November 25, 1996
SUPPLEMENT TO THE PROSPECTUS OF:
PIONEER INCOME FUND
dated April 29, 1996
The Trustees of Pioneer Income Fund (the "Fund") have approved certain changes
to the Fund's operations including a change in the Fund's objective from current
income consistent with the preservation of capital to capital growth and current
income by actively managing investments in a diversified portfolio of equity
securities and bonds and a new management contract increasing the management
fee. These changes have been submitted for shareholder approval at a meeting
scheduled to be held on January 14, 1997. If approved by shareholders, the
changes will take effect on February 1, 1997. In connection with the change in
investment objectives, the Fund will change its name to "Pioneer Balanced Fund."
EXPENSE INFORMATION
As more fully described below, the Fund has submitted for shareholder approval a
proposed management contract under which the management fee payable to
Pioneering Management Corporation ("PMC") would be increased. Under the proposed
contract, the "Annual Operating Expenses" and the "Example" shown on page 2 of
the prospectus would change as set forth below. The "Shareholder Transaction
Expenses" shown on page 2 of the prospectus would not change as a result of the
new contract.
The information in the table below is based on the Fund's actual expenses for
the year ended December 31, 1995. Management fees have been restated to reflect
the management fee payable under the proposed contract. Under the current
management contract, actual management fees and total operating expenses for the
fiscal year ended December 31, 1995 were 0.48% and 1.11%, respectively, for
Class A shares and 0.48% and 1.78%, respectively, for Class B and Class C
shares. For Class C shares, operating expenses are based on estimated amounts
that would have been incurred if Class C shares had been outstanding for the
entire fiscal year ended December 31, 1995. Class C shares were first offered
January 31, 1996.
Annual Fund Operating Expenses (As a Percentage of Average Net Assets):
Class A Class B Class C
Management Fee 0.65% 0.65% 0.65%
12b-1 Fees 0.25% 1.00% 1.00%
Other Expenses 0.38% 0.30% 0.30%
---- ---- ----
Total Operating Expenses 1.28% 1.95% 1.95%
==== ==== ====
Example:
The following illustrates the expenses on a $1,000 investment, assuming
a 5% annual return and redemption at the end of each time period:
<PAGE>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A Shares $57 $84 $112 $193
Class B Shares
- -Assuming complete redemption at end
of period $61 $94 $129 $217*
- -Assuming no redemption $21 $64 $109 $217*
Class C Shares**
- -Assuming complete redemption at end
of period $31 $64 $109 $236
- -Assuming no redemption $21 $64 $109 $236
- ----------------------
*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 are subject to a 1% contingent deferred sales charge
("CDSC").
The example above assumes the reinvestment of all dividends and
distributions and that the percentage amounts listed above under "Annual
Operating Expenses" remain the same each year.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSE OR RETURN. ACTUAL FUND EXPENSES
AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
INVESTMENT OBJECTIVE AND POLICES
It is proposed that the Fund change its objective from current income consistent
with the preservation of capital to capital growth and current income by
actively managing investments in a diversified portfolio of equity securities
and bonds. If shareholders approve this change, the Fund will eliminate its
current policy of investing only in dividend-paying common stocks, preferred
stocks, bonds and debentures, which may or may not be convertible into common
stocks. In lieu of this eliminated investment policy, the Fund will adopt a
policy that would require the Fund, under normal circumstances, to invest
between 35% and 65% of its total assets in each of (1) common stocks, preferred
stocks and other securities with common stock characteristics and (2) bonds.
If the proposed change in objective is approved by shareholders, the Fund will
adopt a policy permitting it to invest up to 25% of its total assets in real
estate investment trusts ("REITs"). REITs are pooled investment vehicles which
primarily invest in income producing real estate or real estate loans or
interests. Investing in REITs involves certain risks including risks related to
general and local economic conditions and risks related to an individual
property.
Management has also proposed changes in a number of the Fund's investment
policies and fundamental investment restrictions set forth in the Fund's
statement of additional information. None of these changes, however, is expected
to have a material effect on the Fund's current investment operations.
MANAGEMENT FEE
Under the proposed management contract, as compensation for its management
related services and certain expenses which PMC incurs on behalf of the Fund,
the Fund would pay PMC a management fee equal to 0.65% of the Fund's average
daily net assets up to $1 billion, 0.60% of the next $4 billion and 0.55% of the
excess over $5 billion.
1196-3814
(C) Pioneer Funds Distributor, Inc.
