[Pioneer Graphic Logo]
Pioneer Bond
Fund
SEMIANNUAL REPORT 12/31/97
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 15
Notes to Financial Statements 22
Report of Independent Public Accountants 26
Trustees, Officers and Service Providers 27
Programs and Services for Pioneer Shareowners 28
<PAGE>
Pioneer Bond Fund
LETTER FROM THE CHAIRMAN 12/31/97
Dear Shareowner,
- --------------------------------------------------------------------------------
I am pleased to present this report for Pioneer Bond Fund, covering the six
months ended December 31, 1997. On behalf of the Fund's investment team, I
thank you for your interest and this opportunity to comment briefly on today's
investing environment.
Since October, investors have shown increasing demand for U.S. bonds, as the
world's stock markets have been exceptionally volatile. Asian markets plunged
in the face of severe instability in currencies and economic growth. Here in
the United States, the Dow Jones Industrial Average experienced - in the space
of two days - both its biggest one-day point drop and its biggest one-day point
gain. Although it recovered, its pace has since been unsteady. European markets
bounced around, shaken by the drop in Asia and then heartened by the speedy
U.S. rebound. Even Latin American markets were affected, mostly in a chain
reaction from nervous investors.
After consecutive quarters of robust growth in stocks, this fast-paced change
forced individuals and institutions to rethink their investment strategy. Money
has poured into the bond market, driving prices up and yields down - to record
levels in the case of the 30-year U.S. Treasury bond. Many investors have moved
away from stocks and into high-quality fixed-income securities - like those
held by your Fund - to shelter their portfolio. We have always believed it is
important to allocate assets among both stocks and bonds, and recent market
conditions demonstrate this importance.
I encourage you to read on to learn more about your Fund. Please contact your
investment professional, or us at 1-800-225-6292, if you have questions about
Pioneer Bond Fund.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Bond Fund
PORTFOLIO SUMMARY 12/31/97
P o r t f o l i o D i v e r s i f i c a t i o n
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(As a percentage of total investment portfolio)
[Pie Chart]
Corporate Securities 56%
Short-Term Cash U.S. Government
Equivalents 4% and Agency Securities 40%
P o r t f o l i o M a t u r i t y
- --------------------------------------------------------------------------------
(Effective life as a percentage of long-term holdings)
[Pie Chart]
0-2 Years 13%
20+ Years 13% 2-5 Years 26%
10-20 Years 11% 5-7 Years 17%
7-10 Years 20%
1 0 L a r g e s t H o l d i n g s
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
1. Government National Mortgage Association, 7.5%, 2027 7.53%
2. U.S. Treasury Notes, 7.25%, 2004 7.39
3. U.S. Treasury Notes, 7.0%, 2006 4.51
4. U.S. Treasury Notes, 8.5%, 2000 3.21
5. U.S. Treasury Notes, 6.125%, 2007 3.13
6. U.S. Treasury Notes, 8.0%, 2001 2.84
7. Ford Capital BV, 9.5%, 2010 2.84
8. Delta Airline Trust, 9.2%, 2014 2.28
9. Imperial Oil, Ltd., 8.75%, 2019 2.11
10. Continental Cablevision, 9.5%, 2013 1.99
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Bond Fund
PERFORMANCE UPDATE 12/31/97 CLASS A SHARES
S h a r e P r i c e s a n d D is t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/97 6/30/97
$ 9.34 $ 9.07
Distributions per Share Income Short-Term Long-Term
(6/30/97 - 12/31/97) Dividends Capital Gains Capital Gains
$ 0.303 - -
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Bond Fund at public offering price, compared to the growth of the
Lehman Brothers Government/Corporate Bond Index.
[boxed text]
Average Annual Total Returns
(As of December 31, 1997)
Net Asset Public Offering
Period Value Price*
10 Years 8.48% 7.98%
5 Years 7.02 6.03
1 Year 9.16 4.26
* Reflects deduction of the maximum 4.5% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
[Mountain Chart]
Growth of $10,000
Pioneer Lehman Brothers Government/
Date Bond Fund* Corporate Bond Index
12/31/87 9,550 10,000
10,280 10,758
12/31/89 11,474 12,289
12,312 13,307
12/31/91 14,226 15,453
15,348 16,625
12/31/93 17,102 18,459
16,385 17,811
12/31/95 19,359 21,239
19,739 21,855
12/31/97 21,547 23,988
The Lehman Brothers Government/Corporate Bond Index is an unmanaged, composite
index of the U.S. bond market. It contains 5,353 issues, including Treasury
and government agency securities, investment-grade corporate bonds and Yankee
bonds. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
<PAGE>
Pioneer Bond Fund
PERFORMANCE UPDATE 12/31/97 CLASS B SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/97 6/30/97
$ 9.31 $ 9.03
Distributions per Share Income Short-Term Long-Term
(6/30/97 - 12/31/97) Dividends Capital Gains Capital Gains
$ 0.259 - -
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Bond Fund, compared to the growth of the Lehman Brothers
Government/Corporate Bond Index.
[boxed text]
Average Annual Total Returns
(As of December 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 6.70% 6.02%
(4/4/94)
1 Year 8.39 4.39
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions.
The maximum CDSC of 4% declines over six years.
[Mountain Chart]
Growth of $10,000 [dagger]
Pioneer Lehman Brothers Government/
Date Bond Fund* Corporate Bond Index
4/30/94 10,000 10,000
6/30/94 9,896 9,958
9,914 10,007
12/31/94 9,906 10,044
10,327 10,545
6/30/95 10,942 11,229
11,089 11,444
12/31/95 11,600 11,977
11,274 11,697
6/30/96 11,286 11,752
11,439 11,959
12/31/96 11,729 12,325
11,614 12,218
6/30/97 11,990 12,663
12,353 13,107
12/31/97 12,413 13,527
[dagger] Index comparison begins 4/30/94. The Lehman Brothers
Government/Corporate Bond Index is an unmanaged, composite index of the
U.S. bond market. It contains 5,353 issues, including Treasury and
government agency securities, investment-grade corporate bonds and
Yankee bonds. Index returns are calculated monthly, assume reinvestment
of dividends and, unlike Fund returns, do not reflect any fees,
expenses or sales charges. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share
price fluctuate, and your shares, when redeemed, may be worth more or
less than their original cost.
4
<PAGE>
Pioneer Bond Fund
PERFORMANCE UPDATE 12/31/97 CLASS C SHARES
S h a r e P r i c e s a n d D i s t r i b u t i o n s
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/97 6/30/97
$ 9.29 $ 9.02
Distributions per Share Income Short-Term Long-Term
(6/30/97 - 12/31/97) Dividends Capital Gains Capital Gains
$ 0.259 - -
I n v e s t m e n t R e t u r n s
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Bond Fund, compared to the growth of the Lehman Brothers
Government/Corporate Bond Index.
[boxed text]
Average Annual Total Returns
(As of December 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 4.61% 4.61%
(1/31/96)
1 Year 8.17 8.17
* Assumes reinvestment of distributions. A 1% contingent deferred sales charge
(CDSC) applies to redemptions made within one year of purchase.
[Mountain Chart]
Growth of $10,000
Pioneer Lehman Brothers Government/
Date Bond Fund* Corporate Bond Index
1/31/96 10,000 10,000
9,766 9,788
3/31/96 9,679 9,706
9,612 9,639
9,620 9,623
6/30/96 9,700 9,751
9,714 9,774
9,687 9,750
9/30/96 9,831 9,923
10,029 10,155
10,207 10,342
12/31/96 10,081 10,227
10,066 10,239
10,087 10,260
3/31/97 9,971 10,138
10,088 10,287
10,174 10,383
6/30/97 10,294 10,507
10,609 10,829
10,465 10,707
9/30/97 10,607 10,876
10,770 11,050
10,806 11,108
12/31/97 10,904 11,225
The Lehman Brothers Government/Corporate Bond Index is an unmanaged, composite
index of the U.S. bond market. It contains 5,353 issues, including Treasury
and government agency securities, investment-grade corporate bonds and Yankee
bonds. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
5
<PAGE>
Pioneer Bond Fund
PORTFOLIO MANAGEMENT DISCUSSION 12/31/97
Pioneer Bond Fund closed the first half of its 20th fiscal year on December 31,
1997. During that time, investors in the U.S. fixed-income market were rewarded
with significant opportunity. Favorable investment conditions in the United
States, combined with upheaval in Asian financial markets, caused interest
rates to fall dramatically and bond prices to rise considerably. Your Fund's
performance reflected this positive atmosphere and was enhanced by carefully
planned investment strategies.
The following discussion with your Fund's portfolio manager, Sherman B. Russ,
provides a detailed account of the factors and events that influenced your
Fund's performance over the past six months, as well as his expectations for
the first half of 1998. An investment professional for more than 20 years, Mr.
Russ oversees the team that is responsible for the daily management of Pioneer
Bond Fund.
Q: How did the Fund perform over the past six months?
A: Pioneer Bond Fund turned in solid performance, generating an attractive
level of both income and total return. As of December 31, 1997, the Fund's
30-day SEC yield stood at 5.14%.
For the six months ended December 31, the Fund's Class A Shares returned 6.39%,
Class B Shares 6.03% and Class C Shares 5.92%. These results compared well to
the average return of 6.27% generated by the 142 funds in Lipper Analytical
Services' Corporate Debt A-rated category. (Returns do not reflect sales
charges.) Unlike many of the funds in this group, at least 85% of Pioneer Bond
Fund must be invested in bonds rated A or better at all times by major rating
agencies. Many of the funds in the Lipper category can invest in lower-quality
high-yield bonds; because of increased credit risk, they can produce higher
returns. As of December 31, 1997, Pioneer Bond Fund's average quality was AA.
Q: Why did interest rates fall over the past six months?
A: A combination of factors drove down interest rates. Inflation remained low
despite moderate-to-strong economic growth, the federal budget deficit declined
and there was strong foreign demand. In the fourth quarter,
6
<PAGE>
Pioneer Bond Fund
especially, upheaval in Asia's financial markets prompted investors to seek a
safe haven. This "flight to quality" translated into greater demand for U.S.
government securities, causing interest rates to fall to levels of historical
significance.
Economic growth in the United States remained steady during the period. The
combination of low inflation and steady growth, along with comments made by
Federal Reserve Chairman Alan Greenspan, prompted an increasing number of
investors to believe that worldwide improvements in technology and productivity
could continue to enable the economy to grow with few inflationary pressures
for quite some time.
The economy's strength can also cause tax revenues to rise. The improved cash
flow helps reduce the federal budget deficit and the need for the U.S.
government to issue bonds. The result is a smaller supply of securities.
Investors anticipated the combination of lower supply and strong demand and
pushed bond prices higher.
Q: What strategies did you use to manage the Fund?
A: We actively managed the Fund's allocation to U.S. Treasury and agency
securities, mortgage-backed securities and corporate bonds. We reduced holdings
in mortgage-backed securities and callable agency securities, and increased the
Fund's position in corporate bonds.
We reduced holdings in mortgage-backed securities and callable agency
securities to enhance total return because these sectors tend to underperform
when interest rates decline. This is because of the possibility that they will
be "called" from the portfolio prior to their stated maturities or before the
portfolio manager would otherwise choose to sell them. Mortgage-backed
securities are subject to prepayment risk - the possibility that the underlying
holder will refinance the existing mortgage at a lower interest rate.
Similarly, callable issues are eliminated from the portfolio on a designated
date if the issuer chooses to refinance at a lower interest rate. In a
declining interest rate environment, investors prefer securities that can
continue to earn income and generate total return until their stated maturity
or until the portfolio manager chooses to sell them.
7
<PAGE>
Pioneer Bond Fund
PORTFOLIO MANAGEMENT DISCUSSION 12/31/97 (continued)
We reinvested in corporate bonds and maintained an emphasis on U.S. Treasurys.
U.S. Treasurys benefited more than any other type of bond from the decline in
interest rates over the past six months. We selected corporate bonds in the
seven- to 10-year maturity range that had "bullet" maturities - that is, they
could not be called away prior to their stated maturity date. Bonds in this
range provided much of the yield of bonds with longer maturities, while
incurring considerably less interest rate risk. We invested in corporate bonds
when their yields became more attractive during the Asian crisis. They provided
higher yields than U.S. Treasurys with comparable maturities, while still
maintaining a high degree of quality.
Q: What is your outlook for the next six months?
A: We are optimistic that many of the positive trends we witnessed in recent
months will continue. But we also recognize that the financial crisis in Asia
and the degree to which it will affect the U.S. economy is still developing. We
expect inflation to remain low, the federal budget deficit to continue to
shrink and investor preference for safe, high-quality investments to be strong.
Further, while many factors point to steady economic activity in the United
States, such as brisk employment growth and high consumer confidence, we
believe a slowdown in Asia could reduce U.S. economic growth from 3.5% to 2.5%
per year and lower inflation to the 1.5% area. We will closely monitor
developments in both international and domestic arenas, but believe the Fund's
emphasis on high-quality investments and careful security selection should keep
it well-positioned going forward.
8
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 12/31/97
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
INVESTMENT IN SECURITIES - 96.1%
Basic Materials - 2.6%
Chemicals - 1.0%
$1,000,000 A/A3 Arco Chemical Co., Deb., 9.8%, 2020 $1,343,650
----------
Paper & Forest Products - 1.6%
1,000,000 BBB-/Baa2 Georgia-Pacific Corp., Deb., 9.5%, 2022 $1,121,100
1,000,000 A-/A3 Mead Corp., 8.125%, 2023 1,089,810
----------
$2,210,910
----------
Total Basic Materials
(Cost $3,108,330) $3,554,560
----------
Capital Goods - 1.2%
Manufacturing - 1.2%
1,500,000 BBB/Baa1 Tenneco, Inc., Notes, 10.075%, 2001 $1,658,835
----------
Total Capital Goods
(Cost $1,597,900) $1,658,835
----------
Consumer Cyclicals - 4.4%
Automobiles - 1.9%
2,000,000 A-/A3 General Motors Corp., Notes, 9.4%, 2021 $2,590,120
----------
Retail - 2.5%
1,000,000 A/A2 J.C. Penney Company, Inc., Deb., 9.75%,
2021 $1,126,580
1,000,000 AA/AA2 Wal-Mart Stores, Inc., Deb., 8.62%, 2010 1,146,290
1,000,000 AA/AA2 Wal-Mart Stores, Inc., Deb., 8.50%, 2024 1,143,090
----------
$3,415,960
----------
Total Consumer Cyclicals
(Cost $5,471,080) $6,006,080
----------
Consumer Staples - 8.4%
Broadcasting - 6.2%
2,200,000 BBB+/Baa2 Continental Cablevision, 9.5%, 2013 $2,611,686
1,500,000 BBB/Baa3 News America Holdings, 10.125%, 2012 1,745,475
1,250,000 BBB-/Ba1 Tele Communication, Deb., 10.125%, 2022 1,661,713
2,000,000 BBB-/Ba1 Time Warner, Inc., Deb., 9.15%, 2023 2,461,500
----------
$8,480,374
----------
Distributors (Food & Health) - 0.8%
1,000,000 BBB+/BAA1 Supervalue, Inc., Notes, 8.875%, 2022 $1,153,030
----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 12/31/97 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Household Products (Non-Durables) - 1.4%
$1,500,000 AA/Aa2 Proctor & Gamble Co., Notes, 9.36%, 2021 $ 1,941,015
-----------
Total Consumer Staples
(Cost $10,481,310) $11,574,419
-----------
Energy - 7.3%
Oil & Gas - 7.3%
1,000,000 BBB/Baa2 Ashland Oil Co., 8.8%, 2012 $ 1,195,030
500,000 A/A2 Atlantic Richfield Co., Deb., 9.875%, 2016 666,775
2,600,000 AA+/Aa2 Imperial Oil, Ltd., 8.75%, 2019 2,779,036
2,000,000 A-/A3 Phillips Petroleum Co., Deb., 9.18%, 2021 2,242,600
1,200,000 A+/A1 Texaco Capital Corp., 8.25%, 2006 1,359,948
1,250,000 A+/A1 Texaco Capital Corp., Gtd. Deb., 9.75%,
2020 1,698,588
-----------
Total Energy
(Cost 9,418,512) $ 9,941,977
-----------
Financial - 22.0%
Banks - 11.7%
1,000,000 A+/A1 Banc One Corp., Sub. Notes, 10.0%, 2010 $ 1,283,320
1,000,000 A/A1 BankAmerica, Sub. Notes, 9.375%, 2001 1,091,020
1,000,000 AA-/Aa3 Barclays North American Capital Corp., Gtd.
Sub. Cap. Notes, 9.75%, 2021 1,130,260
1,000,000 A-/A1 Chase Manhattan, 8.5%, 2002 1,078,600
1,000,000 A-/A1 Chemical NY Corp., Sub. Notes, 9.75%, 1999 1,051,270
1,250,000 A-/A3 Comerica, Inc., Sub. Deb., 10.125%, 1998 1,271,063
1,550,000 A-/A2 CoreStates Capital Corp., Gtd. Sub. Notes,
9.375%, 2003 1,759,545
1,500,000 A-/A2 First Chicago Corp., Sub. Notes, 10.25%,
2001 1,679,370
1,500,000 BBB+/A3 Fleet/Norstar Financial Group, Sub. Notes,
9.9%, 2001 1,665,405
1,000,000 A/A2 Mellon Bank, 7.375%, 2007 1,062,320
1,000,000 A-/A3 Mellon Financial, Sub. Deb., 9.75%, 2001 1,108,940
1,000,000 AA-/Aa3 National Westminster Bancorp, Inc., Gtd.
Cap. Notes, 9.375%, 2003 1,145,660
500,000 AA-/A1 Republic New York Corp., Sub. Notes, 9.3%,
2021 643,495
-----------
$15,970,268
-----------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Financial (Diversified) - 10.3%
$3,000,000 A+/A1 Ford Capital BV, 9.5%, 2010 $ 3,730,170
1,500,000 AA/AA3 GEICO Corp., Deb., 9.15%, 2021 1,685,805
1,500,000 A-/A3 John Deere Capital, 8.625%, 2019 1,680,285
1,000,000 AA/AA3 J.P. Morgan, 8.50%, 2003 1,103,600
1,535,000 AA/AA2 National Re Corp., 8.85%, 2005 1,751,159
2,000,000 AAA/Aaa Standard Credit Card Master Trust Series
1991-3A, 8.875%, 1998 2,030,620
1,000,000 A/A2 Transamerica Corp., 9.875%, 1998 999,830
1,000,000 A/A3 W.R. Berkley, Deb., 8.7%, 2022 1,173,220
-----------
$14,154,689
-----------
Total Financial
(Cost $28,680,322) $30,124,957
-----------
Transportation - 7.2%
Airlines - 4.6%
1,824,432 BBB-/A3 American Airlines, Inc., 9.71%, 2007 $ 2,093,335
2,500,000 BBB/Baa1 Delta Airline Trust, 9.2%, 2014 2,994,200
1,000,000 BB+/BAA3 United Air Lines, 9.125%, 2012 1,193,370
-----------
$ 6,280,905
-----------
Airfreight - 1.7%
2,000,000 BBB+/A3 Federal Express, 8.40%, 2010 $ 2,274,020
-----------
Railroads - 0.9%
1,000,000 AA/BAA1 Norfolk Southern Corp., Notes, 9.0%,
2021 $ 1,249,650
-----------
Total Transportation
(Cost $9,262,140) $ 9,804,575
-----------
Utilities - 1.2%
500,000 AAA/Aaa Cajun Electric Power, Cooperative Utilities
Trust, 10.125%, 2019 $ 532,795
1,000,000 A/A2 Virginia Electric and Power Co., 8.75%,
2021 1,104,940
-----------
Total Utilities
(Cost $1,565,500) $ 1,637,735
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 12/31/97 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government and Agency
Obligations - 40.1%
$ 47,621 Federal Home Loan Mortgage Corp., 10.0%,
2002 $ 50,012
74,358 Federal Home Loan Mortgage Corp., 10.5%,
2019 82,581
110,928 Federal Home Loan Mortgage Corp., REMIC
Series 1988-24B, 9.5%, 2005 115,719
1,500,000 Federal National Mortgage Association,
9.2%, 2000 1,624,935
1,000,000 Federal National Mortgage Association,
10.35%, 2015 1,439,000
44,628 Federal National Mortgage Association,
10.0%, 2019 49,067
594,274 Federal National Mortgage Association,
11.0%, 2019 672,807
2,280,467 Federal National Mortgage Association,
REMIC Series G94-6VB, 8.0%, 2003 2,375,631
900,439 Federal National Mortgage Association,
REMIC Series 1989-72D, 8.9%, 2019 936,816
450,794 Federal National Mortgage Association,
REMIC Series 1989-19A, 10.3%, 2019 485,803
7,751 Federal National Mortgage Association,
REMIC Series 1989-19B, 10.3%, 2019 8,450
220,874 Government National Mortgage Association,
10.0%, 2006 235,277
288,670 Government National Mortgage Association,
10.0%, 2018 320,288
77,826 Government National Mortgage Association,
9.5%, 2020 84,842
299,557 Government National Mortgage Association,
10.0%, 2020 332,179
9,654,664 Government National Mortgage Association,
7.5%, 2027 9,900,278
82,400 Government National Mortgage Association,
Midget, 10.0%, 2004 87,156
31,035 Government National Mortgage Association II,
9.5%, 2020 33,426
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government and Agency
Obligations - (continued)
$ 732,762 Resolution Trust Corp., Series 1992-5A6,
9.238%, 2026 $ 734,594
1,000,000 Tennessee Valley Authority, 8.625%, 2029 1,089,150
2,000,000 U.S. Treasury Bonds, 8.25%, 2005 2,112,460
2,000,000 U.S. Treasury Bonds, 8.75%, 2008 2,278,720
4,000,000 U.S. Treasury Notes, 8.5%, 2000 4,222,520
3,500,000 U.S. Treasury Notes, 8.0%, 2001 3,741,780
9,000,000 U.S. Treasury Notes, 7.25%, 2004 9,714,870
5,500,000 U.S. Treasury Notes, 7.0%, 2006 5,937,635
4,000,000 U.S. Treasury Notes, 6.125%, 2007 4,110,840
2,000,000 U.S. Treasury Notes, 6.375%, 2027 2,110,060
------------
Total U.S. Government and
Agency Obligations
(Cost $53,526,058) $ 54,886,896
------------
Foreign - 1.7%
1,000,000 AAA/Aaa Inter-American Development Bank, Notes,
9.45%, 1998 $ 1,024,520
1,000,000 A-/A3 Province of Saskatchewan, 9.375%, 2020 1,324,730
------------
Total Foreign
(Cost $2,075,737) $ 2,349,250
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $125,186,889) $131,539,284
------------
TEMPORARY CASH
INVESTMENT - 3.9%
Commercial Paper - 3.9%
5,284,000 American Express Co., 6.65%,01/2/98 $ 5,284,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $5,284,000) $ 5,284,000
------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $130,470,889) (a)(b) $136,823,284
=============
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Bond Fund
SCHEDULE OF INVESTMENTS 12/31/97 (continued)
(a) At December 31, 1997, the net unrealized gain on investments, based on cost
for federal income tax purposes of $130,470,889 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $6,831,176
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (478,781)
----------
Net unrealized gain $6,352,395
==========
</TABLE>
(b) At June 30, 1997, the Fund had a net capital loss carryforward of
$3,720,307 which will expire between 1998 and 2005 if not utilized.
Note: The Fund's investments in mortgage-backed securities of the Government
National Mortgage Association (GNMA) are interests in separate pools of
mortgages. All separate investments in this issuer which have the same
coupon rate have been aggregated for the purpose of presentation in this
schedule of investments.
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- ------------
<S> <C> <C>
Long-term U.S. Government $30,859,898 $ 24,802,930
Other Long-term Securities 9,668,461 5,737,444
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
BALANCE SHEET 12/31/97
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investment in securities, at value (including temporary cash
investment of $5,284,000) (cost $130,470,889) $136,823,284
Cash 434
Receivables -
Fund shares sold 183,534
Interest 2,560,380
Other 15,757
-----------
Total assets $139,583,389
-----------
LIABILITIES:
Payables -
Fund shares repurchased $ 191,212
Dividends 198,574
Due to affiliates 180,794
Accrued expenses 57,778
-----------
Total liabilities $ 628,358
-----------
NET ASSETS:
Paid-in capital $137,343,745
Accumulated undistributed net investment income 17,200
Accumulated net realized loss on investments (4,758,309)
Net unrealized gain on investments 6,352,395
-----------
Total net assets $138,955,031
===========
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $106,972,580/11,451,541 shares) $ 9.34
===========
Class B (based on $24,700,370/2,653,676 shares) $ 9.31
===========
Class C (based on $7,282,081/783,767 shares) $ 9.29
===========
MAXIMUM OFFERING PRICE:
Class A $ 9.78
===========
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Bond Fund
STATEMENT OF OPERATIONS
For the Six Months Ended 12/31/97
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $5,093,025
----------
Total investment income $5,093,025
----------
EXPENSES:
Management fees $ 334,454
Transfer agent fees
Class A 96,190
Class B 26,130
Class C 6,437
Distribution fees
Class A 128,086
Class B 112,960
Class C 32,540
Accounting 38,480
Custodian fees 17,281
Registration fees 37,138
Professional fees 33,968
Printing 8,077
Fees and expenses of nonaffiliated trustees 7,383
Miscellaneous 17,682
----------
Total expenses $ 896,806
Less fees paid indirectly (17,284)
----------
Net expenses $ 879,522
----------
Net investment income $4,213,503
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $ (73,925)
Change in net unrealized gain on investments 3,944,389
----------
Net gain on investments $3,870,464
----------
Net increase in net assets resulting from operations $8,083,967
==========
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended 12/31/97 and the Year Ended 6/30/97
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
FROM OPERATIONS: 12/31/97 6/30/97
<S> <C> <C>
Net investment income $ 4,213,503 $ 8,172,340
Net realized loss on investments (73,925) (969,154)
Change in net unrealized gain on investments 3,944,389 832,463
------------ ------------
Net increase in net assets resulting from operations $ 8,083,967 $ 8,035,649
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.30 and $0.63 per share, respectively) $ (3,389,700) $ (6,943,232)
Class B ($0.26 and $0.54 per share, respectively) (626,874) (1,082,662)
Class C ($0.26 and $0.54 per share, respectively) (179,729) (108,347)
------------ ------------
Total distributions to shareholders $ (4,196,303) $ (8,134,241)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 33,917,807 $ 37,432,588
Reinvestment of distributions 3,008,883 5,838,102
Cost of shares repurchased (24,861,656) (37,312,197)
------------ ------------
Net increase in net assets resulting from fund share
transactions $ 12,065,034 $ 5,958,493
------------ ------------
Net increase in net assets $ 15,952,698 $ 5,859,901
NET ASSETS:
Beginning of period 123,002,333 117,142,432
------------ ------------
End of period (including accumulated undistributed net
investment income of $17,200 and $0, respectively) $138,955,031 $123,002,333
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Bond Fund
<TABLE>
<CAPTION>
CLASS A 12/97 Shares 12/97 Amount 6/97 Shares 6/97 Amount
<S> <C> <C> <C> <C>
Shares sold 1,923,719 $ 17,757,010 2,220,001 $20,119,015
Reinvestment of distributions 275,381 2,551,673 561,906 5,097,205
Less shares repurchased (1,589,088) (14,682,103) (3,170,150) (28,744,746)
---------- ------------- ---------- ------------
Net increase (decrease) 610,012 $ 5,626,580 (388,243) $(3,528,526)
========== ============= ========== ============
CLASS B
Shares sold 1,008,005 $ 9,296,027 1,277,126 $11,519,150
Reinvestment of distributions 42,464 392,042 76,366 689,363
Less shares repurchased (623,198) (5,744,679) (772,104) (6,961,177)
---------- ------------- ---------- ------------
Net increase 427,271 $ 3,943,390 581,388 $ 5,247,336
========== ============= ========== ============
CLASS C*
Shares sold 749,580 $ 6,864,770 643,707 5,794,423
Reinvestment of distributions 7,071 65,168 5,723 51,534
Less shares repurchased (481,775) (4,434,874) (178,517) (1,606,274)
---------- ------------- ---------- ------------
Net increase 274,876 $ 2,495,064 470,913 4,239,683
========== ============= ========== ============
</TABLE>
* Class C shares were first publicly offered on January 31, 1996
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
FINANCIAL HIGHLIGHTS 12/31/97
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
12/31/97 6/30/97
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 9.07 $ 9.08
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.30 $ 0.63
Net realized and unrealized gain (loss) on investments 0.27 (0.01)
------- -------
Net increase (decrease) from investment operations $ 0.57 $ 0.62
Distributions to shareholders:
Net investment income (0.30) (0.63)
-------- -------
Net increase (decrease) in net asset value $ 0.27 $ (0.01)
-------- -------
Net asset value, end of period $ 9.34 $ 9.07
======== =======
Total return* 6.39 % 7.09%
Ratio of net expenses to average net assets 1.17%**+ 1.14%+
Ratio of net investment income to average net assets 6.48%**+ 6.97%+
Portfolio turnover rate 48%** 48%
Net assets, end of period (in thousands) $106,973 $98,310
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.14%** 1.12%
Net investment income 6.51%** 6.99%
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
6/30/96 6/30/95 6/30/94 6/30/93
<S> <C> <C> <C> <C>
CLASS A
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:
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%
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%
Net assets, end of period (in thousands) $101,957 $110,158 $106,659 $112,900
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.18% - - -
Net investment income 6.81% - - -
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Bond Fund
FINANCIAL HIGHLIGHTS 12/31/97
<TABLE>
<CAPTION>
Six Months
Ended Year Ended Year Ended Year Ended 4/4/94 to
12/31/97 6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 9.03 $ 9.02 $ 9.31 $ 9.02 $ 9.23
------ ------- ------- ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.26 0.56 $ 0.57 $ 0.60 $ 0.14
Net realized and unrealized gain (loss) on investments 0.28 (0.01) (0.28) 0.31 (0.21)
------ ------- ------- ------ -------
Net increase (decrease) from investment operations $ 0.54 $ 0.55 $ 0.29 $ 0.91 $ 0.07)
Distributions to shareholders:
Net investment income ( 0.26) (0.54) (0.57) (0.62) (0.14)
In excess of net investment income - - (0.01) - -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.28 $ 0.01 $ (0.29) $ 0.29 $(0.21)
------- ------- ------- ------- -------
Net asset value, end of period $ 9.31 $ 9.03 $ 9.02 $ 9.31 $ 9.02
======= ======= ======= ======= =======
Total return* 6.03% 6.24% 3.15% 10.57% (0.73)%
Ratio of net expenses to average net assets 1.98%**+ 1.97%+ 1.96%+ 1.97% 1.92%**
Ratio of net investment income to average net assets 5.66%**+ 6.12%+ 6.01%+ 6.60% 6.09%**
Portfolio turnover rate 48%** 48% 39% 37% 39%
Net assets, end of period (in thousands) $24,700 $20,104 $14,843 $7,338 $1,212
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.95%** 1.96% 1.94% - -
Net investment income 5.69%** 6.13% 6.03% - -
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
FINANCIAL HIGHLIGHTS 12/31/97
<TABLE>
<CAPTION>
Six Months
Ended Year Ended 1/31/96 to
12/31/97 6/30/97 6/30/96
<S> <C> <C> <C>
CLASS C
Net asset value, beginning of period $ 9.02 $ 9.02 $ 9.54
------ ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.27 $ 0.54 $ 0.23
Net realized and unrealized gain (loss) on
investments .26 - (0.52)
------ ------ ------
Net increase (decrease) from investment
operations $ 0.53 $ 0.54 $(0.29)
Distributions to shareholders:
Net investment income (0.26) (0.54) (0.22)
In excess of net investment income - - (0.01)
------ ------ ------
Net increase (decrease) in net asset value $ 0.27 $ - $(0.52)
------ ------ ------
Net asset value, end of period $ 9.29 $ 9.02 $ 9.02
====== ====== ======
Total return* 5.92% 6.13% (3.00)%
Ratio of net expenses to average net assets 1.94%**+ 2.05%+ 2.18%**+
Ratio of net investment income to average net
assets 5.64%**+ 5.83%+ 5.79%**+
Portfolio turnover rate 48%** 48% 39%
Net assets, end of period (in thousands) $7,282 $4,588 $ 343
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.89%** 1.92% 2.13%**
Net investment income 5.69%** 5.96% 5.84%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
Pioneer Bond Fund
NOTES TO FINANCIAL STATEMENTS 12/31/97
1. Organization and Significant Accounting Policies
Pioneer Bond Fund (the Fund) is a Massachusetts business trust registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to seek current
income consistent with preservation of capital.
The Fund offers three classes of shares--Class A, Class B and Class C shares.
The shares of Class A, Class B, and Class C represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends, and liquidation, except that each class of shares can
bear different transfer agent and distributions fees and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class
A, Class B, and Class C shareholders, respectively.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded on trade date. Securities are valued
based on valuations furnished by independent pricing services that utilize
matrix systems. These matrix systems reflect such factors as security
prices, yields, maturities, and ratings and are supplemented by dealer and
exchange quotations and fair market value information from other sources, as
required. Principal amounts of mortgage-backed securities are adjusted for
monthly paydowns. Premium and discount related to certain mortgage-backed
securities are amortized or accreted in proportion to the underlying monthly
paydowns. Interest income is recorded on the accrual basis. Temporary cash
investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
22
<PAGE>
Pioneer Bond Fund
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in-capital, depending on the type of book/tax differences that may
exist.
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $14,595 in
underwriting commissions on the sale of fund shares during the six months
ended December 31, 1997.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B, and Class C shares of the Fund,
respectively. Shareholders of each class share all expenses and fees paid to
the transfer agent, Pioneering Services Corporation (PSC), for their
services, which are allocated based on the number of accounts in each class
and the ratable allocation of related out-of-pocket expenses (see Note 3).
Income, common expenses, and realized and unrealized gains and losses are
calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning
of the day.
The Fund declares as daily dividends substantially all of its net investment
income. All dividends are paid on a monthly basis. Short-term capital gain
distributions, if any, may be declared with the daily dividends.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, and Class C shares can bear different transfer
agent and distribution fees.
23
<PAGE>
Pioneer Bond Fund
NOTES TO FINANCIAL STATEMENTS 12/31/97 (continued)
2. Management Agreement
Pioneering Management Corporation (PMC), the Fund's investment adviser, manages
the Fund's portfolio and is a wholly owned subsidiary of PGI. Management fees
are calculated daily at the annual rate of 0.50% of the Fund's average daily
net assets.
In addition, under the management agreement, certain other services and costs,
including accounting, regulatory reporting, and insurance premiums, are paid by
the Fund. At December 31, 1997, $68,367 was payable to PMC related to
management fees and certain other services.
3. Transfer Agent
PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Fund at negotiated rates. Included in due
to affiliates is $29,763 in transfer agent fees payable to PSC at December 31,
1997.
4. Distribution Plan
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a service
fee of up to 0.25% of the Fund's average daily net assets in reimbursement of
its actual expenditures to finance activities primarily intended to result in
the sale of Class A shares. Pursuant to the Class B Plan and the Class C Plan,
the Fund pays PFD 1.00% of the average daily net assets attributable to each
class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B and Class
C shares. Included in due to affiliates is $82,664 in distribution fees payable
to PFD at December 31, 1997.
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of
purchase. Class B shares that are redeemed within six years of purchase are
subject to a CDSC at declining rates beginning at 4.0%, based on the lower of
cost or market value of shares being redeemed. Redemptions of Class C shares
within one year of purchase are subject to a CDSC of 1.00%. Proceeds from the
CDSCs are paid to PFD. For the six months ended December 31, 1997, CDSCs in the
amount of $22,748 were paid to PFD.
24
<PAGE>
Pioneer Bond Fund
5. Expense Reductions
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended December 31,
1997, the Fund's expenses were reduced by $17,284 under such arrangements.
25
<PAGE>
Pioneer Bond Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the Board of Trustees of Pioneer Bond Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Bond Fund as of December 31, 1997, and the related
statement of operations, statements of changes in net assets, and financial
highlights for the periods presented. These financial statements and the
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Bond Fund as of December 31, 1997, the results of its operations, the
changes in its net assets and the financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 2, 1998
26
<PAGE>
Pioneer Bond Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Sherman B. Russ, Vice President
John W. Kendrick William H. Keough, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
27
<PAGE>
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-800-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as
you meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
28
<PAGE>
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds
you wish to invest in. You choose the amounts and dates for Pioneer to sell
shares of your original fund and use the proceeds to buy shares of the other
funds you have chosen. Over time, your investment will be shifted out of the
original fund. (Automatic Exchange is available for originating accounts with a
balance of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month you want. Pioneer will send
the proceeds by check to the address you designate, or electronically to your
bank account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available only for accounts with a value of $10,000 or
more.)
29
<PAGE>
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[Pioneer Logo]
Pioneer Funds Distributor, Inc.
60 State Street 0298 - 4810
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com [recycle logo] Printed on Recycled Paper
