(Pioneer logo)
Pioneer
Short-Term Income
Trust
Class A and Class B Shares
Prospectus
March 29, 1996
(revised November 15, 1996)
Pioneer Short-Term Income Trust (the "Trust") seeks a high level of current
income consistent with a relatively high level of principal stability. The
Trust is a diversified open-end investment company.
The Trust invests primarily in high grade, short-term debt securities. Under
normal circumstances, the Trust invests at least 85% of its total assets in
securities issued or guaranteed by the United States ("U.S.") government or
its agencies or instrumentalities and other debt securities of U.S. and
foreign issuers rated within the three highest grades by the major recognized
rating services or, if not rated, judged to be of comparable quality by the
Trust's investment adviser. The Trust may invest the remainder of its
portfolio in debt securities rated in the fourth highest grade by the major
rating services or, if not rated, judged to be of comparable quality. The
Trust invests only in securities with remaining maturities of five years or
less. Under normal circumstances, the Trust will maintain a dollar weighted
average maturity of not more than three years.
The Trust is designed for investors seeking:
(bullet) a higher level of current income than normally provided by money
market investments; and
(bullet) less price volatility than investments in intermediate and long-term
fixed income securities.
Unlike certain money market instruments, an investment in the Trust is
neither insured nor guaranteed and its net asset value will fluctuate. The
Trust's yield will normally be more sensitive to interest rate fluctuations
than that of a fund investing primarily in securities with intermediate or
long-term remaining maturities.
The value of your account upon redemption may be more or less than your
purchase price. Shares in the Trust are not deposits or obligations of, or
guaranteed or endorsed by, any bank or other depository institution, and the
shares are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.
This Prospectus provides the information about the Trust that you should
know before investing. Please read and retain it for your future reference.
More information about the Trust is included in the Statement of Additional
Information also dated March 29, 1996 (revised November 15, 1996), which is
incorporated into this Prospectus by reference. A copy of the Statement of
Additional Information may be obtained free of charge by calling Shareholder
Services at 1-800-225-6292 or by written request to the Trust at 60 State
Street, Boston, Massachusetts 02109. Additional information about the Trust
has also been filed with the Securities and Exchange Commission (the "SEC")
and is available upon request and without charge.
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TABLE OF CONTENTS PAGE
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I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 5
IV. MANAGEMENT OF THE TRUST 7
V. TRUST SHARE ALTERNATIVES 8
VI. SHARE PRICE 8
VII. HOW TO BUY TRUST SHARES 9
VIII. HOW TO SELL TRUST SHARES 12
IX. HOW TO EXCHANGE TRUST 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 15
Distribution Options 15
Directed Dividends 16
Direct Deposit 16
Voluntary Tax Withholding 16
Telephone Transactions and Related Liabilities 16
FactFone(SM) 16
Retirement Plans 16
Telecommunications Device for the Deaf (TDD) 16
Systematic Withdrawal Plans 16
Reinstatement Privilege (Class A Shares Only) 17
XIII. THE TRUST 17
XIV. INVESTMENT RESULTS 17
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<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 Trust. The table reflects annual operating expenses based on actual
expenses for the fiscal year ended November 30, 1995.
Class A Class B
---------- -----------
Shareholder Transaction Expenses:
Maximum Initial Sales Charge on
Purchases
(as a percentage of offering
price) 2.50% none
Maximum Sales Charge on
Reinvestment
of Dividends none none
Maximum Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable) none1 2.00%
Redemption fee2 none none
Exchange fee none none
Annual Operating Expenses
(as a percentage of average net
assets):
Management fee (after fee
reduction)3 0.00% 0.00%
12b-1 fees 0.25% 1.00%
Other Expenses (including transfer
agent fee, custodian fees and
accounting and printing
expenses) (after expense
reduction)3 0.60% 0.60%
---------- -----------
Total Operating Expenses (after
fee and expense reductions)3 0.85% 1.60%
========== ===========
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 Trust Shares."
2 Separate fees (currently $10 and $20, respectively) apply to domestic
and international wire transfers of redemption proceeds.
3 Pioneering Management Corporation ("PMC") has agreed not to impose a
portion of its management fee and to make other arrangements, if
necessary, to limit other operating expenses of the Fund to the extent
required to reduce Class A expenses to 0.85% of the average daily net
assets attributable to Class A shares; the portion of fund-wide expenses
attributable to Class B shares will be reduced only to the extent such
expenses are reduced for Class A shares. This agreement is voluntary and
temporary and may be revised or terminated at any time.
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Expenses Absent Fee and Expense Reductions Class A Class B
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Management Fee 0.50% 0.50%
Other Expenses 0.63% 0.67%
Total Operating Expenses 1.38% 2.17%
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Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return with or without redemption at the end of each time period:
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1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
Class A Shares $33 $51 $71 $127
Class B Shares
--Assuming complete
redemption at end of
period $36 $60 $87 $190*
--Assuming no redemption $16 $50 $87 $190*
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* Class B shares convert to Class A shares five years after purchase;
therefore, Class A expenses are used after year five.
The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Trust, see "Management of the Trust," "Distribution Plans"
and "How To Buy Trust Shares" in this Prospectus and "Management of the
Trust" and "Underwriting Agreement and Distribution Plans" in the Statement
of Additional Information. The Trust's imposition of a 12b-1 fee may result
in long-term shareholders indirectly paying more than the economic equivalent
of the maximum sales charge permitted under the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified
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 Trust Shares." No sales charge is applied to
exchanges of shares of the Trust for shares of other publicly available
Pioneer mutual funds. See "How to Exchange Trust Shares."
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II. FINANCIAL HIGHLIGHTS
The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Trust's
financial statements for the fiscal year ending November 30, 1995 appears in
the Trust's Annual Report, which is incorporated by reference in the
Statement of Additional Information. The information listed below should be
read in conjunction with those financial statements. The Annual Report
includes more information about the Trust's performance and is available free
of charge by calling Shareholder Services at 1-800-225-6292.
PIONEER SHORT-TERM INCOME TRUST
Selected Data for a Class A Share Outstanding Throughout Each Period:
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August 10
to
November 30,
For the Year Ended November 30, 1992
---------------------------------- -------------
1995 1994+ 1993 1992
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 3.75 $ 3.95 $ 3.95 $ 4.00
-------- -------- -------- -------------
Increase (decrease) from investment operations:
Net investment income $ 0.25 $ 0.22 $ 0.24 $ 0.08
Net realized and unrealized gain (loss) on investments 0.10 (0.21) 0.00 (0.05)
-------- -------- -------- -------------
Total increase (decrease) from investment operations $ 0.35 $ 0.01 $ 0.24 $ 0.03
-------- -------- -------- -------------
Distributions to shareholders from:
Net investment income $ (0.26) $ (0.21) $ (0.24) $ (0.08)
-------- -------- -------- -------------
Net increase (decrease) in net asset value $ 0.09 $ (0.20) $ 0.00 $ (0.05)
-------- -------- -------- -------------
Net asset value, end of period $ 3.84 $ 3.75 $ 3.95 $ 3.95
======== ======== ======== =============
Total return* 9.64% 0.32% 6.28% 0.79%
Ratio of net operating expenses to average net assets 0.86%+++ 0.85% 0.66% 0.50%**
Ratio of net investment income to average net assets 6.43%+++ 5.89% 5.80% 5.93%**
Portfolio turnover rate 109.60% 144.17% 83.25% 146.45%**
Net assets, end of period (in thousands) $53,860 $59,088 $57,482 $15,588
Ratios assuming no reduction of fees or expenses by PMC:
Net operating expenses 1.38% 1.20% 1.33% 3.40%**
Net investment income 5.29% 5.54% 5.13% 3.03%**
Ratios assuming a reduction of fees and expenses by PMC
and a reduction for fees paid indirectly:
Net operating expenses 0.85%
Net investment loss 6.44%
</TABLE>
+Based upon average shares outstanding and average net assets for the
period presented.
+++Ratios include fees paid indirectly.
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
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II. FINANCIAL HIGHLIGHTS (Continued)
PIONEER SHORT-TERM INCOME TRUST
Selected Data for a Class B Share Outstanding Throughout Each Period:
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April 4
Year ended to
November 30, 1995 November 30, 1994+
----------------- -------------------
<S> <C> <C>
Net asset value, beginning of period $ 3.75 $ 3.89
----------------- -------------------
Increase (decrease) from investment operations:
Net investment income $ 0.22 $ 0.15
Net realized and unrealized gain (loss) on
investments 0.11 (0.16)
----------------- -------------------
Total increase (decrease) from investment operations $ 0.33 $ (0.01)
----------------- -------------------
Distributions to shareholders from:
Net investment income $ (0.23) $ (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* 8.96% (0.24%)
Ratio of net operating expenses to average net assets 1.63%+++ 1.41%**
Ratio of net investment income to average net assets 5.61%+++ 6.05%**
Portfolio turnover rate 109.60% 144.17%
Net assets, end of period (in thousands) $ 2,924 $ 3,182
Ratios assuming no reduction of fees or expenses by
PMC:
Net operating expenses 2.17% 1.82%**
Net investment income 5.08% 5.64%**
Ratios assuming a reduction of fees and expenses by
PMC and a reduction for fees paid indirectly:
Net operating expenses 1.60%
Net investment loss 5.64%
</TABLE>
+Based upon average shares outstanding and average net assets for the
period presented.
+++Ratios include fees paid indirectly.
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
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III. INVESTMENT OBJECTIVE AND POLICIES
The Trust's investment objective is a high level of current income
consistent with a relatively high level of principal stability. The Trust
invests in:
(bullet) Debt securities issued or guaranteed by the U.S. government or
its agencies or instrumentalities;
(bullet) Other debt securities including corporate debt securities such as
bonds, notes and debentures; mortgage-backed securities including
collateralized mortgage obligations; other asset-backed
securities; debt securities of foreign issuers including foreign
corporations, banks, governments and supranational organizations;
and commercial paper, including variable and floating rate paper;
and
(bullet) Short-term money market instruments including time deposits and
certificates of deposit maturing in one year or less, repurchase
agreements maturing in one week or less, and banker's
acceptances.
Although the Trust may invest without limit in short-term obligations of
foreign issuers when PMC as the Trust's investment adviser deems it
advantageous to do so, under normal circumstances not more than 25% of the
Trust's total assets will be invested in securities of foreign issuers (see
"Foreign Investments" below). The Fund may also purchase securities on a
"when-issued" or forward commitment basis and may lend portfolio securities
having a value up to 5% of its total assets.
Quality
Under normal circumstances, the Trust invests at least 85% of its total
assets in securities that are issued or guaranteed by the U.S. government or
its agencies or instrumentalities or that are rated in the highest three
grades by the major recognized rating services or, if unrated, are judged to
be of comparable quality by PMC. The remainder of the Trust's investments
must be rated within the four highest grades of the major rating services
(i.e., at least "Baa" by Moody's Investors Service or "BBB" by Standard &
Poor's Ratings Group, or their equivalents) or, if not rated, judged to be of
comparable quality. Securities rated BBB or Baa are considered investment
grade securities having adequate capacity to pay interest and repay
principal. Such securities may have speculative characteristics, however, and
changes in economic and other conditions are more likely to lead to a
weakened capacity of the issuer of such securities to make principal and
interest payments than is the case with higher rated securities. In the event
that the credit quality of a security falls below investment grade subsequent
to purchase, the Trust will sell such security as soon as PMC determines it
is prudent to do so. No more than 5% of the Trust's assets may be invested in
securities that are rated below investment grade. For a description of
ratings, see the Statement of Additional Information.
Maturity
The dollar-weighted average maturity of the Trust's portfolio will not
exceed three years. Generally, the Trust invests only in securities with
remaining maturities of five years or less. For purposes of these policies,
an instrument will be treated as having a maturity earlier than its stated
maturity date if the instrument has technical features (such as puts, demand,
prepayment or redemption features) or a variable rate of interest which,
based on projected cash flows from the instrument, will in the judgment of
PMC result in the instrument being valued in the market as though it has the
earlier maturity. If a security's estimated remaining maturity changes from
under five years to over five years, PMC will decide either to sell or retain
the security based on its determination of the best interests of the Trust.
U.S. Government Securities and Mortgage and Other Asset Backed Securities
Subject to its policies concerning remaining maturities and average
portfolio maturity, the Trust may invest in a variety of U.S. government
securities, including (1) U.S. Treasury obligations, which differ only in
their interest rates, stated maturities and times of issuance: U.S. Treasury
bills (stated maturities of one year or less), U.S. Treasury notes (stated
maturities of one to ten years) and U.S. Treasury bonds (generally stated
maturities of greater than ten years) and (2) obligations of varying stated
maturities issued or guaranteed by certain agencies and instrumentalities of
the U.S. government, such as mortgage participation certificates guaranteed
by the Government National Mortgage Association ("GNMA"), the Federal
National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
Corporation ("FHLMC") and Federal Housing Administration debentures.
Certain U.S. government securities, including U.S. Treasury bills, notes
and bonds, and GNMA certificates, are supported by the full faith and credit
of the United States. Certain other U.S. government securities issued or
guaranteed by Federal agencies or government sponsored enterprises, such as
securities of the Federal Home Loan Banks, are not supported by the full
faith and credit of the U.S., but may be supported by the right of the issuer
to borrow from the U.S. Treasury. Other obligations, such as those of FHLMC
and FNMA, are supported by the discretionary authority of the U.S. government
to purchase the agency's securities although it has no legal obligation to do
so. Still other obligations are supported only by the credit of the
instrumentality itself.
GNMA, FHLMC and FNMA, as well as private entities, issue mortgage-backed
securities which provide monthly payments which are, in effect, a
"pass-through" of the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans.
Private issuers of such securities include banks, broker-dealers, mortgage
corporations and other financial institutions.
The Trust may invest in collateralized mortgage obligations ("CMOs"),
which are obligations fully collateralized by a portfolio of mortgages or
mortgage-related securities. Payments of principal and interest on the
mortgages are passed through to the holders of the CMOs on the same schedule
as they are received, although certain classes of CMOs have priority over
others with respect to the receipt of prepayments on the mortgages.
Therefore, depending on the type of CMOs in which the Trust invests, the
investment may be subject to a greater or lesser risk of prepayment than
other types of mortgage-related securities. A real estate mortgage investment
conduit ("REMIC") is a form of CMO that qualifies for special tax treat-
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ment under the Internal Revenue Code of 1986, as amended (the "Code"). The
Trust may acquire "regular" interests in REMICs but does not intend, under
current tax law, to acquire residual interests in REMICs. Mortgage-backed
securities may be less effective than traditional debt obligations of similar
maturity at maintaining yields during periods of declining interest rates.
Other asset-backed securities in which the Trust may invest represent
interests in pools of consumer loans unrelated to mortgage loans and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend on payment of the underlying loans by individuals,
although the securities may be supported by letters of credit or other credit
enhancements. The value of such asset-backed securities may also depend on
the creditworthiness of the servicing agent for the loan pool, the originator
of the loans or the financial institution providing the credit enhancement.
Foreign Investments
Under normal circumstances the Trust does not invest more than 25% of its
total assets in the securities of foreign issuers (which term excludes for
these purposes Canadian issuers). When PMC believes, however, that it is in
the best interest of the Trust, the Trust may invest without any limitation
in short-term foreign debt securities. These foreign investments may be
issued by foreign governments, banks or corporations, as well as foreign
branches of U.S. banks and certain supranational organizations such as the
World Bank and the European Union. The Trust's foreign investments may be
denominated in U.S. dollars or selected foreign currencies. The Trust does
not currently hold any non-U.S. dollar denominated security and does not
intend to purchase such securities in the coming year. Foreign investments
are subject to the Trust's quality and maturity policies described above.
Investing in securities of foreign companies and countries involves
certain considerations and risks which are not typically associated with
investing in U.S. government securities and securities of domestic companies.
Foreign companies are not subject to uniform accounting, auditing and
financial standards and requirements comparable to those applicable to U.S.
companies. There may also be less government supervision and regulation of
foreign securities exchanges, brokers and listed companies than exists in the
United States. Interest paid by foreign issuers may be subject to withholding
and other foreign taxes which will decrease the net return on such
investments as compared to interest paid to the Trust by the U.S. government
or by domestic companies. In addition, there may be the possibility of
expropriation, confiscatory taxation, political, economic or social
instability, or diplomatic developments which could affect assets of the
Trust held in foreign countries.
In addition, 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. There
may be less publicly available information about foreign companies compared
to reports and ratings published about U.S. companies. Foreign securities
markets have substantially less trading volume than domestic markets and
securities of some foreign companies are less liquid and more volatile than
securities of comparable U.S. companies. Transaction costs on foreign
securities exchanges are generally higher than in the U.S.
The Trust's investments in securities denominated in foreign currencies
are also subject to currency risk, as the U.S. dollar value of these
securities may be favorably or unfavorably affected by changes in foreign
currency exchange rates and exchange control regulations. Currency exchange
rates may fluctuate significantly over short periods of time causing, among
other factors, the Trust's net asset value to fluctuate as well. Currency
exchange rates are generally determined by forces of supply and demand and
the perceived relative merits of investments in various countries, but can be
affected unpredictably by intervention from U.S. and foreign governments or
central banks, political events and currency control measures.
The Trust 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. A forward foreign currency contract
involves an obligation to purchase or sell a specific currency on a future
date, at a price set at the time of the contract. The Trust 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 Trust 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.
The Trust may also engage in cross-hedging by using forward contracts in
one currency to hedge against fluctuations in the value of securities
denominated in a different currency, if PMC determines that there is a
pattern of correlation between the two currencies. Cross-hedging may also
include entering into a forward transaction involving two foreign currencies,
using one foreign currency as a proxy for the U.S. dollar to hedge against
variations in the other foreign currency if PMC determines that there is a
pattern of correlation between the proxy currency and the U.S. dollar. To the
extent that the expected correlation between two particular currencies is
imperfect, a forward transaction will not be an effective hedge and the Trust
may be exposed to a loss, which loss may exceed the loss that would have
occurred if a cross-hedge were not attempted.
If the Trust enters into a forward contract to buy foreign currency for
any purpose, the Trust will be required to place cash or high grade liquid
debt securities in a segregated account of the Trust in an amount equal to
the value of the Trust's total assets committed to the consummation of the
forward contract. The Trust may enter into forward currency
6
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contracts having an intrinsic value of up to 25% of its net assets. Forward
contracts are subject to the risk that the counterparty to such contract will
default on its obligations. Since a forward contract is not guaranteed by an
exchange or clearinghouse, a default would deprive the Trust of unrealized
profits or the benefits of a currency hedge and may force the Trust to cover
its purchase or sale commitments, if any, at the current market price.
Portfolio Trading
The Trust's portfolio is fully managed by purchasing and selling
securities, as well as holding selected securities to maturity. While the
Trust does not normally engage in trading for short-term profits, the Trust
engages in portfolio trading of securities regardless of the length of time
the Trust has held the securities if it believes a transaction net of costs
(including custodian's fees) will contribute to the achievement of its
investment objective.
Any such changes in the portfolio may result in increases or decreases in
the Trust's current income available for distribution to shareholders and in
its holding of debt securities which sell at moderate to substantial premiums
or discounts from face value. If the Trust's expectations of changes in
interest rates or its evaluation of the normal yield relationships between
two securities prove to be incorrect, the Trust's income, net asset value and
potential gain may be reduced or its potential loss may be increased. An
increase in interest rates will generally reduce the value of portfolio
investments (and, therefore, the net asset value of the shares of the Trust),
and a decline in interest rates will generally increase their value.
A high portfolio turnover rate (i.e., 100% or higher) will result in
correspondingly higher transaction costs to the Trust and may, under some
circumstances, make it more difficult for the Trust to qualify as a regulated
investment company under the Code. See "Financial Highlights" for actual
turnover rates.
Repurchase Agreements
The Trust may enter into repurchase agreements, generally not exceeding
seven days. Such repurchase agreements will be fully collateralized with U.S.
Treasury and/or U.S. government agency obligations with a market value of not
less than 100% of the obligation, valued daily. Collateral will be held by
the Trust's custodian in a segregated, safekeeping account for the benefit of
the Trust. In the event that a repurchase agreement is not fulfilled, the
Trust could suffer a loss to the extent that the value of the collateral
falls below the repurchase price or if the Trust is prevented from realizing
the value of the collateral by reason of an order of a court with
jurisdiction over an insolvency proceeding with respect to the other party to
the repurchase agreement.
The Trust's investment objective is fundamental and cannot be changed
without shareholder approval. Other investment policies and restrictions are
described in the Statement of Additional Information. Since all investments
are subject to risks and fluctuations in value due to economic conditions and
other factors, there can be no assurance that the Trust will achieve its
investment objective.
IV. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees has overall responsibility for management
and supervision of the Trust. There are currently eight Trustees, six of whom
are not "interested persons" of the Trust as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). The Board meets at least
quarterly. By virtue of the functions performed by PMC as investment adviser,
the Trust requires no employees other than its executive officers, all of
whom receive their compensation from PMC or other sources. The Statement of
Additional Information contains the names and general business and
professional background of each Trustee and executive officer of the Trust.
Each fixed income portfolio managed by PMC, including the Trust, is
overseen by a Fixed Income Committee, which consists of PMC's most senior
fixed income professionals, and a Portfolio Management Committee, which
consists of PMC's fixed income portfolio managers. Both committees are
chaired by Mr. David Tripple, PMC's President and Chief Investment Officer
and Executive Vice President of each of the Pioneer mutual funds. Mr. Tripple
joined PMC in 1974 and has had general responsibility for PMC's investment
operations and specific portfolio assignments for over five years. Fixed
income investments at PMC, including those made on behalf of the Trust, are
under the general supervision of Mr. Sherman Russ, a Senior Vice President of
PMC. Mr. Russ joined PMC in 1983. Since August 1992, day-to-day management of
the Trust has been the responsibility of Richard A. Schlanger who joined PMC
in 1988 and is Vice President of PMC and the Trust. In certain instances
where Mr. Schlanger is unavailable, primary responsibility for the day-to-
day management of the Trust may be assumed temporarily by Mr. Russ.
The Trust is managed under a contract with PMC. PMC serves as investment
adviser to the Trust and is responsible for the overall management of the
Trust's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly-owned subsidiary of The Pioneer Group, Inc.
("PGI"), a publicly-traded Delaware corporation. Pioneer Funds Distributor,
Inc. ("PFD"), an indirect wholly-owned subsidiary of PGI, is the principal
underwriter of shares of the Trust.
In addition to the Trust, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109. In an effort to avoid conflicts of
interest with the Trust, the Trust and PMC have adopted a Code of Ethics that
is designed to maintain a high standard of personal conduct by directing that
all personnel defer to the interests of the Trust and its shareholders in
making personal securities transactions.
Investment advisory services are provided to the Trust by PMC pursuant to
a management contract between PMC and the Trust. PMC assists in the
management of the Trust and is authorized in its discretion to buy and sell
securities for the account of the Trust. PMC pays all the expenses, including
executive salaries and the rental of office space, relating to
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its services for the Trust, with the exception of the following which are to
be paid by the Trust: (a) taxes and other governmental charges, if any; (b)
interest on borrowed money, if any; (c) legal fees and expenses; (d) auditing
fees; (e) insurance premiums; (f) dues and fees for membership in trade
associations; (g) fees and expenses of registering and maintaining
registrations by the Trust of its shares with regulatory agencies, individual
states, territories and foreign jurisdictions and of preparing reports to
regulatory agencies; (h) fees and expenses of Trustees not affiliated with or
interested persons of PMC; (i) fees and expenses of the custodian, dividend
disbursing agent, transfer agent and registrar; (j) issue and transfer taxes
chargeable to the Trust in connection with securities transactions to which
the Trust is a party; (k) costs of reports to shareholders, shareholders'
meetings and Trustees' meetings; (l) the cost of certificates representing
shares of the Trust; (m) bookkeeping and appraisal charges; and (n) certain
distribution fees pursuant to its plan of distribution. The Trust also pays
all brokerage commissions in connection with its portfolio transactions.
Orders for the Trust's portfolio securities transactions are placed by
PMC, which strives to obtain the best price and execution for each
transaction. In circumstances in which two or more broker-dealers are in a
position to offer comparable prices and execution, consideration may be given
to whether the broker-dealer provides investment research or brokerage
services or sells shares of any Pioneer mutual fund. See the Statement of
Additional Information for a further description of PMC's brokerage
allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.50% per annum of the
Trust's average daily net assets up to $100 million, 0.45% of the next $200
million, and 0.40% on assets over $300 million. The fee is normally computed
daily and paid monthly.
During the fiscal year ended November 30, 1995, the Trust incurred
expenses of $825,975, including management fees paid or payable to PMC of
$291,294. PMC has agreed not to impose a portion of its management fee and to
make other arrangements, if necessary, to limit other operating expenses of
the Fund to the extent required to reduce Class A expenses to 0.85% of the
average daily net assets attributable to Class A shares; the portion of
fund-wide expenses attributable to Class B shares will be reduced only to the
extent such expenses are reduced for Class A shares. This agreement is
voluntary and temporary and may be revised or terminated at any time. During
the fiscal year ended November 30, 1995, as a result of this agreement, PMC
did not impose its management fee.
John F. Cogan, Jr., Chairman and President of the Trust, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of the date of
this Prospectus.
V. TRUST SHARE ALTERNATIVES
The Trust continuously offers two Classes of shares designated as Class A
and Class B shares, as described more fully in "How to Buy Trust Shares." If
you do not specify in your instructions to the Trust which Class of shares
you wish to purchase, exchange or redeem, the Trust 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 Trust'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 2% if redeemed within three years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1% of the Trust'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, approximately five years after
the initial purchase.
Purchasing Class A or Class B Shares. The decision as to which Class to
purchase depends on the amount you invest, the intended length of the
investment and your personal situation. If you are making an investment that
qualifies for reduced sales charges, you might consider Class A shares. If
you prefer not to pay an initial sales charge on an investment of $250,000 or
less and you plan to hold the investment for at least three years, you might
consider Class B shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund
and shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Trust 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 Trust 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 Trust 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 New York Stock Exchange (the "Exchange") is open, as of the
close of regular trading on the Exchange.
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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 Trust's independent pricing services.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of regular trading on the Exchange. The
values of such securities used in computing the net asset value of the
Trust's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of regular trading on
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 regular trading on the Exchange and will
therefore not be reflected in the computation of the Trust'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 Trust 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 TRUST SHARES
You may buy Trust shares from any securities broker-dealer which has a
sales agreement with PFD. If you do not have a securities broker-dealer,
please call 1-800-225-6292. Shares will be purchased at the public offering
price, that is, the net asset value per share plus any applicable sales
charge, next computed after receipt of a purchase order, except as set forth
below.
The minimum initial investment is $5,000 for Class A and Class B shares
except as specified below. The minimum initial investment is $100 for Class A
accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $100 for Class A shares
and $500 for Class B shares except that the subsequent minimum investment
amount for Class B share accounts may be as little as $50 if an automatic
investment plan 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 three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.
Class A Shares
You may buy Class A shares at the public offering price as follows:
Sales Charge as a % of
---------------------------
Dealer
Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
-------------------------------------------------------------------
Less than $50,000 2.50% 2.56% 2.00%
$50,000 but less than
$100,000 2.00 2.06 1.75
$100,000 but less than
$250,000 1.50 1.52 1.25
$250,000 but less than
$1,000,000 1.00 1.01 1.00
$1,000,000 or more -0- -0- see below
The schedule of sales charges above is applicable to purchases of Class A
shares of the Trust 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 Code, although more than one
beneficiary is involved. The sales charges applicable to a current purchase
of Class A shares of the Trust by a person listed above is determined by
adding the value of shares to be purchased to the aggregate value (at the
then current offering price) of shares of any of the other Pioneer mutual
funds previously purchased and then owned provided PFD is notified by such
person or his or her broker-dealer each time a purchase is made which would
qualify. Pioneer mutual funds include all mutual funds for which PFD serves
as principal underwriter. See the "Letter of Intention" section of the
Account Application.
No sales charge is payable at the time of purchase on investments of $1
million or more or for purchases by participants in certain group plans
(described below) subject to a CDSC of 0.50% which may be imposed in the
event of a redemption of Class A shares within 12 months of purchase. See
"How to Sell Trust Shares." PFD may, in its discretion, pay a commission to
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broker-dealers who initiate and are responsible for such purchases as
follows: 0.50% on sales of $1 million to $5 million; and 0.10% on the excess
over $5 million. These commissions will not be paid if the purchaser is
affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commission paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "How to Sell Trust 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
Trust'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 Trust 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 Trust may be sold
at net asset value without a sales charge to 401(k) retirement plans with 100
or more participants or at least $500,000 in plan assets. Information about
such arrangements is available from PFD.
Class A shares of the Trust 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 or employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which
have entered into sales agreements with PFD; (e) members of the immediate
families of any of the persons above; (f) any trust, custodian, pension,
profit-sharing or other benefit plan of the foregoing persons; (g) insurance
company separate accounts; (h) certain "wrap accounts" for the benefit of
clients of financial planners adhering to standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold
except through redemption or repurchase by or on behalf of the Trust. The
availability of this privilege is conditioned on the receipt by PFD of
written notification of eligibility. Class A shares of the Trust may be sold
at net asset value without a sales charge to Optional Retirement Program (the
"Program") participants if (i) the employer has authorized a limited number
of investment company providers for the Program, (ii) all authorized
investment company providers offer their shares to Program participants at
net asset value, (iii) the employer has agreed in writing to actively promote
the authorized investment providers to Program participants and (iv) the
Program provides for a matching contribution for each participant
contribution. Class A shares of the Trust may also be issued at net asset
value without a sales charge in connection with certain reorganization,
liquidation or acquisition transactions involving other investment companies
or personal holding companies.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Trust shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention procedure, including
its terms, is contained in the Statement of Additional Information. Investors
who are clients of a broker-dealer with a current sales agreement with PFD
may purchase Class A shares of the Trust 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 60
days immediately preceding the purchase of Class A shares of the Trust; that
the client paid a sales charge on the original purchase of the shares
redeemed; and that the mutual fund whose shares were redeemed also offers net
asset value purchases to redeeming shareholders of any of the Pioneer mutual
funds. Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value without the imposition of an
initial sales charge; however, Class B shares redeemed within three 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 Trust will first redeem shares not subject to any CDSC, and then
shares held longest during the three-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:
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Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
-------------------------- -----------------------------------
First 2.0%
Second 2.0%
Third 1.0%
Fourth and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Trust in connection with the sale of Class B shares, including the
payment of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end
of the calendar quarter that is five years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer mutual fund will convert into Class A shares based on the
date of the initial purchase and the applicable CDSC. Class B shares acquired
through reinvestment of distributions will convert into Class A shares based
on the date of the initial purchase to which such shares relate. For this
purpose, Class B shares acquired through reinvestment of distributions will
be attributed to particular purchases of Class B shares in accordance with
such procedures as the Trustees may determine from time to time. The
conversion of Class B shares to Class A shares is subject to the continuing
availability of a ruling from the Internal Revenue Service ("IRS"), which the
Trust 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 or opinion 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 or opinion is no longer
available and, therefore, Class B shares would continue to be subject to
higher expenses than Class A shares for an indeterminate period.
All Classes of Shares
Waiver or Reduction of Contingent Deferred Sales
Charge. The CDSC on Class B shares and on any Class A shares subject to a
CDSC may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of the value of the account in the Trust at the
time the withdrawal plan is established).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may
be waived or reduced for retirement plan accounts if: (a) the redemption
results from the death or a total and permanent disability (as defined in
Section 72 of the Code) occurring after the purchase of the shares being
redeemed of a shareholder or participant in an employer-sponsored retirement
plan; (b) the distribution is to a participant in an IRA, 403(b) or
employer-sponsored retirement plan, is part of a series of substantially
equal payments made over the life expectancy of the participant or the joint
life expectancy of the participant and his or her beneficiary or as scheduled
periodic payments to a participant (limited in any year to 10% of the value
of the participant's account at the time the distribution amount is
established; a required minimum distribution due to the participant's
attainment of age 70-1/2 may exceed the 10% limit only if the distribution
amount is based on plan assets held by Pioneer); (c) the distribution is from
a 401(a) or 401(k) retirement plan and is a return of excess employee
deferrals or employee contributions or a qualifying hardship distribution as
defined by the Code or results from a termination of employment (limited with
respect to a termination to 10% per year of the value of the plan's assets in
the Trust 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 preauthorized through a prior
agreement with PFD regarding participant directed transfers).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may
be waived or reduced for either non-retirement or retirement plan accounts
if: (a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Trust's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers. An order for either Class of Trust shares received by PFD
from a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received 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 its close of business.
PFD or its affiliates may provide additional compensation to certain dealers
or such dealers' affiliates based on certain objective criteria established
from time to time by PFD. All such payments are made out of PFD's or the
affiliate's own assets. These payments will not change the price an investor
will pay for shares or the amount that the Trust will receive from such sale.
General. The Trust reserves the right in its sole discretion to withdraw
all or any part of the offering of shares when, in the judgment of the
Trust's management, such withdrawal is in the best interest of the Trust. An
order to purchase shares is not binding on, and may be rejected by, PFD until
it has been confirmed in writing by PFD and payment has been received.
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VIII. HOW TO SELL TRUST SHARES
You can arrange to sell (redeem) Trust shares on any day the Exchange is
open by selling either some or all of your shares to the Trust.
You may sell your shares either through your broker-dealer or directly to
the Trust.
(bullet) If you are selling shares from a retirement account, you must
make your request in writing (except for exchanges to other
Pioneer mutual funds which can be requested by phone or in
writing). Call 1-800-622-0176 for more information.
(bullet) If you are selling shares from a non-retirement account, you may
use any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received in good order less any applicable CDSC. Sale proceeds
generally will be sent to you in cash, normally within seven days after your
order is received in good order. The Trust reserves the right to withhold
payment of the sale proceeds until checks received by the Trust in payment
for the shares being sold have cleared, which may take up to 15 calendar days
from the purchase date.
In Writing. You may sell your shares by delivering a written request in
good order to PSC, however, you must use a written request, including a
signature guarantee, to sell your shares if any of the following situations
applies:
(bullet) you wish to sell over $50,000 worth of shares,
(bullet) your account registration or address has changed within the last
30 days,
(bullet) the check is not being mailed to the address on your account
(address of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer account with
a different registration.
Your request should include your name, the Trust'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, certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicate otherwise on your
Account Application or by writing to PSC. Proper account identification will
be required for each telephone redemption. A maximum of $50,000 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 tranfer. To receive the proceeds
by check: the check must be made payable exactly as the account is registered
and the check must be sent to the address of record which must not have
changed in the last 30 days. To receive the proceeds by bank wire or by
electronic funds transfer: the proceeds must be sent to your bank address of
record which must have been properly pre-designated either on your Account
Application or on an Account Options Form and which must not have changed in
the last 30 days. To redeem by fax, send your redemption request to
1-800-225-4240. You may always elect to deliver redemption instructions to
PSC by mail. See "Telephone Transactions and Related Liabilities" below.
Telephone and fax redemptions will be priced as described above. You are
strongly urged to consult with your financial representative prior to
requesting a telephone redemption.
By Check. If requested by you, the Trust will establish a checking account
for you with The First National Bank of Omaha (the "Bank"). Checks may be
drawn for not less than $500 nor more than $250,000. When a check is
presented to the Bank for payment, it will cause the Trust to redeem, at the
net asset value next determined after presentation, a sufficient number of
your shares to cover the check. You will receive the daily dividends declared
on your shares until the day the check clears. Please allow 1 to 2 weeks for
receipt of personalized checks.
The checking account will be subject to the Bank's rules and regulations
governing checking accounts. If there is an insufficient number of shares in
your account when a check is presented to the Bank for payment, the check
will be returned.
Since the aggregate value of a shareholder's account in the Trust changes
each day, you should not attempt to withdraw the full amount in your account
by using a check. The checkwriting privilege is generally not available for
retirement plan accounts or accounts subject to backup withholding (see
"Retirement Plans" below).
Selling Shares Through Your Broker-Dealer. The Trust has authorized PFD to
act as its agent in the repurchase of shares of the Trust 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 Trust in an account with a net asset value of less than the minimum
required amount due to redemptions or exchanges, the Trust may redeem the
shares held in this account at net asset value if you have not
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increased the net asset value of the account to at least the minimum required
amount within six months of notice by the Trust to you of the Trust'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 0.50% of the lesser of the value
of the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer mutual fund will continue to be
subject to the CDSC until the original 12-month period expires. However, no
CDSC is payable upon redemption with respect to Class A shares purchased by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Trust of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Trust 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 TRUST SHARES
You may not exchange Class A shares of the Trust, except as noted below,
for shares of any other Pioneer mutual funds for a period of 12 months
following their purchase; following this 12-month period, you may exchange
your Class A shares of the Trust at net asset value, without a sales charge,
for shares of the same Class of any other publicly available Pioneer mutual
fund. Accounts established under a Group Plan and Class A shares purchased at
net asset value without a sales charge are exempt from the 12-month holding
period requirement. Accounts established to utilize Automatic Exchange (see
below) for scheduled periods of 12 months or longer meet this minimum holding
period. Not all Pioneer mutual funds offer more than one Class of shares.
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Fund out of which you wish to exchange and the name of the Pioneer mutual
fund into which you wish to exchange, your fund account number(s), the Class
of shares to be exchanged and the dollar amount or number of shares to be
exchanged. Written exchange requests must be signed by all record owner(s)
exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by
voice or by FactFoneSM, will be recorded. You are strongly urged to consult
with your financial representative prior to requesting a telephone exchange.
See "Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one
Pioneer mutual fund account for shares of the same Class in another Pioneer
mutual fund account on a monthly or quarterly basis. The accounts must have
identical registrations and the originating account must have a minimum
balance of $5,000. The exchange will be effective on the day of the month
designated on your Account Application or Account Options Form.
General. Exchanges must be at least $1,000. 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 below 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 Trust 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 Trust's performance and shareholders, the Trust
and PFD reserve the right to refuse any exchange request or restrict, at any
time without notice, the number and/or frequency of exchanges to prevent
abuses of the exchange privilege. Such abuses may arise from frequent trading
in response to short-term market fluctuations, a pattern of trading by an
individual or group that appears to be an attempt to "time the market," or
any other exchange request which, in the view of management, will have a
detrimental effect on the Trust's portfolio management strategy or its
operations. In addition, the Trust and PFD reserve the right to charge a fee
for exchanges or to modify, limit, suspend or
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discontinue the exchange privilege with notice to shareholders as required by
law.
X. DISTRIBUTION PLANS
The Trust has adopted a Plan of Distribution for both Class A shares
("Class A Plan") and Class B shares ("Class B Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution and service
fees are paid.
Pursuant to the Class A Plan, the Trust reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Trust's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Trust: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Trust'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 Trust's Class A shares with no initial sales charge
(See "How to Buy Trust 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 Trust pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Trust'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 Trust in a given year. The Class A
Plan may not be amended to increase materially the annual percentage
limitation of average net assets which may be spent for the services
described therein without approval of the shareholders of the Trust. The
Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the Trust is first invoiced for an expense.
The limited carryover provision in the Class A Plan may result in an expense
invoiced to the Trust in one fiscal year being paid in the subsequent fiscal
year and thus being treated for purposes of calculating the maximum
expenditures of the Trust as having been incurred in the subsequent fiscal
year. In the event of termination or non- continuance of the Class A Plan,
the Trust has 12 months to reimburse any expense which it incurs prior to
such termination or non-continuance, provided that payments by the Trust
during such 12-month period shall not exceed 0.25% of the Trust's average
daily net assets during such period.
The Class B Plan provides that the Trust will pay a distribution fee at
the annual rate of 0.75% of the Trust's average daily net assets attributable
to Class B shares and will pay PFD a service fee at the annual rate of 0.25%
of the Trust's average daily net assets attributable to Class B shares. The
distribution fee is intended to compensate PFD for its distribution services
to the Trust. The service fee is intended to be additional compensation for
personal services and/or account maintenance services with respect to Class B
shares. PFD also receives the proceeds of any CDSC imposed on the redemption
of Class B shares.
Commissions of 2%, equal to 1.75% of the amount invested and a first
year's service fee equal to 0.25% of the amount invested in Class B shares,
are paid to broker- dealers who have selling agreements with PFD. PFD may
advance to dealers the first year service fee at a rate up to 0.25% of the
purchase price of such shares and, as compensation therefor, PFD may retain
the service fee paid by the Trust with respect to such shares for the first
year after purchase. Dealers will become eligible for additional service fees
with respect to such shares commencing in the 13th month following the
purchase. Dealers may from time to time be required to meet certain criteria
in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Trust has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code
so that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Trust 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 Trust intends to make distributions in a timely
manner and accordingly does not expect to be subject to the excise tax.
A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Trust's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of
its assets is attributable to) certain U.S. government securities, provided
in some states that certain thresholds for holdings of such securities and/or
reporting requirements are satisfied. The Trust will report annually to its
shareholders the percentage of interest income earned from U.S. government
securities during the preceding year. Each shareholder is advised to consult
his own tax adviser regarding the exemptions, if any, available under
applicable state and local law.
In computing its income for dividend purposes, the Trust attempts to
conform its accounting to the requirements for federal income tax purposes.
Each business day the Trust declares a dividend consisting of
substantially all of the Trust's net investment income (which includes earned
interest and certain other income, less expenses). Shareholders begin earning
dividends on
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the first business day following receipt of payment for purchased shares.
Shares continue to earn dividends up to and including the date of redemption.
Dividends are normally paid on the last business day of the month or shortly
thereafter. Monthly distributions may also include a portion of any original
issue discount, market discount, income from securities lending, certain net
realized foreign exchange gains, and any net short-term capital gains
realized by the Trust. Distributions from net long-term capital gains, if
any, will be made annually, generally in December. Additional distributions
may be made at such other times as may be necessary to avoid federal income
or excise tax on the Trust.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Trust. The Trust's monthly dividend distributions from the sources described
above are taxable as ordinary income, and dividends from the Trust's net
long-term capital gains are taxable as long-term capital gains, regardless of
your holding period for the shares of the Trust. 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 Trust.
Information as to the federal tax status of dividends and distributions will
be provided annually to shareholders. For further information on the
distribution options available to shareholders, see "Distribution Options"
and "Directed Dividends" below.
The Trust may be subject to foreign withholding taxes or other foreign
taxes on income (possibly including some capital gains) from certain foreign
investments. The Trust expects that it generally will not qualify to pass
such taxes through to its shareholders, who consequently generally will
neither include such taxes in their gross incomes nor be entitled to
associated foreign tax credits or deductions.
Dividends and other distributions and the proceeds of redemptions,
repurchases or exchanges of Trust shares paid to individuals and other
non-exempt payees will be subject to 31% backup withholding of federal income
tax if the Trust is not provided with the shareholder's correct taxpayer
identification number and certification that the number is correct and the
shareholder is not subject to such backup withholding or the Trust 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 taxes. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax advisers regarding state, local and
other applicable tax laws.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the
Trust. PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI.
PSC's offices are located at 60 State Street, Boston, Massachusetts 02109,
and inquiries to PSC should be mailed to Pioneering Services Corporation,
P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman &
Co. ("the Custodian") serves as the custodian of the Trust's portfolio
securities and other assets. The principal business address of the mutual
funds 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 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 a broker-dealer or other
party will not normally have an account with the Trust and might not be able
to utilize some of the services available to shareholders of record. Examples
of services that might not be available are purchases, exchanges or
redemptions of shares by mail, automatic reinvestment of dividends and
capital gains distributions, withdrawal plans, Letters of Intention, Rights
of Accumulation, telephone exchanges and redemptions and newsletters.
Additional Investments
You may add to your account by sending a check ($100 minimum for Class A
shares and $500 for Class B shares) to PSC (account number and Class of
shares should be clearly indicated). The bottom portion of a confirmation
statement may be used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Trust at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a pre-authorized electronic funds transfer
or draft drawn on a checking account. Pioneer Investomatic Plan investments
are voluntary and you may discontinue the Plan without penalty upon 30 days'
written notice to PSC. PSC acts as agent for the purchasers, the
broker-dealer and PFD in maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semi-annually.
In January of each year the Trust will mail to 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 Trust, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
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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 an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer mutual fund. The value of
this second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer
II). Invested dividends may be in any amount, and there are no fees or
charges for this service. Retirement plan shareholders may only direct
dividends to accounts with identical registrations; i.e., "PGI IRA Cust for
John Smith" may only go into another account registered "PGI IRA Cust for
John Smith."
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from an account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Trust shares by telephone.
See "How to Buy Trust Shares," "How to Sell Trust Shares" and "How to
Exchange Trust Shares" for more information. For personal assistance, call
1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern Time on weekdays.
Computer-assisted transactions may be available to shareholders who have
pre-recorded certain bank information (see "FactFoneSM"). You are strongly
urged to consult with your financial representative prior to requesting any
telephone transaction. To confirm that each transaction instruction received
by telephone is genuine, PSC will record each telephone transaction, require
the caller to provide the personal identification number ("PIN") for the
account and send you a written confirmation of each telephone transaction.
Different procedures may apply to accounts that are registered to non-U.S.
citizens or that are held in the name of an institution or in the name of an
investment broker-dealer or other third-party. If reasonable procedures, such
as those described above, are not followed, the Trust may be liable for any
loss due to unauthorized or fraudulent instructions. The Trust may implement
other procedures from time to time. In all other cases, neither the Trust,
PSC or PFD will be responsible for the authenticity of instructions received
by telephone, therefore, you bear the risk of loss for unauthorized or
fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the
Trust by telephone to institute a redemption or exchange. You should
communicate with the Trust in writing if you are unable to reach the Trust by
telephone.
FactFone(SM)
FactFone(SM)is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM)
allows you to obtain current information on your Pioneer 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 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 third party may not be able to use FactFone(SM). See "How to
Buy Trust Shares," "How to Exchange Trust Shares," "How to Sell Trust Shares"
and "Telephone Transactions and Related Liabilities." Call PSC for
assistance.
Retirement Plans
Interested persons should contact the Retirement Plans Department of PSC
at 1-800-622-0176 for information relating to retirement plans for
businesses, age-weighted profit sharing plans, Simplified Employee Pension
Plans, IRAs, Section 401(k) salary reduction plans and Section 403(b)
retirement plans for employees of certain non-profit organizations and public
school systems, all of which are available in conjunction with investments in
the Trust. The Account Application accompanying this Prospectus should not be
used to establish such plans. Separate applications are required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800- 225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000, you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the plan is implemented. See "Waiver or
Reduction of Contingent Deferred Sales Charge" for more information. Periodic
checks of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly, and your periodic redemptions of shares may be taxable
to you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid
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<PAGE>
to another after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Trust 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 Trust, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Trust 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 Trust in effect immediately after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes
as a result of the redemption, and special tax rules apply if a reinvestment
occurs. Subject to the provisions outlined under "How to Exchange Trust
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 Trust. 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 obtain by calling
1-800-225-6292.
XIII. THE TRUST
The Trust is a diversified open-end management investment company
(commonly referred to as a mutual fund) organized as a Massachusetts business
trust on August 10, 1992. The Trust has authorized an unlimited number of
shares of beneficial interest and the Trustees are authorized to create
additional series of the Trust. The Trust is not required to hold annual
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 Trustees have the authority, without
further shareholder approval, to classify and reclassify the shares of the
Trust, or any new series of the Trust, into one or more classes. As of the
date of this Prospectus, the Trustees have authorized the issuance of two
Classes of shares, designated Class A and Class B. The shares of each Class
represent an interest in the same portfolio of investments of the Trust. Each
Class has equal rights as to voting, redemption, dividends and liquidation,
except that each Class bears different distribution and transfer agent fees
and may bear other expenses properly attributable to the particular Class.
Class A and Class B shareholders have exclusive voting rights with respect to
the Rule 12b-1 distribution plans adopted by holders of those shares in
connection with the distribution of shares.
When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Trust are fully-paid
and non-assessable. Shares will remain on deposit with the Trust's transfer
agent and certificates will not normally be issued. The Trust reserves the
right to charge a fee for the issuance of Class A share certificates;
certificates will not be issued for Class B shares.
XIV. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Trust 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 2.50%; for Class B
shares the calculation reflects the deduction of any applicable CDSC. The
periods illustrated would normally include one, five and ten years (or since
the commencement of the public offering of the shares of a Class, if shorter)
through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Trust's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual funds results may be
cited or compared with the investment results of the Trust. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Trust's investment results will vary from time to time depending on
market conditions, the composition of the Trust's portfolio and operating
expenses of the Trust. All quoted investment results are historical and
should not be considered representative of what an investment in the Trust
may earn in any future period. For further information about the calculation
methods and uses of the Trust's investment results, see the Statement of
Additional Information.
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Notes
18
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THE PIONEER FAMILY OF MUTUAL FUNDS
International Growth Funds
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
Growth Funds
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Gold Shares
Growth and Income Funds
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Income Funds
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
Tax-Free Income Funds
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Money Market Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts
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(Pioneer logo)
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
LEGAL COUNSEL
HALE AND DORR
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 accounts and new accounts, prospectuses,
applications, service forms and telephone transactions 1-800-225-6292
FactFone(SM)
Automated fund yields, automated prices
and account information 1-800-225-4321
Retirement plans 1-800-622-0176
Toll-free fax 1-800-225-4240
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
1196-3720
(C) Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A and Class B Shares
March 29, 1996
(November 15, 1996)
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus, but should be read in conjunction with the
Prospectus (the "Prospectus") dated March 29, 1996 (November 15, 1996), of
Pioneer Short-Term Income Trust (the "Trust"). 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 Trust at 60 State Street, Boston, Massachusetts 02109.
The Annual Report to Shareholders dated November 30, 1995 is attached to this
Statement of Additional Information and is hereby incorporated into this
Statement of Additional Information by reference.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions............................... 2
2. Management of the Trust............................................ 6
3. Investment Adviser................................................. 10
4. Underwriting Agreement and Distribution Plans...................... 12
5. Shareholder Servicing/Transfer Agent............................... 12
6. Custodian.......................................................... 12
7. Principal Underwriter.............................................. 12
8. Independent Public Accountants..................................... 13
9. Portfolio Transactions............................................. 13
10. Tax Status......................................................... 14
11. Description of Shares.............................................. 16
12. Certain Liabilities................................................ 17
13. Determination of Net Asset Value................................... 17
14. Systematic Withdrawal Plan......................................... 18
15. Letter of Intention................................................ 18
16. Investment Results................................................. 19
17. Financial Statements............................................... 22
Appendix A......................................................... 23
Appendix B......................................................... 26
Appendix C......................................................... 35
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus of the Trust identifies the investment objective and the
principal investment policies of the Trust. Other investment policies of the
Trust are set forth below. The Trust's investment adviser is Pioneering
Management Company ("PMC").
Asset-Backed Securities
The Trust may invest in asset-backed securities, which are securities that
represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool or pools of similar
assets (e.g., trade receivables). The credit quality of these securities depends
primarily upon the quality of the underlying assets and the level of credit
support and/or enhancement provided.
The underlying assets (e.g., loans) are subject to prepayments which shorten the
securities' weighted average maturity and may lower their return. If the credit
support or enhancement is exhausted, losses or delays in payment may result if
the required payments of principal and interest are not made. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the pool, the originator of the
pool, or the financial institution or trust providing the credit support or
enhancement.
Mortgage-Backed Securities
The Trust may invest in mortgage-backed securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities and private entities. Some of
these securities, such as GNMA certificates, are backed by the full faith and
credit of the U.S. Treasury while others, such as Freddie Mac certificates, are
not.
Mortgage-backed securities are securities representing interests in a pool of
mortgages. Principal and interest payments made on the mortgages in the
underlying mortgage pool are passed through to the Trust. Unscheduled
prepayments of principal shorten the securities' weighted average life and may
lower their total return. The value of these securities also may change because
of changes in the market's perception of the creditworthiness of the federal
agency that issued them. In addition, the mortgage securities market in general
may be adversely affected by changes in governmental regulations or tax
policies.
When-Issued Securities
The Trust may from time to time purchase securities on a "when-issued" basis,
provided that at any time not more than 5% of the Trust's net assets may consist
of "when-issued" securities. The price of such securities, which may be
expressed in yield terms, is fixed at the time the commitment to purchase is
made, but delivery and payment for the when-issued securities take place at a
later date. It is possible that the value of such securities will increase or
decrease prior to the Trust's actual receipt of them. Normally, the settlement
date occurs within one month of the purchase.
Securities of Foreign Issuers
The Trust may invest in securities issued by foreign issuers and securities of
foreign branches of U.S. banks, such as negotiable certificates of deposit. Such
investments are subject to the Trust's quality and maturity standards (set forth
in the Prospectus).
Forward Foreign Currency Transactions
The foreign currency transactions of the Trust 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 Trust also has authority to deal in forward
foreign currency exchange contracts involving currencies of the different
countries in which it 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
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<PAGE>
date and price set at the time of the contract. The Trust's dealings in forward
foreign currency contracts will be limited to hedging either specific
transactions or portfolio positions. Transaction hedging is the purchase or sale
of forward foreign currency contracts with respect to specific receivables or
payables of the Trust accruing in connection with the purchase and sale of its
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
Trust will be engaged in hedging activities when adverse exchange rate movements
occur. The Trust 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 Trust's investment adviser. The Trust will not enter
into speculative forward foreign currency contracts.
If the Trust enters into a forward contract to purchase foreign currency, its
custodian bank will segregate cash or high grade liquid debt securities in a
separate account of the Trust in an amount equal to the value of the Trust's
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
account so that the value of the account will equal the amount of the Trust'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 Trust to hedge against a devaluation that is so generally
anticipated that the Trust is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The cost to the Trust 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 Trust may close out
a forward position in a currency by selling the forward contract or entering
into an offsetting forward contract.
Lending of Portfolio Securities
The Trust may lend portfolio securities to member firms of the New York Stock
Exchange, under agreements which would require that the loans be secured
continuously by collateral in cash, cash equivalents or U.S. Treasury Bills
maintained on a current basis at an amount at least equal to the market value of
the securities loaned. The Trust would continue to receive the equivalent of the
interest paid by the issuer on the securities loaned and would also receive
compensation based on investment of the collateral. The Trust 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 their 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 Trust has no present intention to engage in any material
portfolio lending in the future. The Trust will lend portfolio securities only
to firms which have been approved in advance by the Trust's Board of Trustees,
which will monitor the creditworthiness of any such firms. The value of the
securities loaned will not exceed 5% of the value of the Trust's total assets.
Restricted Securities
The Trust may invest up to 5% of its total assets in "restricted securities"
(i.e., securities that would be required to be registered prior to distribution
to the public), including restricted securities eligible for resale to certain
institutional investors pursuant to Rule 144A under the Securities Act of 1933.
The Board of Trustees may adopt guidelines and delegate to PMC the daily
function of determining and monitoring the liquidity of restricted securities.
The Board, however, will retain sufficient oversight and be ultimately
responsible for the determinations. Since it is not possible to predict with
assurance exactly how this market for restricted securities sold and offered
under Rule 144A will develop, the Board will carefully monitor the Trust's
investments in these
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securities, focusing on such important factors, among others, as valuation,
liquidity and availability of information. This investment practice could have
the effect of increasing the level of illiquidity in the Trust to the extent
that qualified institutional buyers become for a time uninterested in purchasing
these restricted securities.
Investment Restrictions
Fundamental Investment Restrictions. The Trust has adopted certain fundamental
investment restrictions which may not be changed without the affirmative vote of
the holders of a majority of the Trust's outstanding voting securities. As used
in the Prospectus and Statement of Additional Information, such approval means
the approval of the lesser of (i) the holders of 67% or more of the shares
represented at a meeting if the holders of more than 50% of the outstanding
shares are present in person or by proxy, or (ii) the holders of more than 50%
of the outstanding shares.
The Trust may not:
(1)Issue senior securities, except as permitted by paragraphs (2), (6)
and (7) below. 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 Trust's investment policy, and the pledge,
mortgage or hypothecation of the Trust's assets within the meaning of paragraph
(3) below are not deemed to be senior securities.
(2)Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33 1/3% of the Trust's
total assets (including the amount borrowed) taken at market value. The Trust
will not use leverage to attempt to increase income. The Trust will not purchase
securities while outstanding borrowings exceed 5% of the Trust's total assets.
(3)Pledge, mortgage, or hypothecate its assets, except to secure
indebtedness permitted by paragraph (2) above and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the Trust's total assets
taken at market value.
(4)Act as an underwriter, except to the extent that, in connection with
the disposition of portfolio securities, the Trust may be deemed to be an
underwriter for purposes of the Securities Act of 1933.
(5)Purchase or sell real estate or any interest therein, except that
the Trust may invest in securities secured by real estate or marketable
interests therein or securities issued by companies (other than real estate
limited partnerships) that invest in real estate or interests therein.
(6)Make loans, except that the Trust may lend portfolio securities,
enter into repurchase agreements, and purchase bank certificates of deposit, a
portion of an issue of publicly distributed bonds, bank loan participation
agreements, bankers' acceptances, debentures and other securities, whether or
not the purchase is made upon the original issuance of the securities, in
accordance with its investment policies.
(7)Invest in commodities or commodity contracts or in puts, calls, or
combinations of both, 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 and repurchase agreements entered into in accordance with the Trust's
investment policies.
(8)Purchase securities of an issuer (other than the U.S. Government,
its agencies or instrumentalities), if
(a)such purchase would cause more than 5% of the Trust's total assets
taken at market value to be invested in the securities of such issuer, or
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(b)such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Trust.
With the exception of forward foreign currency exchange contracts, forward
commitments and repurchase agreements, the Trust does not intend to invest more
than 5% of its assets during the current fiscal year in any of the investments
permitted by the exceptions set forth in paragraph (7) above.
It is the policy of the Trust not to concentrate its investments in securities
of companies in any particular industry. In the opinion of the staff of the
Securities and Exchange Commission (the "SEC"), investments are concentrated in
a particular industry if such investments aggregate 25% or more of the Trust's
total assets. The Trust's policy does not apply to investments in U.S.
Government Securities.
Non-fundamental Investment Restrictions. The following restrictions have been
designated as non-fundamental and may be changed by a vote of the Trust's Board
of Trustees without approval of shareholders. The Trust has agreed to many of
these non-fundamental restrictions in connection with the offering of its shares
in various states and foreign countries.
The Trust may not:
(a)Participate on a joint-and-several basis in any securities trading
account. The "bunching" of orders for the sale or purchase of marketable
portfolio securities with other accounts under the management of the investment
adviser to save commissions or to average prices among them is not deemed to
result in a securities trading account.
(b)Purchase securities on margin or make short sales unless by virtue
of its ownership of other securities, the Trust has the right to obtain
securities equivalent in kind and amount to the securities sold and, if the
right is conditional, the sale is made upon the same conditions, except that the
Trust may obtain such short-term credits as may be necessary for the clearance
of purchases and sales of securities and in connection with transactions
involving forward foreign currency exchange transactions.
(c)Purchase a security if, as a result, (i) more than 10% of the
Trust's assets would be invested in securities of closed-end investment
companies, (ii) such purchase would result in more than 3% of the total
outstanding voting securities of any one such closed-end investment company
being held by the Trust, or (iii) more than 5% of the Trust's assets would be
invested in any one such closed-end investment company. The Trust will not
invest in the securities of any open-end investment company.
(d)Purchase securities of any issuer which, together with any
predecessor, has a record of less than three years' continuous operations prior
to the purchase if such purchase would cause investments of the Trust in all
such issuers to exceed 5% of the value of the total assets of the Trust.
(e)Invest in companies for the purpose of exercising control or
management.
(f)Purchase warrants of any issuer, if, as a result of such purchases,
more than 2% of the value of the Trust's net assets would be invested in
warrants which are not listed on the New York Stock Exchange or the American
Stock Exchange or more than 5% of the value of the net assets of the Trust would
be invested in warrants generally, whether or not so listed. For these purposes,
warrants are to be valued at the lesser of cost or market, but warrants acquired
by the Trust in units with or attached to debt securities shall be deemed to be
without value.
(g)Knowingly purchase or retain securities of an issuer if one or more
of the Trustees or officers of the Trust or directors or officers of the
investment adviser or any investment management subsidiary of the investment
adviser individually owns beneficially more than 0.5% and together own
beneficially more than 5% of the securities of such issuer.
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<PAGE>
(h)Purchase interests in oil, gas or other mineral leases or
exploration programs; however, this policy will not prohibit the acquisition of
securities of companies engaged in the production or transmission of oil, gas or
other minerals.
(i)Invest in any security, including any repurchase agreement maturing
in more than seven days, which is illiquid if more than 15% of the total assets
of the Trust, taken at market value, would be invested in such securities.
(j)Purchase puts, calls, straddles, spreads and any combination thereof
if the value of its investment in such securities will exceed 5% of its total
assets.
(k)Write put or call options, or enter into futures contracts with
respect to more than 25% of its net assets.
Many of these restrictions may not be changed without the approval of the
regulatory agencies in such states or foreign countries.
2. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees provides broad supervision over the affairs of the
Trust. The officers of the Trust are responsible for the Trust's operations. The
Trustees and executive officers of the Trust are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the Trust within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB:
June 1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First
Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the
Board and Director of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds and Partner, Hale and Dorr (counsel
to the Trust).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926 Boston University
Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
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JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
ne Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl ,
First Russia, Omega and Pioneer SBIC Corporation, Executive Vice President and
Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer
mutual funds, except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and
PCC; Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Trust) and
Secretary of all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and .formerly of Hale and Dorr (counsel
to the Trust) where he most recently served as junior partner.
RICHARD A. SCHLANGER, Vice President, DOB: July 1948
Vice President of PMC.
The Trust's Declaration of Trust provides that the holders of two-thirds of its
outstanding shares may vote to remove a Trustee of the Trust at any meeting of
shareholders. See "Description of Shares" below. The business address of all
officers is 60 State Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned, directly or
indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the Trust's
investment adviser, serves as the investment adviser for the Pioneer mutual
funds listed below and manages the investments of certain institutional
accounts.
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The table below lists all the Pioneer mutual funds currently offered to the
public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
The Trust's Declaration of Trust provides that the holders of
two-thirds of its outstanding shares may vote to remove a Trustee of the Trust
at any meeting of shareholders. See "Description of Shares" below. The business
address of all officers is 60 State Street, Boston, Massachusetts 02109.
At February 29, 1996, the Trustees and officers of the Trust
beneficially owned, in the aggregate, less than 1% of the outstanding shares of
the Trust. At February 29, 1996, Merrill Lynch Pierce Fenner & Smith, Inc. and
Donaldson Lufkin Jenrette Securities Corporation, 4800 Deer Lake Drive East,
Jacksonville, Florida, owned of record, respectively, 1,202,705 Class A shares
(8.78% of the Class A shares outstanding), and 197,975 Class B shares (21.50% of
the Class B shares outstanding) of the Trust. At February 29, 1996, First
Alabama Bank as Custodian for John A. Gorham IRA, Box 5126, Glencoe, Alabama
owned of record 52,083 shares of the Class B shares of the Trust (5.65% of the
Class B shares outstanding). To the knowledge of the Trust, no individual
officer or Trustee of the Trust owned 5% or more of the issued and outstanding
shares of PGI on the date of the Prospectus, except Mr. Cogan who then owned
approximately 15% of such shares.
Commencing on December 1, 1995, the Trust will pay an annual trustees'
fee to each Trustee who is not affiliated with PGI, PMC, PFD or PSC consisting
of two components: (a) a base fee of $500 and (b) a variable fee, calculated on
the basis of the average net assets of each series, estimated to be
approximately $60 for 1996. In
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addition, the Trust will pay a per meeting fee of $120 to each Trustee who is
not affiliated with PGI, PMC, PFD or PSC. The Trust also will pay an annual
committee participation fee to each Trustee who serves as a member of any
committees established to act on behalf of one or more of the of Pioneer mutual
funds. Committee fees will be allocated to the Trust on the basis of the Trust's
average net assets. Each Trustee who is a member of the Audit Committee for the
Pioneer mutual funds will receive an annual fee equal to 10% of the aggregate
annual trustees' fee, except the Committee Chair who will receive an annual
trustees' fee equal to 20% of the aggregate annual trustees' fee. The 1996 fees
for the Audit Committee members and Chair are expected to be approximately
$6,000 and $12,000, respectively. Members of the Pricing Committee for the
Pioneer mutual funds, as well as any other committee which renders material
functional services to the Board of Trustees for the Pioneer mutual funds, will
receive an annual fee equal to 5% of the annual trustees' fee, except the
Committee Chair who will receive an annual trustees' fee equal to 10% of the
annual trustees' fee. The 1996 fees for the Pricing Committee members and Chair
are expected to be approximately $3,000 and $6,000, respectively. Any such fees
paid to affiliates or interested persons of PGI, PMC, PFD or PSC are reimbursed
to the Trust under its Management Contract. The Trust pays no salaries of
compensation to any of its officers.
For the fiscal year ended November 30, 1995, the Trust paid no salaries
or compensation to any of its officers. The Trust paid an annual trustees' fee
of $500 to each Trustee who was not affiliated with PMC, PFD or PSC and paid an
annual trustees' fee of $500 plus expenses to each Trustee affiliated with PMC,
PFD or PSC.
<TABLE>
<CAPTION>
Total Compensa-
tion from the
Pension or Trust and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
TrusteeFrom the Trust Accrued of Mutual Funds**
<S> <C> <C> <C>
John F. Cogan, Jr. $ 500* $0 $11,000*
Richard H. Egdahl, M.D. 1,000 0 63,315
Margaret B.W. Graham 1,000 0 62,398
John W. Kendrick 1,000 0 62,398
Marguerite A. Piret 1,254 0 76,704
David D. Tripple 500* 0 11,000*
Stephen K. West 1,172 0 68,180
John Winthrop 1,260 0 71,199
-------------------------------------------------------
Totals $7,632 $0 $426,694
========================= ========
</TABLE>
- --------
* PMC fully reimbursed the Trust and the other funds in the Pioneer Family of
Mutual Funds for compensation paid to Messrs. Cogan and Tripple.
** For the calendar year ended December 31, 1995.
Any fees and expenses paid to affiliates or interested persons of PMC,
PFD or PSC are reimbursed to the Trust under its Management Contract.
3. INVESTMENT ADVISER
The Trust has contracted with PMC, 60 State Street, Boston,
Massachusetts, to act as its investment adviser. PMC assists in the management
of the Trust and is authorized in its discretion to buy and sell securities for
the account of the Trust, subject to the right of the Trust's trustees to
disapprove any such purchase or sale. A description of the services provided to
the Trust under the management contract and the expenses paid by the Trust under
the contract is set forth in the Prospectus under the caption "Management of the
Trust."
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The management contract expires initially on April 30, 1994, but it is
renewable annually after such date by the vote of a majority of the Board of
Trustees of the Trust (including a majority of the Board of Trustees who are not
parties to the contract or interested persons of any such parties) 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, by the giving of sixty days' written notice.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the rate of 0.50% per annum on the first $100
million; 0.45% on the next $200 million; and 0.40% on assets over $300 million.
The fee is normally computed daily and paid monthly.
Effective December 1, 1993, PMC agreed not to impose its management fee
to the extent necessary to limit the Trust's expenses to 0.85% of its average
daily net assets. This agreement is voluntary and temporary and may be revised
or terminated at any time.
During the fiscal years ended November 30, 1995, 1994 and 1993, PMC
would have earned management fees of $291,294, $337,731 and $156,492,
respectively, if a voluntary expense limitation had not been in effect. However,
pursuant to the expense limitation agreement described above, PMC reduced its
management fees during the fiscal year ended November 30, 1994 by $235,347, and,
PMC voluntarily agreed not to impose any management fees during the fiscal years
ended November 30, 1995 and 1993.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Trust has entered into an Underwriting Agreement with PFD. The
Underwriting Agreement provides that PFD will bear any distribution expenses not
borne by the Trust.
PFD bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Trust. PFD also pays certain expenses in connection with the
distribution of the Trust's shares, including the cost of preparing, printing
and distributing advertising or promotional materials, and the cost of printing
and distributing prospectuses and supplements to prospective shareholders. The
Trust bears the cost of registering its shares under federal, state and foreign
securities law.
The Trust and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Trust.
The Trust has adopted a plan of distribution pursuant to Rule 12b-1
under the 1940 Act with respect to Class A shares (the "Class A Plan") and a
plan of distribution with respect to Class B shares (the "Class B Plan")
(together, the "Plans").
Class A Plan
Pursuant to the Class A Plan, the Trust may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Trust shares. 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 Trust 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 Trust's average annual net assets
attributable to Class A shares. The Plan does not provide for the carryover of
reimbursable expenses beyond twelve months from the date they are incurred.
Class B Plan
The Class B Plan provides that the Trust shall pay PFD, as the Trust's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Trust's average daily net assets attributable to
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Class B shares and will pay PFD a service fee equal to 0.25% of the Trust'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 Trust'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 consideration for 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 therefore, PFD may
retain the service fee paid by the Trust with respect to such shares for the
first year after purchase. Dealers will become eligible for additional service
fees with respect to such shares commencing in the thirteenth month following
purchase. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is
to compensate PFD for its distribution services to the Trust. 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 CDSC's attributable to Class B shares. (See
"Distribution Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Trust
for review by the Trustees a quarterly written report of the amounts expended
under the respective Plan and the purpose for which such expenditures were made.
In the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Trust, nor any Trustee of the Trust who is
not an interested person of the Trust, has any direct 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 Trust and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Trust, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plans, the Trustees identified and considered a number of
potential benefits which the Plans may provide. The Board of Trustees believes
that there is a reasonable likelihood that the Plans will benefit the Trust 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 Trust affected thereby, and material amendments of the Plans
must also be approved by the Trustees in the manner described above. A Plan may
be terminated at any time, without payment of any penalty, by vote of the
majority of the Trustees who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation 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 Trust. A Plan will automatically terminate in the
event of its assignment (as defined in the 1940 Act).
During the fiscal year ended November 30, 1995, the Trust incurred
total distribution fees pursuant to the Class A and Class B Plans of $138,238
and $30,305, respectively. Distribution fees were paid by the Trust to PFD in
reimbursement of expenses related to compensating dealers and sales personnel.
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During the fiscal year ended November 30, 1995, CDSCs, at a rate
declining from a maximum of 2.0% of the lower of the cost or market value of the
shares being redeemed, of $11,523 were charged to redemptions of Class B shares
made within 3 years of purchase (as described in How to Buy Trust Shares in the
Prospectus). Such CDSCs are paid to PFD in reimbursement of expenses related to
servicing of shareholders accounts and compensation paid to dealers and sales
personnel.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Trust has contracted with PSC, 60 State Street, Boston,
Massachusetts, to act as shareholder servicing agent and transfer agent for the
Trust. This contract terminates if assigned and may be terminated without
penalty by either party by vote of its Board of Directors or Trustees or a
majority of its outstanding voting securities and the giving of ninety days'
written notice.
Under the terms of its contract with the Trust, PSC will service
shareholder accounts, and its duties will include: (i) processing sales,
redemptions and exchanges of shares of the Trust; (ii) distributing dividends
and capital gains associated with Trust portfolio accounts; and (iii)
maintaining account records and responding to routine shareholder inquiries.
PSC receives an annual fee of $30.00 per Class A and Class B
shareholder account from the Trust as compensation for the services described
above. This fee is set at an amount determined by vote of a majority of the
Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies. The Fund may
compensate entities which have contracted to be an agent for specific
transaction processing and services. Any such payments by the Fund would be in
lieu of the per account fee which would otherwise be paid by the Fund to PSC.
6. CUSTODIAN
Brown Brothers Harriman (the "Custodian") is the custodian of the
Trust's assets. The Custodian's responsibilities include safekeeping and
controlling the Trust's cash and securities, handling the receipt and delivery
of securities, and collecting interest and dividends on the Trust's investments.
The Custodian does not determine the investment policies of the Trust or decide
which securities the Trust will buy or sell. The Trust may, however, invest in
securities, including repurchase agreements, issued by the Custodian and may
deal with the Custodian as 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, serves as the principal
underwriter for the Trust in connection with the continuous offering of its
shares.
The Trust will not generally issue Trust shares for consideration other
than cash. At the Trust's sole discretion, however, it may issue Trust shares
for consideration other than cash in connection with an acquisition of portfolio
securities (other than municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) or pursuant to a bona fide
purchase of assets, merger or other reorganization provided (i) the securities
meet the investment objectives and policies of the Trust; (ii) the securities
are acquired by the Trust for investment and not for resale; (iii) the
securities are not restricted as to transfer either by law or liquidity of
market; and (iv) the securities have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a listing on the
American Stock Exchange or the New York Stock Exchange or by quotation on the
NASD Automated Quotation System. An exchange of securities for Trust shares will
generally be a taxable transaction to the shareholder.
The Trust has elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which the Trust is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the Trust's net asset value during any 90-day
period for any one shareholder.
During the fiscal years ended November 30, 1995, 1994 and 1993, net
underwriting commissions earned by PFD in connection with its offering of Trust
shares were approximately $24,247, $49,173 and $79,000, respectively.
Commissions reallowed to dealers by PFD in the same periods were approximately
$107,008, $257,537 and $538,000, respectively.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP is the Trust's independent public accountant,
providing audit services, tax return review, and assistance and consultation
with respect to the preparation of filings with the Securities and Exchange
Commission.
9. PORTFOLIO TRANSACTIONS
The Trust intends to fully manage its portfolio by buying and selling
securities, as well as holding securities to maturity. In managing its
portfolio, the Trust seeks to take advantage of market developments and yield
disparities, which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in anticipation
of a rise in interest rates so as to minimize depreciation of principal;
(2) lengthening the average maturity of its portfolio in anticipation
of a decline in interest rates so as to maximize yield;
(3) selling one type of debt security and buying another when
disparities arise in the relative values of each; and
(4) changing from one debt security to an essentially similar debt
security when their respective yields appear distorted due to market
factors.
The Trust engages in portfolio trading if it believes a transaction net
of costs (including custodian charges) will help in achieving the Trust's
investment objective.
Decisions relating to the purchase and sale of securities for the
Trust, the allocation of portfolio transactions and, where applicable, the
negotiation of commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in which and broker-dealers through which it seeks this result. Debt
securities are traded principally in the over-the-counter market on a net basis
through dealers acting for their own account and not as brokers. The cost of
securities purchased from underwriters includes an underwriter's commission or
concession, and the prices at which securities are purchased and sold from and
to dealers include a dealer's markup or markdown. PMC attempts to negotiate with
underwriters to decrease the commission or concession for the benefit of the
Trust. PMC normally seeks to deal directly with the primary market makers
unless, in its opinion, better prices are available elsewhere.
Subject to the requirement of seeking execution at the best available
price, securities may, as authorized by PMC's management contract, be bought
from or sold to dealers who furnish statistical research and other information
or services to PMC and the Trust, or who sell shares of any of the Pioneer
mutual funds. Brokerage and research 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; and furnishing analyses, manuals and reports concerning issuers,
securities, economic factors and trends, portfolio
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strategy, performance of accounts, comparative fund statistics and credit rating
service information. PMC maintains a listing of dealers who provide such
services on a regular basis. Management believes that no exact dollar value can
be calculated for such services.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Trust and review the dealer spreads paid by the Trust over
representative periods of time to determine if they are reasonable in relation
to the benefits to the Trust.
The Trust is managed by PMC which also serves as investment adviser to
other Pioneer mutual funds and certain private accounts with investment
objectives similar to those of the Trust. Securities frequently meet the
investment objectives of the Trust, such other funds and such private accounts.
In such cases, the decision to recommend a purchase to one fund or account
rather than another is based on a number of factors. The determining factors in
most cases are the amount of securities of the issuer then outstanding, the
value of those securities and the market for them. Other factors considered in
the investment recommendations include other investments which each fund or
account presently has in a particular industry and the availability of
investment funds in each fund or account.
It is possible that at times identical securities will be held by more
than one fund and/or account. However, positions in the same issue may vary and
the length of time that any fund or account may choose to hold its investment in
the same issue may likewise vary. To the extent that the Trust, another mutual
fund in the Pioneer group 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 Trust 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 Trust 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 November 30, 1995, 1994 and 1993, the
Trust paid no brokerage or underwriting commissions.
10. TAX STATUS
It is the Trust's policy to meet the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code") for qualification as
a regulated investment company. These requirements relate to the sources of its
income, the diversification of its assets, and the timing of its distributions
to shareholders. If the Trust meets all such requirements and distributes to its
shareholders, in accordance with the Code's timing requirements, all investment
company taxable income and net capital gain, if any, which it receives, the
Trust will be relieved of the necessity of paying federal income tax.
Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign exchange gains, are taxable as ordinary
income, whether received in cash or in additional shares. Dividends from net
long-term capital gain in excess of net short-term capital loss, if any, whether
received in cash or additional shares, are taxable to the Trust's shareholders
as long-term capital gains for federal income tax purposes without regard to the
length of time shares of the Trust have been held. The federal income tax status
of all distributions will be reported to shareholders annually. Because none of
the Trust's income is expected to arise from dividends paid by U.S. domestic
corporations, no part of the distributions to its U.S. corporate shareholders
will qualify for the dividends-received deduction for corporations.
Any dividend declared by the Trust 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.
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Foreign exchange gains and losses realized by the Trust in connection
with certain transactions involving foreign currency-denominated debt
securities, forward foreign currency contracts, foreign currencies, or payables
or receivables denominated in a foreign currency are subject to Section 988 of
the Code, which generally causes such gains and losses to be treated as ordinary
income and losses and may affect the amount, timing and character of
distributions to shareholders. Any such transactions that are not directly
related to the Trust's investment in securities may increase the amount of gain
it is deemed to recognize from the sale of certain investments held for less
than 3 months, which gain is limited under the Code to less than 30% of its
annual gross income, and may under future Treasury regulations produce income
not among the types of "qualifying income" from which the Trust must derive at
least 90% of its annual gross income. If the net foreign exchange loss for a
year were to exceed the Trust's investment company taxable income (computed
without regard to such loss) the resulting overall ordinary loss for such year
would not be deductible by the Trust or its shareholders in future years.
If the Trust invests in certain PIKs, zero coupon securities, or, in
general, any other securities with original issue discount (or with market
discount if the Trust elects to include market discount in income currently),
the Trust must accrue income on such investments prior to the receipt of the
corresponding cash payments. However, the Trust 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 Trust 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.
At the time of an investor's purchase of Trust shares, a portion of the
purchase price is often attributable to realized or unrealized appreciation in
the Trust's portfolio. Consequently, subsequent distributions from such
appreciation on such shares may be taxable to such investor even if the net
asset value of the investor's shares is, as a result of the distributions,
reduced below the investor's cost for such shares and the distributions in
reality represent a return of a portion of the investment.
Redemptions and exchanges are taxable events. Any loss realized upon
the redemption or other sale of shares with a tax holding period of six months
or less will be treated as a long-term capital loss to the extent of any amounts
treated as distributions of long-term capital gain with respect to such shares.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment at net asset value pursuant
to the reinvestment privilege, the sales charge paid on such shares is not
included in their tax basis under the Code, and (2) in the case of an exchange,
all or a portion of the sales charge paid on such shares is not included in
their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange. Losses on
certain redemptions may be disallowed under "wash sale" rules in the event of
other investments in the Trust (including those made pursuant to automatic
dividend reinvestment) within a period of 61 days beginning 30 days before and
ending 30 days after a redemption or other sale of shares.
For federal income tax purposes, the Trust is permitted to carry
forward a net capital loss in any year to offset capital gains, if any, during
the eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the Trust and are not expected to be distributed as such to
shareholders. For the fiscal period ended November 30, 1995, the Trust had a net
capital loss carryforward of $2,801,943 which will expire between 2000 and 2003
if not utilized.
The Trust may be subject to withholding and other taxes imposed by
foreign countries with respect to its investments in those countries. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes in some cases. The Trust does not expect to satisfy the requirements for
passing through to shareholders their pro rata shares of foreign taxes paid by
the Trust, with the result that shareholders will not include such taxes in
their gross incomes (in addition to dividends and distributions actually
received by shareholders) and will not be entitled to a tax deduction or credit
for such taxes on their own tax returns.
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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.
The Trust is not subject to Massachusetts corporate excise or franchise
taxes. Provided that the Trust qualifies as a regulated investment company under
the Code, it will also not be required to pay any Massachusetts income tax.
Federal law requires that the Trust 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 avoid this withholding
requirement, shareholders must certify on their Applications, or on separate W-9
Forms, that the Social Security Number or other Taxpayer Identification Number
they provide is their correct number and that they are not currently subject to
backup withholding, or that they are exempt from backup withholding. The Trust
may nevertheless be required to withhold if it receives notice from the IRS or a
broker that the number provided is incorrect or backup withholding is applicable
as a result of previous underreporting of interest or dividend income.
The description above relates only to U.S. federal income tax
consequences for shareholders who are U.S. persons, i.e., U.S. citizens or
residents and U.S. domestic corporations, partnerships trusts or estates, and
who are subject to U.S. federal income taxation. The description does not
address the special tax rules applicable to particular types of investors, such
as banks, insurance companies, or tax-exempt entities. Investors other than U.S.
persons may be subject to different U.S. tax treatment, including a possible 30%
U.S. non-resident alien withholding tax (or a non-resident alien withholding tax
at a lower treaty rate) on any amounts treated as ordinary dividends from the
Trust and, unless an effective IRS Form W-8 or authorized substitute is on file,
to 31% backup withholding on certain other payments from the Trust. Shareholders
should consult their own tax advisors on these matters and on state, local and
other applicable tax laws.
11. DESCRIPTION OF SHARES
The Trust's Declaration of Trust permits its Board of Trustees to
authorize the issuance of an unlimited number of full and fractional shares of
beneficial interest (without par value) which may be divided into such separate
series as the Trustees may establish. The Trustees may establish additional
series of shares, and may divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Trust. The Declaration of Trust further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of two classes of
shares of the Trust, Class A shares and Class B shares. Each share of a class of
the Trust represents an equal proportionate interest in the assets of the Trust
allocable to that class. Upon liquidation of the Trust, the shareholders of each
class are entitled to share pro rata in the Trust's net assets allocable to such
class available for distribution to shareholders. The Trust reserves the right
to create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
The shares of the Trust 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 the Trust vote together as a class on
matters that affect the Trust in substantially the same manner. As to matters
affecting a single class, shares of such class will vote separately.
Although Trustees are not elected annually by the shareholders,
shareholders holding 10% or more of the outstanding shares of the Trust may
cause the Trust to hold a meeting of shareholders for the purpose of voting upon
the question of the removal of one or more trustees. Removal shall require the
affirmative vote of the holders of two-thirds of the shares of the Trust
outstanding and entitled to vote at a meeting called for such purpose. No
amendment that adversely affects the rights of shareholders may be made to the
Trust's Declaration
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of Trust without the affirmative vote of a majority of its shares. Shares have
no preemptive or conversion rights. Shares are fully paid and non-assessable,
except as set forth below. See "Certain Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Trust's operations are governed
by its Declaration of Trust dated April 30, 1992, a copy of which is on file
with the Office of the Secretary of State of the Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust or any series of the Trust and
provides that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or its Trustees. Moreover,
the Declaration of Trust provides for the indemnification out of Trust property
of any shareholders held personally liable for any obligations of the Trust or
any series of the Trust. The Declaration of Trust also provides that the Trust
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss beyond his or
her investment because of shareholder liability would be limited to
circumstances in which the Trust itself will be unable to meet its obligations.
In light of the nature of the Trust's business and the nature and amount of its
assets, the possibility of the Trust's liabilities exceeding its assets, and
therefore a shareholder's risk of personal liability, is remote.
The Declaration of Trust further provides that the Trust shall
indemnify each of its Trustees and officers against liabilities and expenses
reasonably incurred by them, in connection with, or arising out of, any action,
suit or proceeding, threatened against or otherwise involving such Trustee or
officer, directly or indirectly, by reason of being or having been a Trustee or
officer of the Trust. The Declaration of Trust does not authorize the Trust to
indemnify any Trustee or officer against any liability to which he or she would
otherwise be subject by reason of or for willful misfeasance, bad faith, gross
negligence or reckless disregard of such person's duties.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Trust is determined
as of the close of regular trading (currently 4:00 p.m., Eastern Time) on each
day on which the New York Stock Exchange is open for trading. As of the date of
this Statement of Additional Information, the New York Stock Exchange is open
for trading every weekday except for the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share of each class
of the Trust is also determined on any other day in which the level of trading
in its portfolio securities is sufficiently high so that the current net asset
value per share might be materially affected by changes in the value of its
portfolio securities. The Trust is not required to determine its net asset value
per share on any day in which no purchase orders for the shares of the Trust
become effective and no shares are tendered for redemption.
The net asset value per share of each class the Trust is computed by
taking the value of all of its assets, less the Trust's liabilities attributable
to the class, and dividing it by the number of outstanding shares of the class.
For purposes of determining net asset value, expenses of the Trust are accrued
daily.
The Board of Trustees has directed that the fair market value of the
Trust's assets should be determined as follows. Ordinarily, investments in debt
securities are valued on the basis of information furnished by a pricing service
which utilizes primarily a matrix system (which reflects such factors as
security prices, yields, maturities and ratings), supplemented by dealer and
exchange quotations, to recommend valuations for normal institutional-sized
trading units of debt securities. In addition, the Board has instructed advisory
personnel not to rely exclusively on this pricing service if the fair market
value of certain securities may be more accurately determined on the basis of
information available from other sources. Temporary cash investments are valued
at cost, which approximates market value.
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The Trust's maximum offering price per Class A share is determined by
adding the maximum sales charge to the net asset value per Class A share. Class
B shares are offered at net asset value without the imposition of an initial
sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from Class A
shares of the Trust deposited by the applicant under this SWP. The applicant
must deposit or purchase for deposit with PSC Class A shares of the Trust having
a total value of not less than $10,000. Periodic checks of $50 or more will be
sent to the applicant, or any person designated by him, monthly or quarterly. A
designation of a third party to receive checks requires an acceptable signature
guarantee. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. Share redemptions are taxable
transactions to shareholders. 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 SWP account. In addition, the amounts received by a shareholder
cannot be considered as an actual yield or income on his or her investment
because part of such payments may be a return of his or her investment.
The SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the SWP have been
redeemed. The fees of PSC for maintaining SWPs are paid by the Trust.
15. LETTER OF INTENTION
Purchases of $50,000 or over of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Trust Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Trust
shares of $50,000 over a 13-month period would be charged at the 2.0% sales
charge rate with respect to all purchases during that period. Should the amount
actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all shares of record held in the Trust and other Pioneer mutual funds
as of the date of the Letter of Intention as a credit toward determining the
applicable scale of sales charge for the Class A shares to be purchased under
the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment in the Letter of Intention.
A Letter of Intention is not a binding obligation upon the investor to purchase,
or the Trust to sell, the full amount indicated and the investor should read the
provisions of the Letter of Intention contained in the Account Application
carefully before signing.
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16. INVESTMENT RESULTS
The Trust's yield quotations and average annual total return quotations
as they may appear in the Prospectus, this Statement of Additional Information
or in advertising are calculated by standard methods prescribed by the SEC.
Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of the Trust may be illustrated
and/or compared with that of other mutual funds with similar investment
objectives, and to other relevant indices. For example, the Trust may compare
its yield to the Shearson Lehman Hutton Government Index, U.S. Government bond
rates, or other comparable indices or investment vehicles.
In addition, the performance of the classes of the Trust may be
compared to alternative investment or savings vehicles and/or to indices or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumer Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, New York Times, Personal Investor,
Smart Money, USA Today, U.S. News and World Report, The Wall Street Journal, and
Worth may also be cited (if the Trust 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., Ibbotson Associates,
Johnson's Charts, Kanon Block Carre and Co., Lipper Analytical Services, Inc.,
Micropal, Inc., Morningstar, Inc., Schabacker Investment Management and Tower
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 Trust.
One of the primary methods used to measure the performance of a class
of the Trust is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in the
class, over any period up to the lifetime of the class. 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 not 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 or by reference to
historical information depicting the value of a hypothetical account in the
Trust since the Trust's inception. Past performance cannot guarantee any
particular future result.
In representing investment results of a class, the Trust 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.
Standardized Yield Quotations
The yield of a class is computed by dividing the class's net investment
income per share during a base period of 30 days, or one month, by the maximum
offering price per share of the class on the last day of such base period in
accordance with the following formula:
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a-b
YIELD = 2[ ( ----- +1)6-1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the
last day of the period
For purposes of calculating interest earned on debt obligations as
provided in item "a" above:
(i)The yield to maturity of each obligation held by the Trust is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates.
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period.
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled.
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date.
With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the Trust accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the Trust may elect (i) to
amortize the discount or premium remaining on a security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the remaining discount
or premium on a security.
For purposes of computing yield, interest income is recognized by
accruing 1/360 of the stated interest rate of each obligation in the Trust's
portfolio each day that the obligation is in the portfolio. Expenses of a class
accrued during any base period, if any, pursuant to the respective Distribution
Plan are included among the expenses accrued during the base period.
The yield on Class A and Class B shares of the Trust for the 30-day
period ended November 30, 1995 computed as above was 5.58% and 4.90%,
respectively, except that absent expense limitations, the yield on Class A and
Class B shares of the Fund would have been 5.25% and 4.61%, respectively.
Standardized Average Annual Total Return Quotations.
Average annual total return quotations for Class A and Class B shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in the class made on the first day of
-20-
<PAGE>
a designated period (assuming all dividends and distributionsare 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 $25 for Class A
shares or the deduction of the CDSC on Class B
shares at the end of the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical
$1,000 initial payment made at the beginning
of the designated period (or fractional
portion thereof)
For purposes of the above computation, it is assumed that the maximum
sales charge of 2.5% was deducted from the initial investment and that all
dividends and distributions made by the Trust 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 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 the Trust's mean account size.
The average annual total returns for period ending November 30, 1995
were:
1 Year 5 Years 10 Years Life
------ ------- -------- ----
Class A Shares 6.93% N/A N/A 3.97% *
Class B Shares 6.79% N/A N/A 4.30% **
* Commencement of operations, August 10, 1992.
** Class B shares first offered on April 4, 1994.
Class A share results reflect the maximum sales charge of 5.75%. Class
B share results reflect the effect of the CDSC that would have been charged if
shares were redeemed at the end of each period. If PMC's voluntary fee and
expense reduction agreement had not been in place, total return would have been
lower.
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed-income funds;
o annualized 7-day yields and 7-day effective (compound) yields
for Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer
mutual funds.
-21-
<PAGE>
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 balance and last three transactions and may order a duplicate statement.
See "FactFoneSM" in the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance; figures for all quoted bond funds include the maximum applicable
sales charge. A shareholder's actual yield and total return will vary with
changing market conditions. The value of Class A and Class B shares (except for
Pioneer money market funds, which seek a stable $1.00 share price) will also
vary and may be worth more or less at redemption than their original cost.
17. FINANCIAL STATEMENTS
The Trust's financial statements for the year ended November 30, 1995
are included in the Trust's Annual Report to Shareholders, which report is
incorporated by reference into and attached to this Statement of Additional
Information. The Trust's Annual Report to Shareholders is so incorporated and
attached in reliance upon the report of Arthur Andersen LLP, independent public
accountants, as experts in accounting and auditing.
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<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Standard & Poor's Corporation3
AAA: Bonds rated AAA are highest grade obligations. This rating indicates an
extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
- --------
1 The ratings described below are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Trust's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except
bonds of educational institutions, projects under construction, enterprises
without established earnings records and situations where current financial data
is unavailable.
3 Rates all governmental bodies having $1,000,000 or more of debt
outstanding, unless adequate information is not available.
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<PAGE>
Pioneer Short-Term Income Trust A
<TABLE>
<CAPTION>
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
8/10/92 $10,000 $4.1000 2.50% 2,439.024 $4.0000 $9,756
</TABLE>
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/92 $9,659 $0 $256 $9,915
12/31/93 $9,634 $0 $863 $10,497
12/31/94 $9,122 $0 $1,395 $10,517
12/31/95 $9,390 $0 $2,190 $11,580
-24-
<PAGE>
Pioneer Short-Term Income Trust B
<TABLE>
<CAPTION>
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
4/4/94 $10,000 $3.8900 4.00% 2,570.694 $3.8900 $10,000
</TABLE>
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/94 $9,589 $0 $385 $9,977
12/31/95 $9,897 $0 $1,021 $10,522
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APPENDIX B
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS The total returns on long-term government bonds
from 1977 to 1991 are constructed with data from The Wall Street Journal. Over
1926-1976, data are obtained from the Government bond file at the Center for
Research in Security Prices (CRSP), Graduate School of Business, University of
Chicago. Each year, a one-bond portfolio with a term of approximately 20 years
and a reasonably current coupon was used, and whose returns did not reflect
potential tax benefits, impaired negotiability, or special redemption or call
privileges. Where callable bonds had to be used, the term of the bond was
assumed to be a simple average of the maturity and first call dates minus the
current date. The bond was "held" for the calendar year and returns were
computed. Total returns for 1977-1991 are calculated as the change in the flat
price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times Mirror/Mosby, St. Louis,
1990, p. 97 ["Level-Coupon Bonds"].) The monthly income return was assumed to be
one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
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<PAGE>
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million. The Russell
3000 is comprised of the 3,000 largest US companies as determined by market
capitalization representing approximately 98% of the US equity market. The
largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
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PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
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PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
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PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
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PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
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PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
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APPENDIX C
The Pioneer family of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest, most respected and
successful money managers in the United States.
As of December 31, 1995, PMC employed a professional investment staff
of 44, with a combined average of 15 years' experience in the financial services
industry.
At December 31, 1995, there were 637,060 non-retirement shareholder
accounts and 345,309 retirement shareholder accounts in the Pioneer's funds.
Total assets for all Pioneer Funds at December 31, 1995 were $12,764,708,124
representing 982,369 shareholder accounts.
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