As filed with the Securities and Exchange Commission on February 2, 1998
33-34801
811-06106
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. ___ / __ /
Post-Effective Amendment No. _8_ /__X_/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 / X /
Amendment No. 9 / X _/
(Check appropriate box or boxes)
PIONEER GROWTH TRUST
____________________________________________________________________
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
- ---------------------------------------------------------------------
(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
- ---------------------------------------------------------------------
Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, MA 02109
- ---------------------------------------------------------------------
(Name and address of agent for service)
It is proposed that this filing will become effective (check
appropriate box):
_ _ immediately upon filing pursuant to paragraph (b)
_X_ on February 2, 1998 pursaunt to paragraph (b)
__ 60 days after filing pursuant to paragraph (a)
___ on [date] pursuant to paragraph (a) of Rule 485
<PAGE>
PIONEER GROWTH TRUST
Cross-Reference Sheet Showing Location in each Prospectus and Statement of
Additional Information of Information
Required by Items of the Registration Form
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
- --------------------------------- -----------
1. Cover Page Prospectus - Cover
Page
2. Synopsis Prospectus - Expense
Information
3. Condensed Financial Information Prospectus -
Financial Highlights
4. General Description of Registrant Prospectus - Investment
Objective and
Policies; Management of
the Fund; The Trust
5. Management of the Fund Prospectus -
Management of the Fund
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Securities Prospectus -
Investment Objective and
Policies;
Dividends, Distributions
and Taxation; The Trust
7. Purchase of Securities Being
Offered Prospectus - Distribution
Plans; Fund
Share Alternatives; Share
Price; How to Buy Fund Shares;
Shareholder Services
8. Redemption or Repurchase Prospectus - Fund
Share Alternatives;
How to Sell Fund Shares;
Shareholder Services
9. Pending Legal Proceedings Not Applicable
<PAGE>
10. Cover Page Statement of
Additional Information -
Cover Page
11. Table of Contents Statement of
Additional Information -
Cover Page
12. General Information and History Statement of
Additional Information -
Cover Page;
Description of Shares
13. Investment Objectives and Policies Statement of
Additional Information -
Investment Policies and
Restrictions
14. Management of the Fund Statement of
Additional Information -
Management of the Funds;
Investment Adviser
15. Control Persons and Principal Holders
of Securities Statement of
Additional Information -
Management of the Fund
16. Investment Advisory and Other
Services Statement of
Additional Information -
Management of the Funds;
Investment Adviser;Shareholder
Servicing/Transfer Agent;
Underwriting Agreement and
Distribution Plans;Custodian;
Independent
Public Accountants
17. Brokerage Allocation and Other
Practices Statement of
Additional Information -
Portfolio Transactions
18. Capital Stock and Other Securities Statement of
Additional Information -
Description of Shares; Certain
Liabilities
<PAGE>
19. Purchase, Redemption and Pricing of
Securities Being Offered Statement of
Additional Information -
Determination of Net Asset
Value; Letter of Intention;
Systematic Withdrawal Plan;
20. Tax Status Statement of
Additional Information -
Tax Status and Dividends
21. Underwriters Statement of
Additional Information -
Principal Underwriter
22. Calculation of Performance Data Statement of
Additional Information -
Investment Results
23. Financial Statements Statement of
Additional Information -
Financial Statements
<PAGE>
[PIONEER LOGO]
Pioneer Capital Growth Fund
Class A, Class B and Class C Shares
Prospectus
February 2, 1998
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 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 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 the Statement of Additional
Information, also dated February 2, 1998, as supplemented or revised from time
to time, 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 by calling 1-800-225-6292 or
through the SEC's Internet web site (http://www.sec.gov).
TABLE OF CONTENTS PAGE
--------------------------------------------------------- -----
I. EXPENSE INFORMATION ..................................... 2
II. FINANCIAL HIGHLIGHTS .................................... 3
III. INVESTMENT OBJECTIVE AND POLICIES ....................... 4
IV. MANAGEMENT OF THE FUND .................................. 5
V. FUND SHARE ALTERNATIVES ................................. 6
VI. SHARE PRICE ............................................. 7
VII. HOW TO BUY FUND SHARES .................................. 7
VIII. HOW TO SELL FUND SHARES ................................. 10
IX. HOW TO EXCHANGE FUND SHARES ............................. 11
X. DISTRIBUTION PLANS ...................................... 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ................... 13
XII. SHAREHOLDER SERVICES .................................... 14
Account and Confirmation Statements .................... 14
Additional Investments ................................. 14
Automatic Investment Plans ............................. 14
Financial Reports and Tax Information .................. 14
Distribution Options ................................... 14
Directed Dividends ..................................... 14
Direct Deposit ......................................... 14
Voluntary Tax Withholding .............................. 14
Telephone Transactions and Related
Liabilities ........................................... 14
FactFoneSM ............................................. 15
Retirement Plans ....................................... 15
Telecommunications Device for the Deaf (TDD) ........... 15
Systematic Withdrawal Plans ............................ 15
Reinstatement Privilege (Class A shares only) .......... 15
XIII. THE TRUST ............................................... 16
XIV. INVESTMENT RESULTS ...................................... 16
APPENDIX--CERTAIN INVESTMENT PRACTICES .................. 17
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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, 1997.
<TABLE>
<S> <C> <C> <C>
Shareholder 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 (as a
percentage of purchase price or
redemption proceeds, as applicable) None(1) 4.00% 1.00%
Redemption fee(2) ..................... None None None
Exchange fee .......................... None None None
Annual Operating Expenses
(as a percentage of average
net assets):(3)
Management fee ........................ 0.50% 0.50% 0.50%
12b-1 fees ............................ 0.25% 1.00% 1.00%
Other Expenses (including accounting
and transfer agent fees, custodian
fees and printing expenses) ......... 0.23% 0.25% 0.23%
---- ---- ----
Total Operating Expenses: .............. 0.98% 1.75% 1.73%
==== ==== ====
</TABLE>
- --------------------
(1) Purchases of $1 million 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 ("CDSC") as further described under "How
to Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) Expenses are net of amounts paid in connection with third-party brokerage/
service and certain expense offset arrangements. See "Financial Highlights."
Example:
You would pay the following expenses on a $1,000 investment assuming a 5%
annual return, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same each
year.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares $67 $87 $109 $171
Class B Shares*
- --Assuming complete
redemption at end of period $58 $85 $115 $186
- --Assuming no redemption $18 $55 $ 95 $186
Class C Shares**
- --Assuming complete
redemption at end of period $28 $54 $ 94 $204
- --Assuming no redemption $18 $54 $ 94 $204
</TABLE>
- --------------------
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject to
a 1% CDSC.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR 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, 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 payment 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 Conduct Rules 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 audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of October 31, 1997 appears in the Fund's Annual Report
which is incorporated by reference into the Statement of Additional
Information. The information listed below should be read in conjunction with
the financial statements contained in the Annual Report. The Annual Report
includes more information about the Fund's performance and is available free of
charge by calling Shareholder Services at 1-800-225-6292.
PIONEER CAPITAL GROWTH FUND
Selected Data for a Class A Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
---------------------------------------------
1997 1996 1995
--------------- --------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period ....................... $ 19.85 $ 19.42 $ -17.26
---------- ---------- --------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ 0.15 $ 0.08 $ 0.08
Net realized and unrealized gain (loss) on investments .... 4.17 2.31 3.03
---------- ---------- --------
Net increase (decrease) from investment
operations .............................................. $ 4.32 $ 2.39 $ 3.11
Distribution to shareholders from:
Net investment income ..................................... (0.06) (0.09) --
Net realized capital gains ................................ (0.88) (1.87) (0.95)
---------- ---------- --------
Net increase (decrease) in net asset value ................. $ 3.38 $ 0.43 $ 2.16
---------- ---------- --------
Net asset value, end of period ............................. $ 23.23 $ 19.85 $ 19.42
========== ========== ========
Total return* .............................................. 22.67% 13.12% 19.32%
Ratio of net operating expenses to average net assets ...... 1.00%+ 1.02%+ 1.16%+
Ratio of net investment income to average net assets ....... 0.64%+ 0.43%+ 0.53%+
Portfolio turnover rate .................................... 63% 37% 59%
Average commission rate paid(1) ............................ $ 0.0552 $ 0.0518 --
Net assets, end of period (in thousands) ................... $1,591,655 $1,299,611 $845,415
Ratios assuming no reduction of fees or expenses by
Pioneering Management Corporation
Net operating expenses .................................... -- -- --
Net investment income (loss) .............................. -- -- --
Ratios assuming reduction for fees paid indirectly:
Net operating expenses .................................... 0.98% 1.00% 1.14%
Net investment income (loss) .............................. 0.66% 0.45% 0.55%
Selected Data for a Class A Share Outstanding Throughout Each Period:
<CAPTION>
---------------------------------------------------
1994 1993 1992 1991
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $ 16.17 $ 12.42 $ 11.58 $ 7.50
-------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ (0.05) $ (0.02) $ (0.01) $ 0.07
Net realized and unrealized gain (loss) on investments .... 2.80 4.43 1.21 4.01
-------- ------- ------- -------
Net increase (decrease) from investment
operations .............................................. $ 2.75 $ 4.41 $ 1.20 $ 4.08
Distribution to shareholders from:
Net investment income ..................................... -- -- ( 0.04) --
Net realized capital gains ................................ (1.66) (0.66) ( 0.32) --
-------- ------- ------- -------
Net increase (decrease) in net asset value ................. $ 1.09 $ 3.75 $ 0.84 $ 4.08
------- ------- ------- -------
Net asset value, end of period ............................. $ 17.26 $ 16.17 $ 12.42 $ 11.58
======= ======= ======= =======
Total return* .............................................. 19.03% 36.59% 10.88% 54.40%
Ratio of net operating expenses to average net assets ...... 1.26% 1.27% 1.48% 1.69%
Ratio of net investment income to average net assets ....... (0.44%) (0.26%) ( 0.20%) 0.69%
Portfolio turnover rate .................................... 47% 68% 62% 38%
Average commission rate paid(1) ............................ -- -- -- --
Net assets, end of period (in thousands) ................... $405,904 $194,670 $75,796 $21,013
Ratios assuming no reduction of fees or expenses by
Pioneering Management Corporation
Net operating expenses .................................... -- -- -- 2.78%
Net investment income (loss) .............................. -- -- -- (0.40%)
Ratios assuming reduction for fees paid indirectly:
Net operating expenses .................................... -- -- -- --
Net investment income (loss) .............................. -- -- -- --
<CAPTION>
Selected Data for a Class A Share Outstanding Throughout Each Period:
7/25/90
(Commencement
of Operations)
to
10/31/90
----------------
<S> <C>
Net asset value, beginning of period ....................... $ 10.50
-------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ (0.04)
Net realized and unrealized gain (loss) on investments .... (2.96)
-------
Net increase (decrease) from investment
operations .............................................. $ (3.00)
Distribution to shareholders from:
Net investment income ..................................... --
Net realized capital gains ................................ --
-------
Net increase (decrease) in net asset value ................. $ (3.00)
-------
Net asset value, end of period ............................. $ 7.50
======
Total return* .............................................. (28.57%)
Ratio of net operating expenses to average net assets ...... 7.12%**
Ratio of net investment income to average net assets ....... (2.16%)**
Portfolio turnover rate .................................... 0%
Average commission rate paid(1) ............................ --
Net assets, end of period (in thousands) ................... $ 2,483
Ratios assuming no reduction of fees or expenses by
Pioneering Management Corporation
Net operating expenses .................................... --
Net investment income (loss) .............................. --
Ratios assuming reduction for fees paid indirectly:
Net operating expenses .................................... --
Net investment income (loss) .............................. --
</TABLE>
Selected Data for a Class B Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31, April 4, 1994 to
1997 1996 1995 October 31, 1994
---------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $ 19.53 $ 19.20 $ 17.20 $ 14.94
------- -------- -------- -------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ (0.02) $ (0.04) $ (0.01) $ (0.04)
Net realized and unrealized gain (loss) on investments .... 4.10 2.26 2.96 2.30
------- -------- -------- -------
Net increase (decrease) from investment operations ......... $ 4.08 $ 2.22 $ 2.95 $ 2.26
Distribution to shareholders:
From net investment income ................................ -- (0.02) -- --
------- -------- -------- -------
From net realized gain .................................... (0.88) (1.87) (0.95) --
------- -------- -------- -------
Net increase (decrease) in net asset value ................. $ 3.20 $ 0.33 $ 2.00 $ 2.26
Net asset value, end of period ............................. $ 22.73 $ 19.53 $ 19.20 $ 17.20
======= ======== ======== =======
Total return* .............................................. 21.70% 12.27% 18.42% 15.13%**
Ratio of net operating expenses to average net assets ...... 1.76%+ 1.79%+ 1.93%+ 2.04%**
Ratio of net investment income (loss) to average
net assets ................................................ (0.12)%+ (0.35)%+ (0.18%)+ (1.12%)**
Portfolio turnover rate .................................... 63% 37% 59% 47%
Average commission rate paid1 .............................. $ 0.0552 $ 0.0518 -- --
Net assets, end of period (in thousands) ................... $745,258 $589,188 $311,672 $42,459
Ratios assuming reduction for fees paid indirectly:
Net operating expenses .................................... 1.75% 1.78% 1.88% --
Net investment income loss ................................ (0.11)% (0.34)% (0.13%) --
</TABLE>
- -----------
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales charge.
Total return would be reduced if sale charges were taken into account.
**Annualized.
+Ratio assuming no reduction for fees paid indirectly.
(1)Amount represents the rate of commissions paid per share on the Fund's
exchange listed security transactions.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER CAPITAL GROWTH FUND
Selected Data for a Class C Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year For the period January 31, 1996
Ended October 31, 1997 through October 31, 1996
<S> <C> <C>
Net asset value, beginning of period .................... $ 19.53 $ 18.69
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) ........................... $ (0.03) $ (0.02)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions ......... 4.11 0.86
------- ---------
Net increase from investment operations ................. $ 4.08 $ 0.84
Distributions to shareholders:
Net investment income .................................. (0.04) --
Net realized gain ...................................... (0.88) --
------- -------
Net increase (decrease) in net asset value .............. $ 3.16 $ 0.84
Net asset value, end of period .......................... $ 22.69 $ 19.53
Total return* ........................................... 21.74% 4.50%
Ratio of net operating expenses to average net
assets ................................................. 1.75%+ 1.79%**+
Ratio of net investment income (loss) to average net
assets ................................................. (0.15)%+ (0.39)%**+
Portfolio turnover rate ................................. 63% 37%
Average commission rate paid(1) ......................... $0.0552 $0.0518
Net assets, end of period (in thousands) ................ $60,211 $27,202
Ratios assuming reduction for fees paid indirectly:
Net operating expenses ................................. 1.73% 1.74%**
Net investment income (loss) ........................... (0.13% (0.34)%**
</TABLE>
- ------------------------
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales charge.
Total return would be reduced if sale charges were taken into account.
**Annualized.
+Ratio assuming no reduction for fees paid indirectly.
(1)Amount represents the rate of commissions paid per share on the Fund's
exchange listed security transactions.
- --------------------------------------------------------------------------------
III. INVESTMENT OBJECTIVE AND POLICIES
The Fund is managed in accordance with the 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
4
<PAGE>
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.
The Fund may invest in warrants as described in the Statement of
Additional Information. Although the Fund does not have a formal percentage
limitation on investing in warrants, it is not expected that PMC will invest
more than 5% of the Fund's total assets in such securities.
In pursuit of its objective, the Fund may employ certain active investment
management techniques including forward foreign currency exchange contracts,
options and futures contracts on currencies, securities and securities indices
and options on such futures contracts. These techniques may be employed in an
attempt to hedge foreign currency and other risks associated with the Fund's
portfolio securities. See the Appendix to this Prospectus and the Statement of
Additional Information for a description of these investment practices and
associated risks.
Risk Factors
The Fund may invest in securities issued by foreign companies. Investing
in securities of foreign companies involves certain considerations and risks
which are not typically associated with investing in securities of domestic
companies. Foreign companies are not subject to uniform accounting, auditing
and financial standards and requirements comparable to those applicable to U.S.
companies. There may also be less publicly available information about foreign
companies compared to reports and ratings published about U.S. companies. In
addition, foreign securities markets have substantially less volume than
domestic markets and securities of some foreign companies are less liquid and
more volatile than securities of comparable U.S. companies. There may also be
less government supervision and regulation of foreign securities exchanges,
brokers and listed companies than exists in the U.S. Dividends or interest, or
in some cases capital gains, from foreign investments issuers may be subject to
withholding or other foreign taxes which will decrease the net return on such
investments as compared to the return on the Fund's domestic investments.
Finally, there may be the possibility of expropriations, confiscatory taxation,
political, economic or social instability or diplomatic developments which
could adversely affect assets of the Fund held in foreign countries.
The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value
of a foreign security held by the Fund as measured in U.S. dollars will
decrease if the foreign currency in which the security is denominated declines
in value against the U.S. dollar. In such event, this will cause an overall
decline in the Fund's net asset value and may also reduce net investment income
and capital gains, if any, to be distributed in U.S. dollars to shareholders of
the Fund.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Trust has overall responsibility for
management and supervision of the Fund. 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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general
responsibility for PMC's investment operations and chairs a committee of PMC's
equity managers which reviews PMC's research and portfolio operations,
including those of the Fund. Mr. Tripple joined PMC in 1974.
Research and management for the Fund is the responsibility of a team of
portfolio managers and analysts focusing on domestic equity securities,
including special equities and smaller companies. Members of the team meet
regularly to discuss holdings, prospective investments and portfolio
composition.
Day-to-day management of the Fund has been the responsibility of Mr. J.
Rodman Wright, a Vice President of PMC and former assistant portfolio manager
for the Fund, since January 24, 1997. Mr. Wright joined PMC in 1994 and has ten
years of investment experience.
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
5
<PAGE>
Street, Boston, Massachusetts 02109. In an effort to avoid conflicts of
interest with the Trust, the Trust and PMC have adopted a Code of Ethics that
is designed to maintain a high standard of personal conduct by directing that
all personnel defer to the interests of the Trust and its shareholders in
making personal securities transactions.
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
regulatory agencies, 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
Investment Company Act of 1940, as amended (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 or other funds for which PMC or any other
affiliate or subsidiary serves as investment adviser or manager. See the
Statement of Additional Information for a further description of PMC's
brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.65% per annum of the
Fund's average daily net assets up to $300 million, 0.60% of the next $200
million, 0.50% of the next $500 million and 0.45% of the excess over $1
billion. The fee is normally computed daily and paid monthly. See "Expense
Information" in this Prospectus and "Investment Adviser" in the Statement of
Additional Information.
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 14% 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% 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% 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
6
<PAGE>
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 each 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.
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 indicate 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 Pioneer 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, including a sales
charge, as follows:
<TABLE>
<CAPTION>
Sales Charge as a % of Dealer
----------------------- Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ----------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see below
</TABLE>
The schedule of sales charges above is applicable to purhases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the
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<PAGE>
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.
At the sole discretion of PFD, holdings of funds domiciled outside the U.S.,
but which are managed by affiliates of PMC, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by 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 participating 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. 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 be sold at net asset value per share without a
sales charge to Optional Retirement Program (the "Program") participants if (i)
the employer has authorized a limited number of investment company providers
for the Program, (ii) all authorized investment company providers offer their
shares to Program participants at net asset value, (iii) the employer has
agreed in writing to actively promote the authorized investment providers to
Program participants and (iv) the Program provides for a matching contribution
for each participant contribution. 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 are available for purchases of $50,000 or more of
Class A shares (excluding any reinvestments of dividends and capital gains
distributions) made within a 13-month period pursuant to a Letter of Intent
("LOI") which may be established by completing the Letter of Intent section of
the Account Application. The reduced sales charge will be the charge that would
be applicable to the purchase of the specified amount of Class A shares as if
the shares had all been purchased at the same time. A purchase not made
pursuant to an LOI may be included if the LOI is submitted to PSC within 90
days of such purchase. You may also obtain the reduced sales charge by
including the value (at current offering price) of all your Class A shares in
the Fund and all other Pioneer mutual funds held of record as of the date of
your LOI in the amount used to determine the applicable sales charge for the
Class A shares to be purchased under the LOI. Five percent of your total
intended purchase amount will be held in escrow by PSC, registered in your
name, until the terms of the LOI are fulfilled.
You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to
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<PAGE>
cover actual sales charges is due, it must be paid to PFD within 20 days after
PFD or your dealer sends you a written request or PFD will direct PSC to
liquidate sufficient shares from your escrow account to cover the amount due.
See the Statement of Additional Information for more 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 the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates shown in the table below. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B shares,
the Fund will first redeem shares not subject to any CDSC, and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
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, 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 the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%. The charge will be assessed on the amount equal to the
lesser of the current market value or the original purchase cost of the shares
being redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gains distributions. Class C shares do not convert to any
other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments
during a 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.
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 UGMA, UTMA 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).
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<PAGE>
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 701/2 may exceed the 10% limit only if the distribution
amount is based on plan assets held in Pioneer mutual funds); (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); (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 shareholder 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 any shares subject to a CDSC may be waived or reduced for
either non-retirement or retirement plan accounts if the redemption is made
pursuant to the Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account. The CDSC on any shares subject to a CDSC will not be
applicable if the selling broker-dealer elects, with PFD's approval, to waive
receipt of the commission normally paid at the time of the sale.
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 responsibility 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, other than an
IRA, 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 or an IRA,
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 by check, bank wire, or electronic funds transfer
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 applies:
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<PAGE>
[bullet] you wish to sell over $100,000 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 mutual fund
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 and 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 by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any 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 indicate 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, except IRAs. A maximum of $100,000 per
account per day 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 predesignated either on your Account
Application or on an Account Options Form and which must not have changed in
the last 30 days. To redeem by fax, send your redemption request to
1-800-225-4240. You may always elect to deliver redemption instructions to PSC
by mail. See "Telephone Transactions and Related Liabilities" below. Telephone
and fax redemptions will be priced as described above. You are strongly urged
to consult with your financial representative prior to requesting a telephone
redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Your broker-dealer must receive your request before the close of business on
the Exchange and transmit it to PFD before PFD's close of business to receive
that day's redemption price. Your broker-dealer is responsible for providing
all necessary documentation to PFD and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value
of the account to at least the minimum required amount within six months of
notice by the Fund to you of the Fund's intention to redeem the shares.
CDSC on Class A Shares. Purchases of Class A shares of $1 million 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 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 indicate otherwise on your Account
Application or by writing to PSC.
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Proper account identification will be required for each telephone exchange.
Telephone exchanges may not exceed $500,000 per account per day. Each telephone
exchange request, whether by voice or by FactFonesm, 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 day of the month designated on
your Account Application or Account Options Form.
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.
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 for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.25% per annum of the Fund's daily net assets
attributable to Class A shares; (ii) reimbursement to PFD for its expenditures
for broker-dealer commissions and employee compensation on certain sales of the
Fund's Class A shares with no initial sales charge (See "How to Buy Fund
Shares"); and (iii) reimbursement to PFD for expenses incurred in providing
services to Class A shareholders and supporting broker-dealers and other
organizations (such as banks and trust companies) in their efforts to provide
such services. Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the described
services, management would consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A Plan
may not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein
without approval of the shareholders of the Fund. The Class A Plan does not
provide for the carryover of reimbursable expenses beyond 12 months from the
time the Fund is first invoiced for an expense. For the calendar year ended
December 31, 1996, there was an allowable carryover of distribution expenses
reimbursable to PFD of $265,247 (less than 0.02% of the net assets attributable
to the Class A shares 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 ser-
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vices 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 sales 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 sales
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 net asset value with respect to such shares.
When a broker-dealer sells Class B or Class C shares and elects, with
PFD's approval, to waive its right to receive the commission normally paid at
the time of sale, PFD may cause all or a portion of the distribution fees
described above to be paid to the broker-dealer.
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 tax on income and capital gains
distributed to shareholders as required under the Code.
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. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the Fund to avoid federal income or excise
tax. Generally, dividends from the Fund's net investment income, market
discount income, net short-term capital gains, and certain net foreign exchange
gains are taxable under the Code as ordinary income, and dividends from the
Fund's net long-term capital gains are taxable as long-term capital gains. The
Fund's distributions of long-term capital gains to individuals or other
noncorporate taxpayers are subject to different maximum tax rates, (which will
be indicated in the annual tax information the Fund provides to shareholders)
depending generally upon the sources of and the Fund's holding periods for the
assets that produce the 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 dividends-received deduction
for corporate shareholders, subject to holding-period requirements and
debt-financing restrictions under the Code.
The Fund may be subject to foreign withholding taxes or other foreign
taxes on income (possibly including, in some cases, capital gains) on certain
of its foreign investments, which will reduce the yield on or return from those
investments. If, as anticipated, the Fund does not qualify to pass such taxes
through to its shareholders, they will neither treat such taxes as additional
income nor be entitled to any associated foreign tax credits or deductions.
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 that the
shareholder is not subject to backup withholding or 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 tax treatment that is different than described above. Shareholders
should consult their own tax
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advisors regarding state, local and other applicable tax laws, including the
effect of recent federal tax legislation, in their particular circumstances.
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
Pioneer Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer mutual fund 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 purchases,
exchanges or redemptions of shares by mail or telephone, automatic reinvestment
of dividends and capital gains distributions, withdrawal plans, Letters of
Intent, Rights of Accumulation 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 preauthorized electronic funds transfer from
your bank account. Pioneer Investomatic Plan investments are voluntary, and you
may discontinue your plan at any time or change your plan elections for the
dollar amount, frequency or investment date by calling PSC at 1-800-225-6292,
or by sending a written request to Pioneering Servicing Corporation, P.O. Box
9014, Boston, Massachusetts 02205-9014. A change to your bank information must
be made in writing on an Account Options Form. You should allow up to five
business days for PSC to make changes to an established plan. 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.
If you elect to receive either dividends or capital gains or both in cash
and a distribution check issued to you is returned by the U.S. Postal Service
as not deliverable or a distribution check remains uncashed for six months or
more, the amount of the check may be reinvested in your account. Such
additional shares will be purchased at the then current net asset value.
Furthermore, the distribution option on the account will automatically be
changed to the reinvestment option until such time as you request a different
option by writing to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer 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.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or for
accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your
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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
"How to Buy Fund Shares," "How to Sell Fund Shares" and "How to Exchange Fund
Shares" for more information.
To confirm that each transaction instruction received by telephone is
genuine, PSC 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 mutual fund
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 tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations, 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 access to TDD key-board 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.
----------------------------------------------
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
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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 Class A certificates; certificates will not be
issued for Class B and Class C shares.
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 indices,
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.
16
<PAGE>
APPENDIX--CERTAIN INVESTMENT PRACTICES
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 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 positions had
not been entered. The Fund will purchase and
17
<PAGE>
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.
18
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
Growth Funds
Global/International
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
United States
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust*
Tax-Exempt
Pioneer Intermediate Tax-Free Fund**
Pioneer Tax-Free Income Fund**
Money Market Fund
Pioneer Cash Reserves Fund
*Offers Class A and B Shares only
**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
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 LLP
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
Visit our web site.........................www.pioneerfunds.com
0198-4732
(c)Pioneer Funds Distributor, Inc.
<PAGE>
[Pioneer logo]
Pioneer Equity-Income
Fund
Class A, Class B and Class C Shares
Prospectus
February 2, 1998
Pioneer Equity-Income Fund (the "Fund") seeks current income and
long-term growth of capital from a portfolio primarily composed of
income-producing equity securities of United States ("U.S.") corporations.
There is 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 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 the Statement of Additional
Information, also dated February 2, 1998, as supplemented or revised from time
to time, 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 by calling 1-800-225-6292 or
through the SEC's Internet web site (http://www.sec.gov).
TABLE OF CONTENTS PAGE
------------------------------------------------------- -----
I. EXPENSE INFORMATION ................................. 2
II. FINANCIAL HIGHLIGHTS ................................. 3
III. INVESTMENT OBJECTIVE AND POLICIES ..................... 4
IV. MANAGEMENT OF THE FUND .............................. 5
V FUND SHARE ALTERNATIVES .............................. 6
VI. SHARE PRICE .......................................... 6
VII. HOW TO BUY FUND SHARES .............................. 7
VIII. HOW TO SELL FUND SHARES .............................. 10
IX. HOW TO EXCHANGE FUND SHARES ........................... 11
X. DISTRIBUTION PLANS .................................... 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ............... 13
XII. SHAREHOLDER SERVICES ................................. 13
Account and Confirmation Statements .................. 13
Additional Investments .............................. 13
Automatic Investment Plans ........................... 14
Financial Reports and Tax Information ............... 14
Distribution Options ................................. 14
Directed Dividends ................................. 14
Direct Deposit ....................................... 14
Voluntary Tax Withholding ........................... 14
Telephone Transactions and Related Liabilities ...... 14
FactFone(SM) ........................................ 14
Retirement Plans .................................... 15
Telecommunications Device for the Deaf (TDD) ......... 15
Systematic Withdrawal Plans ........................ 15
Reinstatement Privilege (Class A Shares Only) ...... 15
XIII. THE TRUST ............................................. 15
XIV. INVESTMENT RESULTS .................................... 16
APPENDIX--CERTAIN INVESTMENT PRACTICES ............... 17
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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, 1997.
Class A Class B Class C
------------ --------- ----------
Shareholder Transaction
Expenses:
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 Charge1
(as a percentage of purchase
price or redemption proceeds,
as applicable) .................. None(1) 4.00% 1.00%
Redemption fee(2) ................... None None None
Exchange fee ........................ None None None
Annual Operating Expenses (as a
percentage of average net assets):(3)
Management fees ..................... 0.61% 0.61% 0.61%
12b-1 fees ........................ 0.25% 1.00% 1.00%
Other Expenses (including
accounting and transfer agent
fees, custodian fees and printing
expenses) ........................ 0.24% 0.26% 0.30%
------- ----- ----
Total Operating Expenses: ............ 1.10% 1.87% 1.91%
======= ===== ====
- ---------
(1) Purchases of $1 million 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 ("CDSC") as further described under "How
to Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) Expenses are net of amounts paid in connection with third-party brokerage/
service and certain expense offset arrangements. See "Financial Highlights."
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same
each year.
1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
Class A Shares $68 $90 $115 $184
Class B Shares*
--Assuming complete
redemption at end of period $59 $89 $121 $199
--Assuming no redemption $19 $59 $101 $199
Class C Shares**
--Assuming complete
redemption at end of period $29 $60 $103 $223
--Assuming no redemption $19 $60 $103 $223
- ---------
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject to
CDSC.
The example is designed for information purposes only, and should not be
considered a representation of past or 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, 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 payment 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 Conduct Rules 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 Fund Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of October 31, 1997 appears in the Fund's Annual Report
which is incorporated by reference into the Statement of Additional
Information. The information listed below should be read in conjunction with
the financial statements contained in the Annual Report. The Annual Report
includes more information about the Fund's performance and is available free of
charge by calling Shareholder Services at 1-800-225-6292.
PIONEER EQUITY-INCOME FUND
Selected Data for a Class A Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
-----------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period ..................... $ 20.37 $ 18.22 $ 16.16
--------- --------- --------
Increase (decrease) from investment operations:
Net investment income (loss) ........................... $ 0.50 $ 0.55 $ 0.54
Net realized and unrealized gain (loss) on investments 5.36 2.24 2.45
--------- --------- --------
Net increase (decrease) from investment operations ... $ 5.86 $ 2.79 $ 2.99
Distribution to shareholders from:
Net investment income ................................. (0.50) (0.50) (0.53)
Net realized capital gains .............................. (0.95) (0.14) (0.40)
---------- ---------- --------
Net increase (decrease) in net asset value ............... $ 4.41 $ 2.15 $ 2.06
---------- ---------- --------
Net asset value, end of period ........................... $ 24.78 $ 20.37 $ 18.22
========== ========== ========
Total return* .......................................... 30.40% 15.53% 19.51%
Ratio of net operating expenses to average net assets ... 1.11%+ 1.19%+ 1.29%+
Ratio of net investment income to average net assets ... 2.22%+ 2.85%+ 3.26%+
Portfolio turnover rate ................................. 18% 47% 13%
Average commission rate paid(1) ........................ $ 0.0583 $ 0.0585 --
Net assets, end of period (in thousands) ............... $452,300 $336,384 $249,981
Ratios assuming no waiver of management fees and
assumption of expenses by Pioneering Management
Corporation and no reduction for fees paid indirectly:
Net operating expenses ................................. -- -- --
Net investment income (loss) ........................... -- -- --
Ratios assuming reduction for fees paid indirectly:
Net operating expenses ................................. 1.10% 1.18% 1.27%
Net investment income (loss) ........................... 2.23% 2.86% 3.28%
<CAPTION>
7/25/90
-----------------
(Commencement
of Operations)
to
1994 1993 1992 1991 10/31/90
----------- ----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $ 16.92 $ 14.56 $ 13.25 $ 10.35 $ 12.50
-------- -------- -------- -------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) ........................... $ 0.55 $ 0.50 $ 0.52 $ 0.61 $ 0.22
Net realized and unrealized gain (loss) on investments (0.54) 2.46 1.57 2.94 (2.24)
-------- -------- -------- -------- ----------
Net increase (decrease) from investment operations ... $ 0.01 $ 2.96 $ 2.09 $ 3.55 $ (2.02)
Distribution to shareholders from:
Net investment income ................................. (0.54) (0.50) (0.56) (0.65) (0.13)
Net realized capital gains .............................. (0.23) (0.10) (0.22) -- --
-------- -------- -------- -------- ----------
Net increase (decrease) in net asset value ............... $ (0.76) $ 2.36 $ 1.31 $ 2.90 $ (2.15)
-------- -------- -------- -------- ----------
Net asset value, end of period ........................... $ 16.16 $ 16.92 $ 14.56 $ 13.25 $ 10.35
======== ======== ======== ======== ==========
Total return* .......................................... 0.09% 20.71% 16.53% 35.10% (13.40%)**
Ratio of net operating expenses to average net assets ... 1.24% 1.33% 1.73% 1.75% 1.75%**
Ratio of net investment income to average net assets ... 3.43% 3.20% 4.01% 5.54% 8.44%**
Portfolio turnover rate ................................. 27% 14% 18% 54% 4%**
Average commission rate paid(1) ........................ -- -- -- -- --
Net assets, end of period (in thousands) ............... $175,943 $143,025 $39,269 $10,616 $ 3,212
Ratios assuming no waiver of management fees and
assumption of expenses by Pioneering Management
Corporation and no reduction for fees paid indirectly:
Net operating expenses ................................. -- -- 1.77% 2.92% 6.62%**
Net investment income (loss) ........................... -- -- 3.97% 4.37% 3.57%**
Ratios assuming reduction for fees paid indirectly:
Net operating expenses ................................. -- -- -- -- --
Net investment income (loss) ........................... -- -- -- -- --
</TABLE>
Selected Data for a Class B Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
----------------------------------------- April 4, 1994 to
1997 1996 1995 October 31, 1994
------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $ 20.26 $ 18.15 $ 16.14 $ 15.46
--------- --------- -------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ 0.33 $ 0.41 $ 0.45 $ 0.21
Net realized and unrealized gain (loss) on investments ... 5.32 2.22 2.41 0.71
--------- --------- -------- ---------
Net increase (decrease) from investment operations ...... $ 5.65 $ 2.63 $ 2.86 $ 0.92
Distribution to shareholders:
From net investment income ................................. (0.33) (0.38) (0.45) (0.21)
In excess of net investment income ........................ -- -- -- (0.03)
From net realized gain .................................... (0.95) (0.14) (0.40) --
--------- --------- -------- ---------
Net increase (decrease) in net asset value .................. $ 4.37 $ 2.11 $ 2.01 $ 0.68
--------- --------- -------- ---------
Net asset value, end of period .............................. $ 24.63 $ 20.26 $ 18.15 $ 16.14
========= ========= ======== =========
Total return* ............................................. 29.35% 14.70% 18.64% 5.93%
Ratio of net operating expenses to average net assets ...... 1.88%+ 1.95%+ 2.02%+ 1.92%**
Ratio of net investment income (loss) to average net assets 1.45%+ 2.06%+ 2.35%+ 2.35%**
Portfolio turnover rate .................................... 18% 47% 13% 27%
Average commission rate paid(1) ........................... $ 0.0583 $ 0.0585 -- --
Net assets, end of period (in thousands) .................. $201,360 $134,657 $60,433 $12,663
Ratios assuming reduction for fees paid indirectly:
Net operating expenses .................................... 1.87% 1.94% 1.98% --
Net investment income (loss) .............................. 1.46% 2.07% 2.39% --
</TABLE>
- -------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commissions paid per share on the Fund's
exchange listed security transactions.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER EQUITY-INCOME FUND
Selected Data for a Class C Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31, For the period January 31, 1996
1997 through October 31, 1996
-------------------------------- --------------------------------
<S> <C> <C>
Net asset value, beginning of period ........................ $ 20.25 $ 19.49
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ 0.32 $ 0.27
Net realized and unrealized gain (loss) on investments ... 5.32 0.76
------- -------
Net increase (decrease) from investment operations ...... $ 5.64 $ 1.03
Distribution to shareholders from:
Net investment income .................................... (0.33) (0.27)
Net realized gain .......................................... (0.95) --
--------- --------
Net increase (decrease) in net asset value .................. $ 4.36 $ 0.76
--------- --------
Net asset value, end of period .............................. $ 24.61 $ 20.25
========= ========
Total return* ............................................. 29.32% 5.34%
Ratio of net operating expenses to average net assets ...... 1.93%+ 1.98%**+
Ratio of net investment income (loss) to average net assets 1.35%+ 1.91%**+
Portfolio turnover rate .................................... 18% 47%
Average commission rate paid(1) ........................... $0.0583 $0.0585
Net assets, end of period (in thousands) .................. $12,324 $ 4,144
Ratios assuming reduction for fees paid indirectly:
Net operating expenses .................................... 1.91% 1.94%**
Net investment income (loss) .............................. 1.37% 1.95%**
</TABLE>
- -------------
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales charges.
Total return would be reduced if sales charges were taken into account.
**Annualized.
+Ratio assuming no reduction for fees paid indirectly.
(1)Amount represents the rate of commissions paid per share on the Fund's
exchange listed security transactions.
- --------------------------------------------------------------------------------
III. INVESTMENT OBJECTIVE AND POLICIES
The Fund is managed in accordance with the 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 three-to-five 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 current income and
long-term growth of capital from a portfolio primarily composed of
income-producing equity securities of U.S. corporations.
Under normal circumstances, the Fund will invest at least 80% of its
assets in income-producing equity securities (i.e., common or preferred
stocks). The remainder of the portfolio may be invested in debt obligations,
most of which are expected to be securities convertible into common stock. A
convertible security is a long-term debt obligation of the issuer convertible
at a stated exchange rate into common stock of the issuer. As with all debt
securities, the market value of convertible securities tends to decline as
interest rates increase and, conversely, to increase as interest rates decline.
Convertible securities rank senior to common stocks in an issuer's capital
structure and are consequently of higher quality and entail less risk than the
issuer's common stock. No more than 10% of the Fund's assets may be invested in
debt securities, including convertible securities, rated below "BBB" by
Standard & Poor's Ratings Group. Debt securities rated less than "BBB" are high
yield, high risk securities, have speculative characteristics and changes in
economic conditions or other circumstances are more likely to lead to a
weakened capacity to make principal and interest payments. If the rating of a
debt security is reduced below investment grade ("BBB" or higher), management
will consider whatever action is appropriate, consistent with the Fund's
investment objective and policies. See the Statement of Additional Information
for a discussion of rating categories.
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.
Management avoids market-timing or speculating on broad market
fluctuations. Therefore, 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
and the Fund does not expect that its portfolio turnover rate will exceed 100%
in the coming year. 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 will not be considered a limiting factor in the execution of investment
decisions. See "Financial Highlights" for the Fund's actual turnover rate.
Short-term, temporary invest-
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ments will 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 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 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.
The Fund may invest in warrants as described in the Statement of
Additional Information. Although the Fund does not have a formal percentage
limitation on investments in warrants, it is not expected that PMC will invest
more than 5% of the Fund's total assets in such securities.
In pursuit of its objective, the Fund may employ certain active investment
management techniques including options and futures contracts on securities and
securities indices and options on such futures contacts. These techniques may
be employed in an attempt to hedge the risks associated with the Fund's
portfolio securities. The Fund may also purchase securities on a forward
commitment basis. See the Appendix to this Prospectus and the Statement of
Additional Information for a description of these investment practices and
associated risks.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Trust has overall responsibility for
management and supervision of the Fund. 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.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general
responsibility for PMC's investment operations and chairs a committee of PMC's
domestic equity managers which reviews PMC's research and portfolio operations,
including those of the Fund. Mr. Tripple joined PMC in 1974.
The Fund is covered by a team of managers and analysts which does research
for and oversees the management of several funds with similar investment
objectives. Members of the team meet regularly to discuss holdings, prospective
investments and portfolio composition. Day-to-day management of the Fund has
been the responsibility of Mr. John A. Carey, Vice President of the Fund and of
PMC, since inception, July 1990. Mr. Carey joined PMC in 1979 and has 19 years
of investment experience.
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. In an effort to avoid conflicts of
interest with the Trust, the Trust and PMC have adopted a Code of Ethics that
is designed to maintain a high standard of personal conduct by directing that
all personnel defer to the interests of the Trust and its shareholders in
making personal securities transactions.
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
regulatory agencies, individual states or blue sky securities agencies,
territories and foreign countries, including the preparation of Prospectuses
and Statements of Additional Information for filing with the regulatory
agencies; (g) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distrib-
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uting 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 Investment Company Act
of 1940, as amended (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 or other funds for which PMC or any other
affiliate or subsidiary serves as investment adviser or manager. See the
Statement of Additional Information for a further description of PMC's
brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.65% per annum of the
Fund's average daily net assets up to $300 million, 0.60% of the next $200
million, 0.50% of the next $500 million and 0.45% of the excess over $1
billion. The fee is normally computed daily and paid monthly. See "Expense
Information" in this Prospectus and "Investment Adviser" in the Statement of
Additional Information.
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 14% 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% 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% of the Fund'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 each 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
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<PAGE>
the mean between the current bid and asked prices. All assets of the Fund for
which there is no other readily available valuation method are valued at their
fair value as determined in good faith by the Trustees.
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.
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 indicate 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 Pioneer 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, including 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 purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Internal Revenue Code of 1986, as amended (the
"Code"), although more than one beneficiary is involved. The sales charges
applicable to a current purchase of Class A shares of the Fund by a person
listed above is determined by adding the value of shares to be purchased to the
aggregate value (at the then current offering price) of shares of any of the
other Pioneer mutual funds previously purchased and then owned, provided PFD is
notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of PMC, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by 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
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<PAGE>
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 participating 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. 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 sub-adviser 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 be sold at net asset value per share without a
sales charge to Optional Retirement Program (the "Program") participants if (i)
the employer has authorized a limited number of investment company providers
for the Program, (ii) all authorized investment company providers offer their
shares to Program participants at net asset value, (iii) the employer has
agreed in writing to actively promote the authorized investment company
providers to Program participants and (iv) the Program provides for a matching
contribution for each participant contribution. 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 are available for purchases of $50,000 or more of
Class A shares (excluding any reinvestments of dividends and capital gains
distributions) made within a 13-month period pursuant to a Letter of Intent
("LOI") which may be established by completing the Letter of Intent section of
the Account Application. The reduced sales charge will be the charge that would
be applicable to the purchase of the specified amount of Class A shares as if
the shares had all been purchased at the same time. A purchase not made
pursuant to an LOI may be included if the LOI is submitted to PSC within 90
days of such purchase. You may also obtain the reduced sales charge by
including the value (at current offering price) of all your Class A shares in
the Fund and all other Pioneer mutual funds held of record as of the date of
your LOI in the amount used to determine the applicable sales charge for the
Class A shares to be purchased under the LOI. Five percent of your total
intended purchase amount will be held in escrow by PSC, registered in your
name, until the terms of the LOI are fulfilled.
You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to cover actual sales charges is due, it must be paid to PFD
within 20 days after PFD or your dealer sends you a written request or PFD will
direct PSC to liquidate sufficient shares from your escrow account to cover the
amount due. See the Statement of Additional Information for more information.
Investors who are clients of a broker-dealer with a current sales
agreement with PFD may purchase 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 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 the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates shown in the table below. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing
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<PAGE>
redemptions of Class B shares, the Fund will first redeem shares not subject to
any CDSC, and then shares held longest during the six-year period. As a result,
you will pay the lowest possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
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, 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 the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%. The charge will be assessed on the amount equal to the
lesser of the current market value or the original purchase cost of the shares
being redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gains distributions. Class C shares do not convert to any
other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments
during a 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.
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 UGMA, UTMA 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 in Pioneer mutual funds); (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).
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<PAGE>
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); (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 shareholder 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 any shares subject to a CDSC may be waived or reduced for
either non-retirement or retirement plan accounts if the redemption is made
pursuant to the Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account. The CDSC on any shares subject to a CDSC will not be
applicable if the selling broker-dealer elects, with PFD's approval, to waive
receipt of the commission normally paid at the time of the sale.
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, provided the
order is received prior to PFD's close of business (usually, 5:30 p.m. Eastern
time). It is the responsibility of broker-dealers to transmit orders so that
they will be received by PFD prior to PFD's 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 its 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, other than an
IRA, 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 or an IRA,
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 by check, bank wire or electronic funds transfer,
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 applies:
[bullet] you wish to sell over $100,000 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 mutual fund
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 and 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 by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any 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 indicate otherwise on your
Account Application or by writ-
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ing to PSC. Proper account identification will be required for each telephone
redemption. The telephone redemption option is not available to retirement plan
accounts, except IRAs. A maximum of $100,000 per account per day may be
redeemed by telephone or fax and the proceeds may be received by check or 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 redemptions will be priced as described
above. You are strongly urged to consult with your financial representative
prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Your broker-dealer must receive your request before the close of business on
the Exchange and transmit it to PFD before PFD's close of business to receive
that day's redemption price. Your broker-dealer is responsible for providing
all necessary documentation to PFD and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value
of the account to at least the minimum required amount within six months of
notice by the Fund to you of the Fund's intention to redeem the shares.
CDSC on Class A Shares. Purchases of Class A shares of $1 million 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 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 indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by voice
or by FactFoneSM, 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 day of the month designated on
your Account Application or Account Options Form.
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.
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
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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 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 for which reimbursement is made are approved by the
Trust's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.25% per annum of the Fund's daily net assets
attributable to Class A shares; (ii) reimbursement to PFD for its expenditures
for broker-dealer commissions and employee compensation on certain sales of the
Fund's Class A shares with no initial sales charge (See "How to Buy Fund
Shares"); and (iii) reimbursement to PFD for expenses incurred in providing
services to Class A shareholders and supporting broker-dealers and other
organizations (such as banks and trust companies) in their efforts to provide
such services. Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the described
services, management would consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A Plan
may not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein
without approval of the shareholders of the Fund. The Class A Plan does not
provide for the carryover of reimbursable expenses beyond 12 months from the
time the Fund is first invoiced for an expense. For the calendar year ended
December 31, 1996, there was an allowable carryover of distribution expenses
reimbursable to PFD of $613 (less than 0.01% of the net assets attributable to
the Class A shares 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 may 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 sales 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 sales
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 service fees of up to 0.75% and 0.25%,
respectively, of the net asset value of such shares.
When a broker-dealer sells Class B or Class C shares and elects, with
PFD's approval, to waive its right to receive the commission normally paid at
the time of sale, PFD may cause all or a portion of the distribution fees
described above to be paid to the broker-dealer.
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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 tax on income and capital gains
distributed to shareholders as required under the Code.
Under the Code, the Fund will be subject to a nondeductible 4% 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. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the Fund to avoid federal income or excise
tax. Generally, dividends from the Fund's net investment income, market
discount income, and net short-term capital gains are taxable under the Code as
ordinary income, and dividends from the Fund's net long-term capital gains are
taxable as long-term capital gains. The Fund's distributions of long-term
capital gains to individuals or other noncorporate taxpayers are subject to
different maximum tax rates (which will be indicated in the annual tax
information the Fund provides to shareholders), depending generally upon the
sources of and the Fund's holding periods for the assets that produce the
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 annually to shareholders. 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 may qualify for the dividends-received deduction for
corporate shareholders, subject to holding-period requirements and
debt-financing restrictions under the Code.
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 that 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 tax treatment that is different than described above. Shareholders
should consult their own tax advisors regarding state, local and other
applicable tax laws, including the effect of recent federal tax legislation, in
their particular circumstances.
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
Pioneer Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with the 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 purchases,
exchanges or redemptions of shares by mail or telephone, automatic reinvestment
of dividends and capital gains distributions, withdrawal plans, Letters of
Intent, 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
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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 preauthorized electronic funds transfer from
your bank account. Pioneer Investomatic Plan investments are voluntary, and you
may discontinue your plan at any time or change your plan elections for the
dollar amount, frequency or investment date by calling PSC at 1-800-225-6292,
or by sending a written request to Pioneering Services Corporation, P.O. Box
9014, Boston, Massachusetts 02205-9014. A change to your bank information must
be made in writing on an Account Options Form. You should allow up to five
business days for PSC to make changes to an established plan. 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.
If you elect to receive either dividends or capital gains or both in cash
and a distribution check issued to you is returned by the U.S. Postal Service
as not deliverable or a distribution check remains uncashed for six months or
more, the amount of the check may be reinvested in your account. Such
additional shares will be purchased at the then current net asset value.
Furthermore, the distribution option on the account will automatically be
changed to the reinvestment option until such time as you request a different
option by writing to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer mutual fund account. The value
of this second account must be at least $1,000 ($500 for Pioneer Fund or
Pioneer II). Invested dividends may be in any amount, and there are no fees or
charges for this service. Retirement plan shareholders may only direct
dividends to accounts with identical registrations.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or for
accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
See "How to Buy Fund Shares," "How to Sell Fund Shares" and "How to Exchange
Fund Shares" for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 9:00 p.m. Eastern time on weekdays. Computer-assisted
transactions may be available to shareholders who have pre-recorded certain
bank information (see "FactFone(SM)"). You are strongly urged to consult with
your financial representative prior to requesting any telephone transaction.
To confirm that each transaction instruction received by telephone is
genuine, PSC 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 mutual
fund 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 mutual fund 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
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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 tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations, 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 access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern time, to contact our telephone representatives with questions
about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals 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.
---------------------
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 Capital
Growth 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 cer-
15
<PAGE>
tificates will not normally be issued. The Trust reserves the right to charge a
fee for the issuance of Class A certificates; certificates will not be issued
for Class B and Class C shares.
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 indices,
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.
16
<PAGE>
APPENDIX--CERTAIN INVESTMENT PRACTICES
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 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, U.S. 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.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices, 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 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 and require margin
deposits.
Limitations and Risks Associated with Transactions in Options and Futures
Contracts
Transactions involving options on securities and securities indices,
futures contracts and options on futures 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 (3) market risk that an incorrect prediction of
securities prices by the Fund's investment adviser may cause the Fund to
perform less favorably than if such positions had not been entered. The Fund
will purchase and sell options that are traded only in a regulated market which
is open to the public. Options and futures 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 is 100%. The loss that may be incurred by the Fund in entering into
futures contracts and written options thereon 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 and 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.
Forward Commitment, When-Issued and Delayed Delivery Securities
The Fund may purchase securities on a forward commitment, when-issued or
delayed delivery basis. When these transactions are negotiated, the price of
the securities is fixed at the time of the commitment, but delivery and payment
take place after the date of the commitment. These securities involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date. When the Fund purchases securities on a forward commitment,
when-issued or delayed delivery basis, the Fund's custodian will maintain a
segregated account cash or liquid, high grade debt securities having a value
(determined daily) at least equal to the amount of the Fund's purchase
commitment.
17
<PAGE>
Notes
18
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
Growth Funds
Global/International
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
United States
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust*
Tax-Exempt
Pioneer Intermediate Tax-Free Fund**
Pioneer Tax-Free Income Fund**
Money Market Fund
Pioneer Cash Reserves Fund
*Offers Class A and B Shares only
**Not suitable for retirement accounts
19
<PAGE>
[Pioneer logo]
Pioneer
Equity-Income
Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
JOHN A. CAREY, 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 LLP
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
Visit our web site........................ www.pioneerfunds.com
0198-4734
(c)Pioneer Funds Distributor, Inc.
<PAGE>
<PAGE>
[Pioneer logo]
Pioneer
Gold Shares
Class A, Class B and Class C Shares
Prospectus
February 2, 1998
Pioneer Gold Shares (the "Fund") seeks long-term capital appreciation and
such protection against inflation as may be provided by investments in
securities of companies engaged in the mining, processing, refining or sale of
gold or other precious metals.
It is anticipated that 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 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. Investments in securities of companies engaged in the mining,
processing, refining or sale of gold or other precious metals entail risks in
addition to those customarily associated with investing in securities in
general. In addition, the Fund may invest in securities issued by foreign
companies or governments which involve risks not typically associated with
investments in U.S. securities. The Fund is intended for investors who can
accept the risks associated with its investments and may not be suitable for all
investors. See "Investment Objectives and Policies" for a discussion of these
risks.
This Prospectus 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 the Statement of Additional
Information, also dated February 2, 1998, as supplemented or revised from time
to time, 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 by calling 1-800-225-6292 or
through the SEC's Internet web site (http://www.sec.gov)
TABLE OF CONTENTS PAGE
------------------------------------------------------- -----
I. EXPENSE INFORMATION ................................. 2
II. FINANCIAL HIGHLIGHTS ................................. 3
III. INVESTMENT OBJECTIVE AND POLICIES ..................... 5
IV. MANAGEMENT OF THE FUND .............................. 6
V. FUND SHARE ALTERNATIVES .............................. 7
VI. SHARE PRICE .......................................... 8
VII. HOW TO BUY FUND SHARES .............................. 8
VIII. HOW TO SELL FUND SHARES .............................. 12
IX. HOW TO EXCHANGE FUND SHARES ........................... 13
X. DISTRIBUTION PLANS .................................... 13
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ............... 14
XII. SHAREHOLDER SERVICES ................................. 15
Account and Confirmation Statements .................. 15
Additional Investments .............................. 15
Automatic Investment Plans ........................... 15
Financial Reports and Tax Information ............... 15
Distribution Options ................................. 15
Directed Dividends ................................. 16
Direct Deposit ....................................... 16
Voluntary Tax Withholding ........................... 16
Telephone Transactions and Related Liabilities ...... 16
FactFoneSM .......................................... 16
Retirement Plans .................................... 16
Telecommunications Device for the Deaf (TDD) ......... 16
Systematic Withdrawal Plans ........................ 16
Reinstatement Privilege (Class A Shares Only) ...... 17
XIII. THE TRUST ............................................. 17
XIV. INVESTMENT RESULTS .................................... 17
APPENDIX--CERTAIN INVESTMENT PRACTICES ............... 18
- --------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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, 1997.
Class A Class B Class C
Shareholder Transaction Expenses:
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
(as a percentage of purchase price
or redemption proceeds, as applicable) None(1) 4.00% 1.00%
Redemption fee(2) ...................... None None None
Exchange fee ........................... None None None
Annual Operating Expenses
(as a percentage of average
net assets)(3):
Management fee (after fee reduction)(4) 0.45% 0.45% 0.45%
12b-1 fees .............................. 0.25% 1.00% 1.00%
Other Expenses (including transfer agent
fee, custodian fees and accounting and
printing expenses) (after expense
reduction)(4) ......................... 1.02% 1.04% 0.88%
------- ----- ----
Total Operating Expenses (after
reductions)(4) ......................... 1.72% 2.49% 2.33%
======= ===== ====
- ---------
(1) Purchases of $1 million 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 ("CDSC") as further described under "How
to Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) Expenses are net of amounts paid in connection with third-party
brokerage/service and certain expense offset arrangements. See "Financial
Highlights."
(4) Pioneering Management Corporation ("PMC"), the Fund's investment adviser,
has agreed not to impose all or a portion of its management fee as required
to limit the Class A shares operating expenses of the Fund to 1.75% of the
average net assets attributable to Class A shares; the portion of Fund-wide
operating expenses attributable to Class B and Class C shares will be
reduced only to the extent that they are reduced for Class A shares. This
agreement is voluntary and temporary and may be revised or terminated at any
time by PMC.
Class A Class B Class C
Expenses Absent Reductions
Management Fee ............ 0.65% 0.65% 0.65%
Other Expenses ............ 1.03% 1.07% 0.93%
Total Operating Expenses 1.93% 2.72% 2.58%
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same each
year.
1 Year 3 Years 5 Years 10 Years
Class A Shares $74 $109 $145 $249
Class B Shares*
--Assuming complete redemption
at end of period $65 $108 $153 $264
--Assuming no redemption $25 $ 78 $133 $264
Class C Shares**
--Assuming complete redemption
at end of period $34 $ 73 $125 $267
--Assuming no redemption $24 $ 73 $125 $267
- ---------
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject to
a 1% CDSC.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR 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, 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 payment of a 12b-1 fee may result in long-term
shareholders indirectly paying more than the economic equivalent of the maximum
sales charge permitted under the Conduct Rules 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 Fund Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of October 31, 1997 appears in the Fund's Annual Report
which is incorporated by reference into the Statement of Additional Information.
The information listed below should be read in conjunction with the financial
statements contained in the Annual Report. The Annual Report includes more
information about the Fund's performance and is available free of charge by
calling Shareholder Services at 1-800-225-6292.
PIONEER GOLD SHARES
Selected Data for a Class A Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
-----------------------------------------------
1997 1996 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Net asset value, beginning of period ............ $ 7.81 $ 6.80 $ 7.94
---------- ---------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) ..................... $ (0.01) $ (0.01) $ (0.01)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions . (1.94) 1.02 (1.13)
---------- ---------- ----------
Net increase (decrease) from investment
operations ....................................... $ (1.95) $ 1.01 $ (1.14)
Distribution to shareholders from:
Net investment income ........................... (0.09) -- --
---------- ---------- ----------
Net increase (decrease) in net asset value ...... $ (2.04) $ 1.01 $ (1.14)
---------- ---------- ----------
Net asset value, end of period .................. $ 5.77 $ 7.81 $ 6.80
========== ========== ==========
Total return* .................................... (25.24)% 14.85% (14.36%)
Ratio of net operating expenses to average net
assets .......................................... 1.74%+ 1.72%+ 1.76%+
Ratio of net investment income to average net
assets .......................................... (0.08)%+ (0.13)%+ (0.16%)+
Portfolio turnover rate ........................... 22% 15% 6%
Average commission rate paid(1) .................. $0.0418 $0.0349 --
Net assets, end of period (in thousands) ......... $28,638 $36,028 $24,412
Ratios assuming no waiver of management fees and assumption of expenses by PMC
and no reduction for fees paid indirectly:
Net operating expenses ........................... 1.93% 1.88% 2.28%
Net investment income (loss) ..................... (0.27)% ( 0.29)% (0.68%)
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction
for fees paid indirectly:
Net operating expenses ........................... 1.72% 1.71% 1.75%
Net investment income (loss) ..................... (0.06)% (0.12)% (0.15)%
<CAPTION>
7/25/90
-----------------
(Commencement
of Operations) to
1994 1993 1992 1991 10/31/90
------------- ------------- ------------- --------- ------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 7.44 $ 5.03 $ 5.35 $ 5.33 $ 6.50
--------- --------- --------- -------- ----------
Increase (decrease) from investment operations:
Net investment income (loss) ..................... $ (0.03) $ (0.03) $ (0.02) $ 0.01 $(0.14)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions . 0.53 2.44 ( 0.28) 0.01 ( 1.03)
--------- --------- --------- -------- ----------
Net increase (decrease) from investment
operations ....................................... $ 0.50 $ 2.41 $ (0.30) $ 0.02 $(1.17)
Distribution to shareholders from:
Net investment income ........................... -- -- (0.02) -- --
--------- --------- --------- -------- ----------
Net increase (decrease) in net asset value ...... $ 0.50 $ 2.41 $ (0.32) $ 0.02 $(1.17)
--------- --------- --------- -------- ----------
Net asset value, end of period .................. $ 7.94 $ 7.44 $ 5.03 $ 5.35 $ 5.33
========= ========= ========= ======== ==========
Total return* .................................... 6.72% 47.91% (5.70%) 0.38% (18.00%)
Ratio of net operating expenses to average net
assets .......................................... 1.75% 1.75% 1.75% 1.75% 9.21%**
Ratio of net investment income to average net
assets .......................................... (0.40%) (0.52%) (0.35%) 0.18% (6.31%)**
Portfolio turnover rate ........................... 3% 6% 4% 10% 15%**
Average commission rate paid(1) .................. -- -- -- -- --
Net assets, end of period (in thousands) ......... $26,168 $14,057 $3,461 $1,800 $1,399
Ratios assuming no waiver of management fees and assumption of expenses by PMC
and no reduction for fees paid indirectly:
Net operating expenses ........................... 2.14% 3.23% 6.62% 10.97% --
Net investment income (loss) ..................... (0.79%) (2.00%) (5.22%) (9.04%) --
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction
for fees paid indirectly:
Net operating expenses ........................... -- -- -- -- --
Net investment income (loss) ..................... -- -- -- -- --
</TABLE>
- -----------
*Assumes initial investment at net asset value at the beginning of
each period, reinvestment of distributions, the complete redemption
of the investment at net asset value at the end of each period and no
sales charge. Total return would be reduced if sale charges were taken
into account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share. Amount may
fluctuate from period to period as a result of portfolio transactions
executed in different markets where trading practices and commission
rate structures may vary.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER GOLD SHARES
Selected Data for a Class B Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
----------------------------------------- April 4, 1994 to
1997 1996 1995 October 31, 1994
------------ ----------- --------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $ 7.65 $ 6.73 $ 7.89 $ 7.83
--------- --------- --------- ---------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ (0.04) $ (0.06) $(0.05) $(0.03)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ........................ (1.91) 0.98 (1.11) 0.09
--------- --------- --------- ---------
Net increase (decrease) from investment operations ......... $ (1.95) $ 0.92 $(1.16) $ 0.06
Distribution to shareholders .............................. (0.09) -- -- --
--------- --------- --------- ---------
Net increase (decrease) in net asset value .................. $ (2.04) $ 0.92 $(1.16) $ 0.06
--------- --------- --------- ---------
Net asset value, end of period .............................. $ 5.61 $ 7.65 $ 6.73 $ 7.89
========= ========= ========= =========
Total return* ............................................. (25.77)% 13.67% (14.70%) 0.77%
Ratio of net operating expenses to average net assets ...... 2.51%+ 2.59%+ 2.57%+ 2.67%**
Ratio of net investment income (loss) to average net
assets ................................................... (0.84)%+ (1.00)%+ (1.01%)+ (1.42%)**
Portfolio turnover rate .................................... 22% 15% 6% 3%
Average commission rate paid(1) ........................... $0.0418 $0.0349 -- --
Net assets, end of period (in thousands) .................. $ 5,394 $ 4,720 $1,762 $ 951
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for
fees paid indirectly:
Net operating expenses .................................... 2.72% 2.73% 3.12% 2.79%**
Net investment income (loss) .............................. (1.05)% (1.14)% (1.56%) (1.54%)**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction for fees
paid indirectly:
Net operating expenses .................................... 2.49% 2.57% 2.53% --
Net investment income (loss) .............................. (0.82)% (0.98)% (0.97%) --
</TABLE>
Selected Data for a Class C Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
For the Year Ended For the period January 31, 1996
October 31, 1997 through October 31, 1996
-------------------- --------------------------------
<S> <C> <C>
Net asset value, beginning of period .................. $ 7.65 $ 8.70
-------
Increase (decrease) from investment operations:
Net investment income (loss) ........................ $ (0.04) $ (0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions .................. (1.90) (1.03)
---------
Net increase (decrease) in net asset value ............ $ (2.03) $ (1.05)
---------
Net asset value, end of period ........................ $ 5.62 $ 7.65
=========
Total return* ....................................... (25.64)% (12.07)%
Ratio of net operating expenses to average net assets 2.38%+ 2.59%**+
Ratio of net investment income (loss) to average net
assets ............................................. (0.76)%+ (1.12)%**+
Portfolio turnover rate .............................. 22% 15%
Average commission rate paid(1) ..................... $0.0418 $0.0349
Net assets, end of period (in thousands) ............ $ 1,034 $ 1,690
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for
fees paid indirectly:
Net operating expenses .............................. 2.58% 2.83%**
Net investment income (loss) ........................ (0.96)% (1.36)%**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction for fees
paid indirectly:
Net operating expenses .............................. 2.33% 2.56%**
Net investment income (loss) ........................ (0.71)% (1.09)%**
</TABLE>
- -----------
*Assumes initial investment at net asset value at the beginning of
each period, reinvestment of distributions, the complete redemption
of the investment at net asset value at the end of each period and no sales
charge. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
(1) Amount represents the rate of commission paid per share. Amount may
fluctuate from period to period as a result of portfolio transactions
executed in different markets where trading practices and commission
rate structures may vary.
4
<PAGE>
III. INVESTMENT OBJECTIVE AND POLICIES
The Fund is managed in accordance with the value investment philosophy of
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 and/or reserve growth over the next
three-to-five 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 long-term capital
appreciation and such protection against inflation as may be provided by
investments in securities of companies engaged in the mining, processing,
refining or sale of gold or other precious metals.
Under normal circumstances, the Fund will invest at least 70% of its assets
in common stocks or securities convertible into common stock of companies
engaged principally in the mining, processing, refining or sale of gold or
products made primarily from gold. A company will be deemed to be engaged
principally in such business if it derives at least 50% of its net income or
gross revenues from such activities or if 50% of its assets are devoted to such
activities. The Fund's investment concentration policy (i.e., investing more
than 25% of its assets in the gold industry) is a fundamental policy which may
not be changed without shareholder approval. The balance of the Fund's assets
may be invested in: (i) securities of companies or countries mining or producing
other precious metals such as platinum or silver; (ii) securities of companies
or countries mining or producing gemstones; (iii) securities which are backed
by, or otherwise tied to the price of gold and securities of companies which
provide goods or services to the mining industry; and (iv) certain short-term,
temporary investments such as marketable obligations issued or guaranteed by the
United States ("U.S.") government, obligations of U.S. banks and commercial
paper.
The Fund may invest all or part of its assets in foreign securities.
Because a significant portion of the worldwide production of gold is outside the
U.S., a significant portion of the Fund's assets will typically consist of such
foreign securities. It is also possible that the Fund will invest more than 25%
of its assets in securities of companies located in a single foreign country.
Although the Fund may invest in the securities of foreign governments, their
agencies and instrumentalities, the Fund has no present intention to invest more
than 5% of its assets in such securities. See 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 will not be considered a limiting factor in
the execution of investment decisions. See "Financial Highlights" for the Fund's
actual turnover rates. Short-term, temporary investments will 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 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 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.
The Fund may invest in warrants as described in the Statement of Additional
Information. Although the Fund does not have a formal percentage limitation on
investments in warrants, it is not expected that PMC will invest more than 5% of
the Fund's total assets in such securities.
In pursuit of its objective, the 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
5
<PAGE>
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 and in
securities issued by foreign governments. Investing in securities of foreign
companies and countries involves certain considerations and risks which are not
typically associated with investing in U.S. government securities and securities
of domestic companies. Foreign companies are not subject to uniform accounting,
auditing and financial standards and requirements comparable to those applicable
to U.S. companies. There may also be less publicly available information about
foreign companies compared to reports and ratings published about U.S.
companies. In addition, foreign securities markets have substantially less
volume than domestic markets and securities of some foreign companies are less
liquid and more volatile than securities of comparable U.S. companies. There may
also be less government supervision and regulation of foreign securities
exchanges, brokers and listed companies than exists in the United States.
Interest or dividends, or in some cases capital gains, from foreign investments
may be subject to withholding or other foreign taxes which will decrease the net
return on such investments as compared to the return on the fund's domestic
investments. Finally, there may be the possibility of expropriations,
confiscatory taxation, political, economic or social instability or diplomatic
developments which could adversely affect assets of the Fund held in foreign
countries.
The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value of
a foreign security held by the Fund as measured in U.S. dollars will 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.
Fixed-income securities in which the Fund may invest generally pay a fixed
rate of return and may include debt obligations of the U.S. government, foreign
governments, corporations and municipalities. Fixed-income securities are
subject to the risk of an issuer's inability to meet principal and interest
payments on the obligations and may also be subject to price volatility due to
such factors as interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity.
The Fund's investment policies present unique risks to the portfolio's
value. In recent years, the prices of gold and other precious metals have been
subject to dramatic fluctuations caused primarily by international monetary and
political developments including trade or currency restrictions, currency
devaluations and revaluations and social and political conditions within a
country. Dramatic fluctuations in the prices of gold or other metals will affect
the market values of the securities of companies in which the Fund intends to
invest. Major gold suppliers are to be found in the Republic of South Africa
("South Africa"), Australia, Canada, the United States and member states of the
Commonwealth of Independent States ("CIS") which were formerly part of the
Soviet Union. The current economic, political and social conditions in South
Africa and the CIS may adversely affect the price of gold and, accordingly, the
market values of the securities of companies in the industry. The only legally
authorized sales agent for gold produced in South Africa, the world's largest
producer, is the Reserve Bank of South Africa. The Reserve Bank's policies
significantly influence the timing of any sales of South African bullion.
Additionally, the South African Ministry of Mines determines gold mining policy.
South Africa depends on the sale of gold for the foreign exchange necessary to
finance its imports, and its sales policy is necessarily subject to national
economic and political developments. Finally, investments in the securities of
South African companies may be affected by laws in the U.S. relating to foreign
investments in South Africa or foreign investments generally.
IV. MANAGEMENT OF THE FUND
The Board of Trustees of the Trust has overall responsibility for
management and supervision of the Fund. 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
shares of the Fund.
Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general responsibility
for PMC's investment operations and chairs a committee of PMC's equity managers
which reviews PMC's research and portfolio operations, including those of the
Fund. Mr. Tripple joined PMC in 1974.
The Fund is covered by a team of managers and analysts which does research
for and oversees the management of the Fund. Members of the team meet regularly
to discuss holdings, prospective investments and portfolio composition.
Mr. Tripple, the Fund's portfolio manager, had primary responsibility for
the day-to-day management of the Fund since its inception. On December 1, 1997,
Mr. Michael P. Bradshaw, the Fund's assistant portfolio manager and a Vice
President of PMC, assumed this responsibility. Mr. Bradshaw
6
<PAGE>
joined PMC in July of 1997 and has four years of investment experience. During
these four years he worked as a financial analyst and as a research associate
within the equity research department of a major Canadian securities firm. Prior
to this time, he was an associate and a partner with an investor group for two
years and an exploration geologist for six years.
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. In an effort to avoid conflicts of
interest with the Trust, the Trust and PMC have adopted a Code of Ethics that is
designed to maintain a high standard of personal conduct by directing that all
personnel defer to the interests of the Trust and its shareholders in making
personal securities transactions.
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
regulatory agencies, 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 Investment
Company Act of 1940, as amended (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 or other funds for which PMC or any other affiliate
or subsidiary serves as investment adviser or manager. See the Statement of
Additional Information for a further description of PMC's brokerage allocation
practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.65% per annum of the
Fund's average daily net assets up to $300 million, 0.60% of the next $200
million, 0.50% of the next $500 million and 0.45% of the excess over $1 billion.
The fee is normally computed daily and paid monthly. See "Expense Information"
in this Prospectus and "Investment Adviser" in the Statement of Additional
Information.
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 14% 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% 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
7
<PAGE>
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% of the
Fund'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 service. 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.
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 indicate 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 Pioneer 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 3 days after the
purchase instruction). Shares purchased by telephone may not be redeemed for 15
8
<PAGE>
days after the date of purchase. 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, including 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 purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Internal Revenue Code of 1986, as amended (the
"Code"), although more than one beneficiary is involved. The sales charges
applicable to a current purchase of Class A shares of the Fund by a person
listed above is determined by adding the value of shares to be purchased to the
aggregate value (at the then current offering price) of shares of any of the
other Pioneer mutual funds previously purchased and then owned, provided PFD is
notified by such person or his or her broker-dealer each time a purchase is made
which would qualify. Pioneer mutual funds include all mutual funds for which PFD
serves as principal underwriter. At the sole discretion of PFD, holdings of
funds domiciled outside the U.S., but which are managed by affiliates of PMC,
may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by 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
participating 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. 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
Trust and partners and employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which 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 a Fund may be sold at net asset value per share without a
sales charge to Optional Retirement Program (the "Program") participants if (i)
the employer has authorized a limited number of investment company providers for
the Program, (ii) all authorized investment company providers offer their shares
to Program participants at net asset value, (iii) the employer has agreed in
writing to actively promote the authorized investment company providers to
Program participants and (iv) the Program provides for a matching contribution
for each participant contribution. 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.
9
<PAGE>
Reduced sales charges are available for purchases of $50,000 or more of
Class A shares (excluding any reinvestments of dividends and capital gains
distributions) made within a 13-month period pursuant to a Letter of Intent
("LOI") which may be established by completing the Letter of Intent section of
the Account Application. The reduced sales charge will be the charge that would
be applicable to the purchase of the specified amount of Class A shares as if
the shares had all been purchased at the same time. A purchase not made pursuant
to an LOI may be included if the LOI is submitted to PSC within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the Fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PSC, registered in your name, until the terms of the
LOI are fulfilled.
You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to cover actual sales charges is due, it must be paid to PFD
within 20 days after PFD or your dealer sends you a written request or PFD will
direct PSC to liquidate sufficient shares from your escrow account to cover the
amount due. See the Statement of Additional Information for more information.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase 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 the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge. However, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates shown in the table below. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made on
the first day of that quarter. In processing redemptions of Class B shares, the
Fund will first redeem shares not subject to any CDSC, and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:
CDSC as a Percentage
of Dollar Amount
Year Since Purchase 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 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, 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 the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%. The charge will be assessed on the amount equal to the
lesser of the current market value or the original purchase cost of the shares
being redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gains distributions. Class C shares do not convert to any
other Class of Fund shares.
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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.
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 UGMA, UTMA 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 701/2 may exceed the 10% limit only if the distribution amount is based
on plan assets held in Pioneer mutual funds); (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; (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 shareholder 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 any shares subject to a CDSC may be waived or reduced for
either non-retirement or retirement plan accounts if the redemption is made
pursuant to each Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account. The CDSC on any shares subject to a CDSC will not be
applicable if the selling broker-dealer elects, with PFD's approval, to waive
receipt of the commission normally paid at the time of the sale.
Broker-Dealers. An order for any Class of Fund shares received by PFD from
a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close of
regular trading on the Exchange on the day the order is received, provided the
order is received prior to PFD's close of business (usually, 5:30 p.m. Eastern
time). It is the responsibility of broker-dealers to transmit orders so that
they will be received by PFD prior to PFD's 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.
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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, other than an
IRA, 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 or an IRA,
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 by check, bank wire, or electronic funds transfer
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 applies:
[bullet] you wish to sell over $100,000 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 mutual fund
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 and 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 by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any certificates are endorsed by the record
owner(s) exactly as the shares are registered and, if a signature guarantee is
required, 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 indicate 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, except IRAs. A maximum of $100,000 per account per
day 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 predesignated either on your Account Application or on an
Account Options Form and which must not have changed in the last 30 days. To
redeem by fax send your redemption request to 1-800-225-4240. You may always
elect to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions will
be priced as described above. You are strongly urged to consult with your
financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Your broker- dealer must receive your request before the close of business on
the Exchange and transmit it to PFD before PFD's close of business to receive
that day's redemption price. Your broker-dealer is responsible for providing all
necessary documentation to PFD and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value of
the account to at least the minimum required amount within six months of notice
by the Fund to you of the Fund's intention to redeem the shares.
CDSC on Class A Shares. Purchases of Class A shares of $1 million 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)
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retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets.
General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Fund to fairly determine the value of
the net assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the fund
out of which you wish to exchange and the name of the 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 indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone exchange. Telephone exchanges may not exceed $500,000 per
account per day. Each telephone exchange request, whether by voice or
FactFoneSM, 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 day of the month designated on your
Account Application or Account Options Form.
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.
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 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
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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 sales 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 sales
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 service fees of up to 0.75% and 0.25%,
respectively, of the net asset value with respect to such shares.
When a broker-dealer sells Class B or Class C shares and elects, with PFD's
approval, to waive its right to receive the commission normally paid at the time
of sale, PFD may cause all or a portion of the distribution fees described above
to be paid to the broker-dealer.
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 tax on income and capital gains distributed
to shareholders as required under the Code.
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's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net long-term capital gains, if
any, in December. Distributions from net short-term capital gains, if any, may
be paid with such dividends; dividends from income and/or capital gains may also
be paid at such other times as may be necessary for the Fund to avoid federal
income or excise tax. Generally, dividends from the Fund's net investment
income, market discount income, net short-term capital gains, and certain net
foreign exchange gains are taxable under the Code as ordinary income, and
dividends from the Fund's net long-term capital gains are taxable as long-term
capital gains. The Fund's distributions of long-term capital gains to
individuals or other noncorporate taxpayers are subject to different maximum tax
rates (which will be indicated in the annual tax information the Fund provides
to Shareholders), depending generally upon the sources of the Fund's holding
periods for the assets that produce the 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 dividends-received deduction
for corporate shareholders, subject to holding-period requirements and
debt-financing restrictions under the Code.
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The Fund may be subject to foreign withholding taxes or other foreign taxes
on income (possibly including, in some cases, capital gains) on certain of its
foreign investments, which will reduce the yield on or return from those
investments. In any year in which the Fund qualifies, it may make an election
that would permit certain of its shareholders to take a credit or a deduction
for their shares of qualified foreign taxes paid by the Fund. Each shareholder
would then include in gross income (in addition to dividends actually received)
his or her share of the amount of qualified foreign taxes paid by the Fund. If
this election is made, the Fund will notify its shareholders annually as to
their share of the amount of qualified foreign taxes paid and the foreign source
income of the Fund.
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 that the shareholder is
not subject to backup withholding or 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 tax treatment that is different than described above. Shareholders
should consult their own tax advisors regarding state, local and other
applicable tax laws, including the effect of recent federal tax legislation, and
regulations referred to above in their particular circumstances.
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
Pioneer Combined Account statement, mailed quarterly, is available to
shareholders who have more than one Pioneer mutual fund 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 purchases,
exchanges or redemptions of shares by mail or telephone, automatic reinvestment
of dividends and capital gains distributions, withdrawal plans, Letters of
Intent, Rights of Accumulation 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 preauthorized electronic funds transfer from
your bank account. Pioneer Investomatic Plan investments are voluntary, and you
may discontinue your plan at any time or change your plan elections for the
dollar amount, frequency or investment date by calling PSC at 1-800-225-6292, or
by sending a written request to Pioneering Services Corporation, P.O. Box 9014,
Boston, Massachusetts 02205-9014. A change to your bank information must be made
in writing on an Account Options Form. You should allow up to five business days
for PSC to make changes to an established plan. 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.
If you elect to receive either dividends or capital gains or both in cash
and a distribution check issued to you is returned by the U.S. Postal Service as
not deliverable or a distribution check remains uncashed for six months or more,
the amount of the check may be reinvested in your account. Such additional
shares will be purchased at the then current
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net asset value. Furthermore, the distribution option on the account will
automatically be changed to the reinvestment option until such time as you
request a different option by writing to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer mutual
fund account invested in a second Pioneer mutual fund account. The value of this
second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service. Retirement plan shareholders may only direct dividends to accounts
with identical registrations .
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your savings,
checking or NOW bank account. You may establish this service by completing the
appropriate section on the Account Application when opening a new account or the
Account Options Form for an existing account. Voluntary Tax Withholding You may
request (in writing) that PSC withhold 28% of the dividends and capital gains
distributions paid from your account (before any reinvestment) and forward the
amount withheld to the IRS as a credit against your federal income taxes. This
option is not available for retirement plan accounts or for accounts subject to
backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone. See
"How to Buy Fund Shares," "How to Sell Fund Shares" and "How to Exchange Fund
Shares" for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 9:00 p.m. Eastern Time on weekdays. Computer-assisted
transactions are available to shareholders who have pre-recorded certain bank
information (see "FactFoneSM"). You are strongly urged to consult with your
financial representative prior to requesting any telephone transaction.
To confirm that each transaction instruction received by telephone is
genuine, PSC 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.
FactFoneSM allows you to obtain current information on your Pioneer mutual fund
accounts and to inquire about the prices and yields of all publicly available
Pioneer mutual funds. In addition, you may use FactFone(SM) to make
computer-assisted telephone purchases, exchanges and redemptions from your
Pioneer mutual fund 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 tax-deferred retirement plans for individuals,
businesses and tax-exempt organizations, 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 access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern time, to contact our telephone representatives with questions
about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals 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.
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<PAGE>
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. 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.
---------------------
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 purposes
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 Capital
Growth Fund, Pioneer Equity-Income Fund 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 Class A certificates; certificates will not be
issued for Class B and Class C shares.
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 indices,
indicators of economic activity or averages of mutual funds results may be cited
or compared with the investment performance 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.
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APPENDIX--CERTAIN INVESTMENT PRACTICES
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 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 positions had
not been entered. The Fund will purchase and sell options that are traded only
in a regulated market which
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<PAGE>
is open to the public. The use of options, futures contracts and forward foreign
currency exchange contracts are highly specialized activities which involve
investment techniques and risks that are different from those associated with
ordinary portfolio transactions. The Fund may not enter into futures contracts
and options on futures contracts for speculative purposes. The percent of the
Fund's assets that may be subject to futures contracts and options on such
contracts entered into for bona fide hedging purposes or in forward foreign
currency exchange contracts is 100%. The loss that may be incurred by the Fund
in entering into future contracts and written options thereon and forward
foreign currency exchange contracts is potentially unlimited. The Fund may not
invest more than 5% of its total assets in financial instruments that are used
for non-hedging purposes and which have a leverage effect.
The Fund's transactions in options, forward foreign currency exchange
contracts, futures contracts and options on futures contracts may be limited by
the requirements for qualification of the Fund as a regulated investment company
for tax purposes. See "Tax Status" in the Statement of Additional Information.
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[Pioneer logo]
Pioneer
Gold Shares
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR LLP
0198-4733
[copyright sign]Pioneer Funds Distributor, Inc.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications and service forms and
telephone transactions..................... 1-800-225-6292
FactFone(SM) Automated fund yields, automated prices
and account information........................ 1-800-225-4321
Retirement plans................................ 1-800-622-0176
Toll-free fax................................... 1-800-225-4240
Telecommunications Device for the Deaf (TDD).... 1-800-225-1997
Visit our web site........................ www.pioneerfunds.com
<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 2, 1998
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus
("Prospectus"), but should be read in conjunction with the Prospectuses for each
of Pioneer Capital Growth Fund dated February 2, 1998, Pioneer Equity-Income
Fund dated February 2, 1998 and Pioneer Gold Shares dated February 2, 1998. 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....................................... 12
3. Investment Adviser............................................ 16
4. Underwriting Agreement and Distribution Plans................. 17
5. Shareholder Servicing/Transfer Agent.......................... 20
6. Custodian..................................................... 20
7. Principal Underwriter......................................... 20
8. Independent Public Accountants................................ 21
9. Portfolio Transactions........................................ 21
10. Tax Status.................................................... 22
11. Description of Shares......................................... 27
12. Certain Liabilities........................................... 28
13. Letter of Intent.............................................. 28
14. Systematic Withdrawal Plan.................................... 29
15. Determination of Net Asset Value.............................. 29
16. Investment Results............................................ 30
17. Financial Statements.......................................... 33
Appendix A.................................................... 34
Appendix B.................................................... 56
-------------------------
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. Capitalized terms not otherwise defined herein have
the meaning given to them in the Prospectuses.
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
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
enter into 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' transactions 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
2
<PAGE>
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.
If Capital Growth Fund or Gold Shares enters into a forward contract to
purchase foreign currency, each Fund 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, Equity-Income 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). None of the Funds intend 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, Equity-Income Fund and Gold Shares may purchase
call options on securities for entering into a "closing purchase transaction,"
3
<PAGE>
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.
Options on Securities Indices
Capital Growth Fund, Equity-Income 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 a
Fund's securities or securities which a 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
("OTC"), 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 and 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.
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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, Equity-Income 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.
In addition to the risks of imperfect correlation between the Funds'
respective portfolios 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 (for Capital Grwoth Fund and Gold Shares only), the Funds 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. The Funds 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 (Capital Growth Fund and Gold Shares only) 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.
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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 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.
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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, Equity-Income 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 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.
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Other Policies and Risks
With the exception of Gold Shares, it is the fundamental policy of each
of the Funds not to concentrate its investments in securities of companies in
any particular industry. Following the current opinion of the staff of the
SEC,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'
fundamental policy allowing the 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 Funds' policies on concentration do not
apply to investments in U.S. Government Securities.
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.("Moody's") or BBB by Standard & Poor's Ratings Group ("Standard & Poor's)
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 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 (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.
Warrants
Capital Growth Fund, Equity-Income Fund and Gold Shares may invest in
warrants, which are securities permitting, but not obligating, their holder to
subscribe for other securities. Warrants do not carry with them the right to
dividends or voting rights with respect to the securities that they entitle
their holders to purchase, and they do not represent any rights in the assets of
the issuer. As a result, an investment in warrants may be considered more
speculative than certain other types of investments. In addition, the value of a
warrant does not necessarily change with the value of the underlying securities
and a warrant ceases to have value if it is not exercised prior to its
expiration date. Although the Funds do not have a formal percentage limitation
on such investments, it is not expected that PMC will invest more than 5% of a
Fund's total assets in such securites.
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Lower Quality Debt Obligations
Equity-Income Fund may invest up to 10% of its total assets in debt
securities, including convertible securities, which are rated below investment
grade by Standard & Poor's Ratings Group ("Standard & Poor's") or, if unrated by
such rating organization, determined to be of comparable quality by PMC.
Bonds rated below BBB or comparable unrated securities are commonly
referred to as "junk bonds" and are considered speculative and may be
questionable as to principal and interest payments. In some cases, such bonds
may be highly speculative, have poor prospects for reaching investment standing
and be in default. As a result, investment in such bonds will entail greater
speculative risks than those associated with investment in investment grade
bonds (i.e., bonds rated BBB or better by Standard & Poor's or, if unrated by
such rating organization, determined to be of comparable quality by PMC).
The amount of junk bond securities outstanding has proliferated in
conjunction with the increase in merger and acquisition and leveraged buyout
activity. An economic downturn could severely affect the ability of highly
leveraged issuers to service their debt obligations or to repay their
obligations upon maturity. Factors having an adverse impact on the market value
of lower quality securities will have an adverse effect on the Fund's net asset
value to the extent that it invests in such securities. In addition, the Fund
may incur additional expenses to the extent it is required to seek recovery upon
a default in payment of principal or interest on its portfolio holdings.
The secondary market for junk bond securities, which is concentrated in
relatively few market makers, may not be as liquid as the secondary market for
more highly rated securities, a factor which may have an adverse effect on the
Fund's ability to dispose of a particular security when necessary to meet its
liquidity needs. Under adverse market or economic conditions, the secondary
market for junk bond securities could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result,
the Fund could find it more difficult to sell these securities or may be able to
sell the securities only at prices lower than if such securities were widely
traded. Prices realized upon the sale of such lower rated or unrated securities,
under these circumstances, may be less than the prices used in calculating the
Fund's net asset value.
Certain proposed and recently enacted federal laws including the
required divestiture by federally insured savings and loan associations of their
investments in junk bonds and proposals designed to limit the use, or tax and
other advantages, of junk bond securities could adversely affect the Fund's net
asset value and investment practices. Such proposals could also adversely affect
the secondary market for junk bond securities, the financial condition of
issuers of these securities and the value of outstanding junk bond securities.
The form of such proposed legislation and the possibility of such legislation
being passed are uncertain.
Since investors generally perceive that there are greater risks
associated with lower quality debt securities of the type in which the Fund may
invest a portion of its assets, the yields and prices of such securities may
tend to fluctuate more than those for higher rated securities. In the lower
quality segments of the debt securities market, changes in perceptions of
issuers' creditworthiness tend to occur more frequently and in a more pronounced
manner than do changes in higher quality segments of the debt securities market,
resulting in greater yield and price volatility.
Lower rated and comparable unrated debt securities tend to offer higher
yields than higher rated securities with the same maturities because the
historical financial condition of the issuers of such securities may not have
been as strong as that of other issuers. Since lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities, investors should consider carefully the relative risks associated
with investment in securities which carry lower ratings and in comparable
unrated securities. In addition to the risk of default, there are the related
costs of recovery on defaulted issues. PMC will attempt to reduce these risks
through portfolio diversification and by analysis of each issuer and its ability
to make timely payments of income and principal, as well as broad economic
trends and corporate developments.
9
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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
(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.
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:
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(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;
(vi) redeem its securities in-kind;or
(vii) invest in interests in oil, gas or other mineral exploration or
development leases or programs.
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) 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.
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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,
which, for the purpose of this calculation is 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.
None of the Funds intend 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 FUND
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 Trust are
listed below, together with their principal occupations during the past five
years. An asterisk indicates those Trustees who are interested persons of the
Trust within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee,
DOB: June 1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC"), Pioneer Real
Estate Advisors, Inc. (PREA), Pioneer Forest, Inc., Pioneer Explorer, Inc.
("PEI"), Pioneer Management (Ireland) Ltd. ("PMIL") and Closed Joint Stock
Company "Forest-Starma"; President and Director of 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"), Pioneer First Polish Trust Fund Joint Stock
Company, S.A. ("PFPT") and Pioneer Czech Investment Company, A.S.; Chairman,
President and Trustee of all of the Pioneer mutual funds; Director of Pioneer
Global Equity Fund Plc, Pioneer Global Bond Fund Plc, Pioneer DM Cashfonds Plc,
Pioneer European Equity Fund Plc, Pioneer Central & Eastern Europe Fund Plc, and
Pioneer US Real Estate Fund Plc, collectively, the ("Pioneer Irish Funds"); and
Partner, Hale and Dorr LLP (counsel to PGI and the Fund).
MARY K. BUSH, Trustee, DOB: April 1948
4201 Cathedral Ave. NW, Washington, DC 20016
President, Bush & Co., an international financial advisory firm, since
1991; Director/Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc., Small Enterprise Assistance Fund and Wilberforce
University; Advisory Board member, Washington Mutual Investors Fund, a
registered investment company; and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Road., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital; and Trustee of all of the Pioneer mutual funds.
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MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, The Winthrop Group, Inc (consulting firm); Manager
of Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management of Technology, and Associate
Dean, Boston University School of Management from 1989 to 1993; and Trustee of
all 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, George Washington University; Director, American
Productivity and Quality Center; Adjunct Scholar 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);
Trustee of Boston Medical Center; Member of the Board of Govenors of the
Investment Company Institute; 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, , PIntl, First
Russia, Omega and Pioneer SBIC Corporation ("Pioneer SBIC"), PMIL, Pioneer
Global Equity Fund Plc, Pioneer Global Bond Fund Plc, Pioneer DM Cashfonds Plc,
Pioneer European Equity Fund Plc, Pioneer Central & Eastern Europe Fund Plc and
Pioneer US Real Estate Fund Plc; and Executive Vice President and Trustee of all
of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
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. (energy sales, services and distribution); 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, , PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC; and Treasurer of all of the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Corporate Secretary of PGI and most of its subsidiaries; Secretary of the
Pioneer mutual funds and Partner, Hale and Dorr LLP (counsel to PGI and the
Fund).
13
<PAGE>
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 junior partner of Hale and Dorr LLP
prior to 1995.
JOHN A. CAREY, Vice President of Pioneer Equity-Income Fund, DOB: May 1949
Vice President of PMC, and Pioneer Fund.
J. RODMAN WRIGHT, Vice President of Pioneer Capital Growth Fund, DOB: January
1961
Vice President of PMC, since January 1997 and former analyst and assistant
portfolio manager of the Fund; formerly an analyst and a co-portfolio manager,
focusing on small capitalization securities, with another investment firm from
November 1989 to July 1994.
The Trust's Declaration of Trust (the "Declaration of Trust") provides that
the holders of two-thirds of its outstanding shares may vote to remove a Trustee
of the Trust at any meeting of shareholders. See "Description of Shares" below.
The business address of all officers is 60 State Street, Boston, Massachusetts
02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly owned Delaware corporation. PMC, the
Trust's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer World Equity 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
14
<PAGE>
Investment Principal
Fund Name Adviser Underwriter
Pioneer Micro-Cap Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Balanced 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 Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares 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 ten 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 14% of such shares. As of the date of this Statement of Additional
Information, the Trustees and Officers of the Trust owned beneficially in the
aggregate less than 1% of the outstanding shares of each Fund. As of such date
Merrill Lynch Pierce Fenner & Smith Inc., for the sole benefit of its customers,
4800 Deer Lake Drive East 3rd Fl, Jacksonville, FL 32246-6484 owned
approximately 17.08% (6,191,356) of the outstanding Class B shares of Capital
Growth Fund; Merrill Lynch Pierce Fenner & Smith Inc., for the sole benefit of
its customers owned approximately 51.47% (1,552,796) of the outstanding Class C
shares of Capital Growth Fund; Merrill Lynch Pierce Fenner & Smith Inc., for the
sole benefit of its customers owned approximately 18.36% (102,678) of the
outstanding Class C shares of Equity-Income Fund; Stephen R. Lanning TTEE of the
Lanning Tire Sales 401(k)Plan, 1235 N. Lime Ave., Sarasota, FL 34237-2807 owned
approximately 5.13% (28,704) of the outstanding Class C shares of Equity Income
Fund; Donaldson Lufkin Jenerette Securities Corporation Inc., Box 2052, Jersey
City, NJ 07303-9998 owned approximately 9.21% (91,070) of the outstanding Class
B shares of Gold Shares; Merrill Lynch Pierce Fenner & Smith Inc., for the sole
benefit of its customers owned approximately 20.89% (82,145) of the outstanding
Class Cshares of Gold Shares.
Compensation of Officers and Trustees
The Trust pays no salaries or compensation to any of its officers. Each
Fund will pay an annual trustee's 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. In addition, each Fund will pay a per meeting fee of $100 to each Trustee
who is not affiliated with PMC, PGI, PFD or PSC. The Trust will 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 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
15
<PAGE>
annual trustee's fee, except the Committee Chair who will receive an annual
trustee's fee equal to 20% of the aggregate annual trustee's fee. 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
trustee's fee, except the Committee Chair who will receive an annual trustee's
fee equal to 10% of the annual trustee's fee. Any such fees paid to affiliates
or interested persons of PGI, PMC, PFD or PSC 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Pension or Total
Retirement Compensation from the
Aggregate Benefits Accrued Trust and Other Pioneer
Compensation as Part of Funds**
Name of Trustee from the Trust* Trust's Expenses
--------------------------------- -------------------- ---------------------- -------------------------
--------------------------------- -------------------- ---------------------- -------------------------
John F. Cogan, Jr. $ 1,500.00 0 $12,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
Mary K.Bush + $ 2,979.00 $0 $ 30,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
Richard H. Egdahl, M.D. $8,886.00 0 $62,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
Margaret B.W. Graham $8,886.00 0 $60,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
John W. Kendrick $8,886.00 0 $55,800.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
Marguerite A. Piret $11,783.00 0 $80,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
David D. Tripple $1,500.00 0 $12,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
Stephen K. West $9,809.00 0 63,800.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
John Winthrop $ 10,250.00 0 $69,000.00
--------------------------------- -------------------- ----------------- -------------------------
--------------------------------- -------------------- ----------------- -------------------------
Total $64,479.00 0 $444,600.00
--------------------------------- -------------------- ----------------- -------------------------
* As of October 31, 1997, the Trust's fiscal year end.
** For the calendar year ended December 31, 1997, there were 24 mutual funds in the Pioneer Family of Funds.
+ Mary K. Bush became a Trustee on June 23, 1997.
</TABLE>
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."
16
<PAGE>
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 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 all or a portion of its management fee as
required to limit the Class A shares operating expenses of Gold Shares to 1.75%
of the average net assets attributable to Class A shares; the portion of
Fund-wide operating expenses attributable to Class B and Class C shares will be
reduced only to the extent that they are reduced for Class A shares. This
agreement is temporary and voluntary and may be revised or terminated at any
time by PMC. See "Expense Information" in Gold Shares' Prospectus.
During the fiscal years ended October 31 1997, October 31 1996, and
October 31, 1995,, PMC earned management fees from the Funds, respectively, as
follows: Capital Growth Fund, $11,315,631, $8,408,000, and $4,584,004;
Equity-Income Fund, $3,512,705, $2,586,845, and $1,559,459; Gold Shares,
$242,889, $254,175, and $174,094.
During the fiscal years ended October 31, 1997, October 31, 1996, and
October 31, 1995 the expense limitations described above resulted in a reduction
of the total management fees payable by Gold Shares, in the following amounts:
Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended
October 31, 1997 October 31, 1996 October 31, 1995
---------------- ---------------- ----------------
$75,447 $59,762 $139,498
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 or compensated by the Trust
under the distribution plans (discussed below). PFD bears all expenses it incurs
in providing services under the Underwriting Agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution related services performed for the Trust. PFD also pays certain
expenses in connection with the distribution of the Trust's shares, including
the cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The Trust bears the cost of registering
its shares under federal and state securities law 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").
17
<PAGE>
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 with respect to Class B 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 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). When a broker-dealer sells Class B
shares and elects, with PFD's approval, to waive its right to receive the
commission normally paid at the time of the sale, PFD may cause all or a portion
of the distribution fees described above to be paid to the broker-dealer.
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
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.
18
<PAGE>
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.)
When a broker-dealer sells Class C shares and elects, with PFD's approval, to
waive its right to receive the commission normally paid at the time of the sale,
PFD may cause all or a portion of the distribution fees described above to be
paid to the broker-dealer.
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 (as defined in the 1940
Act) of the respective Class of a Fund. A Plan will automatically terminate in
the event of its assignment (as defined in the 1940 Act).
During the fiscal year ended October 31, 1997, each Fund incurred total
distribution fees pursuant to the Fund's Class A Plan, Class B Plan and Class C
Plan, respectively, as follows: Capital Growth Fund, $3,822,188,, $6,839,473 and
$462,934; Equity-Income Fund, $975,660, $1,690,659 and $81,441 and Gold Shares,
$76,721, $51,685 and $9,161. The distribution fees were paid by each Fund to PFD
in reimbursement of or compensation for expenses related to servicing of
shareholder accounts and to compensating dealers and sales personnel.
19
<PAGE>
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum of 4% of the lower of the
cost or market value of the shares and Class C shares are subject to a 1% CDSC.
During the fiscal year ended October 31, 1997, CDSCs, in the amount of
approximately $2,079,178 for Capital Growth Fund,$320,537 for Equity-Income
Fund, and $16,366 for Gold Shares, were paid to PFD in reimbursement of or
compensation for expenses related to servicing of shareholders' accounts and
compensation paid to dealers and sales personnel.
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 90 days' written notice.
Under the terms of its contract with the Trust, PSC services
shareholder accounts, and its duties include: (i) processing sales, redemptions
and exchanges of shares of the Trust; (ii) distributing dividends and capital
gains associated with Trust portfolio accounts; and (iii) maintaining account
records and responding to shareholder inquiries.
PSC receives an annual fee of $22.75 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 Trust may compensate entities which have agreed to provide
certain sub-accounting services, such as specific transaction processing and
recordkeeping services. Any such payments by the Trust would be in lieu of the
per account fee which would otherwise be paid by the Trust to PSC.
6. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109, is the custodian (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, 60 State Street, Boston, Massachusetts 02109, 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, 1997, October 31, 1996, and October 31, 1995, total
underwriting commissions paid to PFD in connection with the offering of Class A
shares of the Trust were, respectively, approximately, $9,657,000, $14,820,000,
and $13,577,000 for Capital Growth Fund; $2,177,000, $3,028,000, and $2,615,000
and for Equity-Income Fund; and $291,000, $417,000, and $232,000 for Gold
Shares. Commissions reallowed to dealers during the same periods were
approximately $8,381,000, $12,880,000, and $11,803,000 for Capital Growth Fund;
$1,890,000, $2,630,000, and $2,368,000 for Equity-Income Fund; $252,000,
$361,000, and $200,000 for Gold Shares.
20
<PAGE>
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
8.organizINDEPENDENT PUBLIC ACCOUNTANTSher acquisition of portfolio securities.
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110,
are the Trust's independent public accountants, providing audit services, tax
return review, and assistance and consultation with respect to the preparation
of filings with the SEC.
9. PORTFOLIO TRANSACTIONS
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 or other accounts
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 or
accounts 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 or other accounts 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.
21
<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, 1997, October 31, 1996, and
October 31, 1995 each Fund paid aggregate brokerage and underwriting
commissions, respectively, as follows: Capital Growth Fund, $5,429,305,
$3,019,251, and $2,490,466,; Equity-Income Fund, $255,969, $600,706, and
$188,346,; and Gold Shares, $55,640, $56,065, and $15,970. Differences in
brokerage commissions reflected above were due to increased or decreased
portfolio activity and changes in net assets as a result of shareholder
transactions throughout the respective periods.
10. TAX STATUS
Each Fund is treated as a separate entity for federal income 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 distribution of its
income 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 earns,
the Fund will be relieved of the necessity of paying federal income tax.
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In order to qualify as a regulated investment company under Subchapter
M, a Fund must, among other things, derive at least 90% of its annual gross
income 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 and forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "90% income test"), and satisfy certain annual
distribution and quarterly diversification requirements. Gold Shares' holdings
of and transactions in bullion, coins, and other metals will have to be limited
in order to satisfy the 90% income test and the diversification requirements.
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 reinvested in additional shares. Dividends
from net long-term capital gain in excess of net short-term capital loss, ("net
capital gain"), if any, whether received in cash or reinvested in additional
shares, are taxable to a Fund's shareholders as capital gains for federal income
tax purposes without regard to the length of time shares of the Fund have been
held. As a result of the enactment of the Taxpayer Relief Act of 1997 (the "1997
TRA") on August 5, 1997, gain recognized after May 6, 1997 from the sale of a
capital asset is taxable to individual (noncorporate) investors at different
maximum federal income tax rates, depending generally upon the tax holding
period for the asset, the federal income tax bracket of the taxpayer, and the
dates the asset was acquired and/or sold. The Treasury Department has issued
guidance under the 1997 TRA that (subject to possible modification by future
"technical corrections" legislation) enable the Fund to pass through to its
shareholders the benefits of the capital gains tax rates enacted in the 1997
TRA. The Fund will provide appropriate information to its shareholders about its
distributions, including the tax rate(s) applicable to its distributions from
its long-term capital gains, in accordance with this and any future guidance.
Shareholders should consult their own tax advisers on the correct application of
these new rules in their particular circumstances
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, foreign
currency forward 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. Under future regulations, any such transactions that are not
directly related to a Fund's investments in stock or securities (or its options
or futures contracts with respect to stock or securities) may need to be limited
in order to enable the Fund to satisfy the 90% income test. If the net foreign
exchange loss for a year were to exceed a Fund's investment company taxable
income (computed without regard to such loss), the resulting ordinary loss for
such year would not be deductible by the Fund or its shareholders in future
years.
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If a Fund acquires any equity interest (under proposed regulations,
generally including not only stock but also an option to acquire stock such as
inherent in a convertible bond) in certain foreign corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, certain rents and royalties, or capital gains) 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.
A Fund would not be able to pass through to its shareholders any credit or
deduction for such a tax. An election may generally be available that would
ameliorate these adverse tax consequences, but any such election could require
the electing Fund to recognize taxable income or gain (subject to tax
distribution requirements) without the concurrent receipt of cash. These
investments could also result in the treatment of associated capital gains as
ordinary income. A 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.
If a Fund invests in certain pay-in-kind securities ("PIKs"), zero
coupon securities, deferred interest securities or, in general, any other
securities with original issue discount (or with market discount if the Fund
elects to include market discount in income currently), the Fund must accrue
income on such investments for each taxable year, which generally will be prior
to the receipt of the corresponding cash payments. However, each Fund must
distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid Federal income and excise taxes.
Therefore, a Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.
Equity-Income Fund may invest in debt obligations that are in the lower
rating categories or are unrated. Investments in debt obligations that are at
risk of or in default present special tax issues for the Equity-Income Fund. Tax
rules are not entirely clear about issues such as when Equity-Income Fund may
cease to accrue interest, original issue discount, or market discount, when and
to what extent deductions may be taken for bad debts or worthless securities,
how payments received on obligations in default should be allocated between
principal and income, and whether exchanges of debt obligations in a workout
context are taxable. These and other issues will be addressed by the
Equity-Income Fund, in the event it invests in such securities, in order to seek
to ensure that it distributes sufficient income to preserve its qualification as
a regulated investment company and does not become subject to federal income or
excise tax.
For federal income tax purposes, each Fund is permitted to carry
forward a net capital loss for any year to offset its own capital gains, if any,
during the eight years following the year of the loss. To the extent subsequent
capital gains are offset by such losses, they would not result in federal income
tax liability to the Fund and therefore are not expected to be distributed as
such to shareholders. As of the end of its most recent taxable year, Gold Shares
had a capital loss carryforward of $942,992 which will expire in 2005 if not
used; Capital Growth Fund and Equity-Income Fund had no capital loss
carryforwards
At the time of an investor's purchase of Fund shares, a portion of the
purchase price may be attributable to realized or unrealized appreciation in the
Fund's portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions by the Fund on these shares 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 economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events for shareholders that are
subject to tax. Shareholders should consult their own tax advisers with
reference to their individual circumstances to determine whether any particular
transaction in Fund shares is properly treated as a sale for tax purposes, as
the following discussion assumes, and the character of and tax rate applicable
to any gains or losses recognized in such transactions under the new rate
structure enacted in the 1997 TRA. Any loss realized by a shareholder upon the
redemption, exchange or other disposition of shares with a tax holding period of
six months or less will be treated as a long-term capital loss to the extent of
any amounts treated as distributions of long-term capital gain with respect to
such shares.
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In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment in the Fund 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 shares acquired in the reinvestment or exchange. Losses on
redemptions or other dispositions of shares may be disallowed under "wash sale"
rules in the event of other investments in the same Fund (including those made
pursuant to reinvestment of dividends and/or capital gain distributions) within
a period of 61 days beginning 30 days before and ending 30 days after a
redemption or other disposition of shares. In such a case, the disallowed
portion of any loss would be included in the federal tax basis of the shares
acquired in the other investments.
Options written or purchased and futures contracts entered into by a
Fund on certain 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 even though such options may not have lapsed, been
closed out, or exercised or such futures or forward contracts may not have been
performed or closed out. The tax rules applicable to these contracts may affect
the characterization as long-term or short-term of some capital gains and losses
realized by a Fund. Certain options, futures and forward contracts relating to
foreign currency may be subject to Section 988, as described above, and may
accordingly produce ordinary income or loss. Additionally, the Fund may be
required to recognize gain if an option, futures contract, forward contract, or
other transaction that is not subject to the mark to market rules is treated as
a "constructive sale" of an "appreciated financial position" held by the Fund
under Section 1259 of the Code. Any net mark to market gains and/or gains from
constructive sales may also have to be distributed to satisfy the distribution
requirements referred to above even though no corresponding cash amounts may
concurrently be received, possibly requiring the disposition of portfolio
securities or borrowing to obtain the necessary cash. 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. Certain tax elections may be
available that would enable a Fund to ameliorate some adverse effects of the tax
rules described in this paragraph. The tax rules applicable to options, futures
or forward contracts and straddles may affect the amount, timing and character
of a Fund's income and losses and hence of its distributions to shareholders.
For purposes of the 70% dividends-received deduction generally
available to corporations under the Code, dividends received by a Fund 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) extending
before and after each dividend 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 advisor 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 and, to
the extent such basis would be reduced below zero, current recognition of income
may be required. In order to qualify for the deduction, corporate shareholders
must meet the minimum holding period requirement stated above with respect to
their Fund shares, taking into account any holding period reductions from
certain hedging or other transactions or positions that diminish their risk of
loss with respect to their Fund shares, and, if they borrow to acquire or
otherwise incur debt attributable to Fund shares, they 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.
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A Fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains, with
respect to its investments, if any, in those countries. Tax conventions between
certain countries and the U.S. may reduce or eliminate such taxes in some cases.
Neither Capital Growth Fund nor Equity -Income Fund expects to satisfy the
requirements for passing through to its shareholders their pro rata shares of
qualified foreign taxes paid by the applicable Fund, with the result that
shareholders of these Funds 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. If more than 50% of total assets of Gold Shares at the close of
any taxable year consists of stock or securities of foreign corporations, that
Fund may elect to pass through to its shareholders their pro rata shares of
qualified foreign taxes paid by the Fund, with the result that shareholders
would be required to include such taxes in their gross incomes (in addition to
dividends and distributions they actually received), would treat such taxes as
foreign taxes paid by them, and may be entitled to a tax deduction or credit for
such taxes, subject to a holding period requirement added by the 1997 TRA and
other limitations under the Code.
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 that Fund (not in excess of the
Tax actually owed 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 the Fund makes the election
described above.
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. federal 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.
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 IRS Forms W-9, that the Social Security
Number or other Taxpayer Identification Number they provide is their correct
number and that they are not currently subject to backup withholding, or that
they are exempt from backup withholding. 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.
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If, as anticipated, each Fund qualifies as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes.
The description of certain federal tax provisions above relates only to
U.S. federal income tax consequences for shareholders who are U.S. persons, i.e.
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a possible 30% non-resident alien U.S. withholding tax (or
non-resident alien withholding tax at a lower treaty rate) on amounts treated as
ordinary dividends from a Fund and, unless an effective IRS Form W-8 or
authorized substitute for Form W-8 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.
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."
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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.
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 INTENT (Class A only)
A Letter of Intent ("LOI") may be established by completing the LOI
section of the Account Application. When you sign the Account Application, you
agree to irrevocably appoint PSC your attorney-in-fact to surrender for
redemption any or all shares held in escrow with full power of substitution. An
LOI is not a binding obligation upon the investor to purchase, or the Fund to
sell, the full amount indicated.
If the total purchases, less redemptions, exceed the amount specified under the
LOI and are in an amount which would qualify for a further quantity discount,
all transactions will be recomputed on the expiration date of the LOI to effect
the lower sales charge. Any difference in the sales charge resulting from such
recomputation will be either delivered to you in cash or invested in additional
shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.
If the total purchases, less redemptions, are less than the amount specified
under the LOI, you must remit to PFD any difference between the sales charge on
the amount actually purchased and the amount originally specified in the LOI
section of the Account Application. When the difference is paid, the shares held
in escrow will be deposited to your account. If you do not pay the difference in
sales charge within 20 days after written request from PFD or your dealer, PSC,
after receiving instructions from PFD, will redeem the appropriate number of
shares held in escrow to realize the difference and release any excess. See "How
to Purchase Fund Shares - Letter of Intent" in the Prospectus for more
information.
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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 payments 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 the
applicant . Designation of another person to receive the payments subsequent to
opening an account must be accompanied by a signature guarantee. 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.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
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 potentially 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 SWP have been
redeemed.
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 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, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of each
class of 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 the result 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.
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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; Standard & Poor's 500 Stock Index ( the "S&P 500"), an index
of unmanaged groups of common stock; the Dow Jones Industrial Average, a
recognized unmanaged index of common stocks of 30 industrial companies listed on
the Exchange; or the Russell U.S. Equity Indexes or the Wilshire Total Market
Value Index, which are recognized unmanaged indexes of broad based common
stocks.
In addition, the performance of the classes of 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.
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.
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.
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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 SEC.
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:
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.
31
<PAGE>
The total returns for Class A, Class B, and Class C shares of the Funds as of
October 31, 1997, are as follows:
One Five Life-of-
Class A Shares Year Years Fund
Capital Growth Fund 15.62% 20.46% 16.85%
Equity-Income Fund 22.92% 15.44% 15.18%
Gold Shares (29.57)% 1.80% (2.42)%
One Life-of-
Class B Shares Year Fund
Capital Growth Fund 17.70% 18.44%
Equity-Income Fund 25.35% 18.47%
Gold Shares (28.70)% (9.35))%
One Life-of-
Class C Shares Year Fund
Capital Growth Fund 21.74 14.75%
Equity-Income Fund 29.32 19.32%
Gold Shares (25.64) (21.56)%
During the five year and life-of-Fund periods, PMC temporarily agreed
to limit the operating expenses of the Fund's Class A shares as described in
"Investment Adviser." 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.
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 fund; and
o dividends and capital gains distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard
formulas.
32
<PAGE>
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 Cash Reserves Fund, which seeks to maintain 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 Annual Report dated October 31, 1997, (filed electronically
on December 24, 1997 file no. 33-34801; accession number 0000863334-97-000018,
0000863334-97-000019, and 0000863334-97-000020 is incorporated by reference into
and attached to this Statement of Additional Information in reliance upon the
report of Arthur Andersen LLP, independent public accountants, as experts in
accounting and auditing. A copy of each Fund's Annual Report may be obtained
without charge by calling Shareholder Services at 1-800-225-6292 or by written
request to the Trust at 60 State Street, Boston, Massachusetts 02109.
33
<PAGE>
APPENDIX A
DESCRIPTION OF BOND RATINGS1 [superscript]
MOODY'S INVESTORS SERVICE, INC.2 [superscript]
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 [superscript] THE RATINGS INDICATED HEREIN ARE BELIEVED TO BE THE MOST
RECENT RATINGS AVAILABLE AT THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION
FOR THE SECURITIES LISTED. RATINGS ARE GENERALLY GIVEN TO SECURITIES AT THE TIME
OF ISSUANCE. WHILE THE RATING AGENCIES MAY FROM TIME TO TIME REVISE SUCH
RATINGS, THEY UNDERTAKE NO OBLIGATION TO DO SO, AND THE RATINGS INDICATED DO NOT
NECESSARILY REPRESENT RATINGS WHICH WILL BE GIVEN TO THESE SECURITIES ON THE
DATE OF THE FUND'S FISCAL YEAR-END.
2 [superscript] 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.
34
<PAGE>
STANDARD & POOR'S RATINGS GROUP3 [superscript]
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 [superscript] RATES ALL GOVERNMENTAL BODIES HAVING $1,000,000 OR MORE OF
DEBT OUTSTANDING, UNLESS ADEQUATE INFORMATION IS NOT AVAILABLE.
35
<PAGE>
<TABLE>
<CAPTION>
Pioneer Capital Growth Fund
Class A
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial
Investment Price Purchased Value Net Asset
Included 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 $166 $23,827
12/31/96 $17,881 $8,464 $260 $26,605
12/31/97 $18,841 $11,991 $416 $31,248
<PAGE>
Pioneer Capital Growth Fund
Class B
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial
Investment Price Purchased Value Net Asset
Included 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 CDSC if Total Value CDSC %
Investment Gains
Reinvested Reinvested Redeemed
12/31/94 $10,542 $ 641 $0 $400 $11,183 4.00
12/31/95 $12,396 $2,107 $11 $400 $14,114 4.00
12/31/96 $13,132 $2,934 $12 $300 $15,778 3.00
12/31/97 $13,768 $4,960 $13 $300 $18,441 3.00
<PAGE>
Pioneer Capital Growth Fund
Class C
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial
Investment Price Purchased Value Net Asset
Included Per Share Value
1/31/96 $10,000 $18.69 1.00% 535.045 $18.69 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap. From Dividends CDSC if Total Value CDSC %
Investment Gains Redeemed
Reinvested Reinvested
12/31/96 $10,482 $479 $22 $100 $10,883 1.00%
12/31/97 $10,979 $1,791 $23 $0 $12,793 0.00%
<PAGE>
Pioneer Equity-Income Fund
Class A
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Price Sales Charge Shares Net Asset Initial Net
Investment Purchased Value Asset
Included 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
12/31/96 $15,776 $2,376 $4,315 $22,467
12/31/97 $20,258 $3,889 $6,158 $30,305
<PAGE>
Pioneer Equity-Income Fund
Class B
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Purchased Value Asset
Included 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 CDSC Total Value CDSC %
Investment Gains if Redeemed
Reinvested Reinvested
12/31/94 $9,793 $264 $230 $392 $9,895 4.00
12/31/95 $12,426 $435 $621 $400 $13,082 4.00
12/31/96 $13,034 $1,150 $913 $300 $14,797 3.00
12/31/97 $16,720 $2,038 $1,445 $300 $19,903 3.00
<PAGE>
Pioneer Equity-Income Fund
Class C
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Purchased Value Asset
Included Per Share Value
1/31/96 $10,000 $19.49 1.00% 513.084 $19.49 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap. From Dividends CDSC Total Value CDSC%
Investment Gains if Redeemed
Reinvested Reinvested
12/31/96 $10,328 $507 $192 $100 $10,927 1.00
12/31/97 $13,248 $1,062 $445 $0 $14,755 0.00
<PAGE>
Pioneer Gold Shares
Class A
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Purchased Value Asset
Included 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
12/31/96 $10,701 $128 $31 $10,860
12/31/97 $6,700 $80 $20 $6,800
<PAGE>
Pioneer Gold Shares
Class B
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Purchased Value Asset
Included 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 CDSC Total Value CDSC %
Investment Gains if Redeemed
Reinvested Reinvested
12/31/94 $9,157 $0 $0 $366 $8,791 4.00
12/31/95 $9,336 $0 $0 $373 $8,963 4.00
12/31/96 $9,349 $114 $0 $280 $9,182 3.00
12/31/97 $5,811 $ 71 $0 $174 $5,708 3.00
<PAGE>
Pioneer Gold Shares
Class C
<S> <C> <C> <C> <C> <C> <C>
Date Initial Offering Sales Charge Shares Net Asset Initial Net
Investment Price Purchased Value Asset
Included Per Share Value
1/31/96 $10,000 $8.70 1.00% 1,149.425 $8.70 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From From Cap From Dividends CDSC Total Value CDSC %
Investment Gains
Reinvested Reinvested if Redeemed
12/31/96 $8,413 $103 $0 $84 $8,432 1.00
12/31/97 $5,218 $ 64 $0 $0 $5,282 0.00
</TABLE>
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the Fund, do not reflect past
performance and do not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P 500 includes 500 of
the largest stocks (in terms of stock market value) in the U.S.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of stocks of 30 blue chip
companies widely held by individuals and institutional investors. The 30 stocks
represent about a fifth of the $8 trillion-plus market value of all U.S. stocks
and about a fourth of the value of stocks listed on the New York Stock Exchange
(NYSE).
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the NYSE, plus stocks listed on the American Stock Exchange and over the counter
with the same or less capitalization as the upper bound of the NYSE ninth
decile.
U.S. INFLATION
THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA GROWTH AND VALUE INDEXES are constructed by dividing the stocks in
the S&P 500 according to price-to-book ratios. The GROWTH INDEX contains stocks
with higher price-to-book ratios, and the VALUE INDEX contains stocks with lower
price-to-book ratios. Both indexes are market capitalization weighted.
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
MERRILL LYNCH MICRO-CAP INDEX
The MERRILL LYNCH MICRO-CAP INDEX represents the performance of 2,148 stocks
ranging in market capitalization from $5 million to $60 million. Index returns
are calculated monthly.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds after 1977 are constructed with
data from The Wall Street Journal and are calculated as the change in the flat
price or and-interest price. From 1926 to 1976, data are obtained from the
government bond file at the Center for Research in Security Prices (CRSP),
Graduate School of Business, University of Chicago. Each year, a one-bond
portfolio with a term of approximately 20 years and a reasonably current coupon
was used and whose returns did not reflect potential tax benefits, impaired
negotiability or special redemption or call privileges. Where callable bonds had
to be used, the term of the bond was assumed to be a simple average of the
maturity and first call dates minus the current date. The bond was "held" for
the calendar year and returns were computed.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of intermediate-term government bonds after 1977 are calculated
from The Wall Street Journal prices, using the change in flat price. Returns
from 1934 to 1976 are obtained from the CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five years, and this bond is
"held" for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds
with maturities near five years were partially or fully tax-exempt and were
selected using the rules described above. Personal tax rates were generally low
in that period, so that yields on tax-exempt bonds were similar to yields on
taxable bonds. From 1926 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI")
MSCI's indices are based on the share prices of approximately 1,700 companies
listed on stock exchanges in the 22 countries that make up the MSCI World Index.
MSCI's emerging market indices are comprised of approximately 1000 stocks from
26 countries.
Countries in the MSCI EAFE INDEX are: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia,
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and
United Kingdom.
Countries in the MSCI EMERGING MARKETS FREE INDEX are: Argentina, Brazil,
Canada, Chile, China, Czech Republic, Colombia, Greece, Hong Kong, Hungary,
Indonesia, Jordan, Korea (at 50%),
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
Malaysia, Mexico Free, Pakistan, Peru, Philippines Free, Poland, Portugal,
South Africa, Sri Lanka, Taiwan (at 50%), Thailand Free, Turkey and Venezuela
Free.
6-MONTH CDS
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
Since 1969, corporate bond total returns are represented by the Salomon Brothers
Long-Term High-Grade Corporate Bond Index. As most large corporate bond
transactions take place over the counter, a major dealer is the natural source
of these data. The index includes nearly all Aaa- and Aa-rated bonds. If a bond
is downgraded during a particular month, its return for the month is included in
the index before removing the bond from future portfolios.
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 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 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
coupon and a 20-year maturity. The conventional present-value formula for bond
price for the beginning and end-of-month prices was used. (This formula is
presented in Ross, Stephen A., and Randolph W. Westerfield, Corporate Finance,
Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly
income return was assumed to be one-twelfth the coupon.
U.S. (30-DAY) TREASURY BILLS
For the U.S. TREASURY BILL INDEX, data from The Wall Street Journal are used
after 1977; the CRSP government bond file is the source until 1976. Each month a
one-bill portfolio containing the shortest-term bill having not less than one
month to maturity is constructed. (The bill's original term to maturity is not
relevant.) To measure holding period returns for the one-bill portfolio, the
bill is priced as of the last trading day of the previous month-end and as of
the last trading day of the current month.
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS ("NAREIT")EQUITY REIT
INDEX All of the data are based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighting at the beginning of the period.
Only those REITs listed for the entire period are used in the
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
total return calculation. Dividends are included in the month based upon
their payment date. There is no smoothing of income. Liquidating dividends,
whether full or partial, are treated as income.
RUSSELL U.S. EQUITY INDEXES
The RUSSELL 3000AE INDEX (the "Russell 3000") is comprised of the 3,000 largest
U.S. companies as determined by market capitalization representing approximately
98% of the U.S. equity market. The average market capitalization is
approximately $2.8 billion. The RUSSELL 2500TM INDEX measures performance of the
2,500 smallest companies in the Russell 3000. The average market capitalization
is approximately $733.4 million, and the largest company in the index has an
approximate market capitalization of $2.9 billion. The RUSSELL 2000AE INDEX
measures performance of the 2,000 smallest stocks in the Russell 3000; the
largest company in the index has a market capitalization of approximately $1.1
billion. The RUSSELL 1000AE INDEX (the "Russell 1000") measures the performance
of the 1,000 largest companies in the Russell 3000. The average market
capitalization is approximately $7.6 billion. The smallest company in the index
has an approximate market capitalization of $1.1 billion. The RUSSELL MIDCAPTM
INDEX measures performance of the 800 smallest companies in the Russell 1000.
The largest company in the index has an approximate market capitalization of
$8.0 billion.
The Russell indexes are reconstituted annually as of June 1, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The WILSHIRE REAL ESTATE SECURITIES INDEX is a market capitalization weighted
index of 120 publicly traded real estate securities, such as REITs, real estate
operating companies ("REOCs") and partnerships.
The index contains performance data on five major categories of property:
office, retail, industrial, apartment and miscellaneous. The companies in the
index are 91.33% equity and hybrid REITs and 8.33% REOCs.
STANDARD & POOR'S MIDCAP 400 INDEX
The S&P 400 is a market-value-weighted index. The performance data for the index
were calculated by taking the stocks presently in the index and tracking them
backwards in time as long as there were prices reported. No attempt was made to
determine what stocks "might have been" in the S&P 400 five or ten years ago had
it existed. Dividends are reinvested on a monthly basis prior to June 30, 1991,
and are reinvested daily thereafter.
LIPPER BALANCED FUNDS INDEX
This index represents equally weighted performance, adjusted for capital gains
distributions and income dividends, of approximately 30 of the largest funds
with a primary objective of conserving
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
principal by maintaining at all times a balanced portfolio of stocks and
bonds. Typically, the stock/bond ratio ranges around 60%/40%.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963 to 1987; and The Wall Street Journal thereafter.
Sources: Ibbotson Associates, Towers Data Systems, Lipper Analytical
Services, Inc. and PGI
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/
S&P JONES U.S. SMALL BARRA BARRA MERRILL LYNCH
500 INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP
AVERAGE INDEX INFLATION GROWTH VALUE INDEX
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.34 -49.02 -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A N/A
Dec 1933 53.99 73.72 142.87 0.51 N/A N/A N/A
Dec 1934 -1.44 8.08 24.22 2.03 N/A N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A N/A
Dec 1942 20.34 14.13 44.51 9.29 N/A N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/
S&P JONES U.S. SMALL BARRA 500 BARRA MERRILL LYNCH
500 INDUSTRIAL STOCK U.S. GROWTH 500 MICRO-CAP
AVERAGE INDEX INFLATION VALUE INDEX
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53 36.62
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64 1.81
Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99 30.70
Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99 13.88
Dec 1997 33.36 24.88 22.78 1.92 36.52 29.98 24.61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
LONG- INTERMEDIATE- MSCI LONG-
TERM TERM U.S. EAFE 6- TERM U.S. U.S.
U.S. GOV'T GOVERNMENT (Net of MONTH CORPORATE T-BILL
BONDS BONDS Taxes) CDS BONDS (30-Day)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
LONG- INTERMEDIATE- MSCI LONG-
TERM TERM U.S. EAFE 6- TERM U.S. U.S.
U.S. GOV'T GOVERNMENT (Net of MONTH CORPORATE T-BILL
BONDS BONDS Taxes) CDS BONDS (30-Day)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT LIPPER MSCI
EQUITY RUSSELL WILSHIRE BALANCED EMERGING BANK
REIT 2000 REAL ESTATE S&P FUND MARKETS SAVINGS
INDEX INDEX SECURITIES 400 INDEX FREE INDEX ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT LIPPER MSCI
EQUITY RUSSELL WILSHIRE BALANCED EMERGING BANK
REIT 2000 REAL ESTATE S&P FUND MARKETS SAVINGS
INDEX INDEX SECURITIES 400 INDEX FREE INDEX ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 22.20 35.58 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92
Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 -7.32 4.96
Dec 1995 15.27 28.44 13.65 30.94 24.89 -5.21 5.24
Dec 1996 35.26 16.53 36.87 19.20 13.01 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.26 20.05 -11.59 5.17
Source: Lipper Analytical Services. Inc.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX B
- --------------------------------------------------------------------------------
OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the United States.
As of December 31, 1997, PMC employed a professional investment staff of 58,
with a combined average of 12 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1997, were
approximately $19.8 billion representing 1,177,148 shareholder accounts, 791,468
non-retirement accounts and 385,680 retirement accounts.
<PAGE>
File Nos. 33-34801
811-06106
FORM N-1A
PIONEER GROWTH TRUST
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial highlights of the Registrant for the
fiscal year ended October 31, 1997 are included in
Part A of the Registration Statement and the
financial statements of the Registrant are
incorporated by reference into Part B of the
Registration Statement from the 1997 Annual Reports
to Shareholders for the year ended October 31,
1997 (filed electronically on December 24, 1997
file no. 33-34801; accession number
0000863334-97-000018, 0000863334-97-000019,
and 0000863334-97-000020 ).
(b) Exhibits:
1. Amended and Restated Declaration of Trust*****
1.1 Establishment and Designation of Classes*****
1.2 Establishment and Designation of Classes*****
2 Amended and Restated By-Laws*****
3. None
4. Specimen Stock Certificate**
5.1 Management Contract between Pioneering Management Corporation ("PMC")
and Registrant on behalf of Pioneer Capital Growth Fund, effective
1/1/94*****
5.2 Management Contract between PMC and Registrant on behalf of
Pioneer Equity-Income Fund, effective 1/1/94*****
5.3 Management Contract between PMC and Registrant on behalf of
Pioneer Gold Shares, effective 1/1/94*****
6. Underwriting Agreement**
6.1 Form of Dealer Sale Agreement*****
7. None
8.1 Custodian Agreement with Brown
Brothers Harriman & Co., dated January
14, 1992, on behalf of Pioneer Capital
Growth Fund*****
8.2 Custodian Agreement with Brown
Brothers Harriman & Co., dated January
14, 1992, on behalf of Pioneer Equity
Income Fund*****
<PAGE>
8.3 Custodian Agreement with Brown
Brothers Harriman & Co., dated January 14, 1992, on behalf of Pioneer
Gold Shares*****
9. Investment Company Service Agreement*****
10. None
11. Consent of Arthur Andersen LLP+
12. None
13. Form of Stock Purchase Agreement*******
14. Rule 24f-2 Opinion******
15.1 Form of Distribution Plan*******
15.2 Class B Rule 12b-1 Distribution
Plans for Pioneer Capital Growth Fund,
Pioneer Equity-Income Fund and Pioneer Gold
Shares*****
15.3 Class C Rule 12b-1 Distribution Plans for Pioneer Capital Growth Fund,
Pioneer Equity-Income Fund and Pioneer Gold Shares*****
16. Description of Average Annual Total Return*
17. Financial Data Schedules for Pioneer Gold Shares+
Financial Data Schedules for Pioneer Capital Growth Fund +
Financial Data Schedules for Pioneer Equity-Income Fund +
18.1 Multiple Class Plan Pursuant to Rule 18f-3, dated October 4, 1995, for
Pioneer Capital Growth Fund, Pioneer Equity-Income Fund and Pioneer
Gold Shares*****
18.2 Multiple Class Plan Pursuant to Rule 18f-3, dated
January 31, 1996, for Pioneer Capital Growth Fund, Pioneer
Equity-Income Fund and Pioneer Gold Shares*****
19.1 Powers of Attorney**/***
19.2 Power of Attorney****
19.3 Power of Attorney*****
19.4 Power of Attorney for Mary K. Bush+
- -----------------------
+ Filed electronically herewith.
* Incorporated by reference from the Registrant's Registration
Statement on Form N-1A (File No. 33-34801) ("Registration Statement") as filed
with the Securities and Exchange Commission ("SEC") on May 9, 1990.
** Incorporated by reference from the Registrant's Pre-Effective Amendment
No. 1 to the Registration Statement as filed with the SEC on June 29, 1990.
*** Incorporated by reference from the Registrant's
Post-Effective Amendment No. 3 to the Registration Statement as filed with the
SEC on February 26, 1993.
**** Incorporated by reference from Registrant's
Post-Effective Amendment No. 4 to the Registration Statement as filed with the
SEC on December 27, 1993.
***** Incorporated by reference from Registrant's
Post-Effective Amendment No. 6 to the Registration Statement as filed with the
SEC on February 25, 1996.
****** Incorporated by reference from Registrant's Rule 24f-2 Notice filing
(Accession No. 0000863334-96-000018) as filed with the SEC on December 27, 1996.
******* Incorporated by reference from Registrant's
Post-Effective Amendment No. 7 to the Registration Statement as filed with the
SEC on February 25, 1997.
Item 25. Persons Controlled by or Under Common Control with Registrant
No person is controlled by the Registrant. A common control relationship
could exist from a management perspective because the Chairman and President of
the Registrant owns approximately 14%of the outstanding shares of The Pioneer
Group, Inc. (PGI), the parent company of the Registrant's investment adviser,
and certain Trustees or officers of the Registrant (i) hold similar positions
with other investment companies advised by PGI and (ii) are directors or
officers of PGI and/or its direct or indirect subsidiaries. The following lists
all U.S. and the principal non-U.S. subsidiaries of PGI and those registered
investment companies with a common or similar Board of Trustees advised by PGI.
OWNED BY PERCENT STATE/COUNTRY OF
COMPANY OF SHARES INCORPORATION
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneer Funds Distributor, Inc. (PFD) PMC 100% MA
Pioneer Explorer, Inc. (PEI) PMC 100% DE
Pioneer Fonds Marketing GmbH (GmbH) PFD 100% Germany
Pioneer Forest, Inc. (PFI) PGI 100% DE
CJSC "Forest-Starma" (Forest-Starma) PFI 95% Russia
Pioneer Metals and Technology, Inc. (PMT) PGI 100% DE
Pioneer Capital Corp. (PCC) PGI 100% DE
Pioneer SBIC Corp. PCC 100% MA
Pioneer Real Estate Advisors, Inc. (PREA) PGI 100% DE
Pioneer Management (Ireland) Ltd. (PMIL) PGI 100% Ireland
Pioneer Plans Corporation (PPC) PGI 100% DE
PIOGlobal Corp. (PIOGlobal) PGI 100% DE
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Goldfields Holdings, Inc. (PGH) PGI 100% DE
Pioneer Goldfields Ltd. (PGL) PGH 100% Gurensey
Teberebie Goldfields Ltd. (TGL) PGL 90% Ghana
Pioneer Omega, Inc. (Omega) PGI 100% DE
Pioneer First Russia, Inc. (First Russia) Omega 81.65% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer International Corp. (PIntl) PGI 100% DE
Pioneer First Polish Trust Fund JSC, S.A.
(First Polish) PIntl 100% Poland
Pioneer Czech Investment Company, A.S.
(Pioneer Czech) PIntl 100% Czech Republic
Registered investment companies that are parties to management contracts with
PMC:
BUSINESS
FUND TRUST
Pioneer International Growth Fund MA
Pioneer World Equity Fund DE
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Fund DE
Pioneer II DE
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Fund MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Balanced Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares DE
Pioneer Micro-Cap Fund DE
The following table list's John F. Cogan, Jr.'s positions with the
investment companies, PGI and principal direct or indirect PGI subsidiaries
referenced above and the Registrant's counsel.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
Pioneer mutual
funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
PIntl X X
PMT X X
Omega X X
PIOGlobal X X
First Russia X X
PCC X
PSC X
PMIL X
PEI X
PFI X
PREA X
Forest-Starma X
PMC X X
PFD X X
TGL X X
First Polish Chairman of Supervisory
Board
GmbH Chairman of Supervisory
Board
Pioneer Czech Chairman of Supervisory
Board
Hale and Dorr LLP Partner
Item 26. Number of Holders of Securities
The following table sets forth the approximate number of
record holders of each class of securities of the Registrant as of December
31, 1997:
Number of
Record Holders
Fund Class A Class B Class C
Capital Growth 105,678 52,346 2,750
Equity-Income 25,804 12,659 921
Gold Shares 3,209 770 152
<PAGE>
Item 27. Indemnification
Except for the Amended and Restated Declaration of Trust (the
"Declaration of Trust") dated December 7, 1993, establishing the Registrant as a
Trust under Massachusetts law, there is no contract, arrangement or statute
under which any director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified. The Declaration of Trust provides that no
Trustee or officer will be indemnified against any liability to which the
Registrant would otherwise be subject by reason of or for willful misfeasance,
bad faith, gross negligence or reckless disregard of such person's duties.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in
the Form ADV, as amended, of Pioneering Management Corporation. The following
sections of such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice President and
Trustee
Steven M. Graziano Senior Vice President None
Stephen W. Long Senior Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Bennett Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Mary Kleeman Vice President None
Steven R. Berke Assistant Vice President None
Steven H. Forss Assistant Vice President None
Mary Sue Hoban Assistant Vice President None
Debra A. Levine Assistant Vice President None
Junior Roy McFarland Assistant Vice President None
Marie E. Moynihan Assistant Vice President None
<PAGE>
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
The principle business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's
office at 60 State Street, Boston, Massachusetts; contact the Treasurer.
Item 31. Management Services
The Registrant is a party to only one contract, described in
each Fund's Prospectus and the Statement of Additional Information, under which
it receives services from Pioneering Management Corporation.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) The Registrant hereby undertakes to deliver or cause to be delivered
with the Prospectus, to each person to whom the Prospectus is sent or
given, a copy of the Registrant's report to shareholders furnished
pursuant to and meeting the requirements of Rule 30d-1 under the
Investment Company Act of 1940, as amended, from which the specified
information is incorporated by reference, unless such person currently
holds securities of the Registrant and otherwise has received a copy
of such report, in which case the Registrant shall state in the
Prospectus that it will furnish, without charge, a copy of such report
on request, and the name, address and telephone number of the person
to whom such a request should be directed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this post-effective amendment no. 8 (the
"Amendment") to the Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
The Commonwealth of Massachusetts, on the 2nd day of February, 1998.
PIONEER GROWTH TRUST
By: /s/ David D. Tripple
David D. Tripple
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment has been signed below by the following persons in the
capacities and on the dates indicated:
Title and Signature Date
Principal Executive Officer: )
)
)
John F. Cogan, Jr. )
John F. Cogan, Jr., President )
)
Principal Financial and )
Accounting Officer: )
)
)
/s/William H. Keough* )
William H. Keough, Treasurer )
A MAJORITY OF THE BOARD OF TRUSTEES:
John F. Cogan, Jr. )
John F. Cogan, Jr., Trustee )
)
Mary K. Bush* )
Mary K. Bush, Trustee )
)
Richard H. Egdahl, M.D.* )
Richard H. Egdahl, Trustee )
)
Margaret B.W. Graham* )
Margaret B.W. Graham, Trustee )
)
John W. Kendrick* )
John W. Kendrick, Trustee )
)
Marguerite A. Piret* )
Marguerite A. Piret, Trustee )
)
/s/David D. Tripple* )
David D. Tripple, Trustee )
)
Stephen K. West* )
Stephen K. West, Trustee )
)
John Winthrop* )
John Winthrop, Trustee )
*By: /s/ David D. Tripple Dated: February 2, 1998
David D. Tripple
Attorney-in-fact
<PAGE>
Exhibit Index
Sequential
Exhibit Page
Number Document Title Number
11. Consent of Arthur Andersen LLP
17. Financial Data Schedules for Pioneer Gold Shares
Financial Data Schedules for Pioneer Capital Growth Fund
Financial Data Schedules for Pioneer Equity-Income Fund
19.4 Power of Attorney for Mary K. Bush
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
dated December 3, 1997 (and all references to our firm) included in or made a
part of Pioneer Growth Trust's (comprised of Pioneer Capital Growth Fund,
Pioneer Equity-Income Fund and Pioneer Gold Shares) Post-Effective Amendment No.
8 and Amendment No. 9 to Registration Statement File Nos. 33-34801 and
811-06106, respectively.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
Janauary 30, 1998
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
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<GROSS-EXPENSE> 28116817
<AVERAGE-NET-ASSETS> 46389556
<PER-SHARE-NAV-BEGIN> 19.53
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 4.11
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> (0.88)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.69
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
ON FORM N-SAR DATED OCTOBER 31, 1997 FOR PIONEER GROWTH TRUST AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000863334
<NAME> PIONEER GROWTH TRUST
<SERIES>
<NUMBER> 021
<NAME> PIONEER EQUITY-INCOME FUND CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 486968955
<INVESTMENTS-AT-VALUE> 663392656
<RECEIVABLES> 4094168
<ASSETS-OTHER> 9043
<OTHER-ITEMS-ASSETS> 333
<TOTAL-ASSETS> 667496200
<PAYABLE-FOR-SECURITIES> 108750
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1403282
<TOTAL-LIABILITIES> 1512032
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 468426439
<SHARES-COMMON-STOCK> 18255857
<SHARES-COMMON-PRIOR> 16516465
<ACCUMULATED-NII-CURRENT> 2166552
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18967476
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 176423701
<NET-ASSETS> 665984168
<DIVIDEND-INCOME> 18932158
<INTEREST-INCOME> 146157
<OTHER-INCOME> 0
<EXPENSES-NET> (7680721)
<NET-INVESTMENT-INCOME> 11397594
<REALIZED-GAINS-CURRENT> 19772281
<APPREC-INCREASE-CURRENT> 116333355
<NET-CHANGE-FROM-OPS> 147503230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8790651)
<DISTRIBUTIONS-OF-GAINS> (15676400)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3879341
<NUMBER-OF-SHARES-REDEEMED> 3257004
<SHARES-REINVESTED> 1117055
<NET-CHANGE-IN-ASSETS> 190799114
<ACCUMULATED-NII-PRIOR> 1465184
<ACCUMULATED-GAINS-PRIOR> 22198942
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3512705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7747831
<AVERAGE-NET-ASSETS> 395961545
<PER-SHARE-NAV-BEGIN> 20.37
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> 5.36
<PER-SHARE-DIVIDEND> (0.50)
<PER-SHARE-DISTRIBUTIONS> (0.95)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.78
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
ON FORM N-SAR DATED OCTOBER 31, 1997 FOR PIONEER GROWTH TRUST AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000863334
<NAME> PIONEER GROWTH TRUST
<SERIES>
<NUMBER> 022
<NAME> PIONEER EQUITY-INCOME FUND CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 486968955
<INVESTMENTS-AT-VALUE> 663392656
<RECEIVABLES> 4094168
<ASSETS-OTHER> 9043
<OTHER-ITEMS-ASSETS> 333
<TOTAL-ASSETS> 667496200
<PAYABLE-FOR-SECURITIES> 108750
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1403282
<TOTAL-LIABILITIES> 1512032
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 468426439
<SHARES-COMMON-STOCK> 8173793
<SHARES-COMMON-PRIOR> 6647149
<ACCUMULATED-NII-CURRENT> 2166552
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18967476
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 176423701
<NET-ASSETS> 665984168
<DIVIDEND-INCOME> 18932158
<INTEREST-INCOME> 146157
<OTHER-INCOME> 0
<EXPENSES-NET> (7680721)
<NET-INVESTMENT-INCOME> 11397594
<REALIZED-GAINS-CURRENT> 19772281
<APPREC-INCREASE-CURRENT> 116333355
<NET-CHANGE-FROM-OPS> 147503230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2466847)
<DISTRIBUTIONS-OF-GAINS> (6437316)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2439283
<NUMBER-OF-SHARES-REDEEMED> 1304045
<SHARES-REINVESTED> 391406
<NET-CHANGE-IN-ASSETS> 190799114
<ACCUMULATED-NII-PRIOR> 1465184
<ACCUMULATED-GAINS-PRIOR> 22198942
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3512705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7747831
<AVERAGE-NET-ASSETS> 169266242
<PER-SHARE-NAV-BEGIN> 20.26
<PER-SHARE-NII> 0.33
<PER-SHARE-GAIN-APPREC> 5.32
<PER-SHARE-DIVIDEND> (0.33)
<PER-SHARE-DISTRIBUTIONS> (0.95)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.63
<EXPENSE-RATIO> 1.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL REPORT
ON FORM N-SAR DATED OCTOBER 31, 1997 FOR PIONEER GROWTH TRUST AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000863334
<NAME> PIONEER GROWTH TRUST
<SERIES>
<NUMBER> 023
<NAME> PIONEER EQUITY-INCOME FUND CLASS C
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 486968955
<INVESTMENTS-AT-VALUE> 663392656
<RECEIVABLES> 4094168
<ASSETS-OTHER> 9043
<OTHER-ITEMS-ASSETS> 333
<TOTAL-ASSETS> 667496200
<PAYABLE-FOR-SECURITIES> 108750
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1403282
<TOTAL-LIABILITIES> 1512032
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 468426439
<SHARES-COMMON-STOCK> 500746
<SHARES-COMMON-PRIOR> 204609
<ACCUMULATED-NII-CURRENT> 2166552
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18967476
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 176423701
<NET-ASSETS> 665984168
<DIVIDEND-INCOME> 18932158
<INTEREST-INCOME> 146157
<OTHER-INCOME> 0
<EXPENSES-NET> (7680721)
<NET-INVESTMENT-INCOME> 11397594
<REALIZED-GAINS-CURRENT> 19772281
<APPREC-INCREASE-CURRENT> 116333355
<NET-CHANGE-FROM-OPS> 147503230
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (116752)
<DISTRIBUTIONS-OF-GAINS> (212007)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 325018
<NUMBER-OF-SHARES-REDEEMED> 40498
<SHARES-REINVESTED> 11617
<NET-CHANGE-IN-ASSETS> 190799114
<ACCUMULATED-NII-PRIOR> 1465184
<ACCUMULATED-GAINS-PRIOR> 22198942
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3512705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7747831
<AVERAGE-NET-ASSETS> 8167106
<PER-SHARE-NAV-BEGIN> 20.25
<PER-SHARE-NII> 0.32
<PER-SHARE-GAIN-APPREC> 5.32
<PER-SHARE-DIVIDEND> (0.33)
<PER-SHARE-DISTRIBUTIONS> (0.95)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.61
<EXPENSE-RATIO> 1.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
PIONEER EMERGING MARKETS FUND
PIONEER EUROPE FUND
PIONEER GROWTH TRUST
PIONEER INDIA FUND
PIONEER INTERNATIONAL GROWTH FUND
PIONEER WORLD EQUITY FUND
PIONEER GROWTH SHARES
PIONEER MID-CAP FUND
PIONEER SMALL COMPANY FUND
PIONEER MICRO-CAP FUND
PIONEER BALANCED FUND
PIONEER FUND
PIONEER II
PIONEER REAL ESTATE SHARES
PIONEER AMERICA INCOME TRUST
PIONEER BOND FUND
PIONEER SHORT TERM INCOME TRUST
PIONEER INTERMEDIATE TAX-FREE FUND
PIONEER MONEY MARKET TRUST
POWER OF ATTORNEY
Dated October 7, 1997
I, the undersigned Trustee of each of the above-listed registered
investment companies (each a "Fund"), each a Delaware or a Massachusetts
business trust, do hereby constitute and appoint John F. Cogan, Jr., David D.
Tripple, and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in my capacity as trustee,
any and all amendments to the Registration Statement on Form N-1A to be filed by
each Fund under the Investment Company Act of 1940, as amended (the "1940 Act"),
and under the Securities Act of 1933, as amended (the "1933 Act"), with respect
to the offering of its shares of beneficial interest and any and all other
documents and papers relating thereto, and generally to do all such things in my
name and on my behalf in my capacity as trustee to enable each Fund to comply
with the 1940 Act and the 1933 Act, and all requirements of the Securities and
Exchange Commission thereunder, hereby ratifying and confirming my signature as
it may be signed by said attorneys or each of them to any and all amendments to
said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument as
of the date first written above.
/s/ Mary K. Bush
Mary K. Bush, Trustee
