenses for fund accounting, pricing
and appraisal services and related overhead, including, to the extent such
services are performed by personnel of PMC or its affiliates, office space
and facilities and personnel compensation, training and benefits; (b) the
charges and expenses of auditors; (c) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and
registrar appointed by the Fund; (d) issue and transfer taxes, chargeable to
the Fund in connection with securities transactions to which the Fund is a
party; (e) insurance premiums, interest charges, dues and fees for membership
in trade associations, and all taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies; (f) fees and expenses
involved in registering and maintaining registrations of the Fund and/or its
shares with the SEC, individual states or blue sky securities agencies,
territories and foreign countries, including the preparation of Prospectuses
and Statements of Additional Information for filing with regulatory agencies;
(g) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies; (h) charges and
expenses of legal counsel to the Fund and the Trustees; (i) distribution fees
paid by the Fund in accordance with Rule 12b-1 promulgated by the SEC
pursuant to the 1940 Act; (j) compensation of those Trustees of the Fund who
are not affiliated with or interested persons of PMC, the Fund (other than as
Trustees), PGI or PFD; (k) the cost of preparing and printing share
certificates; and (l) interest on borrowed money, if any. In addition to the
expenses described above, the Fund shall pay all brokers' and underwriting
commissions chargeable to the Fund in connection with securities transactions
to which the Fund is a party.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund. See the Statement of Additional
Information for a further description of PMC's brokerage allocation
practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.50% per annum of the
Fund's average daily net assets. The fee is normally computed daily and paid
monthly. During the fiscal year ended June 30, 1996, the Fund incurred
expenses of approximately $1,484,000, including management fees paid or
payable to PMC of $588,000.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 14% of the outstanding capital stock of PGI as of the date of
this Prospectus.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers three Classes of shares designated as Class A,
Class B and Class C shares, as described more fully in "How to Buy Fund
Shares." If you do not specify in your instructions to the Fund which Class
of shares you wish to purchase, exchange or redeem, the Fund will assume that
your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a CDSC. Class A
shares are subject to distribution and service fees at a combined annual rate
of up to 0.25% of the Fund's average daily net assets attributable to Class A
shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 4% if redeemed within six years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1.00% of the Fund's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is available to work for you
from the time you make your investment, but the higher distribution fee paid
by Class B shares will cause your Class B shares (until conversion) to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class B shares will automatically convert to Class
A shares, based on relative net asset value, approximately eight years after
the initial purchase.
Class C Shares. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are
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redeemed within the first year after purchase. Class C shares are subject to
distribution and service fees at a combined annual rate of up to 1.00% of the
Fund's average daily net assets attributable to Class C shares. Your entire
investment in Class C shares is available to work for you from the time you
make your investment, but the higher distribution fee paid by Class C shares
will cause your Class C shares to have a higher expense ratio and to pay
lower dividends, to the extent dividends are paid, than Class A shares. Class C
shares have no conversion feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not
to pay an initial sales charge on an investment of $250,000 or less and you
plan to hold the investment for at least six years, you might consider Class
B shares. If you prefer not to pay an initial sales charge and you plan to
hold your investment for one to eight years, you may prefer Class C shares.
Investment dealers and their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund
and shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold
outside the U.S. to persons who are not U.S. citizens may be subject to
different sales charges, CDSCs and dealer compensation arrangements in
accordance with local laws and business practices.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share, plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the New York Stock Exchange (the "Exchange") is open, as of the
close of regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities
quoted in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the Fund's independent pricing services.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the Exchange. Occasionally, events
which affect the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the Exchange
and will therefore not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities are valued at their fair
value as determined in good faith by the Trustees. All assets of the Fund for
which there is no other readily available valuation method are valued at fair
value as determined in good faith by the Trustees.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares from any securities broker-dealer which has a sales
agreement with PFD. If you do not have a securities broker-dealer, please
call 1-800-225-6292. Shares will be purchased at the public offering price,
that is, the net asset value per share, plus any applicable sales charge,
next computed after receipt of a purchase order, except as set forth below.
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B and Class C shares except that the subsequent minimum
investment amount for Class B and Class C share accounts may be as little as
$50 if an automatic investment plan is established (see "Automatic Investment
Plans").
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicate otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing fund account; it may not be used to establish a new account. Proper
account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to Individual Retirement Accounts
("IRAs") but may not be available to other types of retirement plan accounts.
Call PSC for more information.
You are strongly urged to consult with your financial representative prior to
requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section
of your Account Application or an Account Options Form. PSC will
electronically debit the amount of each purchase from this predesignated bank
account. Telephone purchases may not be made for 30 days after the
establishment of your bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any applicable
sales charge next determined after PSC's receipt of a telephone purchase
instruction and receipt of
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good funds (usually three days after the purchase instruction). You may
always elect to deliver purchases to PSC by mail. See "Telephone Transactions
and Related Liabilities" for additional information.
Class A Shares
You may buy Class A shares at the public offering price as follows:
Sales Charge as a % of
----------------------
Dealer
Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- --------------------- --------- --------- -------------
Less than $100,000 4.50% 4.71% 4.00%
$100,000 but less
than $250,000 3.50 3.63 3.00
$250,000 but less
than $500,000 2.50 2.56 2.00
$500,000 but less
than $1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see below
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other
fiduciary of a trust estate or fiduciary account or related trusts or
accounts including pension, profit-sharing and other employee benefit trusts
qualified under Section 401 or 408 of the Internal Revenue Code in 1986, as
amended (the "Code"), although more than one beneficiary is involved. The
sales charges applicable to a current purchase of Class A shares of the Fund
by a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of
shares of any of the other Pioneer mutual funds previously purchased and then
owned, provided PFD is notified by such person or his or her broker-dealer
each time a purchase is made which would qualify. Pioneer mutual funds
include all mutual funds for which PFD serves as principal underwriter. See
the "Letter of Intention" section of the Account Application.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by certain Group Plans (described below)
subject to a CDSC of 1% which may be imposed in the event of a redemption of
Class A shares within 12 months of purchase. See "How to Sell Fund Shares."
PFD may, in its discretion, pay a commission to broker-dealers who initiate
and are responsible for such purchases as follows: 1% on the first $5 million
invested; 0.50% on the next $45 million; and 0.25% on the excess over $50
million. Broker-dealers who receive a commission in connection with Class A
share purchases at net asset value by 401(a) or 401(k) retirement plans with
1,000 or more eligible participants or with at least $10 million in plan
assets will be required to return any commission paid or a pro rata portion
thereof if the retirement plan redeems its shares within 12 months of
purchase. See also "How to Sell Fund Shares ." These commissions will not be
paid if the purchaser is affiliated with the broker-dealer or if the purchase
represents the reinvestment of a redemption made during the previous 12
calendar months. In connection with PGI's acquisition of Mutual of Omaha Fund
Management Company and contingent upon the achievement of certain sales
objectives, PFD may pay to Mutual of Omaha Investor Services, Inc. 50% of
PFD's retention of any sales commission on sales of the Fund's Class A shares
through such dealer. From time to time, PFD may elect to reallow the entire
initial sales charge to participating dealers for all Class A sales with
respect to which orders are placed during a particular period. Dealers to
whom substantially the entire sales charge is reallowed may be deemed to be
underwriters under the federal securities laws.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to,
permits group solicitation of, or otherwise facilitates purchases by, its
employees, members or participants. Class A shares of the Fund may be sold at
net asset value without a sales charge to 401(k) retirement plans with 100 or
more participants or at least $500,000 in plan assets. Information about such
arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners or employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which
have entered into sales agreements with PFD; (e) members of the immediate
families of any of the foregoing persons; (f) any trust, custodian, pension,
profit-sharing or other benefit plan of the foregoing persons; (g) insurance
company separate accounts; (h) certain "wrap accounts" for the benefit of
clients of financial planners adhering to standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold
except through redemption or repurchase by or on behalf of the Fund. The
availability of this privilege is conditioned on the receipt by PFD of
written notification of eligibility. Class A shares of a Fund may be sold at
net asset value per share without a sales charge to Optional Retirement
Program (the "Program") participants if (i) the employer has authorized a
limited number of investment company providers for the Program, (ii) all
authorized investment company providers offer their shares to Program
participants at net asset value, (iii) the employer has agreed in writing to
actively promote the authorized investment providers to Program participants
and (iv) the Program provides for a matching contribution for each
participant contribution. Shares of the Fund may also be issued at net asset
value without a sales charge in connection with certain reorganization,
liquidation or acquisition transactions involving other investment companies
or personal holding companies.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Applica-
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tion. Information about the Letter of Intention procedure, including its
terms, is contained in the Statement of Additional Information.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase shares of the Fund at net asset value, without a sales
charge, to the extent that the purchase price is paid out of proceeds from
one or more redemptions by the investor of shares of certain other mutual
funds. In order for a purchase to qualify for this privilege, the investor
must document to the broker-dealer that the redemption occurred within 60
days immediately preceding the purchase of Class A shares of the Fund; that
the client paid a sales charge on the original purchase of the shares
redeemed; and that the mutual fund whose shares were redeemed also offers net
asset value purchases to redeeming shareholders of any of the Pioneer mutual
funds. Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares without the imposition of an initial sales charge
at net asset value per share next computed after receipt of a purchase order;
however, Class B shares redeemed within six years of purchase will be subject
to a CDSC at the rates shown in the table below. The charge will be assessed
on the amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Fund will first redeem shares not subject to any CDSC, and then
shares held longest during the six-year period. As a result, you will pay the
lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- ------------------------- --------------------------------
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class B shares, including the payment
of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end of
the calendar quarter that is eight years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer fund will convert into Class A shares based on the date of
the initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the
date of the initial purchase to which such shares relate. For this purpose,
Class B shares acquired through reinvestment of distributions will be
attributed to particular purchases of Class B shares in accordance with such
procedures as the Trustees may determine from time to time. The conversion of
Class B shares to Class A shares is subject to the continuing availability of
a ruling from the Internal Revenue Service ("IRS"), which the Fund has
obtained, or an opinion of counsel that such conversions will not constitute
taxable events for federal tax purposes. There can be no assurance that such
ruling will continue to be in effect at the time any particular conversion
would normally occur. The conversion of Class B shares to Class A shares will
not occur if such ruling is no longer in effect and such an opinion is not
available and, therefore, Class B shares would continue to be subject to
higher expenses than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1%. The charge will be assessed on the
amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
Class C shares do not convert to any other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments during
a quarter will be aggregated and deemed to have been made on the first day of
that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class C shares, including the payment
of compensation to broker-dealers.
All Classes of Shares
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of
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<PAGE>
the value of the account in the Fund at the time the withdrawal plan is
established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder or participant in
an employer-sponsored retirement plan; (b) the distribution is to a
participant in an IRA, 403(b) or employer-sponsored retirement plan, is part
of a series of substantially equal payments made over the life expectancy of
the participant or the joint life expectancy of the participant and his or
her beneficiary or as scheduled periodic payments to a participant (limited
in any year to 10% of the value of the participant's account at the time the
distribution amount is established; a required minimum distribution due to
the participant's attainment of age 70-1/2 may exceed the 10% limit only if
the distribution amount is based on plan assets held by Pioneer) or a
qualifying hardship distribution as defined by the Code or results from a
termination of employment (limited with respect to a termination to 10% per
year of the value of the plan's assets in the Fund as of the later of the
prior December 31 or the date the account was established unless the plan's
assets are being rolled over to or reinvested in the same class of shares of
a Pioneer mutual fund subject to the CDSC of the shares originally held); (c)
the distribution is from a 401(a) or 401(k) retirement plan and is a return
of excess employee deferrals or employee contributions; (d) the distribution
is from an IRA, 403(b) or employer-sponsored retirement plan and is to be
rolled over to or reinvested in the same class of shares in a Pioneer mutual
fund and which will be subject to the applicable CDSC upon redemption; (e)
the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which
will be subject to the applicable CDSC upon redemption); or (f) the
distribution is from a qualified defined contribution plan and represents a
participant's directed transfer (provided that this privilege has been
pre-authorized through a prior agreement with PFD regarding participant
directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may be
waived or reduced as follows: (a) for automatic redemptions as described in
"Systematic Withdrawal Plans" (limited to 10% of the value of the account);
(b) if the redemption results from the death or a total and permanent
disability (as defined in Section 72 of the Code) occurring after the
purchase of the shares being redeemed of a shareholder or participant in an
employer-sponsored retirement plan; (c) if the distribution is part of a
series of substantially equal payments made over the life expectancy of the
participant or the joint life expectancy of the participant and his or her
beneficiary; or (d) if the distribution is to a participant in an
employer-sponsored retirement plan and is (i) a return of excess employee
deferrals or contributions, (ii) a qualifying hardship distribution as
defined by the Code, (iii) from a termination of employment, (iv) in the form
of a loan to a participant in a plan which permits loans, or (v) from a
qualified defined contribution plan and represents a participant's directed
transfer (provided that this privilege has been pre-authorized through a
prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject to a
CDSC may be waived or reduced for either non-retirement or retirement plan
accounts if: (a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers. An order for any Class of Fund shares received by PFD from
a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business. PFD or
its affiliates may provide additional compensation to certain dealers or such
dealers' affiliates based on certain objective criteria established from time
to time by PFD. All such payments are made out of PFD's or the affiliate's
own assets. These payments will not change the price an investor will pay for
shares or the amount that the Fund will receive from such sale.
General. The Fund reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) Fund shares on any day the Exchange is open
by selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to the
Fund. Please note the following:
(bullet) If you are selling shares from a retirement account, you must make
your request in writing (except for exchanges to other Pioneer
mutual funds which can be requested by phone or in writing). Call
1-800-622-0176 for more information.
(bullet) If you are selling shares from a non-retirement account, you may use
any of the methods described below.
Your shares will be sold at the share price next calculated after your order
is received in good order less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
received in good order. The Fund reserves the right to withhold payment of
the sale proceeds until checks received by the Fund in payment for the shares
being sold have cleared, which may take up to 15 calendar days from the
purchase date.
In Writing. You may always sell your shares by delivering a written
request, signed by all registered owners, in good order to
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PSC, however, you must use a written request, including a signature
guarantee, to sell your shares if any of the following situations applies:
(bullet) you wish to sell over $50,000 worth of shares,
(bullet) your account registration or address has changed within the last 30
days,
(bullet) the check is not being mailed to the address on your account
(address of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer mutual fund
account with a different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and meet any other applicable requirements as
described below. Unless instructed otherwise, PSC will send the proceeds of
the sale to the address of record. Fiduciaries and corporations are required
to submit additional documents. For more information, contact PSC at
1-800-225-6292.
Written requests will not be processed until they are received in good order
by PSC. Good order means that there are no outstanding claims or requests to
hold redemptions on the account, any certificates are endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicate otherwise on your
Account Application or by writing to PSC. Proper account identification will
be required for each telephone redemption. A maximum of $50,000 per account
per day may be redeemed by telephone or fax and the proceeds may be received
by check or by bank wire or electronic funds transfer. To receive the
proceeds by check: the check must be made payable exactly as the account is
registered and the check must be sent to the address of record which must not
have changed in the last 30 days. To receive the proceeds by bank wire or by
electronic funds transfer: the proceeds must be sent to your bank wire
address of record which must have been properly pre-designated either on
your Account Application or on an Account Options Form and which must not
have changed in the last 30 days. To redeem by fax send your redemption
request to 1-800-225-4240. You may always elect to deliver redemption
instructions to PSC by mail. See "Telephone Transactions and Related
Liabilities" below. Telephone and fax redemptions will be priced as described
above. You are strongly urged to consult with your financial representative
prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any
time. Your broker-dealer must receive your request before the close of
business on the Exchange and transmit it to PFD before PFD's close of
business to receive that day's redemption price. Your broker-dealer is
responsible for providing all necessary documentation to PFD and may charge
you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum
required amount due to redemptions or exchanges, the Fund may redeem the
shares held in this account at net asset value if you have not increased the
net asset value of the account to at least the minimum required amount within
six months of notice by the Fund to you of the Fund's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1 million or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 1% of the lesser of the value of
the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer mutual fund will continue to be
subject to the CDSC until the original 12-month period expires. However, no
CDSC is payable upon redemption with respect to Class A shares purchased by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The net
asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Fund out of which you wish to exchange and the name of the Pioneer mutual
fund into which you wish to exchange, your fund account number(s), the Class
of shares to be exchanged and the dollar amount or number of shares to be
exchanged. Written exchange requests must be signed by all record owner(s)
exactly as the shares are registered.
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Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by
voice or FactFone(SM), will be recorded. You are strongly urged to consult
with your financial representative prior to requesting a telephone exchange.
See "Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
mutual fund account for shares of the same Class in another Pioneer mutual
fund account on a monthly or quarterly basis. The accounts must have
identical registrations and the originating account must have a minimum
balance of $5,000. The exchange will be effective on the day of the month
designated on your Account Application or Account Options Form.
General. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Fund shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not
all Pioneer mutual funds offer more than one Class of shares. A new Pioneer
mutual fund account opened through an exchange must have a registration
identical to that on the original account.
Shares which would normally be subject to a CDSC upon redemption will not be
charged the applicable CDSC at the time of an exchange. Shares acquired in an
exchange will be subject to the CDSC of the shares originally held. For
purposes of determining the amount of any applicable CDSC, the length of time
you have owned shares acquired by exchange will be measured from the date you
acquired the original shares and will not be affected by any subsequent
exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements below have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the Fund exchanged and a purchase of shares in another Fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making
any exchange. For the protection of the Fund's performance and shareholders,
the Fund and PFD reserve the right to refuse any exchange request or
restrict, at any time without notice, the number and/or frequency of
exchanges to prevent abuses of the exchange privilege. Such abuses may arise
from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market," or any other exchange request which, in the view of
management, will have a detrimental effect on the Fund's portfolio management
strategy or its operations. In addition, the Fund and PFD reserve the right
to charge a fee for exchanges or to modify, limit, suspend or discontinue the
exchange privilege with notice to shareholders as required by law.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for each Class of shares (the
"Class A Plan," "Class B Plan," and "Class C Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution and service
fees are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Fund's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Fund: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Fund's daily
net assets attributable to Class A shares; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on
certain sales of the Fund's Class A shares with no initial sales charge (See
"How to Buy Fund Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A
Plan does not provide for the carryover of reimbursable expenses beyond
twelve months from the time the Fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the Fund in one fiscal year being paid in the subsequent fiscal
year and thus being treated for purposes of calculating the maximum
expenditures of the Fund as having been incurred in the subsequent fiscal
year. In the event of termination or non-continuance of the Class A Plan, the
Fund has twelve months to reimburse any expense which it incurs prior to such
termination or non-continuance, provided that payments by the Fund during
such twelve-month period shall not exceed 0.25% of the Fund's average daily
net assets during such period. The Class A Plan may not be amended to
increase materially the annual percentage limitation of average net
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assets which may be spent for the services described therein without approval
of the shareholders of the Fund.
Both the Class B and the Class C Plans provide that the Fund will pay a
distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets attributable to the applicable Class of shares and will pay PFD a
service fee at the annual rate of 0.25% of the Fund's average daily net
assets attributable to that Class of shares. The distribution fee is intended
to compensate PFD for its distribution services to the Fund. The service fee
is intended to be additional compensation for personal services and/or
account maintenance services with respect to Class B or Class C shares. PFD
also receives the proceeds of any CDSC imposed on the redemption of Class B
or Class C shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with PFD. PFD may advance to
dealers the first year service fee at a rate up to 0.25% of the purchase
price of such shares and, as compensation therefore, PFD may retain the
service fee paid by the Fund with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the 13th month following the purchase.
Commissions of up to 1% of the amount invested in Class C shares, consisting
of 0.75% of the amount invested and a first year's service fee of 0.25% of
the amount invested, are paid to broker-dealers who have selling agreements
with PFD. PFD may advance to dealers the first year service fee at a rate up
to 0.25% of the purchase price of such shares and, as compensation therefore,
PFD may retain the service fee paid by the Fund with respect to such shares
for the first year after purchase. Commencing in the 13th month following the
purchase of Class C shares, dealers will become eligible for additional
annual distribution fees and service fees of up to 0.75% and 0.25%,
respectively, of the net asset value of such shares.
Dealers may from time to time be required to meet certain criteria in order
to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B or Class C Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.
XI. Dividends, Distributions and Taxation
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code
so that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.
Each business day the Fund declares a dividend consisting of substantially
all of its net investment income (earned interest income less expenses).
Shares being purchased will begin earning dividends on the first business day
following receipt of payment for purchased shares. Shares continue to earn
dividends up to and including the date of redemption. Dividends are normally
paid on the last business day of the month or shortly thereafter.
Distributions from net short-term capital gains, if any, may be paid with
such dividends; distributions of dividends from income and/or capital gains
may also be made at such other times as may be necessary to avoid federal
income or excise tax.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. For federal income tax purposes, all dividends are taxable as described
below whether a shareholder takes them in cash or reinvests them in
additional shares of the Fund. Information as to the federal tax status of
distributions will be provided annually to shareholders. See "Distribution
Options" and "Directed Dividends."
The Fund's dividends from its net investment income, income from securities
lending, and certain net realized foreign exchange gains, and any net
short-term capital gains are taxable to shareholders as ordinary income under
the Code. Dividends from the Fund's net long-term capital gains are taxable
to shareholders as long-term capital gains under the Code, regardless of a
shareholder's holding period for his Fund shares.
The Fund may be subject to foreign withholding taxes or other foreign taxes
on income (possibly including, in some cases, capital gains) from certain
foreign investments, which will reduce its return from those investments. The
Fund anticipates that it generally will not qualify to pass such taxes
through to its shareholders, who will generally neither treat such taxes as
additional income nor be entitled to any foreign tax credits or deductions
with respect to such taxes.
Dividends and other distributions and the proceeds of redemptions, exchanges
or repurchases of Fund shares paid to individuals and other non-exempt payees
will be subject to 31% backup withholding of federal income tax if the Fund
is not provided with the shareholder's correct taxpayer identification number
and certification that the number is correct and the shareholder is not
subject to such backup withholding or if the Fund receives notice from the
IRS or a broker that such withholding applies. Please refer to the Account
Application for additional information.
The description above relates only to federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents, or U.S.
corporations, partnerships, trusts or estates and who are subject to U.S.
federal income tax. A state income (and possibly local income and/or
intangible property) tax exemption is generally available to the extent the
Fund's distributions are derived from interest on (or, in the case of
intangibles taxes, the value of its assets is
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attributable to) certain U.S. government securities, provided in some states
that certain thresholds for holdings of such securities and/or reporting
requirements are satisfied. The Fund will report annually to its shareholders
the percentage of interest income earned from U.S. government securities
during the preceding year. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax adviser regarding this possibility
and other tax consequences under state, local and other applicable tax laws.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Shareholder Services, Pioneering
Services Corporation, P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown
Brothers Harriman & Co. (the "Custodian") serves as the custodian of the
Fund's securities and other assets. The principal business address of the
mutual fund division of the Custodian is 40 Water Street, Boston,
Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders quarterly for dividend
reinvestment and Automatic Investment Plan transactions and more frequently
for other types of transactions. The Pioneer Combined Account Statement,
mailed quarterly, is available to all shareholders who have more than one
Pioneer mutual fund account.
Shareholders whose shares are held in the name of an investment broker-dealer
or other party will not normally have an account with the Fund and might not
be able to utilize some of the services available to shareholders of record.
Examples of services that might not be available are purchases, exchanges or
redemption of shares by mail or telephone, automatic reinvestment of
dividends and capital gains distributions, withdrawal plans, Letters of
Intention or Rights of Accumulation.
Additional Investments
You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B and Class C shares) to PSC (account number and
Class of shares should be clearly indicated). The bottom portion of a
confirmation statement may be used as a remittance slip to make additional
investments. Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized electronic funds transfer or
draft drawn on a checking account. Pioneer Investomatic Plan investments are
voluntary, and you may discontinue the Plan without penalty upon 30 days'
written notice to PSC. PSC acts as agent for the purchaser, the broker-dealer
and PFD in maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semi-annually.
In January of each year the Fund will mail to you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in the distribution option may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer mutual
fund account invested in a second Pioneer mutual fund account. The value of
this second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer
II). Invested dividends may be in any amount. There are no fees or charges
for this service. Retirement plan shareholders may only direct dividends to
accounts with identical registrations i.e., PGI IRA Cust for John Smith may
only go into another account registered PGI IRA Cust for John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends and
capital gains, in cash, or have established a Systematic Withdrawal Plan, you
may choose to have those cash payments deposited directly into your savings,
checking or NOW bank account. You may establish this service by completing
the appropriate section on the Account Application when opening a new account
or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
For personal assistance, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m.
Eastern time on weekdays. See "How to Buy Fund Shares," "How to Sell Fund
Shares" and "How to Exchange Fund Shares" for more information.
Computer-assisted transactions are avail-
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able to shareholders who have pre-recorded certain bank information (see
FactFone(SM)). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. To confirm that
each transaction instruction received by telephone is genuine, the Fund will
record each telephone transaction, require the caller to provide the personal
identification number ("PIN") for the account and send you a written
confirmation of each telephone transaction. Different procedures may apply to
accounts that are registered to non-U.S. citizens or that are held in the
name of an institution or in the name of an investment broker-dealer or other
third-party. If reasonable procedures, such as those described above, are not
followed, the Fund may be liable for any loss due to unauthorized or
fraudulent instructions. The Fund may implement other procedures from time to
time. In all other cases, neither the Fund, PSC or PFD will be responsible
for the authenticity of instructions received by telephone, therefore, you
bear the risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM)
allows you to obtain current information on your Pioneer mutual fund accounts
and to inquire about the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFone(SM) to make computer-
assisted telephone purchases, exchanges and redemptions from your Pioneer
accounts if you have activated your PIN. Telephone purchases and redemptions
require the establishment of a bank account of record. You are strongly urged
to consult with your financial representative prior to requesting any
telephone transaction. Shareholders whose accounts are registered in the name
of a broker-dealer or other third party may not be able to use FactFone(SM).
See "How to Buy Fund Shares," "How to Exchange Fund Shares," "How to Sell
Fund Shares" and "Telephone Transactions and Related Liabilities." Call PSC
for assistance.
Retirement Plans
Interested persons should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to retirement plans for business,
age-weighted profit sharing plans, Simplified Employee Pension Plans, IRAs,
Section 401(k) salary reduction plans and Section 403(b) retirement plans for
employees of certain non-profit organizations and public school systems, all
of which are available in conjunction with investments in the Fund. The
Pioneer Mutual Funds Account Application accompanying this Prospectus should
not be used to establish such plans. Separate applications are required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a SWP
providing for fixed payments at regular intervals. Withdrawals from Class B
and Class C share accounts are limited to 10% of the value of the account at
the time the SWP is implemented. See "Waiver or Reduction of Contingent
Deferred Sales Charge" for more information. Periodic checks of $50 or more
will be sent to you, or any person designated by you, monthly or quarterly
and your periodic redemptions of shares may be taxable to you. Payments can
be made either by check or electronic transfer to a bank account designated
by you. You may also direct that withdrawal checks be paid to another person,
although if you make this designation after you have opened your account, a
signature guarantee must accompany your instructions. Purchases of Class A
shares of the Fund at a time when you have a SWP in effect may result in the
payment of unnecessary sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Fund if you send a written request to PSC not more than
90 days after your shares were redeemed. Your redemption proceeds will be
reinvested at the next determined net asset value of the Class A shares of
the Fund in effect immediately after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes
as a result of the redemption, and special tax rules may apply if a
reinstatement occurs. In addition, if a redemption resulted in a loss and an
investment is made in shares of the Fund within 30 days before or after the
redemption, you may not be able to recognize the loss for federal income tax
purposes. Subject to the provisions outlined under "How to Exchange Fund
Shares" above, you may also reinvest in certain other Pioneer mutual funds;
in this case you must meet the minimum investment requirement for each fund
you enter. The 90-day reinstatement period may be extended by PFD for periods
of up to one year for shareholders living in areas that have experienced a
natural disaster, such as a flood, hurricane, tornado or earthquake.
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended, or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by completing an
Account Options Form, which you may obtain by calling 1-800-225-6292.
XIII. THE FUND
The Fund is an open-end diversified management investment company (commonly
referred to as a mutual fund)
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organized as a Massachusetts corporation on August 16, 1978 and reorganized
as a Massachusetts business trust on December 31, 1985. The Fund will
recognize stock certificates representing shares of Pioneer Bond Fund, Inc.
issued prior to its reorganization as a Massachusetts business trust as
evidence of ownership of an equivalent number of shares of beneficial
interest. Any shareholder desiring to surrender a stock certificate to the
Fund for a share certificate representing an equivalent number of shares of
beneficial interest may do so by making a written request for the exchange to
PSC. The request must be accompanied by the surrendered stock certificate
which must be endorsed on the back exactly in the manner as the certificate
is registered.
The Fund has authorized an unlimited number of shares of beneficial interest
and the Trustees are authorized to create additional series of the Fund. The
Fund is not required to hold annual meetings, although special meetings may
be called for the purposes of electing or removing Trustees, changing
fundamental investment restrictions or approving a management contract. The
Trustees have the authority, without further shareholder approval, to
classify and reclassify the shares of the Fund, or any new series of the
Fund, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of three Classes of shares, designated
Class A, Class B and Class C. The shares of each Class represent an interest
in the same portfolio of investments of the Fund. Each Class has equal rights
as to voting, redemption, dividends and liquidation, except that each Class
bears different distribution and transfer agent fees and may bear other
expenses properly attributable to the particular Class. Class A, Class B and
Class C shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection
with the distribution of shares.
When issued and paid for in accordance with the terms of the Prospectus and
Statement of Additional Information, shares of the Fund are fully-paid and
non-assessable. Shares will remain on deposit with the Fund's transfer agent
and certificates will not normally be issued. The Fund reserves the right to
charge a fee for the issuance of Class A shares certificates; certificates
will not be issued for Class B or Class C shares.
XIV. INVESTMENT RESULTS
The Fund may from time to time include yield information in advertisements or
in information furnished generally to existing or proposed shareholders.
Yield information is computed in accordance with the SEC's standardized yield
formula. The calculation for all Classes is computed by dividing the net
investment income per share of a Class during a base period of 30 days, or
one month, by the maximum offering price per share of the applicable Class of
the Fund on the last day of such base period. The resulting "30-day yield" is
then annualized as described below. Net investment income per share of a
Class is determined by dividing the Fund's net investment income attributable
to a Class during the base period by the average number of shares of that
Class of the Fund. The 30-day yield is then "annualized" by a computation
that assumes that the net investment income per share of a Class is earned
and reinvested for a six-month period at the same rate as during the 30-day
base period and that the resulting six-month income will be generated over an
additional six months.
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal
or state income taxes. In addition, for Class A shares the calculation
assumes the deduction of the maximum sales charge of 4.50%; for Class B and
Class C shares the calculation reflects the deduction of any applicable CDSC.
The periods illustrated would normally include one, five and ten years (or
since the commencement of the public offering of the shares of a Class, if
shorter) through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited to
historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Fund's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indices,
indicators of economic activity or averages of mutual fund results may be
cited or compared with the investment performance of the Fund. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. All quoted investment results are historical and should not be
considered representative of what an investment in the Fund may earn in any
future period. For further information about the calculation methods and uses
of the Fund's investment results, see the Statement of Additional
Information.
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Notes
17
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Notes
18
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THE PIONEER FAMILY OF MUTUAL FUNDS
International Growth Funds
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
Growth Funds
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Gold Shares
Growth and Income Funds
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Income Funds
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
Tax-Free Income Funds
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Money Market Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts
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[COVER]
Pioneer [Pioneer logo]
Bond Fund
60 State Street
Boston, Massachusetts
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
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications and service forms
and telephone transactions 1-800-225-6292
FactFone(SM)
Automated fund yields, automated prices
and account information 1-800-225-4321
Retirement plans 1-800-622-0176
Toll-free fax 1-800-225-4240
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
0896-3603
(C)Pioneer Funds Distributor, Inc.
20
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PIONEER BOND FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
August 30, 1996
This Statement of Additional Information is not a Prospectus, but
should be read in conjunction with the Prospectus (the "Prospectus") dated
August 30, 1996 of Pioneer Bond Fund (the "Fund"). A copy of the Prospectus can
be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or
by written request to the Fund at 60 State Street, Boston, Massachusetts 02109.
The most recent Annual Report to Shareholders is attached to this Statement of
Additional Information and is hereby incorporated in this Statement of
Additional Information by reference.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions.....................................2
2. Management of the Fund...................................................6
3. Investment Adviser......................................................11
4. Underwriting Agreement and Distribution Plans...........................11
5. Shareholder Servicing/Transfer Agent....................................14
6. Custodian...............................................................15
7. Principal Underwriter...................................................15
8. Independent Public Accountants..........................................15
9. Portfolio Transactions..................................................15
10. Tax Status.............................................................17
11. Description of Shares..................................................20
12. Certain Liabilities....................................................20
13. Determination of Net Asset Value.......................................21
14. Systematic Withdrawal Plan.............................................22
15. Letter of Intention....................................................22
16. Investment Results.....................................................23
17. Financial Statements...................................................27
Appendix A............................................................28
Appendix B............................................................33
Appendix C............................................................43
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Fund's Prospectus presents the investment objectives and the
principal investment policies of the Fund. Additional investment policies and a
further description of some of the policies described in the Prospectus appear
below. Capitalized terms not otherwise defined herein have the meaning given to
them in the Prospectus.
The following policies and restrictions set forth under "Investment
Restrictions" supplement those discussed in the Prospectus. Except with respect
to the policy on borrowing described below, whenever an investment policy or
restriction states a maximum percentage of the Fund's assets that may be
invested in any security or presents a policy regarding quality standards, this
standard or other restrictions shall be determined immediately after and as a
result of the Fund's investment. Accordingly, any later increase or decrease
resulting from a change in values, net assets or other circumstances will not be
considered in determining whether the investment complies with the Fund's
investment objectives and policies, other than the policy on borrowing.
Lending of Portfolio Securities
The Fund may lend portfolio securities to member firms of the New York
Stock Exchange (the "Exchange"), under agreements which would require that the
loans be secured continuously by collateral in cash, cash equivalents or United
States ("U.S.") Treasury Bills maintained on a current basis at an amount at
least equal to the market value of the securities loaned. The Fund would
continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities loaned and would also receive compensation based on
investment of the collateral. The Fund would not, however, have the right to
vote any securities having voting rights during the existence of the loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment.
As with other extensions of credit there are risks of delay in recovery
or even loss of rights in the collateral should the borrower of the securities
fail financially. The Fund will lend portfolio securities only to firms which
have been approved in advance by the Fund's Board of Trustees, which will
monitor the creditworthiness of any such firms. At no time would the value of
the securities loaned exceed 30% of the value of the Fund's total assets. The
Fund did not lend portfolio securities during the last fiscal year and has no
present intention to engage in any material securities lending in the future.
Mortgage-Backed Securities
Multiple-Class Pass-through Securities and Collateralized Mortgage Obligations
The Fund may invest in collateralized mortgage obligations ("CMOs") and
real estate mortgage investment conduit ("REMIC") pass-through or participation
certificates, which may be issued by, among others, U.S. Government agencies and
instrumentalities as well as private
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lenders. CMOs and REMIC certificates are issued in multiple classes and the
principal of and interest on the mortgage assets may be allocated among the
several classes of CMOs or REMIC certificates in various ways. Each class of
CMOs or REMIC certificates, often referred to as a "tranche," is issued at a
specific adjustable or fixed interest rate and must be fully retired no later
than its final distribution date. Generally, interest is paid or accrues on all
classes of CMOs or REMIC certificates on a monthly basis. Typically, CMOs are
collateralized by certificates of the Government National Mortgage Association,
the Federal National Mortgage Association, or the Federal Home Loan Mortgage
Corporation but also may be collateralized by other mortgage assets such as
whole loans or private mortgage pass-through securities. Debt service on CMOs is
provided from payments of principal and interest on collateral of mortgaged
assets and any reinvestment income thereon.
Risk Factors Associated with Mortgaged-Backed Securities
The value of an investment in fixed rate obligations can be expected to
rise as interest rates decline and decline as interest rates rise. In contrast,
as interest rates on adjustable rate mortgage loans are reset periodically,
yields on investments in such loans will gradually align themselves to reflect
changes in market interest rates, causing the value of such investments to
fluctuate less dramatically in response to interest rate fluctuations than would
investments in fixed rate obligations.
The yield characteristics of Mortgage-Backed Securities, such as those
in which the Fund may invest, differ from those of traditional fixed income
securities. The major differences typically include more frequent interest and
principal payments (usually monthly), the adjustability of interest rates, and
the possibility that prepayments of principal may be made substantially earlier
than their final distribution dates. Prepayment rates are influenced by changes
in current interest rates and a variety of economic, geographic, social and
other factors and cannot be predicted with certainty. Both adjustable rate
mortgage loans and fixed rate mortgage loans may be subject to a greater rate of
principal prepayment in a declining interest rate environment and to a lesser
rate of principal prepayments in an increasing interest rate environment. Under
certain interest rate and prepayment rate scenarios, the Fund may fail to recoup
fully its investment in Mortgage-Backed Securities notwithstanding any direct or
indirect governmental or agency guarantee. When the Fund reinvests amounts
representing payments and unscheduled prepayments of principal, it may receive a
rate of interest that is lower than the rate on existing adjustable rate
mortgage pass-through securities. Thus, Mortgage-Backed Securities, and
adjustable rate mortgage pass-through securities in particular, may be less
effective than other types of U.S. Government securities as a means of "locking
in" interest rates.
Investment Restrictions
Fundamental Investment Restrictions. The Fund has adopted certain
fundamental investment restrictions which may not be changed without the
affirmative vote of the holders of a majority of the Fund's outstanding voting
securities. As used in the Prospectus and this Statement of Additional
Information, such approval means the approval of the lesser of (i) the
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holders of 67% or more of the shares represented at a meeting if the holders of
more than 50% of the outstanding shares are present in person or by proxy, or
(ii) the holders of more than 50% of the outstanding shares.
The Fund may not:
(1) purchase any security (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities) if,
immediately after and as a result of such investment, (a) more than 5% of the
value of the Fund's total assets would be invested in securities of the issuer;
(b) the Fund would hold more than 10% of the voting securities of the issuer; or
(c) more than 25% of the value of the Fund's assets would be invested in a
single industry (each of the electric utility, natural gas utility, and
telephone industries shall be considered as a separate industry for this
purpose);
(2) buy or sell real estate in the ordinary course of its
business; provided, however, the Fund may invest in readily marketable debt
securities secured by real estate or interests therein or issued by companies,
including real estate investment trusts, which invest in real estate or
interests therein;
(3) buy or sell commodities or commodity contracts except
interest rate futures contracts, options on securities, securities indices,
currency and other financial instruments, futures contracts on securities,
securities indices, currency and other financial instruments and options on such
futures contracts, forward foreign currency exchange contracts, forward
commitments, securities index put or call warrants, interest rate swaps, caps
and floors and repurchase agreements entered into in accordance with the Fund's
investment policies;
(4) underwrite any issue of securities;
(5) make loans in an aggregate amount in excess of 10% of the
value of the Fund's total assets, taken at the time any loan is made, provided
that (i) the purchase of debt securities pursuant to the Fund's investment
objectives shall not be deemed loans for the purposes of this restriction, (ii)
loans of portfolio securities as described, from time to time, under "Lending of
Portfolio Securities" shall be made only in accordance with the terms and
conditions therein set forth and (iii) in seeking a return on temporarily
available cash, the Fund may engage in repurchase transactions maturing in one
week or less and involving obligations of the U.S. Government, its agencies or
instrumentalities;
(6) sell securities short, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;
(7) purchase securities on margin;
(8) borrow money, except that, as a temporary measure for
extraordinary or emergency purposes and not for investment purposes, the Fund
may borrow up to 5% of the value of its total assets at the time of the
borrowing; or
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(9) mortgage, pledge, or hypothecate any of its assets.
Non-fundamental Investment Restrictions. The following restrictions
have been designated as non-fundamental and may be changed by a vote of the
Fund's Board of Trustees without approval of shareholders.
The Fund may not:
(1) invest in companies for the purpose of exercising control
or management;
(2) knowingly purchase securities of other registered
investment companies, except in connection with a merger, consolidation,
acquisition, or reorganization;
(3) invest in any security, including any repurchase agreement
maturing in more than seven days, which is illiquid, if more than 15% of the
total assets of the Fund, taken at market value, would be invested in such
securities;
(4) purchase or retain the securities of any issuer, if those
individual officers and trustees or directors of the Fund, its adviser or
principal underwriter, each owning beneficially more than one half of 1% of the
securities of such issuer, together own more than 5% of the securities of such
issuer; or
(5) invest more than 5% of its total assets in securities of
companies having, together with their predecessors, a record of less than three
years of continuous operation.
It is the policy of the Fund not to concentrate its investments in
securities of companies in any particular industry or group of industries. In
the opinion of the staff of the Securities and Exchange Commission (the "SEC"),
investments are concentrated in a particular industry if such investments
aggregate 25% or more of the Fund's total assets. The Fund has agreed to abide
by the foregoing non- fundamental policy which it will not change without the
affirmative vote of a majority of the Fund's outstanding shares of beneficial
interest.
In connection with the offering of its shares in various states, as a
matter of non-fundamental investment policy, the Fund has agreed not to invest
in puts, calls, straddles, spreads or any combination thereof, in oil, gas or
other mineral leases, exploration or development programs, or in real estate
limited partnerships.
Other Policies and Risks
The Fund may invest up to 15% of its assets in foreign securities and
up to 5% of its assets in foreign securities which are not listed on a
recognized foreign or domestic exchange, provided that purchases of Canadian
securities are not subject to the limitations in this paragraph. Investing in
securities of foreign companies and countries involves certain considerations
and risks which are not typically associated with investing in U.S. government
securities and those of
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domestic companies. Foreign companies are not generally subject to uniform
accounting, auditing and financial standards and requirements comparable to
those applicable to U.S. companies. There may also be less government
supervision and regulation of foreign securities exchanges, brokers and listed
companies than exists in the United States.
Interest paid by foreign issuers may be subject to withholding and
other foreign taxes which may decrease the net return on such investments as
compared to interest paid to the Fund by the U.S. government or by domestic
companies. In addition, there may be the possibility of expropriations,
confiscatory taxation, political, economic or social instability or diplomatic
developments which could affect assets of the Fund held in foreign countries.
The value of foreign securities may be adversely affected by fluctuations in the
relative rates of exchange between the currencies of different nations and by
exchange control regulations. There may be less publicly available information
about foreign companies and governments compared to reports and ratings
published about U.S. companies. Foreign securities markets have substantially
less volume than domestic markets and securities of some foreign companies are
less liquid and more volatile than securities of comparable U.S.
companies.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the
affairs of the Fund. The officers of the Fund are responsible for the Fund's
operations. The Trustees and executive officers of the Fund are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Fund within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First
Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the
Board and Director of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds; and Partner, Hale and Dorr (counsel
to the Fund).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
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Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital; and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc (consulting firm); Manager of
Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993; and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute; and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl,
First Russia, Omega and Pioneer SBIC Corporation; and Executive Vice President
and Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves; and Trustee of all of the Pioneer
mutual funds, except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC; and Treasurer of all of
the Pioneer mutual funds.
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JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and
PCC; Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund); and
Secretary of all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994; Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994; and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC; and formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as junior partner.
SHERMAN B. RUSS, Vice President, DOB: July 1937
Senior Vice President of PMC; Vice President of Pioneer Money Market
Trust, Pioneer America Income Trust and Pioneer Interest Shares, Inc.
The Fund's Declaration of Trust (the "Declaration of Trust") provides
that the holders of two-thirds of its outstanding shares may vote to remove a
Trustee of the Fund at any meeting of shareholders. See "Description of Shares"
below. The business address of all officers is 60 State Street, Boston,
Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the
Fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
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Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to
provide investment vehicles for the variable annuity and
variable life insurance contracts of various insurance
companies or for certain qualified pension plans.
To the knowledge of the Fund, no officer or Trustee of the Fund owned
5% or more of the issued and outstanding shares of PGI as of July 31, 1996,
except Mr. Cogan who then owned approximately 14% of such shares. As of July 31,
1996, the Trustees and officers of the Fund owned, in the aggregate, less than
1% of the outstanding securities of the Fund. To the knowledge of management, no
person or entity owned more than 5% of the outstanding shares of the Fund as of
July 31, 1996. As of July 31, 1996, Merrill Lynch Pierce Fenner & Smith, Mutual
Fund Operations, Jacksonville, Florida owned of record 9.84% (173,944 shares)
and 14.44% (7,239 shares) of the outstanding Class B and Class C shares of the
Fund, respectively. As of July 31, 1996, the following persons or entities owned
more than 5% of the Fund's outstanding Class C shares: William C. Bush (IRA),
138 Bertha Avenue, Donora, PA, 22.94% (11,505 shares); PFD, 21.63% (10,845
shares); Raymond James & Associates, Inc., CSDN, William S. Church SEP, 615
Laurel Drive, Everrett, WA, 9.83% (4,929 shares); Brandy Coats (IRA), 29545
Vacation, Caynon Lake, CA, 8.92% (4,473 shares); Mazie M. Schaackey and Frances
L. Knapton, Joint Tenants, 421 S. Curtis Road, Boise, ID, 5.81% (2915 shares);
and Alice M. Errett, Redstone Highland, Greensburg, PA, 5.39% (2704 shares).
Compensation of Officers and Trustees
The Fund pays no salaries or compensation to any of its officers.
Commencing on January 1, 1996 the Fund will pay an annual trustees' fee to each
Trustee who is not affiliated with PMC, PGI, PFD or PSC consisting of two
components: (a) a base fee of $500 and (b) a variable fee, calculated on the
basis of the average net assets of each Fund, not expected to exceed
approximately $200 for 1996. In addition, each Fund will pay a per meeting fee
of $120
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to each Trustee who is not affiliated with PMC, PGI, PFD or PSC. The Fund also
will pay an annual committee participation fee to Trustees who serve as members
of committees established to act on behalf of one or more of the of Pioneer
mutual funds. Committee fees will be allocated to the Fund on the basis of the
Fund's average net assets. Each Trustee who is a member of the Audit Committee
for the Pioneer mutual funds will receive an annual fee equal to 10% of the
aggregate annual trustees' fee, except the Committee Chair who will receive an
annual trustees' fee equal to 20% of the aggregate annual trustees' fee. The
Audit Committee fees for each member and the Audit Committee Chair for 1996 are
expected to be approximately $6,000 and $12,000, respectively. Members of the
Pricing Committee for the Pioneer mutual funds, as well as any other committee
which renders material functional services to the Board of Trustees for the
Pioneer mutual funds, will receive an annual fee equal to 5% of the annual
trustees' fee, except the Committee Chair who will receive an annual trustees'
fee equal to 10% of the annual trustees' fee. The Pricing Committee fees for
each member and the Pricing Committee Chair for 1996 are expected to be
approximately $3,000 and $6,000, respectively. Any such fees paid to affiliates
or interested persons of PMC, PGI, PFD or PSC are reimbursed to the Fund under
its Management Contract. Prior to January 1, 1996, the Fund paid an annual
trustees' fee of $1,000, and a payment of $100 plus expenses per meeting
attended, to each Trustee who was not affiliated with PGI, PMC, PFD or PSC and
paid an annual trustees' fee of $500 plus expenses to each Trustee affiliated
with PGI, PMC, PFD or PSC. Any such fees and expenses paid to affiliates or
interested persons of PGI, PMC, PFD or PSC are reimbursed to the Fund under its
management contract.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund:
Name of Trustee Aggregate Pension or Total
Compensation Retirement Compensation
from Fund * Benefits from Fund and
Accrued as Pioneer Family
Part of of Funds**
Fund Expenses
John F. Cogan, Jr. $ 500 $0 $11,500
Richard H. Egdahl, M.D. $2,099 $0 $62,000
Margaret B.W. Graham $2,099 $0 $60,000
John W. Kendrick $2,099 $0 $60,000
Margeurite A. Piret $2,099 $0 $80,000
David D. Tripple $ 500 $0 $11,500
Stephen K. West $2,099 $0 $68,000
John Winthrop $2,099 $0 $69,000
------ -- -------
Total $13,594 $0 $423,000
======= == ========
* As of June 30, 1996, the Fund's fiscal year end.
** As of December 31, 1995.
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3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston,
Massachusetts, to act as its investment adviser. The term of the contract is one
year, but it is renewable annually after such date by the vote of a majority of
the Board of Trustees of the Fund (including a majority of the Board of Trustees
who are not parties to the contract or interested persons of any such parties)
cast in person at a meeting called for the purpose of voting on such renewal.
This contract terminates if assigned and may be terminated without penalty by
either party by vote of its Board of Directors or Trustees or by vote of a
majority of outstanding voting securities and the giving of sixty days' written
notice. Pursuant to the management contract, PMC will not be liable for any
error of judgment or mistake of law or for any loss sustained by reason of the
adoption of any investment policy or the purchase, sale or retention of any
securities on the recommendation of PMC. PMC, however, is not protected against
liability by reason of wilful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under the respective management contract.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the rate of 0.50% per annum of the Fund's
average daily net assets. The fee is normally computed daily and paid monthly.
During its 1996, 1995 and 1994 fiscal years, the Fund paid or owed total
management fees to PMC of approximately $588,432, $546,000 and $571,000,
respectively.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund has entered into an Underwriting Agreement with PFD. The
Underwriting Agreement will continue from year to year if annually approved by
the Trustees. The Underwriting Agreement provides that PFD will bear any
distribution expenses not borne by the Fund.
PFD bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Fund. PFD also pays certain expenses in connection with the
distribution of the Fund's shares, including the cost of preparing, printing and
distributing advertising or promotional materials, and the cost of printing and
distributing prospectuses and supplements to prospective shareholders. The Fund
bears the cost of registering its shares under federal and state securities law.
The Fund and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Fund.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1
under the 1940 Act with respect to Class A, Class B and Class C shares (the
"Class A Plan," the "Class B Plan" and the "Class C Plan") (together, the
"Plans").
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Class A Plan
Pursuant to the Class A Plan the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Fund shares. Certain categories of such expenditures have been approved by
the Board of Trustees and are set forth in the Prospectus. See "Distribution
Plans" in the Prospectus. The expenses of the Fund pursuant to the Class A Plan
are accrued on a fiscal year basis and may not exceed, with respect to Class A
shares, the annual rate of 0.25% of the Fund's average annual net assets
attributable to Class A.
Class B Plan
The Class B Plan provides that the Fund shall pay PFD, as the Fund's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Fund's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Fund's average daily
net assets attributable to Class B shares (which PFD will in turn pay to
securities dealers which enter into a sales agreement with PFD at a rate of up
to 0.25% of the Fund's average daily net assets attributable to Class B shares
owned by investors for whom that securities dealer is the holder or dealer of
record). This service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Dealers will become eligible for additional service
fees with respect to such shares commencing in the thirteenth month following
purchase. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is
to compensate PFD for its distribution services to the Fund. PFD pays
commissions to dealers as well as expenses of printing prospectuses and reports
used for sales purposes, expenses with respect to the preparation and printing
of sales literature and other distribution related expenses, including, without
limitation, the cost necessary to provide distribution- related services, or
personnel, travel office expenses and equipment. The Class B Plan also provides
that PFD will receive all CDSC's attributable to Class B shares. (See
"Distributions Plans" in the Prospectus.)
Class C Plan
The Class C Plan provides that a Fund will pay PFD, as the Fund's
distributor for its Class C shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis to 0.75% of the Fund's average daily net
assets attributable to Class C shares and will pay PFD a service fee equal to
0.25% of the Fund's average daily net assets attributable to Class C shares. PFD
will in turn pay to securities dealers which enter into a sales agreement with
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PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the Fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefore, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the amount invested and additional compensation
at a rate of up to 0.75% of the net asset value with respect to such shares.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class C Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is
to compensate PFD for its distribution services with respect to the Class C
shares of the Fund. PFD pays commissions to dealers as well as expenses of
printing prospectuses and reports used for sales purposes, expenses with respect
to the preparation and printing of sales literature and other
distribution-related expenses, including, without limitation, the cost necessary
to provide distribution-related services, or personnel, travel office expenses
and equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distribution Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Fund for
review by the Trustees a quarterly written report of the amounts expended under
the respective Plan and the purpose for which such expenditures were made. In
the Trustees' quarterly review of the Plans, they will consider the continued
appropriate ness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is
not an interested person of the Fund, has any direct or indirect financial
interest in the operation of the Plans except to the extent that PFD and certain
of its employees may be deemed to have such an interest as a result of receiving
a portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Fund, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plans, the Trustees identified and considered a number of
potential benefits which the Plans may provide. The Board of Trustees believes
that there is a reasonable
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likelihood that the Plans will benefit the Fund and its current and future
shareholders. Under their terms, the Plans remain in effect from year to year
provided such continuance is approved annually by vote of the Trustees in the
manner described above. The Plans may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the Fund
affected thereby, and material amendments of the Plans must also be approved by
the Trustees in the manner described above. A Plan may be terminated at any
time, without payment of any penalty, by vote of the majority of the Trustees
who are not interested persons of the Fund and have no direct or indirect
financial interest in the operations of the Plan, or by a vote of a majority of
the outstanding voting securities of the respective Class of the Fund (as
defined in the 1940 Act). A Plan will automatically terminate in the event of
its assignment (as defined in the 1940 Act).
During the fiscal year ended June 30,1996, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan, Class B Plan, and Class C
Plan respectively, as follows: $248,056, $119,908 and $789. The distribution
fees were paid by the Fund to PFD in reimbursement of expenses related to
servicing of shareholder accounts and to compensating dealers and sales
personnel.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B
shares are subject to a CDSC at a rate declining from a maximum of 4% of the
lower of the cost or market value of the shares and Class C shares are subject
to a 1% CDSC. During the fiscal year ended June 30, 1996, CDSCs, in the amount
of approximately $34,000 were paid to PFD in reimbursement of expenses related
to servicing of shareholders' accounts and compensation paid to dealers and
sales personnel.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston,
Massachusetts 02109, to act as shareholder servicing agent and transfer agent
for the Fund. This contract terminates if assigned and may be terminated without
penalty by either party by vote of its Board of Directors or Trustees or a
majority of its outstanding voting securities and the giving of ninety days'
written notice.
Under the terms of its contract with the Fund, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii) distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii) maintaining account records
and responding to routine shareholder inquiries.
PSC receives an annual fee of $28.00 for each Class A, Class B and
Class C shareholder account from the Fund as compensation for the services
described above. This fee is set at an amount determined by vote of a majority
of the Fund's Trustees (including a majority of the Trustees who are not parties
to the contract with PSC or interested persons of any such parties) to be
comparable to fees for such services being paid by other investment companies.
The Fund may compensate entities which have contracted to be an agent for
specific transaction processing and services. Any such payments by the Fund
would be in lieu of the per account fee which
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would otherwise be paid by the Fund to PSC.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian"), 40 Water Street,
Boston, Massachusetts 02109, is the custodian of the Fund's assets. The
Custodian's responsibilities include safekeeping and controlling the Fund's cash
and securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the Fund's investments. The Custodian does not
determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may deal with the Custodian
as principal in securities transactions. Portfolio securities may be deposited
into the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
7. PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, serves as the
principal underwriter for the Fund. During the Fund's 1996, 1995 and 1994 fiscal
years, net underwriting commissions earned by PFD in connection with its
offering of Fund shares were approximately $39,000, $39,000 and $66,000,
respectively. Commissions reallowed to dealers by PFD in those three years were
approximately $281,000, $268,000 and $492,000, respectively. See "Underwriting
Agreement and Distribution Plan" above for a description of the terms of the
Underwriting Agreement with PFD.
The Fund will not generally issue Fund shares for consideration other
than cash. At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with an acquisition of portfolio
securities (other than municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) pursuant to a bona fide
purchase of assets, merger or other reorganization provided (i) the securities
meet the investment objectives and policies of the Fund; (ii) the securities are
acquired by the Fund for investment and not for resale; (ii) the securities are
not restricted as to transfer either by law or liquidity of market; and (iv) the
securities have a value which is readily ascertainable (and not established only
by evaluation procedures) as evidenced by a listing on the American Stock
Exchange or the New York Stock Exchange or by quotation under the NASD Automated
Quotation System. An exchange of securities for Fund shares will generally be a
taxable transaction to the shareholder.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One International Place, Boston, Massachusetts
02110, are the Fund's independent public accountants, providing audit services,
tax return review, and assistance and consultation with respect to the
preparation of filings with the SEC.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of the Fund
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by PMC pursuant to authority contained in the management contract. Securities
purchased and sold on behalf of the Fund normally will be traded in the over-the
counter market on a net basis (i.e. without commission) through dealers acting
for their own account and not as brokers or otherwise through transactions
directly with the issuer of the instrument. Some securities are purchased and
sold on an exchange or in over-the-counter transactions conducted on an agency
basis involving a commission. The primary consideration in placing portfolio
security transactions is execution at the most favorable prices. Additionally,
in selecting brokers or dealers, PMC will consider various relevant factors,
including, but not limited to, the size and type of the transaction; the nature
and character of the markets for the security to be purchased or sold; the
execution efficiency, settlement capability, and financial condition of the
dealer; the dealer's execution services rendered on a continuing basis; the
reasonableness of any dealer spreads; and the dealer's sale of shares of the
Fund or other Pioneer mutual funds.
PMC may select dealers which provide brokerage and/or research services
to the Fund and/or other investment companies managed by PMC. Consistent with
Section 28(e) of the Securities Exchange Act of 1934, as amended, the Fund may
pay commissions to such broker-dealers in an amount greater than the amount
another firm might charge as compensation for such services if PMC determines in
good faith that the amount of the commissions charged by a broker-dealer is
reasonable in relation to the services provided by such broker-dealer. Such
services may include advice concerning the value of securities; the advisability
of investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; providing stock price
quotation services; furnishing analyses, manuals and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
performance of accounts, comparative fund statistics and credit rating service
information; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). PMC maintains a listing
of broker-dealers who provide such services on a regular basis. However, because
it is anticipated that many transactions on behalf of the Fund and other
investment companies managed by PMC are placed with broker-dealers (including
broker-dealers on the listing) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such transactions
directed to such broker- dealers solely because such services were provided.
Management believes that no exact dollar value can be calculated for such
services.
The research received from dealers may be useful to PMC in rendering
investment management services to the Fund and other investment companies
managed by PMC, and conversely, such information provided by brokers or dealers
who have executed transaction orders on behalf of such other PMC clients may be
useful to PMC in carrying out its obligations to the Fund. The receipt of such
research has not reduced PMC's normal independent research activities; however,
it enables PMC to avoid the additional expenses which might otherwise be
incurred if it were to attempt to develop comparable information through its own
staff.
In circumstances where two or more broker-dealers offer comparable
prices and executions, preference may be given to a broker-dealer which has sold
shares of the Fund as well as shares of other investment companies or accounts
managed by PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell
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shares of the Fund.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Fund.
In addition to the Fund, PMC acts as investment adviser to other mutual
funds in the Pioneer group and private accounts with investment objectives
similar to those of the Fund. As such, securities may meet investment objectives
of the Fund, such other funds and such private accounts. In such cases, the
decision to recommend a purchase for one fund or account rather than another is
based on a number of factors. The determining factors in most cases are the
amount of securities of the issuer then outstanding, the value of those
securities and the market for them. Other factors considered in the investment
recommendations include other investments which each company presently has in a
particular industry or country and the availability of investment funds in each
company.
It is possible that, at times, identical securities will be held by
more than one fund and/or account. However, the position of any fund or account
in the same issue may vary and the length of time that any fund or account may
choose to hold its investment in the same issue may likewise vary. To the extent
that the Fund, another mutual fund in the Pioneer group or a private account
managed by PMC seeks to acquire the same security at about the same time, the
Fund may not be able to acquire as large a position in such security as it
desires or it may have to pay a higher price for the security. Similarly, the
Fund may not be able to obtain as large an execution of an order to sell or as
high a price for any particular portfolio security if PMC decides to sell on
behalf of another account the same portfolio security at the same time. On the
other hand, if the same securities are bought or sold at the same time by more
than one account, the resulting participation in volume transactions could
produce better executions for the Fund or other account. In the event that more
than one account purchases or sells the same security on a given date, the
purchases and sales will normally be made as nearly as practicable on a pro rata
basis in proportion to the amounts desired to be purchased or sold by each.
10. TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a
regulated investment company. These requirements relate to the sources of its
income, the diversification of its assets and the timing of its distributions to
shareholders. If the Fund meets all such requirements and distributes to its
shareholders, in accordance with the Code's timing requirements, all investment
company taxable income and net capital gain, if any, which it receives, the Fund
will be relieved of the necessity of paying federal income tax. The Fund is not
subject to Massachusetts corporate excise or franchise taxes and, provided that
it qualifies as a regulated investment company for federal income tax purposes,
it will not be required to pay any Massachusetts income tax.
Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign
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exchange gains, are taxable as ordinary income, whether received in cash or
reinvested in additional shares. Dividends from net long-term capital gain in
excess of net short-term capital loss, if any, whether received in cash or
additional shares, are taxable to the Fund's shareholders as long-term capital
gains for federal income tax purposes without regard to the length of time
shares of the Fund have been held. The federal income tax status of all
distributions will be reported to shareholders annually. Because none of the
Fund's income is expected to arise from dividends, no part of the distributions
to its corporate shareholders will qualify for the dividends-received deduction
for corporations.
Any dividend declared by the Fund in October, November or December as
of a record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by the Fund in connection
with certain transactions involving foreign currency-denominated debt
securities, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code, which generally causes
such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders.
If the Fund invests in certain payment-in-kind securities, zero coupon
securities, or, in general, any other securities with original issue discount
(or with market discount if the Fund elects to include market discount in income
currently), the Fund must accrue income on such investments prior to the receipt
of the corresponding cash payments. However, the Fund must distribute, at least
annually, all or substantially all of its net income, including such accrued
income, to shareholders to qualify as a regulated investment company under the
Code and avoid Federal income and excise taxes. Therefore, the Fund may have to
dispose of its portfolio securities under disadvantageous circumstances to
generate cash, or may have to leverage itself by borrowing the cash, to satisfy
distribution requirements.
At the time of an investor's purchase of Fund shares, a portion of the
purchase price may be attributable to realized or unrealized appreciation in the
Fund's portfolio. Consequently, subsequent distributions from such appreciation
may be taxable to such investor even if the net asset value of the investor's
shares is, as a result of the distributions, reduced below the investor's cost
for such shares and the distributions in reality represent a return of a portion
of the investment.
Any loss realized upon the redemption of shares with a tax holding
period of six months or less will be treated as a long-term capital loss to the
extent of any amounts treated as distributions of long-term capital gain with
respect to such shares.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment at net asset value pursuant
to the reinvestment privilege, the sales charge paid on such shares is not
included in their tax basis under the Code, and (2) in the case of an exchange,
all or a portion of the sales charge paid on such shares is not included in
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their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange. Losses on
certain redemptions may be disallowed under "wash sale" rules in the event of
other investments in the Fund within a period of 61 days beginning 30 days
before and ending 30 days after a redemption or other sale of shares.
For Federal income tax purposes, the Fund is permitted to carry forward
a net capital loss in any year to offset capital gains, if any, during the eight
years following the year of the loss. To the extent subsequent capital gains are
offset by such losses, they would not result in Federal income tax liability to
the Fund and are not expected to be distributed as such to shareholders. At June
30, 1996, the Fund had a net capital loss carry forward of $3,200,964, which
will expire between 1998 and 2004 if not utilized.
The Fund may be subject to withholding and other taxes imposed by
foreign countries with respect to its investments in those countries. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. The Fund does not expect to satisfy the requirements for passing through
to shareholders their pro rata shares of foreign taxes paid by the Fund, with
the result that shareholders will not include such taxes in their gross incomes
(in addition to dividends actually received) and will not be entitled to a tax
deduction or credit for such taxes on their own tax returns.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.
Federal law requires that the Fund withhold 31% of reportable payments,
including dividends, capital gain dividends and the proceeds of redemptions
(including exchanges) and repurchases, to shareholders who have not complied
with IRS regulations. In order to avoid this withholding requirement,
shareholders must certify on their Applications, or on separate W-9 Forms, that
the Social Security Number or other Taxpayer Identification Number they provide
is their correct number and that they are not currently subject to backup
withholding, or that they are exempt from backup withholding. The Fund may
nevertheless be required to withhold if it receives notice from the IRS or a
broker that the number provided is incorrect or backup withholding is applicable
as a result of previous underreporting of interest or dividend income.
The description above relates only to U.S. federal income tax
consequences for shareholders who are U.S. persons, i.e., U.S. citizens or
residents or U.S. corporations, partnerships, trusts or estates and who are
subject to U.S. federal income tax. Investors other than U.S. persons may be
subject to different U.S. tax treatment, including a possible 30% U.S.
withholding tax (or withholding tax at a lower treaty rate) on amounts treated
as ordinary dividends from the Fund and, unless an effective IRS Form W-8 or
authorized substitute is on file, to 31% backup withholding on certain other
payments from the Fund. The description
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above also does not address special tax rules that may be applicable to certain
classes of investors, such as tax-exempt entities, insurance companies, and
financial institutions. Shareholders should consult their own tax advisors on
these matters and on state, local and other applicable tax laws.
11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust permits its Board of Trustees to
authorize the issuance of an unlimited number of full and fractional shares of
beneficial interest (without par value) which may be divided into such separate
series as the Trustees may establish. The Trustees may establish additional
series of shares, and may divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Fund. The Declaration of Trust further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of three classes of
shares of the Fund, Class A shares, Class B shares and Class C shares. Each
share of a class of the Fund represents an equal proportionate interest in the
assets of the Fund allocable to that class. Upon liquidation of the Fund,
shareholders of each class are entitled to share pro rata in the Fund's net
assets allocable to such class available for distribution to shareholders. The
Fund reserves the right to create and issue additional series or classes of
shares, in which case the shares of each class of a series would participate
equally in the earnings, dividends and assets allocable to that class of the
particular series.
The shares of the Fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of the Fund vote together as a class on matters
that affect the Fund in substantially the same manner. As to matters affecting a
single class, shares of such class will vote separately.
Although Trustees are not elected annually by the shareholders,
shareholders have under certain circumstances the right to remove one or more
Trustees. No amendment that adversely affects the rights of shareholders may be
made to the Fund's Declaration of Trust without the affirmative vote of a
majority of its shares. Shares have no preemptive or conversion rights except
that under certain circumstances Class B shares may convert to Class A shares.
Shares are fully paid and non-assessable by the Fund, except as set forth below.
See "Certain Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Fund's operations are governed
by its Declaration of Trust dated December 7, 1993, a copy of which is on file
with the office of the Secretary of State of The Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Fund or any series of the Fund and
provides that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by
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the Fund or its Trustees. Moreover, the Declaration of Trust provides for the
indemnification out of Fund property of any shareholders held personally liable
for any obligations of the Fund or any series of the Fund. The Declaration of
Trust also provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability
would be limited to circumstances in which the Fund itself will be unable to
meet its obligations. In light of the nature of the Fund's business and the
nature and amount of its assets, the possibility of the Fund's liabilities
exceeding its assets, and therefore a shareholder's risk of personal liability,
is remote.
The Declaration of Trust further provides that the Fund shall indemnify
each of its Trustees and officers against liabilities and expenses reasonably
incurred by them, in connection with, or arising out of, any action, suit or
proceeding, threatened against or otherwise involving such Trustee or officer,
directly or indirectly, by reason of being or having been a Trustee or officer
of the Fund. The Declaration of Trust does not authorize the Fund to indemnify
any Trustee or officer against any liability to which he or she would otherwise
be subject by reason of or for willful misfeasance, bad faith, gross negligence
or reckless disregard of such person's duties.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined
as of the close of regular trading on the Exchange (currently 4:00 p.m., Eastern
Time) on each day on which the Exchange is open for trading. As of the date of
this Statement of Additional Information, the Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The net asset value per share of each class of the Fund is also
determined on any other day in which the level of trading in its portfolio
securities is sufficiently high so that the current net asset value per share
might be materially affected by changes in the value of its portfolio
securities. On any day in which no purchase orders for the shares of the Fund
become effective and no shares are tendered for redemption, the net asset value
per share is not required to be determined.
The net asset value per share of each class of the Fund is computed by
taking the value of all of its assets, less the Fund's liabilities, attributable
to the class, and dividing it by the number of outstanding shares of the class.
The Board of Trustees has directed that the fair market value of the Fund's
assets should be determined as follows. Ordinarily, investments in debt
securities are valued on the basis of information furnished by a pricing service
which utilizes primarily a matrix system (which reflects such factors as
security prices, yields, maturities and ratings), supplemented by dealer and
exchange quotations, to recommend valuations for normal institutional-sized
trading units of debt securities. In addition, the Board has instructed advisory
personnel not to rely exclusively on this pricing service if the fair market
value of certain securities may be more accurately determined on the basis of
information available from other sources. Temporary cash investments are valued
at cost, which approximates market value.
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The Fund's maximum offering price per Class A share is determined by
adding the maximum sales charge to the net asset value per Class A share. Class
B and Class C shares are offered at net asset value without the imposition of an
initial sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from shares
of the Fund deposited by the applicant under this SWP. The applicant must
deposit or purchase for deposit with PSC shares of the Fund having a total value
of not less than $10,000. Withdrawals from Class B and Class C share accounts
are limited to 10% of the value of the account at the time the SWP is
implemented. Periodic checks of $50 or more will be sent to the applicant, or
any person designated by him, monthly or quarterly.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. To the extent that such redemptions
for periodic withdrawals exceed dividend income reinvested in the SWP account,
such redemptions will reduce and may ultimately exhaust the number of shares
deposited in the Plan account. Share redemptions are taxable transactions, and
in addition the amounts received by a shareholder cannot be considered as an
actual yield or income on his or her investment because part of such payments
may be a return of his or her investment.
The SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the Plan have been
redeemed. The fees of PSC for maintaining Systematic Withdrawal Plans are paid
by the Fund.
15. LETTER OF INTENTION
Purchases of $100,000 or over of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Fund
shares of $100,000 over a 13-month period would be charged at the 3.50% sales
charge rate with respect to all purchases during that period. Should the amount
actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value
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(at current offering price) of all shares of record held in the Fund and other
Pioneer mutual funds as of the date of the Letter of Intention as a credit
toward determining the applicable scale of sales charge for the Class A shares
to be purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment in the Letter of Intention.
A Letter of Intention is not a binding obligation upon the investor to purchase,
or the Fund to sell, the full amount indicated and the investor should read the
provisions of the Letter of Intention contained in the Account Application
carefully before signing.
16. INVESTMENT RESULTS
The Fund's yield quotations and average annual total return quotations
as they may appear in the Prospectus, this Statement of Additional Information
or in advertising and sales literature are calculated by standard methods
prescribed by the SEC.
Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of the Fund may be illustrated
and/or compared with that of other mutual funds with similar investment
objectives, and to other relevant indices. For example, the Fund may compare a
class's yield and/or total return to the Shearson Lehman Hutton Government
Index, U.S. Government bond rates, or other comparable indices or investment
vehicles.
In addition, the performance of the classes of the Fund may be compared
to alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Personal Investor, Smart Money, USA
Today, U.S. News and World Report, The Wall Street Journal, and Worth may also
be cited (if the Fund is listed in such publications) or used for comparison, as
well as performance listings and rankings from various other sources including
CDA/Weisenberger Investment Companies Service, Donoghue's Mutual Fund Almanac,
Investment Company Data, Inc., Ibbotson Associates, Johnson's Charts, Kanon
Block Carre and Co., Lipper Analytical Services, Micropal, Inc., Morningstar,
Inc., Schabacker Investment Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to Fund shareholders.
One of the primary methods used to measure the performance of a class
of the Fund is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in the
class, over any period up to the lifetime of the class. Total return
calculations will usually assume the reinvestment of all dividends and capital
-23-
<PAGE>
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will usually be annualized; total return percentages for periods
longer than one year may be accompanied by total return percentages for each
year within the period and/or by the average annual compounded total return for
the period. The income and capital components of a given return may be separated
and portrayed in a variety of ways in order to illustrate their relative
significance. Performance may also be portrayed in terms of cash or investment
values, without percentages. Past performance cannot guarantee any particular
future result.
In representing investment results of a class, the Fund may also
include references to certain financial planning concepts, including (a) an
investor's need to evaluate his or her financial assets and obligations to
determine how much to invest; (b) the need to analyze the objectives of various
investments to determine where to invest; and (c) the need to analyze his or her
time frame for future capital needs to determine how long to invest. The
investor controls these three factors, all of which affect the use of
investments in building assets.
Standardized Yield Quotations
The yield of a class is computed by dividing the class's net investment
income per share during a base period of 30 days, or one month, by the maximum
offering price per share of the class on the last day of such base period in
accordance with the following formula:
a-b
YIELD = 2[ ( ----- +1)6-1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the
last day of the period
For purposes of calculating interest earned on debt obligations as provided in
item "a" above:
(i) The yield to maturity of each obligation held by the Fund is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates.
-24-
<PAGE>
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period.
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled.
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date.
With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the Fund accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the Fund may elect (i) to
amortize the discount or premium on a remaining security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the discount or premium
on a remaining security.
For purposes of computing yield, interest income is recognized by
accruing 1/360 of the stated interest rate of each obligation in the Fund's
portfolio each day that the obligation is in the portfolio. Expenses of a class
accrued during any base period, if any, pursuant to the respective Distribution
Plan are included among the expenses accrued during the base period.
The Fund's yield for the 30 days ended June 30, 1996, computed as above
was 5.84% for Class A shares, 5.15% for Class B shares and 5.27% for Class C
shares.
Standardized Average Annual Total Return Quotations
The average annual total return quotations for a class of shares is
computed by finding the average annual compounded rate of return that would
cause a hypothetical investment in the class made on the first day of a
designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of
$1000, less the maximum sales load of
$45 for Class A shares or the
deduction of the CDSC on Class B or
Class C shares at the end of the
period.
T = average annual total return
-25-
<PAGE>
n = number of years
ERV = ending redeemable value of the
hypothetical $1000 initial payment
made at the beginning of the
designated period (or fractional
portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts are
taken into consideration. For any account fees that vary with the size of the
account, the account fee used for purposes of the above computation is assumed
to be the fee that would be charged to the Fund's mean account size.
The total returns for each Class of shares of the Fund as of June 30, 1996, are
as follows:
Average Annual Total Return (%)
One Year Five Years Ten Years Since Inception*
Class A Shares -0.66 6.86 7.34 8.90
Class B Shares -0.73 N/A N/A 4.46
Class C Shares N/A N/A N/A -3.95
* Inception was October 31, 1978 for Class A shares and April 4, 1994 for Class
B shares. Class C Shares were first offered January 31, 1996.
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields
for Pioneer's money market fund; and
o dividends and capital gains distributions on all Pioneer
mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas
outlined earlier in this section.
In addition, by using a personal identification number ("PIN"),
shareholders may enter
-26-
<PAGE>
purchases, exchanges and redemptions, access their account balance and last
three transactions and may order a duplicate statement. See "FactFone" in the
Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance; and figures for all quoted bond funds include the applicable
maximum sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A, Class B and Class C
shares (except for Pioneer money market fund, which seeks a stable $1.00 share
price) will also vary and may be worth more or less at redemption than their
original cost.
17. FINANCIAL STATEMENTS
The Fund's Annual Report dated June 30, 1996, is incorporated by
reference into and attached to this Statement of Additional Information in
reliance upon the report of Arthur Andersen LLP, independent public accountants,
as experts. A copy of the Fund's Annual Report may be obtained without charge by
calling Shareholder Services at 1-800-225-6292 or by written request to the Fund
at 60 State Street, Boston, Massachusetts 02109.
-27-
<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investors Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
- ---------------------------------------------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Fund's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
-28-
<PAGE>
Standard & Poor's Ratings Group 3
AAA: Bonds rated AAA are highest grade obligations. This rating indicates an
extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
- -------------------------------------------------
3 Rates all governmental bodies having $1,000,000 or more of debt outstanding,
unless adequate information is not available.
-29-
<PAGE>
Pioneer Bond Fund A
<TABLE>
<CAPTION>
Initial Sales Charge Shares Purchased Net Asset Value Initial Net
Date Investment Offering Price Included Per Share Asset Value
<S> <C> <C> <C> <C> <C> <C>
7/1/86 $10,000 $10.07 4.50% 993.049 $9.62 $9,550
Dividends and Capital Gains Reinvested
Value of Shares
From Cap. Gains From Dividends
Date From Investment Reinvested Reinvested Total Value
<S> <C> <C> <C> <C>
6/30/87 $9,156 $0 $833 $9,989
6/30/88 $8,977 $0 $1,727 $10,704
6/30/89 $9,116 $0 $2,784 $11,900
6/30/90 $8,858 $0 $3,784 $12,642
6/30/91 $8,928 $0 $4,995 $13,923
6/30/92 $9,305 $0 $6,432 $15,737
6/30/93 $9,742 $0 $7,989 $17,731
6/30/94 $8,977 $0 $8,531 $17,508
6/30/95 $9,285 $0 $10,234 $19,519
6/30/96 $9,016 $0 $11,286 $20,302
</TABLE>
-30-
<PAGE>
Pioneer Bond Fund B
<TABLE>
<CAPTION>
Initial Sales Charge Shares Purchased Net Asset Value Initial Net
Date Investment Offering Price Included Per Share Asset Value
<S> <C> <C> <C> <C> <C> <C>
4/30/94 $10,000 $9.21 0.00% 1085.776 $9.21 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
From Cap. Gains From Dividends
Date From Investment Reinvested Reinvested Total Value
<S> <C> <C> <C> <C>
6/30/94 $9,794 $0 $102 $9,896
6/30/95 $10,109 $0 $833 $10,942
6/30/96 $9,794 $0 $1,492 $11,286
Value of shares if redeemed $10,992
</TABLE>
-31-
<PAGE>
Pioneer Bond Fund C
<TABLE>
<CAPTION>
Initial Sales Charge Shares Purchased Net Asset Value Initial Net
Date Investment Offering Price Included Per Share Asset Value
<S> <C> <C> <C> <C> <C> <C>
1/31/96 $10,000 $9.54 0.00% 1048.218 $9.54 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
From Cap. Gains From Dividends
Date From Investment Reinvested Reinvested Total Value
<S> <C> <C> <C> <C>
6/30/96 $9,455 $0 $245 $9,700
Value of shares if redeemed $9,605
</TABLE>
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<PAGE>
APPENDIX B
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
minus the current date. The bond was "held" for the calendar year and returns
were computed. Total returns for 1977-1991 are calculated as the change in the
flat price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly income
return was assumed to be one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million.
The Russell 3000 is comprised of the 3,000 largest US companies as determined
by market capitalization representing approximately 98% of the US equity market.
The largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
-38-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
-41-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
-42-
<PAGE>
APPENDIX C
Other Pioneer Information
The Pioneer group of mutual funds was established in 1928 with the creation
of Pioneer Fund. Pioneer is one of the oldest and most experienced money
managers in the United States.
As of June 30, 1996, PMC employed a professional investment staff of 48,
with a combined average of 15 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at June 30, 1996, were
approximately $14,225,287,000 representing 1,058,710 shareholder accounts. At
June 30, 1996, there were 3,716 non-retirement accounts and 2,668 retirement
accounts in the Fund.
-43-
<PAGE>
PIONEER BOND FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements of the Registrant are
incorporated by reference from the 1996 Annual Report
to Shareholders as filed with the Securities and
Exchange Commission on August 29, 1996 (accession
number 0000950146-96-001513).
(b) Exhibits:
1. Amended and Restated Declaration of Trust**
1.1. Establishment and Designation of Classes**
2. Amended and Restated By-Laws**
3. None
4. Specimen Stock Certificate**
5. Management Contract between Registrant and
Pioneering Management Corporation**
6.1. Underwriting Agreement**
6.2. Form of Dealer Sales Agreement**
7. None
8. Custodian Agreement with Brown Brothers
Harriman & Co.**
9. Investment Company Service Agreement*
10. None
11. Consent of Arthur Andersen LLP*
12. None
13. None
14. None
15. Class A Rule 12b-1 Distribution Plan**
15.1. Class B Rule 12b-1 Distribution Plan**
15.3. Class C Rule 12b-1 Distribution Plan*
16. Description of Average Annual Total Return
and Yield Calculation**
17. Financial Data Schedule*
18.2 Rule 18f-3 Plan*
19. Powers of Attorney**
- -------------------------
* Filed electronically herewith.
** Incorporated by reference from the exhibits filed by the Registrant with
the Registration Statement (File No. 2-62436) (the "Registration
Statement"), as amended, as filed with the Securities and Exchange
Commission on October 27, 1995 (accession number 0000276776-95-000016).
<PAGE>
Item 25. Persons Controlled By or Under Common Control With Registrant
Percent State/Country
of of
Company Owned By Shares Incorporation
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer Capital Corp. (PCC) PGI 100% MA
Pioneer Fonds Marketing GmbH (GmbH) PGI 100% MA
Pioneer SBIC Corp. (SBIC) PGI 100% MA
Pioneer Associates, Inc. (PAI) PGI 100% MA
Pioneer International Corp. (PInt) PGI 100% MA
Pioneer Plans Corp. (PPC) PGI 100% MA
Pioneer Goldfields Ltd (PGL) PGI 100% MA
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Metals and Technology,
Inc. (PMT) PGI 100% DE
Pioneer First Polish Trust Fund Joint
Stock Co. (First Polish) PGI 100% Poland
Teberebie Goldfields Ltd. (TGL) PGI 90% Ghana
Pioneer Funds Distributor, Inc. (PFD) PMC 100% MA
SBIC's outstanding capital stock PCC 100% MA
THE FUNDS: All are parties to management contracts with PMC.
BUSINESS
FUND TRUST
Pioneer International Growth Fund MA
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Fund DE
Pioneer II DE
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Fund MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Income Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
<PAGE>
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares, Inc. DE
OTHER:
o SBIC is the sole general partner of Pioneer Ventures Limited Partnership, a
Massachusetts limited partnership.
o ITI Pioneer AMC Ltd. (ITI Pioneer) (Indian Corp.), is a joint venture
between PMC and Investment Trust of India Ltd. (ITI) (Indian Corp.)
o ITI and PMC own approximately 54% and 45%, respectively, of the total
equity capital of ITI Pioneer.
JOHN F. COGAN, JR.
Owns approximately 14% of the outstanding shares of PGI.
ENTITY CHAIRMAN PRESIDENT TRUSTEE/ OTHER
DIRECTOR
Pioneer Family of Mutual Funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
Pintl X X
PMT X X
PCC X
PSC X
PMC X X
PFD X X
TGL X X
First Polish X Member of
Supervisory Board
Hale and Dorr Partner
GmbH Chairman of
Supervisory Board
<PAGE>
Item 26. Number of Holders of Securities
The following table sets forth the approximate number of
recordholders of each class of securities of the Registrant as of July 31, 1996:
Class A Class B Class C
Number of Record Holders: 5,436 1,020 24
Item 27. Indemnification
Except for the Amended and Restated Declaration of Trust dated
December 7, 1993 establishing the Registrant as a Trust under Massachusetts law,
there is no contract, arrangement or statute under which any director, officer,
underwriter or affiliated person of the Registrant is insured or indemnified.
The Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability of which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in
the Form ADV, as amended, of the Registrant's Manager, Pioneering Management
Corporation. The following sections of such Form ADV are incorporated herein by
reference:
(a) Items 1 and 2 of Part 2;
(b) Section 6, Business Background, of each
Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
<PAGE>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice President
and Trustee
Steven M. Graziano Senior Vice President None
Stephen W. Long Senior Vice President None
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Mary Kleeman Vice President None
Steven R. Berke Assistant Vice President None
Mary Sue Hoban Assistant Vice President None
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
(c) Not applicable.
<PAGE>
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's
office at 60 State Street, Boston, Massachusetts 02109; contact the Treasurer.
Item 31. Management Services
The Registrant is a party to one contract, described in the
Prospectus and the Statement of Additional Information, under which it receives
management and advisory services from Pioneering Management Corporation.
Item 32. Undertakings
The Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, a copy of the Registrant's report to shareholders furnished pursuant to
and meeting the requirements of Rule 30d-1 from which the specified information
is incorporated by reference, unless such person currently holds securities of
the Registrant and otherwise has received a copy of such report, in which case
the Registrant shall state in the Prospectus that it will furnish, without
charge, a copy of such report on request, and the name, address and telephone
number of the person to whom such a request should be directed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and The
Commonwealth of Massachusetts, on the 28th day of August, 1996.
PIONEER BOND FUND
By:/s/John F. Cogan, Jr.
John F. Cogan, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 24 to the Registration Statement of Pioneer Bond
Fund (File No. 2- 62436) has been signed below by the following persons in the
capacities and on the dates indicated:
Title and Signature Date
Principal Executive Officer: )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr., President )
)
Principal Financial and )
Accounting Officer: )
)
)
William H. Keough* )
William H. Keough, Treasurer )
A MAJORITY OF THE BOARD OF TRUSTEES:
John F. Cogan, Jr.* )
John F. Cogan, Jr., Trustee )
)
Richard H. Egdahl, M.D.* )
Richard H. Egdahl, Trustee )
<PAGE>
)
Margaret B.W. Graham* )
Margaret B.W. Graham, Trustee )
)
John W. Kendrick* )
John W. Kendrick, Trustee )
)
Marguerite A. Piret* )
Marguerite A. Piret, Trustee )
)
David D. Tripple* )
David D. Tripple, Trustee )
)
Stephen K. West* )
Stephen K. West, Trustee )
)
John Winthrop* )
John Winthrop, Trustee )
*By /s/Joseph P. Barri August 28, 1996
Joseph P. Barri
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
9. Investment Company Service Agreement
11. Consent of Arthur Andersen LLP
15.3. Class C Rule 12b-1 Distribution Agreement
17. Financial Data Schedule
18.2. Rule 18f-3 Plan
Exhibit 9
INVESTMENT COMPANY SERVICE AGREEMENT
-----
Pioneer Bond Fund, a Massachusetts business trust with its principal
place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer")
and Pioneering Services Corporation, a Massachusetts corporation ("PSC"), hereby
agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest (the "Series")
of Customer, which may be established, from time to time (the "Account"), with
the services described in Exhibits A, B, C, and D (collectively, the "Exhibits")
that are attached hereto and incorporated herein by reference. It is understood
that PSC may subcontract any of such services to one or more firms designated by
PSC, provided that PSC (i) shall be solely responsible for all compensation
payable to any such firm and (ii) shall be liable to Customer for the acts or
omissions of any such firm to the same extent as PSC would be liable to Customer
with respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in effect
deliver all such materials and data as may be necessary or desirable to enable
PSC to perform its services hereunder, including without limitation, those
described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized Auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such
<PAGE>
times as are prescribed for each service in the Exhibits attached hereto.
Customer agrees to examine or to ask any other authorized recipient to examine
each such report or copy promptly and will report or cause to be reported any
errors or discrepancies therein of which Customer then has any knowledge. PSC
may at its option at any time, and shall forthwith upon Customer's demand, turn
over to Customer and cease to retain in PSC's files, any and all records and
documents created and maintained by PSC pursuant to this Agreement which are no
longer needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of the creation, during the first
two of which the same will be in readily accessible form. At the end of six
years, such records and documents, will be turned over to Customer by PSC unless
Customer authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems
consistent with industry standards in order to safeguard Customer's checks,
records and other data from loss or damage attributable to fire or theft. PSC
shall maintain insurance adequate to protect against the costs of reconstructing
checks, records and other data in the event of such loss and shall notify
Customer in the event of a material adverse change in such insurance coverage.
In the event of damage or loss occurring to Customer's records or data such that
PSC is unable to meet the terms of this Agreement, PSC shall transfer all
records and data to a transfer agent of Customer's choosing upon Customer's
written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be
liable or responsible for delays or errors occurring by reason of circumstances
beyond its control including acts of civil, military or banking authority,
national emergencies, labor difficulties, fire, flood or other catastrophes,
acts of God, insurrection, war, riots, failure of transportation, communication
or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and
-2-
<PAGE>
Statement of Additional Information, or are required by a valid subpoena or
warrant issued by a court of competent jurisdiction or by a state or federal
agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agent, including inspecting PSC's operation
facilities. PSC shall not be liable for injury to or responsible in any way for
the safety of any individual visiting PSC's facilities under the authority of
this section. Customer will keep confidential and will cause to keep
confidential all confidential information obtained by its employees or agents or
any other individual representing Customer while on PSC's premises. Confidential
information shall include (1) any information of whatever nature regarding PSC's
operations, security procedures, and data processing capabilities, (2) financial
information regarding PSC, its affiliates, or subsidiaries, and (3) any
information of whatever kind or description regarding any customer of PSC, its
affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every
-3-
<PAGE>
nature and character arising out of or in any way relating to PSC's action or
non-action upon information, instructions or requests given or made to PSC by
Customer with respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify
or hold PSC harmless, Customer shall be advised of all pertinent facts arising
from the situation in question. Additionally, PSC will use reasonable care to
identify and notify Customer promptly concerning any situation which presents,
actually or potentially, a claim for indemnification against Customer. Customer
shall have the option to defend PSC against any claim for which PSC is entitled
to indemnification from Customer under the terms hereof, and in the event
Customer so elects, it will notify PSC and, thereupon, Customer shall take over
complete defense of the claim and PSC shall sustain no further legal or other
expenses in such a situation for which indemnification shall be sought or
entitled. PSC may in no event confess any claim or make any compromise in any
case in which Customer will be asked to indemnify PSC except with Customer's
prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $21.95 per
account to PSC, such fee to be payable in equal monthly installments. In
addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such
as postage, forms, envelopes, checks, "outside" mailings, telephone line and
other charges, mailgrams, mail insurance on certificates and data processing
file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice to the other.
After the date of termination, for so long as PSC in fact continues to
perform any one or more of the services contemplated by this Agreement or any
exhibit hereto, the provisions of this Agreement, including without limitation
the provisions of Section 8 dealing with indemnification, shall where applicable
continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
-4-
<PAGE>
A. Two (2) copies of the Declaration of Trust of Customer, and of
any amendments thereto, certified by the proper official of the
State where the Declaration of Trust is filed.
B. Two (2) copies of the following documents, currently certified by
the Secretary of Customer;
a. Customer's By-laws and any amendment thereto.
b. Certified copies of resolutions of Customer's Board of
Trustees covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of Customers to
instruct PSC hereunder (if different from other
officers of Customer previously specified by Customer
as to other Customer accounts being serviced by PSC).
C. List of all officers of Customer together with specimen
signatures of those officers who are authorized to sign share
certificates and to instruct PSC in all other matters.
D. Two (2) copies of the following;
a. Prospectus
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization by
and binding effect of this Agreement on Customer, the
applicability of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, and the approval by
such public authorities as may be prerequisite to lawful sale and
delivery in the various states.
F. Amendments to, and changes in, any of the foregoing forthwith
upon such amendments and changes being available, but in no case
later than the effective date.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and
agree that all liabilities arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, including without limitation,
liabilities arising in
-5-
<PAGE>
connection with any agreement of Customer or its Trustees set forth herein to
indemnify any party to this Agreement or any other person, shall be satisfied
out of the assets of the Account first and then of Customer and that no Trustee,
officer or holder of shares of beneficial interest of Customer shall be
personally liable for any of the foregoing liabilities. Customer's Declaration
of Trust, as amended from time to time, is on file in the Office of the
Secretary of State of The Commonwealth of Massachusetts. Such Declaration of
Trust describes in detail the respective responsibilities and limitations on
liability of the Trustees, officers, and holders of shares of beneficial
interest of Customer.
14. MISCELLANEOUS. In connection with the operation of such Agreement,
PSC and Customer may agree from time to time on such provisions interpretative
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretative or additional provisions are to be signed by both parties and
annexed hereto, but no such provision shall contravene any applicable Federal
and state law or regulation, and no such provision shall be deemed to be an
amendment of this Agreement.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PSC have caused this Agreement to be
executed in their respective names by their respective officers thereunto duly
authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
By:
Joseph P. Barri William H. Smith, Jr.
Clerk President
ATTEST: PIONEER BOND FUND
By:
Joseph P. Barri John F. Cogan, Jr.
Secretary President
-6-
<PAGE>
EXHIBIT A TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service --
As Servicing Agent for Plan Accounts in accordance with either the provisions of
standard Plan Applications or Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the planholder.
3. Out of the money received in payment for share sales pay to the
Customer's Custodian the net asset value per share and pay to the
underwriter and to the dealer their commission, if any, on a
semi-monthly basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue certificates, upon instruction, resulting from withdrawals from
plan accounts. Maintain records showing name, address, certificate
numbers and number of shares.
6. Deposit certificates to plan accounts when furnished with such
documents as PSC deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon direction
of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or his
legal representative to substantiate the transfer of ownership of
shares from the registered owner to transferees.
<PAGE>
10. Make transfers from time to time upon the books of the Customer in
accordance with properly executed transfer instructions furnished to
PSC.
11. Upon receiving appropriate detailed instructions and written materials
prepared by Customer and proxy proofs checked by Customer, mail
shareholder reports, proxies and related materials of suitable design
for automatic enclosing, receive and tabulate executed proxies, and
furnish an annual meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to planholders in a timely fashion.
16. Provide Customer with such information regarding correspondence as will
enable Customer to comply with related N-SAR requirements.
17. Maintain continuous proof of the outstanding shares of the Company.
18. Solicit taxpayer identification numbers.
19. Provide data to enable the Company to file abandoned property reports
for those accounts that have been indicated by the Post Office to be
not at the address of record with no forwarding address.
20. Maintain bank accounts and reconcile same on a monthly basis.
<PAGE>
21. Provide management information reports on a quarterly basis to the
Board of Trustees outlining the level of service provided.
22. Provide sale/statistical reporting for purposes of providing fund
management with information to maximizing the return to shareholders.
<PAGE>
EXHIBIT B TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service
In accordance with the provisions of the Customer's Prospectus, as Servicing
Agent for the Redemption function, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of the Customer: i.e., copies of trade
confirmations and other documents deemed necessary or desirable by PSC
on the first business day following the trade date.
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation.
b. Written authorization (where no share certificates are
issued).
3. Verify there are sufficient shares in an account to cover redemption
requests.
4. Transfer the redeemed or repurchased shares to the Customer's treasury
share account, or, if applicable, cancel such shares for retirement.
5. Pay the applicable redemption or repurchase price to the shareholder in
accordance with the prospectus of the Customer and the Declaration of
Trust on or before the seventh calendar day succeeding any receipt of
certificates or requests for redemption or repurchase in "good order"
as defined in the Prospectus.
6. Notify the Customer and the underwriter for the Customer of the total
number of shares presented and covered by such requests within a
reasonable period of time following receipt.
<PAGE>
7. Promptly notify the shareholder if any such certificate or request for
redemption or repurchase is not in "good order" together with notice of
the documents required to comply with the good order standards. Upon
receipt of the necessary documents PSC shall effect such redemption at
the net asset value applicable at the date and time of receipt of such
documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service
1. Receive and process exchanges in accordance with a duly executed
exchange authorization. PSC will redeem existing shares and use the
proceeds to purchase new shares. Shares of the Fund purchased directly
or acquired through reinvestment of dividends on such shares may be
exchanged for shares of other Pioneer Funds (which funds have sales
charges) only by payment of the applicable sales charge. Shares of the
Fund acquired by exchange and through reinvestment of dividends on such
shares may be re-exchanged to another Pioneer Fund at their respective
net asset values.
2. Make authorized deductions of fees.
3. Register new shares identically with the shares surrendered for
exchange. Mail new shares or a plan statement confirming the exchange
by first class mail to the address of record.
4. Maintain a record of unprocessed exchanges and produce a periodic
report.
<PAGE>
EXHIBIT D TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service
1. Distribute income dividends and/or capital gain distributions, either
through reinvestment or in cash, in accordance with shareholder
instructions.
2. On the mailing date, Customer shall make available to PSC collected
funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with the Customer.
5. Prepare and file annual Federal and State information returns of
distributions and, in the case of Federal returns, mail information
copies to shareholders and report and pay Federal income taxes withheld
from distributions made to non-resident aliens.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 1, 1996 and
to all references to our firm included in or made a part of Post-Effective
Amendment No. 23 and Amendment No. 22 to registration statement File No.
2-62436.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 28, 1996
CLASS C SHARES DISTRIBUTION PLAN
PIONEER BOND FUND
CLASS C SHARES DISTRIBUTION PLAN, dated as of January 31, 1996 of
PIONEER BOND FUND, a Massachusetts business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class C Shares") of the Trust in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class C Shares distribution plan (the "Class C Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class C Shares in connection with the Class C Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
C Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class C Shares in connection with the
offering of Class C Shares, (b) PFD may compensate any Dealer that sells Class C
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class C
shares, its profits or any other source available to it;
<PAGE>
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class C Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class C Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class C Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class C Plan will
benefit the Trust and its Class C shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class C Plan for the Trust as a plan of distribution of Class C Shares in
accordance with Rule 12b-1, on the following terms and conditions:
I. (a) The Trust is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection
with the Trust's Class C Shares. Such compensation shall be
calculated and accrued daily and paid monthly or at such other
intervals as the Board of Trustees may determine.
(b) The amount of compensation paid during any one
year for distribution services with respect to Class C Shares
shall be .75% of the Trust's average daily net assets
attributable to Class C Shares for such year.
(c) Distribution services and expenses for which PFD
may be compensated pursuant to this Plan include, without
limitation: compensation to and expenses (including allocable
overhead, travel and telephone expenses) of (i) Dealers,
brokers and other dealers who are members of the National
Association of Securities Dealers, Inc. ("NASD") or their
officers, sales representatives and employees, (ii) PFD and
any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their
officers, sales representatives and employees, who engage in
or support distribution of the Trust's Class C Shares;
printing of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of
sales literature and advertising materials.
<PAGE>
(d) The amount of compensation paid during any one
year for personal and account maintenance services and
expenses shall be .25% of the Trust's average daily net assets
attributable to Class C Shares for such year. As partial
consideration for personal services and/or account maintenance
services provided by PFD to the Class C Shares, PFD shall be
entitled to be paid any fees payable under this clause (d)
with respect to Class C shares for which no dealer of record
exists, where less than all consideration has been paid to a
dealer of record or where qualification standards have not
been met.
(e) Personal and account maintenance services for
which PFD or any of its affiliates, banks or Dealers may be
compensated pursuant to this Plan include, without limitation:
payments made to or on account of PFD or any of its
affiliates, banks, other brokers and dealers who are members
of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance
to, shareholders regarding their ownership of Class C Shares
or their accounts or who provide similar services not
otherwise provided by or on behalf of the Trust.
(f) PFD may impose certain deferred sales charges in
connection with the repurchase of Class C Shares by the Trust
and PFD may retain (or receive from the Trust as the case may
be) all such deferred sales charges.
(g) Appropriate adjustments to payments made pursuant
to clauses (b) and (d) of this paragraph 1 shall be made
whenever necessary to ensure that no payment is made by the
Trust in excess of the applicable maximum cap imposed on asset
based, front-end and deferred sales charges by subsection (d)
of Section 26 of Article III of the Rules of Fair Practice of
the NASD.
II. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class C
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class C Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class C Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
<PAGE>
III. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
IV. This Class C Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class C of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class C Plan or in any agreements
related to the Class C Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class C Plan.
V. This Class C Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class C Plan shall
expire on January 31, 1997.
VI. This Class C Plan may be amended at any time by the Board of
Trustees, provided that this Class C Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class C of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class C Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class C of the Trust.
VII. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class C Plan and the purposes for which such
expenditures were made.
VIII. While this Class C Plan is in effect, the selection and
nomination of Qualified Trustees shall be committed to the discretion of the
Trustees who are not "interested persons" of the Trust.
<PAGE>
IX. For the purposes of this Class C Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
X. The Trust shall preserve copies of this Class C Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
XI. This Class C Plan shall be construed in accordance with the laws of
The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
XII. If any provision of this Class C Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Class C Plan shall not be affected thereby.
[ARTICLE] 6
[CIK] 0000276776
[NAME] PIONEER BOND FUND
[SERIES]
[NUMBER] 001
[NAME] PIONEER BOND FUND CLASS A
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] JUN-30-1996
[PERIOD-END] JUN-30-1996
[INVESTMENTS-AT-COST] 113389952
[INVESTMENTS-AT-VALUE] 114965495
[RECEIVABLES] 2864915
[ASSETS-OTHER] 11045
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 117841455
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 699023
[TOTAL-LIABILITIES] 699023
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 119332609
[SHARES-COMMON-STOCK] 11229772
[SHARES-COMMON-PRIOR] 11784329
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] (50490)
[ACCUMULATED-NET-GAINS] (3715230)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1575543
[NET-ASSETS] 117142432
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 9441368
[OTHER-INCOME] 0
[EXPENSES-NET] (1483820)
[NET-INVESTMENT-INCOME] 7957548
[REALIZED-GAINS-CURRENT] (759570)
[APPREC-INCREASE-CURRENT] (2778133)
[NET-CHANGE-FROM-OPS] 4419845
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (7298352)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 2099659
[NUMBER-OF-SHARES-REDEEMED] 3229151
[SHARES-REINVESTED] 574935
[NET-CHANGE-IN-ASSETS] (353525)
[ACCUMULATED-NII-PRIOR] 67
[ACCUMULATED-GAINS-PRIOR] (2956)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 588432
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1502977
[AVERAGE-NET-ASSETS] 106078613
[PER-SHARE-NAV-BEGIN] 9.35
[PER-SHARE-NII] 0.64
[PER-SHARE-GAIN-APPREC] (0.27)
[PER-SHARE-DIVIDEND] (0.64)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.08
[EXPENSE-RATIO] 1.19
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000276776
[NAME] PIONEER BOND FUND
[SERIES]
[NUMBER] 002
[NAME] PIONEER BOND FUND CLASS B
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] JUN-30-1996
[PERIOD-END] JUN-30-1996
[INVESTMENTS-AT-COST] 113389952
[INVESTMENTS-AT-VALUE] 114965495
[RECEIVABLES] 2864915
[ASSETS-OTHER] 11045
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 117841455
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 699023
[TOTAL-LIABILITIES] 699023
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 119332609
[SHARES-COMMON-STOCK] 1645017
[SHARES-COMMON-PRIOR] 788493
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] (50490)
[ACCUMULATED-NET-GAINS] (3715230)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1575543
[NET-ASSETS] 117142432
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 9441368
[OTHER-INCOME] 0
[EXPENSES-NET] (1483820)
[NET-INVESTMENT-INCOME] 7957548
[REALIZED-GAINS-CURRENT] (759570)
[APPREC-INCREASE-CURRENT] (2778133)
[NET-CHANGE-FROM-OPS] 4419845
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (749344)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1330447
[NUMBER-OF-SHARES-REDEEMED] 528935
[SHARES-REINVESTED] 55012
[NET-CHANGE-IN-ASSETS] (353525)
[ACCUMULATED-NII-PRIOR] 67
[ACCUMULATED-GAINS-PRIOR] (2956)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 588432
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1502977
[AVERAGE-NET-ASSETS] 12048600
[PER-SHARE-NAV-BEGIN] 9.31
[PER-SHARE-NII] 0.57
[PER-SHARE-GAIN-APPREC] (0.28)
[PER-SHARE-DIVIDEND] (0.58)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.02
[EXPENSE-RATIO] 1.96
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000276776
[NAME] PIONEER BOND FUND
[SERIES]
[NUMBER] 003
[NAME] PIONEER BOND FUND CLASS C
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] JUN-30-1996
[PERIOD-END] JUN-30-1996
[INVESTMENTS-AT-COST] 113389952
[INVESTMENTS-AT-VALUE] 114965495
[RECEIVABLES] 2864915
[ASSETS-OTHER] 11045
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 117841455
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 699023
[TOTAL-LIABILITIES] 699023
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 119332609
[SHARES-COMMON-STOCK] 37978
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] (50490)
[ACCUMULATED-NET-GAINS] (3715230)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 1575543
[NET-ASSETS] 117142432
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 9441368
[OTHER-INCOME] 0
[EXPENSES-NET] (1483820)
[NET-INVESTMENT-INCOME] 7957548
[REALIZED-GAINS-CURRENT] (759570)
[APPREC-INCREASE-CURRENT] (2778133)
[NET-CHANGE-FROM-OPS] 4419845
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (4838)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 37622
[NUMBER-OF-SHARES-REDEEMED] 141
[SHARES-REINVESTED] 497
[NET-CHANGE-IN-ASSETS] (353525)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 588432
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1502977
[AVERAGE-NET-ASSETS] 190274
[PER-SHARE-NAV-BEGIN] 9.54
[PER-SHARE-NII] 0.23
[PER-SHARE-GAIN-APPREC] (0.52)
[PER-SHARE-DIVIDEND] (0.23)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.02
[EXPENSE-RATIO] 2.18
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
PIONEER BOND FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares and Class C Shares
January 31, 1996
Each class of shares of PIONEER BOND FUND (the "Fund"), will have the
same relative rights and privileges and be subject to the same sales charges,
fees and expenses, except as set forth below. The Board of Trustees may
determine in the future that other distribution arrangements, allocations of
expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Plan accordingly without the
approval of shareholders of any class. Except as set forth in the Fund's
prospectus, shares may be exchanged only for shares of the same class of another
Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial
sales charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class B
<PAGE>
shares redeemed within a specified number of years of purchase will be subject
to a CDSC as set forth in the Fund's prospectus. Class B Shares are sold subject
to the minimum purchase requirements set forth in the Fund's prospectus. Class B
Shares shall be entitled to the shareholder services set forth from time to time
in the Fund's prospectus with respect to Class B Shares. Class B Shares are
subject to fees calculated as a stated percentage of the net assets attributable
to Class B shares under the Class B Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class B Shareholders of the Fund have exclusive
voting rights, if any, with respect to the Fund's Class B Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class B Shares on a per
account basis except to the extent, if any, such an allocation would cause the
Fund to fail to satisfy any requirement necessary to obtain or rely on a private
letter ruling from the IRS relating to the issuance of multiple classes of
shares. Class B shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund
at the end of a specified number of years after the initial purchase date of
Class B shares, except as provided in the Fund's prospectus. Such conversion
will occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class C shares redeemed within
one year of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Class C Shares are sold subject to the minimum purchase requirements
set forth in the Fund's prospectus. Class C Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class C Shares. Class C Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class C shares under the
Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class C Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class C Shares on a
<PAGE>
per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the IRS relating to the issuance of multiple classes
of shares. Class C shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class C shares.
The initial purchase date for Class C shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.
Article IV. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "Act")) of (a) all of the Trustees of the Trust, on behalf of the Fund, and
(b) those of the Trustees who are not "interested persons" of the Trust, as such
term may be from time to time defined under the Act.
Article V. Amendments
No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article IV.
