As filed with the Securities and Exchange Commission on September 9, 1998
File Nos. 2-28274
811-01604
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
---
Pre-Effective Amendment No. __ / /
Post-Effective Amendment No. 59 / X /
---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 / X /
Amendment No. 30 / X /
(Check appropriate box or boxes)
PIONEER GROWTH SHARES
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
___ immediately upon filing pursuant to paragraph (b)
X on September 9, 1998 pursuant to paragraph (b)
---
___ 60 days after filing pursuant to paragraph (a)(1)
___ on [date] pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on [date] pursuant to paragraph (a)(2)of Rule 485.
If appropriate, check the following box:
___ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest (without
par value)
<PAGE>
PIONEER GROWTH SHARES
Cross-Reference Sheet Showing Location in Prospectus and Statement of
Additional Information of Information
Required by Items of the Registration Form
Locations noted apply to the Class A, Class B and Class C Prospectus and the
Class Y Prospectus unless otherwise noted
FORM N-1A ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS OR STATEMENT
OF ADDITIONAL INFORMATION
1. Cover Page Prospectus - Cover Page
2. Synopsis Prospectus - Expense Information
3. Condensed Financial Information Prospectus - Financial Highlights
(Class A, Class B and Class C
Prospectus); Prospectus Supplement
(Class Y Prospectus)
4. General Description of Registrant Prospectus - Cover Page; Investment
Objective, Policies and Risks (Class A
Class B and Class C Prospectus);
Investment Objective[s] and Policies
(Class Y Prospectus); Management of the
Fund; Fund Share Alternatives (Class A,
Class B and Class C Prospectus); Fund
Shares (Class Y Prospectus); Share
Price; How to Buy Fund Shares (Class A,
Class B and Class C Prospectus);
Purchasing Class Y Shares (Class Y
Prospectus); How to Sell Fund Shares
(Class A, Class B and Class C
Prospectus); Redeeming Class Y Shares
(Class Y Prospectus); How to Exchange
Fund Shares (Class A, Class B and
Class C Prospectus); Exchanging Class Y
Shares (Class Y Prospectus); The
Fund
5. Management of the Fund Prospectus - Management of the Fund;
Shareholder Services
5A. Management's Discussion of Fund
Performance Not Applicable
6. Capital Stock and Other Securities Prospectus - Investment Objective,
Policies and Risks (Class A, Class B
and Class C Prospectus); Investment
Objective[s] and Policies (Class Y
Prospectus); Management of the Fund;
Fund Share Alternatives (Class A,
Class B and Class C Prospectus); Fund
Shares (Class Y Prospectus); Share
Price; How to Buy Fund Shares (Class A,
Class B and Class C Prospectus);
Purchasing Class Y Shares (Class Y
Prospectus); How to Sell Fund Shares
(Class A, Class B and Class C
Prospectus); Redeeming Class Y Shares
(Class Y Prospectus); How to Exchange
Fund Shares (Class A, Class B and Class
C Prospectus); Exchanging Class Y
Shares (Class Y Prospectus); Dividends,
Distributions and Taxation; The
Fund
7. Purchase of Securities Being
Offered Prospectus - Management of the Fund;
Distribution Plans (Class A, Class B
and Class C Prospectus); Distribution
of Class Y Shares (Class Y Prospectus);
Fund Share Alternatives (Class A, Class
B and Class C Prospectus); Fund Shares
(Class Y Prospectus); Share Price; How
to Buy Fund Shares (Class A, Class B
and Class C Prospectus); Purchasing
Class Y Shares (Class Y Prospectus);
How to Exchange Fund Shares (Class A,
Class B and Class C Prospectus);
Exchanging Class Y Shares (Class Y
Prospectus); Shareholder Services
<PAGE>
8. Redemption or Repurchase Prospectus - Fund Share Alternatives;
(Class A, Class B and Class C
Prospectus); Fund Shares (Class Y
Prospectus); How to Sell Fund Shares
(Class A, Class B and Class C
Prospectus); Redeeming Class Y Shares
(Class Y Prospectus); How to Exchange
Fund Shares (Class A, Class B and Class
C Prospectus); Exchanging Class Y
Shares (Class Y Prospectus);
Shareholder Services
9. Pending Legal Proceedings Not Applicable
10. Cover Page Statement of Additional Information -
Cover Page
11. Table of Contents Statement of Additional Information -
Cover Page
12. General Information and History Statement of Additional Information -
Description of Shares
13. Investment Objectives and Policies Statement of Additional Information -
Investment Objective and Policies;
Investment Restrictions; Appendix A
14. Management of the Fund Statement of Additional Information -
Management of the Fund
15. Control Persons and Principal
Holders of Securities Statement of Additional Information -
Management of the Fund
16. Investment Advisory and Other
Services Statement of Additional Information -
Management of the Fund; Investment
Adviser; Underwriting Agreement and
Distribution Plans; Shareholder
Servicing/Transfer Agent; Custodian;
Principal Underwriter; Independent
Public Accountants; Appendix C
17. Brokerage Allocation and Other
Practices Statement of Additional Information -
Portfolio Transactions
18. Capital Stock and Other Securities Statement of Additional Information -
Description of Shares
19. Purchase, Redemption and Pricing
of Securities Being Offered Statement of Additional Information -
Letter of Intent; Systematic Withdrawal
Plan; Determination of Net Asset Value
20. Tax Status Statement of Additional Information -
Tax Status
21. Underwriters Statement of Additional Information -
Underwriting Agreement and Distribution
Plans; Principal Underwriter
22. Calculation of Performance Data Statement of Additional Information -
Investment Results; Appendix B
23. Financial Statements Statement of Additional Information -
Financial Statements
<PAGE>
STATEMENT OF INCORPORATION BY REFERENCE
The Class Y shares prospectus dated April 30, 1998 contained in
Post-Effective Amendment No. 58 to the Registrant's registration statement on
Form N-1A (File Nos. 811-01604 and 2-28274) filed electronically on April 30,
1998 (Accession No. 0001016964-98-000039) is incorporated herein by reference in
its entirety.
<PAGE>
September 9, 1998
PIONEER GROWTH SHARES
CLASS Y SHARES
SUPPLEMENT TO PROSPECTUS DATED APRIL 30, 1998
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of June 30, 1998 appears in the Fund's Semiannual Report
which is incorporated by reference into the Statement of Additional Information.
The information listed below should be read in conjunction with those financial
statements. The Semiannual Report includes more information about the Fund's
performance and is available free of charge by calling Shareholder Services at
1-800-225-6292.
SELECTED DATA FOR A CLASS Y SHARE OUTSTANDING FOR THE PERIOD PRESENTED:
4/30/98 TO
6/30/98
Net asset value, beginning of period......................... $19.73
Increase from investment operations:
Net investment income.................................. $ 0.01
Net realized and unrealized gain on investments........ 0.52
------
Net increase in net asset value.............................. $ 0.53
------
Net asset value, end of period............................... $20.26
======
Total return(1).............................................. 2.69%
Ratio of net expenses to average net assets.................. 0.52%*
Ratio of net investment income to average net assets......... 0.20%*
Portfolio turnover rate...................................... 12%*
Net assets, end of period (in thousands)..................... $3,911
(1)Assumes initial investment at net asset value at the beginning of the period,
reinvestment of distributions and the complete redemption of the investment at
net asset value at the end of the period.
*Annualized.
The first and fourth paragraphs under "Investment Objective, Policies and Risks"
are revised as follows:
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 that are convertible into common stocks. In selecting
portfolio securities, Pioneering Management Corporation ("PMC") attempts to
identify companies that have competitive strengths and benefit from industry
dynamics and broader trends. PMC emphasizes in-depth analysis of potential
investments, including an evaluation of a company's long-term strategic
position, the quality of management, the value of brand names, economies of
scale, market position and installed base, among other factors. Because current
income is not the Fund's investment objective, the Fund may invest in non-income
producing securities. The Fund invests in companies in a variety of industries
in an attempt to reduce its overall exposure to investment and market risks.
The Fund may invest in warrants and in securities of real estate
investment trusts ("REITs") as described in the Statement of Additional
Information. Warrants permit the Fund to subscribe for other securities. REITs
are pooled investment vehicles that invest primarily in income producing real
estate or real estate related loans or interests. Although the Fund does not
have formal percentage limitations on these investments, it is not expected that
PMC will invest more than 5% of the Fund's net assets in warrants or more than
5% of the Fund's net assets in REITs. The Fund may also invest in investment
companies limited to the extent permitted under the Investment Company Act of
1940, as amended (the "1940 Act").
<PAGE>
The following is added above the caption "Repurchase Agreements":
OTHER INVESTMENT COMPANIES
The Fund may invest in the securities of other investment companies to
the extent that such investments are consistent with the Fund's investment
objective and policies and permissible under the 1940 Act. The Fund, as a
shareholder of the securities of another investment company, will bear its pro
rata portion of the other investment company's expenses, including advisory
fees. These expenses are in addition to the direct expenses of the Fund's own
operations.
The second paragraph under "Management of the Fund" is revised as follows:
Ms. Theresa Hamacher, Senior Vice President and Chief Investment
Officer of PMC, has general responsibility for PMC's investment operations. Ms.
Hamacher joined PMC in 1997. She has been an investment professional since 1982.
The last sentence of the third paragraph under "Dividends, Distributions and
Taxation" is deleted.
0998-5390
(C) Pioneer Funds Distributor, Inc.
<PAGE>
[PIONEER LOGO]
PIONEER
GROWTH
SHARES
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
APRIL 30, 1998
(AS REVISED SEPTEMBER 9, 1998)
PIONEER GROWTH SHARES (the "Fund") seeks 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 provides information about the Fund that you should know
before investing. Please read and retain it for your future reference. More
information about the Fund is included in the Statement of Additional
Information, dated April 30, 1998, as supplemented or revised from time to
time, 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 by calling 1-800-225-6292 or through
the SEC's Internet web site (http://www.sec.gov).
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
------------------------------------------------------- -----
<S> <C> <C>
I. EXPENSE INFORMATION ................................... 2
II. FINANCIAL HIGHLIGHTS .................................. 3
III. INVESTMENT OBJECTIVE, POLICIES AND RISKS .............. 6
IV. MANAGEMENT OF THE FUND ................................ 7
V. FUND SHARE ALTERNATIVES ............................... 8
VI. SHARE PRICE ........................................... 9
VII. HOW TO BUY FUND SHARES ................................ 9
VIII. HOW TO SELL FUND SHARES ............................... 13
IX. HOW TO EXCHANGE FUND SHARES ........................... 14
X. DISTRIBUTION PLANS .................................... 14
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ................. 15
XII. SHAREHOLDER SERVICES .................................. 16
Account and Confirmation Statements .................. 16
Additional Investments ............................... 16
Automatic Investment Plans ........................... 16
Financial Reports and Tax Information ................ 16
Distribution Options ................................. 16
Directed Dividends ................................... 17
Direct Deposit ....................................... 17
Voluntary Tax Withholding ............................ 17
Telephone Transactions ............................... 17
FactFone(SM) ......................................... 17
Retirement Plans ..................................... 17
Telecommunications Device for the Deaf (TDD) ......... 17
Systematic Withdrawal Plans .......................... 17
Reinstatement Privilege (Class A Shares Only) ........ 18
XIII. THE FUND .............................................. 18
XIV. INVESTMENT RESULTS .................................... 18
</TABLE>
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses
that you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects annual operating expenses based upon actual
expenses incurred for the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum Initial Sales Charge on
Purchases (as a percentage of offering
price) ............................................. 5.75%(1) None None
Maximum Sales Charge on
Reinvestment of Dividends .......................... None None None
Maximum Deferred Sales Charge (as a
percentage of purchase price or
redemption proceeds, as
applicable) ........................................ None(1) 4.00% 1.00%
Redemption Fee(2) ..................................... None None None
Exchange Fee ......................................... None None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets):
Management Fee ....................................... 0.48% 0.48% 0.48%
12b-1 Fees ........................................... 0.25% 1.00% 1.00%
Other Expenses
(including accounting and transfer
agent fees, custodian fees and
printing expenses)(3) ............................... 0.26% 0.28% 0.21%
-------- ----- -----
TOTAL OPERATING EXPENSES ............................. 0.99% 1.76% 1.69%
======== ===== =====
</TABLE>
- --------------------
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge ("CDSC") as further described under
"How to Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to United States
("U.S.") and international wire transfers of redemption proceeds.
(3) Expenses do not reflect reductions as a result of certain third-party
brokerage/service and expense offset arrangements. Because of those
arrangements "Total Operating Expenses" were 0.97%, 1.72% and 1.63% for
Class A, Class B and Class C shares, respectively, for the fiscal year
ended December 31, 1997.
EXAMPLE:
You would pay the following expenses on a $1,000 investment, with or
without redemption at the end of each time period, assuming a 5% annual return,
reinvestment of all dividends and distributions and that the percentage amounts
listed under "Annual Operating Expenses" remain the same each year:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares ................ $67 $87 $109 $172
Class B Shares*
--Assuming complete
redemption at end of
period .................... $58 $85 $115 $187
--Assuming no redemption...... $18 $55 $ 95 $187
Class C Shares**
--Assuming complete
redemption at end of
period .................... $27 $53 $ 92 $200
--Assuming no redemption...... $17 $53 $ 92 $200
</TABLE>
- --------------------
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share expenses are used after year eight.
**Class C shares redeemed during the first year after purchase are subject to a
1% CDSC.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURN. ACTUAL FUND
EXPENSES AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN
THOSE SHOWN.
For further information regarding management fees, Rule 12b-1 fees and
other expenses of the Fund, see "Management of the Fund," "Distribution Plans"
and "How To Buy Fund Shares" in this Prospectus and "Management of the Fund"
and "Underwriting Agreement and Distribution Plans" in the Statement of
Additional Information. The Fund's payment of a Rule 12b-1 fee may result in
long-term shareholders paying more than the economic equivalent of the maximum
sales charge permitted under the Conduct Rules of the National Association of
Securities Dealers, Inc.
The maximum initial sales charge is reduced on purchases of specified
larger amounts of Class A shares and the value of shares owned in other Pioneer
mutual funds is taken into account in determining the applicable initial sales
charge. See "How to Buy Fund Shares." No sales charge is applied to exchanges
of shares of the Fund for shares of other publicly available Pioneer mutual
funds. See "How to Exchange Fund Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of December 31, 1997 appears in the Fund's Annual
Report which is incorporated by reference into the Statement of Additional
Information. The information listed below should be read in conjunction with
those financial statements. The information for the years from 1988 through
1993 was derived from financial statements audited by the Fund's then
independent public accountants, Coopers & Lybrand. 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 CLASS A SHARE OUTSTANDING FOR EACH PERIOD PRESENTED:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,+
----------------------------------------------------------------
1997 1996 1995 1994
----------------- ----------------- -------------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period ............................ $11.71 $10.12 $8.85 $12.62
--------- --------- -------- -------
Increase (decrease) from
investment operations:
Net investment income (loss) ...... $(0.03) $(0.01) $0.03 $(0.06)
Net realized and unrealized
gain (loss) on investments ....... 5.16 2.67 2.58 (0.38)
--------- --------- -------- -------
Net increase (decrease)
from investment
operations ...................... $5.13 $2.66 $2.61 $(0.44)
Distributions to shareholders:
Net investment income ............. -- -- (0.03) --
Net realized gain ................. (0.49) (1.07) (1.31) (3.32)
In excess of net investment
income ........................... -- -- -- --
Paid-in capital ................... -- -- -- (0.01)
--------- --------- -------- -------
Net increase (decrease) in net
asset value ....................... $4.64 $1.59 $1.27 $(3.77)
--------- --------- -------- -------
Net asset value, end of period ..... $16.35 $11.71 $10.12 $8.85
========= ========= ======== =======
Total return(1) .................... 43.78% 26.95% 29.82% (2.60)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average
net assets ........................ 0.99%++ 1.15%++ 1.23%++ 1.46%
Ratio of net investment income
(loss) to average net assets ...... (0.25)%++ (0.08)%++ 0.28%++ (0.53)%
Portfolio turnover rate ............ 28% 96% 158% 161%
Average brokerage commission
per share ......................... $0.0630 $0.0568 -- --
Net assets, end of period
(in thousands) .................... $567,126 $277,598 $215,564 $132,476
Ratios assuming no waiver of
management fees and
assumption of expenses by
PMC and no reduction for fees
paid indirectly:
Net expenses ...................... 0.99% 1.15% 1.23% --
Net investment income (loss) ...... (0.25)% (0.08)% 0.28% --
Ratios assuming a reduction of
fees paid indirectly:
Net expenses ...................... 0.97% 1.13% 1.21% --
Net investment income (loss) ...... (0.23)% (0.06)% 0.30% --
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,+
-------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988
------------- ------------ ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................ $12.42 $12.27 $7.57 $8.95 $7.39 $6.27
------- ------- ------- ------- ------- -------
Increase (decrease) from
investment operations:
Net investment income (loss) ...... $(0.07) $-- $0.02 $0.08 $0.08 $0.06
Net realized and unrealized
gain (loss) on investments ....... 1.10 0.15 4.70 (0.83) 2.37 1.37
------- -------- ------- ------- ------- -------
Net increase (decrease)
from investment
operations ...................... $1.03 $0.15 $4.72 $(0.75) $2.45 $1.43
Distributions to shareholders:
Net investment income ............. -- -- -- (0.08) (0.08) (0.06)
Net realized gain ................. (0.83) -- -- (0.55) (0.81) (0.25)
In excess of net investment
income ........................... -- -- (0.02) -- -- --
Paid-in capital ................... -- -- -- -- -- --
------- -------- ------- ------- ------- -------
Net increase (decrease) in net
asset value ....................... $0.20 $0.15 $4.70 $(1.38) $1.56 $1.12
------- -------- ------- ------- ------- -------
Net asset value, end of period ..... $12.62 $12.42 $12.27 $7.57 $8.95 $7.39
======= ======== ======= ======= ======= =======
Total return(1) .................... 8.52% 1.22% 62.37% (8.37%) 33.63% 23.01%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average
net assets ........................ 1.20% 1.15% 1.22% 1.29% 1.11% 1.24%
Ratio of net investment income
(loss) to average net assets ...... (0.60)% 0.00% 0.14% 0.89% 0.91% 0.88%
Portfolio turnover rate ............ 29% 25% 27% 44% 58% 48%
Average brokerage commission
per share ......................... -- -- -- -- -- --
Net assets, end of period
(in thousands) .................... $134,546 $120,847 $91,464 $52,322 $48,904 $39,231
Ratios assuming no waiver of
management fees and
assumption of expenses by
PMC and no reduction for fees
paid indirectly:
Net expenses ...................... 1.21% 1.25% 1.28% -- -- --
Net investment income (loss) ...... (0.62)% 0.10% 0.08% -- -- --
Ratios assuming a reduction of
fees paid indirectly:
Net expenses ...................... -- -- -- -- -- --
Net investment income (loss) ...... -- -- -- -- -- --
</TABLE>
- ---------
(1) Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all dividends and 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.
+ Prior to assumption of management contract on December 1, 1993, by
Pioneering Management Corporation ("PMC"), the Fund was advised by Mutual
of Omaha Fund Management Company ("FMC").
++ Ratio assuming no reduction for fees paid indirectly.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER GROWTH SHARES
SELECTED DATA FOR A CLASS B SHARE OUTSTANDING FOR EACH PERIOD PRESENTED:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
APRIL 28, 1995
1997(a) 1996 TO DECEMBER 31, 1995
---------------- ---------------- ---------------------
<S> <C> <C> <C>
Net asset value, beginning of period ............................ $11.55 $10.07 $9.68
-------- -------- -------
Increase (decrease) from investment operations:
Net investment income (loss) ................................... $(0.15) $(0.05) $--
Net realized and unrealized gain (loss) on investments ......... 5.09 2.60 1.73
-------- -------- --------
Net increase (decrease) from investment operations ............ $4.94 $2.55 $1.73
Distributions to shareholders:
Net investment income .......................................... -- -- (0.03)
Net realized gain .............................................. (0.49) (1.07) (1.31)
-------- -------- --------
Net increase (decrease) in net asset value ...................... $4.45 $1.48 $0.39
-------- -------- --------
Net asset value, end of period .................................. $16.00 $11.55 $10.07
======== ======== ========
Total return(1) ................................................. 42.75% 25.97% 18.26%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..................... 1.76%+ 1.86%+ 1.90%*+
Ratio of net investment income (loss) to average net assets ..... (1.01)%+ (0.83)%+ (0.25)%*+
Portfolio turnover rate ......................................... 28% 96% 158%
Average brokerage commission per share .......................... $0.0630 $0.0568 --
Net assets, end of period (in thousands) ........................ $163,955 $31,286 $14,019
Ratios assuming reduction for fees paid indirectly:
Net expenses ................................................... 1.72% 1.84% 1.84%*
Net investment income (loss) ................................... (0.97)% (0.81)% (0.19)%*
</TABLE>
- ---------
(a) Per share data based upon average shares outstanding for the period
presented.
* Annualized.
(1) Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratio assuming no reduction for fees paid indirectly.
4
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER GROWTH SHARES
SELECTED DATA FOR A CLASS C SHARE OUTSTANDING FOR THE PERIOD PRESENTED:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED JANUARY 31, 1996 TO
DECEMBER 31, 1997(a) DECEMBER 31, 1996
---------------------- --------------------
<S> <C> <C>
Net asset value, beginning of period ................................ $11.55 $10.10
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) ....................................... $(0.14) $(0.05)
Net realized and unrealized gain (loss) on investments ............. 5.16 2.57
-------- --------
Net increase (decrease) from investment operations ................ $5.02 $2.52
Distributions to shareholders:
Net realized gain .................................................. (0.49) (1.07)
-------- --------
Net increase (decrease) in net asset value .......................... $4.53 $1.45
-------- --------
Net asset value, end of period ...................................... $16.08 $11.55
======== ========
Total return(1) ..................................................... 43.44% 25.61%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ......................... 1.69%+ 1.89%*+
Ratio of net investment income (loss) to average net assets ......... (0.93)%+ (1.01)%*+
Portfolio turnover rate ............................................. 28% 96%
Average brokerage commission per share .............................. $0.0630 $0.0568
Net assets, end of period (in thousands) ............................ $34,300 $1,354
Ratios assuming reduction for fees paid indirectly:
Net expenses ....................................................... 1.63% 1.87%*
Net investment income (loss) ....................................... (0.87)% (0.99)%*
</TABLE>
- ---------
(a)Per share data based upon average shares outstanding for the period
presented.
(1)Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales charges.
Total return would be reduced if sales charges were taken into account.
*Annualized.
+Ratio assuming no reduction for fees paid indirectly.
5
<PAGE>
III. INVESTMENT OBJECTIVE, POLICIES AND RISKS
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 that are convertible into common stocks.
In selecting portfolio
securities, PMC attempts to identify companies that have competitive strengths
and benefit from industry dynamics and broader trends. PMC emphasizes in-depth
analysis of potential investments, including an evaluation of a company's
long-term strategic position, the quality of management, the value of brand
names, economies of scale, market position and installed base, among other
factors. Because current income is not the Fund's investment objective, the
Fund may invest in non-income producing securities. 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, securities in the
Fund's portfolio will be sold whenever PMC believes that it is necessary
without regard to the length of time the particular security may have been
held. A high portfolio turnover rate (100% or more) involves greater expenses
to the Fund and may increase the possibility of shareholders realizing taxable
income and/or capital gains. See "Financial Highlights" for actual portfolio
turnover rates.
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, PMC 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 equity and equity-related 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.
The Fund may invest in warrants and in securities of real estate
investment trusts ("REITs") as described in the Statement of Additional
Information. Warrants permit the Fund to subscribe for other securities. REITs
are pooled investment vehicles that invest primarily in income producing real
estate or real estate related loans or interests. Although the Fund does not
have formal percentage limitations on these investments, it is not expected
that PMC will invest more than 5% of the Fund's net assets in warrants or more
than 5% of the Fund's net assets in REITs. The Fund may also invest in
investment companies limited to the extent permitted under the Investment
Company Act of 1940, as amended (the "1940 Act").
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in restricted securities (i.e., securities that would
be required to be registered prior to distribution to the public), including
securities eligible for resale to "qualified institutional buyers" in
accordance with Rule 144A under the Securities Act of 1933, as amended (the
"1933 Act"). In addition, the Fund will not invest more than 15% of its net
assets in illiquid securities, which includes repurchase agreements maturing in
more than seven days, securities that are not readily marketable and restricted
securities sold and offered under Rule 144A that are illiquid either as a
result of legal or contractual restrictions or the absence of a trading market.
The Board of Trustees of the Fund may adopt guidelines and delegate to PMC
the daily function of determining and monitoring the liquidity of restricted
securities. The Board 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 Board
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 securities under the 1993
Act and prevailing supply and demand conditions.
FOREIGN SECURITIES
The Fund may invest up to 30% of its total 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
portfolio, investments in securities of foreign issuers entail certain risks
not associated with investments in U.S. 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 to have relatively stable and friendly
governments, e.g., major industrialized nations such as the United Kingdom,
France, Canada, Germany and Japan. In connection with its investments in
foreign securities and in order to pro-
6
<PAGE>
tect itself against uncertainty in future exchange rates, the Fund may engage
in forward foreign currency exchange contracts. See the Statement of Additional
Information.
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.
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 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.
OTHER INVESTMENT COMPANIES
The Fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the Fund's investment
objective and policies and permissible under the 1940 Act. The Fund, as a
shareholder of the securities of another investment company, will bear its pro
rata portion of the other investment company's expenses, including advisory
fees. These expenses are in addition to the direct expenses of the Fund's own
operations.
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, PMC, 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
PMC 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.
RISK FACTORS
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. The Board meets at least quarterly. By
virtue of the functions performed by PMC as the Fund's investment adviser, the
Fund requires no employees other than its executive officers, all of whom
receive their compensation from PMC or other sources. The Statement of
Additional Information contains the name and general business and professional
background information of each Trustee and executive officer of the Fund.
Ms. Theresa Hamacher, Senior Vice President and Chief Investment Officer
of PMC, has general responsibility for PMC's investment operations. Ms.
Hamacher joined PMC in 1997. She has been an investment professional since
1982.
Research and management of the Fund is the responsibility of a team of
portfolio managers and analysts focusing on
7
<PAGE>
equity securities. Members of the team meet regularly to discuss holdings,
prospective investments and portfolio composition.
Day-to-day management of the Fund has been the responsibility of Mr.
Jeffrey B. Poppenhagen, a Vice President of PMC and Vice President of the Fund,
since February 1996. Mr. Poppenhagen joined PMC in 1996 and has 10 years of
investment experience.
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 publicly traded Delaware corporation. Pioneer Funds Distributor, Inc.
("PFD"), an indirect wholly owned subsidiary of PGI, is the principal
underwriter of the Fund. Prior to December 1, 1993, 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. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109. In an effort to avoid conflicts of
interest with the Fund, the Fund and PMC have adopted a Code of Ethics that is
designed to maintain a high standard of personal conduct by directing that all
personnel defer to the interests of the Fund and its shareholders in making
personal securities transactions.
Under the terms of its contract with the Fund, PMC 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 (a) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of PMC or its affiliates,
office space and facilities and personnel compensation, training and benefits;
(b) the charges and expenses of auditors; (c) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and registrar
appointed by the Fund; (d) issue and transfer taxes chargeable to the Fund in
connection with securities transactions to which the Fund is a party; (e)
insurance premiums, interest charges, dues and fees for membership in trade
associations and all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies; (f) fees and expenses involved in
registering and maintaining registrations of the Fund and/or its shares with
the SEC, state securities agencies and foreign jurisdictions, including the
preparation of prospectuses and statements of additional information for filing
with such regulatory agencies; (g) all expenses of shareholders' and Trustees'
meetings and of preparing, printing and distributing prospectuses, notices,
proxy statements and all reports to shareholders and to governmental agencies;
(h) charges and expenses of legal counsel to the Fund and the Trustees; (i) if
applicable, distribution fees paid by the Fund pursuant to a Plan of
Distribution in accordance with Rule 12b-1 promulgated by the SEC pursuant to
the 1940 Act; (j) compensation of those Trustees of the Fund who are not
affiliated with or interested persons of PMC, the Fund (other than as
Trustees), PGI or PFD; (k) the cost of preparing and printing share
certificates; and (l) interest on borrowed money, if any. The Fund also pays
all brokers' and underwriting commissions chargeable to the Fund in connection
with securities transactions to which the Fund is a party.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund or other funds for which PMC or any affiliate
serves as investment adviser or manager. See the Statement of Additional
Information for a further description of PMC's brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee from the Fund at the annual rates
set forth below as a percentage of average daily net assets:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL FEE
- ------------------------------------------------------ -----------
<S> <C>
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%
</TABLE>
See "Expense Information" in this Prospectus and "Investment Adviser" in
the Statement of Additional Information for more information.
John F. Cogan, Jr., Chairman and President of the Fund, President and a
Director of PGI, and Chairman and a Director of PMC and PFD, owned
approximately 14% of the outstanding capital stock of PGI as of the date of
this Prospectus.
Certain information technology experts currently predict the possibility
of a widespread failure of computer systems and certain other equipment which
will be triggered on or after certain dates--primarily January 1, 2000--due to
a systemic inability to process date-related information. This scenario,
commonly known as the "Year 2000 Problem," could have an adverse impact on
individuals and businesses, including the Fund and other mutual funds and
financial organizations. PMC and its affiliates are taking steps believed to be
adequate to address the Year 2000 Problem with respect to the systems and
equipment controlled by the Fund's investment adviser, broker-dealer and
transfer agent. In addition, other entities providing services to the Fund and
its shareholders are being asked to provide assurances that they have
undertaken similar measures with respect to their systems and equipment.
Although PMC is not expecting any adverse impact on it or its clients from the
Year 2000 Problem, it cannot provide complete assurances that its efforts or
the efforts of its key vendors will be successful.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers four Classes of shares designated as Class A,
Class B, Class C and Class Y shares. Information with regard the Class Y shares
of the Fund is available in a separate prospectus. Class A, Class B and Class C
8
<PAGE>
shares are described more fully in "How to Buy Fund Shares." If you do not
specify in your instructions to the Fund which Class of shares you wish to
purchase, exchange or redeem, the Fund will assume that your instructions apply
to Class A shares.
CLASS A SHARES. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase; however, shares redeemed
within 12 months of purchase may be subject to a CDSC. Class A shares are
subject to distribution and service fees at a combined annual rate of up to
0.25% of the Fund's average daily net assets attributable to Class A shares.
CLASS B SHARES. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge, but
are subject to a CDSC of up to 4% if redeemed within six years. Class B shares
are subject to distribution and service fees at a combined annual rate of 1.00%
of the Fund's average daily net assets attributable to Class B shares. Your
entire investment in Class B shares is available to work for you from the time
you make your investment, but the higher distribution fee paid by Class B
shares will cause your Class B shares (until conversion) to have a higher
expense ratio and to pay lower dividends, to the extent dividends are paid,
than Class A shares. Class B shares will automatically convert to Class A
shares, based on relative net asset value, eight years after the initial
purchase.
CLASS C SHARES. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.
SELECTING A CLASS OF SHARES. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not to
pay an initial sales charge on an investment of $250,000 or less and you plan
to hold the investment for at least six years, you might consider Class B
shares. If you prefer not to pay an initial sales charge and you plan to hold
your investment for one to eight years, you may prefer Class C shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund, and
shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold outside
the U.S. to persons who are not U.S. citizens may be subject to different sales
charges, CDSCs and dealer compensation arrangements in accordance with local
laws and business practices.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share, plus any applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its assets,
less liabilities attributable to that Class, by the number of shares of that
Class outstanding. The net asset value is computed once daily, on each day the
New York Stock Exchange (the "Exchange") is open, as of the close of regular
trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities quoted
in foreign currencies are converted to U.S. dollars utilizing foreign exchange
rates employed by the Fund's independent pricing services. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of regular trading on the Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also generally
determined prior to the close of 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 may be valued at
their fair value as determined in good faith by the Trustees. All assets of the
Fund for which there is no other readily available valuation method are valued
at their fair value as determined in good faith by the Trustees.
VII. HOW TO BUY FUND SHARES
YOU MAY BUY FUND SHARES FROM ANY SECURITIES BROKER-DEALER WHICH HAS A
SALES AGREEMENT WITH PFD. IF YOU DO NOT HAVE A SECURITIES BROKER-DEALER, PLEASE
CALL 1-800-225-6292. SHARES WILL BE PURCHASED AT THE PUBLIC OFFERING PRICE,
THAT IS, THE NET ASSET VALUE PER SHARE NEXT COMPUTED AFTER RECEIPT OF A
PURCHASE ORDER, PLUS ANY APPLICABLE SALES CHARGE, EXCEPT AS SET FORTH BELOW.
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or minimum
requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares and
$500 for Class B and Class C shares, except that the subsequent minimum
investment
9
<PAGE>
amount for Class B and Class C share accounts may be as little as $50 if an
automatic investment plan is established (see "Automatic Investment Plans").
TELEPHONE PURCHASES. Your account is automatically authorized to have the
telephone purchase privilege unless you indicate otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing Pioneer mutual fund account; it may not be used to establish a new
account. Proper account identification will be required for each telephone
purchase. A maximum of $25,000 per account may be purchased by telephone each
day. The telephone purchase privilege is available to Individual Retirement
Accounts ("IRAs") but may not be available to other types of retirement plan
accounts. Call PSC for more information.
YOU ARE STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR
TO REQUESTING A TELEPHONE PURCHASE. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section of
your Account Application or an Account Options Form. PSC will electronically
debit the amount of each purchase from this predesignated bank account.
Telephone purchases may not be made for 30 days after the establishment of your
bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's receipt of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions" for additional information.
CLASS A SHARES
You may buy Class A shares at the public offering price, including a sales
charge, as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A % OF DEALER
---------------------- ALLOWANCE
NET AS A % OF
OFFERING AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
- --------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
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
</TABLE>
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Internal Revenue Code of 1986, as amended (the
"Code"), although more than one beneficiary is involved. The sales charges
applicable to a current purchase of Class A shares of the Fund by a person
listed above is determined by adding the value of shares to be purchased to the
aggregate value (at the then current offering price) of shares of any of the
other Pioneer mutual funds previously purchased and then owned, provided PFD is
notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of PMC, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by participants in certain group plans
(described below) subject to a CDSC of 1% which may be imposed in the event of
a redemption of Class A shares within 12 months of purchase. See "How to Sell
Fund Shares." PFD may, in its discretion, pay a commission to broker-dealers
who initiate and are responsible for such purchases as follows: 1% on the first
$5 million invested; 0.50% on the next $45 million; and 0.25% on the excess
over $50 million. These commissions will not be paid if the purchaser is
affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000 or
more eligible participants or with at least $10 million in plan assets will be
required to return any commission paid or a pro rata portion thereof if the
retirement plan redeems its shares within 12 months of purchase. See also "How
to Sell Fund Shares." In connection with PGI's acquisition of FMC and
contingent upon the achievement of certain sales objectives, PFD may pay to
Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of any sales
commission on sales of the Fund's Class A shares through such dealer. From time
to time, PFD may elect to reallow the entire initial sales charge to
participating dealers for all sales of Class A shares with respect to which
orders are placed during a particular period. Dealers to whom substantially the
entire sales charge is reallowed may be deemed to be underwriters under the
federal securities laws.
QUALIFYING FOR A REDUCED SALES CHARGE. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to, permits
group solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Class A shares of the Fund may be sold at net asset
value per share without a sales charge to 401(k) retirement plans with 100 or
more participants or at least $500,000 in plan assets. Information about such
arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners 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,
10
<PAGE>
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 affiliate serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold except
through redemption or repurchase by or on behalf of the Fund. The availability
of this privilege is conditioned upon the receipt by PFD of written
notification of eligibility.
Class A shares of the Fund may be sold at net asset value per share
without a sales charge to Optional Retirement Program (the "Program")
participants if (i) the employer has authorized a limited number of investment
company providers for the Program, (ii) all authorized investment company
providers offer their shares to Program participants at net asset value, (iii)
the employer has agreed in writing to actively promote the authorized
investment providers to Program participants and (iv) the Program provides for
a matching contribution for each participant contribution. Shares of the Fund
may also be 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.
Reduced sales charges are available for purchases of $50,000 or more of
Class A shares (excluding any reinvestments of dividends and capital gains
distributions) made within a 13-month period pursuant to a Letter of Intent
("LOI") which may be established by completing the Letter of Intent section of
the Account Application. The reduced sales charge will be the charge that would
be applicable to the purchase of the specified amount of Class A shares as if
the shares hadall been purchased at the same time. A purchase not made pursuant
to an LOI may be included if the LOI is submitted to PSC within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the Fund and all
other Pioneer mutual funds held of record as of the date of your LOI in the
amount used to determine the applicable sales charge for the Class A shares to
be purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PSC, registered in your name, until the terms of the
LOI are fulfilled.
You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to cover actual sales charges is due, it must be paid to PFD
within 20 days after PFD or your dealer sends you a written request otherwise
PFD will direct PSC to liquidate sufficient shares from your escrow account to
cover the amount due. See the Statement of Additional Information for more
information.
Investors who are clients of a broker-dealer with a current sales
agreement with PFD may purchase Class A shares of the Fund at net asset value,
without a sales charge, to the extent that the purchase price is paid out of
proceeds from one or more redemptions by the investor of shares of certain
other mutual funds. In order for a purchase to qualify for this privilege, the
investor must document to the broker-dealer that the redemption occurred within
the 60 days immediately preceding the purchase of Class A shares; that the
client paid a sales charge on the original purchase of the shares redeemed; and
that the mutual fund whose shares were redeemed also offers net asset value
purchases to redeeming shareholders of any of the Pioneer mutual funds. Further
details may be obtained from PFD.
CLASS B SHARES
You may buy Class B shares at the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates shown in the table below. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B shares,
the Fund will first redeem shares not subject to any CDSC, and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
<TABLE>
<CAPTION>
CDSC AS A %
YEAR SINCE OF DOLLAR AMOUNT
PURCHASE SUBJECT TO CDSC
- -------------------------------- -----------------
<S> <C>
First .......................... 4.0%
Second ......................... 4.0%
Third .......................... 3.0%
Fourth ......................... 3.0%
Fifth .......................... 2.0%
Sixth .......................... 1.0%
Seventh and thereafter ......... none
</TABLE>
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
Fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the
beginning of the calendar quarter that is eight years after the purchase date,
except as noted below. Class B shares acquired by exchange from Class B shares
of another Pioneer mutual fund will convert into Class A shares based on the
date of the initial purchase and the applicable CDSC. Class B shares acquired
through reinvestment of distributions will convert into Class A shares based on
the date of the initial purchase to which such shares relate. For this purpose,
Class B shares acquired through reinvestment of
11
<PAGE>
distributions will be attributed to particular purchases of Class B shares in
accordance with such procedures as the Trustees may determine from time to
time. The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service (the
"IRS") that such conversions will not constitute taxable events for federal tax
purposes. The conversion of Class B shares to Class A shares will not occur if
such ruling is not available and, therefore, Class B shares would continue to
be subject to higher expenses than Class A shares for an indeterminate period.
CLASS C SHARES
You may buy Class C shares at net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%. The charge will be assessed on the amount equal to the
lesser of the current market value or the original purchase cost of the shares
being redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gains distributions. Class C shares do not convert to any
other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments
during a quarter will be aggregated and deemed to have been made on the first
day of that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
Fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGE. The CDSC on Class
B shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of an UGMA, an UTMA or a trust account, the waiver applies upon the
death of all beneficial owners) or a total and permanent disability (as defined
in Section 72 of the Code) of all registered owners occurring after the
purchase of the shares being redeemed or (b) the redemption is made in
connection with limited automatic redemptions as set forth in "Systematic
Withdrawal Plans" (limited in any year to 10% of the value of the account in
the Fund at the time the withdrawal plan is established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and permanent
disability (as defined in Section 72 of the Code) occurring after the purchase
of the shares being redeemed of a shareholder or participant in an employer-
sponsored retirement plan; (b) the distribution is to a participant in an IRA,
403(b) or employer-sponsored retirement plan, is part of a series of
substantially equal payments made over the life expectancy of the participant or
the joint life expectancy of the participant and his or her beneficiary or as
scheduled periodic payments to a participant (limited in any year to 10% of the
value of the participant's account at the time the distribution amount is
established; a required minimum distribution due to the participant's attainment
of age 70-1/2 may exceed the 10% limit only if the distribution amount is based
on plan assets held in Pioneer mutual funds); (c) the distribution is from a
401(a) or 401(k) retirement plan and is a return of excess employee deferrals or
employee contributions or a qualifying hardship distribution as defined by the
Code or results from a termination of employment (limited with respect to a
termination to 10% per year of the value of the plan's assets in the Fund as of
the later of the prior December 31 or the date the account was established
unless the plan's assets are being rolled over to or reinvested in the same
class of shares of a Pioneer mutual fund subject to the CDSC of the shares
originally held); (d) the distribution is from an IRA, 403(b) or
employer-sponsored retirement plan and is to be rolled over to or reinvested in
the same class of shares in a Pioneer mutual fund and which will be subject to
the applicable CDSC upon redemption; (e) the distribution is in the form of a
loan to a participant in a plan which permits loans (each repayment of the loan
will constitute a new sale which will be subject to the applicable CDSC upon
redemption); or (f) the distribution is from a qualified defined contribution
plan and represents a participant's directed transfer (provided that this
privilege has been pre-authorized through a prior agreement with PFD regarding
participant directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may
be waived or reduced as follows: (a) for automatic redemptions as described in
"Systematic Withdrawal Plans" (limited to 10% of the value of the account); (b)
if the redemption results from the death or a total and permanent disability
(as defined in Section 72 of the Code) occurring after the purchase of the
shares being redeemed of a shareholder or participant in an employer-sponsored
retirement plan; (c) if the distribution is part of a series of substantially
equal payments made over the life expectancy of the participant or the joint
life expectancy of the participant and his or her beneficiary; or (d) if the
distribution is to a participant in an employer-sponsored retirement plan and
is (i) a return of excess employee deferrals or contributions, (ii) a
qualifying hardship distribution as defined by the Code, (iii) from a
termination of employment, (iv) in the form of a loan to a participant in a
plan which permits loans, or (v) from a qualified defined contribution plan and
represents a participant's directed transfer (provided that this privilege has
been pre-authorized through a prior agreement with PFD regarding participant
directed transfers).
The CDSC on any shares subject to a CDSC may be waived or reduced for
either non-retirement or retirement plan accounts if the redemption is made
pursuant to each Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account. The CDSC on any shares subject to a CDSC will not be
applicable if the selling broker-dealer elects, with PFD's approval, to waive
receipt of the commission normally paid at the time of the sale.
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<PAGE>
BROKER-DEALERS. An order for any Class of Fund shares received by a
broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close of
regular trading on the Exchange on the day the order is received, provided the
order is received by PFD prior to PFD's close of business (usually, 5:30 p.m.
Eastern time). It is the responsibility of broker-dealers to transmit orders so
that they will be received by PFD prior to its close of business. PFD or its
affiliates may provide additional compensation to certain dealers or such
dealers' affiliates based on certain objective criteria established from time
to time by PFD. All such payments are made out of PFD's or the affiliate's own
assets. These payments will not change the price an investor will pay for
shares or the amount that the Fund will receive from such sale.
GENERAL. The Fund reserves the right in its sole discretion to withdraw
all or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
YOU CAN ARRANGE TO SELL (REDEEM) FUND SHARES ON ANY DAY THE EXCHANGE IS
OPEN BY SELLING EITHER SOME OR ALL OF YOUR SHARES TO THE FUND.
You may sell your shares either through your broker-dealer or directly to
the Fund. Please note the following:
[bullet] If you are selling shares from a retirement account, other than an
IRA, you must make your request in writing (except for exchanges to
other Pioneer mutual funds which can be requested by phone or in
writing). Call 1-800-622-0176 for more information.
[bullet] If you are selling shares from a non-retirement account or IRA, you
may use any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received in good order less any applicable CDSC. Sale proceeds
generally will be sent to you by check, bank wire, or electronic funds transfer
normally within seven days after your order is received in good order. The Fund
reserves the right to withhold payment of the sale proceeds until checks
received by the Fund in payment for the shares being sold have cleared, which
may take up to 15 calendar days from the purchase date.
IN WRITING. You may sell your shares by delivering a written request,
signed by all registered owners, in good order to PSC; however, you must use a
written request, including a signature guarantee, to sell your shares if any of
the following applies:
[bullet] you wish to sell over $100,000 worth of shares,
[bullet] your account registration or address has changed within the last 30
days,
[bullet] the check is not being mailed to the address on your account
(address of record),
[bullet] the check is not being made out to the account owners, or
[bullet] the sale proceeds are being transferred to a Pioneer mutual fund
account with a different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, PSC will send the proceeds of the sale to
the address of record. Fiduciaries and corporations are required to submit
additional documents. For more information, contact PSC at 1-800-225-6292.
Written requests will not be processed until they are received in good
order by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any certificates are endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC at
1-800-225-6292.
BY TELEPHONE OR BY FAX. Your account is automatically authorized to have
the telephone redemption privilege unless you indicate otherwise on your
Account Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. The telephone redemption option is not
available to retirement plan accounts, except IRAs. You may redeem up to
$100,000 per account per day of your shares by telephone or fax and receive the
proceeds by check or bank wire or electronic funds transfer. To receive the
proceeds by check: the check must be made payable exactly as the account is
registered and the check must be sent to the address of record which must not
have changed in the last 30 days. To receive the proceeds by bank wire or by
electronic funds transfer: the proceeds must be sent to your bank address of
record which must have been properly predesignated 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" below. Telephone and fax redemptions will
be priced as described above. YOU ARE STRONGLY URGED TO CONSULT WITH YOUR
FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING A TELEPHONE REDEMPTION.
SELLING SHARES THROUGH YOUR BROKER-DEALER. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Your broker-dealer must receive your request before the close of business on
the Exchange and transmit it to PFD before PFD's close of business to receive
that day's redemption
13
<PAGE>
price. Your broker-dealer is responsible for providing all necessary
documentation to PFD and may charge you for its services.
SMALL ACCOUNTS. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value
of the account to at least the minimum required amount within six months of
notice by the Fund to you of the Fund's intention to redeem the shares.
CDSC ON CLASS A SHARES. Purchases of Class A shares of $1 million or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months following
the share purchase, at the rate of 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividend and capital gain distributions) or
the total cost of such shares. Shares subject to the CDSC which are exchanged
into another Pioneer mutual fund will continue to be subject to the CDSC until
the original 12-month period expires. However, no CDSC is payable upon
redemption with respect to Class A shares purchased by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets.
GENERAL. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
WRITTEN EXCHANGES. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the Class of shares to be exchanged and the dollar amount or number
of shares to be exchanged. Written exchange requests must be signed by all
record owner(s) exactly as the shares are registered.
TELEPHONE EXCHANGES. Your account is automatically authorized to have the
telephone exchange privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by
voice or by FactFone(SM), will be recorded. YOU ARE STRONGLY URGED TO CONSULT
WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING A TELEPHONE EXCHANGE.
See "Telephone Transactions" below.
AUTOMATIC EXCHANGES. You may automatically exchange shares from one Pioneer
mutual fund account for shares of the same Class in another Pioneer mutual
fund account on a monthly or quarterly basis. The accounts must have identical
registrations and the originating account must have a minimum balance of
$5,000. The exchange will be effective on the day of the month designated on
your Account Application or Account Options Form.
GENERAL. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Fund shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not all
Pioneer mutual funds offer more than one Class of shares. A new Pioneer mutual
fund account opened through an exchange must have a registration identical to
that on the original account.
Shares which would normally be subject to a CDSC upon redemption will not
be charged the applicable CDSC at the time of an exchange. Shares acquired in
an exchange will be subject to the CDSC of the shares originally held. For
purposes of determining the amount of any applicable CDSC, the length of time
you have owned shares acquired by exchange will be measured from the date you
acquired the original shares and will not be affected by any subsequent
exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern time will be
effective on that day if the requirements above have been met, otherwise, they
will be effective on the next business day. PSC will process exchanges only
after receiving an exchange request in good order. There are currently no fees
or sales charges imposed at the time of an exchange. An exchange of shares may
be made only in states where legally permitted. For federal and (generally)
state income tax purposes, an exchange is considered to be a sale of the shares
of the fund exchanged and a purchase of shares in another Pioneer mutual fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply.
You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For the protection of the Fund's performance and
shareholders, the Fund and PFD reserve the right to refuse any exchange request
or restrict, at any time without notice, the number and/or frequency of
exchanges to prevent abuses of the exchange privilege. Such abuses may arise
from frequent trading in response to short-term market fluctuations, a pattern
of trading by an individual or group that appears to be an attempt to "time the
market," or any other exchange request which, in the view of management, will
have a detrimental effect on the Fund's portfolio management strategy or its
operations. In addition, the Fund and PFD reserve the right to charge a fee for
exchanges or to modify, limit, suspend or discontinue the exchange privilege
with notice to shareholders as required by law.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for each Class of shares
except Class Y shares (the "Class A Plan," "Class
14
<PAGE>
B Plan," and "Class C Plan") in accordance with Rule 12b-1 under the 1940 Act
pursuant to which certain distribution and service fees are paid to PFD.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares, provided
the categories of expenses for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.25% per annum of the Fund's average daily net assets
attributable to Class A shares; (ii) reimbursement to PFD for its expenditures
for broker-dealer commissions and employee compensation on certain sales of the
Fund's Class A shares with no initial sales charge (see "How to Buy Fund
Shares"); and (iii) reimbursement to PFD for expenses incurred in providing
services to Class A shareholders and supporting broker-dealers and other
organizations (such as banks and trust companies) in their efforts to provide
such services. Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the described
services, management would consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A Plan
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 Fund's Class A shareholders.
Both the Class B Plan and the Class C Plan provide that the Fund will
compensate PFD by paying a distribution fee at the annual rate of 0.75% of the
Fund's average daily net assets attributable to the applicable Class of shares
and will pay PFD a service fee at the annual rate of 0.25% of the Fund's
average daily net assets attributable to that Class of shares. The distribution
fee is intended to compensate PFD for its Class B and Class C distribution
services to the Fund. The service fee is intended to be additional compensation
for personal services and/or account maintenance services with respect to Class
B and Class C shares. PFD also receives the proceeds of any CDSC imposed on the
redemption of Class B and Class C shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first
year's service fee equal to 0.25% of the amount invested in Class B shares, are
paid to broker-dealers who have sales agreements with PFD. PFD may advance to
dealers the first-year service fee at a rate up to 0.25% of the purchase price
of such shares and, as compensation therefor, PFD may retain the service fee
paid by the Fund with respect to such shares for the first year after purchase.
Dealers will become eligible for additional service fees with respect to such
shares commencing in the 13th month following the purchase. Commissions of up
to 1% of the amount invested in Class C shares, consisting of 0.75% of the
amount invested and a first year's service fee of 0.25% of the amount invested,
are paid to broker-dealers who have sales agreements with PFD. PFD may advance
to dealers the first-year service fee at a rate up to 0.25% of the purchase
price of such shares and, as compensation therefor, PFD may retain the service
fee paid by the Fund with respect to such shares for the first year after
purchase. Commencing in the 13th month following the purchase of Class C
shares, dealers will become eligible for additional annual distribution fees
and service fees of up to 0.75% and 0.25%, respectively, of the net asset value
of such shares.
When a broker-dealer sells Class B or Class C shares and elects, with
PFD's approval, to waive its right to receive the commission normally paid at
the time of the sale, PFD may cause all or a portion of the distribution fees
described above to be paid to the broker-dealer.
Dealers may from time to time be required to meet certain criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan or the Class C Plan for which there
is no dealer of record or for which qualification standards have not been met
as partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code,
so that it will not pay federal income tax on income and capital gains
distributed to shareholders as required under the Code.
Under the Code, the Fund will be subject to a nondeductible 4% federal
excise tax on a portion of its undistributed ordinary income and capital gains
if it fails to meet certain distribution requirements with respect to each
calendar year. The Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.
The Fund's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net long-term capital gains, if
any, usually in December. Distributions from net short-term capital gains, if
any, may be paid with such dividends; dividends from income and/or capital
gains may also be paid at such other times as may be necessary for the Fund to
avoid federal income or excise tax. Generally, dividends from the Fund's net
investment income, market discount income, net short-term capital gains and
certain net foreign exchange gains are taxable under the Code as ordinary
income, and dividends from the Fund's net long-term capital gains are taxable
as long-term capital gains.
UNLESS SHAREHOLDERS SPECIFY OTHERWISE, ALL DISTRIBUTIONS WILL BE
AUTOMATICALLY REINVESTED IN ADDITIONAL FULL AND FRACTIONAL SHARES OF THE FUND.
FOR FEDERAL INCOME TAX PURPOSES, ALL DIVIDENDS ARE TAXABLE AS DESCRIBED ABOVE
WHETHER A SHAREHOLDER TAKES THEM IN CASH OR REINVESTS THEM IN ADDITIONAL SHARES
OF THE FUND. Information as to the federal tax status of dividends and
distributions will be
15
<PAGE>
provided to shareholders annually. For further information on the distribution
options available to shareholders, see "Distribution Options" and "Directed
Dividends" below.
Distributions by the Fund of the dividend income it receives from U.S.
corporations may qualify for the dividends-received deduction for corporate
shareholders, subject to holding-period requirements and debt-financing
restrictions under the Code.
The Fund may be subject to foreign withholding taxes or other foreign
taxes on income (possibly including, in some cases, capital gains) from certain
of its foreign investments, which will reduce the yield on or return from those
investments. If, as anticipated, the Fund does not qualify to pass such taxes
through to its shareholders, they will neither treat such taxes as additional
income nor be entitled to any associated foreign tax credits or deductions.
Dividends and other distributions and the proceeds of redemptions,
exchanges or repurchases of Fund shares paid to individuals and other
non-exempt payees will be subject to 31% backup withholding of federal income
tax if the Fund is not provided with the shareholder's correct taxpayer
identification number and certification that the number is correct and that the
shareholder is not subject to backup withholding or if the Fund receives notice
from the IRS or a broker that such withholding applies. Please refer to the
Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S.
corporations, partnerships, trusts or estates and who are subject to U.S.
federal income tax. Non-U.S. shareholders and tax-exempt shareholders are
subject to tax treatment that is not described above. Shareholders should
consult their own tax advisors regarding state, local and other applicable tax
laws, including the effect of recent federal tax legislation, in their
particular circumstances.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Shareholder Services, Pioneering Services
Corporation, P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers
Harriman & Co. (the "Custodian") serves as custodian of the Fund's portfolio
securities and other assets. The principal business address of the mutual fund
division of the Custodian is 40 Water Street, Boston, Massachusetts 02109.
ACCOUNT AND CONFIRMATION STATEMENTS
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur, except
Automatic Investment Plan transactions which are confirmed quarterly. The
Pioneer Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer mutual fund account.
Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with the Fund
and might not be able to utilize some of the services available to shareholders
of record. Examples of services which might not be available are purchases,
exchanges or redemptions of shares by mail or telephone, automatic reinvestment
of dividends and capital gains distributions, withdrawal plans, LOIs, rights of
accumulation and newsletters.
ADDITIONAL INVESTMENTS
You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B and Class C shares) to PSC (account number and
Class of shares should be clearly indicated). The bottom portion of a
confirmation statement may be used as a remittance slip to make additional
investments.
Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
AUTOMATIC INVESTMENT PLANS
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized electronic funds transfer from
your bank account. Pioneer Investomatic Plan investments are voluntary, and you
may discontinue your plan at any time or change your plan elections for the
dollar amount, frequency or investment date by calling PSC at 1-800-225-6292,
or by sending a written request to Shareholder Services, Pioneering Services
Corporation, P.O. Box 9014, Boston, Massachusetts 02205-9014. You should allow
up to five business days for PSC to make changes to an established plan. 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
semiannually. In January of each year, the Fund will mail you information about
the tax status of dividends and distributions.
DISTRIBUTION OPTIONS
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application. Two
other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
If you elect to receive either dividends or dividends and capital gains in
cash and a distribution check issued to you is returned by the U.S. Postal
Service as not deliverable or a distribution check remains uncashed for six
months or more,
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the amount of the check may be reinvested in your account. Such additional
shares will be purchased at the then current net asset value. Furthermore, the
distribution option on the account will automatically be changed to the
reinvestment option until such time as you request a different option by
writing to PSC.
DIRECTED DIVIDENDS
You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer mutual fund account. The value
of this second account must be at least $1,000 ($500 for Pioneer Fund or
Pioneer II). Invested dividends may be in any amount, and there are no fees or
charges for this service. Retirement plan shareholders may only direct
dividends to accounts with identical registrations.
DIRECT DEPOSIT
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
VOLUNTARY TAX WITHHOLDING
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or for
accounts subject to backup withholding.
TELEPHONE TRANSACTIONS
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
See "How to Buy Fund Shares," "How to Sell Fund Shares" and "How to Exchange
Fund Shares" for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 9:00 p.m. Eastern time on weekdays. Computer-assisted
transactions may be available to shareholders who have pre-recorded certain
bank information (see "FactFone(SM)"). YOU ARE STRONGLY URGED TO CONSULT WITH
YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION.
To confirm that each transaction instruction received by telephone is
genuine, PSC 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 nor PFD will be responsible for
the authenticity of instructions received by telephone; therefore, you bear the
risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate with
the Fund in writing if you are unable to reach the Fund by telephone.
FACTFONE(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFone(SM) allows you to obtain current information on your Pioneer mutual
fund accounts and to inquire about the prices and yields of all publicly
available Pioneer mutual funds. In addition, you may use FactFone(SM) to make
computer-assisted telephone purchases, exchanges and redemptions from your
Pioneer mutual fund accounts if you have activated your PIN. Telephone purchases
and redemptions require the establishment of a bank account of record. YOU ARE
STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING
ANY TELEPHONE TRANSACTION. Shareholders whose accounts are registered in the
name of a broker-dealer or other third party may not be able to use
FactFone(SM). See "How to Buy Fund Shares," "How to Exchange Fund Shares," "How
to Sell Fund Shares" and "Telephone Transactions." Call PSC for assistance.
RETIREMENT PLANS
You should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations. The Account Application
accompanying this Prospectus should not be used to establish any of these
plans. Separate applications are required.
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern time, to contact our telephone representatives with questions
about your account.
SYSTEMATIC WITHDRAWAL PLANS
If your account has a total value of at least $10,000, you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B and Class C share accounts are limited to
10% of the value of the account at the time the SWP is implemented. See "Waiver
or Reduction of Contingent Deferred Sales Charge" for more information.
Periodic payments of $50 or more will be sent to you, or any person
designated by you, monthly or quarterly, and your periodic redemptions of
shares may be taxable to you. Payments can be made either by check or
electronic transfer to a bank account designated by you. If you direct that
withdrawal payments be paid to another person after you have opened your
account, a signature guarantee must accompany your instructions. Purchases of
Class A shares of the Fund at a
17
<PAGE>
time when you have a SWP in effect may result in the payment of unnecessary
sales charges and may, therefore, be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in Class
A shares of the Fund if you send a written request to PSC not more than 90 days
after your shares were redeemed. Your redemption proceeds will be reinvested at
the next determined net asset value of the Class A shares of the Fund after
receipt of the written request for reinstatement. You may realize a gain or
loss for federal income tax purposes as a result of the redemption, and special
tax rules may apply if a reinstatement occurs. In addition, if a redemption
resulted in a loss and an investment is made in shares of the Fund within 30
days before or after the redemption, you may not be able to recognize the loss
for federal income tax purposes. Subject to the provisions outlined under "How
to Exchange Fund Shares" above, you may also reinvest in Class A shares of
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 COMPLETING AN
ACCOUNT OPTIONS FORM, WHICH YOU MAY REQUEST BY CALLING 1-800-225-6292.
XIII. THE FUND
The Fund, an open-end, diversified management investment company (commonly
referred to as a mutual fund), was established as a Nebraska corporation on
January 16, 1968 and reorganized as a Delaware business trust on June 30, 1994.
The Fund has authorized an unlimited number of shares of beneficial interest.
As an open-end management investment company, the Fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon
the demand of any shareholder at the then current net asset value per share
less any applicable CDSC. See "How to Sell Fund Shares." The Fund is not
required, and does not intend, to hold annual shareholder meetings although
special meetings may be called for the purposes of electing or removing
Trustees, changing fundamental investment restrictions or approving a
management contract.
The Fund reserves the right to create and issue additional series of
shares. The Trustees have the authority, without further shareholder approval,
to classify and reclassify the shares of the Fund, or any new series, into one
or more classes. As of the date of this Prospectus, the Trustees have
authorized the issuance of four classes of shares, designated as Class A, Class
B, Class C and Class Y. The shares of each class represent an interest in the
same portfolio of investments of the Fund. Each class has equal rights as to
voting, redemption, dividends and liquidation, except that each class bears
different distribution and transfer agent fees and may bear other expenses
properly attributable to the particular class. Class A, Class B and Class C
shareholders have exclusive voting rights with respect to the Rule 12b-1
distribution plans adopted by holders of those shares in connection with the
distribution of shares.
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 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.
When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Fund are fully paid and
non-assessable. Shares will remain on deposit with the Fund's transfer agent
and certificates will not normally be issued. The Fund reserves the right to
charge a fee for the issuance of Class A share certificates; certificates will
not be issued for Class B or Class C shares.
XIV. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for each
class is computed in accordance with the SEC's standardized formula. The
calculation for all classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal or
state income taxes. In addition, for Class A shares the calculation assumes the
deduction of the maximum sales charge of 5.75%; for Class B and Class C shares
the calculation reflects the deduction of any applicable CDSC. The periods
illustrated would normally include one, five and ten years (or since the
commencement of the public offering of the shares of a class, if shorter)
through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share values;
or any graphic illustration of such data may also be used. These data may cover
any period of the Fund's existence and may or may not include the impact of
sales charges, taxes or other factors.
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<PAGE>
Other investments or savings vehicles and/or unmanaged market indices,
indicators of economic activity or averages of mutual fund results may be cited
or compared with the investment results of the Fund. The Fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the Fund's shares. Such performance
information may include rankings or listings by magazines, newspapers or
independent statistical or ratings services, such as Lipper Analytical
Services, Inc. or Ibbotson Associates.
The Fund's investment results will be calculated separately for each class
of shares and will vary from time to time depending on market conditions, the
composition of the Fund's portfolio, operating expenses of the Fund and
expenses attributed to a specific class of shares. All quoted investment
results are historical and should not be considered representative of what an
investment in the Fund may earn in any future period. For further information
about the calculation methods and uses of the Fund's investment results, see
the Statement of Additional Information.
19
<PAGE>
[PIONEER LOGO]
PIONEER
GROWTH
SHARES
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
OFFICERS
JOHN F. COGAN, JR., CHAIRMAN AND PRESIDENT
DAVID D. TRIPPLE, EXECUTIVE VICE PRESIDENT
JEFFREY B. POPPENHAGEN, 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 LLP
LEGAL COUNSEL
HALE AND DORR LLP
0898-5385
(c)Pioneer Funds Distributor, Inc.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
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
FactFone(SM)
Automated fund yields and 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
Visit our website........................................www.pioneerfunds.com
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PIONEER GROWTH SHARES
60 State Street
Boston, Massachusetts 02109
CLASS A, CLASS B, CLASS C AND CLASS Y SHARES
April 30, 1998 (as revised September 9, 1998)
This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the Class A, Class B and Class C prospectus and the Class Y
prospectus (each, a "Prospectus" and together, the "Prospectuses") dated April
30, 1998, as amended and/or supplemented from time to time, of Pioneer Growth
Shares (the "Fund"). A copy of each Prospectus can be obtained free of charge by
calling Shareholder Services at 1-800-225-6292 or by written request to the Fund
at 60 State Street, Boston, Massachusetts 02109. The most recent Annual and
Semiannual Reports to Shareholders are attached to this Statement of Additional
Information and are hereby incorporated into this Statement of Additional
Information by reference.
TABLE OF CONTENTS
PAGE
1. Investment Objective and Policies............................... 2
2. Investment Restrictions......................................... 6
3. Management of the Fund.......................................... 7
4. Investment Adviser.............................................. 11
5. Underwriting Agreement and Distribution Plans................... 12
6. Shareholder Servicing/Transfer Agent............................ 15
7. Custodian....................................................... 15
8. Principal Underwriter........................................... 15
9. Independent Public Accountants.................................. 15
10. Portfolio Transactions.......................................... 16
11. Tax Status...................................................... 17
12. Description of Shares........................................... 21
13. Certain Liabilities............................................. 21
14. Determination of Net Asset Value................................ 22
15. Systematic Withdrawal Plan...................................... 23
16. Letter of Intent................................................ 23
17. Investment Results.............................................. 24
18. Financial Statements............................................ 26
Appendix A - -Description of Short-Term Debt
and Corporate Bond Ratings...................................... 27
Appendix B - -Performance Statistics............................ 32
Appendix C - -Other Pioneer Information......................... 46
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
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<PAGE>
1. INVESTMENT OBJECTIVE AND POLICIES
See the Prospectuses for more information concerning the investment
objective and policies of the Fund. Additional investment policies and a further
description of some of the policies described in the Prospectuses appear below.
This Statement of Additional Information should be read in conjunction with the
Prospectuses. Capitalized terms not otherwise defined herein have the meaning
given to them in the Prospectuses.
RESTRICTED AND ILLIQUID SECURITIES
With respect to liquidity determinations generally, the Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including Rule 144A securities, are liquid or illiquid. The Board
has delegated the function of making day to day determinations of liquidity to
PMC, pursuant to guidelines reviewed by the Trustees. PMC takes into account a
number of factors in reaching liquidity decisions. These factors may include but
are not limited to: (i) the frequency of trading in the security; (ii) the
number of dealers who make quotes in the securities; (iii) the number of dealers
who have undertaken to make a market in the security; (iv) the number of
potential purchasers; and (v) the nature of the security and how trading is
effected (e.g., the time needed to sell the security, how offers are solicited
and the mechanics of transfer). PMC will monitor the liquidity of securities in
the Fund's portfolio and report periodically on such decisions to the Trustees.
Since it is not possible to predict with assurance exactly how the
market for restricted securities sold and offered under Rule 144A will develop,
the Board 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.
LOWER QUALITY DEBT OBLIGATIONS
The Fund may invest up to 5% of its net assets in debt securities which
are rated in the lowest rating categories by Standard & Poor's Ratings Group
("Standard & Poor's") or by Moody's Investors Service, Inc. ("Moody's") (i.e.,
ratings of BB or lower by Standard & Poor's or Ba or lower by Moody's) or, if
unrated by such rating organizations, determined to be of comparable quality by
PMC. In addition, the Fund may invest in medium quality debt securities (i.e.,
securities rated BBB by Standard & Poor's or Baa by Moody's, or unrated
securities determined by PMC to be of comparable quality).
Bonds rated BB or Ba or below or comparable unrated securities are
commonly referred to as "junk bonds" and are considered speculative and may be
questionable as to principal and interest payments. In some cases, such bonds
may be highly speculative, have poor prospects for reaching investment standing
and be in default. As a result, investment in such bonds will entail greater
speculative risks than those associated with investment in investment grade
bonds (i.e., bonds rated BBB or better by Standard & Poor's or Baa or better by
Moody's or, if unrated by such rating organizations, determined to be of
comparable quality by PMC).
The amount of junk bond securities outstanding has proliferated in
conjunction with the increase in merger and acquisition and leveraged buyout
activity. An economic downturn could severely affect the ability of highly
leveraged issuers to service their debt obligations or to repay their
obligations upon maturity. Factors having an adverse impact on the market value
of lower quality securities will have an adverse effect on the Fund's net asset
value to the extent that it invests in such securities. In addition, the Fund
may incur additional expenses to the extent it is required to seek recovery upon
a default in payment of principal or interest on its portfolio holdings.
2
<PAGE>
The secondary market for junk bond securities, which is concentrated in
relatively few market makers, may not be as liquid as the secondary market for
more highly rated securities, a factor which may have an adverse effect on the
Fund's ability to dispose of a particular security when necessary to meet its
liquidity needs. Under adverse market or economic conditions, the secondary
market for junk bond securities could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result,
the Fund could find it more difficult to sell these securities or may be able to
sell the securities only at prices lower than if such securities were widely
traded. Prices realized upon the sale of such lower rated or unrated securities,
under these circumstances, may be less than the prices used in calculating the
Fund's net asset value.
Certain proposed and recently enacted federal laws including the
required divestiture by federally insured savings and loan associations of their
investments in junk bonds and proposals designed to limit the use, or tax and
other advantages, of junk bond securities could adversely affect the Fund's net
asset value and investment practices. Such proposals could also adversely affect
the secondary market for junk bond securities, the financial condition of
issuers of these securities and the value of outstanding junk bond securities.
The form of such proposed legislation and the possibility of such legislation
being passed are uncertain.
Since investors generally perceive that there are greater risks
associated with the medium to lower quality debt securities of the type in which
the Fund may invest a portion of its assets, the yields and prices of such
securities may tend to fluctuate more than those for higher rated securities. In
the lower quality segments of the debt securities market, changes in perceptions
of issuers' creditworthiness tend to occur more frequently and in a more
pronounced manner than do changes in higher quality segments of the debt
securities market, resulting in greater yield and price volatility.
Medium-to-lower rated and comparable unrated debt securities tend to
offer higher yields than higher rated securities with the same maturities
because the historical financial condition of the issuers of such securities may
not have been as strong as that of other issuers. Since medium to lower rated
securities generally involve greater risks of loss of income and principal than
higher rated securities, investors should consider carefully the relative risks
associated with investment in securities which carry medium to lower ratings and
in comparable unrated securities. PMC will attempt to reduce these risks through
portfolio diversification and by analysis of each issuer and its ability to make
timely payments of income and principal, as well as broad economic trends and
corporate developments.
The prices of all debt securities generally fluctuate in response to
the general level of interest rates. Another factor which causes fluctuations in
the prices of debt securities is the supply and demand for similarly rated
securities. Fluctuations in the prices of portfolio securities subsequent to
their acquisition will not affect any cash income from such securities but will
be reflected in the Fund's net asset value.
FORWARD FOREIGN CURRENCY TRANSACTIONS
The Fund may engage in forward foreign currency transactions. These
transactions may be conducted on a spot, i.e., cash basis, at the spot rate for
purchasing or selling currency prevailing in the foreign exchange market. The
Fund also has authority to enter into forward foreign currency exchange
contracts involving currencies of the different countries in which the Fund will
invest as a hedge against possible variations in the foreign exchange rate
between these currencies and the U.S. dollar. This is accomplished through
contractual agreements to purchase or sell a specified currency at a specified
future date and price set at the time of the contract. The Fund's transactions
in forward foreign currency contracts will be limited to hedging either specific
transactions or portfolio positions. Transaction hedging is the purchase or sale
of forward foreign currency contracts with respect to specific receivables or
3
<PAGE>
payables of the Fund, accrued in connection with the purchase and sale of its
portfolio securities denominated in foreign currencies. Portfolio hedging is the
use of forward foreign currency contracts to offset portfolio security positions
denominated or quoted in such foreign currencies. There is no guarantee that the
Fund will be engaged in hedging activities when adverse exchange rate movements
occur. The Fund will not attempt to hedge all of its foreign portfolio
positions, and will enter into such transactions only to the extent, if any,
deemed appropriate by the investment adviser. The Fund will not enter into
speculative forward foreign currency contracts.
If the Fund enters into a forward contract to purchase foreign
currency, the custodian bank will segregate cash or high grade liquid debt
securities in a separate account in an amount equal to the value of the total
assets committed to the consummation of such forward contract. Those assets will
be valued at market daily and if the value of the assets in the separate account
declines, additional cash or securities will be placed in the account so that
the value of the account will equal the amount of the Fund's commitment with
respect to such contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The cost to the Fund of engaging in foreign currency transactions
varies with such factors as the currency involved, the size of the contract, the
length of the contract period and the market conditions then prevailing. Since
transactions in foreign currency and forward contracts are usually conducted on
a principal basis, no fees or commissions are involved. The Fund may close out a
forward position in a currency by selling the forward contract or by entering
into an offsetting forward contract.
WARRANTS
The Fund may invest in warrants, which are securities permitting, but
not obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer. As a result, an investment in
warrants may be considered more speculative than certain other types of
investments. In addition, the value of a warrant does not necessarily change
with the value of the underlying securities and a warrant expires worthless if
it is not exercised on or prior to its expiration date. Although the Fund does
not have a formal percentage limitation on such investments, it is not expected
that PMC will invest more than 5% of the Fund's net assets in such securities.
REAL ESTATE INVESTMENT TRUSTS AND ASSOCIATED RISK FACTORS
The Fund may invest up to 5% of its net assets in shares of REITs. REITs
are pooled investment vehicles which invest primarily in income producing real
estate or real estate related loans or interests. REITs are generally classified
as equity REITs, mortgage REITs or a combination of equity and mortgage REITs.
Equity REITs invest the majority of their assets directly in real property and
derive income primarily from the collection of rents. Equity REITs can also
realize capital gains by selling properties that have appreciated in value.
Mortgage REITs invest the majority of their assets in real estate mortgages and
derive income from the collection of interest payments. Like investment
companies such as the Fund, REITs are not taxed on income distributed to
shareholders provided they comply with
4
<PAGE>
several requirements of the Code. The Fund will indirectly bear its
proportionate share of any expenses paid by REITs in which it invests in
addition to the expenses paid by the Fund.
Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. REITs are subject to heavy cash
flow dependency, default by borrowers, self-liquidation, and the possibilities
of failing to qualify for the exemption from tax for distributed income under
the Code and failing to maintain their exemptions from the 1940 Act. REITs whose
underlying assets include long-term health care properties, such as nursing,
retirement and assisted living homes, may be impacted by federal regulations
concerning the health care industry.
REITs (especially mortgage REITs) are also subject to interest rate
risks. When interest rates decline, the value of a REIT's investment in fixed
rate obligations can be expected to rise. Conversely, when interest rates rise,
the value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.
REITs may have limited financial resources, may trade less frequently
and in a limited volume and may be subject to more abrupt or erratic price
movements than larger company securities.
OTHER INVESTMENT COMPANIES
Under the 1940 Act, the Fund may not acquire the securities of other
domestic or foreign investment companies or investment funds if, as a result,
(i) more than 10% of the Fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the Fund, or (iii) more than 5% of the Fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The Fund, as shareholder in the securities of another
investment company, will bear its pro rata portion of the other investment
company's expenses, including advisory fees. These expenses are in addition to
the direct expenses of the Fund's own operations.
PORTFOLIO TURNOVER RATE
The Fund will limit portfolio turnover to the extent practicable and
consistent with its investment objective and policies. In any event, the Fund
does not consider the rate of portfolio turnover a limiting factor where
management considers changes necessary and as the Fund may deem it advisable to
take advantage of short-term trends by purchases and sales of securities. The
Fund's investment policy from time to time may result in the portfolio turnover
being higher than that of investment companies with investment objectives
different from that of the Fund. A higher portfolio turnover rate may result in
correspondingly higher transaction costs.
5
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2. INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund considers the investment
objective, the investment policy under the caption "Restricted and Illiquid
Securities" in the Prospectus and the following restrictions as fundamental
policies which cannot be changed without approval by a "majority of the
outstanding voting securities" (as defined in Section 2(a)(42) of the 1940 Act)
of the Fund. All other investment policies and restrictions are considered
non-fundamental and may be changed by approval of the Trustees without the vote
of shareholders.
THE FUND MAY NOT:
(1) Concentrate the investment of its assets in any one industry or
group of industries and therefore will not invest 25% or more of its total
assets in any one industry;
(2) Purchase securities on margin, but it may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities;
(3) Make short sales of securities unless at the time of such sale it
owns or has the right to acquire as a result of the ownership of convertible or
exchangeable securities, and without the payment of further consideration, an
equal amount of such securities which it will retain so long as it is in a short
position. At no time will more than 10% of the value of the Fund's assets be
committed to short sales;
(4) Make loans, except by purchase of debt obligations in which the
Fund may invest consistent with its investment policies, by entering into
repurchase agreements or through the lending of portfolio securities, in each
case only to the extent permitted by the Prospectus and this Statement of
Additional Information;
(5) Borrow money except from banks as a temporary measure to facilitate
the meeting of redemption requests or for extraordinary or emergency purposes
and except pursuant to reverse repurchase agreements or dollar rolls, in all
cases in amounts not exceeding 10% of the Fund's total assets (including the
amount borrowed) taken at market value;
(6) Act as an underwriter, except as it may be deemed to be an
underwriter in a sale of restricted securities held in its portfolio, or invest
in real estate, commodities or commodity contracts, except that the Fund may
invest in financial futures contracts and related options and in any other
financial instruments which may be deemed to be commodities or commodity
contracts in which the Fund is not prohibited from investing by the Commodity
Exchange Act and the rules and regulations thereunder;
(7) Purchase any security (other than obligations of the U.S.
Government, its agencies or instrumentalities), if as a result: (a) more than
25% of the value of the Fund's total assets would then be invested in securities
of any single issuer, or (b) as to 75% of the value of the Fund's total assets:
(i) more than 5% of the value of the Fund's total assets would then be invested
in securities of any single issuer, or (ii) the Fund would own more than 10% of
the voting securities of any single issuer;
(8) Issue senior securities, except as permitted by the Fund's
borrowing, lending and commodity restrictions, and for purposes of this
restriction, the issuance of shares of beneficial interest in multiple classes
or series, the purchase or sale of options, futures contracts, options on
futures contracts, forward commitments ("when issued" and "delayed delivery"
securities), forward foreign currency exchange contracts, repurchase agreements,
fully covered reverse repurchase agreements, dollar rolls, swaps and any other
financial transaction entered into pursuant to the Fund's investment policies as
described in the Prospectus and this Statement of Additional Information and in
accordance with applicable SEC
6
<PAGE>
pronouncements, as well as the pledge, mortgage or hypothecation of the
Fund's assets within the meaning of the Fund's fundamental investment
restriction regarding pledging, are not deemed to be senior securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS.
It is not the policy of the Fund to invest in any company for the
purpose of acquiring or exercising management or control of such company. This
policy is non-fundamental and may be changed by approval of the Trustees without
the vote of the shareholders. In view of the risks of loss inherent in investing
in equity securities, there is no assurance that the investment objective of the
Fund will be achieved or that shareholders will be protected from incurring any
losses on their investments.
If a percentage restriction on investment or utilization of assets set
forth in any of the above is adhered to at the time an investment is made, a
later change in percentage resulting from changing values or a change in the
rating of a portfolio security will not be considered a violation of policy.
3. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the
affairs of the Fund. The officers of the Fund are responsible for the Fund's
operations. The Trustees and executive officers of the Fund are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Fund within
the meaning of the 1940 Act.
JOHN F. COGAN, JR.*, CHAIRMAN OF THE BOARD, PRESIDENT AND TRUSTEE,
DOB: JUNE 1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC"), Pioneer Real
Estate Advisors, Inc., Pioneer Forest, Inc., Pioneer Explorer, Inc., Pioneer
Management (Ireland) Ltd. ("PMIL") and Closed Joint Stock Company
"Forest-Starma"; President and Director of Pioneer Metals and Technology, Inc.
("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First Russia, Inc.
("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the Board and
Director of Pioneer Goldfields Limited ("PGL") and Teberebie Goldfields Limited;
Chairman of the Supervisory Board of Pioneer Fonds Marketing, GmbH, Pioneer
First Polish Investment Fund Joint Stock Company, S.A. and Pioneer Czech
Investment Company, A.S.; Chairman, President and Trustee of all of the Pioneer
mutual funds; Director of Pioneer Global Equity Fund Plc, Pioneer Global Bond
Fund Plc, Pioneer DM Cashfonds Plc, Pioneer European Equity Fund Plc, Pioneer
Central & Eastern Europe Fund Plc and Pioneer US Real Estate Fund Plc; and
Partner, Hale and Dorr LLP (counsel to PGI and the Fund).
MARY K. BUSH, TRUSTEE, DOB: APRIL 1948
4201 CATHEDRAL AVENUE, NW, WASHINGTON, DC 20016
President, Bush & Co., an international financial advisory firm;
Director and/or Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc. (not-for-profit educational organization), Small
Enterprise Assistance Fund and Wilberforce University; Advisory Board Member,
Washington Mutual Investors Fund, a registered investment company; and Trustee
of all the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
7
<PAGE>
RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926
BOSTON UNIVERSITY HEALTH POLICY INSTITUTE, 53 BAY STATE ROAD, BOSTON, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; University Professor, Boston
University; Director, Boston University Health Policy Institute and Boston
University Program for Health Care Entrepreneurship; Director, CORE (management
of workers' compensation and disability costs - Nasdaq National Market);
Director, WellSpace (provider of complementary health care); Trustee, Boston
Medical Center; Honorary Trustee, Franciscan Children's Hospital; and Trustee of
all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, TRUSTEE, DOB: MAY 1947
THE KEEP, P.O. BOX 110, LITTLE DEER ISLE, ME 04650
Founding Director, The Winthrop Group, Inc. (consulting firm); Manager
of Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management of Technology and Associate
Dean, Boston University School of Management, from 1989 to 1993; and Trustee of
all the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, TRUSTEE, DOB: JULY 1917
6363 WATERWAY DRIVE, FALLS CHURCH, VA 22044
Professor Emeritus, George Washington University; Director, American
Productivity and Quality Center; Adjunct Scholar, American Enterprise Institute;
and Trustee of all of the Pioneer mutual funds, except Pioneer Variable
Contracts Trust.
MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948
ONE BOSTON PLACE, SUITE 2635, BOSTON, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm);
Trustee of Boston Medical Center; Member of the Board of Governors of the
Investment Company Institute; and Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, TRUSTEE AND EXECUTIVE VICE PRESIDENT, DOB: FEBRUARY 1944
Executive Vice President and a Director of PGI; President and a
Director of PMC; Director of PFD, PCC, PIntl, First Russia, Omega, Pioneer SBIC
Corporation ("Pioneer SBIC"), PMIL, Pioneer Global Equity Fund Plc, Pioneer
Global Bond Fund Plc, Pioneer DM Cashfonds Plc, Pioneer European Equity Fund
Plc, Pioneer Central & Eastern Europe Fund Plc and Pioneer US Real Estate Fund
Plc; and Executive Vice President and Trustee of all of the Pioneer mutual
funds.
STEPHEN K. WEST, TRUSTEE, DOB: SEPTEMBER 1928
125 BROAD STREET, NEW YORK, NY 10004
Of Counsel to Sullivan & Cromwell (law firm); Trustee, The Winthrop
Focus Funds (mutual funds); and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, TRUSTEE, DOB: JUNE 1936
ONE NORTH ADGERS WHARF, CHARLESTON, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of
NUI Corp. (energy sales, services and distribution); and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
8
<PAGE>
WILLIAM H. KEOUGH, TREASURER, DOB: APRIL 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC; and Treasurer of all of the Pioneer mutual funds.
JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946
Corporate Secretary of PGI and most of its subsidiaries; Secretary of
all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP.
ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956
Manager of Business Planning and Internal Audit of PMC since September
1996; Manager of Fund Accounting of PMC since May 1994; Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994; and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, ASSISTANT SECRETARY, DOB: MARCH 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC; and junior partner of Hale and Dorr LLP
prior to 1995.
JEFFREY B. POPPENHAGEN, VICE PRESIDENT, DOB: MARCH 1962
Vice President of PMC since February 1996; Vice President of the
Growth Shares Portfolio of Pioneer Variable Contracts Trust; and formerly a
portfolio manager for a number of equity portfolios.
The Fund's Agreement and Declaration of Trust, dated June 16, 1994
(the "Declaration"), provides that the holders of two-thirds of its outstanding
shares may vote to remove a Trustee of the Fund at any meeting of shareholders.
See "Description of Shares" below. The business address of all officers is 60
State Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly owned Delaware corporation. PMC, the
Fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered
to the public and the investment adviser and principal underwriter for each
fund.
Investment Principal
FUND NAME ADVISER UNDERWRITER
Pioneer World Equity Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Micro-Cap Fund PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Independence Fund PMC Note 1
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
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<PAGE>
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Balanced Fund PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares PMC Note 2
Pioneer Variable Contracts Trust PMC Note 3
- ------------
Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of ten separate portfolios designed to provide
investment vehicles for the variable annuity and variable life insurance
contracts of various insurance companies or for certain qualified pension plans.
As of August 31, 1998, to the knowledge of the Fund, no officer or
Trustee of the Fund owned 5% or more of the issued and outstanding shares of
PGI, except Mr. Cogan who then owned approximately 14% of such shares. As of
August 31, 1998, the officers and Trustees owned beneficially in aggregate less
than 1% of the outstanding shares of the Fund. As of August 31, 1998, Tommie D.
Thompson, Trustee for Mutual of Omaha 401(k) Long-Term Savings Plan, Mutual of
Omaha Plaza, Omaha, NE 68175-0001 owned approximately 3,339,638 (6.37%) of the
outstanding Class A shares of the Fund; Merrill Lynch Pierce Fenner & Smith,
Inc. for the Sole Benefit of its Customers, Mutual Fund Administration, 4800
Deer Lake Drive East, 2nd Floor, Jacksonville, FL 32246-6484 owned approximately
3,384,050 (13.48%) of the outstanding Class B shares of the Fund and 1,890,061
(32.79%) of the outstanding Class C shares of the Fund; and U.S. Trust Company
of the Pacific Northwest, Trustee for Pioneer Retirement Benefit Plan, Special
Fiduciary Services, U.S. Trust Company of the Pacific Northwest, 4380 S.W.
Macadam Avenue, Suite 450, Portland, OR 97201-6407 owned approximately 128,232
(58.16%) and, as trustee for Pioneer Savings and Investment Plan, 90,278
(40.94%) of the outstanding Class Y shares of the Fund.
COMPENSATION OF OFFICERS AND TRUSTEES. The Fund pays no salaries or
compensation to any of its officers. The Fund pays an annual trustee's fee to
each Trustee who is not affiliated with PMC, PGI, PFD or PSC consisting of two
components: (a) a base fee of $750 and (b) a variable fee, calculated on the
basis of the average net assets of the Fund. In addition, the Fund pays a per
meeting fee of $150 to each Trustee who is not affiliated with PMC, PGI, PFD or
PSC and pays an annual trustee's fee of $750 plus expenses to each Trustee
affiliated with PMC, PGI, PFD or PSC. The Fund also pays an annual committee
participation fee to Trustees who serve as members of committees established to
act on behalf of one or more of the Pioneer mutual funds. Committee fees are
allocated to the Fund on the basis of the Fund's average net assets. Each
Trustee who is a member of the Audit Committee for the Pioneer mutual funds
receives an annual fee equal to 10% of the aggregate annual trustee's fee,
except the Committee Chair who receives an annual fee equal to 20% of the
aggregate annual trustee's fee. Members of the Pricing Committee for the Pioneer
mutual funds, as well as any other committee which renders material functional
services to the Boards of Trustees for the Pioneer mutual funds (such as the
Year 2000 Committee, International Transfer Agent Issues Committee and
Disinterested Trustees Committee),
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receive an annual fee equal to 5% of the aggregate annual trustee's fee,
except the Committee Chair who receives an annual fee equal to 10% of the
aggregate annual trustee's fee. Any such fees paid to Trustees affiliated with
PMC, PGI, PFD or PSC are reimbursed to the Fund under its management contract.
The following table sets forth certain information with respect to the
compensation of each Trustee for the year ended December 31, 1997:
Pension or Total Compensa-
Retirement tion from the
Aggregate Benefits Fund and Other
Compensation Accrued as Part Pioneer
NAME OF TRUSTEE FROM THE FUND OF FUND EXPENSES MUTUAL FUNDS
John F. Cogan, Jr. $ 500 $0 $12,000
Mary K. Bush 1,136 0 30,000
Richard H. Egdahl, M.D. 2,212 0 62,000
Margaret B.W. Graham 2,212 0 60,000
John W. Kendrick 2,052 0 55,800
Marguerite A. Piret 2,726 0 80,000
David D. Tripple 500 0 12,000
Stephen K. West 2,242 0 63,800
John Winthrop 2,516 0 69,000
----- - ------
Totals $16,096 $0 $444,600
======= == ========
4. INVESTMENT ADVISER
As stated in the Prospectuses, PMC, 60 State Street, Boston,
Massachusetts 02109, serves as the Fund's investment adviser. PMC became the
Fund's investment adviser on December 1, 1993. Prior to that date, Mutual of
Omaha Fund Management Company ("FMC") served as the Fund's investment adviser.
The term of the management contract is one year and is renewable annually by the
vote of a majority of the Board of Trustees of the Fund (including a majority of
the Board of Trustees who are not parties to the contract or interested persons
of any such parties) cast in person at a meeting called for the purpose of
voting on such renewal. This contract terminates if assigned and may be
terminated without penalty by either party by vote of its Board of Directors or
Trustees or vote of a majority of its outstanding voting securities and the
giving of 60 days' written notice. Pursuant to the management contract, PMC will
not be liable for any error of judgment or mistake of law or for any loss
sustained by reason of the adoption of any investment policy or the purchase,
sale or retention of any securities on the recommendation of PMC. PMC, however,
is not protected against liability by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under the management contract.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the following rates per annum of the Fund's
average daily net assets. This fee is computed and accrued daily and paid
monthly.
NET ASSETS ANNUAL RATE
For assets up to $250,000,000..................................... 0.50%
For assets in excess of $250,000,000 to $300,000,000.............. 0.48%
Over $300,000,000................................................. 0.45%
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The Fund paid $879,379, $1,284,948 and $2,401,013 in management fees to
PMC for the fiscal years ended December 31, 1995, December 31, 1996 and December
31, 1997, respectively.
5 UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund entered into an underwriting agreement with PFD. The underwriting
agreement will continue from year to year if annually approved by the Trustees.
The underwriting agreement provides that PFD will bear certain distribution
expenses not borne by the Fund.
PFD bears all expenses it incurs in providing services under the
underwriting agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution-related services
performed for the Fund. PFD also pays certain expenses in connection with the
distribution of the Fund's shares, including the cost of preparing, printing and
distributing advertising or promotional materials, and the cost of printing and
distributing prospectuses and supplements to prospective shareholders. The Fund
bears the cost of registering its shares under federal and state securities law.
The Fund and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the 1933 Act. Under the underwriting
agreement, PFD will use its best efforts in rendering services to the Fund.
The Fund has adopted a Plan of Distribution for each Class of shares
(except Class Y shares) in accordance with Rule 12b-1 under the 1940 Act (the
"Class A Plan," the "Class B Plan" and the "Class C Plan") (together, the
"Plans") pursuant to which certain distribution fees are paid to PFD.
CLASS A PLAN
Pursuant to the Class A Plan, the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Class A shares of the Fund. Certain categories of such expenditures have been
approved by the Board of Trustees and are set forth in the Prospectus. See
"Distribution Plans" in the Prospectus. The expenses of the Fund pursuant to the
Class A Plan are accrued on a fiscal year basis and may not exceed, with respect
to the Class A shares, the annual rate of 0.25% of the Fund's average daily net
assets attributable to Class A shares.
The Class A 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 Class A Plan may result in an
expense invoiced to the Fund in one fiscal year being paid in the subsequent
fiscal year and thus being treated for purposes of calculating the maximum
expenditures of the Fund as having been incurred in the subsequent fiscal year.
In the event of termination or non-continuance of the Class A Plan, the Fund has
12 months to reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the Fund during such 12-month period
shall not exceed 0.25% of the Fund's average daily net assets attributable to
the Class A shares during such period.
CLASS B PLAN
The Class B Plan provides that the Fund shall pay PFD, as the Fund's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Fund's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Fund's average daily
net assets attributable to Class B shares (which PFD will in turn pay to
securities dealers which enter into a sales agreement with PFD at a rate of up
to 0.25% of the Fund's average daily net assets attributable to Class B shares
owned by investors for whom that securities dealer is the holder or dealer of
record). This service fee is intended to be in consideration for personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the
12
<PAGE>
service fee paid by the Fund with respect to such shares for the
first year after purchase. Dealers will become eligible for additional service
fees with respect to such shares commencing in the thirteenth month following
purchase. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services with respect to Class B shares of
the Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services or personnel, travel, office expenses and
equipment. The Class B Plan also provides that PFD will receive all CDSCs
attributable to Class B shares. (See "Distribution Plans" in the Prospectus.).
When a broker-dealer sells Class B shares and elects, with PFD's approval, to
waive its right to receive the commission normally paid at the time of the sale,
PFD may cause all or a portion of the distribution fees described above to be
paid to the broker-dealer.
CLASS C PLAN
The Class C Plan provides that the Fund will pay PFD, as the Fund's
distributor for its Class C shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis to 0.75% of the Fund's average daily net
assets attributable to Class C shares and will pay PFD a service fee equal to
0.25% of the Fund's average daily net assets attributable to Class C shares. PFD
will in turn pay to securities dealers which enter into a sales agreement with
PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the Fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the current value of the amount invested and
additional compensation at a rate of up to 0.75% of the average net asset value
with respect to such shares. Dealers may from time to time be required to meet
certain other criteria in order to receive service fees. PFD or its affiliates
are entitled to retain all service fees payable under the Class C Plan for which
there is no dealer of record or for which qualification standards have not been
met as partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to the Class C shares
of the Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distribution Plans" in the Prospectus.)
When a broker-dealer sells Class C shares and elects, with PFD's approval, to
waive its right to receive the commission normally paid at the time of the sale,
PFD may cause all or a portion of the distribution fees described above to be
paid to the broker-dealer.
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PFD incurs the expenses of distributing the Fund's Class Y shares, none of
which are reimbursed or paid for by the Fund. These expenses include any
commissions or account servicing fees paid to, or on account of, broker-dealers
which have sales agreements with PFD and certain qualifying registered
investment advisers and other financial institutions.
GENERAL
In accordance with the terms of the Plans, PFD provides to the Fund for
review by the Trustees a quarterly written report of the amounts expended under
the respective Plans and the purpose for which such expenditures were made. In
the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is not an
interested person of the Fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
"interested persons" of the Fund, as defined in the 1940 Act (none of whom had
or have any direct or indirect financial interest in the operation of the
Plans), cast in person at a meeting called for the purpose of voting on the
Plans. In approving the Plans, the Trustees identified and considered a number
of potential benefits which the Plans may provide. The Board of Trustees
believes that there is a reasonable likelihood that the Plans will benefit the
Fund and its current and future shareholders. Under their terms, the Plans
remain in effect from year to year provided such continuance is approved
annually by vote of the Trustees in the manner described above. The Plans may
not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein without
approval of the shareholders of the Fund affected thereby, and material
amendments to the Plans must also be approved by the Trustees in the manner
described above. A Plan may be terminated at any time, without payment of any
penalty, by vote of the majority of the Trustees who are not interested persons
of the Fund and have no direct or indirect financial interest in the operations
of the Plan, or by a vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities (as defined in the 1930 Act) of the respective
class of the Fund. A Plan will automatically terminate in the event of its
assignment (as defined in the 1940 Act).
During the fiscal year ended December 31, 1997, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan, Class B Plan and Class C
Plan, respectively, as follows: $1,018,801, $804,344 and $126,321. Distribution
fees were paid by the Fund to PFD in reimbursement of or as compensation for
expenses related to servicing shareholder accounts and to compensate dealers and
sales personnel.
Redemptions of each class of shares (except Class Y shares) may be subject
to a 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% based on the lower of the cost or market value
of the shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. See "How to Buy Fund Shares" in the
Prospectus. During the fiscal year ended December 31, 1997, CDSCs in the amount
of $145,214 were paid to PFD.
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6 SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts
02109 to act as shareholder servicing agent and transfer agent for the Fund.
This contract may be terminated without penalty by either party upon 90 days'
written notice.
Under the terms of its contract with the Fund, PSC services shareholder
accounts, and its duties will include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii) distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii) maintaining account records
and responding to routine shareholder inquiries.
PSC receives an annual fee of $22.75 per Class A, Class B and Class C
shareholder account from the Fund as compensation for the services described
above. PSC is also reimbursed by the Fund for its out-of-pocket expenditures.
The annual fee is set at an amount determined by vote of a majority of the
Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies. The Fund may
compensate entities which have agreed to provide certain sub-accounting services
such as specific transaction processing and recordkeeping services. Any such
payments by the Fund would be in lieu of the per account fee which would
otherwise be paid by the Fund to PSC.
7 CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109, is the custodian (the "Custodian") of the Fund's assets. The Custodian's
responsibilities include safekeeping and controlling the Fund's cash and
securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the Fund's investments. The Custodian does not
determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may invest in securities issued by the
Custodian, deposit cash in the Custodian and deal with the Custodian as a
principal in securities transactions. Portfolio securities may be deposited into
the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
8 PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, serves as the principal
underwriter for the Fund in connection with the continuous offering of its
shares. During the fiscal years ended December 31, 1995, 1996 and 1997, net
underwriting commissions retained by PFD in connection with its offering of Fund
shares were $152,621, $142,688 and $611,581, respectively. Commissions reallowed
to dealers during such periods were $2,313,042, $944,143 and $4,018,610,
respectively.
The Fund will not generally issue Fund shares for consideration other than
cash. At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger, or other acquisition of portfolio securities.
9 INDEPENDENT PUBLIC ACCOUNTANTS
Effective January 1, 1994, Arthur Andersen LLP, 225 Franklin Street,
Boston, MA 02110 was selected as the independent public accountants for the
Fund. Previously, Coopers & Lybrand had served as independent public accountant
to the Fund. Arthur Andersen LLP provides audit services, tax return review, and
assistance and consultation with respect to the preparation of filings with the
SEC.
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10 PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Fund by PMC pursuant to authority contained in the management
contract. In selecting brokers or dealers, PMC considers various relevant
factors, including, but not limited to, the size and type of the transaction;
the nature and character of the markets for the security to be purchased or
sold; the execution efficiency, settlement capability, and financial condition
of the dealer; the dealer's execution services rendered on a continuing basis;
and the reasonableness of any dealer spreads.
PMC may select broker-dealers which provide brokerage and/or research
services to the Fund and/or other investment companies or accounts managed by
PMC. In addition, consistent with Section 28(e) of the Securities Exchange Act
of 1934, as amended, the Fund may pay commissions to such broker-dealers in an
amount greater than the amount another firm might charge. Such services may
include advice concerning the value of securities; the advisability of investing
in, purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; providing stock price quotation services;
furnishing analyses, electronic information services, manuals and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, performance of accounts and comparative fund statistics and
credit rating service information; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement). PMC
maintains a listing of broker-dealers who provide such services on a regular
basis. However, because many transactions on behalf of the Fund and other
investment companies or accounts managed by PMC are placed with broker-dealers
(including broker-dealers on the listing) without regard to the furnishing of
such services, it is not possible to estimate the proportion of such
transactions directed to such dealers solely because such services were
provided. Management believes that no exact dollar amount can be calculated for
such services.
The research received from broker-dealers may be useful to PMC in rendering
investment management services to the Fund and other investment companies or
accounts managed by PMC, although not all such research may be useful to the
Fund. Conversely, such information provided by brokers or dealers who have
executed transaction orders on behalf of such other PMC clients may be useful to
PMC in carrying out its obligations to the Fund. The receipt of such research
has not reduced PMC's normal independent research activities; however, it
enables PMC to avoid the additional expenses which might otherwise be incurred
if it were to attempt to develop comparable information through its own staff.
In circumstances where two or more broker-dealers offer comparable prices
and executions, preference may be given to a broker-dealer which has sold shares
of the Fund as well as shares of other investment companies or accounts managed
by PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Fund.
In addition to the Fund, PMC acts as investment adviser to other Pioneer
mutual funds and certain private accounts with investment objectives similar to
the Fund's. As such, securities may frequently meet the investment objectives of
the Fund, such other mutual funds and such private accounts. In such cases, the
decision to recommend a purchase to one mutual fund or account rather than
another is based on a number of factors. The determining factors in most cases
are the amount of securities of the issuer then outstanding, the value of those
securities and the market for them. Other factors considered in the investment
recommendations include other investments which each fund or account presently
has in a particular industry and the availability of investment funds in each
fund or account.
It is possible that, at times, identical securities will be held by more
than one fund and/or account. However, positions in the same issue may vary and
the length of time that any fund or account may
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choose to hold its investment in the same issue may likewise vary. To the
extent that the Fund, another Pioneer mutual fund or a private account managed
by PMC seeks to acquire the same security at about the same time, the Fund may
not be able to acquire as large a position in such security as it desires or it
may have to pay a higher price for the security. Similarly, the Fund may not be
able to obtain as large an execution of an order to sell or as high a price for
any particular portfolio security if PMC decides to sell on behalf of another
account the same portfolio security at the same time. On the other hand, if the
same securities are bought or sold at the same time by more than one fund or
account, the resulting participation in volume transactions could produce better
executions for the Fund or the account. In the event more than one account
purchases or sells the same security on a given date, the purchases and sales
will normally be made as nearly as practicable on a pro rata basis in proportion
to the amounts desired to be purchased or sold by each.
For the fiscal years ended December 31, 1995, 1996 and 1997, the Fund paid
or accrued aggregate brokerage commissions of $682,232, $595,133 and $544,026,
respectively.
The Trustees periodically review PMC's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Fund.
11 TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the
Code for qualification as a regulated investment company. These requirements
relate to the sources of the Fund's income, the diversification of its assets
and the distribution of its income to shareholders. If the Fund meets all such
requirements and distributes to its shareholders, in accordance with the Code's
timing requirements, all investment company taxable income and net capital gain,
if any, which it earns, the Fund will be relieved of the necessity of paying
federal income tax.
In order to qualify as a regulated investment company under Subchapter M,
the Fund must, among other things, derive at least 90% of its annual gross
income from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including gains from currency forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies (the "90% income test") and satisfy certain annual distribution and
quarterly diversification requirements. For purposes of the 90% income test,
income the Fund earns from equity interests in certain entities that are not
treated as corporations (e.g., are treated as partnerships or trusts) for U.S.
tax purposes will generally have the same character for the Fund as in the hands
of such entities; consequently, the Fund may be required to limit its equity
investments in such entities that earn fee income, rental income, or other
nonqualifying income.
Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign exchange gains, are taxable as ordinary
income, whether received in cash or reinvested in additional shares. Dividends
from net long-term capital gain in excess of net short-term capital loss ("net
capital gain"), if any, whether received in cash or reinvested in additional
shares, are taxable to the Fund's shareholders as long-term capital gains for
federal income tax purposes without regard to the length of time shares of the
Fund have been held.
Any dividend declared by the Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by the Fund in connection
with certain transactions involving foreign currency-denominated debt
securities, foreign currencies, foreign currency forward
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contracts, or payables or receivables denominated in a foreign currency are
subject to Section 988 of the Code, which generally causes such gains and losses
to be treated as ordinary income and losses and may affect the amount, timing
and character of distributions to shareholders. Under future regulations, any
transactions in foreign currency or currency forward contracts that are not
directly related to the Fund's investments in stock or securities may need to be
limited in order to enable the Fund to satisfy the 90% income test. If the net
foreign exchange loss for a year were to exceed the Fund's investment company
taxable income (computed without regard to such loss), the resulting ordinary
loss for such year would not be deductible by the Fund or its shareholders in
future years.
Certain foreign currency forward contracts may cause the Fund to
recognize gains or losses from marking-to-market even though such forward
contracts may not have been performed or closed out. Forward contracts relating
to foreign currency are subject to Section 988, as described above, and may
accordingly produce ordinary income or loss. Additionally, the Fund may be
required to recognize gain if a forward contract or other transaction that is
not subject to the mark to market rules is treated as a "constructive sale" of
an "appreciated financial position" held by the Fund under Section 1259 of the
Code. Any net mark to market gains and/or gains from constructive sales may also
have to be distributed to satisfy the distribution requirements referred to
above even though no corresponding cash amounts may concurrently be received,
possibly requiring the disposition of portfolio securities or borrowing to
obtain the necessary cash. Losses on certain forward contracts and/or offsetting
positions (portfolio securities or other positions with respect to which the
Fund's risk of loss is substantially diminished by one or more forward
contracts) may also be deferred under the tax straddle rules of the Code, which
may also affect the characterization of capital gains or losses from straddle
positions and certain successor positions as long-term or short-term. Certain
tax elections may be available that would enable the Fund to ameliorate some
adverse effects of the tax rules described in this paragraph. The tax rules
applicable to forward contracts and straddles may affect the amount, timing and
character of the Fund's income and losses and hence of its distributions to
shareholders.
If the Fund acquires any equity interest (under proposed regulations,
generally including not only stock but also an option to acquire stock such as
is inherent in a convertible bond) in certain foreign corporations that receive
at least 75% of their annual gross income from passive sources (such as
interest, dividends, certain rents and royalties, or capital gains) or hold at
least 50% of their assets in investments producing such passive income ("passive
foreign investment companies"), the Fund could be subject to federal income tax
and additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its shareholders.
The Fund would not be able to pass through to its shareholders any credit or
deduction for such a tax. An election may generally be available that would
ameliorate these adverse tax consequences, but any such election could require
the Fund to recognize taxable income or gain (subject to tax distribution
requirements) without the concurrent receipt of cash. These investments could
also result in the treatment of associated capital gains as ordinary income. The
Fund may limit and/or manage its holdings in passive foreign investment
companies to limit its tax liability or maximize its return from these
investments.
The Fund may invest in debt obligations that are in the lowest rating
categories or are unrated, including debt obligations of issuers not currently
paying interest or who are in default. Investments in debt obligations that are
at risk of or in default present special tax issues for the Fund. Tax rules are
not entirely clear about issues such as when the Fund may cease to accrue
interest, original issue discount, or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities, how payments
received on obligations in default should be allocated between principal and
income, and whether exchanges of debt obligations in a workout context are
taxable. These and other issues will be addressed by the Fund, in the event it
invests in such securities, in order to seek to ensure that it distributes
sufficient income to preserve its status as a regulated investment company and
does not become subject to federal income or excise tax.
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If the Fund invests in certain pay-in-kind securities ("PIKs"), zero
coupon securities, deferred interest securities or, in general, any other
securities with original issue discount (or with market discount if the Fund
elects to include market discount in income currently), the Fund must accrue
income on such investments for each taxable year, which generally will be prior
to the receipt of the corresponding cash payments. However, the Fund must
distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid federal income and excise taxes.
Therefore, the Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.
For federal income tax purposes, the Fund is permitted to carry forward a
net capital loss for any year to offset its capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the Fund and therefore are not expected to be distributed as such
to shareholders. As of the end of its most recent taxable year, the Fund had no
capital loss carryforwards.
At the time of an investor's purchase of Fund shares, a portion of the
purchase price may be attributable to realized or unrealized appreciation in the
Fund's portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions by the Fund on these shares from such appreciation or
income may be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events for shareholders that are
subject to tax. Shareholders should consult their own tax advisers with
reference to their individual circumstances to determine whether any particular
transaction in Fund shares is properly treated as a sale for tax purposes, as
the following discussion assumes, and the tax treatment of any gains or losses
recognized in such transactions. Any loss realized by a shareholder upon the
redemption, exchange or other disposition of shares with a tax holding period of
six months or less will be treated as a long-term capital loss to the extent of
any amounts treated as distributions of long-term capital gain with respect to
such shares.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment in the Fund or another
mutual fund at net asset value pursuant to the reinvestment privilege, the sales
charge paid on such shares is not included in their tax basis under the Code,
and (2) in the case of an exchange, all or a portion of the sales charge paid on
such shares is not included in their tax basis under the Code, to the extent a
sales charge that would otherwise apply to the shares received is reduced
pursuant to the exchange privilege. In either case, the portion of the sales
charge not included in the tax basis of the shares redeemed or surrendered in an
exchange is included in the tax basis of the shares acquired in the reinvestment
or exchange. Losses on redemptions or other dispositions of shares may be
disallowed under "wash sale" rules in the event of other investments in the Fund
(including those made pursuant to reinvestment of dividends and/or capital gain
distributions) within a period of 61 days beginning 30 days before and ending 30
days after a redemption or other disposition of shares. In such a case, the
disallowed portion of any loss would be included in the federal tax basis of the
shares acquired in the other investments.
For purposes of the 70% dividends-received deduction generally
available to corporations under the Code, dividends received by the Fund from
U.S. corporations in respect of any share of stock with a tax holding period of
at least 46 days (91 days in the case of certain preferred stock) extending
before and after each dividend held in an unleveraged position and distributed
and designated by the Fund may be treated as qualifying dividends. Any corporate
shareholder should consult its tax advisor regarding the possibility that its
tax basis in its shares may be reduced, for federal income tax purposes, by
reason of "extraordinary dividends" received with respect to the shares and, to
the extent such basis would be reduced below zero, current recognition of income
may be required. In order to qualify for the deduction,
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corporate shareholders must meet the minimum holding period requirement
stated above with respect to their Fund shares, taking into account any holding
period reductions from certain hedging or other transactions or positions that
diminish their risk of loss with respect to their Fund shares, and, if they
borrow to acquire or otherwise incur debt attributable to Fund shares, they may
be denied a portion of the dividends-received deduction. The entire qualifying
dividend, including the otherwise deductible amount, will be included in
determining the excess (if any) of a corporation's adjusted current earnings
over its alternative minimum taxable income, which may increase a corporation's
alternative minimum tax liability.
The Fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries. Tax conventions between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. The Fund does not
expect to satisfy the requirements for passing through to its shareholders their
pro rata shares of qualified foreign taxes paid by the Fund, with the result
that shareholders will not include such taxes in their gross incomes and will
not be entitled to a tax deduction or credit for such taxes on their own tax
returns.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.
A state income (and possibly local income and/or intangible property)
tax exemption is generally available to the extent (if any) the Fund's
distributions are derived from interest on (or, in the case of intangible
property taxes, the value of its assets is attributable to) certain U.S.
Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. The
Fund will not seek to satisfy any threshold or reporting requirements that may
apply in particular taxing jurisdictions, although the Fund may in its sole
discretion provide relevant information to shareholders.
Federal law requires that the Fund withhold (as "backup withholding")
31% of reportable payments, including dividends, capital gain dividends and the
proceeds of redemptions (including exchanges) and repurchases to shareholders
who have not complied with IRS regulations. In order to avoid this withholding
requirement, shareholders must certify on their Account Applications, or on
separate IRS Forms W-9, that the Social Security Number or other Taxpayer
Identification Number they provide is their correct number and that they are not
currently subject to backup withholding, or that they are exempt from backup
withholding. The Fund may nevertheless be required to withhold if it receives
notice from the IRS or a broker that the number provided is incorrect or backup
withholding is applicable as a result of previous underreporting of interest or
dividend income.
If, as anticipated, the Fund continues to qualify as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes or any Delaware corporation income tax.
The description of certain federal tax provisions above relates only to
U.S. federal income tax consequences for shareholders who are U.S. persons,
i.e., U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a possible 30% non-resident alien U.S. withholding tax (or
non-resident alien withholding tax at a lower treaty rate) on amounts treated as
ordinary dividends from the Fund and, unless an effective IRS Form W-8 or
authorized substitute for Form W-8 is on file, to 31% backup withholding on
certain other
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payments from the Fund. Shareholders should consult their own tax
advisers on these matters and on state, local and other applicable tax laws.
12 DESCRIPTION OF SHARES
The Fund is an open-end investment company established as a Nebraska
corporation in 1968 and reorganized as a Delaware business trust in June 1994.
Prior to December 1, 1993, the Fund was called Mutual of Omaha Growth Fund, Inc.
and prior to June 30, 1994, the Fund was called Pioneer Growth Shares, Inc.
Reference to the Fund includes both the Delaware business trust and the Nebraska
corporation.
The Declaration permits its Board of Trustees to authorize the issuance of
an unlimited number of full and fractional shares of beneficial interest
(without par value) which may be divided into such separate series as the
Trustees may establish. Currently, the Fund consists of only one series. The
Trustees may establish additional series of shares, and may divide or combine
the shares into a greater or lesser number of shares without thereby changing
the proportionate beneficial interests in the Fund. The Declaration further
authorizes the Trustees to classify or reclassify any series of the shares into
one or more classes. Pursuant thereto, the Trustees have authorized the issuance
of four classes of shares of the Fund, designated Class A, Class B, Class C and
Class Y shares. Each share of a class represents an equal proportionate interest
in the assets of the Fund allocable to that class. Upon liquidation of the Fund,
shareholders of each class of the Fund are entitled to share pro rata in the
Fund's net assets allocable to such class available for distribution to
shareholders. The Fund reserves the right to create and issue additional series
or classes of shares, in which case the shares of each class of a series would
participate equally in the earnings, dividends and assets allocable to that
class of the particular series.
Shareholders are entitled to one vote for each share held and may vote in
the election of Trustees and on other matters submitted to meetings of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees.
The shares of each series of the Fund are entitled to vote separately to
approve investment advisory agreements or changes in investment restrictions,
but shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the Fund vote together as a
class on matters that affect all series of the Fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of its shares. Shares have no preemptive or conversion rights. Shares
are fully paid and non-assessable by the Fund, except as stated below.
13 CERTAIN LIABILITIES
The Fund is organized as a Delaware business trust. Generally, Delaware
business trust shareholders are not personally liable for obligations of the
Delaware business trust under Delaware law. The Delaware Business Trust Act (the
"Delaware Act") provides that a shareholder of a Delaware business trust shall
be entitled to the same limitation of liability extended to shareholders of
private for-profit corporations. The Declaration expressly provides that the
Fund is organized under the Delaware Act and that the Declaration is to be
governed by Delaware law. There is nevertheless a remote possibility that a
Delaware business trust, such as the Fund, might become a party to an action in
another
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state whose courts refused to apply Delaware law, in which case the trust's
shareholders could become subject to personal liability.
To guard against this risk, the Declaration (i) contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
provides that notice of such disclaimer may be given in each agreement,
obligation or instrument entered into or executed by the Fund or its Trustees,
(ii) provides for the indemnification out of Fund property of any shareholders
held personally liable for any obligations of the Fund or any series of the Fund
and (iii) provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which all of the following factors are present: (1)
a court refused to apply Delaware law; (2) the liability arose under tort law
or, if not, no contractual limitation of liability was in effect; and (3) the
Fund itself would be unable to meet its obligations. In light of Delaware law,
the nature of the Fund's business and the nature of its assets, the risk of
personal liability to a Fund shareholder is remote.
The Declaration further provides that the Fund shall indemnify each of
its Trustees and officers against liabilities and expenses reasonably incurred
by them, in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Fund.
The Declaration does not authorize the Fund to indemnify any Trustee or officer
against any liability to which he or she would otherwise be subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.
14 DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined as of
the close of regular trading on the Exchange (normally 4:00 p.m., Eastern time)
on each day the Exchange is open for trading. As of the date of this Statement
of Additional Information, the Exchange is open for trading every weekday except
for the following holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share of each class
of the Fund is also determined on any other day in which the level of trading in
its portfolio securities is sufficiently high so that the current net asset
value per share might be materially affected by changes in the value of its
portfolio securities. The net asset value per share of the Fund is not
determined on any day in which no purchase orders in good order for the shares
of the Fund are received and no shares are tendered for redemption.
The net asset value per share of each class of the Fund is computed by
taking the value of all of the Fund's assets attributable to a class, less the
Fund's liabilities attributable to that class, and dividing the result by the
number of outstanding shares of the class. For purposes of determining net asset
value, expenses of the classes of the Fund are accrued daily and taken into
account.
In determining the value of the assets of the Fund for the purpose of
obtaining the net asset value, securities listed or traded on a national or
foreign securities exchange shall be valued at their last sales price on the day
of valuation or, if there are no sales on that day, at the latest bid quotation.
Equity securities traded over-the-counter for which the last sales price on the
day of valuation is available shall be valued at that price. All other
over-the-counter equity securities for which reliable quotations are readily
available shall be valued at their latest bid quotation. Convertible securities
traded over-the-counter for which reliable quotations are readily available
shall be valued on the basis of valuations furnished by pricing services which
utilize electronic data processing techniques to determine the valuations for
normal institutional-size trading units of such securities. Securities not
valued by the
22
<PAGE>
pricing service for which reliable quotations are readily available shall
be valued at market values furnished by recognized dealers in such securities.
Short-term obligations with remaining maturities of 60 days or less shall be
valued at amortized cost. Securities and other assets for which reliable
quotations are not readily available shall be valued at their fair value as
determined in good faith under consistently applied guidelines established by
and under the general supervision of the Board of Trustees of the Fund, although
the actual calculations may be made by persons acting pursuant to the direction
of the Board.
The Fund's maximum offering price per Class A share is determined by adding
the maximum sales charge to the net asset value per Class A share. Class B and
Class C shares are offered at net asset value without the imposition of an
initial sales charge. Class Y shares are offered without an initial sales charge
and are not subject to a CDSC.
15 SYSTEMATIC WITHDRAWAL PLAN (CLASS A, CLASS B AND CLASS C SHARES ONLY)
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from shares of the Fund
deposited by the applicant under the SWP. The applicant must deposit or purchase
for deposit with PSC shares of the Fund having a total value of not less than
$10,000. Periodic payments of $50 or more will be deposited monthly or quarterly
directly into a bank account designated by the applicant, or will be sent to the
applicant, or any person designated by the applicant. Class B accounts must meet
the minimum initial investment requirement prior to establishing a SWP.
Withdrawals from Class B and Class C accounts are limited to 10% of the value of
the account at the time the withdrawal plan is established. See "Waiver or
Reduction of Contingent Deferred Sales Charge" in the Prospectus. Designation of
another person to receive the payments subsequent to opening an account must be
accompanied by a signature guarantee.
Any income dividends or capital gains distributions on shares under the SWP
will be credited to the SWP account on the payment date in full and fractional
shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. To the extent that such redemptions
for periodic withdrawals exceed dividend income reinvested in the SWP account,
such redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. Redemptions are potentially taxable transactions
to shareholders. In addition, the amounts received by a shareholder cannot be
considered as an actual yield or income on his or her investment because part of
such payments may be a return of his or her investment.
The SWP may be terminated at any time (1) by written notice to PSC or from
PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3) when all shares under the SWP have been redeemed.
16 LETTER OF INTENT (CLASS A SHARES ONLY)
A Letter of Intent ("LOI") may be established by completing the LOI
section of the Account Application. When you sign the Account Application, you
agree to irrevocably appoint PSC your attorney-in-fact to surrender for
redemption any or all shares held in escrow with full power of substitution. An
LOI is not a binding obligation upon the investor to purchase, or the Fund to
sell, the full amount indicated.
If the total purchases, less redemptions, exceed the amount specified
under the LOI and are in an amount which would qualify for a further quantity
discount, all transactions will be recomputed on the expiration date of the LOI
to effect the lower sales charge. Any difference in the sales charge resulting
from
23
<PAGE>
such recomputation will be either delivered to you in cash or invested in
additional shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.
If the total purchases, less redemptions, are less than the amount
specified under the LOI, you must remit to PFD any difference between the sales
charge on the amount actually purchased and the amount originally specified in
the LOI section of the Account Application. When the difference is paid, the
shares held in escrow will be deposited to your account. If you do not pay the
difference in sales charge within 20 days after written request from PFD or your
dealer, PSC, after receiving instructions from PFD, will redeem the appropriate
number of shares held in escrow to realize the difference and release any
excess. See "How to Buy Fund Shares - Letter of Intent" in the Prospectus for
more information.
17. INVESTMENT RESULTS
QUOTATIONS, COMPARISONS, AND GENERAL INFORMATION
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of the Fund may be illustrated
and/or compared with that of other mutual funds with similar investment
objectives and to stock or other relevant indices. For example, total return of
the Fund's classes may be compared to averages or rankings prepared by LIPPER
ANALYTICAL SERVICES, INC., a widely recognized independent service which
monitors mutual fund performance; STANDARD & POOR'S 500 STOCK INDEX (the "S&P
500"), an index of unmanaged groups of common stock; the DOW JONES INDUSTRIAL
AVERAGE, a recognized unmanaged index of common stocks of 30 industrial
companies listed on the Exchange; or the RUSSELL U.S. EQUITY INDEXES or the
WILSHIRE TOTAL MARKET VALUE INDEX, which are recognized unmanaged indices of
broad based common stocks.
In addition, the performance of the classes of the Fund may be compared
to alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as BARRON'S, BUSINESS WEEK, CONSUMERS DIGEST, CONSUMER REPORTS, FINANCIAL
WORLD, FORBES, FORTUNE, INVESTORS BUSINESS DAILY, KIPLINGER'S PERSONAL FINANCE
MAGAZINE, MONEY MAGAZINE, NEW YORK TIMES, SMART MONEY, USA TODAY, U.S. NEWS AND
WORLD REPORT, THE WALL STREET JOURNAL, and WORTH may also be cited (if the Fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including BLOOMBERG
FINANCIAL MARKETS, CDA/WIESENBERGER, DONOGHUE'S MUTUAL FUND ALMANAC, INVESTMENT
COMPANY DATA, INC., JOHNSON'S CHARTS, KANON BLOCH CARRE AND CO., LIPPER
ANALYTICAL SERVICES, INC., MICROPAL, INC., MORNINGSTAR, INC., SCHABACKER
INVESTMENT MANAGEMENT and TOWERS DATA SYSTEMS, INC.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature, or in reports to shareholders of the Fund.
The Fund may also present, from time to time, historical information
depicting the value of a hypothetical account in one or more classes of the Fund
since the Fund's inception.
In presenting investment results, the Fund may also include references
to certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
24
<PAGE>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
One of the primary methods used to measure the performance of a class
of the Fund is "total return." Total return will normally represent the
percentage change in value of an account, or of a hypothetical investment in a
class of the Fund, over any period up to the lifetime of that class of the Fund.
Total return calculations will usually assume the reinvestment of all dividends
and capital gains distributions and will be expressed as a percentage increase
or decrease from an initial value, for the entire period or for one or more
specified periods within the entire period. Total return percentages for periods
of less than one year will usually be annualized; total return percentages for
periods longer than one year will usually be accompanied by total return
percentages for each year within the period and/or by the average annual
compounded total return for the period. The income and capital components of a
given return may be separated and portrayed in a variety of ways in order to
illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values, without percentages. Past performance cannot
guarantee any particular future result.
The Fund's average annual total return quotations for each of its
classes as that information may appear in the Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the SEC.
Average annual total return quotations for each class of Fund shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in the class made on the first day of a
designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n[superscript] = ERV
Where: P = a hypothetical initial payment of $1000, less the maximum sales
load of $75.50 for Class A Shares or the deduction of any CDSC
applicable to Class B or Class C Shares at the end of the period;
for Class Y Shares, no sales load or deduction of a CDSC is
applicable
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1000 initial payment
made at the beginning of the designated period (or fractional
portion thereof)
For purposes of the above computation, it is assumed that all dividends
and distributions made by the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts of
a particular class of shares are taken into consideration. For any account fees
that vary with the size of the account, the account fee used for purposes of the
above computation is assumed to be the fee that would be charged to the class'
mean account size.
The average annual total returns for Class A, Class B and Class C
shares of the Fund as of June 30, 1998 are as follows:
25
<PAGE>
Average Annual Total Return (%)
ONE YEAR FIVE YEARS TEN YEARS COMMENCEMENT*
Class A Shares 32.82 23.61 19.92 10.59
Class B Shares 35.73 N/A N/A 34.92
Class C Shares 39.84 N/A N/A 39.27
Class Y Shares N/A N/A N/A 2.69
*Commencement was May 17, 1968 for Class A shares; April 28, 1995 for Class B
shares; January 31, 1996 for Class C shares; and April 30, 1998 for Class Y
shares.
AUTOMATED INFORMATION LINE
FactFone(SM), Pioneer's 24-hour automated information line,
allows shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields
for Pioneer Cash Reserves Fund; and
o dividends and capital gains distributions for all Pioneer
mutual funds.
Yields are calculated in accordance with SEC mandated standard
formulas.
In addition, by using a personal identification number (PIN),
shareholders may enter purchases, exchanges and redemptions, access their
account balances and last three transactions and may order a duplicate
statement. See FactFone(SM) in the Prospectus for more information.
All performance numbers communicated through FactFone(SM)
represent past performance and include the applicable maximum sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. The value of Class A, Class B, Class C and Class Y Shares (except
for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost. Certain FactFone(SM) features are not available to
Class Y shareholders.
18. FINANCIAL STATEMENTS
The Fund's Annual Report, filed with the SEC on February 20, 1998
(Accession No. 0000069404-98-000006), and Semiannual Report, filed with the SEC
on August 20, 1998 (Accession No. 0000069404-98-000011), are incorporated by
reference into this Statement of Additional Information. The financial
statements in the Fund's Annual Report and Semiannual Report, including the
financial highlights included or incorporated by reference into the Prospectuses
and this Statement of Additional Information, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect to the financial statements, and are included in reliance upon the
authority of Arthur Andersen LLP as experts in accounting and auditing in giving
their reports.
26
<PAGE>
APPENDIX A
DESCRIPTION OF SHORT-TERM DEBT AND CORPORATE BOND RATINGS1[superscript]
MOODY'S INVESTORS SERVICE, INC SHORT-TERM PRIME RATING SYSTEM - TAXABLE DEBT AND
DEPOSITS GLOBALLY
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's Sovereign Rating for Bank
______________________
1[superscript] The ratings indicated herein are believed to be the most
recent ratings available at the date of this Statement of Additional Information
for the securities listed. Ratings are generally given to securities at the time
of issuance. While the rating agencies may from time to time revise such
ratings, they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the Fund's fiscal year-end.
27
<PAGE>
Deposits. Such branch obligations are rated at the lower of the bank's
rating or Moody's Sovereign Rating for Bank Deposits for the country in which
the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.
MOODY'S CORPORATE BOND RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
28
<PAGE>
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
29
<PAGE>
STANDARD & POOR'S CORPORATE BOND RATINGS
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest-rated obligations only
in a small degree. The obligor's capacity to meet its financial commitment on
the obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to the
obligor's capacity to meet its financial commitment on the obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.
D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments are jeopardized.
Plus (+) or Minus (-): The rating from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.
30
<PAGE>
r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk, such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
31
<PAGE>
APPENDIX B
PERFORMANCE STATISTICS
PIONEER GROWTH SHARES - CLASS A SHARES
<TABLE>
<CAPTION>
DATE INITIAL OFFERING SALES CHARGE SHARES NET ASSET INITIAL NET
INVESTMENT PRICE INCLUDED PURCHASED VALUE ASSET
PER SHARE VALUE
<S> <C> <C> <C> <C> <C>
12/31/86 $10,000 $7.5200 5.75% 1,329.787 $7.0900 $9,425
</TABLE>
Dividends and Capital Gains Reinvested
VALUE OF SHARES
<TABLE>
<CAPTION>
FROM CAPITAL GAINS FROM DIVIDENDS
DATE FROM INVESTMENT REINVESTED REINVESTED TOTAL VALUE
<S> <C> <C> <C> <C> <C>
12/31/87 $ 8,338 $ 677 $ 89 $ 9,104
12/31/88 9,827 1,171 201 11,199
12/31/89 11,901 2,690 373 14,964
12/31/90 10,066 3,197 448 13,711
12/31/91 16,316 5,181 766 22,263
12/31/92 16,515 5,245 775 22,535
12/31/93 16,782 6,885 787 24,454
12/31/94 11,769 11,498 552 23,819
12/31/95 13,457 16,765 700 30,922
12/31/96 15,573 22,874 810 39,257
12/31/97 21,742 33,571 1,132 56,445
</TABLE>
32
<PAGE>
PIONEER GROWTH SHARES - CLASS B SHARES
<TABLE>
<CAPTION>
DATE INITIAL OFFERING PRICE SALES CHARGE SHARES PURCHASED NET ASSET VALUE INITIAL NET
INVESTMENT INCLUDED ASSET
PER SHARE VALUE
<S> <C> <C> <C> <C> <C> <C>
4/28/95 $10,000 $9.6800 0.00% 1,033.058 $9.6800 $10,000
</TABLE>
Dividends and Capital Gains Reinvested
VALUE OF SHARES
<TABLE>
<CAPTION>
FROM CAPITAL
GAINS FROM DIVIDENDS CONTINGENT
FROM DEFERRED SALES
DATE INVESTMENT REINVESTED REINVESTED CHARGE TOTAL VALUE CDSC %
<S> <C> <C> <C> <C> <C> <C>
12/31/95 $10,403 $1,388 $35 $400 $11,426 4.00%
12/31/96 $11,931 $2,926 $40 $400 $14,497 4.00%
12/31/97 $16,529 $4,681 $55 $300 $20,965 3.00%
</TABLE>
33
<PAGE>
PIONEER GROWTH SHARES - CLASS C SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
INITIAL SALES CHARGE SHARES PURCHASED PER SHARE INITIAL NET
DATE INVESTMENT OFFERING PRICE INCLUDED ASSET VALUE
<S> <C> <C> <C> <C> <C> <C>
1/31/96 $10,000 $10.1000 0.00% 990.099 $10.1000 $10,000
</TABLE>
Dividends and Capital Gains Reinvested
VALUE OF SHARES
<TABLE>
<CAPTION>
FROM CAPITAL
GAINS FROM DIVIDENDS CONTINGENT
FROM REINVESTED REINVESTED DEFERRED SALES TOTAL VALUE CDSC
DATE INVESTMENT CHARGE PERCENTAGE
<S> <C> <C> <C> <C> <C> <C>
12/31/96 $11,436 $1,125 $0 $100 $12,431 1.00%
12/31/97 $15,921 $2,096 $0 $0 $18,018 0.00%
</TABLE>
34
<PAGE>
PIONEER GROWTH SHARES - CLASS Y SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
INITIAL SALES CHARGE SHARES PURCHASED PER SHARE INITIAL NET
DATE INVESTMENT OFFERING PRICE INCLUDED ASSET VALUE
<S> <C> <C> <C> <C> <C> <C>
4/30/98 $10,000 $19.7300 0.00% 506.842 $19.7300 $10,000
</TABLE>
Dividends and Capital Gains Reinvested
VALUE OF SHARES
<TABLE>
<CAPTION>
FROM CAPITAL
GAINS FROM DIVIDENDS
FROM REINVESTED REINVESTED TOTAL VALUE
DATE INVESTMENT
<S> <C> <C> <C> <C>
6/30/98 $10,269 $0 $0 $10,269
</TABLE>
35
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the Fund, do not reflect past
performance and do not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P 500 includes 500 of
the largest stocks (in terms of stock market value) in the U.S.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of stocks of 30 blue chip
companies widely held by individuals and institutional investors. The 30 stocks
represent about a fifth of the $8 trillion-plus market value of all U.S. stocks
and about a fourth of the value of stocks listed on the New York Stock Exchange
(NYSE).
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the NYSE, plus stocks listed on the American Stock Exchange and over the counter
with the same or less capitalization as the upper bound of the NYSE ninth
decile.
U.S. INFLATION
THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA GROWTH AND VALUE INDEXES are constructed by dividing the stocks in
the S&P 500 according to price-to-book ratios. The GROWTH INDEX contains stocks
with higher price-to-book ratios, and the VALUE INDEX contains stocks with lower
price-to-book ratios. Both indexes are market capitalization weighted.
MERRILL LYNCH MICRO-CAP INDEX
The MERRILL LYNCH MICRO-CAP INDEX represents the performance of 2,036 stocks
ranging in market capitalization from $50 million to $220 million. Index returns
are calculated monthly.
36
<PAGE>
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds after 1977 are constructed with
data from The Wall Street Journal and are calculated as the change in the flat
price or and-interest price. From 1926 to 1976, data are obtained from the
government bond file at the Center for Research in Security Prices (CRSP),
Graduate School of Business, University of Chicago. Each year, a one-bond
portfolio with a term of approximately 20 years and a reasonably current coupon
was used and whose returns did not reflect potential tax benefits, impaired
negotiability or special redemption or call privileges. Where callable bonds had
to be used, the term of the bond was assumed to be a simple average of the
maturity and first call dates minus the current date. The bond was "held" for
the calendar year and returns were computed.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of intermediate-term government bonds after 1987 are calculated
from The Wall Street Journal prices, using the change in flat price. Returns
from 1934 to 1986 are obtained from the CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five years, and this bond is
"held" for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds
with maturities near five years were partially or fully tax-exempt and were
selected using the rules described above. Personal tax rates were generally low
in that period, so that yields on tax-exempt bonds were similar to yields on
taxable bonds. From 1926 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI")
MSCI's international indices are based on the share prices of approximately
1,700 companies listed on stock exchanges in the 22 countries that make up the
MSCI World Index. MSCI's emerging market indices are comprised of approximately
1000 stocks from 26 countries.
Countries in the MSCI EAFE INDEX are: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia,
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and
United Kingdom.
Countries in the MSCI EMERGING MARKETS FREE INDEX are: Argentina, Brazil, Chile,
China Free, Czech Republic, Colombia, Greece, Hungary, India, Indonesia Free,
Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela.
6-MONTH CDS
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
Since 1969, corporate bond total returns are represented by the Salomon Brothers
Long-Term High-Grade Corporate Bond Index. As most large corporate bond
transactions take place over the counter, a major dealer is the natural source
of these data. The index includes nearly all Aaa- and Aa-rated bonds with at
least 10 years to maturity. If a bond is downgraded during a particular month,
its return for the month is included in the index before removing the bond from
future portfolios.
37
<PAGE>
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. Capital appreciation returns were calculated from
yields assuming (at the beginning of each monthly holding period) a 20-year
maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
coupon and a 20-year maturity. The conventional present-value formula for bond
price for the beginning and end-of-month prices was used. (This formula is
presented in Ross, Stephen A., and Westerfield, Randolph W., Corporate Finance,
Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly
income return was assumed to be one-twelfth the coupon.
U.S. (30-DAY) TREASURY BILLS
For the U.S. TREASURY BILL INDEX, data from The Wall Street Journal are used
after 1977; the CRSP government bond file is the source until 1976. Each month a
one-bill portfolio containing the shortest-term bill having not less than one
month to maturity is constructed. (The bill's original term to maturity is not
relevant.) To measure holding period returns for the one-bill portfolio, the
bill is priced as of the last trading day of the previous month-end and as of
the last trading day of the current month.
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS ("NAREIT")EQUITY REIT
INDEX
All of the data are based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighting at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL U.S. EQUITY INDEXES
The RUSSELL 3000(R) INDEX (the "Russell 3000") is comprised of the 3,000 largest
U.S. companies as determined by market capitalization representing approximately
98% of the U.S. equity market. The average market capitalization is
approximately $2.8 billion. The RUSSELL 2500TM INDEX measures performance of the
2,500 smallest companies in the Russell 3000. The average market capitalization
is approximately $733.4 million, and the largest company in the index has an
approximate market capitalization of $2.9 billion. The RUSSELL 2000(R) INDEX
measures performance of the 2,000 smallest stocks in the Russell 3000; the
largest company in the index has a market capitalization of approximately $1.1
billion. The RUSSELL 1000(R) INDEX (the "Russell 1000") measures the performance
of the 1,000 largest companies in the Russell 3000. The average market
capitalization is approximately $7.6 billion. The smallest company in the index
has an approximate market capitalization of $1.1 billion. The RUSSELL MIDCAPTM
Index measures performance of the 800 smallest companies in the Russell 1000.
The largest company in the index has an approximate market capitalization of
$8.0 billion.
The Russell indexes are reconstituted annually as of July 1, based on May 31
market capitalization rankings.
38
<PAGE>
WILSHIRE REAL ESTATE SECURITIES INDEX
The WILSHIRE REAL ESTATE SECURITIES INDEX is a market capitalization weighted
index of 120 publicly traded real estate securities, such as REITs, real estate
operating companies ("REOCs") and partnerships.
The index contains performance data on five major categories of property:
office, retail, industrial, apartment and miscellaneous. The companies in the
index are 91.66% equity and hybrid REITs and 8.33% REOCs.
STANDARD & POOR'S MIDCAP 400 INDEX
The S&P 400 is a market-capitalization-weighted index. The performance data for
the index were calculated by taking the stocks presently in the index and
tracking them backwards in time as long as there were prices reported. No
attempt was made to determine what stocks "might have been" in the S&P 400 five
or ten years ago had it existed. Dividends are reinvested on a monthly basis
prior to June 30, 1991, and are reinvested daily thereafter.
LIPPER BALANCED FUNDS INDEX
This index represents equally weighted performance, adjusted for capital gains
distributions and income dividends, of approximately 30 of the largest funds
with a primary objective of conserving principal by maintaining at all times a
balanced portfolio of stocks and bonds. Typically, the stock/bond ratio ranges
around 60%/40%.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963 to 1987; and The Wall Street Journal thereafter.
Sources: Ibbotson Associates, Towers Data Systems, Lipper Analytical Services,
Inc., Merrill Lynch and PGI
39
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/
S&P JONES U.S. SMALL BARRA BARRA MERRILL LYNCH
500 INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP
AVERAGE INDEX INFLATION GROWTH VALUE INDEX
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.34 -49.02 -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A N/A
Dec 1933 53.99 73.72 142.87 0.51 N/A N/A N/A
Dec 1934 -1.44 8.08 24.22 2.03 N/A N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A N/A
Dec 1942 20.34 14.13 44.51 9.29 N/A N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A N/A
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/
S&P JONES U.S. SMALL BARRA 500 BARRA MERRILL LYNCH
500 INDUSTRIAL STOCK U.S. GROWTH 500 MICRO-CAP
AVERAGE INDEX INFLATION VALUE INDEX
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53 36.62
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64 1.81
Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99 30.70
Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99 13.88
Dec 1997 33.36 24.88 22.78 1.92 36.52 29.98 24.61
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
LONG- INTERMEDIATE- MSCI LONG-
TERM TERM U.S. EAFE 6- TERM U.S. U.S.
U.S. GOV'T GOVERNMENT (Net of MONTH CORPORATE T-BILL
BONDS BONDS Taxes) CDS BONDS (30-Day)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
LONG- INTERMEDIATE- MSCI LONG-
TERM TERM U.S. EAFE 6- TERM U.S. U.S.
U.S. GOV'T GOVERNMENT (Net of MONTH CORPORATE T-BILL
BONDS BONDS Taxes) CDS BONDS (30-Day)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT LIPPER MSCI
EQUITY RUSSELL WILSHIRE BALANCED EMERGING BANK
REIT 2000 REAL ESTATE S&P FUND MARKETS SAVINGS
INDEX INDEX SECURITIES 400 INDEX FREE INDEX ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT LIPPER MSCI
EQUITY RUSSELL WILSHIRE BALANCED EMERGING BANK
REIT 2000 REAL ESTATE S&P FUND MARKETS SAVINGS
INDEX INDEX SECURITIES 400 INDEX FREE INDEX ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 22.20 35.58 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92
Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 -7.32 4.96
Dec 1995 15.27 28.44 13.65 30.94 24.89 -5.21 5.24
Dec 1996 35.26 16.53 36.87 19.20 13.01 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.26 20.05 -11.59 5.17
</TABLE>
45
<PAGE>
APPENDIX C
OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the United States.
As of December 31, 1997, PMC employed a professional investment staff of 58,
with a combined average of 12 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1997, were
approximately $19.8 billion representing 1,177,148 shareholder accounts, 791,468
non-retirement accounts and 385,680 retirement accounts.
g:\edgar\sai\current\gs998sa3.doc
46
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial highlights of the Registrant for the
fiscal year ended December 31, 1997 and the six
months ended June 30, 1998 are included in Part A of
the Registration Statement and the financial
statements of the Registrant for the fiscal year
ended December 31, 1997 and the six months ended June
30, 1998 are part of the 1997 Annual and 1998
Semiannual Reports to Shareholders (filed electroni-
cally on February 20, 1998 and August 20, 1998; File
No. 811-01604; Accession Nos. 0000069404-98-000006
and 0000069404-98-000011, respectively) which are
incorporated by reference into Part B of the
Registration Statement.
(b) Exhibits:
(1)(a) Agreement and Declaration of Trust.*
(1)(b) Establishment and Designation of Class A,
Class B and Class C Shares of Beneficial
interest.*
(1)(c) Establishment and Designation of Class A,
Class B, Class C and Class Y Shares of
Beneficial Interest***
(2) By-Laws.*
(3) Inapplicable.
(4) Inapplicable.
(5) Management Contract with Pioneering
Management Corporation.*
(6)(a) Underwriting Agreement with Pioneer Funds
Distributor, Inc.*
(6)(b) Form of Dealer Sales Agreement.**
(7) Inapplicable.
(8) Custodian Agreement with Brown Brothers
Harriman & Co.**
(9) Investment Company Service Agreement with
Pioneering Services Corporation.**
(10) Inapplicable.
(11) Consent of Independent Public Accountants
(Arthur Andersen LLP).****
(12) Inapplicable.
C-1
<PAGE>
(13) Inapplicable.
(14) Inapplicable.
(15)(a) Class A Distribution Plan.*
(15)(b) Form of Class B Distribution Plan.*
(15)(c) Class C Distribution Plan.**
(16) Inapplicable.
(17) Financial Data Schedule.****
(18) Form of Multiple Class Plan Pursuant to Rule
18f - 3 Plan Covering Four Classes of
Shares.***
(19) Powers of Attorney.*
(19)(a) Power of Attorney for Mary K. Bush***
- -------------------------
* Previously filed. Incorporated herein by reference from the exhibits filed
with Post - Effective Amendment No. 54 to the Registration Statement (File No.
2-28274) as filed with the Securities and Exchange Commission (the "SEC") on
April 26, 1995 (Accession No. 0000069404-95-000008).
** Previously filed. Incorporated herein by reference from the exhibits filed
with Post - Effective Amendment No. 55 to the Registration Statement (File No.
2-28274) as filed with the SEC on April 25, 1996 (Accession No. 0000069404-
96-000011).
*** Previously filed. Incorporated herein by reference from the exhibits filed
with Post - Effective Amendment No. 57 to the Registration Statement (File No.
2-28274) as filed with the SEC on February 13, 1996 (Accession No. 0001016964-
98-000007).
**** Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
No person is controlled by the Registrant. A common control relationship
could exist from a management perspective because the Chairman and President of
the Registrant owns approximately 14% of the outstanding shares of The Pioneer
Group, Inc. (PGI), the parent company of the Registrant's investment adviser,
and certain Trustees or officers of the Registrant (i) hold similar positions
with other investment companies advised by PGI and (ii) are directors or
officers of PGI and/or its direct or indirect subsidiaries. The following lists
all U.S. and the principal non-U.S. subsidiaries of PGI and those registered
investment companies with a common or similar Board of Trustees advised by PGI.
OWNED BY PERCENT STATE/COUNTRY OF
COMPANY OF SHARES INCORPORATION
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneer Funds Distributor, Inc. (PFD) PMC 100% MA
Pioneer Explorer, Inc. (PEI) PMC 100% DE
Pioneer Fonds Marketing GmbH (GmbH) PFD 100% Germany
Pioneer Forest, Inc. (PFI) PGI 100% DE
C-2
<PAGE>
CJSC "Forest-Starma" (Forest-Starma) PFI 95% Russia
Pioneer Metals and Technology, Inc. (PMT) PGI 100% DE
Pioneer Capital Corp. (PCC) PGI 100% DE
Pioneer SBIC Corp. PCC 100% MA
Pioneer Real Estate Advisors, Inc. (PREA) PGI 100% DE
Pioneer Management (Ireland) Ltd. (PMIL) PGI 100% Ireland
Pioneer Plans Corporation (PPC) PGI 100% DE
PIOGlobal Corp. (PIOGlobal) PGI 100% DE
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Goldfields Holdings, Inc. (PGH) PGI 100% DE
Pioneer Goldfields Ltd. (PGL) PGH 100% Guernsey
Teberebie Goldfields Ltd. (TGL) PGL 90% Ghana
Pioneer Omega, Inc. (Omega) PGI 100% DE
Pioneer First Russia, Inc. (First Russia) Omega 81.65% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer International Corp. (PIntl) PGI 100% DE
Pioneer First Polish Investment
Fund JSC, S.A. (First Polish) PIntl 100% Poland
Pioneer Czech Investment Company, A.S.
(Pioneer Czech) PIntl 100% Czech Republic
Registered investment companies that are parties to management contracts with
PMC:
FUNDS BUSINESS TRUST
Pioneer International Growth Fund MA
Pioneer World Equity Fund DE
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Capital Growth Fund DE
Pioneer Equity-Income Fund DE
Pioneer Gold Shares DE
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Independence Fund DE
Pioneer Fund DE
Pioneer II DE
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Trust MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Balanced Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares DE
Pioneer Micro-Cap Fund DE
C-3
<PAGE>
The following table lists John F. Cogan, Jr.'s positions with the
investment companies, PGI and principal direct or indirect PGI subsidiaries
referenced above and the Registrant's counsel.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
Pioneer mutual
funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
PIntl X X
PMT X X
Omega X X
PIOGlobal X X
First Russia X X
PCC X
PSC X
PMIL X
PEI X
PFI X
PREA X
Forest-Starma X
PMC X X
PFD X X
TGL X X
First Polish Chairman of Supervisory
Board
GmbH Chairman of Supervisory
Board
Pioneer Czech Chairman of Supervisory
Board
Hale and Dorr LLP Partner
Item 26. NUMBER OF HOLDERS OF SECURITIES
(1)
Title of Class (2)
Shares of Beneficial Interest Number of Record Holders
(without par value) as of July 31, 1998
Class A shares 66,141
Class B shares 35,950
Class C shares 6,080
Class Y shares 3
ITEM 27. INDEMNIFICATION
Except for the Agreement and Declaration of Trust (the "Declaration"),
dated June 16, 1994, establishing the Registrant as a business trust under
Delaware law, there is no contract, arrangement or statute under which any
Trustee, officer, underwriter or affiliated person of the Registrant is insured
or indemnified. The Declaration provides that no Trustee or officer will be
indemnified against any liability to which the Registrant would otherwise be
subject by reason of or for willful misfeasance, bad faith, gross negligence or
reckless disregard of such person's duties.
C-4
<PAGE>
Insofar as indemnification for liability arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be available to Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
All of the information required by this item is set forth in the Form ADV,
as amended, of PMC, the Registrant's investment adviser. The following sections
of such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2; and
(b) Section 6, Business Background, of each Schedule D.
ITEM 29. PRINCIPAL UNDERWRITER
(a) See Item 25 above.
(b) Trustees and Officers of PFD:
POSITIONS AND OFFICER WITH POSITIONS AND OFFICER WITH
NAME UNDERWRITER REGISTRANT
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice President and
Trustee
Steven M. Graziano Senior Vice President None
Stephen W. Long Senior Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Bennett Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Mary Kleeman Vice President None
Steven R. Berke Assistant Vice President None
C-5
<PAGE>
Steven H. Forss Assistant Vice President None
Mary Sue Hoban Assistant Vice President None
Debra A. Levine Assistant Vice President None
Junior Roy McFarland Assistant Vice President None
Marie E. Moynihan Assistant Vice President None
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts and records are maintained at the Registrant's office at 60
State Street, Boston, Massachusetts; contact the Treasurer.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant undertakes to deliver or cause to be delivered with
the Prospectus, to each person to whom the Prospectus is sent or given, a copy
of the Registrant's report to shareholders furnished pursuant to and meeting
the requirements of Rule 30d - 1 under the Investment Company Act of 1940, as
amended, from which the specified information is incorporated by reference,
unless such person currently holds securities of the Registrant and otherwise
has received a copy of such report, in which case the Registrant shall state in
the Prospectus that it will furnish, without charge, a copy of such report on
request, and the name, address and telephone number of the person to whom such
a request should be directed.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 59 to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 has duly caused this Post-Effective Amendment No. 59 to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston and Commonwealth of Massachusetts, on the 9th
day of September, 1998.
PIONEER GROWTH SHARES
By: /s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 59 to the Registrant's Registration Statement has
been signed below by the following persons in the capacities indicated on
September 9, 1998:
Signature Title
/s/ John F. Cogan, Jr. Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
/s/ William H. Keough Chief Financial Officer )
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
/s/ John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
Richard H. Egdahl* )
Richard H. Egdahl, M.D. )
)
)
<PAGE>
Margaret B. W. Graham* )
Margaret B. W. Graham )
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
David D. Tripple* )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ John F. Cogan, Jr. )
John F. Cogan, Jr.
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Title
(11) Consent of Independent Public Accountants (Arthur
Andersen LLP)
(17) Financial Data Schedules
Arthur Andersen LLP
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our reports
on Pioneer Growth Shares dated February 2, 1998 and August 7, 1998 (and to all
references to our firm) included in or made a part of Post-Effective Amendment
No. 59 and Amendment No. 30 to Registration Statement File Nos. 2-28274 and
811-01604, respectively.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
September 4, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMIANNUAL
REPORT ON FORM N-SAR DATED JUNE 30, 1998 FOR PIONEER GROWTH SHARES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000069404
<NAME> PIONEER GROWTH SHARES
<SERIES>
<NUMBER> 001
<NAME> PIONEER GROWTH SHARES CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1080759644
<INVESTMENTS-AT-VALUE> 1477817690
<RECEIVABLES> 23752344
<ASSETS-OTHER> 1275
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1501571309
<PAYABLE-FOR-SECURITIES> 11276336
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6003608
<TOTAL-LIABILITIES> 17279944
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1067882477
<SHARES-COMMON-STOCK> 47048252
<SHARES-COMMON-PRIOR> 34682818
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 2634309
<ACCUMULATED-NET-GAINS> 21985151
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 397058046
<NET-ASSETS> 1484291365
<DIVIDEND-INCOME> 2456879
<INTEREST-INCOME> 1346570
<OTHER-INCOME> 0
<EXPENSES-NET> 6437758
<NET-INVESTMENT-INCOME> (2634309)
<REALIZED-GAINS-CURRENT> 15879373
<APPREC-INCREASE-CURRENT> 206090769
<NET-CHANGE-FROM-OPS> 219335833
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19480659
<NUMBER-OF-SHARES-REDEEMED> 7115225
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 718910326
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6105778
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2521505
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6486107
<AVERAGE-NET-ASSETS> 757705715
<PER-SHARE-NAV-BEGIN> 16.35
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 3.92
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.25
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMIANNUAL
REPORT ON FORM N-SAR DATED JUNE 30, 1998 FOR PIONEER GROWTH SHARES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000069404
<NAME> PIONEER GROWTH SHARES
<SERIES>
<NUMBER> 002
<NAME> PIONEER GROWTH SHARES CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1080759644
<INVESTMENTS-AT-VALUE> 1477817690
<RECEIVABLES> 23752344
<ASSETS-OTHER> 1275
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1501571309
<PAYABLE-FOR-SECURITIES> 11276336
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6003608
<TOTAL-LIABILITIES> 17279944
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1067882477
<SHARES-COMMON-STOCK> 21097785
<SHARES-COMMON-PRIOR> 10246289
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 2634309
<ACCUMULATED-NET-GAINS> 21985151
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 397058046
<NET-ASSETS> 1484291365
<DIVIDEND-INCOME> 2456879
<INTEREST-INCOME> 1346570
<OTHER-INCOME> 0
<EXPENSES-NET> 6437758
<NET-INVESTMENT-INCOME> (2634309)
<REALIZED-GAINS-CURRENT> 15879373
<APPREC-INCREASE-CURRENT> 206090769
<NET-CHANGE-FROM-OPS> 219335833
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12313761
<NUMBER-OF-SHARES-REDEEMED> 1462265
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 718910326
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6105778
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2521505
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6486107
<AVERAGE-NET-ASSETS> 282674785
<PER-SHARE-NAV-BEGIN> 16.00
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> 3.77
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.73
<EXPENSE-RATIO> 1.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMIANNUAL
REPORT ON FORM N-SAR DATED JUNE 30, 1998 FOR PIONEER GROWTH SHARES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000069404
<NAME> PIONEER GROWTH SHARES
<SERIES>
<NUMBER> 003
<NAME> PIONEER GROWTH SHARES CLASS C
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1080759644
<INVESTMENTS-AT-VALUE> 1477817690
<RECEIVABLES> 23752344
<ASSETS-OTHER> 1275
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1501571309
<PAYABLE-FOR-SECURITIES> 11276336
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6003608
<TOTAL-LIABILITIES> 17279944
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1067882477
<SHARES-COMMON-STOCK> 5618966
<SHARES-COMMON-PRIOR> 2132599
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 2634309
<ACCUMULATED-NET-GAINS> 21985151
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 397058046
<NET-ASSETS> 1484291365
<DIVIDEND-INCOME> 2456879
<INTEREST-INCOME> 1346570
<OTHER-INCOME> 0
<EXPENSES-NET> 6437758
<NET-INVESTMENT-INCOME> (2634309)
<REALIZED-GAINS-CURRENT> 15879373
<APPREC-INCREASE-CURRENT> 206090769
<NET-CHANGE-FROM-OPS> 219335833
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4475471
<NUMBER-OF-SHARES-REDEEMED> 989104
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 718910326
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6105778
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2521505
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6486107
<AVERAGE-NET-ASSETS> 61235589
<PER-SHARE-NAV-BEGIN> 16.08
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> 3.79
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.83
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMIANNUAL
REPORT ON FORM N-SAR DATED JUNE 30, 1998 FOR PIONEER GROWTH SHARES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000069404
<NAME> PIONEER GROWTH SHARES
<SERIES>
<NUMBER> 004
<NAME> PIONEER GROWTH SHARES CLASS Y
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1080759644
<INVESTMENTS-AT-VALUE> 1477817690
<RECEIVABLES> 23752344
<ASSETS-OTHER> 1275
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1501571309
<PAYABLE-FOR-SECURITIES> 11276336
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6003608
<TOTAL-LIABILITIES> 17279944
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1067882477
<SHARES-COMMON-STOCK> 193014
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 2634309
<ACCUMULATED-NET-GAINS> 21985151
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 397058046
<NET-ASSETS> 1484291365
<DIVIDEND-INCOME> 2456879
<INTEREST-INCOME> 1346570
<OTHER-INCOME> 0
<EXPENSES-NET> 6437758
<NET-INVESTMENT-INCOME> (2634309)
<REALIZED-GAINS-CURRENT> 15879373
<APPREC-INCREASE-CURRENT> 206090769
<NET-CHANGE-FROM-OPS> 219335833
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 194408
<NUMBER-OF-SHARES-REDEEMED> 1394
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 718910326
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 6105778
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2521505
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6486107
<AVERAGE-NET-ASSETS> 3505836
<PER-SHARE-NAV-BEGIN> 19.73
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .52
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.26
<EXPENSE-RATIO> .52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
