April 3, 1995
SUPPLEMENT
to the prospectuses for:
<TABLE>
<CAPTION>
<S> <C>
Pioneer Fund April 29, 1994 (revised October 28, 1994)
Pioneer Growth Shares July 1, 1994
Pioneer Winthrop Real Estate Investment Fund October 28, 1994 (revised February 8, 1995)
Pioneer Income Fund July 1, 1994
Pioneer America Income Trust April 29, 1994 (revised July 1, 1994)
Pioneer Intermediate Tax-Free Fund April 29, 1994
Pioneer Tax-Free Income Fund July 1, 1994
</TABLE>
How to Buy Fund Shares
In addition to the exceptions listed in each FundOs prospectus, Class A shares
of a Fund may be sold at net asset value per share without a sales charge to
Optional Retirement Program participants if (i) the employer has authorized a
limited number of investment company providers for the Program, (ii) all
authorized investment company providers offer their shares to Program
participants at net asset value, (iii) the employer has agreed in writing to
actively promote the authorized investment company providers to Program
participants and (iv) the Program provides for a matching contribution for each
participant contribution.
0495-2418
(C) Pioneer Funds Distributor, Inc.
(PIONEER LOGO)
<PAGE>
Pioneer
Growth
Shares
Prospectus
July 1, 1994
The investment objective of Pioneer Growth Shares (the "Fund") is to seek
appreciation of capital through investments in common stocks, together with
preferred stocks, bonds and debentures which are convertible into common
stocks.
Fund returns and share prices fluctuate and the value of your account upon
redemption may be more or less than your purchase price. Shares in the Fund
are not deposits or obligations of, or guaranteed or endorsed by, any bank or
other depository institution, and the shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency.
This Prospectus (Part A of the Registration Statement) provides the
information about the Fund that you should consider before investing. Please
read and retain it for future reference. More information about the Fund is
included in the Statement of Additional Information (Part B of the
Registration Statement), dated July 1, 1994, which is incorporated by
reference into this Prospectus. A copy of the Statement of Additional
Information may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109. Other information about the Fund has been filed with the
Securities and Exchange Commission (the "SEC") and is available upon request
and without charge.
TABLE OF CONTENTS PAGE
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
IV. MANAGEMENT OF THE FUND 5
V. DISTRIBUTION PLAN 6
VI. INFORMATION ABOUT FUND SHARES 7
How to Purchase Shares 7
Net Asset Value and Pricing of Orders 8
Dividends, Distributions and Taxation 8
Redemptions and Repurchases 9
VII. SHAREHOLDER SERVICES 10
Account and Confirmation Statements 10
Additional Investments 11
Automatic Investment Plans 11
Financial Reports and Tax Information 11
Distribution Options 11
Directed Dividends 11
Direct Deposit 11
Voluntary Tax Withholding 11
Exchange Privilege 11
Telephone Transactions and Related Liabilities 12
Telecommunications Device for the Deaf (TDD) 12
Retirement Plans 12
Systematic Withdrawal Plans 12
Reinstatement Privilege 12
VIII. INVESTMENT RESULTS 12
IX. SHARES OF THE FUND 13
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects estimated expenses based on actual expenses for
the fiscal year ended December 31, 1993, adjusted to reflect certain changes
resulting from, among others, the approval of new management agreements with
Pioneering Management Corporation, expressed as a percentage of average net
assets of the Fund.
Shareholder Transaction Expenses
Maximum Sales Charge on Purchases(1) 5.75%
Maximum Sales Charge on Reinvestment of Dividends None
Deferred Sales Charge(1) None
Redemption Fee(2) None
Exchange Fee None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 0.50%
12b-1 Fees 0.25%
Other Expenses
(including printing expenses and transfer agent,
professional and registration fees) 0.45%
Total Operating Expenses 1.20%
(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans ("Group Plans") are not subject to an initial sales charge. A
contingent deferred sales charge of 1% may, however, be charged on
redemptions by such accounts of shares held less than one year, as
further described under "How to Purchase Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international bank wire transfers of redemption proceeds.
Example:
You would pay the following expenses on a $1,000 investment, assuming 5%
annual return with or without redemption at the end of each time period.
1 Year $ 69
3 Years* $ 93
5 Years* $120
10 Years* $195
*These are cumulative totals, the average annual fees and expenses paid over
a 10-year period would be approximately $19.50
The example above assumes reinvestment of all dividends and distributions and
that the percentage amounts listed under "Annual Operating Expenses" remain
the same each year.
The example is designed for informational purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, see "Management of the Fund," "Distribution Plan" and
"How To Purchase Shares" in this Prospectus and "Management of the Fund" and
"Underwriting Agreement and Distribution Plan" in the Statement of Additional
Information. Because of the 12b-1 fee, a long-term investor over time may pay
more than the economic equivalent of the maximum initial sales charge
permitted under the Rules of Fair Practice of the National Association of
Securities Dealers, Inc.
The maximum sales charge is reduced on purchases of specified amounts and the
value of shares owned in other Pioneer mutual funds is taken into account in
determining the applicable sales charge. See "How to Purchase Shares." No
sales charge is applied to exchanges of shares of the Fund for shares of
other publicly available mutual funds in the Pioneer complex. See "Exchange
Privilege."
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by the Fund's then independent public accountants, Coopers
& Lybrand. The independent public accountants' report on the Fund's financial
statement as of December 31, 1993 appears in the Fund's Annual Report
incorporated by reference into the Fund's Statement of Additional
Information. The Annual Report includes more information about the Fund's
performance and is available free of charge by calling Shareholder Services
at 1-800-225-6292.
PIONEER GROWTH SHARES
Selected Data For a Share Outstanding For The Years Presented
<TABLE>
<CAPTION>
For the Year Ended December 31,
1993 1992 1991 1990 1989 1988 1987
1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Net asset value,
beginning of period $ 12.42 $ 12.27 $ 7.57 $ 8.95 $ 7.39 $ 6.27 $ 7.09 $
6.56 $ 5.41 $ 5.73
Income from investment
operations--
Net investment income $ (0.07) $ 0.00 $ 0.02 $ 0.08 $ 0.08 $ 0.06 $ 0.07 $
0.10 $ 0.10 $ 0.13
Net realized and
unrealized
gain (loss) on
investments 1.10 0.15 4.70 (0.83) 2.37 1.37 (0.31)
0.95 1.46 (0.32)
Total income (loss)
from investment
operations $ 1.03 $ 0.15 $ 4.72 $ (0.75) $ 2.45 $ 1.43 $ (0.24) $
1.05 $ 1.56 $ (0.19)
Distribution to
shareholders from--
Net investment income 0.00 0.00 0.00 (0.08) (0.08) (0.06) (0.07)
(0.10) (0.11) (0.13)
Net realized capital
gains (0.827) 0.00 0.00 (0.55) (0.81) (0.25) (0.51)
(0.42) (0.30) 0.00
Excess distribution of
net investment income
and equalization
credits 0.00 0.00 (0.02) 0.00 0.00 0.00 0.00
0.00 0.00 0.00
Net increase (decrease)
in net asset value $ 0.20 $ 0.15 $ 4.70 $ (1.38) $ 1.56 $ 1.12 $ (0.82) $
0.53 $ 1.15 $ (0.32)
Net asset value, end of
period $ 12.62 $ 12.42 $ 12.27 $ 7.57 $ 8.95 $ 7.39 $ 6.27 $
7.09 $ 6.56 $ 5.41
Total return(1) 8.52% 1.22% 62.37% (8.37%) 33.63% 23.01% (3.44%)
15.83% 28.89% (3.33%)
Ratio of net operating
expenses to average
net assets(2) 1.20% 1.15% 1.22% 1.29% 1.11% 1.24% 1.11%
1.11% 1.25% 1.28%
Ratio of net investment
income to average net
assets(2) (0.60)% 0.00% 0.14% 0.89% 0.91% 0.88% 0.82%
1.28% 1.63% 2.48%
Portfolio turnover rate 29% 25% 27% 44% 58% 48% 51%
45% 110% 74%
Net assets end of period
(in thousands) $134,546 $120,847 $91,464 $52,322 $48,904 $39,231 $36,578
$32,953 $22,441 $18,816
<FN>
(1)Assumes initial investment at net asset value at the beginning of each year, reinvestment of all
dividends and
distributions, the complete redemption of the investment at net asset value at the end of each year,
and no sales charges.
Total return would be reduced if sales charges were taken into account.
(2)Absent the agreement not to impose management fees and the assumption of expenses by the investment
adviser for the years
shown above, the ratios of operating expenses to average net assets and net investment income to
average net assets would
have been:
Operating Expenses 1.21% 1.25% 1.28% -- -- -- --
- -- -- --
Net Investment Income (0.615%) 0.10% 0.08% -- -- -- --
- -- -- --
</FN>
</TABLE>
<PAGE>
III. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to obtain appreciation of capital.
The Fund invests in common stocks, together with preferred stocks, bonds and
debentures which are convertible into common stocks. Current income will be
incidental to the Fund's primary objective. In selecting securities for
investment, the investment adviser attempts to identify companies that have
better-than-average earnings growth potential and those industries that stand
to enjoy the greatest benefit from the predicted economic environment. The
Fund seeks to purchase the securities of companies that are thought to be
best situated in those industry groupings. The Fund invests in companies in a
variety of industries in an attempt to reduce its overall exposure to
investment and market risks.
In pursuing its objective, the Fund purchases portfolio securities with the
view of retaining them on a long-term basis. However, in the constant review
of individual securities, the market and general economic conditions, the
Fund may sell any security without regard to the period of time it has been
held. Although it has not happened in any of the five preceding years, such
sales may cause the Fund's portfolio turnover rate to exceed 100% and may
cause it to incur greater brokerage commissions than would otherwise be the
case.
Part or all of the Fund's assets may be temporarily invested in securities of
the U.S. Government, its agencies or instrumentalities, commercial paper,
bank certificates of deposit and time deposits, bankers' acceptances, other
fixed income securities and repurchase agreements with banks and
broker-dealers with respect to any of the foregoing instruments. At times,
the investment adviser believes that such investments are desirable due to
present or anticipated market or economic conditions which are affecting or
could affect the values of the Fund's investments, as well as for liquidity
purposes or as a temporary investment pending investment in primary
securities. The Fund may invest in lower rated or unrated securities. These
securities involve greater risks of default and price fluctuations due to
credit, economic, liquidity and market concerns.
Restricted and Illiquid Securities
The Fund may purchase securities that are not registered or are offered in an
exempt non-public offering ("restricted securities") under the Securities Act
of 1933 ("1933 Act"), including securities eligible for resale to "qualified
institutional buyers" in accordance with Rule 144A under the 1933 Act.
However, the Fund will not invest more than 15% of its net assets in illiquid
investments, which includes repurchase agreements maturing in more than seven
days, securities that are not readily marketable and restricted securities,
unless the Board of Trustees of the Fund determines, based upon a continuing
review of the trading markets for the specific restricted security, that such
restricted security eligible for resale in accordance with Rule 144A is
liquid. The Board of Trustees of the Fund may adopt guidelines and delegate
to the investment adviser the daily function of determining and monitoring
the liquidity of restricted securities. The Boards of Trustees, however, will
retain sufficient oversight and be ultimately responsible for the
determinations. Since it is not possible to predict with assurance exactly
how the market for restricted securities eligible for resale pursuant to Rule
144A will continue to develop, the Boards of Trustees will carefully monitor
the Fund's investments in these securities, focusing on such important
factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of increasing the
level of illiquidity in the Fund to the extent that qualified institutional
buyers become for a time uninterested in purchasing these restricted
securities.
The purchase price and subsequent valuation of restricted securities normally
reflect a discount from the price at which such securities trade when they
are not restricted to the extent that the restriction makes them less liquid.
The amount of the discount from the prevailing market price is expected to
vary depending upon the type of security, the character of the issuer, the
party who will bear the expenses of registering the restricted securities and
prevailing supply and demand conditions.
Foreign Securities
The Fund may invest up to 30% of its assets at the time of investment in
listed and unlisted foreign securities. While such investments are intended
to reduce risk by permitting greater diversification of the Fund's
portfolios, investments in securities of foreign issuers entail certain risks
not associated with investments in domestic issuers. Such risks include
fluctuations in foreign currency exchange rates; possible expropriation or
nationalization of foreign companies; imposition of exchange control
regulations; currency blockage or dividends or interest withheld at the
source; unfavorable price spreads on currency exchanges; higher transaction
costs; less public information about issuers of securities; lack of uniform
auditing, accounting and financial reporting standards; less governmental
regulation of foreign stock exchanges and brokers; less liquidity and greater
volatility of securities of foreign companies; or imposition of foreign
taxes. Therefore, the Fund intends to invest primarily in the companies
organized under the laws of those nations which are considered as having
relatively stable and friendly governments, e.g., major industrialized
nations such as the United Kingdom, France, Canada, Germany and Japan.
Lending of Portfolio Securities
The Fund may seek to increase its income by lending portfolio securities,
provided that the value of the securities loaned would not exceed one-third
of the value of the total assets of the Fund. Under present regulatory
policies, such loans may be made to institutions, such as certain broker-
dealers, and are required to be secured continuously by collateral in cash,
cash equivalents, or U.S. Government securities maintained on a current basis
in an amount at least equal to the market value of the securities loaned. The
Fund may experience loss or delay in the recovery of its securities if the
institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund.
<PAGE>
When Issued Securities
The Fund may also purchase and sell securities on a "when issued" and
"delayed delivery" basis. These transactions are subject to market
fluctuation; the value at the time of delivery may be more or less than the
purchase price. Since the Fund will rely on the buyer or seller, as the case
may be, to consummate the transaction, failure by the other party to complete
the transaction may result in the Fund missing the opportunity of obtaining a
price or yield considered to be advantageous. No interest accrues to the Fund
prior to delivery. When the Fund is the buyer in such a transaction, however,
it will maintain, in a segregated account with its custodian, cash, U.S.
Government securities, or high-grade, liquid debt obligations having an
aggregate value equal to the amount of such purchase commitments until
payment is made. The Fund will make commitments to purchase securities on
such basis only with the intention of actually acquiring these securities,
but the Fund may sell such securities prior to the settlement date if such
sales are considered to be advisable. To the extent the Fund engages in "when
issued" and "delayed delivery" transactions, it will do so for the purpose of
acquiring securities for the Fund's portfolio consistent with the Fund's
investment objective and policies and not for the purpose of investment
leverage.
Repurchase Agreements
A repurchase agreement is an instrument under which the purchaser acquires
ownership of the obligation but the seller agrees, at the time of sale, to
repurchase the obligation at a mutually agreed upon time and price. The
resale price is in excess of the purchase price and reflects an agreed upon
market rate unrelated to the coupon rate on the purchased security. Such
transactions afford an opportunity for the Fund to invest temporarily
available cash. In the event of the insolvency of the seller, or an order to
stay execution of an agreement by a court or regulatory authority, the Fund
could incur costs before being able to sell the underlying obligations and
the Fund's realization of the underlying obligations could be delayed or
limited, which could adversely affect the price the Fund receives for such
obligations. There is also a risk that the seller may fail to repurchase the
underlying obligations in which case the Fund may incur possible disposition
costs and a loss if the proceeds of the sale of such obligations to a third
party are less than the repurchase price. To guard against these
possibilities, the investment adviser, under guidelines established by the
Fund's Board of Trustees, will evaluate the creditworthiness of the seller.
The Fund will enter into repurchase agreements only with those institutions
that the investment adviser believes present minimal credit risks and which
furnish collateral at least equal in value or market price to the amount of
the repurchase obligations. Repurchase agreements maturing in more than seven
days are considered by the Fund to be illiquid. Distributions to shareholders
of income from repurchase agreements are taxable.
Price Fluctuation
Because prices of securities fluctuate from day to day, the value of an
investment in the Fund will vary based upon the Fund's investment
performance. The value of your shares in the Fund may, at any time, be higher
or lower than your original cost. The Fund may invest in debt securities with
varying maturities. In general, the longer the maturity of a security, the
higher the yield and the greater the potential for price fluctuations. A
decline in interest rates generally produces an increase in the value of debt
securities in the Fund's portfolio, while an increase in interest rates
usually reduces the value of these securities.
Additional Restrictions
In addition to the investment objective and policies discussed above, the
Fund's investments are subject to other restrictions which are described in
its Statement of Additional Information. Unless otherwise stated, the Fund's
investment objective and restrictions are considered fundamental and cannot
be changed without shareholder approval. Unless expressly designated as a
fundamental policy, the Fund's investment policies may be changed without
shareholder approval by the Board of Trustees of the Fund.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Fund has overall responsibility for management
and supervision of the Fund. There are currently eight Trustees, six of whom
are not "interested persons" of the Fund as defined in the Investment Company
Act of 1940 (the "1940 Act"). The Board meets at least quarterly. By virtue
of the functions performed by Pioneering Management Corporation ("PMC") as
investment adviser, the Fund requires no employees other than their executive
officers, all of whom receive their compensation from PMC or other sources.
The Statement of Additional Information contains the names of and general
background information regarding each Trustee and executive officer of the
Fund.
Each portfolio managed by PMC, including the Fund, is overseen by an
Investment Committee (either the Equity Committee or the Fixed-Income
Committee), both of which consist of PMC's most senior investment
professionals. Both Committees are chaired by Mr. David Tripple, PMC's
President and Chief Investment Officer and Executive Vice President of each
of the Funds. Mr. Tripple joined PMC in 1974 and has had general
responsibility for PMC's investment operations and specific portfolio
assignments for over five years. Mr. Warren J. Isabelle is primarily
responsible for the day-to-day management of the Fund. Mr. Isabelle joined
PMC in 1984 and is Vice President of PMC and the Fund.
The Fund is managed under a contract with PMC. PMC serves as investment
adviser to the Fund and is responsible for the overall management of the
Fund's business affairs, subject only to the authority of the Fund's Board of
Trustees. PMC is a wholly owned subsidiary of The Pioneer Group, Inc.
("PGI"), a Delaware corporation. PGI's subsidiary, Pioneer Funds Distributor,
Inc. ("PFD"), is the principal underwriter of shares of the Fund. Prior to
December 1, 1993, Mutual of Omaha Fund Management Company ("FMC") acted as
investment adviser and principal underwriter to the Fund.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts.
<PAGE>
PMC's and PFD's executive offices are located at 60 State Street, Boston,
Massachusetts 02109.
Under the terms of its contract with the Fund, PMC provides the Fund with an
investment program consistent with its investment objective and policies. PMC
furnishes the Fund with office space, equipment and personnel for managing
the affairs of the Fund. PMC also pays all expenses in connection with the
management of the affairs of the Fund except (i) charges and expenses for
fund accounting, pricing and appraisal services and related overhead,
including, to the extent such services are performed by personnel of PMC or
its affiliates, office space and facilities and personnel compensation,
training and benefits; (ii) the charges and expenses of auditors; (iii) the
charges and expenses of any custodian, transfer agent, plan agent, dividend
disbursing agent and registrar appointed by the Fund; (iv) issue and transfer
taxes, chargeable to the Fund in connection with securities transactions to
which the Fund is a party; (v) insurance premiums, interest charges, dues and
fees for membership in trade associations and all taxes and corporate fees
payable by the Fund to federal, state or other governmental agencies; (vi)
fees and expenses involved in registering and maintaining registrations of
the Fund and/or its shares with the SEC, state or blue sky securities
agencies and foreign countries, including the preparation of Prospectuses and
Statements of Additional Information for filing with the SEC; (vii) all
expenses of shareholders' and Trustees' meetings and of preparing, printing
and distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (viii) charges and expenses of
legal counsel to the Fund and the Trustees; (ix) distribution fees paid by
the Fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the
1940 Act; (x) compensation of those Trustees of the Fund who are not
affiliated with or interested persons of PMC, the Fund (other than as
Trustees), PGI or PFD; (xi) the cost of preparing and printing share
certificates; and (xii) interest on borrowed money, if any.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of the Fund or other Pioneer mutual funds. See the Statement of
Additional Information for a further description of PMC's brokerage
allocation practices.
As compensation for its management services for the Fund and certain expenses
which PMC incurs, PMC is entitled to a management fee from the Fund at the
annual rates set forth below as a percentage of average daily net assets:
Net Assets Annual Fee
For assets up to $250,000,000 .50%
For assets in excess of $250,000,000 to $300,000,000 .48%
Over $300,000,000 .45%
PMC has agreed that until December 1, 1995, its fee shall not exceed the fee
that would have been payable under the prior management contract with FMC.
See the Statement of Additional Information for a discussion of the fee
payable under the prior management agreement.
The prior management agreement with FMC was in effect until December 1, 1993
and provided for compensation to FMC at different rates than are set forth
above. For the fiscal year ended December 31, 1993, the Fund paid management
fees as follows: from January 1, 1993 to November 30, 1993, $579,249 to FMC;
from December 1, 1993 to December 31, 1993, $55,956 to PMC.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of March 31,
1994.
V. DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution (the "Plan") in accordance with
Rule 12b-1 under the 1940 Act pursuant to which certain distribution fees are
paid to PFD. As required by Rule 12b-1, the Plan was approved by a majority
of the outstanding shares held by the shareholders of the Fund and by the
Trustees, including a majority of the Trustees who are not "interested
persons" of the Fund.
Pursuant to the Plan, the Fund reimburses PFD for its actual expenditures to
finance any activity primarily intended to result in the sale of shares of
the Fund or to provide services to shareholders of the Fund, provided the
categories of expenses for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for the Fund: (i)
a service fee to be paid to qualified broker-dealers in an amount not to
exceed 0.25% per annum of the Fund's average daily net assets; (ii)
reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the Fund's shares with no initial
sales charge (see "How to Purchase Shares"); and (iii) reimbursement to PFD
for expenses incurred in providing services to shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Fund pursuant to the Plan are accrued daily and may not
exceed 0.25% of average daily net assets. Distribution expenses of PFD are
expected to substantially exceed the distribution fees paid by the Fund in a
given year. The Plan does not provide for the carryover of reimbursable
expenses beyond 12 months from the time the Fund is first invoiced for an
expense. The limited carryover provision in the Plan may result in an expense
invoiced to the Fund in one fiscal year being paid in the subsequent fiscal
year and thus being treated for purposes of calculating the maximum
expenditures of the Fund as having been incurred in the subsequent fiscal
year. In the event of termination or non-continuance of the Plan, the Fund
has 12 months to reimburse any expense which is incurred prior to such termi-
<PAGE>
nation or non-continuance, provided that payments by the Fund during such
12-month period shall not exceed 0.25% of the Fund's average net daily assets
during such period. The Plan may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the Fund.
VI. INFORMATION ABOUT FUND SHARES
HOW TO PURCHASE SHARES
You may purchase shares of the Fund at the public offering price from any
securities broker-dealer having a sales agreement with PFD. The minimum
initial investment is $1,000, except for accounts being established to
utilize monthly bank drafts, government allotments and other similar
automatic investment plans. The minimum investment for such plans, as well as
all other subsequent additions to an account, is $50. Separate minimum
investment requirements apply to retirement plans. No sales charge or minimum
investment requirements apply to the reinvestment of dividends or capital
gains distributions.
The public offering price of shares of the Fund is the net asset value per
share next computed after receipt of a purchase order, plus a sales charge as
follows:
Sales Charge as a % of Dealer
Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.50% 3.63% 3.00%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more -0- -0- See below
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or on purchases by certain Group Plans, but for such
investments a contingent deferred sales charge of 1% is imposed in the event
of certain redemption transactions within one year of purchase. See
"Redemptions and Repurchases" below. PFD may, in its discretion, pay a
commission to broker-dealers who initiate and are responsible for such
purchases as follows: 1% on the first $1 million invested; 0.50% on the next
$4 million; and 0.10% on the excess over $5 million. These commissions shall
not be payable if the purchaser is affiliated with the broker-dealer or if
the purchase represents the reinvestment of a redemption made during the
previous twelve calendar months. In connection with PGI's acquisition of FMC,
PFD pays to a dealer previously affiliated with FMC 50% of PFD's retention of
any sales commission on sales of the Fund's shares through such dealer
contingent upon the achievement of certain sales objectives.
The schedule of sales charges above is applicable to purchases of shares of
the Fund by (i) an individual, (ii) an individual, his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a
trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Internal Revenue Code of 1986, as amended (the
"Code"), although more than one beneficiary is involved.
The sales charge applicable to a current purchase of shares of the Fund by a
person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at current offering price) of shares of any
of the other Pioneer mutual funds previously purchased and then owned,
provided PFD is notified by such person or his or her broker-dealer each
time a purchase is made which would qualify. Pioneer mutual funds include all
mutual funds for which PFD serves as principal underwriter and which are
subject to an initial sales charge. For example, a person investing $5,000 in
the Fund who currently owns shares of other Pioneer funds with a value of
$45,000 would pay a sales charge of 4.50% of the offering price of the new
investment.
Sales charges may also be reduced through an agreement to purchase a
specified quantity of shares over a designated thirteen-month period by
completing the "Letter of Intention" section of the Account Application.
Information about the Letter of Intention procedure, including its terms, is
contained in the Statement of Additional Information.
Shares of the Fund may be sold at a reduced or eliminated sales charge to
certain Group Plans under which a sponsoring organization makes
recommendations to, permits group solicitation of, or otherwise facilitates
purchases by, its employees, members or participants. Information about such
arrangements is available from PFD.
Shares of the Fund may also be sold at net asset value per share without a
sales charge to: (a) current or former Directors, Trustees and officers of
the Fund and partners and employees of its legal counsel; (b) current or
former directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which
have entered into sales agreements with PFD; (e) members of the immediate
families of any of the persons above; (f) any trust, custodian, pension,
profit-sharing or other benefit plan of the foregoing persons; (g) insurance
company separate accounts; (h) certain "wrap accounts" for the benefit of
clients of financial planners adhering to standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes only and may not be resold
except through redemption or repurchase by or on behalf of the Fund. The
availability of this privilege depends upon the receipt by PFD of written
notification of eligibility. Shares of the Fund may also be sold at net asset
value without a sales charge in connection with certain reorganization,
liquidation or acquisition transactions involving other investment companies
or personal holding companies.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase shares of the Fund
<PAGE>
at net asset value, without a sales charge, to the extent that the purchase
price is paid out of proceeds from one or more redemptions by the investor of
shares of certain other mutual funds. In order for a purchase to qualify for
this privilege, the investor must document to the broker-dealer that the
redemption occurred within 60 days immediately preceding the purchase of
shares of the Fund; that the client paid a sales charge on the original
purchase of the shares redeemed; and that the mutual fund whose shares were
redeemed also offers net asset value purchases to redeeming shareholders of
any of the Pioneer mutual funds. Further details may be obtained from PFD.
Shares sold outside the U.S. to persons who are not U.S. citizens may be
subject to different sales charges, CDSCs and dealer compensation
arrangements in accordance with local laws and business practices.
NET ASSET VALUE AND PRICING OF ORDERS
Shares of the Fund are sold at the public offering price, which is the net
asset value per share plus the applicable sales charge, if any. Net asset
value per share of the Fund is determined by dividing the value of its
assets, less liabilities, by the number of shares outstanding. The net asset
value is computed once daily, on each day the New York Stock Exchange (the
"Exchange") is open, as of the close of regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities
quoted in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the Fund's independent pricing services.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of regular trading on the Exchange. The
values of such securities used in computing the net asset value are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of regular trading on the Exchange.
Occasionally, events which affect the values of such securities and such
exchange rates may occur between the times at which they are determined and
the close of regular trading on the Exchange and will therefore not be
reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities occur during such period,
then these securities are valued at their fair value as determined in good
faith in accordance with procedures established by the Trustees. All assets
of the Fund for which there is no other readily available valuation method
are valued at their fair value as determined in good faith in accordance with
procedures established by the Trustees.
An order for shares received by a broker-dealer prior to the close of regular
trading on the Exchange (currently 4:00 p.m. Eastern Time) is confirmed at
the offering price determined at the close of regular trading on the Exchange
on the day the order is received, provided the order is received by PFD prior
to PFD's close of business (normally 5:30 p.m. Eastern Time). It is the
responsibility of broker-dealers to transmit orders so that they will be
received by PFD prior to its close of business. An order received by a
broker-dealer following the close of regular trading on the Exchange will be
confirmed at the offering price as of the close of regular trading on the
Exchange on the next trading day.
The Fund reserves the right in its sole discretion to withdraw all or any
part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
DIVIDENDS, DISTRIBUTIONS AND TAXATION
Taxation
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under the Code so that it will
not pay federal income taxes on income and capital gains distributed to
shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed taxable ordinary income and capital
gains if it fails to meet certain distribution requirements by the end of the
calendar year. The Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.
The Fund's dividends from its taxable net investment income, including
taxable interest income and original issue discount, market discount, income
from securities lending, certain net realized foreign exchange gains, and any
net short-term capital gains realized by the Fund are taxable to shareholders
as ordinary income under the Code. Dividends from the Fund's net long-term
capital gains are taxable to shareholders as long-term capital gains under
the Code, regardless of a shareholder's holding period for his Fund shares.
For federal income tax purposes, dividends are taxable as described above
whether a shareholder takes them in cash or reinvests in additional shares of
the Fund.
Distributions by the Fund of dividend income it receives from U.S. domestic
corporations may qualify for the dividends-received deduction for corporate
shareholders, subject to certain minimum holding period requirements and
debt-financing restrictions under the Code. Amounts qualifying for the
deduction may be includable in income subject to the alternative minimum tax
and/or may result in a reduction in the shareholder's tax basis in the Fund
shares.
The Fund may be subject to foreign withholding taxes with respect to interest
or dividends payable on certain foreign securities and will not qualify to
pass through such taxes to shareholders. However, such taxes will be
deductible by the Fund in computing the income it is required to distribute.
The federal income tax status of all distributions will be reported to
shareholders annually, and taxable shareholders are required to report all
distributions, including tax-exempt distributions, on their federal income
tax returns.
The Fund's taxable dividends and other taxable distributions, and the
proceeds of redemptions, exchanges or repurchases of the Fund's shares paid
to individuals and other non-exempt pay-
<PAGE>
ees will be subject to a 31% backup federal withholding tax if the Fund is
not provided with the shareholder's correct taxpayer identification number
and certification that the number is correct and that the shareholder is not
subject to such backup withholding or if the Fund receives notice from the
IRS or a broker that backup withholding applies.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e. U.S. citizens or residents, or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income tax. It is possible that many states will exempt from
personal income tax that portion of the Fund's dividends attributable to
interest received by the Fund from certain U.S. Government obligations. You
should consult your own tax adviser regarding this possibility and other tax
consequences under state, local and other applicable tax laws.
Dividends and Distributions
The policy of the Fund is to pay dividends from net investment income, if
any, annually. Net short-term capital gains distributions, if any, may be
paid with such dividends, and other distributions of dividends and capital
gains may also be made at such times as may be necessary to avoid federal
income or excise tax.
Unless shareholders specify otherwise, all distributions from the Fund will
be automatically reinvested in additional full and fractional shares of the
Fund. For further information on the distribution options available to
shareholders, see "Distribution Options" and "Directed Dividends" below.
REDEMPTIONS AND REPURCHASES
Redemptions by Mail
As a shareholder, you have the right to offer your shares for redemption by
delivering to Pioneering Services Corporation ("PSC") a written request for
redemption in proper form and, if applicable, your share certificates
properly endorsed and in good order for transfer. Redemptions will be made in
cash at the net asset value per share next determined following receipt by
PSC of all necessary documents subject in certain cases to the contingent
deferred sales charge described below.
Good order means that there are no outstanding claims or requests to hold
redemptions on the account, the certificates are endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by any of the following eligible guarantor institutions: (i) all
brokers, dealers, municipal securities dealers and/or brokers, government
securities dealers and/or brokers, who are members of a clearing agency or
whose net capital exceeds $100,000; (ii) all banks; (iii) all credit unions;
(iv) all savings associations, including all savings and loan associations;
(v) all national securities exchanges, registered securities associations,
and all clearing agencies; and (vi) all trust companies. In addition, in some
cases (involving fiduciary or corporate transactions), good order may require
the furnishing of additional documents.
Signature guarantees will be waived for redemption requests of $50,000 or
less, provided that the record holder executes the redemption request,
payment is directed to the record holder at the address of record, and the
address has not changed in the previous 30 days. You cannot provide a
signature guarantee by facsimile ("fax"). Payment normally will be made
within seven days after receipt of these documents. The Fund reserves the
right to withhold payment until checks received in payment of shares
purchased have cleared, which may take up to 15 calendar days from the
purchase date. For additional information about the necessary documentation
for redemption by mail, call PSC at 1-800-225-6292.
Redemption by Telephone or Fax
Your account is automatically authorized to have the telephone redemption
privilege unless you indicated otherwise on your Account Application or by
writing to PSC. Proper account identification will be required for each
telephone redemption. The telephone redemption option is not available to
retirement plan accounts. A maximum of $50,000 may be redeemed by telephone
or fax and the proceeds may be received by check or by bank wire. To receive
the proceeds by check: the check must be made payable exactly as the account
is registered and the check must be sent to the address of record which must
not have changed in the last 30 days. To receive the proceeds by bank wire:
the wire must be sent to the bank wire address of record which must have been
properly pre-designated either on your Account Application or on an Account
Options Form and which must not have changed in the last 30 days. To redeem
by fax, send your redemption request to 1-800-225-4240. You may always elect
to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone redemptions will be
priced as described above.
Additional Conditions of Redemption
For the convenience of shareholders, the Fund has authorized PFD to act as
its agent in the repurchase of its shares. The Fund reserves the right to
terminate this procedure at any time. Offers to sell shares to the Fund may
be communicated to PFD by wire or telephone by broker-dealers for their
customers. The Fund's practice will be to repurchase shares offered to it at
the net asset value per share determined as of the close of business of the
Exchange on the day the offer for repurchase is received and accepted by the
broker-dealer if the offer is received by PFD before PFD's close of business
on that day. Shareholders whose accounts are registered in the name of a
broker, dealer or other financial institution must contact a representative
of the institution holding the shares to arrange for a redemption.
A broker-dealer which receives an offer for repurchase is responsible for the
prompt transmittal of such offer to PFD. Payment of the repurchase proceeds
will be made in cash to the broker-dealer placing the order. Except for
certain large accounts subject to a contingent deferred sales charge (as
described below), neither the Fund nor PFD charges any fee or commission upon
such repurchase which is then settled as an ordinary transaction with the
broker-dealer (which may make a charge to the shareholder for this service)
delivering the shares repurchased. Payment will be made within seven days of
the receipt by PSC of valid instructions, including validly endorsed
certificates, if appropriate, in good order as described above.
<PAGE>
The net asset value per share received upon redemption or repurchase may be
more or less than the cost of shares to an investor, depending upon the
market value of the portfolio at the time of redemption or repurchase.
Redemptions and repurchases are potentially taxable transactions to
shareholders.
Redemption may be suspended or payment postponed during any period in which
any of the following conditions exist: the Exchange is closed or trading on
the Exchange is restricted; an emergency exists as a result of which disposal
by the Fund of securities owned by it is not reasonably practicable or it is
not reasonably practicable for the Fund to fairly determine the value of the
net assets of its portfolio; or the SEC, by order, so permits.
Purchases of Fund shares of $1,000,000 or more, and purchases by participants
in a Group Plan which have not been subject to a sales charge, may be subject
to a contingent deferred sales charge upon redemption or repurchase. A
contingent deferred sales charge is payable on these investments in the event
of a share redemption within 12 months following the share purchase, at the
rate of 1% of the lesser of the value of the shares redeemed (exclusive of
reinvested dividend and capital gain distributions) or the total cost of such
shares. In determining whether a contingent deferred sales charge is payable,
and, if so, the amount of the charge, it is assumed that shares purchased
with reinvested dividends and capital gain distributions and then such other
shares which are held the longest will be the first redeemed.
Waiver or Reduction of Contingent Deferred Sales Charge
The CDSC on any shares subject to a CDSC may be waived or reduced for
non-retirement accounts if: (a) the redemption results from the death of all
registered owners of an account (in the case of UGMAs, UTMAs and trust
accounts, waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed
or (b) the redemption is made in connection with limited automatic
redemptions as set forth in "Systematic Withdrawal Plans" (limited in any
year to 10% of the value of the account in the Fund at the time the
withdrawal plan is established).
The CDSC on any shares subject to a CDSC may be waived or reduced for
retirement plan accounts if: (a) the redemption results from the death or a
total and permanent disability (as defined in Section 72 of the Code)
occurring after the purchase of the shares being redeemed of a shareholder or
participant in an employer-sponsored retirement plan; (b) the distribution is
to a participant in an IRA, 403(b) or employer-sponsored retirement plan, is
part of a series of substantially equal payments made over the life
expectancy of the participant or the joint life expectancy of the participant
and his or her beneficiary (limited in any year to 10% of the value of the
participant's account at the time the distribution amount is established; a
required minimum distribution due to the participant's attainment of age
70-1/2 may exceed the 10% limit only if the distribution amount is based on
plan assets held by Pioneer); (c) the distribution is from a 401(a) or 401(k)
retirement plan and is a return of excess employee deferrals or employee
contributions; (d) the distribution is from an IRA, 403(b) or
employer-sponsored retirement plan and is to be rolled over to or reinvested
in the same class of shares in a Pioneer mutual fund and which will be
subject to the applicable CDSC upon redemption; (e) the distribution is in
the form of a loan to a participant in a plan which permits loans (each
repayment of the loan will constitute a new sale which will be subject to the
applicable CDSC upon redemption); or (f) the distribution is from a qualified
defined contribution plan and represents a participant's directed transfer
(provided that this privilege has been pre-authorized through a prior
agreement with PFD regarding participant directed transfers).
The CDSC on any shares subject to a CDSC may be waived or reduced for either
non-retirement or retirement plan accounts if: (a) the redemption is made by
any state, county, or city, or any instrumentality, department, authority, or
agency thereof, which is prohibited by applicable laws from paying a
contingent deferred sales charge in connection with the acquisition of shares
of any registered investment management company; or (b) the redemption is
made pursuant to the Fund's right to liquidate or involuntarily redeem shares
in a shareholder's account.
Shares subject to the contingent deferred sales charge which are exchanged
into another Pioneer fund will continue to be subject to the contingent
deferred sales charge until the original 12-month period expires.
VII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly owned subsidiary of PGI. PSC's
principal offices are located at 60 State Street, Boston, Massachusetts
02109, and inquiries to PSC should be mailed to Shareholder Services,
Pioneering Services Corporation, P.O. Box 9014, Boston, Massachusetts
02205-9014. Brown Brothers Harriman & Co. (the "Custodian") serves as
custodian of the Fund's portfolio securities. The principal business address
of the Mutual Fund Division of the Custodian is 40 Water Street, Boston,
Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur. The
Pioneer Combined Account Statement, mailed quarterly, is available to all
shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment broker-dealer
or other party will not normally have an account with the Fund and might not
be able to utilize some of the services available to shareholders of record.
Examples of services which might not be available are investment or
redemption of shares by mail, automatic reinvestment of dividends and capital
gains distributions, withdrawal plans, Letters of Intention, Rights of
Accumulation, telephone exchanges and redemptions, newsletters and other
informational mailings.
<PAGE>
Additional Investments
You may add to your account by sending a check ($50 minimum) to PSC (account
number should be clearly indicated). The bottom portion of a confirmation
statement may be used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer Investomatic
Plan, are invested in full and fractional shares of the Fund at the offering
price in effect as of the close of regular trading on the Exchange on the day
of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments or through a Pioneer Investomatic Plan
(formerly called Bank Service Plan). A Pioneer Investomatic Plan provides for
a monthly or quarterly investment by means of a preauthorized draft drawn on
a checking account. Pioneer Investomatic Plan investments are voluntary and
you may discontinue the plan without penalty upon 30 days' written notice to
PSC. PSC acts as agent for the purchaser, the broker-dealer, and PFD in
maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semi-annually.
In January of each year, the Fund will mail you information about the tax
status of dividends and other distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at net asset value per share,
unless you indicate another option on your Account Application.
Two other available options are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and distributions
in cash. The two options are not available, however, with respect to
retirement plans or an account with a net asset value of less than $500.
Changes in the distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer fund account. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service. Retirement plan shareholders may only direct dividends to
accounts with identical registrations e.g., PGI IRA Cust for John Smith may
only go into another account registered PGI IRA Cust for John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends and
capital gains, in cash, or have established a Systematic Withdrawal Plan, you
may choose to have those cash payments deposited directly into your savings,
checking or NOW bank account. You may establish this service by completing
the appropriate section on your Account Application when opening a new
account or an Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distribution paid from your account (before any reinvestment)
and forward the amount withheld to the Internal Revenue Service as a credit
against your federal income taxes. This option is not available for
retirement plan accounts or for accounts subject to backup withholding.
Exchange Privilege
You may exchange your shares of the Fund at net asset value, without a sales
charge, for shares of other Pioneer funds which do not offer different
classes of shares or for the Class A shares of those Pioneer funds that offer
more than one class of shares. There are currently no fees or sales charges
on such an exchange. The exchange privilege is available only in those states
where exchanges can legally be made.
Exchanges must be at least $1,000. A new Pioneer account opened through an
exchange must have a registration identical to that on the original account.
PSC will process exchanges only after receiving an exchange request in proper
form. Shares of the Fund acquired through exchange of shares subject to a
contingent deferred sales charge will be subject to such charge, if
applicable, upon redemption.
Written Exchanges. If the exchange request is in writing, it must be signed
by all record owner(s) exactly as the shares are registered. If your original
account includes a Pioneer Investomatic or Systematic Withdrawal Plan and you
open a new account by exchange, you should specify whether the plans should
continue in your new account or remain with your original account.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. All telephone exchange requests will be
recorded.
Automatic Exchange. You may automatically exchange shares from one Pioneer
account to another Pioneer account on a regular schedule, either monthly or
quarterly. The accounts must have identical registrations and the originating
account must have a minimum balance of $5,000. The exchange will occur on the
18th day of each month.
If an exchange request is received by PSC before 4:00 p.m. Eastern Time (or
before the time that the Exchange closes for regular trading on that day, if
different), the exchange will be effective on that day if the requirements
above have been met. If the exchange request is received after this time, the
exchange will be effective on the following business day.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each of the fund's current prospectus, before
making any exchange. For federal and (generally) state income tax purposes,
an exchange represents a sale of the shares exchanged and a purchase of
shares in another fund. Therefore, an exchange
<PAGE>
could result in a gain or loss on the shares sold, depending on the cost
basis of these shares and the timing of the transaction, and special tax
rules may apply.
To prevent abuse of the exchange privilege to the detriment of other Fund
shareholders, the Fund and PFD reserve the right to limit the number and/or
frequency of exchanges and/or to charge a fee for exchanges.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicated otherwise on your Account Application or by
writing to PSC. You may sell or exchange your Fund shares by telephone by
calling 1-800-225-6292 between 8:00 a.m. and 8:00 p.m. Eastern Time on
weekdays. See "Net Asset Value and Pricing of Orders" for more information.
To confirm that each transaction instruction received by telephone is
genuine, the Fund will record each telephone transaction, require the caller
to provide the personal identification number (PIN) for the account and send
you a written confirmation of each telephone transaction. Different
procedures may apply to accounts that are registered to non-U.S. citizens or
that are held in the name of an institution or in the name of an investment
broker-dealer or other third-party. If reasonable procedures, such as those
described above, are not followed, the Fund may be liable for any loss due to
unauthorized or fraudulent instructions. The Fund may implement other
procedures from time to time. In all other cases, neither the Fund, PSC or
PFD will be responsible for the authenticity of instructions received by
telephone; therefore, you bear the risk of loss for unauthorized or
fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and you own TDD keyboard equipment, you can
call PSC's TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Retirement Plans
You should contact the Retirement Plans Department of PSC at 1-800-622-0176
for information on retirement plans for business, Simplified Employee Pension
Plans, Individual Retirement Accounts (IRAs), and Section 403(b) retirement
plans for employees of certain non-profit organizations and public school
systems, all of which are available in conjunction with investments in the
Funds. The Account Application accompanying this Prospectus should not be
used to establish any of these plans. Separate applications are required.
Systematic Withdrawal Plans
If the shares in your account have a total value of at least $10,000 you may
establish a Systematic Withdrawal Plan with respect to the Fund providing for
fixed payments at regular intervals. Periodic checks of $50 or more will be
sent to you monthly or quarterly and your periodic redemptions of shares may
be taxable to you. You may also direct that withdrawal checks be paid to
another person, although if you make this designation after you have opened
your account, a signature guarantee must accompany your instructions.
Purchases of shares of the Fund at a time when you have a Systematic
Withdrawal Plan in effect with respect to the Fund may result in the payment
of unnecessary sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Fund's Statement of Additional Information.
Reinstatement Privilege
If you redeem all or part of your shares of the Fund, you may reinvest all or
part of the redemption proceeds without a sales commission in shares of the
Fund if you send a written request to PSC not more than 90 days after your
shares were redeemed. Your redemption proceeds will be reinvested at the next
determined net asset value of the shares of the Fund after receipt of the
written request for reinstatement. You may realize a gain or loss for federal
income tax purposes as a result of the redemption, and special tax rules may
apply. Subject to the provisions outlined under "Exchange Privilege" above,
you may also reinvest in any other Pioneer mutual funds; in this case you
must meet the minimum investment requirements for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up to
one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended, or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by filling out
an Account Options Form, which you may request by calling 1-800-225-6292.
VIII. INVESTMENT RESULTS
The Fund may from time to time include yield information in advertisements or
in information furnished generally to existing or proposed shareholders.
Whenever yield information is provided, it includes a standardized yield
calculation computed by dividing the Fund's net investment income per share
during a base period of 30 days, or one month, by the maximum offering price
per share of the Fund on the last day of such base period. (The Fund's net
investment income per share is determined by dividing the Fund's net
investment income during the base period by the average number of shares of
the Fund entitled to receive dividends during the base period). The Fund's
30-day yield is then "annualized" by a computation that assumes that the
Fund's net investment income is earned and reinvested for a six-month period
at the same rate as during the 30-day base period and that the resulting
six-month income will be generated over an additional six months.
<PAGE>
The Fund may also include in advertisements, and furnish to existing or
prospective shareholders, information concerning the average annual total
return on an investment in the Fund for a designated period of time. Whenever
this information is provided, it includes a standardized calculation of
average annual total return computed by determining the average annual
compounded rate of return that would cause a hypothetical investment (after
deduction of the maximum sales charge) made on the first day of the
designated period (assuming all dividends and distributions are reinvested)
to equal the resulting net asset value of such hypothetical investment on the
last day of the designated period. The periods illustrated would normally
include one, five and ten years. These standardized calculations do not
reflect the impact of federal or state income taxes.
The foregoing computation method is prescribed for advertising and other
communications subject to SEC Rule 482. Communications not subject to this
rule may contain one or more additional measures of investment results,
computation methods and assumptions, including but not limited to: historical
total returns; distribution returns; results of actual or hypothetical
investments; changes in dividends, distributions or share values; or any
graphic illustration of such data. These data may cover any period of the
Fund's existence and may or may not include the impact of sales charges,
taxes or other factors.
Yield and average annual total return quotations of the Fund do not take into
account any required payments for federal or state income taxes.
The Fund's investment results will vary from time to time depending on market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. Therefore, any prior investment results of the Fund should not be
considered representative of what an investment in the Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing
performance information regarding the Fund to information published for other
investment companies, investment vehicles, and unmanaged indexes. Yield and
return quotations should also be considered relative to the risks associated
with the Fund's investment objective and policies. Yields may be affected by
sinking fund call provisions and optional redemption features of portfolio
securities which may have the effect of reducing the stated average maturity
of the Fund's portfolio. At any time in the future, yields and return
quotations may be higher or lower than past yields or return quotations and
there can be no assurance that any historical yield or return quotation will
continue in the future.
The Fund may also include comparative performance information in advertising
or marketing the Fund's shares. This performance information may include
rankings or listing by magazines, newspapers, or independent statistical or
ratings services, such as Lipper Analytical Services, Inc. and Ibbotson
Associates.
For more information about the calculation methods used to compute the Fund's
investment results, see the Statement of Additional Information.
IX. SHARES OF THE FUND
The Fund, an open-end diversified investment management company, was
established as a Nebraska corporation on January 19, 1968 and reorganized as
a Delaware business trust on June 30, 1994. The Trustees are responsible for
the overall management and supervision of its affairs.
Each share represents an equal proportionate interest in the Fund with each
other share. Shares entitle their holders to one vote per share in the
election of Trustees and other matters submitted to shareholders. Shares have
noncumulative voting rights, do not have preemptive or subscription rights
and are transferable. The Trustees are empowered, without shareholder
approval, by the Agreement and Declaration of Trust (the "Declaration of
Trust") and By-Laws to create additional series of shares and to classify and
reclassify any new or existing series of shares into one or more classes.
The Declaration of Trust permits the issuance of series of shares in addition
to the Fund which would represent interests in separate portfolios of
investments. No series would be entitled to share in the assets of any other
series or be liable for the expenses or liabilities of any other series. The
Fund is authorized, but does not currently intend to, issue multiple classes
of its shares.
In addition to the requirements under Delaware law, the Declaration of Trust
provides that a shareholder of the Fund may bring a derivative action on
behalf of the Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Fund, or 10% of the outstanding shares
of the series or class to which such action relates, shall join in the
request for the Trustees to commence such action; and (b) the Trustees must
be afforded a reasonable amount of time to consider such shareholder request
and to investigate the basis of such claim. The Trustees shall be entitled to
retain counsel or other advisers in considering the merits of the request and
shall require an undertaking by the shareholders making such request to
reimburse the Fund for the expense of any such advisers in the event that the
Trustees determine not to bring such action.
The Fund does not intend to hold annual shareholder meetings. Shareholders
have certain rights, as set forth in the Declaration of Trust, including the
right to call a meeting of shareholders for the purpose of voting on the
removal of one or more Trustees. Such removal can be effected upon the action
of two-thirds of the outstanding shares of the Fund.
<PAGE>
Notes
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
Growth Funds
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Growth and Income Funds
Pioneer Three
Pioneer II
Pioneer Fund
Pioneer Equity-Income Fund
Pioneer Winthrop Real Estate Investment Fund
Income Funds
Pioneer Income Fund
Pioneer Bond Fund
Pioneer America Income Trust
Pioneer Tax-Free Income Fund
Pioneer California Double Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
Pioneer Intermediate Tax-Free Fund
Pioneer Short-Term Income Trust
Specialized Growth Funds
Pioneer Gold Shares
Pioneer India Fund
Money Market Funds
Pioneer Cash Reserves Fund
Pioneer U.S. Government Money Fund
Pioneer Tax-Free Money Fund
<PAGE>
Pioneer
Growth
Shares
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN & CO.
LEGAL COUNSEL
HALE AND DORR
0295-1958-2
(C)Pioneer Funds Distributor, Inc.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 742-7825
SERVICES INFORMATION
If you would like information on the following, please call .....
Existing and new accounts, prospectuses,
applications, service forms and
telephone transactions ......................................... 1-800-225-6292
Automated fund yields, prices and
account information ............................................ 1-800-225-4321
Retirement plans ................................................ 1-800-622-0176
Toll-free fax ................................................... 1-800-225-4240
Telecommunications Device for the Deaf (TDD) .................... 1-800-225-1997
