File Nos. 333-46499 and 811-08661
(formerly File Nos. 33-34801 and 811-06106)
As Filed with the Securities and Exchange Commission on June 23, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. 1 / X /
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Post-Effective Amendment No. / /
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and/or
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
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Amendment No. 1 / X /
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(Check appropriate box or boxes)
PIONEER GOLD SHARES
(formerly Pioneer Growth Trust -- Pioneer Gold Shares)
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Joseph P. Barri, Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration statement under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
Title of Shares Being Registered: Shares of Beneficial Interest (without par
value).
<PAGE>
PIONEER GOLD SHARES
Cross-Reference Sheet Showing Location in the Prospectus and Statement of
Additional 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 - Cover Page; Investment
Objective and Policies; Management of
the Fund; Fund Share Alternatives;
Share Price; How to Buy Fund Shares;
How to Sell Fund Shares; How to
Exchange Fund Shares; The Fund;
Appendix--Certain Investment Practices
5. Management of the Fund Prospectus - Management of the Fund;
Shareholder Services
5A. Management's Discussion of Fund
Performance Not Applicable
6. Capital Stock and Other Securities Prospectus - Investment Objective and
Policies; Management of the Fund; Fund
Share Alternatives; Share Price; How to
Buy Fund Shares; How to Sell Fund
Shares; How to Exchange Fund Shares;
Dividends, Distributions and Taxation;
The Fund
7. Purchase of Securities Being
Offered Prospectus - Management of the Fund;
Distribution Plans; Fund Share
Alternatives; Share Price; How to Buy
Fund Shares; How to Sell Fund Shares;
How to Exchange Fund Shares;
Shareholder Services
8. Redemption or Repurchase Prospectus - Fund Share Alternatives;
How to Buy Fund Shares; How to Sell
Fund Shares; How to Exchange 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 -
Description of Shares
13. Investment Objectives and Policies Statement of Additional Information -
Investment Policies and Restrictions;
Appendix A
14. Management of the Fund Statement of Additional Information -
Management of the Fund
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 Fund; Investment
Adviser; Underwriting Agreement and
Distribution Plans; Shareholder
Servicing/Transfer Agent; Custodian;
Principal Underwriter; Independent
Public Accountants; Appendix C
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
19. Purchase, Redemption and Pricing
of Securities Being Offered Statement of Additional Information -
Letter of Intent; Systematic Withdrawal
Plan; Determination of Net Asset Value
20. Tax Status Statement of Additional Information -
Tax Status
21. Underwriters Statement of Additional Information -
Underwriting Agreement and Distribution
Plans; Principal Underwriter
22. Calculation of Performance Data Statement of Additional Information -
Investment Results; Appendix B
23. Financial Statements Statement of Additional Information -
Financial Statements
<PAGE>
[Pioneer Logo]
PIONEER
GOLD SHARES
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
JULY 1, 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. There
is no assurance that the Fund will achieve its investment objective.
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 July 1, 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 Fund at 60
State Street, Boston, Massachusetts 02109. Other information about the Fund 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>
<CAPTION>
TABLE OF CONTENTS PAGE
--------------------------------------------------------- -----
<S> <C> <C>
I. EXPENSE INFORMATION ..................................... 2
II. FINANCIAL HIGHLIGHTS .................................... 3
III. INVESTMENT OBJECTIVE AND POLICIES ....................... 5
IV. MANAGEMENT OF THE FUND .................................. 6
V. FUND SHARE ALTERNATIVES ................................. 8
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 ...................................... 14
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 .................. 16
Distribution Options ................................... 16
Directed Dividends ..................................... 16
Direct Deposit ......................................... 16
Voluntary Tax Withholding .............................. 16
Telephone Transactions ................................. 16
FactFone(SM) ........................................... 16
Retirement Plans ....................................... 16
Telecommunications Device for the Deaf (TDD) ........... 17
Systematic Withdrawal Plans ............................ 17
Reinstatement Privilege (Class A Shares Only) .......... 17
XIII. THE FUND ................................................ 17
XIV. INVESTMENT RESULTS ...................................... 18
APPENDIX--CERTAIN INVESTMENT PRACTICES .................. 18
</TABLE>
-------------------
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 Fund was reorganized as a Delaware business trust on June 30, 1998.
The table reflects annual operating expenses based upon actual expenses incurred
for the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <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):
Management Fee (after fee reduction)(3) .. 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) .......................... 1.04% 1.06% 0.93%
----- ----- -----
TOTAL OPERATING EXPENSES (after
reductions)(4) ............................ 1.74% 2.51% 2.38%
===== ===== =====
</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 United States
("U.S.") and international wire transfers of redemption proceeds.
(3) 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 share operating expenses of the Fund to
1.75% of the average daily 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 after the end of the current fiscal year.
(4) Expenses do not reflect reductions due to certain third-party brokerage/
service and/or expense offset arrangements. Because of those arrangements
"Other Expenses" were 1.02%, 1.04% and 0.88% and "Total Operating Expenses"
were 1.72%, 2.49% and 2.33% for Class A, Class B and Class C shares,
respectively, for the fiscal year ended October 31, 1997. See "Financial
Highlights."
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
EXPENSES ABSENT FEE AND EXPENSE
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%
</TABLE>
EXAMPLE:
You would pay the following expenses on a $1,000 investment, with or
without redemption at the end of each time period, 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 $74 $109 $146 $251
Class B Shares*
--Assuming complete redemption
at end of period $65 $108 $154 $266
--Assuming no redemption $25 $ 78 $134 $266
Class C Shares**
--Assuming complete redemption
at end of period $34 $ 74 $127 $272
--Assuming no redemption $24 $ 74 $127 $272
</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 RETURNS. 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, Rule 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 paying more than the economic equivalent of the maximum
sales charge permitted under the Conduct Rules of the National Association of
Securities Dealers, Inc.
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 reports on the Fund's
financial statements as of October 31, 1997 and April 30, 1998 appear in the
Fund's Annual and Semiannual Reports, respectively, which are incorporated by
reference into the Statement of Additional Information. The information listed
below should be read in conjunction with those financial statements. The Annual
and Semiannual Reports include more information about the Fund's performance and
are 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
SIX MONTHS
ENDED
APRIL 30,
1998
------------------
<S> <C>
Net asset value, beginning of period ............ $ 5.77
-------
Increase (decrease) from investment operations:
Net investment income (loss) ................... $ --
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions .................................. (0.21)
-------
Net increase (decrease) from investment
operations ..................................... $ (0.21)
Distributions to shareholders:
Net investment income .......................... --
Net realized gain .............................. --
-------
Net increase (decrease) in net asset value ...... $ (0.21)
-------
Net asset value, end of period .................. $ 5.56
=======
Total return* ................................... (3.64)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..... 1.81%**+
Ratio of net investment income (loss) to
average net assets ............................. (0.15)%**+
Portfolio turnover rate ......................... 38%**
Average brokerage commission per share .......... $0.0437
Net assets, end of period (in thousands) ........ $25,975
Ratios assuming no waiver of management
fees and assumption of expenses by PMC
and no reduction for fees paid indirectly:
Net expenses ................................... 2.18%**
Net investment income (loss) ................... (0.52)%**
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses ................................... 1.75%**
Net investment income (loss) ................... (0.09)%**
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 7.81 $ 6.80 $ 7.94 $ 7.44 $ 5.03
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) ................... $ (0.01) $ (0.01) $ (0.01) $ (0.03) $ (0.03)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions .................................. (1.94) 1.02 (1.13) 0.53 2.44
------- ------- ------- ------- -------
Net increase (decrease) from investment
operations ..................................... $ (1.95) $ 1.01 $ (1.14) $ 0.50 $ 2.41
Distributions to shareholders:
Net investment income .......................... -- -- -- -- --
Net realized gain .............................. (0.09) -- -- -- --
------- ------- ------- ------- -------
Net increase (decrease) in net asset value ...... $ (2.04) $ 1.01 $ (1.14) $ 0.50 $ 2.41
------- ------- ------- ------- -------
Net asset value, end of period .................. $ 5.77 $ 7.81 $ 6.80 $ 7.94 $ 7.44
======= ======= ======= ======= =======
Total return* ................................... (25.24)% 14.85% (14.36)% 6.72% 47.91%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..... 1.74%+ 1.72%+ 1.76%+ 1.75% 1.75%
Ratio of net investment income (loss) to
average net assets ............................. (0.08)%+ (0.13)%+ (0.16)%+ (0.40)% (0.52)%
Portfolio turnover rate ......................... 22% 15% 6% 3% 6%
Average brokerage commission per share .......... $0.0418 $0.0349 -- -- --
Net assets, end of period (in thousands) ........ $28,638 $36,028 $24,412 $26,168 $14,057
Ratios assuming no waiver of management
fees and assumption of expenses by PMC
and no reduction for fees paid indirectly:
Net expenses ................................... 1.93% 1.88% 2.28% 2.14% 3.23%
Net investment income (loss) ................... (0.27)% (0.29)% (0.68)% (0.79)% (2.00)%
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses ................................... 1.72% 1.71% 1.75% -- --
Net investment income (loss) ................... (0.06)% (0.12)% (0.15)% -- --
<CAPTION>
7/25/90
------------------
FOR THE YEAR ENDED OCTOBER 31, (COMMENCEMENT
------------------------------ OF OPERATIONS) TO
1992 1991 10/31/90
-------- ------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period ............ $ 5.35 $ 5.33 $ 6.50
------ ------ -------
Increase (decrease) from investment operations:
Net investment income (loss) ................... $(0.02) $ 0.01 $ (0.14)
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions .................................. (0.28) 0.01 (1.03)
------ ------ -------
Net increase (decrease) from investment
operations ..................................... $(0.30) $ 0.02 $ (1.17)
Distributions to shareholders:
Net investment income (0.02) -- --
Net realized gain .............................. -- -- --
------ ------ -------
Net increase (decrease) in net asset value ...... $(0.32) $ 0.02 $ (1.17)
------ ------ -------
Net asset value, end of period .................. $ 5.03 $ 5.35 $ 5.33
====== ====== =======
Total return* ................................... (5.70)% 0.38% (18.00)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..... 1.75% 1.75% 9.21%**
Ratio of net investment income (loss) to
average net assets ............................. (0.35)% 0.18% (6.31)%**
Portfolio turnover rate ......................... 4% 10% 15%**
Average brokerage commission per share .......... -- -- --
Net assets, end of period (in thousands) ........ $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 expenses ................................... 6.62% 10.97% --
Net investment income (loss) ................... 5.22)% (9.04)% --
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net 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
charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
PIONEER GOLD SHARES
SELECTED DATA FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
APRIL 30, 1998
-----------------
<S> <C>
Net asset value, beginning of period ............................ $ 5.61
-------
Increase (decrease) from investment operations:
Net investment income (loss) ................................... $ (0.01)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions .................................. (0.22)
-------
Net increase (decrease) from investment operations ............. $ (0.23)
Distributions to shareholders:
Net realized gain .............................................. --
-------
Net increase (decrease) in net asset value ...................... $ (0.23)
-------
Net asset value, end of period .................................. $ 5.38
=======
Total return* ................................................... (4.10)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..................... 2.57%**+
Ratio of net investment income (loss) to average net assets ..... (0.91)%**+
Portfolio turnover rate ......................................... 38%**
Average brokerage commission per share .......................... $0.0437
Net assets, end of period (in thousands) ........................ $ 6,617
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for fees
paid indirectly:
Net expenses ................................................... 2.95%**
Net investment income (loss) ................................... (1.29)%**
Ratios assuming waiver of management fees and assumption
of expenses by PMC and reduction for fees paid indirectly:
Net expenses ................................................... 2.54%**
Net investment income (loss) ................................... (0.88)%**
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
--------------------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period ............................ $ 7.65 $ 6.73 $ 7.89
------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) ................................... $ (0.04) $ (0.06) $ (0.05)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions .................................. (1.91) 0.98 (1.11)
------- ------- -------
Net increase (decrease) from investment operations ............. $ (1.95) $ 0.92 $ (1.16)
Distributions to shareholders:
Net realized gain .............................................. (0.09) -- --
------- ------- ---------
Net increase (decrease) in net asset value ...................... $ (2.04) $ 0.92 $ (1.16)
------- ------- ---------
Net asset value, end of period .................................. $ 5.61 $ 7.65 $ 6.73
======= ======= =========
Total return* ................................................... (25.77)% 13.67% (14.70)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..................... 2.51%+ 2.59%+ 2.57%+
Ratio of net investment income (loss) to average net assets ..... (0.84)%+ (1.00)%+ (1.01)%+
Portfolio turnover rate ......................................... 22% 15% 6%
Average brokerage commission per share .......................... $0.0418 $0.0349 --
Net assets, end of period (in thousands) ........................ $ 5,394 $ 4,720 $ 1,762
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for fees
paid indirectly:
Net expenses ................................................... 2.72% 2.73% 3.12%
Net investment income (loss) ................................... (1.05)% (1.14)% (1.56)%
Ratios assuming waiver of management fees and assumption
of expenses by PMC and reduction for fees paid indirectly:
Net expenses ................................................... 2.49% 2.57% 2.53%
Net investment income (loss) ................................... (0.82)% (0.98)% (0.97)%
<CAPTION>
APRIL 4, 1994 TO
OCTOBER 31, 1994
-----------------
<S> <C>
Net asset value, beginning of period ............................ $ 7.83
-------
Increase (decrease) from investment operations:
Net investment income (loss) ................................... $ (0.03)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions .................................. 0.09
-------
Net increase (decrease) from investment operations ............. $ 0.06
Distributions to shareholders:
Net realized gain .............................................. --
-------
Net increase (decrease) in net asset value ...................... $ 0.06
-------
Net asset value, end of period .................................. $ 7.89
=======
Total return* ................................................... 0.77%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ..................... 2.67%**
Ratio of net investment income (loss) to average net assets ..... (1.42)%**
Portfolio turnover rate ......................................... 3%
Average brokerage commission per share .......................... --
Net assets, end of period (in thousands) ........................ $ 951
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for fees
paid indirectly:
Net expenses ................................................... 2.79%**
Net investment income (loss) ................................... (1.54)%**
Ratios assuming waiver of management fees and assumption
of expenses by PMC and reduction for fees paid indirectly:
Net expenses ................................................... --
Net investment income (loss) ................................... --
</TABLE>
SELECTED DATA FOR A CLASS C SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
APRIL 30, 1998(a)
-------------------
<S> <C>
Net asset value, beginning of period ............................... $ 5.62
-------
Increase (decrease) from investment operations:
Net investment income (loss) ...................................... $ (0.01)
Net realized and unrealized gain (loss) on investments and foreign
currency transactions ............................................. (0.23)
-------
Net increase (decrease) from investment operations ................. $ (0.24)
-------
Distributions to shareholders:
Net realized gain ................................................. --
Net increase (decrease) in net asset value ........................ $ (0.24)
-------
Net asset value, end of period ..................................... $ 5.38
=======
Total return* ...................................................... (4.27)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average net assets ........................ 2.36%**+
Ratio of net investment income (loss) to average net assets ........ (0.63)%**+
Portfolio turnover rate ............................................ 38%**
Average brokerage commission per share ............................. $0.0437
Net assets, end of period (in thousands) ........................... $ 3,034
Ratios assuming no waiver of management fees and assumption of
expenses by PMC and no reduction for fees paid indirectly:
Net expenses ...................................................... 2.76%**
Net investment income (loss) ...................................... (1.03)%**
Ratios assuming waiver of management fees and assumption
of expenses by PMC and reduction for fees paid indirectly:
Net expenses ...................................................... 2.31%**
Net investment income (loss) ...................................... (0.58)%**
<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) from investment operations ................. $ (2.03) $ (1.05)
------- -------
Distributions to shareholders:
Net realized gain ................................................. (0.09) --
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)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net 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 brokerage commission per share ............................. $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 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 expenses ...................................................... 2.33% 2.56%**
Net investment income (loss) ...................................... (0.71)% (1.09)%**
</TABLE>
- -----------
(a) Per share data based upon average shares outstanding for the period
presented.
* 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.
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% or more of the Fund's total 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 in debt
securities provided that no more than 10% of the Fund's total assets may be
invested in debt securities rated below "BBB" by Standard & Poor's Ratings
Group. Debt securities rated less than "BBB" are high yield, high risk
securities (commonly known as "junk bonds"), 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 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 net 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 net 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 actual
portfolio turnover rates. Short-term, temporary investments will not normally
represent more than 10% of the Fund's total 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
5
<PAGE>
have a formal percentage limitation on investments in warrants, it is not
expected that PMC will invest more than 5% of the Fund's net assets in such
securities.
The Fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the Fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund, as a shareholder of the securities of other
investment companies, will bear its pro rata portion of the other investment
company's expenses, including advisory fees. These expenses are in addition to
the direct expenses of the Fund's own operations.
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 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 U.S. 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 Fund 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 name and general business and professional background of each
Trustee and executive officer of the Fund.
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
6
<PAGE>
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. Mr. Tripple joined PMC in 1974.
Ms. Theresa Hamacher, Senior Vice President of PMC, oversees U.S. equity
research and portfolio management.
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.
Day-to-day management of the Fund has been the responsibility of Mr.
Michael P. Bradshaw, Vice President of the Fund and of PMC, since December 1,
1997. Mr. Bradshaw 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 Fund, the Fund 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 Fund and its shareholders in making
personal securities transactions.
Under the terms of its contract with the Fund, 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 Fund; (d) issue
and transfer taxes, chargeable to the Fund in connection with securities
transactions to which the Fund is a party; (e) insurance premiums, interest
charges, dues and fees for membership in trade associations, and all taxes and
corporate fees payable by the Fund to federal, state or other governmental
agencies; (f) fees and expenses involved in registering and maintaining
registrations of the Fund and/or its shares with the SEC, state securities
agencies and foreign jurisdictions, including the preparation of prospectuses
and statements of additional information for filing with regulatory agencies;
(g) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies; (h) charges and expenses
of legal counsel to the Fund and the Trustees; (i) distribution fees paid by the
Fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940
Act; (j) compensation of those Trustees of the Fund who are not affiliated with
or interested persons of PMC, the Fund (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 affiliate 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 Fund, President and a
Director of PGI and Chairman and a Director of PMC and PFD, owned approximately
14% of the outstanding capital stock of PGI as of the date of this Prospectus.
Certain information technology experts currently predict the possibility of
a widespread failure of computer systems and certain other equipment which will
be triggered on or after certain dates--primarily January 1, 2000--due to a
systemic inability to process date-related information. This scenario, commonly
known as the "Year 2000 Problem," could have an adverse impact on individuals
and businesses, including the Fund and other mutual funds and financial
organizations. PMC and its affiliates are taking steps believed to be adequate
to address the Year 2000 Problem with respect to the systems and equipment
controlled by the Fund's investment adviser, broker-dealer and transfer agent.
In addition, other entities providing services to the Fund and its shareholders
are being asked to provide assurances that they have undertaken similar measures
with respect to their systems and equipment. Although PMC is not expecting any
adverse impact to it or its clients from the Year 2000 Problem, it cannot
provide complete assurances that its efforts or the efforts of its key vendors
will be successful.
7
<PAGE>
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 any 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
securities on foreign exchanges 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 NEXT COMPUTED AFTER RECEIPT OF A PURCHASE
ORDER, PLUS ANY APPLICABLE SALES CHARGE, 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
8
<PAGE>
is $50 for Class A shares and $500 for Class B and Class C shares except that
the subsequent minimum investment amount for Class B and Class C share accounts
may be as little as $50 if an automatic investment plan is established (see
"Automatic Investment Plans").
TELEPHONE PURCHASES. Your account is automatically authorized to have the
telephone purchase privilege unless you 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). You may always elect to deliver purchases to PSC by mail.
See "Telephone Transactions" 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 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 per share 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
9
<PAGE>
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 affiliate
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. 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 otherwise
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:
<TABLE>
<CAPTION>
CDSC AS A %
OF DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CDSC
-------------------- -----------------
<S> <C>
First .......................... 4.0%
Second ......................... 4.0%
Third .......................... 3.0%
Fourth ......................... 3.0%
Fifth .......................... 2.0%
Sixth .......................... 1.0%
Seventh and thereafter ......... -0-
</TABLE>
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
Fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the
beginning of the calendar quarter that is eight years after the purchase date,
except as noted below. Class
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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 availability of a ruling from the Internal Revenue Service (the "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 an UGMA, an UTMA or a trust account, 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
preauthorized through a prior agreement with PFD regarding participant directed
transfers).
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<PAGE>
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 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 by PFD 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.
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.
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" 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.
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<PAGE>
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 of the
shares originally held until the original 12-month period expires. However, no
CDSC is payable upon redemption with respect to Class A shares purchased by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets.
GENERAL. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Fund to fairly determine the value of
the net assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
WRITTEN EXCHANGES. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the class of shares to be exchanged and the dollar amount or number
of shares to be exchanged. Written exchange requests must be signed by all
record owner(s) exactly as the shares are registered.
TELEPHONE EXCHANGES. Your account is automatically authorized to have the
telephone exchange privilege unless you 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
FactFone(SM), will be recorded. YOU ARE STRONGLY URGED TO CONSULT WITH
YOUR FINANCIAL REPRESENTATIVE PRIOR TO REQUESTING A TELEPHONE EXCHANGE.
See "Telephone Transactions" 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
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<PAGE>
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 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 to PFD.
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 Class A 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 Class A and Class B 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 and 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
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<PAGE>
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.
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. 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 not 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 Shareholder Services, 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 the
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, LOIs, 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 Shareholder Services, 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
15
<PAGE>
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 dividends and capital gains 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
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 "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 nor 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 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." 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.
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<PAGE>
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
payments 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 payments 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 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 FUND
The Fund is a diversified open-end management investment company (commonly
referred to as a mutual fund) re-organized as a Delaware business trust on June
30, 1998. Prior to that time the Fund operated as a Massachusetts business
trust, initially organized as such on April 7, 1990. The Fund has authorized an
unlimited number of shares of beneficial interest. As an open-end management
investment company, the Fund 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 less any applicable
sales charge. See "How to Sell Fund Shares." The Fund 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 Fund reserves the right to create and issue additional series of
shares. The Trustees have the authority, without further shareholder approval,
to classify and reclassify the shares of the Fund, or any new series of the
Fund, 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.
In addition to the requirements under Delaware law, the Declaration of
Trust provides that a shareholder of the Fund may bring a derivative action on
behalf of the Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Fund, or 10% of the outstanding shares of
the series or class to which such action relates, shall join in the request for
the Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the Fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.
When issued and paid for in accordance with the terms of the Prospectus and
Statement of Additional Information, shares of the Fund are fully paid and
non-assessable. Shares will remain on deposit with the Fund's transfer agent and
certificates will not normally be issued. The Fund 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.
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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. The Fund may also
include securities industry or comparative performance information generally and
in advertising or materials marketing the Fund's shares. Such performance
information may include rankings or listings by magazines, newspapers, or
independent statistical or ratings services, such as Lipper Analytical Services,
Inc. or Ibbotson Associates.
The Fund's investment results will be calculated separately for each class
of shares vary from time to time depending on market conditions, the composition
of the Fund's portfolio and operating expenses of the Fund and expenses
attributed to a specific class of shares. All quoted investment results are
historical and should not be considered representative of what an investment in
the Fund may earn in any future period. For further information about the
calculation methods and uses of the Fund's investment results, see the Statement
of Additional Information.
APPENDIX--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.
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<PAGE>
If the Fund enters into a forward contract to buy foreign currency, the
Fund will be required to place cash or high grade liquid securities in a
segregated account of the Fund maintained by the Fund's custodian in an amount
equal to the value of the Fund's total assets committed to the consummation of
the forward contract.
The Fund may purchase put and call options on foreign currencies for the
purpose of protecting against declines in the dollar value of foreign portfolio
securities and against increases in the U.S. dollar cost of foreign securities
to be acquired. The purchase of an option on a foreign currency may constitute
an effective hedge against exchange rate fluctuations.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices, currency exchange rates or
interest rates, the Fund may purchase and sell various kinds of futures
contracts, and purchase and write call and put options on any of such futures
contracts. The Fund may also enter into closing purchase and sale transactions
with respect to any of such contracts and options. The futures contracts may be
based on various stock and other securities indices, foreign currencies and
other financial instruments and indices. The Fund will engage in futures and
related options transactions for bona fide hedging purposes only. These
transactions involve brokerage costs, require margin deposits and, in the case
of contracts and options obligating the Fund to purchase currencies, require the
Fund to segregate assets to cover such contracts and options.
Limitations and Risks Associated with Transactions
in Options, Futures Contracts and Forward Foreign Currency Exchange Contracts
Transactions involving options on securities and securities indices,
futures contracts and options on futures and forward foreign currency exchange
contracts involve (1) liquidity risk that contractual positions cannot be easily
closed out in the event of market changes or generally in the absence of a
liquid secondary market, (2) correlation risk that changes in the value of
hedging positions may not match the securities market and foreign currency
fluctuations intended to be hedged and (3) market risk that an incorrect
prediction of securities prices or exchange rates by the Fund's investment
adviser may cause the Fund to perform less favorably than if such positions had
not been entered. The Fund will purchase and sell options that are traded only
in a regulated market which is open to the public. 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.
19
<PAGE>
[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
0698-4937
(c) 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 and 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 GOLD SHARES
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
CLASS A, CLASS B AND CLASS C SHARES
JULY 1, 1998
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Prospectus for Pioneer Gold Shares (the "Fund")
dated July 1, 1998, as supplemented or revised from time to time. A copy of the
Prospectus can be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109. The most recent Annual and Semiannual Reports to
Shareholders are attached to this Statement of Additional Information and are
hereby incorporated in this Statement of Additional Information by reference.
TABLE OF CONTENTS
PAGE
1. Investment Policies and Restrictions............................. 2
2. Management of the Fund...........................................12
3. Investment Adviser...............................................17
4. Underwriting Agreement and Distribution Plans....................18
5. Shareholder Servicing/Transfer Agent.............................21
6. Custodian........................................................21
7. Principal Underwriter............................................21
8. Independent Public Accountants...................................22
9. Portfolio Transactions...........................................22
10. Tax Status.......................................................23
11. Description of Shares............................................28
12. Certain Liabilities..............................................29
13. Letter of Intent.................................................30
14. Systematic Withdrawal Plan.......................................30
15. Determination of Net Asset Value.................................31
16. Investment Results...............................................31
17. Financial Statements.............................................34
Appendix A - Description of Short-Term Debt and
Corporate Bond Ratings...........................................35
Appendix B - Performance Statistics..............................40
Appendix C - Other Pioneer Information...........................53
-------------------------
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.
1
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus presents the investment objective and the principal
investment policies of the Fund. Additional investment policies and a further
description of some of the policies described in the Prospectus appear below.
Capitalized terms not otherwise defined herein have the meaning given to them in
the Prospectus.
The following policies and restrictions supplement those discussed in
the Prospectus. Whenever an investment policy or restriction states a maximum
percentage of the Fund's assets that may be invested in any security or presents
a policy regarding quality standards, that standard or other restrictions shall
be determined immediately after and as a result of the 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 the Fund's investment objective and policies.
LENDING OF PORTFOLIO SECURITIES
The Fund 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 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 and the detriment of any decrease 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 Fund will lend portfolio securities only to
firms which have been approved in advance by the Board of Trustees, which will
monitor the creditworthiness of any such firms. At no time would the value of
the securities loaned exceed 30% of the value of the Fund's total assets.
FORWARD FOREIGN CURRENCY TRANSACTIONS
The Fund 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. The
Fund also has authority to enter into forward foreign currency exchange
contracts involving currencies of the different countries in which the Fund 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 Fund's 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 Fund, accrued in connection with the purchase and sale of their
portfolio securities denominated in foreign currencies. Portfolio hedging is the
use of forward foreign currency contracts to offset portfolio security positions
denominated or quoted in such foreign currencies. There is no guarantee that the
Fund will be
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engaged in hedging activities when adverse exchange rate movements
occur. The Fund will not attempt to hedge all of its foreign portfolio
positions, and will enter into such transactions only to the extent, if any,
deemed appropriate by the investment adviser. The Fund will not enter into
speculative forward foreign currency contracts.
If the Fund enters into a forward contract to purchase foreign
currency, the 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 the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The cost to the Fund 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. The Fund 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
The Fund 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). The Fund does not 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,
the 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
the Fund has the option of purchasing the security from the 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 the Fund's investment objective. All call options written by the
Fund are covered; the 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 the Fund's net exposure on its written
option position. The Fund does not consider a security covered by a call option
to be "pledged" as that term is used in the Fund's policy which limits the
pledging or mortgaging of its assets.
The Fund may purchase call options on securities for entering into a
"closing purchase transaction," i.e., a purchase of a call option on the same
security with the same exercise price and expiration date as a "covered" call
already written by the Fund. These closing purchase transactions enable the Fund
to immediately realize gains or minimize losses on its options positions. There
is no
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assurance that the Fund will be able to effect such closing purchase
transactions at a favorable price. If the Fund cannot enter into such a
transaction, it may be required to hold a security that it might otherwise have
sold. The 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
The Fund 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 the Fund's securities or securities which the Fund
intends to buy. Securities index options will not be used for speculative
purposes.
The Fund may only purchase and sell options that are traded only in a
regulated market which is open to the public. Currently, options on stock
indices are traded only on national securities exchanges or over-the-counter,
both in the U.S. and in foreign countries. A securities index fluctuates with
changes in the market values of the securities included in the index. For
example, some stock index options are based on a broad market index such as the
S&P 500 or the Value Line Composite Index in the U.S., the Nikkei in Japan or
the FTSE 100 in the United Kingdom. Index options may also be based on a
narrower market index such as the S&P 100 or on an industry or market segment
such as the AMEX Oil and Gas Index or the Computer and Business Equipment Index.
The 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 foreign 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 other securities indices 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.
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The Fund may 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
its 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 the Fund from closing out its options positions. If the 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 cannot 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 Fund's
portfolio and the index underlying the option, the purchase of securities index
options involves the risk that the premium and transaction costs paid by the
Fund 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, the Fund may purchase and sell various kinds of futures contracts, and
purchase and write (sell) 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 securities (such as U.S. Government securities), securities indices,
foreign currencies and other financial instruments and indices.
The Fund 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 Fund 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
Fund can seek to offset a decline in the value of its current portfolio
securities through the sale of futures contracts. When interest rates are
falling or securities prices are rising, the Fund, through the purchase of
futures contracts, can attempt to secure better rates or prices than might later
be available in the market when it effects anticipated
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purchases. Similarly, the Fund 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. The Fund can purchase futures contracts on a foreign currency to
establish the price in U.S. dollars of a security denominated in such currency
that the Funds have acquired or expect to acquire.
Positions taken in the futures markets are not normally held to
maturity but are instead liquidated through offsetting transactions which may
result in a profit or a loss. While futures contracts on securities or currency
will usually be liquidated in this manner, the Fund 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 the Fund owns or
proposes to acquire. The 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 the Fund or securities with characteristics similar to
those of the Fund's portfolio securities. Similarly, the Fund may sell futures
contracts in a foreign currency in which its 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 PMC, there is a sufficient degree of correlation between price trends for the
Fund's portfolio securities and futures contracts based on other financial
instruments, securities indices or other indices, the Fund may also enter into
such futures contracts as part of its hedging strategies. Although under some
circumstances prices of securities in the 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 the Fund enter into a greater or lesser
number of futures contracts or by attempting to achieve only a partial hedge
against price changes affecting the 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 the Fund's portfolio securities would be substantially offset by a decline in
the value of the futures position.
On other occasions, the Fund may take a "long" position by purchasing
futures contracts. This may be done, for example, when the 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 Fund 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, the 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.
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The writing of a call option on a futures contract generates a premium
which may partially offset a decline in the value of the Fund's assets. By
writing a call option, the 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 the Fund intends to purchase. However, the 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 Fund in writing options on futures is potentially unlimited and may exceed
the amount of the premium received. The Fund will incur transaction costs in
connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate
its position by selling or purchasing an offsetting option on the same series.
There is no guarantee that such closing transactions can be effected. The Fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
The Fund may use options on futures contracts for bona fide hedging or
non-hedging purposes as discussed below.
OTHER CONSIDERATIONS. The Fund 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 1940 Act to engage in such transactions without
registering as commodity pool operators. The Fund is not permitted to engage in
speculative futures trading. The Fund 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 Fund or
which the Fund expects to purchase. Except as stated below, the Fund's 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 Fund owns,
or futures contracts will be purchased to protect the 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, the 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 the 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 Fund to elect to comply with a
different test, under which the sum of the amounts of initial margin deposits on
the 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 the
Fund's total assets. The Fund will engage in transactions in futures contracts
and related options only to the extent such transactions are consistent with the
requirements of the Code for maintaining its qualification as a regulated
investment company 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 Fund to purchase securities or currencies, require
the Fund to segregate assets to cover such contracts and options.
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While transactions in futures contracts and options on futures may
reduce certain risks, such transactions themselves entail certain other risks.
Thus, while the Fund 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 Fund than if it 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
Fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of foreign
securities because currency movements impact the value of different securities
in differing degrees.
OTHER POLICIES AND RISKS
The Fund's fundamental policy allows the concentration in the
securities of companies engaged in the mining, processing or sale of gold and
other precious metals and presents risks that are not presented in portfolios
that allocate their investments over many industries. The Fund will not
concentrate its investment in any other industry. The Fund's policies on
concentration do not apply to investments in U.S. Government securities.
The Fund 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 net assets in such securities.
The Fund 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 the Fund's portfolio and report
periodically on such decisions to the Trustees.
WARRANTS
The Fund 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 expires worthless if
it is not
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exercised on or prior to its expiration date. Although the Fund does
not have a formal percentage limitation on such investments, it is not expected
that PMC will invest more than 5% of the Fund's net assets in such securities.
OTHER INVESTMENT COMPANIES
Under the 1940 Act, the Fund may not acquire the securities of other
domestic orforeign investment companies or investment funds if, as a result, (i)
more than 10% of the Fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the Fund, or (iii) more than 5% of the Fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company.
LOWER QUALITY DEBT OBLIGATIONS
The Fund may invest up to 10% of its total assets in debt 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
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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. 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.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS. The following list presents the
fundamental investment restrictions applicable to the Fund. These restrictions
cannot be changed unless a majority of the outstanding shares (as such vote is
defined in Section 2(a)(42) of the 1940 Act) of the Fund approves the change.
The Fund may not:
(1) borrow money, except from banks as a temporary measure to
facilitate the meeting of redemption requests or for extraordinary or emergency
purposes and except pursuant to reverse repurchase agreements or dollar rolls,
in all cases in amounts not exceeding 331/3% of the Fund's total assets
(including the amount borrowed) taken at market value;
(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) make loans, provided that (i) the purchase of debt securities
pursuant to the Fund's investment objective 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, the Fund may engage in repurchase
transactions as described in the Prospectus;
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(5) issue senior securities, except as permitted by restrictions nos.
1, 3 and 4 above, and, for purposes of this restriction, the issuance of shares
of beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign exchange contracts and repurchase agreements
entered into in accordance with the Fund's investment policies, and the pledge,
mortgage or hypothecation of the Fund's assets within the meaning of fundamental
restriction no. 7 below are not deemed to be senior securities;
(6) act as an underwriter, except as it may be deemed to be an
underwriter in a sale of restricted securities; or
(7) 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.
The Fund does not intend to enter into any reverse repurchase
agreements or dollar rolls, or borrow money as described in fundamental
investment restriction (1) above, during the coming year.
As long as the Fund is registered in the Federal Republic of Germany,
Austria or Switzerland, the Fund may not without the prior approval of its
shareholders:
(i) invest in the securities of any other domestic or foreign
investment company or investment fund, except in connection with a plan of
merger or consolidation with or acquisition of substantially all the assets of
such other investment company or investment fund;
(ii) purchase or sell real estate, or any interest therein, and real
estate mortgage loans, except that the 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 the Fund's total assets
(including the amount borrowed) taken at market value;
(iv) pledge, mortgage or hypothecate its assets in amounts exceeding
10% of the 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 Fund is registered in Switzerland, the Fund may
not 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;
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(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.
In the case of a change in the laws of Germany, Austria or
Switzerland applicable to the Funds, the Trustees have the right to adjust the
above restrictions relating to the Fund's registration in these countries
accordingly without the prior approval of the shareholders.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The following restrictions
have been designated as non-fundamental and may be changed by a vote of the
Fund's Board of Trustees without approval of shareholders.
The Fund may not:
(1) purchase securities for the purpose of controlling management of
other companies; or
(2) invest in any security, including any repurchase agreement maturing
in more than seven days, which is illiquid, if more than 15% of the net assets
of the Fund, taken at market value, would be invested in such securities.
In addition to the foregoing restrictions, in order to remain a
diversified investment company under the 1940 Act, it is a fundamental
investment policy of the Fund that at least 75% of the value of the 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 the Fund
and to not more than 10% of the outstanding voting securities of such issuer.
The Fund does not 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 Fund's Board of Trustees provides broad supervision over the
affairs of the Fund. The officers of the Fund are responsible for the Fund's
operations. The Trustees and executive officers of the Fund are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Fund within
the meaning of the 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., Pioneer Forest, Inc., Pioneer Explorer, Inc., Pioneer
Management (Ireland) Ltd. ("PMIL") and Closed Joint Stock Company
"Forest-Starma"; President and Director of
12
<PAGE>
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 First Polish Investment Fund Joint Stock
Company, S.A. 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; and Partner, Hale and Dorr LLP (counsel to PGI and the
Fund).
MARY K. BUSH, TRUSTEE, DOB: APRIL 1948
4201 CATHEDRAL AVENUE, NW, WASHINGTON, DC 20016
President, Bush & Co., an international financial advisory firm;
Director and Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc. (not-for-profit educational organization), 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., PH.D., TRUSTEE, DOB: DECEMBER 1926
BOSTON UNIVERSITY HEALTH POLICY INSTITUTE, 53 BAY STATE ROAD, BOSTON, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; 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; University Professor, Boston
University; Director, Boston University Health Policy Institute and Boston
University Program for Health Care Entrepreneurship; Director, CORE (management
of workers' compensation and disability costs - Nasdaq National Market);
Director, WellSpace (provider of complementary health care); Trustee, Boston
Medical Center; Honorary Trustee, Franciscan Children's Hospital; and Trustee of
all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, TRUSTEE, DOB: MAY 1947
THE KEEP, P.O. BOX 110, LITTLE DEER ISLE, ME 04650
Founding Director, 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;
Economic Consultant; 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 Governors of the Investment
Company Institute; and Trustee of all of the Pioneer mutual funds.
13
<PAGE>
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, 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
Of Counsel to 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); 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
all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP.
ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956
Manager of Business Planning and Internal Audit of PMC since September
1998; 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.
MICHAEL P. BRADSHAW, VICE PRESIDENT, DOB: FEBRUARY 1962
Vice President of PMC and the Fund since December 1997, equity analyst
for PMC from August 1997 to December 1997; and financial analyst and research
associate for a major Canadian securities firm prior to August 1997.
The Fund's Agreement and Declaration of Trust, dated January 8, 1998
(the "Declaration"), provides that the holders of two-thirds of its outstanding
shares may vote to remove a Trustee of the Fund at any meeting of shareholders.
See "Description of Shares" below. The business address of all officers is 60
State Street, Boston, Massachusetts 02109.
14
<PAGE>
All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly owned Delaware corporation. PMC, the
Fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
INVESTMENT PRINCIPAL
FUND NAME ADVISER UNDERWRITER
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer 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
Pioneer Independence Fund PMC Note 1
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 2
Pioneer Variable Contracts Trust PMC Note 3
Note 1 This fund is available to the general public only through
Pioneer Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 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 Fund, no officer or Trustee of the Fund owned 5%
or more of the issued and outstanding shares of PGI as of the date of this
Statement of Additional Information, except
15
<PAGE>
Mr. Cogan who then owned approximately 14% of such shares. As of May 31,
1998, the Trustees and officers of the Fund owned beneficially in the
approximately 4.25% of the outstanding shares of the Fund. As of May 31, 1998,
Donaldson Lufkin Jenrette Securities Corporation, Inc., P.O. Box 2052, Jersey
City, NJ 07303-9998, owned approximately 7.21% (91,070) of the outstanding Class
B shares of the Fund; and Merrill Lynch Pierce Fencer & Smith, Inc., for the
sole benefit of its customers, 4800 Deer Lake Drive East, Jacksonville, FL
32246-6484, owned approximately 15.01% (80,101) of the outstanding Class C
shares of the Fund.
COMPENSATION OF OFFICERS AND TRUSTEES
The Fund pays no salaries or compensation to any of its officers. The
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 the
Fund. In addition, the Fund will pay a per meeting fee of $100 to each Trustee
who is not affiliated with PMC, PGI, PFD or PSC and pays an annual trustee's fee
of $500 plus expenses to each Trustee affiliated with PMC, PGI, PFD or PSC. The
Fund will also 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 Fund on the basis
of the Fund's average net assets. Each Trustee who is a member of the Audit
Committee for the Pioneer mutual funds will receive an annual fee equal to 10%
of the aggregate annual trustee's fee, except the Committee Chairperson 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 Boards of
Trustees for the Pioneer mutual funds, will receive an annual fee equal to 5% of
the annual trustee's fee, except the Committee Chairperson who will receive an
annual trustee's fee equal to 10% of the annual trustee's fee. Each Trustee who
is not affiliated with PMC, PGI, PFD or PSC also receives $375 per meeting for
attendance at meetings of the Non-Interested Trustees Committee, except for the
Committee Chairperson who will receive an additional $375 per meeting. Any such
fees paid to interested Trustees are reimbursed to the Fund under its management
contract.
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<PAGE>
The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund:
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation from the
Aggregate Benefits Accrued Fund and Other Pioneer
Compensation as Part of Mutual FUNDS**
NAME OF TRUSTEE FROM THE FUND* FUND EXPENSES
<S> <C> <C> <C>
John F. Cogan, Jr. $500.00 $0 $12,000.00
Mary K. Bush $642.00 $0 $30,000.00
Richard H. Egdahl, M.D. $1,814.00 $0 $62,000.00
Margaret B.W. Graham $1,814.00 $0 $60,000.00
John W. Kendrick $1,814.00 $0 $55,800.00
Marguerite A. Piret $2,083.00 $0 $80,000.00
David D. Tripple $500.00 $0 $12,000.00
Stephen K. West $1,933.00 $0 $63,800.00
John Winthrop $2,037.00 $0 $69,000.00
Total $13,137.00 $0 $444,600.00
</TABLE>
*As of October 31, 1997, the Fund's fiscal year end.
**As of the calendar year end December 31, 1997.
3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston,
Massachusetts 02109, to act as investment adviser. A description of the services
provided to the Fund under its management contract and the expenses paid by the
Fund under such contract is set forth in the Prospectus under the caption
"Management of the Fund."
The term of the management contract is one year and is renewable
annually by the vote of a majority of the Board of Trustees of the Fund
(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 60 days' written notice by vote of its Board of Directors or Trustees
or a majority of its outstanding voting securities. Pursuant to the 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 management
contract.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee from the Fund at the rate of 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 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 share 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
temporary and
17
<PAGE>
voluntary and may be revised or terminated at any time by PMC after
October 31, 1998. See "Expense Information" in the Prospectus.
During the fiscal years ended October 31 1997, October 31 1996, and
October 31, 1995, PMC earned management fees from the Fund, respectively, as
follows: $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 the Fund, respectively, as follows:
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 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 Fund's shares, except for expenses incurred by PFD
for which it is reimbursed or compensated by the Fund 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 Fund. PFD also pays certain expenses in connection
with the distribution of the Fund'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 Fund bears the cost of registering its shares under federal
and state securities law and the laws of certain foreign countries. The Fund 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 Fund.
The 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 Fund (the "Class
A Plan," "Class B Plan" and "Class C Plan," together, the "Plans").
CLASS A PLAN
Pursuant to the Class A Plan the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of the Class A shares of the Fund. Certain categories of such expenditures have
been approved by the Board of Trustees and are set forth in the Prospectus. See
"Distribution Plans" in the Prospectus. The expenses of the 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 0.25% of the Fund's average annual net
assets attributable to Class A shares.
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<PAGE>
CLASS B PLAN
The Class B Plan provides that the 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 Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution- related services, or personnel, travel, office expenses and
equipment. The Class B Plan also provides that PFD will receive all contingent
deferred sales charges ("CDSCs") attributable to Class B shares. (See
"Distribution Plans" in the Prospectus.) 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 the 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 the 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 current value of the amount invested and
additional compensation at a rate of up to 0.75% of the average net asset value
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
19
<PAGE>
dealer of record or for which qualification standards have not been
met as partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is
to compensate PFD for its distribution services with respect to the Class C
shares of the Fund. 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 Prospectus.)
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 Fund for
review by the Trustees a quarterly written report of the amounts expended under
the respective Plans 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 Fund, nor any Trustee of the Fund who is
not an interested person of the Fund, 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 the Fund 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 Fund, 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 the Fund and
its current and future shareholders. Under their terms, the Plans remain in
effect from year to year provided such continuance is approved annually by vote
of the Trustees in the manner described above. The Plans may not be amended to
increase materially the annual percentage limitation of average net assets which
may be spent for the services described therein without approval of the
shareholders of the class 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 Fund and who 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 the 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, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan, Class B Plan and Class C
Plan, respectively, as follows $76,721, $51,685 and $9,161. Distribution fees
were paid by the Fund to PFD in reimbursement of or as compensation for expenses
related to servicing shareholder accounts and to compensate dealers and sales
personnel.
20
<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 $16,366 were paid to PFD.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston,
Massachusetts 02109, to act as shareholder servicing and transfer agent for the
Fund. This contract may be terminated without penalty by either party upon 90
days' written notice.
Under the terms of its contract with the Fund PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of Fund shares; (ii) distributing dividends and capital gains
associated with Fund 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 the Fund as compensation for the services
described above. PSC is also reimbursed by the Fund for its out-of-pocket
expenditures. The annual fee is set at an amount determined by vote of a
majority of the Trustees (including a majority of the Trustees who are not
parties to the contract with PSC or interested persons of any such parties) to
be comparable to fees for such services being paid by other investment
companies. The Fund may compensate entities which have agreed to provide certain
sub-accounting services, such as specific transaction processing and
recordkeeping services. Any such payments by the Fund would be in lieu of the
per account fee which would otherwise be paid by the Fund to PSC.
6. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109, is the custodian (the "Custodian") of the Fund's assets. The Custodian's
responsibilities include safekeeping and controlling the Fund's cash and
securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the Fund's investments. The Custodian does not
determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may invest in securities, including repurchase
agreements, issued by the Custodian and 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 Fund in connection with the continuous offering of
its shares. 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, Class B and Class C shares were, respectively,
approximately, $291,000, $417,000, and $232,000. Commissions reallowed to
dealers during the same periods were approximately $252,000, $361,000, and
$200,000, respectively. See "Underwriting Agreement and Distribution Plans"
above for a description of the terms of the underwriting agreement with PFD.
21
<PAGE>
The Fund will not generally issue Fund shares for consideration other
than cash. At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger, or other acquisition of portfolio securities.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110,
is the Fund'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 the Fund by PMC pursuant to authority contained in the 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 Fund and/or other investment companies or other accounts managed
by PMC. In addition, consistent with Section 28(e) of the Securities Exchange
Act of 1934, as amended, the 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; providing stock quotation services;
furnishing analyses, electronic information services, manuals and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, performance of accounts and comparative fund statistics and
credit rating service information; 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 many transactions on behalf of the Fund 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. Management believes that no exact dollar value can be calculated for
such services.
The research received from broker-dealers may be useful to PMC in
rendering investment management services to the Fund as well as other investment
companies or 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 Fund. 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
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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.
In addition to the Fund, PMC acts as investment adviser to other
Pioneer mutual funds and certain private accounts with investment objectives
similar to those of the Fund. As such, securities may frequently meet the
investment objectives of the Fund, such other mutual 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
Pioneer mutual funds 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, the 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 the Fund paid aggregate brokerage and underwriting commissions,
respectively, as follows: $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.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Fund.
10. TAX STATUS
It is the Fund's policy to meet the requirements of Subchapter M of the
Code for qualification as a regulated investment company. These requirements
relate to the sources of the Fund's income, the diversification of its assets
and the distribution of its income to shareholders. If the 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.
In order to qualify as a regulated investment company under Subchapter
M, the 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
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satisfy certain annual distribution and quarterly diversification
requirements. The Fund's 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. For purposes of the 90% income test, income
the Fund earns from equity interests in certain entities that are not treated as
corporations (e.g., are treated as partnerships or trusts) for U.S. tax purposes
will generally have the same character for the Fund as in the hands of such
entities; consequently, the Fund may be required to limit its equity investments
in such entities that earn fee income, rental income, or other nonqualifying
income.
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 the 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 the 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 the 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 the 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 the 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.
If the 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
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companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its shareholders.
The Fund would not be able to pass through to its shareholders any credit or
deduction for such a tax. 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. The 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 the 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, the 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, the 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.
For federal income tax purposes, the Fund is permitted to carry forward
a net capital loss for any year to offset its 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, the Fund had a
capital loss carryforward of $942,992 which will expire in 2005 if not used.
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.
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
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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 the
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 the 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 the 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 the 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 the 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 the Fund from
U.S. 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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The 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.
If more than 50% of total assets of the Fund at the close of any taxable year
consists of stock or securities of foreign corporations, the 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 the
Fund makes the election described above, shareholders may deduct their pro rata
portion of qualified foreign taxes paid by the 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 the Fund 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 the 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 IRS regulations. In order to
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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. The 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.
If, as anticipated, the Fund continues to qualify as a regulated
investment company under the Code, it will not be required to pay any
Massachusetts income, corporate excise or franchise taxes or any Delaware
corporation income tax.
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 the 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 Declaration 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.
Currently, the Fund consists of only one series. 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 Fund. The Declaration further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of three classes of
shares of the Fund, Class A, Class B and Class C shares. Each share of a class
of the Fund represents an equal proportionate interest in the assets of that
Fund allocable to that class. Upon liquidation of the Fund, shareholders of each
class of the Fund are entitled to share pro rata in the Fund's net assets
allocable to such class available for distribution to shareholders. The Fund
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 series of the 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 series of the Fund vote together as a
class on matters that affect all series of the Fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
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 Declaration provides that the holders of two-thirds of its
outstanding shares may vote to remove a Trustee at any special meeting of
shareholders.
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Special meetings of the shareholders of the Fund 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 Fund 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 Declaration without the
affirmative vote of a majority of its shares. Shares have no preemptive or
conversion rights except that under certain circumstances Class B shares may
convert to Class A shares. Shares are fully paid and non-assessable by the Fund,
except as stated below.
12. CERTAIN LIABILITIES
The Fund was originally organized as a series of a Massachusetts
business trust and was reorganized as a Delaware business trust on June 30,,
1998, pursuant to an Agreement and Plan of Reorganization approved by the
shareholders of the Fund. As a Delaware business trust, the Fund's operations
are governed by the Declaration. A copy of the Fund's Certificate of Trust,
dated January 8, 1998, is on file with the office of the Secretary of State of
Delaware. Generally, Delaware business trust shareholders are not personally
liable for obligations of the Delaware business trust under Delaware law. The
Delaware Business Trust Act (the "Delaware Act") provides that a shareholder of
a Delaware business trust shall be entitled to the same limitation of liability
extended to shareholders of private for-profit corporations. The Declaration
expressly provides that the Fund is organized under the Delaware Act and that
the Declaration is to be governed by Delaware law. There is nevertheless a
remote possibility that a Delaware business trust, such as the Fund, might
become a party to an action in another state whose courts refused to apply
Delaware law, in which case the trust's shareholders could become subject to
personal liability.
To guard against this risk, the Declaration (i) contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
provides that notice of such disclaimer may be given in each agreement,
obligation or instrument entered into or executed by the Fund or its Trustees,
(ii) provides for the indemnification out of Fund property of any shareholders
held personally liable for any obligations of the Fund or any series of the Fund
and (iii) provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which all of the following factors are present: (1)
a court refused to apply Delaware law; (2) the liability arose under tort law
or, if not, no contractual limitation of liability was in effect; and (3) the
Fund itself would be unable to meet its obligations. In light of Delaware law,
the nature of the Fund's business and the nature of its assets, the risk of
personal liability to a Fund shareholder is remote.
The Declaration further provides that the Fund 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 Fund.
The Declaration does not authorize the Fund 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.
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13. LETTER OF INTENT (CLASS A SHARES 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.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from shares
of the Fund deposited by the applicant under the SWP. The applicant must deposit
or purchase for deposit with PSC shares of the 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. Class B accounts must meet
the minimum initial investment requirement prior to establishing a SWP.
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" in the Prospectus.
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.
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The SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the SWP have been
redeemed.
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined
as of the close of regular trading on the Exchange (normally 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 the 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. The net asset value per share of the Fund is not
determined on any day in which no purchase orders in good order for the shares
of the Fund are received and no shares are tendered for redemption.
The net asset value per share of each class of the 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 the 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.
The Fund's maximum offering price per Class A share is determined by
adding the maximum applicable 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, but are subject to a CDSC.
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 the 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
the Fund's classes may be compared to averages or rankings prepared by Lipper
Analytical Services, Inc., a widely recognized independent service which
monitors mutual fund performance; Standard & Poor's Composite Index of 500
Common Stocks (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 the Fund may be compared
to alternative investment or savings vehicles and/or to indexes or indicators of
economic activity, e.g., inflation or
31
<PAGE>
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 the 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 the Fund.
In addition to any of the foregoing performance listings and rankings,
performance of the Fund's 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. The Fund may also present historical
information on the production and usage of gold.
The Fund may also present, from time to time, historical information
depicting the value of a hypothetical account in one or more classes of the Fund
since the Fund's inception.
In presenting investment results, the Fund may also include references
to certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class
of the 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 the Fund, over any period up to the lifetime of that class of the 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.
The Fund's average annual total return quotations for each of its
classes as that information may appear in the Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the SEC.
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<PAGE>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
Average annual total return quotations for each class of Fund 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 the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts of
a particular class are taken into consideration. For any account fees that vary
with the size of the account, the account fee used for purposes of the above
computation is assumed to be the fee that would be charged to a class's mean
account size.
The average annual total returns for Class A, Class B, and Class C
shares of the Fund as of October 31, 1997, are as follows:
One Five
YEAR YEARS INCEPTION*
CLASS A SHARES (29.57)% 1.80% (2.42)%
- --------------
CLASS B SHARES (28.70)% N/A (9.35)%
- --------------
CLASS C SHARES (25.64)% N/A (21.56)%
- --------------
*Inception was July 25, 1990 for Class A shares; April 4, 1994 for Class B
shares; and January 31, 1996 for Class C shares.
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<PAGE>
During the one-year, 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." 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:
[bullet] net asset value prices for all Pioneer mutual funds;
[bullet] annualized 30-day yields on Pioneer's fixed income funds;
[bullet] annualized 7-day yields and 7-day effective (compound) yields for
Pioneer Cash Reserves Fund; and
[bullet] dividends and capital gains distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard
formulas.
In addition, by using a personal identification number ("PIN"),
shareholders may enter purchases, exchanges and redemptions, access their
account balances 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 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 Fund's Annual Report, filed with the SEC on December 24, 1997
(Accession No. 0000863334-97-000019), and Semiannual Report, filed with the SEC
on June 22, 1998 (Accession No. 0000863334-98-000016), are incorporated by
reference into this Statement of Additional Information. The financial
statements in the Fund's Annual and Semiannual Reports, including the financial
highlights, for the periods ended October 31, 1997 and April 30, 1998,
respectively, included or incorporated by reference into the Prospectus and this
Statement of Additional Information, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect to
the financial statements, and are included in reliance upon the authority of
Arthur Andersen LLP as experts in accounting and auditing in giving their
reports.
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<PAGE>
APPENDIX A
DESCRIPTION OF SHORT-TERM DEBT AND CORPORATE BOND RATINGS1
MOODY'S INVESTORS SERVICE, INC. SHORT-TERM PRIME RATING SYSTEM - TAXABLE DEBT
AND DEPOSITS GLOBALLY
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
PRIME-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's Sovereign Rating for Bank Deposits.
- --------
1 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.
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<PAGE>
Such branch obligations are rated at the lower of the bank's rating or
Moody's Sovereign Rating for Bank Deposits for the country in which the branch
is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.
MOODY'S CORPORATE BOND RATINGS
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 larger 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 a 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.
BA: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
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<PAGE>
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA: Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
NOTE: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
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<PAGE>
STANDARD & POOR'S CORPORATE BOND RATINGS
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest-rated obligations only
in a small degree. The obligor's capacity to meet its financial commitment on
the obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to the
obligor's capacity to meet its financial commitment on the obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.
D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments are jeopardized.
PLUS (+) OR MINUS (-): The rating from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.
38
<PAGE>
R: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk, such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
39
<PAGE>
APPENDIX B
PERFORMANCE STATISTICS
PIONEER GOLD SHARES
CLASS A
<TABLE>
<CAPTION>
DATE INITIAL OFFERING SALES CHARGE SHARES NET ASSET INITIAL NET
INVESTMENT PRICE PURCHASED VALUE ASSET
INCLUDED PER SHARE VALUE
<S> <C> <C> <C> <C> <C> <C>
7/25/90 $10,000 $7.00 5.75% 1428.571 $6.60 $9,425
</TABLE>
DIVIDENDS AND CAPITAL GAINS REINVESTED
VALUE OF SHARES
<TABLE>
<CAPTION>
DATE FROM FROM CAP FROM DIVIDENDS TOTAL VALUE
INVESTMENT GAINS
REINVESTED REINVESTED
<S> <C> <C> <C> <C>
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
</TABLE>
40
<PAGE>
PIONEER GOLD SHARES
CLASS B
<TABLE>
<CAPTION>
DATE INITIAL OFFERING SALES CHARGE SHARES NET ASSET INITIAL
INVESTMENT PRICE PURCHASED VALUE NET ASSET
INCLUDED PER SHARE VALUE
<S> <C> <C> <C> <C> <C> <C>
4/4/94 $10,000 $7.83 4.00% 1277.139 $7.83 $10,000
</TABLE>
DIVIDENDS AND CAPITAL GAINS REINVESTED
VALUE OF SHARES
<TABLE>
<CAPTION>
DATE FROM FROM CAP FROM DIVIDENDS CDSC IF TOTAL VALUE
INVESTMENT GAINS REDEEMED
REINVESTED REINVESTED
<S> <C> <C> <C> <C> <C>
12/31/94 $9,157 $0 $0 $366 $8,791
12/31/95 $9,336 $0 $0 $373 $8,963
12/31/96 $9,349 $114 $0 $280 $9,182
12/31/97 $5,811 $71 $0 $174 $5,708
</TABLE>
41
<PAGE>
PIONEER GOLD SHARES
CLASS C
<TABLE>
<CAPTION>
DATE INITIAL OFFERING SALES CHARGE SHARES NET ASSET INITIAL
INVESTMENT PRICE PURCHASED VALUE NET ASSET
INCLUDED PER SHARE VALUE
<S> <C> <C> <C> <C> <C> <C>
1/31/96 $10,000 $8.70 1.00% 1,149.425 $8.70 $10,000
</TABLE>
DIVIDENDS AND CAPITAL GAINS REINVESTED
VALUE OF SHARES
<TABLE>
<CAPTION>
DATE FROM FROM CAP FROM DIVIDENDS CDSC IF TOTAL VALUE CDSC %
INVESTMENT GAINS REDEEMED
REINVESTED REINVESTED
<S> <C> <C> <C> <C> <C> <C>
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>
42
<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.
MERRILL LYNCH MICRO-CAP INDEX
The MERRILL LYNCH MICRO-CAP INDEX represents the performance of 2,036 stocks
ranging in market capitalization from $50 million to $220 million. Index returns
are calculated monthly.
43
<PAGE>
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 1987 are calculated
from The Wall Street Journal prices, using the change in flat price. Returns
from 1934 to 1986 are obtained from the CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 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 international 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, Chile,
China Free, Czech Republic, Colombia, Greece, Hungary, India, Indonesia Free,
Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela.
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 with at
least 10 years to maturity. 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.
44
<PAGE>
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 1995. 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 Westerfield, Randolph W., 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 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 3000(R) 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 2000(R) 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 1000(R) 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 July 1, based on May 31
market capitalization rankings.
45
<PAGE>
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 91.66% equity and hybrid REITs and 8.33% REOCs.
STANDARD & POOR'S MIDCAP 400 INDEX
The S&P 400 is a market-capitalization-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 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., Merrill Lynch and PGI
46
<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>
47
<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>
48
<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>
49
<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>
50
<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>
51
<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
</TABLE>
52
<PAGE>
APPENDIX C
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.
g:\edgar\sai\current\gol798sa.doc
53
<PAGE>
File Nos.333-46499 and 811-08661
(formerly File Nos. 33-34801 and 811-06106)
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial highlights of the Registrant's
predecessor (Pioneer Gold Shares, a series of
Pioneer Growth Trust) for the fiscal year ended
October 31, 1997 and the six months ended April 30,
1998 are included in Part A of the Registration
Statement and the financial statements of the
Registrant's predecessor are incorporated by
reference into Part B of the Registration
Statement from the predecssor's 1997 Annual Report to
Shareholders for the year ended October 31, 1997
(filed electronically on December 24, 1997; File No.
811 - 06106; Accession No. 0000863334-97-000019) and
its 1998 Semiannual Report to Shareholders for the
six months ended April 30, 1998 (filed electronically
on June 22, 1998; File No. 811-06106; Accession No.
0000863334-98-000016).
(b) Exhibits:
1.1. Agreement and Declaration of Trust 1
1.2. Certificate of Trust 1
2. By-Laws 1
3. None
4. Specimen Share Certificate 1
5. Form of Management Contract 2
6.1. Form of Underwriting Agreement 1
6.2. Form of Dealer Sales Agreement 1
7. None
8. Form of Custodian Agreement 1
9.1. Form of Investment Company Service Agreement 1
9.2. Form of Agreement and Plan of Reorganization 2
10. Opinion of Counsel 2
11. Consent of Arthur Andersen LLP 2
12. None
13. None
C-1
<PAGE>
14. None
15.1. Class A Distribution Plan 1
15.2. Class B Distribution Plan 1
15.3. Class C Distribution Plan 1
16. None
17. Financial Data Schedules 2
18. Form of Multiclass Plan Pursuant to
Rule 18f-3 1
19. Powers of Attorney 1
- ------------------
1 Previously filed. Incorporated herein by reference from the exhibits filed
with the Registration Statement (File No. 811-08661) as filed with the
Securities and Exchange Commission (the "SEC") on February 18, 1998 (Accession
No. 0000734072-98-000139).
2 Filed herewith.
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% Guernsey
Teberebie Goldfields Ltd. (TGL) PGL 90% Ghana
Pioneer Omega, Inc. (Omega) PGI 100% DE
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<PAGE>
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 Investment
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 Capital Growth Fund DE (effective July 1, 1998)
Pioneer Equity-Income Fund DE (effective July 1, 1998)
Pioneer Gold Shares DE (effective July 1, 1998)
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Independence 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 lists 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
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<PAGE>
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
(1)
Title of Class (2)
Shares of Beneficial Interest Number of Record Holders
(without par value) as of May 31, 1998
Class A shares 3,285
Class B shares 881
Class C shares 227
Item 27. Indemnification
Except for the Agreement and Declaration of Trust (the "Declaration"),
dated January 8, 1998, establishing the Registrant as a business trust under
Delaware law, there is no contract, arrangement or statute under which any
Trustee, officer, underwriter or affiliated person of the Registrant is insured
or indemnified. The Declaration 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.
Insofar as indemnification for liability arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be available to Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
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<PAGE>
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
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 PMC, the Registrant's investment adviser. The following
sections of such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2; and
(b) Section 6, 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
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<PAGE>
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
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
Not applicable.
Item 32. Undertakings
(a)
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Pre-
Effective Amendment No. 1 to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Boston and
Commonwealth of Massachusetts, on the 22nd day of June, 1998.
PIONEER GOLD SHARES
By: /s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registrant's Registration Statement has
been signed below by the following persons in the capacities and on the date
indicated:
Signature Title
/s/ John F. Cogan, Jr. Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
/s/ William H. Keough Chief Financial Officer )
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
/s/ John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
Richard H. Egdahl* )
Richard H. Egdahl )
<PAGE>
)
)
Margaret B. W. Graham* )
Margaret B. W. Graham )
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
David D. Tripple* )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ John F. Cogan, Jr. Dated: June 22, 1998)
John F. Cogan, Jr.
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
5. Form of Management Contract
9.2. Form of Agreement and Plan of Reorganization
10. Opinion of Counsel
11. Consent of Arthur Andersen LLP
17. Financial Data Schedules
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of July, 1998 between Pioneer Gold
Shares, a Delaware business trust (the "Trust"), and Pioneering Management
Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Trust, consistent with the investment objective and policies of
the Trust. The Manager will determine from time to time what securities shall be
purchased for the Trust, what securities shall be held or sold by the Trust and
what portion of the Trust's assets shall be held uninvested as cash, subject
always to the provisions of the Trust's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statements under the 1940 Act
and under the 1933 Act covering the Trust's shares, as filed with the
Commission, and to the investment objective, policies and restrictions of the
Trust, as each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Board of Trustees of the Trust
may from time to time establish. To carry out such determinations, the Manager
will exercise full discretion and act for the Trust in the same manner and with
the same force and effect as the Trust itself might or could do with respect to
purchases, sales or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct of such purchases,
sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct of
the business of the Trust and upon the Trust's request, furnish to the Trust
research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Trust shall at the time have any investment in such industries,
businesses, corporations or
<PAGE>
securities. The Manager will use its best efforts in the preparation of
such reports and will endeavor to consult the persons and sources believed by it
to have information available with respect to such industries, businesses,
corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Trust's securities transactions required by sub-paragraphs (b)(5), (6), (9) and
(10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the Trust's
affairs and investments, and shall arrange, if desired by the Trust, for members
of the Manager's organization to serve as officers or agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or "interested
persons" (as defined in the 1940 Act) of, the Manager and all officers of the
Trust as such; and (ii) all expenses not hereinafter specifically assumed by the
Trust where such expenses are incurred by the Manager or by the Trust in
connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Trust.
(c) The Trust shall assume and shall pay: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of the Manager, or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust; (iv) issue and
transfer taxes chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Trust to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission, state
securities agencies and foreign jurisdictions, including the preparation of
prospectuses and statements of additional information for filing with such
regulatory agencies; (vii) 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; (viii)
charges and expenses of legal counsel to the Trust and the Trustees;
2
<PAGE>
(ix) any distribution fees paid by the Trust in accordance with Rule 12b-1
promulgated by the Commission pursuant to the 1940 Act; (x) compensation of
those Trustees of the Trust who are not affiliated with or interested persons of
the Manager, the Trust (other than as Trustees), The Pioneer Group, Inc. or
Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing share
certificates; and (xii) interest on borrowed money, if any.
(d) In addition to the expenses described in Section 2(c) above, the Trust
shall pay all brokers' and underwriting commissions chargeable to the Trust in
connection with securities transactions to which the Trust is a party.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a 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. Management fees payable hereunder shall be computed daily and paid
monthly in arrears. In the event of termination of this Agreement, the fee
provided in this section shall be computed on the basis of the period ending on
the last business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
(i) If the operating expenses of the Trust in any year exceed the limits
set by state securities laws or regulations in states in which shares of the
Trust are sold, the amount payable to the Manager under subsection (a) above
will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulations. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Trust to the extent required by the preceding sentence.
(ii) In addition to the foregoing, the Manager may from time to time agree
not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
4. It is understood that the Manager may employ one or more sub-investment
advisers (each a "Subadviser") to provide investment advisory services to the
Trust by entering into a written agreement with each such Subadviser; PROVIDED,
that any such agreement first shall be approved by the vote of a majority of the
Trustees, including a majority of the Trustees who are not "interested persons"
(as defined in
3
<PAGE>
the 1940 Act) of the Trust, the Manager or any such Subadviser, at a
meeting of Trustees called for the purpose of voting on such approval and by the
affirmative vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Trust. The authority given to the Manager in
Sections 1 through 6 hereof may be delegated by it under any such agreement;
PROVIDED, that any Subadviser shall be subject to the same restrictions and
limitations on investments and brokerage discretion as the Manager. The Trust
agrees that the Manager shall not be accountable to the Trust or the Trust's
shareholders for any loss or other liability relating to specific investments
directed by any Subadviser, even though the Manager retains the right to reverse
any such investment, because, in the event a Subadviser is retained, the Trust
and the Manager will rely almost exclusively on the expertise of such Subadviser
for the selection and monitoring of specific investments.
5. The Manager 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 security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust or its shareholders 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 this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that the Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for the account of
the Trust, neither the Manager nor any of its Trustees, officers or employees
will act as a principal or agent or receive any commission except as permitted
by the 1940 Act. The Manager shall arrange for the placing of all orders for the
purchase and sale of securities for the Trust's account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers and the
placing of such orders, the
4
<PAGE>
Manager is directed at all times to seek for the Trust the most favorable
execution and net price available except as described herein. It is also
understood that it is desirable for the Trust that the Manager have access to
supplemental investment and market research and security and economic analyses
provided by brokers who may execute brokerage transactions at a higher cost to
the Trust than may result when allocating brokerage to other brokers on the
basis of seeking the most favorable price and efficient execution. Therefore,
the Manager is authorized to place orders for the purchase and sale of
securities for the Trust with such brokers, subject to review by the Trust's
Trustees from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers may be
useful to the Manager in connection with its or its affiliates' services to
other clients.
(c) On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Trust as well as other clients, the Manager,
to the extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the best execution and
lower brokerage commissions, if any. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Manager in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and to such clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until June 30, 1999 and from year to year thereafter, but only
so long as its continuance is approved annually by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Trust, subject to the right of the Trust and the
Manager to terminate this contract as provided in Section 8 hereof.
8. Either party hereto may, without penalty, terminate this
Agreement by vote of its Board of Trustees or Directors, as the case may be, or
by vote of a "majority of its outstanding voting securities" (as defined in the
1940 Act) and the giving of 60 days' written notice to the other party.
9. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Trust agrees that in the event that neither the Manager nor any of
its affiliates acts as an investment adviser to the Trust, the name of the Trust
will be changed to one that does not contain the name "Pioneer" or otherwise
suggest an affiliation with the Manager.
5
<PAGE>
11. The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust or any series thereof.
12. This Agreement states the entire agreement of the parties hereto, and
is intended to be the complete and exclusive statement of the terms hereof. It
may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
13. This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
14. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER GOLD SHARES
By:
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT CORPORATION
By:
Joseph P. Barri David D. Tripple
Secretary President
6
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made as of the 18th day of
June, 1998, by and among Pioneer Growth Trust, a Massachusetts business trust
(the "Current Trust"), and Pioneer Capital Growth Fund, Pioneer Equity-Income
Fund and Pioneer Gold Shares, each a business trust duly formed under the laws
of the State of Delaware (the "Successor Trusts").
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368 (a)(1) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code"), and is intended to effect the
conversion of each series of the Current Trust into a separate corresponding
Delaware business trust. The Current Trust consists of three series, the names
of which correspond to each of the Successor Trusts -- Pioneer Capital Growth
Fund, Pioneer Equity-Income Fund and Pioneer Gold Shares (the "Corresponding
Series"). The conversion will involve the transfer of all of the assets of each
of the Corresponding Series of the Current Trust to that corresponding Successor
Trust having the same name as such individual Corresponding Series, solely in
exchange for (1) the assumption by each Successor Trust of all liabilities of
the Corresponding Series of the Current Trust and (2) the issuance by each
Successor Trust of shares of beneficial interest of each class of such Successor
Trust ("Successor Trust Shares") to such Corresponding Series of the Current
Trust equal to the number of shares of each class of beneficial interest of such
Corresponding Series then outstanding, followed by the pro rata distribution on
the Closing Date (as defined below) of such Successor Trust Shares to the
holders of shares of each class of beneficial interest of such Corresponding
Series of the Current Trust (the "Current Trust Shareholders") in exchange for
their shares of beneficial interest of such class of such Corresponding Series
of the Current Trust ("Current Trust Shares") in liquidation and termination of
such Corresponding Series of the Current Trust, all upon the terms and
conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth the parties hereto covenant and agree as follows.
1. TRANSFER OF ASSETS OF EACH OF THE CORRESPONDING SERIES OF THE CURRENT TRUST
IN EXCHANGE FOR ASSUMPTION OF LIABILITIES AND ISSUANCE OF SHARES OF THE
RESPECTIVE SUCCESSOR TRUSTS; TERMINATION OF THE CURRENT TRUST
1.1 Subject to the terms and conditions set forth herein and on the
basis of the representations and warranties contained herein, each of the
Corresponding Series of the Current Trust agrees to transfer all of its assets,
as set forth in paragraph 1.2, and assign and transfer all of its liabilities to
the respective Successor Trust established solely for the purpose of acquiring
all of the assets and assuming all of the liabilities of such Corresponding
Series of the Current Trust. As of the date of this Agreement and as of the
Closing Date (as defined below), the Successor Trusts have not and will not have
issued any Successor Trust Shares, other than such shares as may be issued to
Pioneering Management Corporation or one of its affiliates to establish the
<PAGE>
necessary minimum capitalization for registration with the Securities and
Exchange Commission ("SEC"), or commenced operations. Each of the Successor
Trusts agrees that in exchange for all of the assets of the respective
Corresponding Series of the Current Trust (1) such Successor Trust shall assume
all of the liabilities of the respective Corresponding Series, whether
contingent or otherwise, then existing and (2) such Successor Trust shall
deliver to the respective Corresponding Series the number of full and fractional
Successor Trust Shares of each class equal to the number of shares of each
corresponding class of Current Trust Shares of that Corresponding Series then
outstanding, which collectively shall be equal to the value of the assets of the
respective Corresponding Series transferred to, less the liabilities of such
Corresponding Series assumed by, such Successor Trust (the "Net Assets"), as
described in paragraph 3.1 on the Closing Date provided for in paragraph 3.1.
Such transactions shall take place at the Closing provided for in paragraph 3.1.
1.2 The assets of each of the Corresponding Series of the Current Trust
to be acquired by the respective Successor Trust shall include, without
limitation, all cash, cash equivalents, securities, receivables (including
interest and dividends receivable), any claims or rights of action or rights to
register shares under applicable securities laws, any books or records of such
Corresponding Series and other property owned by such Corresponding Series and
any deferred or prepaid expenses shown as assets on the books of such
Corresponding Series on the Closing Date provided for in paragraph 3.1.
1.3 Immediately upon delivery to each of the Corresponding Series of
the Current Trust of Successor Trust Shares of the respective Successor Trust,
any duly authorized officer of such Corresponding Series, as the then sole
shareholder of the respective Successor Trust, shall (i) elect as Trustees of
the respective Successor Trust the persons who currently serve as Trustees of
the respective Corresponding Series; (ii) ratify the selection of the
independent accountants; (iii) approve a management contract for the respective
Successor Trust with PMC in the form most recently approved for such
Corresponding Series; (iv) approve the Rule 12b-1 plan of distribution for each
class of the respective Successor Trust substantially identical to the plan then
in effect for such class of the Corresponding Series; and (v) adopt the
investment objectives, investment policies and investment restrictions of such
Corresponding Series.
1.4 As provided in paragraph 3.4, on the Closing Date each of the
Corresponding Series of the Current Trust will distribute in liquidation to the
Current Trust Shareholders of record of each class, determined as of the close
of business on the Closing Date, the Successor Trust Shares of the corresponding
class received from the respective Successor Trust pro rata in proportion to
their respective Current Trust Shares of such class in the respective
Corresponding Series, in exchange for such Current Trust Shares. Such
distribution will be accomplished by the transfer of the respective Successor
Trust Shares then credited to the account of the respective Corresponding Series
on the share records of the respective Successor Trust to open accounts on those
records in the names of such Current Trust Shareholders and representing the
respective pro rata number of the Successor Trust Shares of each class received
from the respective Successor Trust due such Current Trust Shareholders. The
Successor Trusts shall not issue certificates representing Successor Trust
Shares in connection with such distributions. Fractional Successor Trust Shares
shall be rounded to the third place after the decimal point.
<PAGE>
1.5 As soon as practicable after the distribution of the Successor
Trust Shares as set forth in Section 1.4, each of the Corresponding Series of
the Current Trust and the Current Trust shall be terminated and any such further
actions shall be taken in connection therewith as are required by applicable
law.
1.6 Ownership of the Successor Trust Shares by each Successor Trust
Shareholder shall be maintained separately on the books of Pioneering Services
Corporation as the shareholder services and transfer agent for the Successor
Trusts.
1.7 Any transfer taxes payable upon issuance of Successor Trust Shares
in a name other than the registered holder of the Current Trust Shares on the
books of each of the Corresponding Series of the Current Trust as of that time
shall be paid by the person to whom such Successor Trust Shares are to be
distributed as a condition of such transfer.
2. VALUATION
2.1 The value of the Net Assets of each Corresponding Series of the
Current Trust to be acquired hereunder by the respective Successor Trust shall
be the net asset value computed as of the valuation time provided in the then
current prospectus of the respective Corresponding Series on the Closing Date
using the valuation procedures set forth in the then current prospectus or
statement of additional information.
2.2 The value of full and fractional Successor Trust Shares of each
Successor Trust to be issued in exchange for the Net Assets of each of the
Corresponding Series shall be equal to the value of such Net Assets on the
Closing Date, and the number of such Successor Trust Shares of each class to be
issued by the respective Successor Trusts shall equal the number of full and
fractional Current Trust Shares of each class of the respective Corresponding
Series on the Closing Date.
2.3 All computations of value shall be made by Pioneering Management
Corporation for the Current Trust and the Successor Trusts.
3. CLOSING AND CLOSING DATE
3.1 The transfer of the assets of the Corresponding Series of the
Current Trust in exchange for the assumption by the respective Successor Trusts
of the liabilities of such Corresponding Series and the issuance of Successor
Trust Shares to the respective Corresponding Series, as described above,
together with related acts necessary to consummate such acts (the "Closing"),
shall occur at the offices of Hale and Dorr LLP at 60 State Street, Boston,
Massachusetts 02109 on June 30, 1998 (the "Closing Date"), or at such other
place or date on or prior to December 31, 1998 as the parties may agree in
writing. All acts taking place at the Closing shall be deemed to take place
simultaneously as of the last daily determination of the net asset value of the
Corresponding Series or at such other time and/or place as the parties may
agree.
<PAGE>
3.2 In the event that on the Closing Date (a) the New York Stock
Exchange is closed to trading or trading thereon is restricted or (b) trading or
reporting of trading on said Exchange or in any market in which portfolio
securities of the Current Trust are traded is disrupted so that accurate
appraisal of the value of the Net Assets of the Current Trust is impracticable,
the Closing shall be postponed until the first business day upon which trading
shall have been fully resumed and reporting shall have been restored.
3.3 Each Corresponding Series of the Current Trust shall deliver at the
Closing a certificate or separate certificates of an authorized officer stating
that it has notified the Custodian, as custodian for the respective
Corresponding Series and the respective Successor Trust, of the conversion of
such Corresponding Series of the Current Trust to the respective Successor
Trust.
3.4 Pioneering Services Corporation, as shareholder services and
transfer agent for the Current Trust, shall deliver at the Closing certificates
as to the conversion on its books and records of the accounts of the
shareholders of the Corresponding Series of the Current Trust to accounts as
holders of shares of the respective Successor Trusts. Each Successor Trust shall
issue and deliver to the Current Trust a confirmation evidencing the shares of
that Successor Trust to be credited on the Closing Date or provide evidence
satisfactory to the respective Corresponding Series that such shares of such
Successor Trust have been credited to the account of the Corresponding Series on
the books of such Successor Trust. At the Closing each party shall deliver to
the other such bills of sale, checks, assignments, share certificates, receipts
or other documents as such other party or its counsel may reasonably request.
3.5 Portfolio securities that are not held in book-entry form in the
name of the Custodian as record holder for each of the Corresponding Series of
the Current Trust shall be presented by the respective Corresponding Series of
the Current Trust to the Custodian for examination no later than five business
days preceding the Closing Date. Portfolio securities which are not held in
book-entry form shall be delivered by the respective Corresponding Series of the
Current Trust to the Custodian for the account of the respective Successor Trust
on the Closing Date, duly endorsed in proper form for transfer, in such
condition as to constitute good delivery thereof in accordance with the custom
of brokers, and shall be accompanied by all necessary federal and state stock
transfer stamps or a check for the appropriate purchase price thereof. Portfolio
securities held of record by the Custodian in book-entry form on behalf of a
Corresponding Series of the Current Trust shall be delivered to the respective
Successor Trust by the Custodian by recording the transfer of beneficial
ownership thereof on its records. The cash of a Corresponding Series of the
Current Trust to be delivered shall be in the form of currency or by the
Custodian crediting the respective Successor Trust's account maintained with the
Custodian with immediately available funds.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Current Trust represents and warrants as follows:
<PAGE>
4.1.A. The Current Trust is a business trust duly authorized
to exist under the laws of The Commonwealth of Massachusetts and has the power
to own all of its properties and assets and, subject to approval by the
shareholders of the Current Trust, to perform its obligations under this
Agreement. The Current Trust is not required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to qualify would
not subject it to any material liability or disability. The Current Trust has
all necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
4.1.B. The Current Trust is a registered investment company
classified as a management company of the open-end diversified type and its
registration with the Securities and Exchange Commission (the "Commission") as
an investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), is in full force and effect;
4.1.C. The Current Trust is not, and the execution, delivery
and performance of this Agreement will not result, in violation of any provision
of its Amended and Restated Declaration of Trust or By-laws, or any agreement,
indenture, instrument, contract, lease or other undertaking to which the Current
Trust is a party or by which the Current Trust is bound;
4.1.D. The Current Trust has no material contracts or other
commitments (other than this Agreement or agreements for the purchase of
securities entered into in the ordinary course of business and consistent with
its obligations under this Agreement) that will not be terminated without
liability to the Current Trust on or prior to the Closing Date;
4.1.E. No material litigation or administrative proceeding or
investigation of or before any court or governmental body presently is pending
or threatened against the Current Trust or any of its properties or assets. The
Current Trust knows of no facts that might form the basis for the institution of
such proceedings and the Current Trust is not a party to, or subject to, the
provisions of any order, decree or judgment of any court or governmental body
that materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
4.1.F. At the date hereof and at the Closing Date, all
federal, state and other tax returns and reports, including information returns
and payee statements, of each Corresponding Series of the Current Trust required
by law to have been filed or furnished by such dates shall have been filed or
furnished and all federal, state and other taxes, interest and penalties shall
have been paid so far as due or provision shall have been made for the payment
thereof and no such return is currently under audit and no assessment has been
asserted with respect to any of such returns or reports;
4.1.G. Each Corresponding Series has elected to be treated as
a regulated investment company under Subchapter M of the Code, has qualified as
such for each taxable year since its inception, and will qualify as such as of
the Closing Date;
<PAGE>
4.1.H. The authorized capital of the Current Trust consists of
an unlimited number of shares of beneficial interest, no par value, divided into
three classes (Class A, Class B and Class C) of three separate series -- the
Corresponding Series. All issued and outstanding shares of beneficial interest
of the Current Trust are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and nonassessable. The Current Trust does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of its shares of beneficial interest, nor is there outstanding any
security convertible into any of its shares of beneficial interest;
4.1.I. The information to be furnished by the Current Trust
for use in applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto;
4.1.J. All of the issued and outstanding Current Trust Shares
will at the time of the Closing be held by the persons and in the amounts as, on
behalf of each Corresponding Series, certified in accordance with the provisions
of paragraph 3.4;
4.1.K. At the Closing Date, the Current Trust, on behalf of
each Corresponding Series, will have good and marketable title to the assets to
be transferred to the respective Successor Trust pursuant to paragraph 1.1, and
full right, power and authority to sell, assign, transfer and deliver such
assets hereunder, and upon delivery of and payment for such assets, the
respective Successor Trust will acquire good and marketable title thereto
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the Securities Act of 1933, as amended (the
"1933 Act), except as otherwise disclosed in writing to and accepted by the
Successor Trust;
4.1.L. The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action on
the part of the Current Trust and this Agreement constitutes a valid and binding
obligation of the Current Trust enforceable in accordance with its terms,
subject to, for each Corresponding Series, the approval of the shareholders of
that series;
4.1.M. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Current Trust of
the transactions contemplated herein, except such as shall have been obtained
prior to the Closing Date.
4.2 Each of the Successor Trusts represents and warrants
individually as follows:
4.2.A. The Successor Trust is a business trust duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the power to own all of its properties and assets and to perform its
obligations under this Agreement; the Successor Trust is not required to qualify
to do business in any jurisdiction in which it is not so qualified or where
failure to qualify would not subject it to any material liability or disability;
the Successor Trust
<PAGE>
has all necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted; and
as of the date hereof and as of the Closing Date, the Successor Trust consists
of one duly established and designated series;
4.2.B. The Successor Trust is not, and the execution, delivery
and performance of this Agreement will not result, in violation of any provision
of the Certificate of Trust, Agreement and Declaration of Trust or By-laws of
the Successor Trust or any agreement, indenture, instrument, contract, lease or
other undertaking to which the Successor Trust is a party or by which the
Successor Trust is bound;
4.2.C. No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or threatened against the Successor Trust or any of its properties or assets.
The Successor Trust knows of no facts that might form the basis for the
institution of such proceedings, and the Successor Trust is not a party to, or
subject to, the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects it business or its
ability to consummate the transactions herein contemplated;
4.2.D. The Successor Trust will qualify as a regulated
investment company under Subsection M of the Code for the taxable year in which
the Closing occurs will continue to qualify as such for each taxable year;
4.2.E. Other than such shares as may be issued to Pioneering
Management Corporation or one of its affiliates to establish the necessary
minimum capitalization for registration with the SEC, prior to the Closing Date,
there shall be no issued and outstanding Successor Trust Shares or any other
securities of the Successor Trust; Successor Trust Shares issued in connection
with the transactions contemplated herein will be duly and validly issued and
outstanding and fully paid and non-assessable;
4.2.F. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action on the part of the
Successor Trust, and this Agreement constitutes a valid and binding obligation
of the Successor Trust enforceable against the Successor Trust in accordance
with its terms;
4.2.G. The information to be furnished by the Successor Trust
for use in applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with Federal securities and other laws and regulations
applicable thereto; and
4.2.H. No consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the
Successor Trust of the transactions contemplated herein, except such as shall
have been obtained prior to the Closing Date.
<PAGE>
5. COVENANTS OF THE CURRENT TRUST AND THE SUCCESSOR TRUSTS
5.1 The Current Trust covenants that the Successor Trust Shares are not
being acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.2 The Current Trust covenants that it will assist the Successor
Trusts in obtaining such information as the Successor Trusts may reasonably
request concerning the beneficial ownership of Current Trust Shares.
5.3 The Current Trust will, from time to time, as and when requested by
the Successor Trusts execute and deliver, or cause to be executed and delivered,
all such assignments and other instruments, and will take or cause to be taken
such further action, as the Successor Trusts may deem necessary or desirable in
order to vest in, and confirm to, the Successor Trusts, title to, and possession
of, all the assets of the Current Trust to be sold, assigned, transferred and
delivered to the Successor Trusts hereunder and otherwise to carry out the
intent and purpose of this Agreement.
5.4 The Successor Trusts will, from time to time, as and when requested
by the Current Trust, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause to be taken
such further action, as the Current Trust may deem necessary or desirable in
order to vest in, and confirm to, the Current Trust on behalf of the respective
Corresponding Series, title to, and possession of, the Successor Trust Shares
issued, sold, assigned, transferred and delivered hereunder and otherwise to
carry out the intent and purpose of this Agreement.
5.5 The Successor Trusts shall use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such
state securities laws as it may deem appropriate in order to operate after the
Closing Date.
5.6 Subject to the provisions of this Agreement, the Successor Trusts
and the Current Trust each will take, or cause to be taken, all action and will
do or cause to be done all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.7 As promptly as practicable, but in any event within 60 days after
the Closing Date, each Corresponding Series of the Current Trust shall furnish
to the respective Successor Trust, in such form as is reasonably satisfactory to
such Successor Trust, a statement of the earnings and profits of such
Corresponding Series of the Current Trust for federal income tax purposes, and
of any capital loss carryovers and other items that will be carried over to the
respective Successor Trust as a result of Section 381 of the Code, and which
statement will be certified by the President or Treasurer of such Corresponding
Series of the Current Trust.
<PAGE>
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST
The obligations of the Corresponding Series of the Current Trust to
consummate the transactions provided for herein shall be subject to the
performance by the respective Successor Trusts of all the obligations to be
performed by the Successor Trusts hereunder on or before the Closing Date and,
in addition thereto, to the following further conditions:
6.1 All representations and warranties of the Successor Trusts
contained in this Agreement shall be true and correct in all material respects
as of the date hereof except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date, with the same force and
effect as if made on and as of the Closing Date, and
6.2 The Successor Trusts each shall have delivered on the Closing Date
to the Current Trust a certificate executed in such Successor Trust's name by
its President or Vice President, in form and substance satisfactory to the
Current Trust, dated as of the Closing Date, to the effect that the
representations and warranties of such Successor Trust made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this
<PAGE>
Agreement, and as to such other matters as the Current Trust shall
reasonably request.
Each of the foregoing conditions precedent may be waived by the Current
Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SUCCESSOR TRUSTS
The obligations of the Successor Trusts to consummate the transactions
provided for herein shall be subject to the performance by the Current Trust of
all the obligations to be performed hereunder on or before the Closing Date and,
in addition thereto, to the following further conditions:
7.1 All representations and warranties of the Current Trust contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date;
7.2 Each Corresponding Series of the Current Trust shall have delivered
to the respective Successor Trust on the Closing Date a statement of its assets
and liabilities, prepared in accordance with generally accepted accounting
principles consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of such Corresponding Series as to the portfolio securities
of such Corresponding Series and the federal income tax basis and holding period
for each such portfolio security as of the Closing Date; and
7.3 Each Corresponding Series of the Current Trust shall have delivered
to the respective Successor Trust on the Closing Date a certificate executed in
the name of such Corresponding Series by its President or Vice President, in
form and substance satisfactory to the respective Successor Trust, dated as of
the Closing Date, to the effect that the representations and warranties of such
Corresponding Series made in this Agreement are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the respective
Successor Trust shall reasonably request.
Each of the foregoing conditions precedent may be waived by each
Successor Trust.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST AND THE
SUCCESSOR TRUSTS
The obligations of the Current Trust and the Successor Trusts are
subject to the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of each of the Corresponding Series'
shareholders in accordance with applicable law;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection with,
the transactions contemplated hereby;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state securities authorities) deemed necessary by the
Successor Trusts or the Current Trust to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Successor Trusts or the Current Trust, provided that either party hereto may for
itself waive any of such conditions;
8.4 The President or Vice President of each of the Successor Trusts
shall have delivered a certificate to the Current Trust on the Closing Date
certifying that such Successor Trust has taken all necessary action so that it
shall be a registered open-end investment company under the 1940 Act.
8.5 The Current Trust and the respective Successor Trust shall have
received on or before the Closing Date an opinion of Hale and Dorr LLP
satisfactory to the Current Trust and the respective Successor Trusts,
substantially to the effect that for federal income tax purposes:
8.5.A. The acquisition of all of the assets of each
Corresponding Series of the Current Trust by the respective Successor Trust
solely in exchange for the issuance of Successor Trust Shares to such
Corresponding Series and the assumption by such Successor Trust of all of the
liabilities of the respective Corresponding Series, followed by the distribution
in liquidation by such Corresponding Series of such Successor Trust Shares to
the shareholders of such Corresponding Series in exchange for their shares of
such Corresponding Series and the termination of such Corresponding Series, will
constitute a reorganization within the meaning of Section 368(a)(1) of the Code,
and such Corresponding Series and the respective Successor Trust will each be "a
party to a reorganization" within the meaning of Section 368(b) of the Code;
<PAGE>
8.5.B. No gain or loss will be recognized by each
Corresponding Series of the Current Trust upon (i) the transfer of all of its
assets to the respective Successor Trust solely in exchange for the issuance of
Successor Trust Shares to such Corresponding Series and the assumption by the
respective Successor Trust of the liabilities of such Corresponding Series and
(ii) the distribution by such Corresponding Series of such Successor Trust
Shares to the shareholders of such Corresponding Series;
8.5.C. No gain or loss will be recognized by each Successor
Trust upon receipt of all of the assets of the respective Corresponding Series
of the Current Trust solely in exchange for the issuance of the Successor Trust
Shares to such Corresponding Series and the assumption by such Successor Trust
of all of the liabilities of such Corresponding Series;
8.5.D. The tax basis of the assets of each Corresponding
Series of the Current Trust in the hands of the respective Successor Trust will
be, in each instance, the same as the tax basis of those assets in the hands of
such Corresponding Series immediately before the transfer;
8.5.E. The tax holding period of the assets of each
Corresponding Series of the Current Trust in the hands of the respective
Successor Trust will, in each instance, include the tax holding period of such
Corresponding Series for those assets;
8.5.F. Current Trust Shareholders will not recognize gain or
loss upon the exchange of all of their shares of a Corresponding Series of the
Current Trust solely for Successor Trust Shares of the respective Successor
Trust as part of the transaction;
8.5.G. The tax basis of the Successor Trust Shares received by
Current Trust Shareholders of a Corresponding Series in the transaction will be,
for each shareholder, the same as the tax basis of the shares of such
Corresponding Series surrendered in exchange therefor; and
8.5.H. The tax holding period of the Successor Trust Shares
received by Current Trust Shareholders of a Corresponding Series will include,
for each shareholder, the tax holding period for the shares of such
Corresponding Series surrendered in exchange therefor, provided that such shares
of such Corresponding Series were held as capital assets on the date of the
exchange.
Each of the Corresponding Series of the Current Trust and the
respective Successor Trust each agree to make and provide representations with
respect to such Corresponding Series and the respective Successor Trusts which
are reasonably necessary to enable Hale and Dorr LLP to deliver an opinion
substantially as set forth in this paragraph 8.5, which opinion may address such
other federal income tax consequences, if any, that Hale and Dorr LLP believes
to be material to the transaction.
Each of the foregoing conditions precedent to the obligations of a
party, except for the receipt of the opinion of Hale and Dorr LLP set forth in
paragraph 8.5, may be waived by that party.
<PAGE>
9. BROKERAGE FEES AND EXPENSES
Each Successor Trust and the respective Corresponding Series of the
Current Trust each represent and warrant to the other that there are no broker's
or finder's fees payable in connection with the transactions contemplated
hereby.
10. ENTIRE AGREEMENT
Each of the Successor Trusts and the respective Corresponding Series of
the Current Trust agree that neither party has made any representation, warranty
or covenant not set forth herein and that this Agreement constitutes the entire
agreement between the parties. The representations, warranties and covenant
contained herein or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Successor Trust and the Current Trust. In addition, either a Successor Trust or
the Current Trust may at its option terminate this Agreement at or prior to the
Closing Date because:
11.1.A. There exists a material breach by the other party of
any representations, warranties or agreements contained herein to be performed
at or prior to the Closing Date; or
11.1.B. A condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
11.2 In the event of any such termination, there shall be no liability
for damages on the part of the Successor Trust or the Current Trust, or their
respective trustees or officers, to the other party or its trustees or officers.
12. AMENDMENT
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the parties; provided, however,
that following the approval of this Agreement by Current Trust Shareholders, no
such amendment may have the effect of changing the provisions for determining
the number of Successor Trust Shares to be paid to Current Trust Shareholders
under this Agreement to the detriment of Current Trust Shareholders without
their further approval.
13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
13.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
<PAGE>
13.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts.
13.4 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason of
this Agreement.
13.5 All persons dealing with the Current Trust and the Successor
Trusts must look solely to the property of the Current Trust and the Successor
Trust for the enforcement of any claims against such Trust as neither the
Trustees, officers, agents nor shareholders of either Trust assume any personal
liability for obligations entered into on behalf of the Current Trust and the
Successor Trusts.
13.6 A copy of the Agreement and Declaration of Trust of the Current
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Current Trust as trustees and not individually and
that the obligations of this instrument are not binding upon any of the
trustees, officers, or shareholders of the current Trust individually, but are
binding only upon the assets and property of the Current Trust.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Current Trust or the
Successor Trusts, each at 60 State Street, Boston, Massachusetts 02109,
Attention: Secretary.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
PIONEER GROWTH TRUST, a Massachusetts business trust, on
behalf of each of Pioneer Capital Growth Fund, Pioneer
Equity-Income Fund and Pioneer Gold Shares
By:
- ------------------------------
Its:
- ------------------------------
PIONEER CAPITAL GROWTH FUND,
a Delaware business trust
By:
- ------------------------------
Its:
- ------------------------------
PIONEER EQUITY-INCOME FUND,
a Delaware business trust
By:
- ------------------------------
Its:
- ------------------------------
PIONEER GOLD SHARES,
a Delaware business trust
By:
- ------------------------------
Its:
- ------------------------------
M o r r i s, N i c h o l s, A r s h t & T u n n e l
1201 North Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
-------
Telephone (302) 658-9200
Telecopy (302) 658-3989
Writer's Direct Dial Number:
Richard L. Sutton Rachel A. Dwares
Johannes R. Krahmer Karen Jackobs Louden
O. Francis Biondi Karen L. Pascale
Lewis S. Black, Jr. Donna L. Culver
Paul Welsh Julia Heaney
William O. Lamotte, III Jonathan I. Lessner
Douglas E. Whitney Robert J. Dehney
William H. Sudell, Jr. Jeffrey R. Wolters
Martin P. Tully Maryellen Noreika
Thomas R. Hunt, Jr. David J. Teklits
A. Gilchrist Sparks, III S. Mark Hurd
Richard D. Allen Rodger D. Smith*
David Ley Hamilton Lisa K. W. Crossland
John F. Johnston Mona A. Lee
Walter C. Tuthill Stanford L. Stevenson, III
Donald F. Parsons, Jr. J. Andrew Huffman
Jack B. Blumenfeld Derek C. Abbott
Donald Nelson Isken Jessica Zeldin
Donald E. Reid Rodney B. Carroll
Denison H. Hatch, Jr. Bradley James Enna
Thomas C. Grimm David A. Harris
Kenneth J. Nachbar Elizabeth A. Brown**
Andrew M. Johnson Richard H. Cross, Jr.
Mary B. Graham Patricia A. O'Neill
Michael Houghton Gregory W. Werkheiser
Matthew B. Lehr Christopher F. Carlton
Thomas R. Pulsifer Stephanie P. Hochberg***
Jon E. Abramczyk Stephanie L. Nagel
Alan J. Stone Eric Lopez Schnabel
Louis G. Hering
Frederick H. Alexander S. Samuel Arsht
R. Judson Scaggs, Jr. Andrew B. Kirkpatrick, Jr.
William M. Lafferty David A. Drexler
Walter L. Pepperman, II
Of Counsel
June 22, 1998
*Admitted in NY only
**Admitted in MN only
***Admitted in NJ only
Pioneer Gold Shares
60 State Street
Boston, Massachusetts 02109
Re: PIONEER GOLD SHARES
Ladies and Gentlemen:
We have acted as special Delaware counsel to Pioneer Gold Shares, a
Delaware business trust (the "Trust"), in connection with certain matters
relating to the issuance of Shares of beneficial interest in the Trust.
Capitalized terms used herein and not otherwise herein defined are used as
defined in the Agreement and Declaration of Trust of the Trust dated January 8,
1998 (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "Recording Office") on January 14, 1998 (the "Certificate"); the Governing
Instrument; the By-laws of the Trust; certain resolutions of the Trustees of the
Trust; the Trust's Notification of Registration Filed Pursuant to Section 8(a)
of the Investment Company Act of 1940 on Form N-8A as filed with the Securities
and Exchange Commission on February 18, 1998; and a certification of good
standing of the Trust obtained as of a recent date from the Recording Office. In
such examinations, we have assumed the
<PAGE>
Pioneer Gold Shares
June 22, 1998
Page 2
genuineness of all signatures, the conformity to original documents of all
documents submitted to us as copies or drafts of documents to be executed, and
the legal capacity of natural persons to complete the execution of documents. We
have further assumed for the purpose of this opinion: (i) the due adoption,
authorization, execution and delivery by, or on behalf of, each of the parties
thereto of the above- referenced resolutions, instruments, certificates and
other documents, and of all documents contemplated by the Governing Instrument,
the By-laws and applicable resolutions of the Trustees to be executed by
investors desiring to become Shareholders; (ii) the payment of consideration for
Shares, and the application of such consideration, as provided in the Governing
Instrument, and compliance with the other terms, conditions and restrictions set
forth in the Governing Instrument and all applicable resolutions of the Trustees
of the Trust in connection with the issuance of Shares (including, without
limitation, the taking of all appropriate action by the Trustees to designate
Series of Shares and the rights and preferences attributable thereto as
contemplated by the Governing Instrument); (iii) that appropriate notation of
the names and addresses of, the number of Shares held by, and the consideration
paid by, Shareholders will be maintained in the appropriate registers and other
books and records of the Trust in connection with the issuance, redemption or
transfer of Shares; (iv) that no event has occurred subsequent to the filing of
the Certificate that would cause a termination or reorganization of the Trust
under Section 4 or Section 5 of Article IX of the Governing Instrument; (v) that
the activities of the Trust have been and will be conducted in accordance with
the terms of the Governing Instrument and the Delaware Business Trust Act, 12
DEL. C. ss.ss. 3801 ET SEQ. (the "Delaware Act"); and (vi) that each of the
documents examined by us is in full force and effect and has not been modified,
supplemented or otherwise amended. No opinion is expressed herein with respect
to the requirements of, or compliance with, federal or state securities or blue
sky laws. Further, we express no opinion on the sufficiency or accuracy of any
registration or offering documentation relating to the Trust or the Shares. As
to any facts material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
<PAGE>
Pioneer Gold Shares
June 22, 1998
Page 3
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Shares, when issued to Shareholders in accordance with the terms,
conditions, requirements and procedures set forth in the Governing Instrument,
will constitute legally issued, fully paid and non-assessable Shares of
beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument, each
Shareholder of the Trust, in such capacity, will be entitled to the same
limitation of personal liability as that extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware; provided, however, that we express no opinion with respect to the
liability of any Shareholder who is, was or may become a named Trustee of the
Trust. Neither the existence nor exercise of the voting rights granted to
Shareholders under the Governing Instrument will, of itself, cause a Shareholder
to be deemed a trustee of the Trust under the Delaware Act. Notwithstanding the
foregoing or the opinion expressed in paragraph 2 above, we note that, pursuant
to Section 2 of Article VIII of the Governing Instrument, the Trustees have the
power to cause Shareholders, or Shareholders of a particular Series, to pay
certain custodian, transfer, servicing or similar agent charges by setting off
the same against declared but unpaid dividends or by reducing Share ownership
(or by both means).
We understand that the Trust is currently in the process of registering or
qualifying Shares in various states, and we hereby consent to the filing of a
copy of this opinion with the securities administrators of such states and with
the Securities and Exchange Commission as part of a pre-effective amendment to
the Trust's Registration Statement on Form N-1A as filed with the Securities and
Exchange Commission. In giving this consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of
<PAGE>
Pioneer Gold Shares
June 22, 1998
Page 4
1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as provided in this paragraph, the
opinion set forth above is expressed solely for the benefit of the addressee
hereof and may not be relied upon by, or filed with, any other person or entity
for any purpose without our prior written consent.
Sincerely,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
78557
ARTHUR ANDERSEN LLP
Consent Of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our reports
on Pioneer Gold Shares dated June 5, 1998 and December 3, 1997 (and to
all references to our firm) included in or made a part of Pre-Effective
Amendment No. 1 and Amendment No. 1 to Registration Statement File Nos.
333-46499 and 811-08661, respectively.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 23, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE SEMIANNUAL
REPORT ON FORM N-SAR DATED APRIL 30, 1998 FOR PIONEER GROWTH TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000869352
<NAME> PIONEER GOLD SHARES
<SERIES>
<NUMBER> 031
<NAME> PIONEER GOLD SHARES CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 41478315
<INVESTMENTS-AT-VALUE> 36111981
<RECEIVABLES> 421316
<ASSETS-OTHER> 2600
<OTHER-ITEMS-ASSETS> 963
<TOTAL-ASSETS> 36536860
<PAYABLE-FOR-SECURITIES> 835212
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 76083
<TOTAL-LIABILITIES> 911295
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 46513100
<SHARES-COMMON-STOCK> 4669461
<SHARES-COMMON-PRIOR> 4961874
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 38465
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 5482483
<ACCUM-APPREC-OR-DEPREC> (5366587)
<NET-ASSETS> 35625565
<DIVIDEND-INCOME> 170056
<INTEREST-INCOME> 74842
<OTHER-INCOME> 0
<EXPENSES-NET> 283363
<NET-INVESTMENT-INCOME> (38465)
<REALIZED-GAINS-CURRENT> (4530348)
<APPREC-INCREASE-CURRENT> 3869016
<NET-CHANGE-FROM-OPS> (699797)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2431501
<NUMBER-OF-SHARES-REDEEMED> 2723914
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 560569
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 952135
<GROSS-ADVISORY-FEES> 95662
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 345886
<AVERAGE-NET-ASSETS> 22497845
<PER-SHARE-NAV-BEGIN> 5.77
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.56
<EXPENSE-RATIO> 1.81
<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 SEMIANNUAL
REPORT ON FORM N-SAR DATED APRIL 30, 1998 FOR PIONEER GROWTH TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000869352
<NAME> PIONEER GOLD SHARES
<SERIES>
<NUMBER> 032
<NAME> PIONEER GOLD SHARES CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 41478315
<INVESTMENTS-AT-VALUE> 36111981
<RECEIVABLES> 421316
<ASSETS-OTHER> 2600
<OTHER-ITEMS-ASSETS> 963
<TOTAL-ASSETS> 36536860
<PAYABLE-FOR-SECURITIES> 835212
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 76083
<TOTAL-LIABILITIES> 911295
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 46513100
<SHARES-COMMON-STOCK> 1229066
<SHARES-COMMON-PRIOR> 961265
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 38465
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 5482483
<ACCUM-APPREC-OR-DEPREC> (5366587)
<NET-ASSETS> 35625565
<DIVIDEND-INCOME> 170056
<INTEREST-INCOME> 74842
<OTHER-INCOME> 0
<EXPENSES-NET> 283363
<NET-INVESTMENT-INCOME> (38465)
<REALIZED-GAINS-CURRENT> (4530348)
<APPREC-INCREASE-CURRENT> 3869016
<NET-CHANGE-FROM-OPS> (699797)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 709267
<NUMBER-OF-SHARES-REDEEMED> 441466
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 560569
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 952135
<GROSS-ADVISORY-FEES> 95662
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 345886
<AVERAGE-NET-ASSETS> 5072629
<PER-SHARE-NAV-BEGIN> 5.61
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> (.22)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.38
<EXPENSE-RATIO> 2.57
<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 SEMIANNUAL
REPORT ON FORM N-SAR DATED APRIL 30, 1998 FOR PIONEER GROWTH TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000869352
<NAME> PIONEER GOLD SHARES
<SERIES>
<NUMBER> 033
<NAME> PIONEER GOLD SHARES CLASS C
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 41478315
<INVESTMENTS-AT-VALUE> 36111981
<RECEIVABLES> 421316
<ASSETS-OTHER> 2600
<OTHER-ITEMS-ASSETS> 963
<TOTAL-ASSETS> 36536860
<PAYABLE-FOR-SECURITIES> 835212
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 76083
<TOTAL-LIABILITIES> 911295
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 46513100
<SHARES-COMMON-STOCK> 563704
<SHARES-COMMON-PRIOR> 184086
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 38465
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 5482483
<ACCUM-APPREC-OR-DEPREC> (5366587)
<NET-ASSETS> 35625565
<DIVIDEND-INCOME> 170056
<INTEREST-INCOME> 74842
<OTHER-INCOME> 0
<EXPENSES-NET> 283363
<NET-INVESTMENT-INCOME> (38465)
<REALIZED-GAINS-CURRENT> (4530348)
<APPREC-INCREASE-CURRENT> 3869016
<NET-CHANGE-FROM-OPS> (699797)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 514897
<NUMBER-OF-SHARES-REDEEMED> 135279
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 560569
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 952135
<GROSS-ADVISORY-FEES> 95662
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 345886
<AVERAGE-NET-ASSETS> 2110891
<PER-SHARE-NAV-BEGIN> 5.62
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> (.23)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.38
<EXPENSE-RATIO> 2.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
