April 3, 1995
SUPPLEMENT
to the prospectuses for:
<TABLE>
<CAPTION>
<S> <C>
Pioneer Fund April 29, 1994 (revised October 28, 1994)
Pioneer Growth Shares July 1, 1994
Pioneer Winthrop Real Estate Investment Fund October 28, 1994 (revised February 8, 1995)
Pioneer Income Fund July 1, 1994
Pioneer America Income Trust April 29, 1994 (revised July 1, 1994)
Pioneer Intermediate Tax-Free Fund April 29, 1994
Pioneer Tax-Free Income Fund July 1, 1994
</TABLE>
How to Buy Fund Shares
In addition to the exceptions listed in each FundOs prospectus, Class A shares
of a Fund may be sold at net asset value per share without a sales charge to
Optional Retirement 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.
0495-2418
(C) Pioneer Funds Distributor, Inc.
<PAGE>
[Pioneer logo]
Pioneer
Intermediate
Tax-Free
Fund
Class A and Class B
Prospectus
April 29, 1994
The investment objective of Pioneer Intermediate Tax-Free Fund (the "Fund")
is to provide as high a level of current income exempt from Federal income
taxes from a high-quality portfolio of municipal bonds as is consistent with
prudent investment risk.
Fund returns and share prices fluctuate and the value of your account upon
redemption maybe more or less than your purchase price. Shares in the Fund
are not deposits or obligations of, or guaranteed or endorsed by, any bank,
and the shares are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency.
This Prospectus (Part A of the Registration Statement) provides the
information about the Fund that you should know before investing. Please read
and keep it for your future reference. More information about the Fund is
included in Part B, the Statement of Additional Information, also dated April
29, 1994, which is incorporated into this Prospectus by reference. A copy of
the Statement of Additional Information may be obtained free of charge by
calling Shareholder Services at 1-800-225-6292 or by written request to the
Fund at 60 State Street, Boston, Massachusetts 02109. Other information about
the Fund has been filed with the Securities and Exchange Commission (the
"SEC") and is available upon request and without charge.
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
"When Issued" Securities 4
Portfolio Transactions and Turnover 5
IV. MANAGEMENT OF THE FUND 5
V. FUND SHARE ALTERNATIVES 7
VI. SHARE PRICE 7
VII. HOW TO BUY FUND SHARES 7
Class A Shares 7
Class B Shares 8
VIII. HOW TO SELL FUND SHARES 9
IX. HOW TO EXCHANGE FUND SHARES 11
X. DISTRIBUTION PLANS 11
XI. DIVIDENDS AND TAX STATUS 12
XII. SHAREHOLDER SERVICES 13
Account and Confirmation Statements 13
Additional Investments 14
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 14
Direct Deposit 14
Telephone Transactions and Related Liabilities 14
Telecommunications Device for the Deaf (TDD) 14
Systematic Withdrawal Plans (Class A Shares Only) 14
Reinstatement Privilege (Class A Shares Only) 15
XIII. THE FUND 15
XIV. INVESTMENT RESULTS 15
XV. APPENDIX 17
Taxable Equivalent Yields 17
</TABLE>
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 ADE-
QUACY 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 has been restated to reflect actual expenses of the Class
A shares for the fiscal year ended December 31, 1993 and current fees
expressed as a percentage of average net assets of the Fund.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses:
Class A Class B
<S> <C> <C>
Maximum Initial Sales Charge on Purchases (as a
percentage of the offering price) 3.50% none
Maximum Sales Charge on Reinvestment of Dividends none none
Maximum Deferred Sales Charge(1) none 3.00%
Redemption Fee(2) none none
Exchange Fee none none
Annual Operating Expenses (as a percentage of
average net assets):(3)
Management Fee 0.50% 0.50%
12b-1 Fees 0.25% 1.00%
Other Expenses 0.37% 0.37%
Total Operating Expenses: 1.12% 1.87%
Management Fee Reduction(4) (0.12)% (0.12)%
Net Operating Expenses 1.00% 1.76%
</TABLE>
(1) Purchases of $1,000,000 or more and purchases by participants in a "Group
Plan" (as described under "How to Purchase Shares") are not subject to an
initial sales charge but may be subject to a contingent deferred sales charge
as further described under "How to Buy Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic or
international bank wire transfers of redemption proceeds.
(3) For Class B shares, percentages are based on estimated expenses that
would have been incurred during the previous fiscal year had Class B shares
been outstanding.
(4) Effective January 3, 1994, Pioneering Management Corp. ("PMC"), the
investment adviser, will not impose management fees to the extent necessary
to limit total Fund expenses to 1.00% of the average daily net assets
attributable to Class A shares; the portion of the management fee
attributable to Class B shares will be reduced only to the extent the fee is
reduced for Class A shares. PMC's agreement not to impose its management fee
is voluntary and temporary and may be revised or terminated at any time.
Example:
You would pay the following dollar amounts on a $1,000 investment, assuming a
5% annual return and redemption at the end of each of the time periods:
1 Year 3 Years 5 Years 10 Years
Class A Shares $45 $66 $ 88 $153*
Class B Shares
-Assuming
complete redemption
at end of period $58 $85 $116 $206
-Assuming no
redemption $18 $55 $ 95 $206
* These are cumulative totals; the average fees and expenses of Class A
shares paid over a 10-year period would be approximately $14.50 per year.
** Class B shares convert to Class A shares six years after purchase;
therefore, Class A expenses are used after year six.
The example is designed for informational purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return will vary from year to year and may be higher or lower
than those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
fees and expenses are paid, see "Management of the Fund," "Distribution
Plans" and "How To Buy Fund Shares" in this Prospectus and "Management of the
Fund" and "Underwriting Agreement and Distribution Plans" in the Statement of
Additional Information. The Fund's payment of a Rule 12b-1 fee may result in
long-term shareholders indirectly paying more than the economic equivalent of
the maximum sales charge permitted under the National Association of
Securities Dealers, Inc. ("NASD") Rules of Fair Practice.
The maximum initial sales charge is reduced on purchases of specified amounts
of Class A shares and the value of Class A shares owned in other Pioneer
mutual funds is taken into account in determining the applicable initial
charge. See "How to Buy Fund Shares." No sales charge is applied to exchanges
of shares of the Fund for shares of other publicly available mutual funds in
the Pioneer complex. See "How to Buy Fund Shares."
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by Arthur Andersen & Co., independent public accountants,
in connection with their examination of the Fund's financial statements.
Arthur Andersen & Co.'s report on the Fund's financial statements as of
December 31, 1993, appears in the Fund's Annual Report which is incorporated
by reference in the Statement of Additional Information. Class B shares are a
new class of shares; no financial highlights exist for Class B 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.
Pioneer Intermediate Tax-Free Fund
for Each Class A Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
October 27,
1986 to
For the Year Ended December
31, December 31,
1993 1992 1991 1990 1989 1988
1987 1986
<S> <C> <C> <C> <C> <C> <C>
<C> <C>
Net asset value,
beginning of period $ 10.32 $ 10.06 $ 9.63 $ 9.66 $ 9.40 $ 8.95
$ 10.01 $ 10.00
Income from
investment
operations:
Net investment
income $ 0.560 $ 0.587 $ 0.610 $ 0.627 $ 0.634 $ 0.628
$ 0.624 $ 0.050
Net realized and
unrealized gain
(loss) on
investments 0.558 0.257 0.430 (0.033) 0.257 0.476
(1.024) (0.040)
Total income (loss)
from investment
operations $ 1.118 $ 0.844 $ 1.040 $ 0.594 $ 0.891 $ 1.104 $
(0.400) $ 0.010
Distribution to
shareholders from
Net Investment
Income (0.558) (0.584) (0.610) (0.624) (0.631) (0.654)
(0.660) --
Net realized
capital gains (0.120) -- -- -- -- --
- -- --
Net increase
(decrease) in net
asset value $ 0.44 $ 0.26 $ 0.43 $ (0.03) $ 0.26 $ 0.45
$ (1.06) $ 0.01
Net asset value, end
of period $ 10.76 $ 10.32 $ 10.06 $ 9.63 $ 9.66 $ 9.40
$ 8.95 $ 10.01
Total return* 11.08% 8.65% 11.17% 6.42% 9.77%
12.79% (3.91)% 0.10%
Ratio of net
operating expenses
to average net
assets 0.85% 0.85% 0.75% 0.66% 0.60%
0.50% (0.35)% 0.61%**
Ratio of net
investment income
to average net
assets 5.23% 5.78% 6.21% 6.56% 6.60%
6.89% 7.08% 9.73%**
Portfolio turnover
rate 13.93% 3.52% 4.61% 7.99% 4.09%
10.03% 0.06% --
Net assets, end of
period (in
thousands) $82,096,960 $57,352,751 $44,631,428 $34,117,510 $28,754,221 $20,120,769
$13,107,145 $3,066,286
Ratios assuming no waiver of fees or assumption of expenses
Net Operating
Expenses 1.12% 1.27% 1.33% 1.17% 1.10%
1.28% 1.28% 1.53%
Net investment
income 4.96% 5.36% 5.63% 6.05% 6.10%
6.11% 6.11% 5.90%
</TABLE>
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all dividends and distributions, the complete
redemption of the investment at net asset value at the end of each period,
and no sales charges. Total return would be reduced if sales charges were
taken into account.
**Annualized.
<PAGE>
III. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to provide as high a level of current
income exempt from federal income taxes from a high quality portfolio of
municipal bonds as is consistent with prudent investment risk.
The Fund's policy under normal conditions is to invest at least 80% of the
Fund's portfolio in bonds, notes and other debt instruments issued by or on
behalf of states, territories and possessions of the United States ("U.S.")
and the District of Columbia and their political subdivisions, agencies or
instrumentalities, the interest on which is exempt from federal income tax
(hereinafter "Municipal Bonds" or "tax-exempt securities"). As a defensive
measure during times of adverse market conditions, up to 50% of the Fund's
portfolio may be invested in the short-term taxable investments described in
paragraphs 3 and 4 below.
All of the Fund's investments will be made in accordance with the investment
policies set forth below. The Fund's investments will be limited to:
(1) Tax-exempt securities which are rated AAA, AA, A or BBB by Standard &
Poor's Corporation ("S&P" ) or are rated Aaa, Aa, A or Baa by Moody's
Investors Service, Inc. ("Moody's");
(2) Notes of issuers having an issue of outstanding Municipal Bonds rated
AAA, AA or A by S&P or Aaa, Aa or A by Moody's or which are guaranteed by the
U.S. Government;
(3) Obligations issued or guaranteed by the U.S. Government or its agencies
or instrumentalities;
(4) Obligations of banks (including certificates of deposit and bankers'
acceptances) with $1 billion of assets and repurchase agreements with banks
and broker-dealers; and
(5) Tax-exempt securities which are not rated but which, in the opinion of
the Fund's investment adviser, are of at least comparable quality to the
three highest grades of S&P or Moody's.
Municipal bonds include general obligation bonds and revenue bonds. General
obligation bonds are backed by the taxing power of the issuing municipality.
Revenue bonds are backed by the revenues of a project or facility such as the
tolls from a toll bridge.
No more than 15% of the Fund's total portfolio will be invested in securities
which are not rated or which are rated BBB by S&P or Baa by Moody's.
Securities rated BBB by S&P or Baa by Moody's are considered medium-grade,
neither highly protected nor poorly secured, with some elements of
uncertainty over any great length of time and certain speculative
characteristics as well. The Fund will not invest in securities rated below
BBB by S&P or Baa by Moody's.
The dollar weighted average portfolio maturity of the Fund will not exceed 10
years. Under normal circumstances, the Fund will invest at least 80% of its
assets in securities with remaining maturities of 15 years or less. For
purposes of these policies, an instrument will be treated as having a
maturity earlier than its stated maturity date if the instrument has
technical features (such as puts, demand, prepayment or redemption features)
or a variable rate of interest which, based on projected cash flows from the
instrument, will in the judgment of PMC result in the instrument being valued
in the market as though it has the earlier maturity.
The Fund intends to minimize the distribution of taxable income to
shareholders. Thus, investments described in paragraphs 3 and 4 above will
generally be purchased only to meet short-term liquidity needs or to offset
Fund expenses. If the Fund cannot find suitable tax-exempt short-term
instruments in the quantity necessary, or if for any reason the Fund's
taxable income exceeds expenses of the Fund properly deductible from such
taxable income, a portion of the dividends distributed to shareholders may be
taxable as ordinary income. See "Dividends and Tax Status."
The higher quality issues in which the Fund's portfolio will be concentrated
can generally be expected to produce lower yields than issues of lower
quality, though they are generally more marketable.
The net asset value of the shares of an open-end investment company such as
the Fund, which invests primarily in fixed-income tax-exempt securities,
changes as the general levels of interest rates fluctuate. When interest
rates rise, the value of a portfolio invested at lower yields can be expected
to decline. For a description of how to compare yields on Municipal Bonds and
taxable securities, see "Taxable Equivalent Yields" in the Appendix. For the
ratings of S&P and Moody's for Municipal Bonds and a general discussion of
Municipal Bonds and descriptions of short-term investments permitted as Fund
investments, see Appendices B and C to the Statement of Additional
Information.
"When Issued" Securities
Some tax-exempt securities are purchased on a "when-issued" basis, which
means that it may take as long as 60 days or more before the securities are
delivered and paid for. The commitment to purchase a security for which
payment will be made on a future date may be deemed a separate security.
Although the amount of tax-exempt securities for which there may be purchase
commitments on a "when-
<PAGE>
issued" basis is not limited, it is expected that under normal circumstances
not more than 50% of the total assets of the Fund will be committed to such
purchases. The Fund does not start earning interest on "when-issued"
securities until they are issued. In order to invest the assets of the Fund
immediately while awaiting delivery of securities purchased on a
"when-issued" basis, short-term obligations that offer same-day settlement
and earnings will normally be purchased. Although short-term investments will
normally be in tax-exempt securities, short-term taxable securities may be
purchased if suitable short-term tax-exempt securities are not available.
When a commitment to purchase a security on a "when-issued" basis is made,
procedures are established consistent with the General Statement of Policy of
the SEC concerning such purchases. Because that policy currently recommends
that an amount of the Fund's assets equal to the amount of the purchase be
held aside or segregated to be used to pay for the commitment, cash or high
quality debt securities sufficient to cover any commitments are always
expected to be available. However, although it is not intended that such
purchases would be made for speculative purposes, and although the Fund
intends to adhere to the provisions of the SEC policy, purchases of
securities on a "when-issued" basis may involve more risk than other types of
purchases. For example, when the time comes to pay for a "when-issued"
security, portfolio securities of the Fund may have to be sold in order for
the Fund to meets its payment obligations, and a sale of securities to meet
such obligations carries with it a greater potential for the realization of
capital gain, which is not tax-exempt.
Also, if it is necessary to sell the "when-issued" security before delivery,
the Fund may incur a loss because of market fluctuations since the time the
commitment to purchase the "when-issued" security was made. Moreover, any
gain resulting from any such sale would not be tax-exempt. Additionally,
because of market fluctuations between the time of commitment to purchase and
the date of purchase, the "when-issued" security may have a lesser (or
greater) value at the time of purchase than the Fund's payment obligations
with respect to the security.
Portfolio Transactions and Turnover
The Fund will be fully managed by purchasing and selling securities, as well
as holding selected securities to maturity. In purchasing and selling
portfolio securities, the Fund seeks to take advantage of market
developments, yield disparities, and variations in the creditworthiness of
issuers. For a description of the strategies which may be used by the Fund in
purchasing and selling portfolio securities, see the Statement of Additional
Information.
While it is not possible to predict accurately the rate of turnover of the
Fund's portfolio on an annual basis, it is anticipated that the rate will not
materially exceed 85%. A portfolio turnover of 85% would occur if 85% of the
securities in the portfolio were changed once in a twelve-month period.
Computation of portfolio turnover excludes transactions in U.S. Treasury
obligations and securities having a maturity of one year or less.
The investment objective and policy to invest under normal circumstances at
least 80% of the Fund's portfolio in Municipal Bonds, may not be changed
without shareholder approval. Because all of the Fund's investments are
subject to fluctuations in yields and value due to changes in earnings,
economic conditions and other factors, there can be no assurance that the
Fund's investment objective will be achieved.
The Statement of Additional Information includes a discussion of other
investment policies and a listing of specific investment restrictions which
govern the Fund's investment policies. The specific investment restrictions
identified in the Statement of Additional Information as fundamental may not
be changed without shareholder approval.
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.
All portfolios managed by PMC, are overseen by an Investment Committee,
either the Equity Committee or the Fixed Income Committee. Both Committees
consist of PMC's most senior investment professionals and are chaired by Mr.
David Tripple, PMC's President and Chief Investment Officer and Executive
Vice President of each 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. Fixed income investments
at PMC, including those
<PAGE>
made on behalf of the Fund, are under the general supervision of Mr. Sherman
Russ, Vice President of PMC, Pioneer U.S. Government Trust, Pioneer Bond
Fund, Pioneer America Fund, Pioneer Income Fund and Pioneer Money Market
Trust. Mr. Russ joined PMC in 1983. Day-to-day management of the Fund is the
responsibility of Kathleen D. McClaskey. Ms. McClaskey joined PMC in 1988 and
is Vice President of PMC, of the Fund and of the Pioneer Tax-Free State
Series Trust. In certain instances where Ms. McClaskey is unavailable,
primary responsibility for the day-to-day management of the Fund may be
assumed temporarily by Mark Winter. Mr. Winter joined PMC in 1993 and has
been an investment manager of Pioneer Tax-Free Income Fund since 1986
(formerly managed by Mutual of Omaha Fund Management Company, which was
acquired by PGI in 1993).
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"), a
wholly-owned subsidiary of PGI, is the principal underwriter of shares of the
Fund.
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 officers are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Fund, 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 ordinary operating expenses,
including executive salaries and the rental of certain 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 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 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 the SEC; (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 to 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 Fund who are not affiliated
with or interested persons of PMC, the Fund (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 the Fund. See the Statement of Additional Information for a further
description of PMC's brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.50% per annum of the
Fund's average daily net assets. The fee is normally computed daily and paid
monthly. During the fiscal year ended December 31, 1993, the Fund would,
absent an expense limitation agreement, have incurred expenses of $360,654
payable to PMC. Effective January 3, 1994, PMC voluntarily agreed not to
impose management fees to the extent necessary to limit total expenses to
1.00% of average daily net assets. This agreement is voluntary and temporary
and may be revised or terminated at any time. During the fiscal year ended
December 31, 1993, this arrangement resulted in a reduction of expenses for
the Fund of $188,711.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of March 31,
1994.
<PAGE>
V. FUND SHARE ALTERNATIVES
The Fund continuously offers two Classes of shares designated as Class A and
Class B shares, as described more fully in "How to Buy Fund Shares." If you
do not specify in your instructions to the Fund which Class of shares you
wish to purchase, exchange or redeem, the Fund will assume that your
instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a contingent deferred
sales charge ("CDSC"). Class A shares are subject to distribution and service
fees at a combined annual rate of up to 0.25% of the Fund's average daily net
assets attributable to Class A shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 3% if redeemed within four 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, approximately six years after
the initial purchase.
Purchasing Class A or Class B 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 four years, you might
consider Class B shares.
Investment 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 fund and shares acquired in the exchange
will continue to be subject to any CDSC applicable to the shares of the Fund
originally purchased.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the New York Stock Exchange (the "Exchange") is open, as of the
close of regular trading on the Exchange.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares at the public offering price 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 for assistance.
The minimum initial investment is $1,000 for Class A and Class B shares
except the minimum initial investment is $50 for Class A accounts being
established to utilize monthly bank drafts, government allotments and other
similar automatic investment plans. 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 shares.
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:
<TABLE>
<CAPTION>
Dealer
Allowance
Sales Charge as a % of as a % of
Net
Offering Amount Offering
Amount of Purchase Price Invested Price
<S> <C> <C> <C>
Less than $50,000 3.50% 3.62% 3.00%
$50,000 but less than
$100,000 3.00 3.09 2.50
$100,000 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
</TABLE>
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain Group Plans (described
below) subject to a CDSC
<PAGE>
of 0.50% which may be imposed in the event of a redemption of Class A shares
within 12 months of purchase. See "How to Sell Fund Shares." PFD may, in its
discretion, pay a commission to broker-dealers who initiate and are
responsible for such purchases as follows: 0.50% on the first $1 million to
$5 million; and 0.10% on the excess over $5 million. These commissions will
not be paid 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. In connection with PGI's acquisition of Mutual of Omaha
Fund Management Company and contingent upon the achievement of certain sales
objectives, PFD pays 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.
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 under which a
sponsoring organization makes recommendations to, permits group solicitation
of, or otherwise facilitates purchases by, its employees, members or
participants. Information about such arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners or employees 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 foregoing persons; (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 investment advisers adhering to standards established by PFD; and
(i) certain unit investment trusts. Shares so purchased are purchased for
investment purposes and may not be resold except through redemption or
repurchase by or on behalf of the Fund. The availability of this privilege is
conditioned on the receipt by PFD of written notification of eligibility.
Shares of the Fund may also be issued 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.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase shares of the Fund at net asset value, without a sales
charge, to the extent that the purchase price is paid out of proceeds from
one or more redemptions by the investor of shares of certain other mutual
funds. In order for a purchase to qualify for this privilege, the investor
must document to the broker-dealer that the redemption occurred within 60
days immediately preceding the purchase of 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 funds.
Further details may be obtained from PFD.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention Procedure, including
its terms, is contained in the Statement of Additional Information.
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 four 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 fourth-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 3.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth and thereafter none
<PAGE>
Commissions of 3%, equal to 2.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with the Fund. The initial
service fee is paid in advance at the time of sale for the provision of
personal and account maintenance services to shareholders during the 12
months following the sale. In all succeeding years, the service fee is paid
in arrears.
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 six 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, for which the Fund is applying,
or an opinion of counsel that such conversions will not constitute taxable
events for federal tax purposes. There can be no assurance that such ruling
or opinion will be available. The conversion of Class B shares to Class A
shares will not occur if such ruling or opinion is not available and,
therefore, Class B shares would continue to be subject to higher expenses
than Class A shares for an indeterminate period.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares and on any Class A shares subject to a CDSC may be waived or reduced
if: (a) the redemption results from the death or disability (as defined in
Section 72 of the Code) of a shareholder or a participant in an
employer-sponsored retirement plan; (b) the distribution is from an IRA, 403
(b) or employer-sponsored retirement plan and 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
(limited in any year to 10% of the value of the plan's assets in the Fund, or
if greater, any required minimum distribution due to attainment of age
70-1/2); (c) the distribution is from a 401(a) or 401(k) retirement plan and
is a return of excess contributions; (d) the distribution is from a 403(b)
plan or an employer-sponsored retirement plan and is to be rolled over to or
reinvested in a Pioneer fund or 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); (e) 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); or (f) the redemption is made by any state, county, or
city, or any instrumentality, department, authority, or agency thereof, which
is prohibited by applicable laws from paying a contingent deferred sales
charge in connection with the acquisition of shares of any registered
investment management company.
Broker-Dealers. An order for either 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 redeem Fund shares on any day the Exchange is open by
selling (redeeming) 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. The Fund will repurchase only shares for which it has received
payment and only upon the request of the registered owner or owner's duly
authorized agent. Please note the following:
* If you are selling shares from a non-retirement account, you may use any of
the methods described below.
<PAGE>
* If you are selling shares from a retirement account, you must make your
request in writing (except for exchanges to other Pioneer funds which can be
requested by phone or in writing). Call 1-800-622-0176 for more information.
Your shares will be sold at the share price next calculated after your order
is received and accepted less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
accepted. 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 always sell your shares by delivering a written request
in good order to Pioneering Services Corporation ("PSC"), however, you must
use a written request, including a signature guarantee, to sell your shares
if any of the following situations applies:
* you wish to sell over $50,000 worth of shares,
* your account registration or address has changed within the last 30 days,
* the check is not being mailed to the address on your account (address of
record),
* the check is not being made out to the account owners, or
* the sale proceeds are being transferred to a Pioneer 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, Pioneer 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, certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile (fax). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you 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. To receive the proceeds by check: the check must be made payable
exactly as the account is registered and the check must be sent to the
address of record which must not have changed in the last 30 days. To receive
the proceeds by bank wire: the wire must be sent to the 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. The telephone redemption option is not available to
retirement plan accounts. You may always elect to deliver redemption
instructions to PSC by mail. See "Telephone Transactions and Related
Liabilities" below. Telephone and fax redemptions will be priced as described
above.
Selling Shares Through Your Broker-Dealer. Your broker-dealer must receive
your request before the close of business on the Exchange and transmit it to
PFD before the close of business to receive that day's net asset value. Your
broker-dealer is responsible for providing all necessary documentation to PFD
and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of the
Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held
in this account at net asset value if you have not increased the net asset
value of the account to at least the minimum required amount within six
months of notice by the Fund to you of the Fund's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 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
<PAGE>
gain distributions) or the total cost of such shares. Shares subject to the
CDSC which are exchanged into another Pioneer fund will continue to be
subject to the CDSC until the original 12-month period expires.
General. The Fund has authorized PFD to act as its agent in the repurchase of
shares of the Fund and reserves the right to terminate this procedure at any
time. 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 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 the Fund. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. All telephone exchanges will be recorded. 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 18th day of the month.
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 fund. Not all Pioneer 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.
The exchange of Class B shares will not be subject to the applicable CDSC at
the time of the exchange. Class B 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 Class B 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 below 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 Fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the cost basis of these shares and the timing of the
transaction.
You should consider the differences in objectives and policies of the Pioneer
funds, as described in each fund's current prospectus, before making any
exchange. To prevent abuse of the exchange privilege to the detriment of
other Fund shareholders, the Fund and PFD reserve the right to limit the
number and/or frequency of exchanges and/or to charge a fee for exchanges.
The exchange privilege may be changed or discontinued and may be subject to
additional limitations, including certain restrictions on purchases by market
timer accounts.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for both Class A shares ("Class A
Plan") and Class B shares ("Class B Plan") in accordance with Rule 12b-1
under the 1940 Act pursuant to which certain distribution and service fees
are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the
<PAGE>
categories of expenses for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.25% per annum of the Fund's daily net assets
attributable to Class A shares; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on
certain sales of the Fund's Class A shares with no initial sales charge (See
"How to Buy Fund Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A
Plan does not provide for the carryover of reimbursable expenses beyond
twelve 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 which it incurs prior to such
termination or non-continuance, provided that payments by the Fund during
such twelve-month period shall not exceed 0.25% of the Fund's average daily
net assets 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
shareholders of the Fund.
The Class B Plan provides that the Fund will pay a distribution fee at the
annual rate of 0.75% of the Fund's average daily net assets attributable to
Class B shares and will pay PFD a service fee at the annual rate of 0.25% of
the Fund's average daily net assets attributable to Class B shares. The
distribution fee is intended to compensate PFD for its 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
shares. PFD also receives the proceeds of any CDSC imposed on the redemption
of Class B shares.
Commissions of 3%, equal to 2.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, 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. Dealers will become eligible for additional service fees with
respect to such shares commencing in the 13th month following the purchase.
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 for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
XI. DIVIDENDS AND TAX STATUS
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under the Internal Revenue Code
of 1986, as amended (the "Code"). Because the Fund intends to distribute
substantially all of its net investment income and net realized capital gains
to shareholders in a timely manner, it is not expected that the Fund will be
required to pay any Federal income taxes. The Code permits tax-exempt
interest received by the Fund and distributed to the Fund's shareholders to
flow through as tax-exempt "exempt-interest dividends," provided that at
least 50% of the value of the total assets of the Fund at the close of each
quarter of its taxable year consists of tax-exempt obligations. However,
distributions derived from interest on certain "private activity bonds" will
be subject to the federal alternative minimum tax on individuals; and all tax
exempt distributions may result in or increase a corporate shareholder's
liability for the federal alternative minimum tax.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Fund will not be deductible for federal income tax purposes to
the extent the Fund's income dividends consist of exempt-interest dividends.
The Fund may not be an appropriate investment for per
<PAGE>
sons who are "substantial users" of facilities financed by industrial revenue or
private activity bonds or persons related to substantial users. Shareholders
receiving social security or certain railroad retirement benefits may be subject
to federal income tax on up to 85% of such benefits as a result of receiving
investment income, including exempt-interest dividends and other distributions
paid by the Fund.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary (taxable) income (if any) and net
capital gains if it fails to meet certain distribution requirements by the end
of the calendar year. The Fund intends to make distributions in a timely manner
and accordingly does not expect to be subject to the excise tax.
Each business day the Fund declares a dividend consisting of substantially all
of the Fund's net investment income. Shareholders begin earning dividends on the
first business day following receipt of payment for purchased shares. Shares
continue to earn dividends up to and including the date of redemption. Dividends
are normally paid on the last business day of the month or shortly thereafter.
The Fund's net investment income consists of the interest income it earns, less
expenses. In computing interest income, the Fund amortizes premium or accrues
discount on long-term debt securities only to the extent required for federal
income tax purposes.
While the Fund seeks to maximize the percentage of income distributed which is
not subject to federal income taxes, it is possible that under certain
circumstances (see "Investment Objective and Policies") a small portion of the
income dividends paid by the Fund will be subject to federal income tax.
Dividends from the Fund's taxable net investment income, if any, 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. Fund
distributions may also be subject to state and local income taxes. Shareholders
not subject to tax on their income will not be required to pay tax on amounts
distributed to them. The federal income tax status of all distributions will be
reported to shareholders annually, and shareholders are required to report all
distributions, including tax-exempt distributions, on their federal income tax
returns.
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 tax status of distributions will be provided
annually. For "Distribution Options" and "Directed Dividends."
Taxable dividends and other distributions which are taxable and the proceeds of
redemptions (including exchanges) and repurchases of Fund shares paid to
individuals and other non-exempt payees will be subject to a 31% federal backup
withholding 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 if the Fund
receives notice from the IRS or a broker that such withholding applies. Please
refer to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S.
corporations, partnerships, trusts or estates and who are subject to U.S.
federal income tax. Shareholders should consult their own tax advisors regarding
applicable state, local and other tax laws in their particular situations.
XII. SHAREHOLDER SERVICES
PSC is the transfer agent for shares of the Fund. PSC, a Massachusetts
corporation, is a wholly-owned subsidiary of PGI. PSC's offices are located at
60 State Street, Boston, Massachusetts 02109, and inquiries to PSC should be
mailed to Pioneering Services Corporation, P.O. Box 9014, Boston, Massachusetts
02205-9014. Brown Brothers Harriman & Co. (the "Custodian") serves as the
custodian of the Fund's portfolio securities and other assets. The principal
business address of the mutual funds division of the Custodian is 40 Water
Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders quarterly for dividend
reinvestment transactions and more frequently for other types of transactions.
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 a 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,
<PAGE>
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) to PSC; please
indicate your account number and Class of shares clearly. The bottom portion
of a confirmation statement may be used as a remittance slip to make
additional investments. You may also make arrangements for regular automatic
investments for Class A shares only 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 electronic
funds transfer or draft drawn on a checking account. Investomatic Plan
investments (Class A shares only) are voluntary, and you may discontinue the
Plan without penalty upon 30 days' written notice to PSC. PSC acts as agent
for the purchaser, the broker-dealer and PFD in maintaining these plans.
Additions to a shareholder's account, whether by check or through an
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable public offering price in effect as of the close of regular
trading on the Exchange on the day or receipt.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer fund account. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service.
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.
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 the Fund. See "Share Price," "How to Sell Fund Shares" and
"Telephone Exchanges" for more information. You may sell or exchange your
Fund shares by telephone by calling 1-800-225-6292 between 8:00 a.m. and
8:00 p.m. Eastern Time on weekdays. See "Share Price" for more information.
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 registered to non-U.S. citizens or
are held in the name of an institution or in the name of an investment
broker-dealer or other third-party. If reasonable procedures, such as those
described above, are not followed, the Fund may be liable for any loss due to
unauthorized or fraudulent instructions. The Fund may implement other
procedures from time to time. In all other cases, neither the Fund, PSC or
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. Your should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
Telecommunications 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 (Class A Shares Only)
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP")pro
<PAGE>
viding for fixed payments at regular intervals. Periodic checks of $50 or
more will be sent to you, monthly or quarterly. 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 Class A shares of the Fund at a
time when you have a SWP in effect may result in the payment of unnecessary
sales charges and may therefore be disadvantageous. Your periodic redemptions
of shares may be taxable transactions.
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 in shares of the Fund at the net asset value next determined after
receipt of the written request for reinstatement, together with the proceeds
that you wish to reinvest. You may realize a gain or loss for federal income
tax purposes as a result of the redemption, the determination of which may be
subject to special tax rules (See "Tax Status" in the Statement of Additional
Information.) Subject to the provisions outlined under "Exchange Privilege"
above, you may also reinvest in any other Pioneer mutual funds; in this case
you must meet the minimum investment requirement for each fund you enter. The
90-day reinvestment period may be extended by PFD for periods of up to one
year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by completing an
Account Option Form, which you may request by calling 1-800-225-6292.
XIII. THE FUND
The Fund is an open-end diversified management investment company (commonly
referred to as a mutual fund) organized as a Massachusetts business trust on
July 24, 1986. The Fund has authorized an unlimited number of shares of
beneficial interest and the Trustees are authorized to create additional
series of the Fund. The Fund is not required 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 Trustees have the authority, without further
shareholder approval, to classify and reclassify the shares of the Fund, or
any new series of the Fund, into one or more classes. As of the date of this
Prospectus, the Trustees have authorized the issuance of two Classes of
shares, designated Class A and Class B. 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 and
Class B 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.
XIV. INVESTMENT RESULTS
The Fund may from time to time include yield information in advertisements or
in information furnished generally to existing or proposed shareholders.
Whenever yield information is provided, it includes a standardized yield
calculation computed by dividing the Fund's net investment income per share
during a base period of 30 days, or one month, by the maximum offering price
per share of the Fund on the last day of such base period. (The Fund's net
investment income per share is determined by dividing the Fund's net
investment income during the base period by the average number of shares of
the Fund entitled to receive dividends during the base period.) The Fund's
30-day yield is then "annualized" by a computation that assumes that the
Fund's net investment income is earned and reinvested for a six-month period
at the same rate as during the 30-day base period and that the resulting six-
month income will be generated over an additional six months.
The Fund may also from time to time advertise its taxable equivalent yield.
The Fund's taxable equivalent yield is determined by dividing that portion of
the Fund's yield (calculated as described above) that is tax exempt by one
minus the stated federal income tax rate and adding the product to that
portion, if any, of the Fund's yield that is
<PAGE>
not tax exempt. For a table of sample taxable equivalent yields, please see
the Appendix.
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
shares the calculation reflects the deduction of any applicable contingent
deferred sales charge. 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 to unmanaged market indexes,
indicators of economic activity or averages of mutual funds results may be
cited or compared with the investment performance of the Fund. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. All quoted investment results are historical and should not be
considered representative of what an investment in the Fund may earn in any
future period. For further information about the calculation methods and uses
of the Fund's investment results, see the Statement of Additional
Information.
<PAGE>
XV. APPENDIX
Taxable Equivalent Yields*
The tables below show the approximate taxable yields which are equivalent to
hypothetical tax-exempt yields from 5% to 9% under federal income tax laws
applicable to individuals during 1994.
<TABLE>
<CAPTION>
Taxable Yield Required
Single Return Joint Return Tax To Equal A Tax Free Yield Of:
(Taxable Income)* Rate 5% 6% 7% 8% 9%
<S> <C> <C> <C> <C> <C> <C> <C>
Up to $22,750 Up to $38,000 15.0% 5.88 7.06 8.24 9.41 10.59
$22,751-55,100 $38,001-91,850 28.0% 6.94 8.33 9.72 11.11 12.50
$55,101-115,000 $91,851-140,000 31.0% 7.25 8.70 10.14 11.59 13.04
$115,001-$250,000 $140,001-$250,000 36.0% 7.81 9.38 10.94 12.50 14.06
Over $250,000 Over $250,000 39.6% 8.28 9.93 11.59 13.25 14.90
</TABLE>
*Net amount subject to Federal income tax after deductions and exemptions.
Table does not reflect the effect of the Deduction Limitation and Exemption
Phaseout described below** or of the alternative minimum tax, if any. Table
assumes person filing Single Return is not a married individual filing a
separate return, a surviving spouse, or a head of household.
**Deduction Limitation: Each $100 of adjusted gross income ("AGI") in excess
of $111,800 ($55,900 for marrieds filing separately) causes the loss of $3 of
itemized deductions. This limitation affects all itemized deductions other
than medical expenses, investment interest, and casualty, theft and wagering
losses. However, not more than 80% of a taxpayer's itemized deductions can be
eliminated. The threshold amounts will be adjusted for inflation from year to
year.
Exemption Phaseout: Each $2,500 or fraction thereof of AGI in excess of
$167,700 for joint filers ($111,800 for single taxpayers) causes taxpayers to
lose 2% of their personal exemptions. The threshold amounts will be adjusted
for inflation from year to year.
The following formula can be used to calculate a taxable yield which is
equivalent to the corresponding tax-free yield:
Tax Free Yield
------------------ = Taxable Equivalent Yield
1-Your Tax Bracket
For example, if you are in the 28% tax bracket and earn a tax-free yield of
7%, the taxable equivalent yield would be 9.72%.
7% .07
---- = --- = 9.72%
1-28% .72
There can be no assurance that the Fund will achieve any specific tax-exempt
yield. While it is expected that a substantial portion of the interest income
distributed to investors in the Fund will be exempt from regular federal
income taxes, portions of such distributions may be subject to regular
federal income tax or federal alternative minimum tax. In addition, all or a
substantial portion of such distributions may be subject to state and local
taxes. Subsequent tax law changes could result in prospective or retroactive
changes in the tax brackets, tax rates and tax equivalent yields set forth
above.
<PAGE>
Notes
<PAGE>
The Pioneer Family of Mutual Funds
Growth Funds
Pioneer Capital Growth Fund
Pioneer Growth Shares, Inc.
Pioneer Winthrop Real Estate Investment Fund
Pioneer International Growth Fund
Pioneer Europe Fund
Growth and Income Funds
Pioneer Three
Pioneer II
Pioneer Fund
Pioneer Equity-Income Fund
Income Funds
Pioneer Bond Fund
Pioneer U.S. Government Trust
Pioneer Income Fund, Inc.
Pioneer America Fund, Inc.
Pioneer Tax-Free Income Fund, Inc.
Pioneer Short-Term Income Trust
Pioneer Intermediate Tax-Free Fund
Pioneer California Double Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
Specialized Growth Funds
Pioneer Gold Shares
Money Market Funds
Pioneer Cash Reserves Fund
Pioneer Money Market Account, Inc.
Pioneer U.S. Government Money Fund
Pioneer Tax-Free Money Fund
<PAGE>
[COVER]
[Pioneer logo]
Pioneer
Intermediate
Tax-Free
Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
KATHLEEN D. McCLASKEY, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN & CO.
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call...
Existing and new accounts, prospectuses,
applications, service forms and
telephone transactions ..................................... 1-800-225-6292
Automated fund yields, 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
0494-1851
(C)Pioneer Funds Distributor, Inc.
Pioneer
Intermediate
Tax-Free
Fund
Class A and
Class B Shares
Prospectus
April 29, 1994
