(Pioneer Logo)
Pioneer America
Income Trust
Class A, Class B and Class C Shares
Prospectus
April 28, 1995
(revised January 26, 1996)
The investment objective of Pioneer America Income Trust (the "Trust") is to
provide as high a level of current income as is consistent with preservation of
capital and prudent investment risk. The Trust seeks to achieve this objective
by investing its assets exclusively in securities backed by the full faith and
credit of the United States ("U.S.") and in "when issued" commitments and
repurchase agreements with respect to such securities.
Trust returns and share prices fluctuate and the value of your account upon
redemption may be more or less than your purchase price. Shares in the Trust are
not deposits or obligations of, or guaranteed or endorsed by, any bank or other
insured depository institution, and the shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency.
This Prospectus (Part A of the Registration Statement) provides information
about the Trust that you should know before investing in the Trust. Please read
and keep it for your future reference. More information about the Trust is
included in Part B, the Statement of Additional Information, also dated April
28, 1995 (revised January 26, 1996), which is incorporated into this Prospectus
by reference. A copy of the Statement of Additional Information may be obtained
free of charge by calling Shareholder Services at 1-800-225-6292 or by written
request to the Trust at 60 State Street, Boston, Massachusetts 02109. Other
information about the Trust has been filed with the Securities and Exchange
Commission (the "SEC") and is available upon request and without charge.
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TABLE OF CONTENTS PAGE
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I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
U.S. Government Securities 4
GNMA Certificates 4
"When-Issued" GNMA Certificates 5
IV. MANAGEMENT OF THE TRUST 5
V. TRUST SHARE ALTERNATIVES 6
VI. SHARE PRICE 7
VII. HOW TO BUY TRUST SHARES 7
VIII. HOW TO SELL TRUST SHARES 10
IX. HOW TO EXCHANGE TRUST SHARES 11
X. DISTRIBUTION PLANS 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 13
XII. SHAREHOLDER SERVICES 13
Account and Confirmation Statements 13
Additional Investments 13
Automatic Investment Plans 13
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 14
Direct Deposit 14
Voluntary Tax Withholding 14
Telephone Transactions and Related Liabilities 14
FactFone(SM) 14
Retirement Plans 14
Telecommunications Device for the Deaf (TDD) 15
Systematic Withdrawal Plans 15
Reinstatement Privilege (Class A Shares Only) 15
XIII. THE TRUST 15
XIV. INVESTMENT RESULTS 15
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Trust. The table reflects actual expenses for the fiscal year ended
December 31, 1994. For Class B and Class C shares, operating expenses are
based on estimated expenses that would have been incurred if they had been
outstanding for the entire fiscal year ended December 31, 1994.
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Shareholder Transaction Expenses: Class A Class B Class C+
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<S> <C> <C> <C>
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) 4.50% None None
Maximum Sales Charge on Reinvestment
of Dividends None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption price, as applicable) None(1) 4.00% 1.00%
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Operating Expenses
(as a percentage of average net assets):
Management Fee (after Fee Reduction)(3) 0.38% 0.38% 0.38%
12b-1 Fees 0.25% 1.00% 1.00%
Other Expenses (including transfer agent
fee, custodian fees and accounting and
printing expenses) 0.37% 0.40% 0.40%
--------- --------- --------
Total Operating Expenses (after Fee
Reduction):(3) 1.00% 1.78% 1.78%
========= ========= ========
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+ Class C shares will first be offered on January 31, 1996.
(1) Purchases of $1,000,000 or more and purchases by participants of certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge.
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international bank wire transfers of redemption proceeds.
(3) Effective January 1, 1994, Pioneering Management Corporation (the
"Manager"), agreed not to impose a portion of its management fee and to
make other arrangements, if necessary, to limit the Class A shares of the
Trust operating expenses of the Trust to 1.00% of its average daily net
assets. The portion of fund-wide expenses attributable to Class B and
Class C shares will be reduced only to the extent such expenses are
reduced for the Class A shares of the Trust. This agreement is voluntary
and temporary and may be revised or terminated at any time.
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Class A Class B Class C
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<S> <C> <C> <C>
Expenses Absent Fee Reduction
Management Fee 0.50% 0.50% 0.50%
Total Operating Expenses 1.12% 1.90% 1.90%
</TABLE>
Example:
You would pay the following fees and expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each of the time
periods:
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1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
Class A Shares $55 $75 $ 98 $162
Class B Shares
--Assuming complete
redemption at end of
period $58 $86 $116 $189*
--Assuming no
redemption $18 $56 $ 96 $189*
Class C Shares**
--Assuming complete
redemption at end of
period $28 $56 $ 96 $219
--Assuming no
redemption $18 $56 $ 96 $219
</TABLE>
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
**Class C shares redeemed during the first year after purchase are subject to
a 1% Contingent Deferred Sales Charge ("CDSC").
The example above assumes reinvestment of all dividends and distributions
and that the percentage amounts listed under "Annual Operating Expenses"
remain the same each year.
The example is designed for informational purposes only, and should not be
considered a representation of past or future expenses or return. Actual Trust
expenses and return vary from year to year and may be higher or lower than those
shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Trust, including information regarding the basis upon which fees
and expenses are reduced or reallocated, see "Management of the Trust,"
"Distribution Plans" and "How To Buy Trust Shares" in this Prospectus and
"Management of the Trust" and "Underwriting Agreement and Distribution Plans" in
the Statement of Additional Information. The Trust's payment of Rule 12b-1 fees
may result in long-term shareholders indirectly paying more than the economic
equivalent of the maximum initial sales charge permitted under the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
The maximum initial sales charge is reduced on purchases of specified amounts
and the value of shares owned in other Pioneer mutual funds is taken into
account in determining the applicable initial sales charge. See "How to Buy
Trust Shares." No sales charge is applied to exchanges of shares of the Trust
for shares of other publicly available Pioneer mutual funds. See "How to
Exchange Trust Shares."
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II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements of the
Trust which have been audited by Arthur Andersen LLP, independent public
accountants. Arthur Andersen LLP's report on the Trust's financial statements as
of December 31, 1994 appears in the Trust's Annual Report and is incorporated by
reference into the Statement of Additional Information. The information listed
below should be read in conjunction with the financial statements contained in
the Trust's Annual Report. Class C shares are new classes of shares; no
financial highlights exist for Class C shares. The Annual Report includes more
information about the Trust's performance and is available free of charge by
calling Shareholder Services at 1-800-225-6292.
Pioneer America Income Trust
For Each Class A Share Outstanding throughout Each Period:
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For the Year Ended December 31,
--------------------------------------------------------
May 31
to
December 31,
1994+ 1993 1992 1991 1990 1989 1988
--------- --------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.48 $ 10.27 $ 10.35 $ 10.03 $ 10.04 $ 9.86 $10.00
------- ------- ------ ------ ------ ------ ---------
Income from investment operations:
Net investment income $ 0.66 $ 0.68 $ 0.73 $ 0.84 $ 0.87 $ 0.90 $ 0.51
Net realized and unrealized gain (loss)
on investments (1.07) 0.24 (0.07) 0.33 (0.02) 0.18 (0.14)
------- ------- ------ ------ ------ ------ ---------
Total income from investment
operations $ (0.41) $ 0.92 $ 0.66 $ 1.17 $ 0.85 $ 1.08 $ 0.37
Distribution to shareholders from:
Net investment income (0.66) (0.67) (0.73) (0.85) (0.86) (0.90) (0.51)
Net realized capital gains 0.00 (0.04) (0.01) -- -- -- --
------- ------- ------ ------ ------ ------ ---------
Net increase (decrease) in net asset
value $ (1.07) $ 0.21 $ (0.08) $ 0.32 $ (0.01) $ 0.18 $(0.14)
Net asset value, end of period $ 9.41 $ 10.48 $ 10.27 $ 10.35 $ 10.03 $ 10.04 $ 9.86
======= ======= ====== ====== ====== ====== =========
Total return* (3.97)% 9.07% 6.67% 12.14% 8.99% 11.49% 3.76%
Ratio of net operating expenses to
average net assets 1.00% 1.00% 1.03% 0.75% 0.75% 0.75% 0.67%**
Ratio of net investment income to average
net assets 6.84% 6.37% 7.01% 8.07% 8.75% 9.10% 8.86%**
Portfolio turnover rate 60.50% 41.50% 54.50% 36.54% 69.12% 66.06% 61.20%**
Net assets, end of period (in thousands) $161,858 $105,892 $85,425 $43,711 $17,160 $10,533 $4,634
Ratios assuming no reduction of fees or
expenses by the Manager:
Net operating expenses 1.12% 1.13% 1.25% 1.75% 1.81% 2.36% 3.01%**
Net investment income 6.72% 6.24% 6.79% 7.07% 7.69% 7.49% 6.52%**
</TABLE>
For Each Class B Share Outstanding throughout Each Period:
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April 29, 1994
to December 31, 1994+
---------------------
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Net asset value, beginning of period $ 9.85
----------
Income from investment operations:
Net investment income $ 0.40
Net realized and unrealized loss on investments (0.45)
----------
Total loss from investment operations $(0.05)
Distribution to shareholders:
From net investment income (0.40)
Net decrease in net asset value $(0.45)
----------
Net asset value, end of period $ 9.40
==========
Total return* (0.57)%
Ratio of net operating expenses to average net assets 1.78%**
Ratio of net investment income to average net assets 6.35%**
Portfolio turnover rate 60.50%**
Net assets, end of period (in thousands) $2,170
Ratios assuming no reduction of fees or expenses by the
Manager:
Net operating expenses 1.90%**
Net investment income 6.23%**
</TABLE>
+ Based upon average shares outstanding and average net assets for the
period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all dividends and distributions, the complete
redemption of the investment at net asset value at the end of each
period, and no sales charges. Total return would be reduced if sales
charges were taken into account.
** Annualized.
*** Class B shares were first offered April 29, 1994.
3
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III. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Trust is to provide as high a level of
current income as is consistent with preservation of capital and prudent
investment risk. The Trust seeks to achieve this objective by investing its
assets exclusively in securities backed by the full faith and credit of the
United States and in "when-issued" commitments and repurchase agreements with
respect to such securities. The Trust may only invest in securities and
engage in transactions in securities that are legal under applicable Federal
law, as of November 17, 1994, for federal credit unions.
U.S. Government Securities include (1) U.S. Treasury obligations, which
differ only in their interest rates, maturities and times of issuance: U.S.
Treasury bills (maturities of one year or less), U.S. Treasury notes (maturities
of one to ten years) and U.S. Treasury bonds (generally maturities of greater
than ten years) and (2) obligations of varying maturities issued or guaranteed
by certain agencies and instrumentalities of the U.S. Government, such as
mortgage participation certificates ("GNMA Certificates") guaranteed by the
Government National Mortgage Association ("GNMA") and Federal Housing
Administration ("FHA") debentures, for which the U.S. Treasury unconditionally
guarantees payment of principal and interest. Although the payment when due of
interest and principal on U.S. Government Securities is backed by the full faith
and credit of the United States, this guarantee does not extend to the market
value of these securities and, accordingly, the net asset value of the Trust's
shares will fluctuate.
The Trust's portfolio will be managed by purchasing and selling
securities, as well as holding selected securities to maturity. The Trust's
investment manager employs "cycle analysis" in the management of the Trust's
portfolio. Cycle analysis is the process of analyzing the business and credit
cycles of the economy to identify and monitor trends in interest rates and to
identify debt securities with characteristics most likely to meet the Trust's
objectives at given stages in all cycles. Relying on analysis of economic
indicators, as well as price, yield and maturity data of individual
securities, this process requires ongoing adjustments to the portfolio based
on the relative values or maturities of individual securities.
Any such change in the portfolio may result in increases or decreases in
the Trust's current income available for distribution to shareholders and in
its holding of debt securities which sell at moderate to substantial premiums
or discounts from face value. If the Trust's expectations of changes in
interest rates or its evaluation of the normal yield relationships between
two securities prove to be incorrect, the Trust's income, net asset value and
potential gain may be reduced or its potential loss may be increased.
The Trust is free to take advantage of the entire range of maturities
offered by U.S. Government Securities, and the average maturity of the
Trust's portfolio may vary significantly. Under normal circumstances,
however, the dollar weighted average portfolio maturity of the Trust is not
expected to exceed twenty years. Capital gains will not be a major
consideration in the selection of investments. The Trust will not normally
engage in short-term trading but it may do so when it believes a particular
transaction will contribute to the achievement of its investment objective.
The Trust may invest all or any portion of its assets in GNMA Certificates
but it is not obligated to do so; the portion of its assets so invested will
vary with management's view of the relative yields and values of GNMA
Certificates compared to U.S. Treasury obligations.
GNMA Certificates are mortgage-backed securities which evidence part
ownership of a pool of mortgage loans. The mortgages loans are made by
lenders such as mortgage bankers, commercial banks and savings and loan
associations, and are insured by the Federal Housing Administration or the
Farmers' Home Administration ("FHMA"), or guaranteed by the Veterans
Administration ("VA"). The mortgages are grouped in pools containing
mortgages which are of similar types and maturities and bear similar interest
rates. Upon approval by GNMA of a pool, GNMA guarantees the timely payment of
principal and interest on securities backed by the pool. The GNMA guarantee
is backed by the full faith and credit of the United States Government. GNMA
is also empowered to borrow without limitation from the U.S. Treasury if
necessary to make any payments required under its guarantee.
The GNMA Certificates which the Trust purchases are the "modified
pass-through" type. Modified pass-through certificates entitle the holder to
receive all principal and interest owned on the mortgages in the pool, net of
fees paid to the issuer and GNMA, regardless of whether or not the mortgagor
actually makes the payment.
The average life of a GNMA Certificate is likely to be substantially less
than the original maturity of the underlying mortgage pools because of
principal prepayments and foreclosures. Foreclosures create no risk to
principal invested because of the GNMA guarantee. As prepayment rates of
individual mortgage pools will vary widely, it is not possible to predict
accurately the average life of a particular issue of GNMA Certificates.
However, it is customary to treat GNMA Certificates as 30-year
mortgage-backed securities which prepay fully in the twelfth year.
There are several factors that may cause the yield earned by the Trust to
be substantially different than the coupon rate of interest on the GNMA
Certificates and other securities held in the Trust's portfolio. First, as
with any fund consisting of fixed-income securities, repayments and
prepayments of principal require reinvestment which may be at a lower or
higher interest rate. This reinvestment risk is increased in the case of GNMA
Certificates because principal is repaid monthly rather than in a lump sum at
maturity. Second, prepayments of mortgage-backed GNMA Certificates will tend
to increase when general interest rates decline, requiring reinvestment at
the lower market rate. Higher interest rate mortgages will be more prone to
prepayment. Third, the Trust may purchase GNMA Certificates at a premium or
discount, rather than at par, causing actual yield to be lower or higher than
the interest rate on the GNMA Certificates. After issuance, GNMA Certificates
may also trade in the market at a premium or discount. Upon prepayment, the
Trust may realize a loss in the amount of any unamortized premiums paid upon
purchase of GNMA Certificates since prepayment may be at par.
4
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The values of the U.S. Government Securities, including GNMA Certificates,
in which the Trust will invest will fluctuate with changes in interest rates.
Changes in the value of such securities will not affect interest income from
those obligations but will be reflected in the Trust's net asset value. Thus,
a decrease in interest rates will generally result in an increase in the
value of the Trust's shares and conversely during periods of rising interest
rates the value of the Trust's shares will generally decline. The magnitude
of these fluctuations will generally be greater when the Trust's average
maturity is longer.
GNMA Certificates may offer yields higher than those available from other
types of U.S. Government Securities, but because of their prepayment aspect may
be less effective than other types of securities as a means of "locking in"
attractive long-term interest rates. This is caused by the need to reinvest
prepayments of principal generally and the possibility of significant
unscheduled prepayments resulting from declines in mortgage interest rates.
These prepayments would have to be reinvested at the lower rates. As a result,
the Trust's GNMA Certificates may have less potential for capital appreciation
during periods of declining interest rates than other U.S. Government Securities
of comparable maturities, although such obligations may have a comparable risk
of decline in market value during periods of rising interest rates.
GNMA Certificates are highly liquid instruments because of the size of the
market and the active participation in the secondary market by securities
dealers and many types of investors. Prices of GNMA Certificates are readily
available from securities dealers and depend on, among other things, the
level of market rates, the GNMA Certificate's coupon rate and prepayment
experience of the pool of mortgages backing each GNMA Certificate.
For further information on GNMA Certificates, see "Investment Policies and
Restrictions" in the Statement of Additional Information.
"When-Issued" GNMA Certificates. The Trust may purchase and sell GNMA
Certificates on a when-issued or a delayed delivery basis. When-issued or
delayed delivery transactions arise when securities are purchased or sold by
the Trust with payment and delivery taking place in the future in order to
secure what is considered to be an advantageous price and yield which is
fixed at the time of entering into the transaction. However, the yield on a
comparable GNMA Certificate when the transaction is consummated may vary from
the yield on the GNMA Certificate at the time that the when- issued or
delayed delivery transaction was made. Also, the market value of the
when-issued or delayed delivery GNMA Certificate may increase or decrease as
a result of changes in general interest rates. When-issued and delayed
delivery transactions involve risk of loss if the value of the GNMA
Certificate declines before the settlement date. This risk is in addition to
the risk of decline in the value of the Trust's other assets. When the Trust
engages in when-issued and delayed delivery transactions, the Trust relies on
the seller or buyer, as the case may be, to consummate the transaction.
Failure of the seller or buyer to do so may result in the Trust missing the
opportunity of obtaining a price or yield considered to be advantageous.
However, no payment or delivery is made by the Trust until it receives
payment or delivery from the other party to the transaction. To the extent
the Trust engages in when-issued and delayed delivery transactions, it will
do so for the purpose of acquiring or disposing of GNMA Certificates for the
Trust's portfolio consistent with the Trust's investment objective and
policies and not for the purpose of investment leverage.
The value of such purchase commitments at any time will not exceed the
value of the Trust's assets invested in U.S. Treasury Bills and other
securities having remaining maturities of less than six months. The Trust's
investments in when-issued or delayed delivery commitments and in repurchase
agreements (limited to 7 days) may represent up to 25% of its assets.
The Trust's investment objective and its policy of investing exclusively
in U.S. Government Securities and when- issued commitments and repurchase
agreements with respect to such securities are fundamental policies which may
not be changed without shareholder approval. Except for these policies and
certain investment restrictions designated in the Statement of Additional
Information as fundamental, the investment policies described in this
Prospectus and in the Statement of Additional Information are not fundamental
policies. The Trustees may change any non- fundamental investment policies
without shareholder approval.
IV. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees has overall responsibility for management
and supervision of the Trust. There are currently eight Trustees, six of whom
are not "interested persons" of the Trust as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). The Board meets at least
quarterly. By virtue of the functions performed by Pioneering Management
Corporation as investment adviser, the Trust requires no employees other than
its executive officers, all of whom receive their compensation from the
Manager or other sources. The Statement of Additional Information contains
the names and general background of each Trustee and executive officer of the
Trust.
The Trust is managed under a contract with the Manager which serves as
investment adviser to the Trust and is responsible for the overall management
of the Trust's business affairs, subject only to the authority of the Board
of Trustees. The Manager is a wholly-owned subsidiary of The Pioneer Group,
Inc. ("PGI"), a Delaware corporation. Pioneer Funds Distributor, Inc.
("PFD"), an indirect wholly-owned subsidiary of PGI, is the principal
underwriter of shares of the Trust. John F. Cogan, Jr., Chairman and
President of the Trust, Chairman and a director of the Manager, Chairman of
PFD, and President and a Director of PGI, owned approximately 15% of the
outstanding capital stock of PGI as of the date of this Prospectus.
Each domestic fixed income portfolio managed by the Manager, including the
Trust, is overseen by the Domestic Fixed
5
<PAGE>
Income Portfolio Management Committee, which consists of the Manager's most
senior domestic fixed income professionals. The committee is chaired by David
D. Tripple, the Manager's President and Chief Investment Officer and
Executive Vice President of each of the Pioneer funds. Mr. Tripple joined the
Manager in 1974 and has had general responsibility for the Manager's
investment operations and specific portfolio assignments for over five years.
Fixed income investments made by the Manager, including those made on behalf
of the Trust, are under the general supervision of Sherman B. Russ, Vice
President of the Manager and the Trust. Mr. Russ joined the Manager in 1983.
Day-to-day management of the Trust has been the responsibility of Mr. Russ
since inception. In certain instances where Mr. Russ is unavailable, primary
responsibility for the day-to-day management of the Trust may be assumed
temporarily by Richard A. Schlanger who joined the Manager in 1988 and is a
Vice President.
In addition to the Trust, the Manager also manages and serves as the
investment adviser for other mutual funds and is an investment adviser to
certain other institutional accounts. The Manager's and PFD's executive
offices are located at 60 State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Trust, the Manager assists in the
management of the Trust and is authorized in its discretion to buy and sell
securities for the account of the Trust, subject to the right of the Trust's
Trustees to disapprove any such purchase or sale. The Manager pays all the
ordinary operating expenses, including executive salaries and the rental of
office space related to its services for the Trust, with the exception of the
following which are to be paid by the Trust: (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 the
Manager 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 shares of the Trust; (d) issue and transfer taxes, chargeable to
the Trust in connection with securities transactions to which the Trust 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, individual states or blue sky securities agencies,
territories and foreign countries, including the preparation of Prospectuses
and Statements of Additional Information for filing with the regulatory
agencies; (g) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements
and all reports to shareholders and to governmental agencies; (h) charges and
expenses of legal counsel to the Trust and to Trustees; (i) 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 the Manager, the Trust
(other than as Trustees), PGI or PFD; (k) the cost of preparing and printing
share certificates; and (l) interest on borrowed money, if any. The Trust
also pays all brokers' and underwriting commissions chargeable to the Trust
in connection with its portfolio transactions.
Orders for the Trust's portfolio securities transactions are placed by the
Manager, which strives to obtain the best price and execution for each
transaction. In circumstances where two or more broker-dealers are in a
position to offer comparable prices and execution, consideration may be given
to whether the broker-dealer provides brokerage or research services or sells
shares of the Pioneer mutual funds for which PGI or any affiliate or
subsidiary serves as investment adviser or manager. See the Statement of
Additional Information for a further description of the Manager's brokerage
allocation practices.
As compensation for its management services and certain expenses which the
Manager incurs, the Manager is entitled to a management fee equal to 0.50%
per annum of the Trust's average daily net assets. The fee is normally
computed daily and paid monthly.
During the fiscal year ended December 31, 1994, the Trust incurred net
expenses of $1,414,094, including management fees paid or payable to the
Manager of $536,625 after reduction pursuant to the Manager's voluntary
expense limitation agreement.
The Manager has agreed not to impose a portion of its management fee and
to make other arrangements, if necessary to limit certain expenses of the
Trust to the extent required to reduce Class A expenses to 1.00% of the
average daily net assets attributable to the Class A shares; the portion of
the Trust expenses attributable to the Class B shares will only be reduced to
the extent it is reduced for the Class A shares. This agreement is voluntary
and temporary and may be terminated by the Manager at any time. During the
fiscal year ended December 31, 1994, this agreement resulted in a reduction
of the Trust's management fee of $155,511.
V. TRUST SHARE ALTERNATIVES
The Trust continuously offers three Classes of shares designated as Class
A, Class B and Class C shares, as described more fully in "How to Buy Trust
Shares." If you do not specify in your instructions to the Trust which Class
of shares you wish to purchase, exchange or redeem, the Trust will assume
that your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase. However, shares
redeemed within 12 months of purchase may be subject to a contingent deferred
sales charge ("CDSC"). Class A shares are subject to distribution and service
fees at a combined annual rate of up to 0.25% of the Trust's average daily
net assets attributable to Class A shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold
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without an initial sales charge, but are subject to a CDSC of up to 4% if
redeemed within six years. Class B shares are subject to distribution and
service fees at a combined annual rate of 1.00% of the Trust's average daily
net assets attributable to Class B shares. Your entire investment in Class B
shares is available to work for you from the time you make your investment,
but the higher distribution fee paid by Class B shares will cause your Class
B shares (until conversion) to have a higher expense ratio and to pay lower
dividends, to the extent dividends are paid, than Class A shares. Class B
shares will automatically convert to Class A shares, based on relative net
asset value, eight years after the initial purchase.
Class C Shares. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Trust's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not
to pay an initial sales charge on an investment of $250,000 or less and you
plan to hold the investment for at least six years, you might consider Class
B shares. If you prefer not to pay an initial sales charge and you plan to
hold your investment for one to eight years, you may prefer Class C shares.
Investment dealers and their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund
and shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Trust originally purchased. Shares sold
outside the U.S. to persons who are not U.S. citizens may be subject to
different sales charges, CDSCs and dealer compensation arrangements in
accordance with local laws and business practices.
VI. SHARE PRICE
Shares of the Trust are sold at the public offering price, which is the
net asset value per share, plus the applicable sales charge. Net asset value
per share of a Class of the Trust is determined by dividing the fair market
value of its assets, less liabilities attributable to that Class, by the
number of shares of that Class outstanding. The net asset value is computed
once daily, on each day the New York Stock Exchange (the "Exchange") is open,
as of the close of regular trading on the Exchange.
VII. HOW TO BUY TRUST SHARES
You may buy Trust shares from any securities broker-dealer which has a
sales agreement with PFD. If you do not have a securities broker-dealer,
please call 1-800-225-6292. Shares will be purchased at the public offering
price, that is, the net asset value per share plus any applicable sales
charge, next computed after receipt of a purchase order, except as set forth
below.
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B and Class C shares except that the subsequent minimum
investment amount for Class B and Class C share accounts may be as little as
$50 if an automatic investment plan is established (see "Automatic Investment
Plans").
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicated otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing fund account; it may not be used to establish a new account. Proper
account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to Individual Retirement Accounts
("IRAs") but may not be available to other types of retirement plan accounts.
Call PSC for more information.
You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section
of your Account Application or an Account Options Form. PSC will
electronically debit the amount of each purchase from this predesignated bank
account. Telephone purchases may not be made for 30 days after the
establishment of your bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's acceptance of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.
Class A Shares
You may buy Class A shares at the public offering price, that is, at the
net asset value per share next computed after receipt of a purchase order,
plus a sales charge as follows:
7
<PAGE>
<TABLE>
<CAPTION>
Dealer
Sales Charge as % of Allowance
-----------------------
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ---------------------- ---------- ----------- -----------
<S> <C> <C> <C>
Less than $100,000 4.50% 4.71% 4.00%
$100,000 but less than
$250,000 3.50 3.63 3.00
$250,000 but less than
$500,000 2.50 2.56 2.00
$500,000 but less than
$1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see below
</TABLE>
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain group plans (described
below) subject to a CDSC of 1% which may be imposed in the event of a
redemption of Class A shares within 12 months of purchase. See "How to Sell
Trust Shares." PFD may, in its discretion, pay a commission to broker-dealers
who initiate and are responsible for such purchases as follows: 1% on the
first $5 million invested; 0.50% on the next $45 million; and 0.25% on the
excess over $50 million. These commissions will not be paid if the purchaser
is affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commission paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "How to Sell Trust Shares." In connection with PGI's acquisition of
Mutual of Omaha Fund Management Company and contingent upon the achievement
of certain sales objectives, PFD may pay to Mutual of Omaha Investor
Services, Inc. 50% of PFD's retention of any sales commission on sales of the
Trust's Class A shares through such dealer.
The schedule of sales charges above is applicable to purchases of Class A
shares of the Trust by an (i) an individual, (ii) an individual and his or
her spouse and children under the age of 21 and (iii) a trustee or other
fiduciary of a trust estate or fiduciary account or related trusts or
accounts including pension, profit-sharing and other employee benefit trusts
qualified under Section 401 or 408 of the Internal Revenue Code of 1986, as
amended (the "Code"), although more than one beneficiary is involved. The
sales charges applicable to a current purchase of Class A shares of the Trust
by a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of
shares of any of the other Pioneer mutual funds previously purchased and then
owned (except the Class A shares of Pioneer Money Market Trust), provided PFD
is notified by such person or his or her broker-dealer each time a purchase
is made which would qualify. Pioneer mutual funds include all mutual funds
for which PFD serves as principal underwriter. See the "Letter of Intention"
section of the Account Application.
Qualifying for a Reduced Sales Charge. Class A shares of the Trust may be
sold at a reduced or eliminated sales charge to certain group plans with 100
or more participants or at least $500,000 in plan assets ("Group Plans")
under which a sponsoring organization makes recommendations to, permits group
solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Class A shares of the Trust may be sold at net asset
value per share without a sales charge to Optional Retirement Program (the
"Program") participants if (i) the employer has authorized a limited number
of investment company providers for the Program, (ii) all authorized
investment company providers offer their shares to Program participants at
net asset value, (iii) the employer has agreed in writing to actively promote
the authorized investment providers to Program participants and (iv) the
Program provides for a matching contribution for each participant
contribution. Information about such arrangements is available from PFD.
Class A shares of the Trust may be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Trust and partners and employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which the Manager serves as investment adviser, and
the subsidiaries or affiliates of such persons; (d) current or former
officers, partners, employees or registered representatives of broker-dealers
which have entered into sales agreements with PFD; (e) members of the
immediate families of any of the persons above; (f) any trust, custodian,
pension, profit-sharing or other benefit plan of the foregoing persons; (g)
insurance company separate accounts; (h) certain "wrap accounts" for the
benefit of clients of financial planners adhering to standards established by
PFD; (i) other funds and accounts for which the Manager or any of its
affiliates serves as investment adviser or manager; and (j) certain unit
investment trusts. Shares so purchased are purchased for investment purposes
and may not be resold except through redemption or repurchase by or on behalf
of the Trust. The availability of this privilege is conditioned upon the
receipt by PFD of written notification of eligibility. Class A shares may
also be sold at net asset value in connection with certain reorganization,
liquidation, or acquisition transactions involving other investment companies
or personal holding companies.
Shares of the Trust may also be sold at net asset value per share without
a sales charge to clients of a broker-dealer who invest the proceeds from the
sale or redemption of shares of another investment company, provided that the
broker-dealer can document that the sale or redemption was complete within 60
days immediatly preceding the purchase of shares of the Trust. Further
details may be obtained from PFD.
Reduced sales charges for Class A shares are available through an
agreement to purchase a specified quantity of Trust shares over a designated
13-month period by completing the "Letter of Intention" section of the
Account Application. Information about the Letter of Intention Procedure,
including its terms, is contained in the Statement of Additional Information.
Class B Shares
You may buy Class B shares at the net asset value per share next computed
after receipt of a purchase order with-
8
<PAGE>
out the imposition of an initial sales charge. However, Class B shares
redeemed within six years of purchase will be subject to a CDSC at the rates
shown in the table below. The charge will be assessed on the amount equal to
the lesser of the current market value or the original purchase cost of the
shares being redeemed. No CDSC will be imposed on increases in account value
above the initial purchase price, including shares derived from the
reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Trust 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.
<TABLE>
<CAPTION>
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- ----------- ------------------------------
<S> <C>
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
</TABLE>
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 Trust in connection with the sale of Class B shares, including the
payment of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end
of the calendar quarter that is eight years after the purchase date, except
as noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer mutual fund will convert into Class A shares based on the
date of the initial purchase and the applicable CDSC. Class B shares acquired
through reinvestment of distributions will convert into Class A shares based
on the date of the initial purchase to which such shares relate. For this
purpose, Class B shares acquired through reinvestment of distributions will
be attributed to particular purchases of Class B shares in accordance with
such procedures as the Trustees may determine from time to time. The
conversion of Class B shares to Class A shares is subject to the continuing
availability of a ruling from the Internal Revenue Service ("IRS"), for which
the Trust is applying, or an opinion of counsel that such conversions will
not constitute taxable events for federal tax purposes. There can be no
assurance that such ruling or opinion will be available. The conversion of
Class B shares to Class A shares will not occur if such ruling or opinion is
not available and, therefore, Class B shares would continue to be subject to
higher expenses than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1.00%. The charge will be assessed on
the amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
Class C shares do not convert to any other Class of Trust shares.
For the purpose of determining the time of any purchase, all payments
during a quarter will be aggregated and deemed to have been made on the first
day of that quarter. In processing redemptions of Class C shares, the Trust
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 Trust in connection with the sale of Class C shares, including the
payment of compensation to broker-dealers.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in the
case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of all
beneficial owners) or a total and permanent disability (as defined in Section 72
of the Code) of all registered owners occurring after the purchase of the shares
being redeemed or (b) the redemption is made in connection with limited
automatic redemptions as set forth in "Systematic Withdrawal Plans" (limited in
any year to 10% of the value of the account in the Trust at the time the
withdrawal plan is established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder or participant in
an employer-sponsored retirement plan; (b) the distribution is to a
participant in an IRA, 403(b) or employer-sponsored retirement plan, is part
of a series of substantially equal payments made over the life expectancy of
the participant or the joint life expectancy of the participant and his or
her beneficiary or as scheduled periodic payments to a participant (limited
in any year to 10% of the value of the participant's account at the time the
distribution amount is established; a required minimum distribution due to
the participant's attainment of age 70-1/2 may exceed the 10% limit only if
the distribution amount is based on plan assets held by Pioneer); (c) the
distribution is from a 401(a) or 401(k) retirement plan and is a return of
excess employee deferrals or employee contributions or a qualifying hardship
distribution as defined by the Code or results from a termination of
employment (limited with respect to a termination to 10% per year of the
value of the plan's assets in the Trust as of the later of the prior December
31 or the date the account was established unless the plan's assets are being
rolled over to or reinvested in the
9
<PAGE>
same class of shares of a Pioneer mutual fund subject to the CDSC of the
shares originally held); (d) the distribution is from an IRA, 403(b) or
employer-sponsored retirement plan and is to be rolled over to or reinvested
in the same class of shares in a Pioneer mutual fund and which will be
subject to the applicable CDSC upon redemption; (e) the distribution is in
the form of a loan to a participant in a plan which permits loans (each
repayment of the loan will constitute a new sale which will be subject to the
applicable CDSC upon redemption); or (f) the distribution is from a qualified
defined contribution plan and represents a participant's directed transfer
(provided that this privilege has been pre-authorized through a prior
agreement with PFD regarding participant directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may
be waived or reduced as follows: (a) for automatic redemptions as described
in "Systematic Withdrawal Plans" (limited to 10% of the value of the account
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring
after the purchase of the shares being redeemed of a shareowner or
participant in an employer-sponsored retirement plan; (c) if the distribution
is part of a series of substantially equal payments made over the life
expectancy of the participant or the joint life expectancy of the participant
and his or her beneficiary; or (d) if the distribution is to a participant in
an employer-sponsored retirement plan and is (i) a return of excess employee
deferrals or contributions, (ii) a qualifying hardship distribution as
defined by the Code, (iii) from a termination of employment, (iv) in the form
of a loan to a participant in a plan which permits loans, or (v) from a
qualified defined contribution plan and represents a participant's directed
transfer (provided that this privilege has been pre-authorized through a
prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject
to a CDSC may be waived or reduced for either non-retirement or retirement
plan accounts if: (a) the redemption is made by any state, county, or city,
or any instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Trust's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers. An order for either Class of Trust shares received by PFD
from a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business.
General. The Trust reserves the right in its sole discretion to withdraw
all or any part of the offering of shares when, in the judgment of the
Trust's management, such withdrawal is in the best interest of the Trust. An
order to purchase shares is not binding on, and may be rejected by, PFD until
it has been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL TRUST SHARES
You can arrange to sell (redeem) Trust shares on any day the Exchange is
open by selling (redeeming) either some or all of your shares to the Trust.
You may sell your shares either through your broker-dealer or directly to
the Trust.
(bullet) If you are selling shares from a retirement account, you must
make your request in writing (except for exchanges to other
Pioneer mutual funds which can be requested by phone or in
writing). Call 1-800-622-0176 for a retirement distribution form.
(bullet) If you are selling shares from a non-retirement account, you may
use any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received in good order less any applicable CDSC. Sale proceeds
generally will be sent to you in cash, normally within seven days after your
order is received in good order. The Trust reserves the right to withhold
payment of the sale proceeds until checks received by the Trust in payment
for the shares being sold have cleared, which may take up to 15 calendar days
from the purchase date.
In Writing. You may always sell your shares by delivering a written
request, signed by all registered owners, in good order to PSC, however, you
must use a written request, including a signature guarantee, to sell your
shares if any of the following situations applies:
(bullet) you wish to sell over $50,000 worth of shares,
(bullet) your account registration or address has changed within the last
30 days,
(bullet) the check is not being mailed to the address on your account
(address of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer account with
a different registration.
Your request should include your name, the Trust's name, your Trust
account number, the Class of shares to be redeemed, the dollar amount or
number of shares to be redeemed, and any other applicable requirements as
described below. Unless instructed otherwise, Pioneer will send the proceeds
of the sale to the address of record. Fiduciaries or corporations are
required to submit additional documents. For more information, contact PSC at
1-800-225-6292.
Written requests will not be processed until they are received in good
order and accepted by PSC. Good order means that there are no outstanding
claims or requests to hold redemptions on the account, certificates are
endorsed by the record
10
<PAGE>
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicated otherwise on your
Account Application or by writing to PSC. Proper account identification will
be required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last
30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the proceeds must be sent to your bank address of record which must
have been properly pre-designated either on your Account Application or on an
Account Options Form and which must not have changed in the last 30 days. To
redeem by fax send your redemption request to 1-800-225-4240. You may always
elect to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions
will be priced as described above. You are strongly urged to consult with
your financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Trust has authorized PFD to
act as its agent in the repurchase shares of the Trust from qualified
broker-dealers and reserves the right to terminate this procedure at any
time. Your broker-dealer must receive your request before the close of
business on the Exchange and transmit it to PFD before PFD's close of
business to receive that day's redemption price. Your broker-dealer is
responsible for providing all necessary documentation to PFD and may charge
you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Trust in an account with a net asset value of less than the minimum
required amount due to redemptions or exchanges, the Trust may redeem the
shares held in this account at net asset value if you have not increased the
net asset value of the account to at least the minimum required amount within
six months of notice by the Trust to you of the Trust's intention to redeem
the shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 1% of the lesser of the value of
the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer mutual fund will continue to be
subject to the CDSC until the original 12-month period expires. However, no
CDSC is payable upon redemption with respect to Class A shares purchased by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Trust of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Trust to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more
or less than the cost of shares to an investor, depending on the market value
of the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE TRUST SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Trust out of which you wish to exchange and the name of the Pioneer mutual
fund into which you wish to exchange, your fund account number(s), the Class
of shares to be exchanged and the dollar amount or number of shares to be
exchanged. Written exchange requests must
be signed by all record owner(s) exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by
voice or by FactFone, will be recorded. You are strongly urged to consult
with your financial representative prior to requesting a telephone exchange.
See "Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one
Pioneer mutual fund account for shares of the same Class in another Pioneer
mutual fund account on a monthly or quarterly basis. The accounts must have
identical registrations and the originating account must have a minimum
balance of $5,000. The exchange will be effective on the 18th day of the
month.
General. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Trust shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not
all Pioneer mutual funds offer more than one Class of shares. A new Pioneer
mutual fund account opened through an exchange must have a registration
identical to that on the original account.
11
<PAGE>
Class A or Class B shares which would normally be subject to a CDSC upon
redemption will not be charged the applicable CDSC at the time of an
exchange. Shares acquired in an exchange will be subject to the CDSC of the
shares originally held. For purposes of determining the amount of any
applicable CDSC, the length of time you have owned Class B shares acquired by
exchange will be measured from the date you acquired the original shares and
will not be affected by any subsequent exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time, will be
effective on that day if the requirements below have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the fund exchanged and a purchase of shares in another fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply.
You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For the protection of the Trust's performance and
shareholders, the Trust and PFD reserve the right to refuse any exchange
request or restrict, at any time without notice, the number and/or frequency
of exchanges to prevent abuses of the exchange privilege. Such abuses may
arise from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market," or any other exchange request which, in the view of
management, will have a detrimental effect on the Trust's portfolio
management strategy or its operations. In addition, the Trust and PFD reserve
the right to charge a fee for exchanges or to modify, limit, suspend or
discontinue the exchange privilege with notice to shareholders as required by
law.
X. DISTRIBUTION PLANS
The Trust has adopted a Plan of Distribution for each Class of shares (the
"Class A Plan," "Class B Plan," and "Class C Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution and service
fees are paid.
Pursuant to the Class A Plan, the Trust 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 Trust's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Trust: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Trust's
daily net assets attributable to Class A shares; (ii) reimbursement to PFD
for its expenditures for broker-dealer commissions and employee compensation
on certain sales of the Trust's Class A shares with no initial sales charge
(See "How to Buy Trust Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Trust pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Trust'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 Trust in a given year. The Class A
Plan may not be amended to increase materially the annual percentage
limitation of average net assets which may be spent for the services
described therein without approval of the shareholders of the Trust. The
Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the Trust is first invoiced for an expense.
For the fiscal year ended December 31, 1994, there was an allowable carryover
of distribution expenses reimbursable to PFD of $38,421 (approximately 0.20%
of the net assets attributable to the Class A shares of the Trust).
Both the Class B Plan and the Class C Plan provide that the Trust will pay
a distribution fee at the annual rate of 0.75% of the Trust's average daily
net assets attributable to the applicable Class of shares and will pay PFD a
service fee at the annual rate of 0.25% of the Trust's average daily net
assets attributable to that Class of shares. The distribution fee is intended
to compensate PFD for its distribution services to the Trust. The service fee
is intended to be additional compensation for personal services and/or
account maintenance services with respect to Class B or Class C shares. PFD
also receives the proceeds of any CDSC imposed on the redemption of Class B
or Class C shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first
year's service fee equal to 0.25% of the amount invested in Class B shares,
are paid to broker- dealers who have selling agreements with PFD. PFD may
advance to dealers the first year service fee at a rate up to 0.25% of the
purchase price of such shares and, as compensation therefor, PFD may retain
the service fee paid by the Trust with respect to such shares for the first
year after purchase. Dealers will become eligible for additional service fees
with respect to such shares commencing in the 13th month following the
purchase. Commissions of up to 1% of the amount invested in Class C shares,
consisting of 0.75% of the amount invested and a first year's service fee of
0.25% of the amount invested, are paid to broker-dealers who have selling
agreements with PFD. PFD may advance to dealers the first year service fee at
a rate up to 0.25% of the purchase price of such shares and, as compensation
therefore, PFD may retain the service fee paid by the Trust with respect to
such shares for the first year after purchase. Commencing in
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the 13th month following the purchase of Class C shares, dealers will become
eligible for additional annual distribution fees and services fees of up to
0.75% and 0.25%, respectively, of the purchase price with respect to such
shares.
Dealers may from time to time be required to meet certain criteria in
order to receive service fees. PFD or its affiliates are entitled to retain
all service fees payable under the Class B Plan or the Class C Plan for which
there is no dealer of record or for which qualification standards have not
been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Trust has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code,
so that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Trust will be subject to a nondeductible 4% excise tax
on a portion of its undistributed income and capital gains if it fails to
meet certain distribution requirements for each calendar year. The Trust
intends to make distributions in a timely manner and accordingly does not
expect to be subject to the excise tax.
Each business day the Trust declares a dividend consisting of
substantially all of the Trust's net investment income (earned interest
income less expenses). Shareholders begin earning dividends on the first
business day following receipt of payment for purchased shares. Shares
continue to earn dividends up to and including the date of redemption.
Dividends are normally paid on the last business day of the month or shortly
thereafter. Monthly distributions, which consist of net investment income and
may also include a portion of original issue discount or market discount and
any net short-term capital gains realized by the Trust, are taxable as
ordinary income. Net long-term capital gains, if any, will be distributed
annually, in December, or at such additional times as may be necessary to
avoid federal income or excise tax (after taking into account any capital
loss carryforwards) and will be taxable as long-term capital gains regardless
of the shareholder's holding period for the shares. Unless shareholders
specify otherwise, all distributions will be automatically reinvested in
additional full and fractional shares of the Trust. For federal income tax
purposes, all dividends are taxable as described above whether a shareholder
takes them in cash or reinvests them in additional shares of the Trust.
Information as to the federal tax status of dividends and distributions will
be provided annually. For further information on the distribution options
available to shareholders, see "Distribution Options" and "Directed
Dividends" below.
Dividends and other distributions and the proceeds of redemptions or
repurchases of Trust shares paid to individuals and other non-exempt payees
will be subject to a 31% federal backup withholding tax if the Trust is not
provided with the shareholder's correct taxpayer identification number and
certification that the number is correct and the shareholder is not subject
to backup withholding or the Trust receives notice from the IRS or a broker
that such withholding applies. Please refer to the Account Application for
additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or
U.S. corporations, partnerships, trust or estates, and who are subject to
U.S. federal income tax. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax advisors regarding state, local and
other applicable tax laws.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the
Trust. PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI.
PSC's offices are located at 60 State Street, Boston, Massachusetts 02109,
and inquiries to PSC should be mailed to Pioneering Services Corporation,
P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman &
Co. (the "Custodian") serves as custodian of the Trust's portfolio
securities. The principal business address of the mutual fund division of the
Custodian is 40 Water Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing
details of transactions are sent to shareholders as transactions occur,
except Automatic Investment Plan transactions which are confirmed quarterly.
The Pioneer Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with the Trust
and might not be able to utilize some of the services available to
shareholders of record. Examples of services which might not be available are
investment or redemption of shares by mail or telephone, automatic
reinvestment of dividends and capital gains distributions, withdrawal plans,
Letters of Intention, Rights of Accumulation, telephone exchanges, and
newsletters.
Additional Investments
You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B and Class C shares) to PSC (account number and
Class of shares should be clearly indicated). The bottom portion of a
confirmation statement may be used as a remittance slip to make additional
investments. Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Trust at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll
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deduction or through a Pioneer Investomatic Plan. A Pioneer Investomatic Plan
provides for a monthly or quarterly investment by means of a pre-authorized
draft drawn on a checking account. Pioneer Investomatic Plan investments are
voluntary, and you may discontinue the plan at any time without penalty upon
30 days' written notice. PSC acts as agent for the purchaser, the
broker-dealer and PFD in maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least
semiannually. In January of each year, the Trust will mail you information
about the tax status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Trust, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer mutual fund account. The
value of this second account must be at least $1,000 ($500 for Pioneer Fund
or Pioneer II). Invested dividends may be in any amount, and there are no
fees or charges for this service. Retirement plan shareholders may only
direct dividends to accounts with identical registrations, i.e., PGA IRA Cust
for John Smith may only go into another account registered PGA IRA Cust for
John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may also establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicated otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Trust shares by telephone.
See "Share Price" for more information. For personal assistance, call
1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern time on weekdays.
Computer-assisted transactions may be available to shareholders who have
pre-recorded certain bank information (see "FactFone(SM)"). You are strongly
urged to consult with your financial representative prior to requesting any
telephone transaction. To confirm that each transaction instruction received
by telephone is genuine, the Trust 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 Trust may be
liable for any loss due to unauthorized or fraudulent instructions. The Trust
may implement other procedures from time to time. In all other cases, neither
the Trust, PSC or PFD will be responsible for the authenticity of
instructions received by telephone, therefore, you bear the risk of loss for
unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the
Trust by telephone to institute a redemption or exchange. You should
communicate with the Trust in writing if you are unable to reach the Trust by
telephone.
FactFone(SM)
FactFone is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone allows
you to obtain current information on your Pioneer mutual fund accounts and to
inquire about the prices and yields of all publicly available Pioneer mutual
funds. In addition, you may use FactFone to make computer-assisted telephone
purchases, exchanges and redemptions from your Pioneer accounts if you have
activated your PIN. Telephone purchases and redemptions require the
establishment of a bank account of record. You are strongly urged to consult
with your financial representative prior to requesting any telephone
transaction. Shareholders whose accounts are registered in the name of a
broker-dealer or other third party may not be able to use FactFone. See "How
to Buy Trust Shares," "How to Exchange Trust Shares," "How to Sell Trust
Shares" and "Telephone Transactions and Related Liabilities." Call PSC for
assistance.
Retirement Plans
You should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to retirement plans for businesses,
age-weighted profit sharing plans, Simplified Employee Pension Plans, IRAs,
and Section 403(b) retirement plans for employees of certain non-profit
organizations and public school systems, all of which are available in
conjunction with investments in the Trust. The Account Application enclosed
with this Prospectus should not be used to establish any of these plans.
Separate applications are required.
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Telecommunications for the Deaf (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800- 225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals will be limited to 10% of the value of the account if
a CDSC is applicable. See "Waiver or Reduction of Contingent Deferred Sales
Charge" for more information. Periodic payments of $50 or more will be sent
to you, or any person designated by you, monthly or quarterly and your
periodic redemptions may be taxable to you. Payments can be made either by
check or electronic transfer to a bank account designated by you. If you
direct that withdrawal payments be made to another person after you have
opened your account, a signature guarantee must accompany your instructions.
Purchases of Class A shares of the Trust at a time when you have a SWP in
effect may result in the payment of unnecessary sales charges and may,
therefore, be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Trust, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Trust if you send a written request to PSC not more
than 90 days after your shares were redeemed. Your redemption proceeds will
be reinvested at the next determined net asset value of the Class A shares of
the Trust in effect immediately after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes
as a result of the redemption, and special tax rules may apply if a
reinstatement occurs. Subject to the provisions outlined under "How to
Exchange Trust Shares" above, you may also reinvest in Class A shares of
other Pioneer mutual funds; in this case, you must meet the minimum
investment requirement for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up
to one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado or earthquake.
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended or terminated at any time by PFD or by the Trust. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by completing an
Account Options Form, which you may request by calling
1-800-225-6292.
XIII. THE TRUST
Pioneer America Income Trust is an open-end, diversified management
investment company (commonly referred to as a mutual fund) organized as a
Massachusetts business trust on March 17, 1988. Prior to July 1, 1994 the
Trust was named Pioneer U.S. Government Trust. The Trust has authorized an
unlimited number of shares of beneficial interest. As an open-end management
investment company, the Trust usually continuously offers its shares to the
public and under normal conditions must redeem its shares upon the demand of
any shareholder at the then current net asset value per share. See "How to
Sell Trust Shares." The Trust is not required, and does not intend, to hold
annual shareholder meetings, although special meetings may be called for the
purposes of electing or removing Trustees, changing fundamental investment
restrictions or approving a management or subadvisory contract.
The Trustees have the authority, without further shareholder approval, to
classify and reclassify the shares of the Trust, or any additional series of
the Trust, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of three classes of shares, designated
Class A, Class B and Class C. The shares of each class represent an interest
in the same portfolio of investments of the Trust. Each class has equal
rights as to voting, redemption, dividends and liquidation, except that each
class bears different distribution and transfer agent fees and may bear other
expenses properly attributable to the particular class. Class A, Class B and
Class C shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection
with the distribution of shares. The Trust reserves the right to create and
issue additional series of shares.
When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Trust are fully-paid
and non-assessable by the Trust. Shares will remain on deposit with the
Trust's transfer agent and certificates will not normally be issued. The
Trust reserves the right to charge a fee for the issuance of certificates.
XIV. INVESTMENT RESULTS
The Trust may from time to time include yield information in
advertisements or in information furnished generally to existing or proposed
shareholders. Yield information is computed in accordance with the SEC's
standardized yield formula. The calculation for all Classes is computed by
dividing the net investment income per share of a Class during a base period
of 30 days, or one month, by the maximum offering price per share of the
applicable Class of the Trust on the last day of such base period. The
resulting "30-day yield" is then annualized as described below. (Net
investment income per share of a Class is determined by dividing the Trust's
net investment income attributable to a Class during the base period by the
average number of shares of that Class of the Trust.) The 30-day yield is
then "annualized" by a computation that assumes that the net investment
income per share
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of a Class is earned and reinvested for a six-month period at the same rate
as during the 30-day base period and that the resulting six-month income will
be generated over an additional six months.
The average annual total return (for a designated period of time) on an
investment in the Trust may also be included in advertisements, and furnished
to existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value. In addition, for Class A shares the
calculation assumes the deduction of the maximum sales charge of 4.50%; for
Class B and Class C shares the calculation reflects the deduction of any
applicable CDSC. The periods illustrated would normally include one, five and
ten years (or since the commencement of the public offering of the shares of
a Class, if shorter) through the most recent calendar quarter.
Yield and average annual total return quotations of the Trust do not
reflect the impact of federal or state income taxes.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Trust's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual funds results may be
cited or compared with the investment results of the Trust. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Trust's investment results will vary from time to time depending on
market conditions, the composition of the Trust's portfolio and operating
expenses of the Trust. All quoted investment results are historical and
should not be considered representative of what an investment in the Trust
may earn in any future period. For further information about the calculation
methods and uses of the Trust's investment results, see the Statement of
Additional Information.
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Notes
17
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Notes
18
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THE PIONEER FAMILY OF MUTUAL FUNDS
International Growth Funds
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
Growth Funds
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Gold Shares
Growth and Income Funds
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Income Funds
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
Tax-Free Income Funds
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Pioneer New York Triple Tax-Free Fund*
Pioneer Massachusetts Double Tax-Free Fund*
Pioneer California Double Tax-Free Fund*
Money Market Funds
Pioneer U.S. Government Money Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts
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(Pioneer Logo)
Pioneer America
Income Trust
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
SHERMAN B. RUSS, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications and service forms
and telephone transactions ...................... 1-800-225-6292
FactFone(SM)
Automated fund yields, automated prices and
account information ..............................1-800-225-4321
Retirement plans 1-800-622-0176 Toll-free fax .....1-800-225-4240
Telecommunications Device for the Deaf (TDD) ......1-800-225-1997
0196-2966
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER AMERICA INCOME TRUST
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
April 28, 1995
(revised January 26, 1996)
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus but should be read in conjunction with the
Prospectus (the "Prospectus") dated April 28, 1995 (revised January 26, 1996),
as amended and/or supplemented from time to time (the "Prospectus"), of Pioneer
America Income Trust (the "Trust"). 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 Trust at 60 State Street, Boston, Massachusetts 02109.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions................................. 2
2. Management of the Trust.............................................. 6
3. Investment Adviser................................................... 9
4. Principal Underwriter ............................................... 10
5. Distribution Plans................................................... 11
6. Shareholder Servicing/Transfer Agent................................. 13
7. Custodian............................................................ 14
8. Independent Public Accountants....................................... 14
9. Portfolio Transactions............................................... 14
10. Tax Status........................................................... 15
11. Description of Shares................................................ 17
12. Certain Liabilities.................................................. 17
13. Letter of Intention.................................................. 18
14. Systematic Withdrawal Plan........................................... 18
15. Determination of Net Asset Value..................................... 19
16. Investment Results................................................... 19
17. Financial Statements................................................. 23
Appendix A...........................................................A-1
-------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
.........The Prospectus presents the investment objective and principal
investment policies of the Trust. Other investment policies and a further
description of some of the policies described in the Prospectus appear below.
The following policies and restrictions supplement those discussed in
the Prospectus. Whenever an investment policy or restriction states a maximum
percentage of the Trust's assets that may be invested in any security or
presents a policy regarding quality standards, this standard or other
restrictions shall be determined immediately after and as a result of the
Trust's investment. 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 Trust's investment
objective and policies.
Additional Information Regarding GNMA Certificates.
As prepayment rates of individual mortgage pools will vary widely, it
is not possible to predict with certainty the average life of a particular issue
of GNMA Certificates. However, statistics published by the FHA are normally used
as an indicator of the expected average life of GNMA Certificates. These
statistics indicate that the average life of single-family dwelling mortgages
with 25- to 30-year maturities, the type of mortgages backing the vast majority
of GNMA Certificates, is approximately 12 years. For this reason, it is
customary to treat GNMA Certificates as 30-year mortgage-backed securities which
prepay fully in the twelfth year. The actual life of a particular issue of GNMA
Certificates, however, will depend on the coupon rate of the underlying
mortgages, with higher interest rate mortgages being more prone to prepayment or
refinancing.
The coupon rate of interest of GNMA Certificates is lower than the
interest rate paid on the VA-guaranteed or FHA-insured mortgages underlying the
GNMA Certificates, but only by the amount of the fees paid to GNMA and the
issuer. For the most common type of mortgage pool, containing single-family
dwelling mortgages, GNMA receives an annual fee of 6/100 of 1% of the
outstanding principal for providing its guarantee, and the issuer is paid an
annual fee of 44/100 of 1% for assembling the mortgage pool and for passing
through monthly payments of interest and principal to GNMA Certificate holders.
The coupon rate by itself, however, does not indicate the yield that
will be earned on GNMA Certificates for the reasons given in the section
"Investment Objective and Policies" in the Prospectus. In quoting yields for
GNMA Certificates, the customary practice is to assume that the GNMA
Certificates will have a 12-year life. Compared on this basis, GNMA Certificates
have historically yielded roughly 25/100 of 1% more than high grade corporate
bonds and 50/100 of 1% more than United States ("U.S.") Government and U.S.
Government agency bonds. As the life of individual pools may vary widely,
however, the actual yield earned on any issue of GNMA Certificates may differ
significantly from the yield estimated on the assumption of a 12-year life.
Since the inception of the GNMA mortgage-backed securities program in
1970, the amount of GNMA Certificates outstanding has grown rapidly. The size of
the market and the active participation in the secondary market by securities
dealers and many types of investors make the GNMA Certificates a highly liquid
instrument. Prices of GNMA Certificates are readily available from securities
dealers and depend on, among other things, the level of market interest
-2-
<PAGE>
rates, the GNMA Certificate's coupon rate and the prepayment experience of the
pools of mortgages backing each GNMA Certificate.
Investment Restrictions
.........The Trust has adopted certain additional fundamental investment
restrictions which may not be changed without the approval of a majority of the
Trust's outstanding voting securities. As used in the Prospectus and this
Statement of Additional Information, such approval means the approval of the
lesser of (i) the holders of 67% or more of the shares represented at a meeting
if the holders of more than 50% of the outstanding shares are present in person
or by proxy, or (ii) the holders of more than 50% of the outstanding shares.
The Trust may not:
(1) invest its assets, except in U.S. Government Securities (as defined
in the Prospectus) and in when-issued commitments and repurchase agreements with
respect to these securities;
(2) borrow money, except from banks to meet redemptions in amounts not
exceeding 33 1/3% (taken at the lower of cost or current value) of its total
assets (including the amount borrowed). The Trust does not intend to borrow
money during the coming year, and will do so only as a temporary measure for
extraordinary purposes or to facilitate redemptions. The Trust will not purchase
securities while any borrowings are outstanding;
(3) purchase securities on margin;
(4) make loans to any person, except by (a) the purchase of a debt
obligation in which the Trust is permitted to invest and (b) engaging in
repurchase agreements;
(5) act as an underwriter, except as it may be deemed to be an
underwriter in a sale of restricted securities; or
(6) issue senior securities, except as permitted by restrictions nos. 2
and 4 above, and, for purposes of this restriction, the issuance of shares of
beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign exchange contracts and repurchase agreements
entered into in accordance with the Trust's investment policies.
In order to register its shares in certain jurisdictions, the Trust has
agreed to adopt certain additional investment restrictions which are not
fundamental and may be changed by a vote of the Trust's Board of Trustees and
without shareholder approval or notification. Pursuant to these additional
restrictions, the Trust may not:
(a) make short sales of securities;
(b) write, purchase or otherwise invest in any put, call, straddle or
spread option;
(c) invest in any security, including any repurchase agreement maturing
in more than seven days, which is illiquid, if more than 15% of the net assets
of the Trust, taken at market value, would be invested in such securities;
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(d) 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 Trust;
(e) invest in warrants;
(f) invest in oil, gas or other mineral leases or exploration or
development programs; and
(g) purchase or sell real estate, including real estate limited
partnerships except that the Fund may (i) acquire or lease office space for its
own use, (ii) invest in securities of issuers that invest in real estate or
interests therein, (iii) invest in securities that are secured by real estate or
interests therein, (iv) purchase and sell mortgage-related securities and (v)
hold and sell real estate acquired by the Fund as a result of the ownership or
securities.
In order to qualify as permissible investment for Federal credit
unions, the Trust has agreed to adopt the following additional investment
restrictions which are not fundamental and may be changed by a vote of the
Trust's Board of Trustees and without shareholder approval or notification.
(1) Except as provided in non-fundamental restriction (2), with respect
to each security purchased or sold by the Trust: (1) the delivery of the
security will be made within thirty (30) days from the trade date; and (2) the
price of the security at the time of purchase will be the market price.
(2) The Trust may purchases securities on a when-issued or a delayed
delivery basis only in accordance with the following criteria:
a. the securities which are the subject of the when-issued or
delayed delivery commitment will be marked-to-market daily;
b. the delivery of the securities subject to the commitment
will be made within 120 days after the trade date;
c. the price of the security at the time of entering into the
commitment will be the market price; and
d. the Trust's custodian will maintain in a segregated account
liquid, high grade debt securities having a value (determined daily) at
least equal to the amount of the Trust's purchase commitment.
(3) The Trust may engage in repurchase agreements which are comparable
to "investment-type" repurchase agreements into which a Federal credit union may
enter. In all instances, the purchase price of securities obtained in such
repurchase transactions will be at or below the market price for such
securities. An "investment-type" repurchase transaction means a repurchase
transaction where the Federal credit union purchasing the security takes
physical possession of the security, or receives written confirmation of the
purchase and a custodial or safekeeping receipt from a third party under a
written bailment for hire contract, or is recorded as the owner of the security
through the Federal Reserve Book-Entry System.
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(4) The Trust may not purchase or sell a standby commitment.
(5) The Trust may not purchase or sell futures contracts or options on
futures contracts.
(6) The Trust may not engage in "adjusted trading." Adjusted trading
means any method or transaction used to defer a loss whereby the Trust sells a
security to a counterparty at a price above its then-current market price and
simultaneously purchases or commits to purchase from the counterparty another
security at a price above its then-current price.
(7) Except as provided in non-fundamental restriction (10), the Trust
may not purchase stripped mortgage-backed securities ("SMBS").
(8) Except as provided in non-fundamental restriction (10), the Trust
may not purchase or hold a collateralized mortgage obligation ("CMO") or real
estate mortgage investment conduit ("REMIC") that meets any of the following
three tests:
a. Average Life Test. The CMO or REMIC has an expected average
life greater than 10 years;
b. Average Life Sensitivity Test. The average life of the CMO
or REMIC: (a) extends by more then 4 years, assuming an immediate and
sustained parallel shift in the yield curve of plus 300 basis points;
or (b) shortens by more than 6 years, assuming an immediate and
sustained parallel shift in the yield curve of minus 300 basis points;
or
c. Price Sensitivity Test. The estimated change in the price
of the CMO or REMIC is more than 17 percent, due to an immediate and
sustained parallel shift in the yield curve of plus or minus 300 basis
points.
The three tests contained in this non-fundamental restriction apply at
the time of purchase and on any subsequent retesting date, assuming market
interest rates and prepayment speeds at the time the tests are applied.
(9) The Trust may not purchase residual interests in a CMO or REMIC
transaction.
(10) Non-fundamental restrictions (7) and (8) do not apply where an
investment in SMBS, CMOs or REMICs is made solely to reduce interest rate risk
and where:
a. A monitoring and reporting system is in place that provides
the documentation necessary to evaluate the expected and actual
performance of the investment under different interest rate scenarios;
b. The monitoring and reporting system is used to conduct and
document an analysis that shows, prior to purchase, that the proposed
investment will reduce the Trust's interest rate risk; and
c. The investment, subsequent to purchase, is evaluated at
least quarterly, to determine whether or not the investment has
actually reduced the Trust's interest rate risk.
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2. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees provides broad supervision over the
affairs of the Trust. The officers of the Trust are responsible for the Trust's
operations. The Trustees and executive officers of the Trust are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Trust within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First
Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the
Board and Director of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds and Partner, Hale and Dorr (counsel
to the Trust).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc. (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
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MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl ,
First Russia, Omega and Pioneer SBIC Corporation, Executive Vice President and
Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer
mutual funds, except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC; Clerk
of PFD and PSC; Partner, Hale and Dorr (counsel to the Trust) and Secretary of
all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC; and formerly of Hale and Dorr (counsel to
the Trust) where he most recently served as junior partner.
SHERMAN B. RUSS, Vice President, DOB: July 1937
Senior Vice President of PMC; Vice President of Pioneer Bond Fund.
Pioneer Money Market Trust, and Pioneer Interest Shares, Inc.
The Trust's Amended and Restated Declaration of Trust (the "Declaration
of Trust") provides that the holders of two-thirds of its outstanding shares may
vote to remove a Trustee of the Trust at any meeting of shareholders. See
"Description of Shares" below. The business address of all officers is 60 State
Street, Boston, Massachusetts 02109.
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All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the
Trust's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
<PAGE>
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
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<PAGE>
To the knowledge of the Trust, no officer or Trustee of the Trust owned
5% or more of the issued and outstanding shares of PGI as of the date of this
Statement of Additional Information, except Mr. Cogan who then owned
approximately 15% of such shares.
The Trust pays no salaries or compensation to any of its officers. The
Trust pays an annual trustees' fee of $100, and a payment of $1,000 plus
expenses per meeting attended, to each Trustee who is not affiliated with PMC,
PFD or PSC and pays an annual trustees' fee of $500 plus expenses to each
Trustee affiliated with PMC, PFD or PSC.
Total Compensa-
tion from the
Pension or Trust and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Director From the Trust Accrued of Mutual Funds**
John F. Cogan, Jr. $ 500* $0 $11,750*
Richard H. Egdahl, M.D. 3,100 0 55,650
Margaret B.W. Graham 3,100 0 55,650
John W. Kendrick 3,100 0 55,650
Marguerite A. Piret 4,100 0 66,650
David D. Tripple 500* 0 9,000*
Stephen K. West 3,700 0 63,650
John Winthrop 3,700 0 63,650
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* PMC fully reimbursed the Trust and the other funds in the Pioneer Family of
Mutual Funds for compensation paid to Messrs. Cogan and Tripple.
** For the calendar year ended December 31, 1994.
Any such fees and expenses paid to affiliates or interested persons of
PMC, PFD or PSC are reimbursed to the Trust under its Management Contract. As of
the date of this Statement of Additional Information, the Trustees and officers
of the Trust owned beneficially in the aggregate less than 1% of the outstanding
shares of the Trust. As of such date, no person beneficially owned 5% or more of
the outstanding shares of the Trust.
3. INVESTMENT ADVISER
The Trust has contracted with PMC, 60 State Street, Boston,
Massachusetts, to act as its investment adviser. The term of the contract is one
year, but it is renewable annually after such date by the vote of a majority of
the Board of Trustees of the Trust (including a majority of the Board of
Trustees who are not parties to the contract or interested persons of any such
parties). The vote must be cast in person at a meeting called for the purpose of
voting on such renewal. This contract terminates if assigned and may be
terminated without penalty by either party by vote of its Board of Directors or
Trustees or a majority of its outstanding voting securities and the giving of
sixty days' written notice. The management contract was approved by the
shareholders of the Trust at a meeting of shareholders held on December 6, 1993.
As compensation for its
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management services and expenses incurred, PMC is entitled to a management fee
at the rate of 0.60% per annum of the Trust's average daily net assets. The fee
is normally computed and accrued daily and paid monthly.
On an interim basis, PMC has voluntarily agreed not to impose a portion
of its management fee and to make other arrangements, if necessary, to limit
certain other expenses of the Trust to the extent required to reduce total
expenses to 1.00% of the average daily net assets attributable to the Class A
shares. The Trust's management fee will only be imposed on the assets
attributable to the Class B and Class C shares to the extent it is imposed on
the assets attributable to the Class A shares. See "Expense Information" and
"Management of the Trust" in the Prospectus. PMC's agreement to reduce the
management fee is voluntary and temporary and may be revised or terminated by
PMC at any time.
Pursuant to the expense limitation discussed above, during the fiscal
years ended December 31, 1994, 1993 and 1992, the Trust's management fees were
reduced by $155,511, $133,160 and $151,423, respectively, resulting in actual
management fees paid during these periods to PMC of $692,136, $587,361 and
$264,136, respectively. See the Notes to the Financial Statements in the
December 31, 1994 Annual Report (incorporated herein by reference) for more
information.
In an attempt to avoid any potential conflict with portfolio
transactions for the Trust, the Adviser and the Trust have adopted extensive
restrictions on personal securities trading by personnel of the Adviser and its
affiliates. These restrictions include: pre-clearance of all personal securities
transactions and a prohibition of purchasing initial public offerings of
securities. These restrictions are a continuation of the basic principle that
the interests of the Trust and its shareholders come before those of the Adviser
and its employees.
4. PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts, serves as the principal
underwriter for the Trust in connection with the continuous offering of the
shares of the Trust pursuant to an Underwriting Agreement dated July 10, 1990.
The Trustees who are not, and were not at the time they voted, interested
persons of the Trust, as defined in the 1940 Act, approved the Underwriting
Agreement. The Underwriting Agreement will continue from year to year if
annually approved by the Trustees. During the Trust's fiscal years ending
December 31, 1994, 1993 and 1992, net underwriting commissions retained by PFD
in connection with the offering of Trust shares were approximately $76,256,
$58,571 and $97,090, respectively. Commissions reallowed to dealers by PFD in
those periods were approximately $543,725, $504,896 and $845,975, respectively.
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. PFD
also pays certain expenses in connection with the distribution of the Trust'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 Trust bears the cost of
registering its shares under federal and state securities law. The Trust and PFD
have agreed to indemnify each other against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. Under the Underwriting
Agreement, PFD will use its best efforts in rendering services to the Trust.
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The Trust will not generally issue Trust shares for consideration other
than cash. At the Trust's sole discretion, however, it may issue Trust shares
for consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities (other than
municipal debt securities issued by state political subdivisions or their
agencies or instrumentalities) provided (i) the securities meet the investment
objectives and policies of the Trust; (ii) the securities are acquired by the
Trust for investment and not for resale; (ii) the securities are not restricted
as to transfer either by law or liquidity of market; and (iv) the securities
have a value which is readily ascertainable (and not established only by
evaluation procedures) as evidenced by a listing on the American Stock exchange
or the New York Stock Exchange or by quotation under the NASDAQ National Market.
An exchange of securities for Trust shares will generally be a taxable
transaction to the shareholder.
5. DISTRIBUTION PLANS
The Trust has adopted plans of distribution pursuant to Rule 12b-1
promulgated by the Securities and Exchange Commission ("SEC") under the 1940 Act
with respect to Class A, Class B and Class C shares (the "Class A Plan," the
"Class B Plan" and the "Class C Plan") (together, the "Plans").
Class A Plan
Pursuant to the Class A Plan, the Trust may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of the Class A Plan shares. Certain categories of such expenditures have been
approved by the Board of Trustees and are set forth in the Prospectus. See
"Distribution Plans" in the Prospectus. The expenses of the Trust pursuant to
the Class A Plan are accrued daily at a rate which may not exceed the annual
rate of 0.25% of the Trust's average daily net assets attributable to Class A
shares. The Class A Plan became effective on October 15, 1990. The Class A Plan
does not provide for the carryover of reimbursable expenses beyond twelve months
from the time they are incurred.
Class B Plan
The Class B Plan provides that the Trust shall pay PFD, as the Trust's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Trust's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Trust'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 Trust'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 consideration for personal services
and/or account maintenance services rendered by the dealer with respect to Class
B shares. PFD will advance to dealers the first- year service fee at a rate
equal to 0.25% of the amount invested. As compensation therefor, PFD may retain
the service fee paid by the Trust with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the thirteenth month following purchase.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
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<PAGE>
The purpose of distribution payments to PFD under the Class B Plan is
to compensate PFD for its distribution services to the Trust. PFD pays
commissions to dealers as well as expenses of printing prospectuses and reports
used for sales purposes, expenses with respect to the preparation and printing
of sales literature and other distribution related expenses, including, without
limitation, the cost necessary to provide distribution- related services or
personnel, travel, office expenses and equipment. The Class B Plan also provides
that PFD will receive all contingent deferred sales charges ("CDSCs")
attributable to Class B shares. (See "Distribution Plans" in the Prospectus.)
Class C Plan
The Class C Plan provides that the Trust will pay PFD, as the Trust'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 Trust's average daily net
assets attributable to Class C shares and will pay PFD a service fee equal to
0.25% of the Trust'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 Trust'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 Trust with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the amount invested and additional compensation
at a rate of up to 0.75% of the amount invested with respect to such shares.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class C Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is
to compensate PFD for its distribution services with respect to the Class C
shares of the Trust. PFD pays commissions to dealers as well as expenses of
printing prospectuses and reports used for sales purposes, expenses with respect
to the preparation and printing of sales literature and other
distribution-related expenses, including, without limitation, the cost necessary
to provide distribution-related services, or personnel, travel office expenses
and equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distributions Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Trust
for review by the Trustees a quarterly written report of the amounts expended
under the respective Plan and the purpose for which such expenditures were made.
In the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Trust, nor any Trustee of the Trust who is
not an interested person of the Trust, has any direct or indirect financial
interest in the operation of the Plans except
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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 Trust and except to the extent certain officers may have an
interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Trust, as defined in the 1940 Act (none of whom has or
have any direct or indirect financial interest in the operation of the Plans)
(the "Qualified Trustees"), cast in person at a meeting called for the purpose
of voting on the Plans. In approving the Plans, the Trustees identified and
considered a number of potential benefits which the Plans may provide. The Board
of Trustees believes that there is a reasonable likelihood that the Plans will
benefit the Trust and its current and future shareholders. Under their terms,
the Plans remain in effect from year to year provided such continuance is
approved annually by vote of the Trustees in the manner described above. The
Plans may not be amended to increase materially the annual percentage limitation
of average net assets which may be spent for the services described therein
without approval of the shareholders of the Trust affected thereby, and material
amendments of the Plans must also be approved by the Trustees in the manner
described above. A Plan may be terminated at any time, without payment of any
penalty, by vote of the majority of the Trustees who are not interested persons
of the Trust and have no direct or indirect financial interest in the operations
of the Plan, or by a vote of a majority of the outstanding voting securities of
the respective Class of the Trust (as defined in the 1940 Act). A Plan will
automatically terminate in the event of its assignment (as defined in the 1940
Act). In the Trustees' quarterly review of the Plans, they will consider the
Plans' continued appropriateness and the level of compensation they provide.
During the fiscal year ended December 31, 1994, the Trust incurred
distribution fees of $344,155 pursuant to the Class A Plan and $7,649 pursuant
to the Class B Plan. The distribution fees were paid by the Trust to PFD in
reimbursement of expenses related to servicing of shareholder accounts and to
compensating dealers' sales personnel. As of the date of this SAI, the Trust has
not incurred any distribution fees pursuant to the Class C Plan. Class C shares
will first be offered January 31, 1996.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The Trust has contracted with PSC, 60 State Street, Boston,
Massachusetts, to act as shareholder servicing and transfer agent for the Trust.
This contract terminates if assigned and may be terminated without penalty by
either party by vote of its Board of Directors or Trustees or a majority of its
outstanding voting securities and the giving of ninety days' written notice.
Under the terms of its contract with the Trust, PSC services
shareholder accounts, and its duties include: (i) processing sales, redemptions
and exchanges of shares of the Trust; (ii) distributing dividends and capital
gains associated with Trust portfolio accounts; and (iii) maintaining account
records and responding to shareholder inquiries.
PSC receives an annual fee of $30.00 per Class A, Class B and Class C
shareholder account from the Trust as compensation for the services described
above. This fee is set at an amount determined by vote of a majority of the
Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies.
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<PAGE>
7. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of the
Trust's assets. The Custodian's responsibilities include safekeeping and
controlling the Trust's cash and securities, handling the receipt and delivery
of securities and collecting interest and dividends on the Trust's investments.
The Custodian does not determine the investment policies of the Trust or decide
which securities the Trust will buy or sell. The Trust may, however, invest in
securities, including repurchase agreements, issued by the Custodian and may
deal with the Custodian as principal in securities transactions. Portfolio
securities may be deposited into the Federal Reserve-Treasury Department Book
Entry System or the Depository Trust Company.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP are the Trust'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
The Trust intends to fully manage its portfolio by buying and selling
securities, as well as holding securities to maturity. In managing its
portfolio, the Trust seeks to take advantage of market developments and yield
disparities, which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in
anticipation of a rise in interest rates so as to minimize depreciation
of principal;
(2) lengthening the average maturity of its portfolio in
anticipation of a decline in interest rates so as to maximize yield;
(3) selling one type of debt security and buying another when
disparities arise in the relative values of each; and
(4) changing from one debt security to an essentially similar
debt security when their respective yields appear distorted due to
market factors.
The Trust engages in portfolio trading if it believes a transaction net
of costs (including taxes and custodian charges) will help in achieving the
Trust's investment objective.
Decisions relating to the purchase and sale of securities for the
Trust, the allocation of portfolio transactions and, where applicable, the
negotiation of commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in and broker-dealers through which it seeks this result. Debt
securities are traded principally in the over-the-counter market on a net basis
through dealers acting for their own account and not as brokers. The cost of
securities purchased from underwriters includes an underwriter's commission or
concession, and the prices at which securities are purchased and sold from and
to dealers include a dealer's markup or markdown. PMC attempts to negotiate with
underwriters to decrease the commission
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or concession for the benefit of the Trust. PMC normally seeks to deal directly
with the primary market makers unless, in its opinion, better prices are
available elsewhere.
Subject to the requirement of seeking execution at the best available
price, securities may, as authorized by PMC's management contract, be bought
from or sold to dealers who furnish statistical research and other information
or services to PMC and the Trust, or who sell shares of the Trust. Brokerage and
research services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the availability
of securities or the purchasers or sellers of securities; and furnishing
analyses, manuals and reports concerning issuers, securities, economic factors
and trends, portfolio strategy, performance of accounts, comparative fund
statistics and credit rating service information. PMC maintains a listing of
dealers who provide such services on a regular basis. Management believes that
no exact dollar value can be calculated for such services.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Trust.
10. TAX STATUS
It is the Trust's policy to meet the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as
a regulated investment company. These requirements relate to the sources of its
income, diversification of its assets and distribution of its income to
shareholders. If the Trust meets all such requirements and distributes to its
shareholders at least annually all investment company taxable income and net
capital gain, if any, which it receives, the Trust will be relieved of the
necessity of paying federal income tax.
Because the Trust's income is not expected to arise from dividends, no
part of its distributions to its corporate shareholders will qualify for the
dividends-received deduction for corporations.
Any dividend declared by the Trust 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.
Since, at the time of an investor's purchase of Trust shares, a portion
of the per share net asset value by which the purchase price is determined may
be represented by realized or unrealized appreciation in the Trust's portfolio
or undistributed taxable income of the Trust, subsequent distributions (or
portions thereof) on such shares may be taxable to such investor even if the net
asset value of his shares is, as a result of the distributions, reduced below
his cost for such shares and the distributions (or portions thereof) in reality
represent a return of a portion of his investment.
Any loss realized by a shareholder upon the redemption of shares with a
tax holding period at the time of redemption 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.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment pursuant to the
reinvestment privilege, the sales charge paid on such shares is not included in
their tax basis under the Code, and (2) in the case of an exchange,
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<PAGE>
all or a portion of the sales charge paid on such shares in not included in
their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the share redeemed or surrendered in an exchange is included in the
tax basis of the shares acquired in the reinvestment or exchange. Losses on
certain redemptions may be disallowed under "wash sale" rules in the event of
other investments in the Trust within 30 days before or after a redemption or
other sale of shares.
For federal income tax purposes, the Trust is permitted to carry
forward a net realized capital loss in any year to offset realized capital
gains, if any, during the eight years following the year of the loss. To the
extent subsequent net realized capital gains are offset by such losses, they
would not result in federal income tax liability to the Trust and are not
expected to be distributed as such to shareholders.
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.
The Trust is not subject to Massachusetts corporate excise or franchise
taxes and, provided that it qualifies as a regulated investment company under
the Code, will not be required to pay any Massachusetts income tax.
Federal law requires that the Trust withhold (as "backup withholding")
31% of reportable payments, including dividends, capital gain dividends, and
proceeds of redemptions (including exchanges) and repurchases to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Applications, or on separate W-9 Forms, that their Social Security or other
Taxpayer Identification Number is correct and that they are not currently
subject to backup withholding, or that they are exempt from backup withholding.
The Trust 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.
It is possible that some states will exempt from income tax that
portion of a dividend of the Trust that represents interest received by the
Trust from U.S. Government securities. Therefore, the Trust will report annually
to its shareholders the percentage of interest income received from U.S.
Government securities during the preceding year indicating the source of such
income. Each shareholder is advised to consult his own tax adviser regarding the
exemption, if any, of such interest income under applicable law.
The description above relates only to U.S. federal income tax
consequences for shareholders who are U.S. persons, i.e., U.S. citizens or
residents, or U.S. corporations, partnerships, trusts or estates, and who are
subject to U.S. federal income tax. The description does not address the special
tax rules applicable to certain classes of investors, such as banks, insurance
companies or tax-exempt entities. Investors other than U.S. persons may be
subject to different U.S. tax treatment, including a possible 30% U.S.
withholding tax (or withholding tax at a lower treaty rate) on dividends treated
as ordinary income. Shareholders should consult their own tax advisers on these
matters and on state, local and other applicable tax laws.
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11. DESCRIPTION OF SHARES
The Trust's Declaration of Trust permits the Board of Trustees to
authorize the issuance of an unlimited number of full and fractional shares of
beneficial interest (without par value) which may be divided into such separate
series as the Trustees may establish. Currently, the Trust consists of only one
series. The Trustees may, however, establish additional series of shares in the
future, and may divide or combine the shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial interests in the
Trust. The Declaration of Trust further authorizes the Trustees to classify or
reclassify any series of the shares into one or more classes. Pursuant thereto,
the Trustees have authorized the issuance of three classes of shares of the
Trust, Class A shares, Class B shares and Class C shares. Each share of a class
of the Trust represents an equal proportionate interest in the assets of the
Trust allocable to that class. Upon liquidation of the Trust, shareholders of
each class of the Trust are entitled to share pro rata in the Trust's net assets
allocable to such class available for distribution to shareholders. The Trust
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. Prior to July 1, 1994, the Trust was named Pioneer U.S. Government
Trust.
Shareholders are entitled to one vote for each share held and may vote
in the election of Trustees and on other matters submitted to meetings of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. No amendment adversely affecting the rights of shareholders may be
made to the Trust's Declaration of Trust without the affirmative vote of a
majority of its shares. Shares have no preemptive or conversion rights. Shares
are fully paid and non-assessable by the Trust, except as stated below. See
"Certain Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Trust's operations are governed
by its Amended and Restated Declaration of Trust dated December 7, 1993, a copy
of which is on file with the office of the Secretary of The Commonwealth of
Massachusetts. Theoretically, shareholders of a Massachusetts business trust
may, under certain circumstances, be held personally liable for the obligations
of the trust. However, the Declaration of Trust contains an express disclaimer
of shareholder liability for acts or obligations of the Trust or any series of
the Trust and provides that notice of such disclaimer may be given in each
agreement, obligation or instrument entered into or executed by the Trust or its
Trustees. Moreover, the Declaration of Trust provides for the indemnification
out of Trust property of any shareholders held personally liable for any
obligations of the Trust or any series of the Trust. The Declaration of Trust
also provides that the Trust shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Trust and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability
would be limited to circumstances in which the Trust itself will be unable to
meet its obligations. In light of the nature of the Trust's business and the
nature and amount of its assets, the possibility of the Trust's liabilities
exceeding its assets, and therefore a shareholder's risk of personal liability,
is remote.
The Declaration of Trust further provides that the Trust 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
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<PAGE>
such Trustee or officer, directly or indirectly, by reason of being or having
been a Trustee or officer of the Trust. The Declaration of Trust does not
authorize the Trust to indemnify any Trustee or officer against any liability to
which he or she would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such person's
duties.
13. LETTER OF INTENTION
Purchases of $100,000 or more of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Trust Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Trust
Class A shares of $100,000 over a 13-month period would be charged at the 3.5%
sales charge rate with respect to all purchases during that period. Should the
amount actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all his shares in the Trust and other Pioneer mutual funds except
directly purchased Class A shares of Pioneer Money Market Trust, held of record
as of the date of this Letter of Intention as a credit toward determining the
applicable scale of sales charge for the Class A shares to be purchased under
the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment in the Letter of Intention.
A Letter of Intention is not a binding obligation upon the investor to purchase,
or the Trust to sell, the full amount indicated and the investor should read the
provisions thereof carefully before signing.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from shares
of the Trust deposited by the applicant under this SWP. Withdrawals pursuant to
the SWP are limited to 10% of the value of the account at the time the plan is
implemented if a CDSC applies (see the Prospectus). (You may, of course, redeem
your shares without limit outside the SWP.) In order to be eligible for the SWP,
your account must have a total value of not less than $10,000. Periodic payments
of $50 or more will be deposited monthly or quarterly directly into a bank
account designated by you, or will be sent by check to you, or any person
designated by you. A designation of a third party to receive checks requires an
acceptable signature guarantee.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
Payments under the SWP are made from the proceeds of the redemption of
shares deposited under the SWP in your SWP account. Such redemptions are taxable
transactions. To the extent that such redemptions for periodic withdrawals
exceed dividend income reinvested in the SWP account, such redemptions will
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reduce and may ultimately exhaust the number of shares deposited in the SWP
account. In addition, the amounts received by a shareholder cannot be considered
as an actual yield or income on his or her investment because part of such
payments may be a return of his or her capital.
The SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the SWP have been
redeemed.
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Class of the Trust is determined
as of the close of regular trading on the New York Stock Exchange (the
"Exchange") (normally 4:00 p.m., Eastern Time) on each day on which the Exchange
is open for business. As of the date of this Statement of Additional
Information, the Exchange is open for trading every weekday except for the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share of each Class of the Trust is also determined on any other day
in 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 Trust is not required to
determine its net asset value per share on any day in which no purchase orders
for the shares of the Trust become effective and no shares are tendered for
redemption.
The net asset value per share of each class of the Trust is computed by
taking the amount of the value of all the Trust's assets attributable to that
class, less the Trust's liabilities attributable to that class, and dividing it
by the number of outstanding shares of that class. For purposes of determining
net asset value, expenses of the classes of the Trust are accrued daily and
taken into account.
16. INVESTMENT RESULTS
The Trust's yield quotations and average annual total return quotations
for each class of its shares as that information may appear in the Prospectus,
this Statement of Additional Information or in advertising are calculated by
standard methods prescribed by the SEC.
Standardized Yield Quotations
Yield quotations for Class A, Class B and Class C shares are computed
by dividing the net investment income per share attributable to a class during a
base period of 30 days, or one month, by the maximum offering price per share of
that class of the Trust on the last day of such base period in accordance with
the following formula:
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a-b
YIELD = 2[ (------- +1)6-1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last day
of the period
For purposes of calculating interest earned on debt obligations as provided in
item "a" above:
(i) The yield to maturity of each obligation held by the Trust is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates.
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period.
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled.
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date.
With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the Trust accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the Trust may elect (i) to
amortize the discount or premium remaining on a security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the discount or premium
remaining on a security.
The Trust's yield for the 30 days ended December 31, 1994, determined
in accordance with the formula above was 6.75% for Class A shares and 6.34% for
Class B shares, except that absent expense limitations, the Trust's yield would
have been 6.69% for Class A shares and 6.28% for Class B shares. Class C shares
will first be offered January 31, 1996.
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Standardized Average Annual Total Return Quotations
One of the primary methods used to measure the performance of a class
of the Trust is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in a
class of the Trust, over any period up to the lifetime of that class of the
Trust. Total return calculations will usually assume the reinvestment of all
dividends and capital gains distributions and will be expressed as a percentage
increase or decrease from an initial value, for the entire period or for one or
more specified periods within the entire period. Total return percentages for
periods of less than one year will usually be annualized; total return
percentages for periods longer than one year will usually be accompanied by
total return percentages for each year within the period and/or by the average
annual compounded total return for the period. The income and capital components
of a given return may be separated and portrayed in a variety of ways in order
to illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values, without percentages. Past performance cannot
guarantee any particular future result.
Average annual total return quotations for each Class of Trust shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in that class made on the first day of a
designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1000, less
the maximum sales load for Class A shares or
the deduction of any CDSC applicable to Class B
or Class C shares at the end of the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical
$1000 initial payment made at the beginning of
the designated period (or fractional portion
thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the Trust are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts of
a particular class are taken into consideration. For any account fees that vary
with the size of the account, the account fee used for purposes of the above
computation is assumed to be the fee that would be charged to the class' mean
account size.
The average annual total return of the Trust for Class A shares for the
one- and five-year periods ended December 31, 1994 and for the period from
inception (May 31, 1988) through December 31, 1994 were -8.26%, 5.46% and 6.45%,
respectively. The total return of the Trust for Class B shares for the period
from April 29, 1994 through December 31, 1994 was -4.39%.
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Absent expense limitations in effect during these two periods, the average
annual total return of the Trust would have been lower than the returns quoted
above. Class C shares will first be offered January 31, 1996.
Other Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of the Trust may be illustrated
and/or compared with that of other mutual funds with similar investment
objectives, and to other relevant indices. For example, yield of the Trust's
classes may be compared to the Shearson Lehman Hutton Government Index, U.S
Government bond rates, or other comparable indices or investment vehicles.
In addition, the performance of the classes of the Trust may be
compared to alternative investment or savings vehicles and/or to indexes or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumer's Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, the 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 Trust is listed in any such publication) or used for comparison,
as well as performance listings and rankings from various other sources
including Bloomberg Financial Systems, CDA/Wiesenberger Investment Companies
Service, Donoghue's Mutual Fund Almanac, Investment Company Data, Inc.,
Johnson's Charts, Kanon Bloch Carre & Co., Micropal, Inc., Morningstar, Inc.,
Schabacker Investment Management and Towers Data Systems.
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 Trust.
The Trust may also present, from time to time, historical information
depicting the value of a hypothetical account in one or more classes of the
Trust since the Trust's inception.
In presenting investment results, the Trust 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.
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
(degree) net asset value prices for all Pioneer mutual funds;
(degree) annualized 30-day yields on Pioneer's bond funds;
(degree) annualized 7-day yields and 7-day effective (compound)
yields for Pioneer's money market funds; and
(degree) dividends and capital gains distributions on all
Pioneer mutual funds.
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Yields are calculated in accordance with Securities and Exchange
Commission mandated standard formulas.
In addition, by using a personal identification number ("PIN"),
shareholders may enter purchases, exchanges and redemptions, access their
account balance and last three transactions and may order a duplicate statement.
See "FactFoneSM" in the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the applicable
maximum sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A, Class B and Class C
shares (except for Pioneer money market funds, which seek a stable $1.00 share
price) will also vary and may be worth more or less at redemption than their
original cost.
17. FINANCIAL STATEMENTS
The Trust's financial statements for the year ended December 31, 1994
are included in the Trust's Annual Report to Shareholders, which report is
incorporated by reference into and is attached to this Statement of Additional
Information. The Trust's Annual Report to Shareholders is so incorporated and
attached in reliance upon the report of Arthur Andersen LLP, independent public
accountants, as experts in accounting and auditing.
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APPENDIX A
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, most respected and successful money
managers in the United States.
As of December 31, 1994, PMC employed a professional investment staff of 46,
with a combined average of 14 years' experience in the financial services
industry.
At December 31, 1994, there were 591,192 non-retirement shareholder accounts and
337,577 retirement shareholder accounts in Pioneer's funds. Total assets for all
Pioneer Funds were $10,038,000,000 representing 927,769 shareholder accounts.
A-1
<PAGE>
<TABLE>
<CAPTION>
Pioneer America Income Trust
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
6/1/88 $10,000 $10.47 4.50% 955.11 $10.00 $9,551
</TABLE>
Dividends and Capital Gains Reinvested
<TABLE>
<CAPTION>
Value of Shares
Date From From Cap. Gains From Dividends Total Value
Investment Reinvested Reinvested
<S> <C> <C> <C> <C>
12/31/88 $9,418 $0 $ 492 $9,910
12/31/89 $9,589 $0 $1,460 $11,049
12/31/90 $9,580 $0 $2,463 $12,043
12/31/91 $9,885 $0 $3,620 $13,505
12/31/92 $9,809 $0 $4,597 $14,406
12/31/93 $10,010 $52 $5,652 $15,714
12/31/94 $8,987 $47 $6,055 $15,089
</TABLE>
<PAGE>
INDEX DESCRIPTIONS
LONG-TERM MUNICIPAL BOND PORTFOLIO *
For the 1926 to 1984 period, returns are calculated form yields on 20-year prime
issues from Solomon Brothers' Analytical Record of Yields and Yields Spreads,
assuming coupon equals previous year-end yield and a 20-year maturity. For 1985
to the present, returns are calculated using Moody's Bond Record, using the
December average municipal yield as the beginning-of-following year coupon
(average of Aaa, Aa, A, Baa grades).
LONG-TERM CORPORATE BONDS *
For 1969 through 1991, corporate bond total returns are represented by the
Salomon Brothers Long-Term High-Grade Corporate Bond Index. Since most large
corporate bond transactions take place over the counter, a major dealer is the
natural source of these data. The index includes nearly all Aaa- and Aa-rated
bonds. If a bond is downgraded during a particular month, its return for the
month is included in the index before removing the bond from future portfolios.
For 1926 through 1968, total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 through 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
for 1969-1991. Capital appreciation returns were calculated from yields assuming
(at the beginning of each monthly holding period) a 20-year maturity, a bond
price equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times Mirror/ Mosby, St. Louis,
1990, p. 97 ["Level-Coupon Bonds"].) The monthly income return was assumed to be
one-twelfth the coupon.
LONG-TERM GOVERNMENT BOND TOTAL RETURN *
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government Bond File at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates minus the current date. The
bond was "held" for the calendar year and returns were computed. Total returns
for 1977-1991 are calculated as the change in the flat price or and-interest
price.
INTERMEDIATE-TERM GOVERNMENT BONDS TOTAL RETURN *
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns for 1934 through 1986 are obtained from the CRSP Government Bond File.
<PAGE>
INDEX DESCRIPTIONS
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) For the period from 1934 through
1942, almost all bonds with maturities near 5 years were partially or full
tax-exempt and were selected using the rules described above. Personal tax rates
were generally low in that period, so that yields on tax-exempt bonds were
similar to yields on taxable bonds. Between 1926 and 1933, there are few bonds
suitable for construction of a series with a 5-year maturity. For this period,
five year bond yield estimates are used.
U.S. (30 DAY) TREASURY BILL TOTAL RETURNS *
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source of data through
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.
BANK SAVINGS ACCOUNT **
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
6 MONTH CD **
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
Sources: * Ibbotson Associates
** Towers Data Systems
<PAGE>
<TABLE>
<CAPTION>
COMPARATIVE PERFORMANCE STATISTICS
Municipal U.S. Long Term U.S. Long Term U.S. Interm. U.S.(30Day) Bank Savings
Long term Corporate Bds Govt Bonds Govt Bonds Treasury Bill Account 6 Month CD
%TR * %Total Return * %Total Return * %Total Return * %Total Return * %Total Return ** %Total Return **
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1928 0.55 2.84 0.10 0.92 3.56 N/A N/A
Dec 1929 3.22 3.27 3.42 6.01 4.75 N/A N/A
Dec 1930 6.52 7.98 4.66 6.72 2.41 5.30 N/A
Dec 1931 -3.53 -1.85 -5.31 -2.32 1.07 5.10 N/A
Dec 1932 8.19 10.82 16.84 8.81 0.96 4.10 N/A
Dec 1933 -2.17 10.38 -0.07 1.83 0.30 3.40 N/A
Dec 1934 21.66 13.84 10.03 9.00 0.16 3.50 N/A
Dec 1935 9.18 9.61 4.98 7.01 0.17 3.10 N/A
Dec 1936 -15.13 6.74 7.52 3.06 0.18 3.20 N/A
Dec 1937 28.38 2.75 0.23 1.56 0.31 3.50 N/A
Dec 1938 9.24 6.13 5.53 6.23 -0.02 3.50 N/A
Dec 1939 5.70 3.97 5.94 4.52 0.02 3.40 N/A
Dec 1940 10.52 3.39 6.09 2.96 0.00 3.30 N/A
Dec 1941 -0.80 2.73 0.93 0.50 0.06 3.10 N/A
Dec 1942 2.09 2.60 3.22 1.94 0.27 3.00 N/A
Dec 1943 6.51 2.83 2.08 2.81 0.35 2.90 N/A
Dec 1944 4.15 4.73 2.81 1.80 0.33 2.80 N/A
Dec 1945 5.76 4.08 10.73 2.22 0.33 2.50 N/A
Dec 1946 -3.77 1.72 -0.10 1.00 0.35 2.20 N/A
Dec 1947 -4.04 -2.34 -2.62 0.91 0.50 2.30 N/A
Dec 1948 3.79 4.14 3.40 1.85 0.81 2.30 N/A
Dec 1949 14.39 3.31 6.45 2.32 1.10 2.40 N/A
Dec 1950 4.15 2.12 0.06 0.70 1.20 2.50 N/A
Dec 1951 -3.65 -2.69 -3.93 0.36 1.49 2.60 N/A
Dec 1952 -3.21 3.52 1.16 1.63 1.66 2.70 N/A
Dec 1953 0.38 3.41 3.64 3.23 1.82 2.80 N/A
Dec 1954 3.74 5.39 7.19 2.68 0.86 2.90 N/A
Dec 1955 -1.21 0.48 -1.29 -0.65 1.57 2.90 N/A
Dec 1956 -7.61 -6.81 -5.59 -0.42 2.46 3.00 N/A
Dec 1957 5.92 8.71 7.46 7.84 3.14 3.30 N/A
Dec 1958 -2.56 -2.22 -6.09 -1.29 1.54 3.38 N/A
Dec 1959 -3.43 -0.97 -2.26 -0.39 2.95 3.53 N/A
Dec 1960 8.61 9.07 13.78 11.76 2.66 3.86 N/A
Dec 1961 2.37 4.82 0.97 1.85 2.13 3.90 N/A
Dec 1962 7.68 7.95 6.89 5.56 2.73 4.08 N/A
Dec 1963 -0.84 2.19 1.21 1.64 3.12 4.17 N/A
Dec 1964 4.59 4.77 3.51 4.04 3.54 4.19 4.18
Dec 1965 -2.74 -0.46 0.71 1.02 3.93 4.23 4.68
Dec 1966 0.58 0.20 3.65 4.69 4.76 4.45 5.75
Dec 1967 -4.41 -4.95 -9.18 1.01 4.21 4.67 5.48
<PAGE>
COMPARATIVE PERFORMANCE STATISTICS
Municipal U.S. Long Term U.S. Long Term U.S. Interm. U.S.(30Day) Bank Savings
Long term Corporate Bds Govt Bonds Govt Bonds Treasury Bill Account 6 Month CD
%TR * %Total Return * %Total Return * %Total Return * %Total Return * %Total Return ** %Total Return **
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1968 -0.96 2.57 -0.26 4.54 5.21 4.68 6.44
Dec 1969 -15.39 -8.09 -5.07 -0.74 6.58 4.80 8.71
Dec 1970 21.10 18.37 12.11 16.86 6.52 5.14 7.06
Dec 1971 12.26 11.01 13.23 8.72 4.39 5.30 5.36
Dec 1972 1.51 7.26 5.69 5.16 3.84 5.37 5.38
Dec 1973 4.27 1.14 -1.11 4.61 6.93 5.51 8.60
Dec 1974 -10.66 -3.06 4.35 5.69 8.00 5.96 10.20
Dec 1975 11.55 14.64 9.20 7.83 5.80 6.21 6.51
Dec 1976 15.79 18.65 16.75 12.87 5.08 6.23 5.22
Dec 1977 3.87 1.71 -0.69 1.41 5.12 6.39 6.12
Dec 1978 -3.98 -0.07 -1.18 3.49 7.18 6.56 10.21
Dec 1979 1.02 -4.18 -1.23 4.09 10.38 7.29 11.90
Dec 1980 -17.57 -2.76 -3.95 3.91 11.24 8.78 12.33
Dec 1981 -15.52 -1.24 1.86 9.45 14.71 10.71 15.50
Dec 1982 47.94 42.56 40.36 29.10 10.54 11.19 12.18
Dec 1983 3.34 6.26 0.65 7.41 8.80 9.71 9.65
Dec 1984 8.41 16.86 15.48 14.02 9.85 9.92 10.65
Dec 1985 24.03 30.09 30.97 20.33 7.72 9.02 7.82
Dec 1986 27.31 19.85 24.53 15.14 6.16 7.84 6.30
Dec 1987 -5.06 -0.27 -2.71 2.90 5.47 6.92 6.58
Dec 1988 11.47 10.70 9.67 6.10 6.35 7.20 8.15
Dec 1989 14.64 16.23 18.11 13.29 8.37 7.91 8.27
Dec 1990 6.54 6.78 6.18 9.73 7.81 7.8 7.85
Dec 1991 11.18 19.89 19.30 15.46 5.60 4.61 4.95
Dec 1992 10.80 9.39 8.05 7.19 3.51 2.89 3.27
Dec 1993 14.16 13.19 18.24 11.24 2.90 2.73 2.88
Dec 1994 -8.63 -5.76 -7.77 -5.14 3.90 4.96 5.4
</TABLE>
* Source: Ibbotson Associates
** Source: Towers Data Systems
