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PIONEER BOND
FUND
ANNUAL REPORT 6/30/99
<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 19
Notes to Financial Statements 25
Report of Independent Public Accountants 29
Results of Shareowner Meeting 30
Trustees, Officers and Service Providers 32
Retirement Plans from Pioneer 33
Programs and Services for Pioneer Shareowners 35
<PAGE>
PIONEER BOND FUND
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LETTER FROM THE CHAIRMAN 6/30/99
DEAR SHAREOWNER,
- ---------------------------------------------------------------
I am pleased to introduce this annual report for Pioneer Bond Fund, covering the
year ended June 30, 1999. On behalf of your investment team, I appreciate your
confidence in the Fund and Pioneer.
Over the past 12 months, investors witnessed a wide range of extremes in the
bond market. After dropping to recent lows in the latter part of 1998, interest
rates rose during the first six months of 1999, as world economies stabilized
and economic news in the United States remained positive, without any
significant inflation. Daily reminders by the media and financial analysts about
how long we have enjoyed this environment makes it easy for investors to forget
that these conditions will not always exist, and that there are risks inherent
to investing.
It is quite tempting to abandon a balanced investment plan when the stock market
shows returns over 20%, as it has for the past four years. But longer term,
average annual returns of stocks, as measured by the Standard & Poor's 500
Index, are closer to 11%. That is why experts recommend that investors hold a
mix of stocks and bonds to suit their long-term objectives and achieve balance.
If you think your investment mix may be out of line, we encourage you to meet
with your investment professional to discuss how your assets are allocated.
Turning to other matters, for those of you who are interested in new Pioneer
products, we are pleased to introduce Pioneer Strategic Income Fund. The Fund
holds a diverse portfolio of bonds from around the globe, including the United
States. To receive a prospectus for our newest fund - which you should read
carefully before you invest or send any money - or if you have questions
regarding Pioneer Bond Fund, please contact your investment professional, or
call Pioneer at 1-800-225-6292. You can also visit Pioneer's web site at
www.pioneerfunds.com.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
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PIONEER BOND FUND
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PORTFOLIO SUMMARY 6/30/99
PORTFOLIO DIVERSIFICATION
- ---------------------------------------------------------------
(As a percentage of total investment portfolio)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Corporate 57%
U.S. Government and Agency 41%
Foreign Government Sponsored 1%
Short-Term Cash Equivalents 1%
</TABLE>
PORTFOLIO MATURITY
- ---------------------------------------------------------------
(Effective life as a percentage of total investment portfolio)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
0-2 Years 2%
2-5 Years 13%
5-7 Years 15%
7-10 Years 26%
10-20 Years 36%
20+ Years 8%
</TABLE>
10 LARGEST HOLDINGS
- ---------------------------------------------------------------
(As a percentage of debt holdings)
<TABLE>
<C> <S> <C>
1. Government National Mortgage Association, 6.0%, 10/15/28 5.08%
2. U.S. Treasury Notes, 7.25%, 5/15/04 3.00
3. U.S. Treasury Notes, 6.5%, 5/31/01 2.77
4. Government National Mortgage Association, 6.0%, 1/15/29 2.53
5. Government National Mortgage Association, 6.0%, 9/15/28 2.51
6. Government National Mortgage Association, 6.0%, 4/15/28 2.46
7. Ford Capital BV, 9.5%, 6/1/10 1.90
8. U.S. Treasury Notes, 7.0%, 7/15/06 1.73
9. U.S. Treasury Bonds, 8.0%, 11/15/21 1.70
10. U.S. Treasury Notes, 8.0%, 5/15/01 1.70
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
PIONEER BOND FUND
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PERFORMANCE UPDATE 6/30/99 CLASS A SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 6/30/98
<S> <C> <C> <C>
$8.94 $9.37
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(6/30/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.564 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Bond Fund at public offering price, compared to the growth of the Lehman
Brothers Government/Corporate Bond Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
<S> <C> <C>
10 Years 7.38% 6.89%
5 Years 6.73 5.74
1 Year 1.35 -3.20
</TABLE>
* Reflects deduction of the maximum 4.5% sales charge at the beginning of the
period and assumes reinvest-
ment of distributions at net asset value.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Growth of $10,000
Pioneer Bond Lehman Brothers Government/
Fund* Corporate Bond Index
Jun-89 $9,550 $10,000
$10,149 $10,710
Jun-91 $11,176 $11,803
$12,633 $13,473
Jun-93 $14,233 $15,247
$14,054 $15,025
Jun-95 $15,668 $16,944
$16,298 $17,731
Jun-97 $17,453 $19,103
$19,205 $21,259
Jun-99 $19,464 $21,834
</TABLE>
The Lehman Brothers Government/Corporate Bond Index is an unmanaged,
composite index of the U.S. bond market. It contains over 5,000 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
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PIONEER BOND FUND
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PERFORMANCE UPDATE 6/30/99 CLASS B SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 6/30/98
<S> <C> <C> <C>
$8.91 $9.33
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(6/30/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.482 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Bond Fund, compared to the growth of the Lehman Brothers
Government/Corporate Bond Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund 5.46% 5.31%
(4/4/94)
5 Years 5.88 5.73
1 Year 0.57 -3.25
</TABLE>
* 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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Growth of $10,000
Pioneer Bond Lehman Brothers Government/
Fund* Corporate Bond Index
Apr-94 $10,000 $10,000
Jun-94 $9,896 $9,959
$9,906 $10,046
Jun-95 $10,942 $11,231
$11,600 $11,980
Jun-96 $11,286 $11,753
$11,729 $12,325
Jun-97 $11,990 $12,663
$12,713 $13,527
Jun-98 $13,095 $14,092
$13,579 $14,809
Jun-99 $13,073 $14,473
</TABLE>
+ 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 over 5,000 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
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PIONEER BOND FUND
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PERFORMANCE UPDATE 6/30/99 CLASS C SHARES
SHARE PRICES AND DISTRIBUTIONS
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
NET ASSET VALUE
PER SHARE 6/30/99 6/30/98
<S> <C> <C> <C>
$8.89 $9.31
<CAPTION>
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(6/30/98-6/30/99) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
<S> <C> <C> <C>
$0.484 - -
</TABLE>
INVESTMENT RETURNS
- ---------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Bond Fund, compared to the growth of the Lehman Brothers
Government/Corporate Bond Index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(As of June 30, 1999)
IF IF
PERIOD HELD REDEEMED*
<S> <C> <C>
Life-of-Fund 3.65% 3.65%
(1/31/96)
1 Year 0.60 0.60
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Growth of $10,000
Pioneer Bond Lehman Brothers Government/
Fund* Corporate Bond Index
1/31/96 $10,000 $10,000
$9,679 $9,706
6/30/96 $9,700 $9,750
$9,831 $9,922
12/31/96 $10,081 $10,225
$9,971 $10,137
6/30/97 $10,294 $10,505
$10,607 $10,873
12/31/97 $10,904 $11,222
$11,024 $11,393
6/30/98 $11,233 $11,691
$11,700 $12,269
12/31/98 $11,653 $12,286
$11,515 $12,139
6/30/99 $11,300 $12,007
</TABLE>
The Lehman Brothers Government/Corporate Bond Index is an unmanaged,
composite index of the U.S. bond market. It contains over 5,000 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
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PIONEER BOND FUND
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PORTFOLIO MANAGEMENT DISCUSSION 6/30/99
Pioneer Bond Fund's fiscal year closed on June 30, 1999. Following is a
discussion with Sherman B. Russ and Kenneth J. Taubes, detailing the investment
environment and the strategies that affected your Fund's performance over the
past 12 months. With over 38 years of combined experience as investment
professionals, Sherm and Ken oversee the team responsible for the daily
management of Pioneer Bond Fund.
Q: THE PAST YEAR HAS BEEN VERY EVENTFUL FOR BONDS. WHAT HAPPENED?
A: Bond market conditions shifted dramatically. This was reflected in the swing
of long-term interest rates. After opening the period at 5.63% on June 30,
1998, the yield of the benchmark 30-year U.S. Treasury bond moved between
4.72% and 6.16% before closing June 30, 1999 at 5.96%. In the summer and fall
of 1998, the international financial crisis caused interest rates to fall
dramatically as a "flight-to-quality" - extraordinary worldwide demand for
only the highest-quality investments, particularly U.S. Treasurys - pushed
Treasury yields to their lowest levels in 30 years. Later, interest rates
steadied as global economies stabilized, but then rose in the first half of
1999 when U.S. economic growth appeared to be excessive.
Q: HOW DID PIONEER BOND FUND PERFORM IN THIS ENVIRONMENT?
A: In light of market conditions, the Fund performed well, producing an
attractive level of income and preserving capital in a rising interest rate
environment. On June 30, the Fund's 30-day SEC yield stood at 5.63%. For the
12 months ended June 30, the Fund's Class A shares returned 1.35%, Class B
0.57% and Class C 0.60%, all at net asset value. In comparison, the average
return of the 157 funds in Lipper, Inc.'s Corporate Debt A-rated category was
1.11%. (Lipper is an independent company that tracks mutual fund
performance.)
Q: WHAT CAUSED THE CHANGE IN SENTIMENT AFTER THE "FLIGHT-TO-QUALITY?"
A: Central bankers worldwide - including the Federal Reserve - lowered interest
rates. In fact, here the Fed cut interest rates three times in the
6
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PIONEER BOND FUND
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fall of 1998 as a way to keep the U.S. economic engine strong enough to drive
international growth. While recognizing these moves as positive developments,
many investors remained cautious about the strength of future growth, as a
chorus of forecasters called for weak international recoveries to dampen U.S.
economic growth in 1999.
Q: SO, WHY DID INTEREST RATES RISE?
A: Most simply because rather than slowing, the U. S. economy remained robust.
Many international economies also grew faster and stronger than experts
expected. Investors became concerned that the strength could become excessive
- rekindling inflation - and that the Fed would make an about-face and hike
interest rates. The Fed did raise short-term interest rates by 0.25
percentage points in June 1999. However, with the much anticipated increase
came an announcement by its members that, after the June increase, the Fed's
bias would be adjusted to "neutral," suggesting that it does not see a need
to raise rates again in the very near future.
Q: THE FUND RECENTLY HAS BEEN AUTHORIZED TO INVEST IN LOWER-RATED INVESTMENTS.
HOW WILL THESE CHANGES BENEFIT SHAREOWNERS?
A: We believe the ability to invest up to 20% of total assets in high-yield
securities will increase the Fund's income and total return potential. That
said, there hasn't been much of an impact since the changes were not
implemented until May. These securities, rated below BBB, carry higher yields
and the potential for greater price appreciation than bonds with higher
ratings and less risk. (Ratings apply to underlying securities, not Fund
shares.) These bonds are carefully analyzed by our research staff and closely
monitored once they are selected for the portfolio. The past six months
demonstrate their potential. As the outlook for economic strength improved,
investors felt more comfortable with risk and took advantage of the higher
yields available in lower-rated securities; the increased demand helped these
securities to outperform higher-quality bonds.
7
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 6/30/99 (CONTINUED)
Q: WHAT STRATEGIES DID YOU USE IN THE PAST YEAR'S CHANGING INVESTMENT CLIMATE?
A: We emphasized relative value and yield throughout the period. We took
advantage of the market's weakness in both mortgage-backed securities and
corporate bonds to buy them "cheap," boosting yield and total return
potential. The Fund's holdings in mortgage-backed securities are now 22.6% of
the portfolio, up from 10.7% one year ago. We also selectively added
corporate bonds, including high-yield issues.
Q: WHAT IS YOUR OUTLOOK FOR BONDS OVER THE NEXT SIX MONTHS?
A: Overall, we think that the U.S. bond market is attractive with relatively
high yields in a low inflation environment. We believe there are many signs
that the economy could begin to slow. For example, in anticipation of Year
2000 issues, many businesses increased capital spending early in 1999. This
should slow in the latter part of the year. On the consumer side, the rise in
rates should put a damper on housing and other interest rate-sensitive areas
of the economy. If economic growth doesn't slow on its own, we think the Fed
will help it along in the form of higher short-term interest rates, despite
its declared "neutral" position.
As we head into the second half of 1999, we expect to keep our focus on
income and relative value. We are especially encouraged by the Fund's more
flexible investment parameters, and we look forward to the new opportunities
they will provide to increase total return potential.
8
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PIONEER BOND FUND
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
INVESTMENT IN SECURITIES - 99.1%
Corporate Bonds - 56.7%
BASIC MATERIALS - 3.9%
AGRICULTURAL - 0.4%
$ 750,000 BB+/B2 Royster-Clark Inc., 10.25%, 4/1/09 (144A) $ 742,500
------------
CHEMICALS (DIVERSIFIED) - 0.5%
1,000,000 B+/B2 Huntsman ICI Chemicals, 10.125%, 7/1/09 (144A) $ 1,008,750
------------
CHEMICALS (SPECIALTY) - 0.5%
1,000,000 BB/Ba3 Arco Chemical Co., 9.8%, 2/1/20 $ 966,710
------------
IRON & STEEL - 1.6%
1,000,000 AA-/A1 Nucor Corp., 6.0%, 1/1/09 (144A) $ 930,700
2,000,000 BBB-/Baa2 USX Corp., 8.125%, 7/15/23 2,037,640
------------
$ 2,968,340
------------
METALS MINING - 0.3%
500,000 B-/Caa1 AEI Resources, Inc., 11.5%, 12/15/06 (144A) $ 491,250
------------
PAPER & FOREST PRODUCTS - 0.6%
1,000,000 A-/A3 Mead Corp., 8.125%, 2/1/23 $ 1,014,360
------------
TOTAL BASIC MATERIALS $ 7,191,910
------------
CAPITAL GOODS - 1.3%
ENGINEERING & CONSTRUCTION - 0.3%
500,000 B/B2 Metromedia Fiber Network, Inc., 10.0%, 11/15/08 $ 513,750
------------
MANUFACTURING - 0.9%
1,500,000 BBB/Baa1 Tenneco Inc., 10.075%, 2/1/01 $ 1,572,555
------------
WASTE MANAGEMENT - 0.1%
300,000 A-/Baa1 Browning-Ferris Industries, Inc., 6.375%, 1/15/08 $ 253,608
------------
TOTAL CAPITAL GOODS $ 2,339,913
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.1%
$ 986,097 Prudential Securities Secured Financing Co., Series
1999-NRF1 A1, 6.074%, 1/15/08 $ 961,753
1,000,000 Prudential Securities Secured Financing Co., 1999-NRF1 A2,
6.48%, 1/15/09 966,406
212,323 Resolution Trust Corp., Series 1992-5A6, 9.238%, 5/25/26 213,053
------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS $ 2,141,212
------------
COMMUNICATION SERVICES - 1.4%
CELLULAR/WIRELESS TELECOMMUNICATIONS - 0.8%
500,000 B/B3 Crown Castle International Corp., 9.0%, 5/15/11 $ 487,500
1,000,000 B/B3 NEXTLINK Communications, Inc., 10.75%, 6/1/09 1,027,500
------------
$ 1,515,000
------------
TELECOMMUNICATIONS - 0.6%
1,000,000 AA-/A1 AT&T Corp., 8.125%, 1/15/22 $ 1,020,510
------------
TOTAL COMMUNICATION SERVICES $ 2,535,510
------------
CONSUMER CYCLICALS - 6.0%
AUTOMOBILES - 1.3%
2,000,000 A/A2 General Motors Corp., 9.4%, 7/15/21 $ 2,399,600
------------
PUBLISHING (NEWSPAPERS) - 0.9%
1,500,000 BBB-/Baa3 News America Holdings, Inc., 10.125%, 10/15/12 $ 1,697,340
------------
RETAIL - 2.0%
500,000 BB+/Baa3 Saks Inc., 7.25%, 12/1/04 $ 499,830
1,000,000 BB+/Baa3 Saks Inc., 8.25%, 11/15/08 1,045,850
1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.62%, 1/1/10 1,106,200
1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.5%, 9/15/24 1,056,120
------------
$ 3,708,000
------------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
SERVICES (COMMERCIAL &
CONSUMER) - 0.8%
$ 1,500,000 BBB/Baa3 Laidlaw Inc., 7.65%, 5/15/06 $ 1,463,085
------------
TEXTILES (APPAREL) - 1.0%
950,000 BBB-/Baa2 Jones Apparel Group, Inc., 7.875%, 6/15/06 (144A) $ 951,615
1,000,000 BBB-/Baa3 Levi Strauss & Co., 7.0%, 11/1/06 (144A) 892,680
------------
$ 1,844,295
------------
TOTAL CONSUMER CYCLICALS $ 11,112,320
------------
CONSUMER STAPLES - 6.5%
BROADCASTING (TELEVISION/RADIO/ CABLE) - 4.9%
500,000 B+/B2 Charter Communications Holdings LLC, 8.25%, 4/1/07 (144A) $ 476,250
2,200,000 BBB/Baa3 Continental Cablevision, Inc., 9.5%, 8/1/13 2,515,590
1,500,000 A-/Baa1 Cox Enterprises, 7.375%, 6/15/09 (144A) 1,500,255
675,000 B/B2 Echostar DBS Corp., 9.25%, 2/1/06 (144A) 688,500
1,250,000 AA-/A2 Tele-Communications, Inc., 10.125%, 4/15/22 1,641,012
2,000,000 BBB/Baa3 Time Warner Inc., 9.15%, 2/1/23 2,315,880
------------
$ 9,137,487
------------
DISTRIBUTORS (FOOD & HEALTH) - 0.6%
1,000,000 BBB+/Baa1 SUPERVALU Inc., 8.875%, 11/15/22 $ 1,039,920
------------
ENTERTAINMENT - 0.5%
1,000,000 B-/B3 Premier Parks, Inc., 9.75%, 6/15/07 $ 1,010,000
------------
FOODS - 0.5%
500,000 B/B3 Agrilink Foods, Inc., 11.875%, 11/1/08 $ 516,250
500,000 B-/B3 Ameriserve Food Distribution, Inc., 10.125%, 7/15/07 425,000
------------
$ 941,250
------------
TOTAL CONSUMER STAPLES $ 12,128,657
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
ENERGY - 6.6%
OIL (DOMESTIC INTEGRATED) - 1.5%
$ 500,000 A/A2 Atlantic Richfield Co., 9.875%, 3/1/16 $ 629,155
2,000,000 A-/A3 Phillips Petroleum Co., 9.18%, 9/15/21 2,116,100
------------
$ 2,745,255
------------
OIL (INTERNATIONAL INTEGRATED) - 2.2%
2,600,000 AA+/Aa2 Imperial Oil Ltd., 8.75%, 10/15/19 $ 2,715,830
1,200,000 A+/A1 Texaco Capital Corp., 8.25%, 10/1/06 1,305,648
------------
$ 4,021,478
------------
OIL & GAS (DRILLING & EQUIPMENT) - 0.8%
1,500,000 BBB+/A3 Nabors Industries Inc., 6.8%, 4/15/04 $ 1,475,715
------------
OIL & GAS (PRODUCTION/EXPLORATION) - 1.5%
2,000,000 BB-/Ba2 Gulf Canada Resources Ltd., 9.625%, 7/1/05 $ 2,066,140
800,000 BB+/Ba1 Santa Fe Snyder Corp., 8.05%, 6/15/04 798,648
------------
$ 2,864,788
------------
OIL & GAS (REFINING & MARKETING) - 0.6%
1,000,000 BBB/Baa2 Ashland Oil Co., 8.8%, 11/15/12 $ 1,107,240
------------
TOTAL ENERGY $ 12,214,476
------------
FINANCIAL - 20.9%
BANKS (MAJOR REGIONAL) - 5.6%
1,000,000 A/A1 Banc One Corp., 10.0%, 8/5/10 $ 1,220,810
1,000,000 AA-/Aa3 Barclays North America Capital Corp., 9.75%, 5/15/21 1,097,670
1,550,000 A-/A2 Corestates Capital Corp., 9.375%, 4/15/03 1,687,749
1,000,000 A-/A2 First National Bank of Boston, 8.0%, 9/15/04 1,052,340
1,500,000 A-/A3 Fleet/Norstar Financial Group Inc., 9.9%, 6/15/01 1,597,035
2,000,000 A+/A2 Mellon Bank NA, 7.375%, 5/15/07 2,043,020
1,000,000 A/A3 Mellon Financial Co., 9.75%, 6/15/01 1,061,990
500,000 A/A2 Republic New York Corp., 9.3%, 6/1/21 587,670
------------
$ 10,348,284
------------
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
BANKS (MONEY CENTER) - 2.6%
$ 2,630,000 A/A1 The Chase Manhattan Corp., 7.125%, 6/15/09 $ 2,632,209
1,000,000 AA-/A2 J.P. Morgan & Co., 8.5%, 8/15/03 1,068,530
1,000,000 AA-/Aa3 National Westminster Bancorp, Inc., 9.375%, 11/15/03 1,105,040
------------
$ 4,805,779
------------
BANKS (REGIONAL) - 1.6%
2,000,000 A+/A1 Bank of Montreal, 7.8%, 4/1/07 $ 2,104,680
1,000,000 BBB-/Ba2 Imperial Bank, 8.5%, 4/1/09 965,940
------------
$ 3,070,620
------------
CONSUMER FINANCE - 2.9%
1,000,000 BB+/Baa3 Capital One Financial Corp., 7.125%, 8/1/08 $ 946,560
3,000,000 A/A1 Ford Capital BV, 9.5%, 6/1/10 3,499,860
1,000,000 BB-/Ba3 RBF Finance Co., 11.0%, 3/15/06 (144A) 1,020,000
------------
$ 5,466,420
------------
FINANCIAL (DIVERSIFIED) - 5.8%
2,500,000 A+/A2 American General Finance Corp., 8.125%, 8/15/09 $ 2,670,750
2,000,000 AA-/Aa3 Associates Corp., 6.375%, 10/15/02 1,999,120
1,100,000 A+/A1 Associates Corp., 8.15%, 8/1/09 1,176,923
1,000,000 BBB+/Baa1 AvalonBay Communities Inc., 6.8%, 7/15/06 956,400
1,500,000 A/A3 Deere (John) Capital Corp., 8.625%, 8/1/19 1,622,040
1,500,000 A-/A3 Hertz Corp., 6.25%, 3/15/09 1,397,430
1,000,000 BBB/Baa3 Mack-Cali Realty, 7.25%, 3/15/09 949,130
------------
$ 10,771,793
------------
INSURANCE (PROPERTY/CASUALTY) - 2.4%
1,500,000 AAA/Aa1 GEICO Corp., 9.15%, 9/15/21 $ 1,644,645
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
INSURANCE (PROPERTY/CASUALTY) - 2.4% - (CONTINUED)
$ 1,535,000 AA/Aa2 National Re Corp., 8.85%, 1/15/05 $ 1,678,952
1,000,000 BBB+/Baa1 W.R. Berkley, 8.7%, 1/1/22 1,052,230
------------
$ 4,375,827
------------
TOTAL FINANCIAL $ 38,838,723
------------
HEALTHCARE - 2.2%
HEALTHCARE (DIVERSIFIED) - 0.4%
725,000 B/B3 King Pharmaceutical Inc., 10.75%, 2/15/09 $ 746,750
------------
HEALTHCARE (HOSPITAL MANAGEMENT) - 0.5%
1,000,000 BB-/Ba3 Tenet Healthcare Corp., 8.125%, 12/1/08 $ 945,000
------------
HEALTHCARE (MEDICAL PRODUCTS/SUPPLIES) - 1.3%
1,070,000 BBB-/Ba1 Beckman Instruments Inc., 7.05%, 6/1/26 $ 1,017,056
1,500,000 A-/Baa1 Guidant Corp., 6.15%, 2/15/06 1,421,580
------------
$ 2,438,636
------------
TOTAL HEALTHCARE $ 4,130,386
------------
TRANSPORTATION - 4.7%
AIRFREIGHT - 1.1%
2,000,000 BBB+/A3 Federal Express Corp., 8.4%, 3/23/10 $ 2,091,880
------------
AIRLINES - 3.0%
1,567,855 BBB/A2 American Airlines, Inc., 9.71%, 1/2/07 $ 1,723,496
500,000 BB/Ba2 Northwest Airlines Inc., 8.52%, 4/7/04 487,345
2,051,743 A/A1 Southwest Airlines Co., 7.67%, 1/2/14 2,134,613
1,000,000 BB+/Baa3 United Air Lines, Inc., 9.125%, 1/15/12 1,080,010
------------
$ 5,425,464
------------
RAILROADS - 0.6%
1,000,000 BBB+/Baa1 Norfolk Southern Corp., 9.0%, 3/1/21 $ 1,161,850
------------
TOTAL TRANSPORTATION $ 8,679,194
------------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
UTILITIES - 2.1%
ELECTRIC COMPANIES - 0.6%
$ 1,000,000 A/A2 Virginia Electric and Power Co.,
8.75%, 4/1/21 $ 1,047,590
------------
NATURAL GAS - 1.5%
1,000,000 BBB-/Baa2 KN Energy Inc., 6.45%, 11/30/01 $ 980,470
1,000,000 A-/Baa1 Northern Natural Gas, 7.0%, 6/1/11 (144A) 973,790
1,000,000 A/A2 Oneok Inc., 6.0%, 2/1/09 926,940
------------
$ 2,881,200
------------
TOTAL UTILITIES $ 3,928,790
------------
TOTAL CORPORATE BONDS
(Cost $106,407,945) $105,241,091
------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 40.9%
22,453 Federal Home Loan Mortgage Corp.,
10.0%, 11/1/02 $ 23,313
30,378 Federal Home Loan Mortgage Corp.,
10.5%, 4/1/19 33,420
56,423 Federal Home Loan Mortgage Corp.,
REMIC Series 1988-24B, 9.5%, 1/15/05 58,207
1,500,000 Federal National Mortgage Association,
9.2%, 9/11/00 1,562,655
3,000,000 Federal National Mortgage Association,
6.0%, 5/15/08 2,903,250
1,000,000 Federal National Mortgage Association,
10.35%, 12/10/15 1,363,200
380,837 Federal National Mortgage Association,
11.0%, 6/1/19 428,023
43,168 Federal National Mortgage Association,
10.0%, 7/1/19 46,871
248,471 Federal National Mortgage Association,
REMIC Series 1989-19A, 10.3%, 4/25/19 267,146
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - (CONTINUED)
$ 7,751 Federal National Mortgage Association,
REMIC Series 1989-19B, 10.3%, 4/25/19 $ 8,202
185,776 Federal National Mortgage Association,
REMIC Series 1989-72D, 8.9%, 10/25/19 188,642
2,856,033 Government National Mortgage Association, 7.0%, 3/15/12 to
12/15/13 2,879,661
34,913 Government National Mortgage Association, 9.5%, 5/15/20 37,736
402,555 Government National Mortgage Association, 10.0%, 1/15/06 to
7/15/20 435,826
4,470,074 Government National Mortgage Association, 7.5%, 5/15/27 to
6/15/27 4,521,929
2,823,573 Government National Mortgage Association, 6.5%, 4/15/28 2,719,157
26,495,135 Government National Mortgage Association, 6.0%, 4/15/14 to
1/15/29 24,896,490
52,621 Government National Mortgage Association, Midget, 10.0%,
5/15/04 55,262
30,467 Government National Mortgage Association II, 9.5%, 12/20/20 32,911
2,935,736 Government National Mortgage Association II, 7.0%, 2/20/29 2,901,241
1,500,000 Government National Mortgage Association, REMIC Series
1998-21, 6.5%, 10/20/11 1,463,985
2,000,000 U.S. Treasury Bonds, 8.75%, 11/5/08 2,209,440
1,500,000 U.S. Treasury Bonds, 7.25%, 5/15/16 1,651,545
2,600,000 U.S. Treasury Bonds, 8.0%, 11/15/21 3,130,088
2,000,000 U.S. Treasury Notes, 8.5%, 2/15/00 2,040,700
3,000,000 U.S. Treasury Notes, 8.0%, 5/15/01 3,129,300
5,000,000 U.S. Treasury Notes, 6.5%, 5/31/01 5,086,150
2,000,000 U.S. Treasury Notes, 6.5%, 5/31/02 2,045,060
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
<TABLE>
<CAPTION>
S&P'S/MOODY'S
PRINCIPAL RATINGS
AMOUNT (UNAUDITED) VALUE
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - (CONTINUED)
$ 5,200,000 U.S. Treasury Notes, 7.25%, 5/15/04 $ 5,519,436
3,000,000 U.S. Treasury Notes, 7.0%, 7/15/06 3,181,380
1,000,000 U.S. Treasury Notes, 6.25%, 8/15/23 1,002,950
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS
(Cost $78,392,107) $ 75,823,176
------------
FOREIGN GOVERNMENT SPONSORED - 1.5%
1,500,000 A+/A2 Hydro-Quebec, 8.0%, 2/1/13 $ 1,609,140
1,000,000 A/A2 Province of Saskatchewan, 9.375%, 12/15/20 1,241,090
------------
TOTAL FOREIGN GOVERNMENT SPONSORED
(Cost $2,740,700) $ 2,850,230
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $187,540,752) $183,914,497
------------
TEMPORARY CASH INVESTMENT - 0.9%
COMMERCIAL PAPER - 0.9%
1,687,000 Chevron USA, Inc., 5.5%, 7/1/99 $ 1,687,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $1,687,000) $ 1,687,000
------------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH INVESTMENT
-100%
(Cost $189,227,752) (a)(b) $185,601,497
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
SCHEDULE OF INVESTMENTS 6/30/99 (CONTINUED)
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At June 30, 1999, the
value of these securities amounted to $9,676,290 or 5.1% of total net
assets.
(a) At June 30, 1999, the net unrealized loss on investments, based on cost
for federal income tax purposes of $189,227,752 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 2,253,092
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (5,879,347)
-----------
Net unrealized loss $(3,626,255)
-----------
</TABLE>
(b) At June 30, 1999, the Fund had a net capital loss carryforward of
$3,630,356 which will expire between 2003 and 2006 if not utilized.
Note: The Fund's investments in mortgage-backed ]securities of the Government
National Mortgage Association (GNMA) are interests in separate pools of
mortgages. All separate investments in this issuer which have the same
coupon rate have been aggregated for the purpose of presentation in this
schedule of investments.
Purchases and sales of securities (excluding temporary cash investments)
for the year ended June 30, 1999 were as follows:
<TABLE>
<S> <C> <C>
Purchases Sales
----------- -----------
Long-term U.S. Government $81,667,918 $61,902,367
Other Long-term Securities 42,748,107 19,140,257
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
BALANCE SHEET 6/30/99
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $1,687,000) (cost $189,227,752) $185,601,497
Cash 1,928
Receivables -
Investment securities sold 10,806
Fund shares sold 2,567,661
Interest 3,021,849
Other 718
------------
Total assets $191,204,459
------------
LIABILITIES:
Payables -
Investment securities purchased $ 656,676
Fund shares repurchased 369,616
Dividends 225,563
Due to affiliates 205,045
Accrued expenses 75,442
------------
Total liabilities $ 1,532,342
------------
NET ASSETS:
Paid-in capital $196,916,610
Accumulated undistributed net investment income 12,118
Accumulated net realized loss on investments (3,630,356)
Net unrealized loss on investments (3,626,255)
------------
Total net assets $189,672,117
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $129,487,156/14,486,628 shares) $ 8.94
------------
Class B (based on $49,815,957/5,592,081 shares) $ 8.91
------------
Class C (based on $10,369,004/1,166,106 shares) $ 8.89
------------
MAXIMUM OFFERING PRICE:
Class A $ 9.36
------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 6/30/99
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 12,905,588
------------
EXPENSES:
Management fees $818,959
Transfer agent fees
Class A 273,318
Class B 125,346
Class C 33,714
Distribution fees
Class A 317,854
Class B 442,083
Class C 114,936
Administrative fees 52,483
Custodian fees 36,065
Registration fees 42,611
Professional fees 53,412
Printing 21,967
Fees and expenses of nonaffiliated trustees 25,577
Miscellaneous 8,888
--------
Total expenses $ 2,367,213
Less fees paid indirectly (43,884)
------------
Net expenses $ 2,323,329
------------
Net investment income $ 10,582,259
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments $ 937,466
Change in net unrealized gain on investments (10,260,323)
------------
Net loss on investments $ (9,322,857)
------------
Net increase in net assets resulting from operations $ 1,259,402
------------
</TABLE>
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED 6/30/99 AND 6/30/98
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
FROM OPERATIONS: 6/30/99 6/30/98
<S> <C> <C>
Net investment income $ 10,582,259 $ 8,586,541
Net realized gain (loss) on investments 937,466 (27,677)
Change in net unrealized gain (loss) on investments (10,260,323) 4,226,062
------------- ------------
Net increase in net assets resulting from operations $ 1,259,402 $ 12,784,926
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.56 and $0.59 per share, respectively) $ (7,701,473) $ (6,776,551)
Class B ($0.48 and $0.52 per share, respectively) (2,283,992) (1,379,864)
Class C ($0.48 and $0.52 per share, respectively) (599,723) (423,824)
------------- ------------
Total distributions to shareholders $ (10,585,188) $ (8,580,239)
------------- ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 220,458,929 $ 79,685,588
Reinvestment of distributions 7,689,631 6,168,312
Cost of shares repurchased (182,879,191) (59,332,386)
------------- ------------
Net increase in net assets resulting from fund share
transactions $ 45,269,369 $ 26,521,514
------------- ------------
Net increase in net assets $ 35,943,583 $ 30,726,201
NET ASSETS:
Beginning of year 153,728,534 123,002,333
------------- ------------
End of year (including accumulated undistributed net
investment income of $12,118 and $15,047, respectively) $ 189,672,117 $153,728,534
------------- ------------
</TABLE>
<TABLE>
<CAPTION>
CLASS A '99 SHARES '99 AMOUNT '98 SHARES '98 AMOUNT
<S> <C> <C> <C> <C>
Shares sold 16,837,950 $ 157,202,981 4,618,197 $ 42,978,625
Reinvestment of distributions 638,020 5,941,487 553,400 5,150,324
Less shares repurchased (15,191,420) (141,713,341) (3,811,048) (35,457,410)
----------- ------------- ---------- ------------
Net increase 2,284,550 $ 21,431,127 1,360,549 $ 12,671,539
----------- ------------- ---------- ------------
CLASS B
Shares sold 4,694,027 $ 43,795,349 2,194,576 $ 20,360,306
Reinvestment of distributions 160,668 1,489,392 92,814 860,618
Less shares repurchased (2,573,656) (23,845,332) (1,202,753) (11,149,336)
----------- ------------- ---------- ------------
Net increase 2,281,039 $ 21,439,409 1,084,637 $ 10,071,588
----------- ------------- ---------- ------------
CLASS C
Shares sold 2,092,821 $ 19,460,599 1,763,437 $ 16,346,657
Reinvestment of distributions 27,934 258,752 16,991 157,370
Less shares repurchased (1,869,099) (17,320,518) (1,374,869) (12,725,640)
----------- ------------- ---------- ------------
Net increase 251,656 $ 2,398,833 405,559 $ 3,778,387
----------- ------------- ---------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
PIONEER BOND FUND
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/97 6/30/96 6/30/95
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of year $ 9.37 $ 9.07 $ 9.08 $ 9.35 $ 9.04
----------- ----------- ----------- ----------- -----------
Increase (decrease) from investment operations:
Net investment income $ 0.56 $ 0.59 $ 0.63 $ 0.64 $ 0.68
Net realized and unrealized gain (loss) on investments (0.43) 0.30 (0.01) (0.27) 0.31
----------- ----------- ----------- ----------- -----------
Net increase from investment operations $ 0.13 $ 0.89 $ 0.62 $ 0.37 $ 0.99
Distributions to shareholders:
Net investment income (0.56) (0.59) (0.63) (0.64) (0.68)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value $ (0.43) $ 0.30 $ (0.01) $ (0.27) $ 0.31
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 8.94 $ 9.37 $ 9.07 $ 9.08 $ 9.35
----------- ----------- ----------- ----------- -----------
Total return* 1.35% 10.04% 7.09% 4.02% 11.48%
Ratio of net expenses to average net assets 1.04%+ 1.18%+ 1.14%+ 1.19%+ 1.14%
Ratio of net investment income to average net assets 6.01%+ 6.34%+ 6.97%+ 6.80%+ 7.55%
Portfolio turnover rate 46% 44% 48% 39% 37%
Net assets, end of year (in thousands) $129,487 $114,326 $98,310 $101,957 $110,158
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.02% 1.17% 1.12% 1.18% -
Net investment income 6.03% 6.35% 6.99% 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
PIONEER BOND FUND
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/99 6/30/98 6/30/97 6/30/96 6/30/95
<S> <C> <C> <C> <C> <C>
CLASS B
Net asset value, beginning of year $ 9.33 $ 9.03 $ 9.02 $ 9.31 $ 9.02
----------- ----------- ----------- ----------- -----------
Increase (decrease) from investment operations:
Net investment income $ 0.48 $ 0.51 $ 0.56 $ 0.57 $ 0.60
Net realized and unrealized gain (loss) on investments (0.42) 0.31 (0.01) (0.28) 0.31
----------- ----------- ----------- ----------- -----------
Net increase from investment operations $ 0.06 $ 0.82 $ 0.55 $ 0.29 $ 0.91
Distributions to shareholders:
Net investment income (0.48) (0.52) (0.54) (0.57) (0.62)
In excess of net investment income - - - (0.01) -
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset value $ (0.42) $ 0.30 $ 0.01 $ (0.29) $ 0.29
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 8.91 $ 9.33 $ 9.03 $ 9.02 $ 9.31
----------- ----------- ----------- ----------- -----------
Total return* 0.57% 9.21% 6.24% 3.15% 10.57%
Ratio of net expenses to average net assets 1.86%+ 1.98%+ 1.97%+ 1.96%+ 1.97%
Ratio of net investment income to average net assets 5.18%+ 5.52%+ 6.12%+ 6.01%+ 6.60%
Portfolio turnover rate 46% 44% 48% 39% 37%
Net assets, end of year (in thousands) $49,816 $30,888 $20,104 $14,843 $ 7,338
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.83% 1.97% 1.96% 1.94% -
Net investment income 5.21% 5.53% 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
PIONEER BOND FUND
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 6/30/99
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED 1/31/96 TO
6/30/99 6/30/98 6/30/97 6/30/96
<S> <C> <C> <C> <C>
CLASS C
Net asset value, beginning of period $ 9.31 $ 9.02 $ 9.02 $ 9.54
----------- ----------- ----------- -----------
Increase (decrease) from investment operations:
Net investment income $ 0.48 $ 0.52 $ 0.54 $ 0.23
Net realized and unrealized gain (loss) on investments (0.42) 0.29 - (0.52)
----------- ----------- ----------- -----------
Net increase (decrease) from investment operations $ 0.06 $ 0.81 $ 0.54 $ (0.29)
Distributions to shareholders:
Net investment income (0.48) (0.52) (0.54) (0.22)
In excess of net investment income - - - (0.01)
----------- ----------- ----------- -----------
Net increase (decrease) in net asset value $ (0.42) $ 0.29 $ - $ (0.52)
----------- ----------- ----------- -----------
Net asset value, end of period $ 8.89 $ 9.31 $ 9.02 $ 9.02
----------- ----------- ----------- -----------
Total return* 0.60% 9.12% 6.13% (3.00)%
Ratio of net expenses to average net assets 1.86%+ 1.90%+ 2.05%+ 2.18%**+
Ratio of net investment income to average net assets 5.17%+ 5.58%+ 5.83%+ 5.79%**+
Portfolio turnover rate 46% 44% 48% 39%
Net assets, end of period (in thousands) $10,369 $ 8,515 $ 4,588 $ 343
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.83% 1.89% 1.92% 2.13%**
Net investment income 5.20% 5.59% 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.
24
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Bond Fund (the Fund) is a Delaware 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 each 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 at
prices supplied by independent pricing services, which consider such factors
as Treasury spreads, yields, maturities and ratings, and valuations may be
supplemented by dealers and 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.
25
<PAGE>
PIONEER BOND FUND
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS 6/30/99 (CONTINUED)
B. FEDERAL INCOME TAXES
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules. Therefore,
the source of the Fund's distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from paid-in-capital,
depending on the type of book/tax differences that may exist.
At June 30, 1999, the Fund reclassified $152,984 from paid-in capital to
accumulated net realized loss on investments. The reclassification has no
impact on the net asset value of the Fund and is designed to present the
Fund's capital accounts on a tax basis.
C. FUND SHARES
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $65,615 in
underwriting commissions on the sale of fund shares for the year ended June
30, 1999.
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.
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PIONEER BOND FUND
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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.
2. MANAGEMENT AGREEMENT
Pioneer Investment Management, Inc. (PIM), 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 and administration agreements, certain other
services and costs, including accounting, regulatory reporting, and insurance
premiums, are paid by the Fund. At June 30, 1999, $89,659 was payable to PIM
related to management fees, administrative 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 $43,684 in transfer agent fees payable to PSC at June 30, 1999.
4. DISTRIBUTION PLANS
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Fund pays PFD a 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 $71,702 in distribution fees payable to
PFD at June 30, 1999.
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PIONEER BOND FUND
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NOTES TO FINANCIAL STATEMENTS 6/30/99 (CONTINUED)
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 year ended June 30, 1999, CDSCs in the amount of $46,713 were paid
to PFD.
5. EXPENSE OFFSETS
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended June 30, 1999, the
Fund's expenses were reduced by $43,884 under such arrangements.
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PIONEER BOND FUND
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREOWNERS 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 June 30, 1999, 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 June
30, 1999, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Bond Fund as of June 30, 1999, 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
August 6, 1999
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PIONEER BOND FUND
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RESULTS OF SHAREOWNER MEETING
On May 4, 1999, Pioneer Bond Fund held a special meeting of shareowners. All
proposals were passed by shareowner vote. Here are the detailed results of the
votes.
<TABLE>
<S> <C> <C>
PROPOSAL 1 - TO ELECT TRUSTEES.
NOMINEE AFFIRMATIVE WITHHELD
John F. Cogan, Jr. 15,020,708.572 268,682.045
Mary K. Bush 15,034,631.492 52,135.000
Richard H. Egdahl, M.D. 15,038,446.416 250,944.201
Margaret B.W. Graham 15,038,864.723 250,525.894
John W. Kendrick 14,923,363.991 366,026.626
Marguerite A. Piret 14,936,077.562 353,313.055
David D. Tripple 15,044,587.438 244,803.179
Stephen K. West 15,040,212.113 249,178.504
John Winthrop 15,045,557.932 243,832.685
PROPOSAL 2 - TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION FOR THE FUND.
AFFIRMATIVE AGAINST ABSTAIN
12,232,818.002 404,896.914 408,039.701
PROPOSAL 3(A) - TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE.
AFFIRMATIVE AGAINST ABSTAIN
12,268,918.457 649,080.870 127,755.290
PROPOSAL 3(B) - TO APPROVE AN AMENDMENT ELIMINATING THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING RATING DEBT SECURITIES.
AFFIRMATIVE AGAINST ABSTAIN
12,236,458.166 686,087.590 123,208.860
PROPOSAL 3(C) - TO APPROVE AN AMENDMENT ELIMINATING THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING FOREIGN SECURITIES.
AFFIRMATIVE AGAINST ABSTAIN
12,198,860.981 699,209.140 147,684.495
PROPOSAL 3(D) -- TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING PORTFOLIO
DIVERSIFICATION AND CONCENTRATION.
AFFIRMATIVE AGAINST ABSTAIN
12,287,538.181 626,909.705 131,305.731
</TABLE>
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PIONEER BOND FUND
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<TABLE>
<S> <C> <C>
PROPOSAL 3(E) - TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING REAL
ESTATE.
AFFIRMATIVE AGAINST ABSTAIN
12,223,214.155 685,212.525 137,327.937
PROPOSAL 3(F) - TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING INVESTING
IN COMMODITIES.
AFFIRMATIVE AGAINST ABSTAIN
12,163,712.896 730,083.121 151,958.600
PROPOSAL 3(G) - TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING
UNDERWRITING SECURITIES.
AFFIRMATIVE AGAINST ABSTAIN
12,272,472.375 659,634.428 113,648.815
PROPOSAL 3(H) - TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING LOANS.
AFFIRMATIVE AGAINST ABSTAIN
12,181,893.992 712,861.956 150,997.668
PROPOSAL 3(I) - TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING SELLING
SECURITIES SHORT.
AFFIRMATIVE AGAINST ABSTAIN
12,210,579.263 716,037.011 119,038.673
PROPOSAL 3(J)- TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING PURCHASING
SECURITIES ON MARGIN.
AFFIRMATIVE AGAINST ABSTAIN
12,140,425.976 752,364.597 152,966.043
PROPOSAL 3(K)- TO AMEND THE FUND'S INVESTMENT RESTRICTION REGARDING BORROWING.
AFFIRMATIVE AGAINST ABSTAIN
12,143,715.513 744,750.605 157,288.498
PROPOSAL 3(L)- TO AMEND THE FUND'S INVESTMENT RESTRICTION ON PLEDGING ASSETS.
AFFIRMATIVE AGAINST ABSTAIN
12,157,009.294 748,954.294 139,790.028
</TABLE>
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PIONEER BOND FUND
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TRUSTEES, OFFICERS AND SERVICE PROVIDERS
TRUSTEES OFFICERS
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and President
Mary K. Bush David Triple, Executive Vice President
Richard H. Egdahl, M.D. Sherman B. Russ, Vice President
Margaret B.W. Graham Eric W. Reckard, Treasurer
John W. Kendrick Joseph P. Barri, Secretary
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
INVESTMENT ADVISER
Pioneer Investment Management, Inc.
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
OFFICERS
David D. Tripple, Executive Vice President
Sherman B. Russ, Vice President
Eric W. Reckard, Treasurer
Joseph P. Barri, Secretary
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RETIREMENT PLANS FROM PIONEER
Pioneer has a long history of helping people work toward their retirement goals,
offering plans suited to the individual investor and businesses of all sizes.
For more information on Pioneer retirement plans, contact your investment
professional, or call Pioneer at 1-800-622-0176.
INDIVIDUAL RETIREMENT ACCOUNT (IRA)
TRADITIONAL IRA
A Traditional IRA allows anyone under age 70 1/2 with earned income to
contribute up to $2,000 annually. Spouses may contribute up to $2,000 annually
into a separate IRA, for a total of $4,000 per year for a married couple.
Earnings are tax-deferred, and contributions may be tax-deductible.
ROTH IRA
Contributions, up to $2,000 a year per person in earned income, are not
tax-deductible, but earnings are tax-free for qualified withdrawals. You can
contribute beyond age 70 1/2, although there are income limits for contributions
at any age.
401(K) PLAN
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $9,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES) IRA PLAN
Businesses with 100 or fewer eligible employees can establish the plan; it
resembles the traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and an
employer contribution is required.
403(B) PLAN
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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RETIREMENT PLANS FROM PIONEER (continued)
and other tax-exempt organizations. A 403(b) plan lets employees set aside a
portion of their salary, before taxes, through payroll deduction.
SIMPLIFIED EMPLOYEE PENSION PLAN (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must contribute
the same percentage of pay for themselves and any eligible employees;
contributions are made directly to employees' IRAs. SEPs are easy to administer
and can be an especially good choice for firms with few or no employees.
PROFIT SHARING PLAN
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and vesting
schedules.
AGE-WEIGHTED PROFIT SHARING PLAN
Like traditional profit sharing plans, employer contributions are flexible, but
age-weighted plans allocate contributions based on both age and salary.
Age-weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
MONEY PURCHASE PENSION PLAN (MPP)
Money purchase plans are similar to profit sharing plans, but allow for higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment professional 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-SM- 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.
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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.
<TABLE>
<S> <C> <C>
Pioneer Investment Management, Inc.
60 State Street 0899-6839
Boston, Massachusetts 02109 -C- Pioneer Funds Distributor, Inc.
[LOGO] www.pioneerfunds.com yPrinted on Recycled Paper
</TABLE>
