PIONEER SHORT-TERM INCOME TRUST
DEAR FELLOW SHAREOWNERS,
Pioneer Short-Term Income Trust completed its fourth fiscal year on November
30, 1995. The bond market generally was strong during the 12-month period,
thanks to low inflation, falling interest rates and modest economic growth.
After the difficulties of 1994, bond investors enthusiastically welcomed the
much-improved conditions and higher bond prices that 1995 brought.
How Your Fund Performed
We are pleased to report the following results for Pioneer Short-Term Income
Trust for the 12 months ended November 30, 1995. For additional performance
information, turn to pages 4 and 5.
(bullet) Class A shares -- The Fund paid daily dividends totaling $0.261 per
share. The Fund's 30-day yield was 5.58% as of November 30, 1995.(1)
Net asset value stood at $3.84 per share, versus $3.75 one year
earlier, a gain of 2.40%. For shareowners who reinvested
distributions at net asset value, the Fund's total return was 9.64%
based on net asset value, and 6.79% based on maximum public offering
price.
(bullet) Class B shares -- The Fund paid daily dividends totaling $0.226 per
share. The Fund's 30-day yield was 4.90% as of November 30, 1995.(1)
Net asset value stood at $3.85 per share, versus $3.75 one year
earlier, a gain of 2.67%. For shareowners who reinvested
distributions, the Fund's total return was 8.93% assuming shares
were held throughout the period, and 6.93% assuming shares were
redeemed.
Favorable Economic Environment for Bond Investors
Continued low inflation and expectations of a slowing economy revived U.S.
bond prices over the past year. The market bounced back from 1994, when the
Federal Reserve's (the Fed's) series of interest rate hikes, aimed at keeping
inflation and the economy under control, sent bond prices into a severe
decline. Moving into 1995, however, the Fed's fiscal policy proved
successful; a number of important economic indicators pointed to a
slower-growing economy, and inflation remained benign. When the Fed raised
the federal funds rate to 6.0% in February, investors viewed the action
positively, relieved to see further proof of the Fed's intent to keep
inflation at favorable levels. Later, as mixed signals about the economy's
strength surfaced, the Fed stepped in and lowered the federal funds rate to
5.75% on July 6. This action, too, was viewed optimistically by investors and
contributed to strong bond prices and lower interest rates.
As long-term interest rates declined during the course of the year,
short-term securities like those in which your Fund invests provided
investors with highly competitive yields. While short-term bonds did not
experience the same price appreciation that longer-term securities did in
1995, they continued to offer investors a comparable level of income and a
relatively high level of stability (because of lower sensitivity to interest
rate swings). The chart on the following page shows how the difference
between yields offered by short- and longer-term securities decreased as the
year progressed.
(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 shares and Class B shares would have been 5.25% and 4.61%,
respectively.
<PAGE>
Yields on Selected Treasury Securities
(November 30, 1994, versus November 30, 1995)
===============================================================================
[graphic]
MATURITY 11/30/94 11/3/95
3 Months 5.71% 5.48%
6 Months 6.23% 5.45%
1 Year 6.88% 5.35%
2 Years 7.40% 5.35%
3 Years 7.61% 5.40%
5 Years 7.79% 5.52%
10 Years 7.90% 5.75%
30 Years 8.00% 6.13%
===============================================================================
Pursuing Income and Capital Preservation
Pioneer Short-Term Income Trust invests only in short-term, high-quality
securities, with a special concentration on the highest-quality (AAA) rating.
All holdings in the Fund have an effective maturity of five years or less,
and your management looks to keep the portfolio's average maturity under
three years. Over the 12-month period, we increased the Fund's weighting in
U.S. government and agency securities to 82% of the portfolio, up from 68%
one year ago. Your Fund continues to hold a sizable position in
collateralized mortgage obligations (CMOs), issued by the Federal National
Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation
(Freddie Mac). These investments added nicely to your Fund's income stream
and total return over the year. Our focus remains on CMOs that pass stringent
tests for quality and other characteristics, and that have well-defined
agency collateral and maturity constraints.
Corporate securities continue to make up only a small portion of your Fund's
portfolio. Given the restrictive position taken by the Fed last year, your
management has been reluctant to invest in companies with the potential to
experience lower earnings. One notable exception has been the financial
sector, an industry that has benefited from lower interest rates, as well as
the group's trend toward consolidation. Your management looks for securities
we think not only should perform well if the economy slows, but that also
exhibit the potential for a credit upgrade by one of the major rating
agencies. Holdings in the portfolio include General Motors Acceptance Corp.,
Transamerica Financial and Sears Credit. Of course, until we see more
clear-cut signs of the economy's direction, your Fund's largest weighting
will remain in government and agency securities.
Portfolio Quality
(as of November 30, 1995)
===============================================================================
[pie chart]
Treasury/Agency 82%
AAA 7%
AA 1%
A 9%
BBB 1%
===============================================================================
As of November 30, 1995, the portfolio's average life was 1.95 years, not too
far from its 1.66 years average life one year ago. As mentioned, short-term
issues currently offer extremely competitive yields, in addition to their
inherent stability. Your management kept the majority of the Fund's holdings
in this range, adding to issues with one-to-three years to maturity. We
virtually eliminated the portfolio's commercial paper position, which stood
at 18% one year ago. While commercial paper provides stability, it adds
relatively little to the Fund's income stream. We expect these cash
equivalents will remain unattractive moving forward, particularly if the Fed
lowers short-term interest rates and investors can turn to higher- yielding
securities with little added risk. Finally, we continued to keep a solid
footing in three-to-five year investments, most
2
<PAGE>
of which we acquired at very attractive prices. We think the Fund's average
life -- and high quality -- should continue to provide a steady income stream
and share price.
Effective Portfolio Maturity
(as of November 30, 1995)
===============================================================================
[pie chart]
Less than 1 Year 30%
1-3 Years 50%
3-5 Years 20%
===============================================================================
Looking Ahead
Moving into your Fund's fifth fiscal year, we expect the bond market will
remain strong, particularly if the Fed lowers short-term interest rates. We
also think prices of short-term securities should benefit most in terms of
higher prices if and when the Fed intervenes next -- they have not yet
appreciated to the extent that long-term bonds have over the past year. In
addition, factors such as the national deficit should not affect the value of
short-term securities to any great extent, nor should the past year's huge
stock market run-up. In fact, investors who exit the stock market often move
to high-quality, short-term bonds, which tends to increase both demand and
the prices of these investments. Money markets currently are not offering
comparable yields, leading us to think investors will turn to more
competitive short-term vehicles, such as your Fund.
Naturally, your management will closely watch events that may affect the
overall bond market, including changes in interest rates, economic indicators
and the strength of the U.S. dollar. We think your Fund's conservative
positioning should minimize the effects of these events, while working to
maintain and increase the Fund's income stream and net asset value. We remain
confident our strategy will continue to offer shareowners solid performance
and a high level of comfort.
The following pages show the Fund's audited portfolio and financial
statements as of November 30, 1995. If you have any questions about your
investment in Pioneer Short-Term Income Trust, please contact your investment
representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Short-Term Income Trust
January 10, 1996
3
<PAGE>
Growth of a $10,000 Investment*
This chart shows the growth of a $10,000 investment made in Pioneer
Short-Term Income Trust Class A shares at public offering price on August 10,
1992, compared to the growth of the Merrill Lynch 1-3 Year Government Bond
Index.
===============================================================================
[graphic]
PIONEER SHORT-TERM INCOME TRUST CLASS A:
Average Annual Total Returns
(as of November 30, 1995)
Life of Fund
1 Year 3 Years (8/10/92)
Net Asset Value 9.64% 5.34% 5.08%
Offering Price* 6.79 4.47 4.30
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust Class A Government Bond Index
8/10/92 9750 10000
9779 10024
11/30/92 9833 10045
10091 10332
5/31/93 10229 10401
10387 10591
11/30/93 10450 10649
10513 10690
5/31/94 10492 10614
10544 10771
11/30/94 10483 10730
10782 11049
5/31/95 11149 11406
11286 11584
11/30/95 11493 11841
===============================================================================
The Merrill Lynch 1-3 Year Government Bond Index is an unmanaged, composite
index of debt obligations of the U.S. Treasury and U.S. government agencies
(excluding mortgage-backed securities). All issues have a maturity of at
least one year and no more than three years. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Index.
* 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.
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.
4
<PAGE>
Growth of a $10,000 Investment*
This chart shows the growth of a $10,000 investment made in Pioneer
Short-Term Income Trust Class B shares at public offering price on April 4,
1994, compared to the growth of the Merrill Lynch 1-3 Year Government Bond
Index.
===============================================================================
[graphic]
PIONEER SHORT-TERM INCOME TRUST CLASS B:
Average Annual Total Returns
(as of November 30, 1995)
Life of Fund
1 Year (4/4/94)
If Held 8.93% 5.13%
If Redeemed* 6.93 3.97
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust Class B Government Bond Index
4/4/94 10000 10000
10015 10023
5/31/94 10001 10037
10014 10067
10052 10152
8/31/94 10042 10185
10037 10166
10031 10190
11/30/94 9976 10146
9974 10165
10105 10306
2/28/95 10236 10448
10315 10508
10366 10601
5/31/95 10554 10786
10579 10844
10607 10889
8/31/95 10659 10954
10709 11008
10788 11100
11/30/95 10470 11197
===============================================================================
The Merrill Lynch 1-3 Year Government Bond Index is an unmanaged, composite
index of debt obligations of the U.S. Treasury and U.S. government agencies
(excluding mortgage-backed securities). All issues have a maturity of at
least one year and no more than three years. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Index.
* Reflects deduction of the maximum 2.0% contingent deferred sales charge at
the end of the period and assumes reinvestment of all distributions.
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.
5
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
November 30, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- ----------- ------------------------------------------------------------------------- ------------
<S> <C> <C> <C>
INVESTMENT IN SECURITIES--100.0%(+)
U.S. Government and Agency Obligations--82.4%
$ 500,000 Aid-Israel, 7.75%, 1999 $ 532,500
1,000,000 Federal Home Loan Bank, 7.0%, 2000 1,006,660
500,000 Federal Home Loan Bank, 7.55%, 1997 518,595
900,000 Federal Home Loan Bank, 8.0%, 1999 903,807
500,000 Federal Home Loan Bank, 8.125%, 2000 513,685
1,000,000 Federal Home Loan Bank, 8.25%, 2000 1,003,560
400,000 Federal Home Loan Bank, 8.26%, 1999 408,832
250,000 Federal Home Loan Bank, Step Up Note, 7.0%, 1998 250,450
300,000 Federal Home Loan Mortgage Corp., 7.51%, 2000 313,278
500,000 Federal Home Loan Mortgage Corp., 7.645%, 2000 523,860
500,000 Federal Home Loan Mortgage Corp., 7.726%, 2000 510,640
500,000 Federal Home Loan Mortgage Corp., 7.84%, 2000 503,560
250,000 Federal Home Loan Mortgage Corp., 7.91%, 1997 250,000
500,000 Federal Home Loan Mortgage Corp., Global Notes, 6.93%, 2000 509,005
799,888 Federal Home Loan Mortgage Corp., REMIC Series 1579PN, 6.45%, 2022 800,728
502,992 Federal Home Loan Mortgage Corp., REMIC Series 1564J, 6.5%, 2008 507,131
149,941 Federal Home Loan Mortgage Corp., REMIC Series 1039G, 6.5%, 2019 149,693
458,527 Federal Home Loan Mortgage Corp., REMIC Series 1590K, 6.5%, 2023 459,151
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1358F, 6.75%, 2019 502,075
380,755 Federal Home Loan Mortgage Corp., REMIC Series 1319E, 7.0%, 2004 382,275
211,225 Federal Home Loan Mortgage Corp., REMIC Series 1164F, 7.0%, 2005 211,916
113,397 Federal Home Loan Mortgage Corp., REMIC Series 1072F, 7.0%, 2005 113,351
730,355 Federal Home Loan Mortgage Corp., REMIC Series 1457E, 7.0%, 2007 732,254
928,726 Federal Home Loan Mortgage Corp., REMIC Series 1278F, 7.0%, 2020 930,992
300,000 Federal Home Loan Mortgage Corp., REMIC Series 1238G, 7.25%, 2006 304,443
559,718 Federal Home Loan Mortgage Corp., REMIC Series 1292E, 7.35%, 2003 560,899
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1243H, 7.5%, 2004 1,019,150
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1262F, 7.5%, 2015 1,017,510
560,201 Federal Home Loan Mortgage Corp., REMIC Series 1311E, 7.5%, 2016 560,145
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1255DC, 7.5%, 2017 500,450
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1311F, 7.5%, 2018 505,310
374,002 Federal Home Loan Mortgage Corp., REMIC Series 1264F, 7.75%, 2019 378,000
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1145G, 8.0%, 2006 1,037,700
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1281F, 8.0%, 2018 516,745
1,100,000 Federal Home Loan Mortgage Corp., REMIC Series 186D, 8.0%, 2019 1,114,509
316,190 Federal Home Loan Mortgage Corp., REMIC Series 1143H, 8.0%, 2019 318,432
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
November 30, 1995 (continued)
Principal
Amount Value
- ----------- ----------- ------------------------------------------------------------------------- ------------
$ 797,849 Federal Home Loan Mortgage Corp., REMIC Series 189C, 8.0%, 2021 $ 817,692
469,441 Federal Home Loan Mortgage Corp., REMIC Series 82C, 8.9%, 2019 477,553
235,000 Federal National Mortgage Association, 7.85%, 1998 248,012
1,000,000 Federal National Mortgage Association, Global Notes, 6.85%, 2000 1,021,420
500,000 Federal National Mortgage Association, Medium Term Note, 6.64%, 2000 509,935
500,000 Federal National Mortgage Association, Medium Term Note, 6.81%, 2000 511,065
1,050,000 Federal National Mortgage Association, Medium Term Note, 7.11%, 2000 1,082,382
500,000 Federal National Mortgage Association, Medium Term Note, 7.26%, 1999 511,025
585,000 Federal National Mortgage Association, Medium Term Note, 7.26%, 2000 605,703
1,000,000 Federal National Mortgage Association, Medium Term Note, 7.3%, 2000 1,034,070
1,000,000 Federal National Mortgage Association, Medium Term Note, 8.01%, 1999 1,003,830
500,000 Federal National Mortgage Association, Medium Term Note, 8.16%, 2000 514,105
500,000 Federal National Mortgage Association, REMIC Series 1993-23PJ, 6.7%,
2019 504,655
1,000,000 Federal National Mortgage Association, REMIC Series 1992-110G, 7.0%,
2005 1,012,800
555,000 Federal National Mortgage Association, REMIC Series 1992-16G, 7.0%, 2017 558,474
432,164 Federal National Mortgage Association, REMIC Series 1992-131E, 7.0%,
2017 431,770
268,984 Federal National Mortgage Association, REMIC Series 1992-64M, 7.0%, 2022 273,035
500,000 Federal National Mortgage Association, REMIC Series 1992-145J, 7.15%,
2003 518,900
1,000,000 Federal National Mortgage Association, REMIC Series 1992-131G, 7.25%,
2019 1,012,310
500,000 Federal National Mortgage Association, REMIC Series 1992-84G, 7.5%, 2014 507,870
965,796 Federal National Mortgage Association, REMIC Series 1988-26C, 7.5%, 2018 981,761
392,570 Federal National Mortgage Association, REMIC Series 1992-43B, 7.5%, 2018 393,967
398,901 Federal National Mortgage Association, REMIC Series 1990-48G, 7.95%,
2019 404,609
968,492 Federal National Mortgage Association, REMIC Series 1991-74J, 7.95%,
2020 978,293
500,000 Federal National Mortgage Association, REMIC Series 1992-97DB, 8.0%,
1999 523,335
144,636 Federal National Mortgage Association, REMIC Series 1992-77G, 8.0%, 2021 147,501
211,192 Federal National Mortgage Association, REMIC Series 1991-107M, 8.5%,
2002 211,342
581,021 Federal National Mortgage Association, REMIC Series 1990-8E, 8.5%, 2018 591,805
350,179 Federal National Mortgage Association, REMIC Series 1989-87G, 8.75%,
2018 353,005
750,000 Federal National Mortgage Association, REMIC Series 1991-103HB, 8.75%,
2020 767,753
500,000 Federal Farm Credit Bank, Medium Term Note, 7.79%, 1997 522,075
300,000 Student Loan Marketing Association, Global Notes, 7.0%, 1998 309,195
500,000 Student Loan Marketing Association, Medium Term Note, 8.29%, 1997 500,720
500,000 Tennessee Valley Authority, 7.625%, 1999 506,250
1,000,000 Tennessee Valley Authority, 8.375%, 1999 1,087,500
1,285,000 U.S. Treasury Notes, 7.5%, 1997 1,314,966
2,935,000 U.S. Treasury Notes, 8.125%, 1998 3,097,540
----------
Total (Cost $45,938,717) $46,219,514
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
SCHEDULE OF INVESTMENTS
November 30, 1995 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (unaudited) Value
- ----------- ----------- ------------------------------------------------------------------ -------------
<S> <C> <C> <C>
Financials--11.2%
$ 500,000 AA-/Aa3 Associates Corp. N.A., 8.125%, 1998 $ 523,125
250,000 BBB+/Baa1 Discover Credit Corp., Medium Term Note, 7.77%, 1997 256,875
500,000 A+/A1 Ford Motor Credit Co., 6.85%, 2000 515,625
700,000 AAA/Aaa General Electric Company, 7.875%, 1996 706,125
250,000 A-/A3 General Motors Acceptance Corp., Deb., 8.0%, 1996 254,258
500,000 A-/A3 General Motors Acceptance Corp., Deb., 8.25%, 1996 507,670
350,000 A-/A3 General Motors Acceptance Corp., Medium Term Note, 7.4%, 1997 357,875
500,000 A-/A3 General Motors Acceptance Corp., Medium Term Note, 7.9%, 1997 514,375
100,000 A+/A2 International Lease Finance Corp., Deb., 7.9%, 1996 101,681
1,000,000 BBB/A2 Sears Medium Term Note, 8.0%, 1996 1,017,500
500,000 A/A3 Transamerica Financial, 6.75%, 2000 511,875
1,000,000 A/A2 Xerox Corp., Medium Term Note, 7.13%, 1999 1,035,000
-----------
Total (Cost $6,257,868) $ 6,301,984
-----------
Asset Backed Securities--5.5%
550,000 AAA/Aaa Chase Manhattan Credit Card Master Trust, Series 1992-1A, 7.4%,
2000 $ 564,795
500,000 AAA/Aaa MBNA Master Credit Card Trust, Series 1995-DA, 6.05%, 2002 504,040
500,000 AAA/Aaa Nationsbank Credit Card Master Trust, Series 1995-1A, 6.45%, 2003 512,690
750,000 AAA/Aaa Premier Auto Trust, 7.2%, 1999 777,653
500,000 AAA/Aaa Sears Credit Account Master Trust, Series 1994-1A, 7.0%, 2004 519,925
200,000 AAA/Aaa Sears Credit Account Trust, Series 1991-D, 7.75%, 1998 203,434
-----------
Total (Cost $3,031,197) $ 3,082,537
-----------
Industrials--0.9%
500,000 BBB/Baa2 Comdisco Inc., 6.5%, 2000 $ 503,125
-----------
Total (Cost $496,495) $ 503,125
-----------
TOTAL INVESTMENT IN SECURITIES (Cost $55,724,277) ((a)) ((b)) $ 56,107,160
-----------
(+) The period of time that the Trust expects to receive all scheduled principal payments
may be shorter than the stated maturity of the obligations.
((a)) At November 30, 1995, the net unrealized gain on investments based on cost for federal
income tax purposes of $55,725,437 was as follows:
Aggregate gross unrealized gain for all investments in which there is an excess
of value over tax cost $ 644,977
Aggregate gross unrealized loss for all investments in which there is an excess
of tax cost over value (263,254)
-----------
Net unrealized gain $ 381,723
===========
((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 year ended November 30, 1995
were as follows:
Purchases Sales
----------- -----------
Long-term U.S. Government $60,550,028 $57,705,146
Other Long-term Securities 4,235,670 4,276,516
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
BALANCE SHEET
November 30, 1995
Assets:
Investment in securities, at value (cost $55,724,277; see
Schedule of Investments and Note 1) $56,107,160
Cash 132,446
Receivables --
Interest 680,289
Trust shares sold 75,220
Other 2,177
-----------
Total assets $56,997,292
-----------
Liabilities:
Payables --
Trust shares repurchased $ 50,358
Dividends 77,768
Due to affiliates (Notes 2, 3 and 4) 37,015
Accrued expenses 48,409
-----------
Total liabilities $ 213,550
-----------
Net Assets:
Paid-in capital (Note 1) $59,192,702
Accumulated undistributed net investment income (Note 1) 16,107
Accumulated net realized loss on investments (Note 1) (2,807,950)
Net unrealized gain on investments (Note 1) 382,883
-----------
Total net assets $56,783,742
===========
Net Asset Value Per Share:
Class A -- (based on $53,859,998/14,008,266 shares of
beneficial interest outstanding--
unlimited number of shares authorized) $3.84
===========
Class B -- (based on $2,923,744/759,882 shares of beneficial
interest outstanding--
unlimited number of shares authorized) $3.85
===========
Maximum Offering Price:
Class A $3.94
===========
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
STATEMENT OF OPERATIONS
For the Year Ended November 30, 1995
Investment Income (Note 1):
Interest $4,246,756
-----------
Expenses:
Management fees (Note 2) $ 291,294
Distribution fees (Note 4)
Class A 138,238
Class B 30,305
Transfer agent fees (Note 3)
Class A 102,445
Class B 6,552
Registration fees 66,791
Professional fees 49,380
Accounting (Note 2) 86,621
Custodian fees 10,849
Printing 15,858
Fees and expenses of nonaffiliated trustees 5,714
Miscellaneous 21,928
-----------
Total expenses $ 825,975
Less fees paid indirectly (Note 5) (9,059)
Less management fees waived and expenses assumed by
Pioneering Management Corporation (Note 2) (299,597)
-----------
Net expenses $ 517,319
-----------
Net investment income $3,729,437
-----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments (Note 1) $ (804,710)
Change in net unrealized gain on investments 2,442,228
-----------
Net gain on investments $1,637,518
-----------
Net increase in net assets resulting from operations $5,366,955
===========
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended November 30, 1995 and 1994
<TABLE>
<CAPTION>
Year Year
Ended Ended
November 30, November 30,
1995 1994
------------- --------------
<S> <C> <C>
From Operations:
Net investment income $ 3,729,437 $ 3,964,967
Net realized loss on investments (804,710) (1,803,756)
Change in net unrealized gain (loss) on investments 2,442,228 (1,932,913)
------------ ------------
Net increase in net assets resulting from operations $ 5,366,955 $ 228,298
------------ ------------
Distributions to Shareholders From:
Net investment income
Class A ($0.26 and $0.21 per share, respectively) $ (3,791,748) $ (3,671,419)
Class B ($0.23 and $0.13 per share, respectively) (178,555) (36,575)
------------ ------------
Decrease in net assets resulting from distributions to
shareholders $ (3,970,303) $ (3,707,994)
------------ ------------
From Trust Share Transactions:
Net proceeds from sale of shares $ 30,760,993 $ 55,646,719
Net asset value of shares issued to shareholders in
reinvestment of dividends 2,969,805 2,593,227
Cost of shares repurchased (40,613,691) (49,972,576)
------------ ------------
Increase (decrease) in net assets resulting from trust
share transactions $ (6,882,893) $ 8,267,370
------------ ------------
Net increase (decrease) in net assets $ (5,486,241) $ 4,787,674
Net Assets:
Beginning of year 62,269,983 57,482,309
------------ ------------
End of year (including accumulated undistributed net
investment income of $16,107 and $256,973 respectively) $ 56,783,742 $ 62,269,983
============ ============
</TABLE>
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1995 November 30, 1994
--------------------------- -----------------------------
Shares Amount Shares Amount
------------ ------------- ------------- --------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 4,746,546 $ 18,022,565 13,039,685 $ 50,866,270
Shares issued to shareholders in
reinvestment of distributions 743,271 2,831,308 707,412 2,563,580
Less shares repurchased (7,218,106) (27,401,015) (12,550,437) (48,392,130)
----------- ------------ ------------ ------------
Net increase (decrease) (1,728,289) $ (6,547,142) 1,196,660 $ 5,037,720
=========== ============ ============ ============
CLASS B*
Shares sold 3,354,078 $ 12,738,428 1,254,765 $ 4,780,449
Shares issued to shareholders in
reinvestment of distributions 36,365 138,497 7,815 29,647
Less shares repurchased (3,478,134) (13,212,676) (415,007) (1,580,446)
----------- ------------ ------------ ------------
Net increase (decrease) (87,691) $ (335,751) 847,573 $ 3,229,650
=========== ============ ============ ============
</TABLE>
*Class B shares were first publicly offered on April 4, 1994.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
August 10,
1992
For the Years Ended November 30, to
------------------------------------------- November 30,
1995 1994(+) 1993 1992
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 3.75 $ 3.95 $ 3.95 $ 4.00
------------ ------------ ------------ ------------
Increase (decrease) from investment
operations:
Net investment income $ 0.25 $ 0.22 $ 0.24 $ 0.08
Net realized and unrealized gain (loss) on
investments 0.10 (0.21) -- (0.05)
------------ ------------ ------------ ------------
Total increase 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) $ -- $ (0.05)
------------ ------------ ------------ ------------
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 waiver of management
fees and assumption of expenses by PMC and
no reduction for fees paid indirectly:
Net operating expenses 1.38% 1.20% 1.33% 3.40%**
Net investment income 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 operating expenses 0.85% -- -- --
Net investment income 6.44% -- -- --
</TABLE>
+ The per share data presented above is based upon average shares outstanding
for the period presented.
++ Ratios assuming no reduction for 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.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected Data for a Share Outstanding for the Periods Presented (continued)
<TABLE>
<CAPTION>
April 4, 1994
For the Year Ended to
November 30, 1995 November 30, 1994(+)
-----------------------------------------
<S> <C> <C>
CLASS B
Net asset value, beginning of period $ 3.75 $ 3.89
------------------ -------------------
Increase (decrease) from investment operations:
Net investment income $ 0.22 $ 0.15
Net realized and unrealized gain (loss) on investments 0.11 (0.16)
------------------ -------------------
Total gain (loss) 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* 8.93% (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 waiver of management fees and
assumption of expenses by PMC and no reduction for fees
paid indirectly:
Net operating expenses 2.17% 1.82%**
Net investment income 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 1.60% --
Net investment income 5.64% --
</TABLE>
+ The per share data presented above is based upon average shares outstanding
for the period presented.
++ Ratios assuming no reduction for 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.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
November 30, 1995
1. Pioneer Short-Term Income Trust (the Trust) is a Massachusetts business
trust, registered under the Investment Company Act of 1940 as a diversified,
open-end management investment company. The investment objective of the Trust
is to seek a high level of current income consistent with a relatively 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. Class B shares were
first publicly offered on April 4, 1994. Shares issued and outstanding prior
to April 4, 1994 were designated as Class A shares. The shares of each class
represent an interest in the same portfolio of investments of the Trust and
have equal rights to voting, 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 shareholders of Class A and Class B.
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 plus accrued interest, which
approximates value. 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 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. Trust Shares--The Trust records sales and repurchases of trust shares
on trade date. Shares are sold and
14
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
November 30, 1995 (continued)
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 Group, Inc. (PGI). PFD earned $24,451 in
underwriting commissions on the sale of trust shares during the year ended
November 30, 1995. 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. Dividends paid by the Trust, if any, with respect to each class of
shares are calculated in the same manner, at the same time, on the same day
and in the same amount, except that Class A and Class B shares bear different
transfer agent and distribution fees.
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 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.
E. Repurchase Agreements--The Trust may enter into repurchase agreements.
At the time the Trust enters into a repurchase agreement, the value of the
underlying security (collateral), including accrued interest, will be equal
to or exceed the value of the repurchase agreement, and in the case of
repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in safekeeping
in the customer-only account of the Trust's custodian, or at the Federal
Reserve Bank. If the seller defaults and the value of the collateral
declines, or if bankruptcy proceedings commence with respect to the seller of
the security, realization of the collateral by the Trust may be delayed or
limited. At November 30, 1995, the Trust had no outstanding repurchase
agreements.
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 $2,960 in accounting fees
payable to PMC at November 30, 1995.
3. PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the
15
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
November 30, 1995 (continued)
Trust at negotiated rates. Included in due to affiliates is $9,931 in
transfer agent fees payable to PSC at November 30, 1995.
4. The Trust adopted a Plan of Distribution for Class A shares (Class A Plan)
and Class B shares (Class B Plan) in accordance with Rule 12b-1 of the
Investment Company Act of 1940. These plans allow for Class A shares and
Class B shares to reimburse and compensate PFD for providing varying levels
of distribution services and other account maintenance services. The Class A
Plan and Class B Plan provide for reimbursement of PFD's distribution
services in an amount up to 0.25% and 0.75%, respectively, of the average
daily net assets of the respective classes of shares. The Trust may also
compensate PFD for additional services in an amount up to 0.25% of the
Trust's average daily net assets attributable to Class B shares. Included in
due to affiliates is $24,124 in distribution fees payable to PFD at November
30, 1995.
In addition, Class B shares that are redeemed within three years of purchase
are subject to a contingent deferred sales charge (CDSC) at declining rates
beginning at 2.0% based on the lower of cost or market value of shares being
redeemed. Proceeds from the CDSC are paid to PFD. For the year ended November
30, 1995, CDSC in the amount of $11,523 was paid to PFD.
5. The Trust has entered into certain expense offset arrangements resulting
in a reduction in the Trust's total expenses. For the year ended November 30,
1995, the Trust's expenses were reduced by $9,059 under such arrangements.
16
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER SHORT-TERM INCOME
TRUST:
We have audited the accompanying balance sheet of Pioneer Short-Term
Income Trust, including the schedule of investments, as of November 30, 1995,
and the related statement of operations, statements of changes in net assets
and financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1995 by correspondence with the
custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Pioneer Short-Term Income Trust as of November 30, 1995, the results of its
operations, the changes in its net assets and financial highlights for the
periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 29, 1995
17
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP
OF TRUSTEES AND OFFICERS (UNAUDITED)
The aggregate direct remuneration paid by the Trust to nonaffiliated
trustees and officers during the year ended November 30, 1995 was
approximately $5,400, plus expenses incurred in attending trustees meetings
of approximately $3,000. Fees of trustees who are affiliated with or
"interested persons" of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., investment adviser and principal underwriter,
respectively, of the Trust ($1,000 in 1995) are reimbursed to the Trust by
Pioneering Management Corporation in accordance with the management agreement
with the Trust. At November 30, 1995, the trustees and officers of the Trust
owned beneficially 56,339 Class A shares of the Trust (approximately 0.4% of
the outstanding Class A shares). The Pioneer Group, Inc., the parent company
of Pioneering Management Corporation and Pioneer Funds Distributor, Inc., is
a publicly held corporation of which Mr. Cogan, Chairman and President of the
Trust, owned approximately 15% of the outstanding shares of capital stock at
November 30, 1995.
18
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
TAX TREATMENT OF DISTRIBUTIONS
Made During the Year Ended November 30, 1995
During the year ended November 30, 1995, Pioneer Short-Term Income Trust paid
the following distributions:
Distributions Per Share
From
Net Investment Income
-----------------------
Payment Date Class A Class B
- -------------- ---------------------
12/31/94 $0.0220 $0.0190
01/31/95 0.0220 0.0190
02/28/95 0.0220 0.0190
03/31/95 0.0220 0.0190
04/30/95 0.0230 0.0190
05/31/95 0.0230 0.0190
06/30/95 0.0220 0.0190
07/31/95 0.0230 0.0200
08/31/95 0.0220 0.0190
09/30/95 0.0205 0.0180
10/31/95 0.0205 0.0180
11/30/95 0.0190 0.0180
--------- ---------
$0.2610 $0.2260
========= =========
For purposes of the dividend exclusion, none of the distributions per share
qualify for the exclusion.
19
<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 Fund, this report
must be accompanied by an official prospectus, which discusses the
objectives, policies and other information concerning the Fund.
0196-2980
(c)Pioneer Funds Distributor, Inc.
[Pioneer logo]
Pioneer
Short-Term
Income
Trust
ANNUAL REPORT
NOVEMBER 30, 1995
