[Pioneer Logo]
Pioneer
Short-Term Income
Trust
ANNUAL REPORT 11/30/97
<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
Retirement Plans from Pioneer 25
Programs and Services for Pioneer Shareowners 26
The Pioneer Family of Mutual Funds 29
</TABLE>
<PAGE>
Pioneer Short-Term Income Trust
LETTER FROM THE CHAIRMAN 11/30/97
Dear Shareowner,
- --------------------------------------------------------------------------------
I am pleased to introduce this report for Pioneer Short-Term Income Trust,
covering its fiscal year ended November 30, 1997. On behalf of the Fund's
investment team, I thank you for your interest and this opportunity to comment
briefly on today's investing environment.
During the Fund's last fiscal quarter, demand in the U.S. bond market soared as
the world's stock markets demonstrated exceptional volatility. Asian markets
plunged after languishing for several months as they digested currency and
economic changes. Here in the United States, the Dow Jones Industrial Average
took a break from its exhilarating upward climb to experience - in the space of
two days - both its biggest one-day point drop and its biggest one-day point
gain. European markets bounced around, shaken by the drop in Asia and then
heartened by the speedy U.S. rebound. Even Latin American markets were
affected, mostly in a chain reaction from nervous investors.
After consecutive quarters of robust growth in stocks, this fast-paced change
forced a lot of investors to rethink their investment strategy. Many concerned
investors have moved away from stocks and into high-quality, fixed-income
securities - like those held by your Fund - to shelter their portfolio. We have
always believed it is important to allocate your assets across both stock and
bond investments and recent market conditions demonstrate this importance.
I encourage you to read on to learn more about your Fund. Please contact your
investment representative, or us at 1-800-225-6292, if you have questions about
Pioneer Short-Term Income Trust.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
Chairman and President
1
<PAGE>
Pioneer Short-Term Income Trust
PORTFOLIO SUMMARY 11/30/97
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
U.S. Government Agency Obligations 74%
Corporate Bonds 16%
U.S. Government Obligations 9%
Short-Term Cash Equivalents 1%
Portfolio Quality
- --------------------------------------------------------------------------------
(As a percentage of debt holdings)
Treasury/Agency 83%
AAA 5%
AA 2%
A 5%
BBB 5%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of debt holdings)
1. U.S. Treasury Notes, 7.75%, 1999 6.71%
2. Federal National Mortgage Association, Medium Term Note, 7.11%, 2000 2.28
3. Tennessee Valley Authority, 8.375%, 1999 2.25
4. Federal National Mortgage Association, Medium Term Note, 7.17%, 2001 2.18
5. Federal National Mortgage Association, Medium Term Note, 7.3%, 2000 2.17
6. Federal National Mortgage Association, Medium Term Note, 7.0%, 2001 2.17
7. Federal Home Loan Mortgage Corp., Global Notes, 6.85%, 2000 2.17
8. Federal Home Loan Mortgage Corp., REMIC Series 1243H, 7.5%, 2004 2.16
9. Federal Home Loan Mortgage Corp., REMIC Series 1145G, 8.0%, 2006 1.97
10. Premier Auto Trust, Series 1995-2A6, 7.2%, 1999 1.91
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Short-Term Income Trust
PERFORMANCE UPDATE 11/30/97 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 11/30/97 11/30/96
$3.77 $3.79
Income Short-Term Long-Term
Distributions per Share
(11/30/96-11/30/97) Dividends Capital Gains Capital Gains
$0.227 - -
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of November 30, 1997)
Net Asset Public Offering
Period Value Price*
Life-of-Fund 5.21% 4.72%
(8/10/92)
5 Year 5.37 4.85
1 Year 5.64 2.93
* Reflects deduction of the maximum
2.5% sales charge at the beginning
of the period and assumes reinvest-
ment of distributions at net asset
value.
[mountain chart]
Growth of $10,000 [dagger]
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust* Government Bond Index
08/31/92 9,750 10,000
11/30/92 9,809 10,018
05/31/92 10,204 10,372
11/30/93 10,424 10,623
05/31/94 10,466 10,586
11/30/94 10,457 10,697
05/31/95 11,122 11,375
11/30/95 11,466 11,810
05/31/96 11,606 11,975
11/30/96 12,062 12,494
05/30/97 12,332 12,766
11/30/97 12,743 13,235
+ 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
<PAGE>
Pioneer Short-Term Income Trust
PERFORMANCE UPDATE 11/30/97 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 11/30/97 11/30/96
$3.76 $3.79
Income Short-Term Long-Term
Distributions per Share
(11/30/96-11/30/97) Dividends Capital Gains Capital Gains
$0.199 - -
</TABLE>
Investment Returns
- --------------------------------------------------------------------------------
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.
[boxed text]
Average Annual Total Returns
(As of November 30, 1997)
If If
Period Held Redeemed*
Life-of-Fund 4.78% 4.78%
(4/4/94)
1 Year 4.60 2.60
* Reflects deduction of the maximum
2.5% sales charge at the beginning
of the period and assumes reinvest-
ment of distributions at net asset
value.
[mountain chart]
Growth of $10,000[dagger]
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust* Government Bond Index
04/30/94 10,000 10,000
05/31/94 9,987 10,014
11/30/94 9,961 10,119
05/31/95 10,539 10,761
11/30/95 10,850 11,172
05/31/96 10,910 11,328
11/30/96 11,325 11,819
05/31/97 11,521 12,077
11/30/97 11,845 12,520
+ 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
<PAGE>
Pioneer Short-Term Income Trust
PORTFOLIO MANAGEMENT DISCUSSION 11/30/97
Dear Shareowner,
- --------------------------------------------------------------------------------
It is with pleasure that I introduce this annual report for Pioneer Short-Term
Income Trust, covering the 12 months ended November 30, 1997. Fixed-income
investments fared well for the year, enjoying declining interest rates in the
past six months after facing rising interest rates during the first half of the
fiscal year.
As a whole, short-term income funds performed well. According to Lipper
Analytical Services, an independent firm that reports mutual fund performance,
the 100 short-term income funds it tracked generated an average total return of
5.51% for the year ended November 30, 1997. For the same time period, your Fund
finished slightly ahead of the pack, posting a healthy 5.64% total return for
Class A Shares and 4.60% total return for Class B Shares. (Returns are for the
one-year period and are based on share price at net asset value with all
dividends reinvested.)
Despite mixed conditions in the fixed-income market, the Fund met its objective
of providing high current income and a relatively stable share price. Class A
Shares of the Fund paid a total of $0.227 per share in monthly dividends and
had an attractive 30-day S.E.C. yield of 5.11% on November 30.
Fed Raises Rates, Bonds Bounce Back
Early in the year, it was evident the U.S. economy was growing at an
unsustainable rate. Unemployment had dropped to a 24-year low of 4.8%. With
fewer people available, companies are forced to attract workers with wage
increases. The result is higher costs for companies, which are passed on to the
consumer as higher prices for goods and services - starting the cycle of
inflation. After observing months of low unemployment, along with increased
factory output and strengthening consumer confidence, the Federal Reserve moved
to slow growth and stem inflation. The Fed raised short-term interest rates by
0.25 percentage points on March 25, boosting the Federal funds rate to 5.50%.
The hike, an effort to slow lending by increasing the rate banks charge one
another for overnight loans, was much expected and bond prices fell both before
and after the move.
5
<PAGE>
Pioneer Short-Term Income Trust
PORTFOLIO MANAGEMENT DISCUSSION 11/30/97 (continued)
Toward the second half of the fiscal year, all but the shortest interest rates
declined as bond prices rose; Treasury bills suffered as foreign banks sold
them to support faltering currencies. Overall, however, bond investors reacted
favorably to the slower pace of economic growth that settled in, and the threat
of further Fed action passed. Indeed, the Fed's move in March was the only
change to rates it initiated in 1997.
Unprecedented volatility in the world's stock markets during the fourth quarter
also added to bonds' appeal. The Dow Jones Industrial Average of 30 "blue chip"
stocks plunged 554 points on October 27, its largest one-day point loss, when
Asian markets began to unwind, sparking sharp and sudden sell-offs in stocks
across the globe.
There is no doubt that the recent collapse of currencies and stocks markets in
places such as South Korea, Indonesia and Malaysia will have an impact on our
economy and monetary policy. So far, trouble overseas has had a positive effect
on U.S. bonds and probably stalled any further Fed action. It also created a
"flight to quality" as investors seek the historic stability that U.S.
government securities offer, a trend we expect to continue.
Portfolio Adjusts to Changing Market
We are pleased with the Fund's performance for the fiscal year. As always, we
maintained a high-quality portfolio of securities with remaining maturities of
five years or less. At fiscal year-end, the largest percentage of the
portfolio, 83%, was invested in securities of the U.S. government and its
agencies, a decrease from 89% at the midpoint of the year. Government
securities offer stability and attractive levels of income, trademarks of your
Fund, without the potential credit risk of non-government securities. We use
these easily traded issues to manage portfolio volatility. By fiscal year-end,
the Fund's duration was 1.42 years, which is on the lower end of the risk
spectrum. (Duration is a measure of price sensitivity to interest rates. The
longer the duration, the greater the change in response to a move in interest
rates.)
6
<PAGE>
Pioneer Short-Term Income Trust
Holding government securities also allows the Fund to easily raise cash for
unique buying opportunities as they arise. We saw several such opportunities in
the corporate sector this year. We always search for companies with improving
business and financial fundamentals that leave them likely to be upgraded in
credit quality. As corporate performance improved over the fiscal year, we
responded by adding companies such as Bank One and Discover Card Master. Both
companies possess domestic business lines, which boosts their balance sheets,
and maintain a stable track record of interest payments - exactly what we look
for in a non-government security. By fiscal year-end, corporate bonds accounted
for 16% of the portfolio and were a strong contribution to Fund performance.
This was the largest increase in allocation over the past year, up from 10% on
May 31 and 11% one year ago.
Looking Ahead
Currently, Fed policy on short-term interest rates is holding steady, as we
expect it will until overseas wrinkles are ironed out. We're seeing heightened
demand for high-quality issues, especially those backed by the U.S. government.
This has pushed up prices and sent interest rates falling. As we move into
1998, investors may decide to reduce their stock exposure by adding bonds. A
fund such as Pioneer Short-Term Income Trust, which invests in high-quality,
relatively short-term securities, offers the potential for greater price
stability than long-term stock and bond funds, and higher-current income
potential than savings accounts. We look forward to managing the Fund in the
coming months, and thank you for investing with Pioneer.
Respectfully,
/s/ Richard A. Schlanger
Richard A. Schlanger,
Portfolio Manager
7
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 11/30/97
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
INVESTMENT IN SECURITIES - 99.5%
Corporate Bonds - 16.7%
Asset-Backed - 4.3%
$ 600,000 AAA/Aaa Carco Auto, Series 1997-1A, 6.689%,
2004 $ 606,888
875,000 AAA/Aaa Premier Auto Trust, Series 1995-2A6,
7.2%, 1999 882,613
500,000 AAA/Aaa Sears Credit Account Master Trust, Series
1994-1A, 7.0%, 2004 508,715
----------
$1,998,216
----------
Financial - 8.5%
500,000 AA-/Aa3 Associates Corp. N.A., 8.125%, 1998 $ 501,415
600,000 A+/A1 Bank One, 7.25%, 2002 621,006
500,000 AAA/Aaa Discover Card Master, 6.792%, 2010 501,406
500,000 A-/A2 First Interstate Bancorp, 8.15%, 2002 503,170
500,000 A+/A1 Ford Motor Credit Co., 6.85%, 2000 507,220
800,000 BBB/Baa2 Spieker Properties L.P., 6.8%, 2001 806,800
500,000 A/A3 Transamerica Financial, 6.75%, 2000 504,910
----------
$3,945,927
----------
Industrial - 3.9%
500,000 BBB-/Baa2 A. H. Belo Corp., 6.875%, 2002 $ 507,125
780,000 BBB+/Baa1 Comdisco Inc., 6.5%, 2000 785,577
500,000 AA/Aa2 McDonalds Corp., 7.375%, 2002 522,895
----------
$1,815,597
----------
Total Corporate Bonds
(Cost $7,688,581) $7,759,740
----------
U.S. Government Obligations - 8.9%
500,000 U.S. Treasury Notes, 7.125%, 1999 $ 511,530
3,000,000 U.S. Treasury Notes, 7.75%, 1999 3,109,980
500,000 U.S. Treasury Notes, 6.25%, 2002 506,900
----------
Total U.S. Government Obligations
(Cost $4,214,531) $4,128,410
----------
U.S. Government Agency Obligations - 73.9%
500,000 Aid-Isreal, 7.75%, 1999 $ 515,950
350,000 Federal Home Loan Bank, 6.32%, 2001 349,853
</TABLE>
8 The accompanying notes are an integral part of these financial statements.
<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 Home Loan Bank, 6.36%, 2001 $ 500,615
800,000 Federal Home Loan Bank, 6.17%, 2002 800,024
600,000 Federal Home Loan Mortgage Corp.,
6.29%, 2000 601,146
500,000 Federal Home Loan Mortgage Corp.,
7.28%, 2000 503,495
200,000 Federal Home Loan Mortgage Corp.,
7.38%, 2000 201,082
300,000 Federal Home Loan Mortgage Corp.,
7.51%, 2000 301,452
500,000 Federal Home Loan Mortgage Corp.,
7.645%, 2000 502,930
500,000 Federal Home Loan Mortgage Corp.,
6.87%, 2001 505,075
500,000 Federal Home Loan Mortgage Corp.,
6.92%, 2001 505,820
500,000 Federal Home Loan Mortgage Corp.,
7.08%, 2002 502,315
1,000,000 Federal Home Loan Mortgage Corp.,
Global Notes, 6.85%, 2000 1,005,250
21,299 Federal Home Loan Mortgage Corp.,
REMIC Series 1319E, 7.0%, 2004 21,274
1,000,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1243H, 7.5%, 2004 1,002,969
145,391 Federal Home Loan Mortgage Corp.,
REMIC Series 1238G, 7.25%, 2006 146,512
422,794 Federal Home Loan Mortgage Corp.,
REMIC Series 1132I, 8.0%, 2006 432,628
888,375 Federal Home Loan Mortgage Corp.,
REMIC Series 1145G, 8.0%, 2006 913,347
321,885 Federal Home Loan Mortgage Corp.,
REMIC Series 1564J, 6.5%, 2008 321,003
556,259 Federal Home Loan Mortgage Corp.,
REMIC Series 1262F, 7.5%, 2015 558,395
231,101 Federal Home Loan Mortgage Corp.,
REMIC Series 153F, 7.75%, 2015 232,201
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 11/30/97 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 157,877 Federal Home Loan Mortgage Corp.,
REMIC Series 1311F, 7.5%, 2018 $ 158,229
500,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1281F, 8.0%, 2018 508,800
282,042 Federal Home Loan Mortgage Corp.,
REMIC Series 1358F, 6.75%, 2019 282,513
76,591 Federal Home Loan Mortgage Corp.,
REMIC Series 1264F, 7.75%, 2019 76,794
200,151 Federal Home Loan Mortgage Corp.,
REMIC Series 186D, 8.0%, 2019 200,215
500,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1142H, 7.95%, 2020 513,320
530,440 Federal Home Loan Mortgage Corp.,
REMIC Series 112H, 8.8%, 2020 542,449
415,643 Federal Home Loan Mortgage Corp.,
REMIC Series 189C, 8.0%, 2021 425,680
369,101 Federal Home Loan Mortgage Corp.,
REMIC Series 1590K, 6.5%, 2023 369,485
235,000 Federal National Mortgage Association,
7.85%, 1998 238,614
500,000 Federal National Mortgage Association,
6.45%, 2001 501,210
635,000 Federal National Mortgage Association,
6.85%, 2002 638,480
500,000 Federal National Mortgage Association,
Medium Term Note, 6.64%, 2000 502,335
1,050,000 Federal National Mortgage Association,
Medium Term Note, 7.11%, 2000 1,056,836
585,000 Federal National Mortgage Association,
Medium Term Note, 7.26%, 2000 588,984
1,000,000 Federal National Mortgage Association,
Medium Term Note, 7.3%, 2000 1,005,990
600,000 Federal National Mortgage Association,
Medium Term Note, 6.4%, 2001 601,086
500,000 Federal National Mortgage Association,
Medium Term Note, 6.61%, 2001 502,805
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<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, 6.63%, 2001 $ 506,115
1,000,000 Federal National Mortgage Association,
Medium Term Note, 7.0%, 2001 1,005,320
285,000 Federal National Mortgage Association,
Medium Term Note, 7.04%, 2001 287,725
1,000,000 Federal National Mortgage Association,
Medium Term Note, 7.17%, 2001 1,008,120
300,000 Federal National Mortgage Association,
Medium Term Note, 6.36%, 2002 302,217
350,000 Federal National Mortgage Association,
Medium Term Note, 6.45%, 2002 353,087
300,000 Federal National Mortgage Association,
Medium Term Note, 6.52%, 2002 303,390
450,000 Federal National Mortgage Association,
Medium Term Note, 6.78%, 2002 453,591
500,000 Federal National Mortgage Association,
Medium Term Note, 6.97%, 2002 505,830
500,000 Federal National Mortgage Association,
Medium Term Note, 7.15%, 2002 507,830
257,074 Federal National Mortgage Association,
REMIC Series 1991-175E, 7.0%, 1998 257,300
143,909 Federal National Mortgage Association,
REMIC Series G93-26PL, 7.0%, 1998 143,983
355,753 Federal National Mortgage Association,
REMIC Series 1992-97DB, 8.0%, 1999 361,129
469,236 Federal National Mortgage Association,
REMIC Series 1992-40G, 7.0%, 2002 469,945
377,401 Federal National Mortgage Association,
REMIC Series 1992-145J, 7.15%, 2003 383,232
500,000 Federal National Mortgage Association,
REMIC Series 1992-110G, 7.0%, 2005 502,585
300,000 Federal National Mortgage Association,
REMIC Series 1991-119M, 8.5%, 2008 308,988
354,545 Federal National Mortgage Association,
REMIC Series 1992-84G, 7.5%, 2014 356,428
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 11/30/97 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 29,056 Federal National Mortgage Association,
REMIC Series 1992-132PE, 7.25%, 2015 $28,937
240,327 Federal National Mortgage Association,
REMIC Series 1992-171PB, 6.5%, 2017 240,147
502,213 Federal National Mortgage Association,
REMIC Series 1988-26C, 7.5%, 2018 511,173
27,949 Federal National Mortgage Association,
REMIC Series 1992-43B, 7.5%, 2018 27,894
152,605 Federal National Mortgage Association,
REMIC Series 1990-8E, 8.5%, 2018 153,681
500,000 Federal National Mortgage Association,
REMIC Series 1993-23PJ, 6.7%, 2019 503,015
550,000 Federal National Mortgage Association,
REMIC Series 1993-17PE, 6.75%, 2019 550,006
776,843 Federal National Mortgage Association,
REMIC Series 1992-131G, 7.25%, 2019 779,858
80,603 Federal National Mortgage Association,
REMIC Series 1990-48G, 7.95%, 2019 80,651
500,000 Federal National Mortgage Association,
REMIC Series 1991-169PJ, 7.0%, 2020 503,265
189,819 Federal National Mortgage Association,
REMIC Series G92-35C, 7.5%, 2020 191,983
44,092 Federal National Mortgage Association,
REMIC Series 1991-74J, 7.95%, 2020 44,006
175,800 Federal National Mortgage Association,
REMIC Series 1991-103HB, 8.75%, 2020 177,060
68,466 Federal National Mortgage Association,
REMIC Series 1992-77G, 8.0%, 2021 69,182
124,586 Federal National Mortgage Association,
REMIC Series 1992-64M, 7.0%, 2022 125,129
500,000 Federal Farm Credit Bank, Medium Term
Note, 7.79%, 1997 500,210
500,000 Federal Farm Credit Bank, Medium Term
Note, 6.62%, 2001 502,500
250,000 Federal Farm Credit Bank, Medium Term
Note, 7.3%, 2001 252,943
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<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 Farm Credit Bank, Medium Term
Note, 6.42%, 2002 $ 500,625
500,000 Federal Farm Credit Bank, Medium Term
Note, 6.59%, 2002 502,054
1,000,000 Tennessee Valley Authority, 8.375%, 1999 1,042,400
-----------
Total U.S. Government Agency Obligations
(Cost $34,482,270) $34,440,695
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $46,385,382) $46,328,845
-----------
TEMPORARY CASH INVESTMENT - 0.5%
Commercial Paper - 0.5%
247,000 Household Finance Corp., 5.70%,
12/01/97 $ 247,000
-----------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $247,000) $ 247,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $46,632,382) (a) (b) $46,575,845
-----------
(a) At November 30, 1997, the net unrealized loss on investments based on cost
for federal income tax purposes of $46,632,382 was as follows:
Aggregate gross unrealized gain for all investments in which there is an
excess of value over tax cost $ 209,845
Aggregate gross unrealized loss for all investments in which there is an
excess of tax cost over value (266,382)
----------
Net unrealized loss $(56,537)
----------
(b) At November 30, 1997, the Fund had a net capital loss carryforward of
$3,365,002 which will expire between 2000 and 2005 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended November 30, 1997 were as follows:
<S> <C> <C>
Purchases Sales
--------- -------
Long-term U.S. Government $10,905,979 $22,784,828
Other Long-term Securities 4,033,687 2,561,771
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Short-Term Income Trust
BALANCE SHEET 11/30/97
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash investment
of $247,000) (cost $46,632,382) $46,575,845
Cash 764
Receivables -
Fund shares sold 106,301
Interest 664,749
Due from Pioneering Management Corporation 52,067
Other 4,406
-----------
Total assets $47,404,132
-----------
LIABILITIES:
Payables -
Fund shares repurchased $ 27,074
Dividends 51,368
Due to affiliates 39,964
Accrued expenses 40,100
-----------
Total liabilities $ 158,506
-----------
NET ASSETS:
Paid-in capital $50,669,174
Accumulated distributions in excess of net investment income (10,351)
Accumulated net realized loss on investments (3,356,660)
Net unrealized loss on investments (56,537)
-----------
Total net assets $47,245,626
-----------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $42,058,284/11,150,229 shares) $ 3.77
-----------
Class B (based on $5,187,342/1,377,961 shares) $ 3.76
-----------
MAXIMUM OFFERING PRICE:
Class A $ 3.87
-----------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
STATEMENT OF OPERATIONS
For the Year Ended 11/30/97
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $3,538,771
----------
EXPENSES:
Management fees $253,266
Transfer agent fees
Class A 91,314
Class B 12,426
Distribution fees
Class A 114,554
Class B 48,316
Accounting 83,088
Custodian fees 18,666
Registration fees 36,740
Professional fees 41,900
Printing 18,300
Fees and expenses of nonaffiliated trustees 15,808
Miscellaneous 36,127
--------
Total expenses $ 770,505
Less management fees waived and expenses
reimbursed by Pioneering Management
Corporation (289,028)
Less fees paid indirectly (11,675)
----------
Net expenses $ 469,802
----------
Net investment income $3,068,969
----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments $ (315,856)
Change in net unrealized gain on investments (88,164)
----------
Net loss on investments $ (404,020)
----------
Net increase in net assets resulting from operations $2,664,949
----------
</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 Years Ended 11/30/97 and 11/30/96
<TABLE>
<CAPTION>
Year Ended Year Ended
FROM OPERATIONS: 11/30/97 11/30/96
<S> <C> <C>
Net investment income $ 3,068,969 $ 3,404,164
Net realized loss on investments (315,856) (248,627)
Change in net unrealized gain on investments (88,164) (351,256)
------------ -----------
Net increase in net assets resulting from operations
$ 2,664,949 $ 2,804,281
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.23 and $0.24 per share, respectively) (2,774,220) (3,222,631)
Class B ($0.20 and $0.21 per share, respectively) (257,396) (197,640)
In excess of net investment income:
Class A ($0.00 and $0.00 per share, respectively) -- (25,178)
Class B ($0.00 and $0.01 per share, respectively) -- (23,437)
------------ -----------
Total distributions to shareholders
$ (3,031,616) $(3,468,886)
------------ -----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 35,938,522 $32,092,020
Reinvestment of distributions 2,292,014 2,552,698
Cost of shares repurchased (50,223,665) (31,158,433)
------------ -----------
Net increase (decrease) in net assets resulting from
fund share transactions $(11,993,129) $ 3,486,285
------------ -----------
Net increase (decrease) in net assets
$(12,359,796) $ 2,821,680
NET ASSETS:
Beginning of year 59,605,422 56,783,742
------------ -----------
End of year (including accumulated distributions in excess
of net investment income of $10,351 and $48,615,
respectively) $ 47,245,626 $59,605,422
------------ -----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A '97 Shares '97 Amount '96 Shares '96 Amount
Shares sold 6,898,656 $ 25,945,608 6,451,953 $24,450,587
Reinvestment of distributions 562,149 2,116,959 635,331 2,410,126
Less shares repurchased (10,708,837) (40,309,982) (6,697,289) (25,468,788)
----------- ------------- ---------- ------------
Net increase (decrease) (3,248,032) $ (12,247,415) 389,995 $ 1,391,925
----------- ------------- ---------- ------------
CLASS B
Shares sold 2,657,915 $ 9,992,914 2,013,404 $ 7,641,433
Reinvestment of distributions 46,605 175,055 37,660 142,572
Less shares repurchased (2,638,370) (9,913,683) (1,499,135) (5,689,645)
----------- ------------- ---------- ------------
Net increase 66,150 $ 254,286 551,929 $ 2,094,360
----------- ------------- ---------- ------------
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
Pioneer Short-Term Income Trust
FINANCIAL HIGHLIGHTS 11/30/97
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A 11/30/97 11/30/96 11/30/95 11/30/94(a) 11/30/93
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 3.79 $ 3.84 $ 3.75 $ 3.95 $ 3.95
------- ------- ------- ------ ------
Increase (decrease) from investment operations:
Net investment income $ 0.21 $ 0.24 $ 0.25 $ 0.22 $ 0.24
Net realized and unrealized gain (loss) on investments -- (0.05) 0.10 (0.21) $ --
------- ------- ------- ------- ------
Net increase from investment operations $ 0.21 $ 0.19 $ 0.35 $ 0.01 $ 0.24
Distributions to shareholders:
Net investment income (0.23) (0.24) (0.26) (0.21) (0.24)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.02) $ (0.05) $ 0.09 $ (0.20) $ --
------- ------- ------- ------- -------
Net asset value, end of year $ 3.77 $ 3.79 $ 3.84 $ 3.75 $ 3.95
------- ------- ------- ------- -------
Total return* 5.64% 5.20% 9.64% 0.32% 6.28%
Ratio of net expenses to average net assets 0.87%+ 0.87%+ 0.86%+ 0.85% 0.66%
Ratio of net investment income to average net assets 6.10%+ 6.25%+ 6.43%+ 5.89% 5.80%
Portfolio turnover rate 31% 65% 110% 144% 83%
Net assets, end of year (in thousands) $42,058 $54,637 $53,860 $59,088 $57,482
Ratios assuming no waiver of management fees and assumption of
expenses by PMC and no reduction for fees paid indirectly:
Net expenses 1.44% 1.33% 1.38% 1.20% 1.33%
Net investment income 5.53% 5.79% 5.92% 5.54% 5.13%
Ratios assuming waiver of management fees and assumption of
expenses by PMC and reduction for fees paid indirectly:
Net expenses 0.85% 0.85% 0.85% -- --
Net investment income 6.12% 6.27% 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.
+ Ratio assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
<TABLE>
<CAPTION>
Pioneer Short-Term Income Trust
FINANCIAL HIGHLIGHTS 11/30/97
Year Ended Year Ended Year Ended 4/4/94 to
CLASS B 11/30/97 11/30/96 11/30/95 11/30/94(a)
<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 $ 0.20 $ 0.21 $ 0.22 $ 0.15
Net realized and unrealized gain (loss) on investments (0.03) (0.05) 0.11 (0.16)
------ ------ ------ -------
Net increase (decrease) from investment operations $ 0.17 $ 0.16 $ 0.33 $ (0.01)
Distributions to shareholders:
Net investment income (0.20) (0.21) (0.23) (0.13)
In excess of net investment income -- (0.01) -- --
------ ------ ------ -------
Net increase (decrease) in net asset value $(0.03) $(0.06) $ 0.10 $ (0.14)
------ ------ ------ -------
Net asset value, end of period $ 3.76 $ 3.79 $ 3.85 $ 3.75
------ ------ ------ -------
Total return* 4.60% 4.37% 8.93% (0.24)%
Ratio of net expenses to average net assets 1.67%+ 1.69%+ 1.63%+ 1.41% **
Ratio of net investment income to average net assets 5.29%+ 5.40%+ 5.61%+ 6.05% **
Portfolio turnover rate 31% 65% 110% 144%
Net assets, end of period (in thousands) $5,187 $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 2.25% 2.15% 2.17% 1.82%**
Net investment income 4.71% 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 1.66% 1.67% 1.60% --
Net investment income 5.30% 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.
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
NOTES TO FINANCIAL STATEMENTS 11/30/97
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 11/30/97 (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.
At November 30, 1997, the Trust reclassified $15,773 and $911 from
accumulated net realized loss on investments and accumulated distributions in
excess of net investment income, respectively, to paid-in capital. The
reclassification has no impact on the net asset value of the Trust and is
designed to present the Trust's capital accounts on a tax basis.
C. Trust 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 $16,197 in
underwriting commissions on the sale of trust shares during the year ended
November 30, 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.
20
<PAGE>
Pioneer Short-Term Income Trust
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 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 Agreement
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 safekeeping 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.
21
<PAGE>
Pioneer Short-Term Income Trust
NOTES TO FINANCIAL STATEMENTS 11/30/97 (continued)
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 $17,784 in transfer agent fees payable to PSC at November
30, 1997.
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 $22,180 in
distribution fees payable to PFD at November 30, 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 year ended November 30, 1997, CDSCs in the amount of $47,504
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 year ended November 30, 1997,
the Trust's expenses were reduced by $11,675 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 November 30, 1997, and
the related statement of operations, statements of changes in net assets and
the 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, 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 November 30, 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
January 5, 1998
23
<PAGE>
Pioneer Short-Term Income Trust
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Richard H. Egdahl, M.D. David D. Tripple, Executive Vice President
Margaret B.W. Graham Richard A. Schlanger, Vice President
John W. Kendrick William H. Keough, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
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>
RETIREMENT PLANS FROM PIONEER
Pioneer offers retirement plans suited to the individual investor and
businesses of all sizes. For information, contact your investment professional,
or call Pioneer at 1-800-622-0176.
Individual Plans
Individual Retirement Account (IRA) The $2,000 maximum annual contribution may
be tax-deductible; earnings are tax-deferred.
Roth IRA New in 1998, $2,000 maximum annual contributions are not tax-
deductible. Earnings are tax-free for qualified withdrawals.
Plans for Small Businesses or the Self-Employed
SIMPLE (Savings Incentive Match PLan for Employees)
IRA or 401(k) Plan For firms with 100 or fewer employees. Employees can make
pre-tax contributions of up to $6,000 annually, and an employer contribution is
required.
Simplified Employee Pension Plan (SEP) Self-employed people and small- business
owners can make tax-deductible contributions of up to 15% of their income.
Employer-Sponsored Plans
401(k) Plan Allows employees to make pre-tax contributions. Also allows for
employer contributions.
403(b) Plan Lets employees of tax-exempt organizations set aside part of their
salary, before taxes, through payroll deduction.
Profit Sharing Plan Employers contribute on a discretionary basis, usually
based on profits.
Age-Weighted Profit Sharing Plan Employer makes discretionary contributions
based on employees' age and salary.
Money Purchase Pension Plan (MPP) Employers contribute based on a fixed
formula.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
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 logo]
Pioneer Funds Distributor, Inc.
60 State Street 0198-4681
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com [recycle logo] Printed on Recycled Paper
