SUPPLEMENT TO THE October 31, 1997
STATEMENT OF ADDITIONAL INFORMATION OF
PIONEER AMERICA INCOME TRUST
Dated April 30, 1997
1. INVESTMENT POLICIES AND RESTRICTIONS
The following non-fundamental investment restrictions replace the
current non-fundamental investment restrictions of Pioneer America Income Trust
(the Trust) applicable to its status as an eligible investment for Federal
credit unions on pages 4 and 5 of the attached Statement of Additional
Information:
In order to qualify as a 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:
(a) The Trust may contract for the purchase or sale of a security as
long as the delivery of the security is by regular-way settlement. Regular-way
settlement means delivery of a security from a seller to a buyer within the time
frame that the securities industry has established for that type of security.
(b) The Trust may invest in a variable rate investment, as long as the
index is tied to domestic interest rates and not, for example, to foreign
currencies, foreign interest rates, or domestic or foreign commodity prices,
equity prices, or inflation rates. For these purposes, the U.S.
dollar-denominated London Interbank Offered Rate (LIBOR) is a domestic interest
rate.
(c) The Trust may not invest in shares or deposits in a corporate
credit union.
(d) The Trust may not invest in a registered investment company or
collective investment fund.
(e) (1) The Trust may invest in a fixed or variable rate CMO/REMIC
only if the security meets all of the following tests:
(i) Average Life Test. The CMO/REMIC's
estimated average life is 10 years or
less;
(ii) Average Life Sensitivity Test. The
CMO/REMIC's estimated average life extends by
four years or less, assuming an immediate and
sustained parallel shift in interest rates of up
to and including plus 300 basis points, and
shortens by six years or less, assuming an
immediate and sustained parallel shift in
interest rates of up to and including minus 300
basis points; and
(iii) Price Sensitivity Test. The CMO/REMIC's
estimated price change is 17 percent or less, as
a result of an immediate and sustained parallel
shift in interest rates of up to and including
plus and minus 300 basis points.
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(2) The Trust must retest CMOs/REMICs at least quarterly, more
frequently if market or business conditions dictate.
(3) If the Trust uses individual prepayment estimates for
testing, the Trust must obtain estimates from all of the
prepayment sources listed in its investment policy. When the
Trust purchases a CMO/REMIC, the security must pass the tests
for each estimate. When the Trust retests the CMO/REMIC, the
security must pass the tests for a majority of the estimates.
(4) If the Trust uses a median prepayment estimate, the median
estimate at the time of purchase of a CMO/REMIC must be based on
at least five prepayment sources. When the Trust retests the
CMO/REMIC, the median estimate must be based on at least two
prepayment sources.
(f) The Trust may not invest in municipal securities.
(g) The Trust may not invest in any of the following instruments:
(1) Yankee dollar deposits;
(2) Eurodollar deposits;
(3) Banker's acceptances;
(4) Deposit notes; and
(5) Bank notes.
(h) The Trust may enter into a repurchase transaction as long as:
(1) The repurchase securities are of the type
described in the Prospectus for investment
by the Trust;
(2) The Trust receives a daily assessment of the market
value of the repurchase securities, including accrued
interest, and maintains adequate margin that reflects a
risk assessment of the repurchase securities and the terms
of the transaction; and
(3) The Trust has entered into signed contracts with all
approved counterparties.
(i) The Trust may not enter into reverse repurchase and collateralized
borrowing transactions.
(j) The Trust may not lend portfolio securities.
(k) (1) The Trust may trade securities, including engaging in
when-issued trading and pair-off transactions, as long as the
Trust's investment adviser can show that it has sufficient
resources, knowledge, systems, and procedures to handle the
risks.
(2) The Trust must record any security it purchases or sells
for trading purposes at fair value on the trade date. The trade
date is the date the Trust commits, orally or in writing, to
purchase or sell a security.
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(3) At least monthly, the Trust must give its Board of
Trustees or the investment adviser's investment-related
committee a written report listing all purchase and sale
transactions of trading securities and the resulting gain or
loss on an individual basis.
(l) The Trust may not purchase or sell financial derivatives, such as
futures, options, interest rate swaps, or forward rate agreements.
(m) The Trust may not engage in adjusted trading or short sales.
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.
(n) The Trust may not purchase stripped mortgage-backed securities,
residual interests in CMOs/REMICs, mortgage servicing rights, commercial
mortgage related securities, or small business related securities.
(o) The Trust may not purchase a zero coupon investment with a
maturity date that is more than 10 years from the settlement date.
2. MANAGEMENT OF THE TRUST
MARY K. BUSH, Trustee, DOB: April 1948
4201 Cathedral Ave. NW, Washington, DC 20016
President, Bush & Co., an international financial advisory firm, since
1991; Director/Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc., Small Enterprise Assistance Fund and Wilberforce
University; Advisory Board member, Washington Mutual Investors Fund, a
registered investment company; U.S. Alternate Executive Director, International
Monetary Fund (1984-1988); and Managing Director, Federal Housing Finance Board
(1989-1991), and Trustee of all of the Pioneer mutual funds, except Pioneer
Variable Contracts Trust.
Total Compensation from the
Pension or Trust and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Trustee From the Trust Accrued of Mutual Funds**
Mary K. Bush+ $ 0 $0 $ 0
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+ Mary K. Bush became a Trustee on June 23, 1997.
