Pioneer Short-Term Income Trust
Dear Fellow Shareowners,
This semiannual report details Pioneer Short-Term Income Trust's positive
achievements for the six months through May 31, 1995. The climate for bond
investing was much improved during the period. Low inflation and moderate
economic growth brought optimism into the market, sending bond prices up and
interest rates down.
How Your Fund Performed
We are pleased to report the following results for Pioneer Short-Term Income
Trust for the six months ended May 31, 1995.
Class A shares -- The Fund paid daily dividends totaling $0.134 per share
during the period. The Fund's 30-day SEC yield was 5.76% as of May 31,
1995.(1) Net asset value stood at $3.85 per share, versus $3.75 six months
ago. The Fund's total return was 6.35% based on net asset value, and 3.59%
based on maximum public offering price. Both returns assume the reinvestment
of distributions at net asset value. Your Fund fared well compared to its
peers; the average short-term, investment-grade debt fund tracked by Lipper
Analytical Services, an independent mutual fund research firm, posted total
returns of 5.88% for the six-month period. (Lipper's total return figure was
based on 143 funds.)
Class B shares -- The Fund paid daily dividends totaling $0.114 per share
during the period. The Fund's 30-day SEC yield was 5.12% as of May 31,
1995.(1) Net asset value stood at $3.85 per share, versus $3.75 six months
ago. The Fund's total return was 5.80% assuming shares were held throughout
the period, and 3.80% assuming shares were redeemed.
The accompanying table provides the Fund's results over longer time frames.
Average Annual Total Returns
(as of May 31, 1995)
Net Public
Asset Offering
Class A Shares Value Price*
- --------------------- ------- -------------
Life-of-Fund
(8/10/92) 4.86% 3.95%
1 Year 6.26 3.58
Return If
Not Return If
Class B Shares Redeemed Redeemed**
- -------------------- ----------- -----------
Life-of-Fund
(4/4/94) 4.76% 3.06%
1 Year 5.53 3.53
A Favorable Bond Market Environment
Bond prices moved higher over much of the six-month period, as evidence of a
slowing economy (e.g., declines in home sales, manufacturing and consumer
spending) quelled inflationary fears and helped rally bond prices. Further
fueling the bond market was the Federal Reserve's (the Fed's) increase in
short-term interest rates on February 1, 1995. The Fed raised the federal
funds rate by one-half of one percent to a three-year high of 6.0%. While the
Fed's interest rate hikes in 1994 caused turmoil in financial markets and
sent bond prices lower, its commitment to keep inflation low and prevent the
economy from moving ahead too quickly was welcomed by many investors.
(1)SEC yield is based on a standard formula prescribed by the Securities and
Exchange Commission. The Fund's investment adviser, Pioneering Management
Corporation, is currently reducing its management fee and certain other
expenses, otherwise returns would have been lower and the SEC yield for Class
A shares and Class B shares would have been 5.41% and 4.81%, respectively.
*Reflects deduction of the maximum 2.5% sales charge and assumes reinvestment
of all distributions at net asset value.
**Reflects deduction of the maximum 2.0% contingent deferred sales charge and
assumes reinvestment of all distributions at net asset value.
Past performance does not guarantee future results. Return and share price
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
Short-term securities fared well during the period, offering investors highly
competitive yields. At the same time, they provided greater stability than
longer-maturity bonds because of their lower sensitivity to interest rate
swings. The accompanying chart shows how the yields offered by short-term
securities (as represented by U.S. Treasury securities) changed versus
longer-term bonds during the period.
(graphic--bar graph)
Yields on Treasury Securities
Maturity 3 6 1 2 3 5 10 30
Months Months Year Years Years Years Years Years
11/30/94
Yield 5.71% 6.23% 6.88% 7.40% 7.61% 7.79% 7.90% 8.00%
5/31/95 5.80% 5.82% 5.79% 5.84% 5.91% 6.05% 6.28% 6.65%
Yield
(end bar graph)
Your management maintained the Fund's low average maturity throughout the
period; as of May 31, 1995, the portfolio's average life was 1.73 years. We
currently favor investments with less than a year to maturity, since they are
providing extremely competitive yields as well as stability. We also hold a
number of attractive investments in the three-to-five year range, most of
which were greatly discounted over the past year. These securities have
appreciated in price in response to a slower economy and the assumption that
the Fed is nearing the end of its interest rate hikes. We think these
holdings should benefit both the Fund's income stream and share price going
forward.
Your Fund invests only in high-quality securities, with an emphasis on
securities with the highest rating, AAA. Over the period, we increased the
Fund's weighting in U.S. government agency securities. Many of these
investments had fallen in price as interest rates climbed higher and investor
doubt mounted because of negative events such as the Orange County, CA
debacle. (Orange County, which declared bankruptcy, had to sell a heavy
volume of agency issues to meet cash needs, driving down prices and creating
greater value in the agency sector.) We uncovered some good values, and they
have played a significant role in the Fund's income stream and positive total
return. As of May 31, 38% of the portfolio was invested in well-structured
collateralized mortgage obligations (CMOs) issued by the Federal National
Mortgage Association and Federal Home Loan Mortgage Corporation. We continue
to choose CMOs with well-defined agency collateral, and equally well-defined
maturity constraints, that fit within your Fund's five-year maximum maturity
range. In addition, we bought bonds with call protection to help hold
attractive issues in the portfolio and to avoid the disruptions that can
occur with securities that the issuer can redeem, or "call," before their
maturity date.
Given the economy's apparent slowdown, we have been reluctant to invest in
corporate securities. One exception over the period was the financial sector.
Your management expects that the Fund's financial holdings will do well in
the current interest rate environment. We also are confident they will
outperform bonds in other corporate sectors if there is a pick-up in economic
growth. While we recognize the economic slowdown that has occurred so far in
1995, we think the economy also is sending some positive growth signals,
namely strong consumer confidence and a high capacity utilization rate (the
level of output by factories), in addition to a strong stock market. The
financial sector should perform well if and when the economy does gain
momentum. Of course, until we see more
2
<PAGE>
clear-cut signs of a slower or growing economy, we will focus our efforts on
government and agency securities.
The accompanying charts provide the portfolio's maturity and quality
allocations as of May 31, 1995:
(graphic--pie chart)
Portfolio Maturity
(as of May 31, 1995)
0-1 years 35%
1-3 years 52%
3-5 years 13%
(end pie chart)
(graphic--pie chart)
Portfolio Quality
(as of May 31, 1995)
AAA 5%
BBB 5%
A 7%
Treasury/Agency 83%
(end pie chart)
Looking Ahead
The Fed's active stance in fighting inflation has improved the environment
for bond investing. Whether the current climate of moderate economic growth
and low inflation will continue for an extended period of time remains to be
seen. As debate over this issue -- and the issue of what the Fed will do next
with interest rates -- continues, your management will proceed to actively
monitor and adjust your Fund's portfolio. We are pleased with your Fund's
current positioning and remain committed to maintaining the conservative
investment strategy that has brought the Fund positive results to date.
The following pages show the audited list of portfolio holdings and financial
statements as of May 31, 1995. If you have any questions about your
investment in Pioneer Short-Term Income Trust, please contact your investment
representative, or call Pioneer at 1-800-225-6292.
Respectfully,
(Signature of John F. Cogan, Jr.)
John F. Cogan, Jr.
Chairman and President,
Pioneer Short-Term Income Trust
July 7, 1995
3
<PAGE>
Pioneer Short-Term Income Trust
Schedule of Investments
May 31, 1995
<TABLE>
<CAPTION>
S&P
Principal Rating
Amount (unaudited) Value
- ---------- --- ---------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
INVESTMENT IN SECURITIES--100.0%
U.S. Government and Agency Obligations--82.6%
$ 500,000 Aid-Israel, 7.75%, 1999 $ 526,250
500,000 Federal Home Loan Bank, 6.62%, 1997 503,760
500,000 Federal Home Loan Bank, 6.78%, 1999 504,325
500,000 Federal Home Loan Bank, 7.55%, 1997 516,435
500,000 Federal Home Loan Bank, 8.0%, 1997 504,855
500,000 Federal Home Loan Bank, 8.0%, 2000 500,905
500,000 Federal Home Loan Bank, 8.125%, 2000 527,325
550,000 Federal Home Loan Bank, 8.25%, 2000 571,785
400,000 Federal Home Loan Bank, 8.26%, 1999 411,292
500,000 Federal Home Loan Bank, Step Up Note, 6.5%, 1997 500,367
1,000,000 Federal Home Loan Bank, Step Up Note, 6.65%, 1997 1,015,580
500,000 Federal Home Loan Bank, Step Up Note, 6.7%, 1997 500,539
500,000 Federal Home Loan Bank, Step Up Note, 6.875%, 1999 500,942
750,000 Federal Home Loan Bank, Step Up Note, 7.0%, 1998 765,375
500,000 Federal Home Loan Bank, Step Up Note, 7.0%, 1999 505,400
500,000 Federal Home Loan Mortgage Corp., 7.645%, 2000 514,890
500,000 Federal Home Loan Mortgage Corp., 7.726%, 2000 511,795
500,000 Federal Home Loan Mortgage Corp., 7.84%, 2000 513,585
750,000 Federal Home Loan Mortgage Corp., 7.91%, 1997 763,897
1,000,000 Federal Home Loan Mortgage Corp., 8.0%, 2000 1,005,036
841,119 Federal Home Loan Mortgage Corp., REMIC Series 1579PN, 6.45%, 2022 832,691
533,612 Federal Home Loan Mortgage Corp., REMIC Series 1564J, 6.5%, 2008 529,999
226,537 Federal Home Loan Mortgage Corp., REMIC Series 1039G, 6.5%, 2019 225,919
462,489 Federal Home Loan Mortgage Corp., REMIC Series 1590K, 6.5%, 2023 461,985
469,491 Federal Home Loan Mortgage Corp., REMIC Series 1319E, 7.0%, 2004 470,341
267,054 Federal Home Loan Mortgage Corp., REMIC Series 1164F, 7.0%, 2005 267,767
189,336 Federal Home Loan Mortgage Corp., REMIC Series 1072F, 7.0%, 2005 189,338
730,355 Federal Home Loan Mortgage Corp., REMIC Series 1457E, 7.0%, 2007 737,630
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1278F, 7.0%, 2020 1,002,020
792,986 Federal Home Loan Mortgage Corp., REMIC Series 1292E, 7.35%, 2003 796,007
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1310E, 7.35%, 2016 1,008,440
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1288E, 7.35%, 2016 502,950
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1243H, 7.5%, 2004 1,018,940
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1262F, 7.5%, 2015 1,015,280
851,269 Federal Home Loan Mortgage Corp., REMIC Series 1311E, 7.5%, 2016 852,282
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1255DC, 7.5%, 2017 502,805
4
<PAGE>
$ 380,000 Federal Home Loan Mortgage Corp., REMIC Series 1264F, 7.75%, 2019 $ 385,689
1,100,000 Federal Home Loan Mortgage Corp., REMIC Series 186D, 8.0%, 2019 1,117,996
419,142 Federal Home Loan Mortgage Corp., REMIC Series 1143H, 8.0%, 2019 423,405
893,838 Federal Home Loan Mortgage Corp., REMIC Series 189C, 8.0%, 2021 909,087
603,211 Federal Home Loan Mortgage Corp., REMIC Series 82C, 8.9%, 2019 613,562
235,000 Federal National Mortgage Association, 7.85%, 1998 245,307
250,000 Federal National Mortgage Association, Medium Term Note, 6.74%, 1997 252,297
585,000 Federal National Mortgage Association, Medium Term Note, 7.26%, 2000 604,024
1,000,000 Federal National Mortgage Association, Medium Term Note, 8.01%, 1999 1,041,880
500,000 Federal National Mortgage Association, Medium Term Note, 8.16%, 2000 520,515
500,000 Federal National Mortgage Association, REMIC Series 1993-23PJ, 6.7%, 2019 500,080
546,000 Federal National Mortgage Association, REMIC Series 1993-12EB, 6.75%, 2000 549,150
1,000,000 Federal National Mortgage Association, REMIC Series 1992-109E, 7.0%, 2004 1,002,950
555,000 Federal National Mortgage Association, REMIC Series 1992-16G, 7.0%, 2017 557,337
500,000 Federal National Mortgage Association, REMIC Series 1992-131E, 7.0%, 2017 500,215
1,000,000 Federal National Mortgage Association, REMIC Series 1992-79G, 7.0%, 2018 1,003,850
309,152 Federal National Mortgage Association, REMIC Series 1991-19G, 7.0%, 2019 308,735
370,283 Federal National Mortgage Association, REMIC Series 1992-64M, 7.0%, 2022 369,520
500,000 Federal National Mortgage Association, REMIC Series 1992-84G, 7.5%, 2014 506,940
485,045 Federal National Mortgage Association, REMIC Series 1992-43B, 7.5%, 2018 488,135
497,162 Federal National Mortgage Association, REMIC Series 1990-48G, 7.95%, 2019 503,660
400,000 Federal National Mortgage Association, REMIC Series 1991-107M, 8.5%, 2002 402,648
720,060 Federal National Mortgage Association, REMIC Series 1990-8E, 8.5%, 2018 735,527
500,000 Federal National Mortgage Association, REMIC Series 1989-87G, 8.75%, 2018 506,690
425,555 Federal National Mortgage Association, REMIC Series 1988-28D, 9.05%, 2017 424,521
500,000 Federal Farm Credit Bank, Medium Term Note, 7.79%, 1997 517,095
800,000 Private Export Funding, 5.75%, 1998 789,000
500,000 Student Loan Marketing Association, Medium Term Note, 7.79%, 1997 504,850
500,000 Student Loan Marketing Association, Medium Term Note, 8.29%, 1997 504,625
500,000 Tennessee Valley Authority, 6.98%, 1998 1,262,500
1,000,000 Tennessee Valley Authority, 8.375%, 1999 1,075,000
4,170,000 U.S. Treasury Notes, 7.875%, 1996 4,226,045
2,120,000 U.S. Treasury Notes, 8.125%, 1998 2,234,416
-----------
Total (Cost $47,314,944) $47,665,983
-----------
Financials--16.0%
500,000 AAA Associates Corp. N.A., 8.125%, 1998 $ 521,250
250,000 BBB+ Discover Credit Corp., Medium Term Note, 7.77%, 1997 256,875
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
$1,000,000 A Ford Motor Credit Co., Global Notes, 6.25%, 1998 $ 997,500
700,000 AAA General Electric Company, 7.875%, 1996 712,250
250,000 BBB+ General Motors Acceptance Corp., Deb., 8.0%, 1996 255,938
500,000 BBB+ General Motors Acceptance Corp., Deb., 8.25%, 1996 511,875
350,000 BBB+ General Motors Acceptance Corp., Medium Term Note, 7.4%, 1997 357,000
500,000 BBB+ General Motors Acceptance Corp., Medium Term Note, 7.9%, 1997 513,750
460,000 A ITT Financial Corp., Sr. Notes, 7.0%, 1997 463,450
500,000 A+ International Lease Finance Corp., Deb., 5.75%, 1999 487,500
100,000 A+ International Lease Finance Corp., Deb., 7.9%, 1996 102,250
750,000 AAA Premier Auto Trust, 7.2%, 1999 768,600
500,000 AAA Sears Master Trust, 7.0%, 2004 509,750
1,000,000 BBB+ Sears Medium Term Note, 8.0%, 1996 1,021,100
200,000 AAA Sears Receivables Financing Corp., Series 1991-D, 7.75%, 1996 203,940
500,000 A Transamerica Financial, 6.75%, 2000 501,407
1,000,000 A Xerox Corp. Medium Term Note, 7.13%, 1999 1,021,600
-----------
Total (Cost $9,202,120) $ 9,206,035
-----------
Banks--1.4%
550,000 AAA Chase Manhattan Credit Card Master Trust, Series 1992-1A, 7.4%, 2000 $ 560,670
250,000 A Nationsbank Corp., Sr. Notes, 6.625%, 1998 251,563
-----------
Total (Cost $818,875) $ 812,233
-----------
TOTAL INVESTMENT IN SECURITIES (Cost $57,335,939) (a) (b) $57,684,251
-----------
(a) At May 31, 1995, the net unrealized appreciation on investments, based on
cost for federal income tax purposes of $57,335,939, was as follows:
Aggregate gross unrealized appreciation for all investments in which there
is an excess of value over tax cost $ 663,965
Aggregate gross unrealized depreciation for all investments in which there
is an excess of tax over value (315,653)
-----------
Net unrealized appreciation $ 348,312
===========
(b) At November 30, 1994, the Fund had a capital loss carryforward of
$2,003,240 which will expire between 2000 and 2002 if not utilized.
Purchases and sales of securities (excluding temporary cash investments)
for the six months ended May 31, 1995, were as follows:
</TABLE>
Purchases Sales
---------- ------------
Long-term U.S. Government $36,129,941 $32,678,843
Other Long-term
Securities 2,241,639 1,280,733
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Pioneer Short-Term Income Trust
Balance Sheet
May 31, 1995
<TABLE>
<S> <C>
Assets:
Investment in securities, at value (cost $57,335,939; see Schedule of Investments
and Note 1) $57,684,251
Receivables --
Investment securities sold 490,086
Interest 746,889
Trust shares sold 154,034
Due from Pioneering Management Corporation (Note 2) 80,017
Other 1,175
------------
Total assets $59,156,452
------------
Liabilities:
Payables --
Investment securities purchased $ 500,000
Trust shares repurchased 96,512
Dividends 82,584
Due to bank 5,185
Accrued expenses (Notes 2, 3 and 4) 118,513
------------
Total liabilities $ 802,794
------------
Net Assets:
Paid-in capital (Note 1) $60,727,258
Accumulated undistributed net investment income 70,454
Accumulated net realized loss on investments (2,792,366)
Net unrealized gain on investments 348,312
------------
Total net assets $58,353,658
============
Net Asset Value Per Share:
Class A--(based on $54,926,541/14,275,731 shares of beneficial interest outstanding--
unlimited number of shares authorized) $3.85
=====
Class B--(based on $ 3,427,117/889,754 shares of beneficial interest outstanding--
unlimited number of shares authorized) $3.85
=====
Maximum Offering Price:
Class A $3.95
=====
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
Pioneer Short-Term Income Trust
Statement of Operations
For the Six Months Ended May 31, 1995
<TABLE>
<S> <C>
Investment Income (Note 1):
Interest $2,176,440
-----------
Expenses:
Management fees (Note 2) $ 148,822
Distribution fees (Note 4)
Class A 70,576
Class B 16,010
Transfer agent fees (Note 3)
Class A 43,490
Class B 1,940
Registration fees 46,061
Professional fees 31,732
Accounting (Note 2) 55,406
Custodian fees 19,920
Printing 9,240
Fees and expenses of nonaffiliated trustees 3,880
Miscellaneous 28,373
-----------
Total expenses $ 475,450
Less management fees waived and expenses assumed by Pioneering Management Corporation
(Note 2) 211,936
-----------
Net expenses $ 263,514
-----------
Net investment income $1,912,926
-----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments $ (789,126)
Increase in net unrealized gain on investments 2,407,657
-----------
Net gain on investments $1,618,531
-----------
Net increase in net assets resulting from operations $3,531,457
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Pioneer Short-Term Income Trust
Statements of Changes in Net Assets
For the Six Months Ended May 31, 1995 and the Year Ended November 30, 1994
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
May 31, November 30,
1995 1994
----------- -------------
<S> <C> <C>
From Operations:
Net investment income $ 1,912,926 $ 3,964,967
Net realized loss on investments (789,126) (1,803,756)
Increase (decrease) in net unrealized gain (loss) on investments 2,407,657 (1,932,913)
------------ -------------
Net increase in net assets resulting from operations $ 3,531,457 $ 228,298
------------ -------------
Distributions to Shareholders From:
Investment income
Class A ($0.13 and $0.21 per share, respectively) $ (2,003,852) $ (3,671,419)
Class B ($0.11 and $0.13 per share, respectively) (95,593) (36,575)
------------ -------------
Decrease in net assets resulting from distributions to shareholders $ (2,099,445) $ (3,707,994)
------------ -------------
From Trust Share Transactions:
Net proceeds from sale of shares $ 19,547,707 $ 55,646,719
Net asset value of shares issued to shareholders in reinvestment of dividends 1,584,844 2,593,227
Cost of shares repurchased (26,480,888) (49,972,576)
------------ -------------
Increase (decrease) in net assets resulting from trust share transactions $ (5,348,337) $ 8,267,370
------------ -------------
Net increase (decrease) in net assets $ (3,916,325) $ 4,787,674
Net Assets:
Beginning of period 62,269,983 57,482,309
------------ -------------
End of period (including accumulated undistributed net investment income of
$70,454 and $256,973, respectively). $ 58,353,658 $ 62,269,983
============ =============
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1995 November 30, 1994
------------------------ --------------------------
Shares Amount Shares Amount
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 2,874,627 $ 10,844,416 13,039,685 $ 50,866,270
Shares issued to shareholders in reinvestment of
distributions 398,288 1,509,529 707,412 2,563,580
Less shares repurchased (4,733,739) (17,872,796) (12,550,437) (48,392,130)
-------- -------- -------- ----------
Net increase (decrease) (1,460,824) $ (5,518,851) 1,196,660 $ 5,037,720
======== ======== ======== ==========
CLASS B*
Shares sold 2,303,009 $ 8,703,291 1,254,765 $ 4,780,449
Shares issued to shareholders in reinvestment of
distributions 19,898 75,315 7,815 29,647
Less shares repurchased (2,280,726) (8,608,092) (415,007) (1,580,446)
-------- -------- -------- ----------
Net increase 42,181 $ 170,514 847,573 $ 3,229,650
======== ======== ======== ==========
*Class B shares were first publicly offered on
April 4, 1994.
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Pioneer Short-Term Income Trust
Financial Highlights
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
For the
Six
Months For the Year August 10
Ended Ended November to
May 31, 30, November 30,
----------------
1995 1994+ 1993 1992
---------- ------ ------ -------------
<S> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 3.75 $ 3.95 $ 3.95 $ 4.00
-------- ------- ------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.12 $ 0.22 $ 0.24 $ 0.08
Net realized and unrealized gain (loss) on investments 0.11 (0.21) 0.00 (0.05)
-------- ------- ------- ----------
Total increase from investment operations $ 0.23 $ 0.01 $ 0.24 $ 0.03
-------- ------- ------- ----------
Distributions to shareholders from:
Net investment income $ (0.13) $ (0.21) $ (0.24) $ (0.08)
-------- ------- ------- ----------
Net increase (decrease) in net asset value $ 0.10 $ (0.20) $ 0.00 $ (0.05)
-------- ------- ------- ----------
Net asset value, end of period $ 3.85 $ 3.75 $ 3.95 $ 3.95
======== ======= ======= ==========
Total return* 6.35% 0.32% 6.28% 0.79%
Ratio of net operating expenses to average net assets 0.85%** 0.85% 0.66% 0.50%**
Ratio of net investment income to average net assets 6.47%** 5.89% 5.80% 5.93%**
Porfolio turnover rate 119.82%** 144.17% 83.25% 146.45%**
Net assets, end of period (in thousands) $54,926 $59,088 $57,482 $15,588
Ratios assuming no waiver of management fees or
assumption of expenses by PMC:
Net operating expenses 1.56%** 1.20% 1.33% 3.40%**
Net investment income 5.76%** 5.54% 5.13% 3.03%**
</TABLE>
+ The per share data presented above is based upon average shares outstanding
and average net assets for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
Pioneer Short-Term Income Trust
Financial Highlights
Selected Data for a Share Outstanding for the Periods Presented (continued)
<TABLE>
<CAPTION>
For the Six
Months April 4
Ended to
May 31, November 30,
1995 1994+
----------- -----------------
<S> <C> <C>
CLASS B ***
Net asset value, beginning of period $ 3.75 $ 3.89
--------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.10 $ 0.15
Net realized and unrealized gain (loss) on investments 0.11 (0.16)
--------- ----------
Total gain (loss) from investment operations $ 0.21 $ (0.01)
--------- ----------
Distributions to shareholders from:
Net investment income (0.11) (0.13)
--------- ----------
Net increase (decrease) in net asset value $ 0.10 $ (0.14)
--------- ----------
Net asset value, end of period $ 3.85 $ 3.75
========= ==========
Total return* 5.80% (0.24%)
Ratio of net operating expenses to average net assets 1.56%** 1.41%**
Ratio of net investment income to average net assets 5.71%** 6.05%**
Porfolio turnover rate 119.82%** 144.17%
Net assets, end of period (in thousands) $ 3,427 $ 3,182
Ratios assuming no waiver of management fees or
assumption of expenses by PMC:
Net operating expenses 2.27%** 1.82%**
Net investment income 5.00%** 5.64%**
</TABLE>
+ The per share data presented above is based upon average shares outstanding
and average net assets for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
*** Class B shares were first publicly offered on April 4, 1994.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Pioneer Short-Term Income Trust
NOTES TO FINANCIAL STATEMENTS
May 31, 1995
1.Pioneer Short-Term Income Trust (the Trust) is a Massachusetts business
trust, registered under the Investment Company Act of 1940 as a diversified,
open-end management company.
The Board of Trustees (the Trustees) has authorized the issuance of two
classes of the Trust, designated as Class A and Class B shares. Class B
shares were first publicly offered on April 4, 1994. Shares issued and
outstanding prior to April 4, 1994 were designated as Class A shares. The
shares of each class represent an interest in the same portfolio of
investments of the Trust and have equal rights to voting, redemption,
dividend and liquidation, except that each class of shares can bear different
transfer agent and distribution fees and have exclusive voting rights with
respect to the distribution plans that have been adopted by holders of Class
A and Class B shares, respectively.
The following is a summary of significant accounting policies consistently
followed by the Trust, which are in conformity with those generally accepted
in the investment company industry.
A.Security Valuation--Security transactions are recorded on the date the
securities are purchased or sold. Securities are valued based on valuations
furnished by an independent pricing service that utilizes a matrix system.
This matrix system reflects such factors as security prices, yields,
maturities and ratings, and is supplemented by dealer and exchange quotations
and fair market value information from other sources. Principal amounts of
mortgage-backed securities are adjusted for monthly paydowns. Premium and
discount related to certain mortgage-backed securities are amortized or
accreted in direct proportion to the underlying monthly paydowns. Temporary
cash investments are valued at cost plus accrued interest, which approximates
market value. Interest income is recorded on the accrual basis.
Gains and losses from sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Trust's practice to first select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B.Federal Income Taxes--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and net realized
capital gains, if any, to its shareholders. Therefore, no federal income tax
provisions are required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with income tax rules. Therefore, the
source of the Trust distributions may be shown in the accompanying financial
statements as either from or in excess of net investment income or net
realized gain on investment transactions, or from capital, depending on the
type of book/tax differences that may exist.
C.Trust Shares--The Trust records sales and repurchases of its trust shares
on the trade date. Net losses, if any, as a result of cancellations, are
absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter
for the Trust and wholly owned subsidiary of The Pioneer Group, Inc. (PGI).
PFD earned $11,619 in underwriting commissions on the sale of trust shares
during the six months ended May 31, 1995. Dividends and distributions to
shareholders are recorded as of the ex-dividend date. Dividends paid by the
Trust, if any, with respect to each class of shares are calculated in the
same manner, at the same time, on the same day and are in the same amount,
except that Class A and Class B shares can bear different transfer agent and
distribution fees.
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D.Class Allocations--Distribution expenses are calculated based on the
average daily net asset value attributable to Class A and Class B shares of
the Trust, respectively. Shareholders of Class A and Class B share all
expenses and fees paid to the transfer service organization, Pioneering Serv-
ices Corporation (PSC), for their services, that are allocated based on the
number of accounts in each class and the ratable allocation of related
out-of-pocket expenses (see Note 3). Income, common expenses and realized and
unrealized gains (losses) are calculated at the Trust level and allocated
daily to each class of shares based on the respective percentage of adjusted
net assets at the beginning of the day.
E.Repurchase Agreements--The Trust may enter into repurchase agreements. At
the time the Trust enters into a repurchase agreement, the value of the
underlying security (collateral), including accrued interest, will be equal
to or exceed the value of the repurchase agreement, and in the case of
repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in safekeeping
in the customer-only account of the Trust's custodian, or at the Federal
Reserve Bank. If the seller defaults and the value of the collateral
declines, or if bankruptcy proceedings commence with respect to the seller of
the security, realization of the collateral by the Trust may be delayed or
limited. At May 31, 1995, the Trust had no outstanding repurchase agreements.
2.Pioneering Management Corporation (PMC) is the Trust's investment adviser,
manages the Trust's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 0.50% of the
Trust's average daily net assets up to $100,000,000, 0.45% of such assets
between $200,000,000 and $300,000,000 and 0.40% of such assets in excess of
$300,000,000. PMC has agreed not to impose a portion of its management fee
and to make other arrangements, if necessary, to absorb certain other
expenses of the Trust to the extent necessary to limit Class A expenses to
0.85% of the average daily net assets attributable to Class A shares; the
portion of the Trust-wide expenses attributable to Class B shares will be
reduced only to the extent such expenses are reduced for Class A shares.
PMC's agreement is voluntary and temporary, and may be revised or terminated
at any time.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Trust. Included in Accrued expenses is $15,808 in accounting fees
payable to PMC at May 31, 1995.
3.PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Trust at negotiated rates. Included in
Accrued expenses is $6,018 in transfer agent fees payable to PSC at May 31,
1995.
4.The Trust has adopted a Plan of Distribution (the Plan) for both Class A
shares (Class A Plan) and Class B shares (Class B Plan) in accordance with
Rule 12b-1 under the Investment Company Act of 1940 pursuant to which certain
distribution and service fees are paid to PFD.
Pursuant to the Class A Plan, the Trust reimburses PFD for its actual
expenditures to finance any activities primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares.
Reimbursement for such expenditures, if any, may not exceed 0.25% of the
Trust's average annual net assets attributable to Class A
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<PAGE>
shares. The Class B Plan provides that the Trust may pay a distribution fee
at an annual rate of 0.75% of the Trust's average annual net assets
attributable to Class B shares and may pay PFD a service fee at the annual
rate of 0.25% of the Trust's average daily net assets attributable to Class B
shares. Included in Accrued expenses is $24,817 in distribution fees payable
to PFD at May 31, 1995.
Class B shares that are redeemed within three years of purchase are subject
to a contingent deferred sales charge (CDSC) at declining rates beginning at
2.0% of the lesser of the current market value at the time of redemption or
the original purchase cost of the shares being redeemed. Proceeds from the
CDSC are paid to PFD. For the six months ending May 31, 1995, CDSC in the
amount of $2,684 was paid to PFD.
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<PAGE>
Pioneer Short-Term Income Trust
Report of Independent Public Accountants
To the Shareholders and the Board of Trustees of Pioneer Short-Term Income
Trust:
We have audited the accompanying balance sheet of Pioneer Short-Term Income
Trust, including the schedule of investments, as of May 31, 1995, and the
related statement of operations, statements of changes in net assets and
financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Short-Term Income Trust as of May 31, 1995, the results of its
operations, the changes in its net assets and financial highlights for the
periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
June 30, 1995
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PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR.
Chairman and President
DAVID D. TRIPPLE
Executive Vice President
RICHARD A. SCHLANGER
Vice President
WILLIAM H. KEOUGH
Treasurer
JOSEPH P. BARRI
Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT
CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS
DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B.W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
PIONEERING SERVICES
CORPORATION
60 State Street
Boston, Massachusetts
02109
Please call Pioneer for information on:
Existing accounts, new accounts, prospectuses,
applications, and service forms .............................. 1-800-225-6292
Fund yields and prices ....................................... 1-800-225-4321
Toll-free fax ................................................ 1-800-225-4240
Retirement plans ............................................. 1-800-622-0176
Telecommunications Device for the
Deaf (TDD) ................................................... 1-800-225-1997
When distributed to persons who are not shareowners of the Trust, this report
must be accompanied by an official prospectus, which discusses the
objectives, policies and other information concerning the Trust.
0795-2590
(c) Pioneer Funds Distributor, Inc.
(Pioneer logo)
Pioneer
Short-Term
Income
Trust
Semiannual Report
May 31, 1995
