File Nos. 2-79140
811-3564
As Filed with The Securities and Exchange Commission January 28, 1997
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. 22 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 / X /
Amendment No. 22 /_X _/
(Check appropriate box or boxes)
PIONEER MID-CAP FUND
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective:
_X_ on January 28, 1997 pursuant to paragraph (b) of Rule 485
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) of the Investment Company Act
of 1940. Registrant filed a Rule 24f-2 Notice for its fiscal year ending
September 30, 1996 on November 25, 1996.
Title of Amount of Proposed Proposed
Securities Shares Maximum Maximum Amount of
Being Being Offering Price Aggregate Registration
Registered Registered Per Unit Offering Price Fee
Shares 9,622,220 $ 22.00 $211,688,840 $ 100
<PAGE>
This calculation has been made pursuant to Rule 24e-2 under the
Investment Company Act of 1940. During its fiscal year ended September 30, 1996,
the Registrant redeemed or repurchased 9,607,220 shares of beneficial interest,
none of which were used by the Registrant on its Rule 24f-2 Notice filed on
November 25, 1996, and all of which are being used herein for purposes of
reducing the filing fee payable herewith under Rule 24e-2. An additional 15,000
shares being registered hereby are valued at the public offering price of $22.00
as of January 21, 1997.
<PAGE>
PIONEER MID-CAP FUND
Cross-Reference Sheet Showing Location in Prospectus and Statementof
Additional Information of Information
Required by Items of the Registration Form
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption 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
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 - Fund
Share Alternatives; Share
Price; How to Buy Fund Shares;
How to Sell Fund Shares; How to
Exchange Fund Shares;
Distribution Plans;
Shareholder Services; The
Fund
8. Redemption or Repurchase Prospectus - Fund
Share Alternatives; Share
Price; How to Buy Fund Shares;
How to Sell Fund Shares; How to
Exchange Fund Shares;
Shareholder Services; The
Fund
9. Pending Legal Proceedings ........ Not Applicable
10. Cover Page Statement of
Additional Information -
Cover Page
11. Table of Contents Statement of
Additional Information -
Cover Page
12. General Information and History Statement of
Additional Information -
Description of Shares
13. Investment Objectives and Policies Statement of
Additional Information -
Investment Policies and
Restrictions
14. Management of the Fund Statement of
Additional Information -
Management of the Fund;
Investment Adviser
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 theFund;
Investment Adviser;
Underwriting Agreement and
Distribution Plans;
Shareholder
Servicing/Transfer Agent;
Custodian;Principal
Underwriter;Independent
Public Accountants
17. Brokerage Allocation and Other
Practices Statement of
Additional Information -
Portfolio Transactions
18. Capital Stock and Other Securities Statement of
Additional Information -
Description of Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered Statement of
Additional Information -
Letter of Intention;
Systematic Withdrawal Plan;
Determination of Net Asset
Value
20. Tax Status Statement of
Additional Information -
Tax Status
21. Underwriters Statement of
Additional Information -
Underwriting Agreement and
Distribution Plans;
Principal Underwriter
22. Calculation of Performance Data Statement of
Additional Information -
Investment Results
23. Financial Statements Financial
Statements
<PAGE>
Pioneer
Mid-Cap Fund
Class A, Class B and Class C Shares
Prospectus
January 28, 1997
Pioneer Mid-Cap Fund (the "Fund") seeks capital growth by investing in a
diversified portfolio of securities consisting primarily of common stocks. Any
current income generated from these securities is incidental to the investment
objective of the Fund.
In order to achieve its investment objective, the Fund will invest at least
65% of its total assets in common stocks and common stock equivalents (such as
convertible bonds and preferred stock) of companies with a market capitalization
between $100 million and $5 billion ("Mid-Cap Companies"). The Fund may invest a
portion of its assets in foreign securities. See "Investment Objective and
Policies" in this Prospectus. There is no assurance that the Fund will achieve
its investment objective.
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. INVESTMENTS IN THE SECURITIES OF MID-CAP COMPANIES MAY OFFER GREATER
CAPITAL APPRECIATION POTENTIAL THAN INVESTMENTS IN LARGE-CAPITALIZATION COMPANY
SECURITIES, BUT MAY BE SUBJECT TO GREATER SHORT-TERM PRICE FLUCTUATIONS. THE
FUND IS INTENDED FOR INVESTORS WHO CAN ACCEPT THE RISKS ASSOCIATED WITH ITS
INVESTMENTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. SEE "INVESTMENT OBJECTIVE
AND POLICIES" FOR A DISCUSSION OF THESE RISKS.
This Prospectus provides information about the Fund that you should know
before investing. Please read and retain it for your future reference. More
information about the Fund is included in the Statement of Additional
Information, also dated January 28, 1997, which is incorporated into this
Prospectus by reference. 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.
Additional information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC") and is available upon request and without
charge.
TABLE OF CONTENTS PAGE
- --------- ----------------------------------------------------- --------
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
IV. MANAGEMENT OF THE FUND 5
V. FUND SHARE ALTERNATIVES 6
VI. SHARE PRICE 7
VII. HOW TO BUY FUND SHARES 7
VIII. HOW TO SELL FUND SHARES 11
IX. HOW TO EXCHANGE FUND SHARES 12
X. DISTRIBUTION PLANS 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 13
XII. SHAREHOLDER SERVICES 14
Account and Confirmation Statements 14
Additional Investments 14
Automatic Investment Plans 14
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 15
Direct Deposit 15
Voluntary Tax Withholding 15
Telephone Transactions and Related Liabilities 15
FactFoneSM 15
Retirement Plans 15
Telecommunications Device for the Deaf (TDD) 15
Systematic Withdrawal Plans 15
Reinstatement Privilege (Class A Shares Only) 16
XIII. THE FUND 16
XIV. INVESTMENT RESULTS 16
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
The 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. Management fees have been restated to reflect the annualized effective fee
rate payable to Pioneering Management Corporation ("PMC") for the period ending
September 30, 1996 under the performance-based management contract in effect
since July 1, 1996. Actual management fees for Class A shares for the fiscal
year ended September 30, 1996 were 0.49% reflecting a management contract in
effect through June 30, 1996. For Class B and Class C shares, other expenses and
distribution fees are based on amounts that would have been incurred if such
shares had been outstanding for the entire fiscal year ended September 30, 1996.
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 None(1) 4.00% 1.00%
(as a percentage of purchase price
or redemption proceeds, as
applicable)
Redemption fee2 None None None
Exchange fee None None None
Annual Fund Operating Expenses
(as a percentage of average net
assets):
Management fee* 0.50% 0.50% 0.50%
12b-1 fees 0.18% 1.00% 1.00%
Other Expenses (including
accounting and transfer agent
fees, custodian fees and printing
expenses) 0.21% 0.16% 0.43%
---------- ----------- ------------
Total Operating Expenses 0.89% 1.66% 1.93%
========== =========== ============
+ Class B and Class C shares were first offered on February 1, 1996.
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 domestic and
international wire transfers of redemption proceeds.
* The Fund pays a management fee that may vary from 0.425% to 0.825% based on
its performance. See "Management of the Fund."
Example:
You would pay the following expenses on a $1,000 investment, with or
without redemption at the end of each time period, assuming a 5% annual
return, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same
each year.
1 Year 3 Years 5 Years 10 Years
------- -------- -------- ----------
Class A Shares $66 $84 $104 $161
Class B Shares*
- --Assuming complete redemption
at end of period $57 $82 $110 $176
- --Assuming no redemption $17 $52 $ 90 $176
Class C Shares**
- --Assuming complete redemption
at end of period $30 $61 $104 $225
- --Assuming no redemption $20 $61 $104 $225
* Class B shares convert to Class A shares eight years after purchase.
** Class C shares redeemed during the first year after purchase are subject
to a 1% CDSC.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURN. ACTUAL FUND
EXPENSES AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER
THAN THOSE SHOWN.
For further information regarding management fees, 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. ("NASD").
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 Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accounts. Arthur Andersen LLP's report on the Fund's
financial statements as of September 30, 1996 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 1-800-225-6292.
PIONEER MID-CAP FUND
Selected Data for a Class A Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended September 30,
------------------------------------------------------
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $21.48 $19.92 $21.12 $18.03
Income (decrease) from investment operations--
Net investment income (loss) $0.18 $0.24 $0.24 $0.28
Net realized and unrealized gain (loss) on investments 1.47 2.70 0.32 3.72
Net increase (decrease) from investment operations $1.65 $2.94 $0.56 $4.00
Distribution to shareholders from--
Net investment income (0.30) (0.23) (0.25) (0.29)
Net realized capital gains (1.71) (1.15) (1.51) (0.62)
Net increase (decrease) in net asset value $(0.36) $1.56 $(1.20) $3.09
Net asset value, end of period $21.12 $21.48 $19.92 $21.12
Total Return* 8.61% 16.24% 2.62% 22.82%
Ratio of net operating expenses to average net assets 0.90%+ 0.85%+ 0.86% 0.84%
Ratio of net investment income to average net assets 0.85%+ 1.18%+ 1.19% 1.43%
Portfolio turnover rate 75% 19% 15% 18%
Average commission rate paid(1) $0.0527 -- -- --
Net assets, end of period (in thousands) $1,008,177 $1,082,154 $1,017,233 $1,019,059
Ratios assuming reduction for fees paid indirectly
Net operating expenses 0.88% -- -- --
Net investment income (loss) 0.87% -- -- --
</TABLE>
<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.16 $12.96 $17.80 $15.09 $18.52 $16.01
Income (decrease) from investment operations--
Net investment income (loss) $0.33 $0.41 $0.41 $0.42 $0.30 $0.28
Net realized and unrealized gain (loss) on
investments 2.04 3.94 (3.56) 3.33 (1.91) 3.76
Net increase (decrease) from investment operations $2.37 $4.35 $(3.15) $3.75 $(1.61) $4.04
Distribution to shareholders from--
Net investment income (0.35) (0.41) (0.46) (0.36) (0.41) (0.36)
Net realized capital gains (0.15) (0.74) (1.23) (0.68) (1.41) (1.17)
Net increase (decrease) in net asset value $1.87 $3.20 $(4.84) $2.71 $(3.43) $2.51
Net asset value, end of period $18.03 $16.16 $12.96 $17.80 $15.09 $18.52
Total Return* 15.05% 35.80% (19.39%) 26.32% (6.00%) 27.50%
Ratio of net operating expenses to average net assets 0.85% 0.74% 0.71% 0.72% 0.76% 0.68%
Ratio of net investment income to average net assets 1.85% 2.72% 2.58% 2.56% 2.15% 1.74%
Portfolio turnover rate 12% 5% 14% 16% 12% 23%
Average commission rate paid(1) -- -- -- -- -- --
Net assets, end of period (in thousands) $779,631 $692,344 $562,343 $752,135 $616,953 $734,300
Ratios assuming reduction for fees paid indirectly
Net operating expenses -- -- -- -- -- --
Net investment income (loss) -- -- -- -- -- --
</TABLE>
Selected Data for a Class B Share Outstanding Throughout Each Period:(a)
<TABLE>
<CAPTION>
For the period February 1, 1996
through September 30, 1996
------------------------------
<S> <C>
Net asset value, beginning of period $ 19.28
Increase (decrease) from investment operations--
Net investment income (loss) $ 0.12
Net realized and unrealized gain (loss) on investments 1.78
Net increase (decrease) from investment operations $ 1.90
Distribution to shareholders from--
Net investment income (0.16)
Net increase (decrease) in net asset value $ 1.74
Net asset value, end of period $ 21.02
Total return* 9.88%
Ratio of net operating expenses to average net assets 1.68%**+
Ratio of net investment income (loss) to average net assets (0.26)%**+
Portfolio turnover rate 75%
Average commission rate paid(1) $0.0527
Net assets, end of period (in thousands) $ 4,939
Ratios assuming reduction for fees paid indirectly
Net operating expenses 1.66%**
Net investment income (loss) (0.24)%**
</TABLE>
(a) Class B shares were first publicly offered on February 1, 1996.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charge. Total return would be reduced if sale charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commissions paid per share on the Fund's
exchange listed security transactions.
3
<PAGE>
Selected Data for a Class C Share Outstanding Throughout Each Period:(a)
<TABLE>
<CAPTION>
For the period February 1, 1996
through September 30, 1996
------------------------------
<S> <C>
Net asset value, beginning of period $ 19.28
Increase (decrease) from investment operations--
Net investment income (loss) $ 0.03
Net realized and unrealized gain (loss) on investments 1.93
Net increase (decrease) from investment operations $ 1.96
Distribution to shareholders from--
Net investment income (0.12)
Net increase (decrease) in net asset value $ 1.84
Net asset value, end of period $ 21.12
Total return* 10.18%
Ratio of net operating expenses to average net assets 1.96%**+
Ratio of net investment income (loss) to average net assets (0.29)%**+
Portfolio turnover rate 75%
Average commission rate paid(1) $0.0527
Net assets, end of period (in thousands) $ 379
Ratios assuming reduction for fees paid indirectly
Net operating expenses 1.93%**
Net investment income (loss) (0.26)%**
</TABLE>
(a) Class C shares were first publicly offered on February 1, 1996.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charge. Total return would be reduced if sale charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commissions paid per share on the Fund's
exchange listed security transactions.
III. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek capital growth by
investing in a diversified portfolio of securities consisting primarily of
common stocks.
The Fund is managed in accordance with the value philosophy of PMC. This
approach consists of developing a diversified portfolio of securities
consistent with the Fund's investment objective and selected primarily on the
basis of PMC's judgment that the securities have an underlying value, or
potential value, which exceeds their current prices. The analysis and
quantification of the economic worth, or basic value, of individual companies
reflects PMC's assessment of a company's assets and the company's prospects
for earnings growth over the next 1-1/2-to-3 years. PMC relies primarily on
the knowledge, experience and judgment of its own research staff, but also
receives and uses information from a variety of outside sources, including
brokerage firms, electronic data bases, specialized research firms and
technical journals.
Under normal circumstances, at least 65% of the Fund's total assets are
invested in common stocks of companies with a market capitalization of
between $100 million and $5 billion determined at the time the security is
purchased. The Fund's investments in common stock include common stock
equivalents, that is, securities with common stock characteristics such as
convertible bonds and preferred stocks. While Mid-Cap Company securities may
offer a greater capital appreciation potential than investments in large-cap
company securities, they may also present greater risks. Mid-Cap Company
securities tend to be more sensitive to changes in earnings expectations and
have lower trading volumes than large-cap company securities and, as a
result, they may experience more abrupt and erratic price movements.
A convertible security is a long-term debt obligation of the issuer
convertible at a stated exchange rate into common stock of the issuer.
Convertible securities rank senior to common stocks in an issuer's capital
structure and are consequently of higher quality and entail less risk than
the issuer's common stock. As with all debt securities, the market values of
convertible securities tend to increase when interest rates decline and,
conversely, tend to decline when interest rates increase. The Fund may invest
in investment grade debt securities, that is, securities rated "BBB" or
higher by Standard & Poor's Ratings Group or the equivalent rating of other
rating agencies. If the rating of a security falls below investment grade,
management will consider whatever action is appropriate consistent with the
Fund's investment objectives and policies. See the Statement of Additional
Information for a discussion of rating categories.
While there is no requirement to do so, the Fund intends to limit
investments in foreign securities to no more than 10% of its assets and to
limit investments in securities of real estate investment trusts ("REITS") to
no more than 5% of assets. REITs are pooled investment vehicles which invest
primarily in income producing real estate or real estate related loans or
interests. Investing in REITs involves risks similar to those associated with
investing in mid-cap companies. Any current income produced by a security is
not a significant factor in the selection of investments. The Fund's
portfolio may include a number of securities which are owned by other equity
mutual funds managed by PMC. See "Portfolio Transactions" in the Statement of
Additional Information for more information.
The Fund's fundamental investment objective and the fundamental investment
restrictions set forth in the Statement of Additional Information may not be
changed without shareholder approval. Certain other investment policies,
strategies and restrictions on investment are noted throughout the Prospectus
and are set forth in the Statement of Additional Information. These
non-fundamental investment policies, strategies and restrictions may be
changed at any time by a vote of the Board of Trustees.
4
<PAGE>
It is the policy of the Fund not to engage in trading for short-term
profits. Nevertheless, changes in the portfolio will be made promptly when
determined to be advisable by reason of developments not foreseen at the time
of the initial investment decision, and usually without reference to the
length of time a security has been held. Accordingly, portfolio turnover rate
is not considered a limiting factor in the execution of investment decisions.
The Fund intends to be substantially fully invested at all times. If
suitable investments are not immediately available, the Fund may hold a
portion of its investments in cash and cash-equivalents. For temporary
defensive purposes, however, the Fund may invest up to 100% of its assets in
short-term investments. The Fund will assume a defensive posture only when
political and economic factors affect common stock markets to such an extent
that PMC believes there to be extraordinary risks in being substantially
invested in common stocks. A short-term investment is considered to be an
investment with a maturity of one year or less from the date of issuance.
Short-term investments will not normally represent more than 10% of the
Fund's assets.
The Fund may enter into repurchase agreements, not to exceed seven days,
with broker-dealers and any member bank of the Federal Reserve System. The
Board of Trustees of the Fund will review and monitor the creditworthiness of
any institution which enters into a repurchase agreement with the Fund. Such
repurchase agreements will be fully collateralized with United States
("U.S.") Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily. Collateral will be held by the
Fund's custodian in a segregated, safekeeping account for the benefit of the
Fund. Repurchase agreements afford the Fund an opportunity to earn income on
temporarily available cash at low risk. In the event that a repurchase
agreement is not fulfilled, the Fund could suffer a loss to the extent that
the value of the collateral falls below the repurchase price.
The Fund may invest in securities issued by companies located in foreign
countries. Investing in securities of foreign companies involves certain
considerations and risks which are not typically associated with investing in
securities of domestic companies. Foreign companies are not subject to
uniform accounting, auditing and financial standards and requirements
comparable to those applicable to U.S. companies. There may also be less
publicly available information about foreign companies compared to reports
and ratings published about U.S. companies. In addition, foreign securities
markets have substantially less volume than domestic markets and securities
of some foreign companies are less liquid and more volatile than securities
of comparable U.S. companies. There may also be less government supervision
and regulation of foreign securities exchanges, brokers and listed companies
than exists in the United States. Dividends or interest paid by foreign
issuers may be subject to withholding and other foreign taxes which will
decrease the net return on such investments as compared to dividends or
interest paid to the Fund by domestic companies. Finally, there may be the
possibility of expropriations, confiscatory taxation, political, economic or
social instability or diplomatic developments which could adversely affect
assets of the Fund held in foreign countries.
The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value
of a foreign security held by the Fund as measured in U.S. dollars will
decrease if the foreign currency in which the security is denominated
declines in value against the U.S. dollar. In such event, this will cause an
overall decline in the Fund's net asset value and may also reduce net
investment income and capital gains, if any, to be distributed in U.S.
dollars to shareholders of the Fund.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Fund has overall responsibility for
management and supervision of the Fund. There are currently eight Trustees,
six of whom are not "interested persons" of the Fund as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The Board meets
at least quarterly. By virtue of the functions performed by Pioneering
Management Corporation as 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 names and general business and professional background of each Trustee
and executive officer of the Fund.
Investment advisory services are provided to the Fund by PMC pursuant to a
management contract between PMC and the Fund. 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 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.
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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of the Fund, has general responsibility for PMC's
investment operations and chairs a committee of PMC's domestic equity
managers which reviews PMC's research and portfolio operations, including
those of the Fund. Mr. Tripple joined PMC in 1974.
The Fund is covered by a team of managers and analysts which does research
for and oversees the management of several funds with similar investment
objectives. 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. Steven C. Carhart, a Vice
President of PMC, since July 1996. Mr. Carhart joined PMC in 1996 and has 5
years of experience in research and 9 years of experience as a portfolio
manager.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an
5
<PAGE>
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 serves as the Fund's
manager and investment adviser subject to the supervision of the Fund's
Trustees. PMC pays all the ordinary operating expenses, including executive
salaries and the rental of office space relating to its services for the Fund
with the exception of the following which are to be paid by the Fund: (a)
taxes and other governmental charges, if any; (b) interest on borrowed money,
if any; (c) legal fees and expenses; (d) auditing fees; (e) insurance
premiums; (f) dues and fees for membership in trade associations; (g) fees
and expenses of registering and maintaining registrations by the Fund of its
shares with regulatory agencies, individual states, territories and foreign
jurisdictions and of preparing reports to government agencies; (h) fees and
expenses of Trustees not affiliated with or interested persons of PMC; (i)
fees and expenses of the custodian, dividend disbursing agent, transfer agent
and registrar; (j) issue and transfer taxes chargeable to the Fund in
connection with securities transactions to which the Fund is a party; (k)
costs of reports to shareholders, shareholders' meetings and Trustees'
meetings; (l) the cost of certificates representing shares of the Fund; (m)
fund accounting, pricing and appraisal charges and related overhead; and (n)
distribution fees in accordance with Rule 12b-1. The Fund also pays all
brokerage commissions and any taxes or other charges in connection with its
portfolio transactions.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of 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 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 equal to
0.625% per annum of the Fund's average daily net assets (the "Basic Fee").
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 Standard and Poors
Mid-Cap 400 Index of mid-capitalization stocks (the "Index") over the same
period. The performance period consists of the current month and the prior 35
months ("performance period"). Each percentage point of difference (up to a
maximum of +\- 10) is multiplied by a performance adjustment rate of 0.02%.
Thus, the maximum annualized adjustment rate is +\- 0.20%. This performance
comparison is made at the end of each month. One twelfth (1/12) of this rate
is then applied to the Fund's average net assets for the entire performance
period, giving a dollar amount that will be added to (or subtracted from) the
Basic Fee.
The Fund's performance is calculated based on the net asset value per
share of its Class A shares. For purposes of calculating the performance
adjustment, any dividends or capital gains distributions paid by the Fund are
treated as if reinvested in the Fund's Class A shares at the net asset value
per share as of the record date for payment. The record for the Index is
based on change in value and is adjusted for any cash distributions from the
companies whose securities comprise the Index.
Because the adjustment to the Basic Fee is based on the comparative
performance of the Class A shares 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 record 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.
The Basic Fee is computed daily, the performance fee adjustment is
calculated once per month and the entire management fee, allocated to each
Class of shares in proportion to its average daily net assets, is normally
paid monthly.
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% 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
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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, CDSC's 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 a Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the Exchange is open, as of the close of regular trading on the
Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities
quoted in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the Fund's independent pricing services.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of 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, B and 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; and no sales charge or
minimum investment 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 C shares except that the subsequent
minimum investment amount for Class B and C share accounts may be as little
as $50 if an automatic investment plan (see "Automatic Investment Plans") is
established.
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 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
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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, including a sales
charge, as follows:
Sales Charge as a % of Dealer
------------------------ Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ------------------------------------ ---------- ----------- -----------
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see below
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 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"
below. PFD may, in its discretion, pay a commission to broker-dealers who
initiate and are responsible for such purchases as follows: 1% on the first
$5 million invested; 0.50% on the next $45 million invested; and 0.25% on the
excess over $50 million invested. These commissions shall not be payable if
the purchaser is affiliated with the broker-dealer or if the purchase
represents the reinvestment of a redemption made during the previous 12
calendar months. Broker-dealers who receive a commission in connection with
Class A share purchases at net asset value by 401(a) or 401(k) retirement
plans with 1,000 or more eligible participants or with at least $10 million
in plan assets will be required to return any commissions 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 Mutual of Omaha Fund Management Company 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 shares through such dealer. From time to time, PFD may
elect to reallow the entire initial sales charge to participating dealers for
all Class A sales with respect to which orders are placed during a particular
period. Dealers to whom substantially the entire sales charge is reallowed
may be deemed to be underwriters under the federal securities laws.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to,
permits group solicitation of, or otherwise facilitates purchases by, its
employees, members or participants. Class A shares of the Fund may be sold at
net asset value per share without a sales charge to 401(k) retirement plans
with 100 or more participants or at least $500,000 in plan assets.
Information about such arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners and employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI, 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 an 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 on the receipt by PFD of
written notification of eligibility.
Class A shares of a 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 contribu
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<PAGE>
tion for each participant contribution. Class A 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 had all been purchased at the same time. For example, a
person who signs an LOI agreeing to purchase $50,000 worth of Class A shares
would be charged at the 4.50% sales charge rate with respect to all purchases
during the 13-month period of the LOI. 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 your total purchases minus redemptions during the period are less
than the amount specified in your LOI, you will be required to pay the
difference between the sales charges actually paid and the sales charges that
would otherwise have been applied. Your payment must be made to PFD within 20
days after PFD or your dealer sends you a written request. If PFD does not
receive the required payment, PFD will direct PSC to liquidate sufficient
shares from your escrow account to cover the amount due and release any
excess amount to you. If your total purchases minus redemptions exceed the
amount specified by the LOI and are in an amount that qualifies for a further
quantity discount, sales charges for transactions made in connection with
your LOI will be recalculated as of the date your LOI expires to effect the
lower rate. Any difference in the sales charge will be delivered to you in
cash or invested in additional Class A shares at the lower sales charge. In
this event, your dealer agrees to return any excess commissions paid. 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 60 days immediately preceding the purchase of
Class A shares; that the client paid a sales charge on the original purchase
of the shares redeemed; and that the mutual fund whose shares were redeemed
also offers net asset value purchases to redeeming shareholders of any of the
Pioneer mutual funds. Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at the net asset value per share next computed
after receipt of a purchase order, without the imposition of an initial sales
charge; however, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates shown in the table below. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed
on increases in account value above the initial purchase price, including
shares derived from the reinvestment of dividends or capital gains
distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Fund will first redeem shares not subject to any CDSC, and then
shares held longest during the six-year period. As a result, you will pay the
lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
Year Since CDSC as a Percentage of Dollar
Purchase Amount 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 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 avail-
9
<PAGE>
ability of a ruling from the Internal Revenue Service ("IRS") that such
conversions will not constitute taxable events for federal tax purposes.
There can be no assurance that such ruling will continue to be in effect at
the time any particular conversion would normally occur. The conversion of
Class B shares to Class A shares will not occur if such ruling is not
available and, therefore, Class B shares would continue to be subject to
higher expenses than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at net asset value per share next computed
after receipt of a purchase order, without the imposition of an initial sales
charge; however, Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%. The charge will be assessed on the amount equal to
the lesser of the current market value or the original purchase cost of the
shares being redeemed. No CDSC will be imposed on increases in account value
above the initial purchase price, including shares derived from the
reinvestment of dividends or capital gains distributions. Class C shares do
not convert to any other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments
during a quarter will be aggregated and deemed to have been made on the first
day of that quarter. In processing redemptions of Class C shares, the Fund
will first redeem shares not subject to any CDSC, and then shares held for
the shortest period of time during the one-year period. As a result, you will
pay the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class C shares, including the payment
of compensation to broker-dealers.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class
B shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of the value of the account in the Fund at the
time the withdrawal plan is established).
The CDSC on 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 by Pioneer); (c) the
distribution is from a 401(a) or 401(k) retirement plan and is a return of
excess employee deferrals or employee contributions or a qualifying hardship
distribution as defined by the Code or results from a termination of
employment (limited with respect to a termination to 10% per year of the
value of the plan's assets in the Fund as of the later of the prior December
31 or the date the account was established unless the plan's assets are being
rolled over to or reinvested in the same class of shares of a Pioneer mutual
fund subject to the CDSC of the shares originally held); (d) the distribution
is from an IRA, 403(b) or employer-sponsored retirement plan and is to be
rolled over to or reinvested in the same class of shares in a Pioneer mutual
fund and which will be subject to the applicable CDSC upon redemption; (e)
the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which
will be subject to the applicable CDSC upon redemption); or (f) the
distribution is from a qualified defined contribution plan and represents a
participant's directed transfer (provided that this privilege has been
preauthorized 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
subject to the CDSC); (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 shareowner 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 preauthorized
through a prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject
to a CDSC may be waived or reduced for either non-retirement or retirement
plan accounts if: (a) the redemption is made by any state, county, or city,
or any instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account. The CDSC on any
shares subject to a CDSC will not be applicable if the selling broker-dealer
elects, with PFD's approval, to waive receipt of the commission normally paid
at the time of the sale.
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Broker-Dealers. An order for any Class of Fund shares received by PFD from
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 $50,000 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, and any certificates are
endorsed by the record owner(s) exactly as the shares are registered and, if
required, the signature(s) are guaranteed by an eligible guarantor. You
should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association. A notary public cannot
provide a signature guarantee. Signature guarantees are not accepted by
facsimile ("fax"). For additional information about the necessary
documentation for redemption by mail, please contact PSC at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicate otherwise on your
Account Application or by writing to PSC. Proper account identification will
be required for each telephone redemption. A maximum of $50,000 per account
per day may be redeemed by telephone or fax and the proceeds may be received
by check or by 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 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 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
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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 fund will continue to be subject to
the CDSC until the original 12-month period expires. However, no CDSC is
payable with respect to purchases of Class A shares 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
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 FactFoneSM, 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 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 fees are paid
to PFD.
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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 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 shareholders of the Fund.
Both the Class B Plan and the Class C Plan provide that the Fund will
compensate PFD by paying a distribution fee at the annual rate of 0.75% of
the Fund's average daily net assets attributable to the applicable Class of
shares and a service fee at the annual rate of 0.25% of the Fund's average
daily net assets attributable to that Class of shares. The distribution fee
is intended to compensate PFD for its Class B and Class C distribution
services to the Fund. The service fee is intended to be additional
compensation for personal services and/or account maintenance services with
respect to Class B or Class C shares. PFD also receives the proceeds of any
CDSC imposed on the redemption of Class B or Class C shares.
Commissions of 4% of the amount invested in Class B shares, equal to 3.75%
of the amount invested and a first year's service fee equal to 0.25% of the
amount invested, are paid to broker-dealers who have selling 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 therefore,
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 B shares, dealers will become eligible for additional
annual service fees of up to 0.25% of the net asset value of such shares.
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 selling
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
therefore, 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 services fees of up to 0.75% and
0.25%, respectively, of the net asset value of such shares.
When a broker-dealer sells Class B or Class C shares and elects, with
PFD's approval, to waive its right to receive the commission normally paid at
the time of the sale, PFD may cause all or a portion of the distribution fees
described above to be paid to the broker-dealer.
Dealers may from time to time be required to meet certain criteria in
order to receive service fees. PFD or its affiliates are entitled to retain
all service fees payable under the Class B Plan or the Class C Plan for which
there is no dealer of record or for which qualification standards have not
been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund has elected to be treated, has qualified and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code,
so that it will not pay federal income tax on income and capital gains
distributed to shareholders as required under the Code. Under the Code, the
Fund will be subject to a nondeductible 4% 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, twice each year during the months of June and December and to
make distributions from net long-term capital gains, if any, in December.
Distributions from net short-term capital gains, if any, may be paid with
such dividends; dividends from income and/or capital gains may also be paid
at such other times as may be necessary for the Fund to avoid federal income
or excise tax. Generally, dividends from the Fund's net investment income,
market discount income, net short-term capital gains, and certain net foreign
exchange gains are taxable under the Code as ordinary income, and dividends
from the Fund's net long-term capital gains are taxable as long-term capital
gains.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. For federal income tax purposes, all dividends are taxable as described
above whether a shareholder takes them in cash or reinvests them in
additional shares of the Fund. Information as to the federal tax status of
dividends and distributions will be provided to shareholders annually. For
further information on the distribu-
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tion 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) on certain
of its foreign investments, which will reduce the yield 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.
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 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
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 Intention, 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 C shares) to PSC (account number and Class of
shares should be clearly indicated). The bottom portion of a confirmation
statement may be used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a pre-authorized electronic funds transfer
or draft drawn on a checking account. Pioneer Investomatic Plan investments
are voluntary, and you may discontinue the Plan at any time without penalty
upon 30 days' written notice to PSC. PSC acts as agent for the purchaser, the
broker-dealer and PFD in maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least
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 United States
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.
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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, i.e., PGI IRA Cust
for John Smith may only go into another account registered PGI IRA Cust for
John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on 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.
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 are available to
shareholders who have pre-recorded certain bank information (see
"FactFoneSM"). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. See "How to Buy
Fund Shares," "How to Sell Fund Shares" and "How to Exchange Fund Shares" for
more information. 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 shareholders by dialing 1-800-225-4321. FactFoneSM
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 FactFoneSM to make computer-assisted
telephone purchases, exchanges and redemptions from your Pioneer mutual fund
accounts if you have activated your PIN. Telephone purchases and redemptions
require the establishment of a bank account of record. You are strongly urged
to consult with your financial representative prior to requesting any
telephone transaction. Shareholders whose accounts are registered in the name
of a broker-dealer or other third party may not be able to use FactFoneSM.
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 retirement plans for businesses,
age-weighted profit sharing plans, Simplified Employee Pension Plans, IRAs,
and Section 403(b) retirement plans for employees of certain non-profit
organizations and public school systems, all of which are available in
conjunction with investments in the Fund. The Account Application
accompanying this Prospectus should not be used to establish any of these
plans. Separate applications are required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B and Class C share accounts are limited to
10% of the value of the account at the time the SWP is implemented. See
"Waiver or Reduction of Contingent Deferred Sales Charge" for more
information. Periodic 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.
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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. 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 is a diversified open-end management investment company (commonly
referred to as a mutual fund) organized as a Delaware business trust on
January 31, 1996. Prior to that time the Fund operated as a Massachusetts
business trust, initially reorganized as such on January 31, 1985. 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
additional series of the Fund, into one or more classes. As of the date of
this Prospectus, the Trustees have authorized the issuance of three classes
of shares, designated 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 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 certificates.
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 indexes,
indicators of economic activity or averages of
16
<PAGE>
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 vary from time to time depending on
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund. 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.
17
<PAGE>
Notes
18
<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 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
19
<PAGE>
[PIONEER LOGO]
Pioneer Mid-Cap
Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR LLP
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications, service forms
and telephone transactions ................................ 1-800-225-6292
FactFone(SM)
Automated fund yields and prices and
account information ........................................ 1-800-225-4321
Retirement plans ............................................ 1-800-622-0176
Toll-free fax ............................................... 1-800-225-4240
Telecommunications Device for the Deaf (TDD) ................ 1-800-225-1997
0197-3908
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER MID-CAP FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
January 28, 1997
This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectus, dated January 28, 1997 (the "Prospectus"). A
copy of the Prospectus can be obtained free of charge by calling Shareholder
Services at 1- 800-225-6292 or by written request to Pioneer Mid-Cap Fund (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 in this Statement of Additional Information by
reference.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions............................... 2
2. Management of the Fund............................................. 7
3. Investment Adviser................................................. 12
4. Underwriting Agreement and Distribution Plans...................... 15
5. Shareholder Servicing/Transfer Agent............................... 18
6. Custodian.......................................................... 19
7. Principal Underwriter.............................................. 19
8. Independent Public Accountants..................................... 19
9. Portfolio Transactions............................................. 19
10. Tax Status......................................................... 21
11. Description of Shares.............................................. 25
12. Certain Liabilities................................................ 26
13. Letter of Intention................................................ 27
14. Systematic Withdrawal Plan......................................... 28
15. Determination of Net Asset Value................................... 28
16. Investment Results................................................. 29
17. Financial Statements............................................... 32
Appendix A.........................................................A-33
Appendix B.........................................................B-50
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 POLICIES AND RESTRICTIONS
The Fund's current prospectus (the "Prospectus") presents the investment
objective and the principal investment policies of the Fund. Additional
investment policies and a further description of some of the policies described
in the Prospectus appear below.
The following policies and restrictions supplement those discussed in the
Prospectus. Whenever an investment policy or restriction states a maximum
percentage of the Fund's assets that may be invested in any security or presents
a policy regarding quality standards, this standard or other restrictions shall
be determined immediately after and as a result of the Fund's investment.
Accordingly, any later increase or decrease resulting from a change in values,
net assets or other circumstances will not be considered in determining whether
the investment complies with the Fund's investment objectives and policies.
Lending of Portfolio Securities
The Fund may lend portfolio securities to member firms of the New York Stock
Exchange under agreements which would require that the loans be secured
continuously by collateral in cash, cash equivalents or United States ("U.S.")
Treasury Bills maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The Fund would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned as well as the benefit of an increase in the market value of the
securities loaned and would also receive compensation based on investment of the
collateral. The Fund would not, however, have the right to vote any securities
having voting rights during the existence of the loan, but would call the loan
in anticipation of an important vote to be taken among holders of the securities
or of the giving or withholding of consent on a material matter affecting the
investment.
As with other extensions of credit there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The Fund will lend portfolio securities only to firms which have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 5% of the value of the Fund's total assets.
Forward Foreign Currency Transactions
The Fund may engage in 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
-2-
<PAGE>
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 the
Fund 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.
Real Estate Investment Trusts and Associated Risk Factors
The Fund may invest up to 5% of its assets in shares of real estate investment
trusts ("REITs"). REITs are pooled investment vehicles which invest primarily in
income producing real estate or real estate related loans or interests. REITs
are generally classified as equity REITs, mortgage REITs or a combination of
equity and mortgage REITs. Equity REITs invest the majority of their assets
directly in real property and derive income primarily from the collection of
rents. Equity REITs can also realize capital gains by selling properties that
have appreciated in value. Mortgage REITs invest the majority of their assets in
real estate mortgages and derive income from the collection of interest
payments. Like investment
-3-
<PAGE>
companies such as the Fund, REITs are not taxed on income distributed to
shareholders provided they comply with several requirements of the Internal
Revenue Code of 1986, as amended (the "Code"). The Fund will indirectly bear its
proportionate share of any expenses paid by REITs in which it invests in
addition to the expenses paid by the Fund.
Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. Equity REITs
may be affected by changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. REITs are subject to heavy cash
flow dependency, default by borrowers, self- liquidation, and the possibilities
of failing to qualify for the exemption from tax for distributed income under
the Code and failing to maintain their exemptions from the Investment Company
Act of 1940, as amended (the "1940 Act"). REITs whose underlying assets include
long-term health care properties, such as nursing, retirement and assisted
living homes, may be impacted by federal regulations concerning the health care
industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.
Investing in REITs involves risks similar to those associated with investing in
mid capitalization companies. REITs may have limited financial resources, may
trade less frequently and in a limited volume and may be subject to more abrupt
or erratic price movements than larger company securities. Historically, mid
capitalization stocks, such as REITs, have been more volatile in price than the
larger capitalization stocks included in the Standard & Poor's Index of 500
Common Stocks.
Investment Restrictions
Fundamental Investment Restrictions. The Fund has adopted certain additional
investment restrictions which may not be changed without the affirmative vote of
the holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities. The Fund may not:
(1) 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
-4-
<PAGE>
contracts and options on futures contracts, forward commitments, forward foreign
exchange contracts, repurchase agreements, 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.
(2) 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 33 1/3% of the Fund's total assets
(including the amount borrowed) taken at market value. The Fund will not use
leverage to attempt to increase income. The Fund will not purchase securities
while outstanding borrowings (including reverse repurchase agreements and dollar
rolls) exceed 10% of the Fund's total assets.
(3) Guarantee the securities of any other company, or , mortgage,
pledge, hypothecate or assign or otherwise encumber as security for indebtedness
its securities or receivables in an amount exceeding the amount of the borrowing
secured thereby.
(4) Purchase securities of a company if the purchase would result in
the Fund's having more than 5% of the value of its total assets invested in
securities of such company.
(5) Purchase securities of a company if the purchase would result in
the Fund's owning more than 10% of the outstanding voting securities of such
company.
(6) Act as an underwriter, except as it may deemed to be on
underwriter in a sale of restricted securities held in its portfolio.
(7) 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.
(8) Invest in real estate, commodities or commodity contracts, except
that the Fund may invest in real estate investment trusts and 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
(9) Purchase securities on "margin" or effect " short sales" of
securities.
-5-
<PAGE>
It is the fundamental policy of the Fund not to concentrate its investments in
securities of companies in any particular industry. Following the current
opinion of the staff of the Securities and Exchange Commission (the
"Commission"), the Fund's investments are concentrated in a particular industry
if such investments aggregate 25% or more of the Fund's total assets. The Fund's
policy does not apply to investments in U.S. Government Securities.
The Fund does not intend to enter into any reverse repurchase agreement, lend
portfolio securities or invest in securities index put and call warrants, as
described in fundamental investment restrictions (2), (6) and (7) above, during
the coming year.
Non-Fundamental Investment Restrictions.
The following restrictions have been designated as non-fundamental and may be
changed by a vote of the Fund's Board of Trustees without approval of
shareholders.
The Fund may not:
(1) purchase or retain the securities of any company if officers of the
Fund or Trustees of the Fund, or officers and directors of its adviser or
principal underwriter, individually own more than one-half of 1% of the
securities of such company or collectively own more than 5% of the securities of
such company; or
(2) invest in securities of other registered investment companies,
except by purchases in the open market including only customary brokers'
commissions, and except as they may be acquired as part of a merger, a
consolidation or an acquisition of assets; or
(3) purchase (a) securities which at the time of investment are not
readily marketable, (b) securities the disposition of which is restricted under
federal securities laws (excluding restricted securities that have been
determined by the Trustees of the Fund (or the person designated by them to make
such determinations) to be readily marketable) and (c) repurchase agreements
maturing in more than seven days, if, as a result, more than 15% of the Fund's
net assets would be invested in securities described in (a), (b), and (c) above.
In addition, in connection with the offering of its shares in various states,
the Fund has agreed not to: (1) invest in puts, calls, straddles, spreads or any
combination thereof, or in oil, gas or other mineral exploration or development
leases or programs; (2) invest more than 5% of its assets in equity securities
of any issuer which are not readily marketable, i.e., securities for which a
bona fide market does not exist at the time of purchase or subsequent valuation;
(3) pledge its portfolio securities, unless its net assets less pledged
securities continues to amount to at least 90% of the offering price; (4) invest
more than 5% of its total assets in warrants, valued at the lower of cost or
market, or more than 2% of its total assets in
-6-
<PAGE>
warrants, so valued, which are not listed on the New York or American Stock
Exchanges; and (5) invest in real estate limited partnerships.
2. 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 Investment Company Act of 1940, as amended (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") and
Forest-Starma (Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), 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 Directors of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP
(counsel to the Fund).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., 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, Winthrop Group, Inc (consulting firm); Manager of
Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management
-7-
<PAGE>
of Technology, Boston University School of Management ("BUSM"), 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 and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
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) 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, PIC, PIntl,
First Russia, Omega and Pioneer SBIC Corporation; 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.; 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, PIC, PItnl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC; and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and
PCC; Clerk of PFD and PSC; Partner, Hale and Dorr LLP (counsel to the Fund); and
Secretary of all of the Pioneer mutual funds.
-8-
<PAGE>
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 formerly of Hale and Dorr LLP
(counsel to the Fund) where he most recently served as junior partner.
STEVEN C. CARHART, DOB: November 1948
Vice President of PMC since July 1996; formerly a portfolio manager for
a number of investment advisers.
The Fund's 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 of 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 International Growth Fund PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer Europe Fund PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer World Equity 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 Small Company Fund PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer Gold Shares PMC PFD
-9-
<PAGE>
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer Balanced Fund PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer Equity-Income Fund PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer Fund PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer II PMC PFD
- ---------------------------------------------------- ------------- -----------
- ---------------------------------------------------- ------------- -----------
Pioneer Real Estate Shares 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, Inc. 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.
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 on the date of this Statement of
Additional Information, except Mr. Cogan who then owned approximately 14% of
such shares. As of the date of this Statement of Additional Information, the
Trustees and officers of the Fund owned beneficially in the aggregate less than
1% of the outstanding shares of the Fund. As of such date, PFD, 60 State Street,
Boston, MA 02109 owned approximately 32.73% (5,814) of the outstanding Class C
shares of the Fund;. Merrill Lynch Pierce Fenner & Smith Inc., 4800 Deer Lake
Drive East 3rd Fl, Jacksonville, FL 32246-6484 owned approximately 22.19%
(3,942) of the outstanding Class C shares of the Fund; Moberg Enterprises Inc.,
8906 Maple Street, Omaha, NE 68134-6128 owned approximately 11.99 % (2,130) of
the outstanding Class C shares of the Fund; Zelma A. Stearman TTEE for Jean M.
Stearman and Jennifer Stearman U/A DTD 11/17/95, 6614 Sunshine Drive, Omaha, NE
68107-3759 owned approximately 6.72 % (1,193) of the outstanding Class C shares
of the Fund; PGI Cust ORP Emp: North Harris College, 63331 Rusty Gate, Spring TX
77373 owned approximately 5.18 % (920) 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. The Fund will
pay an annual trustee's fee to each Trustee who is not affiliated with PMC, PGI,
PFD or PSC
-10-
<PAGE>
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 will pay a per meeting fee of $100 to each Trustee who is not affiliated
with PMC, PGI, PFD or PSC. The Fund also will pay 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 will be
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 will
receive an annual fee equal to 10% of the aggregate annual trustee's fee, except
the Committee Chair who will 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 Board of Trustees for the Pioneer mutual funds, will receive an
annual fee equal to 5% of the annual trustee's fee, except the Committee Chair
who will receive an annual trustee's fee equal to 10% of the annual trustee's
fee. Any such fee paid to affiliates or interested persons of PGI, PMC, PFD or
PSC are reimbursed to the Fund under its Management Contract.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund for the fiscal year ending September
30, 1996:
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Compensation
Aggregate Accrued as from Fund and
Compensation Part of Pioneer Family
Name of Trustee from the Fund* Fund's Expenses of Funds**
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
<S> <C> <C> <C>
John F. Cogan, Jr.* $ 500.00 $0 $ 11,083.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
Richard H. Egdahl, M.D. 3,137.00 0 59,858.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
Margaret B.W. Graham 3,137.00 0 59,858.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
John W. Kendrick 3,137.00 0 59,858.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
Marguerite A. Piret 4,395.00 0 79,842.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ----------------------------------------- --------------------------------- ------------------ ---------------------
David D. Tripple* 500.00 0 11,083.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
Stephen K. West 3,520.00 0 67,850.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
John Winthrop 3,679.00 0 66,442.00
---------- - -----------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
- ------------------------------------------ --------------------------------- ------------------ ---------------------
$ 22,005.00 $ 0 $415,874.00
- ------------------------------------------ --------------------------------- ------------------ ---------------------
</TABLE>
* PMC fully reimburses the Fund and the other funds in the Pioneer Family of
Funds for compensation paid to Messrs. Cogan and Tripple.
** Estimated for calendar year ended December 31, 1996.
-11-
<PAGE>
3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston, Massachusetts, to act
as its investment adviser. A description of the services provided to the Fund
under its management contract and the expenses paid by the Fund under the
contract is set forth in the Prospectus under the caption "Management of the
Fund."
The term of the management contract is one year and is renewable annually by the
vote of a majority of the Board of Trustees of the Fund (including a majority of
the Board of Trustees who are not parties to the contract or interested persons
of any such parties). The vote must be cast in person at a meeting called for
the purpose of voting on such renewal. The contract terminates if assigned and
may be terminated without penalty by either party upon sixty days' written
notice by vote of the Board of Directors or Trustees or a majority of the Fund's
outstanding voting securities. Pursuant to the management contract, PMC will not
be liable for any error of judgment or mistake of law or for any loss sustained
by reason of the adoption of any investment policy or the purchase, sale or
retention of any securities on the recommendation of PMC. PMC, however, is not
protected against liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the management contract.
As compensation for its management services and expenses incurred, and certain
expenses which PMC incurs on behalf of the Fund, the Fund pays PMC a basic fee
of 0.625% of the Fund's average daily net assets (the "Basic Fee"). One twelfth
(1/12) of this annual Basic Fee is applied to the Fund's average net assets for
the current month, giving a dollar amount which is the monthly fee.
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 Standard and Poors Mid-Cap 400 Index of mid-capitalization stocks (the
"Index") over the same period. The Index is comprised of 400 domestic stocks
chosen for market size (with company market capitalization ranging from $118
million to $7.487 billion), liquidity and industry group representation. It is a
market-value weighted index and was the first benchmark of midcap stock price
movements. The performance period consists of the current month and the prior 35
months ("performance period"). Each percentage point of difference (up to a
maximum of +/-10) is multiplied by a performance adjustment rate of 0.02%. The
maximum annualized adjustment rate is +/- 0.20%. This performance comparison is
made at the end of each month. One twelfth (1/12) of this rate is then applied
to the average net assets for the entire
-12-
<PAGE>
performance period, giving a dollar amount that is added to (or subtracted from)
the Basic Fee.
The Fund's performance is calculated based on net asset value of the Fund's
Class A shares. For purposes of calculating the performance adjustment, any
dividends or capital gains distributions paid by the Fund are treated as if
reinvested in Class A shares at the net asset value as of the record date for
payment. The record for the Index is based on change in value and is adjusted
for any cash distributions from the companies whose securities comprise the
Index.
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 Class A shares 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
First Day End of Period Absolute Percentage
Points
Fund $ 10 $ 13 +$ 3 + 30%
Index 100 123 + 23 + 23%
* Reflects performance at net asset value. Any dividends or capital gains
distributions paid by the Fund are treated as if reinvested in Class A shares of
the Fund at net asset value as of the payment date and any dividends paid on
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: One-twelfth of
the Basic Fee of 0.625% would be applied to 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 0.02% producing a rate of
0.14%. One-twelfth of this rate is then applied to 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
dollar amount calculated for the performance period. If the investment
performance of the Fund during the performance period was exceeded by the record
of the Index, the dollar amount of 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
-13-
<PAGE>
down, but whether it is up or down more or less than the record of the Index.
Moreover, the comparative investment 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.
The Basic Fee is computed daily, the performance fee is calculated once each
month and the entire management fee, allocated in proportion to the average
daily net assets of each class of shares, is normally paid monthly.
Phase-In of Performance Adjustment
For the period February 1, 1996 through June 30, 1996, the management fee was
paid at the annual rate of 0.50% of average net assets up to $250 million, 0.48%
of the next $50 million in net assets and 0.45% on the net assets exceeding $300
million. Because the performance adjustment operated on a prospective basis
only, neither investment results nor average assets from periods prior to
February 1, 1996 were considered in the initial implementation of the
performance based fee. Additionally, a performance adjustment increasing the
Basic Fee may also be made starting in January 1997 after a 12 month performance
record has accrued. Performance adjustments that had the effect of lowering the
Basic Fee started in July 1996 after a 6 month performance record had accrued.
Accordingly, starting with July 1996, the Basic Fee took effect and was adjusted
for the relative performance of the Fund and the record of the Index from
February 1, 1996 onward which had the effect of lowering the Basic Fee. Starting
with January, 1997, the Basic Fee will be adjusted to reflect both increases and
decreases based upon the Fund's performance relative to the Index from February
1, 1996 onward.
The performance adjustment will be applied against assets over the same period
of performance and thereafter a new month will be added to the period for
purposes of measuring performance and the average assets until the period equals
36 months. After 36 months have elapsed from February 1, 1996, the performance
period will consist of the most recent month plus the previous 35 months.
During its fiscal years ended September 30, 1994, 1995 and for the period
October 1, 1995 through June 30, 1996, the Fund paid or owed total management
fees to PMC of approximately $4,801,000, $4,701,000 and $3,550,000 pursuant to a
management contract previously in effect under which fees were paid at the
annual rate of 0.50% of the average net assets up to $250 million., 0.48% of the
next $50 million in assets and 0.45% on the net assets exceeding $300 million.
For the period July 1, 1996 through September 30, 1996, under the current
management contract, the Fund paid or owed total management fees to PMC of
approximately $1,385,000.
-14-
<PAGE>
4. 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 expenses for the
distribution of the Fund's shares, except for expenses incurred by PFD for which
it is reimbursed by the Fund under the Plan. 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 and the laws of certain
foreign countries. 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 pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan"), a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans").
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. See "Distribution Plans" in the
Prospectus. The expenses of the Fund pursuant to the Class A Plan are accrued on
a fiscal year basis and may not exceed, with respect to Class A shares, the
annual rate of 0.25% of the Fund's average annual net assets attributable to
Class A.
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 of personal services and/or
account maintenance services rendered by
-15-
<PAGE>
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 to 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 "Distributions Plans" in the Prospectus.)
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.
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 amount invested with respect to such shares.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under
-16-
<PAGE>
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 "Distributions Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Fund for review
by the Trustees a quarterly written report of the amounts expended under the
respective 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 each Fund and their 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 of 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
-17-
<PAGE>
operations of the Plan, or by a vote of a majority of the outstanding voting
securities of the respective Class of the Fund (as defined in the 1940 Act). A
Plan will automatically terminate in the event of its assignment (as defined in
the 1940 Act).
During the fiscal year ended September 30, 1996, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan, Class B Plan and Class C
Plan respectively, as follows: $1,846,000, $9,000 and $1,400. Distribution fees
were paid by the Fund to PFD in reimbursement of expenses related to servicing
of shareholder accounts and to compensating dealers and sales personnel.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares and the Class C shares are subject to a 1% CDSC.
During the fiscal year ended September 30, 1996, CDSCs in the amount to
approximately $500 were paid to PFD in reimbursement of expenses related to
servicing of shareholders' accounts and compensation paid to dealers and sales
personnel.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts, to act
as shareholder servicing and transfer agent for the Fund. This contract
terminates if assigned and may be terminated without penalty by either party
upon ninety days' written notice by vote of its Board of Directors or Trustees
or a majority of its outstanding voting securities.
Under the terms of its contract with the Fund, PSC services shareholder
accounts, and its duties 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 shareholder inquiries.
PSC receives an annual fee of $22.75 for each Class A, Class B and Class C
shareholder account from the Fund as compensation for the services described
above. PSC is also reimbursed by the Fund for its cash out-of-pocket
expenditures. The annual fee is set at an amount determined by vote of a
majority of the Trustees (including a majority of the Trustees who are not
parties to the contract with PSC or interested persons of any such parties) to
be comparable to fees for such services being paid by other investment
companies. The Fund may compensate entities which have agreed to provide certain
sub-accounting services regarding shareholder records, specific transaction
processing and 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.
-18-
<PAGE>
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") 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 does
not determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may 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.
7. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter for the Fund in connection with the
continuous offering of the Class A, Class B and Class C shares of the Fund.
During the fiscal years ended September 30, 1994, September 30, 1995 and
September 30, 1996 total underwriting commissions paid to PFD in connection with
the offering of Class A shares of the Fund were, respectively, approximately
$2,714,000, $1,409,000 and $1,001,000. Commissions reallowed to dealers during
the same periods were approximately $2,359,000, $1,224,000 and $870,000.
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.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One International Place, Boston, Massachusetts 02110, is
the Fund's independent public accountants, providing audit services, tax return
review, and assistance and consultation with respect to the preparation of
filings with the Commission.
9. 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.
-19-
<PAGE>
PMC may select broker-dealers which provide brokerage and/or research services
to the Fund and/or other investment companies managed by PMC. 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, 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.
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 Trustees periodically review 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 to other Pioneer mutual
funds and certain private accounts with investment objectives similar to those
of the Fund. Securities frequently meet the investment objectives 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
-20-
<PAGE>
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 mutual fund
in the Pioneer group 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.
During the fiscal years ended September 30, 1994, September 30, 1995 and
September 30, 1996 the Fund paid aggregate brokerage and underwriting
commissions of approximately $494,000, $857,000 and $2,105,000.
10. TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the Code
for qualification as a regulated investment company. These requirements relate
to the sources of the Fund's income, the diversification of its assets and the
distribution of its income to shareholders. If the Fund meets all such
requirements and distributes to its shareholders, in accordance with the Code's
timing requirements, all investment company taxable income and net capital gain,
if any, which it earns, the Fund will be relieved of the necessity of paying
federal income tax.
In order to qualify as a regulated investment company under Subchapter M, the
Fund must, among other things, derive at least 90% of its annual gross income
from dividends, interest, payments with respect to securities loans, gains from
the sale or other disposition of stock, securities or foreign currencies, and
certain other income (the "90% income test"), limit its gains from the sale of
stock, securities and certain other positions held for less than three months to
less than 30% of its annual gross income (the "30% 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
-21-
<PAGE>
capital loss, 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. The federal income tax status of all distributions will be
reported to shareholders annually.
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 currency forward contracts, 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. Any such transactions 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 limitations described in the second
paragraph above that are applicable to the income or gains recognized by a
regulated investment company. 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.
If the Fund acquires any equity interest (under proposed regulations, generally
including not only stock but also an option to acquire stock) in certain foreign
corporations that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, rents, royalties or capital gain) 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. Certain elections may, if available,
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. 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.
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
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<PAGE>
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 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. 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 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.
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
forward contracts may not have been performed or closed out. Forward contracts
relating to foreign currency are generally subject to Section 988, as described
above, and may accordingly produce
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<PAGE>
ordinary income or loss. 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.
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.
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
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<PAGE>
Revenue Service ("IRS") regulations. In order to avoid this withholding
requirement, shareholders must certify on their Account Applications, or on
separate IRS Forms W-9, that the Social Security Number or other Taxpayer
Identification Number they provide is their correct number and that they are not
currently subject to backup withholding, or that they are exempt from backup
withholding. The Fund may nevertheless be required to withhold if it receives
notice from the IRS or a broker that the number provided is incorrect or backup
withholding is applicable as a result of previous underreporting of interest or
dividend income.
If, as anticipated, the Fund 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.
11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust permits the Board of Trustees to authorize the
issuance of an unlimited number of full and fractional shares of beneficial
interest which may be divided into such separate series as the Trustees may
establish. Currently, the Fund consists of only one series. The Trustees may,
however, establish additional series of shares in the future, and may divide or
combine the shares into a greater or lesser number of shares without thereby
changing the proportionate beneficial interests in the Fund. The Declaration of
Trust further authorizes the Trustees to classify or reclassify any series of
the shares into one or more classes. Pursuant thereto, the Trustees have
authorized the issuance of three classes of shares of the Fund, designated as
Class A shares, Class B and Class C shares. Each share of a class of the Fund
represents an equal proportionate interest in the assets of the Fund allocable
to that class. Upon liquidation of the Fund, shareholders of each class of the
Fund are entitled to share pro rata in the Fund's net assets allocable to such
class available for distribution to shareholders. The Fund reserves the right to
create and issue additional series or classes of
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<PAGE>
shares, in which case the shares of each class of a series would participate
equally in the earnings, dividends and assets allocable to that class of the
particular series.
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees.
The shares of each series of the Fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the Fund vote together as a
class on matters that affect all series of the Fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Fund's Declaration of Trust without the
affirmative vote of a majority of its shares. Shares have no preemptive or
conversion rights. Shares are fully paid and non-assessable by the Fund, except
as stated below.
12. CERTAIN LIABILITIES
The Fund (previously named Pioneer Three) was previously organized as a
Massachusetts business trust and was reorganized as a Delaware business trust on
January 31, 1996, pursuant to an Agreement and Plan of Reorganization approved
by the shareholders of the Fund. As a Delaware business trust, the Fund's
operations are governed by its Declaration of Trust dated January 31, 1996. A
copy of the fund's Certificate of Trust, also dated January 31, 1996, is on file
with the office of the Secretary of State of Delaware. Generally, Delaware
business trust shareholders are not personally liable for obligations of the
Delaware business trust under Delaware law. The Delaware Business Trust Act (the
"Delaware Act") provides that a shareholder of a Delaware business trust shall
be entitled to the same limitation of liability extended to shareholders of
private for-profit corporations. The Fund's Declaration of Trust expressly
provides that the Fund is organized under the Delaware Act and that the
Declaration of Trust is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the Fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the trust's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration of Trust (i) contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
provides that notice of such disclaimer may be given in each agreement,
obligation or instrument entered into or executed by the Fund or its Trustees,
(ii) provides for the indemnification out of Fund property of any shareholders
held personally liable for any obligations of the Fund or any series of the Fund
and (iii) provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any
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<PAGE>
judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the Fund
itself would be unable to meet its obligations. In light of Delaware law, the
nature of the Fund's business and the nature of its assets, the risk of personal
liability to a Fund shareholder is remote.
The Declaration of Trust further provides that the Fund shall indemnify each of
its Trustees and officers against liabilities and expenses reasonably incurred
by them, in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Fund.
The Declaration of Trust does not authorize the Fund to indemnify any Trustee or
officer against any liability to which he or she would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
13. LETTER OF INTENT (Class A only)
A Letter of Intent (a "Letter") 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. A Letter of Intent 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
Letter of Intention and are in an amount which would qualify for a further
quantity discount, all transactions will be recomputed on the expiration date of
the Letter of Intention 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 Letter of Intention.
If the total purchases, less redemptions, are less than the amount specified
under the Letter of Intention, you must remit to PFD any difference between the
sales charge on the amount actually purchased and the amount originally
specified in the Letter of Intention 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.
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<PAGE>
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from Class A shares of
the Fund deposited by the applicant under this 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 checks of $50 or more will be deposited monthly or
quarterly directly into a bank account designated by the applicant or will be
sent by check to the applicant, or any person designated by him monthly or
quarterly. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented.
Any income dividends or capital gains distributions on shares under the SWP will
be credited to the SWP account on the payment date in full and fractional shares
at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares deposited
under the SWP in a SWP account. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the Plan account. Redemptions are taxable transactions to
shareholders. In addition, the amounts received by a shareholder cannot be
considered as 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 Plan have been redeemed.
15. 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")
(currently 4:00 p.m., Eastern Time) on each day on which the Exchange is open
for trading. As of the date of this Statement of Additional Information, the
Exchange is open for trading every weekday except for the following holidays:
New Year's Day, 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. The Fund is not required to determine its net asset
value per share on any day in which no purchase
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<PAGE>
orders in good order for the shares of the Fund are received and no shares are
tendered for redemption.
The net asset value per share of each class of the Fund is computed by taking
the value of all of the Fund's assets attributable to a class, less the Fund's
liabilities attributable to a class, and dividing it 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.
Securities that 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 last
bid and asked prices. Securities for which no market quotations are readily
available (excluding those whose trading has been suspended) will be valued at
fair value as determined in good faith by the Board of Trustees, although the
actual computations may be made by persons acting pursuant to the direction of
the Board of Trustees.
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.
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 & Poors Mid-Cap 400 Index (described above);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
indexes 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 indexes 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
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<PAGE>
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
such 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.
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, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the Commission.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A, Class B and Class C 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
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investment on the last day of the designated period in accordance with the
following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000,
less the maximum sales load of $57.50 for
Class A shares or the deduction of the CDSC
for Class B and Class C shares at the end of
the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical
$1000 initial payment made at the
beginning of the designated period
(or fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class 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 a class's mean
account size.
The total returns for each Class of shares of the Funds as of September 30,
1996, are as follows:
Average Annual Total Return (%)
Since
One Year Five Years Ten Years Inception*
- ------------------- --------- ---------------- ----------- ---------------
Class A Shares 2.37 11.52 11.09 12.61
- ------------------- --------- ---------------- ----------- ---------------
- ------------------- --------- ---------------- ----------- ---------------
Class B Shares N/A N/A N/A 5.88
- ------------------- --------- ---------------- ----------- ---------------
- ------------------- --------- ---------------- ----------- ---------------
Class C Shares N/A N/A N/A 9.18
- ------------------- --------- ---------------- ----------- ---------------
*Inception was November 19, 1982 for Class A shares. Class B shares and Class
C shares were first offered February 1,
1996.
Automated Information Line
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FactFoneSM, 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's money market fund; and
o dividends and capital gains distributions on all
Pioneer mutual funds.
Yields are calculated in accordance with Commission mandated standard formulas.
In addition, by using a personal identification number ("PIN"), shareholders may
enter purchases, exchanges and redemptions, access their account balance and
last three transactions and may order a duplicate statement. See "FactFoneSM" in
the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted 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 and Class C
shares (except for the Pioneer money market 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.
17. FINANCIAL STATEMENTS
The Fund's financial statements for the fiscal year ended September 30, 1996 and
the Report of Independent Public Accountants included in this Statement of
Additional Information have been included in reliance upon the report of Arthur
Andersen LLP, independent public accountants, as experts in accounting and
auditing. The report of Independent Accountants and financial statements
included in the Fund's Annual Report for the fiscal year ended September 30,
1996, are incorporated by reference into this Statement of Additional
Information. The financial highlights table in the Prospectus and the financial
statements incorporated by reference into the Prospectus and Statement of
Additional Information have been so included and incorporated in reliance upon
the report of Arthur Andersen LLP, independent public accountants, given on
their authority as experts in accounting and auditing.
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<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
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 bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest 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.
- ---------------------------------------------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus 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.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
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Standard & Poor's Ratings Group 3
AAA: Bonds rated AAA are highest grade obligations. This rating indicates an
extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
- -------------------------------------------------
3 Rates all governmental bodies having $1,000,000 or more of debt outstanding,
unless adequate information is not available.
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<TABLE>
<CAPTION>
Pioneer Mid-Cap Fund
Class A
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Investment
Included Per Share Value
11/19/82 $10,000 $10.61 5.75% 942.507 $10.00 $9,425
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/82 $9,425 $0 $0 $9,425
12/31/83 $11,941 $161 $140 $12,242
12/31/84 $12,055 $335 $438 $12,828
12/31/85 $14,194 $803 $917 $15,914
12/31/86 $14,307 $2,094 $1,295 $17,696
12/31/87 $11,414 $3,381 $1,502 $16,297
12/31/88 $13,874 $5,060 $2,251 $21,185
12/31/89 $15,108 $7,311 $3,100 $25,519
12/31/90 $12,055 $7,039 $3,119 $22,213
12/31/91 $15,919 $9,579 $4,813 $30,311
12/31/92 $18,190 $12,106 $6,099 $36,395
12/31/93 $19,416 $15,856 $7,012 $42,284
12/31/94 $16,984 $16,297 $6,612 $39,893
12/31/95 $18,407 $21,522 $7,673 $47,602
12/31/96 $18,897 $26,818 $8,307 $54,022
</TABLE>
<TABLE>
<CAPTION>
Pioneer Mid-Cap Fund
Class B
Date Initial Offering Price Shares Purchased Net Asset Value per Intitial Net Asset CDSC
Investment Share Value
<S> <C> <C> <C> <C> <C> <C>
2/1/96 $10,000.00 $19.2800 518.672 $19.2800 $10,000 4.00%
Dividends and
Capital Gains
Reinvested
Value of Shares
Date From Investment From Cap Gains From Dividends Contingent Deferred Total Value
Reinvested Reinvested Sales Charge
12/31/96 $10,321 $1,004 $81 $400 $11,006
Pioneer Mid-Cap Fund
Class C
Date Initial Offering Price Shares Purchased Net Asset Value per Intitial Net Asset CDSC
Investment Share Value
<S> <C> <C> <C> <C> <C> <C>
2/1/96 $10,000.00 $19.2800 518.672 $19.2800 $10,000 1.00%
Dividends and
Capital Gains
Reinvested
Value of Shares
Date From Investment From Cap Gains From Dividends Contingent Deferred Total Value
Reinvested Reinvested Sales Charge
12/31/96 $1,001 $61 $100 $11,330
$10,368
</TABLE>
-36-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
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 Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) 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 Index 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.
-37-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, 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. Total returns
for 1977-1991 are calculated as the change in the flat price or and-interest
price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 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 1934-1942, almost all bonds
with maturities near 5 years were partially or full 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 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
Countries in the MSCI EMERGING MARKET FREE INDEX are: Argentina, Brazil, Chile,
China, Czech Republic, Colombia, Greece, Hungary, India, Indonesia, Israel,
Jordan, Korea Free (at 50%), Malaysia, Mexico Free, Pakistan, Peru, Philippines
Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan, Thailand, Turkey,
Venezuela Free
-38-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since 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.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. 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 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent 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 for
1977-1991; the CRSP U.S. 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.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
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 weighing at the beginning of the period.
Only those REITs listed for the entire period are
-39-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
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 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million. The Russell
3000 is comprised of the 3,000 largest US companies as determined by market
capitalization representing approximately 98% of the US equity market. The
largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 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 MidCap 400 Index 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.
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
LIPPER BALANCED FUNDS INDEX
Equally-weighted performance indices, 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%.
-40-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
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 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
-41-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Dow S&P/ S&P/
S&P Jones U.S. Small BARRA BARRA
500 Industrial Stock U.S. 500 500
Index Average Index Inflation Growth Value
----- ------- ----- --------- ------ -----
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
-42-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Dow S&P/ S&P/
S&P Jones U.S. Small BARRA BARRA
500 Industrial Stock U.S. 500 500
Index Average Index Inflation Growth Value
----- ------- ----- --------- ------ -----
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
Dec 1996 23.07 28.84 17.62 3.58 23.96 21.99
-43-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
----- ----- ----- --- ----- -------
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 0.1 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
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 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
-44-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
----- ----- ----- --- ----- -------
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -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 5.38 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 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -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 6.58 -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 19.3 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 16.8 11.21 5.21 26.39 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
-45-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
LIPPER MSCI EMERGING
RUSSELL 2000 WILSHIRE REAL S&P MIDCAP BALANCED MARKETS FREE BANK
NAREIT-EQUITY INDEX ESTATE 400 FUND INDEX SAVINGS ACCOUNT
SECURITIES INDEX INDEX
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 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
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
</TABLE>
-46-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
LIPPER MSCI EMERGING
RUSSELL 2000 WILSHIRE REAL S&P MIDCAP BALANCED MARKETS FREE BANK
NAREIT-EQUITY INDEX ESTATE 400 FUND INDEX SAVINGS ACCOUNT
SECURITIES INDEX INDEX
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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
Source: Lipper
</TABLE>
-50-
<PAGE>
APPENDIX B
OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the United States.
As of December 31, 1996, PMC employed a professional investment staff of 53,
with a combined average of 12 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1996, were
approximately $15.8 billion representing 1,086,554 shareholder accounts, 722,661
non-retirement accounts and 363,893 retirement accounts.
<PAGE>
<PAGE>
File Nos. 2-79140
811-3564
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial highlights of the Registrant for the fiscal year ended
September 30, 1996 are included in Part A of the Registration Statement
and the financial statements of the Registrant are incorporated by
reference into Part B of the Registration Statement from the 1996
Annual Report to Shareholders for the year ended September 30, 1996
(filed electronically on November 26, 1996; file no. 811-07525;
accession number 0000706155-96-000020).
(b) Exhibits:
1. Agreement and Declaration of Trust*
2. By-Laws*
3. None
4.1 Specimen Class A Share Certificate*
4.2 Specimen Class B Share Certificate*
4.3 Specimen Class C Share Certificate*
5. Management Contract*
6.1 Underwriting Agreement*
6.2 Form of Dealer Sales Agreement*
7. None
8. Form of Custodian Agreement
with Brown Brothers Harriman & Co.*
9. Investment Company Service Agreement*
10. Legal Opinion of Morris, Nichols, Arsht & Tunnell
<PAGE>
11. Consent of Arthur Andersen LLP
12. None
13. Form of Stock Purchase Agreement*
14. None
15.1 Class A Distribution Plan*
15.2 Class B Distribution Plan*
15.3 Class C Distribution Plan*
16. Description of Average Annual Total Return*
17. Financial Data Schedule
18. Multiple Class Plan Pursuant to Rule 18f-3*
19. Powers of Attorney*
- ------------------------
* Previously filed. Incorporated by reference from the exhibits filed
with the Registration Statement (File No. 2-79140), as amended, of the
Registrant.
Item 25. Persons Controlled By or Under
Common Control With Registrant
Percent State/Country
of of
Company Owned By Shares Incorporation
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer Capital Corp. (PCC) PGI 100% MA
Pioneer Fonds Marketing GmbH (GmbH) PGI 100% MA
Pioneer SBIC Corp. (SBIC) PGI 100% MA
Pioneer Associates, Inc. (PAI) PGI 100% MA
Pioneer International Corp. (PInt) PGI 100% MA
Pioneer Plans Corp. (PPC) PGI 100% MA
Pioneer Goldfields Ltd (PGL) PGI 100% MA
Pioneer Investments Corp. (PIC) PGI 100% MA
<PAGE>
Pioneer Metals and Technology,
Inc. (PMT) PGI 100% DE
Pioneer First Polish Trust Fund
Joint Stock Co. (First Polish) PGI 100% Poland
Teberebie Goldfields Ltd. (TGL) PGI 90% Ghana
Pioneer Funds Distributor, Inc.
(PFD) PMC 100% MA
SBIC's outstanding capital stock PCC 100% MA
THE FUNDS: All are parties to management contracts with PMC.
BUSINESS
FUND 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 MA
Pioneer II MA
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Fund 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, Inc. DE
OTHER:
.. SBIC is the sole general partner of Pioneer Ventures Limited Partnership, a
Massachusetts limited partnership.
.. ITI Pioneer AMC Ltd. (ITI Pioneer) (Indian Corp.), is a joint venture
between PMC and Investment Trust of India Ltd. (ITI) (Indian Corp.)
.. ITI and PMC own approximately 54% and 45%, respectively, of the total
equity capital of ITI Pioneer.
<PAGE>
JOHN F. COGAN, JR.
Owns approximately 14% of the outstanding shares of PGI.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
Pioneer Family of
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
PCC X
PSC X
PMC X X
PFD X X
TGL X X
First Polish X Member of
Supervisory Board
Hale and Dorr LLP Partner
GmbH Chairman of
Supervisory Board
Item 26. Number of Holders of Securities
At December 31, 1996, there were approximately 55,523 holders
ofthe Registrant's Class A shares, 368 holders of the Registrant's Class B
shares and 34 holders of the Registrant's Class C shares.
<PAGE>
Item 27. Indemnification
Except for the Declaration of Trust dated January 12, 1996,
establishing the Registrant as a Trust under Delaware law, there is no contract,
arrangement or statute under which any director, officer, underwriter or
affiliated person of the Registrant is insured or indemnified. The Declaration
of Trust 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.
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 Pioneering Management Corporation. The following
sections of such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Positions and Offices Positions and Offices
Name with Underwriter with 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 None
Vice President
Stephen W. Long Senior None
Vice President
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Rice 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 None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
(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
The Registrant is not a party to any management-related
service contract, except as described in the Prospectus and Statement of
Additional Information.
<PAGE>
Item 32. Undertaking
(a) Not applicable.
(b) Not applicable.
(c) The Registrant hereby 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 22 to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 22 to such
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston and The Commonwealth of Massachusetts, on
the 27 th day of January, 1997.
PIONEER MID-CAP FUND
By:/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 22 to the Registrant's Registration Statement has
been signed below by the following persons in the capacities and on the date
indicated:
Signature Title
/s/ John F. Cogan, Jr. Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
William H. Keough* Chief Financial Officer )
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
Trustees: )
)
)
/s/ John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
)
)
Margaret B. W. Graham* )
Margaret B. W. Graham )
)
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
)
David D. Tripple* )
David D. Tripple )
)
)
)
Stephen K. West* )
Stephen K. West )
)
)
)
John Winthrop* )
John Winthrop )
)
)
*By:/s/ John F. Cogan, Jr. Dated: January 27, 1997
John F. Cogan, Jr.
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
10. Legal Opinion of Morris, Nichols, Arsht & Tunnell
11. Consent of Arthur Andersen LLP
17. Financial Data Schedule
January 23, 1997
Pioneer Mid-Cap Fund
60 State Street
Boston, Massachusetts 02109
Re: Pioneer Mid-Cap Fund
Ladies and Gentlemen:
We have acted as special Delaware counsel to Pioneer Mid-Cap
Fund, a Delaware business trust (the "Trust"), in connection with certain
matters relating to the formation of the Trust and the issuance of Shares of
beneficial interest in the Trust. Capitalized terms used herein and not
otherwise herein defined are used as defined in the Agreement and Declaration of
Trust of the Trust dated January 12, 1996 (the "Governing Instrument").
In rendering this opinion, we have examined copies of the
following documents, each in the form provided to us: the Certificate of Trust
of the Trust as filed in the Office of the Secretary of State of the State of
Delaware (the "Recording Office") on January 29, 1996 (the "Certificate"); the
Governing Instrument; the By-laws of the Trust; certain resolutions of the
Trustees of the Trust; an Adoption Of And Amendment To Notification Of
Registration as filed with the Securities and Exchange Commission on February 1,
1996 by which the Trust adopted the Notification of Registration Filed Pursuant
to Section 8(a) of the Investment Company Act of 1940 on Form N-8A of Pioneer
Three, a Massachusetts business trust; Post-Effective Amendment No. 21 to the
Registration Statement on Form N-1A (the "Registration Statement") of Pioneer
Three, a Massachusetts business trust, by which the Trust adopted the
Registration Statement as filed with the Securities and Exchange Commission on
February 1, 1996; Post-Effective Amendment No. 22 to the Registration Statement
to be filed with The Securities and Exchange Commission on or about the date
hereof (the "Post-Effective Amendment"); and a certification of good standing of
the Trust obtained as of a recent date from the Recording Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents
<PAGE>
of all documents submitted to us as copies or drafts of documents to be
executed, and the legal capacity of natural persons to complete the execution of
documents. We have further assumed for the purpose of this opinion: (i) the due
authorization, execution and delivery by, or on behalf of, each of the parties
thereto of the above-referenced instruments, certificates and other documents,
and of all documents contemplated by the Governing Instrument, the By-laws and
applicable resolutions of the Trustees to be executed by investors desiring to
become Shareholders; (ii) the payment of consideration for Shares, and the
application of such consideration, as provided in the Governing Instrument, and
compliance with the other terms, conditions and restrictions set forth in the
Governing Instrument and all applicable resolutions of the Trustees of the Trust
in connection with the issuance of Shares (including, without limitation, the
taking of all appropriate action by the Trustees to designate Series of Shares
and the rights and preferences attributable thereto as contemplated by the
Governing Instrument); (iii) that appropriate notation of the names and
addresses of, the number of Shares held by, and the consideration paid by,
Shareholders will be maintained in the appropriate registers and other books and
records of the Trust in connection with the issuance, redemption or transfer of
Shares; (iv) that no event has occurred subsequent to the filing of the
Certificate that would cause a termination or reorganization of the Trust under
Section 4 or Section 5 of Article IX of the Governing Instrument; (v) that the
activities of the Trust have been and will be conducted in accordance with the
terms of the Governing Instrument and the Delaware Business Trust Act, 12 Del.
C. ss.ss. 3801 et seq. (the "Delaware Act"); and (vi) that each of the documents
examined by us is in full force and effect and has not been modified,
supplemented or otherwise amended, except as herein referenced. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. Further, we express no opinion on
the sufficiency or accuracy of any registration or offering documentation
relating to the Trust or the Shares. As to any facts material to our opinion,
other than those assumed, we have relied without independent investigation on
the above-referenced documents and on the accuracy, as of the date hereof, of
the matters therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing
business trust in good standingunder the laws of the State of Delaware.
2. The Shares registered by the Post-Effective Amendment, when
issued to Shareholders in accordance with the terms, conditions, requirements
and procedures set forth in the Governing Instrument, will constitute legally
issued, fully paid and non-assessable Shares of beneficial interest in the
Trust.
<PAGE>
Pioneer Mid-Cap Fund
January 23, 1997
Page 3
3. Under the Delaware Act and the terms of the Governing
Instrument, each Shareholder of the Trust, in such capacity, will be entitled to
the same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the general corporation law of
the State of Delaware; provided, however, that we express no opinion with
respect to the liability of any Shareholder who is, was or may become a named
Trustee of the Trust. Neither the existence nor exercise of the voting rights
granted to Shareholders under the Governing Instrument will, of itself, cause a
Shareholder to be deemed a trustee of the Trust under the Delaware Act.
Notwithstanding the foregoing or the opinion expressed in paragraph 2 above, we
note that, pursuant to Section 2 of Article VIII of the Governing Instrument,
the Trustees have the power to cause Shareholders, or Shareholders of a
particular Series, to pay certain custodian, transfer, servicing or similar
agent charges by setting off the same against declared but unpaid dividends or
by reducing Share ownership (or by both means).
We understand that you are about to register 9,622,220 Shares
of beneficial interest in the Trust by the Post-Effective Amendment, and we
hereby consent to the filing of a copy of this opinion with the Securities and
Exchange Commission as part of the Post-Effective Amendment. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as provided in this paragraph, the opinion set forth above is
expressed solely for the benefit of the addressee hereof and may not be relied
upon by, or filed with, any other person or entity for any purpose without our
prior written consent.
Sincerely,
MORRIS, NICHOLS, ARSHT & TUNNELL
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 31, 1996
for Pioneer Mid-Cap Fund and to all references to our firm included in or made a
part of Post-Effective Amendment No. 22 and Amendment No. 22 to registration
statement File Nos. 2-79140 and 811-3564, respectively.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 23, 1997
[ARTICLE] 6
[CIK] 0000706155
[NAME] PIONEER MID-CAP FUND
[SERIES]
[NUMBER] 001
[NAME] PIONEER MID-CAP CLASS A
[MULTIPLIER] 1,000
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1996
[PERIOD-END] SEP-30-1996
[INVESTMENTS-AT-COST] 745519
[INVESTMENTS-AT-VALUE] 1009083
[RECEIVABLES] 13628
[ASSETS-OTHER] 24
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 1022735
[PAYABLE-FOR-SECURITIES] 4101
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 5139
[TOTAL-LIABILITIES] 9240
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 661790
[SHARES-COMMON-STOCK] 47735
[SHARES-COMMON-PRIOR] 50391
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 88141
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 263564
[NET-ASSETS] 1013495
[DIVIDEND-INCOME] 12426
[INTEREST-INCOME] 5244
[OTHER-INCOME] 0
[EXPENSES-NET] (8939)
[NET-INVESTMENT-INCOME] 8731
[REALIZED-GAINS-CURRENT] 100500
[APPREC-INCREASE-CURRENT] (28131)
[NET-CHANGE-FROM-OPS] 81100
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (14724)
[DISTRIBUTIONS-OF-GAINS] (84356)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 2024
[NUMBER-OF-SHARES-REDEEMED] 9576
[SHARES-REINVESTED] 4895
[NET-CHANGE-IN-ASSETS] (50670)
[ACCUMULATED-NII-PRIOR] 6320
[ACCUMULATED-GAINS-PRIOR] 71679
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 4935
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 9092
[AVERAGE-NET-ASSETS] 1007776
[PER-SHARE-NAV-BEGIN] 21.48
[PER-SHARE-NII] 0.18
[PER-SHARE-GAIN-APPREC] 1.47
[PER-SHARE-DIVIDEND] (0.30)
[PER-SHARE-DISTRIBUTIONS] (1.71)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 21.12
[EXPENSE-RATIO] 0.90
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000706155
[NAME] PIONEER MID-CAP FUND
[SERIES]
[NUMBER] 002
[NAME] PIONEER MID-CAP CLASS B
[MULTIPLIER] 1,000
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] SEP-30-1996
[PERIOD-END] SEP-30-1996
[INVESTMENTS-AT-COST] 745519
[INVESTMENTS-AT-VALUE] 1009083
[RECEIVABLES] 13628
[ASSETS-OTHER] 24
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 1022735
[PAYABLE-FOR-SECURITIES] 4101
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 5139
[TOTAL-LIABILITIES] 9240
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 661790
[SHARES-COMMON-STOCK] 235
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 88141
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 263564
[NET-ASSETS] 1013495
[DIVIDEND-INCOME] 12426
[INTEREST-INCOME] 5244
[OTHER-INCOME] 0
[EXPENSES-NET] (8939)
[NET-INVESTMENT-INCOME] 8731
[REALIZED-GAINS-CURRENT] 100500
[APPREC-INCREASE-CURRENT] (28131)
[NET-CHANGE-FROM-OPS] 81100
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (8)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 266
[NUMBER-OF-SHARES-REDEEMED] 31
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] (50670)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 4935
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 9092
[AVERAGE-NET-ASSETS] 1383
[PER-SHARE-NAV-BEGIN] 19.28
[PER-SHARE-NII] 0.12
[PER-SHARE-GAIN-APPREC] 1.78
[PER-SHARE-DIVIDEND] (0.16)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 21.02
[EXPENSE-RATIO] 1.68
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000706155
[NAME] PIONEER MID-CAP FUND
[SERIES]
[NUMBER] 003
[NAME] PIONEER MID-CAP CLASS C
[MULTIPLIER] 1,000
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] SEP-30-1996
[PERIOD-END] SEP-30-1996
[INVESTMENTS-AT-COST] 745519
[INVESTMENTS-AT-VALUE] 1009083
[RECEIVABLES] 13628
[ASSETS-OTHER] 24
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 1022735
[PAYABLE-FOR-SECURITIES] 4101
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 5139
[TOTAL-LIABILITIES] 9240
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 661790
[SHARES-COMMON-STOCK] 18
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 88141
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 263564
[NET-ASSETS] 1013495
[DIVIDEND-INCOME] 12426
[INTEREST-INCOME] 5244
[OTHER-INCOME] 0
[EXPENSES-NET] (8939)
[NET-INVESTMENT-INCOME] 8731
[REALIZED-GAINS-CURRENT] 100500
[APPREC-INCREASE-CURRENT] (28131)
[NET-CHANGE-FROM-OPS] 81100
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (1)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 18
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] (50670)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 4935
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 9092
[AVERAGE-NET-ASSETS] 206
[PER-SHARE-NAV-BEGIN] 19.28
[PER-SHARE-NII] 0.03
[PER-SHARE-GAIN-APPREC] 1.93
[PER-SHARE-DIVIDEND] (0.12)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 21.12
[EXPENSE-RATIO] 1.96
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
