[Pioneer logo]
Pioneer Capital
Growth Fund
Class A, Class B and Class C Shares
Prospectus
February 23, 1996
(revised July 15, 1996)
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 23, 1996 (revised July 15, 1996), which is incorporated into this
Prospectus by reference. A copy of the Statement of Additional Information
may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Trust at 60 State Street, Boston,
Massachusetts 02109. Additional information about the Trust has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge.
TABLE OF CONTENTS PAGE
- -------- ----------------------------------------------- -------
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
Risk Factors 4
IV. MANAGEMENT OF THE FUND 5
V. FUND SHARE ALTERNATIVES 6
VI. SHARE PRICE 6
VII. HOW TO BUY FUND SHARES 6
VIII. HOW TO SELL FUND SHARES 10
IX. HOW TO EXCHANGE FUND SHARES 11
X. DISTRIBUTION PLANS 11
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 12
XII. SHAREHOLDER SERVICES 13
Account and Confirmation Statements 13
Additional Investments 13
Automatic Investment Plans 13
Financial Reports and Tax Information 13
Distribution Options 13
Directed Dividends 13
Direct Deposit 13
Voluntary Tax Withholding 13
Telephone Transactions and Related
Liabilities 14
FactFone(SM) 14
Retirement Plans 14
Telecommunications Device for the Deaf (TDD) 14
Systematic Withdrawal Plans 14
Reinstatement Privilege (Class A only) 14
XIII. THE TRUST 15
XIV. INVESTMENT RESULTS 15
APPENDIX 16
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects annual operating expenses based on actual
expenses incurred for the fiscal year ended October 31, 1995. For Class C
shares, operating expenses are based on estimated expenses that would have
been incurred if C shares had been outstanding for the entire fiscal year
ended October 31, 1995.
<TABLE>
<S> <C> <C> <C>
Shareowner Transaction Expenses: Class A Class B Class C+
Maximum Initial Sales Charge on
Purchases (as a percentage of
offering price) 5.75%(1) None None
Maximum Sales Charge on
Reinvestment of Dividends None None None
Maximum Deferred Sales Charge None(1) 4.00% 1.00%
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Operating Expenses
(As a Percentage of Average
Net Assets):
Management Fees 0.65% 0.65% 0.65%
12b-1 Fees 0.24% 1.00% 1.00%
Other Expenses (including accounting
and transfer agent fees, custodian
fees and printing expenses) 0.25% 0.23% 0.23%
-------- -------- ----------
Total Operating Expenses: 1.14% 1.88% 1.88%
======== ======== ==========
</TABLE>
+ Class C shares were first offered on January 31, 1996.
(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. See "How to Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
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:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Class A Shares $68 $92 $117 $188
Class B Shares
- --Assuming complete
redemption at end of
period $59 $89 $122 $201*
- --Assuming no redemption $19 $59 $102 $201*
Class C Shares**
- --Assuming complete
redemption at end of
period $29 $59 $102 $220
- --Assuming no redemption $19 $59 $102 $220
</TABLE>
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject
to a 1% contingent deferred sales charge ("CDSC").
The example above assumes 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 the 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."
2
<PAGE>
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, 1995 appears in the Fund's Annual Report which is
incorporated by reference into the Statement of Additional Information. Class
C shares are a new class of shares; no financial highlights exist for Class C
shares. 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:
<TABLE>
<CAPTION>
7/25/90
(Commencement
Year Ended of
---------------------------------------------------------------------- Operations)
October 31, October 31, October 31, October 31, October 31, to
1995 1994 1993 1992 1991 10/31/90
----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 17.26 $ 16.17 $ 12.42 $ 11.58 $ 7.50 $10.50
--------- --------- --------- --------- --------- ----------
Increase (decrease)
from investment
operations--
Net investment
income (loss)--net $ 0.08 $ (0.05) $ (0.02) $ (0.01) $ 0.07 $(0.04)
Net realized and
unrealized gain
(loss) on
investments 3.03 2.80 4.43 1.21 4.01 (2.96)
--------- --------- --------- --------- --------- ----------
Total increase
(decrease) from
investment
operations $ 3.11 $ 2.75 $ 4.41 $ 1.20 $ 4.08 $(3.00)
Distribution to
shareholders from:
Net investment
income -- -- -- (0.04) -- --
Net realized gain (0.95) (1.66) (0.66) (0.32) -- --
--------- --------- --------- --------- --------- ----------
Net increase
(decrease) in net
asset value $ 2.16 $ 1.09 $ 3.75 $ 0.84 $ 4.08 $(3.00)
--------- --------- --------- --------- --------- ----------
Net asset value, end
of period $ 19.42 $ 17.26 $ 16.17 $ 12.42 $ 11.58 $ 7.50
========= ========= ========= ========= ========= ==========
Total return* 19.32% 19.03% 36.59% 10.88% 54.40% (28.57%)**
Ratio of net
operating expenses
to average net
assets 1.16%+ 1.26% 1.27% 1.48% 1.69% 7.12%**
Ratio of net
investment income
(loss) to average
net assets 0.53%+ (0.44%) (0.26%) (0.20%) 0.69% (2.18%)**
Portfolio turnover
rate 59.43% 47.10% 68.09% 62.00% 37.76% 0.00%
Net assets, end of
period (in
thousands) $845,415 $405,904 $194,670 $75,796 $21,013 $2,483
Ratios assuming no
reduction of fees
or expenses by
Pioneering
Management
Corporation
Net operating
expenses -- -- -- -- 2.78% --
Net investment loss -- -- -- -- (0.40%) --
Ratios assuming
reduction for fees
paid indirectly:
Net operating
expenses 1.14%
Net investment
income 0.55%
</TABLE>
Financial Highlights for Each Class B Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
Year Ended April 4, 1994 to
October 31, 1995 October 31, 1994
------------------ --------------------
<S> <C> <C>
Net asset value, beginning of period $ 17.20 $ 14.94
----------------- ------------------
Increase (decrease) from investment operations:
Net investment loss $ (0.01) $ (0.04)
Net realized and unrealized gain on investments 2.96 2.30
----------------- ------------------
Total increase (decrease) from investment
operations $ 2.95 $ 2.26
Distribution to shareholders from:
Net realized gain (0.95) --
----------------- ------------------
Net increase in net asset value $ 2.00 $ 2.26
----------------- ------------------
Net asset value, end of period $ 19.20 $ 17.20
================= ==================
Total return* 18.42% 15.13%**
Ratio of net operating expenses to average net assets 1.93%+ 2.04%**
Ratio of net investment loss to average net assets (0.18%)+ (1.12%)**
Portfolio turnover rate 59.43% 47.10%
Net assets, end of period (in thousands) $311,672 $42,459
Ratios assuming reduction for fees paid indirectly:
Net operating expenses 1.88%
Net investment loss (0.13%)
</TABLE>
+Ratios include fees paid indirectly.
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
3
<PAGE>
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. See
"Financial Highlights" for the Fund's actual turnover rate. 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 will 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. The risks associated with the Fund's
transactions in options and futures, which are considered to be derivative
securities, may include some or all of the following: market risk, leverage
and volatility risk, correlation risk, credit risk and liquidity and
valuation risk. 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 U.S.
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.
4
<PAGE>
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
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.
Although the Fund may invest in securities with any size capitalization, it
currently has substantial holdings in small capitalization ("cap") companies.
While small cap company securities may offer a greater capital appreciation
than investments in mid or large cap company securities, they may also
present greater risks. Small cap company securities tend to be more sensitive
to changes in earnings expectations and have lower trading volumes than mid
or large cap companies and, as a result, they may experience more abrupt and
erratic price movements. Portfolio holdings will, however, vary over time.
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"), an indirect 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 Pioneer mutual fund. Mr. Tripple Joined PMC in 1974 and has
had general responsibility for PMC's investment operations and specific
portfolio assignments for over five years.
Day-to-day management of the Fund's investments is the responsibility of
Warren J. Isabelle, Vice President of the Fund and Senior Vice President 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 regulatory agencies; (g) all expenses
of shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the 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
5
<PAGE>
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, 1995, the Fund incurred expenses of
$10,456,739, including management fees paid or payable to PMC of $4,584,004.
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 three Classes of shares designated as Class A,
Class B and Class C shares, as described more fully in "How to Buy Fund
Shares." If you do not specify in your instructions to the Fund which Class
of shares you wish to purchase, exchange or redeem, the Fund will assume that
your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a CDSC. Class A
shares are subject to distribution and service fees at a combined annual rate
of up to 0.25% of the Fund's average daily net assets attributable to Class A
shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 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.
Class C Shares. Class C shares are sold without an initial sales charge, but
are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Trust's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not
to pay an initial sales charge on an investment of $250,000 or less and you
plan to hold the investment for at least six years, you might consider Class
B shares. If you prefer not to pay an initial sales charge and you plan to
hold your investment for one to eight years, you may prefer Class C shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund
and shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Pioneer mutual fund originally purchased.
Shares sold outside the U.S. to persons who are not U.S. citizens may be
subject to different sales charges, CDSCs and dealer compensation
arrangements in accordance with local laws and business practices.
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 from any securities broker-dealer which has a sales
agreement with PFD. If you do not have a securities broker-dealer, please
call 1-800-225-6292. Shares will be purchased at the public offering price,
that is, the net asset value per share plus any applicable sales charge, next
computed after receipt of a purchase order, except as set forth below.
6
<PAGE>
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B and Class C shares except that the subsequent minimum
investment amount for Class B and Class C share accounts may be as little as
$50 if an automatic investment plan (see "Automatic Investment Plans") is
established.
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 mutual fund account; it may not be used to establish a new account.
Proper account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to Individual Retirement Accounts
("IRAs") but may not be available to other types of retirement plan accounts.
Call PSC for more information.
You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section
of your Account Application or an Account Options Form. PSC will
electronically debit the amount of each purchase from this predesignated bank
account. Telephone purchases may not be made for 30 days after the
establishment of your bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's receipt of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.
Class A Shares
You may buy Class A shares at the public offering price, that is, at the net
asset value per share next computed after receipt of a purchase order, plus a
sales charge as follows:
Sales Charge as a % of Dealer
----------------------- Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ----------------------------------- ---------- --------- ------------
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
The schedule of sales charges above is applicable to purhases 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 $5 million invested; 0.50% on the next $45 million; and 0.25% on the
excess over $50 million. These commissions will not be paid if the purchaser
is affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commission paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "How to Sell 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 may pay to Mutual of Omaha Investor
Services, Inc. 50% of PFD's retention of any sales commission on sales of the
Fund's Class A shares through such dealer. From time to time, PFD may elect
to reallow the entire initial sales charge to dealers for all Class A sales
with respect to which orders are placed during a particular period. Dealers
to whom substantially the entire sales charge is reallowed may be deemed to
be underwriters under the federal securities laws.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to,
permits group solicitation of, or otherwise facilitates purchases by, its
employees, members or participants. Class A shares of the Fund may be sold at
net asset value without a sales charge to 401(k) retirement plans with 100 or
more participants or at least $500,000 in plan assets. Class A shares of a
Fund may be sold at net asset value per share without a sales charge to
Optional Retirement Program (the "Program") participants if
7
<PAGE>
(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 standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold
except through redemption or repurchase by or on behalf of the Fund. The
availability of this privilege is conditioned 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 mutual funds.
Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales
charge; however, Class 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.
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- -------------------------- --------------------------------
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class B shares, including the payment
of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end of
the calendar quarter that is eight years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer mutual fund will convert into Class A shares based on the
date of the initial purchase and the applicable CDSC. Class B shares acquired
through reinvestment of distributions will convert into Class A shares based
on the date of the initial purchase to which such shares relate. For this
purpose, Class B shares acquired through reinvestment of distributions will
be attributed to particular purchases of Class B shares in accordance with
such procedures as the Trustees may determine from time to time. The
conversion of Class B shares to Class A shares is subject to the continuing
availability of a ruling from the Internal Revenue Service ("IRS"), 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 in effect and such an
opinion is not available and,
8
<PAGE>
therefore, Class B shares would continue to be subject to higher expenses
than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1.00%. The charge will be assessed on
the amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
Class C shares do not convert to any other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments during
a quarter will be aggregated and deemed to have been made on the first day of
that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class C shares, including the payment
of compensation to broker-dealers.
All Classes of Shares
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of the value of the account in the Fund at the
time the withdrawal plan is established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder or participant in
an employer-sponsored retirement plan; (b) the distribution is to a
participant in an IRA, 403(b) or employer-sponsored retirement plan, is part
of a series of substantially equal payments made over the life expectancy of
the participant or the joint life expectancy of the participant and his or
her beneficiary or as scheduled periodic payments to a participant (limited
in any year to 10% of the value of the participant's account at the time the
distribution amount is established; a required minimum distribution due to
the participant's attainment of age 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 C shares and on any Class A shares subject to a CDSC may
be waived or reduced as follows: (a) for automatic redemptions as described
in "Systematic Withdrawal Plans" (limited to 10% of the value of the account
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring
after the purchase of the shares being redeemed of a shareowner or
participant in an employer-sponsored retirement plan; (c) if the distribution
is part of a series of substantially equal payments made over the life
expectancy of the participant or the joint life expectancy of the participant
and his or her beneficiary; or (d) if the distribution is to a participant in
an employer-sponsored retirement plan and is (i) a return of excess employee
deferrals or contributions, (ii) a qualifying hardship distribution as
defined by the Code, (iii) from a termination of employment, (iv) in the form
of a loan to a participant in a plan which permits loans, or (v) from a
qualified defined contribution plan and represents a participant's directed
transfer (provided that this privilege has been pre-authorized through a
prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject to
a CDSC may be waived or reduced for either non-retirement or retirement plan
accounts if: (a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers. An order for each 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 by PFD,
provided the order is received prior to PFD's close of business (usually,
5:30 p.m. Eastern Time). It is the responsi-
9
<PAGE>
bility of broker-dealers to transmit orders so that they will be received by
PFD prior to its close of business. PFD or its affiliates may provide
additional compensation to certain dealers or such dealers' affiliates based
on certain objective criteria established from time to time by PFD. All such
payments are made out of PFD's or the affiliate's own assets. These payments
will not change the price an investor will pay for shares or the amount that
the Fund will receive from such sale.
General. The Fund reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to 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
mutual funds which can be requested by phone or in writing). Call
1-800-622-0176 for more information.
(bullet) If you are selling shares from a non-retirement account, you may
use any of the methods described below.
Your shares will be sold at the share price next calculated after your order
is received in good order less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
received in good order. The Fund reserves the right to withhold payment of
the sale proceeds until checks received by the Fund in payment for the shares
being sold have cleared, which may take up to 15 calendar days from the
purchase date.
In Writing. You may 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, PSC 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 law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last
30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the proceeds must be sent to your bank address of record which must
have been properly pre-designated either on your Account Application or on an
Account Options Form and which must not have changed in the last 30 days. To
redeem by fax, send your redemption request to 1-800-225-4240. You may always
elect to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions
will be priced as described above. You are strongly urged to consult with
your financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The 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
10
<PAGE>
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 mutual fund will continue to be
subject to the CDSC until the original 12-month period expires. However, no
CDSC is payable upon redemption with respect to Class A shares purchased by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any period
in which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more
or less than the cost of shares to an investor, depending on the market value
of the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the Class of shares to be exchanged and the dollar amount or
number of shares to be exchanged. Written exchange requests must be signed by
all record owner(s) exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you 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
mutual fund account for shares of the same Class in another Pioneer mutual
fund account on a monthly or quarterly basis. The accounts must have
identical registrations and the originating account must have a minimum
balance of $5,000. The exchange will be effective on the 18th day of the
month.
General. Exchanges must be at least $1,000. You may exchange your investment
from one Class of Fund shares at net asset value, without a sales charge, for
shares of the same Class of any other Pioneer mutual fund. Not all Pioneer
mutual funds offer more than one Class of shares. A new Pioneer mutual fund
account opened through an exchange must have a registration identical to that
on the original account.
Class A, Class B or Class C shares which would normally be subject to a CDSC
upon redemption will not be charged the applicable CDSC at the time of an
exchange. Shares acquired in an exchange will be subject to the CDSC of the
shares originally held. For purposes of determining the amount of any
applicable CDSC, the length of time you have owned shares acquired by
exchange will be measured from the date you acquired the original shares and
will not be affected by any subsequent exchange.
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. For the protection of the Fund's performance and
shareholders, the Fund and PFD reserve the right to refuse any exchange
request or restrict, at any time without notice, the number and/or frequency
of exchanges to prevent abuses of the exchange privilege. Such abuses may
arise from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market," or any other exchange request which, in the view of
management, will have a detrimental effect on the Fund's portfolio management
strategy or its operations. In addition, the Fund and PFD reserve the right
to charge a fee for exchanges or to modify, limit, suspend or discontinue the
exchange privilege with notice to shareholders as required by law.
X. DISTRIBUTION PLANS
The Trust, on behalf of the Fund, has adopted a Plan of Distribution for
each Class of shares (the "Class A Plan," "Class B Plan," and "Class C Plan")
in accordance with Rule 12b-1 under the 1940 Act pursuant to which certain
distribution and service fees are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses
11
<PAGE>
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.
Both the Class B Plan and the Class C Plan provide that the Fund will pay a
distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets attributable to the applicable Class of shares and will pay PFD a
service fee at the annual rate of 0.25% of the Fund's average daily net
assets attributable to that Class of shares. The distribution fee is intended
to compensate PFD for its distribution services to the Fund. The service fee
is intended to be additional compensation for personal services and/or
account maintenance services with respect to Class B or Class C shares. PFD
also receives the proceeds of any CDSC imposed on the redemption of Class B
or Class C shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with PFD. PFD may advance to
dealers the first year service fee at a rate up to 0.25% of the purchase
price of such shares and, as compensation therefore, PFD may retain the
service fee paid by the Fund with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the 13th month following the purchase.
Commissions of up to 1% of the amount invested in Class C shares, consisting
of 0.75% of the amount invested and a first year's service fee of 0.25% of
the amount invested, are paid to broker-dealers who have selling agreements
with PFD. PFD may advance to dealers the first year service fee at a rate up
to 0.25% of the purchase price of such shares and, as compensation therefore,
PFD may retain the service fee paid by the Fund with respect to such shares
for the first year after purchase. Commencing in the 13th month following the
purchase of Class C shares, dealers will become eligible for additional
annual distribution fees and services fees of up to 0.75% and 0.25%,
respectively, of the purchase price with respect to such shares.
Dealers may from time to time be required to meet certain criteria in order
to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan or the Class C Plan for which
there is no dealer of record or for which qualification standards have not
been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The 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 ordinary income and capital
gains if it fails to meet certain distribution requirements with respect to
each calendar year. The Fund intends to make distributions in a timely manner
and accordingly does not expect to be subject to the excise tax.
The Fund makes distributions to shareholders from its net long-term capital
gains, if any, annually, usually in December. Income dividends, and
distributions from net short-term capital gains, if any, are paid to
shareholders quarterly, during the months of March, June, September and
December. Additional distributions of dividends from income and/or capital
gains may be made at such other 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 fractional shares of the
Fund. For federal income tax purposes, all dividends are taxable as described
above whether a shareholder takes them in cash or reinvests them in
additional shares of the Fund. Information as to the federal tax status of
dividends and distributions will be provided to shareholders 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 or return from those
investments. The Fund does
12
<PAGE>
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 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 and Class C shares) to PSC (account number and
Class of shares should be clearly indicated). The bottom portion of a
confirmation statement may be used as a remittance slip to make additional
investments.
Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a pre-authorized electronic funds transfer
or 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.
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
13
<PAGE>
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 9:00 p.m.
Eastern time on weekdays. Computer-assisted transactions are available to
shareholders who have pre-recorded certain bank information (see
"FactFone(SM)"). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. 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(SM) is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFone(SM) allows you to obtain current information on your Pioneer
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 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 and Class C share accounts are limited to
10% of the value of the account at the time the SWP is implemented. See
"Waiver or Reduction of Contingent Deferred Sales Charge" for more
information. Periodic 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
reinstatement occurs. In addition, if a redemption resulted in a loss and an
investment is made in shares of the Fund within 30 days before or after the
redemption, you may not be able to recognize the loss for federal income tax
purposes. Subject to the provisions outlined under "How to Exchange Fund
Shares" above, you may also reinvest in Class A shares of other Pioneer
mutual funds; in this case you must meet the minimum investment requirements
for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up to
one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
14
<PAGE>
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 three classes of shares, designated Class A, Class B and
Class C. The shares of each class represent an interest in the same portfolio
of investments of the Fund. Each class has equal rights as to voting,
redemption, dividends and liquidation, except that each class bears different
distribution and transfer agent fees and may bear other expenses properly
attributable to the particular class. Class A, Class B and Class C
shareholders have exclusive voting rights with respect to the Rule 12b-1
distribution plans adopted by holders of those shares in connection with the
distribution of shares.
When issued and paid for in accordance with the terms of the Prospectus and
Statement of Additional Information, shares of the 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 and
Class C shares the calculation reflects the deduction of any applicable CDSC.
The periods illustrated would normally include one, five and ten years (or
since the commencement of the public offering of the shares of a Class, if
shorter) through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Fund's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market 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.
15
<PAGE>
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 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
16
<PAGE>
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.
17
<PAGE>
Notes
18
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
International Growth Funds
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
Growth Funds
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Gold Shares
Growth and Income Funds
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Income Funds
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
Tax-Free Income Funds
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Money Market Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts
19
<PAGE>
[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
0796-3576
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER GROWTH TRUST
Pioneer Capital Growth Fund
Pioneer Equity-Income Fund
Pioneer Gold Shares
60 State Street
Boston, Massachusetts 02109
Class A, Class B and Class C Shares
February 23, 1996
(revised July 15, 1996)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information (Part B of the Registration
Statement) is not a prospectus, but should be read in conjunction with the
Prospectuses for each of Pioneer Capital Growth Fund dated February 23, 1996
(revised July 15, 1996), Pioneer Equity-Income Fund dated February 23, 1996 and
Pioneer Gold Shares dated February 23, 1996. A copy of each Prospectus can be
obtained free of charge by calling Shareholder Services at 1- 800-225-6292 or by
written request to Pioneer Growth Trust (the "Trust") at 60 State Street,
Boston, Massachusetts 02109. The most recent Annual Report to Shareholders is
attached to this Statement of Additional Information and is hereby incorporated
in this Statement of Additional Information by reference.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions................................... 2
2. Management of the Funds................................................ 11
3. Investment Adviser..................................................... 15
4. Underwriting Agreement and Distribution Plans.......................... 16
5. Shareholder Servicing/Transfer Agent................................... 18
6. Custodian.............................................................. 19
7. Principal Underwriter.................................................. 19
8. Independent Public Accountants......................................... 20
9. Portfolio Transactions................................................. 20
10. Tax Status and Dividends............................................... 21
11. Description of Shares.................................................. 24
12. Certain Liabilities.................................................... 25
13. Letter of Intention.................................................... 26
14. Systematic Withdrawal Plan............................................. 26
15. Determination of Net Asset Value....................................... 27
16. Investment Results..................................................... 27
17. Financial Statements................................................... 30
Appendix A..............................................................31
Appendix B..............................................................33
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED
BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
Pioneer Capital Growth Fund (the "Capital Growth Fund"), Pioneer
Equity-Income Fund (the "Equity-Income Fund") and Pioneer Gold Shares ("Gold
Shares") are the separate investment portfolios of the Trust (each, a "Fund" and
collectively, the "Funds"). Each Fund's current prospectus (each, a "Prospectus"
and collectively, the "Prospectuses") presents the investment objective and the
principal investment policies of its respective Fund. Additional investment
policies and a further description of some of the policies described in the
Prospectuses appear below.
The following policies and restrictions supplement those discussed in the
Prospectuses. Whenever an investment policy or restriction states a maximum
percentage of a Fund's assets that may be invested in any security or presents a
policy regarding quality standards, this standard or other restrictions shall be
determined immediately after and as a result of a Fund's investment.
Accordingly, any later increase or decrease resulting from a change in values,
net assets or other circumstances will not be considered in determining whether
the investment complies with a Fund's investment objective and policies.
Lending of Portfolio Securities
Each of the Funds may lend portfolio securities to member firms of the New
York Stock Exchange, under agreements which would require that the loans be
secured continuously by collateral in cash, cash equivalents or United States
("U.S.") Treasury Bills maintained on a current basis at an amount at least
equal to the market value of the securities loaned. The Fund would continue to
receive the equivalent of the interest or dividends paid by the issuer on the
securities loaned as well as the benefit of an increase in the market value of
the securities loaned and would also receive compensation based on investment of
the collateral. The Fund would not, however, have the right to vote any
securities having voting rights during the existence of the loan, but would call
the loan in anticipation of an important vote to be taken among holders of the
securities or of the giving or withholding of consent on a material matter
affecting the investment.
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 Funds 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 a Fund's total assets.
Forward Foreign Currency Transactions for Capital Growth Fund and Gold
Shares
Capital Growth Fund and Gold Shares may engage in foreign currency
transactions. These transactions may be conducted on a spot, i.e., cash basis,
at the spot rate for purchasing or selling currency prevailing in the foreign
exchange market. Capital Growth Fund and Gold Shares also have authority to deal
in forward foreign currency exchange contracts involving currencies of the
different countries in which the Funds will invest as a hedge against possible
variations in the foreign exchange rate between these currencies and the U.S.
dollar. This is accomplished through contractual agreements to purchase or sell
a specified currency at a specified future date and price set at the time of the
contract. The Funds' dealings in forward foreign currency contracts will be
limited to hedging either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the Funds, accrued
in connection with the purchase and sale of their portfolio securities
denominated in foreign currencies. Portfolio hedging is the use of forward
foreign currency contracts to offset portfolio security positions denominated or
quoted in such foreign currencies. There is no guarantee that Capital Growth
Fund or Gold Shares will be engaged in hedging activities when adverse exchange
rate movements occur. Neither Capital Growth Fund nor Gold Shares will attempt
to hedge all of its foreign portfolio positions, and both Funds will enter into
such transactions only to the extent, if any, deemed appropriate by the
investment adviser. Neither Fund will enter into speculative forward foreign
currency contracts.
-2-
<PAGE>
If Capital Growth Fund or Gold Shares enters into a forward contract to
purchase foreign currency, the custodian bank will segregate cash or high grade
liquid debt securities in a separate account in an amount equal to the value of
the total assets committed to the consummation of such forward contract. Those
assets will be valued at market daily and if the value of the assets in the
separate account declines, additional cash or securities will be placed in the
accounts so that the value of the account will equal the amount of the Fund's
commitment with respect to such contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for Capital Growth Fund or Gold Shares to hedge against a
devaluation that is so generally anticipated that the Funds are not able to
contract to sell the currency at a price above the devaluation level they
anticipate.
The cost to Capital Growth Fund and Gold Shares of engaging in foreign
currency transactions varies with such factors as the currency involved, the
size of the contract, the length of the contract period and the market
conditions then prevailing. Since transactions in foreign currency and forward
contracts are usually conducted on a principal basis, no fees or commissions are
involved. Capital Growth Fund and Gold Shares may close out a forward position
in a currency by selling the forward contract or by entering into an offsetting
forward contract.
Options on Securities
Capital Growth Fund and Gold Shares may write (sell) covered call options
on certain portfolio securities, but options may not be written on more than 25%
of the aggregate market value of any single portfolio security (determined each
time a call is sold as of the date of such sale). Neither Capital Growth Fund or
Gold Shares intends to write covered call options on portfolio securities with
an aggregate market value exceeding 5% of the Fund's total assets in the coming
year. As the writer of a call option, a Fund receives a premium less commission,
and, in exchange, foregoes the opportunity to profit from increases in the
market value of the security covering the call above the sum of the premium and
the exercise price of the option during the life of the option. The purchaser of
such a call written by a Fund has the option of purchasing the security from
that Fund at the option price during the life of the option. Portfolio
securities on which options may be written are purchased solely on the basis of
investment considerations consistent with a Fund's investment objectives. All
call options written by a Fund are covered; a Fund may cover a call option by
owning the securities subject to the option so long as the option is outstanding
or using the other methods described below. In addition, a written call option
may be covered by purchasing an offsetting option or any other option which, by
virtue of its exercise price or otherwise, covers a Fund's net exposure on its
written option position. The Funds do not consider a security covered by a call
option to be "pledged" as that term is used in each Funds' policy which limits
the pledging or mortgaging of its assets.
Capital Growth Fund and Gold Shares may purchase call options on securities
for entering into a "closing purchase transaction," i.e., a purchase of a call
option on the same security with the same exercise price and expiration date as
a "covered" call already written by the Fund. These closing purchase
transactions enable the Funds to immediately realize gains or minimize losses on
their respective options positions. There is no assurance that a Fund will be
able to effect such closing purchase transactions at a favorable price. If a
Fund cannot enter into such a transaction it may be required to hold a security
that it might otherwise have sold. A Fund's portfolio turnover may increase
through the exercise of options if the market price of the underlying securities
goes up and the Fund has not entered into a closing purchase transaction. The
commission on purchase or sale of a call option is higher in relation to the
premium than the commission in relation to the price on purchase or sale of the
underlying security.
-3-
<PAGE>
Options on Securities Indices
Capital Growth Fund and Gold Shares may purchase call and put options on
securities indices for the purpose of hedging against the risk of unfavorable
price movements adversely affecting the value of either such Fund's securities
or securities which either such Fund intends to buy. Securities index options
will not be used for speculative purposes.
The Funds may only purchase and sell options that are traded only in a
regulated market which is open to the public. Currently, options on stock
indices are traded only on national securities exchanges or over-the-counter,
both in the U.S. and in foreign countries. A securities index fluctuates with
changes in the market values of the securities included in the index. For
example, some stock index options are based on a broad market index such as the
S&P 500 or the Value Line Composite Index in the U.S., the Nikkei in Japan or
the FTSE 100 in the United Kingdom. Index options may also be based on a
narrower market index such as the S&P 100 or on an industry or market segment
such as the AMEX Oil and Gas Index or the Computer and Business Equipment Index.
The Funds may purchase put options in order to hedge against an anticipated
decline in securities prices that might adversely affect the value of the Funds'
respective portfolio securities. If a 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 such 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, such 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 such Fund's
portfolio securities.
Capital Growth Fund or Gold Shares may purchase call options on securities
indices in order to remain fully invested in a particular foreign stock market
or to lock in a favorable price on securities that it intends to buy in the
future. If a 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 other securities indices above the exercise price. Such
payments would in effect allow such 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 such 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, a 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 such Fund pays to buy additional
securities for its portfolio.
Capital Growth Fund and Gold Shares may each sell the securities index
option it has purchased or write a similar offsetting securities index option in
order to close out a position in a securities index option which it has
purchased. These closing sale transactions enable the Funds to immediately
realize gains or minimize losses on their respective options positions. However,
there is no assurance that a liquid secondary market on an options exchange will
exist for any particular option, or at any particular time, and for some options
no secondary market may exist. In addition, securities index prices may be
distorted by interruptions in the trading of securities of certain companies or
of issuers in certain industries, or by restrictions that may be imposed by an
exchange on opening or closing transactions, or both, which would disrupt
trading in options on such indices and preclude a Fund from closing out its
options positions. If a Fund is unable to effect a closing sale transaction with
respect to options that it has purchased, it would have to exercise the options
in order to realize any profit.
The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that can not be
reflected in the options markets. The purchase of options is a highly
specialized activity which involves investment techniques and risks different
from those associated with ordinary portfolio securities transactions.
-4-
<PAGE>
In addition to the risks of imperfect correlation between the Funds'
respective portfolio and the index underlying the option, the purchase of
securities index options involves the risk that the premium and transaction
costs paid by the Funds in purchasing an option will be lost. This could occur
as a result of unanticipated movements in prices of the securities comprising
the securities index on which the option is based.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or currency exchange rates,
Capital Growth Fund and Gold Shares may each purchase and sell various kinds of
futures contracts, and purchase and write (sell) call and put options on any of
such futures contracts. Capital Growth Fund and Gold Shares may each 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 securities
(such as U.S. Government securities), securities indices, foreign currencies and
other financial instruments and indices. The Funds will engage in futures and
related options transactions for bona fide hedging and non-hedging purposes as
described below. All futures contracts entered into by the Funds are traded on
U.S. exchanges or boards of trade that are licensed and regulated by the
Commodity Futures Trading Commission (the "CFTC") or on foreign exchanges.
Futures Contracts. A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
for an agreed price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the Funds
can seek to offset a decline in the value of their respective current portfolio
securities through the sale of futures contracts. When interest rates are
falling or securities prices are rising, the Funds, through the purchase of
futures contracts, can attempt to secure better rates or prices than might later
be available in the market when they effect anticipated purchases. Similarly,
Capital Growth Fund and Gold Shares can sell futures contracts on a specified
currency to protect against a decline in the value of such currency and a
decline in the value of its portfolio securities which are denominated in such
currency. Capital Growth Fund and Gold Shares can purchase futures contracts on
a foreign currency to establish the price in U.S. dollars of a security
denominated in such currency that the Funds have acquired or expect to acquire.
Positions taken in the futures markets are not normally held to maturity
but are instead liquidated through offsetting transactions which may result in a
profit or a loss. While futures contracts on securities or currency will usually
be liquidated in this manner, the Funds may instead make, or take, delivery of
the underlying securities or currency whenever it appears economically
advantageous to do so. A clearing corporation associated with the exchange on
which futures on securities or currency are traded guarantees that, if still
open, the sale or purchase will be performed on the settlement date.
Hedging Strategies. Hedging, by use of futures contracts, seeks to
establish with more certainty the effective price, rate of return and currency
exchange rate on portfolio securities and securities that a Fund owns or
proposes to acquire. A Fund may, for example, take a "short" position in the
futures market by selling futures contracts in order to hedge against an
anticipated rise in interest rates or a decline in market prices or foreign
currency rates that would adversely affect the value of the Fund's portfolio
securities. Such futures contracts may include contracts for the future delivery
of securities held by a Fund or securities with characteristics similar to those
of a Fund's portfolio securities. Similarly, Capital Growth Fund and Gold Shares
may sell futures contracts in a foreign currency in which their respective
portfolio securities are denominated or in one currency to hedge against
fluctuations in the value of securities denominated in a different currency if
there is an established historical pattern of correlation between the two
currencies. If, in the opinion of Pioneering Management Corporation ("PMC"),
there is a sufficient degree of correlation between price trends for the Funds'
respective portfolio securities and futures contracts based on other financial
instruments, securities indices or other indices, the Funds may also enter into
such futures contracts as part of their hedging strategies. Although under some
circumstances prices of securities in a Fund's portfolio may be more or less
volatile than prices of
-5-
<PAGE>
such futures contracts, PMC will attempt to estimate the extent of this
volatility difference based on historical patterns and compensate for any such
differential by having that Fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against price
changes affecting that Fund's portfolio securities. When hedging of this
character is successful, any depreciation in the value of portfolio securities
will be substantially offset by appreciation in the value of the futures
position. On the other hand, any unanticipated appreciation in the value of a
Fund's portfolio securities would be substantially offset by a decline in the
value of the futures position.
On other occasions, the Funds may take a "long" position by purchasing
futures contracts. This may be done, for example, when a Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
Options on Futures Contracts. The acquisition of put and call options on
futures contracts will give the Funds the right (but not the obligation) for a
specified price to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, a Fund obtains the benefit of the futures position if prices
move in a favorable direction but limits its risk of loss in the event of an
unfavorable price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium
which may partially offset a decline in the value of a Fund's assets. By writing
a call option, a Fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that a Fund intends to purchase. However, such Fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the Funds
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The Funds will incur transaction costs in connection
with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The Funds'
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
The Funds may use options on futures contracts for bona fide hedging or
non-hedging purposes as discussed below.
Other Considerations. Capital Growth Fund and Gold Shares will engage in
futures and related options transactions only for bona fide hedging or
non-hedging purposes in accordance with CFTC regulations which permit principals
of an investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") to engage in such transactions without registering as
commodity pool operators. The Funds are not permitted to engage in speculative
futures trading. The Funds will determine that the price fluctuations in the
futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the respective
Fund or which the respective Fund expects to purchase. Except as stated below,
the Funds' futures transactions will be entered into for traditional hedging
purposes -- i.e., futures contracts will be sold to protect against a decline in
the price of securities (or the currency in which they are denominated) that the
respective Fund owns, or futures contracts will be purchased to protect the
respective Fund against an increase in the price of securities (or the currency
in which they are denominated) it intends to purchase. As evidence of this
hedging intent, each Fund expects that on 75% or more of the occasions on which
it takes a long futures or option position (involving the purchase of futures
contracts), the Fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities or assets denominated in
the related currency in the cash market at the time when the futures or option
position is closed out. However, in
-6-
<PAGE>
particular cases, when it is economically advantageous for a Fund to do so, a
long futures position may be terminated or an option may expire without the
corresponding purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging
definition, a CFTC regulation permits the Funds to elect to comply with a
different test, under which the sum of the amounts of initial margin deposits on
a Fund's existing non-hedging futures contracts and premiums paid for options on
futures entered into for non-hedging purposes (net of the amount the positions
are "in the money") would not exceed 5% of the market value of that Fund's total
assets. The Funds will engage in transactions in futures contracts and related
options only to the extent such transactions are consistent with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), for
maintaining their qualifications as regulated investment companies for federal
income tax purposes.
Transaction costs associated with futures contracts and related options
involve brokerage costs, require margin deposits and, in the case of contracts
and options obligating the Funds to purchase securities or currencies, require
the Funds to segregate assets to cover such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the Funds may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the Funds than if they had
not entered into any futures contracts or options transactions. In the event of
an imperfect correlation between a futures position and a portfolio position
which is intended to be protected, the desired protection may not be obtained
and the Funds may be exposed to risk of loss. It is not possible to hedge fully
or perfectly against the effect of currency fluctuations on the value of foreign
securities because currency movements impact the value of different securities
in differing degrees.
Other Policies and Risks
With the exception of Gold Shares, it is the policy of each of the Funds
not to concentrate its investments in securities of companies in any particular
industry. In the opinion of the staff of the Securities and Exchange Commission
(the "Commission"), investments are deemed to be concentrated in a particular
industry if such investments constitute 25% or more of the Fund's total assets.
Gold Shares' concentration in the securities of companies engaged in the mining,
processing or sale of gold and other precious metals presents risks which are
not presented in portfolios which diversify their investments over many
industries. Gold Shares will not concentrate its investment in any other
industry. The 1940 Act provides that the policy of each Fund with respect to
concentration is a fundamental policy.
Gold Shares may invest in the securities of foreign governments, their
agencies and instrumentalities ("foreign government securities") but has no
present intention to invest more than 5% of its total assets in such securities.
Gold Shares will limit its investment in foreign government securities to those
rated at least investment grade, i.e., Baa by Moody's Investor Service, Inc. or
BBB by Standard & Poor's Ratings Group or, if unrated, determined by PMC to be
of comparable quality. See the Appendix for a description of the ratings.
Investment in foreign government securities entails certain risks similar to
those of investing in foreign companies as set forth in the Prospectus and the
additional risk that the foreign government will repudiate its underlying
obligation or alter any favorable tax treatment associated with the obligation.
With respect to liquidity determinations generally, the Board of Trustees
has the ultimate responsibility for determining whether specific securities are
liquid or illiquid. The Board has delegated the function of making day to day
determinations of liquidity to PMC, pursuant to guidelines reviewed by the
Trustees. PMC takes into account a number of factors in reaching liquidity
decisions. These factors may include but are not limited to: (i) the frequency
of trading in
-7-
<PAGE>
the security; (ii) the number of dealers who make quotes in the securities;
(iii) the number of dealers who have undertaken to make a market in the
security; (iv) the number of potential purchasers; and (v) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). PMC will
monitor the liquidity of securities in each Fund's portfolio and report
periodically on such decisions to the Trustees.
Investment Restrictions
Fundamental Investment Restrictions. The following list presents the
fundamental investment restrictions applicable to the Funds. These restrictions
cannot be changed for a particular Fund unless a majority of the outstanding
shares (as such vote is defined in Section 2(a)(42) of the 1940 Act) of such
Fund approve the change.
A Fund may not:
(1) borrow money, except from banks to meet redemptions in amounts not
exceeding 33 1/3% (taken at the lower of cost or current value) of its total
assets (including the amount borrowed);
(2) invest in real estate or interests therein, excluding readily
marketable securities of companies that invest in real estate or real estate
investment trusts (as provided in non- fundamental investment restriction no.
1);
(3) invest in commodities or commodity contracts, except interest rate
futures contracts, options on securities, securities indices, currency and other
financial instruments, futures contracts on securities, securities indices,
currency and other financial instruments and options on such futures contracts,
forward foreign currency exchange contracts, forward commitments, securities
index put or call warrants, interest rate swaps, caps and floors and repurchase
agreements entered into in accordance with the Fund's investment policies.
(4) purchase securities of an issuer (other than the U.S. Government, its
agencies or instrumentalities), if such purchase would at the time result in
more than 10% of the outstanding voting securities of such issuer being held by
the Fund.
(5) make loans, provided that (i) the purchase of debt securities pursuant
to a Fund's investment objectives shall not be deemed loans for the purposes of
this restriction; (ii) loans of portfolio securities as described, from time to
time, under "Lending of Portfolio Securities" shall be made only in accordance
with the terms and conditions therein set forth and (iii) in seeking a return on
temporarily available cash a Fund may engage in repurchase transactions as
described in the Prospectus;
(6) issue senior securities, except as permitted by restrictions nos. 1, 3
and 5 above, and, for purposes of this restriction, the issuance of shares of
beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign exchange contracts and repurchase agreements
entered into in accordance with the Fund's investment policies, and the pledge,
mortgage or hypothecation of the Fund's assets within the meaning of fundamental
restriction no. 8 below are not deemed to be senior securities.
(7) act as an underwriter, except as it may be deemed to be an underwriter
in a sale of restricted securities; or
(8) guarantee the securities of any other company, or mortgage, pledge,
hypothecate, assign or otherwise encumber as security for indebtedness its
securities or receivables in an amount exceeding the amount of the borrowing
secured thereby.
-8-
<PAGE>
As long as the Funds are registered in the Federal Republic of Germany,
Austria or Switzerland, no Fund may without the prior approval of its
shareholders:
(i) invest in the securities of any other domestic or foreign investment
company or investment fund, except in connection with a plan of merger or
consolidation with or acquisition of substantially all the assets of such other
investment company or investment fund;
(ii) purchase or sell real estate, or any interest therein, and real estate
mortgage loans, except that a Fund may invest in securities of corporate or
governmental entities secured by real estate or marketable interests therein or
securities issued by companies (other than real estate limited partnerships,
real estate investment trusts and real estate funds) that invest in real estate
or interests therein;
(iii) borrow money in amounts exceeding 10% of a Fund's total assets
(including the amount borrowed) taken at market value;
(iv) pledge, mortgage or hypothecate its assets in amounts exceeding 10% of
a Fund's total assets taken at market value;
(v) purchase securities on margin or make short sales; or
(vi) redeem its securities in-kind.
Further, as long as the Funds are registered in Switzerland, no Fund may
without the prior approval of its shareholders:
(a) purchase gold or silver bullion, coins or other precious metals or
purchase or sell futures contracts or options on any such precious metals;
(b) invest more than 10% of its total assets in the securities of any one
issuer; provided, however, that this restriction does not apply to cash items
and U.S. Government securities;
(c) write (sell) uncovered calls or puts or any combination thereof or
purchase, in an amount exceeding 5% of its assets, calls, puts, straddles,
spreads or any combination thereof; or
(d) invest more than 5% of its total assets in financial instruments that
are used for non-hedging purposes and which have a leverage effect.
Non-fundamental Investment Restrictions. The following restrictions have
been designated as non-fundamental and may be changed by a vote of the Trust's
Board of Trustees without approval of shareholders.
A Fund may not:
(1) purchase securities for the purpose of controlling management of other
companies;
(2) purchase or retain the securities of any company if officers of the
Trust or Trustees of the Trust, or officers and directors of its adviser or
principal underwriter, individually own more than one-half of 1% of the
securities of such company or collectively own more than 5% of the securities of
such company; or
-9-
<PAGE>
(3) invest in any security, including any repurchase agreement maturing in
more than seven days, which is illiquid, if more than 15% of the total assets of
the Fund, taken at market value, would be invested in such securities.
In addition to the foregoing restrictions, at least 75% of the value of
each Fund's total assets must be represented by cash and cash items, government
securities, securities of other investment companies, and other securities for
the purpose of this calculation limited in respect of any one issuer to an
amount not greater in value than 5% of the value of the total assets of a Fund
and to not more than 10% of the outstanding voting securities of such issuer.
In order to register its shares in certain jurisdictions, the Trust has
agreed to adopt certain additional investment restrictions, which are
non-fundamental and which may be changed by a vote of the Trust's Board of
Trustees. Pursuant to these additional investment restrictions, a Fund may not
(i) invest more than 2% of its assets in warrants, valued at the lower of cost
or market, provided that it may invest up to 5% of its total assets, as so
valued, in warrants listed on the New York or American Stock Exchanges, (ii)
invest in interests in oil, gas or other mineral exploration or development
leases or programs, (iii) purchase the securities of any enterprise which has a
business history of less than three years, including the operation of any
predecessor business to which it has succeeded, or (iv) invest in real estate
investment trusts or real estate limited partnerships. None of the Funds intends
to borrow money during the coming year, and in any case would do so only as a
temporary measure for extraordinary purposes or to facilitate redemptions.
2. MANAGEMENT OF THE FUNDS
The Trust's Board of Trustees provides broad supervision over the affairs
of each Fund and the Trust. The officers of the Trust are responsible for each
Fund's operations. The Trustees and executive officers of the Funds are listed
below, together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Fund within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of PMC and Pioneer Funds Distributor, Inc.
("PFD"); Director of Pioneering Services Corporation ("PSC"), Pioneer Capital
Corporation ("PCC") and Forest-Starma (a Russian corporation); President and
Director of Pioneer Plans Corporation ("PPC"), Pioneer Investment Corp. ("PIC"),
Pioneer Metals and Technology, Inc. ("PMT"), Pioneer International Corp.
("PIntl"), Pioneer First Russia, Inc. ("First Russia") and Pioneer Omega, Inc.
("Omega"); Chairman of the Board and Director of Pioneer Goldfields Limited
("PGL") and Teberebie Goldfields Limited; Chairman of the Supervisory Board of
Pioneer Fonds Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board
of Pioneer First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman,
President and Trustee of all of the Pioneer mutual funds and Partner, Hale and
Dorr (counsel to the Fund).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management; Professor
of Public Health, Boston University School of Public Health; Professor of
Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment
-10-
<PAGE>
adviser), Health Payment Review, Inc. (health care containment software firm),
Mediplex Group, Inc. (nursing care facilities firm), Peer Review Analysis, Inc.
(health care facilities firm) and Springer-Verlag New York, Inc. (publisher);
Honorary Trustee, Franciscan Children's Hospital and Trustee of all of the
Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center,
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief Investment
Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl , First Russia,
Omega and Pioneer SBIC Corporation, Executive Vice President and Trustee of all
of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus Funds
(mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of
NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government Reserves
and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
-11-
<PAGE>
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC;
Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund) and Secretary
of all of the Pioneer mutual funds.
JOHN A. CAREY, Vice President of Pioneer Equity-Income Fund, DOB: May 1949
Vice President of PMC, Pioneer Income Fund and Pioneer Fund.
WARREN J. ISABELLE, Vice President of Pioneer Capital Growth Fund, DOB: January
1952
Director of Research and Senior Vice President of PMC and Vice President of
Pioneer Small Company Fund.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as junior partner.
The Fund's Amended and Restated Declaration of Trust (the "Declaration of
Trust") provides that the holders of two-thirds of its outstanding shares may
vote to remove a Trustee of the Fund at any meeting of shareholders. See
"Description of Shares" below. The business address of all officers is 60 State
Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned, directly
or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the Fund's
investment adviser, serves as the investment adviser for the Pioneer mutual
funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to the
public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Gold Shares PMC PFD
-12-
<PAGE>
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life insurance
contracts of various insurance companies or for certain qualified pension
plans.
To the knowledge of the Trust, no officer or trustee of the Trust owned 5%
or more of the issued and outstanding shares of PGI on the date of this
Statement of Additional Information, except Mr. Cogan who then owned
approximately 15% of such shares. At January 31, 1996, the trustees and officers
of the Trust beneficially owned, in the aggregate, less than 1% of the
outstanding shares of each Fund. As of January 31, 1996, Merrill Lynch owned
approximately 16.27% (3,394,604) of the outstanding Class B shares of Capital
Growth Fund; PFD owned approximately 100% (5,414.185) of the outstanding Class C
shares of Capital Growth Fund; PFD owned approximately 100% (5,224.660) of the
Class C shares of Equity-Income Fund; Merrill Lynch owned approximately 7.02%
(19,560) of the outstanding Class B shares of Gold Shares; and PFD owned
approximately 100% (11,627.907) of the outstanding Class C shares of Gold
Shares.
Compensation of Officers and Trustees
The Trust pays no salaries or compensation to any of its officers.
Commencing on November 1, 1995, each Fund will pay an annual trustees' fee to
each Trustee who is not affiliated with PMC, PGI, PFD or PSC consisting of two
components: (a) a base fee of $500 and (b) a variable fee, calculated on the
basis of the average net assets of each Fund, not expected to exceed
approximately $1,600 for 1996. In addition, each Fund will pay a per meeting fee
of $120 to each Trustee who is not affiliated with PMC, PGI, PFD or PSC. The
Trust also will pay an annual committee participation fee to Trustees who serve
as members of committees established to act on behalf of one or more of the of
Pioneer mutual funds. Committee fees will be allocated to the Trust on the basis
of the Trust's average net assets. Each Trustee who is a member of the Audit
Committee for the Pioneer mutual funds will receive an annual fee equal to 10%
of the aggregate annual trustees' fee, except the Committee Chair who will
receive an annual trustees' fee equal to 20% of the aggregate
-13-
<PAGE>
annual trustees' fee. The Audit Committee fees for each member and the Audit
Committee Chair for 1996 are expected to be approximately $6,000 and $12,000,
respectively. Members of the Pricing Committee for the Pioneer mutual funds, as
well as any other committee which renders material functional services to the
Board of Trustees for the Pioneer mutual funds, will receive an annual fee equal
to 5% of the annual trustees' fee, except the Committee Chair who will receive
an annual trustees' fee equal to 10% of the annual trustees' fee. The Pricing
Committee fees for each member and the Pricing Committee Chair for 1996 are
expected to be approximately $3,000 and $6,000, respectively. Any such fees paid
to affiliates or interested persons of PMC, PGI, PFD or PSC are reimbursed to
the Trust under its Management Contract.
For the fiscal year ended October 31, 1995, the Trust paid an annual
trustees' fee of $2,000 plus $200 per meeting attended to each Trustee not
affiliated with PMC, PFD, PSC or PGI and pays an annual trustees' fee of $500
plus expenses to each Trustee affiliated with PMC, PFD, PSC or PGI. Any such
fees and expenses paid to affiliates or interested persons of PMC, PFD, PSC or
PGI are reimbursed to the Trust under its Management Contract.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Trust:
Pension or
Retirement Total
Benefits Compensation
Aggregate Accrued as from Trust and
Compensation Part of Pioneer Family
Name of Trustee from the Trust* Trust's Expenses of Funds**
John F. Cogan, Jr. $666.69 $0 $11,000
Richard H. Egdahl, M.D. $5217.67 $0 $63,315
Margaret B.W. Graham $5217.67 $0 $62,398
John W. Kendrick $5217.67 $0 $62,398
Margeurite A. Piret $6351.98 $0 $76,704
David D. Tripple $666.69 $0 $11,000
Stephen K. West $5604.00 $0 $68,180
John Winthrop $5896.82 $0 $71,199
-------- -- -------
Total $34,839.19 $0 $426,194
========== == ========
- --------------------
* As of Trust's fiscal year end.
** As of December 31, 1995 (calendar year end for all Pioneer Funds).
3. INVESTMENT ADVISER
The Trust, with respect to each Fund, has contracted with PMC, 60 State
Street, Boston, Massachusetts, to act as investment adviser. A description of
the services provided to each Fund under its respective management contract and
the expenses paid by the Fund under such contract is set forth in each
Prospectus under the caption "Management of the Fund."
The term of each management contract is one year and is renewable annually
by the vote of a majority of the Board of Trustees of the Trust (including a
majority of the Board of Trustees who are not parties to the contract or
interested persons of any such parties). The vote must be cast in person at a
meeting called for the purpose of voting on such renewal. This contract
terminates if assigned and may be terminated without penalty by either party
upon
-14-
<PAGE>
sixty days' written notice by vote of its Board of Directors or Trustees or a
majority of its outstanding voting securities. Pursuant to each management
contract, PMC will not be liable for any error of judgment or mistake of law or
for any loss sustained by reason of the adoption of any investment policy or the
purchase, sale or retention of any securities on the recommendation of PMC. PMC,
however, is not protected against liability by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under the respective
management contract.
As compensation for its management services and expenses incurred, PMC is
entitled to a management fee from each Fund at the rate of 0.65% per annum of a
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 any excess over $1 billion.
The fee is normally computed and accrued daily and paid monthly.
PMC has agreed not to impose any management fees and make other
arrangements, if necessary, to limit expenses for Gold Shares' Class A shares to
not more than 1.75% of such Class's average net assets. The management fee
attributable to Gold Shares' Class B and Class C shares will not be imposed to
the same extent that it is not imposed for Class A shares. This agreement is
temporary and voluntary and may be terminated at any time by PMC. PMC's expense
limitation agreement was effective with respect to Gold Shares' Class A shares
during the fiscal year ended October 31, 1995. PMC's agreements to limit
expenses with respect to Capital Growth Fund and Equity-Income Fund terminated
in 1992 and 1993, respectively. See "Expense Information" in Gold Shares'
Prospectus.
During the fiscal years ended October 31, 1995, October 31, 1994 and
October 31 1993, PMC earned management fees from the Funds, respectively, as
follows: Capital Growth Fund, $,4,584,004, $1,805,402 and $914,765; Equity-
Income Fund, $1,559,459, $1,060,828 and $589,465; Gold Shares, $174,094,
$140,960 and $45,510.
During the fiscal years ended October 31, 1995, October 31, 1994 and
October 31, 1993, the expense limitations described above resulted in a
reduction of the total management fees payable by the Funds, as follows:
Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended
October 31, 1995 October 31, 1994 October 31, 1993
---------------- ---------------- ----------------
Capital Growth
Fund --- --- ---
Equity-Income
Fund --- --- ___
Gold Shares $139,498 $83,070 $45,510
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Trust, on behalf of each Fund, entered into an Underwriting Agreement
with PFD. The Underwriting Agreement will continue from year to year if annually
approved by the Trustees. The Underwriting Agreement provides that PFD will bear
expenses for the distribution of the Trust's shares, except for expenses
incurred by PFD for which it is reimbursed by the Trust under the Plan. PFD
bears all expenses it incurs in providing services under the Underwriting
Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Trust. PFD also pays certain expenses in
-15-
<PAGE>
connection with the distribution of the Trust's shares, including the cost of
preparing, printing and distributing advertising or promotional materials, and
the cost of printing and distributing prospectuses and supplements to
prospective shareholders. The Trust bears the cost of registering its shares
under federal and state securities law and the laws of certain foreign
countries. The Trust and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Trust.
The Trust, on behalf of each Fund, has adopted a plan of distribution
pursuant to Rule 12b-1 under the 1940 Act with respect to each Class of shares
of the Funds (the "Class A Plan", "Class B Plan", and "Class C Plan", and,
together, the "Plans").
Class A Plan
Pursuant to the Class A Plan a Fund may reimburse PFD for its expenditures
in financing any activity primarily intended to result in the sale of Fund
shares. Certain categories of such expenditures have been approved by the Board
of Trustees and are set forth in each Prospectus. See "Distribution Plans" in
each Prospectus. The expenses of each Fund pursuant to the Class A Plan are
accrued on a fiscal year basis and may not exceed, with respect to Class A
shares, the annual rate of .25% of a Fund's average annual net assets
attributable to Class A shares.
Class B Plan
The Class B Plan provides that a Fund shall pay PFD, as the Fund's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Fund's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Fund's average daily
net assets attributable to Class B shares (which PFD will in turn pay to
securities dealers which enter into a sales agreement with PFD at a rate of up
to 0.25% of the Fund's average daily net assets attributable to Class B shares
owned by investors for whom that securities dealer is the holder or dealer of
record). This service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Dealers will become eligible for additional service
fees with respect to such shares commencing in the thirteenth month following
purchase. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services to the Funds. PFD pays commissions
to dealers as well as expenses of printing prospectuses and reports used for
sales purposes, expenses with respect to the preparation and printing of sales
literature and other distribution-related expenses, including, without
limitation, the cost necessary to provide distribution- related services, or
personnel, travel office expenses and equipment. The Class B Plan also provides
that PFD will receive all contingent deferred sales charges ("CDSC")
attributable to Class B shares. (See "Distribution Plans" in the Prospectus).
Class C Plan
The Class C Plan provides that a Fund will pay PFD, as the Fund's
distributor for its Class C shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis to 0.75% of the Fund's average daily net
assets attributable to Class C shares and will pay PFD a service fee equal to
0.25% of the Fund's average daily net assets attributable to Class C shares. PFD
will in turn pay to securities dealers which enter into a sales agreement with
-16-
<PAGE>
PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of each Fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the amount invested and additional compensation
at a rate of up to 0.75% of the amount invested with respect to such shares.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class C Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to the Class C shares
of the Funds. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distribution Plans" in the Prospectuses.)
General
In accordance with the terms of the Plans, PFD provides to the Trust for
review by the Trustees a quarterly written report of the amounts expended under
the respective Plan and the purpose for which such expenditures were made. In
the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Trust, nor any Trustee of the Trust who is not
an interested person of the Trust, has any direct or indirect financial interest
in the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by each of the Funds and except
to the extent certain officers may have an interest in PFD's ultimate parent,
PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Trust, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plans, the Trustees identified and considered a number of
potential benefits which the Plans may provide. The Board of Trustees believes
that there is a reasonable likelihood that the Plans will benefit each Fund and
their current and future shareholders. Under their terms, the Plans remain in
effect from year to year provided such continuance is approved annually by vote
of the Trustees in the manner described above. The Plans may not be amended to
increase materially the annual percentage limitation of average net assets which
may be spent for the services described therein without approval of the
shareholders of the Fund affected thereby, and material amendments of the Plans
must also be approved by the Trustees in the manner described above. A Plan may
be terminated at any time, without payment of any penalty, by vote of the
majority of the Trustees who are not interested persons of the Trust and have no
direct or indirect financial interest in the operations of the Plan, or by a
vote of a majority of the outstanding voting securities of the respective Class
of a Fund (as defined in the 1940 Act). A Plan will automatically terminate in
the event of its assignment (as defined in the 1940 Act).
-17-
<PAGE>
During the fiscal year ended October 31, 1995, each Fund incurred total
distribution fees pursuant to the Fund's Class A Plan and Class B Plan,
respectively, as follows: Capital Growth Fund, $1,493,206 and $1,609,246;
Equity-Income Fund, $516,430 and $333,963; and Gold Shares, $55,852 and $14,660.
The distribution fees were paid by each Fund to PFD in reimbursement of expenses
related to servicing of shareholder accounts and to compensating dealers and
sales personnel. The Funds had not incurred any distribution fees pursuant to
the Class C Plan. Class C shares were first offered January 31, 1996.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Trust, on behalf of the Funds, has contracted with PSC, 60 State
Street, Boston, Massachusetts, to act as shareholder servicing and transfer
agent for the Trust. This contract terminates if assigned and may be terminated
without penalty by either party upon ninety days' written notice by vote of its
Board of Directors or Trustees or a majority of its outstanding voting
securities.
Under the terms of its contract with the Trust, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the Trust; (ii) distributing dividends and capital gains
associated with Trust portfolio accounts; and (iii) maintaining account records
and responding to shareholder inquiries.
PSC receives an annual fee of $22.00 per each Class A, Class B and Class C
shareholder account from each Fund as compensation for the services described
above. PSC is also reimbursed by each Fund for its cash out-of-pocket
expenditures. The annual fee is set at an amount determined by vote of a
majority of the Trustees (including a majority of the Trustees who are not
parties to the contract with PSC or interested persons of any such parties) to
be comparable to fees for such services being paid by other investment
companies. The Fund may compensate entities which have contracted to be an agent
for specific transaction processing and services. Any such payments by the Fund
would be in lieu of the per account fee which would otherwise be paid by the
Fund to PSC.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of each
Fund's assets. The Custodian's responsibilities include safekeeping and
controlling each Fund's cash and securities, handling the receipt and delivery
of securities, and collecting interest and dividends on each Fund's investments.
The Custodian does not determine the investment policies of any of the Funds or
decide which securities a Fund will buy or sell. Each Fund may, however, invest
in securities, including repurchase agreements, issued by the Custodian and may
deal with the Custodian as a principal in securities transactions. Portfolio
securities may be deposited into the Federal Reserve-Treasury Department Book
Entry System or the Depository Trust Company.
7. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter for the Trust in connection with
the continuous offering of the Class A, Class B and Class C shares of each Fund.
During the fiscal years ended October 31, 1995, October 31, 1994 and October 31,
1993, net underwriting commissions paid to PFD in connection with the offering
of Class A shares of the Trust were, respectively, approximately $13,577,000,
$710,655 and $399,113 for Capital Growth Fund; $2,615,000, $314,836 and $405,311
for Equity-Income Fund; and $232,000, $68,180 and $39,614 for Gold Shares.
Commissions reallowed to dealers during the same periods were approximately
$11,803,000, $5,774,128 and $2,969,000 for Capital Growth Fund; $2,368,000,
$2,401,554.39 and $3,374,000 for Equity-Income Fund; and $200,000, $460,376 and
$267,000 for Gold Shares.
The Trust will not generally issue Trust shares for consideration other
than cash. At the Trust's sole discretion, however, it may issue Trust shares
for consideration other than cash in connection with a bona fide
-18-
<PAGE>
reorganization, statutory merger, or other acquisition of portfolio securities
(other than municipal debt securities issued by state political subdivisions or
their agencies or instrumentalities) provided (i) the securities meet the
investment objectives and policies of the Trust; (ii) the securities are
acquired by the Trust for investment and not for resale; (iii) the securities
are not restricted as to transfer either by law or liquidity of market; and (iv)
the securities have a value which is readily ascertainable (and not established
only by evaluation procedures) as evidenced by a listing on the American Stock
Exchange or the New York Stock Exchange or the NASDAQ National Market.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP are the Trust's independent public accountants,
providing audit services, tax return review, and assistance and consultation
with respect to the preparation of filings with the Commission.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each Fund by PMC pursuant to authority contained in the Fund's
management contract. In selecting brokers or dealers, PMC will consider various
relevant factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability, and
financial condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads.
PMC may select broker-dealers which provide brokerage and/or research
services to the Funds and/or other investment companies managed by PMC. In
addition, if PMC determines in good faith that the amount of commissions charged
by a broker-dealer is reasonable in relation to the value of the brokerage and
research services provided by such broker, a Fund may pay commissions to such
broker-dealer in an amount greater than the amount another firm may charge. Such
services may include advice concerning the value of securities; the advisability
of investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). PMC maintains a listing of broker-dealers who provide such services
on a regular basis. However, because it is anticipated that many transactions on
behalf of the Funds and other investment companies managed by PMC are placed
with broker-dealers (including broker-dealers on the listing) without regard to
the furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such dealers solely because such services were
provided.
The research received from broker-dealers may be useful to PMC in rendering
investment management services to the Trust as well as other investment
companies managed by PMC, although not all such research may be useful to the
Fund. Conversely, such information provided by brokers or dealers who have
executed transaction orders on behalf of such other PMC clients may be useful to
PMC in carrying out its obligations to the Trust. The receipt of such research
has not reduced PMC's normal independent research activities; however, it
enables PMC to avoid the additional expenses which might otherwise be incurred
if it were to attempt to develop comparable information through its own staff.
In circumstances where two or more broker-dealers offer comparable prices
and executions, preference may be given to a broker-dealer which has sold shares
of the Fund as well as shares of other investment companies or accounts managed
by PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Fund.
-19-
<PAGE>
The Trustees periodically review PMC's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Trust.
In addition to the Trust, PMC acts as investment adviser or subadviser to
other Pioneer mutual funds and certain private accounts with investment
objectives similar to those of the Funds. Securities frequently meet the
investment objectives of the Funds, such other funds and such private accounts.
In such cases, the decision to recommend a purchase to one fund or account
rather than another is based on a number of factors. The determining factors in
most cases are the amount of securities of the issuer then outstanding, the
value of those securities and the market for them. Other factors considered in
the investment recommendations include other investments which each fund or
account presently has in a particular industry and the availability of
investment funds in each fund or account.
It is possible that at times identical securities will be held by more than
one fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that more than one of the Funds,
another Pioneer mutual fund or a private account managed by PMC may not be able
to acquire as large a position in such security as it desires, it may have to
pay a higher price for the security. Similarly, a Fund may not be able to obtain
as large an execution of an order to sell or as high a price for any particular
portfolio security if PMC decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one Fund or account, the
resulting participation in volume transactions could produce better executions
for the Fund or the account. In the event more than one account purchases or
sells the same security on a given date, the purchases and sales will normally
be made as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each.
During the fiscal years ended October 31, 1995, October 31, 1994 and
October 31, 1993, each Fund paid aggregate brokerage and underwriting
commissions, respectively, as follows: Capital Growth Fund, $2,490,466,
$1,371,516 and $1,886,025; Equity-Income Fund, $188,346, $208,839.20 and
$418,512; and Gold Shares, $15,970, $75,307.93 and $40,020.
10. TAX STATUS AND DIVIDENDS
Each Fund is treated as a separate entity for accounting and tax purposes.
It is each Fund's policy to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a
regulated investment company. These requirements relate to the sources of a
Fund's income, the diversification of its assets, and the timing of its
distributions to shareholders. If a Fund meets all such requirements and
distributes to its shareholders, in accordance with the Code's timing
requirements, all investment company taxable income and net capital gain, if
any, which it receives, the Fund will be relieved of the necessity of paying
federal income tax.
In order to qualify as a registered investment company under Subchapter M,
a Fund must, among other things, derive at least 90% of its gross income for
each taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including gains from options, futures or forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "90% income test"), limit its gains from the sale
of stock, securities and certain other investments held for less than three
months to less than 30% of its annual gross income (the "30% test") and satisfy
certain quarterly diversification and periodic income distribution requirements.
Any gain realized by Gold Shares upon the sale of investments in gold or silver
bullion, coins or other precious metals does not constitute income satisfying
the 90% income test, and such investments are not considered diversified
securities for purposes of the diversification requirements. Gold Shares will
monitor such investments to ensure compliance with these tests.
-20-
<PAGE>
Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign exchange gains are taxable as ordinary
income, whether received in cash or in additional shares. Dividends from net
long-term capital gain in excess of net short-term capital loss, if any, whether
received in cash or additional shares, are taxable to a Fund's shareholders as
long-term capital gains for federal income tax purposes without regard to the
length of time shares of the Fund have been held. The federal income tax status
of all distributions will be reported to shareholders annually.
Any dividend declared by a Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by a Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, forward
foreign currency contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Any such transactions that are not directly related to the Fund's
investment in stock or securities may increase the amount of gain it is deemed
to recognize from the sale of certain investments held for less than 3 months
for purposes of the 30% test, and may under future Treasury regulations produce
income not among the types of "qualifying income" for purposes of the 90% income
test. If the net foreign exchange loss for a year were to exceed the Fund's
investment company taxable income (computed without regard to such loss) the
resulting overall ordinary loss for such year would not be deductible by the
Fund or its shareholders in future years.
If a Fund acquires stock in certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), the Fund could be subject to Federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections may, if available, ameliorate these adverse tax
consequences but any such election would require a Fund to recognize taxable
income or gain without the concurrent receipt of cash. Each Fund may limit
and/or manage its holdings in passive foreign investment companies to minimize
its tax liability or maximize its return from these investments.
At the time of an investor's purchase of Fund shares, a portion of the
purchase price is often attributable to realized or unrealized appreciation in
the Fund's portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions from such appreciation or income may be taxable to such
investor even if the net asset value of the investor's shares is, as a result of
the distributions, reduced below the investor's cost for such shares and the
distributions in reality represent a return of a portion of the investment.
Redemptions and exchanges are taxable events. Any loss realized upon the
redemption or other disposition of shares with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain with respect to such
shares.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment at net asset value pursuant
to the reinvestment privilege, the sales charge paid on such shares is not
included in their tax basis under the Code and (2) in the case of an exchange,
all or a portion of the sales charge paid on such shares is not included in
their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the
-21-
<PAGE>
shares acquired in the reinvestment or exchange. Losses on certain redemptions
may be disallowed under "wash sale" rules in the event of other investments in
the same Fund (including pursuant to automatic dividend reinvestments) within a
period of 61 days beginning 30 days before and ending 30 days after a redemption
or other sale of shares.
For federal income tax purposes, a Fund is permitted to carry forward a net
capital loss in any year to offset capital gains, if any, during the eight years
following the year of the loss. To the extent subsequent capital gains are
offset by such losses, they would not result in federal income tax liability to
such Fund and are not expected to be distributed as such to shareholders. On
October 31, 1995, Gold Shares had capital loss carryforwards of $72,050 which
will expire in 2001.
Options written or purchased and futures contracts entered into by a Fund
on certain securities, securities indices and foreign currencies, as well as
certain foreign currency forward contracts, may cause the Fund to recognize
gains or losses from marking-to-market at the end of its taxable year even
though such options may not have lapsed, been closed out, or exercised or such
futures or forward contracts may not have been closed out or disposed of and may
affect the characterization as long-term or short-term of some capital gains and
losses realized by the Fund. Certain options, futures and forward contracts on
foreign currency may be subject to Section 988, described above, and accordingly
produce ordinary income or loss. Losses on certain options, futures or forward
contracts and/or offsetting positions (portfolio securities or other positions
with respect to which a Fund's risk of loss is substantially diminished by one
or more options, futures or forward contracts) may also be deferred under the
tax straddle rules of the Code, which may also affect the characterization of
capital gains or losses from straddle positions and certain successor positions
as long-term or short-term. The tax rules applicable to options, futures,
forward contracts and straddles may affect the amount, timing and character of a
Fund's income and loss and hence of its distributions to shareholders. Certain
tax elections may be available that would enable a Fund to ameliorate some
adverse effects of the tax rules described in this paragraph.
For purposes of the 70% dividends-received deduction available to
corporations, dividends received by a Fund, if any, from U.S. domestic
corporations in respect of any share of stock with a tax holding period of at
least 46 days (91 days in the case of certain preferred stock) held in an
unleveraged position and distributed and designated by the Fund may be treated
as qualifying dividends. Any corporate shareholder should consult its tax
adviser regarding the possibility that its tax basis in its shares may be
reduced, for federal income tax purposes, by reason of "extraordinary dividends"
received with respect to the shares. Corporate shareholders must meet the
minimum holding period requirement stated above (46 or 91 days), taking into
account any holding-period reductions from certain hedging or other transactions
that diminish risk of loss, with respect to their Fund shares in order to
qualify for the deduction and, if they borrow to acquire Fund shares, may be
denied a portion of the dividends-received deduction. The entire qualifying
dividend, including the otherwise deductible amount, will be included in
determining the excess (if any) of a corporation's adjusted current earnings
over its alternative minimum taxable income, which may increase a corporation's
alternative minimum tax liability.
Capital Growth Fund and Gold Shares may be subject to withholding and other
taxes imposed by foreign countries with respect to investments in those
countries. Tax conventions between certain countries and the U.S. may reduce or
eliminate such taxes in some cases. Capital Growth Fund does not expect to
satisfy the requirements for passing through to shareholders their pro rata
shares of foreign taxes paid by such Fund, with the result that its shareholders
will not include such taxes in their gross incomes and will not be entitled to a
tax deduction or credit for such taxes on their own tax returns. As described in
its Prospectus, Gold Shares may satisfy such requirements and, if it does, may
pass through to its shareholders their pro rata shares of the qualified foreign
taxes it pays, in which case such shareholders would be required to include such
taxes in their gross incomes (in addition to dividends and distributions
actually received by the shareholders) and may be entitled to a tax deduction or
credit for their shares of such taxes, subject to certain limitations under the
Code.
-22-
<PAGE>
Qualified foreign taxes generally include taxes that would be treated as
income taxes under U.S. tax regulations but do not include most other taxes,
such as stamp taxes, securities transaction taxes, and similar taxes. If Gold
Shares makes the election described above, shareholders may deduct their pro
rata portion of qualified foreign taxes paid by the Fund in computing their
income subject to U.S. federal income taxation or, alternatively, use them as
foreign tax credits, subject to applicable limitations under the Code, against
their U.S. federal income taxes. Shareholders who do not itemize deductions for
federal income tax purposes will not, however, be able to deduct their pro rata
portion of qualified foreign taxes paid by the Fund, although such shareholders
will be required to include their shares of such taxes in gross income.
If Gold Shares makes this election and a shareholder chooses to take a
credit for the foreign taxes deemed paid by such shareholder, the amount of the
credit that may be claimed in any year may not exceed the same proportion of the
U. S. tax against which such credit is taken which the shareholder's taxable
income from foreign sources (but not in excess of the shareholder's entire
taxable income) bears to his entire taxable income. For this purpose, long-term
and short-term capital gains the Fund realizes and distributes to shareholders
will generally not be treated as income from foreign sources in their hands, nor
will distributions of certain foreign currency gains subject to Section 988 of
the Code and of any other income realized by the Fund that is deemed, under the
Code, to be U.S. source income in the hands of the Fund. This foreign tax credit
limitation may also be applied separately to certain specific categories of
foreign-source income and the related foreign taxes. As a result of these rules,
which have different effects depending upon each shareholder's particular tax
situation, certain shareholders may not be able to claim a credit for the full
amount of their proportionate share of the foreign taxes paid by the Fund.
Shareholders who are not liable for U. S. income taxes, including tax-exempt
shareholders, will ordinarily not benefit from this election. If the Fund does
make the election, it will provide required tax information to shareholders. If
the Fund does not make the election, it may deduct such taxes in computing its
income available for distribution to shareholders to satisfy applicable tax
distribution requirements.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions is accorded to accounts
maintained as qualified retirement plans.
Shareholders should consult their tax advisers for more information.
Each Fund is not subject to Massachusetts corporation franchise or excise
taxes and, provided that it qualifies as a regulated investment company under
the Code, also will not be required to pay any Massachusetts income tax.
Federal law requires that each Fund withhold (as "backup withholding") 31%
of reportable payments, including dividends, capital gain dividends, and the
proceeds of redemptions (including exchanges) and repurchases, to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate W-9 Forms, that the Social Security Number
or other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. A Fund may nevertheless be required to withhold
if it receives notice from the IRS or a broker that the number provided is
incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.
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 and U.S.
domestic corporations, partnerships, trusts or estates, and who are subject to
U.S. federal income tax. The description does not address the special tax rules
applicable to particular types of investors, such as banks, insurance companies,
or tax-exempt entities. Investors other than U.S. persons may be subject to
different U.S. tax treatment, including a possible 30% U.S. nonresident alien
withholding tax (or nonresident alien withholding tax at a lower treaty rate) on
amounts treated as ordinary dividends from a Fund and, unless an effective IRS
Form W-8 or authorized substitute is on file, to 31% backup withholding on
certain other payments from such Fund. Shareholders should consult their own tax
advisers on these matters and on state, local and other applicable tax laws.
-23-
<PAGE>
11. DESCRIPTION OF SHARES
The Trust's Declaration of Trust permits the Board of Trustees to authorize
the issuance of an unlimited number of full and fractional shares of beneficial
interest which may be divided into such separate series as the Trustees may
establish. In addition to the three Funds, the Trustees may establish additional
series of shares, and may divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Trust. The Declaration of Trust further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of three classes of
shares of each of the Trust's three Funds, Class A, Class B and Class C shares.
Each share of a class of a Fund represents an equal proportionate interest in
the assets of that Fund allocable to that class. Upon liquidation of the Trust,
shareholders of each class of a Fund are entitled to share pro rata in that
Fund's net assets allocable to such class available for distribution to
shareholders. The Trust reserves the right to create and issue additional series
or classes of shares, in which case the shares of each class of a series would
participate equally in the earnings, dividends and assets allocable to that
class of the particular series.
The shares of each Fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all Funds vote together as a class on
matters that affect all of the Funds in substantially the same manner. As to
matters affecting a single Fund or class, shares of such Fund or class will vote
separately.
Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The Trust's Declaration of Trust provides that the holders of
two-thirds of its outstanding shares may vote to remove a Trustee at any special
meeting of shareholders. Special meetings of the shareholders of the Trust shall
be called by the Trustees upon the written request of shareholders owning at
least one-tenth of the outstanding shares. Whenever ten or more shareholders,
meeting the qualifications set forth in Section 16(c) of the 1940 Act, seek the
opportunity of furnishing materials to the other shareholders with a view to
obtaining signatures on such a request for a meeting, the Trustees shall comply
with the provisions of Section 16(c) with respect to providing such shareholders
access to the list of the shareholders of record of the Trust or the mailing of
such materials to such shareholders of record. No amendment that adversely
affects the rights of shareholders may be made to the Trust's Declaration of
Trust without the affirmative vote of a majority of its shares. Shares have no
preemptive or conversion rights. Shares are fully paid and non-assessable by the
Trust, except as stated below. See "Certain Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Trust's operations are governed by
its Declaration of Trust dated December 7, 1993, a copy of which is on file with
the office of the Secretary of State of The Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust or any series of the Trust and
provides that notice of such disclaimer may be given in each agreement,
obligation or instrument entered into or executed by the Trust or its Trustees.
Moreover, the Declaration of Trust provides for the indemnification out of Trust
property of any shareholders held personally liable for any obligations of the
Trust or any series of the Trust. The Declaration of Trust also provides that
the Trust shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss beyond his or
her investment because of shareholder liability would be limited to
circumstances in which the Trust itself will be unable to meet its obligations.
In light of the nature of the Trust's business and the nature and amount of its
assets, the possibility of the Trust's liabilities exceeding its assets, and
therefore a shareholder's risk of personal liability, is remote.
-24-
<PAGE>
The Declaration of Trust further provides that the Trust shall indemnify
each of its Trustees and officers against liabilities and expenses reasonably
incurred by them, in connection with, or arising out of, any action, suit or
proceeding, threatened against or otherwise involving such Trustee or officer,
directly or indirectly, by reason of being or having been a Trustee or officer
of the Trust. The Declaration of Trust does not authorize the Trust to indemnify
any Trustee or officer against any liability to which he or she would otherwise
be subject by reason of or for willful misfeasance, bad faith, gross negligence
or reckless disregard of such person's duties.
13. LETTER OF INTENTION
Purchases in a Fund of $50,000 or over of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in each Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Class
A shares of $50,000 over a 13-month period would be charged at the 4.50% sales
charge rate with respect to all purchases during that period. Should the amount
actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all the shares of record he holds in the Trust and in all other
Pioneer mutual funds except Pioneer Money Market Trust as of the date of the
Letter of Intention as a credit toward determining the applicable scale of sales
charge for the Class A shares to be purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow Class A shares having a
purchase price equal to 5% of the stated investment specified in the Letter of
Intention. A Letter of Intention is not a binding obligation upon the investor
to purchase, or the Trust to sell, the full amount indicated and the investor
should carefully read the provisions of the Letter of Intention set forth in the
Account Application before signing.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from shares of any Fund
deposited by the applicant under this SWP. The applicant must deposit or
purchase for deposit with PSC shares of a Fund having a total value of not less
than $10,000. Periodic checks of $50 or more will be deposited monthly or
quarterly directly into a bank account designated by the applicant or will be
sent by check to the applicant, or any person designated by him monthly or
quarterly. Withdrawals are limited to 10% of the value of the account at the
time the SWP is implemented if a CDSC applies.
Any income dividends or capital gains distributions on shares under the SWP
will be credited to the Plan account on the payment date in full and fractional
shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. To the extent that such redemptions
for periodic withdrawals exceed dividend income reinvested in the SWP account,
such redemptions will reduce and may ultimately exhaust the number of shares
deposited in the Plan account. Redemptions are taxable transactions to
shareholders. In addition, the amounts received by a shareholder cannot be
considered as yield or income on his or her investment because part of such
payments may be a return of his or her investment.
The SWP may be terminated at any time (1) by written notice to PSC or from
PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3) when all shares under the Plan have been redeemed.
-25-
<PAGE>
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of each Fund is determined as
of the close of regular trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m., Eastern Time) on each day on which the Exchange is open
for trading. As of the date of this Statement of Additional Information, the
Exchange is open for trading every weekday except for the following holidays:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of
each class of each Fund is also determined on any other day in which the level
of trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. A Fund is not required to determine its net asset
value per share on any day in which no purchase orders for the shares of the
Fund become effective and no shares are tendered for redemption.
The net asset value per share of each class of each Fund is computed by
taking the value of all of the Fund's assets attributable to a class, less the
Fund's liabilities attributable to that class, and dividing it by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of a Fund are accrued daily.
Securities that 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
last bid and asked prices. Securities for which no market quotations are readily
available (excluding those whose trading has been suspended) will be valued at
fair value as determined in good faith by the Board of Trustees, although the
actual computations may be made by persons acting pursuant to the direction of
the Board of Trustees.
Each Fund's maximum offering price per Class A share is determined by
adding the maximum sales charge to the net asset value per Class A share. Class
B and Class C shares are offered at net asset value without the imposition of an
initial sales charge.
16. INVESTMENT RESULTS
Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of each Fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. For example, total return of a Fund's
classes may be compared to rankings prepared by Lipper Analytical Services,
Inc., a widely recognized independent service which monitors mutual fund
performance; the Standard & Poor's 500 Stock Index ("S&P 500"), an index of
unmanaged groups of common stock; the Dow Jones Industrial Average, a recognized
unmanaged index of common stocks of 30 industrial companies listed on the New
York Stock Exchange; or The Frank Russell Indexes ("Russell 1000," "2000,"
"2500," "3000,") or the Wilshire Total Market Value Index ("Wilshire 5000"), two
recognized unmanaged indexes of broad based common stocks.
In addition, the performance of the classes of a Fund may be compared to
alternative investment or savings vehicles and/or to indexes or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, The Wall Street Journal, and Worth may also be cited (if a Fund is
listed in any such publication) or used for comparison, as well as performance
listings and rankings from various other sources including Bloomberg Financial
Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Investment Company
Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co., Lipper Analytical
Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.
-26-
<PAGE>
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements in sales
literature, or in reports to shareholders of a Fund.
In addition to any of the foregoing performance listings and rankings,
performance of Gold Shares' classes may be measured against such indices as the
London Gold Prices, the Toronto Gold Index, the Australian Gold Index and the
Financial Times Gold Mining Shares Index. Gold Shares may also present
historical information on the production and usage of gold. See Appendix A.
The Funds may also present, from time to time, historical information
depicting the value of a hypothetical account in one or more classes of a Fund
since such Fund's inception.
In presenting investment results, each Fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class of a
Fund is "total return." "Total return" will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of
such Fund, over any period up to the lifetime of that class of such Fund. Total
return calculations will usually assume the reinvestment of all dividends and
capital gains distributions and will be expressed as a percentage increase or
decrease from an initial value, for the entire period or for one or more
specified periods within the entire period. Total return percentages for periods
of less than one year will usually be annualized; total return percentages for
periods longer than one year will usually be accompanied by total return
percentages for each year within the period and/or by the average annual
compounded total return for the period. The income and capital components of a
given return may be separated and portrayed in a variety of ways in order to
illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values, without percentages. Past performance cannot
guarantee any particular future result.
Each of the Funds' average annual total return quotations for each of its
classes as that information may appear in each Fund's Prospectus, this Statement
of Additional Information or in advertising are calculated by standard methods
prescribed by the Securities and Exchange Commission.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A, Class B, and Class C
shares are computed by finding the average annual compounded rates of return
that would cause a hypothetical investment in that class made on the first day
of a designated period (assuming all dividends and distributions are reinvested)
to equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
-27-
<PAGE>
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000, less the
maximum sales load of $57.50 for Class A shares or
the deduction of any CDSC applicable to Class B or
Class C shares at the end of the period
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1000
initial payment made at the beginning of the
designated period (or fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by a Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts of
a particular class are taken into consideration. For any account fees that vary
with the size of the account, the account fee used for purposes of the above
computation is assumed to be the fee that would be charged to a class's mean
account size.
The total returns for Class A and Class B shares of the Funds as of October
31, 1995 are as follows:
One Five Life-of-
Class A Shares Year Years Fund
Capital Growth Fund 12.48% 27.13% 16.50%
Equity-Income Fund 12.61% 16.47% 12.44%
Gold Shares (19.24)% 3.80% (0.49)%
One Life-of-
Class B Shares Year Fund
Capital Growth Fund 19.40% 14.42%
Equity-Income Fund 18.64% 14.64
Gold Shares (11.45)% (18.11)%
During the five year and life-of-Fund periods, PMC temporarily agreed to
reduce its management fee and made other arrangements to limit certain other
expenses of the Funds. During the one-year period, the same arrangement was in
effect for Gold Shares. Had PMC not made such an arrangement, the total returns
for the periods noted would have been lower. Class C Shares were first offered
January 31, 1996.
-28-
<PAGE>
Automated Information Line (FactFoneSM)
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for
Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer mutual
funds.
Yields are calculated in accordance with Securities and Exchange Commission
mandated standard formulas.
In addition, by using a personal identification number ("PIN"),
shareholders may enter purchases, exchanges and redemptions, access their
account balance and last three transactions and may order a duplicate statement.
See "FactFoneSM" in the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the maximum
applicable sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A, Class B and Class C
shares (except for Pioneer money market funds, which seek a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost.
17. FINANCIAL STATEMENTS
The Trust's financial statements for the year ended October 31, 1995 are
included in each Fund's Annual Report to Shareholders, which report is
incorporated by reference into and attached to this Statement of Additional
Information. The Trust's Annual Report to Shareholders is so incorporated and
attached in reliance upon the report of Arthur Andersen LLP, independent public
accountants, as experts in accounting and auditing.
-29-
<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
- --------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed.
Ratings are generally given to securities at the time of issuance. While
the rating agencies may from time to time revise such ratings, they
undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on
the date of the Fund's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds
of educational institutions, projects under construction, enterprises
without established earnings records and situations where current
financial data is unavailable.
-30-
<PAGE>
Standard & Poor's Ratings Group3
AAA: Bonds rated AAA are highest grade obligations. This rating indicates
an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
3 Rates all governmental bodies having $1,000,000 or more of debt
outstanding, unless adequate information is not available.
-31-
<PAGE>
Pioneer Capital Growth Fund A
Date Initial Offering Sales Charge Shares Net Asset Initial
Investment Price Included Purchased Value Net Asset
Per Share Value
7/25/90 $10,000 $11.14 5.75% 897.666 $10.50 $9,425
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap. From Dividends Total Value
Investment Gains
Reinvested Reinvested
12/31/90 $7,693 $0 $0 $7,693
12/31/91 $10,198 $306 $38 $10,542
12/31/92 $12,541 $1,013 $47 $13,601
12/31/93 $13,124 $2,699 $49 $15,872
12/31/94 $14,210 $3,963 $53 $18,226
12/31/95 $16,787 $6,874 $23,661 $23,827
-32-
<PAGE>
Pioneer Capital Growth Fund B
Date Initial Offering Sales Charge Shares Net Asset Initial
Investment Price Included Purchased Value Net Asset
Per Share Value
4/4/94 $10,000 $14.94 4.00% 669.344 $14.94 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap. From Dividends Total Value
Investment Gains
Reinvested Reinvested
12/31/94 $10,542 $641 $0 $11,183
12/31/95 $12,396 $2,107 $11 $14,114
-33-
<PAGE>
Pioneer Equity-Income Fund A
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Included Purchased Value Asset
Per Share Value
7/25/90 $10,000 $12.83 5.75% 779.423 $12.09 $9,425
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap. From Dividends Total Value
Investment Gains
Reinvested Reinvested
12/31/90 $8,612 $0 $242 $8,854
12/31/91 $10,187 $191 $818 $11,196
12/31/92 $11,777 $311 $1,443 $13,531
12/31/93 $12,713 $547 $2,022 $15,282
12/31/94 $11,816 $896 $2,373 $15,085
12/31/95 $15,035 $1,287 $3,597 $19,919
-34-
<PAGE>
Pioneer Equity-Income Fund B
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Included Purchased Value Asset
Per Share Value
4/4/94 $10,000 $15.46 4.00% 646.831 $15.46 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap. From Dividends Total Value
Investment Gains
Reinvested Reinvested
12/31/94 $9,793 $264 $230 $10,287
12/31/95 $12,426 $435 $621 $13,082
-35-
<PAGE>
Pioneer Gold Shares A
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Included Purchased Value Asset
Per Share Value
7/25/90 $10,000 $7.00 5.75% 1428.571 $6.60 $9,425
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap From Dividends Total Value
Investment Gains
Reinvested Reinvested
12/31/90 $7,900 $0 $0 $7,900
12/31/91 $7,443 $0 $22 $7,465
12/31/92 $6,843 $0 $20 $6,863
12/31/93 $11,686 $0 $34 $11,720
12/31/94 $10,315 $0 $30 $10,345
12/31/95 $10,572 $0 $31 $10,603
-36-
<PAGE>
Pioneer Gold Shares B
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Included Purchased Value Asset
Per Share Value
4/4/94 $10,000 $7.83 4.00% 1277.139 $7.83 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap From Dividends Total Value
Investment Gains
Reinvested Reinvested
12/31/94 $9,157 $0 $0 $9,157
12/31/95 $9,336 $0 $0 $8,963
-37-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates
-38-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
minus the current date. The bond was "held" for the calendar year and returns
were computed. Total returns for 1977-1991 are calculated as the change in the
flat price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times
-39-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly income
return was assumed to be one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million.
The Russell 30000 is comprised of the 3,000 largest US companies as determined
by market capitalization representing approximately 98% of the US equity market.
The largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
-40-
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
-41-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
-42-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
-43-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
-44-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
-45-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
-46-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
-47-
<PAGE>
APPENDIX B
Additional Pioneer Information
The Pioneer group of mutual funds was established in 1928 with the creation
of Pioneer Fund. Pioneer is one of the oldest and most experienced money
managers in the United States.
As of December 31, 1995, PMC employed a professional investment staff of
44, with a combined average of 15 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1995, were
approximately $12 billion representing 982,369 shareholder accounts - 637,060
non-retirement accounts and 345,309 retirement accounts.
-48-
