<PAGE>
[PIONEER LOGO]
Pioneer
Short-Term Income
Trust
SEMIANNUAL REPORT 5/31/99
<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 6
Schedule of Investments 9
Financial Statements 16
Notes to Financial Statements 23
Report of Independent Public Accountants 27
Trustees, Officers and Service Providers 28
The Pioneer Family of Mutual Funds 29
</TABLE>
<PAGE>
Pioneer Short-Term Income Trust
LETTER FROM THE CHAIRMAN 5/31/99
Dear Shareowner,
- --------------------------------------------------------------------------------
I am pleased to introduce this semiannual report for Pioneer Short-Term Income
Trust, covering the six months ended May 31, 1999. On behalf of your investment
team, I appreciate your confidence in the Fund and Pioneer.
For much of the 1990s, the economic environment in the United States has
remained strong, with no significant inflationary pressures surfacing. Daily
speculation by the media and financial analysts on how long this environment
will continue makes it easy for investors to forget that these conditions will
not always be the norm. Including relatively conservative investments, like the
investment-grade bonds that comprise a majority of Pioneer Short-Term Income
Trust's portfolio, can diversify your portfolio and help smooth out inevitable
market volatility. (Ratings apply to the creditworthiness of the issuer of
securities, not the Fund.) Investing in a mix of stocks and bonds is the
backbone of a healthy financial plan and an excellent way to achieve balance.
It is wise to meet with your investment professional periodically to discuss
the state of your portfolio and ensure it continues to suit your needs and
goals.
I encourage you to read the pages that follow. The Portfolio Management
Discussion reviews the factors that affected Fund performance and also
discusses recent modifications to the portfolio. In light of these changes, I'd
like to announce that the Fund's name will be changing to Pioneer Limited
Maturity Bond Fund this autumn. If you have questions, please contact your
investment professional, or Pioneer at 1-800-225-6292. You can also visit our
website at www.pioneerfunds.com
Respectfully,
/s/ John F. Cogan, Jr.
- ----------------------
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Short-Term Income Trust
PORTFOLIO SUMMARY 5/31/99
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[PIE CHART]
Short-Term Cash Equivalents 4%
U.S. Government Obligations 10%
U.S. Government Agency Obligations 38%
Corporate Bonds 48%
Portfolio Quality
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
[PIE CHART]
B 3%
BB 5%
BBB 16%
A 14%
AA 3%
AAA 9%
Treasury/Agency 50%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of long-term holdings)
<TABLE>
<S> <C>
1. U.S. Treasury Notes, 6.25%, 2/15/07 4.74%
2. U.S. Treasury Notes, 6.25%, 1/31/02 4.22
3. Government National Mortgage Association II, 7.5%, 8/20/27 2.77
4. Government National Mortgage Association II, 6.5%, 2/20/29 2.25
5. Federal National Mortgage Association, REMIC Series G94-1, 7.0%, 11/25/04 1.70
6. Sony Corp., 6.125%, 3/4/03 1.59
7. Riggs National Corp., 8.5%, 2/1/06 1.58
8. U.S. Treasury Notes, 6.5%, 8/31/01 1.57
9. Aid-Israel, 6.375%, 8/15/01 1.56
10. NationsBank Corp., 6.5%, 8/15/03 1.54
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Short-Term Income Trust
PERFORMANCE UPDATE 5/31/99 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 5/31/99 11/30/98
$3.70 $3.78
Distributions per Share Income Short-Term Long-Term
(11/30/98-5/31/99) Dividends Capital Gains Capital Gains
$0.105 - -
</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 Treasury Index.
Average Annual Total Returns
(As of May 31, 1999)
<TABLE>
<CAPTION>
Net Asset Public Offering
Period Value Price*
<S> <C> <C>
Life-of-Fund
(8/10/92) 5.07% 4.69%
5 Years 5.43 4.89
1 Year 4.12 1.42
</TABLE>
* 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]
<TABLE>
<CAPTION>
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust* Treasury Index
<S> <C>
9750 10000
9809 10018
10204 10372
10425 10623
10466 10586
10457 10697
11122 11375
11466 11810
11606 11975
12062 12494
12332 12766
12743 13235
13094 13657
13543 14207
13633 14380
</TABLE>
+ Index comparison begins 8/31/92. The Merrill Lynch 1-3 Year Treasury 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 5/31/99 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 5/31/99 11/30/98
$3.70 $3.78
Distributions per Share Income Short-Term Long-Term
(11/30/98-5/31/99) Dividends Capital Gains Capital Gains
$0.088 - -
</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 Treasury Index.
Average Annual Total Returns
(As of May 31, 1999)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund
(4/4/94) 4.48% 4.48%
5 Years 4.63 4.63
1 Year 3.42 1.45
</TABLE>
* 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.
[MOUNTAIN CHART]
<TABLE>
<CAPTION>
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust* Treasury Index
<S> <C>
10000 10000
9987 10014
9961 10119
10539 10761
10850 11172
10910 11328
11325 11819
11521 12077
11845 12520
12107 12919
12396 13440
12521 13603
</TABLE>
+ Index comparison begins 4/30/94. The Merrill Lynch 1-3 Year Treasury 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
PERFORMANCE UPDATE 5/31/99 CLASS Y SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 5/31/99 11/30/98
$3.71 $3.79
Distributions per Share Income Short-Term Long-Term
(11/30/98-5/31/99) Dividends Capital Gains Capital Gains
$0.111 - -
</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 Treasury Index.
Average Annual Total Returns
(As of May 31, 1999)
<TABLE>
<CAPTION>
If If
Period Held Redeemed*
<S> <C> <C>
Life-of-Fund
(4/9/98) 4.56% 4.56%
1 Year 4.66 4.66
</TABLE>
* Assumes reinvestment of distributions.
[MOUNTAIN CHART]
<TABLE>
<CAPTION>
Pioneer Short-Term Merrill Lynch 1-3 Year
Income Trust* Treasury Index
<S> <C>
10000 10000
10050 10053
10100 10105
10151 10153
10255 10281
10414 10416
10437 10467
10432 10458
10454 10495
10505 10537
10444 10485
10527 10557
10550 10591
10518 10585
</TABLE>
+ Index comparison begins 4/30/98. The Merrill Lynch 1-3 Year Treasury 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.
5
<PAGE>
Pioneer Short-Term Income Trust
PORTFOLIO MANAGEMENT DISCUSSION 5/31/99
In the following discussion, Richard Schlanger details the investment
environment and the strategies that affected your Fund's performance over the
past six months. Rich has been a key member of Pioneer Short-Term Income
Trust's team since the Fund was introduced in 1992. All of Pioneer's bond funds
are managed by our fixed-income team, led by Sherman Russ and Ken Taubes.
Q: What were economic conditions over the last six months? How did they affect
investors?
A: Compared to six months ago, in many ways it was "deja vu all over again," as
Yogi Berra would say. The United States' economy grew at a strong pace, and
inflation was low. The rate of unemployment continued to fall, hitting an
historic low of 4%, while prices of large-company stocks reached all-time
highs. There was at least one important difference, though. Overseas,
economies began to stabilize in some regions, taking the pressure off the
United States to hold down interest rates. In fact, interest rates here
rose close to one percentage point, reflecting the possibility that we may
not be the only engine of growth going forward. As the U.S. stock market
reached new highs, many portfolios became overweighted in stocks. Equity
investors had to ride out extreme volatility, and more started to turn to
bonds.
Q: How did Pioneer Short-Term Income Trust perform in this environment?
A: The composition of the Fund's portfolio - investment-grade issues blended
with a high-yield component - helped it fare very well. A stronger level of
income from some of the bonds in the portfolio more than offset the slight
decrease in your Fund's net asset value. For the six months ended May 31,
Class A shares returned 0.66% at net asset value, better than the 0.28%
average return for the 103 funds in Lipper, Inc.'s short-term investment
grade debt category. (Returns do not reflect sales charges. Lipper is an
independent firm that tracks mutual fund performance.) On May 31, the
Fund's 30-day SEC yield stood at 5.41%, and the portfolio's average credit
quality remained AA.
6
<PAGE>
Pioneer Short-Term Income Trust
Q: The Fund's investment universe expanded in December. How have shareowners
benefited?
A: The Fund's investment policies were designed to generate a higher level of
income as a way to deliver better total returns for shareowners. Adding
high-yield bonds slightly increases the Fund's overall risk profile but
their strong outperformance, especially in comparison to other fixed-income
investments, boosted the Fund's returns this period. Right now, 8% of the
portfolio is in high-yield bonds, close to our maximum of 10%. The ability
to include issues with longer maturities, up to 10 years, also adds
flexibility and helps us be slightly more aggressive when we see good
opportunities. However, the average effective maturity of the portfolio is
limited to five years. Reflecting its greater flexibility, the name of the
Fund will be changing to Pioneer Limited Maturity Bond Fund this autumn.
With the addition of a high-yield component, we are now far less reliant on
Treasurys and other government issues. In fact, most of the high-yield
position was funded by selling Treasurys. We also built up the position in
GNMAs. They were attractive, with mortgage rates seeming to have bottomed,
reducing the likelihood that homeowners would refinance at lower rates. We
slightly increased high-quality asset-backed holdings; we like their strong
income potential.
Q: What corporate bonds did you find particularly attractive?
A: Pioneer is known for its value tradition, and that tradition relates not
only to our equity funds but to our bond funds as well. Pioneer Short-Term
Income Trust's portfolio holdings have their own value story. Our strategy
is to find value, before others recognize the potential for improved credit
ratings. (Ratings apply to the creditworthiness of the issuer of
securities, not the Fund.)
Additions to the portfolio included AmeriServ Food - a food service provider
with long-term contracts to chains such as Kentucky Fried Chicken, Olive
Garden, Wendy's and Dairy Queen - and Advanta, a strong niche player in
consumer finance. We also bought notes of EchoStar DBS, a satellite
broadcast company that also designs, manufactures and distributes other
digital equipment. We expect that
7
<PAGE>
Pioneer Short-Term Income Trust
PORTFOLIO MANAGEMENT DISCUSSION 5/31/99 (continued)
notes of Riggs National, a mid-Atlantic bank, will soon be bought back or
"called," at a premium over our purchase price.
Q: What is duration and why is it important to bond investors?
A: Duration measures a portfolio's sensitivity to interest rate changes. This
is another area where we made some adjustments to the Fund's investment
strategy, and we think this gives shareowners a good balance between risk
and reward. The shorter a portfolio's duration, the less its net asset
value will be affected by changing interest rates. However, there are
benefits to holding longer-term bonds. Because more risk is assumed if a
bond has a longer maturity, it is also likely that investors will be
rewarded with higher yields to offset the additional risk. Six months ago,
the Fund's duration was 2.1 years; the duration today is 3.1 years.
Q: What is your outlook for the remainder of the year?
A: If we reach January 2000 without any economic slowdown, we will have had the
longest economic expansion on record. However, numerous indicators for
slower economic growth are evident. For example, many companies increased
capital spending early in the year and now they are very highly leveraged.
On the consumer side, household savings rates have been declining for seven
years. We think the U.S. economy will eventually slow down, either on its
own or with some help from the Federal Reserve in the form of higher
interest rates. The question is, when will that happen? Until that's clear,
we expect rates to drift higher.
Our goal is to take a conservative, value-oriented approach to investing in
bonds, with safety the primary consideration. We believe that the Fund's
more diverse portfolio, especially the addition of high-yield bonds, offers
improved potential for attractive income, solid total returns and relative
safety of principal in almost any environment.
8
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 5/31/99
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
INVESTMENT IN SECURITIES - 95.7%
Corporate Bonds - 47.9%
Asset-Backed - 8.7%
$ 256,658 AAA/Aaa Advanta Mortgage Loan Trust, Series
93-4A, 5.55%, 3/25/10 $ 253,370
400,000 AAA/Aaa Americredit Automobile Receivables Trust,
Series 1999-B, 5.96%, 3/12/06 398,888
1,000,000 AAA/Aaa Bay View Auto Trust, Series 1997-RA1,
6.59%, 12/15/04 1,001,600
500,000 AAA/Aaa California Infrastructure SCE-1,
Series 1997-1, 6.28%, 9/25/05 501,925
600,000 AAA/Aaa Carco Auto Loan Master Trust,
Series 1997-1A, 6.689%, 8/15/04 603,012
350,000 AAA/Aaa Citibank Credit Card Master Trust I,
Series 1999-5A, 6.1%, 5/15/08 354,967
250,000 AAA/Aaa Comed Transitional Funding Trust,
Series 1998-1, 5.34%, 3/25/04 245,913
500,000 A-/Baa1 Continental Airlines, Series 1998-3 Pass
Through Trust C-1, 7.08%, 5/1/07 497,190
500,000 AAA/Aaa Discover Card Master Trust, Series 1998-
7A, 5.6%, 5/15/06 488,425
500,000 AAA/Aaa Discover Card Master Trust, Series 1997-2,
6.792%, 4/16/10 508,335
500,000 AAA/Aaa Greenpoint Manufactured Housing,
Series 1999-1 A2, 6.01%, 8/15/15 495,845
275,000 AAA/Aaa Premier Auto Trust, Series 1997-1 A4,
6.35%, 4/6/02 276,185
312,500 AAA/Aaa Sears Credit Account Master Trust,
Series 1994-1A, 7.0%, 1/15/04 315,815
----------
$5,941,470
----------
Collateralized Mortgage Obligations - 0.9%
104,360 AAA/Aaa Mortgage Capital Funding Inc., 1995-MCI
Class A1B, 7.6%, 5/25/27 $ 106,284
495,301 AAA/Aaa Prudential Securities Secured Financing
Co., Series 1999-NRF1 A1, 6.074%,
1/15/08 485,549
----------
$ 591,833
----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 5/31/99 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
Financial - 15.6%
$ 500,000 BB-/B2 Advanta Corp., 6.65%, 1/31/00 $ 494,250
528,000 AA-/Aa3 Associates Corp., 6.5%, 7/15/02 530,952
500,000 BBB/Baa3 A T & T Capital Corp., 6.875%, 1/16/01 504,275
600,000 A/A1 Bank One Corp., 7.25%, 8/1/02 616,584
500,000 BB+/Ba1 Capital One Financial Corp., 7.125%, 8/1/08 475,875
500,000 A+/A1 Citicorp, 7.125%, 6/1/03 511,605
500,000 A/A1 Ford Motor Credit Co., 6.85%, 8/15/00 505,790
500,000 A/A1 Ford Motor Credit Co., 6.55%, 9/10/02 502,715
500,000 A/A2 General Motors Acceptance Corp., 7.05%, 4/23/02 510,020
500,000 A/A2 General Motors Acceptance Corp., 6.75%, 3/15/03 505,670
470,000 BBB-/Ba2 Imperial Bank, 8.5%, 4/1/09 461,446
500,000 A/Baa1 Lehman Brothers Holdings, 6.625%, 4/1/04 489,245
500,000 BBB/Baa2 MBNA Corp., 6.5%, 9/15/00 500,465
1,000,000 A/Aa3 NationsBank Corp., 6.5%, 8/15/03 1,002,980
400,000 A+/Aa3 Norwest Corp., 6.8%, 5/15/02 407,040
1,000,000 BB+/Ba1 Riggs National Corp., 8.5%, 2/1/06 1,024,500
500,000 BBB/Baa2 The Rouse Co., 8.05%, 3/23/01 504,950
250,000 BBB/Baa2 Spieker Properties L.P., 6.65%, 12/15/00 250,105
800,000 BBB/Baa2 Spieker Properties L.P., 6.8%, 12/15/01 799,512
-----------
$10,597,979
-----------
Industrial - 22.7%
500,000 BBB-/Baa2 A. H. Belo Corp., 6.875%, 6/1/02 $ 500,105
500,000 A/A2 Akzo Nobel, North America, 6.0%, 11/15/03 488,280
500,000 BB/Ba2 Allied Waste Industries, Inc., 7.625%,
1/1/06 472,500
500,000 B-/B3 Ameriserve Food Distribution, Inc.,
10.125%, 7/15/07 440,000
500,000 BBB/Baa2 Canadian Occidental Petroleum Ltd.,
7.125%, 2/4/04 494,460
350,000 B+/B2 Charter Communications Holdings LLC,
8.25%, 4/1/07 (144A) 341,250
930,000 BBB+/Baa1 Comdisco Inc., 6.5%, 6/15/00 935,106
</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>
Industrial - (continued)
$ 500,000 A-/A3 Conoco Inc., 5.9%, 4/15/04 $ 489,410
500,000 A/A3 CVS Corp., 5.5%, 2/15/04 (144A) 483,585
500,000 BBB/Baa2 Delphi Auto Systems, 6.125%, 5/1/04 486,765
700,000 B/B2 Echostar DBS Corp., 9.25%, 2/1/06 (144A) 703,500
350,000 A/A2 General Motors Acceptance Corp.,
6.375%, 4/23/02 351,596
500,000 A-/Baa1 Guidant Corp., 6.15%, 2/15/06 476,805
500,000 BB-/Ba2 Gulf Canada Resources Ltd., 9.625%, 7/1/05 511,415
1,000,000 BBB-/Baa2 KN Energy Inc., 6.45%, 11/30/01 1,002,060
854,000 BBB/Baa3 Laidlaw Inc., 8.75%, 1/1/00 864,299
300,000 BBB/Baa3 Laidlaw Inc., 7.65%, 5/15/06 296,154
685,000 BBB/Baa3 Levi Strauss & Co., 7.0%, 11/1/06 (144A) 617,384
500,000 AA/Aa2 McDonald's Corp., 7.375%, 7/15/02 501,335
500,000 BBB+/A3 Nabors Industries, 6.8%, 4/15/04 494,065
150,000 B/B3 Nextlink Communications, Inc., 10.75%,
6/1/09 150,000
500,000 AA/Aa1 Northern Illinois Gas Co., 6.75%, 6/1/02 503,250
500,000 BB/Ba2 Northwest Airlines Corp., 8.52%, 4/7/04 487,675
1,000,000 BBB-/Baa3 Shopko Stores, 6.5%, 8/15/03 974,370
1,050,000 A+/Aa3 Sony Corp., 6.125%, 3/4/03 1,036,812
325,000 BBB+/Baa2 USA Waste Services, 6.5%, 12/15/02 325,111
500,000 BBB-/Baa2 USX Corp., 7.2%, 2/15/04 503,765
500,000 AA/Aa2 Wal-Mart Stores, 6.75%, 5/15/02 510,925
-----------
$15,441,982
-----------
Total Corporate Bonds
(Cost $33,465,315) $32,573,264
-----------
U.S. Government Obligations - 10.1%
1,000,000 U.S. Treasury Notes, 6.5%, 8/31/01 $ 1,021,330
2,700,000 U.S. Treasury Notes, 6.25%, 1/31/02 2,746,143
3,000,000 U.S. Treasury Notes, 6.25%, 2/15/07 3,082,350
-----------
Total U.S. Government Obligations
(Cost $6,941,516) $ 6,849,823
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 5/31/99 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - 37.7%
$1,000,000 Aid-Israel, 6.375%, 8/15/01 $1,014,020
1,000,000 Federal Home Loan Mortgage Corp., 6.3%,
6/1/04 1,000,000
500,000 Federal Home Loan Mortgage Corp.,
Series 2072, 6.0%, 7/15/24 496,010
293,086 Federal Home Loan Mortgage Corp.,
REMIC Series 1191EB, 7.0%, 8/15/02 293,919
149,946 Federal Home Loan Mortgage Corp.,
REMIC Series 1132I, 8.0%, 5/15/06 152,141
104,049 Federal Home Loan Mortgage Corp.,
REMIC Series 1181H, 7.0% 7/15/06 104,701
492,678 Federal Home Loan Mortgage Corp.,
REMIC Series 1145G, 8.0%, 9/15/06 506,946
97,645 Federal Home Loan Mortgage Corp.,
REMIC Series 1564J, 6.5%, 7/15/08 97,588
500,000 Federal Home Loan Mortgage Corp.,
REMIC Series PB1848, 7.0%, 2/15/20 504,895
93,045 Federal Home Loan Mortgage Corp.,
REMIC Series 1142H, 7.95%, 12/15/20 93,182
204,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1206H, 7.0%, 3/15/21 205,106
238,059 Federal Home Loan Mortgage Corp.,
REMIC Series 1761-G, 8.0%, 6/15/21 238,747
500,000 Federal Home Loan Mortgage Corp.,
REMIC Series 1987PM, 6.5%, 10/15/21 503,525
90,186 Federal Home Loan Mortgage Corp.,
REMIC Series 189C, 8.0%, 10/15/21 90,906
74,530 Federal Home Loan Mortgage Corp.,
REMIC Series 1590K, 6.5%, 10/15/23 73,521
374,887 Federal Home Loan Mortgage Corp.,
REMIC Series 2017C, 6.5%, 11/15/23 375,723
993,740 Federal National Mortgage Association,
6.5%, 9/1/28 971,550
258,583 Federal National Mortgage Association,
Series 1992-145, 7.15%, 7/25/03 261,016
500,000 Federal National Mortgage Association,
Series 1999-W5, 6.115%, 11/15/05 489,531
</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 National Mortgage Association,
Medium Term Note, 6.63%, 6/5/01 $ 506,460
300,000 Federal National Mortgage Association,
Medium Term Note, 6.52%, 9/5/02 302,478
500,000 Federal National Mortgage Association,
Medium Term Note, 6.0%, 4/17/06 490,190
1,087,556 Federal National Mortgage Association,
REMIC Series G94-1, 7.0%, 11/25/04 1,103,923
6,105 Federal National Mortgage Association,
REMIC Series 1992-110G, 7.0%, 9/25/05 6,105
317,287 Federal National Mortgage Association,
REMIC Series 1995-23D, 7.0%, 10/25/07 320,038
492,906 Federal National Mortgage Association,
REMIC Series 1993-129KB, 6.5%, 4/25/08 486,370
8,491 Federal National Mortgage Association,
REMIC Series 1991-119M, 8.5%, 11/25/08 8,491
937,244 Federal National Mortgage Association,
REMIC Series 1993-30PG, 6.65%, 9/25/17 939,549
167,753 Federal National Mortgage Association,
REMIC Series 1988-26C, 7.5%, 7/25/18 169,674
273,481 Federal National Mortgage Association,
REMIC Series 1993-17PE, 6.75%, 6/25/19 274,263
817,000 Federal National Mortgage Association,
REMIC Series 1993-23PJ, 6.7%, 7/25/19 818,993
10,074 Federal National Mortgage Association,
REMIC Series G92-35C, 7.5%, 7/25/20 10,052
76,739 Federal National Mortgage Association,
REMIC Series 1991-169PJ, 7.0%, 9/25/20 76,652
834,963 Federal National Mortgage Association,
REMIC Series 1998-50 EN, 6.5%, 9/25/28 829,101
837,865 Government National Mortgage
Association II, 6.5%, 10/15/08 838,703
1,757,701 Government National Mortgage
Association II, 7.5%, 8/20/27 1,799,710
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Short-Term Income Trust
SCHEDULE OF INVESTMENTS 5/31/99 (continued)
<TABLE>
<CAPTION>
S&P/Moody's
Principal Ratings
Amount (Unaudited) Value
<S> <C> <C> <C>
U.S. Government Agency Obligations - (continued)
$ 989,115 Government National Mortgage
Association II, 6.5%, 8/20/28 $ 966,039
851,261 Government National Mortgage
Association II, 7.5%, 8/20/28 871,606
994,740 Government National Mortgage
Association II, 7.0%, 1/20/29 997,057
982,077 Government National Mortgage
Association II, 6.5%, 2/15/29 959,165
1,500,116 Government National Mortgage
Association II, 6.5%, 2/20/29 1,465,118
984,870 Government National Mortgage
Association II, 7.0%, 2/20/29 987,164
998,263 Government National Mortgage
Association II, 6.0%, 3/20/29 946,663
995,387 Government National Mortgage
Association II, 6.5%, 3/20/29 972,165
477,537 Government National Mortgage
Association, REMIC Series 1998-24A,
6.0%, 10/20/24 472,404
500,000 Tennessee Valley Authority, 8.375%, 10/1/99 505,115
-----------
Total U.S. Government Agency Obligations
(Cost $25,406,376) $25,596,275
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $65,813,207) $65,019,362
-----------
TEMPORARY CASH INVESTMENT - 4.3%
Commercial Paper - 4.3%
2,922,000 Exxon Asset Management Corp., 4.93%, 6/1/99 $ 2,922,000
-----------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $2,922,000) $ 2,922,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $68,735,207) (a) (b) $67,941,362
-----------
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
144A Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such securities may be resold normally to qualified institutional
buyers in a transaction exempt from registration. At May 31, 1999, the
value of these securities amounted to $2,145,719 or 3.2% of total net
assets.
(a) At May 31, 1999, the net unrealized loss on investments based on cost for
federal income tax purposes of $68,735,207 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 74,645
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (868,490)
---------
Net unrealized loss $(793,845)
---------
</TABLE>
(b) At November 30, 1998, the Fund had a net capital loss carryforward of
$3,702,260 which will expire between 2000 and 2006 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for
the six months ended May 31, 1999 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Long-Term U.S. Government $21,136,575 $27,117,362
Other Long-Term Securities 20,273,785 5,791,281
</TABLE>
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Short-Term Income Trust
BALANCE SHEET 5/31/99
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash
investment of $2,922,000) (cost $68,735,207) $67,941,362
Cash 773
Receivables -
Fund shares sold 196,179
Interest 900,543
Other 1,153
------------
Total assets $69,040,010
------------
LIABILITIES:
Payables -
Investment securities purchased $ 1,150,000
Fund shares repurchased 76,384
Dividends 45,338
Due to affiliates 36,787
Accrued expenses 24,589
------------
Total liabilities $ 1,333,098
------------
NET ASSETS:
Paid-in capital $72,294,886
Accumulated undistributed net investment income 6,710
Accumulated net realized loss on investments (3,800,839)
Net unrealized loss on investments (793,845)
------------
Total net assets $67,706,912
------------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $56,334,453/15,217,023 shares) $ 3.70
------------
Class B (based on $11,006,197/2,973,296 shares) $ 3.70
------------
Class Y (based on $366,262/98,766 shares) $ 3.71
------------
MAXIMUM OFFERING PRICE:
CLASS A $ 3.79
------------
</TABLE>
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
STATEMENT OF OPERATIONS
For the Six Months Ended 5/31/99
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $ 1,934,989
-----------
EXPENSES:
Management fees $150,148
Transfer agent fees
Class A 44,213
Class B 13,734
Class Y 75
Distribution fees
Class A 61,424
Class B 52,650
Administrative fees 18,888
Custodian fees 11,054
Registration fees 11,434
Professional fees 20,021
Printing 5,328
Fees and expenses of nonaffiliated trustees 18,200
Miscellaneous 5,054
--------
Total expenses $ 412,223
Less management fees waived and
expenses reimbursed by Pioneer
Investment Management, Inc. (107,058)
Less fees paid indirectly (6,076)
-----------
Net expenses $ 299,089
-----------
Net investment income $ 1,635,900
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments $ (84,602)
Change in net unrealized gain on investments (1,201,352)
-----------
Net loss on investments $(1,285,954)
-----------
Net increase in net assets resulting from operations $ 349,946
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Short-Term Income Trust
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended 5/31/99 and the Year Ended 11/30/98
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
5/31/99 11/30/98
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,635,900 $ 2,925,411
Net realized loss on investments (84,602) (340,080)
Change in net unrealized gain or loss on investments (1,201,352) 464,044
----------- -----------
Net increase in net assets resulting from operations $ 349,946 $ 3,049,375
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.11 and $0.22 per share, respectively) $(1,365,717) $(2,584,947)
Class B ($0.09 and $0.18 per share, respectively) (246,151) (327,714)
Class Y ($0.11 and $0.14 per share, respectively) (11,553) (10,981)
----------- -----------
Total distributions to shareholders $(1,623,421) $(2,923,642)
----------- -----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $33,740,874 $58,766,110
Reinvestment of distributions 1,284,993 2,314,221
Cost of shares repurchased (25,821,490) (48,675,680)
----------- -----------
Net increase in net assets resulting
from fund share transactions $ 9,204,377 $12,404,651
----------- -----------
Net increase in net assets $ 7,930,902 $12,530,384
NET ASSETS:
Beginning of period 59,776,010 47,245,626
----------- -----------
End of period (including accumulated undistributed/
(distributions in excess of) net investment income of
$6,710 and $(5,769), respectively) $67,706,912 $59,776,010
----------- -----------
</TABLE>
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
STATEMENTS OF CHANGES IN NET ASSETS (continued)
For the Six Months Ended 5/31/99 and the Year Ended 11/30/98
<TABLE>
<CAPTION>
'99 Shares '99 Amount '98 Shares '98 Amount
<S> <C> <C> <C> <C>
CLASS A
Shares sold 7,361,958 $27,574,330 9,455,747 $35,650,906
Reinvestment of distributions 297,722 1,114,195 550,731 2,078,817
Less shares repurchased (5,426,484) (20,376,244) (8,172,880) (30,815,032)
---------- ----------- ---------- -----------
Net increase 2,233,196 $ 8,312,281 1,833,598 $ 6,914,691
---------- ----------- ---------- -----------
CLASS B
Shares sold 1,625,077 $ 6,082,274 6,017,333 $22,668,229
Reinvestment of distributions 42,566 159,254 59,471 224,347
Less shares repurchased (1,410,811) (5,284,209) (4,738,301) (17,841,391)
---------- ----------- ---------- -----------
Net increase 256,832 $ 957,319 1,338,503 $ 5,051,185
---------- ----------- ---------- -----------
CLASS C
Shares sold 22,455 $ 84,270 118,231 $ 446,975
Reinvestment of distributions 3,078 11,544 2,920 11,057
Less shares repurchased (42,828) (161,037) (5,090) (19,257)
---------- ----------- ---------- -----------
Net increase (decrease) (17,295) $ (65,223) 116,061 $ 438,775
---------- ----------- ---------- -----------
</TABLE>
* Class Y Shares were first publicly offered on April 9, 1998.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Short-Term Income Trust
FINANCIAL HIGHLIGHTS 5/31/99
<TABLE>
<CAPTION>
Six Months Ended Year Ended
5/31/99 11/30/98
CLASS A
<S> <C> <C>
Net asset value, beginning of period $ 3.78 $ 3.77
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.11 $ 0.22
Net realized and unrealized gain (loss) on investments (0.08) 0.01
------- -------
Net increase from investment operations $ 0.03 $ 0.23
Distributions to shareholders:
Net investment income (0.11) (0.22)
------- -------
Net increase (decrease) in net asset value $ (0.08) $ 0.01
------- -------
Net asset value, end of period $ 3.70 $ 3.78
------- -------
Total return* 0.66% 6.28%
Ratio of net expenses to average net assets 0.88%**+ 0.85%+
Ratio of net investment income to average net assets 5.61%**+ 5.78%+
Portfolio turnover rate 112%** 70%
Net assets, end of period (in thousands) $56,334 $49,072
Ratios assuming no waiver of management fees and
assumption of expenses by PIM and no reduction for fees
paid indirectly:
Net expenses 1.24%** 1.30%
Net investment income 5.25%** 5.33%
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 0.85%** 0.85%
Net investment income 5.64%** 5.78%
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
11/30/97 11/30/96 11/30/95 11/30/94(a)
CLASS A
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 3.79 $ 3.84 $ 3.75 3.95
------- ------- ------- ------
Increase (decrease) from investment operations:
Net investment income $ 0.21 $ 0.24 $ 0.25 $ 0.22
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
Distributions to shareholders:
Net investment income (0.23) (0.24) (0.26) (0.21)
------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.02) $ (0.05) $ 0.09 $ (0.20)
------- ------- ------- -------
Net asset value, end of period $ 3.77 $ 3.79 $ 3.84 $ 3.75
------- ------- ------- -------
Total return* 5.64% 5.20% 9.64% 0.32%
Ratio of net expenses to average net assets 0.87%+ 0.87%+ 0.86%+ 0.85%
Ratio of net investment income to average net assets 6.10%+ 6.25%+ 6.43%+ 5.89%
Portfolio turnover rate 31% 65% 110% 144%
Net assets, end of period (in thousands) $42,058 $54,637 $53,860 $59,088
Ratios assuming no waiver of management fees and
assumption of expenses by PIM and no reduction for fees
paid indirectly:
Net expenses 1.44% 1.33% 1.38% 1.20%
Net investment income 5.53% 5.79% 5.92% 5.54%
Ratios assuming waiver of management fees and assumption of
expenses by PIM 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.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
FINANCIAL HIGHLIGHTS 5/31/99
<TABLE>
<CAPTION>
Six Months Ended Year Ended
5/31/99 11/30/98
CLASS B
<S> <C> <C>
Net asset value, beginning of period $ 3.78 $ 3.76
------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.09 $ 0.19
Net realized and unrealized gain (loss) on investments (0.08) 0.01
------- -------
Net increase (decrease) from investment operations $ 0.01 $ 0.20
Distributions to shareholders:
Net investment income (0.09) (0.18)
In excess of net investment income - -
------- -------
Net increase (decrease) in net asset value $ (0.08) $ 0.02
------- -------
Net asset value, end of period $ 3.70 $ 3.78
------- -------
Total return* 0.21% 5.49%
Ratio of net expenses to average net assets 1.71%**+ 1.63%+
Ratio of net investment income to average net assets 4.78%**+ 5.00%+
Portfolio turnover rate 112%** 70%
Net assets, end of period (in thousands) $11,006 $10,264
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.06%** 1.99%
Net investment income 4.43%** 4.64%
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 1.70%** 1.62%
Net investment income 4.79%** 5.01%
<CAPTION>
Year Ended Year Ended Year Ended 4/4/94 to
11/30/97 11/30/96 11/30/95 11/30/94(a)
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 $ 0.20 $ 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 PIM 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 PIM 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 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. 21
<PAGE>
Pioneer Short-Term Income Trust
FINANCIAL HIGHLIGHTS 5/31/99
<TABLE>
<CAPTION>
Six Months Ended 4/9/98 to
CLASS Y 5/31/99 11/30/98
<S> <C> <C>
Net asset value, beginning of period $ 3.79 $ 3.77
------ -------
Increase (decrease) from investment
operations:
Net investment income $ 0.11 $ 0.14
Net realized and unrealized gain
(loss) on investments (0.08) 0.02
------ -------
Net increase from investment
operations $ 0.03 $ 0.16
Distributions to shareholders:
Net investment income (0.11) (0.14)
------ -------
Net increase (decrease) in net asset
value $(0.08) $ 0.02
------ -------
Net asset value, end of period $ 3.71 $ 3.79
------ -------
Total return* 0.83% 4.35%
Ratio of net expenses to average net
assets 0.49%**+ 0.55%**+
Ratio of net investment income to
average net assets 6.00%**+ 5.99%**+
Portfolio turnover rate 112%** 70%
Net assets, end of period
(in thousands) $ 366 $ 440
Ratios assuming no waiver of
management fees and assumption
of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 0.84%** 0.74%**
Net investment income 5.65%** 5.80%**
Ratios assuming waiver of
management fees and assumption
of expenses by PIM and reduction
for fees paid indirectly:
Net expenses 0.48%** 0.55%**
Net investment income 6.01%** 5.99%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
NOTES TO FINANCIAL STATEMENTS 5/31/99
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 three classes of shares - Class A, Class B and Class Y shares.
Each class of shares represents an interest in the same portfolio of
investments of the Trust and has equal rights to voting, redemptions, dividends
and liquidation, except that the level of transfer agent and distribution fees
may differ among classes. Class A and Class B shareholders have exclusive
voting rights with respect to the distribution plan for each class. There is no
distribution plan for Class Y shares.
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 at
prices supplied by independent pricing services, which consider such factors
as Treasury spreads, yields, maturities and ratings. Valuations may be
supplemented by 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 that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
23
<PAGE>
Pioneer Short-Term Income Trust
NOTES TO FINANCIAL STATEMENTS 5/31/99 (continued)
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 $8,538 in
underwriting commissions on the sale of fund shares during the six months
ended May 31, 1999.
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. Class
Y shares are not subject to a distribution plan. 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
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, and Class Y shares can bear different transfer
agent and distribution fees.
24
<PAGE>
Pioneer Short-Term Income Trust
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 counter parties, 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,
Pioneer Investment Management, Inc. (PIM), is responsible for determining
that the value of the collateral remains at least equal to the repurchase
price.
2. Management Agreement
PIM 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.
PIM 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 and
Class Y shares will be reduced only to the extent that such expenses are
reduced for Class A shares. PIM's agreement is voluntary and temporary and may
be revised or terminated at any time.
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Trust. At May 31, 1999, $8,729 was payable to PIM
related to management fees, administrative and certain other services
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 $7,853 in transfer agent fees payable to PSC at May 31,
1999.
4. Distribution Plans
The Trust adopted a Plan of Distribution with respect to Class A and Class B
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
25
<PAGE>
Pioneer Short-Term Income Trust
NOTES TO FINANCIAL STATEMENTS 5/31/99 (continued)
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 $20,205 in distribution fees payable
to PFD at May 31, 1999.
In addition, redemptions of each class of shares (except Class Y 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 CDSCs are paid to PFD. For the six months ended May 31, 1999, CDSCs in
the amount of $34,403 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, 1999,
the Trust's expenses were reduced by $6,076 under such arrangements.
6. Line of Credit Facility
The Trust, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary or
emergency purposes. The Trust may borrow up to the lesser of $50 million or the
limits set by its prospectus for borrowings. Interest on collective borrowings
of up to $25 million is payable at the Federal Funds Rate plus 3/8% on an
annualized basis, or at the Federal Funds Rate plus 1/2% if the borrowing
exceeds $25 million at any one time. The Funds pay an annual commitment fee for
this facility. The commitment fee is allocated among such Funds based on their
respective borrowing limits. For the six months ended May 31, 1999, the Trust
had no borrowings under this agreement.
26
<PAGE>
Pioneer Short-Term Income Trust
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners 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 (the Trust), as of May 31,
1999, 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 May
31, 1999 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, 1999, 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 9, 1999
27
<PAGE>
Pioneer Short-Term Income Trust
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
<TABLE>
<CAPTION>
Trustees Officers
<S> <C>
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 Eric W. Reckard, Treasurer
Marguerite A. Piret Joseph P. Barri, Secretary
David D. Tripple
Stephen K. West
John Winthrop
</TABLE>
Investment Adviser
Pioneer Investment Management, Inc.
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
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.
<TABLE>
<S> <C>
Growth Funds Income Funds
United States Taxable
Pioneer Capital Growth Fund Pioneer America Income Trust
Pioneer Growth Shares Pioneer Bond Fund
Pioneer Micro-Cap Fund Pioneer Short-Term Income Trust
Pioneer Mid-Cap Fund Pioneer Strategic Income Fund
Pioneer Small Company Fund
Tax-Free
Pioneer Tax-Free Income Fund
International/Global
Pioneer Emerging Markets Fund
Pioneer Europe Fund Money Market Fund
Pioneer Cash Reserves Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
</TABLE>
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
FactFone(SM) 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 Investment Management, Inc.
60 State Street 0799-6652
Boston, Massachusetts 02109 (C) Pioneer Funds Distributor, Inc.
www.pioneerfunds.com [Recycle Logo] Printed on Recycled Paper
