As filed with the Securities and Exchange Commission on February 13, 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. 57 / X /
---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 / X /
Amendment No. 28 / 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)
___ on [date] pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
_X_ on May 1, 1998 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
Class A Shares, Class B Shares and Class C Shares
Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of Information Required by
Items of the Registration Form
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
4. General Description of Registrant Prospectus - Cover Page; Investment
Objective and Policies; Management of
the Fund; Fund Share Alternatives;
Share Price; How to Buy Fund Shares;
How to Sell Fund Shares; How to
Exchange Fund Shares; 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 and
Policies; Management of the Fund; Fund
Share Alternatives; Share Price; How
to Buy Fund Shares; How to Sell Fund
Shares; How to Exchange Fund Shares;
Dividends, Distributions and Taxation;
The Fund
7. Purchase of Securities
Being Offered Prospectus - Management of the Fund;
Fund Share Alternatives; Share Price;
How to Buy Fund Shares; How to Sell
Fund Shares; How to Exchange Fund
Shares; Distribution Plans;
Shareholder Services
8. Redemption or Repurchase Prospectus - Fund Share Alternatives;
How to Buy Fund Shares; How to Sell
Fund Shares; How to Exchange Fund
Shares; Shareholder Services
9. Pending Legal Proceedings Not Applicable
<PAGE>
FORM N-1A ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS OR STATEMENT OF
ADDITIONAL INFORMATION
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 -
Shares of the Fund; General
Information
13. Investment Objectives and Policies Statement of Additional Information -
Investment Objective and Policies;
Investment Restrictions
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--Other
Pioneer Information
17. Brokerage Allocation and Other
Practices Statement of Additional Information -
Portfolio Transactions
18. Capital Stock and Other Securities Statement of Additional Information -
Shares of the Fund
19. Purchase, Redemption and Pricing of
Securities Being Offered Statement of Additional Information -
Determination of Net Asset Value;
Systematic Withdrawal Plan; Letter of
Intent
20. Tax Status Statement of Additional Information -
Dividends and 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--
Performance Statistics
23. Financial Statements Statement of Additional Information -
Financial Statements
<PAGE>
PIONEER GROWTH SHARES
Class Y Shares
Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of
Information Required by Items of the Registration Form
Form N-1A Item Number and Caption Location
- --------------------------------- --------
Part A
- ------
1. Cover Page............................. Cover Page
2. Synopsis............................... Expense Information
3. Condensed Financial Information........ Financial Highlights
4. General Description of Registrant...... Investment Objectives and
Policies and Associated
Risks; Management of the
Fund; Fund Shares; The Fund
5. Management of the Fund................. Management of the Fund
5A. Management's Discussion of Fund
Performance........................ Not Applicable
6. Capital Stock and Other Securities..... The Fund; Dividends;
Distributions and Taxation;
Distribution of Class Y Shares
7. Purchase of Securities Being Offered... Purchasing Class Y Shares;
Share Price
8. Redemption or Repurchase............... Redeeming Class Y Shares;
Exchanging Class Y Shares;
9. Pending Legal Proceedings.............. Not Applicable
<PAGE>
Form N-1A Item Number and Caption Location
- --------------------------------- --------
Part B
- ------
10. Cover Page............................. Cover Page
11. Table of Contents...................... Cover Page
12. General Information and History........ Cover Page; General
Information and History;
Certain Liabilities
13. Investment Objectives and Policies..... Investment Policies and
Restrictions
14. Management of the Fund................. Management of the Fund
15. Control Persons and Principle Holders
of Securities........................ Management of the Fund
16. Investment Advisory and Other
Services............................. Management of the Fund;
Advisory Services;
Shareholder Servicing/Transfer
Agent; Custodian; Independent
Public Accountant
17. Brokerage Allocation and Other
Practices............................ Portfolio Transactions
18. Capital Stock and Other Securities..... Description of Shares;
Certain Liabilities
19. Purchase Redemption and Pricing of
Securities Being Offered............. Determination of Net Asset
Value; Letter of Intent;
Systematic Withdrawal Plan
20. Tax Status............................. Tax Status
21. Underwriters........................... Principal Underwriter;
Underwriting Agreement and
Distribution Plans
22. Calculation of Performance Data........ Investment Results
23. Financial Statements................... Financial Statements
<PAGE>
[Pioneer logo]
Pioneer
Growth
Shares
Class A, Class B and Class C Shares
Prospectus
May 1, 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 future reference. More
information about the Fund is included in the Statement of Additional
Information, dated May 1, 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 OF CONTENTS PAGE
-------------------------------------------------------- -----
I. EXPENSE INFORMATION .................................... 2
II. FINANCIAL HIGHLIGHTS ................................... 4
III. INVESTMENT OBJECTIVE, POLICIES AND RISKS ............... 7
IV. MANAGEMENT OF THE FUND ................................. 8
V. FUND SHARE ALTERNATIVES ................................ 10
VI. SHARE PRICE ............................................ 10
VII. HOW TO BUY FUND SHARES ................................. 11
VIII. HOW TO SELL FUND SHARES ................................ 14
IX. HOW TO EXCHANGE FUND SHARES ............................ 15
X. DISTRIBUTION PLANS ..................................... 16
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION .................. 17
XII. SHAREHOLDER SERVICES ................................... 17
Account and Confirmation Statements ................... 17
Additional Investments ................................ 17
Automatic Investment Plans ............................ 18
Financial Reports and Tax Information ................. 18
Distribution Options .................................. 18
Directed Dividends .................................... 18
Direct Deposit ........................................ 18
Voluntary Tax Withholding ............................. 18
Telephone Transactions and Related Liabilities ........ 18
FactFone(SM) .......................................... 18
Retirement Plans ...................................... 19
Telecommunications Device for the Deaf (TDD) .......... 19
Systematic Withdrawal Plans ........................... 19
Reinstatement Privilege (Class A Shares Only) ......... 19
XIII. THE FUND ............................................... 19
XIV. INVESTMENT RESULTS ..................................... 20
--------------------
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 information in the table below is based on the Fund's actual
expenses for the year ended December 31, 1997. Management fees have been
restated to reflect the basic, maximum and minimum fees payable to Pioneering
Management Corporation ("PMC") under the most recently approved management
contract. See "Management of the Fund." For the fiscal year ended December 31,
1997, actual management fees for each Class of shares were 0.48% and total
operating expenses were 0.97% for Class A shares, 1.72% for Class B shares and
1.63% for Class C shares, under the management contract previously in effect.
Shareholder Transaction Expenses Class A Class B Class 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) .......................... None1 4.00% 1.00%
Redemption fee2 ........................ None None None
Exchange fee ........................... None None None
Annual Operating Expenses
(as a percentage of average net assets)
Management Fee3
Class A Shares Basic Maximum Minimum
Management Fee ..................... 0.70% 0.80% 0.60%
12b-1 Fees ......................... 0.25% 0.25% 0.25%
Other Expenses
(including accounting and transfer
agent fees, custodian fees and
printing expenses) ............... 0.24% 0.24% 0.24%
---- ---- ----
Total Operating Expenses ........... 1.19% 1.29% 1.09%
==== ==== ====
Class B Shares
Management Fee ..................... 0.70% 0.80% 0.60%
12b-1 Fees ......................... 1.00% 1.00% 1.00%
Other Expenses
(including accounting and transfer
agent fees, custodian fees and
printing expenses) ............... 0.24% 0.24% 0.24%
---- ---- ----
Total Operating Expenses ........... 1.94% 2.04% 1.84%
==== ==== ====
Class C Shares
Management Fee ..................... 0.70% 0.80% 0.60%
12b-1 Fees ......................... 1.00% 1.00% 1.00%
Other Expenses
(including accounting and transfer
agent fees, custodian fees and
printing expenses ................ 0.15% 0.15% 0.15%
---- ---- ----
Total Operating Expenses ........... 1.85% 1.95% 1.75%
==== ==== ====
- --------------------
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 The management fee payable to PMC consists of a basic fee of 0.70% of average
daily net assets and a performance adjustment. For the period May 1, 1998
through April 30, 1999, the managem ent fee payable to PMC will include the
basic fee only. See "Management of the Fund" for additional information
about the fee calculation.
Example:
You would pay the following expenses on a $1,000 investment in the Fund,
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.
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
Class A Shares
Management Fee
Basic ....................... $ 69 $ 93 $119 $194
Maximum ..................... $ 70 $ 96 $124 $204
Minimum ..................... $ 68 $ 90 $114 $183
Class B Shares*
Management Fee
Basic
--Assuming complete
redemption at end of
period ................... $ 60 $ 91 $125 $207
--Assuming no redemption..... $ 20 $ 61 $105 $207
Maximum
--Assuming complete
redemption at end of
period ................... $ 61 $ 94 $130 $218
--Assuming no redemption..... $ 21 $ 64 $110 $218
Minimum
--Assuming complete
redemption at end of
period ................... $ 59 $ 88 $120 $196
--Assuming no redemption..... $ 19 $ 58 $100 $196
Class C Shares**
Management Fee
Basic
--Assuming complete
redemption at end of
period ................... $ 29 $ 58 $100 $217
--Assuming no redemption..... $ 19 $ 58 $100 $217
Maximum
--Assuming complete
redemption at end of
period ................... $ 30 $ 61 $105 $227
- --Assuming no redemption ..... $ 20 $ 61 $105 $227
Minimum
--Assuming complete
redemption at end of
period ................... $ 28 $ 55 $ 95 $206
- --Assuming no redemption ..... $ 18 $ 55 $ 95 $206
- --------------------
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
**Class C shares redeemed during the first year after purchase are subject to a
1% CDSC.
2
<PAGE>
THE EXAMPLE IS DESIGNED FOR INFORMATIONAL PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURN. ACTUAL FUND
EXPENSES AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN
THOSE SHOWN.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, see "Management of the Fund," "Distribution 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."
3
<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 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)
Distribution to shareholders
from:
Net investment income ............. -- -- ( 0.03) 0.00
Net realized gains ................ ( 0.49) ( 1.07) ( 1.31) ( 3.32)
In excess of net investment
income ............................ -- -- -- 0.00
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 return1 ...................... 43.78 % 26.95 % 29.82% ( 2.60)%
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
rate paid per share ............... $ 0.0630 $ 0.0568
Net assets, end of period
(in thousands) .................... $ 567,125 $ 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 ...................... -- -- -- --
Net investment income (loss) ...... -- -- -- --
Ratios assuming a reduction of
fees paid indirectly:
Net expenses ...................... 0.97 % 1.13 % 1.21%
Net investment income ............. ( 0.23 %) ( 0.06 %) 0.30%
</TABLE>
- ---------
1 Assumes initial investment at net asset value at the beginning of each
year, reinvestment of all dividends and distributions, the net asset value
at the end of each year, and no sales charges. Total return would be
reduced if sales charges were taken into account.
+ Prior to December 1, 1993, Mutual of Omaha Fund Management Company ("FMC")
acted as the investment adviser to the Fund.
++ Ratios assuming no reduction for fees paid indirectly.
<TABLE>
<CAPTION>
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) $ 0.00 $ 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
Distribution to shareholders
from:
Net investment income ............. 0.00 0.00 0.00 (0.08) (0.08) (0.06)
Net realized gains ................ ( 0.83) 0.00 0.00 (0.55) (0.81) (0.25)
In excess of net investment
income ............................ 0.00 0.00 ( 0.02) 0.00 0.00 0.00
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 return1 ...................... 8.52% 1.22% 62.37% (8.37%) 33.63% 23.01%
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
rate paid 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 .............
</TABLE>
- ---------
1 Assumes initial investment at net asset value at the beginning of each
year, reinvestment of all dividends and distributions, the net asset value
at the end of each year, and no sales charges. Total return would be
reduced if sales charges were taken into account.
+ Prior to December 1, 1993, Mutual of Omaha Fund Management Company ("FMC")
acted as the investment adviser to the Fund.
++ Ratios assuming no reduction for fees paid indirectly.
4
<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 April 28, 1995
December 31, to
1997 1996 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 from:
Net investment income ............................................... -- -- (0.03)
Net realized gain ................................................... (0.49) (1.07) (1.31)
-------- ------- -------
Net increase 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%
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 rate paid 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>
- ---------
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
5
<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 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 from investment operations ........................... $ 5.02 $ 2.52
Distributions to shareholders from:
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%
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 rate paid 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>
- ---------
(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.
6
<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 which are convertible into common stocks. Current income will be
incidental to the Fund's primary objective. In selecting securities for
investment, Pioneering Management Corporation ("PMC"), the Fund's investment
adviser, attempts to identify companies that have better-than-average earnings
growth potential and those industries that stand to enjoy the greatest benefit
from the predicted economic environment. The Fund seeks to purchase the
securities of companies that are thought to be best situated in those industry
groupings. The Fund invests in companies in a variety of industries in an
attempt to reduce its overall exposure to investment and market risks.
In pursuing its objective, the Fund purchases portfolio securities with
the view of retaining them on a long-term basis. However, 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. This policy is subject to certain requirements for continuing the Fund's
qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended (the "Code"). 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 turnover rates.
Part or all of the Fund's assets may be temporarily invested in securities
of the United States ("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 as described in the Statement of
Additional Information. Although the Fund does not have a formal percentage
limitation on investments in warrants, it is not expected that PMC will invest
more than 5% of the Fund's total assets in such securities. 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 ("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 restricted securities and
prevailing supply and demand conditions.
Foreign Securities
The Fund may invest up to 30% of its assets at the time of investment in
listed and unlisted foreign securities. While such investments are intended to
reduce risk by permitting greater diversification of the Fund's portfolio,
investments in securities of foreign issuers entail certain risks not
associated with investments in domestic issuers. Such risks include
fluctuations in foreign currency exchange rates; possible expropriation or
nationalization of foreign companies; imposition of exchange control
regulations; currency blockage or dividends or interest withheld at the source;
unfavorable price spreads on currency exchanges; higher transaction costs; less
public information about issuers of securities; lack of uniform auditing,
accounting and financial reporting standards; less governmental regulation of
foreign stock exchanges and brokers; less liquidity and greater volatility of
securities of foreign companies; or imposition of foreign taxes. Therefore, the
Fund intends to invest primarily in the companies organized under the laws of
those nations which are considered to have relatively stable and friendly
governments, e.g., major industrialized nations such as the United
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<PAGE>
Kingdom, France, Canada, Germany and Japan. In connection with its investments
in foreign securities and in order to protect 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.
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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general
responsibility for PMC's investment operations and chairs a committee of PMC's
equity managers which reviews PMC's research and portfolio operations,
including those of the Fund. Mr. Tripple joined PMC in 1974.
Research and management of the Fund is the responsibility of a team of
portfolio managers and analysts focusing on equity securities. Members of the
team meet regularly to discuss holdings, prospective investments and portfolio
composition.
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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 with respect to 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 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. In addition to the
expenses described above, the Fund shall pay 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 where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of the Fund or other Pioneer mutual funds. See the Statement of
Additional Information for a further description of PMC's brokerage allocation
practices.
Management Fee
As compensation for its management related services and certain expenses
which PMC incurs on behalf of the Fund, the Fund pays PMC a management fee that
is comprised of two components. The first component is a basic fee (the "Basic
Fee") equal to 0.70% per annum of the Fund's average daily net assets up to $1
billion, 0.675% of the next $4 billion, 0.65% of the next $5 billion and 0.575%
of the excess over $10 billion. The Basic Fee is computed daily and paid
monthly. The second component is a performance fee adjustment.
Computing The Performance Fee Adjustment
The Basic Fee is subject to an upward or downward adjustment, depending on
whether, and to what extent, the investment performance of the Class A shares
of the Fund for the performance period exceeds, or is exceeded by, the record
of the Lipper Growth Funds Index (the "Index") over the same period. This
performance comparison is made at the end of each month. Each percentage point
of difference (up to a maximum of -0.10 percentage points) is multiplied by a
performance adjustment rate of 0.01%. An appropriate percentage of this rate
(based on the number of days in the current month) is then applied to the
Fund's average net assets over the entire performance period, giving the dollar
amount that is added to (or subtracted from) the Basic Fee. The monthly
performance adjustment is further adjusted to the extent necessary to insure
that the total annual adjustment to the Basic Fee does not exceed -0.10% of the
average daily net assets for that year.
Because the adjustment to the Basic Fee is based on the comparative
performance of the Fund's Class A shares and the record of the Index, the
controlling factor is not whether the performance of the Fund's Class A shares
is up or down, but whether it is up or down more or less than the record of the
Index. Moreover, the comparative investment performance of the Fund's Class A
shares is based solely on the relevant performance period without regard to the
cumulative performance over a longer or shorter period of time.
From time to time, the Trustees may determine that another securities
index is a more appropriate benchmark than the Index for purposes of evaluating
the performance of the Fund. In such event, a successor index may be
substituted for the Index in prospectively calculating the perform-
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<PAGE>
ance based adjustment to the Base Fee. However, the Fund's performance
relative to the Index will still be used in calculating the performance
adjustment concerning portions of the performance period prior to the approval
of the successor index. In addition, because of the possible future
identification of a more appropriate class of Fund shares for comparison to the
Index, the Trustees have reserved the ability to substitute the class of Fund
shares designated for the performance comparison to the Index; provided, in such
event the calculation of the performance adjustment for any portion of the
performance period prior to the designation of a successor class would still be
based upon the performance of the previously designated class of Fund shares.
Phase-In of Performance Fee Arrangements
The current management contract with PMC became effective May 1, 1998. As
of May 1, 1998, the Fund began paying management fees at a rate equal to the
Basic Fee. The performance adjustment will be phased-in as follows: (a) during
the initial 12-month period, the Basic Fee will remain unadjusted, (b) during
the following 24 months, the Fund's performance will be measured over an
increasing period covering the current month and the prior months dating back
to May 1, 1998, (c) beginning in the thirty-sixth month, the duration of
the Fund's performance period will become fixed and (d) thereafter, the Fund's
performance would be measured over a rolling thirty-six month period covering
the current month and the prior thirty-five months (each a "Performance
Period"). The Fund will pay management fees at a rate equal to the Basic Fee
plus or minus the amount of the performance adjustment for the relevant
Performance Period.
The Basic Fee is computed daily, the performance fee adjustment is
calculated once per month and the entire management fee is paid monthly.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 14% of the outstanding capital stock of PGI as of the date of
this Prospectus.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers three Classes of shares designated as Class
A, Class B and Class C shares, as 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 contingent deferred sales
charge ("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% 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 the applicable sales charge. Net asset value per
share of each Class of Fund shares 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
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<PAGE>
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 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 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 the Exchange and will therefore not be reflected in the computation of
the Fund's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities are valued at their
fair value as determined in good faith 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 plus any applicable sales charge, next
computed after receipt of a purchase order, 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 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 and Related Liabilities" for additional
information.
Class A Shares
You may buy Class A shares at the public offering price as follows:
Sales Chargeas a % of Dealer
--------------------- Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- --------------------------------- ---------- ---------- ----------
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than $250,000 3.50% 3.63% 3.00%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more -0- -0- see below
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
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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 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 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, pension, profit-sharing or other benefit plan of the
foregoing persons; (g) insurance company separate accounts; (h) certain "wrap
accounts" for the benefit of clients of financial planners adhering to
standards established by PFD; (i) other funds and accounts for which PMC or any
of its affiliates serves as investment adviser or manager; and (j) certain unit
investment trusts. Shares so purchased are purchased for investment purposes
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
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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:
CDSC as a Percentage
Year Since of Dollar Amount
Purchase Subject to CDSC
- ------------------------ ---------------------
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
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 end
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 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 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, UTMA and 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 redemp-
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tion; (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.
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 an 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 in cash, 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
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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 and Related Liabilities" 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 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 and Related Liabilities" 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
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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 (the
"Class A Plan," "Class 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.
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 pay
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 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
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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. The Fund's distributions of long-term capital gains
to individuals or other noncorporate taxpayers are subject to different maximum
tax rates (which will be indicated in the annual tax information the Fund
provides to shareholders), depending generally upon the sources of, and the
Fund's holding periods for the assets that produce, the 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 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.
domestic corporations, if any, 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 different 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, Letters of
Intent, 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
17
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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 pre-authorized 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 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 capital gains or both 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, 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 and Related Liabilities
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,
18
<PAGE>
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 and Related Liabilities." 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 Pioneer Mutual
Funds 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 1-800-622-1997, 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 checks 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 checks 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
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 in effect
immediately 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.
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 purpose 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 three classes of shares, designated as Class A,
Class B and Class C. 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
19
<PAGE>
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.
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. Rankings or listings by
magazines, newspapers or independent statistical or rating services, such as
Lipper Analytical Services, Inc., may also be referenced.
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 Fund 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.
20
<PAGE>
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
0598-4604
(C)Pioneer Funds Distributor, Inc.
[Pioneer logo]
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, automated 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>
[Pioneer logo]
PIONEER
GROWTH
SHARES
CLASS Y SHARES
PROSPECTUS
MAY 1, 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 and its Class Y shares
that you should know before investing. Please read and retain it for future
reference. More information about the Fund is included in the Statement of
Additional Information, dated May 1, 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 OF CONTENTS PAGE
-------------------------------------------------------- -----
I. EXPENSE INFORMATION ....................................
II. FINANCIAL HIGHLIGHTS ...................................
III. INVESTMENT OBJECTIVES, POLICIES AND RISKS ..............
IV. MANAGEMENT OF THE FUND .................................
V. FUND SHARES.............................................
VI. SHARE PRICE ............................................
VII. PURCHASING CLASS Y SHARES...............................
VIII. REDEEMING CLASS Y SHARES................................
IX. EXCHANGING CLASS Y SHARES...............................
X. DISTRIBUTION OF CLASS Y SHARES..........................
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ..................
XII. SHAREHOLDER SERVICES ...................................
Account and Confirmation Statements ...................
Financial Reports and Tax Information .................
Distribution Options ..................................
Telephone Transactions ................................
FactFone(SM) ..........................................
XIII. THE FUND ...............................................
XIV. INVESTMENT RESULTS .....................................
--------------------
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 investors understand the charges and
expenses that an investor will bear directly or indirectly when investing in the
Fund. Operating expenses for Class Y shares are based on expenses that would
have been incurred for the fiscal year ended December 31, 1997 had such shares
been outstanding for the entire fiscal year. +
Shareholder Transaction Expenses:........................... Class Y
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) ..................... None
Maximum Sales Charge on
Reinvestment of Dividends ............................... None
Maximum Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable).................. None
Redemption fee ........................................... None
Exchange fee ............................................. None
Annual Operating Expenses
(As a Percentage of Average Net Assets):
Management fee ........................................... 0.48%
Other Expenses (estimated) (including
accounting and transfer agent fees, custodian fees and
printing expenses)....................................... 0.24%
----
Total Operating Expenses .................................. 0.72%
====
- ---------
+ Class Y shares were first offered May 1, 1998.
EXAMPLE:
You would pay the following expenses on a $1,000 investment, 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.
1 Year 3 Years 5 Years 10 Years
--------- ---------- ---------- ----------
Class Y Shares $7 $23 $40 $89
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 VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
For further information regarding management fees and other expenses of
the Fund, see "Management of the Fund" and "Distribution of Class Y Shares" in
this Prospectus and "Management of the Fund" and "Underwriting Agreement and
Distribution Plan" in the Statement of Additional Information.
II. FINANCIAL HIGHLIGHTS
Class Y shares are a new class of shares; financial highlights are not
currently available for Class Y shares. Arthur Andersen LLP's report on the
Fund's audited financial statements as of December 31, 1997 for Class A, Class B
and Class C shares appears in the Fund's Annual Report which is incorporated by
reference into the Statement of Additional Information. The Annual Report
includes more information about the Fund's performance and is available free of
charge by calling Shareholder Services at 1-888-XXX-XXXX.
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 which are convertible into common stocks. Current income will be
incidental to the Fund's primary objective. In selecting securities for
investment, Pioneering Management Corporation ("PMC"), the Fund's investment
adviser, attempts to identify companies that have better-than-average earnings
growth potential and those industries that stand to enjoy the greatest benefit
from the predicted economic environment. The Fund seeks to purchase the
securities of companies that are thought to be best situated in those industry
groupings. The Fund invests in companies in a variety of industries in an
attempt to reduce its overall exposure to investment and market risks.
In pursuing its objective, the Fund purchases portfolio securities with
the view of retaining them on a long-term basis. However, 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. This
policy is subject to certain requirements for continuing the Fund's
qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended (the "Code"). 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 turnover rates.
Part or all of the Fund's assets may be temporarily invested in securities
of the United States ("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 as described in the Statement of
Additional Information. Although the Fund does not have a formal percentage
limitation on investments in warrants, it is not expected that PMC will invest
more than 5% of the Fund's total assets in such securities. 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 ("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 restricted securities and
prevailing supply and demand conditions.
FOREIGN SECURITIES
The Fund may invest up to 30% of its assets at the time of investment in
listed and unlisted foreign securities. While such investments are intended to
reduce risk by permitting greater diversification of the Fund's portfolio,
investments in securities of foreign issuers entail certain risks not associated
with investments in domestic issuers. Such risks include fluctuations in foreign
currency exchange rates; possible expropriation or nationalization of foreign
companies; imposition of exchange control regulations; currency blockage or
dividends or interest withheld at the source; unfavorable price spreads on
currency exchanges; higher transaction costs; less public information about
issuers of securities; lack of uniform auditing, accounting and financial
reporting standards; less governmental regulation of foreign stock exchanges and
brokers; less liquidity and greater volatility of securities of foreign
companies; or imposition of foreign taxes. Therefore, the Fund intends to invest
primarily in the companies organized under the laws of those nations which are
considered 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
protect 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.
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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general responsibility
for PMC's investment operations and chairs a committee of PMC's equity managers
which reviews PMC's research and portfolio operations, including those of the
Fund. Mr. Tripple joined PMC in 1974.
Research and management of the Fund is the responsibility of a team of
portfolio managers and analysts focusing on 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 with respect to 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 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. In addition to the expenses described above,
the Fund shall pay 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 where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells shares
of the Fund or other Pioneer mutual funds. See the Statement of Additional
Information for a further description of PMC's brokerage allocation practices.
MANAGEMENT FEE
As compensation for its management related services and certain expenses
which PMC incurs on behalf of the Fund, the Fund pays PMC a management fee that
is comprised of two components. The first component is a basic fee (the "Basic
Fee") equal to 0.70% per annum of the Fund's average daily net assets up to $1
billion, 0.675% of the next $4 billion, 0.65% of the next $5 billion and 0.575%
of the excess over $10 billion. The Basic Fee is computed daily and paid
monthly. The second component is a performance fee adjustment.
COMPUTING THE PERFORMANCE FEE ADJUSTMENT
The Basic Fee is subject to an upward or downward adjustment, depending on
whether, and to what extent, the investment performance of the Class A shares of
the Fund for the performance period exceeds, or is exceeded by, the record of
the Lipper Growth Funds Index (the "Index") over the same period. This
performance comparison is made at the end of each month. Each percentage point
of difference (up to a maximum of -0.10 percentage points) is multiplied by a
performance adjustment rate of 0.01%. An appropriate percentage of this rate
(based on the number of days in the current month) is then applied to the Fund's
average net assets over the entire performance period, giving the dollar amount
that is added to (or subtracted from) the Basic Fee. The monthly performance
adjustment is further adjusted to the extent necessary to insure that the total
annual adjustment to the Basic Fee does not exceed -0.10% of the average daily
net assets for that year.
Because the adjustment to the Basic Fee is based on the comparative
performance of the Fund's Class A shares and the record of the Index, the
controlling factor is not whether the performance of the Fund's Class A shares
is up or down, but whether it is up or down more or less than the record of the
Index. Moreover, the comparative investment performance of the Fund's Class A
shares is based solely on the relevant performance period without regard to the
cumulative performance over a longer or shorter period of time.
From time to time, the Trustees may determine that another securities
index is a more appropriate benchmark than the Index for purposes of evaluating
the performance of the Fund. In such event, a successor index may be substituted
for the Index in prospectively calculating the performance based adjustment to
the Base Fee. However, the Fund's performance relative to the Index will still
be used in calculating the performance adjustment concerning portions of the
performance period prior to the approval of the successor index. In addition,
because of the possible future identification of a more appropriate class of
Fund shares for comparison to the Index, the Trustees have reserved the ability
to substitute the class of Fund shares designated for the performance comparison
to the Index; provided, in such event the calculation of the performance
adjustment for any portion of the performance period prior to the designation of
a successor class would still be based upon the performance of the previously
designated class of Fund shares.
PHASE-IN OF PERFORMANCE FEE ARRANGEMENTS
The current management contract with PMC became effective May 1, 1998. As
of May 1, 1998, the Fund began paying management fees at a rate equal to the
Basic Fee. The performance adjustment will be phased-in as follows: (a) during
the initial 12-month period, the Basic Fee will remain unadjusted, (b) during
the following 24 months, the Fund's performance will be measured over an
increasing period covering the current month and the prior months dating back to
May 1, 1998, (c) beginning in the 36th month, the duration of the Fund's
performance period will become fixed and (d) thereafter, the Fund's performance
would be measured over a rolling 36 month period covering the current month and
the prior 35 months (each a "Performance Period"). The Fund will pay management
fees at a rate equal to the Basic Fee plus or minus the amount of the
performance adjustment for the relevant Performance Period.
The Basic Fee is computed daily, the performance fee adjustment is
calculated once per month and the entire management fee is paid monthly.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 14% of the outstanding capital stock of PGI as of the date of this
Prospectus.
V. FUND SHARES
The Fund continuously offers four Classes of shares designated as Class A,
Class B, Class C and Class Y shares. Class A, Class B and Class C shares are
offered in a separate prospectus which may be obtained by contacting your sales
representative or by calling PSC at 1-888-XXXX.
Class Y shares are sold at net asset value, without either an initial
sales charge or a contingent deferred sales charge. Class Y shares are not
subject to any ongoing service fee or distribution fee and do not convert to any
other class of shares. Class Y shares are described more fully in "Purchasing
Class Y Shares" in this Prospectus.
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 accourdance with local
laws and business practices.
VI. SHARE PRICE
Class Y shares of the Fund are sold at the net asset value per share. The
net asset value per share of each 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. The net asset value per share of
Class Y shares will generally be higher than the net asset value per share of
the Fund's other three classes of shares because Class Y shares are not subject
to any ongoing distribution fee, and certain other expenses are expected to be
lower.
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 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 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 the Exchange and will therefore not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities are valued at their
fair value as determined in good faith 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. PURCHASING CLASS Y SHARES
To open an account for an individual or other non-institutional investor,
a completed Account Application must be received by Pioneering Service
Corporation ("PSC") by mail or by fax prior to the purchase of Class Y shares.
All other investors should call PSC at 1-888-294-4480 to obtain an account
set-up kit and to obtain an account number. A bank wire address of record (your
predesignated bank account") must be provided to PSC at the time an account is
established.
The minimum initial investment for Class Y shares is $5 million which may
be invested in one or more of the Pioneer mutual funds that currently offer
Class Y shares. There is no minimum additional investment amount. Class Y shares
will be purchased at the net asset value per share next computed after receipt
of a purchase order without the imposition of an initial sales charge and are
not subject to a contingent deferred sales charge. All purchases must be made in
U.S. dollars.
The $5 million minimum investment requirement will be waived if:
(i) a trust company or bank trust department is initially investing at least
$1 million in any of the Pioneer mutual funds and, at the time of the
purchase, such assets are held in a fiduciary, advisory, custodial or
similar capacity over which the trust company or bank trust department
has full or shared investment discretion; or
(ii) the investment is made by an employer sponsored retirement plan that
meets the requirements of Section 401, 403 or 457 of the Code, provided
that the number of employees covered by the plan is 5,000 or more or the
plan has assets of $25 million or more; or
(iii) the investment is at least $1 million and the purchaser is an insurance
company separate account; or
(iv) the investment is made by an employer sponsored retirement plan
established for the benefit of (1) employees of PGI or employees of PGI's
affiliates or (2) employees of broker-dealers who have a Class Y shares
sales agreement with PFD.
PAYMENT BY WIRE. Funds may be wired in payment of a request to purchase Class Y
shares provided that such funds are wired to a Class Y shares account. See above
for information on establishing an account. To wire funds in payment of a
request to purchase Class Y shares instruct your bank to wire funds to:
Receiving Bank State Street Bank and Trust Company
Address 225 Franklin Street
Boston, MA 02101
ABA Routing No. 011000028
For further credit to: Shareholder Name
Existing Pioneer Account No.
Pioneer Real Estate Shares
A request to purchase shares must be received by PSC or by your
broker-dealer by the close of regular trading of the Exchange (currently 4:00
p.m. Eastern time) in order to purchase shares at the price determined on that
day. Funds wired in payment of such requests must be received by State Street
Bank and Trust Company by 11:00 a.m. Eastern time on the next business day
following receipt of the request to purchase shares. IF WIRED FUNDS ARE NOT
RECEIVED BY PSC BY 11:00 A.M. OF THE NEXT BUSINESS DAY FOLLOWING RECEIPT OF THE
REQUEST TO PURCHASE SHARES, THE TRANSACTION WILL BE CANCELED AT THE EXPENSE AND
RISK OF THE PURCHASER. Wire transfers normally take two or more hours to
complete and a fee may be charged by the sending bank. Wire transfers may be
restricted on holidays and at certain other times. Questions on wire transfers
should be directed to PSC or your broker-dealer.
BY MAIL. Purchases of Class Y shares may always be made by mail. For
accounts registered to individuals or non-institutional investors, make your
check payable to Pioneer Real Estate Shares and mail a completed Account
Application to PSC at: P.O. Box 9150, Boston, Massachusetts 02205-8573. For
accounts registered to institutions, completed account set-up kit materials must
be sent to PSC with payment. Checks written on non-U.S. banks will delay
purchases until U.S. funds are received and a collection charge may be imposed.
BROKER-DEALERS. An order for Class Y shares received by a broker-dealer
prior to the close of regular trading on the Exchange is confirmed at the price
for Class Y shares 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 from the
broker-dealer prior to PFD's close of business (usually, 5:30 p.m. Eastern
time), except as described above for wire transfers. It is the responsibility of
broker-dealers to transmit orders so that they will be received by PFD prior to
its close of business.
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. REDEEMING CLASS Y SHARES
Class Y shares will be redeemed at the share price next calculated after a
redemption request is received in good order as described below. Redemption
proceeds generally will be sent to the registered owner by check or by wire
transfer, normally within seven days after the request is received in good
order. The Fund reserves the right to withhold payment of the redemption
proceeds until checks or wire transfers 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. Class Y shares may be redeemed by delivering a written
request, signed by all registered owners, in good order to PSC. A written
request, including a signature guarantee, must be used to redeem Class Y shares
if any of the following applies:
o the requested redemption is for over $100,000 and there is no record of a
predesignated bank account,
o the requested redemption is for over $100,000 and the account registration
or address of record has changed within the last 30 days,
o the requested redemption is for over $5 million,
o the check for the amount of the redemption proceeds is not being mailed to
o the address of record, the check for the amount of the redemption proceeds
is not being made payable to the account's record owners, or
o the redemption proceeds are being transferred to a Pioneer mutual fund
account with a different registration.
Include in the request the account's registration name, the Fund's name,
the 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. Redemption requests for accounts registered in the name of a
corporation or other fiduciary must name an authorized person and must be
accompanied by a certified copy of a current corporate resolution, certificate
of incumbency or similar legal document showing that the named individual is
authorized to act on behalf of the record owner. Unless instructed otherwise,
PSC will send the proceeds of the redemption by check to the address of record.
For more information, contact PSC at 1-800-888-294-4480.
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 share certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) on the
share certificate are guaranteed by an eligible guarantor. A bank, broker,
dealer, credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association will generally be able to
provide a signature guarantee. 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 1-888-294-4480.
A signature guarantee must also accompany any request to change your
predesignated bank account information.
BY TELEPHONE OR FAX. Class Y share accounts are automatically authorized
to have the telephone redemption privilege unless indicated otherwise on the
Account Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. A maximum of $5 million per account per
day may be redeemed by telephone or fax if PSC has a predesignated bank account
number on record. If there is no predesignated bank account number on file, a
maximum of $100,000 may be redeemed by telephone or fax. The proceeds of a
telephone or fax redemption may be received by bank wire, electronic funds
transfer or by check. Proceeds of a telephone or fax request will normally be
mailed or transmitted the next business day.
To redeem by telephone, see "Shareholder Services - Telephone
Transactions" for more information.
To redeem by fax, send your redemption request to 1-888-294-4485.
To receive the proceeds by bank wire: the proceeds must be sent to the
bank wire 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 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.
You may always elect to deliver redemption instructions to PSC by mail.
REDEEMING SHARES THROUGH A 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.
Broker-dealers must receive redemption requests prior to the close of business
of the Exchange and must transmit each redemption request to PFD before PFD's
close of business to receive that day's redemption price. Broker-dealers are
responsible for providing all necessary documentation to PFD and may charge for
their services.
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
unless the account qualifies as tax-exempt. 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.
BY MAIL. Purchases of Class Y shares may always be made by mail. Make your
check payable to Pioneer Real Estate Shares and mail a completed Account
Application to PSC at: P.O. Box 9150, Boston, Massachusetts 02205-8573. Checks
written on non-U.S. banks will delay purchases until U.S. funds are received and
a collection charge may be imposed.
IX. EXCHANGING CLASS Y SHARES
Exchanges of Class Y shares 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 Class Y shares. A new Pioneer mutual fund account
opened through an exchange must have a registration identical to that on the
original account.
PSC will process exchanges only after receiving an exchange request in
good order. Exchange requests received by PSC before the close of the Exchange,
generally 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. 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.
TELEPHONE AND FAX EXCHANGES. Class Y share accounts are automatically
authorized to have the telephone exchange privilege unless indicated otherwise
on the Account Application or by writing to PSC. Proper account identification
will be required for each telephone exchange. Telephone exchanges or fax
exchanges of Class Y shares may not exceed $5 million per account per day. Each
telephone exchange request will be recorded. See "Telephone Transactions" below.
WRITTEN EXCHANGES. Class Y shares may be exchanged by sending a letter of
instruction to PSC. Include in your letter the record name on the account, the
name of the Pioneer mutual fund out of which to exchange and the name of the
Pioneer mutual fund into which to exchange, the 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. Written documentation may be required for
accounts registered in the name of a corporation or fiduciary.
X. DISTRIBUTION OF FUND SHARES
PFD incurs the expenses of distributing the Fund's Class Y shares, none of
which is reimbursed or paid for by the Fund. These expenses include fees paid
to, or on account of, broker-dealers and other qualifying institutions which
have sales agreements with PFD, advertising expenses, the cost of printing and
mailing prospectuses to potential investors and other direct and indirect
expenses associated with the sale of Fund's Class Y shares.
PFD or its affiliates may make payments out of its own resources to
dealers and other persons who distribute shares of the Fund, including Class Y
shares. Such payments may be calculated by reference to the net asset value of
shares sold by such person or otherwise. Dealers and other persons may from time
to time be required to meet certain criteria in order to receive such payments.
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.
The Fund has adopted a Plan of Distribution for each Class of shares,
other than Class Y shares, in accordance with Rule 12b-1 under the 1940 Act
pursuant to which certain distribution fees are paid to PFD. For more
information, see "Distribution Plans" in the Statement of Additional
Information.
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. The Fund's distributions of long-term capital gains to
individuals or other noncorporate taxpayers are subject to different maximum tax
rates (which will be indicated in the annual tax information the Fund provides
to shareholders), depending generally upon the sources of, and the Fund's
holding periods for the assets that produce, the 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 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.
domestic corporations, if any, 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 different 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.
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 capital gains or both 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,
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.
TELEPHONE TRANSACTIONS
Class Y accounts are automatically authorized to have telephone
transaction privileges as described above. To redeem or exchange Class Y shares
by telephone, call 1-888-294-4480 between the hours of 9:00 a.m. and 6:00 p.m.
Eastern time on weekdays. See "Selling Class Y Shares" and "Exchanging Class Y
Shares" for more information.
To confirm that each transaction instruction received by telephone is
genuine, the Fund will record each telephone transaction, require the caller to
provide the personal identification number ("PIN") for the account and send you
a written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third-party. If reasonable procedures, such as those described above, are
not followed, the Fund may be liable for any loss due to unauthorized or
fraudulent instructions. 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. The Fund may implement other procedures from time to time.
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 Pioneer mutual fund
accounts and to inquire about the prices and yields of all publicly available
Pioneer mutual funds. Computer assisted telephone purchases, exchanges and
redemptions of Class Y shares are not currently available through FactFone(SM).
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. 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
purpose 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.
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. Rankings or listings by
magazines, newspapers or independent statistical or rating services, such as
Lipper Analytical Services, Inc., may also be referenced.
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 Fund 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.
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
Growth Funds
Global/International
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
United States
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust*
Tax-Exempt
Pioneer Intermediate Tax-Free Fund**
Pioneer Tax-Free Income Fund**
Money Market Fund
Pioneer Cash Reserves Fund
* Offers Class A and B Shares only
**Not suitable for retirement accounts
21
<PAGE>
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
(C)Pioneer Funds Distributor, Inc.
[Pioneer logo]
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......................... 1-888-XXX-XXXX
FactFone(SM)
Automated fund yields, automated prices and
account information............................ 1-800-225-4321
Toll-free fax................................... 1-888-XXX-XXXX
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
May 1, 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 May 1,
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 Report
to Shareholders is attached to this Statement of Additional Information and is
hereby incorporated by reference.
TABLE OF CONTENTS
Page
1. Investment Objective and Policies..................... 2
2. Investment Restrictions............................... 5
3. Management of the Fund................................ 7
4. Investment Adviser.................................... 13
5. Underwriting Agreement and Distribution Plans......... 16
6. Shareholder Servicing/Transfer Agent.................. 19
7. Custodian............................................. 19
8. Principal Underwriter................................. 21
9. Independent Public Accountant......................... 21
10. Portfolio Transactions................................ 21
11. Dividends and Tax Status.............................. 21
12. Shares of the Fund.................................... 26
13. Determination of Net Asset Value...................... 27
14. Systematic Withdrawal Plan............................ 28
15. Letter of Intent...................................... 28
16. Investment Results.................................... 29
17. General Information................................... 31
18. Financial Statements.................................. 31
Appendix A - -Description of Bond Ratings............. 36
Appendix B - -Performance Statistics.................. 40
Appendix C - -Other Pioneer Information............... 54
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.
<PAGE>
1. INVESTMENT OBJECTIVE AND POLICIES
See "Investment Objective and Policies" in the Prospectuses for more
information concerning the investment objective and policies of the Fund.
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
Pioneering Management Corporation ("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.
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. In addition to the risk of default, there are
the related costs of recovery on defaulted issues. 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 deal in 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 dealings 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
payables of the Fund, accrued in connection with the purchase and sale of their
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 accounts 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 they anticipate.
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 ceases to have value
if it is not exercised 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 total assets in such securities.
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.
2. INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions. The Fund considers the investment
objective, the investment policy under the caption "Restricted and Illiquid
Securities", and the following restrictions as fundamental policies which cannot
be changed without approval by a "majority" of the Fund's outstanding voting
securities (as defined in Section 2(a)(42) of the Investment Company Act of
1940, as amended (the "1940 Act")). 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 more than 25% of its 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; Participate on a joint or
joint-and-several basis in any securities trading account;
(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 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 Trust 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 and
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 Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc., 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.
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Road, Boston, MA 02115
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; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); 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, Chief
Investment Officer 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 and 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
Partner, 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); Trustee of
Alliance Capital Reserves, Alliance Government Reserves and Alliance Tax Exempt
Reserves; and Trustee of all of the Pioneer mutual funds, except Pioneer
Variable Contracts Trust.
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 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; formerly a portfolio
manager for a number of equity portfolios.
The Fund's Amended and Restated Declaration of Trust (the
"Declaration of Trust") 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 Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
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 1
Pioneer Variable Contracts Trust PMC Note 2
- ------------
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight 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.
Messrs. Cogan, Tripple, Keough and Barri, officers and/or Trustees of
the Fund, are also officers and/or directors of PFD, PMC, PSC and PGI. As of
March 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 March 31, 1998 the
officers and Trustees held in aggregate less than [1%] of the outstanding shares
of the Fund. As of March 31, 1998, [John A. Sturgeon as Trustee of the Mutual of
Omaha 401(k) Long-Term Savings Plan owned approximately 10.13% (2,494,646) of
the outstanding Class A shares of the Fund. MLPF&S For the Sole Benefit of Its
Customers, 4800 Deer Lake Drive East 3rd Fl., Jacksonville FL 32246-6484, owned
approximately 5.19% (172,537) of the outstanding Class B shares of the Fund.
Merrill Lynch Pierce Fenner & Smith Inc., 4800 Deer Lake Drive East 3rd Fl,
Jacksonville, FL 32246-6484 owned approximately 13.73% (43,105) of the
outstanding Class C shares of the Fund; Prudential Securities Inc. FBO Jean E.
Fine & Abraham T. Baron JT TEN, 160 E 65th Street #2B, New York New York
10021-6654, owned approximately 5.00% (15,699) of the outstanding Class C shares
of the Fund.]
Compensation of Officers and Trustees. The Fund pays no salaries or
compensation to any of its officers, however, 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 $500 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 $100 to each Trustee who is not 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 receive an
annual trustee's 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, receive an annual fee equal to 5% of the annual
trustee's fee, except the Committee Chair who receives an annual trustee's fee
equal to 10% of the annual trustee's fee. Any such fees paid to affiliates or
interested persons of PGI, PMC, PFD or PSC are reimbursed to the Fund under its
Management Contract.
The following table provides information regarding the compensation
paid by the Fund and other Pioneer Funds to the Trustees for their services.
Total Compensa-
tion from the
Pension or Fund and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Trustee From the Fund* Accrued of 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
======= ==== =========
- -------
* As of December 31, 1997, the Fund's most recent completed fiscal
year. ** As of December 31, 1997 (the calendar year end for all 21 Pioneer
mutual funds).
4. INVESTMENT ADVISER
As stated in the Prospectus, PMC, 60 State Street, Boston,
Massachusetts, 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
management contract 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 Trustees or a majority of its outstanding voting
securities and the giving of 60 days' written notice.
As compensation for its management services and certain expenses which
PMC incurs on behalf of the Fund, the Fund would pay PMC an annual management
fee under the Proposed Contract (the "Basic Fee") equal to 0.70% of the Fund's
average daily net assets up to $1 billion, 0.675% of the next $4 billion, 0.65%
of the next $5 billion and 0.575% of the excess over $10 billion. The Basic Fee
is computed daily and paid monthly.
Performance Fee Adjustment
Beginning May 1, 1999, the Basic Fee will be subject to an upward or
downward adjustment, depending on whether and to what extent, the investment
performance of the Class A shares of the Fund at net asset value exceeds, or is
exceeded by, the record of the Lipper Growth Funds Index (the "Index") over the
same period. The Index is an equally-weighted performance index adjusted for
income dividends and capital gains distributions comprised of the 30 largest
funds listed by Lipper Analytical Services, Inc. as having an investment
objective of growth. Each percentage point of difference (up to a maximum of
+/-10) is multiplied by a performance adjustment rate of 0.01%. An appropriate
percentage of this rate (based on the number of days in the current month) is
then applied to the Fund's average net assets over the entire performance
period, giving the dollar amount that will be added to (or subtracted from) the
Basic Fee. The monthly performance adjustment will be further adjusted to the
extent necessary to insure that the total annual adjustment to the Basic Fee
does not exceed +/-0.10% of the average daily net assets for that year.
From time to time, the Trustees may determine that another securities
index is a more appropriate benchmark than the Index for purposes of evaluating
the performance of the Fund. In such event, a successor index may be substituted
for the Index in prospectively calculating the performance based adjustment to
the Basic Fee. However, the calculation of the performance adjustment for any
portion of the performance period prior to the adoption of the successor index
would still be based upon the Fund's performance compared to the Index.
In addition, because of the possible future identification of a more
appropriate class of Fund shares for comparison with the Index, the Trustees
have reserved the ability to substitute the class of Fund shares designated for
the performance comparison with the Index; provided, in such event, the
calculation of the performance adjustment for any portion of the performance
period prior to the designation of a successor class would still be based upon
the performance of the previously designated class of Fund shares.
Application of Performance Adjustment
The application of the performance adjustment is illustrated by the
following hypothetical example, assuming that the net asset value of the Fund
and the level of the Index were $10 and 100, respectively, on the first day of
the performance period.
Investment Performance* Cumulative Change
------------------------ ----------------------------
Fund Index
First Day $10 100
End of Period $13 123
Absolute Change +$ 3 +23
Percentage Change + 30% +23%
* Reflects performance at net asset value of the Class A shares of the Fund. Any
dividends or capital gains distributions paid by the Fund are treated as if
reinvested in shares of the Fund at net asset value as of the payment date and
any dividends paid on the securities which comprise the Index are treated as if
reinvested on the ex-dividend date.
The difference in relative performance for the performance period is +7
percentage points. Accordingly, the annualized management fee rate for the last
month of the performance period would be calculated as follows: an appropriate
percentage of the Basic Fee rate (based upon the number of days in the month) of
0.70% (assuming Fund assets of up to $1 billion) would be multiplied by the
Fund's average daily net assets for the month resulting in a dollar amount. The
+7 percentage point difference is multiplied by the performance adjustment rate
of 0.01% producing a rate of 0.07%. An appropriate percentage of this rate
(based upon the number of days in the month) is then multiplied by the average
daily net assets of the Fund over the performance period resulting in a dollar
amount which is added to the dollar amount of the Basic Fee. The management fee
paid is the Basic Fee adjusted by the dollar amount of the performance
adjustment calculated for the performance period. If the investment performance
of the Index during the performance period exceeded the performance record of
the Fund, the dollar amount of the performance adjustment would be deducted from
the Basic Fee.
Because the adjustment to the Basic Fee is based on the comparative
performance of the Fund and the record of the Index, the controlling factor is
not whether Fund performance is up or down, but whether it is up or down more or
less than the record of the Index. Moreover, the comparative investment
performance of the Fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter period of
time.
Phase-In of Performance Adjustment
The Fund's current management contract with PMC became effective on May
1, 1998. Under the terms of the contract (1) from May 1, 1998 through April 30,
1999 the Fund will pay management fees at a rate equal to the Basic Fee; (2)
from May 1, 1999 through April 30, 2001, the Fund will pay management fees at a
rate equal to the Basic Fee plus or minus the amount of the performance
adjustment based upon the current month and the preceding months dating back to
May 1, 1998; and (3) beginning on May 1, 2001, the Fund will pay management fees
at a rate equal to the Basic Fee plus or minus the amount of the performance
adjustment based upon the current month and the preceding thirty-five months.
Because the performance adjustment will be calculated no earlier than twelve
months after May 1, 1998 and because the performance adjustment will not reflect
the Fund's performance prior to May 1, 1998, the effect of the initial
performance adjustment (and all subsequent adjustments) is unknown and cannot
reasonably be estimated at this time.
Prior to May 1, 1998, as compensation for its management services and
certain expenses which PMC incurred on behalf of the Fund, the Fund paid PMC an
annual management fee equal to 0.50% of the Fund's average daily net assets up
to $250 million, 0.48% of the next $50 million, and 0.45% of the excess over
$300 million. This fee was computed daily and paid monthly. 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 Securities Act of 1933, as amended.
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 Fund shares. Certain categories of such expenditures have been approved by
the Board of Trustees and are set forth in the Prospectus under the caption
"Distribution Plans." 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 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 the 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
contingent deferred sales charges ("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 amount invested and additional compensation
at a rate of up to 0.75% of the net asset value of 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.
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 each Plan, PFD provides to the Fund for
review by the Trustees a quarterly written report of the amounts expended under
the Plan 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 of the respective Class of the Fund. Each Plan
will automatically terminate in the event of its assignment (as defined in the
1940 Act). In the Trustees' quarterly review of the Plans, they will consider a
Plan's continued appropriateness and the level of compensation it provides.
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 of $1,018,801, $804,344 and $126,321, respectively. Distribution fees were
paid by the Fund to PFD in reimbursement of or compensation for expenses related
to servicing of shareholder accounts and to compensating 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%. During the fiscal year ended December
31, 1997, CDSCs in the amount of approximately $145,214 were paid to PFD.
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 terminates if assigned and may be terminated without
penalty by either party by vote of its Board of Directors or Trustees or a
majority of its outstanding voting securities and the giving of 90 days' written
notice.
Under the terms of its contract with the Fund, PSC will service
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 shareholder account from the
Fund as compensation for the services described above. This 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. (the "Custodian"), 40 Water Street,
Boston, Massachusetts 02109, is 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 also provides
fund accounting, bookkeeping and pricing assistance to the Fund.
The Custodian does not determine the investment policies of the Fund or
decide which securities it 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, 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 earned by PFD in connection with its offering of Fund
shares were approximately $152,621, $142,688 and $611,581. Commissions reallowed
to dealers by PFD were approximately $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 ACCOUNTANT
Effective January 1, 1994, Arthur Andersen LLP, 225 Franklin Street,
Boston, MA 02110 was selected as the independent public accountant for the Fund.
Previously, Coopers & Lybrand had served as independent public accountant to the
Fund. Arthur Andersen's election as independent public accountant was approved,
at a meeting called for the purpose of voting on such approval, by the vote of a
majority of those Trustees on the Board of Trustees who are not interested
persons of the Fund.
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 Fund's
management contract. In selecting brokers or dealers, PMC will consider 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.
In circumstances where two or more broker-dealers are in a position to
offer comparable prices and execution. PMC may select broker-dealers which
provide brokerage and/or research services to the Fund and/or other investment
companies managed by PMC or who sell shares of the Pioneer mutual funds. In
addition, if PMC determines in good faith that the amount of commissions charged
by a broker-dealer is reasonable in relation to the value of the brokerage and
research services provided by such broker-dealer, the Fund may pay commissions
to such broker-dealer in an amount greater than the amount another firm may
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; furnishing analyses
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy and performance of accounts; 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 it is anticipated that many transactions on
behalf of the Fund and other investment companies 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 as well as other investment
companies 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.
The Board of Trustees periodically reviews PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Fund.
In addition to the Fund, PMC acts as investment adviser or subadviser
to the other Pioneer mutual funds, Pioneer Interest Shares and certain private
accounts with investment objectives similar to that of the Fund. Securities
frequently meet the investment objective of the Fund, such other funds and such
private accounts. In such cases, the decision to recommend a purchase to one
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 choose to hold its investment in
the same issue may likewise vary. To the extent that the Fund, another Pioneer
mutual fund, Pioneer Interest Shares or a private account managed by PMC may not
be able to acquire as large a position in such security as it desires, 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.
The Fund paid brokerage or underwriting commissions of approximately
$682,232, $595,000 and $XXX,XXX respectively, for the fiscal years ended
December 31, 1995, 1996 and 1997.
11. DIVIDENDS AND TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (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 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.
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. . As a result of the enactment of the Taxpayer Relief Act
of 1997 (the "1997 TRA") on August 5, 1997, gain recognized after May 6, 1997
from the sale of a capital asset is taxable to individual (noncorporate)
investors at different maximum federal income tax rates, depending generally
upon the tax holding period for the asset, the federal income tax bracket of the
taxpayer, and the dates the asset was acquired and/or sold. The Treasury
Department has issued guidance under the 1997 TRA that (subject to possible
modification by future "technical corrections" legislation) enables the Fund to
pass through to its shareholders the benefits of the capital gains tax rates
enacted in the 1997 TRA. The Fund will provide appropriate information to its
shareholders about its distributions, including the tax rate(s) applicable to
its distributions from long-term capital gains, in accordance with this and any
future guidance. Shareholders should consult their own tax advisers on the
correct application of these new rules in their particular circumstances.
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, 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 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 at the end of its taxable year
even though such 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 an option, futures contract, 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
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 would require
the Fund to recognize taxable income or gain 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 minimize 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.
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 character of and tax rate applicable
to any gains or losses recognized in such transactions under the new rate
structure enacted in the 1997 TRA. 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 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. domestic 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) 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. In order to qualify for the deduction,
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 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 Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate IRS Form 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 qualifies 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 payments from the Fund. Shareholders should consult their own tax
advisers on these matters and on state, local and other applicable tax laws.
12. SHARES OF THE FUND
General
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 Board of Trustees, as of the date of this Statement of
Additional Information, has authorized the issuance of four classes of shares:
Class A, Class B, Class C and Class Y.
Unless otherwise required by the 1940 Act or the Declaration of Trust,
the Fund has no intention of holding annual meetings of shareholders.
Shareholders may remove a Trustee by the affirmative vote of at least two-thirds
of the Fund's outstanding shares and the Trustees shall promptly call a meeting
for such purpose when requested to do so in writing by the record holders of not
less than 10% of the outstanding shares of the Fund. Shareholders may, under
certain circumstances communicate with other shareholders in connection with
requesting a special meeting of shareholders. However, at any time that less
than a majority of the Trustees holding office were elected by the shareholders,
the Trustees will call a special meeting of shareholders for the purpose of
electing Trustees.
The Declaration of Trust permits the issuance of series of shares in
addition to the Fund which would represent interests in separate portfolios of
investments. No series would be entitled to share in the assets of any other
series or be liable for the expenses or liabilities of any other series.
In addition to the requirements under Delaware law, the Declaration of
Trust provides that shareholders of the Fund may bring a derivative action on
behalf of the Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Fund, or 10% of the outstanding shares of
the series or class to which such action relates, shall join in the request for
the Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and to
investigate the basis of such claim. The Trustees shall be entitled to retain
counsel or other advisers in considering the merits of the request and shall
require an undertaking by the shareholders making such request to reimburse the
Fund for the expense of any such advisers in the event that the Trustees
determine not to bring such action.
Shareholder and Trustee Liability
The Fund is organized as a Delaware business trust, and, under Delaware
law, the shareholders of such a trust are not generally subject to liability for
the debts or obligations of the trust. Similarly, Delaware law provides that the
Fund will not be liable for the debts or obligations of any other series of the
trust. However, no similar statutory or other authority limiting business trust
shareholder liability exists in many other states. As a result, to the extent
that a Delaware business trust or a shareholder is subject to the jurisdiction
of courts in such other states, the courts may not apply Delaware law and may
thereby subject the Delaware business trust shareholders to liability. To guard
against this risk, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Fund. Notice of such
disclaimer will normally be given in each agreement, obligation or instrument
entered into or executed by the Fund or a Trustee. The Declaration of Trust
provides for indemnification by the Fund for any loss suffered by a shareholder
as a result of an obligation of the Fund. The Declaration of Trust also 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. The Trustees believe that, in view of the above, the risk of personal
liability of shareholders is remote.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustee against any liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
or her office.
13. 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 New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., Eastern time) on each day the Exchange is open
for business. 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 that the current net asset value per share might be materially
affected by changes in the value of its portfolio securities. On any day in
which no purchase orders for the shares of the Fund become effective and no
shares are tendered for redemption, the Fund's net asset value per share may not
be determined.
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 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.
14. 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 him, monthly or quarterly.
A designation of a third party to receive checks requires an acceptable
signature guarantee. Withdrawals from Class B and Class C share accounts are
limited to 10% of the value of the account at the time the withdrawal plan is
implemented. See "Waiver or Reduction of Contingent Deferred Sales Charge" in
the Prospectus. Designation of another person to receive the checks 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. Redemptions are taxable transactions
to shareholders. 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. 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.
15. LETTER OF INTENT (Class A Shares only)_
A Letter of Intent (an "LOI") may be established by completing the
Letter of Intent 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 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 Purchase Fund Shares Letter of Intent" in the Prospectus for
more information.
16. 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 rankings prepared by Lipper Analytical
Services, Inc., a widely recognized independent service which monitors mutual
fund performance; the Standard & Poor's 500 Stock Index ("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 New
York Stock Exchange; or The Frank Russell Indexes ("Russell 1000," "2000,"
"2500," "3000,") or the Wilshire Total Market Value Index ("Wilshire 5000"), two
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.
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 Fund's Prospectus or in
advertising are calculated by standard methods prescribed by the Securities and
Exchange Commission (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:
n
P(1+T) = ERV
Where: P = a hypothetical initial payment of $1000 (less the
maximum sales load for Class A Shares or the deduction
of the CDSC on 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%.
The total returns for each Class of shares of the Fund as of December
31, 1997 were as follows:
Average Annual Total Return (%)
One Year Five Years Ten Years Commencement*
Class A Shares 35.76 18.74 19.31 9.98
Class B Shares 38.75 N/A N/A 31.81
Class C Shares 43.44 N/A N/A 35.88
*Commencement was 5/17/68 for Class A shares and 4/28/95 for Class B shares.
Class C Shares were first offered January 31, 1996. Class Y shares were first
offered on May 1, 1998.
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 Fund's
mean account size.
Automated Information Line (FactFone(SM))
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's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields
for Pioneer money market 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 access their account balance and last three transactions and
may order a duplicate statement.
All performance numbers communicated through FactFone(SM) represent
past performance, and figures for all bond funds include the maximum applicable
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 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 FactFoneSM features are not available to Class
Y shareholders.
17. GENERAL INFORMATION
The Fund is registered with the SEC as a diversified, open-end
management investment company. Such registration does not involve supervision by
the SEC of the management or policies of the Fund. For further information with
respect to the Fund and the securities offered hereby, reference is made to the
registration statement filed with the SEC, including all exhibits thereto.
Annual and semiannual reports of the Fund are mailed to each shareholder.
18. FINANCIAL STATEMENTS
The Fund's financial statements for the year ended December 31, 1997
are included in the Fund's Annual Report to Shareholders (filed electronically
on February [ ], 1998 file no. 2-28274; accession number [ ]), which report is
incorporated by reference into and is attached to this Statement of Additional
Information. The Fund's Annual Report to Shareholders is so incorporated and
attached in reliance upon the report of Arthur Andersen LLP, independent public
accountants, as experts in accounting and auditing. A copy of the Fund's Annual
Report may be obtained without charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109.
<PAGE>
Pioneer Growth Shares A
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Included Purchased Value Asset
Per Share Value
12/31/86 $10,000 $7.5200 5.75% 1,329.87 $7.0900 $9,425
</TABLE>
<TABLE>
<CAPTION>
Dividends and Capital Gains Reinvested
Value of Shares
<S> <C> <C> <C> <C>
Date From Investment From Cap Gains From Dividends Total Value
Reinvested Reinvested
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pioneer Growth Shares B
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net
Investment Included Asset
Per Share Value
4/28/95 $10,000 $9.6800 0.00% 1,033.058 $9.6800 $10,000
</TABLE>
<TABLE>
<CAPTION>
Dividends and Capital Gains Reinvested
Value of Shares
<S> <C> <C> <C> <C> <C> <C>
From Cap. Gains From Dividends Contingent
From Deferred Sales
Date Investment Reinvested Reinvested Charge Total Value CDSC %
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%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pioneer Growth Shares C
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value
Initial Sales Charge Shares Purchased Per Shares Initial Net
Date Investment Offering Price Included Asset Value
1/31/96 $10,000 $10.1000 0.00% 990.099 $10.1000 $10,000
</TABLE>
<TABLE>
<CAPTION>
Dividends and Capital Gains Reinvested
Value of Shares
<S> <C> <C> <C> <C> <C> <C>
From Cap. From Dividends Contingent
From Gains Reinvested Deferred Sales Total Value CDSC
Date Investment Reinvested Charge Percentage
12/31/96 $11,436 $1,125 $0 $100 $12,431 1.00%
</TABLE>
<PAGE>
APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS1
MOODY'S INVESTORS SERVICE, INC.
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 posses 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.
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
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.
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.
<PAGE>
APPENDIX B
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 2,148 stocks
ranging in market capitalization from $5 million to $60 million. Index returns
are calculated monthly.
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 1977 are calculated
from The Wall Street Journal prices, using the change in flat price. Returns
from 1934 to 1976 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 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,
Canada, Chile, China, Czech Republic, Colombia, Greece, Hong Kong, Hungary,
Indonesia, Jordan, Korea (at 50%), Malaysia, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela Free.
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. 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.
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 1991. 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 Randolph W. Westerfield, 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 June 1, based on May 31
market capitalization rankings.
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-value-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. and PGI
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
Dow S&P/ S&P/
S&P Jones U.S. Small BARRA BARRA Merrill Lynch
500 Industrial Stock U. S. 500 500 Micro-Cap
Index Average Index Inflation Growth Value Index
- ----------------------------------------------------------------------------------------------------------------------
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>
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
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
Index Average Index Inflation Value Index
- ----------------------------------------------------------------------------------------------------------------------
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 3.3258 23.96 21.99 13.88
Dec 1997 33.36 24.88 22.78 1.92 36.52 29.98 24.61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
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)
- ------------------------------------------------------------------------------------------------------
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>
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
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)
- ------------------------------------------------------------------------------------------------------
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 4.178 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 5.478 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.454 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.701 -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 5.398 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 15.5049 -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>
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
NAREIT- Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities MidCap Index Free Index Account
400
Index
- -----------------------------------------------------------------------------------------------------------------------
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>
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
NAREIT- Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities MidCap Index Free Index Account
400
Index
- -----------------------------------------------------------------------------------------------------------------------
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>
Source: Lipper Analytical Services. Inc.
<PAGE>
APPENDIX C
Additional 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.
- --------
1 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.
<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 are included in
Part A of the Registration Statement and the
financial statements of the Registrant for
the fiscal year ended December 31, 1997 are part of
the 1997 Annual Report to Shareholders (filed
electronically on February __, 1998; File No.
811-01604; Accession No. 0000069404-98-00000_) which
is 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) Form of 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).
*** 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 Trust 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 Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company 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 January 31, 1998
Class A shares 41,426
Class B shares 15,097
Class C shares 1,995
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 has duly caused this
Post-Effective Amendment No. 57 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 13th day of February, 1998.
PIONEER GROWTH SHARES
By: /s/ David D. Tripple
David D. Tripple
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 57 to the Registrant's Registration Statement has
been signed below by the following persons in the capacities indicated on
February 13, 1998:
Signature Title
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 )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
Richard H. Egdahl, M.D.* )
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 )
)
)
/s/ David D. Tripple )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ David D. Tripple )
David D. Tripple
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Title
(1)(c) Establishment and Designation of Class A,
Class B, Class C and Class Y Shares of
Beneficial Interest
(5) Form of Management Contract with Pioneering Management
Corporation
(11) Consent of Independent Public Accountants (Arthur
Andersen LLP)
(17) Financial Data Schedules
(18) Form of Multiple Class Plan Pursuant to Rule 18f-3
Covering Four Classes of Shares
(19) Power of Attorney for Mary K. Bush
PIONEER GROWTH SHARES
Establishment and Designation
of
Class A Shares, Class B Shares, Class C Shares and Class Y Shares
of Beneficial Interest of
Pioneer Growth Shares
The undersigned, being a majority of the Trustees of Pioneer Growth Shares,
a Delaware business trust (the "Fund"), acting pursuant to Article V, Section 1
of the Agreement and Declaration of Trust dated June 16, 1994 of the Fund (the
"Declaration"), do hereby divide the shares of beneficial interest of the Fund
(the "Shares") to create four classes of Shares of the Fund as follows:
1. The four classes of Shares established and designated hereby are "Class A
Shares," "Class B Shares," "Class C Shares" and "Class Y Shares,"
respectively.
2. Class A Shares, Class B Shares, Class C Shares and Class Y Shares shall
each be entitled to all of the rights and preferences accorded to Shares
under the Declaration.
3. The purchase price of Class A Shares, Class B Shares, Class C Shares and
Class Y Shares, the method of determining the net asset value of Class A
Shares, Class B Shares, Class C Shares and Class Y Shares and the relative
dividend rights of holders of Class A Shares, Class B Shares, Class C
Shares and Class Y Shares shall be established by the Trustees of the Trust
in accordance with the provisions of the
<PAGE>
Declaration and shall be set forth in the Trust's Registration Statement on
Form N-1A under the Securities Act of 1933 and/or the Investment Company
Act of 1940, as amended and as in effect at the time of issuing such
Shares.
4. The Trustees, acting in their sole discretion, may determine that any
Shares of the Fund issued are Class A Shares, Class B Shares, Class C
Shares, Class Y Shares, or Shares of any other class of the Fund
hereinafter established and designated by the Trustees.
IN WITNESS WHEREOF, the undersigned have executed this instrument this 1st
day of July, 1996.
/s/ John F. Cogan, Jr. /s/ Marguerite A. Piret
John F. Cogan, Jr. Marguerite A. Piret
as Trustee and not individually as Trustee and not individually
975 Memorial Drive, #802 162 Washington Street
Cambridge, MA 02138 Belmont, MA 02178
/s/ Mary K. Bush /s/ David D. Tripple
Mary K. Bush David D. Tripple
as Trustee and not individually as Trustee and not individually
Health Policy Institute 6 Woodbine Road
53 Bay State Road Belmont, MA 02178
Boston, MA 02215
/s/ Richard H. Egdahl /s/ Stephen K. West
Richard H. Egdahl, M.D. Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
Health Policy Institute Sullivan & Cromwell
53 Bay State Road 125 Board Street
Boston, MA 02215 New York, NY 10004
/s/ Margaret B.W. Graham /s/ John Winthrop
Margaret B.W. Graham John Winthrop
as Trustee and not individually as Trustee and not individually
The Keep One Adgers Wharf
P.O. Box 110 Charlestown, SC 29401
Little Deer Isle, ME 04650
/s/ John W. Kendrick
John W. Kendrick
as Trustee and not individually
6363 Waterway Drive
Falls Church, VA 22044
MANAGEMENT CONTRACT
THIS AGREEMENT dated this day of , 1998 between Pioneer Growth Shares, a
Delaware business trust (the "Trust"), and Pioneering Management Corporation, a
Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the Manager
should be engaged, subject to the supervision of the Trust's Board of Trustees
and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Trust, consistent with the investment objectives and policies of
the Trust. The Manager will determine from time to time what securities shall be
purchased for the Trust, what securities shall be held or sold by the Trust and
what portion of the Trust's assets shall be held uninvested as cash, subject
always to the provisions of the Trust's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statements under the 1940 Act
and under the 1933 Act covering the Trust's shares, as filed with the Securities
and Exchange Commission, and to the investment objectives, policies and
restrictions of the Trust, as each of the same shall be from time to time in
effect, and subject,
<PAGE>
further, to such policies and instructions as the Board of Trustees of the
Trust may from time to time establish. To carry out such determinations, the
Manager will exercise full discretion and act for the Trust in the same manner
and with the same force and effect as the Trust itself might or could do with
respect to purchases, sales or other transactions, as well as with respect to
all other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct of
the business of the Trust and upon the Trust's request, furnish to the Trust
research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Trust shall at the time have any investment in such industries,
businesses, corporations or securities. The Manager will use its best efforts in
the preparation of such reports and will endeavor to consult the persons and
sources believed by it to have information available with respect to such
industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Trust's securities transactions required by subparagraphs (b)(5), (6), (9) and
(10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the Trust's
2
<PAGE>
affairs and investments, and shall arrange, if desired by the Trust, for members
of the Manager's organization to serve as officers or agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or "interested
persons" (as defined in the 1940 Act) of, the Manager and all officers of the
Trust as such; and (ii) all expenses not hereinafter specifically assumed by the
Trust where such expenses are incurred by the Manager or by the Trust in
connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Trust.
(c) The Trust shall assume and shall pay: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of the Manager, or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust with respect to the Trust; (iv) issue and
transfer taxes chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Trust to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission, state
securities agencies and foreign jurisdictions, including the preparation of
Prospectuses and Statements of Additional Information for filing with such
regulatory agencies; (vii) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies;
(viii) charges and expenses of legal counsel to the Trust and the Trustees; (ix)
if applicable, any distribution fees paid by the
3
<PAGE>
Trust in accordance with Rule 12b-1 promulgated by the Commission pursuant
to the 1940 Act; (x) compensation of those Trustees of the Trust who are not
affiliated with or interested persons of the Manager, the Trust (other than as
Trustees), The Pioneer Group, Inc. or Pioneer Funds Distributor, Inc.; (xi) the
cost of preparing and printing share certificates; and (xii) interest on
borrowed money, if any.
(d) In addition to the expenses described in Section 2(c) above, the Trust
shall pay all brokers' and underwriting commissions chargeable to the Trust in
connection with securities transactions to which the Trust is a party.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee as set forth below.
Management fees payable hereunder shall be computed daily and paid monthly in
arrears.
(i) The fee payable hereunder shall be composed of the Basic Fee (defined
below) and a Performance Adjustment (defined below) to the Basic Fee based upon
the investment performance of the Trust in relation to the investment record of
a securities index determined by the Trustees of the Trust to be appropriate
over the same period. The Trustees have initially designated the Lipper Growth
Funds Index (the "Index") for this purpose. Prior to the completion of the
initial performance period described in subsection (iii) below the fee payable
hereunder shall consist of the Basic Fee without a Performance Adjustment.
(ii) From time to time, the Trustees may by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
such parties, determine 1) that another securities index is a more appropriate
benchmark than the Index for purposes of evaluating the performance of the
Trust; and/or 2) that a Class of shares of
4
<PAGE>
the Trust other than Class A is most appropriate for use in calculating the
Performance Adjustment. After ten days' written notice to the Manager, a
successor index (the "Successor Index") may be substituted for the Index in
prospectively calculating the Performance Adjustment; and/or a different Class
of Shares may be substituted in calculating the Performance Adjustment. However,
the calculation of that portion of the Performance Adjustment attributable to
any portion of the performance period prior to the adoption of the Successor
Index will still be based upon the Trust's performance compared to the Index.
The use of a different Class of shares for purposes of calculating the
Performance Adjustment shall apply to the entire performance period so long as
such Class was outstanding at the beginning of such period. In the event that
such Class of shares was not outstanding for all or a portion of the Performance
Period, it may only be used in calculating that portion of the Performance
Adjustment attributable to the period during which such Class was outstanding
and any prior portion of the Performance Period shall be calculated using Class
A shares.
(iii) The Basic Fee is payable at an annual rate of 0.70% of the Trust's
average daily net assets up to $1 billion, .675% of the next $4 billion of such
assets, 0.65% of the next $5 billion of such assets and 0.575% of the excess
over $10 billion.
(iv) The Performance Adjustment consists of an adjustment to the monthly
Basic Fee to be made by applying a performance adjustment rate to the average
net assets of the Trust over the performance period. The resulting dollar figure
will be added to or subtracted from the Basic Fee depending on whether the Trust
experienced better or worse performance than the Index.
The Performance Adjustment rate is 0.01% per annum for each percentage
point rounded to the nearer point (the higher point if exactly one-half point)
that the Trust's investment performance
5
<PAGE>
for the period was better or worse than the record of the Index as then
constituted. The maximum performance adjustment is 0.10% per annum. In addition,
as the Trust's average daily net assets over the performance period may differ
substantially from the Trust's average daily net assets during the current year,
the performance adjustment may be further adjusted to the extent necessary to
insure that the total adjustment to the Basic Fee on an annualized basis does
not exceed 0.10%.
The initial performance period will consist of the 12 month period
beginning , 1998 and ending , 1999. Each month thereafter, the performance
period shall consist of the current month plus the preceding months until a
period of 36 months is included in the performance period. In months subsequent
to a 36 month performance period having been reached, the performance period
will be a rolling 36 month period consisting of the most recently completed
month and the previous 35 months.
The Trust's investment performance will be measured by comparing the (i)
opening net asset value of one share of the Trust on the first business day of
the performance period with (ii) the closing net asset value of the one share of
the Trust as of the last business day of such period. In computing the
investment performance of the Trust and the investment record of the Index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of investment
income on the part of the Trust, and all cash distributions of the companies
whose stock comprise the Index, will be treated as reinvested in accordance with
Rule 205-1 or any other applicable rule under the Investment Advisers Act of
1940, as the same from time to time may be amended.
The computation of the performance adjustment will not be cumulative. A
positive fee adjustment will apply even though the performance of the Trust over
some period of time shorter than
6
<PAGE>
the performance period has been behind that of the Index, and, conversely,
a negative fee adjustment will apply for the month even though the performance
of the Trust over some period of time shorter than the performance period has
been ahead of that of the Index.
(v) An appropriate percentage (based on the number of days in the current
month) of the annual Performance Adjustment rate shall be multiplied by the
average of the net assets of the Trust (computed in the manner set forth in the
Declaration of Trust of the Trust adjusted as provided above, if applicable)
determined as of the close of business on each business day through out the
performance period. The resulting dollar amount is added to or deducted from the
Basic Fee.
(vi) In the event of termination of this Agreement, the Basic Fee then in
effect shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current month as a percentage of the total
number of days in such month. The amount of any Performance Adjustment to the
Basic Fee will be computed on the basis of and applied to net assets averaged
over the 36 month period ending on the last business day on which this Agreement
is in effect, provided that if this Agreement has been in effect less than 36
months, the computation will be made on the basis of the period of time during
which it has been in effect.
(b) If the operating expenses of the Trust in any year exceed the limits
set by state securities laws or regulations in states in which shares of the
Trust are sold, the amount payable to the Manager under subsection (a) above
will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulations. If amounts have already been
advanced to the Manager under this Agreement, the
7
<PAGE>
Manager will return such amounts to the Trust to the extent required by the
preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time agree
not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
4. It is understood that the Manager may employ one or more sub-investment
advisers (each a "Subadviser") to provide investment advisory services to the
Trust by entering into a written agreement with each such Subadviser; provided,
that any such agreement first shall be approved by the vote of a majority of the
Trustees, including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Trust, the Manager or any such Subadviser,
at a meeting of Trustees called for the purpose of voting on such approval and
by the affirmative vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Trust. The authority given to the Manager in
Sections1 through 6 hereof may be delegated by it under any such agreement;
provided, that any Subadviser shall be subject to the same restrictions and
limitations on investments and brokerage discretion as the Manager. The Trust
agrees that the Manager shall not be accountable to the Trust or the Trust's
shareholders for any loss or other liability relating to specific investments
directed by any Subadviser, even though the Manager retains the right to reverse
any such investment, because, in the event a Subadviser is retained, the Trust
and the Manager will rely almost exclusively on the expertise of such Subadviser
for the selection and monitoring of specific investments.
8
<PAGE>
5. The Manager 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 security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust or its shareholders 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 this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, directors, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that the Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for the account of
the Trust, neither the Manager nor any of its Trustees, officers or employees
will act as a principal or agent or receive any commission except as permitted
9
<PAGE>
by the 1940 Act. The Manager shall arrange for the placing of all orders for the
purchase and sale of securities for the Trust's account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers and the
placing of such orders, the Manager is directed at all times to seek for the
Trust the most favorable execution and net price available except as described
herein. It is also understood that it is desirable for the Trust that the
Manager have access to supplemental investment and market research and security
and economic analyses provided by brokers who may execute brokerage transactions
at a higher cost to the Trust than may result when allocating brokerage to other
brokers on the basis of seeking the most favorable price and efficient
execution. Therefore, the Manager is authorized to place orders for the purchase
and sale of securities for the Trust with such brokers, subject to review by the
Trust's Trustees from time to time with respect to the extent and continuation
of this practice. It is understood that the services provided by such brokers
may be useful to the Manager in connection with its or its affiliates' services
to other clients.
(c) On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Trust as well as other clients, the Manager,
to the extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Manager in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and to such clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until May, 1999 and from year to year thereafter, but only so
long as its continuance is approved annually by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or "interested persons" (as defined in
10
<PAGE>
the 1940 Act) of any such parties, at a meeting of Trustees called for the
purpose of voting on such approval or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Trust,
subject to the right of the Trust and the Manager to terminate this contract as
provided in Section 8 hereof.
8. Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Trustees or Directors, as the case may be, or by vote of a
"majority of its outstanding voting securities" (as defined in the 1940 Act) and
the giving of 60 days' written notice to the other party.
9. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Trust agrees that in the event that neither the Manager nor any of
its affiliates acts as an investment adviser to the Trust, the name of the Trust
will be changed to one that does not contain the name "Pioneer" or otherwise
suggest an affiliation with the Manager.
11. The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust or any series thereof.
12. This Agreement states the entire agreement of the parties hereto, and
is intended to be the complete and exclusive statement of the terms hereof. It
may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
11
<PAGE>
13. This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
14. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER GROWTH SHARES
By:
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT
CORPORATION
By:
Joseph P. Barri David D. Tripple
Secretary President
Arthur Andersen LLP
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
dated February 2, 1998 (and to all references to our firm) included in or made
a part of Pioneer Growth Shares Post-Effective Amendment No. 57 and Amendment
No. 28 to Registration Statement File Nos. 2-28274 and 811-01604, respectively.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
February 13, 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, 1997 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-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 335739996
<INVESTMENTS-AT-VALUE> 475263570
<RECEIVABLES> 3167266
<ASSETS-OTHER> 23519
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 478454355
<PAYABLE-FOR-SECURITIES> 2088275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 780545
<TOTAL-LIABILITIES> 2868820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 327842143
<SHARES-COMMON-STOCK> 26889809
<SHARES-COMMON-PRIOR> 23708651
<ACCUMULATED-NII-CURRENT> (690711)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8910529
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 139523574
<NET-ASSETS> 475585535
<DIVIDEND-INCOME> 1141129
<INTEREST-INCOME> 264061
<OTHER-INCOME> 0
<EXPENSES-NET> (2095901)
<NET-INVESTMENT-INCOME> (690711)
<REALIZED-GAINS-CURRENT> 4567632
<APPREC-INCREASE-CURRENT> 85239647
<NET-CHANGE-FROM-OPS> 89116568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5879787
<NUMBER-OF-SHARES-REDEEMED> 2698629
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 165347564
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4342897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 900835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2128904
<AVERAGE-NET-ASSETS> 324608178
<PER-SHARE-NAV-BEGIN> 11.71
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 3.11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.80
<EXPENSE-RATIO> 1.05
<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, 1997 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-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 335739996
<INVESTMENTS-AT-VALUE> 475263570
<RECEIVABLES> 3167266
<ASSETS-OTHER> 23519
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 478454355
<PAYABLE-FOR-SECURITIES> 2088275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 780545
<TOTAL-LIABILITIES> 2868820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 327842143
<SHARES-COMMON-STOCK> 4826784
<SHARES-COMMON-PRIOR> 2708114
<ACCUMULATED-NII-CURRENT> (690711)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8910529
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 139523574
<NET-ASSETS> 475585535
<DIVIDEND-INCOME> 1141129
<INTEREST-INCOME> 264061
<OTHER-INCOME> 0
<EXPENSES-NET> (2095901)
<NET-INVESTMENT-INCOME> (690711)
<REALIZED-GAINS-CURRENT> 4567632
<APPREC-INCREASE-CURRENT> 85239647
<NET-CHANGE-FROM-OPS> 89116568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2694151
<NUMBER-OF-SHARES-REDEEMED> 575481
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 165347564
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4342897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 900835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2128904
<AVERAGE-NET-ASSETS> 45138987
<PER-SHARE-NAV-BEGIN> 11.55
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> 3.05
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.55
<EXPENSE-RATIO> 1.80
<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, 1997 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-31-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 335739996
<INVESTMENTS-AT-VALUE> 475263570
<RECEIVABLES> 3167266
<ASSETS-OTHER> 23519
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 478454355
<PAYABLE-FOR-SECURITIES> 2088275
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 780545
<TOTAL-LIABILITIES> 2868820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 327842143
<SHARES-COMMON-STOCK> 504533
<SHARES-COMMON-PRIOR> 117278
<ACCUMULATED-NII-CURRENT> (690711)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8910529
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 139523574
<NET-ASSETS> 475585535
<DIVIDEND-INCOME> 1141129
<INTEREST-INCOME> 264061
<OTHER-INCOME> 0
<EXPENSES-NET> (2095901)
<NET-INVESTMENT-INCOME> (690711)
<REALIZED-GAINS-CURRENT> 4567632
<APPREC-INCREASE-CURRENT> 85239647
<NET-CHANGE-FROM-OPS> 89116568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 509313
<NUMBER-OF-SHARES-REDEEMED> 122058
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 165347564
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4342897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 900835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2128904
<AVERAGE-NET-ASSETS> 3760397
<PER-SHARE-NAV-BEGIN> 11.55
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 3.10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.61
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
PIONEER GROWTH SHARES
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares, Class C Shares and Class Y Shares
May , 1998
Each class of shares of Pioneer Growth Shares (the "Fund"), will have the
same relative rights and privileges and be subject to the same sales charges,
fees and expenses, except as set forth below. The Board of Trustees may
determine in the future that other distribution arrangements, allocations of
expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Plan accordingly without the
approval of shareholders of any class. Except as set forth in the Fund's
prospectus, shares may be exchanged only for shares of the same class of another
Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial
sales charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class B shares redeemed within a
specified number of years of purchase will be subject to a CDSC as set forth in
the Fund's prospectus. Class B Shares are sold subject to the minimum purchase
requirements set forth in the Fund's prospectus. Class B Shares shall be
entitled to the shareholder services set forth from time to time in the Fund's
prospectus with respect to Class B Shares. Class B Shares are subject to fees
calculated as a stated percentage of the net assets attributable to Class B
shares under the Class B Rule 12b-1 Distribution Plan as set forth in such
Distribution Plan. The Class B Shareholders of the Fund have exclusive voting
rights, if any, with respect to the Fund's Class B Rule 12b-1 Distribution Plan.
Transfer agency fees are allocated to Class B Shares on a per account basis
except to the extent, if any, such an allocation would cause the Fund to fail to
satisfy any requirement necessary to obtain or rely on a private letter ruling
from the IRS relating to the issuance of multiple classes of shares. Class B
shares shall bear the costs and expenses associated with conducting a
shareholder meeting for matters relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund
at the end of a specified number of years after the initial purchase date of
Class B shares, except as provided in the Fund's prospectus. Such conversion
will occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class C shares redeemed within
one year of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Class C Shares are sold subject to the minimum purchase requirements
set forth in the Fund's prospectus. Class C Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class C Shares. Class C Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class C shares under the
Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class C Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class C Shares on a per account basis except to the extent, if
any, such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class C shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class C shares.
The initial purchase date for Class C shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.
Article IV. Class Y Shares
Class Y Shares are sold at net asset value per share without the
imposition of an initial sales charge. Class Y Shares are not subject to a CDSC
upon redemption regardless of the length of the period of time such shares are
held. Class Y Shares are sold subject to the minimum purchase requirements set
forth in the Fund's prospectus. Class Y Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class Y Shares. Class Y Shares are not subject to fees payable under
a distribution or other plan adopted to Rule 12b-1. The Class Y Shareholders of
the Fund have exclusive voting rights, if any, with respect to the Fund's
possible future adoption of a Class Y Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class Y Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the IRS
relating to the issuance of multiple classes of shares. Class Y shares shall
bear the costs and expenses associated with conducting a shareholder meeting for
matters relating to Class Y shares.
The initial purchase date for Class Y shares acquired through (i)
reinvestment of dividends on Class Y Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class Y
shares were purchased.
Article V. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "Act")) of (a) all of the Trustees of the Trust, on behalf of the Fund, and
(b) those of the Trustees who are not "interested persons" of the Trust, as such
term may be from time to time defined under the Act.
Article VI. Amendments
No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article V.
PIONEER EMERGING MARKETS FUND
PIONEER EUROPE FUND
PIONEER GROWTH TRUST
PIONEER INDIA FUND
PIONEER INTERNATIONAL GROWTH FUND
PIONEER WORLD EQUITY FUND
PIONEER GROWTH SHARES
PIONEER MID-CAP FUND
PIONEER SMALL COMPANY FUND
PIONEER MICRO-CAP FUND
PIONEER BALANCED FUND
PIONEER FUND
PIONEER II
PIONEER REAL ESTATE SHARES
PIONEER AMERICA INCOME TRUST
PIONEER BOND FUND
PIONEER SHORT TERM INCOME TRUST
PIONEER INTERMEDIATE TAX-FREE FUND
PIONEER MONEY MARKET TRUST
POWER OF ATTORNEY
Dated October 7, 1997
I, the undersigned Trustee of each of the above-listed registered
investment companies (each a "Fund"), each a Delaware or a Massachusetts
business trust, do hereby constitute and appoint John F. Cogan, Jr., David D.
Tripple, and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in my capacity as trustee,
any and all amendments to the Registration Statement on Form N-1A to be filed by
each Fund under the Investment Company Act of 1940, as amended (the "1940 Act"),
and under the Securities Act of 1933, as amended (the "1933 Act"), with respect
to the offering of its shares of beneficial interest and any and all other
documents and papers relating thereto, and generally to do all such things in my
name and on my behalf in my capacity as trustee to enable each Fund to comply
with the 1940 Act and the 1933 Act, and all requirements of the Securities and
Exchange Commission thereunder, hereby ratifying and confirming my signature as
it may be signed by said attorneys or each of them to any and all amendments to
said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument as
of the date first written above.
/s/ Mary K. Bush
Mary K. Bush, Trustee
