Pioneer II
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
MAY 1, 1996
The investment objectives of Pioneer II (the "Fund") are reasonable
income and growth of capital. The Fund seeks these objectives by investing in
a broad list of carefully selected, reasonably priced securities rather than
in securities whose prices reflect a premium resulting from their current
market popularity. Pioneer II follows a policy of investing a portion of its
assets, not to exceed 25%, in foreign securities.
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 SECURITIES ISSUED BY
FOREIGN COMPANIES OR GOVERNMENTS ENTAIL RISKS IN ADDITION TO THOSE CUSTOMARILY
ASSOCIATED WITH INVESTING IN U.S. SECURITIES. 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 OBJECTIVES AND POLICIES"
FOR A DISCUSSION OF THESE RISKS.
This Prospectus provides the information about the Fund that you
should know before investing in the Fund. Please read and retain it for your
future reference. More information about the Fund is included in the
Statement of Additional Information, also dated May 1, 1996, which is incorpor
ated into this Prospectus by reference. A copy of the Statement of Additional
Information and the Fund's most recent Annual Report 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.
TABLE OF CONTENTS PAGE
- --------------------------------------------------------------------------------
I. EXPENSE INFORMATION......................................... 2
II. FINANCIAL HIGHLIGHTS........................................ 2
III. INVESTMENT OBJECTIVES AND POLICIES.......................... 3
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..................................... 10
IX. HOW TO EXCHANGE FUND SHARES................................. 11
X. DISTRIBUTION PLANS........................................... 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION....................... 12
XII. SHAREHOLDER SERVICES........................................ 13
Account and Confirmation Statements..................... 13
Additional Investments.................................. 13
Automatic Investment Plans.............................. 13
Financial Reports and Tax Information................... 13
Distribution Options.................................... 13
Directed Dividends...................................... 13
Direct Deposit.......................................... 14
Voluntary Tax Withholding............................... 14
Telephone Transactions and Related Liabilities.......... 14
FactFone [Service Mark]................................. 14
Retirement Plans........................................ 14
Telecommunications Device for the Deaf (TDD)............ 14
Systematic Withdrawal Plans............................. 14
Reinstatement Privilege (Class A Shares Only).......... 14
XIII. THE FUND................................................ 15
XIV. INVESTMENT RESULTS...................................... 15
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in the
Fund. The table reflects expenses based on actual Class A expenses for the
fiscal year ended September 30, 1995. Management fees have been restated to
reflect the maximum, basic and minimum fees payable to Pioneering Management
Corporation ("PMC") under the most recently approved management contract. See
"Management of the Fund." Actual management fees and total operating expenses
for the fiscal year ended September 30, 1995 were 0.45% and 0.93%, respectively,
under a management contract previously in effect. For Class B and Class C
shares, operating expenses are based on estimated expenses that would have been
incurred if such shares had been outstanding for the entire fiscal year ended
September 30, 1995.
SHAREHOLDER TRANSACTION EXPENSES:
CLASS A CLASS B CLASS C+
------- ------- ---------
Maximum Initial Sales Charge on
Purchases (as a percentage
of offering price) 5.75% None None
Maximum Sales Charge on
Reinvestment of Dividends None None None
Maximum Deferred
Sales Charge None [1] 4.00% 1.00%
Redemption Fee [2] None None None
Exchange Fee None None None
ANNUAL OPERATING EXPENSES (as a percentage
of average net assets):
MANAGEMENT FEE [3]
---------------------------
CLASS A SHARES BASIC MAXIMUM MINIMUM
Management Fee 0.60% 0.70% 0.50%
12b-1 Fees 0.19% 0.19% 0.19%
Other Expenses (including
accounting and transfer
agent fees, custodian
fees and printing expenses) 0.29% 0.29% 0.29%
---- ---- ----
TOTAL OPERATING EXPENSES 1.08% 1.18% 0.98%
==== ==== ====
CLASS B SHARES
Management Fee 0.60% 0.70% 0.50%
12b-1 Fees 1.00% 1.00% 1.00%
Other Expenses (including
transfer agent fee, custodian
fees and accounting and
printing expenses) 0.29% 0.29% 0.29%
---- ---- ----
TOTAL OPERATING EXPENSES 1.89% 1.99% 1.79%
==== ==== ====
CLASS C SHARES
Management Fee 0.60% 0.70% 0.50%
12b-1 Fees 1.00% 1.00% 1.00%
Other Expenses (including
transfer agent fee, custodian
fees and accounting and
printing expenses) 0.29% 0.29% 0.29%
---- ---- ----
TOTAL OPERATING EXPENSES 1.89% 1.99% 1.79%
==== ==== ====
+ Class B and Class C shares will first be offered on July 1, 1996.
[1] Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge. A contingent
deferred sales charge of 1% may, however, be charged on redemptions by such
accounts of shares held less than one year, as further described under "How
to Sell Fund Shares."
[2] Separate fees (currently $10 and $20, respectively) apply to domestic or
international bank wire transfers of redemption proceeds.
[3] Expenses include amounts paid in connection with third party
brokerage/service and certain expense offset arrangements. See "Financial
Highlights."
EXAMPLE:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and constant expenses, with or without redemption at the end of
each time period:
1 3 5 10
Year Years Years Years
---- ----- ----- -----
Class A shares
Management Fee
Basic $10 $32 $56 $125
Maximum $11 $35 $61 $135
Minimum $ 9 $29 $51 $113
Class B shares*
- --Assuming complete redemption
at end of period
Management Fee
Basic $59 $89 $122 $200
Maximum $60 $92 $127 $211
Minimum $58 $86 $117 $189
- --Assuming no redemption
Management Fee
Basic $19 $59 $102 $200
Maximum $20 $62 $107 $211
Minimum $18 $56 $97 $189
Class C shares**
- --Assuming complete redemption
at end of period
Management Fee
Basic $29 $59 $102 $200
Maximum $30 $62 $107 $232
Minimum $28 $56 $97 $211
- --Assuming no redemption
Management Fee
Basic $19 $59 $102 $200
Maximum $20 $62 $107 $232
Minimum $18 $56 $97 $211
- ----------
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject to a
1% contingent deferred sales charge (CDSC).
The example above assumes reinvestment of all dividends and distributions
and that the percentage amounts listed 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 PAST OR FUTURE EXPENSES OR RETURN. ACTUAL FUND
EXPENSES AND RETURN VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
management fees and 12b-1 fees are paid, see "Management of the Fund,"
"Distribution Plans" and "How to Buy Fund Shares" in this Prospectus and
Management of the Fund and Principal Underwriter and "Distribution Plans" in the
Statement of Additional Information. The Funds 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 Rules of Fair Practice of the National
Association of Securities Dealers, Inc. (NASD).
The maximum sales charge is reduced on purchases of specified amounts of
Class A shares and the value of shares owned in other Pioneer mutual funds is
taken into account in determining the applicable sales charge. See "How to Buy
Fund Shares." No sales charge is applied to exchanges of shares of other
publicly available Pioneer mutual funds. See "How to Exchange Fund Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants, in connection with their audit of the
Fund's financial statements. Arthur Andersen LLP's report on the Fund's
financial statements as of September 30, 1995 appears in the Fund's Annual
Report which is incorporated by reference in the Statement of Additional
Information. Class B and Class C shares are new classes of shares; no
financial highlights exist for either Class B or Class C shares. 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.
<TABLE>
<CAPTION>
PIONEER II
FOR EACH CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR:
FOR THE YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period. $19.38 $20.55 $18.86 $18.22 $15.35 $21.12 $18.29 $24.09 $18.48 $16.65
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Increase/decrease from
investment operations
Net investment
income............ $ 0.35 $ 0.36 $ 0.38 $ 0.44 $ 0.52 $ 0.59 $ 0.65 $ 0.54 $ 0.46 $ 0.43
Net realized and
unrealized gain
(loss) on
investments and
other foreign
currency
transactions...... 3.04 1.05 2.85 1.27 3.16 (3.81) 3.84 (3.86) 6.67 3.07
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total increase/
decrease from
investment
operations...... $ 3.39 $ 1.41 $ 3.23 $ 1.71 $ 3.68 $(3.22) $ 4.49 $(3.32) $ 7.13 $ 3.50
Distribution to
shareholders from
Net investment
income.......... (0.30) (0.33) (0.39) (0.47) (0.55) (0.64) (0.62) (0.48) (0.49) (0.52)
Net realized
capital gains... (1.81) (2.25) (1.15) (0.60) (0.26) (1.91) (1.04) (2.00) (1.03) (1.15)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase (decrease)
in net asset value.. $ 1.28 $(1.17) $ 1.69 $ 0.64 $ 2.87 $(5.77) $ 2.83 $ (5.80) $ 5.61 $ 1.83
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period....... $20.66 $19.38 $20.55 $18.86 $18.22 $15.35 $21.12 $18.29 $24.09 $18.48
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return*......... 19.92% 7.37% 18.15% 9.92% 24.61% (17.16%) 26.55% (12.04%) 41.37% 22.77%
Ratio of net operating
expenses to average
net assets.......... 0.93%** 0.90%+ 0.96%+ 0.94%+ 0.83% 0.75% 0.77% 0.81% 0.75% 0.72%
Ratio of net
investment income to
average net assets.. 1.85%** 1.59%+ 1.89%+ 2.31%+ 3.02% 3.18% 3.31% 3.06% 2.18% 2.43%
Portfolio turnover
rate................ 63% 68% 66% 64% 46% 42% 34% 30% 26% 29%
Net assets end
of period
(in thousands) ..... 5,114,963 4,509,225 4,347,672 3,974,712 4,039,234 3,588,735 4,411,923 3,724,615 4,456,459 2,841,545
Ratios net of expenses
paid through third
party brokerage/
service and certain
expense offset
arrangements:
Net operating
expenses........ 0.91% 0.90% 0.95% 0.93% -- -- -- -- -- --
Net investment
income.......... 1.87% 1.59% 1.90% 2.32% -- -- -- -- -- --
___________________
<FN>
* Assumes initial investment at net asset value at the beginning of each year, reinvestment of all distributions, and the complete
redemption of the investment at the net asset value at the end of each year and no sales charges. Total return would be reduced
if sales charges were taken into account.
** Ratios include expenses paid through third party brokerage/service and certain expense offset arrangements.
+ Ratios for 1994, 1993 and 1992 have been modified to comply with certain provisions of SEC Release No. 33-7197: Payment for
Investment Company Services with Brokerage Commissions. Ratios of net operating expenses and net investment income to average
net assets prior to 1992 have not been modified as such.
</FN>
</TABLE>
III. INVESTMENT OBJECTIVES AND POLICIES
The objectives of the Fund are reasonable income and growth of capital. The
Fund seeks these objectives by investing in a broad list of carefully selected,
reasonably priced securities rather than in securities whose prices reflect a
premium resulting from their current market popularity. As all investments are
subject to inherent market risks and fluctuations in value due to earnings,
economic conditions and other factors, the Fund, of course, cannot give
assurance that its investment objectives will be achieved.
The major portion of the Fund's assets will be invested in equity
securities, including common and preferred stocks and securities convertible
into common or preferred stocks. Assets of the Fund will be substantially fully
invested at all times and, by this means, management intends to avoid
speculating upon broad changes in the level of the market.
In general, the largest portion of the Fund's portfolio, at any time, will
consist of securities which have yielded their holders an interest or dividend
return within the preceding twelve months; but non-income-producing securities
may be held for anticipated increases in value.
It is the policy of the Fund not to engage in trading for short-term
profits and the Fund intends to limit its portfolio turnover to the extent
practicable. 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 investment decision, and usually without reference to the length of time a
security has been held. Accordingly, portfolio turnover rate will not be
considered a limiting factor in the execution of investment decisions. See
"Financial Highlights" for the Fund's actual turnover rate.
The Fund may purchase put and call options on securities indices to manage
cash flow and to attempt to remain fully
3
<PAGE>
invested in the stock market, instead of or in addition to buying
and selling stocks. the Fund may also purchase these options in order to
hedge against risks of market-wide price fluctuations. Options on securities
indices are similar to options on securities except that the delivery
requirements are different. Unlike a securities option, which gives the
holder the right to purchase or sell a specified security at a specified
price, an option on a securities index gives the holder the right to receive
a cash "exercise settlement amount" equal to (i) the difference between the
exercise price of the option and the value of the underlying securities index
on the exercise date, (ii) multiplied by a fixed "index multiplier." In
exchange for undertaking the obligation to make such a cash payment, the
writer of the securities index option receives a premium.
Gains or losses on the Fund's transactions in securities index options
depend on price movements in the securities market generally (or, for narrow
market indices, in a particular industry or segment of the market) rather than
the price movement of individual securities held by the Fund. The effectiveness
of hedging through the purchase of stock index options will depend upon the
extent to which price movements in the portion of the securities portfolio being
hedged correlate with the price movements in the selected stock index. Perfect
correlation may not be possible because the securities held or to be acquired by
the Fund may not exactly match the composition of the stock index on which
options are written. If the forecasts of the Fund's investment adviser regarding
movements in securities prices are incorrect, the Fund's investment results may
have been better without the hedge. a more thorough description of these
investment practices and their associated risks is contained in the Fund's
Statement of Additional Information.
The Fund may sell a securities index option it has purchased or write
a similar option prior to the expiration of the purchased option in order to
close out its position in a securities index option which it has purchased.
The Fund may also allow options to expire unexercised, which would result in
the loss of the premium paid. There is no assurance that a liquid secondary
market will exist for any particular option at any particular time, and the
Fund may therefore be unable to effect closing transactions on, or sell,
options it has purchased. The Fund will not invest more than 20% of its net
assets in premiums on index put and call options.
The Fund may also invest a portion of its portfolio in temporary cash
investments including finance company obligations, corporate commercial paper
and other short-term commercial obligations, in each case rated or issued by
companies with similar securities outstanding that are rated Prime-1 or Aa or
better by Moody's Investors Service or A-1 or AA or better by Standard & Poor's
Ratings Group or, if unrated, of comparable quality as determined by the Fund's
investment adviser.
The objectives and policies described above may not be changed without
shareholder approval. Other investment policies and restrictions on investment
are described in the Statement of Additional Information, including a policy on
lending portfolio securities. Among these other investment policies and
restrictions on investments, the Fund follows a practice of generally investing
between 10% and 25% of its assets in foreign securities. The Fund may invest up
to 5% of its net assets in securities of issuers located in countries with
emerging economies or securities markets. See "Investments in Emerging Markets"
in the Statement of Additional Information. In addition, no more than 5% of the
Fund's net assets may be invested in debt securities, including convertible
securities, which are rated below investment grade or the equivalent.
Investing in securities of foreign companies and countries involves certain
considerations and risks which are not typically associated with investing in
U.S. government securities and securities of domestic companies. Foreign
companies are not generally subject to uniform accounting, auditing and
financial standards and requirements comparable to those applicable to 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. Interest and dividends paid by foreign issuers and, in some
cases, gains realized upon the sale of foreign securities may be subject to
withholding and other foreign taxes which may decrease the net return on such
investments as compared to the Fund's net return from securities issued by the
U.S. government or by domestic companies. In addition, there may be the
possibility of expropriations, confiscatory taxation, political, economic or
social instability or diplomatic developments which could affect assets of the
Fund held in foreign countries. The value of foreign securities may be adversely
affected by fluctuations in the relative rates of exchange between the
currencies of different nations and by exchange control regulations. There may
be less publicly available information about foreign companies and governments
compared to reports and ratings published about U.S. companies. 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. Each of these risks may be heightened
in the case of investments in emerging markets. See "Investment Policies and
Restrictions" in the Statement of Additional Information.
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency contracts to facilitate
settlement of foreign securities transactions or to protect against changes in
foreign currency exchange rates. A forward foreign currency contract involves an
obligation to purchase or sell a specific currency on a future date, at a price
set at the time of the contract. The Fund might sell a foreign currency on
either a spot or forward basis to hedge against an anticipated decline in the
dollar value of securities in its portfolio or securities it intends or has
contracted to sell or to preserve the U.S. dollar value of dividends, interest
or other amounts it expects to receive. Although this strategy could minimize
the risk of loss due to a decline in the value of the hedged foreign currency,
it could also limit any potential gain which might result from an increase in
the value of the currency. Alternatively, the Fund might purchase a foreign
currency or enter into a forward purchase contract for the currency to preserve
the U.S. dollar price of securities it is authorized to purchase or has
contracted to purchase.
The Fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency (including the U.S. dollar), if the Fund's investment
adviser determines that there is a pattern of correlation between the two
currencies. Cross-hedging may also include entering into a forward transaction
involving two
4
<PAGE>
foreign currencies, using one foreign currency as a proxy for the U.S. dollar
to hedge against variations in the other foreign currency if the investment
adviser determines that there is a pattern of correlation between the proxy
currency and the U.S. dollar.
If the Fund enters into a forward contract to buy foreign currency for any
purpose, the Fund will be required to place cash or liquid, high grade debt
securities in a segregated account with the Fund's custodian in an amount equal
to the value of the Fund's total assets committed to the consummation of the
forward contract. The Fund may enter into forward currency contracts having an
intrinsic value of up to 30% of its net assets.
The Fund may purchase and write put and call options on foreign currencies
for the purpose of protecting against declines in the dollar value of foreign
portfolio securities and against increases in the U.S. dollar cost of foreign
securities to be acquired. The Fund may also use options on currency to
cross-hedge, which involves writing or purchasing options on one currency to
hedge against changes in exchange rates of a different currency (including the
U.S. dollar) with a pattern of correlation. Cross-hedging may also include using
a foreign currency as a proxy for the U.S. dollar if the investment adviser
determines that there is a pattern of correlation between that currency and the
U.S. dollar. The writing of an option on foreign currency will constitute only a
partial hedge, up to the amount of the premium received, and the Fund could be
required to purchase or sell foreign currencies at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on a foreign currency
may constitute an effective hedge against exchange rate fluctuations. However,
in the event of unanticipated rate movements adverse to the Fund's option
position, the Fund may forfeit the entire amount of the premium plus related
transaction costs. Options on foreign currencies to be written or purchased by
the Fund will be traded on U.S. or foreign exchanges or over-the-counter.
Options on foreign currencies which are traded in the over-the-counter market
may be considered illiquid securities and there can be no assurance that a
liquid secondary market will exist at any particular time for any particular
option. The Fund may not invest more than 10% of its net assets in premiums on
purchased currency options. See "Other Policies and Risks" in the Statement of
Additional Information.
The Fund's transactions in options on securities indices, currencies,
options on currencies and forward foreign currency contracts may be limited by
the requirements for qualification of the Fund as a regulated investment company
for tax purposes. See "Tax Status" in the Statement of Additional Information.
The Fund may enter into repurchase agreements with banks and
broker-dealers, generally not exceeding seven days. Such repurchase agreements
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 obligations, 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.
IV. MANAGEMENT OF THE FUND
The Fund's Board of Trustees 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 PMC 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 background of each Trustee and executive officer
of the Fund.
The Fund is managed under a contract with PMC. PMC serves as investment
adviser to the Fund and is responsible for the overall management of the Fund's
business affairs, subject only to the authority of the Board of Trustees. PMC is
a wholly-owned subsidiary of The Pioneer Group, Inc. ("PGI"), a Delaware
corporation. Pioneer Funds Distributor, Inc. ("PFD"), an indirect wholly-owned
subsidiary of PGI, is the principal underwriter of shares of the Fund.
Each domestic equity portfolio managed by PMC, including the Fund, is
overseen by an Equity Committee, which consists of PMC's most senior equity
professionals, and a Portfolio Management Committee, which consists of PMC's
domestic equity portfolio managers. Both committees are chaired by Mr. David
Tripple, PMC's President and Chief Investment Officer and Executive Vice
President of the Pioneer mutual funds. Mr. Tripple joined PMC in 1974 and has
had general responsibility for PMC's investment operations and specific
portfolio assignments for over five years. The day-to-day management of the Fund
is the primary responsibility of Mr. Francis J. Boggan, Vice President of the
Fund and PMC. Mr. Boggan joined PMC in 1991, and assumed full responsibility for
the Fund as of January 1, 1996. Previously, he was responsible for managing from
80% to 90% of the Fund's portfolio. Prior to joining PMC, Mr. Boggan was
Director of Equity Investments at Farmers Group, Inc. John F. Cogan, Jr.,
Chairman and President of the Fund, Chairman of PFD, and President and a
Director of PGI and PMC, owned approximately 14% of the outstanding capital
stock of PGI as of the date of this Prospectus.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Trust, PMC assists in the
management of the Fund and is authorized in its discretion to buy and sell
securities for the account of the Fund. PMC pays all the expenses, including
executive salaries, and the rental of office space, related to its services for
the Fund with the exception of the following, which are to be paid by the Fund:
(a) charges and expenses for fund accounting, pricing and appraisal services and
related overhead, including to the extent such services are performed by
personnel of PMC or its affiliates, office space and facilities and personnel
compensation, training and benefits; (b) the charges and expenses of auditors;
(c) the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Trust with respect to
the Fund; (d) issue and transfer taxes, chargeable to the Fund in connection
with securities transactions to which the Fund is a party; (e) insurance
premiums, interest charges, dues and fees for membership in trade associations,
and all taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the Fund and/or its shares with the
5
<PAGE>
SEC, individual states or blue sky securities agencies,
territories and foreign countries, including the preparation of Prospectuses
and Statements of Additional Information for filing with regulatory agencies;
(g) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies; (h) charges and
expenses of legal counsel to the Fund and the Trustees; (i) distribution fees
paid by the Fund in accordance with Rule 12b-1 promulgated by the SEC
pursuant to the 1940 Act; (j) compensation of those Trustees of the Trust who
are not affiliated with or interested persons of PMC, the Trust (other than
as Trustees), PGI or PFD; (k) the cost of preparing and printing share
certificates; and (l) interest on borrowed money, if any. In addition to the
expenses described above, the Fund shall pay all brokers' and underwriting
commissions chargeable to the Fund in connection with securities transactions
to which the Fund is a party.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells shares
of any Pioneer mutual fund. 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 0.60%
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 appropria te
over the same period. The Trustees have designated the Lipper Growth and Income
Funds Index (the "Index") for this purpose. The Index represents the arithmetic
mean performance (i.e., equally weighted) of the thirty largest funds with a
growth and income investment objective.
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 multiplied by 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 its net asset value per
share. For purposes of calculating the performance adjustment, any dividends or
capital gains distributions paid by the Fund are treated as if reinvested in
Fund 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 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.
From time to time, the Trustees may determine that another securities index
is a more appropriate benchmark than the Index for purposes of evaluating the
performance of the Fund. In such event, a successor index may be substituted for
the Index. However, the calculation of the performance adjustment for any
portion of the performance period prior to the adoption of the successor index
would still be based upon the Fund's performance compared to the Index.
The Fund's current management contract with PMC became effective May 1,
1996. Under the terms of the contract, beginning on May 1, 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 35 months. At
the end of each succeeding month, the performance period will roll forward one
month so that it is always a 36-month period consisting of the current month and
the prior 35 months as described above. If including the initial rolling
performance period (that is, the period prior to the effectiveness of the
management contract), has the effect of increasing the Basic Fee for any month,
such aggregate prior results will be treated as Index neutral for purposes of
calculating the performance adjustment for such month. Otherwise, the
performance adjustment will be made as described above.
The Basic Fee is computed daily, the performance fee adjustment is
calculated once per month and the entire management fee is normally paid
monthly.
Until May 1, 1996, as compensation for its management services and certain
expenses which PMC incurred, PMC was entitled to a management fee equal to 0.50%
per annum of the Fund's average daily net assets up to $250 million, 0.48% of
the next $50 million, and 0.45% of the excess over $300 million. The fee was
normally computed daily and paid monthly. During the fiscal year ended September
30, 1995, the Fund incurred expenses of approximately $43,240,000, including
management fees paid to PMC of approximat ely $21,051,000.
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
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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 CDSC.
Class A shares are subject to distribution and service fees at a combined annual
rate of up to 0.25% of the Fund's average daily net assets attributable to Class
A shares.
CLASS B SHARES. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge, but
are subject to a CDSC of up to 4% if redeemed within six years. Class B shares
are subject to distribution and service fees at a combined annual rate of 1.00%
of the Fund's average daily net assets attributable to Class B shares. Your
entire investment in Class B shares is available to work for you from the time
you make your investment, but the higher distribution fee paid by Class B shares
will cause your Class B shares (until conversion) to have a higher expense ratio
and to pay lower dividends, to the extent dividends are paid, than Class A
shares. Class B shares will automatically convert to Class A shares, based on
relative net asset value, eight years after the initial purchase.
CLASS C SHARES. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the higher
distribution fee paid by Class C shares will cause your Class C shares to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class C shares have no conversion feature.
SELECTING A CLASS OF SHARES. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and your
personal situation. If you are making an investment that qualifies for reduced
sales charges, you might consider Class A shares. If you prefer not to pay an
initial sales charge on an investment of $250,000 or less and you plan to hold
the investment for at least six years, you might consider Class B shares. If you
prefer not to pay an initial sales charge and you plan to hold your investment
for one to eight years, you may prefer Class C shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund and
shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold outside
the U.S. to persons who are not U.S. citizens may be subject to different sales
charges, CDSCs and dealer compensation arrangements in accorda nce 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 any applicable sales charge. The net asset value per
share of each Class of the Fund shares is determined by dividing the value of
its assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on each
day the New York Stock Exchange (the "Exchange") is open, as of the close of
regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for 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 A 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 $50 for Class A share accounts and $1,000
for Class B and Class C share accounts, except as specified below.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or minimum
requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares and
$500 for Class B and Class C shares except that the subsequent minimum
investment for Class B and Class C shares may be as little as $50 if an
automatic investment plan (see "Automatic Investment Plans") is established.
The Fund has a minimum Class A account requirement of $500. As a new
purchaser, you will be given at least 24 months from your initial purchase to
increase the value of the Class A account to $500. See "How to Sell Fund
Shares."
TELEPHONE PURCHASES. Your account is automatically authorized to have the
telephone purchase privilege unless you indicated 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 mutual fund account; it may not be used to establish a new account.
Proper account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to Individual Retirement Accounts
("IRAs") but may not be avail-
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able to other types of retirement plan accounts. Call PSC for more information.
YOU ARE STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR
TO REQUESTING A TELEPHONE PURCHASE. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section of
your Account Application or an Account Options Form. PSC will electronically
debit the amount of each purchase from this predesignated bank account.
Telephone purchases may not be made for 30 days after the establishment of your
bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value, plus any
applicable sales charge next determined after PSC's receipt of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by mail.
See "Telephone Transactions and Related Liabilities" for additional information.
CLASS A SHARES
You may buy Class A shares at the public offering price, that is, at the
net asset value per share next computed after receipt of a purchase order, plus
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
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or on purchases by certain group plans (described below), but
for such investments a CDSC of 1% is imposed in the event of a redemption of
Class A shares within 12 months of purchase. See "How to Sell Fund Shares." PFD
may, in its discretion, pay a commission to broker-dealers who initiate and are
responsible for such purchases as follows: 1% on the first $5 million invested;
0.50% on the next $45 million; and 0.25% on the excess over $50 million. These
commissions 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 purchases at net asset value by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets will be required to return any commission paid or a pro
rata portion thereof if the retirement plan redeems its shares within 12 months
of purchase. See also "How to Sell Fund Shares." In connection with PGI's
acquisition of 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 Class A shares through such dealer.
The schedule of Class A sales charges above is applicable to purchases of
shares of the Fund by (i) an individual, (ii) an individual, 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
Sections 401 or 408 of the Internal Revenue Code of 1986, as amended (the
"Code") although more than one beneficiary is involved. The sales charge
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 current offering price) of shares of any of the 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
so qualify.
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 to 401(k)
retirement plans with 100 or more participants or at least $500,000 in plan
assets. Information about the above 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 employees and partners of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which have
entered into sales agreements with PFD; (e) members of the immediate families of
any of the persons above; (f) any trust, custodian, pension, profit-sharing or
other benefit plan of the foregoing persons; (g) insurance company separate
accounts; (h) certain "wrap accounts" for the benefit of clients of financial
planners adhering to standards established by PFD; (i) other funds and accounts
for which PMC or any of its affiliates serves as investment adviser or manager;
and (j) certain unit investment trusts. Shares so purchased are purchased for
investment purposes and may not be resold except through redemption or
repurchase by or on behalf of the Fund. The availability of this privilege
depends upon the receipt by PFD of written notification of eligibility. In
addition, Class A shares of the Fund may be sold at net asset value per share
without a sales charge to Optional Retirement Program (the "Program")
participants if (i) the employer has authorized a limited number of investment
company providers for the Program, (ii) all authorized investment company
providers offer their shares to Program participants at net asset value, (iii)
the employer has agreed in writing to actively promote the authorized investment
company providers to Program participants and (iv) the Program provides for a
matching contribution for each participant contribution. Class A shares 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.
Class A sales charges may also be reduced through an agreement to purchase
a specified quantity of shares over a designated thirteen-month period by
completing the "Letter of Intention" section of the Account Application.
Information about the Letter of Intention procedure, including its terms, is
con-
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<PAGE>
tained in the Account Application as well as in the Statement of Additional
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 privil ege, the investor must
document to the broker-dealer that the redemption occurred within 60 days
immediately preceding the purchase of shares of the Fund; 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 net asset value 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.
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 availability of a ruling from the Internal
Revenue Service ("IRS") that such conversions will not constitute taxable events
for federal tax purposes. The conversion of Class B shares to Class A shares
will not occur if such ruling is not available and, therefore, Class B shares
would continue to be subject to higher expenses than Class A shares for an
indeterminate period.
CLASS C SHARES
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1.00%. 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 shareowner or participant in an
employer-sponsored retirement plan; (b) the distribution is to a participant in
an Individual Retirement Account ("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
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<PAGE>
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 pre-authorized through a prior agreement
with PFD regarding participant directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may
be waived or reduced as follows: (a) for automatic redemptions as described in
"Systematic Withdrawal Plans" (limited to 10% of the value of the account); (b)
if the redemption results from the death or a total and permanent disability (as
defined in Section 72 of the Code) occurring after the purchase of the shares
being redeemed of a 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
pre-authorized through a prior agreement with PFD regarding participant directed
transfers).
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 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.
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:
o If you are selling shares from a retirement account, 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.
o If you are selling shares from a non-retirement account, 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 situations applies:
o you wish to sell over $50,000 worth of shares,
o your account registration or address has changed within the last 30 days,
o the check is not being mailed to the address on your account (address of
record),
o the check is not being made out to the account owners, or
o 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 or 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 and accepted by PSC. Good order means that there are no outstanding claims
or requests to hold redemptions on the account, any certificates are endorsed by
the record owner(s) exactly as the shares are registered and the signature(s)
are guaranteed by 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 FAX. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone redemption. The telephone redemption option is not available
to retirement plan accounts. A maximum of $50,000 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
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<PAGE>
proceeds by check: the check must be made payable exactly as the account is
registered and the check must be sent to the address of record which must not
have changed in the last 30 days. To receive the proceeds by bank wire or by
electronic funds transfer: the proceeds must be sent to your bank wire address
of record which must have been properly pre-designated 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 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. As a new shareholder, you have a minimum of 24 months
(including the six months following the mailing of the notice described below)
to increase the value of your account to the minimum account value of $500. If
you hold shares of the Fund in an account with a net asset value of less than
the minimum required amount due to redemptions or exchanges or failure to meet
the initial minimum account requirement set forth above, 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 $1,000,000 or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months following
the share purchase, at the rate of 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividend and capital gain distributions) or
the total cost of such shares. Shares subject to the CDSC which are exchanged
into another Pioneer mutual fund will continue to be subject to the CDSC until
the original 12-month period expires. However, no CDSC is payable upon
redemption with respect to Class A shares purchased by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets.
GENERAL. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Fund to fairly determine the value of
the net assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
WRITTEN EXCHANGES. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the 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 indicated 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 voice-requested or FactFone [Service Mark] telephone
exchange request 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
account for shares of the same Class in another Pioneer 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 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
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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 a Plan of Distribution for each Class of shares (the "Class A
Plan," the "Class B Plan" and the "Class C Plan") adopted in accordance with
Rule 12b-1 under the 1940 Act pursuant to which certain distribution fees are
paid to PFD.
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
the Class A shares of the Fund 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 the
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 average daily net assets. Distribution expenses of PFD
are expected to substantially exceed the distribution fees paid by the Fund in a
given year. The Class A Plan does not provide for the carryover of reimbursable
expenses beyond 12 months from the time the Fund is first invoiced for an
expense. The limited carryover provision in the Class A Plan may result in an
expense invoiced to the Fund in one fiscal year being paid in the subsequent
fiscal year and thus being treated for purposes of calculating the maximum
expenditures of the Fund as having been incurred in the subsequent fiscal year.
In the event of termination or non-continuance of the Class A Plan, the Fund has
twelve months to reimburse any expense whi ch it incurs prior to such
termination or non-continuance, provided that payments by the Fund during such
12-month period shall not exceed 0.25% of the Fund's average daily net assets
attributable to Class A shares during such period. 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 Class A 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 average net asset value of such shares.
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 shareowner 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 taxes on income and capital gains
distributed to shareholders at least annually.
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 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
distribute net long-term capital gains, if any, in December. Distributions from
net short-term capital gains, if any, may be paid with such dividends;
distributions of dividends
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from income and/or capital gains may also be made at such other times as may be
necessary to avoid federal income or excise tax. Dividends from the Fund's net
investment income, certain net foreign exchange gains, and net short-term
capital gains are taxable 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 distribution options available to shareholders, see "Distribution
Options" and "Directed Dividends" below.
Distributions by the Fund of dividend income it receives from U.S. domestic
corporations may qualify for the dividends-received deduction for corporate
shareholders, subject to certain minimum 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 capital gains) on certain of its foreign
investments, if any, which will reduce the yield or return from those
investments. The Fund anticipates that it will not qualify to pass such taxes
through to its shareholders, who consequently will not include them in income or
be entitled to 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 the shareholder is not
subject to such backup withholding or the fund receives notice from the Internal
Revenue Service ("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 Shareholder Services, Pioneering Services
Corporation, p.o. box 9014, Boston, Massachusetts 02205-9014. Brown Brothers
Harriman & Co. (the "Custodian") serves as custodian of the Fund's securities.
The principal business address of the Custodian's Mutual Fund Division is 40
Water Street, Boston, Massachusetts 02109.
ACCOUNT AND CONFIRMATION STATEMENTS
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur. The
Pioneer Combined Account Statement, mailed quarterly, is available to all
shareholders who have more than one Pioneer 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 investment or
redemption of shares by mail, automatic reinvestment of dividends and capital
gains distributions, withdrawal plans, Letters of Intention, Rights of
Accumulation, telephone exchanges and redemptions and newsletters.
ADDITIONAL INVESTMENTS
You may add to your account by sending a check ($50 minimum for Class A
shares and $500 for Class B and Class 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 also arrange for regular investments of $50 or more through
government/military allotments or through a Pioneer Investomatic Plan. A Pioneer
Investomatic Plan provides for a monthly or quarterly investment by means of a
preauthorized 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 pgi in maintaining these plans.
FINANCIAL REPORTS AND TAX INFORMATION
As a shareholder, you will receive financial reports at least
semi-annually. 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 new account application.
Two other options available are (a) dividends in cash and capital
gains distributions in additional shares; and (b) all dividends and
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 the distribution options may be made by written request to PSC.
DIRECTED DIVIDENDS
You may elect (in writing) to have the dividends paid by one Pioneer mutual
fund account invested in a second Pioneer mutual fund account. The value of this
second account must be at least $1,000 ($500 for the Fund or Pioneer Fund).
Invested dividends may be in any amount, and there are no fees or charges for
this service. This option is not currently available for retirement plan
accounts.
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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 Internal Revenue Service 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 indicated otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone. See
"Share Price" for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 9:00 p.m. Eastern Time on weekdays. Computer-assisted
transactions may be available to shareholders who have pre-recorded certain bank
information (see "FactFone [Service Mark]"). YOU ARE STRONGLY URGED TO CONSULT
WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING ANY TELEPHONE
TRANSACTION.
To confirm that each transaction instruction received by telephone
is genuine, the Fund will record each telephone transaction, require the
caller to provide the personal identification number ("PIN") for the account
and send you a written confirmation of each telephone transaction. Different
procedures may apply to accounts that are 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 al
l 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 [Service Mark]
FactFone [Service Mark] is an automated inquiry and telephone transaction
system available to Pioneer shareholders by dialing 1-800-225-4321. FactFone
[Service Mark] allows you to obtain current information on your Pioneer mutual
fund accounts and to inquire about the prices and yields of all publicly
available Pioneer mutual funds. In addition, you may use FactFone [Service Mark]
to make computer-assisted telephone purchases, exchanges and redemptions from
your Pioneer accounts if you have activated your PIN. Telephone purchases and
redemptions require the establishment of a bank account of record. YOU ARE
STRONGLY URGED TO CONSULT WITH YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING
ANY TELEPHONE TRANSACTION.
Shareholders whose accounts are registered in the name of a broker-dealer
or other third party may not be able to use FactFone [Service Mark]. 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 business, 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 you own 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 C share accounts will be
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."
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. You may also direct that withdrawal checks be paid to another
person, although if you make this designation after you have opened your
account, a signature guarantee must accompany your instructions. Purchases of
shares of the Fund at a time when you have a SWP in effect may result in the
payment of unnecessary sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY)
If you redeem all or part of your Class A shares of the Fund you may
reinvest all or part of the redemption proceeds without a sales commission 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 reinvestment
occurs. Subject to the provisions outlined under "How to Exchange Fund Shares"
above, you may also reinvest in Class A shares of any other Pioneer mutual
fund; in this case you must meet the minimum investment requirement 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.
-----------------------------------
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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) which was originally organized as a Massachusetts
corporation on March 18, 1969, and reorganized as a Massachusetts business trust
on February 15, 1985 and a Delaware business trust on May 1, 1996.
The Fund has authorized an unlimited number of shares of beneficial
interest. As an open-end 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 meetings, although special meetings may be called for the purposes
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 shareowner 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 shareowner 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 shareowner 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.
The Fund will recognize stock certificates representing shares of Pioneer
II, Inc. issued prior to its reorganization as a Massachusetts business trust as
evidence of ownership of an equivalent number of shares of beneficial interest.
Any shareholder desiring to surrender a stock certificate to the Fund for a
share certificate representing an equivalent number of shares of beneficial
interest may do so by making a written request for such exchange to PSC. Such
request must be accompanied by the surrendered stock certificate which must be
endorsed on the back exactly in the manner as such certificate is registered.
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 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 may also
include securities industry, real estate industry or comparative performance
information in advertising or materials marketing the Fund's shares. Such
performance information may include rankings or listings by magazines,
newspapers, or independent statistical or ratings services, such as Lipper
Analytical Services, Inc. or Ibbotson Associates.
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.
For more information about the calculation methods used to compute the
Fund's investment results, see the Statement of Additional Information.
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Pioneer II
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
FRANCIS J. BOGGAN, 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
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Mass. 02109
Telephone: (617) 742-7825
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 [Service Mark]
Automated fund yields, automated
prices and account information ........................ 1-800-225-4321
Retirement plans............................................. 1-800-622-0176
Toll-free fax................................................ 1-800-225-4240
Telecommunications Device for the
Deaf (TDD)............................................... 1-800-225-1997
0596-3310
[Copyright] Pioneer Funds Distributor, Inc.
