[Pioneer Logo]
Pioneer
Bond
Fund
Class A, Class B and Class C Shares
Prospectus
August 30, 1996
(revised March 19, 1997)
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 (revised March 19, 1997), 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 .............................. 11
IX. HOW TO EXCHANGE FUND SHARES ........................... 12
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 ................................. 15
Direct Deposit ....................................... 15
Voluntary Tax Withholding ........................... 15
Telephone Transactions and Related Liabilities ...... 15
FactFone(SM) .......................................... 15
Retirement Plans .................................... 15
Telecommunications Device for the Deaf (TDD) ......... 15
Systematic Withdrawal Plans ........................ 15
Reinstatement Privilege (Class A Shares Only) ...... 16
XIII. THE FUND ............................................. 16
XIV. INVESTMENT RESULTS .................................... 16
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<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 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 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, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same each
year.
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 share expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject to
a 1% CDSC.
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:
<TABLE>
<CAPTION>
For the Year Ended June 30,
------------------------------------------------
1996 1995 1994 1993
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
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%
<CAPTION>
For the Year Ended June 30,
------------------------------------------------------------------
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
1996 1995 to June 30, 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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of the Fund, has general responsibility for PMC's
investment operations and chairs a committee of PMC's fixed income managers
which reviews PMC's research and portfolio operations, including those of the
Fund. Mr. Tripple joined PMC in 1974.
Research and management for the Fund is the responsibility of a team of
portfolio managers and analysts focusing on fixed income securities. Members of
the team meet regularly to discuss holdings, prospective investments and
portfolio composition. Mr. Sherman Russ is the senior member of the fixed income
team. Mr. Russ joined PMC in 1983.
Day-to-day management of the Fund has been the responsibility of Mr. Russ,
a Senior Vice President of PMC and Vice President of the Fund, since March 1988.
Mr. Russ has 33 years of investment experience.
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 regulatory
agencies, 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 or other funds for which PMC or any other affiliate
or subsidiary serves as investment adviser or manager. 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. See "Expense Information" in this Prospectus and "Investment Adviser"
in the Statement of Additional Information.
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% 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.
6
<PAGE>
Class C Shares. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are 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% 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 each 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
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receipt of a telephone purchase instruction and receipt of 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, including a sales
charge, 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. At the sole discretion of PFD, holdings of
funds domiciled outside the U.S., but which are managed by affiliates of PMC,
may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by participants in 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 the 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 are available for purchases of $100,000 or more of
Class A shares (excluding any reinvest-
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<PAGE>
ments of dividends and capital gains distributions) made within a 13-month
period pursuant to a Letter of Intent ("LOI") which may be established by
completing the Letter of Intent section of the Account Application. The reduced
sales charge will be the charge that would be applicable to the purchase of the
specified amount of Class A shares as if the shares had all been purchased at
the same time. A purchase not made pursuant to an LOI may be included if the LOI
is submitted to PSC within 90 days of such purchase. You may also obtain the
reduced sales charge by including the value (at current offering price) of all
your Class A shares in the Fund and all other Pioneer mutual funds held of
record as of the date of your LOI in the amount used to determine the applicable
sales charge for the Class A shares to be purchased under the LOI. Five percent
of your total intended purchase amount will be held in escrow by PSC, registered
in your name, until the terms of the LOI are fulfilled.
You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to cover actual sales charges is due, it must be paid to PFD
within 20 days after PFD or your dealer sends you a written request or PFD will
direct PSC to liquidate sufficient shares from your escrow account to cover the
amount due. See the Statement of Additional Information for more 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 at the net asset value per share next computed
after receipt of a purchase order 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 per share next computed after
receipt of a purchase order 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.
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<PAGE>
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.
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 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 any 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. The CDSC
on any shares subject to a CDSC will not be applicable if the selling
broker-dealer elects, with PFD's approval, to waive receipt of the commission
normally paid at the time of the sale.
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.
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<PAGE>
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, other than an
IRA, 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 or an IRA,
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 PSC, however, you
must use a written request, including a signature guarantee, to sell your shares
if any of the following 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. The telephone redemption option is not available
to retirement plan accounts, except IRAs. 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
11
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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.
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
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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 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.
When a broker-dealer sells Class B or Class C shares and elects, with PFD's
approval, to waive its right to receive the commission normally paid at the time
of sale, PFD may cause all or a portion of the distribution fees described above
to be paid to the broker-dealer.
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 tax on income and capital gains distributed
to shareholders as required under the Code.
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. The Fund's
policy is to make distributions from net long-term capital gains, if any, in
December. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the Fund 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 above
whether a shareholder takes them in cash or reinvests them in additional shares
of the Fund. Information as to the federal tax status of dividends and
distributions will be provided annually to shareholders. See "Distribution
Options" and "Directed Dividends."
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Generally, dividends from the Fund's net investment income, income from
securities lending, market discount income, certain net realized foreign
exchange gains, and net short-term capital gains are taxable as ordinary income
under the Code, and dividends from the Fund's net long-term capital gains are
taxable as long-term capital gains.
The Fund's dividends and distributions will not qualify for any
dividends-received deduction available to corporate shareholders.
The Fund may be subject to foreign withholding taxes or other foreign taxes
on income (possibly including, in some cases, capital gains) from certain of its
foreign investments, which will reduce the yield on or 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 associated foreign tax credits
or deductions.
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 that 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 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. 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 intangible
property taxes, the value of its shares is attributable to) certain U.S.
Government obligations, provided in some states that certain reporting or other
requirements are satisfied. The Fund will not attempt to and may not satisfy all
such requirements in all states. Non-U.S. shareholders and tax-exempt
shareholders are subject to tax treatment that is different than described
above. Shareholders should consult their own tax advisor regarding 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, newsletters,
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.
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If you elect to receive either dividends or capital gains or both in cash
and a distribution check issued to you is returned by the U.S. Postal Service as
not deliverable or a distribution check remains uncashed for six months or more,
the amount of the check may be reinvested in your account. Such additional
shares will be purchased at the then current net asset value. Furthermore, the
distribution option on the account will automatically be changed to the
reinvestment option until such time as you request a different option by writing
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 available 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 mutual fund 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
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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) 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
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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.
17
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Notes
18
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THE PIONEER FAMILY OF MUTUAL FUNDS
Growth Funds
Global/International
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
United States
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Mid-Cap Fund
Pioner Small Company Fund
Pioneer Micro-Cap Fund*
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust*
Tax-Exempt
Pioneer Intermediate Tax-Free Fund**
Pioneer Tax-Free Income Fund**
Money Market Fund
Pioneer Cash Reserves Fund
*Offers Class A and B Shares only
**Not suitable for retirement accounts
19
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[Pioneer logo]
Pioneer
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 LLP
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
0397-4055
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER BOND FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
August 30, 1996
(revised March 19, 1997)
This Statement of Additional Information is not a Prospectus, but should be
read in conjunction with the Prospectus (the "Prospectus") dated August 30,
1996, (revised March 19, 1997) 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 Intent.......................................................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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<PAGE>
(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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<PAGE>
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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<PAGE>
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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<PAGE>
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 World Equity Fund PMC PFD
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
Pioneer Micro-Cap 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 Balanced Fund PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond 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.) When a broker-dealer sells Class B
shares and elects, with PFD's approval, to waive its right to receive the
commission normally paid at the time of the sale,PFD may cause all or a portion
of the distribution fees described above to be paid to the broker-dealer.
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.)
When a broker-dealer sells Class C shares and elects, with PFD's approval, to
waive its right to receive the commission normally paid at the time of the sale,
PFD may cause all or a portion of the distribution fees described above to be
paid to the broker-dealer.
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 agreed to provide certain
sub-accounting services, such as specific transaction processing and
recordkeeping services. Any such payments by the Fund would be in lieu of the
per account fee which would otherwise be paid by the Fund to PSC.
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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, 225 Franklin Street, 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 the Fund's
income, the diversification of its assets and the distribution of its income 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 earns, the Fund
will be relieved of the necessity of paying federal income tax.
In order to qualify as a regulated investment company under Subchapter M, the
Fund must, among other things, derive at least 90% of its annual gross income
from interest, payments with respect to securities loans, gains from the sale or
other disposition of securities or foreign currencies, or other income derived
with respect to its business of investing in such securities or currencies (the
"90% income test"), limit its gains from the sale of securities and certain
other positions held for less than three months to less than 30% of its annual
gross income (the "30% test") and satisfy certain annual distribution and
quarterly diversification requirements.
<PAGE>
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 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 reinvested in 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.
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. Any transactions in
foreign currency that are not directly related to the Fund's investments in
securities may need to be limited in order to enable the Fund to satisfy the
limitations described in the second paragraph above that are applicable to the
income or gains recognized by a regulated investment company. If the net foreign
exchange loss for a year were to exceed the Fund's investment company taxable
income (computed without regard to such loss), the resulting ordinary loss for
such year would not be deductible by the Fund or its shareholders in future
years.
If the Fund invests in certain pay-in-kind securities ("PIKs"), zero coupon
securities, deferred interest 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 for each taxable year, which generally will be 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.
For federal income tax purposes, the Fund is permitted to carry forward a net
capital loss for any year to offset its 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 therefore are not expected to be distributed as such to
shareholders. At June 30, 1996, the Fund had aggregate capital loss
carryforwards of approximately $3,200,964, which will expire between 1998 and
2004 if not utilized
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 on these shares 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 economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events. Any loss realized by a shareholder
upon the redemption, exchange or other disposition 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 their tax
basis under the Code, to the extent a sales charge that would otherwise apply to
<PAGE>
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 redemptions or
other dispositions of shares may be disallowed under "wash sale" rules in the
event of other investments in the Fund (including those made pursuant to
reinvestment of dividends and/or capital gain distributions) within a period of
61 days beginning 30 days before and ending 30 days after a redemption or other
disposition of shares. In such a case, the disallowed portion of any loss would
be included in the federal tax basis of the shares acquired in the other
investments.
The Fund's dividends and distributions will not qualify for any
dividends-received deduction that might otherwise be available for certain
dividends received by shareholders that are corporations.
The Fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains, with
respect to its investments in those countries. Tax conventions between certain
countries and the U.S. may reduce or eliminate such taxes in some cases. The
Fund does not expect to satisfy the requirements for passing through to its
shareholders their pro rata shares of qualified foreign taxes paid by the Fund,
with the result that shareholders will not include such taxes in their gross
incomes 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.
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 intangible property taxes, the
value of its assets is attributable to) certain U.S. Government obligations,
provided in some states that certain thresholds for holdings of such obligations
and/or reporting requirements are satisfied. The Fund will not seek to satisfy
any threshold or reporting requirements that may apply in particular taxing
jurisdictions, although the Fund may in its sole discretion provide relevant
information to shareholders.
Federal law requires that the Fund withhold (as "backup withholding") 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 Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate IRS Forms W-9, 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.
If, as anticipated, the Fund qualifies as a regulated investment company under
the Code, it will not be required to pay any Massachusetts income, corporate
excise or franchise taxes.
The description of certain federal tax provisions 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. This description does not address
the special tax rules that may be applicable to particular types of investors,
such as financial institutions, insurance companies, securities dealers, or
tax-exempt or tax-deferred plans, accounts or entities. Investors other than
U.S. persons may be subject to different U.S. tax treatment, including a
possible 30% non-resident alien U.S. withholding tax (or non-resident alien
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 for
Form W-8 is on file, to 31% backup withholding on certain other payments from
the Fund. Shareholders should consult their own tax advisers 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 INTENT (Class A only)
A Letter of Intent (a "Letter") may be established by completing the Letter of
Intent section of the Account Application. When you sign the Account
Application, you agree to irrevocably appoint PSC your attorney-in-fact to
surrender for redemption any or all shares held in escrow with full power of
substitution. A Letter of Intent is not a binding obligation upon the investor
to purchase, or the Fund to sell, the full amount indicated.
If the total purchases, less redemptions, exceed the amount specified under the
Letter of Intention and are in an amount which would qualify for a further
quantity discount, all transactions will be recomputed on the expiration date of
the Letter of Intention to effect the lower sales charge. Any difference in the
sales charge resulting from such recomputation will be either delivered to you
in cash or invested in additional shares at the lower sales charge. The dealer,
by signing the Account Application, agrees to return to PFD, as part of such
retroactive adjustment, the excess of the commission previously reallowed or
paid to the dealer over that which is applicable to the actual amount of the
total purchases under the Letter of Intention.
If the total purchases, less redemptions, are less than the amount specified
under the Letter of Intention, you must remit to PFD any difference between the
sales charge on the amount actually purchased and the amount originally
specified in the Letter of Intention section of the Account Application. When
the difference is paid, the shares held in escrow will be deposited to your
account. If you do not pay the difference in sales charge within 20 days after
written request from PFD or your dealer, PSC, after receiving instructions from
PFD, will redeem the appropriate number of shares held in escrow to realize the
difference and release any excess. See "How to Purchase Fund Shares - Letter of
Intent" in the Prospectus for more information.
<PAGE>
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>
-32-
<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
-36-
<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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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
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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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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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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
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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
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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.
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