As Filed With The Securities and Exchange Commission on April 29, 1999
File Nos. 33-13179
811-5099
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. 18 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 19 / X /
(Check appropriate box or boxes)
PIONEER MONEY MARKET TRUST
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Esq., Hale and Dorr LLP,
60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
___ immediately upon filing pursuant to paragraph (b)
_X_ on May 3, 1999 pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on [date] pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on [date] pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
___This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities: Shares of Beneficial Interest, no par value
<PAGE>
[Pioneer Logo]
P i o n e e r
Cash Reserves Fund
- --------------------------------------------------------------------------------
CLASS A, CLASS B AND CLASS C SHARES
Prospectus, May 3, 1999
Contents
<TABLE>
<S> <C>
Basic information about the fund 1
Management 4
Buying, exchanging and selling shares 6
Dividends, capital gains and taxes 22
Financial highlights 23
</TABLE>
Neither the Securities and Exchange Commission
nor any state securities agency has approved
the fund's shares or determined whether this
prospectus is accurate or complete. Any
representation to the contrary is a crime.
<PAGE>
- - -------------------------------------------------------------------------
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing
in the fund.
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- - -------------------------------------------------------------------------
Contact your investment professional to discuss how the fund fits into
your portfolio.
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<PAGE>
Basic information about the fund
Investment objective
High current income, preservation of capital and liquidity through investments
in high-quality short-term securities.
Investment strategies
The fund seeks to maintain a constant net asset value of $1.00 per share by
investing in high quality money market securities. The fund may invset more than
25% of its total assets in U.S. government securities and bank obligations.
The fund invests in U.S. government obligations and securities rated (at the
time of purchase) in one of the two highest rating categories for short-term
debt by a nationally recognized securities rating organization or determined to
be of equivalent credit quality by Pioneer Investment Management, Inc., the
fund's investment adviser. If rating organizations differ in the rating assigned
to a security, the fund will treat the security as having the higher rating if
at least two rating organizations assigned that rating. If a rating organization
downgrades the quality rating assigned to one or more of the fund's portfolio
securities, Pioneer will consider what actions, if any, are appropriate
including selling the downgraded security or purchasing additional high-quality
securities as soon as it is prudent to do so.
The fund invests exclusively in securities with a maximum remaining maturity of
397 days from the date of settlement of the purchase and maintains an
dollar-weighted average portfolio maturity of 90 days or less. The fund's
investments may have fixed, floating or variable interest rates.
In selecting the fund's portfolio, Pioneer complies with the rating, maturity
and diversification requirements applicable to money market funds. Within those
limits, Pioneer's assessment of broad economic factors that are expected to
affect economic activity and interest rates influence its securities selection.
Pioneer also employs fundamental research and due diligence to assess an
issuer's credit quality.
Principal risks of investing in the fund
Even though the fund seeks to maintain a $1 share price, you could lose money on
your investment or the fund could fail to generate high current income if:
[closed box] Interest rates go up, causing the value of the fund's investments
to decline
[closed box] The issuer of a security owned by the fund defaults on its
obligation to pay principal and/or interest or has its credit
rating downgraded
[closed box] Pioneer's judgment about the credit quality, attractiveness or
relative value of a particular security proves to be incorrect
[Begin Sidebar]
[Graphic Magnifying Glass]
Money market
securities
Money market
securities include:
[closed box] Securities issued
or guaranteed
by the U.S.
government, its
agencies or
instrumentalities
[closed box] Corporate debt
securities
[closed box] Bank obligations
[closed box] Commercial paper
[closed box] Repurchase
agreements
- - ---------------------
[End Sidebar]
1
<PAGE>
Basic information about the fund
The fund's past performance
The bar chart and table indicate the risks of investing in the fund by showing
how the fund has performed in the past. The fund's performance varies from year
to year.
The fund's past performance does not necessarily indicate how it will perform in
the future. As a shareowner, you may lose or make money on your investment.
- --------------------------------------------------------------------------------
Fund performance
The chart shows the performance of the fund's Class A shares for each of the
past 10 calendar years. Class B and Class C shares have different performance.
The chart does not reflect any Class A sales charges you may pay when you buy or
sell fund shares. Any sales charge will reduce your return.
The fund's highest calendar quarterly return was 2.25% (3/31/89 to 6/30/89)
The fund's lowest calendar quarterly return was 0.60% (3/31/93 to 6/30/93)
For the calendar quarter ended 3/31/99, the fund's total return was 0.97%
Annual return Class A shares
(Year ended December 31)
[Bar Chart]
'89 8.80%
'90 7.74%
'91 5.29%
'92 3.06%
'93 2.46%
'94 3.57%
'95 5.17%
'96 4.65%
'97 4.78%
'98 4.84%
[End of Bar Chart]
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Comparison with 90-day Treasury Bills
The table shows the average annual total return for each class of the fund
over time and compares these returns to the returns of the 90-day Treasury bill.
The fund's 7-day yield for the period December 24 to December 31, 1998 was:
Class A - 4.43%
Class B - 3.60%
Class C - 3.85%
Please contact Pioneer at 1-800-225-6292 to obtain the fund's
current 7-day yield. The table:
[closed box] Reflects sales charges applicable to the
[closed box] Assumes that you sell your shares at the end of the period
[closed box] Assumes that you reinvest all of your dividends and distributions
Average annual total return (%)
(for periods ended December 31, 1998)
<TABLE>
<CAPTION>
Since Inception
1 Year 5 Years 10 Years Inception Date
- - -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 4.84 4.60 5.02 5.27 6/22/87
- - -------------------------------------------------------------------------------
Class B -0.04 n/a n/a 3.26 3/31/95
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Class C 4.12 n/a n/a 3.92 1/31/96
- - -------------------------------------------------------------------------------
90-day Treasury bill 4.83 5.03 5.26 5.45* n/a
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</TABLE>
* Reflects the return of the 90-day Treasury bill since the inception of Class
A shares. The return of the 90-day Treasury bill since the inception of Class
B shares is 5.09% and class since the inception of Class C shares is 5.21%.
2
<PAGE>
Fees and expenses
These are the fees and expenses, based on the fund's latest fiscal year, you may
pay if you invest in the fund.
<TABLE>
<CAPTION>
Shareowner fees
paid directly from your investment Class A Class B Class C
- - ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge (load) when you buy shares as a
percentage of offering price None None None
- - ---------------------------------------------------------------------------------------
Maximum deferred sales charge (load) as a percentage of
offering price or the amount you receive when you sell
shares, whichever is less None 4% 1%
- - ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Annual fund operating expenses
paid from the assets of the fund
as a percentage of average daily net assets Class A Class B Class C
- - ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.40% 0.40% 0.40%
- - ---------------------------------------------------------------------------------------
Distribution and Service (12b-1) Fee 0.15% 1.00% 1.00%
- - ---------------------------------------------------------------------------------------
Other Expenses 0.33% 0.27% 0.26%
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Total Annual Fund Operating Expenses 0.88% 1.67% 1.66%
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</TABLE>
Example
This example helps you compare the costs of investing in the fund with the cost
of investing in other mutual funds. It assumes that: a) you invest $10,000 in
the fund for the time periods shown, b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs could be:
<TABLE>
<CAPTION>
If you sell your shares If you do not sell your shares
----------------------------------------------------------------
Number of years you own your shares
----------------------------------------------------------------
1 3 5 10 1 3 5 10
- - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $89 $281 $488 $1,084 $89 $281 $488 $1,084
- - ----------------------------------------------------------------------------
Class B 570 826 1,107 1,766 170 526 907 1,766
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Class C 269 523 902 1,965 169 523 902 1,965
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</TABLE>
3
<PAGE>
Management
Pioneer, the fund's investment adviser,
selects the fund's investments and oversees the fund's operations.
Pioneer Group
The Pioneer Group, Inc. and its subsidiaries are engaged in financial services
businesses in the United States and many foreign countries. As of December 31,
1998, the firm had more than $23 billion in assets under management worldwide
including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual
fund investment history includes creating in 1928 one of the first mutual funds.
John F. Cogan, chairman of the board and president of The Pioneer Group, Inc.,
owns approximately 14% of the firm. He is also an officer and director of each
of the Pioneer mutual funds.
Investment adviser
Pioneer manages a family of U.S. and international stock funds, bond funds
and money market funds. Pioneer is a subsidiary of The Pioneer Group, Inc. Its
main office is at 60 State Street, Boston, Massachusetts 02109.
Portfolio manager
Day-to-day management of the fund's portfolio is the responsibility of a team
of fixed income portfolio managers and analysts supervised by Sherman B. Russ
and Kenneth J. Taubes.
Mr. Russ and Mr. Taubes are jointly responsible for overseeing Pioneer's U.S.
and global fixed income team. Mr. Russ is a senior vice president of Pioneer. He
joined Pioneer in 1983 as an assistant portfolio manager and has been an
investment professional since 1962. Mr. Taubes joined Pioneer as a senior vice
president in September 1998 and has been an investment professional since 1986.
Prior to joining Pioneer, Mr. Taubes had served since 1991 as a senior vice
president and senior portfolio Manager for several Putnam investments
institutional accounts and mutual funds.
Mr. Russ, Mr. Taubes and their team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.
4
<PAGE>
Management fee
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to 0.40%
of the fund's average daily net assets. The fee is normally computed daily and
paid monthly.
Distributor and transfer agent
Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneering Services
Corporation is the fund's transfer agent. The fund compensates the distributor
and transfer agent for their services. The distributor and the transfer agent
are subsidiaries of The Pioneer Group, Inc.
Year 2000
Information technology experts are concerned about computer and other electronic
systems' ability to process date-related information on and after January 1,
2000. This scenario, commonly referred to as the "Year 2000 problem," could have
an adverse impact on the fund and the provision of services to its shareowners.
Pioneer is addressing the Year 2000 problem with respect to its systems and
those used by the distributor and transfer agent. During 1999, Pioneer expects
to finish addressing all material Year 2000 issues and to participate in
industry-wide testing. The fund has obtained assurances from its other service
providers that they are taking appropriate Year 2000 measures and Pioneer is
monitoring their efforts. Although the fund does not expect the Year 2000
problem to adversely impact it, the fund cannot guarantee that its, or the
fund's service providers', efforts will be successful.
5
<PAGE>
Buying, exchanging and selling shares
[Begin Sidebar]
[Magnifying Glass Graphic]
- - ------------------
Share price
The net asset
value per share
calculated on the
day of your
transaction,
adjusted for any
applicable sales
charge, is often
referred to as the
share price.
- - ------------------
[End Sidebar
Net asset value
The fund's net asset value is the value of its portfolio of securities plus any
other assets minus its operating expenses and any other liabilities. The fund
calculates a net asset value for each class of shares every day the New York
Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern
time).
The fund generally values its portfolio securities using the amortized cost
method. This valuation method assumes a steady rate of amortization of any
premium or discount from the date of purchase until the maturity of each
security.
You buy or sell shares at the net asset value per share calculated on the day of
your transaction, adjusted for any applicable sales charge. When you buy Class A
shares, you do not pay a sales charge. When you sell Class B or Class C shares,
you may pay a contingent deferred sales charge depending on how long you have
owned your shares.
Choosing a class of shares
The fund offers three classes of shares through this prospectus. Each class has
different sales charges and expenses, allowing you to choose the class that best
meets your needs.
Factors you should consider include:
[closed box] How long you expect to own the shares
[closed box] The expenses paid by each class
[closed box] Whether you qualify for any reduction or waiver of sales charges
Your investment professional can help you determine which class meets your
goals. Your investment firm may receive different compensation depending upon
which class you choose. If you are not a U.S. citizen and are purchasing shares
outside the U.S., you may pay different sales charges under local laws and
business practices.
Distribution plans
The fund has adopted a distribution plan for each class of shares offered
through this prospectus in accordance with Rule 12b-1 under the Investment
Company Act of 1940. Under each plan the fund pays distribution and service fees
to the distributor. Because these fees are an ongoing expense, over time they
increase the cost of your investment and your shares may cost more than shares
that are not subject to a distribution fee.
6
<PAGE>
- --------------------------------------------------------------------------------
Comparing classes of shares
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Class B Class C
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Why you might prefer You may prefer Class A You may prefer Class B You may prefer Class C
each class shares if you do not shares if you do not shares if you do not wish
want to pay an initial or want to pay an initial to pay an initial sales
contingent deferred sales charge, or if you charge and you would
sales charge when you plan to hold your rather pay higher annual
buy your fund shares. investment for at least expenses over time.
six years. Class B
shares are not
recommended if you
are investing $250,000
or more.
- - ----------------------------------------------------------------------------------------------------------------
Initial sales charge None, but you may pay None None
a sales charge if you
exchange your shares
for the Class A shares
of another Pioneer
mutual fund.
- - ----------------------------------------------------------------------------------------------------------------
Contingent deferred None. Up to 4% is charged if A 1% charge if you sell
sales charges you sell your shares. your shares within one
The charge is reduced year of purchase. Your
over time and not investment firm may
charged after six years. receive a commission
Your investment firm from the distributor at the
may receive a time of your purchase of
commission from the up to 1%.
distributor at the time
of your purchase of up
to 4%.
- - ----------------------------------------------------------------------------------------------------------------
Distribution and Up to 0.15% of average Up to 1% of average Up to 1% of average daily
service fees daily net assets. daily net assets. net assets.
- - ----------------------------------------------------------------------------------------------------------------
Annual expenses Lower than Class B or Higher than Class A Higher than Class A
(including distribution Class C. shares; Class B shares shares; Class C shares
and service fees) convert to Class A do not convert to any
shares after eight other class of shares.
years. You continue to pay
higher annual expenses.
- - ----------------------------------------------------------------------------------------------------------------
Exchange privilege Class A shares of other Class B shares of other Class C shares of other
Pioneer mutual funds. Pioneer mutual funds. Pioneer mutual funds.
</TABLE>
7
<PAGE>
Buying, exchanging and selling shares
[Begin sidebar]
[Magnifying Glass Graphic]
- - ------------------------
Contingent deferred
sales charge
A sales charge that
may be deducted
from your sale
proceeds.
- - ------------------------
[End Sidebar]
Sales charges: Class B shares
You buy Class B shares at net asset value per share without paying an initial
sales charge. However, you will pay a contingent deferred sales charge to the
distributor if you sell your Class B shares within six years of purchase. The
contingent deferred sales charge decreases as the number of years since your
purchase increases.
Contingent deferred sales charge
- - -----------------------------------------
<TABLE>
<CAPTION>
On shares sold As a % of
before the dollar amount subject
end of year to the sales charge
- - -----------------------------------------
<S> <C>
1 4
- - -----------------------------------------
2 4
- - -----------------------------------------
3 3
- - -----------------------------------------
4 3
- - -----------------------------------------
5 2
- - -----------------------------------------
6 1
- - -----------------------------------------
7+ -0-
- - -----------------------------------------
</TABLE>
Conversion to Class A shares
Class B shares automatically convert into Class A shares. This helps you because
Class A shares pay lower expenses.
Your Class B shares will convert to Class A shares at the beginning of the
calendar month (calendar quarter for shares purchased before October 1, 1998)
that is eight years after the date of purchase except that:
[closed box] Shares bought by reinvesting dividends and capital gains will
convert to Class A shares at the same time as shares on which the
dividend or distribution was paid
[closed box] Shares purchased by exchanging shares from another fund will
convert on the date that the shares originally acquired would have
converted into Class A shares
Currently, the Internal Revenue Service permits the conversion of shares to take
place without imposing a federal tax. Conversion may not occur if the Internal
Revenue Service deems it a taxable event for federal tax purposes.
- --------------------------------------------------------------------------------
Paying the contingent deferred sales charge (CDSC)
Several rules apply for Class B shares so that you pay the lowest CDSC.
[closed box] The CDSC is calculated on the current market value, or the
original cost, of the shares you are selling, whichever is less
[closed box] You do not pay a CDSC on reinvested dividends or distributions
[closed box] In determining the number of years since your purchase, all
purchases are considered to have been made on the first day of
that month (quarter for shares purchased before October 1, 1998)
[closed box] If you sell only some of your shares, the transfer agent will
first sell your shares that are not subject to any CDSC and then
the shares that you have owned the longest
[closed box] You may qualify for a waiver of the CDSC normally charged. See
"Qualifying for a reduced sales charge"
- --------------------------------------------------------------------------------
8
<PAGE>
Sales charges: Class C shares
You buy Class C shares at net asset value per share without paying an initial
sales charge. However, if you sell your Class C shares within one year of
purchase, you will pay to the distributor a contingent deferred sales charge of
1% of the current market value, or the original cost, of the shares you are
selling, whichever is less.
- --------------------------------------------------------------------------------
Paying the contingent deferred sales charge (CDSC)
Several rules apply for Class C shares which result in your paying the lowest
CDSC.
[closed box] The CDSC is calculated on the current market value, or the
original cost, of the shares you are selling, whichever is less
[closed box] You do not pay a CDSC on reinvested dividends or distributions
[closed box] In determining the number of years since your purchase, all
purchases are considered to have been made on the first day of
that month (quarter for shares purchased before October 1, 1998)
[closed box] If you sell only some of your shares, the transfer agent will
first sell your shares that are not subject to any CDSC and then
the shares that you have bought most recently
[closed box] You may qualify for a waiver of the CDSC normally charged. See
"Qualifying for a reduced sales charge"
- --------------------------------------------------------------------------------
[Begin Sidebar]
- - ------------------------
[Magnifying Glass Graphic]
Contingent deferred
sales charge
A sales charge that
may be deducted
from your sale
proceeds.
- - -------------------------
[End Sidebar]
9
<PAGE>
Buying, exchanging and selling shares
Waiver or reduction of contingent
deferred sales charges (CDSC)
Class B and Class C shares
The distributor may waive or reduce the CDSC for Class B or Class C shares if:
[closed box] The distribution results from the death of all registered account
owners or a participant in an employer-sponsored plan. For UGMAs,
UTMAs and trust accounts, the waiver applies only upon the death
of all beneficial owners;
[closed box] The distribution results from a total and permanent disability (as
defined by Section 72 of the Internal Revenue Code) occurring
after the purchase of the shares being sold. For UGMAs, UTMAs and
trust accounts, the waiver only applies upon the disability of all
beneficial owners;
[closed box] The distribution is made in connection with limited automatic
redemptions as described 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);
[closed box] The distribution is from any type of IRA, 403(b) or
employer-sponsored plan and one of the following applies:
- It is part of a series of substantially equal periodic payments
made over the life expectancy of the participant or the joint
life expectancy of the participant and his or her beneficiary
(limited in any year to 10% of the value of the participant's
account at the time the distribution amount is established);
- It is a required minimum distribution due to the attainment of
age 701/2, in which case the distribution amount may exceed 10%
(based solely on plan assets held in Pioneer mutual funds);
- It is rolled over to or reinvested in another Pioneer fund in
the same class of shares, which will be subject to the CDSC of
the shares originally held;
- It is in the form of a loan to a participant in a plan that
permits loans (each repayment will be subject to a CDSC as
though a new purchase);
[closed box] The distribution is to a participant in an employer-sponsored
retirement plan qualified under section 401 of the Internal
Revenue Code and is:
- A return of excess employee deferrals or contributions;
- A qualifying hardship distribution as defined by the Internal
Revenue Code. For Class B shares, waiver is granted only on
payments of up to 10% of total plan assets held by Pioneer for
all participants, reduced by the total of any prior
distributions made in that calendar year;
- Due to retirement or termination of employment. For Class B
shares, waiver is granted only on payments of up to 10% of total
plan assets held in a Pioneer mutual fund for all participants,
reduced by the total of any prior distributions made in the same
calendar year;
- From a qualified defined contribution plan and represents a
participant's directed transfer, provided that this privilege
has been preauthorized through a prior agreement with the
distributor regarding participant directed transfers (not
available to Class B shares);
[closed box] The distribution is made pursuant to the fund's right to liquidate
or involuntarily redeem shares in a shareholder's account;
[closed box] The selling broker elects, with the distributor's approval, to
waive receipt of the commission normally paid at the time of the
sale.
10
<PAGE>
Opening your account
If your shares are held in your investment firm's name, the options and services
available to you may be different from those discussed in this prospectus. Ask
your investment professional for more information.
Account options
Use your account application to select options and privileges for your account.
You can change your selections at any time by sending a completed account
options form to the transfer agent. You may be required to obtain a signature
guarantee to make certain changes to an existing account.
Call or write to the fund's transfer agent for account applications, account
options forms and other account information:
Pioneering Services Corporation
P.O. Box 9014
Boston, Massachusetts 02205-9014
Telephone 1-800-225-6292
Telephone transaction privileges
If your account is registered in your name, you can buy, exchange or sell fund
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the transfer agent.
When you request a telephone transaction the transfer agent will try to confirm
that the request is genuine. The transfer agent records the call, requires the
caller to provide the personal identification number for the account and sends
you a written confirmation. The fund may implement other confirmation procedures
from time to time. Different procedures may apply if you have a non-U.S. account
or if your account is registered in the name of an institution, broker-dealer or
other third party.
[Begin Sidebar]
[Telephone Graphic]
- - ------------------------
By phone
If you want to place
your telephone
transaction by
speaking to a
shareowner
services
representative, call
1-800-225-6292
between 8:00 a.m.
and 9:00 p.m.
Eastern time on
any weekday that
the New York Stock
Exchange is open.
You may use
FactFone(sm) at any
time.
- - ----------------------
11
<PAGE>
Buying, exchanging and selling shares
[Begin Sidebar]
- - ----------------------
[Question Mark Graphic]
Consult your
investment
professional to
learn more about
buying, exchanging
or selling fund
shares.
- - ----------------------
[End Sidebar]
General rules on buying, exchanging and selling
your fund shares
Share price
If you place an order with your investment firm before the New York Stock
Exchange closes and your investment firm submits the order to the distributor
prior to the distributor's close of business (usually 5:30 p.m. Eastern time),
your share price will be calculated that day. Otherwise, your price per share
will be calculated at the close of the New York Stock Exchange after the
distributor receives your order. Your investment firm is responsible for
submitting your order to the distributor.
Buying
You may buy fund shares from any investment firm that has a sales agreement with
the distributor. If you do not have an investment firm, please call
1-800-225-6292 for information on how to locate an investment professional in
your area.
You can buy fund shares at the offering price. The distributor may reject any
order until it has confirmed the order in writing and received payment. The fund
reserves the right to stop offering any class of shares.
Minimum investment amounts
Your initial investment must be at least $1,000. Additional investments must be
at least $100 for Class A shares and $500 for Class B or Class C shares. You may
qualify for lower initial or subsequent investment minimums if you are opening a
retirement plan account, establishing an automatic investment plan or placing
your trade through your investment firm.
- --------------------------------------------------------------------------------
Retirement plan accounts
You can purchase fund shares through tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations.
Your initial investment for most types of retirement plan accounts must be at
least $250. Additional investments for most types of retirement plans must be
at least $100.
You may not use the account application accompanying this prospectus to
establish a Pioneer retirement plan. You can obtain retirement plan
applications from your investment firm or by calling the Retirement Plans
Department at 1-800-622-0176.
- --------------------------------------------------------------------------------
12
<PAGE>
Exchanging
You may exchange your shares for shares of the same class of another Pioneer
mutual fund.
Your exchange request must be for at least $1,000 unless the fund you are
exchanging into has a different minimum. The fund allows you to exchange your
shares (except Class A shares purchased directly) at net asset value without
charging you either an initial or contingent deferred sales charge at the time
of the exchange. When you exchange Class A fund shares you acquired by investing
directly in the fund, these shares will be subject any applicable initial or
contingent deferred sales charge of the fund into which you are exchanging.
Shares you acquire as part of an exchange will continue to be subject to any
contingent deferred sales charge that applies to the shares you originally
purchased. When you ultimately sell your shares, the date of your original
purchase will determine your contingent deferred sales charge.
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus.
Selling
Your shares will be sold at net asset value per share next calculated after the
fund receives your request in good order.
If the shares you are selling are subject to a deferred sales charge, it will be
deducted from the sale proceeds. The fund generally will send your sale proceeds
by check, bank wire or electronic funds transfer. Normally you will be paid
within seven days. If you recently sent a check to purchase the shares being
sold, the fund may delay payment of the sale proceeds until your check has
cleared. This may take up to 15 calendar days from the purchase date.
If you are selling shares from a nonretirement account or certain IRAs, you may
use any of the methods described below. If you are selling shares from a
retirement account other than an IRA, you must make your request in writing.
- --------------------------------------------------------------------------------
Good order means that:
[closed box] You have provided adequate instructions
[closed box] There are no outstanding claims against your account
[closed box] There are no transaction limitations on your account
[closed box] If you have any fund share certificates, you submit them and they
are signed by each record owner exactly as the shares are
registered
[closed box] Your request includes a signature guarantee if you:
- Are selling over $100,000 or exchanging over $500,000 worth
of shares
- Changed your account registration or address within the last 30
days
- Instruct the transfer agent to mail the check to an address
different from the one on your account
- Want the check paid to someone other than the account owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund
account with a different registration
- --------------------------------------------------------------------------------
[Begin Sidebar]
[Pillar Graphic]
- - ------------------------
You may have to
pay federal income
taxes on a sale or
an exchange.
- - ------------------------
[End Sidebar]
13
<PAGE>
Buying, exchanging and selling shares
Checkwriting privilege
You may write a check to sell your shares, if you have established the
checkwriting privilege. You may write a check for as little as $500 or as much
as $250,000.
To establish the checkwriting privilege, complete a checkwriting form. The fund
will then establish a checking account for you with The First National Bank of
Omaha. About two weeks after you request checkwriting, the Bank will send your
personalized checks to you.
Each time you write a check, the check will be presented to the Bank for
payment. The Bank will instruct the fund to sell a sufficient number of shares
to cover the amount of your check. The fund will sell shares in payment of a
check at the net asset value next calculated after your check is presented to
the Bank. You will receive any daily dividends declared on your shares until the
day a check clears. You may not write a check to close your account because the
value of your shares changes each day.
Your checking account with the Bank is subject to the Bank's rules and
regulations governing checking accounts. If you do not have enough shares in
your fund account to cover the amount of a check when the check is presented to
the Bank for payment, the Bank will return your check to the presenter without
making payment.
The checkwriting privilege is not available to accounts subject to backup
withholding. The checkwriting privilege is generally not available to retirement
plan accounts.
14
<PAGE>
<TABLE>
<CAPTION>
- - ---------------------------------------------- ----------------------------------------------
Buying shares Exchanging shares
- - ---------------------------------------------- ----------------------------------------------
<S> <C>
Normally, your investment firm will send your Normally, your investment firm will send your
purchase request to the fund's transfer exchange request to the fund's transfer
agent. Consult your investment professional agent. Consult your investment professional
for more information. Your investment firm for more information about exchanging your
may receive a commission from the distributor shares.
for your purchase of fund shares. The
distributor or its affiliates may pay
additional compensation, out of their own
assets, to certain investment firms or their
affiliates based on objective criteria
established by the distributor.
- - ---------------------------------------------- ----------------------------------------------
You can use the telephone purchase privilege After you establish your fund account, you
if you have an existing non-retirement can exchange fund shares by phone if:
account or certain IRAs. You can purchase
additional fund shares by phone if: [closed box] You are using the exchange to
establish a new account,
[closed box] You established your bank provided the new account has a
account of record at least 30 registration identical to the
days ago original account
[closed box] Your bank information has not [closed box] The fund into which you are
changed for at least 30 days exchanging offers the same
class of shares
[closed box] You are not purchasing more
than $25,000 worth of shares [closed box] You are not exchanging more
per account per day than $500,000 worth of shares
per account per day
[closed box] You can provide the proper
account identification [closed box] You can provide the proper
information account identification
information
When you request a telephone purchase, the
transfer agent will electronically debit the
amount of the purchase from your bank account
of record. The transfer agent will purchase
fund shares for the amount of the debit at
the offering price determined after the
transfer agent receives your telephone
purchase instruction and good funds. It
usually takes three business days for the
transfer agent to receive notification from
your bank that good funds are available in
the amount of your investment.
- - ---------------------------------------------- ----------------------------------------------
You can purchase fund shares for an existing You can exchange fund shares by mailing or
fund account by mailing a check to the faxing a letter of instruction to the
transfer agent. Make your check payable to transfer agent. You can exchange fund shares
the fund. Neither initial nor subsequent directly through the fund only if your
investments should be made by third party account is registered in your name. However,
check. Your check must be in U.S. dollars and you may not fax an exchange request for more
drawn on a U.S. bank. Include in your than $500,000. Include in your letter:
purchase request the fund's name, the account
number and the name or names in the account [closed box] The names, social security
registration. number and signatures of all
registered owners
[closed box] A signature guarantee for each
registered owner if the amount
of the exchange is more than
$500,000
[closed box] The name of the fund out of
which you are exchanging and
the name of the fund into
which you are exchanging
[closed box] The class of shares you are
exchanging
[closed box] The dollar amount or number of
shares you are exchanging
</TABLE>
15
<PAGE>
Buying, exchanging and selling shares
- --------------------------------------------------------------------------------
Selling shares
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. Consult your investment professional for more
information. The fund has authorized the distributor to act as its agent in the
repurchase of fund shares from qualified investment firms. The fund reserves the
right to terminate this procedure at any time.
- --------------------------------------------------------------------------------
You may sell up to $100,000 per account per day. You may sell fund shares held
in a retirement plan account by phone only if your account is an IRA. You may
not sell your shares by phone if you have changed your address (for checks) or
your bank information (for wires and transfers) in the last 30 days.
You may receive your sale proceeds:
[closed box] By check, provided the check is made payable exactly as your
account is registered
[closed box] By bank wire or by electronic funds transfer, provided the sale
proceeds are being sent to your bank address of record
- --------------------------------------------------------------------------------
You can sell some or all of your fund shares by writing directly to the fund
only if your account is registered in your name. Include in your request your
name, your social security number, the fund's name, your fund account number,
the class of shares to be sold, the dollar amount or number of shares to be sold
and any other applicable requirements as described below. The transfer agent
will send the sale proceeds to your address of record unless you provide other
instructions. Your request must be signed by all registered owners and be in
good order. The transfer agent will not process your request until it is
received in good order. You may not sell more than $100,000 per account per day
by fax.
[sidebar]
- - ----------------------------------------------
How to contact us
By phone [telephone graphic]
For information or to request a telephone
transaction between 8:00 a.m. and 9:00 p.m.
(Eastern time) by speaking with a shareholder
services representative call 1-800-225-6292
To request a transaction using FactFone(sm) call
1-800-225-4321
Telecommunications Device for
the Deaf (TDD)
1-800-225-1997
By mail [envelope graphic]
Send your written instructions to:
Pioneering Services Corporation
P.O. Box 9014 Boston,
Massachusetts 02205-9014
By fax [fax machine graphic]
Fax your exchange and sale requests to:
1-800-225-4240
- - ----------------------------------------------
Exchange privilege
The fund and the distributor 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.
Abuses include frequent trading in response
to short-term market fluctuations and a
pattern of trading that appears to be an
attempt to "time the market." In addition,
the fund and the distributor reserve the
right, at any time without notice, to charge
a fee for exchanges or to modify, limit or
suspend the exchange privilege. The fund will
provide 60 days notice of material amendments
to or termination of the privilege.
- - ----------------------------------------------
[end sidebar]
16
<PAGE>
Account options
See the account application form for more details on each of the following
options.
Automatic investment plans
You can make regular periodic investments in the fund by setting up monthly bank
drafts, government allotments, payroll deduction, a Pioneer Investomatic Plan
and other similar automatic investment plans. You may use an automatic
investment plan to establish a Class A share account with a small initial
investment. If you have a Class B or Class C share account and your balance is
at least $1,000, you may establish an automatic investment plan.
Automatic exchanges
You can automatically exchange your fund shares for shares of the same class of
another Pioneer mutual fund. The automatic exchange will begin on the day you
select when you complete the appropriate section of your account application
or an account options form. In order to use automatic exchange:
[closed box] You must select exchanges on a monthly or quarterly basis
[closed box] Both the originating and receiving accounts must have identical
registrations
[closed box] The originating account has a minimum balance of $5,000
Distribution options
The fund offers two distribution options. Any fund shares you buy by reinvesting
distributions will be priced at the applicable net asset value per share.
(1) Unless you indicate another option on your account application, any
dividends and capital gain distributions paid to you by the fund will
automatically be invested in additional fund shares.
(2) You may elect to have the full amount of any dividends and/or capital gain
distributions paid to you in a monthly check.
You may also direct that the dividend checks be paid to another person or to an
address other than your address of record. You must provide a signature
guarantee if you make this election after you open your account.
If your distribution check is returned to the transfer agent or you do not cash
the check for six months or more, the transfer agent may reinvest the amount of
the check in your account and automatically change the distribution option on
your account to option (1) until you request a different option in writing.
These additional shares will be purchased at the then current net asset value.
17
<PAGE>
Buying, exchanging and selling shares
Directed dividends
You can invest the dividends paid by one of your Pioneer mutual fund accounts in
a second Pioneer mutual fund account. The value of your second account must be
at least $1,000 ($500 for Pioneer Fund or Pioneer II). You may direct the
investment of any amount of dividends. There are no fees or charges for directed
dividends. If you have a retirement plan account, you may only direct dividends
to accounts with identical registrations.
Systematic withdrawal plans
When you establish a systematic withdrawal plan for your account, the transfer
agent will sell the number of fund shares you specify on a periodic basis and
the proceeds will be paid to you or to any person you select. You must obtain a
signature guarantee to direct payments to another person after you have
established your systematic withdrawal plan. Payments can be made either by
check or by electronic transfer to a bank account you designate.
To establish a systematic withdrawal plan:
[closed box] Your account must have a total value of at least $10,000 when you
establish your plan
[closed box] You must request a periodic withdrawal of at least $50
[closed box] You may not request a periodic withdrawal of more than 10% of the
value of any Class B or Class C share account (valued at the time
the plan is implemented)
Systematic sales of fund shares may be taxable transactions for you. If you
purchase Class A shares while you are making systematic withdrawals from your
account, you may pay unnecessary sales charges.
Direct deposit
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
Voluntary tax withholding
You may have the transfer agent withhold 28% of the dividends and capital gain
distributions paid from your fund account (before any reinvestment) and forward
the amount withheld to the Internal Revenue Service as a credit against your
federal income taxes. Voluntary tax withholding is not available for retirement
plan accounts or for accounts subject to backup withholding.
18
<PAGE>
Shareowner services
FactFone(sm) 1-800-225-4321
You can use FactFone(sm) to:
[closed box] Obtain current information on your Pioneer mutual fund accounts
[closed box] Inquire about the prices and yields of all publicly available
Pioneer mutual funds
[closed box] Make computer-assisted telephone purchases, exchanges and
redemptions for your fund accounts
[closed box] Request account statements
If you plan to use FactFone(sm) to make telephone purchases and redemptions,
first you must activate your personal identification number and establish your
bank account of record. If your account is registered in the name of a
broker-dealer or other third party, you may not be able to use FactFone(sm).
Confirmation statements
The transfer agent maintains an account for each investment firm or individual
shareowner and records all account transactions. You will be sent confirmation
statements showing the details of your transactions as they occur, except
automatic investment plan transactions, which are confirmed quarterly. If you
have more than one Pioneer mutual fund account registered in your name, the
Pioneer combined account statement will be mailed to you each quarter.
Tax information
In January of each year, the fund will mail you information about the tax status
of the dividends and distributions paid to you by the fund.
Pioneer website
www.pioneerfunds.com
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
[closed box] Your current account information
[closed box] Prices, returns and yields of all publicly available Pioneer
mutual funds
[closed box] Prospectuses for all the Pioneer funds
TDD 1-800-225-1997
If you have a hearing disability and access to TDD keyboard equipment, you can
contact our telephone representatives with questions about your account by
calling our TDD number between 8:30 a.m. and 5:30 p.m. Eastern time any weekday
that the New York Stock Exchange is open.
19
<PAGE>
Buying, exchanging and selling shares
Shareowner account policies
Signature guarantees and other requirements
You are required to obtain a signature guarantee when you are:
[closed box] Requesting certain types of exchanges or sales of fund shares
[closed box] Redeeming shares for which you hold a share certificate
[closed box] Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
Fiduciaries and corporations are required to submit additional documents to sell
fund shares.
Minimum account size
The fund requires that you maintain a minimum account value of $500. If you hold
less than the minimum in your account because you have sold or exchanged some of
your shares, the fund will notify you of its intent to sell your shares and
close your account. You may avoid this by increasing the value of your account
to at least the minimum within six months of the notice from the fund.
Telephone access
You may have difficulty contacting the fund by telephone during times of market
volatility or disruption in telephone service. If you are unable to reach the
fund by telephone, you should communicate with the fund in writing.
Share certificates
Normally, your shares will remain on deposit with the transfer agent and
certificates will not be issued. If you are legally required to obtain a
certificate, you may request one for your Class A shares only. A fee may be
charged for this service.
Other policies
The fund may suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when an emergency exists that makes it
impracticable for the fund to sell or value its portfolio securities or with the
permission of the Securities and Exchange Commission.
The fund or the distributor may revise, suspend or terminate the account options
and services available to shareowners at any time.
The fund reserves the right to redeem in kind by delivering portfolio securities
to a redeeming shareowner, provided that the fund must pay redemptions in cash
if a shareowner's aggregate redemptions in a 90 day period are less than
$250,000 or 1% of the fund's net assets.
20
<PAGE>
Dividends, capital gains and taxes
Dividends and capital gains
Each day the fund declares substantially all of its net investment income as a
dividend to shareowners of record as of 4:00 p.m. Eastern time. You begin
earning dividends on the first business day after the fund is credited with same
day fund for your purchase. If your payment is wired to the fund custodian's
federal wire address by 4 p.m., you will also receive dividends declared that
day. Dividends are accrued each day and paid on the last business day of the
month. Short-term capital gains distributions may be paid with the daily
dividend. The fund may also pay dividends and distributions at other times if
necessary for the fund to avoid federal income or excise tax.
Taxes
For federal income tax purposes, your distributions from the fund's net
long-term capital gains are considered long-term capital gains and may be
taxable to you at different maximum rates depending upon their source and other
factors. Dividends and short-term capital gain distributions are taxable as
ordinary income. Dividends and distributions are taxable, whether you take
payment in cash or reinvest them to buy additional fund shares. You may also
have tax consequences (generally, a capital gain or loss) when you sell or
exchange fund shares. Each year the fund will mail to you information about your
dividends and distributions for, and the shares you sold in, the previous
calendar year.
You must provide your social security number or other taxpayer identification
number to the fund along with the certifications required by the Internal
Revenue Service when you open an account. If you do not or if it is otherwise
legally required to do so, the fund will withhold 31% "backup withholding" tax
from your dividends and distributions, sales proceeds and any other payments to
you.
You should ask your own tax adviser about any federal or state tax
considerations, including possible additional withholding taxes for non-U.S.
shareholders. You may also consult the fund's statement of additional
information for a more detailed discussion of federal income tax considerations
that may affect the fund and its shareowners.
[sidebar]
[pillar graphic]
- - ----------------------------------
Sales and exchanges may be taxable
transactions to shareowners.
- - ----------------------------------
[end sidebar]
21
<PAGE>
Financial highlights
The financial highlights table helps you understand
the fund's financial performance for the past five years.
Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate that you would have earned on an
investment in the fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by Arthur Andersen LLP, whose report is
included in the fund's annual report along with the fund's financial statements.
The annual report is available upon request.
Pioneer Cash Reserves Fund
Class A shares
<TABLE>
<CAPTION>
For the year ended December 31
---------------------------------------------------------------------
1998 1997 1996 1995 1994
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.03
Distributions to shareholders:
Net investment income (0.05) (0.05) (0.05) (0.05) (0.03)
-------- -------- -------- -------- ---------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =========
Total return* 4.84% 4.78% 4.65% 5.17% 3.57%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.88%+ 0.94%+ 0.91%+ 0.88%+ 0.50%
Ratio of net investment income (loss)
to average net assets 4.61%+ 4.62%+ 4.50%+ 5.00%+ 2.59%
Net assets, end of period (in thousands) $250,318 $209,041 $189,346 $163,820 $173,195
Ratios assuming no waiver of management fees and
assumption of expenses by Pioneer and no reduction
for fees paid indirectly:
Net expenses 0.88% 0.98% 1.05% 1.15% 0.65%
Net investment income (loss) 4.61% 4.58% 4.36% 4.73% 2.44%
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and reduction
for fees paid indirectly:
Net expenses 0.77% 0.87% 0.85% 0.82% -
Net investment income (loss) 4.72% 4.69% 4.56% 5.06% -
</TABLE>
- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of distributions and the complete redemption of the investment at
net asset value at the end of each period.
+ Ratio assuming no reduction for fees paid indirectly.
22
<PAGE>
Pioneer Cash Reserves Fund
Class B shares
<TABLE>
<CAPTION>
March 31,
For the year ended December 31 1995 through
--------------------------------------- December 31,
1998 1997 1996 1995
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.04 $ 0.04 $ 0.04 $ 0.03
Distributions to shareholders:
Net investment income (0.04) (0.04) (0.04) (0.03)
------ ------ ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ======= =======
Total return* 3.96% 3.89% 3.82% 3.28%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 1.67%+ 1.75%+ 1.75%+ 1.66%**+
Ratio of net investment income (loss)
to average net assets 3.79%+ 3.85%+ 3.66%+ 4.20%**+
Net assets, end of period (in thousands) $39,639 $32,477 $10,342 $ 7,574
Ratios assuming no waiver of management fees
by Pioneer and no reduction for fees
paid indirectly:
Net expenses 1.67% 1.78% 1.88% 1.86%**
Net investment income (loss) 3.79% 3.82% 3.53% 4.00%**
Ratios assuming waiver of management fees
by Pioneer and reduction for fees paid indirectly:
Net expenses 1.60% 1.70% 1.67% 1.61%**
Net investment income (loss) 3.86% 3.90% 3.74% 4.25%**
</TABLE>
- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
23
<PAGE>
Financial highlights
Pioneer Cash Reserves Fund
Class C shares
<TABLE>
<CAPTION>
January 31,
For the year ended December 31 1996 through
------------------------------ December 31,
1998 1997 1996
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
------- ------ ------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.04 $ 0.04 $ 0.03
Distributions to shareholders:
Net investment income (0.04) (0.04) (0.03)
------- ------ ------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
======= ====== ======
Total return* 4.12% 3.96% 3.35%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 1.66%+ 1.79%+ 1.84%**+
Ratio of net investment income (loss)
to average net assets 3.79%+ 3.84%+ 3.61%**+
Net assets, end of period (in thousands) $18,316 $7,537 $ 912
Ratios assuming no waiver of management fees
by Pioneer and no reduction for fees paid indirectly:
Net expenses 1.66% 1.81% 1.95%**
Net investment income (loss) 3.79% 3.82% 3.50%**
Ratios assuming waiver of management fees
by Pioneer and reduction for fees paid indirectly:
Net expenses 1.38% 1.62% 1.77%**
Net investment income (loss) 4.07% 4.01% 3.68%**
</TABLE>
- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of 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.
+ Ratio assuming no reduction for fees paid indirectly.
24
<PAGE>
NOTES
<PAGE>
Pioneer
Cash Reserves Fund
You can obtain more free information about the fund from your investment firm or
by writing to Pioneering Services Corporation, 60 State Street, Boston,
Massachusetts 02109. You may also call 1-800-225-6292.
Shareowner reports
Annual and semiannual reports to shareowners provide information about the
fund's investments. The annual report discusses market conditions and investment
strategies that significantly affected the fund's performance during its last
fiscal year.
Statement of additional information
The statement of additional information provides more detailed information about
the fund. It is incorporated by reference into this prospectus.
Visit our website
www.pioneerfunds.com
You can also review the fund's shareowner reports, prospectus and statement of
additional information at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. or by calling 1-800-SEC-0330 to request a
copy. The Commission charges a fee for this service. You can get the same
information free from the Commission's Internet website (http://www.sec.gov).
(Investment Company Act file no. 811-05099)
[Pioneer Logo] Pioneer Funds Distributor, Inc.
60 State Street
Boston, MA 02109
0499-6247
www.pioneerfunds.com (C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER MONEY MARKET TRUST
PIONEER CASH RESERVES FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
CLASS A, CLASS B AND CLASS C SHARES
MAY 3, 1999
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's prospectus dated May 3, 1999, as supplemented or
revised from time to time. 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. You can also obtain
a copy of the fund's prospectus from our website at www.pioneerfunds.com. The
fund's financial statements for the fiscal year ended December 31, 1998 are
incorporated into this statement of additional information by reference. The
most recent annual report to shareholders is attached to this statement of
additional information.
TABLE OF CONTENTS
PAGE
1. Fund History......................................................2
2. Investment Policies, Risks and Restrictions.......................2
3. Management of the Fund...........................................10
4. Investment Adviser...............................................13
5. Principal Underwriter and Distribution Plans.....................15
6. Shareholder Servicing/Transfer Agent.............................19
7. Custodian........................................................20
8. Independent Public Accountants...................................20
9. Portfolio Transactions...........................................20
10. Description of Shares............................................21
11. Sales Charges....................................................23
12. Redeeming Shares.................................................25
13. Telephone Transactions...........................................25
14. Pricing of Shares................................................27
15. Tax Status.......................................................28
16. Investment Results...............................................32
17. Financial Statements.............................................33
18. Appendix A - Annual Fee, Expense and Other Information...........35
19. Appendix B - Description of Short-term Debt, Corporate Bond
and Preferred Stock Ratings......................................55
20. Appendix C - Performance Statistics..............................43
21. Appendix D - Other Pioneer Information...........................57
<PAGE>
1. FUND HISTORY
The fund is a diversified open-end management investment company. The fund
originally was organized as a Massachusetts business trust on March 31, 1987 and
was reorganized as a Delaware business trust on March 30, 1995. The fund is a
series of the Pioneer Money Market Trust.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectus presents the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectus and provides additional information on the fund's investment
policies or restrictions. Restrictions or policies stated as a maximum
percentage of the fund's assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable. Accordingly, any
later increase or decrease resulting from a change in values, net assets or
other circumstances will not be considered in determining whether the investment
complies with the fund's restrictions and policies.
PRIMARY INVESTMENTS
Under normal circumstances, the fund invests in high quality money market
securities with a maximum remaining maturity of 397 days from the date of
settlement of the purchase, and which result in the fund maintaining a
dollar-weighted average maturity of 90 days or less.
The fund may not invest more than 5% of its total assets (taken at amortized
cost) in securities issued by or subject to puts from any one issuer (except
U.S. government securities and repurchase agreements collateralized by such
securities). The fund will not invest more than 5% of its total assets in
securities that, although of high quality, have not been rated in the highest
short-term rating category by at least two rating agencies (or if rated by only
one rating agency, by that rating agency or, if unrated, determined to be of
equivalent credit quality by Pioneer), provided that within this 5% limitation,
the fund will not nvest more than the greater of 1% or $1 million of its total
assets in the securities (other than U,S, government securities) of any one
issuer.
MONEY MARKET INSTRUMENTS
The fund may invest in short term money market instruments including commercial
bank obligations and commercial paper denominated in U.S. currency. The fund's
investment in commercial bank obligations include certificates of deposit
("CDs"), time deposits ("TDs") and bankers' acceptances. Obligations of foreign
branches of U.S. banks and of foreign banks may be general obligations of the
parent bank in addition to the issuing bank, or may be limited by the terms of a
specific obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the fund to investment risks that
are different in some respects from those of investments in obligations of
domestic issuers.
The fund's investments in commercial paper consist of short-term unsecured
promissory notes issued by corporations in order to finance their current
operations. The fund may also invest in variable amount master demand notes
(which is a type of commercial paper) which represents a direct borrowing
arrangement involving periodically fluctuating rates of interest under a letter
agreement between a commercial paper issuer and an institutional lender,
pursuant to which the lender may determine to invest varying amounts. Transfer
of such notes is usually restricted by the issuer, and there is no secondary
trading market for such notes. To the extent the fund invests in master demand
notes, these investments will be included in the fund's limitation on illiquid
securities.
CERTIFICATES OF DEPOSIT. The fund may invest in certificates of deposit of large
domestic banks and savings and loan associations (i.e., banks which at the time
of their most recent annual financial statements show total assets in excess of
$1 billion), including foreign branches of such domestic banks, and of smaller
banks as described below. The fund will not invest in certificates of deposit of
foreign banks.
Investment in certificates of deposit issued by foreign branches of domestic
banks involves investment risks that are different in some respects from those
associated with investment in certificates of deposit issued by domestic banks,
including the possible imposition of withholding taxes on interest income, the
possible adoption of foreign governmental restrictions which might adversely
affect the payment of principal and interest on such certificates of deposit, or
other adverse political or economic developments. In addition, it might be more
difficult to obtain and enforce a judgment against a foreign branch of a
domestic bank.
Although the fund's investment adviser recognizes that the size of a bank is
important, this fact alone is not necessarily indicative of its
creditworthiness. The fund may invest in certificates of deposit issued by banks
and savings and loan institutions which had at the time of their most recent
annual financial statements total assets not in excess of $1 billion, provided
that (i) the principal amounts of such certificates of deposit are insured by an
agency of the U.S. government, (ii) at no time will the fund hold more than
$100,000 principal amount of certificates of deposit of any one such bank and
(iii) at the time of acquisition, no more than 10% of the fund's assets (taken
at current value) are invested in certificates of deposit of such banks having
total assets not in excess of $1 billion.
DEBT SECURITIES RATING CRITERIA
High quality debt securities are those rated "AAA" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's"), "Aaa" or higher by Moody's Investors
Service, Inc. ("Moody's"), or the equivalent rating of other national
statistical rating organizations or determined to be of equivalent credit
quality by Pioneer Investment Management, Inc. ("Pioneer"). High quality
commercial paper is rated "A-1" or higher by Standard & Poor's, "Prime-1" or
higher by Moody's, or the equivalent rating of other national statistical rating
organizations or determined to be of equivalent credit quality by Pioneer. See
Appendix B for a description of rating categories.
U.S. GOVERNMENT SECURITIES
U.S. government securities in which the fund invests include debt obligations
issued by the U.S. Treasury or issued or guaranteed by an agency or
instrumentality of the U.S. government, including the Federal Housing
Administration, Federal Financing Bank, Farmers Home Administration,
Export-Import Bank of the U.S., Small Business Administration, Government
National Mortgage Association ("GNMA"), General Services Administration, Central
Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks,
Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage
Association ("FNMA"), Maritime Administration, Tennessee Valley Authority,
District of Columbia Armory Board, Student Loan Marketing Association,
Resolution Trust Corporation and various institutions that previously were or
currently are part of the Farm Credit System (which has been undergoing
reorganization since 1987). Some U.S. government securities, such as U.S.
Treasury bills, Treasury notes and Treasury bonds, which differ only in their
interest rates, maturities and times of issuance, are supported by the full
faith and credit of the United States. Others are supported by: (i) the right of
the issuer to borrow from the U.S. Treasury, such as securities of the Federal
Home Loan Banks; (ii) the discretionary authority of the U.S. Government to
purchase the agency's obligations, such as securities of the FNMA; or (iii) only
the credit of the issuer, such as securities of the Student Loan Marketing
Association. No assurance can be given that the U.S. government will provide
financial support in the future to U.S. government agencies, authorities or
instrumentalities that are not supported by the full faith and credit of the
United States. Securities guaranteed as to principal and interest by the U.S.
government, its agencies, authorities or instrumentalities include: (i)
securities for which the payment of principal and interest is backed by an
irrevocable letter of credit issued by the U.S. government or any of its
agencies, authorities or instrumentalities; and (ii) participations in loans
made to foreign governments or other entities that are so guaranteed. The
secondary market for certain of these participations is limited and, therefore,
may be regarded as illiquid.
U.S. government securities may include zero coupon securities that may be
purchased when yields are attractive and/or to enhance portfolio liquidity. Zero
coupon U.S. government securities are debt obligations that are issued or
purchased at a significant discount from face value. The discount approximates
the total amount of interest the security will accrue and compound over the
period until maturity or the particular interest payment date at a rate of
interest reflecting the market rate of the security at the time of issuance.
Zero coupon U.S. government securities do not require the periodic payment of
interest. These investments benefit the issuer by mitigating its need for cash
to meet debt service, but also require a higher rate of return to attract
investors who are willing to defer receipt of cash. These investments may
experience greater volatility in market value than U.S. government securities
that make regular payments of interest. The fund accrues income on these
investments for tax and accounting purposes, which is distributable to
shareholders and which, because no cash is received at the time of accrual, may
require the liquidation of other portfolio securities to satisfy the fund's
distribution obligations, in which case the fund will forego the purchase of
additional income producing assets with these funds. Zero coupon U.S. government
securities include STRIPS and CUBES, which are issued by the U.S. Treasury as
component parts of U.S. Treasury bonds and represent scheduled interest and
principal payments on the bonds.
ECONOMIC MONETARY UNION (EMU)
January 1, 1999, 11 European countries adopted by a single currency - the Euro.
The conversion to the Euro is being phased in over a three-year period. For
participating countries, EMU will mean sharing a single currency and single
official interest rate and adhering to agreed upon limits on government
borrowing. Budgetary decisions will remain in the hands of each participating
country, but will be subject to each country's commitment to avoid "excessive
deficits" and other more specific budgetary criteria. A European Central Bank is
responsible for setting the official interest rate to maintain price stability
within the Euro zone.
EMU is driven by the expectation of a number of economic benefits, including
lower transaction cost, reduced exchange risk, greater competition, and a
broadening and deepening of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty may increase the
volatility of European markets. This may affect the fund to the extent it
invests in obligations of foreign branches of U.S.
banks.
MORTGAGE-BACKED SECURITIES
The fund may invest in mortgage pass-through certificates and multiple-class
pass-through securities, such as real estate mortgage investment conduits
("REMIC") pass-through certificates, collateralized mortgage obligations and
stripped mortgage-backed securities ("SMBS"), and other types of
"mortgage-backed securities" that may be available in the future. A
mortgage-backed security is an obligation of the issuer backed by a mortgage or
pool of mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations (CMOs),
make payments of both principal and interest at a variety of intervals; others
make semiannual interest payments at a predetermined rate and repay principal at
maturity (like a typical bond). Mortgage-backed securities are based on
different types of mortgages including those on commercial real estate or
residential properties. Mortgage-backed securities often have stated maturities
of up to thirty years when they are issued, depending upon the length of the
mortgages underlying the securities. In practice, however, unscheduled or early
payments of principal and interest on the underlying mortgages may make the
securities' effective maturity shorter than this, and the prevailing interest
rates may be higher or lower than the current yield of the fund's portfolio at
the time the fund receives the payments for reinvestment. Mortgage-backed
securities may have less potential for capital appreciation than comparable
fixed income securities, due to the likelihood of increased prepayments of
mortgages as interest rates decline. If the fund buys mortgage-backed securities
at a premium, mortgage foreclosures and prepayments of principal by mortgagors
(which may be made at any time without penalty) may result in some loss of the
fund's principal investment to the extent of the premium paid.
The value of mortgage-backed securities may also change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities markets as a whole. Non-governmental
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
governmental issues.
GUARANTEED MORTGAGE PASS-THROUGH SECURITIES. Guaranteed mortgage pass-through
securities represent participation interests in pools of residential mortgage
loans and are issued by U.S. Governmental or private lenders and guaranteed by
the U.S. Government or one of its agencies or instrumentalities, including but
not limited to GNMA, FNMA and FHLMC. GNMA certificates are guaranteed by the
full faith and credit of the U.S. government for timely payment of principal and
interest on the certificates. FNMA certificates are guaranteed by FNMA, a
federally chartered and privately owned corporation, for full and timely payment
of principal and interest on the certificates. FHLMC certificates are guaranteed
by FHLMC, a corporate instrumentality of the U.S. government, for timely payment
of interest and the ultimate collection of all principal of the related mortgage
loans.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such issuers may,
in addition, be the originators and/or servicers of the underlying mortgage
loans as well as the guarantors of the mortgage-related securities. Because
there are no direct or indirect government or agency guarantees of payments in
pools created by such non-governmental issuers, they generally offer a higher
rate of interest than government and government-related pools. Timely payment of
interest and principal of these pools may be supported by insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit. The insurance and guarantees are issued by governmental
entities, private insurers and the mortgage poolers. There can be no assurance
that the private insurers or guarantors can meet their obligations under the
insurance policies or guarantee arrangements.
Mortgage-related securities without insurance or guarantees may be purchased if
Pioneer determines that the securities meet the fund's quality standards.
Mortgage-related securities issued by certain private organizations may not be
readily marketable.
MULTIPLE-CLASS PASS-THROUGH SECURITIES AND COLLATERALIZED MORTGAGE OBLIGATIONS.
CMOs and REMIC pass-through or participation certificates may be issued by,
among others, U.S. government agencies and instrumentalities as well as private
issuers. REMICs are CMO vehicles that qualify for special tax treatment under
the Internal Revenue Code of 1986, as amended (the "Code") and invest in
mortgages principally secured by interests in real property and other
investments permitted by the Code. CMOs and REMIC certificates are issued in
multiple classes and the principal of and interest on the mortgage assets may be
allocated among the several classes of CMOs or REMIC certificates in various
ways. Each class of CMOs or REMIC certificates, often referred to as a
"tranche," is issued at a specific adjustable or fixed interest rate and must be
fully retired no later than its final distribution date. Generally, interest is
paid or accrues on all classes of CMOs or REMIC certificates on a monthly basis.
Typically, CMOs are collateralized by GNMA, FNMA or FHLMC certificates but also
may be collateralized by other mortgage assets such as whole loans or private
mortgage pass-through securities. Debt service on CMOs is provided from payments
of principal and interest on collateral of mortgaged assets and any reinvestment
income thereon.
STRIPPED MORTGAGE-BACKED SECURITIES. SMBS are multiple-class mortgage-backed
securities that are created when a U.S. government agency or a financial
institution separates the interest and principal components of a mortgage-backed
security and sells them as individual securities. The fund invests SMBS that are
usually structured with two classes that receive different proportions of
interest and principal distributions on a pool of mortgage assets. A typical
SMBS will have one class receiving some of the interest and most of the
principal, while the other class will receive most of the interest and the
remaining principal. The holder of the "principal-only" security (PO) receives
the principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments from
the same underlying security. The prices of stripped mortgage-backed securities
may be particularly affected by changes in interest rates. As interest rates
fall, prepayment rates tend to increase, which tends to reduce prices of IOs and
increase prices of POs. Rising interest rates can have the opposite effect.
Although the market for these securities is increasingly liquid, Pioneer may
determine that certain stripped mortgage-backed securities issued by the U.S.
government, its agencies or instrumentalities are not readily marketable. If so,
these securities, together with privately-issued stripped mortgage-backed
securities, will be considered illiquid for purposes of the fund's limitation on
investments in illiquid securities. The yields and market risk of interest only
and principal only SMBS, respectively, may be more volatile than those of other
fixed income securities.
The fund also may invest in planned amortization class ("PAC") and target
amortization class ("TAC") CMO bonds which involve less exposure to prepayment,
extension and interest rate risks than other mortgage-backed securities,
provided that prepayment rates remain within expected prepayment ranges or
"collars." To the extent that the prepayment rates remain within these
prepayment ranges, the residual or support tranches of PAC and TAC CMOs assume
the extra prepayment, extension and interest rate risks associated with the
underlying mortgage assets.
RISK FACTORS ASSOCIATED WITH MORTGAGE-BACKED SECURITIES. Investing in
mortgage-backed securities involves certain risks, including the failure of a
counterparty to meet its commitments, adverse interest rate changes and the
effects of prepayments on mortgage cash flows. In addition, investing in the
lowest tranche of CMOs and REMIC certificates involves risks similar to those
associated with investing in equity securities. However, due to adverse tax
consequences under current tax laws, the fund does not intend to acquire
"residual" interests in REMICs. Further, the yield characteristics of
mortgage-backed securities differ from those of traditional fixed income
securities. The major differences typically include more frequent interest and
principal payments (usually monthly), the adjustability of interest rates of the
underlying instrument, and the possibility that prepayments of principal may be
made substantially earlier than their final distribution dates.
Prepayment rates are influenced by changes in current interest rates and a
variety of economic, geographic, social and other factors and cannot be
predicted with certainty. Both adjustable rate mortgage loans and fixed rate
mortgage loans may be subject to a greater rate of principal prepayments in a
declining interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Under certain interest
rate and prepayment rate scenarios, the fund may fail to recoup fully its
investment in mortgage-backed securities notwithstanding any direct or indirect
governmental, agency or other guarantee. When the fund reinvests amounts
representing payments and unscheduled prepayments of principal, it may obtain a
rate of interest that is lower than the rate on existing adjustable rate
mortgage pass-through securities. Thus, mortgage-backed securities, and
adjustable rate mortgage pass-through securities in particular, may be less
effective than other types of U.S. government securities as a means of "locking
in" interest rates.
ASSET-BACKED SECURITIES
The fund may invest in asset-backed securities, which are securities that
represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool or pools of similar
assets (e.g., trade receivables). The credit quality of these securities depends
primarily upon the quality of the underlying assets and the level of credit
support and/or enhancement provided.
The underlying assets (e.g., loans) are subject to prepayments which shorten the
securities' weighted average maturity and may lower their return. If the credit
support or enhancement is exhausted, losses or delays in payment may result if
the required payments of principal and interest are not made. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool, or the financial institution or trust providing the credit support or
enhancement.
ILLIQUID SECURITIES
The fund will not invest more than 10% of its net assets in illiquid and other
securities that are not readily marketable. Repurchase agreements maturing in
more than seven days will be included for purposes of the foregoing limit.
Securities subject to restrictions on resale under the Securities Act of 1933,
as amended (the "1933 Act"), are considered illiquid unless they are eligible
for resale pursuant to Rule 144A or another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Pioneer. Pioneer
determines the liquidity of Rule 144A and other restricted securities according
to procedures adopted by the Board of Trustees. The Board of Trustees monitors
Pioneer's application of these guidelines and procedures. The inability of the
fund to dispose of illiquid investments readily or at reasonable prices could
impair the fund's ability to raise cash for redemptions or other purposes. If
the fund sold restricted securities other than pursuant to an exception from
registration under the 1933 Act such as Rule 144A, it may be deemed to be acting
as an underwriter and subject to liability under the 1933 Act.
REPURCHASE AGREEMENTS
The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with the difference being income to the fund. The Board of
Trustees reviews and monitors the creditworthiness of any institution which
enters into a repurchase agreement with the fund. The counterparty's obligations
under the repurchase agreement are collateralized with U.S. Treasury and/or
agency obligations with a market value of not less than 100% of the obligations,
valued daily. Collateral is held by the fund's custodian in a segregated,
safekeeping account for the benefit of the fund. Repurchase agreements afford
the fund an opportunity to earn income on temporarily available cash at low
risk. In the event of commencement of bankruptcy or insolvency proceedings with
respect to the seller of the security before repurchase of the security under a
repurchase agreement, the fund may encounter delay and incur costs before being
able to sell the security. Such a delay may involve loss of interest or a
decline in price of the security. If the court characterizes the transaction as
a loan and the fund has not perfected a security interest in the security, the
fund may be required to return the security to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, the
fund would be at risk of losing some or all of the principal and interest
involved in the transaction.
ASSET SEGREGATION
The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the fund's
portfolio. If the fund enters into a transaction requiring segregation, such as
a forward commitment, the custodian or Pioneer will segregate liquid assets in
an amount required to comply with the 1940 Act. Such segregated assets will be
valued at market daily. If the aggregate value of such segregated assets
declines below the aggregate value required to satisfy the 1940 Act, additional
liquid assets will be segregated.
INVESTMENT RESTRICTIONS
In compliance with an informal position taken by the staff of the SEC regarding
leverage, the fund will not purchase securities during the coming year at any
time that outstanding borrowings exceed 5% of the fund's total assets.
The fund will not (i) pledge, mortgage or hypothecate its portfolio securities
if at the time of such action the value of the securities so pledged, mortgaged
or hypothecated would exceed 10% of the value of the fund, or (ii) buy or sell
real estate, except that the fund may acquire or lease office space for its own
use, invest in securities of issuers that invest in real estate or interests
therein, invest in securities that are secured by real estate or interests
therein, invest in real estate limited partnerships, purchase and sell
mortgage-related securities and hold and sell real estate acquired by the fund
as a result of the ownership of securities. Policies in this paragraph may be
changed by the Trustees without shareholder approval or notification.
FUNDAMENTAL INVESTMENT RESTRICTIONS. The fund has adopted certain investment
restrictions which, along with the fund's investment objective, may not be
changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the fund. For
this purpose, a majority of the outstanding shares of the fund means the vote of
the lesser of:
1. 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
2. more than 50% of the outstanding shares of the fund.
The fund may not:
(1) except with respect to investments in obligations of (a) the U.S.
government, its agencies, authorities or instrumentalities and (b)
domestic banks, purchase any security if, as a result (i) more than 5%
of the assets of the fund would be in the securities of any one issuer,
or (ii) more than 25% of its assets would be in a particular industry;
(2) borrow money, except from banks for extraordinary purposes or to meet
redemptions in amounts not exceeding 33 1/3% of its total assets
(including the amount borrowed). The fund does not intend to borrow
money during the coming year;
(3) make short sales of securities;
(4) purchase securities on margin;
(5) write, purchase or otherwise invest in any put, call, straddle or
spread option or buy or sell real estate, commodities or commodity
futures contracts or invest in oil, gas or mineral exploration or
development programs;
(6) make loans to any person, except by (a) the purchase of a debt
obligation in which the fund is permitted to invest and (b) engaging in
repurchase agreements;
(7) purchase the securities of other investment companies or investment
trusts, unless they are acquired as part of a merger, consolidation or
acquisition of assets;
(8) act as an underwriter, except as it may be deemed to be an underwriter
in a sale of restricted securities;
(9) invest in companies for the purpose of exercising control or
management; or
(10) issue senior securities, except that the issuance of multiple classes
of shares, in accordance with a statute, regulation or order of the
SEC, shall not constitute the issuance of a senior security.
The term "person" as used in fundamental investment restriction no. 6 includes
institutions as well as individuals.
3. 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
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 Pioneer, Pioneer Funds Distributor, Inc.
("PFD"), Pioneer Goldfields Limited; Teberebie Goldfields Limited; Closed
Joint-Stock Company "Amgun-Forest," Closed Joint-Stock Company "Udinskoye," and
Closed Joint-Stock Company "Tas-Yurjah" Mining Company; Director of Pioneering
Services Corporation ("PSC"), Pioneer Real Estate Advisors, Inc. ("PREA"),
Pioneer Forest, Inc., Pioneer Explorer, Inc., Pioneer Management (Ireland) Ltd.
("PMIL"), Pioneer First Investment Fund, and Closed Joint-Stock Company
"Forest-Starma"; President and Director of Pioneer Metals and Technology, Inc.,
Pioneer International Corp. ("PIntl"), Pioneer First Russia, Inc. and Pioneer
Omega, Inc. ("Pioneer Omega"); Chairman of the Supervisory Board of Pioneer
Fonds Marketing, GmbH, Pioneer First Polish Investment Fund Joint Stock Company,
S.A. ("Pioneer First Polish") and Pioneer Czech Investment Company, A.S.
("Pioneer Czech"); Member of the Supervisory Board of Pioneer Universal Pension
Fund Company; Chairman, President and Trustee of all of the Pioneer mutual
funds; Director of Pioneer Global Equity Fund Plc, Pioneer Global Bond Fund Plc,
Pioneer Euro Reserve Fund Plc, Pioneer European Equity Fund Plc, Pioneer
Emerging Europe Fund Plc, Pioneer US Real Estate Fund Plc and Pioneer U.S.
Growth Fund Plc (collectively, the "Irish Funds"); and Partner, Hale and Dorr
LLP (counsel to PGI and the fund).
MARY K. BUSH, TRUSTEE, DOB: APRIL 1948
4201 CATHEDRAL AVENUE, NW, WASHINGTON, DC 20016
President, Bush & Co. (international financial advisory firm); Director and/or
Trustee of Mortgage Guaranty Insurance Corporation, Novecon Management Company,
Hoover Institution, Folger Shakespeare Library, March of Dimes, Project 2000,
Inc. (not-for-profit educational organization), Wilberforce University and
Texaco, Inc.; Advisory Board Member, Washington Mutual Investors Fund
(registered investment company); and Trustee of all the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926
BOSTON UNIVERSITY HEALTH POLICY INSTITUTE, 53 BAY STATE ROAD, BOSTON, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; 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; University Professor, Boston
University; Director, Boston University Health Policy Institute, Boston
University Program for Health Care Entrepreneurship, CORE (management of
workers' compensation and disability costs - Nasdaq National Market), and
WellSpace (provider of complementary health care); Trustee, Boston Medical
Center; 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, The Winthrop Group, Inc. (consulting firm); Manager of
Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management of Technology and Associate
Dean, Boston University School of Management, from 1989 to 1993; and Trustee of
all 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, George Washington University; Director, American
Productivity and Quality Center; Adjunct Scholar, American Enterprise Institute;
Economic Consultant; and Trustee of all of the Pioneer mutual funds, except
Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948
ONE BOSTON PLACE, 26TH FLOOR, BOSTON, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm); Trustee of
Boston Medical Center; Member of the Board of Governors of the Investment
Company Institute; Director, Organogenesis Inc. (tissue engineering company);
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 and a Director of
Pioneer and PFD; Director of PIntl, PREA, Pioneer Omega, PMIL, Pioneer First
Investment Fund and the Irish Funds; Member of the Supervisory Board of Pioneer
First Polish and Pioneer Czech; and 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
Of Counsel, Sullivan & Cromwell (law firm); Director, Kleinwort Benson
Australian Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc.
since 1995 (mutual funds), AMVESCAP PLC (investment managers) since 1997 and
American Insurance Holdings, Inc; 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
President, John Winthrop & Co., Inc. (private investment firm); Director of NUI
Corp. (energy sales, services and distribution); and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN A. BOYNTON, TREASURER, DOB: JANUARY 1954
Executive Vice President, Treasurer and Chief Financial Officer of PGI;
Treasurer of Pioneer, PFD, PSC, PIntl, PREA, Pioneer Omega and all of the
Pioneer mutual funds. Prior to joining PGI in November 1998, Mr. Boynton was a
Senior Vice President of The Quaker Oats Company.
JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946
Corporate Secretary of PGI and most of its subsidiaries; Secretary of all of the
Pioneer mutual funds; and Partner, Hale and Dorr LLP.
ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956
Vice President-Corporate Finance of PGI since February 1999; Manager of Business
Planning and Internal Audit of PGI since September 1996; Manager of Fund
Accounting of Pioneer 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
Senior Vice President, General Counsel and Assistant Secretary of PGI since
1995; Assistant Secretary of Pioneer, certain other PGI subsidiaries and all of
the Pioneer mutual funds; Assistant Clerk of PFD and PSC; and junior partner of
Hale and Dorr LLP prior to 1995.
The business address of all officers is 60 State Street, Boston, Massachusetts
02109.
All of the outstanding capital stock of PFD, Pioneer and PSC is owned, directly
or indirectly, by PGI, a publicly owned Delaware corporation. Pioneer, the
fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds and manages the investments of certain institutional accounts.
The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.
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INVESTMENT ADVISER PRINCIPAL
FUND NAME UNDERWRITER
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Pioneer International Growth Fund Pioneer PFD
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Pioneer Europe Fund Pioneer PFD
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Pioneer World Equity Fund Pioneer PFD
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Pioneer Emerging Markets Fund Pioneer PFD
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Pioneer Indo-Asia Fund Pioneer PFD
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Pioneer Capital Growth Fund Pioneer PFD
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Pioneer Mid-Cap Fund Pioneer PFD
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Pioneer Growth Shares Pioneer PFD
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Pioneer Small Company Fund Pioneer PFD
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Pioneer Independence Fund Pioneer Note 1
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Pioneer Micro-Cap Fund Pioneer PFD
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Pioneer Gold Shares Pioneer PFD
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Pioneer Balanced Fund Pioneer PFD
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Pioneer Equity-Income Fund Pioneer PFD
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Pioneer Fund Pioneer PFD
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Pioneer II Pioneer PFD
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Pioneer Real Estate Shares Pioneer PFD
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Pioneer Short-Term Income Trust Pioneer PFD
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Pioneer America Income Trust Pioneer PFD
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Pioneer Bond Fund Pioneer PFD
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Pioneer Tax-Free Income Fund Pioneer PFD
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Pioneer Cash Reserves Fund Pioneer PFD
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Pioneer Strategic Income Fund Pioneer PFD
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Pioneer Interest Shares Pioneer Note 2
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Pioneer Variable Contracts Trust Pioneer Note 3
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Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of 12 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.
SHARE OWNERSHIP
See Appendix A for annual information on the ownership of fund shares by the
Trustees, the fund's officers and owners in excess of 5% of any class of shares
of the fund.
COMPENSATION OF OFFICERS AND TRUSTEES
The fund pays no salaries or compensation to any of its officers. The fund
compensates each Trustee who is not affiliated with PGI, Pioneer, PFD or PSC
with a base fee, a variable fee calculated on the basis of average net assets of
the fund, per meeting fees, and annual committee participation fees for each
committee member or chairperson that are based on percentages of his or her
aggregate annual fee. See the fee table in Appendix A.
4. INVESTMENT ADVISER
5. The trust has contracted with Pioneer to act as the fund's investment
adviser. Pioneer is a wholly owned subsidiary of PGI. PGI is engaged in the
financial services business in the U.S. and other countries. Certain Trustees or
officers of the fund are also directors and/or officers of PGI and its
subsidiaries (see management biographies above).
As the fund's investment adviser, Pioneer provides the fund with investment
research, advice and supervision and furnishes an investment program for the
fund consistent with the fund's investment objective and policies, subject to
the supervision of the fund's Trustees. Pioneer determines what portfolio
securities will be purchased or sold, arranges for the placing of orders for the
purchase or sale of portfolio securities, selects brokers or dealers to place
those orders, maintains books and records with respect to the fund's securities
transactions, and reports to the Trustees on the fund's investments and
performance.
Under the terms of its contract with the trust, Pioneer pays all the operating
expenses, including executive salaries and the rental of office space, relating
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 Pioneer or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed by
the trust with respect to the fund; (d) issue and transfer taxes, chargeable to
the trust 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 trust to
federal, state or other governmental agencies; (f) fees and expenses involved in
registering and maintaining registrations of the trust and/or its shares with
the SEC, state or blue sky securities agencies 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 trust and the Trustees; (i) any
distribution fees paid by the trust in accordance with Rule 12b-1 promulgated by
the SEC pursuant to the 1940 Act; (j) compensation of those Trustees of the
trust who are not affiliated with or interested persons of Pioneer, 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 brokers' and underwriting
commissions chargeable to the fund in connection with securities transactions to
which the fund is a party. The Trustees' approval of and the terms, continuance
and termination of the management contract are governed by the 1940 Act and the
Investment Advisers Act of 1940, as applicable. Pursuant to the management
contract, Pioneer 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
Pioneer. Pioneer, 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 management contract.
ADVISORY FEE. As compensation for its management services to the fund pays
Pioneer a fee at the annual rate of 0.40% of the fund's average daily net
assets. This fee is normally computed and accrued daily and paid monthly.
ADMINISTRATION AGREEMENT. The fund has entered into an administration agreement
with Pioneer pursuant to which certain accounting and legal services which are
expenses payable by the fund under the management contract are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services.
POTENTIAL CONFLICT OF INTEREST. The fund is managed by Pioneer which also serves
as investment adviser to other Pioneer mutual funds and private accounts with
investment objectives identical or similar to those of the fund. Securities
frequently meet the investment objectives of the fund, the other Pioneer 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 fund or account presently has in a particular industry
and the availability of investment funds in each fund 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 more than one of the Pioneer
mutual funds or a private account managed by Pioneer seeks to acquire the same
security at about the same time, the fund may not be able to acquire as large a
position in such security as it desires or 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 Pioneer decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the fund. In the event 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 account. Although the other Pioneer mutual funds
may have the same or similar investment objectives and policies as the fund,
their portfolios do not generally consist of the same investments as the fund or
each other, and their performance results are likely to differ from those of the
fund.
PERSONAL SECURITIES TRANSACTIONS. In an effort to avoid conflicts of interest
with the fund, the fund and Pioneer 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.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS
PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is an
indirect wholly owned subsidiary of PGI.
The fund entered into an underwriting agreement with PFD which provides that PFD
will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed or compensated by the fund
under the distribution plans (discussed below). 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 law and the laws of certain
foreign countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.
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 a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.
The redemption price of shares of beneficial interest of the fund may, at
Pioneer's discretion, be paid in cash or portfolio securities. The fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which the fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the fund's net asset value during any 90-day period for any
one shareholder. Should the amount of redemptions by any shareholder exceed such
limitation, the fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken at their
value employed in determining the fund's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of such securities will be made in
such manner as the Board of Trustees deems fair and reasonable.
DISTRIBUTION PLANS
The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan") and a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans"), pursuant to which certain distribution and service fees
are paid to PFD. Because of the Plans, long-term shareholders may pay more than
the economic equivalent of the maximum sales charge permitted by the National
Association of Securities Dealers, Inc. (the "NASD") regarding investment
companies.
CLASS A PLAN. 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 Board of Trustees. The Board of Trustees has approved the following
categories of expenses that may be reimbursed under the Class A Plan: (i) a
service fee to be paid to qualified broker-dealers in an amount not to exceed
0.15% 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 (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 is prohibited from acting in
any capacity or providing any of the described services, management will
consider what action, if any, would be appropriate. The expenses of the fund
pursuant to the Class A Plan are accrued daily at a rate which may not exceed
the annual rate of 0.15% 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 12 months from the time the fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the fund in one fiscal year being paid in the subsequent fiscal year
and thus being treated for purposes of calculating the maximum expenditures of
the fund as having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Class A Plan, the fund has 12 months to
reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the fund during such 12-month period
shall not exceed 0.15% of the fund's average daily net assets attributable to
Class A shares during such period. See Appendix A for the amount, if any, of
carryover of distribution expenses as of the end of the most recent calendar
year.
CLASS B PLAN. Commissions on the sale of Class B shares equal to 4.00% of the
amount invested are paid to broker-dealers who have sales agreements with PFD.
PFD may also advance to dealers the first-year service fee payable under the
Class B Plan at a rate up to 0.25% of the purchase price of such shares. As
compensation for such advance of the service fee, PFD may retain the service fee
paid by the fund with respect to such shares for the first year after purchase.
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. Commencing in the 13th month following the purchase of Class B shares,
dealers will become eligible for additional annual service fees of up to 0.25%
of the net asset value of such shares. 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 with respect to Class B 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 B Plan also provides that PFD will receive all contingent
deferred sales charges ("CDSCs") attributable to Class B shares. When a
broker-dealer sells Class B shares and elects, with PFD's approval, to waive its
right to receive the commission normally paid at the time of the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
the broker-dealer.
The Class B Plan and underwriting agreement permit PFD to sell its right to
receive distribution fees under the Class B Plan and CDSCs to third parties. PFD
enters into such transactions to finance the payment of commissions to brokers
at the time of sale and other distribution-related expenses. In connection with
such amendments, the fund has agreed that the distribution fee will not be
terminated or modified (including a modification by change in the rules relating
to the conversion of Class B shares into Class A shares) with respect to Class B
shares (a) issued prior to the date of any termination or modification or (b)
attributable to Class B shares issued through one or a series of exchanges of
shares of another investment company for which PFD acts as principal underwriter
which were initially issued prior to the date of such termination or
modification or (c) issued as a dividend or distribution upon Class B shares
initially issued or attributable to Class B shares issued prior to the date of
any such termination or modification except:
(i) to the extent required by a change in the 1940 Act, the rules or
regulations under the 1940 Act, the Conduct Rules of the NASD or an order of any
court or governmental agency;
(ii) in connection with a Complete Termination (as defined in the
Class B Plan); or
(iii) on a basis, determined by the Board of Trustees acting in good
faith, so long as from and after the effective date of such modification or
termination: neither the fund, the adviser nor certain affiliates pay, directly
or indirectly, a fee to any person for the provision of personal and account
maintenance services (as such terms are used in the Conduct Rules of the NASD)
to the holders of Class B shares of the fund and the termination or modification
of the distribution fee applies with equal effect to all Class B shares
outstanding from time to time.
The Class B Plan also provides that PFD shall be deemed to have performed all
services required to be performed in order to be entitled to receive the
distribution fee, if any, payable with respect to Class B shares sold through
PFD upon the settlement date of the sale of such Class B shares or in the case
of Class B shares issued through one or a series of exchanges of shares of
another investment company for which PFD acts as principal underwriter or issued
as a dividend or distribution upon Class B shares, on the settlement date of the
first sale on a commission basis of a Class B share from which such Class B
share was derived.
In the amendments to the underwriting agreement, the fund agreed that subsequent
to the issuance of a Class B share, it would not take any action to waive or
change any CDSC (including a change in the rules applicable to conversion of
Class B shares into another class) in respect of such Class B shares, except (i)
as provided in the fund's prospectus or statement of additional information, or
(ii) as required by a change in the 1940 Act and the rules and regulations
thereunder, the Conduct Rules of the NASD or any order of any court or
governmental agency.
CLASS C PLAN. Commissions on the sale of Class C shares of up to 0.75% of the
amount invested in Class C shares are paid to broker-dealers who have sales
agreements with PFD. PFD may also advance to dealers the first-year service fee
payable under the Class C Plan at a rate up to 0.25% of the purchase price of
such shares. As compensation for such advance of the service fee, PFD may retain
the service fee paid by the fund with respect to such shares for the first year
after purchase.
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 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. 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 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. When a broker-dealer sells Class C shares and
elects, with PFD's approval, to waive its right to receive the commission
normally paid at the time of the sale, PFD may cause all or a portion of the
distribution fees described above to be paid to the broker-dealer.
<PAGE>
GENERAL
In accordance with the terms of each Plan, PFD provides to the fund for review
by the Trustees a quarterly written report of the amounts expended under the
Plan and the purposes 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.
Each Plan's adoption, terms, continuance and termination are governed by Rule
12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit the fund and its current and
future shareholders. 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 as provided in Rule 12b-1.
See Appendix A for fund expenses under the Class A Plan, Class B Plan and Class
C Plan and CDSCs paid to PFD for the most recently completed fiscal year.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares and Class C shares may be subject to a 1% CDSC.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PSC, 60 State Street, Boston, Massachusetts 02109,
to act as shareholder servicing and transfer agent for the fund.
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 the fund's portfolio; and (iii) maintaining account records and
responding to shareholder inquiries.
PSC receives an annual fee of $28.00 for each Class A, Class B and Class C
shareholder account from the fund as compensation for the services described
above. PSC is also reimbursed by the fund for its cash out-of-pocket
expenditures. The fund may compensate entities which have agreed to provide
certain sub-accounting 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.
7. CUSTODIAN
Brown Brothers Harriman & Co., 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.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110, is 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
All orders for the purchase or sale of portfolio securities are placed on behalf
of the fund by Pioneer pursuant to authority contained in the fund's management
contract. Pioneer seeks to obtain the best execution on portfolio trades. The
price of securities and any commission rate paid are always factors, but
frequently not the only factors, in judging best execution. In selecting brokers
or dealers, Pioneer considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security to be purchased or sold; the execution efficiency,
settlement capability and financial condition of the dealer; the dealer's
execution services rendered on a continuing basis; and the reasonableness of any
dealer spreads.
Pioneer may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts managed
by Pioneer. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Pioneer determines in good faith that the
amount of commissions charged by a broker-dealer is reasonable in relation to
the value of the brokerage and research services provided by such broker, the
fund may pay commissions to such broker-dealer in an amount greater than the
amount another firm may charge. Such 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; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analyses, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). Pioneer maintains a listing of broker-dealers who provide such
services on a regular basis. However, because many transactions on behalf of the
fund and other investment companies or accounts managed by Pioneer are placed
with broker-dealers (including broker-dealers on the listing) without regard to
the furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such dealers solely because such services were
provided. Pioneer believes that no exact dollar value can be calculated for such
services.
The research received from broker-dealers may be useful to Pioneer in rendering
investment management services to the fund as well as other investment companies
or other accounts managed by Pioneer, although not all such research may be
useful to the fund. Conversely, such information provided by brokers or dealers
who have executed transaction orders on behalf of such other accounts may be
useful to Pioneer in carrying out its obligations to the fund. The receipt of
such research has not reduced Pioneer's normal independent research activities;
however, it enables Pioneer to avoid the additional expenses which might
otherwise be incurred if it were to attempt to develop comparable information
through its own staff.
In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the fund as well as shares of other investment companies managed by Pioneer.
This policy does not imply a commitment to execute all portfolio transactions
through all broker-dealers that sell shares of the fund.
Pursuant to certain directed brokerage arrangements with third-party
broker-dealers, such broker-dealers may pay certain of the fund's custody
expenses. The fund has also entered into expense offset arrangements, resulting
in further-reduction in the fund's total expenses. See "Financial highlights" in
the prospectus.
The Pioneer funds have entered into third-party brokerage and/or expense offset
arrangements to reduce the funds' total operating expenses. Pursuant to
third-party brokerage arrangements, certain of the funds that invest primarily
in U.S. equity securities may incur lower custody fees by directing brokerage to
third-party broker-dealers. Pursuant to expense offset arrangements, the funds
incur lower transfer agency expenses by maintaining their cash balances with the
custodian. See "Financial highlights" in the prospectus.
See the table in Appendix A for aggregate brokerage and underwriting commissions
paid by the fund in connection with its portfolio transactions during recently
completed fiscal years. The Board of Trustees periodically reviews Pioneer's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the fund.
10. DESCRIPTION OF SHARES
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 next determined net asset value per share less
any applicable CDSC. See "Sales Charges." 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 share
certificates; certificates will not be issued for Class B or Class C shares.
The trust's Agreement and Declaration of Trust, dated March 7 1995 (the
"Declaration"), permits the Board of Trustees to authorize the issuance of an
unlimited number of full and fractional shares of beneficial interest which may
be divided into such separate series as the Trustees may establish. Currently,
the trust consists of only one series, the fund. The Trustees may, however,
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 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, designated as 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 of the fund 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 each class represent an interest in the same portfolio of
investments of the fund. Each class has equal rights as to voting, redemption,
dividends and liquidation, except that each class bears different distribution
and transfer agent fees and may bear other expenses properly attributable to the
particular class. Class A and Class B shareholders have exclusive voting rights
with respect to the Rule 12b-1 Plans adopted by holders of those shares in
connection with the distribution of shares.
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The fund is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.
The shares of each series 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 all series of the fund vote together as a
class on matters that affect all series of the fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of the fund's shares. Shares have no preemptive or conversion rights
except that under certain circumstances Class B shares may convert to Class A
shares.
As a Delaware business trust, the fund's operations are governed by the
Declaration. A copy of the fund's Certificate of Trust, dated March 7, 1995, is
on file with the office of the Secretary of State of Delaware. Generally,
Delaware business trust shareholders are not personally liable for obligations
of the Delaware business trust under Delaware law. The Delaware Business Trust
Act (the "Delaware Act") provides that a shareholder of a Delaware business
trust shall be entitled to the same limitation of liability extended to
shareholders of private for-profit corporations. The Declaration expressly
provides that the fund is organized under the Delaware Act and that the
Declaration is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the fund's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of the fund and provides that
notice of such disclaimer may be given in each agreement, obligation or
instrument entered into or executed by the fund or its Trustees, (ii) provides
for the indemnification out of fund property of any shareholders held personally
liable for any obligations of the fund or any series of the fund and (iii)
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 is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the fund
itself would be unable to meet its obligations. In light of Delaware law, the
nature of the fund's business and the nature of its assets, the risk of personal
liability to a fund shareholder is remote.
In addition to the requirements under Delaware law, the Declaration provides
that a shareholder of the fund may bring a derivative action on behalf of the
fund only if the following conditions are met: (a) shareholders eligible to
bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.
The Declaration 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, directly or
indirectly, by reason of being or having been a Trustee or officer of the fund.
The Declaration 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.
The Declaration provides that any Trustee who is not an "interested person" of
Pioneer shall be considered to be independent for purposes of Delaware law
notwithstanding the fact that such trustee receives compensation for serving as
a trustee of the fund or other investment companies for which Pioneer acts as
investment adviser.
11. SALES CHARGES
The fund continuously offers three classes of shares designated as Class A,
Class B and Class C shares as described in the prospectus.
CLASS A SHARE SALES CHARGES
You may buy Class A shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge.
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 six years of purchase will be subject to
a CDSC at the rates shown in the table below. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial purchase price, including shares derived from
the reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years from
the time of purchase until the time of redemption of Class B shares. For the
purpose of determining the number of years from the time of any purchase, all
payments during a month will be aggregated and deemed to have been made on the
first day of that month. For the purpose of determining the number of years from
the time of any purchase made prior to October 1, 1998, all payments during a
quarter will be aggregated and deemed to have been made on the first day of that
quarter. In processing redemptions of Class B shares, the fund will first redeem
shares not subject to any CDSC and then shares held longest during the six-year
period. As a result, you will pay the lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be determined
as follows:
CDSC AS A % OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CDSC
First ......... 4.0
Second ......... 4.0
Third ......... 3.0
Fourth ......... 3.0
Fifth ......... 2.0
Sixth ......... 1.0
Seventh and thereafter 0.0
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 beginning
of the calendar month (or the calendar quarter for purchases made prior to
October 1, 1998) that is eight years after the purchase date, except as noted
below. Class B shares acquired by exchange from Class B shares of another
Pioneer 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 (the "IRS") or an opinion of counsel that such
conversions will not constitute taxable events for federal tax purposes. The
conversion of Class B shares to Class A shares will not occur if such ruling or
opinion is not available and, therefore, Class B shares would continue to be
subject to higher expenses than Class A shares for an indeterminate period.
CLASS C SHARES
You may buy Class C shares at net asset value per share 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
month will be aggregated and deemed to have been made on the first day of that
month. For the purpose of determining the number of years from the time of any
purchase made prior to October 1, 1998, 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.
12. REDEEMING SHARES
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.
SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP"). A SWP is designed to provide a convenient
method of receiving fixed payments at regular intervals from fund share accounts
having a total value of not less than $10,000. You must also be reinvesting all
dividends and capital gains distributions to use the SWP option.
Periodic payments of $50 or more will be deposited monthly, quarterly,
semiannually or annually 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. Payments can be made either by check or electronic funds transfer
to a bank account designated by you. Class B accounts must meet the minimum
initial investment requirement prior to establishing a SWP. Withdrawals 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 "Qualifying for a reduced sales
charge" in the prospectus. If you direct that withdrawal payments be paid to
another person, want to change the bank where payments are sent or designate an
address that is different from the account's address of record after you have
opened your account, a signature guarantee must accompany your instructions
SWP redemptions reduce and may ultimately exhaust the number of shares in your
account. In addition, the amounts received by a shareholder cannot be considered
as yield or income on his or her investment because part of such payments may be
a return of his or her investment.
A 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 in the shareholder's account have
been redeemed.
You may obtain additional information by calling PSC at 1-800-225-6292.
13. TELEPHONE TRANSACTIONS
You may purchase, exchange or sell shares by telephone. See the prospectus for
more information. For personal assistance, call 1-800-225-6292 between 8:00 a.m.
and 9:00 p.m. Eastern time on weekdays. Computer-assisted transactions may be
available to shareholders who have prerecorded certain bank information (see
"FactFoneSM"). YOU ARE STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT
PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION.
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
the personal identification number ("PIN") for the account and send you a
written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the fund may be liable for any loss due to unauthorized or
fraudulent instructions. The fund may implement other procedures from time to
time. In all other cases, neither the fund, PSC nor PFD will be responsible for
the authenticity of instructions received by telephone; therefore, you bear the
risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of severe
weather or a natural disaster, it may be difficult to contact the fund by
telephone to institute a purchase, exchange or redemption. You should
communicate with the fund in writing if you are unable to reach the fund by
telephone.
FACTFONESM. FactFoneSM is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFoneSM allows shareholder access to current information on Pioneer mutual
fund accounts and to the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFoneSM to make computer-assisted
telephone purchases, exchanges or redemptions from your Pioneer mutual fund
accounts, access your account balances and last three transactions and order a
duplicate statement if you have activated your PIN. Telephone purchases or
redemptions require the establishment of a bank account of record. YOU ARE
STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL 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 FactFoneSM.
Call PSC for assistance.
FactFoneSM allows shareholders to hear the following recorded fund information:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for
Pioneer's money market fund; and
o dividends and capital gains distributions on all Pioneer
mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
All performance numbers communicated through FactFoneSM represent past
performance, and figures include the maximum applicable sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. Because the fund seeks to maintain a stable $1.00 share price, the
value of its shares generally will not vary.
14. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the
close of regular trading on 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, Martin Luther King,
Jr. 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 on which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The fund is not required to determine its net asset
value per share on any day on which no purchase orders in good order for fund
shares are received and no shares are tendered and accepted for redemption.
Securities are valued at the last sale price on the principal exchange or market
where they are traded. Securities which have not traded on the date of valuation
or securities for which sales prices are not generally reported are valued at
the mean between the current bid and asked prices. All assets of the fund for
which there is no other readily available valuation method are valued at their
fair value as determined in good faith by the Trustees, although the actual
computations may be made by persons acting pursuant to the direction of the
Board of Trustees.
The net asset value per share of each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the fund are accrued daily and taken into account.
Shares are offered at net asset value without the imposition of an initial sales
charge (Class B and Class C shares may be subject to a CDSC).
Except as set forth in the following paragraph, the fund's portfolio investments
are valued on each business day on the basis of amortized cost, if the Board of
Trustees determines in good faith that such method approximates fair value. This
technique involves valuing an instrument at its cost and, thereafter, assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
While this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower than the
price the fund would receive if it sold the investment. During periods of
declining interest rates, the yield on shares of the fund computed as described
below may tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon market prices
and estimates of market prices for all of its portfolio investments. Thus, if
the use of amortized cost by the fund resulted in a lower aggregate portfolio
value on a particular day, a prospective investor in the fund would be able to
obtain a somewhat higher yield than would result from investment in a fund
utilizing solely market values. The converse would apply in a period of rising
interest rates.
Standby commitments will be valued at zero in determining net asset value.
"When-issued" securities will be valued at the value of the security at the time
the commitment to purchase is entered into.
The valuation of the fund's portfolio investments based upon their amortized
cost and the concomitant expectation to maintain the fund's per share net asset
value of $1.00 is permitted in accordance with Rule 2a-7 under the 1940 Act
pursuant to which the fund must adhere to certain conditions.. The fund must
maintain a dollar-weighted average portfolio maturity of 90 days or less. The
maturities of variable rate demand instruments held in the fund's portfolio will
be deemed to be the longer of the demand period or the period remaining until
the next interest rate adjustment, although stated maturities may be in excess
of one year. The Trustees have established procedures designed to stabilize, to
the extent reasonably possible, the price per share of each class of the fund
for the purpose of maintaining sales and redemptions at a single value. It is
the intention of the fund to maintain each class' per share net asset value of
$1.00 but there can be no assurance of this. Such procedures will include review
of the fund's portfolio holdings by the Trustees, at such intervals as they may
deem appropriate, to determine whether the fund's net asset value per class
calculated by using available market quotations deviates from $1.00 per share
and, if so, whether such deviation may result in material dilution or is
otherwise unfair to existing shareholders. In the event the Trustees determine
that such a deviation exists, they have agreed to take such corrective action as
they regard as necessary and appropriate, including: (i) the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity; (ii) withholding dividends; (iii) redeeming shares
in kind; or (iv) establishing a net asset value per share by using available
market quotations.
15. TAX STATUS
It is the fund's policy to meet the requirements of Subchapter M of 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 and other 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.
If the fund did not qualify as a regulated investment company, it would be
treated as a U.S. corporation subject to federal income tax. Under the Code, the
fund will be subject to a nondeductible 4% federal excise tax on a portion of
its undistributed ordinary income and capital gains if it fails to meet certain
distribution requirements with respect to each calendar year. The fund intends
to make distributions in a timely manner and accordingly does not expect to be
subject to the excise 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"), and satisfy certain annual
distribution and quarterly diversification requirements.
Dividends from investment company taxable income, which includes net investment
income and net short-term capital gain in excess of net long-term capital loss,
are taxable as ordinary income, whether received in cash or reinvested in
additional shares. Dividends from net long-term capital gain in excess of net
short-term capital loss ("net capital gain"), 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 fund does not anticipate
that it will earn or distribute any net capital gain. 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.
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. See Appendix A for the fund's available capital loss
carryforwards, if any.
Redemptions and exchanges of shares are taxable events for shareholders that are
subject to tax but generally will not result in taxable gain or loss if the fund
successfully maintains a constant net asset value per share. A loss may occur to
the extent a CDSC is imposed in connection with a redemption or exchange. Any
loss realized by a shareholder upon the redemption, exchange or other
disposition of shares with a tax holding period of six months or less will be
treated as a long-term capital loss to the extent of any amounts treated as
distributions of long-term capital gain with respect to such shares.
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. Shareholders should consult their own tax
advisers with reference to their individual circumstances to determine whether
any particular transaction in fund shares is properly treated as a sale for tax
purposes, as this discussion assumes, and the tax treatment of any gains or
loses recognized in such transactions..
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.
The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gain, with respect
to its investments in those countries. Tax conventions between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. The fund does not
expect to satisfy the requirements for passing through to its shareholders their
pro rata shares of qualified foreign taxes paid by the fund, with the result
that shareholders will not include such taxes in their gross incomes and will
not be entitled to a tax deduction or credit for such taxes on their own tax
returns.
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions, and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
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 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.
Federal law requires that the fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, to shareholders who have not complied
with 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.
If, as anticipated, the fund continues to qualify as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes or any Delaware corporation income tax.
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. Shareholders should consult their own tax advisers on these
matters and on state, local and other applicable tax laws.
16. INVESTMENT RESULTS
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 investment objectives and
to stock or other relevant indices. For example, total return of the fund's
classes may be compared to rankings prepared by Lipper Inc., a widely recognized
independent service which monitors mutual fund performance; the S&P 500, an
index of unmanaged groups of common stock; the Dow Jones Industrial Average, a
recognized unmanaged index of common stocks of 30 industrial companies listed on
the Exchange; or the Russell U.S. Equity Indexes or the Wilshire Total Market
Value Index, which are recognized unmanaged indexes of broad-based common
stocks.
In addition, the performance of the classes of the fund may be compared to
alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. The fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the fund's shares. 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, 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 Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson
Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre
and Co., Lipper Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to shareholders of the fund.
The fund may also present, from time to time, historical information depicting
the value of a hypothetical account in one of more classes of the fund since
inception.
In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
STANDARDIZED YIELD QUOTATIONS
From time to time, the fund will provide yield quotations for its shares. These
quotations are calculated by standard methods prescribed by the SEC and may from
time to time be used in the fund's Prospectus, Statement of Additional
Information, advertisements, shareholder reports or other communications to
shareholders. However, these yield quotations should not be considered as
representative of the performance of the fund in the future since, unlike some
bank deposits or other investments which pay a fixed yield for a stated period
of time, the yields of the fund will vary based on the type, quality and
maturities of the securities held in its portfolio, fluctuations in short-term
interest rates and changes in its expenses.
The fund's yield quotations are computed using the appropriate figures for a
particular class as follows: the net change, exclusive of capital changes (i.e.,
realized gains and losses from the sale of securities and unrealized
appreciation and depreciation), in the value of a hypothetical pre-existing
Class A, Class B or Class C account having a balance of one share at the
beginning of the seven-day base period is determined by subtracting a
hypothetical charge reflecting expense deductions from the hypothetical account,
and dividing the net change in value by the value of the share at the beginning
of the base period. This base period return is then multiplied by 365/7 with the
resulting yield figure carried to the nearest 100th of 1%. The determination of
net change in account value reflects the value of additional shares purchased
with dividends from the original share, dividends declared on both the original
share and any such additional shares, and all fees that are charged to the fund,
in proportion to the length of the base period and the fund's average account
size (with respect to any fees that vary with the size of an account).
The fund may also advertise quotations of effective yield. Effective yield is
computed by compounding the unannualized base period return determined as in the
preceding paragraph by adding 1 to the base period return, raising the sum to a
power equal to 365 divided by 7, and subtracting one from the result, according
to the following formula:
Effective Yield = (base period return + 1) 365/7 - 1
Yields are calculated in accordance with SEC mandated standard formulas.See
Appendix A for the yield and effective yield for each class of fund shares as of
the most recently completed fiscal year.
17. FINANCIAL STATEMENTS
The fund's audited financial statements for the fiscal year ended December 31,
1998 from the fund's annual report filed with the SEC on February 24, 1999
(Accession No. 0000812195-99-000004) are incorporated by reference into this
statement of additional information. Those financial statements, including the
financial highlights in the prospectus, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
to the financial statements and are included in reliance upon the authority of
Arthur Andersen LLP as experts in accounting and auditing in giving their
report.
The fund's annual report includes the financial statements referenced above and
is available without charge upon request by calling Shareholder Services at
1-800-225-6292. To the extent permitted by the SEC, if members of the same
family hold shares of the fund and have the same address of record, the fund
will only send one copy of its shareholders report to such address, unless the
shareholders at same address request otherwise.
<PAGE>
18. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION
SHARE OWNERSHIP
As of March 31, 1999, the Trustees and officers of the fund owned beneficially
in the aggregate less than 1% of the outstanding shares of the fund. As of March
31, 1999 there were no holders of 5% or more of any class of the fund's
outstanding shares.:
COMPENSATION OF OFFICERS AND TRUSTEES
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
<TABLE>
<S> <C> <C> <C>
PENSION OR RETIREMENT TOTAL COMPENSATION FROM
BENEFITS ACCRUED AS THE FUND AND OTHER
AGGREGATE PART OF FUND EXPENSES PIONEER MUTUAL FUNDS**
COMPENSATION FROM
NAME OF TRUSTEE FUND*
John F. Cogan, Jr.*** $ 750.00 $0 $ 18,750.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
Mary K. Bush 2,485.00 0 77,125.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
Richard H. Egdahl, M.D. 2,531.00 0 79,125.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
Margaret B.W. Graham 2,543.00 0 81,750.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
John W. Kendrick 2,024.00 0 65,900.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
Marguerite A. Piret 2,873.00 0 98,750.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
David D. Tripple*** 750.00 0 18,750.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
Stephen K. West 2,564.00 0 85,050.00
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
John Winthrop 2,685.00 0 85,875.00
-------- - ---------
- ----------------------- ---------------------- ------------------------ --------------------------
- ----------------------- ---------------------- ------------------------ --------------------------
$19,205.00 $0 $611,075.00
- ----------------------- ---------------------- ------------------------ --------------------------
</TABLE>
* For the fiscal year ended December 31, 1998.
** For the calendar year ended December 31, 1998
*** Under the management contract, Pioneer reimburses the fund
for any Trustees fees paid by the fund.
<PAGE>
APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED PIONEER
For the Fiscal Years Ended December 31,
1998 1997 1996
$1,112,593 $799,390* $514,166*
*An expense limitation was in effect during the years ended December 31, 1997
and 1996. In the absence of the expense limitation, the fund would have paid
$799,390 and $514,166 in management fees for such periods.
CARRYOVER OF DISTRIBUTION PLAN EXPENSES
As of December 31, 1998 there was no carryover of distribution expenses under
the Class A Plan.
APPROXIMATE NET UNDERWRITING COMMISSIONS RETAINED BY PFD
The fund paid no brokerage commissions for the fiscal years ended December 31,
1998, 1997 and 1996.
FUND EXPENSES UNDER THE DISTRIBUTION PLANS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
Class A Plan Class B Plan Class C Plan
$285,318 $367,184 $146,562
CDSCS
During the fiscal year ended December 31, 1998, CDSCs in the amount of $202,798
were paid to PFD.
CAPITAL LOSS CARRYFORWARDS
At the end of its most recent taxable year, the fund had a net capital loss
carryforward of $276,063 which will expire between 2002 and 2003 if not used.
YIELD AND EFFECTIVE YIELD
The yield and effective yield of the fund for the seven-day period ended
December 31, 1998 is as follows:
EFFECTIVE
YIELD YIELD
Class A Shares 4.43% 4.53%
Class B Shares 3.60% 3.67%
Class C Shares 3.85% 3.92%
<PAGE>
19. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND
PREFERRED STOCK RATINGS1
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") PRIME RATING SYSTEM
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries. High rates of
return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection. Broad margins in earnings coverage of fixed
financial charges and high internal cash generation. Well-established
access to a range of financial markets and assured sources of alternate
liquidity.
Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
- --------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information 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.
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch
obligations are rated at the lower of the bank's rating or Moody's Sovereign
Rating for Bank Deposits for the country in which the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.
MOODY'S DEBT RATINGS
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
edged." 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 risk appear somewhat larger than the 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 a 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.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's bond ratings, where specified, are applicable to financial contracts,
senior bank obligations and insurance company senior policyholder and claims
obligations with an original maturity in excess of one year. Obligations relying
upon support mechanisms such as letters-of-credit and bonds of indemnity are
excluded unless explicitly rated. Obligations of a branch of a bank are
considered to be domiciled in the country in which the branch is located.
Unless noted as an exception, Moody's rating on a bank's ability to repay senior
obligations extends only to branches located in countries which carry a Moody's
Sovereign Rating for Bank Deposits. Such branch obligations are rated at the
lower of the bank's rating or Moody's Sovereign Rating for the Bank Deposits for
the country in which the branch is located. When the currency in which an
obligation is denominated is not the same as the currency of the country in
which the obligation is domiciled, Moody's ratings do not incorporate an opinion
as to whether payment of the obligation will be affected by the actions of the
government controlling the currency of denomination. In addition, risk
associated with bilateral conflicts between an investor's home country and
either the issuer's home country or the country where an issuer branch is
located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance company
obligations are exempt from registration under the 1933 Act or issued in
conformity with any other applicable law or regulation. Nor does Moody's
represent any specific bank or insurance company obligation is legally
enforceable or a valid senior obligation of a rated issuer.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
MOODY'S PREFERRED STOCK RATINGS
Because of the fundamental differences between preferred stocks and bonds, a
variation of Moody's familiar bond rating symbols is used in the quality ranking
of preferred stock. The symbols, presented below, are designed to avoid
comparison with bond quality in absolute terms. It should always be borne in
mind that preferred stock occupies a junior position to bonds within a
particular capital structure and that these securities are rated within the
universe of preferred stocks.
aaa: An issue which is rated aaa is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.
aa: An issue which is rated aa is considered a high-grade preferred stock. This
rating indicates that there is a reasonable assurance the earnings and asset
protection will remain relatively well maintained in the foreseeable future.
a: An issue which is rated a is considered to be an upper-medium grade preferred
stock. While risks are judged to be somewhat greater then in the aaa and aa
classification, earnings and asset protection are, nevertheless, expected to be
maintained at adequate levels.
baa: An issue which is rated baa is considered to be a medium-grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.
ba: An issue which is rated ba is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.
b: An issue which is rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small.
caa: An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payments.
ca: An issue which is rated ca is speculative in a high degree and is likely to
be in arrears on dividends with little likelihood of eventual payments.
c: This is the lowest rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
STANDARD & POOR'S LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation; Nature of and provisions of the obligation;
Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the
laws of bankruptcy and other laws affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: A subordinated debt or preferred stock obligation rated C is CURRENTLY HIGHLY
VULNERABLE to nonpayment. The C rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued. A C also will be assigned to a
preferred stock issue in arrears on dividends or sinking fund payments but that
is currently paying.
D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments are jeopardized.
Plus (+) or Minus (-): The rating from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.
r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk, such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.
LOCAL CURRENCY AND FOREIGN CURRENCY RISKS
Country risk considerations are a standard part of Standard & Poor's analysis
for credit ratings on any issuer or issue. Currency of repayment is a key factor
in this analysis. An obligor's capacity to repay foreign currency obligations
may be lower than its capacity to repay obligations in its local currency due to
the sovereign government's own relatively lower capacity to repay external
versus domestic debt. These sovereign risk considerations are incorporated in
the debt ratings assigned to specific issues. Foreign currency issuer ratings
are also distinguished from local currency issuer ratings to identify those
instances where sovereign risks make them different for the same issuer.
<PAGE>
20. APPENDIX C - PERFORMANCE STATISTICS
PIONEER CASH RESERVES FUND
CLASS A SHARES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET
INITIAL SALES CHARGE SHARES VALUE PER INITIAL NET
DATE INVESTMENT OFFERING PRICE INCLUDED PURCHASED SHARE ASSET VALUE
6/22/87 $10,000 $1.0000 0.00% 10,000.000 $1.0000 $10,000
</TABLE>
VALUE OF SHARES
(DIVIDENDS AND CAPITAL GAINS REINVESTED)
<TABLE>
<S> <C> <C> <C> <C>
FROM INVESTMENT REINVESTED FROM DIVIDENDS
DATE REINVESTED TOTAL VALUE
12/31/88 $10,000 $0 $1,077 $11,077
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/89 $10,000 $0 $2,052 $12,052
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/90 $10,000 $0 $2,985 $12,985
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/91 $10,000 $0 $3,672 $13,672
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/92 $10,000 $0 $4,091 $14,091
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/93 $10,000 $0 $4,438 $14,438
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/94 $10,000 $0 $4,954 $14,954
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/95 $10,000 $0 $5,727 $15,727
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/96 $10,000 $0 $6,458 $16,458
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/97 $10,000 $0 $7,245 $17,245
- ---------------------- -------------------- --------------------- --------------------- --------------------
- ---------------------- -------------------- --------------------- --------------------- --------------------
12/31/98 $10,000 $0 $8,080 $18,080
- ---------------------- -------------------- --------------------- --------------------- --------------------
</TABLE>
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
<PAGE>
PIONEER CASH RESERVES FUND
CLASS B SHARES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
NET ASSET
INITIAL SALES CHARGE SHARES VALUE PER INITIAL NET
DATE INVESTMENT OFFERING PRICE INCLUDED PURCHASED SHARE ASSET VALUE
3/31/95 $10,000 $1.0000 0.00% 10,000.000 $1.0000 $10,000
- ---------------- -------------- --------------- -------------- -------------- --------------- --------------
</TABLE>
VALUE OF SHARES
(DIVIDENDS AND CAPITAL GAINS REINVESTED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FROM CAPITAL FROM
FROM GAINS REINVESTED DIVIDENDS CDSC IF REDEEMED TOTAL VALUE
DATE INVESTMENT REINVESTED CDSC %
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
12/31/95 $10,000 $0 $328 $400 $ 9,928 4.00
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
12/31/96 $10,000 $0 $722 $400 $10,322 4.00
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
12/31/97 $10,000 $0 $1,140 $300 $10,840 3.00
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
12/31/98 $10,000 $0 $1,581 $300 $11,281 3.00
</TABLE>
CLASS C SHARES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------- -------------- --------------- -------------- -------------- --------------- --------------
NET ASSET
INITIAL SALES CHARGE SHARES VALUE PER INITIAL NET
DATE INVESTMENT OFFERING PRICE INCLUDED PURCHASED SHARE ASSET VALUE
1/31/96 $10,000 $1.0000 0.00% 10,000.000 $1.0000 $10,000
- ---------------- -------------- --------------- -------------- -------------- --------------- --------------
</TABLE>
VALUE OF SHARES
(DIVIDENDS AND CAPITAL GAINS REINVESTED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
FROM CAPITAL FROM
FROM GAINS REINVESTED DIVIDENDS CDSC IF REDEEMED TOTAL VALUE
DATE INVESTMENT REINVESTED CDSC %
12/31/96 $10,000 $0 $335 $100 $10,235 1.00
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
12/31/97 $10,000 $0 $744 0 $10,744 0.00
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
12/31/98 $10,000 $0 $1,186 0 $11,186 0.00
- ---------------- --------------- ------------------ -------------- ------------------ -------------- ---------------
</TABLE>
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
<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 also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the fund, do not reflect past
performance and do 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 500 includes
500 of the largest stocks (in terms of stock market value) in the U.S.
Dow Jones Industrial Average. This is a total return index based on the
performance of stocks of 30 blue chip companies widely held by individuals and
institutional investors. The 30 stocks represent about a fifth of the $8
trillion-plus market value of all U.S. stocks and about a fourth of the value of
stocks listed on the New York Stock Exchange (NYSE).
U.S. Small Stock Index. This index is a market value weighted index of the ninth
and tenth deciles of the NYSE, plus stocks listed on the American Stock Exchange
and over the counter 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 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.
Merrill Lynch Micro-Cap Index. The Merrill Lynch Micro-Cap Index represents the
performance of 1,980 stocks ranging in market capitalization from $50 million to
$125 million. Index returns are calculated monthly.
Long-Term U.S. Government Bonds. The total returns on long-term government bonds
after 1977 are constructed with data from The Wall Street Journal and are
calculated as the change in the flat price or and-interest price. From 1926 to
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.
Intermediate-Term U.S. Government Bonds. Total returns of intermediate-term
government bonds after 1987 are calculated from The Wall Street Journal prices,
using the change in flat price. Returns from 1934 to 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 five 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 to 1942, almost all bonds
with maturities near five years were partially or fully 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 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
Morgan Stanley Capital International ("MSCI"). These indices are in U.S. dollar
terms with gross dividends reinvested and measure the performance of 45 stock
markets around the world. MSCI All Country indices represent both the developed
and the emerging markets for a particular region. These indices are unmanaged.
The free indices exclude shares which are not readily purchased by non-local
investors. MSCI covers over 1,700 securities in 28 emerging markets and 2,600
securities in 23 developed markets, totalling over $15 trillion in market
capitalization.
Countries in the MSCI EAFE Index are: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and United
Kingdom.
Countries in the MSCI Emerging Markets Free Index are: Argentina, Brazil, Chile,
China Free, Colombia, Czech Republic, Greece, Hungary, India, Indonesia Free,
Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Singapore, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela.
MSCI All Country (AC) Asia Free ex Japan: This index is made up of the following
12 countries: China Free, Hong Kong, India, Indonesia Free, Korea @50%, Malaysia
Free, Pakistan, Philippines Free, Singapore Free, Sri Lanka, Taiwan @50% and
Thailand Free.
MSCI All Country (AC) Asia Pacific Free ex Japan: This index is made up of the
following 14 countries: Australia, China Free, Hong Kong, India, Indonesia Free,
Korea @50%, Malaysia Free, New Zealand, Pakistan, Philippines Free, Singapore
Free, Sri Lanka, Taiwan @50% and Thailand Free.
6-Month CDs. Data sources include the Federal Reserve Bulletin and The Wall
Street Journal.
Long-Term U.S. Corporate Bonds. Since 1969, corporate bond total returns are
represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index.
As 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 with at least 10 years to maturity. 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.
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. 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 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
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 Westerfield, Randolph W., 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 after 1977; the CRSP 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.
National Association of Real Estate Investment Trusts ("NAREIT") Equity REIT
Index. All of the data are based upon the last closing price of the month for
all tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are
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 weighting at the beginning of the period.
Only those REITs listed for the entire period are 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 U.S. Equity Indexes. The Russell 3000(R) Index (the "Russell 3000") is
comprised of the 3,000 largest U.S. companies as determined by market
capitalization representing approximately 98% of the U.S. equity market. The
average market capitalization is approximately $3.7 billion. The Russell 2500TM
Index measures performance of the 2,500 smallest companies in the Russell 3000.
The average market capitalization is approximately $931 million, and the largest
company in the index has an approximate market capitalization of $3.7 billion.
The Russell 2000(R) Index measures performance of the 2,000 smallest stocks in
the Russell 3000; the largest company in the index has a market capitalization
of approximately $1.4 billion. The Russell 1000(R) Index (the "Russell 1000")
measures the performance of the 1,000 largest companies in the Russell 3000. The
average market capitalization is approximately $9.9 billion. The smallest
company in the index has an approximate market capitalization of $1.4 billion.
The Russell MidcapTM Index measures performance of the 800 smallest companies in
the Russell 1000. The largest company in the index has an approximate market
capitalization of $10.3 billion.
The Russell indexes are reconstituted annually as of July 1, based on May 31
market capitalization rankings.
Wilshire Real Estate Securities Index. The Wilshire Real Estate Securities Index
is a market capitalization weighted index of 119 publicly traded real estate
securities, such as REITs, real estate operating companies ("REOCs") and
partnerships.
The index contains performance data on five major categories of property:
office, retail, industrial, apartment and miscellaneous. The companies in the
index are 94.11% equity and hybrid REITs and 5.89% REOCs.
Standard & Poor's MidCap 400 Index. The S&P 400 is a
market-capitalization-weighted index. The performance data for the index were
calculated by taking the stocks presently in the 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 S&P 400 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.
Lipper Balanced Funds Index. This index represents equally weighted performance,
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%.
Lehman Brothers Aggregate Bond Index. The Lehman Brothers Aggregate Bond Index
is composed of the Lehman Brothers Government/Corporate Index, the Lehman
Brothers Mortgage-Backed Securities Index and the Lehman Brothers Asset-Backed
Securities Index. The index includes fixed rate debt issues rated investment
grade or higher by Moody's Investors Service, Standard & Poor's Corporation or
Fitch Investors Service, in that order. All issues have at least one year to
maturity with intermediate indices including bonds with maturities up to ten
years and long-term indices composed of bonds with maturities longer than ten
years. All returns are market value weighted inclusive of accrued interest.
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 to 1987; and The Wall
Street Journal thereafter.
Sources: Ibbotson Associates, Towers Data Systems, Lipper, Inc. and PGI
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Dow S&P/ S&P/
Jones U.S. Small BARRA BARRA Merrill Lynch
S&P Industrial Stock U.S. 500 500 Micro-Cap
500 Average Index Inflation Growth Value Index
- ----------------------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.34 -49.02 -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A N/A
Dec 1933 53.99 73.72 142.87 0.51 N/A N/A N/A
Dec 1934 -1.44 8.08 24.22 2.03 N/A N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A N/A
Dec 1942 20.34 14.13 44.51 9.29 N/A N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A N/A
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Dow S&P/ S&P/
Jones U.S. Small BARRA 500 BARRA Merrill Lynch
S&P Industrial Stock U.S. Growth 500 Micro-Cap
500 Average Index Inflation Value Index
- ----------------------------------------------------------------------------------------------------------------------
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53 36.62
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64 1.81
Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99 30.70
Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99 13.88
Dec 1997 33.36 24.88 22.78 1.70 36.52 29.98 24.61
Dec 1998 28.58 18.15 -7.31 1.80 42.16 14.67 -6.15
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Long- Intermediate- MSCI Long-
Term Term U.S. EAFE 6- Term U.S. U.S.
U.S. Gov't Government (Net of Month Corporate T-Bill
Bonds Bonds Taxes) CDs Bonds (30-Day)
- ------------------------------------------------------------------------------------------------------
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 0.10 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
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Long- Intermediate- MSCI Long-
Term Term U.S. EAFE 6- Term U.S. U.S.
U.S. Gov't Government (Net of Month Corporate T-Bill
Bonds Bonds Taxes) CDs Bonds (30-Day)
- ------------------------------------------------------------------------------------------------------
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 4.17 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -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 5.39 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 6.11 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 29.10 -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 6.59 -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 19.30 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 16.80 11.21 5.21 27.20 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26
Dec 1998 13.06 10.21 20.00 5.34 10.76 4.86
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
NAREIT Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities 400 Index Free Index Account
- -----------------------------------------------------------------------------------------------------------------------
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
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
NAREIT Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities 400 Index Free Index Account
- -----------------------------------------------------------------------------------------------------------------------
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
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 16.49 36.87 19.20 13.05 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.26 20.30 -11.59 5.17
Dec 1998 -17.51 -2.55 -17.63 19.12 15.09 -25.34 4.63
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C>
MSCI All Country
MSCI All Country (AC) (AC) Asia Pacific Lehman Brothers
Asia Free ex Japan Free ex Japan Aggregate Bond Index
- ----------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A
Dec 1926 N/A N/A N/A
Dec 1927 N/A N/A N/A
Dec 1928 N/A N/A N/A
Dec 1929 N/A N/A N/A
Dec 1930 N/A N/A N/A
Dec 1931 N/A N/A N/A
Dec 1932 N/A N/A N/A
Dec 1933 N/A N/A N/A
Dec 1934 N/A N/A N/A
Dec 1935 N/A N/A N/A
Dec 1936 N/A N/A N/A
Dec 1937 N/A N/A N/A
Dec 1938 N/A N/A N/A
Dec 1939 N/A N/A N/A
Dec 1940 N/A N/A N/A
Dec 1941 N/A N/A N/A
Dec 1942 N/A N/A N/A
Dec 1943 N/A N/A N/A
Dec 1944 N/A N/A N/A
Dec 1945 N/A N/A N/A
Dec 1946 N/A N/A N/A
Dec 1947 N/A N/A N/A
Dec 1948 N/A N/A N/A
Dec 1949 N/A N/A N/A
Dec 1950 N/A N/A N/A
Dec 1951 N/A N/A N/A
Dec 1952 N/A N/A N/A
Dec 1953 N/A N/A N/A
Dec 1954 N/A N/A N/A
Dec 1955 N/A N/A N/A
Dec 1956 N/A N/A N/A
Dec 1957 N/A N/A N/A
Dec 1958 N/A N/A N/A
Dec 1959 N/A N/A N/A
Dec 1960 N/A N/A N/A
Dec 1961 N/A N/A N/A
</TABLE>
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<TABLE>
<S> <C> <C> <C>
MSCI All Country
MSCI All Country (AC) (AC) Asia Pacific Lehman Brothers
Asia Free ex Japan Free ex Japan Aggregate Bond Index
- ----------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A
Dec 1963 N/A N/A N/A
Dec 1964 N/A N/A N/A
Dec 1965 N/A N/A N/A
Dec 1966 N/A N/A N/A
Dec 1967 N/A N/A N/A
Dec 1968 N/A N/A N/A
Dec 1969 N/A N/A N/A
Dec 1970 N/A N/A N/A
Dec 1971 N/A N/A N/A
Dec 1972 N/A N/A N/A
Dec 1973 N/A N/A N/A
Dec 1974 N/A N/A N/A
Dec 1975 N/A N/A N/A
Dec 1976 N/A N/A 15.62
Dec 1977 N/A N/A 3.05
Dec 1978 N/A N/A 1.39
Dec 1979 N/A N/A 1.94
Dec 1980 N/A N/A 2.70
Dec 1981 N/A N/A 6.23
Dec 1982 N/A N/A 32.62
Dec 1983 N/A N/A 8.37
Dec 1984 N/A N/A 15.14
Dec 1985 N/A N/A 22.11
Dec 1986 N/A N/A 15.29
Dec 1987 N/A N/A 2.75
Dec 1988 30.00 30.45 7.89
Dec 1989 32.13 21.43 14.53
Dec 1990 -6.54 -11.86 8.95
Dec 1991 30.98 32.40 16.00
Dec 1992 21.81 9.88 7.40
Dec 1993 103.39 84.94 9.75
Dec 1994 -16.94 -12.59 -2.92
Dec 1995 4.00 10.00 18.48
Dec 1996 10.05 8.08 3.61
Dec 1997 -40.31 -34.20 9.68
Dec 1998 -7.79 -4.42 8.67
</TABLE>
Source: Lipper, Inc.
<PAGE>
21. APPENDIX D - OTHER 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 U.S.
As of June 30, 1998, Pioneer employed a professional investment staff of 75.
Total assets of all Pioneer mutual funds at December 31, 1998, were
approximately $22 billion representing 1,363,446 shareholder accounts, 890,148
non-retirement accounts and 473,298 retirement accounts.
<PAGE>
PIONEER MONEY MARKET TRUST
PART C. OTHER INFORMATION
Item 23. Exhibits
Amended Form N-1A
Exhibit Reference:
(a) 1. Agreement and Declaration of Trust (Delaware Business
Trust)(1)
(a) 1.1 Establishment and Designation of Classes for Pioneer Cash
Reserves Fund(2)
(b) 2. By-laws (Delaware Business Trust)(1)
(c) 4. Specimen Stock Certificate(1)
(d) 5. Management Contract between Registrant, on behalf of each
series, and Pioneering Management Corporation and schedule
of substantially similar omitted documents(1)
(e) 6. Form of Underwriting Agreement between Registrant, on behalf
of each series, and Pioneer Funds Distributor, Inc.(3)
(f) 7. None
(g) 8. Custodian Agreement with Brown Brothers Harriman & Co.(1)
(h) 9. Form of Investment Company Service Agreement(5)
(h) 9.1 Administration Agreement(4)
(i) 10. Opinion and Consent of Counsel(5)
(j) 11. Consent of Arthur Andersen LLP(5)
(k) 12. None
(l) 13. Stock Purchase Agreement(1)
(m) 15.1 Amended Class A Rule 12b-1 Distribution Plan(2)
(m) 15.2 Form of Class B Rule 12b-1 Distribution Plan on behalf of
Pioneer Cash Reserves Fund(3)
(m) 15.3 Class C Rule 12b-1 Distribution Plan on behalf of Pioneer
Cash Reserves Fund(2)
(n) 17. Financial Data Schedules(5)
(o) 18. Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Cash
Reserves Fund(2)
N/A 19. Powers of Attorney(4)
- ------------------------
(1) Incorporated by reference from the Registrant's Post-Effective Amendment
No. 12 to the Registration Statement as filed electronically with the
Securities and Exchange Commission ("SEC") on March 29, 1995 (Accession
number 0000812195-95-000013).
(2) Incorporated by reference from the Registrant's Post-Effective Amendment
No. 13 to the Registration Statement as filed electronically with the
SEC on April 29, 1996 (Accession number 0000812195-96-000009).
(3) Incorporated by reference from the Registrant's Post-Effective Amendment
No. 16 to the Registration Statement as filed electronically with the
SEC on October 30, 1998 (Accession Number 0000812195-98-000010).
(4) Incorporated by reference from the Registrant's Post-Effective Amendment
No. 17 to the Registration Statement as filed electronically with the
SEC on February 18, 1999 (Accession Number 0000812195-99-000003).
(5) Filed herewith.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Except for the Agreement and Declaration of Trust, dated March
7, 1995 (the "Declaration"), establishing the Fund as a business trust under
Delaware law, there is no contract, arrangement or statute under which any
Trustee, officer, underwriter or affiliated person of the Fund is insured or
indemnified. The Declaration provides that no Trustee or officer will be
indemnified against any liability to which the Fund 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 "1933 Act"), may be available to Trustees, officers
and controlling persons of the Fund pursuant to the foregoing provisions, or
otherwise, the Fund has been advised that in the opinion of the SEC such
C-1
<PAGE>
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund of expenses incurred or
paid by a Trustee, officer or controlling person of the Fund 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
Fund 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 1933 Act and will be governed by the final adjudication of such
issue.
Item 26. Business and Other Connections of Investment Adviser
Pioneer Investment Management, Inc. ("Pioneer Investments") is a registered
investment adviser under the Investment Advisers Act of 1940, as amended, and is
a wholly owned subsidiary of The Pioneer Group, Inc. ("Pioneer"). Pioneer
Investments manages investment companies, pension and profit sharing plans,
trusts, estates or charitable organizations and other corporations or
business entities.
To the knowledge of the Fund, none of Pioneer Investments' directors
or executive officers is or has been during their employment with Pioneer
Investments engaged in any other business, profession, vocation or employment
of a substantial nature for the past two fiscal years, except as noted below.
Certain directors and officers, however, may hold or may have held various
positions with, and engage or have engaged in business for, the investment
companies that Pioneer Investments manages, Pioneer and/or other Pioneer
subsidiaries.
OTHER BUSINESS, PROFESSION, VOCATION OR
EMPLOYMENT OF SUBSTANTIAL NATURE WITHIN LAST TWO
NAME OF DIRECTOR/OFFICER FISCAL YEARS
John F. Cogan, Jr. Senior Partner, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
Joseph P. Barri Senior Partner, Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109
Item 27. Principal Underwriters
(a) See "Management of the Fund" in the Statement of Additional
Information.
(b) Directors and officers of Pioneer Funds Distributor, Inc.:
POSITIONS AND OFFICES WITH POSITIONS AND OFFICES WITH
NAME UNDERWRITER FUND
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
David D. Tripple Director and President Executive Vice President and
Trustee
Stephen W. Long Director and Executive
Vice President None
Steven M. Graziano Executive Vice President None
William A. Misata Senior Vice President None
Constance D. Spiros Senior Vice President None
Marcy L. Supovitz Senior Vice President None
Mark R. Kiniry Vice President, Regional
Director, Sales None
Barry G. Knight Vice President None
C-2
<PAGE>
William H. Spencer Vice President, Regional
Director, Sales None
Elizabeth A. Watson Vice President, Compliance None
Steven R. Berke Assistant Vice President,
Blue Sky None
John A. Boynton Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 28. Location of Accounts and Records
The accounts and records are maintained at the Fund's office at
60 State Street, Boston, Massachusetts 02109; contact the Treasurer.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund certifies that it meets all of the
requirements for effectiveness of this registration statement under Rule 485(b)
under the Securities Act of 1933 and has duly caused this registration statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Boston and The Commonwealth of Massachusetts on the 29th day of April, 1999.
PIONEER MONEY MARKET TRUST
By: /s/David D. Tripple
David D. Tripple
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title
John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
/s/ John A. Boynton Chief Financial Officer )
John A. Boynton and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl* )
Richard H. Egdahl )
)
)
Margaret BW Graham* )
Margaret B. W. Graham )
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/David D. Tripple* )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ David D. Tripple Dated: April 29, 1999)
David D. Tripple
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
h 9. Form of Investment Company Service Agreement
i 10. Opinion and Consent of Counsel
j 11. Consent of Arthur Andersen LLP
n 17. Financial Data Schedules (filed as Exhibit 27)
INVESTMENT COMPANY SERVICE AGREEMENT
__________ __, 1999
__________________, a ____________ business trust with its principal
place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer"),
and Pioneering Services Corporation, a Massachusetts corporation with its
principal place of business at 60 State Street, Boston, Massachusetts 02109
("PSC"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest of Customer,
which may be established, from time to time (the "Account"), with the services
described in EXHIBITS A, B, C and D (collectively, the "Exhibits") that are
attached hereto and incorporated herein by reference. It is understood that PSC
may subcontract any of such services to one or more firms designated by PSC,
provided that PSC (i) shall be solely responsible for all compensation payable
to any such firm and (ii) shall be liable to Customer for the acts or omissions
of any such firm to the same extent as PSC would be liable to Customer with
respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY OF DOCUMENTATION, MATERIALS AND DATA. Customer shall, from
time to time, while this Agreement is in effect deliver all such documentation,
materials and data as may be necessary or desirable to enable PSC to perform its
services hereunder.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such times
as are prescribed for each service in the Exhibits attached hereto. Customer
agrees to examine or to ask any other authorized recipient to examine each such
report or copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC pursuant to this Agreement which are no longer
needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of creation, during the first two of
which the same shall be in readily accessible form. At the end of six years,
such records and documents will be turned over to Customer by PSC unless
Customer authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems
consistent with industry standards in order to safeguard Customer's checks,
records and other data from loss or damage attributable to fire or theft. PSC
shall maintain insurance adequate to protect against the costs of reconstructing
checks, records and other data in the event of such loss and shall notify
Customer in the event of a material adverse change in such insurance coverage.
In the
-1-
<PAGE>
event of damage or loss occurring to Customer's records or data such that
PSC is unable to meet the terms of this Agreement, PSC shall transfer all
records and data to a transfer agent of Customer's choosing upon Customer's
written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be
liable or responsible for delays or errors occurring by reason of circumstances
beyond its control including acts of civil, military or banking authority,
national emergencies, labor difficulties, fire, flood or other catastrophes,
acts of God, insurrection, war, riots, failure of transportation, communication
or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and Statement of Additional Information, or are
required by a valid subpoena or warrant issued by a court of competent
jurisdiction or by a state or federal agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agents, including inspecting PSC's
operation facilities. PSC shall not be liable for injury to or responsible in
any way for the safety of any individual visiting PSC's facilities under the
authority of this section. Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing Customer while on PSC's premises.
Confidential information shall include (1) any information of whatever nature
regarding PSC's operations, security procedures, and data processing
capabilities, (2) financial information regarding PSC, its affiliates, or
subsidiaries, and (3) any information of whatever kind or description regarding
any customer of PSC, its affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's action or non-action
upon information, instructions or requests given or made to PSC by Customer with
respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify
or hold PSC harmless, Customer shall be advised of all pertinent facts arising
from the situation in question. Additionally, PSC will use reasonable care to
identify and notify Customer promptly concerning
-2-
<PAGE>
any situation, which presents, actually or potentially, a claim for
indemnification against Customer. Customer shall have the option to defend PSC
against any claim for which PSC is entitled to indemnification from Customer
under the terms hereof, and in the event Customer so elects, it will notify PSC
and, thereupon, Customer shall take over complete defense of the claim and PSC
shall sustain no further legal or other expenses in such a situation for which
indemnification shall be sought or entitled. PSC may in no event confess any
claim or make any compromise in any case in which Customer will be asked to
indemnify PSC except with Customer's prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay to PSC an annual fee of
$______* per open account and an annual fee of $7.30 per closed account, such
fees to be payable in equal monthly installments. Customer shall reimburse PSC
monthly for out-of-pocket expenses, including but not limited to, forms,
postage, mail service, telephone charges, including internet access charges,
archives, microfiche and other records storage services, mailing and tabulating
proxies, sub account recordkeeper fees relating to omnibus accounts, and
miscellaneous. In addition, the Customer will reimburse any other expenses
incurred by PSC at the request of or with the consent of the Customer.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice to the other.
After the date of termination, for so long as PSC in fact continues to
perform any one or more of the services contemplated by this Agreement or the
Exhibits, the provisions of this Agreement, including without limitation the
provisions of Section 8 dealing with indemnification, shall where applicable
continue in full force and effect.
12. REPRESENTATIONS AND WARRANTIES; REQUIRED DOCUMENTS.
12.1 REPRESENTATIONS AND WARRANTIES OF PSC.
PSC represents and warrants to the Customer that:
(a) It is a corporation duly organized and existing and
in good standing under the laws of The Commonwealth
of Massachusetts.
(b) It is duly qualified to carry on its business in The
Commonwealth of Massachusetts and the State of
Nebraska.
(c) All requisite corporate proceedings have been taken
to authorize it to enter into this Agreement.
(d) It is empowered under all applicable laws and by its
Articles of Organization and By Laws to enter into
and perform this Agreement.
12.2 REPRESENTATIONS AND WARRANTIES OF CUSTOMER.
Customer represents and warrants to PSC that:
- --------
* Insert $25.25 for equity funds and $33.00 for fixed income funds and money
market fund.
-3-
<PAGE>
(a) It is a business trust duly organized and existing and
in good standing under the laws of its governing
jurisdiction.
(b) All requisite corporate proceedings have been taken to
authorize it to enter into this Agreement.
(c) It is empowered under all applicable laws and by its
Agreement and Declaration of Trust and By Laws to enter
into and perform this Agreement.
(d) It is an open-end management investment company
registered under the Investment Company Act of 1940, as
amended.
(e) A registration statement under the Securities Act of
1933, as amended (the "Registration Statement"), has
been filed with the Securities and Exchange Commission
and is currently effective and will remain effective,
and appropriate state securities law filings have been
made and will continue to be made, with respect to all
shares of beneficial interest of the Customer to be
offered for sale.
12.3 CUSTOMER DOCUMENT DELIVERY.
Customer shall promptly furnish to PSC the following:
(a) A copy of Customer's Agreement and Declaration of Trust
and By Laws and all amendments related thereto.
(b) A certified copy of the resolution of the Customer's
Board of Trustees authorizing the appointment of PSC
and the execution and delivery of this Agreement.
(c) A copy of the Customer's Registration Statement and all
amendments thereto.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and agree
that all liabilities arising, directly or indirectly, under this Agreement, of
any and every nature whatsoever, including without limitation, liabilities
arising in connection with any agreement of Customer or its Trustees set forth
herein to indemnify any party to this Agreement or any other person, shall be
satisfied out of the assets of the Account first and then of Customer and that
no Trustee, officer or holder of shares of beneficial interest of Customer shall
be personally liable for any of the foregoing liabilities. Customer's Agreement
and Declaration of Trust describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest of Customer.
14. MISCELLANEOUS. In connection with the operation of this Agreement,
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
-4-
<PAGE>
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether written or oral.
If any provision or provisions of this Agreement shall be held invalid,
unlawful or unenforceable, the validity, legality, and enforceability of the
remaining provisions of the Agreement shall not in any way be affected or
impaired.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PSC have caused this Agreement to
be executed in their respective names by their respective officers thereunto
duly authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
_____________________________ By: _____________________________
Robert P. Nault, Assistant Clerk Roger B. Rainville
President
PIONEER ________________
_____________________________ By: _____________________________
Robert P. Nault, Assistant Secretary John F. Cogan, Jr.
President
-5-
<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
SHAREHOLDER ACCOUNT SERVICE:
As Servicing Agent for fund accounts and in accordance with the provisions of
the standard fund application and Customer's Prospectus and Statement of
Additional Information, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's shares pay
to the Customer's custodian the net asset value per share and pay to
the underwriter and to the dealer their commission, if any, on a
bimonthly basis.
4. Redeem shares by systematic withdrawal orders. (SEE EXHIBIT B)
5. Issue share certificates, upon instruction, resulting from withdrawals
from share accounts (It is the policy of PSC to issue share
certificates only upon request of the shareholder). Maintain records
showing name, address, certificate numbers and number of shares.
6. Deposit certificates to shareholder accounts when furnished with such
documents, as PSC deems necessary, to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon direction of
shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or his
legal representative to substantiate the transfer of ownership of
shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer in
accordance with properly executed transfer instructions furnished to
PSC.
11. Upon receiving appropriate detailed instructions and written materials
prepared by Customer and, where applicable, proxy proofs checked by
Customer, mail shareholder reports, proxies and related materials of
suitable design for automatic enclosing, receive and tabulate executed
proxies, and furnish an annual meeting list of shareholders when
required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely fashion
(confirmations of Automatic Investment Plan transactions will be mailed
quarterly).
-6-
<PAGE>
16. Provide Customer with such information regarding correspondence as well
as enable Customer to comply with related Form N-SAR (semi-annual
report) requirements.
17. Maintain continuous proof of the outstanding shares of Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property reports for
those accounts that have been indicated by the Post Office to be not at
the address of record with no forwarding address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to
Customer's Board of Trustees outlining the level of service provided.
22. Provide sale/statistical reporting for purposes of providing Customer's
management with information to maximizing the return to shareholders.
-7-
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
REDEMPTION SERVICE:
In accordance with the provisions of the Customer's Prospectus and Statement of
Additional Information, as servicing agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of Customer (i.e., copies of trade
confirmations and other documents deemed necessary or desirable by PSC
on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation; or
b. Written or telephone authorization (where no share certificates are
issued).
3. Verify there are sufficient available shares in an account to cover
redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's treasury
share account or, if applicable, cancel such shares for retirement.
5. Pay the applicable redemption or repurchase price to the shareholder in
accordance with Customer's Prospectus, Statement of Additional
Information and Agreement and Declaration of Trust on or before the
seventh calendar day succeeding any receipt of certificates or requests
for redemption or repurchase in "good order" as defined in the
Prospectus and Statement of Additional Information.
6. Notify Customer and the underwriter on behalf of Customer of the total
number of shares presented and covered by such requests within a
reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or request for
redemption or repurchase is not in "good order" together with notice of
the documents required to comply with the good order standards. Upon
receipt of the necessary documents PSC shall effect such redemption at
the net asset value applicable at the date and time of receipt of such
documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and distributions.
10. Report to Customer any late redemptions which must be included in
Customer's Form N-SAR (semi-annual report) filing.
-8-
<PAGE>
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
EXCHANGE SERVICE:
1. Receive and process exchanges in accordance with a duly executed
exchange authorization. PSC will redeem existing shares and use the
proceeds to purchase new shares. Shares of Customer purchased directly
or acquired through reinvestment of dividends on such shares may be
exchanged for shares of other Pioneer funds (which funds have sales
charges) only by payment of the applicable sales charge, if any, as
described in Customer's Prospectus and Statement of Additional
Information. Shares of Customer acquired by exchange and through
reinvestment of dividends on such shares may be re-exchanged to another
Pioneer fund at their respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered for
exchange. Mail new shares certificates, if requested, or an account
statement confirming the exchange by first class mail to the address of
record.
4. Maintain a record of unprocessed exchanges and produce a periodic
report.
-9-
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
INCOME ACCRUAL AND DISBURSING SERVICE:
1. Distribute income dividends and/or capital gain distributions, either
through reinvestment or in cash, in accordance with shareholder
instructions.
2. On the mailing date, Customer shall make available to PSC collected funds
to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns of
distributions and, in the case of Federal returns, mail information
copies to shareholders and report and pay Federal income taxes withheld
from distributions made to non-resident aliens.
-10-
K
HALE AND DORR LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 o fax 617-526-5000
April 28, 1999
Pioneer Money Market Trust
60 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
Pioneer Money Market Trust (the "Trust") was established as a Delaware
business trust under an Agreement and Declaration of Trust dated, February 7,
1995, as amended from time to time (as so amended, the "Declaration of Trust").
The beneficial interests thereunder are represented by transferable shares of
beneficial interest, no par value.
The Trustees have the powers set forth in the Declaration of Trust,
subject to the terms, provisions and conditions therein provided. Pursuant to
Article V, Section 2 of the Declaration of Trust, the number of shares of
beneficial interest authorized to be issued under the Declaration of Trust is
unlimited and the Trustees are authorized to divide the shares into one or more
series of shares and one or more classes thereof as they deem necessary or
desirable. Pursuant to Article V, Section 3 of the Declaration of Trust, the
Trustees are empowered in their discretion to issue shares of any series for
such amount and type of consideration, including cash or securities, and on such
terms as the Trustees may authorize, all without action or approval of the
shareholders. As of the date of this opinion, the Trustees have divided the
shares of the Trust into four classes, designated as Class A, Class B, Class C
and Class Y.
We have examined the Declaration of Trust and By-Laws, each as amended
from time to time, of the Trust, and such other documents as we have deemed
necessary or appropriate for the purposes of this opinion, including, but not
limited to, originals, or copies certified or otherwise identified to our
satisfaction, of such documents, Trust records and other instruments. In our
examination of the above documents, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified of photostatic copies.
Washington, DC Boston, MA London, UK*
- --------------------------------------------------------------------------------
HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INTERNATIONAL JOINT VENTURE LAW FIRM)
<PAGE>
Any reference to "our knowledge", to any matter "known to us", "coming
to our attention" or "of which we are aware" or any variation of any of the
foregoing shall mean the conscious awareness of the attorneys in this firm who
have rendered substantive attention to the preparation of the Trust's
Registration Statement on Form N-1A or any amendments thereto, of the existence
or absence of any facts which would contradict the opinions set forth below. We
have not undertaken any independent investigation to determine the existence or
absence of such facts, and no inference as to our knowledge of the existence or
absence of such facts should be drawn from the fact of our representation of the
Trust. Without limiting the foregoing, we have not examined any dockets or
records of any court, administrative tribunal or other similar entity, or any
electronic or computer databases, in connection with our opinions expressed
below.
Our opinions below are qualified to the extent that they may be subject
to or affected by (i) applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting the
rights and remedies of creditors generally, (ii) statutory or decisional law
concerning recourse by creditors to security in the absence of notice or hearing
and (iii) duties and standards imposed on creditors and parties to contracts,
including, without limitation, requirements of good faith, reasonableness and
fair dealing. Further, we do not express any opinion as to (i) the availability
of the remedy of specific performance or any other equitable remedy upon breach
of any provision of any agreement whether applied by a court of law or equity,
(ii) the successful assertion of any equitable defense, or (iii) the right of
any party to enforce the indemnification or contribution provisions of any
agreement.
In rendering the opinion below, insofar as it relates to the good
standing and valid existence of the Trust, we have relied solely on certificates
of the Secretary of State of the State of Delaware, dated as of a recent date,
and such opinion is limited accordingly and is rendered as of the respective
dates of such certificates.
This opinion is limited to the Delaware Business Trust Act, and we
express no opinion with respect to the laws of any other jurisdiction or to any
other laws of the State of Delaware. Further, we express no opinion as to
compliance with any state or federal securities laws, including the securities
laws of the State of Delaware.
Our opinion below, as it relates to the non-assessability of the shares
of the Trust, is qualified to the extent that any shareholder is, was or may
become a named Trustee of the Trust. It is also qualified to the extent that,
pursuant to Section 2 of Article VIII of the Declaration of Trust, the Trustees
have the power to cause shareholders, or shareholders of a particular series, to
pay certain custodian, transfer, servicing or similar agent charges by setting
off the same against declared but unpaid dividends or by reducing share
ownership (or by both means).
<PAGE>
Subject to the foregoing, we are of the opinion that the Trust is a
duly organized and validly existing business trust in good standing under the
laws of the State of Delaware and that the shares of beneficial interest of the
Trust, when issued in accordance with the terms, conditions, requirements and
procedures set forth in the Declaration of Trust, the Trust's Registration
Statement on Form N-1A and the Underwriting Agreement between the Trust and
Pioneer Funds Distributor, Inc., will constitute legally and validly issued,
fully paid and non-assessable shares of beneficial interest in the Trust,
subject to compliance with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and the applicable state laws
regulating the sale of securities.
We are opining only as to the specific legal issues expressly set forth
herein, and no opinion should be inferred as to any other matters. We are
opining on the date hereof as to the law in effect on the date hereof, and we
disclaim any obligation to advise you of any change in any of these sources of
law or subsequent legal or factual developments that might affect any matters or
opinions set forth herein. Further, we are expressing no opinion as to shares
previously issued by the Trust and currently outstanding.
This opinion is furnished to you solely for your use and may not be
quoted to or relied upon by any other person or entity or used for any other
purpose, without our prior written consent.
We consent to your filing this opinion with the Securities and Exchange
Commission (the "Commission") as an exhibit to any amendments to the Trust's
registration statement with the Commission. Except as provided in this
paragraph, this opinion may not be relied upon by, or filed with, any other
parties or for any other purpose.
Very truly yours,
/s/Hale and Dorr LLP
Hale and Dorr LLP
/LegalOZ/Rogato_Lynn/Legal/719.76.106/opn4_99.wpf
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our
report on Pioneer Cash Reserves Fund dated February 12, 1999 (and to all
references to our firm) included in or made a part of Post-Effective Amendment
No. 18 and Amendment No. 19 to Registration Statement File Nos. 33-13179 and
811-5099, respectively.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
April 28, 1999
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