[PIONEER LOGO]
Pioneer
Short-Term Income
Trust
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SEMIANNUAL REPORT 5/31/97
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<PAGE>
Table of Contents
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<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 5
Schedule of Investments 8
Financial Statements 14
Notes to Financial Statements 19
Report of Independent Public Accountants 23
Trustees, Officers and Service Providers 24
Programs and Services for Pioneer Shareowners 26
The Pioneer Family of Mutual Funds 29
</TABLE>
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Pioneer Short-Term Income Trust
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LETTER FROM THE CHAIRMAN 5/31/97
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Dear Shareowner,
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Welcome to this semiannual report on Pioneer Short-Term Income Trust, covering
the six months ended May 31, 1997. Despite what turned out to be a sluggish
period for the bond market, your Fund continued to pay regular dividends and
posted a modest total return.
Once again, the bond market couldn't seem to gather any forward momentum,
thanks to conflicting economic data and the sometimes puzzling market reactions
to them. One positive trend for your Fund, however, was the narrowing yield
differential between low-rated and high-quality securities, particularly U.S.
government issues. When these "spreads" shrink, investors often tend to choose
the higher-quality investment, which helps support prices of the types of
securities in your Fund's portfolio.
No one can foresee with assurance when the economy will shift gears or the rate
of inflation will start to increase. Investor psychology is even less
predictable, as we are continually reminded. However, the benefits of
high-quality securities, a tightly managed short-term portfolio and a
disciplined investment style are clear, and should become more apparent if the
stock market runs into any difficulty. In all, we think Pioneer Short-Term
Income Trust is still a sound alternative for conservative, quality-conscious
investors looking for regular income.
If you have questions on your investment in Pioneer Short-Term Income Trust,
please contact your investment representative, or Pioneer at 1-800-225-6292.
Thank you for your continued support.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
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Pioneer Short-Term Income Trust
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PORTFOLIO SUMMARY 5/31/97
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[DESCRIPTION OF PIE CHART]
U.S. Government Agency Obligations 82%
Corporate Bonds 10%
U.S. Government Obligations 7%
Short-Term Cash Equivalents 1%
Portfolio Quality
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(As a percentage of debt holdings)
[DESCRIPTION OF PIE CHART]
Treasury/Agency 90%
AAA 3%
AA 1%
A 3%
BBB 3%
10 Largest Holdings
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(As a percentage of debt holdings)
<TABLE>
<S> <C>
1. U.S. Treasury Notes, 7.75%, 1999 5.40%
2. Federal National Mortgage Association, Medium Term Note, 7.0%, 2001 2.62
3. Federal National Mortgage Association, Medium Term Note, 7.11%, 2000 2.21
4. Tennessee Valley Authority, 8.375%, 1999 2.18
5. Federal Home Loan Mortgage Corp., REMIC Series 1145G, 8.0%, 2006 2.13
6. Federal Home Loan Mortgage Corp., REMIC Series 1243H, 7.5%, 2004 2.12
7. Federal National Mortgage Association, Medium Term Note, 7.3%, 2000 2.11
8. Federal National Mortgage Association, Medium Term Note, 7.17%, 2001 2.10
9. Federal National Mortgage Association, REMIC Series 1992-131G, 2.10
7.25%, 2019
10. Federal Home Loan Bank, 7.125%, 2002 2.09
</TABLE>
2
Fund holdings will vary for other periods.
<PAGE>
Pioneer Short-Term Income Trust
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PERFORMANCE UPDATE 5/31/97 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 5/31/97 11/30/96
$3.76 $3.79
Distributions per Share Income Short-Term Long-Term
(11/30/96-5/31/97) Dividends Capital Gains Capital Gains
$0.113 - -
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Short-Term Income Trust at public offering price, compared to the
growth of the Merrill Lynch 1-3 Year Government Bond Index.
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Average Annual Total Returns
(As of May 31, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 5.05% 4.51%
(8/10/92)
1 Year 6.25 3.51
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* Reflects deduction of the maximum 2.5% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
Growth of $10,000+
[DESCRIPTION OF MOUNTAIN CHART]
Merrill Lynch 1-3 Year
Pioneer Short-Term Income Trust Government Bond Index
8/92 9750 10000
11/92 9809 10018
10066 10307
5/93 10204 10372
10362 10564
11/93 10424 10623
10488 10661
5/94 10466 10586
10518 10746
11/94 10457 10697
10756 11019
5/95 11122 11375
11259 11553
11/95 11466 11810
11576 11951
5/96 11606 11975
11743 12150
11/96 12062 12494
12148 12582
5/97 12332 12766
+ Index comparison begins 8/31/92. 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.
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.
3
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Pioneer Short-Term Income Trust
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PERFORMANCE UPDATE 5/31/97 CLASS B SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 5/31/97 11/30/96
$3.75 $3.79
Distributions per Share Income Short-Term Long-Term
(11/30/96-5/31/97) Dividends Capital Gains Capital Gains
$0.104 - -
Investment Returns
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The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Short-Term Income Trust, compared to the growth of the Merrill
Lynch 1-3 Year Government Bond Index.
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Average Annual Total Returns
(As of May 31, 1997)
If If
Period Held Redeemed*
Life-of-Fund 4.63% 4.63%
(4/4/94)
1 Year 5.60 3.60
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* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 2% declines over three years.
Growth of $10,000+
[DESCRIPTION OF MOUNTAIN CHART]
Merrill Lynch 1-3 Year
Pioneer Short-Term Income Trust Government Bond Index
4/94 10000 10000
5/94 9987 10014
10027 10166
11/94 9961 10119
10221 10424
5/95 10539 10761
10643 10929
11/95 10850 11172
10922 11306
5/96 10910 11328
11044 11493
11/96 11325 11819
11367 11902
5/97 11521 12077
+ Index comparison begins 4/30/94. 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.
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
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Pioneer Short-Term Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 5/31/97
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Dear Shareowner,
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The first half of Pioneer Short-Term Income Trust's sixth fiscal year came to a
close on May 31, 1997, rewarding investors with a positive total return and
steady monthly dividends. The Fund generated a six-month total return of 2.24%
for Class A Shares, 1.73% for Class B Shares. The Fund's performance compared
well with the average 2.05% total return offered by the 105 funds in Lipper
Analytical Services' Short-Term Investment-Grade Debt category during the same
time. (Returns do not reflect sales charges.)
Uncertainty and Rate Increase Stifle Bond Market
Short-term interest rates rose a modest half-percent over the past six months,
creating a fairly benign investing environment for bonds. The U.S. economy
during the period was characterized by varied but strong economic growth, low
interest rates and low unemployment. In fact, unemployment dropped from 5.3% to
4.8% over the six months, hitting the lowest level in 23 years. Inflation
remained minimal, even in the face of increasing economic strength. Many
observers of the economy were confounded, since fast-paced growth traditionally
has sparked a rise in inflation.
Against this backdrop, the Federal Reserve (the Fed) took preemptive action in
response to reports suggesting the economy could be growing too quickly. The
Fed raised short-term rates one-quarter of a percentage point (0.25%) on March
25. Typical of the way markets have behaved over the past year or so, the rate
hike didn't have a significant or lasting effect. Investors, acting in advance
of the Fed's much-discussed move, had steadily driven down bond prices (sending
yields higher) from mid-February through March. Bond prices then resumed their
ascent in April. Interestingly, the stock market also seemed to shrug off the
rate hike after a short sell-off in late March and early April, and the Dow
Jones Industrial Average of 30 large stocks resumed its record-setting upward
surge.
Even after quickly digesting the rate hike, the bond market remained off
balance for the rest of the period. Varying interpretations of later economic
reports and speculation about further Fed increases again put a damper on bond
prices. At the same time, however, concerns about
5
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Pioneer Short-Term Income Trust
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PORTFOLIO MANAGEMENT DISCUSSION 5/31/97 (continued)
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Europe's progress toward monetary union and a strong U.S. dollar fueled demand
for U.S. securities, particularly Treasury and agency issues. In all, we ended
the period much the way it had begun - with a mixed bag of fact and opinion.
Emphasis on High Quality, Tightly Managed Maturity
For Pioneer Short-Term Income Trust, our focus is on high-quality securities,
strategic allocation and a solid income stream. Portfolio holdings continued to
generate a good amount of income, and shareowners received steady or slightly
higher income dividends each month. At the close of the period, the Fund's
Class A Shares produced a 30-day SEC yield of 5.73%.
On May 31, 97.3% of the portfolio's holdings were rated A or above. The Fund's
assets are allocated among three primary sectors: U.S. government and agency
securities, collateralized mortgage obligations (CMOs) and corporate
securities. We did some minor redistributing among these sectors due to market
conditions, winding up with slightly larger positions in Treasury issues and
CMOs. We bought U.S. government agency securities, as their yields were
comparable to those offered by corporate issues. We didn't actively add to
CMOs.
In the corporate sector, we reduced holdings in asset-backed securities. Even
though issuers in the portfolio had not experienced any difficulties with
credit card delinquencies, we wouldn't be surprised to see other companies run
into troubles, which could affect prices across this sector. We prefer to
invest in higher-quality issues, but will look at good opportunities in
lower-quality bonds if companies show strength. One position we added over the
period is BBB-rated Spieker Properties. This California real estate investment
trust (REIT) is operating in a strong market and has shown a healthy income
stream, bolstering our confidence and the likelihood that its credit rating
will be upgraded eventually.
The Fund holds only securities with remaining maturities of five years or less.
The portfolio's average maturity cannot exceed three years, which can help
limit volatility. At the end of November 1996, the Fund's effective duration
and average maturity were 1.62 years and 1.76 years, respectively. (Effective
maturity takes into account the time left until a bond matures or can be called
on demand by the issuer, whichever is sooner. Duration reflects both the
effective maturity and the effects of expected
6
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Pioneer Short-Term Income Trust
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income. Duration is a good indicator of risk, with a portfolio likely to change
in value by one percentage point for every percentage point change in interest
rates, up or down.)
We adjusted the portfolio's maturity profile as interest rates rose and fell,
shortening and lengthening in small increments when we saw opportunity. By the
end of May, effective duration and average maturity were at 1.70 years and 1.92
years, reflecting our moderately increased optimism for the current bond
market. Even so, the Fund remains conservatively positioned.
A Look Ahead
As we close the first half of the Fund's fiscal year, the economy and markets
look to be moving forward with an "all news is good news" attitude. Signs seem
to indicate that inflation will remain contained, with interest rates staying
near their current range. We are watching consumer spending, however. If it
picks up, the Fed may feel pressure to raise rates once again to cool the
economy. We expect to continue making modest moves away from some of the Fund's
most defensive positioning, looking for opportunities to increase duration
where appropriate.
Regardless of the individual changes we may make within the portfolio, we are
committed to quality. We know many of you look to the Fund as an alternative to
the low rates offered by CDs, money market accounts or savings accounts. Even
as we manage the Fund to offer strong current income and solid total returns,
you should remember that the Fund's share price and income will move up and
down with market conditions. That said, we believe the Fund's focus on
high-quality, shorter-term securities makes it an attractive alternative to
other short-term vehicles. Thank you for investing in Pioneer Short-Term Income
Trust.
Respectfully,
/s/ Richard A. Schlanger
Richard A. Schlanger,
Portfolio Manager
7
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Pioneer Short-Term Income Trust
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SCHEDULE OF INVESTMENTS 5/31/97
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
INVESTMENT IN SECURITIES - 99.3%
Corporate Bonds - 10.1%
Asset-Backed - 3.3%
$ 183,333 AAA/Aaa Chase Manhattan Credit Card Master
Trust, Series 1992-1A, 7.4%, 2000 $ 183,665
875,000 AAA/Aaa Premier Auto Trust, Series 1995-2A6,
7.2%, 1999 888,694
500,000 AAA/Aaa Sears Credit Account Master Trust, Series
1994-1A, 7.0%, 2004 507,145
-----------
$1,579,504
-----------
Financial - 5.2%
500,000 AA-/Aa3 Associates Corp. N.A., 8.125%, 1998 $ 507,000
500,000 A-/A2 First Interstate Bancorp, 8.15%, 2002 506,390
500,000 A+/A1 Ford Motor Credit Co., 6.85%, 2000 501,420
500,000 BBB/Baa2 Spieker Properties L.P., 6.8%, 2001 493,630
500,000 A/A3 Transamerica Financial, 6.75%, 2000 499,805
-----------
$2,508,245
-----------
Industrial - 1.6%
780,000 BBB+/Baa1 Comdisco Inc., 6.5%, 2000 $ 774,540
-----------
Total Corporate Bonds
(Cost $4,843,472) $4,862,289
-----------
U.S. Government Obligations - 7.5%
500,000 U.S. Treasury Notes, 7.25%, 1998 $ 504,845
500,000 U.S. Treasury Notes, 7.125%, 1999 509,155
2,500,000 U.S. Treasury Notes, 7.75%, 1999 2,582,250
-----------
Total U.S. Government Obligations
(Cost $3,699,454) $3,596,250
-----------
U.S. Government Agency
Obligations - 81.7%
500,000 Aid-Israel, 7.75%, 1999 $ 513,450
500,000 Federal Home Loan Bank, 7.55%, 1997 504,890
500,000 Federal Home Loan Bank, 8.125%, 2000 503,070
500,000 Federal Home Loan Bank, 6.3%, 2001 491,835
350,000 Federal Home Loan Bank, 6.32%, 2001 345,163
500,000 Federal Home Loan Bank, 6.36%, 2001 493,960
1,000,000 Federal Home Loan Bank, 7.125%, 2002 1,000,720
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
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Pioneer Short-Term Income Trust
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 600,000 Federal Home Loan Mortgage Corp.,
6.29%, 2000 $ 593,334
500,000 Federal Home Loan Mortgage Corp.,
7.28%, 2000 504,595
200,000 Federal Home Loan Mortgage Corp.,
7.38%, 2000 201,852
300,000 Federal Home Loan Mortgage Corp.,
7.51%, 2000 303,024
500,000 Federal Home Loan Mortgage Corp.,
7.645%, 2000 505,855
500,000 Federal Home Loan Mortgage Corp.,
6.87%, 2001 500,715
500,000 Federal Home Loan Mortgage Corp.,
6.92%, 2001 500,555
300,000 Federal Home Loan Mortgage Corp.,
7.055%, 2001 300,174
350,000 Federal Home Loan Mortgage Corp.,
7.5%, 2001 350,381
500,000 Federal Home Loan Mortgage Corp.,
7.08%, 2002 500,405
500,000 Federal Home Loan Mortgage Corp.,
Global Notes, 6.93%, 2000 500,465
97,888 Federal Home Loan Mortgage Corp.,
REMIC Series 1319E, 7.0%, 2004 98,070
1,000,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1243H, 7.5%, 2004 1,011,180
37,731 Federal Home Loan Mortgage Corp.,
REMIC Series 1164F, 7.0%, 2005 37,750
4,098 Federal Home Loan Mortgage Corp.,
REMIC Series 1027H, 9.0%, 2005 4,098
190,552 Federal Home Loan Mortgage Corp.,
REMIC Series 1238G, 7.25%, 2006 191,882
492,946 Federal Home Loan Mortgage Corp.,
REMIC Series 1132I, 8.0%, 2006 503,722
1,000,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1145G, 8.0%, 2006 1,019,380
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
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Pioneer Short-Term Income Trust
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SCHEDULE OF INVESTMENTS 5/31/97 (continued)
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 114,252 Federal Home Loan Mortgage Corp.,
REMIC Series 1457E, 7.0%, 2007 $ 114,245
390,252 Federal Home Loan Mortgage Corp.,
REMIC Series 1564J, 6.5%, 2008 382,806
931,993 Federal Home Loan Mortgage Corp.,
REMIC Series 1262F, 7.5%, 2015 939,142
286,169 Federal Home Loan Mortgage Corp.,
REMIC Series 1311F, 7.5%, 2018 287,926
500,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1281F, 8.0%, 2018 511,075
428,047 Federal Home Loan Mortgage Corp.,
REMIC Series 1358F, 6.75%, 2019 429,207
140,014 Federal Home Loan Mortgage Corp.,
REMIC Series 1264F, 7.75%, 2019 140,970
413,656 Federal Home Loan Mortgage Corp.,
REMIC Series 186D, 8.0%, 2019 415,488
15,103 Federal Home Loan Mortgage Corp.,
REMIC Series 1143H, 8.0%, 2019 15,105
500,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1142H, 7.95%, 2020 508,830
672,831 Federal Home Loan Mortgage Corp.,
REMIC Series 112H, 8.8%, 2020 689,235
497,045 Federal Home Loan Mortgage Corp.,
REMIC Series 189C, 8.0%, 2021 506,921
233,928 Federal Home Loan Mortgage Corp.,
REMIC Series 1158D, 8.5%, 2021 236,705
439,733 Federal Home Loan Mortgage Corp.,
REMIC Series 1590K, 6.5%, 2023 435,415
235,000 Federal National Mortgage Association,
7.85%, 1998 240,398
500,000 Federal National Mortgage Association,
6.45%, 2001 495,010
1,000,000 Federal National Mortgage Association,
Global Notes, 6.85%, 2000 1,000,620
500,000 Federal National Mortgage Association,
Medium Term Note, 7.26%, 1999 502,095
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
Pioneer Short-Term Income Trust
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 500,000 Federal National Mortgage Association,
Medium Term Note, 6.64%, 2000 $ 499,295
500,000 Federal National Mortgage Association,
Medium Term Note, 6.81%, 2000 501,025
1,050,000 Federal National Mortgage Association,
Medium Term Note, 7.11%, 2000 1,057,350
585,000 Federal National Mortgage Association,
Medium Term Note, 7.26%, 2000 589,774
1,000,000 Federal National Mortgage Association,
Medium Term Note, 7.3%, 2000 1,008,550
600,000 Federal National Mortgage Association,
Medium Term Note, 6.4%, 2001 590,466
500,000 Federal National Mortgage Association,
Medium Term Note, 6.61%, 2001 495,340
500,000 Federal National Mortgage Association,
Medium Term Note, 6.63%, 2001 497,360
500,000 Federal National Mortgage Association,
Medium Term Note, 6.93%, 2001 499,665
1,250,000 Federal National Mortgage Association,
Medium Term Note, 7.0%, 2001 1,253,137
500,000 Federal National Mortgage Association,
Medium Term Note, 7.0%, 2001 500,635
500,000 Federal National Mortgage Association,
Medium Term Note, 7.0%, 2001 501,150
285,000 Federal National Mortgage Association,
Medium Term Note, 7.04%, 2001 285,516
1,000,000 Federal National Mortgage Association,
Medium Term Note, 7.17%, 2001 1,005,160
450,000 Federal National Mortgage Association,
Medium Term Note, 6.78%, 2002 447,480
500,000 Federal National Mortgage Association,
Medium Term Note, 7.15%, 2002 502,385
382,283 Federal National Mortgage Association,
REMIC Series 1991-175E, 7.0%, 1998 383,988
256,405 Federal National Mortgage Association,
REMIC Series 1993-26PL, 7.0%, 1998 257,025
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
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Pioneer Short-Term Income Trust
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SCHEDULE OF INVESTMENTS 5/31/97 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 446,968 Federal National Mortgage Association,
REMIC Series 1992-97DB, 8.0%, 1999 $ 453,342
500,000 Federal National Mortgage Association,
REMIC Series 1992-40G, 7.0%, 2002 501,575
464,405 Federal National Mortgage Association,
REMIC Series 1992-145J, 7.15%, 2003 464,828
500,000 Federal National Mortgage Association,
REMIC Series 1992-110G, 7.0%, 2005 501,555
300,000 Federal National Mortgage Association,
REMIC Series 1991-119M, 8.5%, 2008 310,965
500,000 Federal National Mortgage Association,
REMIC Series 1992-84G, 7.5%, 2014 504,075
190,355 Federal National Mortgage Association,
REMIC Series 1992-132PE, 7.25%, 2015 190,504
23,922 Federal National Mortgage Association,
REMIC Series 1992-131E, 7.0%, 2017 23,869
602,032 Federal National Mortgage Association,
REMIC Series 1988-26C, 7.5%, 2018 609,269
106,630 Federal National Mortgage Association,
REMIC Series 1992-43B, 7.5%, 2018 106,759
238,242 Federal National Mortgage Association,
REMIC Series 1990-8E, 8.5%, 2018 241,468
500,000 Federal National Mortgage Association,
REMIC Series 1993-23PJ, 6.7%, 2019 497,795
1,000,000 Federal National Mortgage Association,
REMIC Series 1992-131G, 7.25%, 2019 1,004,650
149,813 Federal National Mortgage Association,
REMIC Series 1990-48G, 7.95%, 2019 150,863
500,000 Federal National Mortgage Association,
REMIC Series 1991-169PJ, 7.0%, 2020 498,900
226,856 Federal National Mortgage Association,
REMIC Series 1991-74J, 7.95%, 2020 227,396
289,402 Federal National Mortgage Association,
REMIC Series 1991-103HB, 8.75%, 2020 293,049
84,153 Federal National Mortgage Association,
REMIC Series 1992-77G, 8.0%, 2021 85,227
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
Pioneer Short-Term Income Trust
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<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 156,261 Federal National Mortgage Association,
REMIC Series 1992-64M, 7.0%, 2022 $ 155,830
500,000 Federal Farm Credit Bank, Medium Term
Note, 7.79%, 1997 505,800
500,000 Federal Farm Credit Bank, Medium Term
Note, 6.62%, 2001 495,020
250,000 Federal Farm Credit Bank, Medium Term
Note, 7.3%, 2001 251,940
1,000,000 Tennessee Valley Authority, 8.375%, 1999 1,043,790
------------
Total U.S. Government Agency Obligations
(Cost $39,540,983) $39,325,488
------------
TOTAL INVESTMENT IN SECURITIES
(Cost $48,083,909) $47,784,027
------------
TEMPORARY CASH INVESTMENT - 0.7%
Commercial Paper - 0.7%
359,000 Household Finance Corp., 5.53%,
6/02/97 $ 359,000
------------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $359,000) $ 359,000
------------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $48,442,909) (a) (b) $48,143,027
------------
</TABLE>
(a) At May 31, 1997, the net unrealized gain on investments
based on cost for federal income tax purposes of
$48,442,909 was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 129,216
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value
(429,098)
---------
Net unrealized loss $(299,882)
=========
(b) At November 30, 1996, the Fund had a net capital loss
carryforward of $3,046,729 which will expire between
2000 and 2004 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended May 31, 1997 were as follows:
Purchases Sales
----------- ------------
Long-term U.S. Government $4,750,288 $12,176,258
Other Long-term Securities 998,661 2,378,438
The accompanying notes are an integral part of these financial statements.
13
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Pioneer Short-Term Income Trust
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BALANCE SHEET 5/31/97
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<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investment in securities, at value (including temporary cash investment
of $359,000) (cost $48,442,909) $ 48,143,027
Cash 799
Receivables -
Fund shares sold 82,042
Interest 654,078
Due from Pioneering Management Corporation 5,112
Other 453
-------------
Total assets $ 48,885,511
-------------
LIABILITIES:
Payables -
Investment securities purchased $ 235,556
Fund shares repurchased 150,822
Dividends 56,818
Due to affiliates 28,463
Accrued expenses 24,596
-------------
Total liabilities $ 496,255
-------------
NET ASSETS:
Paid-in capital $ 51,999,975
Accumulated distributions in excess of net investment income (29,162)
Accumulated net realized loss (3,281,675)
Net unrealized loss on investments (299,882)
-------------
Total net assets $ 48,389,256
-------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $43,598,102/11,597,295 shares) $ 3.76
-------------
Class B (based on $4,791,154/1,278,757 shares) $ 3.75
-------------
MAXIMUM OFFERING PRICE:
Class A $ 3.86
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended 5/31/97
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $ 1,898,972
-----------
EXPENSES:
Management fees $135,328
Transfer agent fees
Class A 43,638
Class B 6,300
Distribution fees
Class A 61,520
Class B 24,578
Accounting 48,454
Custodian fees 9,221
Registration fees 12,160
Professional fees 18,762
Printing 3,250
Fees and expenses of nonaffiliated trustees 8,098
Miscellaneous 10,418
---------
Total expenses $ 381,727
Less management fees waived by
Pioneering Management Corporation (123,884)
Less fees paid indirectly (7,266)
-----------
Net expenses $ 250,577
-----------
Net investment income $ 1,648,395
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments $ (225,098)
Change in net unrealized gain on investments (331,509)
-----------
Net loss on investments $ (556,607)
-----------
Net increase in net assets resulting from operations $ 1,091,788
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 5/31/97 and the Year Ended 11/30/96
<TABLE>
<CAPTION>
Six Months Year Ended
FROM OPERATIONS: Ended 5/31/97 11/30/96
<S> <C> <C>
Net investment income $ 1,648,395 $ 3,404,164
Net realized loss on investments (225,098) (248,627)
Change in net unrealized gain on investments (331,509) (351,256)
------------- -------------
Net increase in net assets resulting from operations $ 1,091,788 $ 2,804,281
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.11 and $0.24 per share, respectively) $ (1,491,742) $ (3,222,631)
Class B ($0.08 and $0.21 per share, respectively) (107,174) (197,640)
In excess of net investment income:
Class A ($0.00 and $0.00 per share, respectively) - (25,178)
Class B ($0.02 and $0.01 per share, respectively) (30,026) (23,437)
------------- -------------
Total distributions to shareholders $ (1,628,942) $ (3,468,886)
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 21,740,498 $ 32,092,020
Reinvestment of distributions 1,201,498 2,552,698
Cost of shares repurchased (33,621,008) (31,158,433)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions $ (10,679,012) $ 3,486,285
------------- -------------
Net increase (decrease) in net assets $ (11,216,166) $ 2,821,680
NET ASSETS:
Beginning of year 59,605,422 56,783,742
------------- -------------
End of year (including distributions in excess of net
investment income of $(29,162) and $(48,615),
respectively) $ 48,389,256 $ 59,605,422
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
Shares sold 4,725,305 $ 17,742,935 6,451,953 $ 24,450,587
Reinvestment of distributions 295,212 1,109,720 635,331 2,410,126
Less shares repurchased (7,821,483) (29,409,991) (6,697,289) (25,468,788)
------------ ------------- ------------ --------------
Net increase (decrease) (2,800,966) $ (10,557,336) 389,995 $ 1,391,925
------------ ------------- ------------ --------------
CLASS B
Shares sold 1,066,076 $ 3,997,563 2,013,404 $ 7,641,433
Reinvestment of distributions 24,485 91,778 37,660 142,572
Less shares repurchased (1,123,615) (4,211,017) (1,499,135) (5,689,645)
------------ ------------- ------------ --------------
Net increase (decrease) (33,054) $ (121,676) 551,929 $ 2,094,360
------------ ------------- ------------ --------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 5/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
5/31/97 11/30/96
<S> <C> <C>
CLASS A
Net asset value, beginning of period $ 3.79 $ 3.84
---------- ---------
Increase (decrease) from investment operations:
Net investment income $ 0.11 $ 0.24
Net realized and unrealized gain (loss) on investments (0.03) (0.05)
---------- ---------
Net increase from investment operations $ 0.08 $ 0.19
Distributions to shareholders:
Net investment income (0.11) (0.24)
---------- ---------
Net increase (decrease) in net asset value $ (0.03) $ (0.05)
---------- ---------
Net asset value, end of period $ 3.76 $ 3.79
---------- ---------
Total return* 2.24% 5.20%
Ratio of net expenses to average net assets 0.88%**+ 0.87%+
Ratio of net investment income to average net assets 6.15%**+ 6.25%+
Portfolio turnover rate 22%** 65%
Net assets, end of period (in thousands) $ 43,598 $ 54,637
Ratios assuming no waiver of management fees and assumption
of expenses by PMC and no reduction for fees paid indirectly:
Net expenses 1.34%** 1.33%
Net investment income 5.69%** 5.79%
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 6.18%** 6.27%
<CAPTION>
Year Ended Year Ended Year Ended 8/10/92 to
11/30/95 11/30/94(a) 11/30/93 11/30/92
<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)
--------- ------- ------- --------
Net increase from investment operations $ 0.35 $ 0.01 $ 0.24 $ 0.03
Distributions to shareholders:
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 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 110% 144% 83% 146%**
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 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 expenses 0.85% - - -
Net investment income 6.44% - - -
</TABLE>
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 5/31/97
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months 4/4/94 to
Ended Year Ended Year Ended 11/30/94(a)
5/31/97 11/30/96 11/30/95
CLASS B
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 3.79 $ 3.85 $ 3.75 $ 3.89
---------- --------- --------- ------------
Increase (decrease) from investment operations:
Net investment income $ 0.10 $ 0.21 $ 0.22 $ 0.15
Net realized and unrealized gain (loss) on investments (0.04) (0.05) 0.11 (0.16)
---------- --------- --------- ------------
Net increase (decrease) from investment operations $ 0.06 $ 0.16 $ 0.33 $ (0.01)
Distributions to shareholders:
Net investment income (0.08) (0.21) (0.23) (0.13)
In excess of net investment income (0.02) (0.01) - -
---------- --------- --------- ------------
Net increase (decrease) in net asset value $ (0.04) $ (0.06) $ 0.10 $ (0.14)
---------- --------- --------- ------------
Net asset value, end of period $ 3.75 $ 3.79 $ 3.85 $ 3.75
---------- --------- --------- ------------
Total return* 1.73% 4.37% 8.93% (0.24)%
Ratio of net expenses to average net assets 1.70%**+ 1.69%+ 1.63%+ 1.41%**
Ratio of net investment income to average net assets 5.31%**+ 5.40%+ 5.61%+ 6.05%**
Portfolio turnover rate 22%** 65% 110% 144%
Net assets, end of period (in thousands) $ 4,791 $ 4,969 $ 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 2.17%** 2.15% 2.17% 1.82%**
Net investment income 4.84%** 4.94% 5.08% 5.64%**
Ratios assuming waiver of management fees and assumption
of expenses by PMC and
reduction for fees paid indirectly:
Net expenses 1.69%** 1.67% 1.60% -
Net investment income 5.32%** 5.42% 5.64% -
</TABLE>
(a) The per share data presented above is based upon the average shares
outstanding for the period presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
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 Trust offers two classes of shares - Class A and Class B shares. Shares of
Class A and Class B each 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 independent pricing services that utilize matrix
systems. These matrix systems reflect such factors as security prices,
yields, maturities and ratings and are 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.
Interest income is recorded on the accrual basis. Temporary cash investments
are valued at amortized cost.
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
19
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97 (continued)
- --------------------------------------------------------------------------------
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. 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 $8,932 in
underwriting commissions on the sale of fund shares during the six months
ended May 31, 1997.
D. Class Allocations
Distribution fees are calculated based on the average daily net assets
attributable to Class A and Class B shares of the Trust, respectively.
Shareholders of each class 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.
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.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Trust with respect to each class of shares are
20
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
calculated in the same manner, at the same time, and in the same amount,
except that Class A and Class B shares can bear different transfer agent and
distribution fees.
E. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value of
the underlying securities (collateral), including accrued interest received
from counterparties, is required to be at least equal to or in excess of the
value of the repurchase agreement at the time of purchase. The collateral for
all repurchase agreements is held in safe- keeping in the customer-only
account of the Trust's custodian, or subcustodians. The Trust's investment
adviser, Pioneering Management Corporation (PMC), is responsible for
determining that the value of the collateral remains at least equal to the
repurchase price.
2. Management Agreement
PMC 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.
3. Transfer Agent
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 $5,877 in transfer agent fees payable to PSC at May 31,
1997.
21
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 5/31/97 (continued)
- --------------------------------------------------------------------------------
4. Distribution Plans
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 the Class B 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 $22,586 in
distribution fees payable to PFD at May 31, 1997.
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 redemptions of
certain net asset value purchases of Class A shares 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, 1997, CDSCs in the amount of $40,280
were paid to PFD.
5. Expense Offsets
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, 1997,
the Trust's expenses were reduced by $7,266 under such arrangements.
22
<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, including the schedule of
investments, of Pioneer Short-Term Income Trust as of May 31, 1997, and the
related statement of operations, the statements of changes in net assets, and
the financial highlights for the periods presented. These financial statements
and the 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, 1997 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, 1997, the results of its
operations, the changes in its net assets, and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
July 1, 1997
23
<PAGE>
Pioneer Short-Term Income Trust
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Richard H. Egdahl, M.D. President
Margaret B.W. Graham David D. Tripple, Executive Vice
John W. Kendrick President
Marguerite A. Piret Richard A. Schlanger, Vice President
David D. Tripple William H. Keough, Treasurer
Stephen K. West Joseph P. Barri, Secretary
John Winthrop
Investment Adviser
Pioneering Management Corporation
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
24
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
25
<PAGE>
- --------------------------------------------------------------------------------
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
- --------------------------------------------------------------------------------
Your investment representative can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-800-225-6292.
FactFoneSM
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as
you meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
26
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Exchange Program
A simple way to move money from a money market or bond fund into a stock fund
over a period of time. Just invest a lump sum in a Pioneer money market fund or
bond fund. Then, select the Pioneer equity fund or funds you wish to invest in,
and choose the amounts and dates for Pioneer to sell shares of your money
market or bond fund and use the proceeds to buy shares of the Pioneer equity
fund you have chosen. Over time, your original investment will be shifted to
your Pioneer equity fund.
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month you want. Pioneer will send
the proceeds by check to the address you designate, or electronically to your
bank account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available only for accounts with a value of $10,000 or
more.)
27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This page for your notes.
28
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
Global/International Taxable
Pioneer Emerging Markets Fund Pioneer America Income Trust
Pioneer Europe Fund Pioneer Bond Fund
Pioneer Gold Shares Pioneer Short-Term Income Trust*
Pioneer India Fund
Pioneer International Growth Fund Tax-Exempt
Pioneer World Equity Fund Pioneer Intermediate Tax-Free Fund
Pioneer Tax-Free Income Fund
United States
Pioneer Capital Growth Fund Money Market Fund
Pioneer Growth Shares Pioneer Cash Reserves Fund
Pioneer Micro-Cap Fund*
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Growth and Income Funds
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II
*Offers Class A and B Shares only
29
<PAGE>
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFoneSM for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us at:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
[PIONEER Pioneer Funds Distributor, Inc. 0797-4310
LOGO] 60 State Street (C) Pioneer Funds Distributor, Inc.
Boston, Massachusetts 02109 (Recycled logo) Printed on Recycled Paper
