March 11, 1996
PIONEER FUND
Supplement dated February , 1996
to Prospectus dated April 24, 1995
The Trustees of Pioneer Fund (the "Fund") have approved certain changes to the
Fund's operations, including a new management contract with a performance based
management fee. These changes have been submitted for shareholder approval at a
meeting scheduled to be held in April, 1996. If approved by shareholders, the
changes will take effect on May 1, 1996.
EXPENSE INFORMATION
As more fully described below, the Fund has submitted for shareholder approval a
proposed management contract under which the basic rate of management fee
payable to Pioneering Management Corporation ("PMC") would be increased or
decreased based upon the Fund's investment performance relative to the record of
a benchmark securities index. Under the proposed contract, the "Annual Operating
Expenses" and the "Example" shown on pages 2 of the prospectus would change as
set forth below. The "Shareholder Transaction Expenses" shown on page 2 of the
prospectus would not change as a result of the new contract.
The information in the table below is based on the Fund's actual expenses for
the year ended December 31, 1994. Management fees have been restated to reflect
the basic, maximum and minimum fees payable under the proposed contract. Actual
management fees and total operating expenses for the fiscal year ended December
31, 1994 were 0.45% and 0.94%, respectively, under the management contract
currently in effect. Had the proposed contract been in effect throughout this
period management fees and total operating expenses would have been the same as
shown under the basic fee column below.
Annual Fund Operating Expenses (As a Percentage of Average Net Assets):
Management Fee
Basic Maximum Minimum
Management Fee 0.60% 0.70% 0.50%
12b-1 Fees 0.16% 0.16% 0.16%
Other Expenses (including accounting and transfer
agent fees, custodian fees and printing expenses) 0.33% 0.33% 0.33%
---- ---- ----
Total Operating Expenses 1.09% 1.19% 0.99%
==== ==== ====
Example:
You would pay the following fees and expenses on a $1,000 investment, assuming a
5% annual return and redemption at the end of each time period:
Management Fee 1 Year 3 Years 5 Years 10 Years
Basic $68 $90 $114 $183
Maximum $69 $93 $119 $194
Minimum $67 $87 $109 $172
The example above assumes the reinvestment of all dividends and distributions
and that the percentage amounts listed above under "Annual Operating Expenses"
remain the same each year.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSE OR RETURN. ACTUAL FUND EXPENSES
AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
<PAGE>
MANAGEMENT FEE
Under the proposed management contract, as compensation for its management
related services and certain expenses which PMC incurs on behalf of the Fund,
the Fund would pay PMC a management fee that is comprised of two components. The
first component is a basic fee equal to 0.60% 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 Fund for the
performance period exceeds, or is exceeded by, the record of the index
determined by the Fund to be appropriate over the same period. The Trustees have
initially designated the Lipper Growth & Income Funds Index (the "Index") for
this purpose. 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 0.01%.
Thus, the maximum annualized adjustment rate is +/- 0.10%. This performance
comparison is made at the end of each month. An appropriate percentage of this
rate (based upon the number of days in the current month) 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.
Because the adjustment to the Basic Fee is based on the comparative performance
of the Fund and the record of the Index, the controlling factor is not whether
Fund performance is up or down, but whether it is up or down more or less than
the record of the Index. Moreover, the comparative investment performance of the
Fund is based solely on the relevant performance period without regard to the
cumulative performance over a longer or shorter period of time.
From time to time, the Trustees may determine that another securities index is a
more appropriate benchmark for purposes of evaluating the performance of the
Fund. In such event, a successor index may be substituted for the Index in
prospectively calculating the performance based adjustment to the Basic Fee.
However, the calculation of the performance adjustment for the performance
period prior to the adoption of the successor index would still be based upon
the Fund's performance compared to the index.
As indicated above, if approved by shareholders, the proposed contract with PMC
will become effective May 1, 1996. Accordingly, beginning in May, 1996, the Fund
will pay management fees at a rate equal to the Basic Fee plus or minus the
amount of the performance adjustment for the current month and the preceding
thirty-five months. In this regard, the performance adjustment for the
thirty-five month period prior to the effectiveness of the Proposed Contract
would likely -- on the basis of performance since April 1993 -- result in a
negative adjustment to the Basic Fee.
The Basic Fee is computed daily, the performance fee adjustment is
calculated once per month and the entire management fee is paid monthly.
INVESTMENT POLICIES
Changes in the Fund's policy relating to investments in repurchase agreements
and in a number of the fundamental investment restrictions set forth in the
Fund's statement of additional information have also been proposed. However,
none of these changes are expected to have a material effect on the Fund's
current investment operations.
0296-3194
(C) Pioneer Funds Distributor, Inc.
