[PIONEER LOGO]
Pioneer Bond
Fund
SEMIANNUAL REPORT 12/31/98
<PAGE>
Table of Contents
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<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 22
Report of Independent Public Accountants 26
Trustees, Officers and Service Providers 27
The Pioneer Family of Mutual Funds 28
Retirement Plans from Pioneer 29
</TABLE>
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Pioneer Bond Fund
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LETTER FROM THE CHAIRMAN 12/31/98
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Dear Shareowner,
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I am pleased to introduce this semiannual report for Pioneer Bond Fund, covering
the six months ended December 31, 1998. On behalf of your investment team, I
thank you for your interest and this opportunity to comment on today's investing
environment.
Before moving on to review the bond market, I'd like to announce a recent
addition to the Fund's management team. We are pleased that Kenneth J. Taubes
joined us in September, bringing with him 13 years of investment experience. He
and Sherman B. Russ, who has worked with your Fund for 16 years, supervise the
team of portfolio managers and analysts responsible for the day-to-day
management of the Fund.
Economic news in the United States remained positive over the last half of 1998,
with low unemployment and no signs of inflation. The financial markets, and
especially U.S. government bonds, turned in impressive results through the end
of the year. The yield on the 30-year Treasury bond fell to historic lows, which
subsequently pushed bond prices higher and increased total returns.
Although bond returns were again overshadowed by the returns of the overall
stock market, 1998 showed that bonds can play a vital role in a well-balanced
portfolio. Funds that hold a diversified portfolio of bonds, such as Pioneer
Bond Fund, can cushion some of the stock market's volatility and often add
much-needed income to a portfolio. As you look ahead into 1999, we suggest you
discuss your needs for diversification with your investment professional.
I encourage you to read the report that follows, including the Portfolio
Management Discussion where your team reviews Fund performance. If you have any
questions, please contact your investment professional, or Pioneer at
1-800-225-6292.
Respectfully,
/s/ John F. Coogan, Jr.
- --------------------------------
John F. Cogan, Jr.,
Chairman and President
1
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Pioneer Bond Fund
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PORTFOLIO SUMMARY 12/31/98
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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)
[GRAPHIC OMMITTED: PIE CHART]
<TABLE>
<S> <C>
U.S. Government and Agency Securities 48%
Corporate Securities 47%
Short-Term Cash Equivalents 3%
Foreign Government Sponsored 2%
</TABLE>
P o r t f o l i o M a t u r i t y
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(Effective life as a percentage of total investment portfolio)
[GRAPHIC OMMITTED: PIE CHART]
<TABLE>
<S> <C>
0-2 Years 11%
2-5 Years 29%
5-7 Years 13%
7-10 Years 22%
10-20 Years 12%
20+ Years 13%
</TABLE>
1 0 L a r g e s t H o l d i n g s
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(As a percentage of long-term holdings)
<TABLE>
<S> <C>
1. U.S. Treasury Notes, 7.25%, 5/15/04 6.12%
2. Government National Mortgage Association, 6.0%, 10/15/28 5.45
3. U.S. Treasury Notes, 6.5%, 5/31/01 2.85
4. Government National Mortgage Association, 6.0%, 9/15/28 2.70
5. Government National Mortgage Association, 6.0%, 4/15/28 2.66
6. U.S. Treasury Notes, 8.5%, 2/15/00 2.49
7. U.S. Treasury Notes, 7.0%, 7/15/06 2.49
8. U.S. Treasury Bonds, 8.0%, 11/15/21 2.25
9. Ford Capital BV, 9.5%, 6/1/10 2.09
10. U.S. Treasury Notes, 8.0%, 5/15/01 2.05
</TABLE>
Fund holdings will vary for other periods.
2
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Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/98 CLASS A SHARES
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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
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<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/98 6/30/98
$9.46 $9.37
Distributions per Share Income Short-Term Long-Term
(6/30/98 - 12/31/98) Dividends Capital Gains Capital Gains
$0.292 - -
</TABLE>
I n v e s t m e n t R e t u r n s
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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.
Average Annual Total Returns
(As of December 31, 1998)
<TABLE>
<CAPTION>
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
10 Years 8.48% 7.98%
5 Years 6.29 5.32
1 Year 7.69 2.85
</TABLE>
* Reflects deduction of the maximum 4.5% sales charge at the beginning of
the period and assumes reinvestment of distributions at net asset value.
[GRAPHIC OMITTED: MOUNTAIN CHART]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer Lehman Brothers
Bond Government/Corporate
Fund* Bond Index
<S> <C> <C>
12/88 9550 10000
10690 11424
12/90 11439 12369
13216 14361
12/92 14259 15449
15889 17157
12/94 15222 16555
17985 19742
12/96 18338 20311
20018 22293
12/98 21558 24405
</TABLE>
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
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Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/98 CLASS B SHARES
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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
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<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/98 6/30/98
$9.42 $9.33
Distributions per Share Income Short-Term Long-Term
6/30/98 - 12/31/98) Dividends Capital Gains Capital Gains
$0.252 - -
</TABLE>
I n v e s t m e n t R e t u r n s
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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 December 31, 1998)
<S> <C> <C>
If If
Period Held Redeemed*
Life-of-Fund 6.74% 6.41%
(4/4/94)
1 Year 6.81 2.81
</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.
[GRAPHIC OMITTED: MOUNTAIN CHART]
Growth of $10,000+
<TABLE>
<CAPTION>
Pioneer Lehman Brothers
Bond Government/Corporate
Fund* Bond Index
<S> <C> <C>
4/94 10000 10000
9896 9959
9914 10009
12/94 9906 10046
10327 10546
10942 11231
11089 11446
12/95 11600 11980
11274 11699
11286 11753
11439 11960
12/96 11729 12325
11614 12219
11990 12663
12353 13107
12/97 12713 13527
12839 13733
13095 14092
13634 14789
12/98 13379 14809
</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
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
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Pioneer Bond Fun
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PERFORMANCE UPDATE 12/31/98 CLASS C SHARES
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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
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<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/98 6/30/98
$ 9.40 $ 9.31
Distributions per Share Income Short-Term Long-Term
(6/30/98 - 12/31/98) Dividends Capital Gains Capital Gains
$ 0.255 - -
</TABLE>
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.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of December 31, 1998)
<S> <C> <C>
If If
Period Held Redeemed*
Life-of-Fund 5.38% 5.38%
(1/31/96)
1 Year 6.87 6.87
</TABLE>
* Assumes reinvestment of distributions. A 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
[GRAPHIC OMITTED: MOUNTAIN CHART]
Growth of $10,000
<TABLE>
<CAPTION>
Pioneer Lehman Brothers
Bond Government/Corporate
Fund* Bond Index
<S> <C> <C>
1/96 10000 10000
9679 9706
9700 9750
9831 9922
12/96 10081 10225
9971 10137
10294 10505
10607 10873
12/97 10904 11222
11024 11393
11233 11691
11700 12269
12/98 11653 12286
</TABLE>
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
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/98
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Pioneer Bond Fund closed the first half of its fiscal year on December 31, 1998.
During that time, your Fund produced solid returns. Increasingly fragile global
economies and financial markets prompted extraordinary investor demand for the
safety and quality of U.S. Treasurys. As Treasury prices rose sharply, interest
rates fell to historical lows. Further, the Federal Reserve lowered interest
rates three times in the autumn to jump start the U.S. capital markets and
ensure that U.S. economic growth would stay strong enough to recharge foreign
economies. Stability was re-established by the end of the period; and in the
transition, we believe your Fund seized the opportunity that market turbulence
often creates.
In the following discussion, Sherman Russ, who leads the investment team along
with Ken Taubes, reviews the period's investment environment and the strategies
that shaped Fund performance. He also provides his outlook for the bond market
in the first half of 1999.
Q: How did the Fund perform over the past six months?
A: The Fund produced solid results. For the six months, the Fund's Class A
Shares returned 4.12% at net asset value, producing both a good level of
income and price appreciation. In comparison, the average return of the 166
funds in Lipper, Inc.'s Corporate Debt A-rated bond fund category was 3.55%.
Lipper is an independent company that ranks mutual fund performance. (Returns
do not reflect sales charges.) As of December 31, the Fund's 30-day SEC yield
stood at 4.90%.
Q: What was the investment environment like for bonds?
A: Extremely positive for U.S. Treasurys. Prices of other types of investment
grade bonds rose, but not to the same degree as Treasury issues. During the
summer and early fall, global economies and financial markets became
increasingly unstable. The situation powered a flight to quality
extraordinary worldwide demand for Treasurys - particularly the most recently
issued Treasurys. Demand for securities other than Treasurys diminished,
however, as investors began to require increasingly greater yield advantages
for bonds perceived to have greater risk.
6
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Pioneer Bond Fund
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In the final months of 1998 - after the Federal Reserve cut the federal funds
rate three times and foreign central bankers made other interest rate cuts -
the world's financial markets began to regain stability. Interest rates
remained low, but rose from their extraordinarily low levels. The events of
the summer were almost unprecedented in speed and degree. However, we don't
expect that upheaval in the bond markets to be repeated anytime soon.
Liquidity conditions are much better now thanks to the Fed's action in
cutting rates.
Q: What role did asset allocation play in your strategy?
A: We actively managed the Fund's asset-allocation, emphasizing relative value
and yield. As the period progressed, yields of mortgage-backed securities
and corporate bonds became very attractive relative to Treasurys, as yields
on Treasurys fell. We doubled the Fund's mortgage-backed position to 24% of
net assets and modestly added to corporate bond holdings. We focused on GNMA
issues (Government National Mortgage Association), which carry the "full
faith and credit" pledge of the U.S. government, selecting newly issued GNMAs
to minimize the risk of prepayments. Prepayments occur when a mortgage is
paid prior to its stated maturity - an activity that typically increases as
interest rates decline and mortgage owners refinance to take advantage of
lower interest rates. When the older, higher interest rate mortgage is paid
off, its coupon no longer contributes to the Fund's income stream. On
December 31, 1998, over 56% of the portfolio was invested in bonds rated AAA
or AA, which gave the Fund an average quality of AA. (Ratings apply to
underlying securities, not Fund shares.)
Q: What other strategies did you use to improve total return?
A: We kept the Fund's duration fairly stable - 5.03 years on December 31
because in our opinion, bonds with durations in that area provided the best
balance of interest rate sensitivity and yield. Expressed in years, duration
measures a fund's sensitivity to interest rate changes. Lengthening duration
increases a portfolio's sensitivity to changes in interest rates, building
total return potential when interest rates fall and raising
7
<PAGE>
Pioneer Bond Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/98 (continued)
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the risk of price declines when interest rates rise. In contrast, shortening
duration makes a portfolio less sensitive to interest rate changes, enhancing
price stability.
Q: What is your outlook for the next six months?
A: We are optimistic. While we do not expect interest rates to fall as
dramatically as in 1998, we think they could gradually move lower especially
short-term interest rates. However, the past several months of global
interest rate cuts could re-energize world economies, and the Fed does not
want to over-stimulate the economy whereby inflation could become a factor.
We anticipate continued positive, but slower, economic growth about 2.5%
versus an estimated 4% in 1998 - and minimal inflation in the United States,
as a slowdown in international economies - particularly Asia and Latin
America - reduces domestic economic strength.
The past six months served as a reminder that quality and liquidity play an
important role in a well-rounded investment portfolio. In addition to
providing a safe haven in turbulent financial markets, high-quality bonds
continue to offer attractive value - particularly with inflation at such
minimal levels.
8
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Pioneer Bond Fund
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SCHEDULE OF INVESTMENTS 12/31/98
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
INVESTMENT IN SECURITIES - 97.5%
Basic Materials - 2.3%
Chemicals - 0.6%
$1,000,000 BBB+/Ba2 Arco Chemical Co., 9.8%, 2/1/20 $1,032,590
----------
Iron & Steel - 1.1%
2,000,000 BBB-/Baa2 USX Corp., 8.125%, 7/15/23 $2,141,700
----------
Paper & Forest Products - 0.6%
1,000,000 A-/A3 Mead Corp., 8.125%, 2/1/23 $1,137,690
----------
Total Basic Materials
(Cost $4,279,950) $4,311,980
----------
Capital Goods - 0.9%
Manufacturing - 0.9%
1,500,000 BBB/Baa1 Tenneco Inc., 10.075%, 2/1/01 $1,616,760
----------
Total Capital Goods
(Cost $1,597,900) $1,616,760
----------
Communication Services - 1.1%
Telecommunications - 1.1%
1,000,000 AA-/Aa3 AT&T Corp., 8.125%, 1/15/22 $1,083,160
1,000,000 A-/Baa1 Sprint Capital Corp., 5.7%, 11/15/03 1,004,680
----------
Total Communication Services
(Cost $2,086,180) $2,087,840
----------
Consumer Cyclicals - 4.1%
Automobiles - 1.4%
2,000,000 A/A2 General Motors Corp., 9.4%, 7/15/21 $2,669,460
----------
Retail - 2.7%
1,000,000 A/A2 Penney (J.C.) Co., Inc., 9.75%, 6/15/21 $1,128,540
500,000 BB+/Baa3 Saks Inc., 7.25%, 12/1/04 498,920
1,000,000 BB+/Baa3 Saks Inc., 8.25%, 11/15/08 1,061,310
1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.62%, 1/1/10 1,156,230
1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.5%, 9/15/24 1,160,000
----------
$5,005,000
----------
Total Consumer Cyclicals
(Cost $6,999,500) $7,674,460
----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Bond Fund
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SCHEDULE OF INVESTMENTS 12/31/98 (continued)
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Consumer Staples - 6.3%
Broadcasting (Television/Radio/Cable) - 4.7%
$2,200,000 BBB/Baa3 Continental Cablevision, Inc., 9.5%, 8/1/13 $ 2,626,800
1,500,000 BBB-/Baa3 News America Holdings, Inc., 10.125%,
10/15/12 1,745,970
1,250,000 BBB-/Baa3 Tele-Communications, Inc., 10.125%,
4/15/22 1,797,575
2,000,000 BBB/Baa3 Time Warner Inc., 9.15%, 2/1/23 2,613,760
-----------
$ 8,784,105
-----------
Distributors (Food & Health) - 0.6%
1,000,000 BBB+/Baa1 SUPERVALU Inc., 8.875%, 11/15/22 $ 1,104,370
-----------
Household Products (Non-Durables) - 1.0%
1,500,000 AA/Aa2 Proctor & Gamble Co., 9.36%, 1/1/21 $ 1,996,050
-----------
Total Consumer Staples
(Cost $10,481,310) $11,884,525
-----------
Energy - 5.3%
Oil & Gas - 5.3%
1,000,000 BBB/Baa2 Ashland Oil Co., 8.8%, 11/15/12 $ 1,181,350
500,000 A/A2 Atlantic Richfield Co., 9.875%, 3/1/16 683,175
2,600,000 AA+/Aa2 Imperial Oil Ltd., 8.75%, 10/15/19 2,759,770
2,000,000 A-/A3 Phillips Petroleum Co., 9.18%, 9/15/21 2,258,680
1,200,000 A+/A1 Texaco Capital Corp., 8.25%, 10/1/06 1,400,412
1,250,000 A+/A1 Texaco Capital Corp., 9.75%, 3/15/20 1,743,088
-----------
Total Energy
(Cost $9,418,512) $10,026,475
-----------
Financial - 19.8%
Banks - 11.8%
1,000,000 A/A1 Banc One Corp., 10.0%, 8/5/10 $ 1,334,740
1,000,000 A/Aa3 BankAmerica Corp., 9.375%, 3/1/01 1,078,960
2,000,000 A+/A1 Bank of Montreal, 7.8%, 4/1/07 2,241,440
1,000,000 AA-/Aa3 Barclays North American Capital Corp.,
9.75%, 5/15/21 1,140,550
1,000,000 A/A1 The Chase Manhattan Corp., 8.5%,
2/15/02 1,079,800
2,630,000 A/A1 The Chase Manhattan Corp., 7.125%,
6/15/09 2,865,148
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Banks - (continued)
$1,550,000 A-/A2 CoreStates Capital Corp., 9.375%,
4/15/03 $ 1,760,723
1,500,000 A/A1 First Chicago NBD Corp., 10.25%, 5/1/01 1,656,615
1,000,000 A-/A2 First National Bank of Boston, 8.0%,
9/15/04 1,082,430
1,500,000 A-/A3 Fleet/Norstar Financial Group, 9.9%,
6/15/01 1,647,000
1,000,000 AA-/A2 J.P. Morgan & Co., 8.5%, 8/15/03 1,110,820
2,000,000 A+/A2 Mellon Bank NA, 7.375%, 5/15/07 2,211,440
1,000,000 A/A3 Mellon Financial Co., 9.75%, 6/15/01 1,097,010
1,000,000 AA-/Aa3 National Westminster Bancorp, Inc.,
9.375%, 11/15/03 1,147,220
500,000 A/A2 Republic New York Corp., 9.3%, 6/1/21 653,925
-----------
$22,107,821
-----------
Financial (Diversified) - 8.0%
2,500,000 A+/A2 American General Finance Corp., 8.125%,
8/15/09 $ 2,888,425
2,000,000 AA-/Aa3 Associates Corp., 6.375%, 10/15/02 2,059,720
1,500,000 A/A3 Deere (John) Capital Corp., 8.625%,
8/1/19 1,701,945
3,000,000 A/A1 Ford Capital BV, 9.5%, 6/1/10 3,825,660
1,500,000 AAA/Aa3 GEICO Corp., 9.15%, 9/15/21 1,700,730
1,535,000 AA/Aa2 National Re Corp., 8.85%, 1/15/05 1,749,853
1,000,000 A/A3 W.R. Berkley, 8.7%, 1/1/22 1,137,810
-----------
$15,064,143
-----------
Total Financial
(Cost $35,210,158) $37,171,964
-----------
Transportation - 6.4%
Airlines - 4.5%
1,649,100 BBB/A2 American Airlines, Inc., 9.71%, 1/2/07 $ 1,943,497
2,500,000 BBB/Baa1 Delta Air Lines, Inc. 9.2%, 9/23/14 2,997,725
2,096,773 A/A1 Southwest Airlines Co., 7.67%, 1/2/14 2,341,383
1,000,000 BB+/Baa3 United Air Lines, Inc., 9.125%, 1/15/12 1,178,520
-----------
$ 8,461,125
-----------
Airfreight - 1.2%
2,000,000 BBB+/A3 Federal Express Corp., 8.4%, 3/23/10 $ 2,310,500
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Bond Fund
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SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Railroads - 0.7%
$1,000,000 BBB+/Baa1 Norfolk Southern Corp., 9.0%, 3/1/21 $ 1,292,720
-----------
Total Transportation
(Cost $11,351,781) $12,064,345
-----------
Utilities - 1.1%
Electric Companies - 0.6%
1,000,000 A/A2 Virginia Electric and Power Co., First
Mortgage Bonds, 8.75%, 4/1/21 $ 1,083,050
-----------
Natural Gas - 0.5%
1,000,000 BBB-/Baa2 KN Energy, Inc., 6.45%, 11/30/01 $ 1,008,540
-----------
Total Utilities
(Cost $2,062,280) $ 2,091,590
-----------
U.S. Government and Agency
Obligations - 48.5%
29,032 Federal Home Loan Mortgage Corp.,
10.0%, 11/1/02 $ 30,248
49,413 Federal Home Loan Mortgage Corp.,
10.5%, 4/1/19 54,447
2,000,000 Federal Home Loan Mortgage Corp.,
6.0%, 7/15/24 2,019,780
72,278 Federal Home Loan Mortgage Corp.,
REMIC Series 1988-24B, 9.5%, 1/15/05 74,936
1,500,000 Federal National Mortgage Association,
9.2%, 9/11/00 1,602,900
3,000,000 Federal National Mortgage Association,
6.0%, 5/15/08 3,161,880
1,000,000 Federal National Mortgage Association,
10.35%, 12/10/15 1,486,550
445,227 Federal National Mortgage Association,
11.0%, 6/1/19 501,437
43,502 Federal National Mortgage Association,
10.0%, 7/1/19 47,349
2,280,467 Federal National Mortgage Association,
REMIC Series G94-6VB, 8.0%, 11/17/03 2,294,218
315,532 Federal National Mortgage Association,
REMIC Series 1989-19A, 10.3%, 4/25/19 337,260
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government and Agency
Obligations - (continued)
$ 7,752 Federal National Mortgage Association,
REMIC Series 1989-19B, 10.3%, 4/25/19 $ 7,967
419,077 Federal National Mortgage Association,
REMIC Series 1989-72D, 8.9%, 10/25/19 430,405
3,029,998 Government National Mortgage Association,
7.0%, 3/15/12 to 12/15/13 3,107,885
64,366 Government National Mortgage Association,
9.5%, 5/15/20 69,616
581,091 Government National Mortgage Association,
10.0%, 1/15/06 to 7/15/20 629,242
6,025,798 Government National Mortgage Association,
7.5%, 5/15/27 to 6/15/27 6,214,104
2,970,004 Government National Mortgage Association,
6.5%, 4/15/28 2,998,783
19,985,571 Government National Mortgage Association,
6.0%, 4/15/28 to 10/15/28 19,806,028
72,469 Government National Mortgage Association,
Midget, 10.0%, 5/15/04 76,002
30,666 Government National Mortgage Association
II, 9.5%, 12/20/20 33,052
1,500,000 Government National Mortgage Association,
REMIC Series 1998-21, 6.5%, 10/20/11 1,505,310
375,462 Resolution Trust Corp., Series 1992-5A6,
9.238%, 5/25/26 376,048
1,000,000 Tennesee Valley Authority, 8.625%,
11/15/29 1,079,830
2,000,000 U.S. Treasury Bonds, 8.25%, 5/15/05 2,091,640
2,000,000 U.S. Treasury Bonds, 8.75%, 11/5/08 2,330,320
3,075,000 U.S. Treasury Bonds, 8.0%, 11/15/21 4,113,889
2,000,000 U.S. Treasury Bonds, 6.25%, 8/15/23 2,235,060
4,385,000 U.S. Treasury Notes, 8.5%, 2/15/00 4,565,224
3,000,000 U.S. Treasury Notes, 6.375%, 3/31/01 3,112,800
3,500,000 U.S. Treasury Notes, 8.0%, 5/15/01 3,763,620
5,000,000 U.S. Treasury Notes, 6.5%, 5/31/01 5,214,350
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/98 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government and Agency
Obligations - (continued)
$10,000,000 U.S. Treasury Notes, 7.25%, 5/15/04 $ 11,205,200
4,000,000 U.S. Treasury Notes, 7.0%, 7/15/06 4,553,760
------------
Total U.S. Government and
Agency Obligations
(Cost $89,705,133) $ 91,131,140
------------
Foreign Government Sponsored - 1.7%
1,500,000 A+/A2 Hydro-Quebec, 8.0%, 2/1/13 $ 1,788,330
1,000,000 A/A2 Province of Saskatchewan, 9.375%,
12/15/20 1,371,940
------------
Total Foreign Government Sponsored
(Cost $2,740,700) $ 3,160,270
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $175,933,404) $183,221,349
------------
TEMPORARY CASH
INVESTMENT - 2.5%
Commercial Paper - 2.5%
4,632,000 Ford Motor Credit Corp., 4.92%, 1/4/99 $ 4,632,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $4,632,000) $ 4,632,000
------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $180,565,404) (a)(b) $187,853,349
============
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) At December 31, 1998, the net unrealized gain on investments, based on cost
for federal income tax purposes of $180,565,404 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $8,077,336
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (789,391)
----------
Net unrealized gain $7,287,945
==========
</TABLE>
(b) At June 30, 1998, the Fund had a net capital loss carryforward of $4,558,838
which will expire between 1999 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
six months ended December 31, 1998 were as follows:
<TABLE>
<S> <C> <C>
Purchases Sales
------------ -----------
Long-term U.S. Government $53,364,520 $23,425,597
Other Long-term Securities 8,328,185 6,545,192
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
BALANCE SHEET 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $4,632,000) (cost $180,565,404) $187,853,349
Cash 516
Receivables -
Fund shares sold 2,904,836
Interest 3,031,566
Other 5,582
------------
Total assets $193,795,849
------------
LIABILITIES:
Payables -
Fund shares repurchased $ 1,181,991
Dividends 259,584
Due to affiliates 185,617
Accrued expenses 78,439
------------
Total liabilities $ 1,705,631
------------
NET ASSETS:
Paid-in capital $188,706,765
Accumulated undistributed net investment income 93,094
Accumulated net realized loss on investments (3,997,586)
Net unrealized gain on investments 7,287,945
------------
Total net assets $192,090,218
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $132,808,943/14,043,549 shares) $ 9.46
============
Class B (based on $45,982,252/4,882,034 shares) $ 9.42
============
Class C (based on $13,299,023/1,414,893 shares) $ 9.40
============
MAXIMUM OFFERING PRICE:
Class A $ 9.91
=============
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 12/31/98
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $6,297,045
----------
EXPENSES:
Management fees $358,045
Transfer agent fees
Class A 118,288
Class B 43,092
Class C 11,467
Distribution fees
Class A 158,292
Class B 201,316
Class C 59,056
Administrative fees 36,152
Custodian fees 16,292
Registration fees 6,820
Professional fees 12,546
Printing 9,955
Fees and expenses of nonaffiliated trustees 11,770
Miscellaneous 3,417
--------
Total expenses $1,046,508
Less fees paid indirectly (26,600)
----------
Net expenses $1,019,908
----------
Net investment income $5,277,137
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 723,220
Change in net unrealized gain on investments 653,877
----------
Net gain on investments $1,377,097
----------
Net increase in net assets resulting from operations $6,654,234
==========
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 12/31/98 and the Year Ended 6/30/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
FROM OPERATIONS: 12/31/98 6/30/98
<S> <C> <C>
Net investment income $ 5,277,137 $ 8,586,541
Net realized gain (loss) on investments 723,220 (27,677)
Change in net unrealized gain on investments 653,877 4,226,062
------------- ------------
Net increase in net assets resulting from operations $ 6,654,234 $ 12,784,926
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.29 and $0.59 per share, respectively) $ (3,829,383) $ (6,776,551)
Class B ($0.25 and $0.52 per share, respectively) (1,056,742) (1,379,864)
Class C ($0.26 and $0.52 per share, respectively) (312,965) (423,824)
------------- ------------
Total distributions to shareholders $ (5,199,090) $ (8,580,239)
------------- ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $112,265,640 $ 79,685,588
Reinvestment of distributions 3,771,380 6,168,312
Cost of shares repurchased (79,130,480) (59,332,386)
------------- ------------
Net increase in net assets resulting from fund share
transactions $ 36,906,540 $ 26,521,514
------------- ------------
Net increase in net assets $ 38,361,684 $ 30,726,201
NET ASSETS:
Beginning of period 153,728,534 123,002,333
------------- ------------
End of period (including accumulated undistributed net
investment income of $93,094 and $15,047,
respectively) $192,090,218 $153,728,534
============= ============
</TABLE>
<TABLE>
<CAPTION>
CLASS A 12/98 Shares 12/98 Amount 6/98 Shares 6/98 Amount
<S> <C> <C> <C> <C>
Shares sold 7,739,227 $ 73,070,447 4,618,197 $42,978,625
Reinvestment of distributions 311,342 2,960,844 553,400 5,150,324
Less shares repurchased (6,209,098) (58,622,951) (3,811,048) (35,457,410)
---------- ------------- ---------- ------------
Net increase 1,841,471 $ 17,408,340 1,360,549 $12,671,539
========== ============= ========== ============
CLASS B
Shares sold 2,755,599 $ 25,949,355 2,194,576 $20,360,306
Reinvestment of distributions 72,209 680,210 92,814 860,618
Less shares repurchased (1,256,816) (11,810,152) (1,202,753) (11,149,336)
---------- ------------- ---------- ------------
Net increase 1,570,992 $ 14,819,413 1,084,637 $10,071,588
========== ============= ========== ============
CLASS C
Shares sold 1,416,488 $ 13,245,838 1,763,437 $16,346,657
Reinvestment of distributions 13,864 130,326 16,991 157,370
Less shares repurchased (929,909) (8,697,377) (1,374,869) (12,725,640)
---------- ------------- ---------- ------------
Net increase 500,443 $ 4,678,787 405,559 $ 3,778,387
========== ============= ========== ============
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
12/31/98 6/30/98
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 9.37 $ 9.07
-------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.29 $ 0.59
Net realized and unrealized gain (loss) on investments 0.09 0.30
-------- --------
Net increase (decrease) from investment operations $ 0.38 $ 0.89
Distributions to shareholders:
Net investment income (0.29) (0.59)
-------- --------
Net increase (decrease) in net asset value $ 0.09 $ 0.30
-------- --------
Net asset value, end of period $ 9.46 $ 9.37
======== ========
Total return* 4.12% 10.04%
Ratio of net expenses to average net assets 0.95%**+ 1.18%+
Ratio of net investment income to average net assets 6.09%**+ 6.34%+
Portfolio turnover rate 35%** 44%
Net assets, end of period (in thousands) $132,809 $114,326
Ratios assuming reduction for fees paid indirectly:
Net expenses 0.92%** 1.17%
Net investment income 6.12%** 6.35%
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 9.08 $ 9.35 $ 9.04 $ 9.81
------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.63 $ 0.64 $ 0.68 $ 0.67
Net realized and unrealized gain (loss) on investments (0.01) (0.27) 0.31 (0.77)
------- -------- -------- --------
Net increase (decrease) from investment operations $ 0.62 $ 0.37 $ 0.99 $ (0.10)
Distributions to shareholders:
Net investment income (0.63) (0.64) (0.68) (0.67)
------- -------- -------- --------
Net increase (decrease) in net asset value $ (0.01) $ (0.27) $ 0.31 $ (0.77)
------- -------- -------- --------
Net asset value, end of period $ 9.07 $ 9.08 $ 9.35 $ 9.04
======== ======== ======== ========
Total return* 7.09% 4.02% 11.48% (1.26)%
Ratio of net expenses to average net assets 1.14%+ 1.19%+ 1.14% 1.05%
Ratio of net investment income to average net assets 6.97%+ 6.80%+ 7.55% 6.93%
Portfolio turnover rate 48% 39% 37% 39%
Net assets, end of period (in thousands) $98,310 $101,957 $110,158 $106,659
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.12% 1.18% - -
Net investment income 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.
** 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 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
12/31/98 6/30/98
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 9.33 $ 9.03
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.25 $ 0.51
Net realized and unrealized gain (loss) on investments 0.09 0.31
------- -------
Net increase (decrease) from investment operations $ 0.34 $ 0.82
Distributions to shareholders:
Net investment income (0.25) (0.52)
In excess of net investment income - -
------- -------
Net increase (decrease) in net asset value $ 0.09 $ 0.30
------- -------
Net asset value, end of period $ 9.42 $ 9.33
======= =======
Total return* 3.70% 9.21%
Ratio of net expenses to average net assets 1.71%**+ 1.98%+
Ratio of net investment income to average net assets 5.31%**+ 5.52%+
Portfolio turnover rate 35%** 44%
Net assets, end of period (in thousands) $45,982 $30,888
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.67%** 1.97%
Net investment income 5.35%** 5.53%
<CAPTION>
Year Ended Year Ended Year Ended 4/4/94 to
6/30/97 6/30/96 6/30/95 6/30/94
<S> <C> <C> <C> <C>
CLASS B
Net asset value, beginning of period $ 9.02 $ 9.31 $ 9.02 $ 9.23
------- ------- ------ --------
Increase (decrease) from investment operations:
Net investment income $ 0.56 $ 0.57 $ 0.60 $ 0.14
Net realized and unrealized gain (loss) on investments (0.01) (0.28) 0.31 (0.21)
------- ------- ------ --------
Net increase (decrease) from investment operations $ 0.55 $ 0.29 $ 0.91 $ (0.07)
Distributions to shareholders:
Net investment income (0.54) (0.57) (0.62) (0.14)
In excess of net investment income - (0.01) - -
------- ------- ------ --------
Net increase (decrease) in net asset value $ 0.01 $ (0.29) $ 0.29 $ (0.21)
------- ------- ------ --------
Net asset value, end of period $ 9.03 $ 9.02 $ 9.31 $ 9.02
======= ======= ====== ========
Total return* 6.24% 3.15% 10.57% (0.73)%
Ratio of net expenses to average net assets 1.97%+ 1.96%+ 1.97% 1.92%**
Ratio of net investment income to average net assets 6.12%+ 6.01%+ 6.60% 6.09%**
Portfolio turnover rate 48% 39% 37% 39%
Net assets, end of period (in thousands) $20,104 $14,843 $7,338 $ 1,212
Ratios assuming reduction for fees paid indirectly:
Net expenses 1.96% 1.94% - -
Net investment income 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. The accompanying notes
are an integral part of these financial statements.
20
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/98
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six
Months Ended Year Ended Year Ended 1/31/96 to
12/31/98 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 $ 0.26 $ 0.52 $ 0.54 $ 0.23
Net realized and unrealized gain (loss)
on investments 0.09 0.29 - (0.52)
------- ------- ------- -------
Net increase (decrease) from
investment operations $ 0.35 $ 0.81 $ 0.54 $ (0.29)
Distributions to shareholders:
Net investment income (0.26) (0.52) (0.54) (0.22)
In excess of net investment income - - - (0.01)
------- ------- ------- -------
Net increase (decrease) in net asset
value $ 0.09 $ 0.29 $ - $ (0.52)
------- ------- ------- -------
Net asset value, end of period $ 9.40 $ 9.31 $ 9.02 $ 9.02
======= ======= ======= =======
Total return* 3.74% 9.12% 6.13% (3.00)%
Ratio of net expenses to average net
assets 1.69%**+ 1.90%+ 2.05%+ 2.18%**+
Ratio of net investment income to
average net assets 5.31%**+ 5.58%+ 5.83%+ 5.79%**+
Portfolio turnover rate 35%** 44% 48% 39%
Net assets, end of period (in thousands) $13,299 $ 8,515 $ 4,588 $ 343
Ratios assuming reduction for fees paid
indirectly:
Net expenses 1.66%** 1.89% 1.92% 2.13%**
Net investment income 5.34%** 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. 21
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/98
- --------------------------------------------------------------------------------
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 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.
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 $29,055 in
underwriting commissions on the sale of fund shares for the six months ended
December 31, 1998.
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 12/31/98 (continued)
- --------------------------------------------------------------------------------
2. Management Agreemen
Pioneer Investment Management, Inc. (PIM), (formerly Pioneering Management
Corp.), 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 December 31, 1998, $91,860 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 $17,707 in transfer agent fees payable to PSC at December 31,
1998.
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 $76,050 in distribution fees payable to
PFD at December 31, 1998.
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.
24
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For the six months ended December 31, 1998, CDSCs in the amount of $46,507 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 six months ended December 31,
1998, the Fund's expenses were reduced by $26,600 under such arrangements.
25
<PAGE>
Pioneer Bond Fund
- --------------------------------------------------------------------------------
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 December 31, 1998, 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, 1998, 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, 1998, 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 12, 1999
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
Margaret B.W. Graham President
John W. Kendrick Sherman B. Russ, Vice President
Marguerite A. Piret John A. Boynton, Treasurer
David D. Tripple Joseph P. Barri, Secretary
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 Agen
Pioneering Services Corporation
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Pioneer Bond Fund
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THE PIONEER FAMILY OF MUTUAL FUNDS
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For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
United States Taxable
Pioneer Capital Growth Fund Pioneer America Income Trust
Pioneer Growth Shares Pioneer Bond Fund
Pioneer Micro-Cap Fund Pioneer Short-Term Income Trust
Pioneer Mid-Cap Fund
Pioneer Small Company Fund Tax-Free
Pioneer Tax-Free Income Fund
International/Globa
Pioneer Emerging Markets Fund Money Market Fund
Pioneer Cash Reserves Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
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RETIREMENT PLANS FROM PIONEER
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Pioneer offers retirement plans suited to the individual investor and businesses
of all sizes. For information, contact your investment professional, or call
Pioneer at 1-800-622-0176.
Individual Plans
Individual Retirement Account (IRA) The $2,000 maximum annual contribution may
be tax-deductible; earnings are tax-deferred.
Roth IRA The $2,000 maximum annual contributions are not tax-deductible.
Earnings are tax-free for qualified withdrawals.
Plans for Small Businesses or the Self-Employed
SIMPLE (Savings Incentive Match PLan for Employees)
IRA or 401(k) Plan For firms with 100 or fewer employees. Employees can make
pre-tax contributions of up to $6,000 annually, and an employer contribution is
required.
Simplified Employee Pension Plan (SEP) Self-employed people and small-business
owners can make tax-deductible contributions of up to 15% of their income.
Employer-Sponsored Plans
401(k) Plan Allows employees to make pre-tax contributions. Also allows for
employer contributions.
403(b) Plan Lets employees of tax-exempt organizations set aside part of their
salary, before taxes, through payroll deduction.
Profit Sharing Plan Employers contribute on a discretionary basis, usually based
on profits.
Age-Weighted Profit Sharing Plan Employer makes discretionary contributions
based on employees' age and salary.
Money Purchase Pension Plan (MPP) Employers contribute based on a fixed formula.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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HOW TO CONTACT PIONEER
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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 Investment Management, Inc.
60 State Street 0299-6034
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com [RECYCLE SYMBOL] Printed on Recycled Paper
