[PIONEER LOGO]
Pioneer Capital
Growth Fund
Class A and Class B Shares
Prospectus
February 24, 1995
(revised June 23, 1995)
Pioneer Capital Growth Fund (the "Fund") seeks capital appreciation by
investing in a diversified portfolio of securities consisting primarily of
common stocks. Any current income generated from these securities is incidental
to the investment objective of the Fund.
In order to achieve its investment objective, the Fund may invest a significant
portion of its assets in foreign securities. See "Investment Objective and
Policies" in this Prospectus. There is, of course, no assurance that the Fund
will achieve its investment objective. The Fund is one of three series of
Pioneer Growth Trust (the "Trust").
Fund returns and share prices fluctuate and the value of your account upon
redemption may be more or less than your purchase price. Shares in the Fund are
not deposits or obligations of, or guaranteed or endorsed by, any bank or other
depository institution, and the shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency.
This Prospectus (Part A of the Registration Statement) provides information
about the Fund that you should know before investing. Please read and retain it
for your future reference. More information about the Fund is included in Part
B, the Statement of Additional Information, also dated February 24, 1995, 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. Additional 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
Risk Factors 4
IV. MANAGEMENT OF THE FUND 5
V. FUND SHARE ALTERNATIVES 5
VI. SHARE PRICE 6
VII. HOW TO BUY FUND SHARES 6
Class A Shares 6
Class B Shares 8
VIII. HOW TO SELL FUND SHARES 9
IX. HOW TO EXCHANGE FUND SHARES 10
X. DISTRIBUTION PLANS 11
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 11
XII. SHAREHOLDER SERVICES 12
Account and Confirmation Statements 12
Additional Investments 12
Automatic Investment Plans 12
Financial Reports and Tax Information 12
Distribution Options 12
Directed Dividends 12
Direct Deposit 13
Voluntary Tax Withholding 13
Telephone Transactions and Related Liabilities 13
FactFone(SM) 13
Retirement Plans 13
Telecommunications Device for the Deaf (TDD) 13
Systematic Withdrawal Plans 13
Reinstatement Privilege (Class A only) 13
XIII. THE TRUST 14
XIV. INVESTMENT RESULTS 14
APPENDIX 14
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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.
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I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in the
Fund. The table reflects estimated annual operating expenses based on actual
expenses for the fiscal year ended October 31, 1994.
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Shareholder Transaction Expenses: Class A Class B
Maximum Initial Sales Charge on
Purchases (as a percentage of offering price) 5.75%(1) None
Maximum Sales Charge on
Reinvestment of Dividends None None
Maximum Deferred Sales Charge None(1) 4.00%
Redemption Fee(2) None None
Exchange Fee None None
Annual Operating Expenses (As a Percentage
of Net Assets):(3)
Management Fees 0.65% 0.65%
12b-1 Fees 0.24% 1.00%
Other Expenses (including accounting and transfer
agent fees, custodian fees and printing expenses) 0.37% 0.39%
Total Operating Expenses: 1.26% 2.04%
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(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge as further described under "How to
Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) For Class B shares, percentages are based on estimated expenses that would
have been incurred during the previous fiscal year had Class B shares been
outstanding for the entire period.
Example:
You would pay the following dollar amounts on a $1,000 investment in the
Fund, assuming 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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Class A Shares $70 $95 $123 $201
Class B Shares
- --Assuming complete
redemption at end of period $61 $94 $130 $217*
- --Assuming no redemption $21 $64 $110 $217*
</TABLE>
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
The example above assumes the 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 information purposes only, and should not be
considered a representation of future expenses or return. Actual Fund expenses
and return will vary from year to year and may be higher or lower than those
shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
management fees and 12b-1 fees are paid, see "Management of the Fund,"
"Distribution Plans" and "How To Buy Fund Shares" in this Prospectus and
"Management of the Funds" and "Underwriting Agreement and Distribution Plans"
in the Statement of Additional Information. The Fund's imposition of a Rule
12b-1 fee may result in long-term shareholders indirectly paying more than the
economic equivalent of the maximum sales charge permitted under Rules of Fair
Practice of the National Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified larger
amounts of Class A shares and the value of shares owned in other Pioneer mutual
funds is taken into account in determining the applicable initial sales charge.
See "How to Buy Fund Shares." No sales charge is applied to exchanges of shares
of the Fund for shares of other publicly available Pioneer mutual funds. See
"How to Exchange Shares."
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II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements of the
Fund which have been audited by Arthur Andersen LLP, independent public
accountants, in connection with their examination of the Fund's financial
statements. Arthur Andersen LLP's report on the Fund's financial statements as
of October 31, 1994 appears in the Fund's Annual Report which 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 Annual Report. The Annual Report includes more information
about the Fund's performance and is available free of charge by calling
Shareholder Services at 1-800-225-6292.
Pioneer Capital Growth Fund
Financial Highlights for Each Class A Share Outstanding Throughout Each Period:
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7/25/90
(Commencement
Year
Ended of Operations)
October 31, October 31, October 31,
October 31, to
1994 1993 1992
1991 10/31/90
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Net asset value, beginning of period $ 16.17 $ 12.42 $11.58 $
7.50 $ 10.50
Income from investment operations--
Net investment income (loss)--net $ (0.05) $ (0.02) $ (0.01) $
0.07 $ (0.04)
Net realized and unrealized gain (loss) on
investments 2.80 4.43 1.21
4.01 (2.96)
Total income (loss) from investment
operations $ 2.75 $ 4.41 $ 1.20 $
4.08 $ (3.00)
Distribution to shareholders from:
Net investment income -- -- (0.04)
- -- --
Net realized capital gains (1.66) (0.66) (0.32)
- -- --
Net increase (decrease) in net asset value $ 1.09 $ 3.75 $ 0.84 $
4.08 $ (3.00)
Net asset value, end of period $ 17.26 $ 16.17 $12.42
$11.58 $ 7.50
Total return* 19.03% 36.59% 10.88%
54.40% (28.57%)
Ratio of net operating expenses to average net
assets 1.26% 1.27% 1.48%
1.69% 7.12%**
Ratio of net investment income (loss) to
average net assets (0.44%) (0.26%) (0.20%)
0.69% (2.18%)**
Portfolio turnover rate 47.10% 68.09% 62.00%
37.76% 0.00%
Net assets, end of period (in thousands) $405,904 $194,670 $75,796
$21,013 $ 2,483
Ratios assuming no reduction of fees or
expenses by PMC
Net operating expenses -- -- --
2.78% --
Net investment loss -- -- --
(0.40%) --
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Financial Highlights for Each Class B Share Outstanding Throughout the Period:
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April 4, 1994 to
October 31, 1994***
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Net asset value, beginning of period $14.94
Income from investment operations:
Net investment loss $ (0.04)
Net realized and unrealized gain on
investments 2.30
Total income from investment operations $ 2.26
Distribution to shareholders --
Net increase in net asset value $ 2.26
Net asset value, end of period $ 17.20
Total return* 15.13%
Ratio of net operating expenses to average net
assets** 2.04%
Ratio of net investment loss to average net
assets** (1.12%)
Portfolio turnover rate 47.10%
Net assets, end of period (in thousands) $42,459
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*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
***Class B shares were first offered on April 4, 1994.
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III. INVESTMENT OBJECTIVE AND POLICIES
The Fund is managed in accordance with the "Investing for Value" investment
philosophy of Pioneering Management Corporation ("PMC"), the Fund's investment
adviser. This approach consists of developing a diversified portfolio of
securities consistent with the Fund's investment objective and selected
primarily on the basis of PMC's judgment that the securities have an underlying
value, or potential value, which exceeds their current prices. The analysis and
quantification of the economic worth, or basic value, of individual companies
reflects PMC's assessment of a company's assets and the company's prospects for
earnings growth over the next 1-1/2-to-3 years. PMC relies primarily on the
knowledge, experience and judgment of its own research staff, but also receives
and uses information from a variety of outside sources, including brokerage
firms, electronic data bases, specialized research firms and technical
journals.
The investment objective of the Fund is to seek capital appreciation by
investing in a diversified portfolio of securities consisting primarily of
common stocks.
In addition to common stocks, the Fund also invests in securities with
common stock characteristics, such as convertible bonds and preferred stocks.
While there is no requirement to do so, the Fund generally invests at least 80%
of its assets in common stocks and limits investments in foreign securities to
no more than 25% of its assets. Any current income produced by a security is
not a primary factor in the selection of investments. The Fund's portfolio
often includes a number of securities which are owned by other equity mutual
funds managed by PMC. See "Investment Policies and Restrictions" in the
Statement of Additional Information for more information.
The Fund's fundamental investment objective and the fundamental investment
restrictions set forth in the Statement of Additional Information may not be
changed without shareholder approval. Certain other investment policies and
strategies and restrictions on investment are noted throughout the Prospectus
and are set forth in the Statement of Additional Information. These investment
policies and strategies and restrictions may be changed at any time by a vote
of the Board of Trustees.
The Fund is substantially fully invested at all times. It is the policy of
the Fund not to engage in trading for short-term profits. Nevertheless, changes
in the portfolio will be made promptly when determined to be advisable by
reason of developments not foreseen at the time of the initial investment
decision, and usually without reference to the length of time a security has
been held. Accordingly, portfolio turnover rate is not considered a limiting
factor in the execution of investment decisions. Short-term, temporary
investments do not normally represent more than 10% of the Fund's assets. A
short-term investment is considered to be an investment with a maturity of one
year or less from the date of issuance.
The Fund may enter into repurchase agreements, not to exceed seven days,
with broker-dealers and any member bank of the Federal Reserve System. The
Board of Trustees of the Trust will review and monitor the creditworthiness of
any institution which enters into a repurchase agreement with the Fund. Such
repurchase agreements will be fully collateralized with United States ("U.S.")
Treasury and/or agency obligations with a market value of not less than 100% of
the obligations, valued daily. Collateral will be held by the Fund's custodian
in a segregated, safekeeping account for the benefit of the Fund. In the event
that a repurchase agreement is not fulfilled, the Fund could suffer a loss to
the extent that the value of the collateral falls below the repurchase price.
The Fund may lend portfolio securities to member firms of the New York Stock
Exchange (the "Exchange"). As with other extensions of credit, there are risks
of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. The Fund will lend portfolio
securities only to firms which have been approved in advance by the Board of
Trustees, which will monitor the creditworthiness of any such firms. At no time
would the value of the securities loaned exceed 30% of the value of the Fund's
total assets. These investment strategies are also described in the Statement
of Additional Information.
In pursuit of its objective, Fund may employ certain active investment
management techniques including forward foreign currency exchange contracts,
options and futures contracts on currencies, securities and securities indices
and options on such futures contracts. These techniques may be employed in an
attempt to hedge foreign currency and other risks associated with the Fund's
portfolio securities. See the Appendix to this Prospectus and the Statement of
Additional Information for a description of these investment practices and
associated risks.
Risk Factors
The Fund may invest in securities issued by foreign companies. Investing in
securities of foreign companies involves certain considerations and risks which
are not typically associated with investing in securities of domestic
companies. Foreign companies are not subject to uniform accounting, auditing
and financial standards and requirements comparable to those applicable to U.S.
companies. There may also be less publicly available information about foreign
companies compared to reports and ratings published about U.S. companies. In
addition, foreign securities markets have substantially less volume than
domestic markets and securities of some foreign companies are less liquid and
more volatile than securities of comparable U.S. companies. There may also be
less government supervision and regulation of foreign securities exchanges,
brokers and listed companies than exists in the United States. Dividends or
interest paid by foreign issuers may be subject to withholding and other
foreign taxes which will decrease the net return on such investments as
compared to dividends or interest paid to the Fund by domestic companies.
Finally, there may be the possibility of expropriations, confiscatory taxation,
political, economic or social instability or diplomatic developments which
could adversely affect assets of the Fund held in foreign countries.
The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value
of a foreign security held by the Fund as measured in U.S. dollars will
4
<PAGE>
decrease if the foreign currency in which the security is denominated declines
in value against the U.S. dollar. In such event, this will cause an overall
decline in the Fund's net asset value and may also reduce net investment income
and capital gains, if any, to be distributed in U.S. dollars to shareholders of
the Fund.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Trust has overall responsibility for management
and supervision of the Fund. 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 PMC as investment adviser, the Fund
requires no employees other than its executive officers, all of whom receive
their compensation from PMC or other sources. The Statement of Additional
Information contains the names and general business and professional background
of each Trustee and executive officer of the Trust.
Investment advisory services are provided to the Fund by PMC pursuant to a
management contract between PMC and the Trust, on behalf of the Fund. PMC
serves as investment adviser to the Fund and is responsible for the overall
management of the Fund's business affairs, subject only to the authority of the
Board of Trustees. PMC is a wholly-owned subsidiary of The Pioneer Group, Inc.
("PGI"), a publicly-traded Delaware corporation. Pioneer Funds Distributor,
Inc. ("PFD"), a wholly-owned subsidiary of PGI, is the principal underwriter of
the Fund.
Each domestic equity portfolio managed by PMC, including this Fund, is
overseen by an Equity Committee, which consists of PMC's most senior equity
professionals, and a Portfolio Management Committee, which consists of PMC's
domestic equity portfolio managers. Both committees are chaired by Mr. David
Tripple, PMC's President and Chief Investment Officer and Executive Vice
President of each of the Funds. Mr. Tripple Joined PMC in 1974 and has had
general responsibility for PMC's investment operations and specific portfolio
assignments for more than the last five years.
Day-to-day management of the Fund's investments is the responsibility of
Warren J. Isabelle, Vice President of the Fund and of PMC. Mr. Isabelle joined
PMC in 1984 and has managed the Fund since its inception.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Trust, PMC assists in the
management of the Fund and is authorized in its discretion to buy and sell
securities for the account of the Fund. PMC pays all the expenses, including
executive salaries and the rental of certain office space, related to its
services for the Fund, with the exception of the following which are to be paid
by the Fund: (a) charges and expenses for fund accounting, pricing and
appraisal services and related overhead, including, to the extent such services
are performed by personnel of PMC or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed
by the Trust with respect to the Fund; (d) issue and transfer taxes, chargeable
to the Fund in connection with securities transactions to which the Fund is a
party; (e) insurance premiums, interest charges, dues and fees for membership
in trade associations, and all taxes and corporate fees payable by the Fund to
federal, state or other governmental agencies; (f) fees and expenses involved
in registering and maintaining registrations of the Fund and/or its shares with
the SEC, individual states or blue sky securities agencies, territories and
foreign countries, including the preparation of Prospectuses and Statements of
Additional Information for filing with the SEC; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the Fund and the Trustees; (i) distribution fees paid by the Fund in
accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940 Act; (j)
compensation of those Trustees of the Trust who are not affiliated with or
interested persons of PMC, 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. In addition to the expenses described above, the Fund
shall pay all brokers' and underwriting commissions chargeable to the Fund in
connection with securities transactions to which the Fund is a party.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund. See the Statement of Additional Information
for a further description of PMC's brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.65% per annum of the
Fund's average daily net assets up to $300 million, 0.60% of the next $200
million, 0.50% of the next $500 million and 0.45% of the excess over $1
billion. The fee is normally computed daily and paid monthly.
During the fiscal year ended October 31, 1994, the Fund incurred expenses of
$3,627,519, including management fees paid or payable to PMC of $1,805,402.
John F. Cogan, Jr., Chairman and President of the Trust, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of the date of
this Prospectus.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers two Classes of shares designated as Class A and
Class B shares, as described more fully
5
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in "How to Buy Fund Shares." If you do not specify in your instructions to the
Fund which Class of shares you wish to purchase, exchange or redeem, the Fund
will assume that your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares redeemed
within 12 months of purchase may be subject to a contingent deferred sales
charge ("CDSC"). Class A shares are subject to distribution and service fees at
a combined annual rate of up to 0.25% of the Fund's average daily net assets
attributable to Class A shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge, but
are subject to a CDSC of up to 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 Fund's average daily net assets attributable to Class B shares. Your
entire investment in Class B shares is available to work for you from the time
you make your investment, but the higher distribution fee paid by Class B
shares will cause your Class B shares (until conversion) to have a higher
expense ratio and to pay lower dividends, to the extent dividends are paid,
than Class A shares. Class B shares will automatically convert to Class A
shares, based on relative net asset value, eight years after the initial
purchase.
Purchasing Class A or Class B Shares. The decision as to which Class to
purchase depends on the amount you invest, the intended length of the
investment and your personal situation. If you are making an investment that
qualifies for reduced sales charges, you might consider Class A shares. If you
prefer not to pay an initial sales charge on an investment of $250,000 or less
and you plan to hold the investment for at least six years, you might consider
Class B shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer fund and shares
acquired in the exchange will continue to be subject to any CDSC applicable to
the shares of the Fund originally purchased. Shares sold outside the U.S. to
persons who are not U.S. citizens may be subject to different sales charges,
CDSCs and dealer compensation arrangements in accordance with local laws and
business practices.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its assets,
less liabilities attributable to that Class, by the number of shares of that
Class outstanding. The net asset value is computed once daily, on each day the
Exchange is open, as of the close of regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities quoted
in foreign currencies are converted to U.S. dollars utilizing foreign exchange
rates employed by the Fund's independent pricing services. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the Exchange. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times. Foreign currency exchange rates are also generally determined prior to
the close of the Exchange. Occasionally, events which affect the values of such
securities and such exchange rates may occur between the times at which they
are determined and the close of the Exchange and will therefore not be
reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities occur during such period,
then these securities are valued at their fair value as determined in good
faith by the Trustees. All assets of the Fund for which there is no other
readily available valuation method are valued at their fair value as determined
in good faith by the Trustees.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares at the public offering price from any securities
broker-dealer which has a sales agreement with PFD. If you do not have a
securities broker-dealer, please call 1-800-225-6292 for assistance.
The minimum initial investment is $1,000 for Class A and Class B shares
except 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 shares except that the subsequent minimum investment amount
for Class B share accounts may be as little as $50 if an automatic investment
plan (see "Automatic Investment Plans") is established.
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:
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Dealer
Sales Charge as a % of Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
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Less than $50,000 5.75% 6.10% 5.00%
$50,000 but 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>
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the 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 Fund by a person
listed above is determined by adding the value of shares to be purchased to the
aggregate value (at the then current offering price) of shares of any of the
other Pioneer mutual funds previously purchased and then owned, provided PFD is
notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. See the "Letter of Intention"
section of the Account Application.
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 Fund 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 $1 million invested;
0.50% on the next $4 million; and 0.10% on the excess over $5 million. These
commissions will not be paid if the purchaser is affiliated with the
broker-dealer or if the purchase represents the reinvestment of a redemption
made during the previous 12 calendar months. Broker-dealers who receive a
commission in connection with Class A share purchases at net asset value by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets will be required to return any
commission paid or a pro rata portion thereof if the retirement plan redeems
its shares within 12 months of purchase. See also "How to Sell Fund Shares." In
connection with PGI's acquisition of Mutual of Omaha Fund Management Company
and contingent upon the achievement of certain sales objectives, PFD pays to
Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of any sales
commission on sales of the Fund's Class A shares through such dealer.
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 IRA accounts 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.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to, permits
group solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Class A shares of a Fund may be sold at net asset
value per share without a sales charge to Optional Retirement Program
participants if (i) the employer has authorized a limited number of investment
company providers for the Program, (ii) all authorized investment company
providers offer their shares to Program participants at net asset value, (iii)
the employer has agreed in writing to actively promote the authorized
investment 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 Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners 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 PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which have
entered into sales agreements with PFD; (e) members of the immediate families
of any of the 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 stan-
7
<PAGE>
dards established by PFD; (i) other funds and accounts for which PMC or any of
its affiliates serves as investment adviser or manager; and (j) certain unit
investment trusts. Shares so purchased are purchased for investment purposes
and may not be resold except through redemption or repurchase by or on behalf
of the Fund. The availability of this privilege is conditioned upon the receipt
by PFD of written notification of eligibility. Class A shares of the Fund may
also be sold at net asset value without a sales charge in connection with
certain reorganization, liquidation or acquisition transactions involving other
investment companies or personal holding companies.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention procedure, including its
terms, is contained in the Statement of Additional Information. Investors who
are clients of a broker-dealer with a current sales agreement with PFD may
purchase Class A shares of the Fund at net asset value, without a sales charge,
to the extent that the purchase price is paid out of proceeds from one or more
redemptions by the investor of shares of certain other mutual funds. In order
for a purchase to qualify for this privilege, the investor must document to the
broker-dealer that the redemption occurred within the 60 days immediately
preceding the purchase of Class A shares; that the client paid a sales charge
on the original purchase of the shares redeemed; and that the mutual fund whose
shares were redeemed also offers net asset value purchases to redeeming
shareholders of any of the Pioneer funds. Further details may be obtained from
PFD.
Class B Shares
You may buy Class B shares at net asset value without the imposition of an
initial sales charge; however, Class B shares redeemed within 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 Fund will first redeem shares not subject to any CDSC, and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.
<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
Fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end of
the calendar quarter that is eight years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of another
Pioneer fund will convert into Class A shares based on the date of the initial
purchase and the applicable CDSC. Class B shares acquired through reinvestment
of distributions will convert into Class A shares based on the date of the
initial purchase to which such shares relate. For this purpose, Class B shares
acquired through reinvestment of distributions will be attributed to particular
purchases of Class B shares in accordance with such procedures as the Trustees
may determine from time to time. The conversion of Class B shares to Class A
shares is subject to the continuing availability of a ruling from the Internal
Revenue Service ("IRS"), which the Fund has obtained, or an opinion of counsel
that such conversions will not constitute taxable events for federal tax
purposes. There can be no assurance that such ruling will continue to be in
effect at the time any particular conversion would normally occur. The
conversion of Class B shares to Class A shares will not occur if such ruling is
no longer available and, therefore, Class B shares would continue to be subject
to higher expenses than Class A shares for an indeterminate period.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares and on any Class A shares subject to a CDSC may be waived or reduced for
non-retirement accounts if: (a) the redemption results from the death of all
registered owners of an account (in the case of UGMAs, UTMAs and trust
accounts, waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed or
(b) the redemption is made in connection with limited automatic redemptions as
set forth in "Systematic Withdrawal Plans" (limited in any year to 10% of the
value of the account in the Fund at the time the withdrawal plan is
established).
The CDSC on Class B shares and on any Class A shares subject to a CDSC 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
8
<PAGE>
redeemed of a shareholder or participant in an employer-sponsored retirement
plan; (b) the distribution is to a participant in an Individual Retirement
Account ("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 Fund as of the later of the prior December 31 or the date
the account was established unless the plan's assets are being rolled over to
or reinvested in the same class of shares of a Pioneer mutual fund subject to
the CDSC of the shares originally held); (d) the distribution is from an IRA,
403(b) or employer-sponsored retirement plan and is to be rolled over to or
reinvested in the same class of shares in a Pioneer mutual fund and which will
be subject to the applicable CDSC upon redemption; (e) the distribution is in
the form of a loan to a participant in a plan which permits loans (each
repayment of the loan will constitute a new sale which will be subject to the
applicable CDSC upon 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 B 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 Fund's right to liquidate or involuntarily redeem
shares in a shareholder's account.
Broker-Dealers. An order for either Class of Fund shares received by PFD
from a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close of
regular trading on the Exchange on the day the order is received, provided the
order is received prior to PFD's close of business (usually, 5:30 p.m. Eastern
Time). It is the responsibility of broker-dealers to transmit orders so that
they will be received by PFD prior to its close of business.
General. The Fund reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) fund shares on any day the Exchange is open
by selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to
the Fund. Please note the following:
(bullet) If you are selling shares from a retirement account, you must make
your request in writing (except for exchanges to other Pioneer
funds which can be requested by phone or in writing). Call
1-800-622-0176 for more information.
(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 and accepted less any applicable CDSC. Sale proceeds generally will
be sent to you in cash, normally within seven days after your order is
accepted. The Fund reserves the right to withhold payment of the sale proceeds
until checks received by the Fund in payment for the shares being sold have
cleared, which may take up to 15 calendar days from the purchase date.
In Writing. You may 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 Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, Pioneer will send the proceeds of the sale
to the address of record. Fiduciaries or corporations are required to submit
additional documents. For more information, contact PSC at 1-800-225-6292.
Written requests will not be processed until they are received in good order
and accepted by PSC. Good order means that there are no outstanding claims or
requests to hold redemptions on the account, certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under state
9
<PAGE>
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 the 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 Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund 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
Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value
of the account to at least the minimum required amount within six months of
notice by the Fund to you of the Fund's intention to redeem the shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months following
the share purchase, at the rate of 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividend and capital gain distributions) or
the total cost of such shares. Shares subject to the CDSC which are exchanged
into another Pioneer fund will continue to be subject to the CDSC until the
original 12-month period expires. However, no CDSC is payable with respect to
purchases of Class A shares by 401(a) or 401(k) retirement plans with 1,000 or
more eligible participants or with at least $10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any period
in which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Fund to fairly determine the value of
the net assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the Fund
out of which you wish to exchange and the name of the Fund into which you wish
to exchange, your fund account number(s), the Class of shares to be exchanged
and the dollar amount or number of shares to be exchanged. Written exchange
requests must be signed by all record owner(s) exactly as the shares are
registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each voice-requested or FactFone(SM) telephone
exchange request 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
account for shares of the same Class in another Pioneer account on a monthly or
quarterly basis. The accounts must have identical registrations and the
originating account must have a minimum balance of $5,000. The exchange will be
effective on the 18th day of the month.
General. Exchanges must be at least $1,000. You may exchange your investment
from one Class of Fund shares at net asset value, without a sales charge, for
shares of the same Class of any other Pioneer mutual fund. Not all Pioneer
mutual funds offer more than one Class of shares. A new Pioneer account opened
through an exchange must have a registration identical to that on the original
account.
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
10
<PAGE>
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 above have been met, otherwise, they
will be effective on the next business day. PSC will process exchanges only
after receiving an exchange request in good order. There are currently no fees
or sales charges imposed at the time of an exchange. An exchange of shares may
be made only in states where legally permitted. For federal and (generally)
state income tax purposes, an exchange is considered to be a sale of the shares
of the Fund exchanged and a purchase of shares in another Pioneer mutual fund.
Therefore, an exchange could result in a 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. To prevent abuse of the exchange privilege to the
detriment of other Fund shareholders, the Fund and PFD reserve the right to
limit the number and/or frequency of exchanges and/or to charge a fee for
exchanges. The exchange privilege may be changed or discontinued and may be
subject to additional limitations, including certain restriction on purchases
by market timer accounts.
X. DISTRIBUTION PLANS
The Trust, on behalf of the Fund, has adopted a Plan of Distribution for
both Class A shares ("Class A Plan") and Class B shares ("Class B Plan") in
accordance with Rule 12b-1 under the 1940 Act pursuant to which certain
distribution and service fees are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares, provided
the categories of expenses for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.25% per annum of the Fund's daily net assets
attributable to Class A shares; (ii) reimbursement to PFD for its expenditures
for broker-dealer commissions and employee compensation on certain sales of the
Fund's Class A shares with no initial sales charge (See "How to Buy Fund
Shares"); and (iii) reimbursement to PFD for expenses incurred in providing
services to Class A shareholders and supporting broker-dealers and other
organizations (such as banks and trust companies) in their efforts to provide
such services. Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the described
services, management would consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A Plan
may not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein
without approval of the shareholders of the Fund.
The Class B Plan provides that the Fund will pay a distribution fee at the
annual rate of 0.75% of the Fund's average daily net assets attributable to
Class B shares and will pay PFD a service fee at the annual rate of 0.25% of
the Fund's average daily net assets attributable to Class B shares. The
distribution fee is intended to compensate PFD for its distribution services to
the Fund. The service fee is intended to be additional compensation for
personal services and/or account maintenance services with respect to Class B
shares. PFD also receives the proceeds of any CDSC imposed on the redemption of
Class B shares.
Commissions of 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 therefore, PFD may retain the service fee
paid by the Fund with respect to such shares for the first year after purchase.
Dealers will become eligible for additional service fees with respect to such
shares commencing in the 13th month following the purchase. Dealers may from
time to time be required to meet certain criteria in order to receive service
fees. PFD or its affiliates are entitled to retain all service fees payable
under the Class B Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for personal
services and/or account maintenance services performed by PFD or its affiliates
for shareholder accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code,
so that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal
excise tax on a portion of its undistributed income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The Fund intends to make distributions in a timely manner and accordingly
does not expect to be subject to the excise tax.
The Fund's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net long-term capital gains, if
any, in December. Distributions from net short-term capital gains, if any, may
be paid with such dividends; distributions from income and/or capital gains may
also be made at such times as may be necessary to avoid federal income or
excise tax. Dividends from the Fund's net investment income, net short-term
capital gains, and certain net foreign exchange gains are taxable as ordinary
income, and dividends from the Fund's net long-term capital gains are taxable
as long-term capital gains.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and frac-
11
<PAGE>
tional shares of the Fund. For federal income tax purposes, all dividends are
taxable as described above whether a shareholder takes them in cash or
reinvests them in additional shares of the Fund. Information as to the 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.
Distributions by the Fund of the dividend income it receives from U.S.
domestic corporations, if any, may qualify for the corporate dividends-received
deduction for corporate shareholders, subject to minimum holding-period
requirements and debt-financing restrictions under the Code.
The Fund anticipates that it will be subject to foreign withholding taxes or
other foreign taxes on income (possibly including capital gains) on certain
foreign investments, which will reduce the yield on those investments. The Fund
does not expect to qualify to pass such taxes and any associated tax deductions
or credits through to its shareholders.
Dividends and other distributions and the proceeds of redemptions, exchanges
or repurchases of Fund shares paid to individuals and other non-exempt payees
will be subject to a 31% backup withholding of federal income tax if the Fund
is not provided with the shareholder's correct taxpayer identification number
and certification that the number is correct and the shareholder is not subject
to backup withholding or if the Fund receives notice from the IRS or a broker
that such withholding applies. Please refer to the Account Application for
additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S.
corporations, partnerships, trusts or estates and who are subject to U.S.
federal income tax. 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 advisers regarding state, local and other
applicable tax laws.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Pioneering Services Corporation, P.O. Box
9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co. (the
"Custodian") serves as custodian of the Fund's portfolio securities and other
assets. 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
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 Fund
and might not be able to utilize some of the services available to shareholders
of record. Examples of services which might not be available are investment or
redemption of shares by mail, automatic reinvestment of dividends and capital
gains distributions, withdrawal plans, Letters of Intention, Rights of
Accumulation, telephone exchanges and redemptions, 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 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 Fund at
the applicable offering price in effect as of the close of the Exchange on the
day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a 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
to PSC. PSC acts as agent for the purchaser, the broker-dealer and PFD in
maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer fund account. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II). Invested
dividends may be in any amount, and there are no fees or charges for this
service. Retirement plan shareholders may only direct dividends to accounts
with identical registrations, i.e., PGI IRA Cust for John Smith may only go
into another account registered PGI IRA Cust for John Smith.
12
<PAGE>
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
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 indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
For personal assistance, call 1-800-225-6292 between 8:00 a.m. and 8:00 p.m.
Eastern time on weekdays. Computer-assisted transactions are available to
shareholders who have pre-recorded certain bank information (see
"FactFone(SM)"). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. See "Share Price"
for more information. To confirm that each transaction instruction received by
telephone is genuine, the Fund will record each telephone transaction, require
the caller to provide the personal identification number (PIN) for the account
and send you a written confirmation of each telephone transaction. Different
procedures may apply to accounts that are registered to non-U.S. citizens or
that are held in the name of an institution or in the name of an investment
broker-dealer or other third-party. If reasonable procedures, such as those
described above, are not followed, the Fund may be liable for any loss due to
unauthorized or fraudulent instructions. The Fund may implement other
procedures from time to time. In all other cases, neither the Fund, PSC or PFD
will be responsible for the authenticity of instructions received by telephone;
therefore, you bear the risk of loss for unauthorized or fraudulent telephone
transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate with
the Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone is an automated inquiry and telephone transaction system available
to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM) allows you to
obtain current information on your Pioneer accounts and to inquire about the
prices and yields of all publicly available Pioneer mutual funds. In addition,
you may use FactFone(SM) to make computer-assisted telephone purchases,
exchanges and redemptions from your Pioneer accounts if you have activated your
personal identification number ("PIN"). Telephone purchases and redemptions
require the establishment of a bank account of record. You are strongly urged
to consult with your financial representative prior to requesting any telephone
transaction. Shareholders whose accounts are registered in the name of a
broker-dealer or other third party may not be able to use FactFone(SM). See
"How to Buy Fund Shares," "How to Exchange Fund Shares," "How to Sell Fund
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 Fund. The Account Application accompanying this Prospectus
should not be used to establish any of these plans. Separate applications are
required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and you own TDD keyboard equipment, you can
call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern Time, to contact our telephone representatives with questions
about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the plan is implemented. See "Waiver or
Reduction of Contingent Deferred Sales Charge" for more information. Periodic
checks of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly, and your periodic redemptions of shares may be taxable to
you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another person after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Fund at a time
when you have a SWP in effect may result in the payment of unnecessary sales
charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in Class
A shares of the Fund if you send a written request to PSC not more than 90 days
after your shares were redeemed. Your redemption proceeds will be reinvested at
the next determined net asset value of the Class A shares of the Fund in effect
immediately after receipt of the written request for reinstatement. You may
realize a gain or loss for federal income tax purposes as a result of the
redemption, and special tax rules may apply if a reinvestment occurs. Subject
to the provisions outlined under "How to Exchange Fund Shares" above, you may
also reinvest in Class A shares of other Pioneer mutual funds; in this case you
must meet the minimum investment requirements for each fund you enter.
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The 90-day reinstatement period may be extended by PFD for periods of up to
one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
The options and services available to shareholders, including the terms of the
Exchange Privilege and the Pioneer Investomatic Plan, may be revised, suspended
or terminated at any time by PFD or by the Fund. You may establish the services
described in this section when you open your account. You may also establish or
revise many of them on an existing account by completing an Account Options
Form, which you may request by calling 1-800-225-6292.
XIII. THE TRUST
The Fund is a diversified series of the Trust, an open-end management
investment company (commonly referred to as a mutual fund) organized as a
Massachusetts business trust on April 7, 1990. The Trust has authorized an
unlimited number of shares of beneficial interest. As an open-end management
investment company, the Trust continuously offers its shares to the public and
under normal conditions must redeem its shares upon the demand of any
shareholder at the then current net asset value per share. See "How to Sell
Fund Shares." The Trust is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.
The shares of the Trust are divided into three series: Pioneer Equity-Income
Fund, Pioneer Gold Shares and the Fund (collectively, the "Funds"). The Trust
reserves the right to create and issue additional series of shares in addition
to the three Funds currently available. The Trustees have the authority,
without further shareholder approval, to classify and reclassify the shares of
the Fund, 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
two classes of shares, designated Class A and Class B. The shares of each class
represent an interest in the same portfolio of investments of the Fund. Each
class has equal rights as to voting, redemption, dividends and liquidation,
except that each class bears different distribution and transfer agent fees and
may bear other expenses properly attributable to the particular class. Class A
and Class B shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection with
the distribution of shares.
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. 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 average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for each
Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal or
state income taxes. In addition, for Class A shares the calculation assumes the
deduction of the maximum sales charge of 5.75%; for Class B shares the
calculation reflects the deduction of any applicable CDSC. The periods
illustrated would normally include one, five and ten years (or since the
commencement of the public offering of the shares of a Class, if shorter)
through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share values;
or any graphic illustration of such data may also be used. These data may cover
any period of the Fund's existence and may or may not include the impact of
sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual funds results may be
cited or compared with the investment results of the Fund. Rankings or listings
by magazines, newspapers or independent statistical or rating services, such as
Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund. All quoted investment results are historical and should
not be considered representative of what an investment in the Fund may earn in
any future period. For further information about the calculation methods and
uses of the Fund's investment results, see the Statement of Additional
Information.
APPENDIX
This Appendix provides a brief description of certain investment techniques
that the Fund may employ. For a more complete discussion of these and other
practices, see "Investment Objective and Policies" in this Prospectus and
"Investment Policies and Restrictions" in the Statement of Additional
Information.
Options on Securities Indices
The Fund may purchase put and call options on indices that are based on
securities in which it may invest to manage cash flow and to manage its
exposure to foreign and domestic stocks or stock markets instead of, or in
addition to, buying and selling stock. The Fund may also purchase options in
order to hedge against risks of market-wide price fluctuations.
The Fund may purchase put options in order to hedge against an anticipated
decline in securities prices that might adversely affect the value of the
Fund's portfolio securities. If the Fund purchases a put option on a securities
index, the amount of the payment it would receive upon exercising the option
would depend on the extent of any decline in the level of the securities index
below the exercise price. Such payments would tend to offset a decline in the
value of the
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Fund's portfolio securities. However, if the level of the securities index
increases and remains above the exercise price while the put option is
outstanding, the Fund will not be able to profitably exercise the option and
will lose the amount of the premium and any transaction costs. Such loss may be
partially offset by an increase in the value of the Fund's portfolio
securities.
The Fund may purchase call options on securities indices in order to remain
fully invested in a particular stock market or to lock in a favorable price on
securities that it intends to buy in the future. If the Fund purchases a call
option on a securities index, the amount of the payment it receives upon
exercising the option depends on the extent of an increase in the level of the
securities index above the exercise price. Such payments would in effect allow
the Fund to benefit from securities market appreciation even though it may not
have had sufficient cash to purchase the underlying securities. Such payments
may also offset increases in the price of securities that the Fund intends to
purchase. If, however, the level of the securities index declines and remains
below the exercise price while the call option is outstanding, the Fund will
not be able to exercise the option profitably and will lose the amount of the
premium and transaction costs. Such loss may be partially offset by a reduction
in the price the Fund pays to buy additional securities for its portfolio.
The Fund may sell an option it has purchased or a similar option prior to
the expiration of the purchased option in order to close out its position in an
option which it has purchased. The Fund may also allow options to expire
unexercised, which would result in the loss of the premium paid.
Forward Foreign Currency Exchange Contracts and Options on Foreign Currencies
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency contracts to facilitate
settlement of foreign securities transactions or to protect against changes in
foreign currency exchange rates. The Fund might sell a foreign currency on
either a spot or forward basis to hedge against an anticipated decline in the
dollar value of securities in its portfolio or securities it intends or has
contracted to sell or to preserve the U.S dollar value of dividends, interest
or other amounts it expects to receive. Although this strategy could minimize
the risk of loss due to a decline in the value of the hedged foreign currency,
it could also limit any potential gain which might result from an increase in
the value of the currency. Alternatively, the Fund might purchase a foreign
currency or enter into a forward purchase contract for the currency to preserve
the U.S. dollar price of securities it is authorized to purchase or has
contracted to purchase.
If the Fund enters into a forward contract to buy foreign currency, the Fund
will be required to place cash or high grade liquid securities in a segregated
account of the Fund maintained by the Fund's custodian in an amount equal to
the value of the Fund's total assets committed to the consummation of the
forward contract.
The Fund may purchase put and call options on foreign currencies for the
purpose of protecting against declines in the dollar value of foreign portfolio
securities and against increases in the U.S. dollar cost of foreign securities
to be acquired. The purchase of an option on a foreign currency may constitute
an effective hedge against exchange rate fluctuations.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices, currency exchange rates or
interest rates, the Fund may purchase and sell various kinds of futures
contracts, and purchase and write call and put options on any of such futures
contracts. The Fund may also enter into closing purchase and sale transactions
with respect to any of such contracts and options. The futures contracts may be
based on various stock and other securities indices, foreign currencies and
other financial instruments and indices. The Fund will engage in futures and
related options transactions for bona fide hedging purposes only. These
transactions involve brokerage costs, require margin deposits and, in the case
of contracts and options obligating the Fund to purchase currencies, require
the Fund to segregate assets to cover such contracts and options.
Limitations and Risks Associated with Transactions in Options, Futures
Contracts and Forward Foreign Currency Exchange Contracts
Transactions involving options on securities and securities indices, futures
contracts and options on futures and forward foreign currency exchange
contracts involve (1) liquidity risk that contractual positions cannot be
easily closed out in the event of market changes or generally in the absence of
a liquid secondary market, (2) correlation risk that changes in the value of
hedging positions may not match the securities market and foreign currency
fluctuations intended to be hedged and (3) market risk that an incorrect
prediction of securities prices or exchange rates by the Fund's investment
adviser may cause the Fund to perform less favorably than if such positions had
not been entered. The Fund will purchase and sell options that are traded only
in a regulated market which is open to the public. Options, futures contracts
and forward foreign currency exchange contracts are highly specialized
activities which involve investment techniques and risks that are different
from those associated with ordinary portfolio transactions. The Fund may not
enter into futures contracts and options on futures contracts for speculative
purposes. The percent of the Fund's assets that may be subject to futures
contracts and options on such contracts entered into for bona fide hedging
purposes or in forward foreign currency exchange contracts is 100%. The loss
that may be incurred by the Fund in entering into future contracts and written
options thereon and forward foreign currency exchange contracts is potentially
unlimited. The Fund may not invest more than 5% of its total assets in
financial instruments that are used for non-hedging purposes and which have a
leverage effect.
The Fund's transactions in options, forward foreign currency exchange
contracts, futures contracts and options on futures contracts may be limited by
the requirements for qualification of the Fund as a regulated investment
company for tax purposes. See "Tax Status" in the Statement of Additional
Information.
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[PIONEER LOGO]
Pioneer Capital
Growth Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WARREN J. ISABELLE, 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, 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
0695-2573
(C)Pioneer Funds Distributor, Inc.
