[Pioneer Logo]
Pioneer
Bond Fund
ANNUAL REPORT 6/30/96
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 14
Notes to Financial Statements 20
Report of Independent Public Accountants 24
Tax Treatment of Distributions 25
Trustees' Fees and Share Ownership 26
Trustees, Officers and Service Providers 27
</TABLE>
<PAGE>
Pioneer Bond Fund
LETTER FROM THE CHAIRMAN 6/30/96
Dear Shareowner,
It is with great pleasure that I introduce this annual report for Pioneer
Bond Fund, covering the year ended June 30, 1996. As you see, we've given
your Fund's annual report a facelift.
The new, improved style reflects what shareowners told us they want to see in
fund reports. We wish to thank all of you who took the time to respond to our
questions. Now, in both your annual and semiannual reports, you'll find a
Table of Contents and consistent, easy-to-read summaries of portfolio
information and performance. We've also included a separate Portfolio
Management Discussion, where your Fund's portfolio manager offers insights
into market conditions, portfolio strategy and results for the fiscal period.
As you no doubt are aware, the bond market experienced a number of changes in
the past year. We saw a significant shift from 1995, when the slow-paced
economy pushed interest rates down and bond prices up. The trend reversed in
February, following reports of accelerating economic growth. We are pleased
to report that, despite the far less favorable environment for bonds overall,
Pioneer Bond Fund continued to pay shareowners attractive dividends and
generated a competitive, positive total return.
On a closing note, we wish to welcome the Fund's new shareowners,
particularly those who joined us through the Fund's Class C Shares, which
were introduced on January 31, 1996. Please contact your investment
representative, or Pioneer at 1-800-225-6292, if you have any questions about
your investment in Pioneer Bond Fund. Thank you for your continued support.
Respectfully,
[/s/ John F. Cogan, Jr.]
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Bond Fund
PORTFOLIO SUMMARY 6/30/96
Portfolio Quality
(As a percentage of total investment portfolio)
[Pie Graphic]
BB 2% Commercial Paper 9% BBB 12% U.S. Treasury/Agency 25%
A 31% AAA 10% AA 11%
Effective Portfolio Maturity
(As a percentage of total investment portfolio)
10-20 Years 8% 20+ Years 16% 0-2 Years 22%
7-10 Years 6% 5-7 Years 8% 2-5 Years 40%
10 Largest Holdings
(As a percentage of investment in securities)
<TABLE>
<CAPTION>
<S> <C>
1. U.S. Treasury Notes, 8.25%, 7/15/98 5.23%
2. U.S. Treasury Notes 8.5%, 2/15/00 4.09
3. U.S. Treasury Notes, 8.625%, 8/15/97 3.45
4. Imperical Oil Ltd., 8.75%, 10/15/19 2.69
5. International Bank for Reconstruction and Development, 9.25%, 7/15/17 2.30
6. General Motors Corp., 9.4%, 7/15/21 2.24
7. Commonwealth Edison Co., First Mortgage Bonds, 9.75%, 2/15/20 2.17
8. U.S. Treasury Bonds, 8.75%, 11/05/08 2.13
9. British Telecom Finance Plc, Deb., 9.625%, 2/15/19 2.11
10. Ford Motor Credit Co., 9.14%, 12/30/14 2.10
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Bond Fund
PERFORMANCE UPDATE 6/30/96 - CLASS A SHARES
Share Prices and Distributions
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net Asset Value
per Share 6/30/96 6/30/95
$9.08 $9.35
Distributions per Share Income Short-Term Long-Term
(6/30/95-6/30/96) Dividends Capital Gains Capital Gains
$0.641 - -
</TABLE>
Investment Returns
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Bond Fund at public offering price, compared to the growth of the
Lehman Brothers Government/Corporate Bond Index.
<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual Total Returns
(As of June 30, 1996)
Net Asset Public Offering
Period Value Price*
10 Years 7.83% 7.34%
5 Years 7.84 6.86
1 Year 4.02 -0.66
</TABLE>
[Mountain Chart]
$24,000 20,000 16,000 12,000 8,000
[Plot Points Mountain Chart A]
Lehman Brothers
Pioneer Government/
Bond Corporate
Fund Bond Index
-------- ----------------
6/86 9550 10000
6/87 9989 10468
6/88 10704 11250
6/89 11900 12639
6/90 12642 13537
6/91 13923 14921
6/92 15737 17035
6/93 17731 19274
6/94 17508 18993
6/95 19519 21417
6/96 20302 22414
Growth of $10,000 $22,414 $20,302
[ ] Pioneer Bond Fund*
[ ] [ ] Lehman Brothers Government/
Corporate Bond Index
* Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
The Lehman Brothers Government/Corporate Bond Index is an unmanaged,
composite index of the U.S. bond market. It contains 5,353 issues, including
Treasury and government agency securities, investment-grade corporate bonds
and Yankee bonds. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees, expenses or sales charges. You cannot
invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
<PAGE>
Pioneer Bond Fund
PERFORMANCE UPDATE 6/30/96 - CLASS B SHARES
Share Prices and Distributions
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net Asset Value
per Share 6/30/96 6/30/95
$9.02 $9.31
Distributions per Share Income Short-Term Long-Term
(6/30/95-6/30/96) Dividends Capital Gains Capital Gains
$0.581 - -
</TABLE>
Investment Returns
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Bond Fund, compared to the growth of the Lehman Brothers
Government/Corporate Bond Index.
<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual Total Returns
(As of June 30, 1996)
If If
Period Held Redeemed*
Life-of-Fund 5.70% 4.46%
(4/4/94)
1 Year 3.15 -0.73
</TABLE>
[Mountain Chart]
$16,000 12,000 8,000 4,000
Plot Points Mountain Chart B
Lehman Brothers
Pioneer Government/
Bond Corporate
Fund Bond Index
-------- ----------------
4/94 10000 10000
6/94 9896 9958
9/94 9914 10007
12/94 9906 10044
3/95 10327 10545
6/95 10942 11229
9/95 11089 11444
12/95 11600 11977
3/96 11274 11697
6/96 10986 11752
Growth of $10,000+ $11,752 $10,992
[ ] Pioneer Bond Fund*
[ ] [ ] Lehman Brothers Government/
Corporate Bond Index
* Reflects deduction of the maximum applicable contingent deferred sales
charge (CDSC) at the end of the period and assumes reinvestment of
distributions. The maximum CDSC of 4% declines over six years.
+ Index comparison begins 4/30/94. The Lehman Brothers Government/Corporate
Bond Index is an unmanaged, composite index of the U.S. bond market. It
contains 5,353 issues, including Treasury and government agency securities,
investment-grade corporate bonds and Yankee bonds. Index returns assume
reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, expenses or sales charges. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
4
<PAGE>
Pioneer Bond Fund
PERFORMANCE UPDATE 6/30/96 - CLASS C SHARES
Share Prices and Distributions
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net Asset Value
per Share 6/30/96 1/31/96
$9.02 $9.54
Distributions per Share Income Short-Term Long-Term
(1/31/96-6/30/96) Dividends Capital Gains Capital Gains
$0.233 - -
</TABLE>
Investment Returns
The table below shows the Fund's total return since its recent inception. A
mountain chart comparing the Fund to the Lehman Brothers Government/
Corporate Bond Index will appear in the Fund's semiannual report dated
December 31, 1996.
<TABLE>
<CAPTION>
<S> <C> <C>
Cumulative Total Returns
(As of June 30, 1996)
If If
Period Held Redeemed*
Life-of-Fund -3.00% -3.95%
(1/31/96)
</TABLE>
* Reflects deduction of the 1% contingent deferred sales charge (CDSC) at the
end of the period and assumes reinvestment of distributions.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
5
<PAGE>
Pioneer Bond Fund
PORTFOLIO MANAGEMENT DISCUSSION 6/30/96
Dear Shareowner,
As portfolio manager for Pioneer Bond Fund, I welcome this opportunity to
update you about the bond market for the period covering your Fund's
eighteenth fiscal year. First of all, however, allow me to thank you for your
interest in the Fund; we at Pioneer believe that conservative, high-quality
investments have a place in most financial portfolios. We will continue to do
all we can to provide you with dependable dividends and competitive
investment returns.
A Shifting Bond Market
The United States bond market and your Fund began the fiscal year on a
strong, positive note. In fact, prices of most bonds increased dramatically
throughout 1995, thanks to low inflation, a slow-moving economy and lower-
trending interest rates. These conditions remained intact as we moved into
1996, and the feeling was that the bond market would continue to be
profitable. The generally optimistic outlook was reinforced when the Federal
Reserve (the Fed) cut short-term interest rates in December and January,
indicating that too-fast economic growth and inflation were not concerns.
The mood changed in February, however, when the monthly employment report,
one of many indicators used to monitor the economy's strength, showed the
biggest job increase in 12 years. Worries about an overheating economy
triggered fears that the Fed would raise short-term rates. At the same time,
strong economic forecasts led the stock market in its continued upward surge,
further undermining investor confidence in bonds. The resulting drop in bond
prices translated into a yield of 6.89% for the benchmark 30-year Treasury
bond as of June 30, versus 6.62% one year earlier and 5.95% on December 31,
1995.
Pioneer Bond Fund's results tracked those of the general market, with solid
performance for the last six months of 1995, and negative results recorded
for 1996. When all was said and done, your Fund's Class A Shares posted a
total return of 4.02% for the year, at net asset value, a hair below the
4.06% turned in by the average corporate debt A-rated mutual fund tracked by
Lipper Analytical Services. Lipper, an indepen-
6
<PAGE>
Pioneer Bond Fund
dent mutual fund research firm, tracked 116 funds for the period. For
additional information about your Fund's performance, please refer to the
Performance Updates, which begin on page 3.
Focus on a Diversified, High-Quality Portfolio
Pioneer Bond Fund invests for current income with capital appreciation
through U.S. government securities and high-quality corporate bonds. At least
85% of its total assets must be invested in bonds rated A or better. At the
close of the fiscal year, the Fund's holdings maintained an average quality
rating of AA. More detailed information about your Fund's portfolio appears
on page 2.
As the year progressed and bond prices became more volatile, we adjusted the
portfolio to make it more conservative. We shortened the Fund's duration
(which reflects the sensitivity of bond prices to changes in interest rates),
in large part by increasing short-term cash equivalents. We also augmented
the Fund's weighting in securities with less than five years to their
effective maturity, generally by selling Treasury bonds with more than 20
years to maturity. We prefer to adjust the portfolio with Treasurys, given
their ready liquidity. These changes moved the portfolio's average effective
life to 7.6 years, versus 11.1 years last June 30 and 9.6 years on December
31, 1995. While short-term issues may not be major contributors to the Fund's
income stream, they do add price stability. We believe our strategy will work
in the Fund's favor if the economy, bond market and interest rates continue
to be as erratic as they were over much of the past year.
As mentioned, we make adjustments to the portfolio by buying and selling
Treasurys. On the flip side, we prefer to hold corporate securities since we
subject each issue to a lengthy credit analysis process before we add it to
the portfolio. Your portfolio's corporate holdings remain diversified across
a variety of sectors, although we continued to favor industrial issuers. We
constantly keep an eye toward quality and try to select issues with the
potential for a credit upgrade. As a result, we tend to choose well-known,
proven companies. These firms have a solid long-term history of repaying
their debt; currently we especially like American Airlines, Wal-Mart and
General Motors.
7
<PAGE>
Pioneer Bond Fund
PORTFOLIO MANAGEMENT DISCUSSION 6/30/96
(continued)
Moving Forward
The bond market's results over the past 12 months demonstrate how closely
investors have watched the economy and how quickly they acted on their
emotions. Until the economy or policy-makers appear set on a certain course,
prices could remain volatile over the near term. While we all would prefer
slow, steady gains from conservative bond investments, you can take solace in
the fact that a long-term view is the best way to ride out market turbulence
- - and to work toward future financial goals.
On a positive note, we think that inflation will remain subdued in the second
half of the year. Since February, the economy has shown sustainable and good
growth, but with low inflation. At this point, however, it is uncertain what
action - if any - the Fed will take. In this election year, the Fed may be
hesitant to act in the absence of evidence of extreme inflation or economic
growth.
Another factor that could benefit bonds is the significant appreciation that
has taken place in the stock market. Many investors chose to participate in
stocks during the past year and ignored the bond market. We think this could
soon change, given the gains the stock market has realized, as well as the
heightened volatility stocks have been experiencing. We expect many equity
investors who become nervous about stocks will turn to bonds, especially
since many bonds are now attractively priced.
Regardless of market conditions, our primary focus for your Fund remains the
same - to generate a steady stream of income while maintaining principal. We
expect Pioneer Bond Fund's conservative focus will continue to provide
shareowners with solid long-term results. If you have any questions about
your investment in the Fund, please contact your investment representative,
or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ Sherman B. Russ
Sherman B. Russ
Portfolio Manager
8
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 6/30/96
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
INVESTMENT IN SECURITIES - 90.7%
U.S. Government and Agency
Obligations - 24.8%
$ 79,155 Federal Home Loan Mortgage Corp.,
10.0%, 2002 $ 83,088
140,144 Federal Home Loan Mortgage Corp.,
10.5%, 2019 154,377
174,294 Federal Home Loan Mortgage Corp.,
REMIC Series 1988-24B, 9.5%, 2005 182,997
1,000,000 Federal National Mortgage Association,
8.8%, 1997 1,034,060
1,000,000 Federal National Mortgage Association,
9.2%, 1997 1,029,690
1,500,000 Federal National Mortgage Association,
9.2%, 2000 1,640,385
1,000,000 Federal National Mortgage Association,
10.35%, 2015 1,312,030
118,912 Federal National Mortgage Association,
10.0%, 2019 129,501
856,858 Federal National Mortgage Association,
11.0%, 2019 959,141
1,440,303 Federal National Mortgage Association,
REMIC Series 1989-72D, 8.9%, 2019 1,492,053
657,023 Federal National Mortgage Association,
REMIC Series 1989-19A, 10.3%, 2019 717,739
7,751 Federal National Mortgage Association,
REMIC Series 1989-19B, 10.3%, 2019 7,962
498,753 Government National Mortgage
Association, Midget, 10.0%, 2004 to 2006 525,246
361,985 Government National Mortgage
Association, 10.0%, 2018 395,128
196,975 Government National Mortgage
Association, 9.5%, 2020 210,509
478,486 Government National Mortgage
Association, 10.0%, 2020 521,396
1,000,000 Resolution Trust Corp., Series
1992-5A6, 9.238%, 2026 1,010,000
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 6/30/96
(continued)
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
U.S. Government and Agency
Obligations - (Continued)
$2,000,000 U.S. Treasury Bonds, 8.75%, 2008 $ 2,218,440
1,565,000 U.S. Treasury Notes, 8.5%, 1997 1,605,831
3,500,000 U.S. Treasury Notes, 8.625%, 1997 3,602,270
5,250,000 U.S. Treasury Notes, 8.25%, 1998 5,457,533
4,000,000 U.S. Treasury Notes, 8.5%, 2000 4,266,240
-----------
Total U.S. Government and Agency
Obligations (Cost $28,662,712) $28,555,616
-----------
Industrials - 29.0%
1,000,000 A-/A2 Alcan Aluminum, Ltd., Deb., 9.625%,
2019 $ 1,094,790
1,923,825 BBB-/A3 American Airlines Inc., 9.71%, 2007 2,124,115
1,000,000 A/A3 ARCO Chemical Co., Deb., 9.8%, 2020 1,229,580
500,000 A/A2 Atlantic Richfield Co., Deb., 9.875%,
2016 615,795
1,500,000 A/A2 Caterpillar Inc., 9.75%, 2019 1,676,445
1,200,000 BBB/Baa3 Centex Corp., Deb., 8.75%, 2007 1,248,000
1,500,000 BB+/Baa3 Coastal Corp., Deb., 9.625%, 2012 1,708,785
2,000,000 A-/A3 General Motors Corp., Notes, 9.4%, 2021 2,337,700
1,000,000 BBB-/Baa2 Georgia-Pacific Corp., Deb., 9.5%, 2022 1,059,230
2,600,000 AA+/Aa2 Imperial Oil Ltd., 8.75%, 2019 2,802,436
1,000,000 BBB/Ba1 Joy Technologies Co., Sen. Notes,
10.25%, 2003 1,100,000
1,500,000 BBB/Baa3 News America Holdings, 10.125%, 2012 1,686,750
1,000,000 AA/Aa3 Norfolk Southern Corp., Notes, 9.0%,
2021 1,162,280
1,000,000 A+/A1 J.C. Penney Co., Inc., Deb., 9.75%,
2021 1,120,210
2,000,000 BBB/Baa1 Phillips Petroleum Co., Deb., 9.18%,
2021 2,146,800
1,500,000 AA/Aa2 Proctor & Gamble Co., Notes, 9.36%,
2021 1,776,825
1,000,000 BBB+/A3 Supervalue, Inc., Notes, 8.875%, 2022 1,039,870
1,500,000 BBB-/Baa2 Tenneco, Inc., Notes, 9.875%, 2001 1,656,720
The accompanying notes are an integral part of these financial statements
10
<PAGE>
Pioneer Bond Fund
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
Industrials - (Continued)
$1,250,000 A+/A1 Texaco Capital Corp., Gtd. Deb., 9.75%,
2020 $ 1,545,050
2,000,000 BBB-/Ba1 Time Warner Inc., Deb., 9.15%, 2023 2,067,880
1,000,000 BB+/Baa3 USX Corp.-U.S. Steel Group, Deb.,
9.375%, 2012 1,102,540
1,000,000 AA/Aa2 Wal-Mart Stores, Inc., Deb., 8.50%,
2024 1,054,470
-----------
Total Industrials (Cost $32,680,551) $33,356,271
-----------
Financial - 8.8%
2,000,000 A+/A1 Ford Motor Credit Co., 9.14%, 2014 $ 2,194,320
1,500,000 AA/Aa2 GEICO Corp., Deb., 9.15%, 2021 1,607,085
2,000,000 AAA/Aaa Standard Credit Card Master Trust,
Series 1991-3A, 8.875%, 1998 2,091,860
2,000,000 AAA/Aaa Standard Credit Card Trust, Series
1990-6A, 9.375%, 1997 2,060,000
1,000,000 A/A2 Transamerica Corp., 9.875%, 1998 1,048,950
1,000,000 A+/A3 W.R. Berkley, Deb., 8.7%, 2022 1,067,990
-----------
Total Financial (Cost $10,032,928) $10,070,205
-----------
Banks - 15.5%
1,000,000 A+/A1 Banc One Corp., Sub. Notes, 10.0%, 2010 $ 1,201,320
1,000,000 A/A3 BankAmerica, Sub. Notes, 9.375%, 2001 1,095,020
1,000,000 AA-/Aa3 Barclays North American Capital Corp.,
Gtd. Sub. Cap. Notes, 9.75%, 2021 1,127,490
1,000,000 A-/A2 Chase Manhattan, 8.5%, 2002 1,069,800
1,000,000 A-/A2 Chemical NY Corp., Sub. Notes, 9.75%,
1999 1,077,300
898,000 A/A3 Citicorp, Sub. Notes, 10.75%, 2015 943,448
1,250,000 A-/A3 Comerica Inc., Sub. Deb., 10.125%, 1998 1,323,725
1,550,000 A-/A2 CoreStates Capital Corp., Gtd. Sub.
Notes, 9.375%, 2003 1,729,505
1,500,000 A-/A2 First Chicago Corp., Sub. Notes,
10.25%, 2001 1,699,650
2,000,000 BBB+/A3 First Interstate Bancorp, Sub. Notes,
9.0%, 2004 2,086,820
The accompanying notes are an integral part of these financial statements
11
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 6/30/96
(continued)
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
Banks - (Continued)
$1,500,000 BBB+/A3 Fleet/Norstar Financial Group, Sub.
Notes, 9.9%, 2001 $ 1,678,425
1,000,000 A-/A3 Mellon Financial, Sub. Deb., 9.75%,
2001 1,109,690
1,000,000 AA-/Aa3 National Westminster Bancorp Inc., Gtd.
Cap. Notes, 9.375%, 2003 1,127,530
500,000 AA-/A1 Republic New York Corp., Sub. Notes,
9.3%, 2021 585,920
-----------
Total Banks (Cost $17,146,014) $17,855,643
-----------
Utilities - 5.2%
500,000 AAA/Aaa Cajun Electric Power, Cooperative
Utility Trust, 10.125%, 2019 $ 551,120
2,000,000 BBB/Baa2 Commonwealth Edison, First Mortgage
Bonds, 9.75%, 2020 2,260,720
1,000,000 A/A2 Virginia Electric Power, 8.75%, 2021 1,048,000
1,000,000 A-/A3 ONEOK Inc. Deb., 9.7%, 2019 1,055,540
1,000,000 BBB+/Baa1 GTE Corp., Deb., 10.3%, 2017 1,095,500
-----------
Total Utilities (Cost $5,850,410) $ 6,010,880
-----------
Sovereigns and Supranationals - 7.4%
500,000 AA+/Aa1 British Columbia Hydro Power, 15.5%,
2011 $ 549,990
2,000,000 AAA/Aaa British Telecom Finance, Deb., 9.625%,
2019 2,204,040
1,000,000 AAA/Aaa Inter-American Development Bank, Notes,
9.45%, 1998 1,060,550
2,000,000 AAA/Aaa International Bank for Reconstruction
and Development, Deb., 9.25%, 2017 2,393,940
500,000 AA-/Aa3 Province of Ontario, 15.75%, 2012 558,730
1,000,000 BBB+/A2 Province of Saskatchewan, 9.375%, 2020 1,191,060
The accompanying notes are an integral part of these financial statements
12
<PAGE>
Pioneer Bond Fund
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
Sovereigns and Supranationals -
(Continued)
$ 500,000 AAA/Aaa Tokyo (Metropolis of), Gtd. Bonds,
10.375%, 1997 $ 524,570
-----------
Total Sovereigns and Supranationals
(Cost $8,383,337) $ 8,482,880
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $102,755,952) $104,331,495
-----------
TEMPORARY CASH INVESTMENTS - 9.3%
Commercial Paper - 9.3%
3,573,000 Commercial Credit Corp., 5.37%, 7/2/96 $ 3,573,000
4,338,000 Ford Motor Credit Co., 5.45%, 7/3/96 4,338,000
2,723,000 General Electric Credit Corp., 5.37%,
7/1/96 2,723,000
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $10,634,000) $ 10,634,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENTS - 100% (Cost
$113,389,952)(a)(b) $114,965,495
-----------
</TABLE>
(a) At June 30, 1996, the net unrealized gain on investments based on cost
for federal income tax purposes of $113,389,952 was as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 3,180,303
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (1,604,760)
----------
Net unrealized gain $ 1,575,543
----------
</TABLE>
(b) At June 30, 1996, the Fund had a net capital loss carryforward of
approximately $3,200,964 which will expire between 1998 and 2004 if not
utilized.
Note: The Fund's investments in mortgage-backed securities of the Government
National Mortgage Association (GNMA) are interests in separate pools of
mortgages. All separate investments in this issuer which have the same
coupon rate have been aggregated for the purpose of presentation in
this schedule of investments.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended June 30, 1996 were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Purchases Sales
-------- ----------
Long-term U.S. Government $20,923,787 $39,787,869
Other Long-term Securities 22,676,391 10,200,891
</TABLE>
The accompanying notes are an integral part of these financial statements
13
<PAGE>
Pioneer Bond Fund
BALANCE SHEET 6/30/96
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investments of $10,634,000) (cost $113,389,952) $114,965,495
Receivables -
Interest 2,543,689
Fund shares sold 321,226
Other 11,045
---------
Total assets $117,841,455
---------
LIABILITIES:
Payables -
Fund shares repurchased $ 335,332
Dividends 175,159
Due to affiliates 140,062
Accrued expenses 48,470
---------
Total liabilities $ 699,023
---------
NET ASSETS:
Paid-in capital $119,332,609
Distributions in excess of net investment income (50,490)
Accumulated net realized loss on investments (3,715,230)
Net unrealized gain on investments 1,575,543
---------
Total net assets $117,142,432
---------
Net Asset Value Per Share:
(Unlimited number of shares authorized)
Class A - (based on $101,956,701/11,229,772 shares) $ 9.08
---------
Class B - (based on $14,842,995/1,645,017 shares) $ 9.02
---------
Class C - (based on $342,736/37,978 shares) $ 9.02
---------
Maximum Offering Price:
Class A $ 9.51
---------
</TABLE>
The accompanying notes are an integral part of these financial statements
14
<PAGE>
Pioneer Bond Fund
STATEMENT OF OPERATIONS
For the Year Ended 6/30/96
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $9,441,368
---------
EXPENSES:
Management fees $588,432
Transfer agent fees
Class A 226,695
Class B 27,817
Class C 351
Distribution fees
Class A 248,056
Class B 119,908
Class C 789
Accounting 76,880
Professional fees 69,850
Registration fees 57,227
Custodian fees 28,048
Printing 20,799
Fees and expenses of nonaffiliated trustees 17,961
Miscellaneous 20,164
----
Total expenses $ 1,502,977
Less fees paid indirectly (19,157)
---------
Net expenses $ 1,483,820
---------
Net investment income $ 7,957,548
---------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments $ (759,570)
Change in net unrealized gain on investments $(2,778,133)
---------
Net loss on investments $(3,537,703)
---------
Net increase in net assets resulting from operations $ 4,419,845
---------
</TABLE>
The accompanying notes are an integral part of these financial statements
15
<PAGE>
Pioneer Bond Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended 6/30/96 and 6/30/95
<TABLE>
<CAPTION>
Year Ended Year Ended
FROM OPERATIONS: 6/30/96 6/30/95
<S> <C> <C>
Net investment income $ 7,957,548 $ 8,154,313
Net realized loss on investments (759,570) (2,541,990)
Change in net unrealized gain/loss on investments (2,778,133) 6,451,657
--------- -----------
Net increase in net assets resulting from operations $ 4,419,845 $ 12,063,980
--------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A ($0.64 and 0.68 per share, respectively) $ (7,298,352) $ (7,888,862)
Class B ($0.57 and 0.62 per share, respectively) (714,880) (258,198)
Class C ($0.22 and 0.00 per share, respectively) (4,649) -
In excess of net investment income
Class B ($0.01 and 0.00 per share, respectively) (34,464) -
Class C ($0.01 and 0.00 per share, respectively) (189) -
--------- -----------
Total distributions to shareholders $ (8,052,534) $ (8,147,060)
--------- -----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 32,345,460 $ 26,149,127
Reinvestment of distributions 5,865,063 6,062,601
Cost of shares repurchased (34,931,359) (26,503,240)
--------- -----------
Net increase in net assets resulting from fund
share transactions $ 3,279,164 $ 5,708,488
--------- -----------
Net increase (decrease) in net assets $ (353,525) $ 9,625,408
NET ASSETS:
Beginning of year $117,495,957 $107,870,549
--------- -----------
End of year (including (distributions in excess of)/
accumulated undistributed net investment income of
$(50,490) and $66,799, respectively) $117,142,432 $117,495,957
--------- -----------
</TABLE>
<TABLE>
<CAPTION>
'96 Shares '96 Amount '95 Shares '95 Amount
<S> <C> <C> <C> <C>
Class A
Shares sold 2,099,659 $ 19,598,057 2,143,981 $ 19,180,561
Reinvestment of distributions 574,935 5,351,873 654,382 5,879,994
Less shares repurchased (3,229,151) (30,032,780) (2,814,975) (25,231,568)
-------- --------- ---------- -----------
Net decrease (554,557) $ (5,082,850) (16,612) $ (171,013)
-------- --------- ---------- -----------
Class B
Shares sold 1,330,447 $ 12,402,112 773,773 $ 6,968,566
Reinvestment of distributions 55,012 508,688 20,268 182,607
Less shares repurchased (528,935) (4,897,315) (139,897) (1,271,672)
-------- --------- ---------- -----------
Net increase 856,524 $ 8,013,485 654,144 $ 5,879,501
-------- --------- ---------- -----------
Class C*
Shares sold 37,622 $ 345,291
Reinvestment of distributions 497 4,502
Less shares repurchased (141) (1,264)
-------- ---------
Net increase 37,978 $ 348,529
-------- ---------
</TABLE>
*Class C shares were first publicly offered on January 31, 1996.
The accompanying notes are an integral part of these financial statements
16
<PAGE>
Pioneer Bond Fund
FINANCIAL HIGHLIGHTS 6/30/96
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
6/30/96 6/30/95 6/30/94 6/30/93 6/30/92
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of year $ 9.35 $ 9.04 $ 9.81 $ 9.37 $ 8.99
-------- -------- -------- -------- ----------
Increase (decrease) from investment
operations:
Net investment income $ 0.64 $ 0.68 $ 0.67 $ 0.70 $ 0.74
Net realized and unrealized gain (loss)
on investments (0.27) 0.31 (0.77) 0.44 0.39
-------- -------- -------- -------- ----------
Net increase (decrease) from
investment operations $ 0.37 $ 0.99 $ (0.10) $ 1.14 $ 1.13
Distributions to shareholders from:
Net investment income (0.64) (0.68) (0.67) (0.70) (0.75)
-------- -------- -------- -------- ----------
Net increase (decrease) in net asset
value $ (0.27) $ 0.31 $ (0.77) $ 0.44 $ 0.38
-------- -------- -------- -------- ----------
Net asset value, end of year $ 9.08 $ 9.35 $ 9.04 $ 9.81 $ 9.37
-------- -------- -------- -------- ----------
Total return* 4.02% 11.48% (1.26%) 12.67% 13.03%
Ratio of net expenses to average net
assets 1.19%+ 1.14% 1.05% 1.10% 1.09%
Ratio of net investment income to
average net assets 6.80%+ 7.55% 6.93% 7.37% 8.04%
Portfolio turnover rate 39% 37% 39% 37% 17%
Net assets, end of year (in thousands) $101,957 $110,158 $106,659 $112,900 $102,503
Ratios assuming reduction for fees paid
indirectly:
Net expenses 1.18% - - - -
Net investment income 6.81% - - - -
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements
17
<PAGE>
Pioneer Bond Fund
FINANCIAL HIGHLIGHTS 6/30/96
<TABLE>
<CAPTION>
Year Ended Year Ended 4/4/94 to
6/30/96 6/30/95 6/30/94
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 9.31 $ 9.02 $ 9.23
-------- -------- -----------
Increase (decrease) from
investment operations:
Net investment income 0.57 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%)
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%**
Porfolio turnover rate 39% 37% 39%
Net assets, end of period (in thousands) $14,843 $7,338 $1,212
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.94% - -
Net investment income 6.03% - -
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements
18
<PAGE>
Pioneer Bond Fund
FINANCIAL HIGHLIGHTS 6/30/96
<TABLE>
<CAPTION>
1/31/96 to
6/30/96
<S> <C>
CLASS C+
Net asset value, beginning of period $ 9.54
--------
Increase (decrease) from investment operations:
Net investment income 0.23
Net realized and unrealized loss on investments (0.52)
--------
Net decrease from investment operations $(0.29)
Distributions to shareholders:
From net investment income (0.22)
In excess of net investment income (0.01)
--------
Net decrease in net asset value $(0.52)
--------
Net asset value, end of period $ 9.02
--------
Total return* (3.00%)
Ratio of net expenses to average net assets 2.18%**+
Ratio of net investment income to average net
assets 5.79%**+
Porfolio turnover rate 39%
Net assets, end of period (in thousands) $ 343
Ratios assuming reduction for fees paid indirectly:
Net expenses 2.13%**
Net investment income 5.84%**
</TABLE>
+ Class C shares were first publicly offered on January 31, 1996.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements
19
<PAGE>
Pioneer Bond Fund
NOTES TO FINANCIAL STATEMENTS 6/30/96
1. Organization and Significant Accounting Policies
Pioneer Bond Fund (the Fund) is a Massachusetts business trust registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The investment objective of the Fund is to
seek current income from a high quality portfolio.
The Fund offers three classes of shares - Class A, Class B and Class C
shares. Class C shares were first publicly offered on January 31, 1996. The
shares of Class A, Class B and Class C represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distributions fees and have exclusive
voting rights with respect to the distribution plans that have been adopted
by Class A, Class B and Class C shareholders, respectively.
The Fund's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the
Fund to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates. The following is a summary
of significant accounting policies consistently followed by the Fund, which
are in conformity with those generally accepted in the investment company
industry:
A. Security Valuation
Security transactions are recorded on trade date. Securities are valued
based on valuations furnished by an independent pricing service that
utilizes a matrix system. This matrix system reflects such factors as
security prices, yields, maturities, and ratings and is supplemented by
dealer and exchange quotations and fair market value information from
other sources, as required. Principal amounts of mortgage-backed
securities are adjusted for monthly paydowns. Temporary cash investments
are valued at amortized cost. Interest income is recorded on the accrual
basis.
Gains and losses on sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes.
It is the Fund's practice to first select for sale those securities that
have the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
20
<PAGE>
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareholders. Therefore, no federal income tax provision is
required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in-capital, depending on the type of book/tax differences that may
exist.
At June 30, 1996, the Fund has reclassed $22,303 to paid-in capital and to
distributions in excess of net investment income. This reclassification
has no impact on the net asset value of the Fund and is designed to
present the Fund's capital accounts on a tax basis.
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $39,583
in underwriting commissions on the sale of fund shares during the year
ended June 30, 1996. The Fund declares as daily dividends substantially
all of its net investment income. All dividends are paid on a monthly
basis. Short-term capital gain distributions, if any, may be declared with
the daily dividends. Distributions paid by the Fund, if any, with respect
to each class of shares are calculated in the same manner, at the same
time, on the same day and in the same amount, except that Class A, Class B
and Class C shares can bear different transfer agent and distribution
fees.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid
to the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each
class and the ratable allocation of related out-of-pocket expenses (see
Note 3). Income, common expenses and realized and unrealized
21
<PAGE>
Pioneer Bond Fund
NOTES TO FINANCIAL STATEMENTS 6/30/96
(continued)
gains and losses are calculated at the Fund level and allocated daily to
each class of shares based on the respective percentage of adjusted net
assets at the beginning of the day.
2. Management Agreement
Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio, and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 0.50% of the
Fund's average daily net assets.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in due to affiliates is $44,246 and $6,085 in
management and accounting fees, respectively, payable to PMC at June 30,
1996.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Fund at negotiated rates. Included in
due to affiliates is $23,103 in transfer agent fees payable to PSC at June
30, 1996.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A
Plan, Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. Pursuant to the Class A Plan, the Fund pays
PFD a sevice fee of up to 0.25% of the Fund's average daily net assets in
reimbursement of its actual expenditures to finance activities primarily
intended to result in the sale of Class A shares. Pursuant to the Class B
Plan and Class C Plan, the Fund pays PFD 1.00% of the average daily net
assets attributable to each class of shares. The fee consists of a 0.25%
service fee and a 0.75% distribution fee paid as compensation for personal
services and/or account maintenance services or distribution services with
regard to Class B and Class C shares. Included in due to affiliates is
$66,628 in distribution fees payable to PFD at June 30, 1996.
In addition, redemptions of each class of shares may be subject to a
contingent deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on
certain net asset value purchases of Class A shares that are redeemed within
one year of purchase. Class B shares that are redeemed within six years of
purchase are subject to a CDSC at declining rates beginning at 4.0%, based on
the lower of cost or market value of shares being
22
<PAGE>
Pioneer Bond Fund
redeemed. Redemptions of Class C shares within one year of purchase are
subject to a CDSC of 1.00%. Proceeds from the CDSC are paid to PFD. For the
year ended June 30, 1996, CDSCs in the amount of $33,807 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended June 30, 1996, the
Fund's expenses were reduced by $19,157 under such arrangements.
23
<PAGE>
Pioneer Bond Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the Board of Trustees of
Pioneer Bond Fund:
We have audited the accompanying balance sheet of Pioneer Bond Fund,
including the schedule of investments, as of June 30, 1996, and the related
statement of operations, the statements of changes in net assets and
financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 1996 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Bond Fund as of June 30, 1996, the results of its operations, the
changes in its net assets and financial highlights for the periods presented,
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 1, 1996
24
<PAGE>
Pioneer Bond Fund
TAX TREATMENT OF DISTRIBUTIONS
Made during the Year Ended 6/30/96
During the year ended 6/30/96, Pioneer Bond Fund paid the following
distributions from net investment income:
<TABLE>
<CAPTION>
Distributions Distributions Distributions
Payment Per Share Per Share Per Share
Date (Class A) (Class B) (Class C)*
<S> <C> <C> <C>
7/31/95 $0.055 $0.053 $ -
8/31/95 0.055 0.053 -
9/29/95 0.053 0.048 -
10/31/95 0.053 0.048 -
11/30/95 0.053 0.048 -
12/29/95 0.054 0.049 -
1/31/96 0.054 0.049 -
2/29/96 0.052 0.047 0.047
3/29/96 0.053 0.047 0.047
4/30/96 0.054 0.047 0.047
5/31/96 0.054 0.047 0.047
6/28/96 0.051 0.045 0.045
--------- --------- -----------
Total $0.641 $0.581 $0.233
--------- --------- -----------
</TABLE>
For purposes of the dividend exclusion, none of the distributions per share
qualify for the exclusion.
*Class C shares were first publicly offered on January 31, 1996.
25
<PAGE>
Pioneer Bond Fund
TRUSTEES' FEES AND SHARE OWNERSHIP 6/30/96
Trustees' Fees, Principal Shareholders and Share
Ownership of Trustees and Officers (Unaudited)
The aggregate direct remuneration paid by the Fund to trustees and officers
during the year ended June 30, 1996 was $13,571, plus expenses incurred in
attending trustees meetings of $3,618. Fees of trustees who are affiliated
with or are "interested persons" of Pioneering Management Corporation and
Pioneer Funds Distributor, Inc., investment adviser and underwriter,
respectively, of the Fund ($19,206 in 1996), are reimbursed to the Fund by
Pioneering Management Corporation in accordance with the management contract
with the Fund. At June 30, 1996, the trustees and officers of the Fund owned
beneficially 146,331 Class A shares of the Fund (approximately 1.3% of the
outstanding Class A shares). The Pioneer Group, Inc. is a publicly held
corporation of which Mr. Cogan beneficially owned approximately 15% of the
outstanding shares of capital stock at June 30, 1996.
26
<PAGE>
Pioneer Bond Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Richard H. Egdahl, M.D. President
Margaret B.W. Graham David D. Tripple, Executive Vice President
John W. Kendrick Sherman B. Russ, Vice President
Marguerite A. Piret William H. Keough, Treasurer
David D. Tripple Joseph P. Barri, Secretary
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr
Shareholder Services and Transfer Agent
Pioneering Services Corporation
27
<PAGE>
This page for your notes.
<PAGE>
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us
for assistance or information.
You can call us for:
<TABLE>
<CAPTION>
<S> <C>
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFoneSM for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Or write to us at:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
</TABLE>
This report must be preceded or accompanied by a current
Fund prospectus.
[Pioneer Logo]
Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
0896-3597
(c) Pioneer Funds Distributor, Inc.
[Recycle symbol]Printed on Recycled Paper
