<PAGE>
[logo]
Pioneer
Short-Term
Income
Trust
SEMIANNUAL REPORT
MAY 31, 1996
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
DEAR SHAREOWNER,
Pioneer Short-Term Income Trust completed the first half of its fifth fiscal
year on May 31, 1996. When the period began, the bond market was generally
strong, and there were signs of low inflation, falling interest rates and
modest economic growth. There was the feeling that the bond market would
continue to be profitable. This generally optimistic outlook was reinforced
when the Federal Reserve (the Fed) cut short-term interest rates in December
and January, indicating its concern over seemingly sputtering economic
growth. The mood changed in February, however, when the monthly employment
report, one of the many indicators used to monitor the economy's strength,
showed the biggest job increase in 12 years. Since then, worries about an
overzealous economy have undermined investor confidence in bonds and led
interest rates higher.
How Your Fund Performed
Your Fund's performance reflected the overall dip in bond prices. Following
are results for the six months ended May 31, 1996.
Class A Shares
[bullet] The Fund paid daily dividends totaling $0.117 per share during the
period. The Fund's 30-day SEC yield(1) was 5.81% as of May 31, 1996.
[bullet] Net asset value stood at $3.77 per share on May 31, versus $3.84 six
months ago, reflecting the overall decline in bond prices during the
period.
[bullet] Assuming reinvestment of dividends at net asset value, the Fund's
total return was 1.23% based on net asset value, and -1.34% based on
maximum public offering price.
[bullet] Your Fund's performance tracked the average for short-term,
investment-grade debt funds followed by Lipper Analytical Services,
an independent mutual fund research firm. The group of 97 funds
posted an average total return of 1.24% for the six-month period.
Class B Shares
[bullet] The Fund paid daily dividends totaling $0.111 per share during the
period. The Fund's 30-day SEC yield(1) was 5.17% as of May 31, 1996.
[bullet] Net asset value stood at $3.76 per share on May 31 versus $3.85 six
months ago, reflecting the period's overall decline in bond prices.
[bullet] Assuming dividends were reinvested, the Fund's total return was
0.55% if shares were held throughout the period, and -1.40% if
shares were redeemed and the maximum 2% contingent deferred sales
charge deducted at the end of the period.
The accompanying table provides the Fund's results over longer time frames.
Average Annual Total Returns
(As of May 31, 1996)
Public
Net Asset Offering
Class A Shares Value Price*
-------------------------- ----------- -------------
Life of Fund (8/10/92) 4.73% 4.05%
Three Years 4.39 3.53
One Year 4.36 1.72
Return If
Not Return If
Class B Shares Redeemed Redeemed**
-------------------------- ----------- -------------
Life of Fund (4/04/94) 4.19% 3.76%
One Year 3.53 1.57
(1)Yield is based on a standard formula prescribed by the Securities and
Exchange Commission. The Fund's investment adviser, Pioneering Management
Corporation, currently is reducing its management fee and certain other
expenses, otherwise returns would have been lower and the yield for Class
A and Class B shares would have been 5.33% and 4.74%, respectively.
*Reflects deduction of the maximum 2.5% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
**Reflects deduction of the maximum 2.0% contingent deferred sales charge at
the end of the period, and assumes reinvestment of all distributions at net
asset value.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
<PAGE>
A Shifting Bond Market
Bond prices fluctuated broadly during the past six months. Reflecting
conflicting data and opinions about the economy's strength, short-term
interest rates fell half a percentage point (0.5%) from November 30 to
January 31 but rose one percentage point (1.0%) from the beginning of
February to the end of May.
Short-term securities, like those in which your Fund invests, provided the
best price stability during the period as interest rates moved up and down.
The accompanying chart shows how the difference changed between yields
offered by short and longer-term securities, as represented by U.S. Treasury
securities, during the period.
Yields on Treasury Securities
(November 30, 1995, versus May 31, 1996)
[bar graph]
MATURITY
11/30/95 Yield 5/31/96 Yield
3 Months 5.48% 5.18%
6 Months 5.45% 5.36%
1 Year 5.35% 5.74%
2 Years 5.35% 6.24%
3 Years 5.40% 6.42%
5 Years 5.52% 6.63%
10 Years 5.75% 6.85%
30 Years 6.13% 6.99%
Pioneer Short-Term Income Trust invests only in high-quality securities, with
a special concentration on the highest quality (AAA) rating. By design, the
Fund's average maturity cannot exceed three years, and generally no portfolio
holding will have a maturity of more than five years.
To capture and keep rising yields in the portfolio, your management pushed
out the Fund's average maturity to 2.45 years as of May 31, 1996. At the
close of the period, 18% of the portfolio was due to mature in a year or
less, giving management the ability to capture yields if they rise further,
while adding stability to the Fund's share price.
Effective Portfolio Maturity
(as of May 31, 1996)
[pie chart]
0-1 year 18%
1-3 years 40%
3-5 years 42%
As for specific securities, we reduced the Fund's position in collateralized
mortgage obligations (CMOs) issued by the Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation. Over the same time,
we added to government agency and asset-backed issues, but stayed away from
corporate securities. The only corporate issues currently in the portfolio
are those we believe possess strong fundamental business and financial
characteristics. We continued to buy bonds with call protection to help hold
attractive issues in the portfolio and avoid the disruptions that can occur
with securities an issuer can redeem, or "call," before their maturity date.
2
<PAGE>
Portfolio Quality
(as of May 31, 1996)
[pie chart]
Treasury/Agency 84%
AAA 6%
AA 1%
A 8%
BBB 1%
Looking Forward
From our vantage point, we think that inflation will remain subdued in the
second half of the year. Since February, housing and consumer spending have
shown remarkable resiliency in the face of higher interest rates, helping the
economy show sustainable and good growth, but with low inflation. At this
point, however, it is uncertain what action -- if any -- the Fed will take.
In this election year, the Fed may be hesitant to move in the absence of
evidence of extreme inflation or strong domestic growth.
Regardless of market conditions, the Fund's goal remains the same -- to
provide attractive income and a degree of share price stability. Your
management continues to invest conservatively to generate a steady stream of
income while maintaining principal.
The following pages show the Fund's audited Schedule of Investments and
financial statements as of May 31, 1996. If you have any questions about your
investment in Pioneer Short-Term Income Trust, please contact your investment
representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Short-Term Income Trust
3
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
May 31, 1996
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
- ----------- -------- --------------------------------------------------------------------- ------------
<S> <C> <C> <C>
INVESTMENT IN SECURITIES--97.1%
U.S. Government and Agency Obligations--81.1%
$ 500,000 Aid-Israel, 7.75%, 1999 $ 514,375
500,000 Federal Home Loan Bank, 7.55%, 1997 512,110
400,000 Federal Home Loan Bank, 6.47%, 1999 395,404
500,000 Federal Home Loan Bank, 8.125%, 2000 506,255
200,000 Federal Home Loan Bank, 6.17%, 2001 194,350
350,000 Federal Home Loan Bank, 6.32%, 2001 336,431
500,000 Federal Home Loan Bank, 6.36%, 2001 486,205
600,000 Federal Home Loan Mortgage Corp., 6.29% 2000 585,156
200,000 Federal Home Loan Mortgage Corp., 7.38%, 2000 201,874
300,000 Federal Home Loan Mortgage Corp., 7.51%, 2000 304,287
500,000 Federal Home Loan Mortgage Corp., 7.645%, 2000 507,585
500,000 Federal Home Loan Mortgage Corp., 7.726%, 2000 502,760
500,000 Federal Home Loan Mortgage Corp., 6.87%, 2001 494,645
500,000 Federal Home Loan Mortgage Corp., Global Notes, 6.93%, 2000 495,320
254,845 Federal Home Loan Mortgage Corp., REMIC Series 1292E, 7.35%, 2003 255,130
268,779 Federal Home Loan Mortgage Corp., REMIC Series 1319E, 7.0%, 2004 269,168
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1243H, 7.5%, 2004 1,022,640
141,526 Federal Home Loan Mortgage Corp., REMIC Series 1164F, 7.0%, 2005 142,052
25,555 Federal Home Loan Mortgage Corp., REMIC Series 1072F, 7.0%, 2005 25,509
261,083 Federal Home Loan Mortgage Corp., REMIC Series 1027H, 9.0%, 2005 264,417
285,936 Federal Home Loan Mortgage Corp., REMIC Series 1238G, 7.25%, 2006 286,345
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1145G, 8.0%, 2006 1,002,860
525,870 Federal Home Loan Mortgage Corp., REMIC Series 1457E, 7.0%, 2007 527,858
471,023 Federal Home Loan Mortgage Corp., REMIC Series 1564J, 6.5%, 2008 465,700
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1262F, 7.5%, 2015 1,004,370
113,139 Federal Home Loan Mortgage Corp., REMIC Series 1311E, 7.5%, 2016 113,002
67,532 Federal Home Loan Mortgage Corp., REMIC Series 1255DC, 7.5%, 2017 67,486
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1311F, 7.5%, 2018 504,250
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1281F, 8.0%, 2018 503,950
61,087 Federal Home Loan Mortgage Corp., REMIC Series 1039G, 6.5%, 2019 61,019
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1358F, 6.75%, 2019 496,730
280,988 Federal Home Loan Mortgage Corp., REMIC Series 1264F, 7.75%, 2019 283,899
892,450 Federal Home Loan Mortgage Corp., REMIC Series 186D, 8.0%, 2019 899,884
191,182 Federal Home Loan Mortgage Corp., REMIC Series 1143H, 8.0%, 2019 192,733
317,321 Federal Home Loan Mortgage Corp., REMIC Series 82C, 8.9%, 2019 321,386
679,586 Federal Home Loan Mortgage Corp., REMIC Series 189C, 8.0%, 2021 687,904
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
- ----------- -------- --------------------------------------------------------------------- ------------
$ 458,527 Federal Home Loan Mortgage Corp., REMIC Series 1590K, 6.5%, 2023 $ 454,208
235,000 Federal National Mortgage Association, 7.85%, 1998 242,003
500,000 Federal National Mortgage Association, 6.45%, 2001 488,555
1,000,000 Federal National Mortgage Association, Global Notes, 6.85%, 2000 992,790
500,000 Federal National Mortgage Association, Medium Term Note, 7.26%, 1999 504,215
500,000 Federal National Mortgage Association, Medium Term Note, 6.35%, 2000 490,535
500,000 Federal National Mortgage Association, Medium Term Note, 6.64%, 2000 493,620
500,000 Federal National Mortgage Association, Medium Term Note, 6.81%, 2000 495,725
1,050,000 Federal National Mortgage Association, Medium Term Note, 7.11%, 2000 1,054,053
585,000 Federal National Mortgage Association, Medium Term Note, 7.26%, 2000 588,820
1,000,000 Federal National Mortgage Association, Medium Term Note, 7.3%, 2000 1,007,830
500,000 Federal National Mortgage Association, Medium Term Note, 8.16%, 2000 504,460
500,000 Federal National Mortgage Association, Medium Term Note, 6.37%, 2001 487,035
500,000 Federal National Mortgage Association, Medium Term Note, 6.63%, 2001 494,975
1,250,000 Federal National Mortgage Association, Medium Term Note, 7.0%, 2001 1,237,138
500,000 Federal National Mortgage Association, REMIC Series 1992-97DB, 8.0%,
1999 511,090
500,000 Federal National Mortgage Association, REMIC Series 1992-40G, 7.0%,
2002 502,990
500,000 Federal National Mortgage Association, REMIC Series 1992-145J,
7.15%, 2003 500,870
1,000,000 Federal National Mortgage Association, REMIC Series 1992-110G, 7.0%,
2005 989,310
500,000 Federal National Mortgage Association, REMIC Series 1992-84G, 7.5%,
2014 501,825
455,305 Federal National Mortgage Association, REMIC Series 1992-132PE,
7.25%, 2015 456,980
248,564 Federal National Mortgage Association, REMIC Series 1992-131E, 7.0%,
2017 248,520
830,753 Federal National Mortgage Association, REMIC Series 1988-26C, 7.5%,
2018 832,498
263,270 Federal National Mortgage Association, REMIC Series 1992-43B, 7.5%,
2018 264,750
427,948 Federal National Mortgage Association, REMIC Series 1990-8E, 8.5%,
2018 433,772
178,752 Federal National Mortgage Association, REMIC Series 1989-87G, 8.75%,
2018 179,637
500,000 Federal National Mortgage Association, REMIC Series 1993-23PJ, 6.7%,
2019 488,830
1,000,000 Federal National Mortgage Association, REMIC Series 1992-131G,
7.25%, 2019 1,000,220
285,846 Federal National Mortgage Association, REMIC Series 1990-48G, 7.95%,
2019 289,064
500,000 Federal National Mortgage Association, REMIC Series 1991-169PJ,
7.0%, 2020 489,980
631,905 Federal National Mortgage Association, REMIC Series 1991-74J, 7.95%,
2020 636,733
611,549 Federal National Mortgage Association, REMIC Series 1991-103HB,
8.75%, 2020 624,458
115,174 Federal National Mortgage Association, REMIC Series 1992-77G, 8.0%,
2021 116,074
228,334 Federal National Mortgage Association, REMIC Series 1992-64M, 7.0%,
2022 227,350
500,000 Federal Farm Credit Bank, Medium Term Note, 7.79%, 1997 513,990
300,000 Student Loan Marketing Association, Global Notes, 7.0%, 1998 302,790
1,000,000 Tennessee Valley Authority, 8.375%, 1999 1,048,750
1,975,000 U.S. Treasury Notes, 7.25%, 1998 2,007,054
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
- ----------- -------- --------------------------------------------------------------------- ------------
$1,390,000 U.S. Treasury Notes, 7.125%, 1999 $ 1,413,769
2,000,000 U.S. Treasury Notes, 7.75%, 1999 2,072,520
1,000,000 U.S. Treasury Notes, 6.375%, 2000 994,020
----------
Total (Cost $43,216,416) $42,618,855
----------
Financials--8.5%
500,000 AA-/Aa3 Associates Corp. N.A., 8.125%, 1998 $ 512,500
250,000 A-/A2 Discover Credit Corp., Medium Term Note, 7.77%, 1997 253,820
500,000 A+/A1 Ford Motor Credit Co., 6.85%, 2000 496,250
250,000 A-/A3 General Motors Acceptance Corp., Deb., 8.0%, 1996 251,840
500,000 A-/A3 General Motors Acceptance Corp., Deb., 8.25%, 1996 502,040
350,000 A-/A3 General Motors Acceptance Corp., Medium Term Note, 7.4%, 1997 354,386
500,000 A-/A3 General Motors Acceptance Corp., Medium Term Note, 7.9%, 1997 508,155
100,000 A+/A2 International Lease Finance Corp., Deb., 7.9%, 1996 100,705
1,000,000 A-/A2 Sears Medium Term Note, 8.0%, 1996 1,007,700
500,000 A/A3 Transamerica Financial, 6.75%, 2000 494,375
----------
Total (Cost $4,548,795) $ 4,481,771
----------
Asset-Backed--6.0%
550,000 AAA/Aaa Chase Manhattan Credit Card Master Trust, Series 1992-1A, 7.4%, 2000 $ 555,528
500,000 AAA/Aaa Nationsbank Credit Card Master Trust, Series 1995-1A, 6.45%, 2003 494,855
500,000 AAA/Aaa Navistar Financial Corp. Owner Trust, Series 1996-A2, 6.35%, 2002 498,050
875,000 AAA/Aaa Premier Auto Trust, Series 1995-2A6, 7.2%, 1999 886,856
500,000 AAA/Aaa Sears Credit Account Master Trust, Series 1994-1A, 7.0%, 2004 506,440
200,000 AAA/Aaa Sears Credit Account Trust, Series 1991-DA, 7.75%, 1998 201,090
----------
Total (Cost $3,160,337) $ 3,142,819
----------
Industrials--1.5%
780,000 BBB+/Baa2 Comdisco Inc., 6.5%, 2000 $ 763,425
----------
Total (Cost $779,844) $ 763,425
----------
TOTAL INVESTMENT IN SECURITIES (Cost $51,705,392) $51,006,870
----------
Temporary Cash Investment--2.9%
Commercial Paper--2.9%
1,520,000 Ford Motor Credit Co., 5.3%, 06/03/96 $ 1,520,000
----------
Total (Cost $1,520,000) $ 1,520,000
----------
TOTAL INVESTMENT IN SECURITIES AND TEMPORARY CASH INVESTMENTS--100%
(Cost $53,225,392) (a) (b) $52,526,870
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
May 31, 1996 (continued)
<TABLE>
<S> <C>
(a) At May 31, 1996, the net unrealized loss on investments based on cost for federal
income tax purposes of $53,231,017 was as follows:
Aggregate gross unrealized gain for all investments in which there is an excess of
value over tax cost $ 154,133
Aggregate gross unrealized loss for all investments in which there is an excess of
tax cost over value (858,280)
---------
Net unrealized loss $(704,147)
=========
(b) At November 30, 1995, the Fund had a net capital loss carryforward of $2,801,943
which will expire between 2000 and 2003 if not utilized.
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended May 31, 1996 were as follows:
Purchases Sales
---------- ------------
Long-term U.S. Government $20,834,898 $23,450,847
Other Long-term Securities 911,786 2,218,903
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
BALANCE SHEET
May 31, 1996
<TABLE>
<S> <C>
Assets:
Investment in securities, at value (including temporary cash investments of
$1,520,000) (cost $53,225,392; see Schedule of Investments and Note 1) $52,526,870
Cash 967
Receivables --
Interest 558,164
Fund shares sold 570,004
Other 383
----------
Total assets $53,656,388
----------
Liabilities:
Payables --
Investment securities purchased $ 900,000
Fund shares repurchased 237,237
Dividends 74,722
Due to affiliates (Notes 2, 3 and 4) 36,723
Accrued expenses 40,646
----------
Total liabilities $ 1,289,328
----------
Net Assets:
Paid-in capital (Note 1) $55,881,895
Accumulated undistributed net investment income (Note 1) 93,011
Accumulated net realized loss on investments (Note 1) (2,909,324)
Net unrealized loss on investments (Note 1) (698,522)
----------
Total net assets $52,367,060
==========
Net Asset Value Per Share:
Class A--(based on $48,786,499/12,950,827 shares of beneficial interest
outstanding--unlimited number of shares authorized) $3.77
==========
Class B--(based on $3,580,561/952,207 shares of beneficial interest
outstanding--unlimited number of shares authorized) $3.76
==========
Maximum Offering Price:
Class A $3.87
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 1996
<TABLE>
<S> <C>
Investment Income (Note 1):
Interest $ 1,982,431
-----------
Expenses:
Management fees (Note 2) $ 137,895
Distribution fees (Note 4)
Class A 64,694
Class B 17,014
Transfer agent fees (Note 3)
Class A 50,486
Class B 4,378
Registration fees 11,578
Professional fees 16,329
Accounting (Note 2) 47,871
Custodian fees 7,733
Printing 7,304
Fees and expenses of nonaffiliated trustees 7,384
Miscellaneous 10,182
-----------
Total expenses $ 382,848
Less fees paid indirectly (Note 5) (5,836)
Less management fees waived by Pioneering Management Corporation
(Note 2) (129,170)
-----------
Net expenses $ 247,842
-----------
Net investment income $ 1,734,589
-----------
Realized and Unrealized Loss on Investments:
Net realized loss on investments (Note 1) $ (101,374)
Change in net unrealized gain on investments (1,081,405)
-----------
Net loss on investments $(1,182,779)
-----------
Net increase in net assets resulting from operations $ 551,810
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended May 31, 1996 and the Year Ended November 30, 1995
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
May 31, November 30,
1996 1995
----------- -------------
<S> <C> <C>
From Operations:
Net investment income $ 1,734,589 $ 3,729,437
Net realized loss on investments (101,374) (804,710)
Change in net unrealized gain/loss on investments (1,081,405) 2,442,228
--------- -----------
Net increase in net assets resulting from operations $ 551,810 $ 5,366,955
--------- -----------
Distributions to Shareholders From:
Net investment income
Class A ($0.12 and $0.26 per share, respectively) $ (1,559,554) $ (3,791,748)
Class B ($0.11 and $0.23 per share, respectively) (98,131) (178,555)
--------- -----------
Decrease in net assets resulting from distributions to shareholders $ (1,657,685) $ (3,970,303)
--------- -----------
From Fund Share Transactions:
Net proceeds from sale of shares $ 13,696,187 $ 30,760,993
Net asset value of shares issued to shareholders in reinvestment of
distributions 1,203,298 2,969,805
Cost of shares repurchased (18,210,292) (40,613,691)
--------- -----------
Net decrease in net assets resulting from fund share transactions $ (3,310,807) $ (6,882,893)
--------- -----------
Net decrease in net assets $ (4,416,682) $ (5,486,241)
Net Assets:
Beginning of period 56,783,742 62,269,983
--------- -----------
End of period (including accumulated undistributed net investment income of
$93,011, and $16,107, respectively) $ 52,367,060 $ 56,783,742
========= ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1996 November 30, 1995
------------------------- ---------------------------
Shares Amount Shares Amount
---------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 2,611,055 $ 9,984,996 4,746,546 $ 18,022,565
Shares issued to shareholders in reinvestment of
distributions 299,016 1,140,450 743,271 2,831,308
Less shares repurchased (3,967,510) (15,175,003) (7,218,106) (27,401,015)
-------- --------- -------- -----------
Net decrease (1,057,439) $ (4,049,557) (1,728,289) $ (6,547,142)
======== ========= ======== ===========
CLASS B
Shares sold 969,663 $ 3,711,191 3,354,078 $ 12,738,428
Shares issued to shareholders in reinvestment of
distributions 16,504 62,848 36,365 138,497
Less shares repurchased (793,842) (3,035,289) (3,478,134) (13,212,676)
-------- --------- -------- -----------
Net increase (decrease) 192,325 $ 738,750 (87,691) $ (335,751)
======== ========= ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
For the Six
Months For the Years Ended August 10, 1992
Ended November 30, to
May 31, -------------------------- November 30,
1996 1995 1994++ 1993 1992
----------- ------ ------ ------ ----------------
<S> <C> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $3.84 $3.75 $3.95 $3.95 $4.00
--------- ---- ---- ---- --------------
Increase (decrease) from investment
operations:
Net investment income $0.12 $0.25 $0.22 $0.24 $0.08
Net realized and unrealized gain (loss) on
investments (0.07) 0.10 (0.21) -- (0.05)
--------- ---- ---- ---- --------------
Net increase from investment operations $0.05 $0.35 $0.01 $0.24 $0.03
Distributions to shareholders from net
investment income (0.12) (0.26) (0.21) (0.24) (0.08)
--------- ---- ---- ---- --------------
Net increase (decrease) in net asset value $(0.07) $0.09 $(0.20) $ -- $(0.05)
--------- ---- ---- ---- --------------
Net asset value, end of period $3.77 $3.84 $3.75 $3.95 $3.95
========= ==== ==== ==== ==============
Total return* 1.23% 9.64% 0.32% 6.28% 0.79%
Ratio of net expenses to average net assets 0.87%**+ 0.86%+ 0.85% 0.66% 0.50%**
Ratio of net investment income to average
net assets 6.33%**+ 6.43%+ 5.89% 5.80% 5.93%**
Portfolio turnover rate 80.07%** 109.60% 144.17% 83.25% 146.45%**
Net assets, end of period (in thousands) $48,786 $53,860 $59,088 $57,482 $15,588
Ratios assuming no waiver of management fees
and assumption of expenses by PMC and no
reduction for fees paid indirectly:
Net expenses 1.34%** 1.38% 1.20% 1.33% 3.40%**
Net investment income 5.86%** 5.92% 5.54% 5.13% 3.03%**
Ratios assuming waiver of management fees
and assumption of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 0.85%** 0.85% -- -- --
Net investment income 6.35%** 6.44% -- -- --
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data presented above is based upon average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented (continued)
<TABLE>
<CAPTION>
For the Six For the Year April 4, 1994
Months Ended to
Ended November 30, November 30,
May 31, 1996 1995 1994++
-------------- -------------- ------------------
<S> <C> <C> <C>
CLASS B
Net asset value, beginning of period $3.85 $3.75 $3.89
------------ ------------ ----------------
Increase (decrease) from investment operations:
Net investment income $0.11 $0.22 $0.15
Net realized and unrealized gain (loss) on
investments (0.09) 0.11 (0.16)
------------ ------------ ----------------
Net increase (decrease) from investment operations $0.02 $0.33 $(0.01)
Distributions to shareholders from net investment
income (0.11) (0.23) (0.13)
------------ ------------ ----------------
Net increase (decrease) in net asset value $(0.09) $0.10 $(0.14)
------------ ------------ ----------------
Net asset value, end of period $3.76 $3.85 $3.75
============ ============ ================
Total return* 0.55% 8.93% (0.24%)
Ratio of net expenses to average net assets 1.67%** + 1.63%+ 1.41%**
Ratio of net investment income to average net assets 5.48%** + 5.61%+ 6.05%**
Portfolio turnover rate 80.07%** 109.60% 144.17%
Net assets, end of period (in thousands) $3,581 $2,924 $3,182
Ratios assuming no waiver of management fees and
assumption of expenses by PMC and no reduction for
fees paid indirectly:
Net expenses 2.15%** 2.17% 1.82%**
Net investment income 5.00%** 5.08% 5.64%**
Ratios assuming waiver of management fees and
assumption of expenses by PMC and reduction for
fees paid indirectly:
Net operating expenses 1.65%** 1.60% --
Net investment income 5.50%** 5.64% --
</TABLE>
+ Ratios assuming no reduction for fees paid indirectly.
++ The per share data presented above is based upon average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
May 31, 1996
1. Pioneer Short-Term Income Trust (the Trust) is a Massachusetts business
trust registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The Trust's investment objective is
to seek a high level of current income consistent with a high level of
principal stability.
The Board of Trustees has authorized the issuance of two share classes of
the Trust, designated as Class A and Class B shares. The shares of each class
represent an interest in the same portfolio of investments of the Trust and
have equal rights to voting, redemptions, dividends and liquidation, except
that each class of shares can bear different transfer agent and distribution
fees and have exclusive voting rights with respect to the distribution plans
that have been adopted by Class A and Class B shareholders, respectively.
The Trust's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates. The following is a summary
of significant accounting policies consistently followed by the Trust, which
are in conformity with those generally accepted in the investment company
industry.
A. Security Valuation--Security transactions are recorded on trade date.
Securities are valued based on valuations furnished by an independent pricing
service that utilizes a matrix system. This matrix system reflects such
factors as security prices, yields, maturities and ratings, and is
supplemented by dealer and exchange quotations and fair market value
information from other sources, as required. Principal amounts of
mortgage-backed securities are adjusted for monthly paydowns. Premium and
discount related to certain mortgage- backed securities are amortized or
accreted in proportion to the underlying monthly paydowns. Temporary cash
investments are valued at amortized cost. Interest income is recorded on the
accrual basis.
Gains and losses on sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Trust's practice to first select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B. Federal Income Taxes--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and net realized
capital gains, if any, to its shareholders. Therefore, no federal income tax
provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Trust's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
C. Fund Shares--The Trust records sales and repurchases of its shares on
trade date. Shares are sold and redeemed on a continuous basis at net asset
value per share. Net losses, if any, as a result of cancellations, are
absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter
for the Trust and an indirect subsidiary of The Pioneer
13
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
May 31, 1996 (continued)
Group, Inc. (PGI). PFD earned $12,392 in underwriting commissions on the sale
of fund shares during the six months ended May 31, 1996. The Trust declares
as daily dividends substantially all of its net investment income. All
dividends are paid on a monthly basis. Short-term capital gain distributions,
if any, may be declared with the daily dividends.
D. Class Allocations--Distribution expenses are calculated based on the
average daily net asset value attributable to Class A and Class B shares of
the Trust, respectively. Shareholders of Class A and Class B share all
expenses and fees paid to the transfer agent, Pioneering Services Corporation
(PSC), for their services, which are allocated based on the number of
accounts in each class and the ratable allocation of related out-of-pocket
expense (see Note 3). Income, common expenses and realized and unrealized
gains and losses are calculated at the Trust level and allocated daily to
each class of shares based on the respective percentage of adjusted net
assets at the beginning of the day.
2. Pioneering Management Corporation (PMC), the Trust's investment adviser,
manages the Trust's portfolio and is a wholly owned subsidiary of PGI.
Management fees are calculated daily at the annual rate of 0.50% of the
Trust's average daily net assets up to $100 million; 0.45% of the next $200
million; and 0.40% of the excess over $300 million.
PMC has agreed not to impose a portion of its management fee and to assume
other operating expenses of the Trust to the extent necessary to limit Class
A expenses to 0.85% of the average daily net assets attributable to Class A
shares; the portion of the Trust-wide expenses attributable to Class B shares
will be reduced only to the extent that such expenses are reduced for Class A
shares. PMC's agreement is voluntary and temporary and may be revised or
terminated at any time.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Trust. Included in due to affiliates is $4,766 in accounting fees
payable to PMC at May 31, 1996.
3. PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Trust at negotiated rates. Included in
due to affiliates is $8,029 in transfer agent fees payable to PSC at May 31,
1996.
4. The Trust adopted a Plan of Distribution for each class of shares (Class A
Plan and Class B Plan) in accordance with Rule 12b-1 of the Investment
Company Act of 1940. Pursuant to the Class A Plan, the Trust pays PFD a
service fee of up to 0.25% of the Trust's average daily net assets in
reimbursement of its actual expenditures to finance activities primarily
intended to result in the sale of Class A shares. Pursuant to the Class B
Plan, the Trust pays PFD 1.00% of the average daily net assets attributable
to each class of shares. The fee consists of a 0.25% service fee and a 0.75%
distribution fee paid as compensation for personal services and/or account
maintenance services or distribution services with regard to Class B shares.
Included in due to affiliates is $23,928 in distribution fees payable to PFD
at May 31, 1996.
In addition, redemptions of each class of shares may be subject to a
contingent deferred sales charge (CDSC). A CDSC of 0.50% may be imposed on
certain net asset value purchases of Class A shares that are redeemed within
one year of purchase. Class B shares that are redeemed within three years of
purchase are subject to a CDSC at declining rates beginning at 2.0% based on
the lower of cost or market value of shares being redeemed. Proceeds from the
CDSC are paid to PFD. For the six months ended May 31, 1996, CDSCs in the
amount of $4,639 were paid to PFD.
14
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
May 31, 1996 (continued)
5. The Trust has entered into certain expense offset arrangements resulting
in a reduction in the Trust's total expenses. For the six months ended May
31, 1996, the Trust's expenses were reduced by approximately $5,836 under
such arrangements.
PIONEER SHORT-TERM INCOME TRUST
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER SHORT-TERM INCOME
TRUST:
We have audited the accompanying balance sheet of Pioneer Short-Term
Income Trust, including the schedule of investments, as of May 31, 1996, and
the related statement of operations, statements of changes in net assets and
financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of May 31, 1996 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Pioneer Short-Term Income Trust as of May 31, 1996, the results of its
operations, the changes in its net assets and financial highlights for the
periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
July 1, 1996
15
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR.
Chairman and President
DAVID D. TRIPPLE
Executive Vice President
RICHARD A. SCHLANGER
Vice President
WILLIAM H. KEOUGH
Treasurer
JOSEPH P. BARRI
Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT
CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS
DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B.W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
PIONEERING SERVICES
CORPORATION
60 State Street
Boston, Massachusetts
02109
Please call Pioneer for information on:
Existing accounts, new accounts, prospectuses,
applications, and service forms .............................. 1-800-225-6292
Fund yields and prices ....................................... 1-800-225-4321
Toll-free fax ................................................ 1-800-225-4240
Retirement plans ............................................. 1-800-622-0176
Telecommunications Device for the
Deaf (TDD) ................................................... 1-800-225-1997
When distributed to persons who are not shareowners of the Trust, this report
must be accompanied by a current prospectus, which discusses the objectives,
policies and other information concerning the Trust.
0796-3536
(c)Pioneer Funds Distributor, Inc.
