As filed with the Securities and Exchange Commission on April 28, 1997.
File Nos. 33-7592
811-4768
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. __ /----/
Post-Effective Amendment No. 15 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /_X_ /
Amendment No.15 /_X_ /
(Check appropriate box or boxes)
PIONEER INTERMEDIATE TAX-FREE FUND
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Esq.,
Hale and Dorr LLP
60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective:
_X_ on April 30, 1997 pursuant to paragraph (b) of Rule 485
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) of the Investment Company Act
of 1940. Registrant filed a Rule 24f-2 Notice for its fiscal year ending
December 31, 1996 on or about February 26, 1997.
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
CLASS A, CLASS B AND CLASS C SHARES
Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of
Information Required by Items of the Registration Form
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
- --------------------------------- ----------------------
1. Cover Page. Prospectus - Cover Page
2. Synopsis Prospectus - Expense
Information
3. Condensed Financial Information Prospectus - Financial
Highlights
4. General Description of Registrant Prospectus - Investment
Objective and Policies;
The Fund
5. Management of the Fund Prospectus - Management
of the Fund
6. Capital Stock and Other Securities Prospectus -Investment
Objective and Policies;
The Fund
7. Purchase of Securities Being Offered Prospectus - Fund
ShareAlternatives; How to
Buy Fund Shares;
Shareholder Services;
Distribution Plans
8. Redemption or Repurchase Prospectus - Fund Share
Alternatives; How to Sell
Fund Shares; Shareholder
Services
9. Pending Legal Proceedings Not Applicable
10. Cover Page Statement of Additional
Information - Cover Page
11. Table of Contents Statement of Additional
Information - Cover Page
12. General Information and History Statement of Additional
Information - Cover Page;
Description of Shares
<PAGE>
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
- --------------------------------- ----------------------
13. Investment Objectives and Policies Statement of Additional
Information - Investment
Policies and Restrictions
14. Management of the Fund Statement of Additional
Information - Management
of the Fund; Investment
Adviser
15. Control Persons and Principal Holders
of Securities Statement of Additional
Information - Management
of the Fund
16. Investment Advisory and Other Services Statement of Additional
Information - Management
of the Fund; Investment
Adviser; Shareholder
Servicing/Transfer Agent;
Underwriting Agreementand
Distribution Plans;
Custodian; Independent
Public Accountants
17. Brokerage Allocation and Other Practices Statement of Additional
Information - Portfolio
Transactions
18. Capital Stock and Other Securities Statement of Additional
Information - Description
of Shares; Certain
Liabilities
19. Purchase Redemption and Pricing of
Securities Being Offered
Statement of Additional
Information -
Determination of Net
Asset Value; Letter of
Intention; Systematic
Withdrawal Plan
20. Tax Status Statement of Additional
Information - Tax Status
21. Underwriters Statement of Additional
Information - Principal
Underwriter; Underwriting
Agreement and
Distribution Plans
<PAGE>
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
- --------------------------------- ----------------------
22. Calculation of Performance Data Statement of Additional
Information - Investment
Results
23. Financial Statements Balance Sheet; Report of
Independent Public
Accountants
<PAGE>
Pioneer [Pioneer logo]
Intermediate
Tax-Free
Fund
Prospectus
Class A, Class B and Class C Shares
April 30, 1997
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 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.
This Prospectus 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 the Statement of Additional
Information, also dated April 30, 1997, which is incorporated into this
Prospectus by reference. A copy of the Statement of Additional Information may
be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or
by written request to the Fund at 60 State Street, Boston, Massachusetts 02109.
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 OF CONTENTS PAGE
--------------------------------------------------------- ------
I. EXPENSE INFORMATION ................................. 2
II. FINANCIAL HIGHLIGHTS ................................. 3
III. INVESTMENT OBJECTIVE AND POLICIES ..................... 5
IV. MANAGEMENT OF THE FUND .............................. 6
V. FUND SHARE ALTERNATIVES .............................. 7
VI. SHARE PRICE .......................................... 8
VII. HOW TO BUY FUND SHARES .............................. 8
VIII. HOW TO SELL FUND SHARES .............................. 11
IX. HOW TO EXCHANGE FUND SHARES ........................... 12
X. DISTRIBUTION PLANS .................................... 13
XI. DIVIDENDS AND TAX STATUS .............................. 14
XII. SHAREHOLDER SERVICES ................................. 15
Account and Confirmation Statements .................. 15
Additional Investments .............................. 15
Automatic Investment Plans ........................... 15
Financial Reports and Tax Information ............... 15
Distribution Options ................................. 15
Directed Dividends ................................. 15
Direct Deposit ....................................... 15
Telephone Transactions and Related Liabilities ...... 15
FactFone(SM) .......................................... 16
Telecommunications Device for the Deaf (TDD) ......... 16
Systematic Withdrawal Plans ........................ 16
Reinstatement Privilege (Class A Shares Only) ...... 16
XIII. THE FUND ............................................. 16
XIV. INVESTMENT RESULTS .................................... 17
XV. APPENDIX ............................................. 18
Taxable Equivalent Yields ........................... 18
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
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 annual operating expenses based on actual expenses for
the fiscal year ended December 31, 1996. For Class C shares, operating expenses
are based on estimated expenses that would have been incurred if Class C shares
had been outstanding for the entire fiscal year ended December 31, 1996.
Shareholder Transaction Expenses: Class A Class B Class C
Maximum Initial Sales Charge on Purchases
(as a percentage of the offering price) ... 3.50%(1) None None
Maximum Sales Charge on Reinvestment of
Dividends ................................. None None None
Maximum Deferred Sales Charge
(as a percentage of purchase price or
redemption proceeds, as applicable) ...... None(1) 3.00% 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 (after fee reduction)(3) ...... 0.39% 0.39% 0.39%
12b-1 fees ................................. 0.23% 1.00% 1.00%
Other Expenses (including transfer agent fee,
custodian fees and accounting and printing
expenses) ................................. 0.38% 0.37% 0.50%
------- ----- -------
Total Operating Expenses (after fee
reductions)(3) ............................. 1.00% 1.76% 1.89%
======= ===== ========
- ---------
1 Purchases of $1 million or more and purchases by participants in a group plan
are not subject to an initial sales charge but may be subject to a contingent
deferred sales charge ("CDSC") as further described under "How to Sell Fund
Shares."
2 Separate fees (currently $10 and $20, respectively) apply to domestic or
international wire transfers of redemption proceeds.
3 Effective January 3, 1994, Pioneering Management Corporation ("PMC"), agreed
not to impose a portion of its management fee and to make other arrangements
to the extent necessary to limit the Class A shares operating expenses of the
Fund to 1.00% of the average daily net assets attributable to the Class A
shares. The portion of fund-wide expenses attributable to Class B and Class C
shares will be reduced only to the extent such expenses are reduced for the
Class A shares of the Fund. This agreement is voluntary and temporary and may
be revised or terminated at any time.
Expenses Absent Reductions* Class A Class B Class C
--------- --------- ---------
Management Fee ............. 0.50% 0.50% 0.50%
Total Operating Expenses ... 1.11% 1.87% 2.00%
- ---------
* Reductions reflect total operating expenses net of custodian and transfer
agent fee credits.
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same each
year.
1 Year 3 Years 5 Years 10 Years
--------- ---------- ---------- ----------
Class A Shares $45 $66 $88 $153
Class B Shares*
-Assuming complete
redemption at end
of period $48 $75 $95 $187
-Assuming no redemption $18 $55 $95 $187
Class C shares**
-Assuming complete
redemption at end
of period $29 $59 $102 $221
-Assuming no redemption $19 $59 $102 $221
- ---------
* Class B shares convert to Class A shares six years after purchase;
therefore, Class A share expenses are used after year six.
** Class C shares redeemed during the first year after purchase are subject to
a 1% CDSC.
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, 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 Conduct Rules of the National Association of
Securities Dealers, Inc. ("NASD").
The maximum initial 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 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 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. Arthur Andersen LLP's report on the Fund's
financial statements as of December 31, 1996, appears in the Fund's Annual
Report which is incorporated by reference in the Statement of Additional
Information. The Annual Report includes more information about the Fund's
performance and is available free of charge by calling Shareholder Services at
1-800-225-6292.
Pioneer Intermediate Tax-Free Fund
Selected Data for a Class A Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------
1996 1995 1994+ 1993
------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period ..................... $ 10.44 $ 9.62 $ 10.76 $10.32
-------- -------- -------- ------
Increase (decrease) from
investment operations:
Net investment income ...... $ 0.46 $ 0.49 $ 0.49 $ 0.56
Net realized and
unrealized gain (loss)
on investments ............... (0.15) 0.82 (1.13) 0.56
-------- -------- -------- ------
Net increase
(decrease) from
investment operations ......... $ 0.31 $ 1.31 $ (0.64) $ 1.12
Distribution to
shareholders from:
Net investment income ...... (0.47) (0.49) (0.49) (0.56)
Net realized gains ............ -- -- (0.01) (0.12)
-------- -------- -------- ------
Net increase (decrease) in net
asset value .................. $ (0.16) $ 0.82 $ (1.14) $ 0.44
-------- -------- -------- ------
Net asset value, end
of period ..................... $ 10.28 $ 10.44 $ 9.62 $10.76
======== ======== ======== ======
Total return* .................. 3.03% 13.80% (6.02)% 11.08%
Ratio of net expenses to
average net assets ............ 1.03%++ 1.02%++ 1.00% 0.85%
Ratio of net investment income
to average net assets ......... 4.47%++ 4.77%++ 4.89% 5.23%
Portfolio turnover rate ...... 34% 29% 39% 14%
Net assets, end of period
(in thousands) ............... $73,387 $79,432 $76,674 $82,097
Ratios assuming no
reduction of fees or
expenses:
Net expenses ............... 1.14% 1.12% 1.22% 1.12%
Net investment income ...... 4.36% 4.67% 4.67% 4.97%
Ratios assuming a reduction of
fees and expenses by PMC
and a reduction for fees paid
indirectly:
Net expenses ............... 1.00% 1.00% -- --
Net investment income ...... 4.50% 4.79% -- --
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------
1992 1991 1990 1989 1988 1987
---------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ..................... $10.06 $ 9.63 $ 9.66 $ 9.40 $ 8.95 $ 10.01
------ ------ ------ ------ ------ ---------
Increase (decrease) from
investment operations:
Net investment income ...... $ 0.59 $ 0.61 $ 0.63 $ 0.63 $ 0.63 $ 0.62
Net realized and
unrealized gain (loss)
on investments ............... 0.25 0.43 (0.04) 0.26 0.47 (1.02)
------ ------ ------ ------ ------ ---------
Net increase
(decrease) from
investment operations ......... $ 0.84 $ 1.04 $ 0.59 $ 0.89 $ 1.10 $ (0.40)
Distribution to
shareholders from:
Net investment income ...... (0.58) (0.61) (0.62) (0.63) (0.65) (0.66)
Net realized gains ............ -- -- -- -- -- --
------ ------ ------ ------ ------ ---------
Net increase (decrease) in net
asset value .................. $ 0.26 $ 0.43 $(0.03) $ 0.26 $ 0.45 $ (1.06)
------ ------ ------ ------ ------ ---------
Net asset value, end
of period ..................... $10.32 $10.06 $ 9.63 $ 9.66 $ 9.40 $ 8.95
====== ====== ====== ====== ====== =========
Total return* .................. 8.65% 11.17% 6.42% 9.77% 12.79% (3.91)%
Ratio of net expenses to
average net assets ............ 0.85% 0.75% 0.66% 0.60% 0.50% 0.35%
Ratio of net investment income
to average net assets ......... 5.78% 6.21% 6.56% 6.60% 6.89% 7.08%
Portfolio turnover rate ...... 4% 5% 8% 4% 10% 1%
Net assets, end of period
(in thousands) ............... $57,353 $44,631 $34,118 $28,754 $20,121 $13,107
Ratios assuming no
reduction of fees or
expenses:
Net expenses ............... 1.27% 1.33% 1.17% 1.10% 1.28% 1.53%
Net investment income ...... 5.36% 5.63% 6.05% 6.10% 6.11% 5.90%
Ratios assuming a reduction of
fees and expenses by PMC
and a reduction for fees paid
indirectly:
Net expenses ............... -- -- -- -- -- --
Net investment income ...... -- -- -- -- -- --
</TABLE>
- -------------
+ Based upon average shares outstanding and average net assets for the period
presented.
++ Ratios assuming no reduction for fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
Pioneer Intermediate Tax-Free Fund
Selected Data for a Class B Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
April 29,
1994 to
For the Year Ended December 31, December 31,
-------------------------------- ------------
1996 1995 1994+
---------- ------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period ............. $10.46 $ 9.65 $ 10.07
------- -------- --------
Increase (decrease) from investment operations:
Net investment income ............................ $ 0.38 $ 0.41 $ 0.27
Net realized and unrealized gain (loss)
on investments ................................... (0.15) 0.80 (0.42)
------- -------- --------
Total increase (decrease) from
investment operations ........................... $ 0.23 $ 1.21 $ (0.15)
Distribution to shareholders from:
Net investment income ............................ (0.38) (0.40) (0.27)
Net realized (unrealized) gains ................ -- -- --
------- -------- --------
Net increase (decrease) in net asset value ....... $(0.15) $ 0.81 $ (0.42)
------- -------- --------
Net asset value, end of period ................... $10.31 $ 10.46 $ 9.65
======= ======== ========
Total return* ..................................... 2.25% 12.71% (1.49)%
Ratio of net expenses to average net assets ....... 1.81%+ 1.86%++ 1.84%**
Ratio of net investment income to
average net assets .............................. 3.68%+ 3.90%++ 4.17%**
Portfolio turnover rate ......................... 34% 29% 39%
Net assets, end of period (in thousands) .......... $2,864 $ 2,553 $ 1,529
Ratios assuming no reduction of
fees or expenses:
Net expenses ..................................... 1.91% 1.96% 2.14%**
Net investment income ............................ 3.58% 3.80% 3.87%**
Ratios assuming a reduction of fees and
expenses by PMC and a reduction for
fees paid indirectly: --
Net expenses ..................................... 1.76% 1.82% --
Net investment income ............................ 3.73% 3.94%
</TABLE>
Pioneer Intermediate Tax-Free Fund
<TABLE>
<CAPTION>
Selected Data for a Class C Share Outstanding Throughout Each Period:
For the period
January 31, 1996
through
December 31, 1996***
--------------------
<S> <C>
Net asset value, beginning of period .................. $ 10.51
---------
Increase (decrease) from investment operations:
Net investment income ................................. $ 0.33
Net realized and unrealized gain (loss) on investments (0.21)
---------
Net increase (decrease) from investment operations ... $ 0.12
Distribution to shareholders from:
Net investment income ................................. (0.33)
In excess of net investment income .................. (0.01)
---------
Net increase (decrease) in net asset value ............ $ (0.22)
---------
Net asset value, end of period ........................ $ 10.29
=========
Total return* .......................................... 1.22%
Ratio of net expenses to average net assets ............ 1.97%++**
Ratio of net investment income to average net assets ... 3.51%++**
Portfolio turnover rate .............................. 34%
Net assets, end of period (in thousands) ............... $ 202
Ratios assuming no reduction of fees or expenses:
Net expenses .......................................... 2.08%**
Net investment income ................................. 3.40%**
Ratios assuming a reduction of fees and expenses
by PMC and a reduction for fees paid indirectly:
Net expenses .......................................... 1.89%++
Net investment income ................................. 3.59%++
</TABLE>
- -------------
+ Based upon average shares outstanding and average net assets for the period
presented.
++ Ratios assuming no reduction for fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all 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.
*** Class C shares were first publicly offered on January 31, 1996.
4
<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 Ratings Service ("S&P" ) or are rated Aaa, Aa, A or Baa by Moody's
Investor 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 any
portion of Fund expenses allocable to the Fund's taxable income. If the Fund
cannot find suitable tax-exempt short-term instruments in the quantity
necessary, or if for any reason the Fund earns 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 the
Fund's 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-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
5
<PAGE>
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,
the Fund's distributions of 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%. Securities in the Fund's portfolio will be sold whenever
PMC believes that it is necessary without regard to the length of time the
particular security may have been held. This policy is subject to certain
requirements for continuing the Fund's qualification as a regulated investment
company under the Internal Revenue Code of 1986, as amended (the "Code"). See
"Financial Highlights" for actual turnover rates. 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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general responsibility
for PMC's investment operations and chairs a committee of PMC's fixed income
managers which reviews PMC's research and portfolio operations, including those
of the Fund. Mr. Tripple joined PMC in 1974.
Research and management of the Fund is the responsibility of a team of
portfolio managers and analysts focusing on fixed income securities. Members of
the team meet regularly to discuss holdings, prospective investments and
portfolio composition. Mr. Sherman Russ, a Senior Vice President of PMC and Vice
President of the Fund, is the senior member of the team. Mr. Russ joined PMC in
1983.
Day-to-day management of the Fund has been the responsibility of Ms.
Kathleen D. McClaskey, a Vice President of PMC and the Fund, since February,
1990. Ms. McClaskey joined PMC in 1986 and has over 15 years of investment
experience.
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. John F.
Cogan, Jr., Chairman and President of the Fund, Chairman of PFD, President and a
Director of PGI and Chairman and a Director of PMC, owned approximately 14% of
the outstanding capital stock of PGI as of the date of this Prospectus.
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. In an effort to avoid conflicts of
interest with the Fund, the Fund and PMC have adopted a Code of Ethics that is
designed to maintain a high standard of personal conduct by directing that all
personnel defer to the interests of the Fund and its shareholders in making
personal securities transactions.
Under the terms of its contract with the Fund, PMC 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,
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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 regulatory
agencies, 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 brokerage or investment research services or sells shares
of any Pioneer mutual fund or other funds for which PMC or any affiliate or
subsidiary serves as investment adviser or manager. 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.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers three Classes of shares designated as Class A,
Class B and Class C shares, as described more fully in "How to Buy Fund Shares."
If you do not specify in your instructions to the Fund which Class of shares you
wish to purchase, exchange or redeem, the Fund will assume that your
instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares redeemed
within 12 months of purchase may be subject to a 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% 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.
Class C Shares. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the higher
distribution fee paid by Class C shares will cause your Class C shares to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class C shares have no conversion feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and your
personal situation. If you are making an investment that qualifies for reduced
sales charges, you might consider Class A shares. If you prefer not to pay an
initial sales charge on an investment of $250,000 or less and you plan to hold
the investment for at least four 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 Pioneer mutual 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
accordance with local laws and business practices.
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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. Net asset value per
share of each Class of 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.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares from any securities broker-dealer which has a sales
agreement with PFD. If you do not have a securities broker-dealer, please call
1-800-225-6292. Shares will be purchased at the public offering price, that is,
the net asset value per share plus any applicable sales charge, next computed
after receipt of a purchase order, except as set forth below.
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments 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 and Class C
shares except that the subsequent minimum investment amount for Class B and
Class C share accounts may be as little as $50 if an automatic investment plan
is established (see "Automatic Investment Plans").
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicate otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing Pioneer 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 available to other types of retirement plan
accounts. Call PSC for more information.
You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section of
your Account Application or an Account Options Form. PSC will electronically
debit the amount of each purchase from this predesignated bank account.
Telephone purchases may not be made for 30 days after the establishment of your
bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's receipt of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by mail.
See "Telephone Transactions and Related Liabilities" for additional information.
Class A Shares
You may buy Class A shares at the public offering price, including a sales
charge, as follows:
Dealer
Allowance
Sales Charge as a % of as a % of
----------------------- ----------
Net
Offering Amount Offering
Amount of Purchase Price Invested Price
- -------------------------------- ----------- ----------- ----------
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
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Code, although more than one beneficiary is involved.
The sales charges applicable to a current purchase of Class A shares of the Fund
by a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of shares
of any of the other Pioneer mutual funds previously purchased and then owned,
provided PFD is notified by such person or his or her broker-dealer each time a
purchase is made which would qualify. Pioneer mutual funds include all mutual
funds for which PFD serves as principal underwriter. At the sole discretion of
PFD, holdings of funds domiciled outside the U.S., but which are managed by
affiliates of PMC, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by participants in certain group plans
(described below) subject to a CDSC 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. Broker-dealers who receive a
commission in connection with Class A share purchases at net asset value by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets will be required to return any
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
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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. From time to time, PFD may
elect to reallow the entire initial sales charge to participating dealers for
all Class A sales with respect to which orders are placed during a particular
period. Dealers to whom substantially the entire sales charge is reallowed may
be deemed to be underwriters under the federal securities laws.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to, permits
group solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Class A shares of the Fund may be sold at net asset
value without a sales charge to 401(k) retirement plans with 100 or more
participants or at least $500,000 in plan assets. Information about such
arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners 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 financial
planners adhering to standards established by PFD; (i) other funds and accounts
for which PMC or any of its affiliates serves as investment adviser or manager;
and (j) certain unit investment trusts. Shares so purchased are purchased for
investment purposes and may not be resold except through redemption or
repurchase by or on behalf of the Fund. The availability of this privilege is
conditioned on the receipt by PFD of written notification of eligibility. Class
A shares of 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 providers to Program
participants and (iv) the Program provides for a matching contribution for each
participant contribution. Shares of the Fund may also be sold at net asset value
without a sales charge in connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies or personal
holding companies.
Reduced sales charges are available for purchases of $100,000 or more of
Class A shares (excluding any reinvestments of dividends and capital gains
distributions) made within a 13-month period pursuant to a Letter of Intent
("LOI") which may be established by completing the Letter of Intent section of
the Account Application. The reduced sales charge will be the charge that would
be applicable to the purchase of the specified amount of Class A shares as if
the shares had all been purchased at the same time. A purchase not made pursuant
to an LOI may be included if the LOI is submitted to PSC within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the Fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PSC, registered in your name, until the terms of the
LOI are fulfilled.
You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to cover actual sales charges is due, it must be paid to PFD
within 20 days after PFD or your dealer sends you a written request, otherwise
PFD will direct PSC to liquidate sufficient shares from your escrow account to
cover the amount due. See the Statement of Additional Information for more
information.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase shares of the Fund at net asset value, without a sales
charge, to the extent that the purchase price is paid out of proceeds from one
or more redemptions by the investor of shares of certain other mutual funds. In
order for a purchase to qualify for this privilege, the investor must document
to the broker-dealer that the redemption occurred within 60 days immediately
preceding the purchase of Class A shares; that the client paid a sales charge on
the original purchase of the shares redeemed; and that the mutual fund whose
shares were redeemed also offers net asset value purchases to redeeming
shareholders of any of the Pioneer mutual funds. Further details may be obtained
from PFD.
Class B Shares
You may buy Class B shares at the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class B shares redeemed within 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
9
<PAGE>
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 four-year period. As a result,
you will pay the lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- ---------------------- --------------------------------
First 3.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth 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 six years after the purchase date, except as noted
below. Class B shares acquired by exchange from Class B shares of another
Pioneer mutual 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"), which the Fund has obtained, 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 continue to
be in effect at the time any particular conversion would occur. The conversion
of Class B shares to Class A shares will not occur if such ruling is no longer
in effect and such an 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.
Class C Shares
You may buy Class C shares at the net asset value next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class C shares redeemed within one year of purchase will be subject to
a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of
the current market value or the original purchase cost of the shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gains distributions. Class C shares do not convert to any
other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments
during a quarter will be aggregated and deemed to have been made on the first
day of that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
Fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class
B shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in the
case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of all
beneficial owners) or a total and permanent disability (as defined in section 72
of the Code) of all registered owners occurring after the purchase of the shares
being redeemed or (b) the redemption is made in connection with limited
automatic redemptions as set forth in "Systematic Withdrawal Plans" (limited in
any year to 10% of the value of the account in the Fund at the time the
withdrawal plan is established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and permanent
disability (as defined in Section 72 of the Code) occurring after the purchase
of the shares being redeemed of a shareholder or participant in an
employer-sponsored retirement plan; (b) the distribution is to a participant in
an IRA, 403(b) or employer-sponsored retirement plan, is part of a series of
substantially equal payments made over the life expectancy of the participant or
the joint life expectancy of the participant and his or her beneficiary or as
scheduled periodic payments to a participant (limited in any year to 10% of the
value of the participant's account at the time the distribution amount is
established; a required minimum distribution due to the participant's attainment
of age 701/2 may exceed the 10% limit only if the distribution amount is based
on plan assets held by Pioneer); (c) the distribution is from a 401(a) or 401(k)
retirement plan and is a return of excess employee deferrals or employee
contributions or a qualifying hardship distribution as defined by the Code or
results from a termination of employment (limited with respect to a termination
to 10% per year of the value of the plan's assets in the Fund as of the later of
the prior December 31 or the date the account was established unless the plan's
assets are being rolled over to or reinvested in the same class of shares of a
Pioneer mutual fund subject to the CDSC of the shares originally held); (d) the
distribution is from an IRA, 403(b) or employer-sponsored retirement plan and is
to be rolled over to or reinvested in the same class of shares in a Pioneer
mutual fund and which will be subject to the applicable CDSC upon redemption;
(e) the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which will
be subject to the applicable CDSC upon
10
<PAGE>
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
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder 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).
The CDSC on any shares subject to a CDSC may be waived or reduced for
either non-retirement or retirement plan accounts if the redemption is made
pursuant to the Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account. The CDSC on any shares subject to a CDSC will not be
applicable if the selling broker-dealer elects, with PFD's approval, to waive
receipt of the commission normally paid at the time of the sale.
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 PFD's close of business. PFD or its
affiliates may provide additional compensation to certain dealers or such
dealers' affiliates based on certain objective criteria established from time to
time by PFD. All such payments are made out of PFD's or the affiliate's own
assets. These payments will not change the price an investor will pay for shares
or the amount that the Fund will receive from such sale.
General. The Fund reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has been
confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to 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. Please note the following:
[bullet] If you are selling shares from a retirement account, other than an
IRA, you must make your request in writing (except for exchanges to
other Pioneer mutual funds which can be requested by phone or in
writing). Call 1-800-622-0176 for more information.
[bullet] If you are selling shares from a non-retirement account or an IRA,
you may use any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received in good order less any applicable CDSC. Sale proceeds
generally will be sent to you in cash, normally within seven days after your
order is received in good order. The Fund reserves the right to withhold payment
of the sale proceeds until checks received by the Fund in payment for the shares
being sold have cleared, which may take up to 15 calendar days from the purchase
date.
In Writing. You may always sell your shares by delivering a written
request, signed by all registered owners, in good order to PSC, however, you
must use a written request, including a signature guarantee, to sell your shares
if any of the following applies:
[bullet] you wish to sell over $50,000 worth of shares,
[bullet] your account registration or address has changed within the last 30
days,
[bullet] the check is not being mailed to the address on your account
(address of record),
[bullet] the check is not being made out to the account owners, or
[bullet] the sale proceeds are being transferred to a Pioneer mutual fund
account with a different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described below.
Unless instructed otherwise, PSC will send the proceeds of the sale to the
address of record. Fiduciaries and corporations are required to submit
additional documents. For more information, contact PSC at 1-800-225-6292.
Written requests will not be processed until they are received in good
order by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any 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
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information about the necessary documentation for redemption by mail, please
contact PSC at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone redemption. The telephone redemption option is not available
to retirement plan accounts except IRAs. A maximum of $50,000 per account per
day may be redeemed by telephone or fax and the proceeds may be received by
check or by bank wire or electronic funds transfer. To receive the proceeds by
check: the check must be made payable exactly as the account is registered and
the check must be sent to the address of record which must not have changed in
the last 30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the proceeds must be sent to your bank address of record which must
have been properly predesignated either on your Account Application or on an
Account Options Form and which must not have changed in the last 30 days. To
redeem by fax send your redemption request to 1-800-225-4240. You may always
elect to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions will
be priced as described above. You are strongly urged to consult with your
financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund and reserves the right
to terminate this procedure at any time. Your broker-dealer must receive your
request before the close of business on the Exchange and transmit it to PFD
before PFD's close of business to receive that day's redemption price. Your
broker-dealer is responsible for providing all necessary documentation to PFD
and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value of
the account to at least the minimum required amount within six months of notice
by the Fund to you of the Fund's intention to redeem the shares.
CDSC on Class A Shares. Purchases of Class A shares of $1 million or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months following
the share purchase, at the rate of 0.50% 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
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the Class of shares to be exchanged and the dollar amount or number
of shares to be exchanged. Written exchange requests must be signed by all
record owner(s) exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicate otherwise on your Account
Application or by writing to the PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by voice
or by FactFone(SM), will be recorded. You are strongly urged to consult with
your financial representative prior to requesting a telephone exchange. See
"Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
mutual fund account for shares of the same Class in another Pioneer mutual fund
account on a monthly or quarterly basis. The accounts must have identical
registrations and the originating account must have a minimum balance of $5,000.
The exchange will be effective on the day of the month designated on your
Account Application or Account Options Form.
General. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Fund shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not all
Pioneer mutual funds offer more than one Class of shares. A new Pioneer mutual
fund account opened through an exchange must have a registration identical to
that on the original account.
Shares which would normally be subject to a CDSC upon redemption will not
be charged the applicable CDSC at the time of an exchange. Shares acquired in an
exchange will be subject to the CDSC of the shares originally held. For purposes
of determining the amount of any applicable CDSC, the length of time you have
owned shares acquired by exchange will be measured from the date you acquired
the original shares and will not be affected by any subsequent exchange.
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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 taxable gain or loss on the shares
sold, depending on the tax basis of these shares and the timing of the
transaction and special tax rules may apply.
You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For the protection of the Fund's performance and
shareholders, the Fund and PFD reserve the right to refuse any exchange request
or restrict, at any time without notice, the number and/or frequency of
exchanges to prevent abuses of the exchange privilege. Such abuses may arise
from frequent trading in response to short-term market fluctuations, a pattern
of trading by an individual or group that appears to be an attempt to "time the
market," or any other exchange request which, in the view of management, will
have a detrimental effect on the Fund's portfolio management strategy or its
operations. In addition, the Fund and PFD reserve the right to charge a fee for
exchanges or to modify, limit, suspend or discontinue the exchange privilege
with notice to shareholders as required by law.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for each Class of shares (the
"Class A Plan," "Class B Plan," and "Class C Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution 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
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.
Both the Class B Plan and the Class C Plan provide 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 the applicable Class of 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 that Class of 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 and Class C shares. PFD also
receives the proceeds of any CDSC imposed on the redemption of Class B and Class
C 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.
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 service fees of up to 0.75% and 0.25%,
respectively, of the net asset value of such shares. When a broker-dealer sells
Class B or Class C
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shares and elects, with PFD's approval, to waive its right to receive the
commission normally paid at the time of sale, PFD may cause all or a portion of
the distribution fees described above to be paid to the broker-dealer.
Dealers may from time to time be required to meet certain criteria in order
to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan or the Class C Plan for which there
is no dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
XI. DIVIDENDS AND TAX STATUS
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code, so
that it will not pay federal income tax on income and capital gains distributed
to shareholders as required under the Code. The Code permits the Fund's
shareholders to treat tax-exempt interest received by the Fund and distributed
to them in the form of "exempt-interest dividends" as tax-exempt interest,
provided that the Fund qualifies as a regulated investment company and 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 for individuals, estates or trusts that are
subject to such tax; 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 it is deemed related to the Fund's exempt-interest dividends. The Fund
may not be an appropriate investment for persons 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 a portion
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% excise tax
on a portion of its undistributed ordinary (taxable) income (if any) and capital
gains if it fails to meet certain distribution requirements with respect to each
calendar year. The Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.
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. The Fund will make distributions from net long-term gains, if any, in
December. Dividends from net short-term capital gains, if any, may be paid with
such dividends; dividends from income and/or capital gains may also be paid at
such other times as may be necessary for the Fund to avoid federal income or
excise tax.
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.
Generally, dividends from the Fund's taxable net investment income, if any,
market discount income and net short-term capital gains are taxable under the
Code as ordinary income, and dividends from the Fund's net long-term capital
gains are taxable as long-term capital gains. The Fund's dividends and
distributions generally will not qualify for any dividends-received deduction
available to corporate shareholders. Fund distributions may also be subject to
state and local income taxes. A state income (and possibly local income and/or
intangible property) tax exemption is generally available to the extent the
Fund's distributions are derived from interest on (or, in the case of intangible
property taxes, the value of its Shares is attributable to) certain U.S.
government obligations and/or tax-exempt municipal obligations issued by or on
behalf of the particular state or a political subdivision thereof, provided in
some states that certain concentration, designation, reporting or other
requirements are satisfied. Shareholders are required to report all dividends
and 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
to shareholders annually. See "Distribution Options" and "Directed Dividends."
Dividends (other than exempt-interest dividends) and other distributions
and the proceeds of redemptions, exchanges or repurchases of Fund shares paid to
individuals and other non-exempt payees may be subject to 31% backup withholding
of federal income tax if the Fund is not provided with the shareholder's correct
taxpayer identification number and certification that the number is correct and
that the shareholder is not subject to backup withholding or that the Fund
receives notice from the IRS or a broker that such withholding applies. Please
refer to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S.
corporations, partnerships, trusts or estates, and who are subject to U.S.
federal income tax. Non-U.S. shareholders and tax-exempt shareholders are
subject to different tax treatment that is not described above. Shareholders
should consult their own tax advisors regarding state, local and other
applicable tax laws.
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XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Pioneering Services Corporation, P.O. Box
9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co. (the
"Custodian") serves as 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 as transactions occur, except
Automatic Investment Plan transactions which are confirmed quarterly. The
Pioneer Combined Account Statement, mailed quarterly, is available to all
shareholders who have more than one Pioneer mutual fund 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 purchases, exchanges or redemptions of
shares by mail or telephone, automatic reinvestment of dividends and capital
gains distributions, withdrawal plans, Letters of Intent, Rights of Accumulation
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; 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.
Additions to your account, whether by check or through a Pioneer Investomatic
Plan, are invested in full and fractional shares of the Fund at the applicable
offering price in effect as of the close of regular trading on the Exchange on
the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized electronic funds transfer or
draft drawn on a checking account. Pioneer Investomatic Plan investments 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.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail you information about the tax status
of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value per
share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
If you elect to receive either dividends or capital gains or both in cash
and a distribution check issued to you is returned by the U.S. Postal Service as
not deliverable or a distribution check remains uncashed for six months or more,
the amount of the check may be reinvested in your account. Such additional
shares will be purchased at the then current net asset value. Furthermore, the
distribution option on the account will automatically be changed to the
reinvestment option until such time as you request a different option by writing
to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer mutual
fund account invested in a second Pioneer mutual fund account. The value of this
second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service.
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 indicate otherwise on your Account Application or by
writing to PSC. See "How to Buy Fund Shares," "How to Sell Fund Shares" and "How
to Exchange Fund Shares" 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 are available to shareholders who have pre-
recorded certain bank information (See "FactFone(SM)"). 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, PSC will record each telephone transaction, require the caller to
provide the personal identification number ("PIN") for the account and send you
a written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or are held in the
name of an institution or in the name of an
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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 nor PSC nor
PFD will be responsible for the authenticity of instructions received by
telephone; therefore, you bear the risk of loss for unauthorized or fraudulent
telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund by
telephone to institute a redemption or exchange. You should communicate with the
Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFone(SM) 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(SM) to make
computer-assisted telephone purchases, exchanges and redemptions from your
Pioneer mutual fund accounts if you have activated your PIN. Telephone purchases
and redemptions require the establishment of a bank account of record. You are
strongly urged to consult with your financial representative prior to requesting
any telephone transaction. Shareholders whose accounts are registered in the
name of a broker-dealer or other third party may not be able to use
FactFone(SM). See "How to Buy Shares," "How to Exchange Fund Shares," "How to
Sell Fund Shares" and "Telephone Transactions and Related Liabilities." Call PSC
for assistance.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern Time, to contact our telephone representatives with questions
about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B and Class C shares accounts are limited to
10% of the value of the account at the time the SWP is implemented. See "Waiver
or Reduction of Contingent Deferred Sales Charge" for more information. Periodic
payments of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly and your periodic redemptions of shares may be taxable to
you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another person, after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Fund at a time
when you have a SWP in effect may result in the payment of unnecessary sales
charges and may therefore be disadvantageous. Your periodic redemptions of
shares may be taxable.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in Class
A shares of the Fund if you send a written request to PSC not more than 90 days
after your shares were redeemed. Your redemption proceeds will be reinvested at
the next determined net asset value of the Class A shares of the Fund in effect
immediately after receipt of the written request for reinstatement. You may
realize a taxable gain or loss for federal income tax purposes as a result of
the redemption, and special tax rules may apply if a reinstatement occurs. In
addition, if a redemption resulted in a loss and an investment is made in shares
of the Fund within 30 days before or after the redemption, you may not be able
to recognize the loss for federal income tax purposes. 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 funds; 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.
---------------------
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 a diversified, open-end 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. As an open-end management investment company, the Fund continuously
offers its shares to the public, and under normal conditions, must redeem its
shares upon the demand of any shareholder at the then current net asset value
per share. See "How to Sell Fund Shares." The Fund is not required 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 three Classes of
shares, designated Class A,
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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.
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 Class A shares certificates; certificates will not be
issued for Class B or Class C 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 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 3.50%; 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 indices,
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.
17
<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 1997.
<TABLE>
<CAPTION>
Taxable Yield Required
Single Return Joint Return To Equal A Tax Free Yield Of:
- ------------------- -------------------- Tax -----------------------------------------------
(Taxable Income)* Rate 5% 6% 7% 8% 9%
- ------------------------------------------ -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Up to $24,650 Up to $41,200 15.0% 5.88 7.06 8.24 9.41 10.59
$24,651-$59,750 $41,201-$99,600 28.0% 6.94 8.33 9.72 11.11 12.50
$59,751-$124,650 $99,601-$151,750 31.0% 7.25 8.70 10.14 11.59 13.04
$124,651-$271,050 $151,751-$271,050 36.0% 7.81 9.38 10.94 12.50 14.06
Over $271,050 Over $271,050 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
$121,200 ($60,600 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
$181,800 for joint filers ($121,200 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.
18
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
Growth Funds
Global/International
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
United States
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Pioneer Micro-Cap Fund*
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust*
Tax-Exempt
Pioneer Intermediate Tax-Free Fund**
Pioneer Tax-Free Income Fund**
Money Market Fund
Pioneer Cash Reserves Fund
*Offers Class A and B Shares only
**Not suitable for retirement accounts.
19
<PAGE>
Pioneer [Pioneer logo]
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
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR LLP
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses, applications,
service forms
and telephone transactions ................................. 1-800-225-6292
FactFone(SM)
Automated fund yields, 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
0497-4183
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
APRIL 30, 1997
This Statement of Additional Information is not a Prospectus, but should be
read in conjunction with the Prospectus (the "Prospectus") dated April 30, 1997
of Pioneer Intermediate Tax-Free Fund (the "Fund"). A copy of the Prospectus can
be obtained free of charge by calling Shareholder Services at 1-800-225-6292 or
by written request to the Fund at 60 State Street, Boston, Massachusetts 02109.
The most recent Annual Report to Shareholders is attached to and is hereby
incorporated into this Statement of Additional Information by reference. Prior
to January 3, 1994, the Fund was known as "Pioneer Municipal Bond Fund."
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions..................................2
2. Management of the Fund................................................4
3. Investment Adviser....................................................8
4 Underwriting Agreement and Distribution Plans.........................9
5. Shareholder Servicing/Transfer Agent..................................12
6. Custodian.............................................................12
7. Principal Underwriter.................................................12
8. Independent Public Accountants........................................13
9. Portfolio Transactions................................................13
10. Tax Status............................................................14
11. Description of Shares.................................................17
12. Certain Liabilities...................................................17
13. Determination of Net Asset Value......................................18
14. Systematic Withdrawal Plan............................................18
15. Letter of Intent......................................................19
16. Investment Results....................................................19
17. Financial Statements..................................................23
Appendix A - Description of Municipal Bonds and Bond Ratings..........24
Appendix B - Description of Certain Other Investments.................27
Appendix C - Comparative Performance and Statistics...................28
Appendix D - Additional Pioneer Information...........................41
-------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS
AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Fund's Prospectus identifies the investment objective and the principal
investment policies of the Fund. Additional investment policies and a further
description of some of the policies are set forth below. This Statement of
Additional Information should be read be read in conjunction with the
Prospectus. Capitalized terms not otherwise defined herein have the meaning
given to them in the Prospectus.
PORTFOLIO MANAGEMENT
The Fund intends to manage its portfolio fully by buying and selling
securities, as well as holding securities to maturity. In managing its portfolio
the Fund seeks to take advantage of market developments and yield disparities,
which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in
anticipation of a rise in interest rates so as to minimize depreciation of
principal;
(2) lengthening the average maturity of its portfolio in
anticipation of a decline in interest rates so as to maximize tax-exempt
yield;
(3) selling one type of debt security (e.g., revenue bonds) and
buying another (e.g., general obligation bonds) when disparities arise in
the relative values of each; and
(4) changing from one debt security to an essentially similar debt
security when their respective yields appear distorted due to market
factors.
The Fund engages in portfolio trading if it believes a transaction net of
costs (including custodian charges) will help in achieving its investment
objective.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund has adopted certain
fundamental investment restrictions which may not be changed without the
affirmative vote of the holders of a majority of the Fund's outstanding shares.
As used in the Prospectus and this Statement of Additional Information, such
approval means the approval of the lesser of (i) the holders of 67% or more of
the shares represented at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (ii) the holders of
more than 50% of the outstanding shares.
The Fund may not:
(1) Borrow money, except as a temporary measure for extraordinary
or emergency purposes, and then only in an amount not exceeding 10% of its
gross assets, or pledge, mortgage or hypothecate an amount of its assets
taken at market value which would exceed 15% of its gross assets, in each
case taken at the lower of cost or market value and subject to a 300% asset
coverage requirement;
(2) Underwrite securities issued by other persons except insofar
as the Fund may technically be deemed an underwriter under the Securities
Act of 1933 in selling a portfolio security;
-2-
<PAGE>
(3) Purchase or sell real estate (including limited partnership
interests, but excluding Municipal Bonds secured by real estate or
interests therein), interests in oil, gas or mineral leases or exploration
or development programs, commodities or commodity contracts (except
contracts for the future acquisition or delivery of fixed-income
securities) in the ordinary course of its business;
(4) Make loans to other persons except through the use of
repurchase agreements. The purchase of debt securities by the Fund pursuant
to its investment objectives and other investment policies shall not be
considered loans for purposes of this restriction. Not more than 10% of its
total assets will be invested in repurchase agreements maturing in more
than seven days;
(5) Purchase the securities of any issuer if such purchase, at the
time thereof, would cause more than 5% of its total assets taken at market
value to be invested in the securities of such issuer, other than
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities; or
(6) Purchase any securities or evidences of interest therein on
margin, except that the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities;
The Fund will not purchase securities while any borrowings are
outstanding.
Although the Fund may invest more than 25% of its assets in
industrial development revenue bonds, the Fund will not purchase a security
if, as a result, more than 25% of the Fund's assets would be in industrial
revenue bonds where payment of principal and interest is the ultimate
responsibility of issuers in the same industry.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The following
restrictions have been designated as non-fundamental and may be changed by
a vote of the Fund's Board of Trustees without approval of shareholders.
The Fund may not:
(a) Purchase or retain the securities of any issuer, if
those individual officers, directors or trustees of the Fund, its adviser
or principal underwriter, each owning beneficially 0.50% of the securities
of such issuer, together own more than 5.0% of the securities of such
issuer;
(b) Sell any security which the Fund does not own unless
by virtue of its ownership of other securities it has at the time of sale a
right to obtain securities without payment of further consideration
equivalent in kind and amount to the securities sold and provided that if
such right is conditional the sale is made upon the same conditions;
(c) Purchase or sell any put or call option or any
combination thereof, provided that this shall not prevent the purchase,
ownership, holding or sale of contracts for the future delivery of fixed
income securities; or
(d) Invest in any security, including any repurchase
agreement maturing in more than seven days, which is illiquid, if more than
15% of the total assets of the Fund, taken at market value, would be
invested in such securities.
-3-
<PAGE>
In addition, in connection with the offering of its shares in certain
jurisdictions, the Fund has agreed to adopt certain additional investment
restrictions which are not fundamental and may be changed by a vote of the
Fund's Board of Trustees. The Fund has agreed (1) to invest no more than 5% of
its total assets in warrants, valued at the lower of cost or market, and no more
than 2% of its total assets in warrants, so valued, which are not listed on
either the New York or American Stock Exchanges; (2) that (i) short sales at any
one time shall not exceed 25% of the net equity of the Fund and (ii) the value
of any one issuer in which the Fund is short may not exceed the lesser of 2.0%
of the value of the Fund's net assets or 2.0% of the securities of any class of
any issuer; and (3) not to pledge, mortgage or hypothecate its portfolio
securities if the percentage of securities so pledged, mortgaged or hypothecated
plus the percentage of the sales charge on its shares would exceed 10%. In
addition, short sales may only be made in securities fully listed on a national
stock exchange.
PERCENTAGE RESTRICTIONS
If a percentage restriction on investment or utilization of assets set
forth above or in the Prospectus is adhered to at the time an investment is made
or assets are so utilized, a later change in percentage resulting from changes
in the value of the Fund's portfolio securities will not be considered a
violation of a policy.
The Fund has adopted the following operating policies which are not
fundamental and which may be changed without shareholder approval. The Fund may
enter into repurchase agreements (a purchase of and a simultaneous commitment to
resell a security at an agreed upon price on an agreed upon date) with
broker-dealers and member banks of the Federal Reserve System and only if
collateralized by U.S. government securities. If the vendor of a repurchase
agreement fails to pay the sum agreed to on the agreed upon delivery date, the
Fund would have the right to sell the U.S. government securities, but might
incur a loss in so doing and in certain cases may not be permitted to sell the
U.S. government securities. As noted in Non-fundamental Investment Restriction
(d), the Fund may not invest more than 15% of its assets in illiquid securities
including repurchase agreements maturing in more than seven days. The Fund does
not anticipate investing more than 5% of its total assets in repurchase
agreements maturing in more than 7 days in the foreseeable future.
For the purposes of the Fund's investment restrictions, the issuer of a
tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of the principal of, and interest on, the security.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the affairs of
the Fund. The officers of the Fund are responsible for the Fund's operations.
The Trustees and executive officers of the Fund are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the Fund within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, CHAIRMAN OF THE BOARD, PRESIDENT AND TRUSTEE, DOB: JUNE
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (Russian timber joint venture); President and Director of Pioneer
Plans Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology,
-4-
<PAGE>
Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Luscina, Inc., Pioneer
First Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega") and Theta
Enterprises, Inc.; Chairman of the Board and Director of Pioneer Goldfields
Limited ("PGL") and Teberebie Goldfields Limited; Chairman of the Supervisory
Board of Pioneer Fonds Marketing, GmbH ("Pioneer GmbH"); Member of the
Supervisory Board of Pioneer First Polish Trust Fund Joint Stock Company
("PFPT"); Chairman, President and Trustee of all of the Pioneer mutual funds and
Partner, Hale and Dorr LLP (counsel to the Fund).
RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management; Professor
of Public Health, Boston University School of Public Health; Professor of
Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, TRUSTEE, DOB: MAY 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc. (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, TRUSTEE, DOB: JULY 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, TRUSTEE AND EXECUTIVE VICE PRESIDENT, DOB: FEBRUARY 1944
Executive Vice President and a Director of PGI; President, Chief Investment
Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl, First Russia,
Omega and Pioneer SBIC Corporation, Executive Vice President and Trustee of all
of the Pioneer mutual funds.
STEPHEN K. WEST, TRUSTEE, DOB: SEPTEMBER 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus Funds
(mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, TRUSTEE, DOB: JUNE 1936
One North Adgers Wharf, Charleston, SC 29401
-5-
<PAGE>
President, John Winthrop & Co., Inc. (private investment firm); Director of
NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government Reserves
and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, TREASURER, DOB: APRIL 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC;
Clerk of PFD and PSC; Partner, Hale and Dorr LLP (counsel to the Fund) and
Secretary of all of the Pioneer mutual funds.
ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, ASSISTANT SECRETARY, DOB: MARCH 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and formerly of Hale and Dorr LLP
(counsel to the Fund) where he most recently served as junior partner.
KATHLEEN D. MCCLASKEY, VICE PRESIDENT, DOB: JANUARY 1952
Vice President of PMC.
The Fund's Amended and Restated Declaration of Trust (the "Declaration of
Trust") provides that the holders of two-thirds of its outstanding shares may
vote to remove a Trustee of the Fund at any meeting of shareholders. See
"Description of Shares" below. The business address of all officers is 60 State
Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned, directly
or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the Fund's
investment adviser, serves as the investment adviser for the Pioneer mutual
funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to the
public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer World Equity Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
-6-
<PAGE>
Pioneer Small Company Fund PMC PFD
Pioneer Micro-Cap Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Balanced Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life insurance
contracts of various insurance companies or for certain qualified pension
plans.
To the knowledge of the Fund, no officer or Trustee of the Fund owned 5% or
more of the issued and outstanding shares of PGI as of March 31, 1997, except
Mr. Cogan who then owned approximately 14% of such shares.
At March 31, 1997, the Trustees and officers of the Fund owned in the
aggregate, less than 1% of the outstanding securities of the Fund. As of such
date, no share holder owned more than 5% of the outstanding Class A shares of
the Fund. MLPF&S for the sole benefit of ITS customers, 4800 Deer Lake Drive
East, Jacksonville, FL 32246 owned approximately 6.17% (17,366) of the
outstanding Class B shares of the Fund. PFD, 60 State Street, Boston, MA 02109
owned approximately 47.97% (9,959) of the outstanding Class C shares of the
Fund; Edward R. Gossett & Laverne M. Gossett JTWROS, 3043 Arizona Dr., Bismarck,
ND 58501 owned approximately 35.90% (7,453) of the outstanding Class C shares of
the Fund; Mazie M. Schaackey, 421 S. Curtis Road, Boise, ID 83705 owned
approximately 6.37% (1,323) of the outstanding Class C shares of the Fund.
COMPENSATION OF OFFICERS AND TRUSTEES
The Fund pays no salaries or compensation to any of its officers. The Fund
pays an annual trustees' fee to each Trustee who is not affiliated with PGI,
PMC, PFD or PSC consisting of two components: (a) a base fee of $500 and (b) a
variable fee, calculated on the basis of the average net assets of the Fund. In
addition, the Fund pays a per meeting fee of $120 to each Trustee who is not
affiliated with PGI, PMC, PFD or PSC. The Fund also pays an annual committee
participation fee to Trustees who serve as members of committees established to
act on behalf of one or more of the of Pioneer mutual funds. Committee fees will
be allocated to the Fund on the basis of the Fund's average net assets. Each
Trustee who is a member of the Audit Committee for the Pioneer mutual funds
receives an annual fee equal to 10% of the aggregate annual trustees' fee,
except the Committee Chair who receives an annual trustees' fee equal to 20% of
the aggregate annual trustees' fee. Members of the Pricing Committee for the
Pioneer mutual funds, as well as any other committee which renders material
functional services to the Board of Trustees for the Pioneer mutual funds,
receives an annual fee equal to 5% of the annual trustees' fee,
-7-
<PAGE>
except the Committee Chair who receives an annual trustees' fee equal to 10% of
the annual trustees' fee. Any such fees paid to affiliates or interested persons
of PGI, PMC, PFD or PSC are reimbursed to the Fund under its management
contract.
The following table provides information regarding the compensation paid by
the Fund and other Pioneer mutual funds to the Trustees for their services.
Pension or Total Compen-
Retirement sation from the
Benefits Fund and all
Aggregate Accrued as other
Compensation Part of the Pioneer Mutual
Name of Trustee from the Fund* Fund's Expense Funds**
John F. Cogan, Jr. $ 500 $0 $11,083
Richard H. Egdahl, M.D. 1,890 0 59,858
Margaret B.W. Graham 1,990 0 59,858
John W. Kendrick 1,990 0 59,858
Marguerite A. Piret 2,271 0 79,842
David D. Tripple 500 0 11,083
Stephen K. West 2,112 0 67,850
John Winthrop 2,097 0 66,442
----- - ------
Total $13,350 $0 $417,052
======= == ========
* As of the Fund's fiscal year end.
** For the calendar year ended December 31, 1996, there were 21 mutual funds in
the Pioneer Family of Funds.
3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston, Massachusetts,
to act as its investment adviser. The term of the contract is one year and is
renewable annually by the vote of a majority of the Board of Trustees of the
Fund (including a majority of the Board of Trustees who are not parties to the
contract or interested persons of any such parties) cast in person at a meeting
called for the purpose of voting on such renewal. This contract terminates if
assigned and may be terminated without penalty by either party by vote of its
Board of Directors or Trustees or a majority of its outstanding voting
securities and the giving of sixty days' written notice. Pursuant to the
management contract, PMC will not be liable for any error of judgment or mistake
of law or for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale or retention of any securities on the
recommendation of PMC. PMC, however, is not protected against liability by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under the respective management contract.
As compensation for its management services and expenses incurred, PMC is
entitled to a management fee at the rate of 0.50% per annum of the Fund's
average daily net assets. The fee is normally computed daily and paid monthly.
On an interim basis, PMC has agreed not to impose all or a portion of its
management fees for the Fund and if necessary to limit or otherwise reduce other
operating expenses to the extent needed to limit the expenses of the Fund as
described in the Prospectus in Note 3
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to the table set forth under "Expense Information." PMC's agreement is voluntary
and temporary and may be revised or terminated at any time. The purpose of this
policy is to enhance the Fund's dividend yield during the period when, because
of the Fund's size, fixed expenses have a more significant impact on yield.
Pursuant to the expense limitation discussed above, during the fiscal years
ended December 31, 1996, 1995 and 1994, the management fees were reduced by
$87,136, $89,114 and $183,384, respectively, resulting in actual management fees
paid during those periods to PMC of $396,543, $319,383 and $229,615,
respectively. See the Notes to the Financial Statements in the December 31, 1996
Annual Report (incorporated herein by reference) for more information.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund has entered into an Underwriting Agreement with PFD. The
Underwriting Agreement will continue from year to year if annually approved by
the Trustees. The Underwriting Agreement provides that PFD will bear any
distribution expenses not borne by the Fund.
PFD bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Fund. PFD also pays certain expenses in connection with the
distribution of the Fund's shares, including the cost of preparing, printing and
distributing advertising or promotional materials, and the cost of printing and
distributing prospectuses and supplements to prospective shareholders. The Fund
bears the cost of registering its shares under federal and state securities
laws. The Fund and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Fund.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under
the 1940 Act with respect to each Class of shares (the "Class A Plan," "Class B
Plan" and "Class C Plan") (together, the "Plans).
CLASS A PLAN
Pursuant to the Class A Plan, the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Fund shares. Certain categories of such expenditures have been approved by
the Board of Trustees and are set forth in the Prospectus. See "Distribution
Plans" in the Prospectus. The expenses of the Fund pursuant to the Class A Plan
are accrued on a fiscal year basis and may not exceed, with respect to Class A
shares, the annual rate of 0.25% of the Fund's average annual net assets
attributable to Class A shares.
CLASS B PLAN
The Class B Plan provides that the Fund shall pay PFD, as the Fund's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Fund's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Fund's average daily
net assets attributable to Class B shares (which PFD will in turn pay to
securities dealers which enter into a sales agreement with PFD at a rate of up
to 0.25% of the Fund's average daily net assets attributable to Class B shares
owned by investors for whom that securities dealer is the holder or dealer of
record). This service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. PFD will advance to dealers the first-year service
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fee at a rate equal to 0.25% of the amount invested. As compensation therefor,
PFD may retain the service fee paid by the Fund with respect to such shares for
the first year after purchase. Dealers will become eligible for additional
service fees with respect to such shares commencing in the thirteenth month
following purchase. Dealers may from time to time be required to meet certain
other criteria in order to receive service fees. PFD or its affiliates are
entitled to retain all service fees payable under the Class B Plan for which
there is no dealer of record or for which qualification standards have not been
met as partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services to the Fund. PFD pays commissions
to dealers as well as expenses of printing prospectuses and reports used for
sales purposes, expenses with respect to the preparation and printing of sales
literature and other distribution related expenses, including without
limitation, the cost necessary to provide distribution- related services, or
personnel, travel, office expenses and equipment. The Class B Plan also provides
that PFD will receive all contingent deferred sales charges ("CDSCs")
attributable to Class B shares. (See "Distributions Plans" in the Prospectus.)
When the broker-dealer effecting the sale of Class B shares waives its right to
receive commissions on such sales, PFD may cause the distribution fees described
above to be paid to that broker-dealer.
CLASS C PLAN
The Class C Plan provides that the Fund will pay PFD, as the Fund's
distributor for its Class C shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis to 0.75% of the Fund's average daily net
assets attributable to Class C shares and will pay PFD a service fee equal to
0.25% of the Fund's average daily net assets attributable to Class C shares. PFD
will in turn pay to securities dealers which enter into a sales agreement with
PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the Fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the amount invested and additional compensation
at a rate of up to 0.75% of the net asset value of such shares. Dealers may from
time to time be required to meet certain other criteria in order to receive
service fees. PFD or its affiliates are entitled to retain all service fees
payable under the Class C Plan for which there is no dealer of record or for
which qualification standards have not been met as partial consideration for
personal services and/or account maintenance services performed by PFD or its
affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to the Class C shares
of the Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distribution Plans" in the Prospectus.)
When the broker-dealer effecting the sale of Class C shares waives its right to
receive commissions on such sales, PFD may cause the distribution fees described
above to be paid to that broker-dealer.
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GENERAL
In accordance with the terms of the Plans, PFD provides to the Fund, for
review by the Trustees, a quarterly written report of the amounts expended under
the respective Plan and the purpose for which such expenditures were made. In
the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is not an
interested person of the Fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Fund, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plan, the Trustees identified and considered a number of potential
benefits which the Plans may provide. The Board of Trustees believes that there
is a reasonable likelihood that the Plans will benefit the Fund and its current
and future shareholders. Under their terms, the Plans remain in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. The Plans may not be amended to increase
materially the annual percentage limitation of average net assets which may be
spent for the services described therein without approval of the shareholders of
the Fund affected thereby, and material amendments of the Plans must also be
approved by the Trustees in the manner described above. A Plan may be terminated
at any time, without payment of any penalty, by vote of the majority of the
Trustees who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act). A Plan will automatically terminate in the event of its assignment
(as defined in the 1940 Act).
During the fiscal year ended December 31, 1996, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan and Class B Plan of
$178,968 and $28,597, respectively. For the period January 31, 1996 through
December 31, 1996, the Fund incurred total distribution fees pursuant to Fund's
Class C Plan of $1,745. Class C shares were first offered January 31, 1996.The
distribution fees were paid by the Fund to PFD in reimbursement of expenses
related to servicing of shareholder accounts and to compensating dealers and
sales personnel.
Redemptions of each Class of shares may be subject to a CDSC. A CDSC of
1.00% may be imposed on certain net asset purchases of Class A shares that are
redeemed within one year of purchase. Class B shares that are redeemed within
four years of purchase are subject to a CDSC at declining rates beginning at
3.0% based on the lower of cost or market value of shares being redeemed.
Redemptions of Class C shares within one year of purchase are subject to a CDSC
of 1.00%. See " How to Buy Fund Shares" in the Prospectus. During the fiscal
year ended December 31, 1996, CDSCs in the amount of approximately $11,695 were
paid to PFD. Such CDSCs are paid to PFD in reimbursement of expenses related to
servicing of shareholders accounts and compensation paid to dealers and sales
personnel.
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5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts,
to act as shareholder servicing agent and transfer agent for the Fund. This
contract terminates if assigned and may be terminated without penalty by either
party by vote of the Board of Directors or Trustees or a majority of its
outstanding voting securities and the giving of ninety days' written notice.
Under the terms of its contract with the Fund, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii) distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii) maintaining account records
and responding to shareholder inquiries.
PSC receives an annual fee of $30.00 per Class A, Class B and Class C
shareholder account from the Fund as compensation for the services described
above. This fee is set at an amount determined by vote of a majority of the
Fund's Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies. The Fund may
compensate entities which have agreed to provide certain subaccounting services
such as specific transaction processing and recordkeeping services. Any such
payments by the Fund would be in lieu of the per account fee which would
otherwise be paid by the Fund to PSC.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") 40 Water Street, Boston,
Massachusetts 02109, is the custodian of the Fund's assets. The Custodian's
responsibilities include safekeeping and controlling the Fund's cash and
securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the Fund's investments. The Custodian does not
determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may deal with the Custodian
as principal in securities transactions. Portfolio securities may be deposited
into the federal Reserve- Treasury Department Book Entry System or the
Depository Trust Company.
7. PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts, serves as the principal
underwriter for the Fund in connection with the continuous offering of its
shares. During the Fund's 1996, 1995 and 1994fiscal years, net underwriting
commissions retained by PFD in connection with its offering of Fund shares were
approximately $11,322, $16,256 and $26,044, respectively. Commissions
reallowedto dealers by PFD in those periods were approximately $207,180,
$116,073 and $299,506, respectively. See "Underwriting Agreement and
Distribution Plans" above for a description of the terms of the Underwriting
Agreement with PFD.
The Fund will not generally issue Fund shares for consideration other than
cash. At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with an acquisition of portfolio
securities or amerger or other reorganization.
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8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110, are
the Fund's independent public accountants, providing audit services, tax return
review, and assistance and consultation with respect to the preparation of
filings with the SEC.
9. PORTFOLIO TRANSACTIONS
Decisions relating to the purchase and sale of securities for the Fund, the
allocation of portfolio transactions and, where applicable, the negotiation of
commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in and broker-dealers through which it seeks this result. Municipal
Bonds and other debt securities are traded principally in the over-the-counter
market on a net basis through dealers acting for their own account and not as
brokers. The cost of securities purchased from underwriters includes an
underwriter's commission or concession, and the prices at which securities are
purchased and sold from and to dealers include a dealer's mark-up or mark- down.
PMC attempts to negotiate with underwriters to decrease the commission or
concession for the benefit of the Fund. PMC normally seeks to deal directly with
the primary market makers unless, in its opinion, better prices are available
elsewhere.
Subject to the requirement of seeking execution at the best available
price, securities may, as authorized by PMC's management agreement, be bought
from or sold to dealers who furnish research services to the Fund and/or other
investment companies managed by PMC, or who sell shares of the Fund. Brokerage
and research services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the availability
of securities or the purchasers or sellers of securities; and furnishing
analyses, manuals and reports concerning issuers, securities, economic factors
and trends, portfolio strategy, performance of accounts, comparative fund
statistics and credit rating service information. PMC maintains a listing of
dealers who provide such services on a regular basis. Management believes that
no exact dollar value can be calculated for such services.
The Fund is managed by PMC, which also serves as investment adviser to
other Pioneer mutual funds and certain private accounts with investment
objectives similar to those of the Fund. Securities frequently meet the
investment objectives of the Fund, such other mutual funds and such private
accounts. In such cases, the decision to recommend a purchase to one fund or
account rather than another is based on a number of factors. The determining
factors in most cases are the amount of securities of the issuer then
outstanding, the value of those securities and the market for them. Other
factors considered in the investment recommendations include other investments
which each client or account presently has in a particular industry and the
availability of investment funds in each client or account.
It is possible that at times identical securities will be held by more than
one fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that the Fund, another Pioneer
mutual fund or a private account managed by PMC may not be able to acquire as
large a position in such security as it desires, it may have to pay a higher
price for the security. Similarly, the Fund may not be able to obtain as large
an execution of an order to sell or as high a price for any particular portfolio
security if PMC decides to sell on behalf of another account the same portfolio
security at the same time.
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On the other hand, if the same securities are bought or sold at the same time by
more than one account, the resulting participation in volume transactions could
produce better executions for the Fund or the account. In the event that more
than one account purchases or sells the same security on a given date, the
purchases and sales will normally be made as nearly as practicable on a pro rata
basis in proportion to the amounts desired to be purchased or sold by each.
During the fiscal years ended December 31, 1996, 1995 and 1994, the Fund
paid no brokerage or underwriting commissions.
The Trustees periodically review PMC's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Fund.
10. TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a
regulated investment company. These requirements relate to the sources of the
Fund's income, the diversification of its assets and the distribution of its
income to shareholders. If the Fund meets all such requirements and distributes
to its shareholders, in accordance with the Code's timing requirements, all
investment company taxable income and net capital gain, if any, which it earns,
the Fund will be relieved of the necessity of paying federal income tax.
In order to qualify as a regulated investment company under Subchapter M,
the Fund must, among other things, derive at least 90% of its annual gross
income from interest, gains from the sale or other disposition of securities and
certain other income (the "90% income test"), limit its gains from the sale of
securities and certain other positions held for less than three months to less
than 30% of its annual gross income (the "30% test") and satisfy certain annual
distribution and quarterly diversification requirements.
In accordance with its investment objectives, the Fund invests its assets
in a manner which will provide as large a portion of tax-exempt income as is
consistent with the protection of shareholders' capital. Since the protection of
capital is an important aspect of the Fund's investment objectives, the Fund may
from time to time invest a portion of its portfolio in short-term obligations
and may engage in transactions generating gains or income which is not
tax-exempt, e.g., purchase non-municipal securities, sell or lend portfolio
securities, enter into repurchase agreements, dispose of rights to when-issued
securities prior to issuance, acquire any debt obligation at a market discount,
or acquire certain stripped tax-exempt obligations or their coupons.
The Code permits tax-exempt interest received by the Fund to flow through
as tax-exempt "exempt-interest dividends" to the Fund's shareholders, provided
that the Fund qualifies as a regulated investment company and at least 50% of
the value of the Fund's total assets at the close of each quarter of its taxable
year consists of tax-exempt obligations, i.e., obligations described in Section
103(a) of the Code. That part of the Fund's net investment income which is
attributable to interest from tax-exempt obligations and which is distributed to
shareholders will be designated by the Fund as an "exempt-interest dividend"
under the Code. Exempt-interest dividends are excluded from a shareholder's
gross income under the Code. The percentage of income designated as tax-exempt
is applied uniformly to all distributions made during each taxable year and may
differ from the actual tax-exempt percentage earned by the Fund during any
particular month. That portion of the Fund's dividends and distributions not
designated as tax-exempt will be taxable as described below.
Dividends from investment company taxable income, which includes taxable
net investment income and net short-term capital gain in excess of net long-term
capital loss, are taxable as ordinary income,
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whether received in cash or reinvested in additional shares. Dividends from net
long-term capital gain in excess of net short-term capital loss, if any, whether
received in cash or reinvested in additional shares, are taxable to the Fund's
shareholders as long-term capital gains for federal income tax purposes without
regard to the length of time shares of the Fund have been held. The federal
income tax status of all distributions will be reported to shareholders
annually.
Any dividend declared by the Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
If the Fund invests in certain pay-in-kind securities ("PIKs"), zero coupon
securities, deferred interest securities or, in general, any other securities
with original issue discount (or with market discount if the Fund elects to
include market discount in income currently), the Fund must accrue income on
such investments for each taxable year, which generally will be prior to the
receipt of the corresponding cash payments. However, the Fund must distribute,
at least annually, all or substantially all of its net taxable and tax-exempt
income, including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid federal income and excise taxes.
Therefore, the Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.
For federal income tax purposes, the Fund is permitted to carry forward a
net capital loss for any year to offset its capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the Fund and therefore are not expected to be distributed as such
to shareholders. As of the end of its most recent taxable year, the Trust had no
capital loss carryforwards.
At the time of an investor's purchase of Fund shares, a portion of the
purchase price may be attributable to realized or unrealized appreciation in the
Fund's portfolio. Consequently, subsequent distributions on these shares from
such appreciation may be taxable to such investor even if the net asset value of
the investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events. Any loss realized by a
shareholder on the redemption, exchange, or other disposition of shares with a
tax holding period of six months or less will be disallowed to the extent of any
exempt-interest dividends paid with respect to such shares, and any portion of
such loss that exceeds the amount disallowed will be treated as a long-term
capital loss to the extent of any distributions treated as long-term capital
gain with respect to such shares.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment at net asset value pursuant
to the reinvestment privilege, the sales charge paid on such shares is not
included in their tax basis under the Code, and (2) in the case of an exchange,
all or a portion of the sales charge paid on such shares is not included in
their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange. Losses on
redemptions or other dispositions of shares may be disallowed under "wash sale"
rules in the event of other investments in the Fund (including those made
pursuant to reinvestment of dividends and/or capital gain distributions) within
a period of 61 days beginning 30 days before and ending 30 days after a
redemption or other disposition of shares. In such a case, the disallowed
portion of any loss would be included in the federal tax basis of the shares
acquired in the other investments.
The Fund's dividends and distributions will not qualify for any
dividends-received deduction that might otherwise be available for certain
dividends received by shareholders that are corporations.
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<PAGE>
A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent (if any) the Fund's distributions
are derived from interest on (or, in the case of intangible property taxes, the
value of its assets is attributable to) certain U.S. government obligations,
provided in some states that certain thresholds for holdings of such obligations
and/or reporting requirements are satisfied. The Fund will not seek to satisfy
any threshold or reporting requirements that may apply in particular taxing
jurisdictions, although the Fund may in its sole discretion provide relevant
information to shareholders.
The exemption of exempt-interest dividends for federal income tax purposes
does not necessarily result in exemption under the tax laws of any state or
local taxing authority, which vary with respect to the taxation of such income.
Many states will exempt from tax that portion of an exempt-interest dividend
which represents interest received by the Fund on that state's securities,
subject in some cases to compliance with concentration and/or reporting
requirements, which the Fund makes no commitment to seek to satisfy. However,
the Fund will report annually to its shareholders the percentage of interest
income received by the Fund during the preceding year on federally tax-exempt
obligations indicating, on a state-by-state basis only, the source of such
income. Each shareholder is advised to consult his own tax adviser regarding the
exemption, if any, of exempt-interest dividends under the state and local laws
applicable to the shareholder.
Interest on indebtedness incurred (directly or indirectly) by shareholders
to purchase or carry shares of the Fund will not be deductible for federal
income tax purposes to the extent it is deemed under the Code and applicable
regulations to relate to exempt-interest dividends received from the Fund.
Federal law requires that the Fund withhold (as "backup withholding") 31%
of reportable payments, including taxable dividends, capital gain dividends and
the proceeds of redemptions (including exchanges) and repurchases to
shareholders who have not complied with Internal Revenue Service ("IRS")
regulations. In order to avoid this withholding requirement, shareholders must
certify on their Account Applications, or on separate IRS Forms W-9, that the
Social Security Number or other Taxpayer Identification Number they provide is
their correct number and that they are not currently subject to backup
withholding, or that they are exempt from backup withholding. The Fund may
nevertheless be required to withhold if it receives notice from the IRS or a
broker that the number provided is incorrect or backup withholding is applicable
as a result of previous underreporting of interest or dividend income. Backup
withholding may be inapplicable for any year in which the Fund reasonably
estimates that at least 95% of its dividends paid with respect to such year are
exempt-interest dividends.
If, as anticipated, the Fund qualifies as a regulated investment company
under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes.
The description of certain federal tax provisions above relates only to
U.S. federal income tax consequences for shareholders who are U.S. persons, i.e.
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a possible 30% non-resident alien U.S. withholding tax (or
non-resident alien withholding tax at a lower treaty rate) on amounts treated as
ordinary dividends from the Fund and, unless an effective IRS Form W-8 or
authorized substitute for Form W-8 is on file, to 31% backup withholding on
certain other payments from the Fund. Shareholders should consult their own tax
advisers on these matters and on state, local and other applicable tax laws.
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11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust permits its Board of Trustees to authorize
the issuance of an unlimited number of full and fractional shares of beneficial
interest (without par value) which may be divided into such separate series as
the Trustees may establish. The Trustees may establish additional series of
shares, and may divide or combine the shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial interests in the
Fund. The Declaration of Trust further authorizes the Trustees to classify or
reclassify any series of the shares into one or more classes. Pursuant thereto,
the Trustees have authorized the issuance of three classes of shares of the
Fund, Class A shares, Class B shares and Class C shares. Each share of a class
of the Fund represents an equal proportionate interest in the assets of the Fund
allocable to that class. Upon liquidation of the Fund, shareholders of each
class are entitled to share pro rata in the Fund's net assets allocable to such
class available for distribution to shareholders. The Fund reserves the right to
create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
The shares of the Fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of the Fund vote together as a class on matters
that affect the Fund in substantially the same manner. As to matters affecting a
single class, shares of such class will vote separately.
Although Trustees are not elected annually by the shareholders,
shareholders have under certain circumstances the right to remove one or more
Trustees. No material amendment may be made to the Fund's Declaration of Trust
without the affirmative vote of a majority of its shares. Shares have no
pre-emptive or conversion rights. Shares are fully paid and non-assessable by
the Fund, except as set forth below. See "Certain Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Fund's operations are governed by
its Declaration of Trust dated July 24, 1986, a copy of which is on file with
the office of the Secretary of State of the Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Fund and provides that notice of such
disclaimer be given in each agreement, obligation or instrument entered into or
executed by the Fund or its Trustees. Moreover, the Declaration of Trust
provides for the indemnification out of Fund property of any shareholders held
personally liable for any obligations of the Fund. The Declaration of Trust also
provides that the Fund shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the Fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability would be limited
to circumstances in which the Fund itself will be unable to meet its
obligations. In light of the nature of the Fund's business and the nature and
amount of its assets, the possibility of the Fund's liabilities exceeding its
assets, and therefore a shareholder's risk of personal liability, is remote.
The Declaration of Trust further provides that the Fund shall indemnify
each of its Trustees and officers against liabilities and expenses reasonably
incurred by them, in connection with, or arising out of, any action, suit or
proceeding, threatened against or otherwise involving such Trustee or officer,
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directly or indirectly, by reason of being or having been a Trustee or officer
of the Fund. The Declaration of Trust does not authorize the Fund to indemnify
any Trustee or officer against any liability to which he or she would otherwise
be subject by reason of or for willful misfeasance, bad faith, gross negligence
or reckless disregard of such person's duties.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined as of
the close of regular trading on the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m., Eastern Time) on each day on which the Exchange is open for
trading. As of the date of this Statement of Additional Information, the
Exchange is open for trading every weekday except for the following holidays:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of
each class of the Fund is also determined on any other day in which the level of
trading in its portfolio is sufficiently high so that the current net asset
value per share might be materially affected by changes in the value of its
portfolio securities. On any day in which no purchased orders for the shares of
the Fund become effective and no shares are tendered for redemption, the net
asset value per share is not determined.
The net asset value per share of each class of the Fund is computed by
taking the amount of the value of all of the Fund's assets attributable to that
class, less the Fund's liabilities attributable to the class, and dividing it by
the number of outstanding shares of that class. The Board of Trustees has
directed that the fair market value of the Fund's assets should be determined as
follows. Ordinarily, investments in debt securities are valued on the basis of
information furnished by a pricing service which utilizes primarily a matrix
system (which reflects such factors as security prices, yields, maturities and
ratings), supplemented by dealer and exchange quotations, to recommend
valuations for normal institutional-sized trading units of debt securities. In
addition, the Board has instructed advisory personnel not to rely exclusively on
this pricing service if the fair market value of certain securities may be more
accurately determined on the basis of information available from other sources.
Temporary cash investments are valued at amortized cost, which approximates
market value.
The Fund's maximum offering price per Class A share is determined by adding
the maximum sales charge to the net asset value per Class A share. Class B and
Class C shares are offered at net asset value without the imposition of an
initial sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from shares of the Fund
deposited by the applicant under this SWP. The applicant must deposit or
purchase for deposit with PSC shares of the Fund having a total value of not
less than $10,000. Periodic payments of $50 or more will be deposited monthly or
quarterly directly into a bank account designated by the applicant, or will be
sent by check to the applicant, or any person designated by the applicant. A
designation of a third party to receive checks subsequent to opening an account
requires an acceptable signature guarantee. Withdrawals under a SWP from Class B
and Class C share accounts are limited to 10% of the value of the account at the
time the SWP is established. See "How to Sell Fund Shares - Waiver or Reduction
of Contingent Deferred Sales Charge" in the Prospectus.
Any income dividends or capital gains distributions on shares under the SWP
will be credited to the SWP account on the payment date in full and fractional
shares at the net asset value per share in effect on the record date.
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<PAGE>
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. Redemptions are potentially taxable
transactions to shareholders. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. In addition, the amounts received by a shareholder
cannot be considered as an actual yield or income on his or her investment
because part of such payments may be a return of his or her investment.
The SWP may be terminated at any time (1) by written notice to PSC or from
PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3) when all shares under the SWP have been redeemed.
The fees of PSC for maintaining SWPs are paid by the Fund.
15. LETTER OF INTENT
A Letter of Intent (a "LOI") may be established by completing the
Letter of Intent section of the Account Application. When you sign the Account
Application, you agree to irrevocably appoint PSC your attorney-in-fact to
surrender for redemption any or all shares held in escrow with full power of
substitution. A LOI is not a binding obligation upon the investor to purchase,
or the Fund to sell, the full amount indicated.
If the total purchases, less redemptions, exceed the amount specified
under the LOI and are in an amount which would qualify for a further quantity
discount, all transactions will be recomputed on the expiration date of the LOI
to effect the lower sales charge. Any difference in the sales charge resulting
from such recomputation will be either delivered to you in cash or invested in
additional shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI .
If the total purchases, less redemptions, are less than the amount
specified under the LOI , you must remit to PFD any difference between the sales
charge on the amount actually purchased and the amount originally specified in
the Letter of Intent section of the Account Application. When the difference is
paid, the shares held in escrow will be deposited to your account. If you do not
pay the difference in sales charge within 20 days after written request from PFD
or your dealer, PSC, after receiving instructions from PFD, will redeem the
appropriate number of shares held in escrow to realize the difference and
release any excess.
See "How to Buy Fund Shares" in the Prospectus for more information.
16. INVESTMENT RESULTS
The Fund's yield quotations and average annual total return quotations as
they may appear in the Prospectus, this Statement of Additional Information or
in advertising are calculated by standard methods prescribed by the SEC.
QUOTATIONS, COMPARISONS, AND GENERAL INFORMATION
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the Fund may be illustrated and/or
compared with that of other mutual funds with similar
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<PAGE>
investment objectives, and to other relevant indices. For example, the Fund may
compare a class's yield and/or total return to the Shearson Lehman Hutton
Municipal Bond Index, or other comparable indices or investment vehicles.
In addition, the performance of the classes of the Fund may be compared to
alternative investment or savings vehicles (such as individual securities, bank
deposits, or certificates of deposit) and/or indices or indicators of economic
activity, e.g., inflation, interest rates, or the Consumer Price Index.
Performance rankings and listings reported in newspapers or national business
and financial publications, such as Barron's, Business Week, Consumers Digest,
Consumer Reports, Financial World, Forbes, Fortune, Investors Business Daily,
Kiplinger's Personal Finance Magazine, Money Magazine, New York Times, Personal
Investor, Smart Money, USA Today, U.S. News and World Report, the Wall Street
Journal, and Worth may also be cited (if the Fund is listed in any such
publication) or used for comparison, as well as performance listings and
rankings from various other sources including CDA/Weisenberger Investment
Companies Service, Donoghue's Mutual Fund Almanac, Investment Company Data,
Inc., Ibbotson Associates, Johnson's Charts, Kanon Bloch Carre and Co., Lipper
Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
Other data that may be advertised or published about a class of the Fund
include the average portfolio quality, the average portfolio maturity, and the
average portfolio duration.
STANDARDIZED YIELD QUOTATIONS
The yield of a class is computed by dividing the class'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 class on the last day of such base period in
accordance with the following formula:
YIELD = 2[ (a-b +1 ) 6 -1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividendshares
d = the maximum offering price per share on
the last day of the period
For purposes of calculating interest earned on debt obligations as provided in
item "a" above:
(i)The yield to maturity of each obligation held by the Fund is computed
based on the market value of the obligation (including actual accrued interest,
if any) at the close of business each day during the 30-day base period, or,
with respect to obligations purchased during the month, the purchase price (plus
actual accrued interest, if any) on settlement date, and with respect to
obligations sold during the month the sale price (plus actual accrued interest,
if any) between the trade and settlement dates;
(ii) The yield to maturity of each obligation is then divided by 360 and
the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine
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the interest income on the obligation for each day. The yield to maturity
calculation has been made on each obligation during the 30 day base period;
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled;
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date;
(v) Obligations with sinking fund call provisions may be regarded as
maturing as to that portion to be retired on each sinking fund call date or
during a twelve-month period; and
(vi) In the case of a tax-exempt obligation issued without original issue
discount and having a current market discount, the coupon rate of interest of
the obligation is used in lieu of yield to maturity to determine interest income
earned on the obligation. In the case of a tax-exempt obligation with original
issue discount where the discount based on the current market value of the
obligation exceeds the then remaining portion of original issue discount (i.e.
market discount), the yield to maturity used to determine interest income earned
on the obligation is the imputed rate based on the original issue discount
calculation. In the case of a tax-exempt obligation with original issue discount
where the discount based on the current market value of the obligation is less
than the then remaining portion of the original issue discount (market premium),
the yield to maturity used to determine interest income earned on the obligation
is based on the market value of the obligation.
The yields of the Fund for the one-month period ended December 31, 1996
determined in accordance with the formula above were 3.77% for Class A shares,
3.11% for Class B shares and 3.04% for Class C shares, except that absent
expense limitations, the yields on Class A,Class B and Class C shares of the
Fund would have been 3.65%, 3.01% and 2.94%, respectively.
TAXABLE EQUIVALENT YIELD
The Fund may also from time to time advertise the taxable equivalent yield
of a class which is determined by dividing that portion of the class'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
class's yield that is not tax exempt. For a description of how to compare yields
on municipal bonds and taxable securities, see the Taxable Equivalent Formula
set forth in Appendix A to the Prospectus. The taxable equivalent yield for a
Class A shareholder, Class B shareholder and Class C shareholder in the 39.6%
federal income tax bracket for the one-month period ended December 31, 1996
determined in accordance with such formula was 6.24%, 5.15% and 5.03%,
respectively, except that absent expense limitations, such tax-equivalent yield
on Class A shares, Class B shares and Class C shares of the Fund would have been
6.04%, 4.98% and 4.87%, respectively.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
One of the primary methods used to measure the performance of a class of
the Fund is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in the
class, over any period up to the lifetime of the class. Total return
calculations will usually assume the reinvestment of all dividends and capital
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will usually be annualized; total return percentages for periods
longer than one year will usually be accompanied by
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total return percentages for each year within the period and/or by the average
annual compounded total return for the period. The income and capital components
of a given return may be separated and portrayed in a variety of ways in order
to illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values, without percentages. Past performance cannot
guarantee any particular future result.
Average annual total return quotations for each class of shares are
computed by finding the average annual compounded rates of return that would
cause a hypothetical investment made on the first day of a designated period to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000, less the
maximum sales load of $35 for Class A shares or
the deduction of any CDSC on Class B or Class C
shares at the end of the period
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000
initial payment made at the beginning of the
designated period (or fractional portion thereof)
The computation above assumes that all dividends and distributions made by
the Fund are reinvested at net asset value during the designated period. The
average annual total return quotation is determined to the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts are
taken into consideration. For any account fees that vary with the size of the
account, the account fee used for purposes of the above computation is assumed
to be the fee that would be charged to the Fund's mean account size.
The total returns for Class A, Class B and Class C shares of the Fund as of
December 31, 1996 are as follows:
AVERAGE ANNUAL TOTAL RETURN (%)
One Year Five Years Since Commencement*
-------- ---------- -------------------
Class A Shares (0.58) 5.12 5.98
Class B Shares (0.71) N/A 4.15
Class C Shares N/A N/A 0.24
*Commencement was 10/22/86 for Class A shares; 4/29/94 for Class B shares; and
1/31/96 for Class C shares.
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PMC temporarily agreed to reduce its management fee and made other
arrangements to limit certain other expenses of the Fund. Had PMC not made such
an arrangement, the total returns for the periods would have been lower.
AUTOMATED INFORMATION LINE
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
(degree) net asset value prices for all Pioneer mutual funds;
(degree) annualized 30-day yields on Pioneer fixed income funds;
(degree) annualized 7-day yields and 7-day effective (compound) yields for
Pioneer Cash Reserves Fund; and
(degree) dividends and capital gains distributions on all Pioneer mutual
funds.
Yields are calculated in accordance with SEC mandated standard formulas.
In addition, by using a personal identification number ("PIN"),
shareholders may enter purchases, exchanges and redemptions, access their
account balance and last three transactions and may order a duplicate statement.
See "FactFoneSM" in the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the applicable
maximum sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A, Class B and Class C
shares (except for Pioneer Cash Reserves Fund, which seeks a stable $1.00 share
price) will also vary and may be worth more or less at redemption than their
original cost.
17. FINANCIAL STATEMENTS
The Fund's Annual Report dated December 31, 1996, attached to and is
incorporated by reference into this Statement of Additional Information in
reliance upon the report of Arthur Andersen LLP, independent public accountants,
as experts. Additional copies of the Fund's Annual Report may be obtained
without charge by calling Shareholder Services at 1-800-225-6292 or by written
request to the Fund at 60 State Street, Boston, Massachusetts 02109.
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APPENDIX A
DESCRIPTION OF MUNICIPAL BONDS
Municipal Bonds include debt obligations issued to obtain funds for various
public purposes, including the construction of a wide range of public facilities
such as bridges, highways, housing, mass transportation, schools, streets and
water and sewer works. Other public purposes for which Municipal Bonds may be
issued include refunding outstanding obligations, obtaining funds for general
operating expenses, and obtaining funds to loan to other public institutions.
The two principal classifications of Municipal Bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment for
principal and interest. The payment of such bonds may be dependent upon an
appropriation by the issuer's legislative body. The characteristics and
enforcement of general obligation bonds vary according to the law applicable to
the particular issuer. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. There are, of
course, variations in the security of Municipal Bonds, both within a particular
classification and between classifications, depending on numerous factors.
The yields on Municipal Bonds are dependent on a variety of factors,
including general money market conditions, supply and demand and general
conditions of the Municipal Bond market, size of a particular offering, the
maturity of the obligation and rating of the issue. The ratings of Moody's
Investor Service, Inc. and Standard & Poor's corporation represent their
opinions as to the quality of various Municipal Bonds. It should be emphasized,
however, that ratings are not absolute standards of quality. Consequently,
Municipal Bonds with the same maturity, coupon and rating may have different
yields while Bonds of the same maturity and coupon with different ratings may
have the same yield.
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<PAGE>
DESCRIPTION OF BOND RATINGS1
MOODY'S INVESTOR'S SERVICE, INC.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat bigger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
---------------------------------------------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating
agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings indicated do not necessarily represent
ratings which will be given to these securities on the date of the Fund's
fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
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<PAGE>
STANDARD & POOR'S RATINGS GROUP3
AAA: Bonds rated AAA are highest grade obligations. This rating indicates an
extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances
and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds
in this category than for bonds in the A category.
- -------------------------------------------------
3 Rates all governmental bodies having $1,000,000 or more of debt outstanding,
unless adequate information is not available.
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<PAGE>
APPENDIX B
DESCRIPTION OF CERTAIN OTHER INVESTMENTS
U.S. Government Obligations - are issued by the Treasury and include bills,
certificates of indebtedness, notes, and bonds. Agencies and instrumentalities
of the U.S. government are established under the authority of an act of Congress
and include, but are not limited to, the Government National Mortgage
Association, the Tennessee Valley Authority, the Bank for cooperatives, the
Farmers Home Administration, Federal Home Loan Banks, Federal Intermediate
Credit Banks, Federal Land Banks, and the Federal National Mortgage Association.
Certificates of Deposit - are certificates issued against funds deposited
in a commercial bank, are for a definite period of time, earn a specified rate
of return, and are normally negotiable.
Bankers' Acceptances - are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.
Repurchase Agreements - are agreements by which a person purchases a
security and simultaneously commits to resell that security to the seller (a
member bank of the Federal Reserve System or recognized securities dealer) at an
agreed upon price on an agreed upon date within a number of days (usually not
more than seven) from the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of interest which is unrelated to
the coupon rate or maturity of the purchased security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security, usually
U.S. government or Government agency issues. Under the 1940 Act, repurchase
agreements are considered to be loans by the Fund. The Fund's risk is limited to
the ability of the seller to pay the agreed upon amount on the delivery date. In
the opinion of the Fund's adviser this risk is not material; if the seller
defaults, the underlying security constitutes collateral for the seller's
obligation to pay although the Fund may incur certain costs in liquidating this
collateral and in certain cases may not be permitted to liquidate this
collateral.
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<PAGE>
APPENDIX C
PIONEER INTERMEDIATE TAX-FREE
CLASS A SHARES
<TABLE>
<CAPTION>
Initial
Date Initial Offering Sales Charge Shares Net Asset Value Asset
Investment Price Included Purchased Per Share Value
<S> <C> <C> <C> <C> <C> <C>
10/22/86 $10,000 $10.3600 3.50% 965.251 $10.0000 $9,650
</TABLE>
Dividends and Capital Gains Reinvested
VALUE OF SHARES
Date From Investment From Cap. From Dividends Total Value
Gains Reinvested
Reinvested
12/31/86 $9,662 $0 $0 $9,662
12/31/87 $8,639 $0 $645 $9,284
12/31/88 $9,073 $0 $1,398 $10,471
12/31/89 $9,324 $0 $2,170 $11,494
12/31/90 $9,295 $0 $2,937 $12,232
12/31/91 $9,710 $0 $3,888 $13,598
12/31/92 $9,962 $0 $4,813 $14,775
12/31/93 $10,387 $181 $5,844 $16,412
12/31/94 $9,286 $165 $5,973 $15,424
12/31/95 $10,078 $179 $7,295 $17,552
12/31/96 $9,923 $177 $7,985 $18,085
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<PAGE>
PIONEER INTERMEDIATE TAX-FREE
CLASS B SHARES
<TABLE>
<CAPTION>
Date Initial Shares Net Asset Value Initial Net Asset
Investment Offering Price Purchased Per Share Value
<S> <C> <C> <C> <C> <C>
4/29/94 $10,000 $10.0700 993.049 $10.0700 $10,000
Dividends and Capital Gains Reinvested
VALUE OF SHARES
Contingent
From Cap. Gains From Dividends Deferred Sales
From Reinvested Reinvested Charge if Redeemed Total Value CDSC
Date Investment if Redeemed Percentage
<S> <C> <C> <C> <C> <C> <C>
12/31/94 $9,584 $2 $265 $288 $9,851 3.00%
12/31/95 $10,388 $2 $712 $300 $10,802 3.00%
12/31/96 $10,238 $2 $1,111 $200 $11,151 2.00%
</TABLE>
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<PAGE>
PIONEER INTERMEDIATE TAX-FREE
CLASS C SHARES
<TABLE>
<CAPTION>
Net Asset Value Initial Net
Initial Offering Price Shares Per Share Asset
Date Investment Purchased Value
<S> <C> <C> <C> <C> <C>
1/31/96 $10,000 $10.510 951.475 $10.51 $10,000
Dividends and Capital Gains Reinvested
VALUE OF SHARES
Contingent
From Cap. Gains From Dividends Deferred Sales
From Reinvested Reinvested Charge if Redeemed Total Value CDSC
Date Investment if Redeemed Percentage
<S> <C> <C> <C> <C> <C> <C>
12/31/96 $9,791 $0 $331 $98 $10,251 1.00%
</TABLE>
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
-31-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates minus the current date. The
bond was "held" for the calendar year and returns were computed. Total returns
for 1977-1991 are calculated as the change in the flat price or and-interest
price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
Countries in the MSCI EMERGING MARKET FREE INDEX are: Argentina, Brazil, Chile,
China, Czech Republic, Colombia, Greece, Hungary, India, Indonesia, Israel,
Jordan, Korea Free (at 50%), Malaysia, Mexico Free, Pakistan, Peru, Philippines
Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan, Thailand, Turkey,
Venezuela Free
-32-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times Mirror/Mosby, St. Louis,
1990, p. 97 ["Level-Coupon Bonds"].) The monthly income return was assumed to be
one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are
-33-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
used in the total return calculation. Dividends are included in the month based
upon their payment date. There is no smoothing of income. Liquidating dividends,
whether full or partial, are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million. The Russell
3000 is comprised of the 3,000 largest US companies as determined by market
capitalization representing approximately 98% of the US equity market. The
largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
LIPPER BALANCED FUNDS INDEX
Equally-weighted performance indices, adjusted for capital gains distributions
and income dividends of approximately 30 of the largest funds with a primary
objective of conserving principal by maintaining at all times a balanced
portfolio of stocks and bonds. Typically, the stock/bond ratio ranges around
60%/40%.
-34-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
-35-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
- --------------------------------------------------------------------------------
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
-37-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
- --------------------------------------------------------------------------------
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
Dec 1996 23.07 28.84 17.62 3.58 23.96 21.99
-38-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
- --------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
-39-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
- --------------------------------------------------------------------------------
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
-40-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<CAPTION>
RUSSELL LIPPER MSCI EMERGING
2000 WILSHIRE REAL S&P MIDCAP BALANCED MARKETS FREE BANK
NAREIT-EQUITY INDEX ESTATE 400 FUND INDEX SAVINGS ACCOUNT
SECURITIES INDEX INDEX
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
-41-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
RUSSELL LIPPER MSCI EMERGING
2000 WILSHIRE REAL S&P MIDCAP BALANCED MARKETS FREE BANK
NAREIT-EQUITY INDEX ESTATE 400 FUND INDEX SAVINGS ACCOUNT
SECURITIES INDEX INDEX
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 22.20 35.58 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92
Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 10.55 7.80
Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 7.32 4.96
Dec 1995 15.27 28.44 13.65 30.94 24.89 5.21 5.24
Dec 1996 35.26 16.53 36.87 19.20 13.01 6.03 4.95
</TABLE>
Source: Lipper
-42-
<PAGE>
APPENDIX D
ADDITIONAL PIONEER
INFORMATION
The Pioneer group of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest and most experienced
money managers in the United States.
As of December 31, 1996, PMC employed a professional investment staff
of 53, with a combined average of twelve years' experience in the financial
services industry.
Total assets of all Pioneer mutual funds at December 31, 1996, were
approximately $15.8 billion representing 1,086,554 shareholder accounts, 722,661
non-retirement accounts and 363,893 retirement accounts.
-43-
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial highlights of the Registrant are
included in Part A of the Registration Statement and
the financial statements of the Registrant are
incorporated by reference into Part B of the
Registration Statement from the 1996 Annual Report to
Shareholders for the year ended December 31, 1996
(filed electronically on February 26, 1997; file no.
811-4768; accession number 0000798172-97-000010.
(b) Exhibits:
1. Amended and Restated Declaration of Trust+
1.1 Establishment and Designation of Classes+
1.2 Establishment and Designation of Class C shares*
2. By-Laws+
3. None
4. None
5. Management Contract+
6.1 Underwriting Agreement+
6.2 Form of Dealer Sales Agreement+
6.3 Form of Dealer Sales Agreement*
7. None
8. Power of Attorney+
8.1 Form of Custodian Agreement with Brown Brothers
Harriman & Co.+
<PAGE>
9. Investment Company Service Agreement+
10. None
11. Consent of Arthur Andersen LLP**
12. None
13. Form of Stock Purchase Agreement+
14. None
15. Distribution Plan+
15.1 Form of Class B Rule 12b-1 Distribution Plan+
15.2 Class C Rule 12b-1 Distribution Plan*
16. Description of Average Annual Total Return and Yield
Calculation+
17. Financial Data Schedule**
18. Power of Attorney+
18.1 Rule 18f-3 Plan for Class A and Class B shares*
18.2 Rule 18f-3 Plan for Class A, B and C shares*
---------------
+ Incorporated by reference from the Registrant's Registration Statement
on Form N-1A (File No.33-7592 and 811- 4768) as filed electronically
with the Securities and Exchange Commission as Post-Effective Amendment
No. 11 on April 27, 1995.
* Incorporated by reference from the Registrant's Registration Statement
on Form N-1A (File No.33-7592 and 811- 4768) as filed electronically
with the Securities and Exchange Commission as Post-Effective Amendment
No. 14 on April 25, 1996.
** Filed electronically herewith in accordance with EDGAR requirements.
C-2
<PAGE>
Item 25. Persons Controlled By or Under
Common Control With Registrant
PERCENT STATE/COUNTRY
OF OF
COMPANY OWNED BY SHARES INCORPORATION
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer Capital Corp. (PCC) PGI 100% MA
Pioneer Funds Marketing GmbH (GmbH) PGI 100% MA
Pioneer SBIC Corp. (SBIC) PGI 100% MA
Pioneer Associates, Inc. (PAI) PGI 100% MA
Pioneer International Corp. (PInt) PGI 100% MA
Pioneer Plans Corp. (PPC) PGI 100% MA
Pioneer Goldfields Ltd (PGL) PGI 100% MA
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Metals and Technology, Inc.(PMT) PGI 100% DE
Pioneer First Polish Trust Fund
Joint Stock Co. (First Polish) PGI 100% Poland
Teberebie Goldfields Ltd. (TGL) PGI 90% Ghana
Pioneer Funds Distributor, Inc. (PFD) PMC 100% MA
SBIC's outstanding capital stock PCC 100% MA
THE FUNDS: All are parties to management contracts with PMC.
BUSINESS
FUND TRUST
Pioneer World Equity Fund DE
Pioneer International Growth Fund MA
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Micro-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Fund MA
Pioneer II MA
Pioneer Real Estate Shares DE
C-3
<PAGE>
Pioneer Short-Term Income Trust MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Balanced Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares DE
OTHER:
o SBIC is the sole general partner of Pioneer Ventures Limited
Partnership, a Massachusetts limited partnership.
o Kotari Pioneer AMC Ltd. (Kotari Pioneer) (Indian Corp.), is a
joint venture between PMC and Investment Trust of India Ltd.
(Kotari) (Indian Corp.)
o Kotari and PMC own approximately 46% and 49%, respectively, of
the total equity capital of Kotari Pioneer.
JOHN F. COGAN, JR.
OWNS APPROXIMATELY 14% OF THE OUTSTANDING SHARES OF PGI.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
------ -------- --------- -------- -----
Pioneer Family
of Mutual Funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
PIntl X X
PMT X X
C-4
<PAGE>
PCC X
PSC X
PMC X X
PFD X X
TGL X X
First Polish X Member of
Supervisory
Board
Hale and Dorr LLP Partner
GmbH Chairman of
Supervisory
Board
Item 26. Number of Holders of Securities
The following table sets forth the approximate number of
recordholders of each class of securities of the Registrant as of March 31,
1997:
Class A Class B Class C
Number of Record Holders: 1,992 102 10
Item 27. Indemnification
Except for the Agreement and Declaration of Trust establishing
the Registrant as a trust under Massachusetts law, there is no contract,
arrangement or statute under which any director, officer, underwriter or
affiliated person of the Registrant is insured or indemnified. The Agreement and
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act"), may be available to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in
the Forms ADV, as amended, of the Registrant's Manager, Pioneering Management
Corporation. The following sections of each such Form ADV are incorporated
herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of
each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice
President and Trustee
Steven M. Graziano Senior None
Vice President
C-5
<PAGE>
Stephen W. Long Senior None
Vice President
John W. Drachman Vice President None
Mary Kleeman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Bennett Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's
office at 60 State Street, Boston, Massachusetts; contact the Treasurer.
C-6
<PAGE>
Item 31. Management Services
The Registrant is a party to one contract, described in the
Prospectus and the Statement of Additional Information, under which it receives
management and advisory services from Pioneering Management Corporation.
Item 32. Undertakings
(A) None.
(B) None.
(C) The Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, a copy of the Registrant's annual report to shareholders furnished
pursuant to and meeting the requirements of Rule 30d-1 from which the specified
information is incorporated by reference, unless such person currently holds
securities of the Registrant and otherwise has received a copy of such report,
in which case the Registrant shall state in the Prospectus that it will furnish,
without charge, a copy of such report on request, and the name, address and
telephone number of the person to whom such a request should be directed.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 15 to its Registration Statement (the "Amendment")
(which meets all the requirements for effectiveness pursuant to paragraph (b) of
Rule 485 and the Securities Act of 1933) to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and The
Commonwealth of Massachusetts, on the 25th day of April, 1997.
PIONEER INTERMEDIATE TAX-FREE FUND
By: /s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 15 to the Registration Statement of Pioneer
Intermediate Tax-Free Fund (File Nos. 33-7592; 811-4768) has been signed below
by the following persons in the capacities and on the dates indicated:
Signature Title
--------- -----
/s/John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President (Principal )
Executive
Officer) )
)
)
/s/William H. Keough* Chief Financial Officer )
William H. Keough, Treasurer and Treasurer (Principal )
Financial and Accounting )
Officer)
)
)
April 25, 1997
)
<PAGE>
A MAJORITY OF THE BOARD OF TRUSTEES:
)
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
/s/Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D.* )
)
)
/s/Margaret B.W. Graham* )
Margaret B.W. Graham )
)
)
/s/John W. Kendrick* ) April 25, 1997
John W. Kendrick )
)
)
/s/Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/David D. Tripple* )
David D. Tripple )
)
)
/s/Stephen K. West* )
Stephen K. West )
)
)
/s/John Winthrop* )
John Winthrop )
*By: /s/ John F. Cogan, Jr.
John F. Cogan Jr.
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Title
11. Consent of Independent Public Accountants
17. Financial Data Schedule
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated February 3, 1997 included in Pioneer Intermediate Tax-Free Fund's 1996
Annual Report (and to all references to our firm) included in or made a part of
the Pioneer Intermediate Tax-Free Fund Post-Effective Amendment No. 15 to
Registration Statement File No. 33-7592 and Amendment No. 15 to Registration
Statement File No. 811-4768.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 24, 1997
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