October 17, 1997
SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION FOR
FUND DATED
PIONEER FUND April 30, 1997
PIONEER II January 28, 1997
The following supplements the corresponding section of the Statement of
Additional Information. Please consult the Statement of Additional Information
for the full text of the supplemented section.
1. INVESTMENT RESTRICTIONS AND POLICIES
Restricted and Illiquid Securities
Restricted securities are securities which cannot be resold or
distributed to the public without an effective registration under the Securities
Act of 1933 (the "1933 Act"). Illiquid securities are securities which at the
time of investment are not readily marketable. For the purposes of this
Statement of Additional Information, restricted securities exclude any
restricted securities that have been determined by the Trustees (or their
designee) to be readily marketable such as restricted securities
eligible for resale to certain institutional investors pursuant to Rule 144A of
the 1933 Act or foreign securities which are offered or sold outside the United
States. The Fund's practice of investing in Rule 144A securities could have the
effect of increasing the level of illiquidity in the Fund to the extent that
qualified institutional buyers become for a time uninterested in purchasing
these restricted securities.
The Board of Trustees has the ultimate responsibility for determining
whether specific securities, including Rule 144A securities, are liquid or
illiquid. The Board has delegated the function of making day to day
determinations of liquidity to PMC, pursuant to guidelines reviewed by the
Trustees. PMC takes into account a number of factors in reaching liquidity
decisions. These factors may include but are not limited to: (i) the frequency
of trading in the security; (ii) the number of dealers who make quotes in the
securities; (iii) the number of dealers who have undertaken to make a market in
the security; (iv) the number of potential purchasers; and (v) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). PMC will
monitor the liquidity of securities in the Fund's portfolio and report
periodically to the Trustees.
Repurchase Agreements
The Fund may enter into repurchase agreements not exceeding seven days
in duration. In a repurchase agreement, an investor (e.g., the Fund) purchases a
debt security from a seller which undertakes to repurchase the security at a
specified resale price on an agreed future date (ordinarily a week or less). The
resale price generally exceeds the purchase price by an amount which reflects an
agreed-upon market interest rate for the term of the repurchase agreement.
Repurchase agreements entered into by the Fund will be fully collateralized with
U.S. Treasury and/or U.S. government agency obligations with a market value of
not less than 100% of the obligation, valued daily. Collateral will be held in a
segregated, safekeeping account for the benefit of the Fund. 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 or if
the Fund is prevented from realizing the value of the collateral by reason of an
order of a court with jurisdiction over an insolvency proceeding with respect to
the other party to the repurchase agreement.
<PAGE>
2. MANAGEMENT OF THE FUND
MARY K. BUSH, Trustee, DOB: April 1948
4201 Cathedral Ave. NW, Washington, DC 20016
President, Bush & Co., an International Financial Advisory firm, since
1991; Director/Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc., Small Enterprise Assistance Fund and Wilberforce
University; Advisory Board member, Washington Mutual Investors Fund, a
registered investment company; U.S. Alternate Executive Director, International
Monetary Fund (1984-1988); and Managing Director, Federal Housing Finance Board
(1989-1991), and Trustee of all of the Pioneer mutual funds, except Pioneer
Variable Contracts Trust.
The table disclosing trustee compensation is supplement as follows:
Total Compensation from the
Pension or Fund and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Trustee From the Fund Accrued of Mutual Funds**
Mary K. Bush+ $0 $0 $0
--------
+ Mary K. Bush became a Trustee on June 23, 1997.
