PIONEER REAL ESTATE SHARES, 485BPOS, 1998-04-09

PIONEER REAL ESTATE SHARES
485BPOS, 1998-04-09

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File No. 33-65822
811-07379
(formerly 811-7870)

As Filed with the Securities and Exchange Commission on April 9, 1998.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]

Pre-Effective Amendment No. ___ [ ]

Post-Effective Amendment No. 12 [x]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]

Amendment No. 13 [x]

(Check appropriate box or boxes)

PIONEER REAL ESTATE SHARES
(Formerly, Pioneer Winthrop Real Estate Investment Fund)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)

60 State Street, Boston, Massachusetts 02109
--------------------------------------------
(Address of principal executive office) Zip Code

(617) 742-7825
----------------------------------------------------
(Registrant's Telephone Number, including Area Code)

Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
-----------------------------------------------------------------
(Name and address of agent for service)

It is proposed that this filing will become effective (check appropriate box):
[x] immediately upon filing pursuant to paragraph (b)
[ ] on [date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on [date] pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on [date] pursuant to paragraph (a)(2)
of Rule 485

Title of Securities: Shares of beneficial interest, no par value

<PAGE>

PIONEER REAL ESTATE SHARES

Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of
Information Required by Items of the Registration Form

Locations noted apply to the Class A, Class B and Class C Prospectus and the
Class Y Prospectus contained in this Amendment unless otherwise noted

Form N-1A Item Number and Caption Location
- --------------------------------- --------

Part A
- ------

1. Cover Page............................. Cover Page

2. Synopsis............................... Expense Information

3. Condensed Financial Information........ Financial Highlights

4. General Description of Registrant...... Cover Page; Investment
Objectives and Policies and
Associated Risks; Management of
the Fund; The Fund; Appendix;
Fund Share Alternatives (Class
A, B & C Prospectus); Fund
Shares (Class Y Prospectus)

5. Management of the Fund................. Management of the Fund

5.a. Management's Discussion of Fund
Performance........................ Not Applicable

6. Capital Stock and Other Securities..... Fund Share Alternatives (Class
A, B & C Prospectus); Distribu-
tion of Class Y Shares (Class
Y Prospectus); The Fund,
Dividends, Distributions and
Taxation;

7. Purchase of Securities Being Offered... Fund Share Alternatives, How to
Buy Fund Shares, Distribution
Plans, Shareholder Services
(Class A, B & C Prospectus);
Purchasing Class Y Shares
(Y Prospectus); Share Price

8. Redemption or Repurchase............... Fund Share Alternatives;
Shareholder Services, How to
Sell Fund Shares (Class A, B &
C Prospectus); Redeeming Class Y
Shares, Exchanging Class Y
Shares (Class Y Prospectus)

9. Pending Legal Proceedings.............. Not Applicable

<PAGE>

Form N-1A Item Number and Caption Location
- --------------------------------- --------

Part B
- ------

10. Cover Page............................. Cover Page

11. Table of Contents...................... Cover Page

12. General Information and History........ Cover Page; General
Information and History;
Certain Liabilities

13. Investment Objectives and Policies..... Investment Policies and
Restrictions

14. Management of the Fund................. Management of the Fund

15. Control Persons and Principle Holders
of Securities........................ Management of the Fund

16. Investment Advisory and Other
Services............................. Management of the Fund;
Advisory Services;
Shareholder
Servicing/Transfer Agent;
Custodian; Independent Public
Accountant

17. Brokerage Allocation and Other
Practices............................ Portfolio Transactions

18. Capital Stock and Other Securities..... Description of Shares;
Certain Liabilities

19. Purchase Redemption and Pricing of
Securities Being Offered............. Determination of Net Asset
Value; Letter of Intent;
Systematic Withdrawal Plan

20. Tax Status............................. Tax Status

21. Underwriters........................... Principal Underwriter;
Underwriting Agreement and
Distribution Plans

22. Calculation of Performance Data........ Investment Results

23. Financial Statements................... Financial Statements

<PAGE>
PIONEER REAL ESTATE SHARES

PART A

CLASS A, CLASS B AND CLASS C PROSPECTUS
<PAGE>
[PIONEER LOGO]

Pioneer Real
Estate Shares

Class A, Class B and Class C Shares
Prospectus
April 9, 1998

Pioneer Real Estate Shares (the "Fund") is a non-diversified open-end
investment company seeking primarily long-term growth of capital. Current
income is a secondary objective. The Fund will seek to achieve its investment
objectives by investing at least 75% of its total assets in a portfolio of
equity securities of real estate investment trusts and other real estate
industry companies.

The Fund may also invest up to 25% of its total assets in debt securities
of real estate industry companies, mortgage-backed securities and short-term
investments. In pursuit of its objectives, the Fund may employ active
management techniques (including futures and options) in an attempt to hedge
risks associated with the Fund's investments in real estate equity securities.
There is, of course, no assurance that the Fund will achieve its investment
objectives.
Fund returns and share prices fluctuate and the value of your account
upon redemption may be more or less than your purchase price. Shares in the
Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank
or other depository institution, and the shares are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency. Investments in securities of real estate industry
companies entail risks in addition to those customarily associated with
investing in securities in general. The Fund is intended for investors who can
accept the risks associated with its investments and may not be suitable for
all investors. See "Investment Objectives and Policies and Associated Risks"
for a discussion of these risks.

This Prospectus provides information about the Fund that you should know
before investing in the Fund. Please read and retain it for your future
reference. More information about the Fund is included in the Statement of
Additional Information, also dated April 9, 1998, as supplemented or revised
from time to time, which is incorporated into this Prospectus by reference. A
copy of the Statement of Additional Information may be obtained free of charge
by calling Shareholder Services at 1-800-225-6292 or by written request to the
Fund at 60 State Street, Boston, Massachusetts 02109. Other information about
the Fund has been filed with the Securities and Exchange Commission (the "SEC")
and is available upon request and without charge by calling 1-800-225-6292 or
through the SEC's Internet web site (http://www.sec.gov).

TABLE OF CONTENTS PAGE
--------------------------------------------------------- -----
I. EXPENSE INFORMATION ..................................... 2
II. FINANCIAL HIGHLIGHTS .................................... 3
III. INVESTMENT OBJECTIVES AND POLICIES AND
ASSOCIATED RISKS ....................................... 6
IV. MANAGEMENT OF THE FUND .................................. 8
V. FUND SHARE ALTERNATIVES ................................. 9
VI. SHARE PRICE ............................................. 10
VII. HOW TO BUY FUND SHARES .................................. 10
VIII. HOW TO SELL FUND SHARES ................................. 14
IX. HOW TO EXCHANGE FUND SHARES ............................. 15
X. DISTRIBUTION PLANS ...................................... 15
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ................... 16
XII. SHAREHOLDER SERVICES .................................... 17
Account and Confirmation Statements .................... 17
Additional Investments ................................. 17
Automatic Investment Plans ............................. 17
Financial Reports and Tax Information .................. 17
Distribution Options ................................... 17
Directed Dividends ..................................... 18
Direct Deposit ......................................... 18
Voluntary Tax Withholding .............................. 18
Telephone Transactions ................................. 18
FactFoneSM ............................................. 18
Retirement Plans ....................................... 18
Telecommunications Device for the Deaf (TDD) ........... 18
Systematic Withdrawal Plans ............................ 18
Reinstatement Privilege (Class A Shares only) .......... 19
XIII. THE FUND ................................................ 19
XIV. INVESTMENT RESULTS ...................................... 19
APPENDIX A: Certain Investment Practices ................ 20

--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>

I. EXPENSE INFORMATION

This table is designed to help you understand the charges and expenses
that you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects annual operating expenses based on expenses
incurred for the fiscal period ended December 31, 1997.

<TABLE>
<S> <C> <C> <C>
Shareholder Transaction Expenses: Class A Class B Class C
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) ............. 5.75%(1) None None
Maximum Sales Charge on
Reinvestment of Dividends ....................... None None None
Maximum Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable) ......... None(1) 4.00% 1.00%
Redemption Fee(2).................................. None None None
Exchange Fee ...................................... None None None
Annual Operating Expenses (As a Percentage
of Average Net Assets):
Management Fee .................................... 1.00% 1.00% 1.00%
12b-1 Fees ........................................ 0.25% 1.00% 1.00%
Other Expenses (including accounting and
transfer agent fees, custodian fees and
printing expenses) .............................. 0.38% 0.36% 0.32%
---- ---- ----
Total Operating Expenses ........................... 1.63% 2.36% 2.32%
==== ==== ====
</TABLE>

- --------------------

(1) Purchases of $1 million or more and certain purchases by participants in
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge ("CDSC") as further described in "How
to Sell Fund Shares."

(2) Separate fees (currently $10 and $20, respectively) apply to United States
("U.S.") and international wire transfers of redemption proceeds.

Example:

You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return, reinvestment of all dividends and distributions and that the
percentage amounts listed under "Annual Operating Expenses" remain the same
each year.

1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
Class A Shares $73 $106 $141 $240
Class B Shares*
- --Assuming complete
redemption at end of period $64 $104 $146 $251
- --Assuming no redemption $24 $ 74 $126 $251
Class C Shares**
- --Assuming complete
redemption at end of period $34 $ 72 $124 $266
- --Assuming no redemption $24 $ 72 $124 $266

- --------------------
* Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share expenses are used after year eight.
** Class C shares redeemed during the first year after purchase are subject to
a 1% CDSC.

The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual fund
expenses and return vary from year to year and may be higher or lower than
those shown.

For further information regarding management fees, Rule 12b-1 fees and
other expenses of the Fund, see "Management of the Fund," "Distribution Plans"
and "How to Buy Fund Shares" in this Prospectus and "Management of the Fund"
and "Underwriting Agreement and Distribution Plans" in the Statement of
Additional Information. The Fund's payment of a Rule 12b-1 fee may result in
long-term shareholders paying more than the economic equivalent of the maximum
initial sales charge permitted under the Conduct Rules of the National
Association of Securities Dealers, Inc.

The maximum sales charge is reduced on purchases of specified amounts of
Class A shares and the value of shares owned in other Pioneer mutual funds is
taken into account in determining the applicable initial sales charge. See "How
to Buy Fund Shares." No sales charge is applied to exchanges of shares of other
publicly available Pioneer mutual funds. See "How to Exchange Fund Shares."

<PAGE>

II. FINANCIAL HIGHLIGHTS

The following information has been audited by Arthur Andersen LLP,
independent public accountants. Arthur Andersen LLP's report on the Fund's
financial statements as of December 31, 1997 appears in the Fund's Annual Report
which is incorporated by reference into the Statement of Additional Information.
The information listed below should be read in conjunction with those financial
statements. The Annual Report includes more information about the Fund's
performance and is available free of charge by calling Shareholder Services at
1- 800-225-6292.

PIONEER REAL ESTATE SHARES
Selected Data for a Class A Share Outstanding for Each Period Presented:

<TABLE>
<CAPTION>
For the Year Ended December 31
---------------------------------------
1997 1996 1995
------------- ------------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ....................... $ 15.52 $ 12.02 $ 11.38
--------- --------- -------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ 0.41 $ 0.42 $ 0.32
Net realized and unrealized gain (loss) on investments .... 2.61 3.82 1.01
--------- --------- -------
Net increase (decrease) from investment operations ....... $ 3.02 $ 4.24 $ 1.33
Distributions to shareholders:
From net investment income ................................ (0.36) (0.40) (0.33)
In excess of net investment income ........................ -- -- (0.02)
Net realized gain ......................................... (0.23) (0.34) --
Tax return of capital ..................................... (0.14) -- (0.34)
- ------------------------------------------------------------ ---------- ---------- -------
Net increase (decrease) in net asset value ................. $ 2.29 $ 3.50 $ 0.64
---------- ---------- -------
Net asset value, end of period ............................. $ 17.81 $ 15.52 $ 12.02
========== ========== =======
Total return* .............................................. 19.74% 36.45% 12.11%
Ratio of net expenses to average net assets ................ 1.65%+ 1.71%+ 1.77%+
Ratio of net investment income to average net assets ....... 2.51%+ 3.52%+ 2.73%+
Portfolio turnover rate .................................... 28% 47% 10%
Average brokerage commission per share ..................... $ 0.0592 $ 0.0556 --
Net assets, end of period (in thousands) ................... $115,772 $ 72,572 $27,491
Ratios assuming no waiver of management fees and assumption
of expenses by Pioneering Management Corporation ("PMC")
and no reduction for fees paid indirectly:
Net expenses ............................................. 1.65% 2.09% 2.59%
Net investment income (loss) ............................. 2.51% 3.14% 1.91%
Ratios assuming waiver of management fees and reduction for
fees paid indirectly:
Net expenses ............................................. 1.63% 1.69% 1.75%
Net investment income (loss) ............................. 2.53% 3.54% 2.75%

</TABLE>

<TABLE>
<CAPTION>
October 25, 1993
(commencement
July 1, 1994 of operations)
through through
December 31, 1994(a) June 30, 1994
---------------------- -----------------
<S> <C> <C>
Net asset value, beginning of period ....................... $ 12.02 $ 12.50
-------- --------
Increase (decrease) from investment operations:
Net investment income (loss) .............................. $ 0.21 $ 0.27
Net realized and unrealized gain (loss) on investments .... (0.48) (0.45)
--------- ---------
Net increase (decrease) from investment operations ....... $ (0.27) $ (0.18)
Distributions to shareholders:
From net investment income ................................ (0.20) (0.27)
In excess of net investment income ........................ -- --
Net realized gain ......................................... (0.02) --
Tax return of capital ..................................... (0.15) (0.03)
- ------------------------------------------------------------- --------- ---------
Net increase (decrease) in net asset value ................. $ (0.64) $ (0.48)
--------- ---------
Net asset value, end of period ............................. $ 11.38 $ 12.02
========= =========
Total return* .............................................. (2.16%) (1.47%)
Ratio of net expenses to average net assets ................ 1.75%** 1.71%**
Ratio of net investment income to average net assets ....... 3.72%** 3.73%**
Portfolio turnover rate .................................... 17%** 24%**
Average brokerage commission per share ..................... -- --
Net assets, end of period (in thousands) ................... $ 28,068 $ 29,584
Ratios assuming no waiver of management fees and assumption
of expenses by Pioneering Management Corporation ("PMC")
and no reduction for fees paid indirectly:
Net expenses ............................................. 2.27%** 2.15%**
Net investment income (loss) ............................. 3.20%** 3.28%**
Ratios assuming waiver of management fees and reduction for
fees paid indirectly:
Net expenses ............................................. -- --
Net investment income (loss) ............................. -- --
</TABLE>

- -----------
(a) Subsequent to December 31, 1994, the Fund's fiscal year end was changed
from June 30 to December 31.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions, and the complete redemption of the
investment at the 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.

<PAGE>

II. FINANCIAL HIGHLIGHTS (continued)
Selected Data for a Class B Share Outstanding for Each Period Presented:

<TABLE>
<CAPTION>
Year Ended
December 31, January 31, 1996 to
1997 December 31, 1996
-------------- --------------------
<S> <C> <C>
Net asset value, beginning of period ............................ $ 15.45 $ 12.09
-------- -------
Increase from investment operations:
Net investment income (loss) ................................... $ 0.28 $ 0.35
Net realized and unrealized gain (loss) on investments ......... 2.60 3.73
-------- -------
Net increase (decrease) from investment operations ............ $ 2.88 $ 4.08
Distributions to shareholders:
Net investment income .......................................... (0.29) (0.35)
In excess of net investment income ............................. -- (0.03)
Net realized gain .............................................. (0.23) (0.34)
Tax return of capital .......................................... (0.11) --
--------- --------
Net increase in net asset value ................................. $ 2.25 $ 3.36
--------- --------
Net asset value, end of period .................................. $ 17.70 $ 15.45
========= ========
Total return* ................................................... 18.85% 34.81%
Ratio of net expenses to average net assets ..................... 2.39%+ 2.33%**+
Ratio of net investment income to average net assets ............ 1.82%+ 3.73%**+
Portfolio turnover rate ......................................... 28% 47%
Average brokerage commission per share .......................... $0.0592 $0.0556
Net assets, end of period (in thousands) ........................ $82,695 $26,379
Ratios assuming no waiver of management fees and no reduction for
fees paid indirectly:
Net expenses .................................................. 2.39% 2.45%**
Net investment income (loss) .................................. 1.82% 3.61%**
Ratios assuming waiver of management fees and reduction for
fees paid indirectly:
Net expenses .................................................. 2.36% 2.30%**
Net investment income (loss) .................................. 1.85% 3.76%**
</TABLE>

- -----------

* 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.

<PAGE>

II. FINANCIAL HIGHLIGHTS (continued)
Selected Data for a Class C Share Outstanding for Each Period Presented:

<TABLE>
<CAPTION>
Year Ended January 31, 1996
December 31, to
1997 December 31, 1996
-------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ..................................... $ 15.46 $ 12.09
-------- --------
Increase from investment operations:
Net investment income (loss) ............................................ $ 0.29 $ 0.34
Net realized and unrealized gain (loss) on investments .................. 2.59 3.73
-------- --------
Net increase (decrease) from investment operations ..................... $ 2.88 $ 4.07
Distributions to shareholders:
Net investment income ................................................... (0.30) (0.34)
In excess of net investment income ...................................... -- (0.02)
Net realized gain ....................................................... (0.23) (0.34)
Tax return of capital ................................................... (0.11) --
Net increase in net asset value .......................................... $ 2.24 $ 3.37
---------- ---------
Net asset value, end of period ........................................... $ 17.70 $ 15.46
========== =========
Total return* ............................................................ 18.86% 34.76%
Ratio of net expenses to average net assets .............................. 2.35%+ 2.35%**+
Ratio of net investment income to average net assets ..................... 1.88%+ 3.66%**+
Portfolio turnover rate .................................................. 28% 47%
Average brokerage commission per share ................................... $ 0.0592 $0.0556
Net assets, end of period (in thousands) ................................. $ 24,227 $ 6,699
Ratios assuming no waiver of management fees and no reduction for fees
paid indirectly:
Net expenses ........................................................... 2.35% 2.48%**
Net investment income (loss) ........................................... 1.88% 3.53%**
Ratios assuming waiver of management fees and reduction for fees paid
indirectly:
Net expenses ........................................................... 2.32% 2.32%**
Net investment income (loss) ........................................... 1.91% 3.69%**

</TABLE>

- -----------

<PAGE>

III. INVESTMENT OBJECTIVES AND POLICIES AND ASSOCIATED RISKS

The Fund's primary investment objective is to seek long-term growth of
capital. Current income is a secondary investment objective. The Fund pursues
these objectives by investing in a non-diversified portfolio of equity
securities of real estate investment trusts and other real estate industry
companies and, to a lesser extent, in debt securities of such companies and in
mortgage-backed securities.

Under normal circumstances, at least 75% of the Fund's total assets are
invested in equity securities of real estate investment trusts ("REITs") and
other real estate industry companies. For purposes of the Fund's investments, a
"real estate industry company" is a company that derives at least 50% of its
gross revenues or net profits from either (a) the ownership, development,
construction, financing, management or sale of commercial, industrial or
residential real estate or (b) products or services related to the real estate
industry like building supplies or mortgage servicing. The equity securities of
real estate industry companies in which the Fund will invest consist of common
stock, shares of beneficial interest of REITs and securities with common stock
characteristics, such as preferred stock and debt securities convertible into
common stock ("Real Estate Equity Securities").

The Fund may also invest up to 25% of its total assets in (a) debt
securities of real estate industry companies, (b) mortgage-backed securities,
such as mortgage pass-through certificates, real estate mortgage investment
conduit ("REMIC") certificates and collateralized mortgage obligations ("CMOs")
and (c) short-term investments (as listed below). See "Other Eligible
Investments."

In pursuit of its objectives, the Fund may employ certain active
management techniques including options on securities indices and futures
contracts on securities and indices and options on such futures contracts.
These techniques may be employed in an attempt to hedge interest rate or other
risks associated with the Fund's portfolio securities. See Appendix A for a
description of these investment practices and securities and associated risks.

For temporary defensive purposes, the Fund may invest up to 100% of its
total assets in short-term investments (as listed below). The Fund will assume
a temporary defensive posture only when economic and other factors affect the
real estate industry market to such an extent that Pioneering Management
Corporation ("PMC") believes there to be extraordinary risks in being
substantially invested in Real Estate Equity Securities.

As to any specific investment in Real Estate Equity Securities, PMC's
analysis will focus on evaluating the fundamental value of an enterprise. The
Fund will purchase securities for its portfolio when, in the judgment of PMC,
their market price appears to be less than their fundamental value and/or which
offer a high level of current income consistent with reasonable investment
risk. In selecting specific investments, PMC will attempt to identify
securities with significant potential for appreciation relative to their
downside exposure and/or which have a timely record and high level of interest
or dividend payments. In making these determinations, PMC will take into
account price-earnings ratios, cash flow, the relationship of asset value to
market price of the securities, interest or dividend payment history and other
factors which it may determine from time to time to be relevant. PMC will
attempt to allocate the Fund's portfolio investments across regional economies
and property types.

Risk Factors Associated with the Real Estate Industry

Although the Fund does not invest directly in real estate, it does invest
primarily in Real Estate Equity Securities and will concentrate its investments
in the real estate industry, and, therefore, an investment in the Fund may be
subject to certain risks associated with the direct ownership of real estate
and with the real estate industry in general. These risks include, among
others: possible declines in the value of real estate; risks related to general
and local economic conditions; possible lack of availability of mortgage funds;
overbuilding; extended vacancies of properties; increases in competition,
property taxes and operating expenses; changes in zoning laws; costs resulting
from the clean-up of, and liability to third parties for damages resulting
from, environmental problems; casualty or condemnation losses; uninsured
damages from floods, earthquakes or other natural disasters; limitations on and
variations in rents; and changes in interest rates.

In addition, if the Fund has rental income or income from the disposition
of real property acquired as a result of a default on securities the Fund owns,
the receipt of such income may adversely affect its ability to retain its tax
status as a regulated investment company. See "Tax Status" in the Statement of
Additional Information. Investments by the Fund in securities of companies
providing mortgage servicing will be subject to the risks associated with
refinancings and their impact on servicing rights.

Real Estate Investment Trusts and Associated Risk Factors

The Fund may invest without limitation in shares of REITs. REITs are
pooled investment vehicles which invest primarily in income producing real
estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs invest the majority of their assets in
real estate mortgages and derive income from the collection of interest
payments. Like investment companies such as the Fund, REITs are not taxed on
income distributed to shareholders provided they comply with several
requirements of the Internal Revenue Code of 1986, as amended (the "Code"). The
Fund will indirectly bear its proportionate share of any expenses paid by REITs
in which it invests in addition to the expenses paid by the Fund.

Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes

<PAGE>

in the value of the underlying property owned by the REITs, while mortgage
REITs may be affected by the quality of any credit extended. REITs are
dependent upon management skills, are not diversified, and are subject to the
risks of financing projects. REITs are subject to heavy cash flow dependency,
default by borrowers, self-liquidation, and the possibilities of failing to
qualify for the exemption from tax for distributed income under the Code and
failing to maintain their exemptions from the Investment Company Act of 1940,
as amended (the "1940 Act"). REITs whose underlying assets include long-term
health care properties, such as nursing, retirement and assisted living homes,
may be impacted by federal regulations concerning the health care industry.

REITs (especially mortgage REITs) are also subject to interest rate risks.
When interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

Investing in REITs involves risks similar to those associated with
investing in small capitalization companies. REITs may have limited financial
resources, may trade less frequently and in a limited volume and may be subject
to more abrupt or erratic price movements than larger company securities.
Historically, small capitalization stocks, such as REITs, have been more
volatile in price than the larger capitalization stocks included in the
Standard & Poor's Index of 500 Common Stocks.

Other Eligible Investments

The Fund may invest up to 25% of its total assets in any of the
investments described in this section.

Debt Securities of Real Estate Industry Companies and Mortgage-Backed
Securities. The Fund may invest in debt securities (including convertible debt
securities) of real estate industry companies. PMC intends to invest no more
than 5% of the Fund's net assets in debt securities rated, at the time of
investment, below Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by
Standard & Poor's Ratings Group ("Standard & Poor's"), commonly referred to as
junk bonds, or, if unrated, judged by PMC to be of at least comparable quality.
Securities rated Baa by Moody's or BBB by Standard & Poor's and securities of
comparable quality, referred to as "medium grade" obligations, have speculative
characteristics, and changes in economic conditions and other factors are more
likely to lead to weakened capacity to pay principal and interest than is the
case for higher rated investment grade securities. In the event a debt security
purchased by the Fund is subsequently down graded below investment grade, PMC
will consider whether the Fund should continue to hold the security. See the
Statement of Additional Information for a description of the corporate debt
ratings assigned by Moody's and Standard & Poor's and the risks associated with
lower-rated debt securities.

The Fund may also invest in securities that directly or indirectly
represent participations in, or are collateralized by and payable from,
mortgage loans secured by real property ("Mortgage-Backed Securities").
Investing in Mortgage-Backed Securities involves certain unique risks in
addition to those associated with investing in the real estate industry in
general. These risks include the failure of a counter-party to meet its
commitments, adverse interest rate changes and the effects of prepayments on
mortgage cash flows. See Appendix A for a more complete description of the
characteristics of Mortgage-Backed Securities and associated risks.

Short-Term Investments. The Fund may invest in short-term investments
consisting of: corporate commercial paper and other short-term commercial
obligations, in each case rated or issued by companies with similar securities
outstanding that are rated Prime-1, Aa or better by Moody's or A-1, AA or
better by Standard & Poor's; obligations (including certificates of deposit,
time deposits, demand deposits and bankers' acceptances) of banks with
securities outstanding that are rated Prime-1, Aa or better by Moody's, or A-1,
AA or better by Standard & Poor's; obligations issued or guaranteed by the U.S.
government or its agencies or instrumentalities with remaining maturities not
exceeding 18 months; and repurchase agreements.

Foreign Investments

The Fund may invest up to 10% of its net assets in equity and debt
securities of foreign real estate companies, provided that purchases of
Canadian securities are not subject to the limitations of this paragraph.
Investing in securities of foreign companies involves certain considerations
and risks which are not typically associated with investing in securities of
U.S. companies. Foreign companies are not subject to uniform accounting,
auditing and financial standards and requirements comparable to those
applicable to U.S. companies. There may also be less publicly available
information about foreign companies compared to reports and ratings published
about U.S. companies. In addition, foreign securities markets have
substantially less volume than U.S. markets and securities of some foreign
companies are less liquid and more volatile than securities of comparable U.S.
companies. There may also be less government supervision and regulation of
foreign securities exchanges, brokers and listed companies than exists in the
U.S. Dividends or interest or, in some cases capital gains, from foreign
investments may be subject to withholding or other foreign taxes which will
decrease the net return on such investments as compared to the return on the
Fund's U.S. investments. Finally, there may be the possibility of
expropriations, confiscatory taxation, political, economic or social
instability or diplomatic developments which could adversely affect assets of
the Fund held in foreign countries.

The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange

<PAGE>

control regulations. For example, the value of a foreign security held by the
Fund as measured in U.S. dollars will decrease if the foreign currency in which
the security is denominated declines in value against the U.S. dollar. In such
event, this will cause an overall decline in the Fund's net asset value and may
also reduce net investment income and capital gains, if any, to be distributed
in U.S. dollars to shareholders of the Fund. See "Foreign Real Estate Companies
and Associated Risks" in the Statement of Additional Information for a
description of the risks associated with foreign investments.

Restricted and Illiquid Securities

The Fund may invest up to 5% of its net assets in securities exempt from
registration and up to 15% of its net assets in illiquid investments. See
Appendix A for a description of the risks associated with these securities.

Non-Diversified Status

The Fund is "non-diversified" for purposes of the 1940 Act. As a
non-diversified mutual fund, the Fund may be more susceptible to risks
associated with a single economic, political or regulatory occurrence than a
diversified fund might be. Like most other registered investment companies,
however, the Fund intends to qualify as a "regulated investment company" under
the Code and therefore will be subject to diversification limits, which
generally require that, as of the close of each quarter of its taxable year,
(i) no more than 25% of its assets may be invested in the securities of a
single issuer (except for U.S. government securities) and (ii) with respect to
50% of its total assets, no more than 5% of its total assets may be invested in
the securities of a single issuer (except for U.S. government securities) or
invested in more than 10% of the outstanding voting securities of a single
issuer.

Portfolio Turnover

PMC generally avoids market-timing or speculating on broad market
fluctuations. Therefore, except as described above, the Fund will be
substantially fully invested at all times. Changes in the portfolio may be made
promptly when determined to be advisable by reason of developments not foreseen
at the time of the initial investment decision, and usually without reference
to the length of time a security has been held. Accordingly, portfolio turnover
rates are not considered a limiting factor in the execution of investment
decisions. See "Financial Highlights" for the Fund's actual turnover rates.

The Fund's investment objectives and certain investment restrictions
designated as fundamental in the Statement of Additional Information may be
changed by the Board of Trustees only with shareholder approval.

IV. MANAGEMENT OF THE FUND

The Fund's Board of Trustees has overall responsibility for the management
and supervision of the Fund. The Board meets at least quarterly. By virtue of
the functions performed by PMC as investment adviser, the Fund requires no
employees other than its executive officers, all of whom receive their
compensation from PMC or other sources. The Statement of Additional Information
contains the name and general business and professional background of each
Trustee and executive officer of the Fund.

The Manager

The Fund is managed under a management contract with PMC. PMC serves as
investment adviser to the Fund and is responsible for the overall management of
the Fund's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly owned subsidiary of The Pioneer Group, Inc. ("PGI"),
a Delaware corporation. Pioneer Funds Distributor, Inc. ("PFD"), an indirect
wholly-owned subsidiary of PGI, is the principal underwriter of shares of the
Fund. John F. Cogan, Jr., Chairman and Chief Executive Officer of the Fund,
Chairman and a Director of PMC and PFD, and President and a Director of PGI,
beneficially owned approximately 14% of the outstanding capital stock of PGI as
of the date of this Prospectus.

Mr. David Tripple, President and Chief Investment Officer of PMC and
Executive Vice President of each Pioneer mutual fund, has general
responsibility for PMC's investment operations and chairs a committee of PMC's
equity managers which reviews PMC's research and portfolio operations,
including those of the Fund. Mr. Tripple joined PMC in 1974.

Research and management of the Fund is the responsibility of a team
consisting of a PMC portfolio manager and analysts from Boston Financial
Securities, Inc. ("BFS"), the Fund's subadviser. Members of the team meet
regularly to discuss holdings, prospective investments and portfolio
composition. Mr. Robert Bensen, a Senior Vice President of PMC and the Fund, is
the senior member of the team. Mr. Bensen joined PMC in 1974 and has 24 years
of investment experience. Mr. Bensen is responsible for the day-to-day
management of the Fund.

In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. The executive offices of PMC, PGI and PFD are located
at 60 State Street, Boston, Massachusetts 02109. In an effort to avoid
conflicts of interest with the Fund, the Fund, PMC and BFS, the subadvisor to
the Fund, have adopted a Code of Ethics that is designed to maintain a high
standard of personal conduct by directing that all personnel defer to the
interests of the Fund and its shareholders in making personal securities
transactions.

Under the terms of its contract with the Fund, PMC assists in the
management of the Fund and is authorized in its discretion to buy and sell
securities for the account of the Fund. PMC pays all the ordinary operating
expenses, including executive salaries and the rental of office space relating
to its services for the Fund with the exception of the following which are to
be paid by the Fund: (a) charges and expenses for fund accounting, pricing and
appraisal services and related overhead, including, to the extent such services
are performed by personnel of PMC or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed
by

<PAGE>

the Fund with respect to the Fund; (d) issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is a
party; (e) insurance premiums, interest charges, dues and fees for membership
in trade associations and all taxes and corporate fees payable by the Fund to
federal, state or other governmental agencies; (f) fees and expenses involved
in registering and maintaining registrations of the Fund and/or its shares with
the SEC, state or blue sky securities agencies and foreign countries, including
the preparation of Prospectuses and Statements of Additional Information for
filing with the SEC; (g) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies; (h)
charges and expenses of legal counsel to the Fund and the Trustees; (i)
distribution fees paid by the Fund pursuant to the 1940 Act; (j) compensation
of those Trustees of the Fund who are not affiliated with or interested persons
of PMC, the Fund (other than as Trustees), PGI or PFD; (j) the cost of
preparing and printing share certificates; (k) interest on borrowed money, if
any; and (l) organizational expenses of the Fund. The Fund also pays all
brokerage commissions and any taxes or other charges in connection with its
portfolio transactions. In addition, the expense of organizing the Fund and
initially registering and qualifying its shares under federal and state
securities laws are being charged to the Fund's operations, as an expense, over
a period not to exceed 60 months from the Fund's inception date.

Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund or other funds for which PMC or any other
affiliate or subsidiary serves as investment adviser or manager. See the
Statement of Additional Information for a further description of PMC's
brokerage allocation practices.

As compensation for its management and investment advisory services and
certain expenses which PMC incurs, PMC is entitled to a management fee equal to
1% per annum of the Fund's average daily net assets. The fee is normally
computed daily and paid monthly. See "Expense Information" in this Prospectus
and "Investment Adviser" in the Statement of Additional Information.

The Real Estate Subadviser. BFS is an affiliate of The Boston Financial
Group Limited Partnership, a Massachusetts limited partnership ("Boston
Financial"), which together with a predecessor business has extensive
experience and expertise in placing, evaluating and providing advice on a
variety of real estate related investments since 1969 for individuals,
institutions and real estate professionals. Several other affiliates of BFS
also provide a variety of financial, consulting and management services to real
estate investors and developers. As one of the largest real estate asset
managers in the U.S., Boston Financial oversees investment in over $4.5 billion
of properties in 49 states. The company serves over 30,000 investors with
equity contributions in excess of $2 billion in real estate investments. In its
capacity as subadviser to the Fund, BFS (i) identifies and analyzes real estate
industry companies, including real estate properties and other permissible
investments for the Fund, (ii) analyzes market conditions affecting the real
estate industry generally and specific geographical and securities markets in
which the Fund may invest or is invested, (iii) continuously reviews and
analyzes the investments in the Fund's portfolio and (iv) furnishes advisory
reports based on such analysis to PMC.

Mr. Fred N. Pratt, Jr. has the ultimate responsibility for overseeing the
provisions of subadvisory services to the Fund. Mr. Pratt is President and
Chief Executive Officer of Boston Financial, a Director of BFS and a Trustee of
the Fund. Mr. Pratt has worked in the real estate industry since 1969. Mr. Mark
Howard-Johnson, a Vice President of BFS, is primarily responsible for the
day-to-day provision of subadvisory services to the Fund since September 30,
1996. Mr. Howard-Johnson has worked as a real estate analyst since 1994.

As compensation for its subadvisory services, PMC (and not the Fund) pays
BFS a subadvisory fee equal to 0.25% per annum of the Fund's average daily net
assets up to $27 million and 0.50% of average daily net assets in excess of $27
million. After written notice to BFS, the subadvisory fee payable by PMC to BFS
would be reduced proportionally to the extent that PMC elects to utilize a
portion of the management fees paid to PMC by the Fund to make payments to
third parties.

The executive offices of BFS are located at 101 Arch Street, Boston,
Massachusetts 02110. BFS is a registered broker-dealer and may act as a broker
in connection with the sale of shares of the Fund under a sales agreement with
PFD.

Certain information technology experts currently predict the possibility
of a widespread failure of computer systems and certain other equipment which
will be triggered on or after certain dates--primarily January 1, 2000--due to
a systemic inability to process date-related information. This scenario,
commonly known as the "Year 2000 Problem," could have an adverse impact on
individuals and businesses, including the Fund and other mutual funds and
financial organizations. PMC and its affiliates are taking steps believed to be
adequate to address the Year 2000 Problem with respect to the systems and
equipment controlled by the Fund's investment adviser, broker-dealer and
transfer agent. In addition, other entities providing services to the Fund and
its shareholders are being asked to provide assurances that they have
undertaken similar measures with respect to their systems and equipment.
Although PMC is not expecting any adverse impact to it or its clients from the
Year 2000 Problem, it cannot provide complete assurances that its efforts or
the efforts of its key vendors will be successful.

V. FUND SHARE ALTERNATIVES

The Fund continuously offers four Classes of shares designated as Class A,
Class B, Class C and Class Y shares. Information with regard to Class Y shares
of the Fund is available in a separate prospectus. Class A, Class B and Class C
shares are described more fully in "How to Buy Fund Shares."

<PAGE>

If you do not specify in your instructions to the Fund which Class of shares
you wish to purchase, exchange or redeem, the Fund will assume that your
instructions apply to Class A shares.

Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase; however, shares redeemed
within 12 months of purchase may be subject to a CDSC. Class A shares are
subject to distribution and service fees at a combined annual rate of up to
0.25% of the Fund's average daily net assets attributable to Class A shares.

Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge, but
are subject to a CDSC of up to 4% if redeemed within six years. Class B shares
are subject to distribution and service fees at a combined annual rate of 1% of
the Fund's average daily net assets attributable to Class B shares. Your entire
investment in Class B shares is available to work for you from the time you
make your investment, but the higher distribution fee paid by Class B shares
will cause your Class B shares (until conversion) to have a higher expense
ratio and to pay lower dividends, to the extent dividends are paid, than Class
A shares. Class B shares will automatically convert to Class A shares, based on
relative net asset value, eight years after the initial purchase.

Class C Shares. Class C shares are sold without an initial sales charge,
but are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.

Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not to
pay an initial sales charge on an investment of $250,000 or less and you plan
to hold the investment for at least six years, you might consider Class B
shares. If you prefer not to pay an initial sales charge and you plan to hold
your investment for one to eight years, you may prefer Class C shares.

Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund, and
shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold outside
the U.S. to persons who are not U.S. citizens may be subject to different sales
charges, CDSCs and dealer compensation arrangements in accordance with local
laws and business practices.

VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share, plus any applicable sales charge. The net asset value
per share of each Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares of
that Class outstanding. The net asset value is computed once daily, on each day
the New York Stock Exchange (the "Exchange") is open, as of the close of
regular trading on the Exchange.

Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities quoted
in foreign currencies are converted to U.S. dollars utilizing foreign exchange
rates employed by the Fund's independent pricing services. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the Exchange. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times. Foreign currency exchange rates are also generally determined prior to
the close of the Exchange. Occasionally, events which affect the values of such
securities and such exchange rates may occur between the times at which they
are determined and the close of the Exchange and will therefore not be
reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities occur during such period,
then these securities may be valued at their fair value as determined in good
faith by the Trustees. All assets of the Fund for which there is no other
readily available valuation method are valued at their fair value as determined
in good faith by the Trustees.

VII. HOW TO BUY FUND SHARES

You may buy Fund shares from any securities broker-dealer which has a sales
agreement with PFD. If you do not have a securities broker-dealer, please call
1-800-225-6292. Shares will be purchased at the public offering price, that is,
the net asset value per share, plus any applicable sales charge, next computed
after receipt of a purchase order, except as set forth below.

The minimum initial investment is $1,000 for Class A, Class B and Class C
shares, except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; and no sales charge or
minimum investment requirements apply to the reinvestment of dividends or
capital gains distributions. The minimum subse-

<PAGE>

quent investment is $50 for Class A shares and $500 for Class B and C shares,
except that the subsequent minimum investment amount for Class B and C share
accounts may be as little as $50 if an automatic investment plan is established
(see "Automatic Investment Plans").

Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicate otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing mutual fund account; it may not be used to establish a new account.
Proper account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to Individual Retirement Accounts
("IRAs") but may not be available to other types of retirement plan accounts.
Call PSC for more information.

You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section of
your Account Application or an Account Options Form. PSC will electronically
debit the amount of each purchase from this predesignated bank account.
Telephone purchases may not be made for 30 days after the establishment of your
bank of record or any change to your bank information.

Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's receipt of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.

Class A Shares

You may buy Class A shares at the public offering price, including a sales
charge, as follows:

Sales Charge as a % of
-----------------------
Dealer
Net Allowance
Offering Amount as a % of
Amount of Purchase Price Invested Price
- ----------------------------------- ---------- ---------- ----------
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1 million or more -0- -0- See Below

The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Code, although more than one beneficiary is involved.
The sales charges applicable to a current purchase of Class A shares of the
Fund by a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of shares
of any of the other Pioneer mutual funds previously purchased and then owned,
provided PFD is notified by such person or his or her broker-dealer each time a
purchase is made which would qualify. Pioneer mutual funds include all mutual
funds for which PFD serves as principal underwriter. At the sole discretion of
PFD, holdings of funds domiciled outside the U.S., but which are managed by
affiliates of PMC, may be included for this purpose.

No sales charge is payable at the time of purchase on investments of $1
million or more, or for purchases by participants in certain group plans
(described below), subject to a CDSC of 1% is imposed in the event of a
redemption of Class A shares within 12 months of purchase. See "How to Sell
Fund Shares" below. PFD may, in its discretion, pay a commission to
broker-dealers who initiate and are responsible for such purchases as follows:
1% on the first $5 million invested; 0.50% on the next $45 million invested;
and 0.25% on the excess over $50 million invested. These commissions shall not
be paid if the purchaser is affiliated with the broker-dealer or if the
purchase represents the reinvestment of a redemption made during the previous
12 calendar months. Broker-dealers who receive a commission in connection with
Class A share purchases at net asset value by 401(a) or 401(k) retirement plans
with 1,000 or more eligible participants or with at least $10 million in plan
assets will be required to return any commission paid or a pro rata portion
thereof if the retirement plan redeems its shares within 12 months of purchase.
See also "How to Sell Fund Shares." In connection with PGI's acquisition of
Mutual of Omaha Fund Management Company and contingent upon the achievement of
certain sales objectives, PFD may pay to Mutual of Omaha Investor Services,
Inc. 50% of PFD's retention of any sales commission on sales of the Fund's
shares through such dealer. From time to time, PFD may elect to reallow the
entire initial sales charge to participating dealers for all Class A shares
with respect to which orders are placed during a particular period. Dealers to
whom substantially the entire sales charge is reallowed may be deemed to be
underwriters under the federal securities laws.

Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to, permits
group solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Class A shares of the Fund may be sold at net asset
value without a sales charge to 401(k) retirement plans with 100 or more
participants or at least $500,000 in plan assets. Information about such
arrangements is available from PFD.

Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners and employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as an investment adviser, and the
subsid-

<PAGE>

iaries or affiliates of such persons; (d) current or former officers, partners,
employees or registered representatives of broker-dealers which have entered
into sales agreements with PFD; (e) members of the immediate families of any of
the persons above; (f) any trust, custodian, pension, profit-sharing or other
benefit plan of the foregoing persons; (g) insurance company separate accounts;
(h) certain "wrap accounts" for the benefit of clients of financial planners
adhering to standards established by PFD; (i) other funds and accounts for
which PMC or any of its affiliates serves as investment adviser or manager; and
(j) certain unit investment trusts. Shares so purchased are purchased for
investment purposes and may not be resold except through redemption or
repurchase by or on behalf of the Fund. The availability of this privilege is
conditioned on the receipt by PFD of written notification of eligibility. Class
A shares of the Fund may be sold at net asset value per share without a sales
charge to state-sponsored Optional Retirement Program (the "Program")
participants if (i) the employer has authorized a limited number of investment
company providers for the Program, (ii) all authorized investment company
providers offer their shares to Program participants at net asset value, (iii)
the employer has agreed in writing to actively promote the authorized
investment providers to Program participants and (iv) the Program provides for
a matching contribution for each participant contribution. Class A shares of
the Fund may also be sold at net asset value without a sales charge in
connection with certain reorganization, liquidation or acquisition transactions
involving other investment companies or personal holding companies.

Reduced sales charges are available for purchases of $50,000 or more of
Class A shares (excluding any reinvestments of dividends and capital gains
distributions) made within a 13-month period pursuant to a Letter of Intent
("LOI") which may be established by completing the Letter of Intent section of
the Account Application. The reduced sales charge will be the charge that would
be applicable to the purchase of the specified amount of Class A shares as if
the shares had all been purchased at the same time. A purchase not made
pursuant to an LOI may be included if the LOI is submitted to PSC within 90
days of such purchase. You may also obtain the reduced sales charge by
including the value (at current offering price) of all your Class A shares in
the Fund and all other Pioneer mutual funds held of record as of the date of
your LOI in the amount used to determine the applicable sales charge for the
Class A shares to be purchased under the LOI. Five percent of your total
intended purchase amount will be held in escrow by PSC, registered in your
name, until the terms of the LOI are fulfilled.

You are not obligated to purchase the amount specified in your LOI. If,
however, the amount actually purchased during the 13-month period is more or
less than that indicated in your LOI, an adjustment in the sales charge will be
made. If a payment to cover actual sales charges is due, it must be paid to PFD
within 20 days after PFD or your dealer sends you a written request, otherwise
PFD will direct PSC to liquidate sufficient shares from your escrow account to
cover the amount due. See the Statement of Additional Information for more
information.

Investors who are clients of a broker-dealer with a current selling
agreement with PFD may purchase Class A shares of the Fund at net asset value,
without a sales charge, to the extent that the purchase price is paid out of
proceeds from one or more redemptions by the investor of shares of certain
other mutual funds. In order for a purchase to qualify for this privilege, the
investor must document to the broker-dealer that the redemption occurred within
60 days immediately preceding the purchase of Class A shares; that the client
paid a sales charge on the original purchase of the shares redeemed; and that
the mutual fund whose shares were redeemed also offers net asset value
purchases to redeeming shareholders of any of the Pioneer mutual funds. Further
details may be obtained from PFD.

Class B Shares

You may buy Class B shares at the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates shown in the table below. The charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.

The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B shares,
the Fund will first redeem shares not subject to any CDSC, and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.

The CDSC for Class B shares subject to a CDSC upon redemption will be
determined as follows:

Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- -------------------------------- -------------------------------
First .......................... 4.0%
Second ......................... 4.0%
Third .......................... 3.0%
Fourth ......................... 3.0%
Fifth .......................... 2.0%
Sixth .......................... 1.0%
Seventh and thereafter ......... none

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
Fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.

Class B shares will automatically convert into Class A shares at the end
of the calendar quarter that is eight years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of another
Pioneer mutual fund will convert into Class A shares based on the date of the
initial purchase and the applicable CDSC.

<PAGE>

Class B shares acquired through reinvestment of distributions will convert into
Class A shares based on the date of the initial purchase to which such shares
relate. For this purpose, Class B shares acquired through reinvestment of
distributions will be attributed to particular purchases of Class B shares in
accordance with such procedures as the Trustees may determine from time to
time. The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service (the
"IRS") that such conversions will not constitute taxable events for federal tax
purposes. The conversion of Class B shares to Class A shares will not occur if
such ruling is not available and, therefore, Class B shares would continue to
be subject to higher expenses than Class A shares for an indeterminate period.

Class C Shares

You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1%. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial purchase price, including shares derived from
the reinvestment of dividends or capital gains distributions. Class C shares do
not convert to any other Class of Fund shares.

For the purpose of determining the time of any purchase, all payments
during a quarter will be aggregated and deemed to have been made on the first
day of that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.

Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
Fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.

Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class
B shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of an UGMA, an UTMA or a trust account, waiver applies upon the death
of all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of the value of the account in the Fund at the time
the withdrawal plan is established).

The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and permanent
disability (as defined in Section 72 of the Code) occurring after the purchase
of the shares being redeemed of a shareholder or participant in an
employer-sponsored retirement plan; (b) the distribution is to a participant in
an IRA, 403(b) or employer-sponsored retirement plan, is part of a series of
substantially equal payments made over the life expectancy of the participant
or the joint life expectancy of the participant and his or her beneficiary or
as scheduled periodic payments to a participant (limited in any year to 10% of
the value of the participant's account at the time the distribution amount is
established; a required minimum distribution due to the participant's
attainment of age 70-1/2 may exceed the 10% limit only if the distribution
amount is based on plan assets held in Pioneer mutual funds); (c) the
distribution is from a 401(a) or 401(k) retirement plan and is a return of
excess employee deferrals or employee contributions or a qualifying hardship
distribution as defined by the Code or results from a termination of employment
(limited with respect to a termination to 10% per year of the value of the
plan's assets in the Fund as of the later of the prior December 31 or the date
the account was established unless the plan's assets are being rolled over to
or reinvested in the same class of shares of a Pioneer mutual fund subject to
the CDSC of the shares originally held); (d) the distribution is from an IRA,
403(b) or employer-sponsored retirement plan and is to be rolled over to or
reinvested in the same class of shares in a Pioneer mutual fund and which will
be subject to the applicable CDSC upon redemption; (e) the distribution is in
the form of a loan to a participant in a plan which permits loans (each
repayment of the loan will constitute a new sale which will be subject to the
applicable CDSC upon redemption); or (f) the distribution is from a qualified
defined contribution plan and represents a participant's directed transfer
(provided that this privilege has been pre-authorized through a prior agreement
with PFD regarding participant directed transfers).

The CDSC on Class C shares and on any Class A shares subject to a CDSC may
be waived or reduced as follows: (a) for automatic redemptions as described in
"Systematic Withdrawal Plans" (limited to 10% of the value of the account
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder or participant in an
employer-sponsored retirement plan; (c) if the distribution is part of a series
of substantially equal payments made over the life expectancy of the
participant or the joint life expectancy of the participant and his or her
beneficiary; or (d) if the distribution is to a participant in an
employer-sponsored retirement plan and is (i) a return of excess employee
deferrals or contributions, (ii) a qualifying hardship distribution as defined
by the Code, (iii) from a termination of employment, (iv) in the form of a loan
to a participant in a plan which permits loans, or (v) from a qualified defined
contribution plan and represents a participant's directed transfer (provided
that this privilege has been pre-authorized through a prior agreement with PFD
regarding participant directed transfers).

The CDSC on any shares subject to a CDSC may be waived or reduced for
either non-retirement or retirement plan accounts if the redemption is made
pursuant to the Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account. The CDSC on any shares subject to a CDSC will not be
applicable if the selling broker-dealer elects, with

<PAGE>

PFD's approval, to waive receipt of the commission normally paid at the time of
the sale.

Broker-Dealers. An order for any Class of Fund shares received by a
broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close of
regular trading on the Exchange on the day the order is received, provided the
order is received by PFD prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders so
that they will be received by PFD prior to its close of business. PFD or its
affiliates may provide additional compensation to certain dealers or such
dealers' affiliates based on certain objective criteria established from time
to time by PFD. All such payments are made out of PFD's or the affiliate's own
assets. These payments will not change the price an investor will pay for
shares or the amount that the Fund will receive from such sale.

General. The Fund reserves the right in its sole discretion to withdraw
all or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.

VIII. HOW TO SELL FUND SHARES

You can arrange to sell (redeem) Fund shares on any day the Exchange is
open by selling either some or all of your shares to the Fund.

You may sell your shares either through your broker-dealer or directly to
the Fund. Please note the following:

[bullet] If you are selling shares from a retirement account, other than an
IRA, you must make your request in writing (except for exchanges to
other Pioneer mutual funds which can be requested by phone or in
writing). Call 1-800-622-0176 for more information.

[bullet] If you are selling shares from a non-retirement account or IRA,
you may use any of the methods described below.

Your shares will be sold at the share price next calculated after your
order is received in good order less any applicable CDSC. Sale proceeds
generally will be sent to you by check, bank wire or electronic funds transfer,
normally within seven days after your order is received in good order. The Fund
reserves the right to withhold payment of the sale proceeds until checks
received by the Fund in payment for the shares being sold have cleared, which
may take up to 15 calendar days from the purchase date.

In Writing. You may sell your shares by delivering a written request,
signed by all registered owners, in good order to PSC; however, you must use a
written request, including a signature guarantee, to sell your shares if any of
the following situations applies:

[bullet] you wish to sell over $100,000 worth of shares,

[bullet] your account registration or address has changed within the last
30 days,

[bullet] the check is not being mailed to the address on your account
(address of record),

[bullet] the check is not being made out to the account owners, or

[bullet] the sale proceeds are being transferred to a Pioneer mutual fund
account with a different registration.

Your request should include your name, the Fund's name, your Fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, PSC will send the proceeds of the sale to
the address of record. Fiduciaries and corporations are required to submit
additional documents. For more information, contact PSC at 1-800-225-6292.

Written requests will not be processed until they are received in good
order by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any certificates are endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under state
law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC at
1-800-225-6292.

By Telephone or Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. The telephone redemption option is not
available to retirement plan accounts, except IRAs. A maximum of $100,000 per
account per day may be redeemed by telephone or fax and the proceeds may be
received by check or by bank wire or electronic funds transfer. To receive the
proceeds by check: the check must be made payable exactly as the account is
registered and the check must be sent to the address of record which must not
have changed in the last 30 days. To receive the proceeds by bank wire or
electronic funds transfer: the proceeds must be sent to the bank wire address
of record which must have been properly pre-designated either on your Account
Application or on an Account Options Form and which must not have changed in
the last 30 days. To redeem by fax, send your redemption request to
1-800-225-4240. You may always elect to deliver redemption instructions to PSC
by mail. See "Telephone Transactions" below. Telephone redemptions will be
priced as described above. You are strongly urged to consult with your
financial representative prior to requesting a telephone redemption.

Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Your broker-dealer must receive your request before the close of business on
the Exchange and transmit it to PFD before PFD's close of business to receive
that day's redemption price. Your broker-dealer is responsible for providing
all necessary documentation to PFD and may charge you for its services.

<PAGE>

Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held in
this account at net asset value if you have not increased the net asset value
of the account to at least the minimum required amount within six months of
notice by the Fund to you of the Fund's intention to redeem the shares.

CDSC on Class A Shares. Purchases of Class A shares of $1 million or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months following
the share purchase, at the rate of 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividend and capital gain distributions) or
the total cost of such shares. Shares subject to the CDSC which are exchanged
into another Pioneer mutual fund will continue to be subject to the CDSC until
the original 12-month period expires. However, no CDSC is payable with respect
to Class A shares purchased by 401(a) or 401(k) retirement plans with 1,000 or
more eligible participants or with at least $10 million in plan assets.

General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.

Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.

IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the Class of shares to be exchanged and the dollar amount or number
of shares to be exchanged. Written exchange requests must be signed by all
record owner(s) exactly as the shares are registered.

Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicate otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each voice-requested or FactFoneSM telephone
exchange request will be recorded. You are strongly urged to consult with your
financial representative prior to requesting a telephone exchange. See
"Telephone Transactions" below.

Automatic Exchanges. You may automatically exchange shares from one
Pioneer mutual fund account for shares of the same Class in another Pioneer
mutual fund account on a monthly or quarterly basis. The accounts must have
identical registrations and the originating account must have a minimum balance
of $5,000. The exchange will be effective on the day of the month designated on
your Account Application or Account Options Form.

General. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Fund shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not all
Pioneer mutual funds offer more than one Class of shares. A new Pioneer mutual
fund account opened through an exchange must have a registration identical to
that on the original account.

Shares which would normally be subject to a CDSC upon redemption will not
be charged the applicable CDSC at the time of an exchange. Shares acquired in
an exchange will be subject to the CDSC of the shares originally held. For
purposes of determining the amount of any applicable CDSC, the length of time
you have owned shares acquired by exchange will be measured from the date you
acquired the original shares and will not be affected by any subsequent
exchange.

Exchange requests received by PSC before 4:00 p.m. Eastern time will be
effective on that day if the requirements above have been met, otherwise, they
will be effective on the next business day. PSC will process exchanges only
after receiving an exchange request in good order. There are currently no fees
or sales charges imposed at the time of an exchange. An exchange of shares may
be made only in states where legally permitted. For federal and (generally)
state income tax purposes, an exchange is considered to be a sale of the shares
of the Fund exchanged and a purchase of shares in another Pioneer mutual fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply.

You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For the protection of the Fund's performance and
shareholders, the Fund and PFD reserve the right to refuse any exchange request
or restrict, at any time without notice, the number and/or frequency of
exchanges to prevent abuses of the exchange privilege. Such abuses may arise
from frequent trading in response to short-term market fluctuations, a pattern
of trading by an individual or group that appears to be an attempt to "time the
market," or any other exchange request which, in the view of management, will
have a detrimental effect on the Fund's portfolio management strategy or its
operations. In addition, the Fund and PFD reserve the right to charge a fee for
exchanges or to modify, limit, suspend or discontinue the exchange privilege
with notice to shareholders as required by law.

X. DISTRIBUTION PLANS

The Fund has adopted a Plan of Distribution for each Class of shares (with
the exception of Class Y Shares) (the "Class A Plan," "Class B Plan," and
"Class C Plan") in accordance with

<PAGE>

Rule 12b-1 under the 1940 Act pursuant to which certain distribution fees are
paid to PFD.

Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares, provided
the categories of expenses for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.25% per annum of the Fund's daily net assets
attributable to Class A shares; (ii) reimbursement to PFD for its expenditures
for broker-dealer commissions and employee compensation on certain sales of the
Fund's Class A shares with no initial sales charge (see "How to Buy Fund
Shares"); and (iii) reimbursement to PFD for expenses incurred in providing
services to Class A shareholders and supporting broker-dealers and other
organizations (such as banks and trust companies) in their efforts to provide
such services. Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the described
services, management would consider what action, if any, would be appropriate.

Expenditures of the Fund pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A Plan
may not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein
without approval of the Class A shareholders of the Fund.

Both the Class B Plan and the Class C Plan provide that the Fund will pay
a distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets attributable to the applicable class of shares and will pay PFD a
service fee at the annual rate of 0.25% of the Fund's average daily net assets
attributable to that Class of shares. The distribution fee is intended to
compensate PFD for its Class B and Class C distribution services to the Fund.
The service fee is intended to be additional compensation for personal services
and/or account maintenance services with respect to Class B or Class C shares.
PFD also receives the proceeds of any CDSC imposed on the redemption of Class B
or Class C shares.

Commissions of 4% of the amount invested in Class B shares, equal to 3.75%
of the amount invested and a first year's service fee equal to 0.25% of the
amount invested, in Class B Shares are paid to broker-dealers who have sales
agreements with PFD. PFD may advance to dealers the first year service fee at a
rate up to 0.25% of the purchase price of such shares and, as compensation
therefore, PFD may retain the service fee paid by the Fund with respect to such
shares for the first year after purchase. Dealers will become eligible for
additional annual service fees of up to 0.25% of the net asset value of such
shares commencing in the 13th month following the purchase.

Commissions of up to 1% of the amount invested in Class C shares,
consisting of 0.75% of the amount invested and a first year's service fee of
0.25% of the amount invested, are paid to broker-dealers who have sales
agreements with PFD. PFD may advance to dealers the first year service fee at a
rate up to 0.25% of the purchase price of such shares and, as compensation
therefore, PFD may retain the service fee paid by the Fund with respect to such
shares for the first year after purchase. Commencing in the 13th month
following the purchase of Class C shares, dealers will become eligible for
additional annual distribution fees and service fees of up to 0.75% and 0.25%,
respectively, of the net asset value of such shares.

When a broker-dealer sells Class B or Class C shares and elects, with
PFD's approval, to waive its right to receive the commission normally paid at
the time of the sale, PFD may cause all or a portion of the distribution fees
described above to be paid to the broker dealer.

Dealers may from time to time be required to meet certain criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan or the Class C Plan for which there
is no dealer of record or for which qualification standards have not been met
as partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareholder accounts.

XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund has elected to be treated, has qualified and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code,
so that it will not pay federal income tax on income and capital gains
distributed to shareholders as required under the Code.

Under the Code, the Fund will be subject to a nondeductible 4% federal
excise tax on a portion of its undistributed ordinary income and capital gains
if it fails to meet certain distribution requirements with respect to each
calendar year. The Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.

The Fund's policy is to pay to shareholders dividends from net investment
income, if any, quarterly during the months of March, June, September and
December and to make distributions from net long-term capital gains, if any,
usually in December. Distributions from net short-term capital gains, if any,
may be paid with such dividends; dividends from income and/or capital gains may
also be paid at such other times as may be necessary for the Fund to avoid
federal income or excise tax. Generally, dividends from the Fund's net
investment income, market discount income, net short-term capital gains, and
certain net foreign exchange gains are taxable under the Code as ordinary
income, and dividends from the Fund's net long-term capital gains are taxable
as long-term capital gains.

The Fund's distributions of long-term capital gains to individuals or
other noncorporate taxpayers are subject to differ-

<PAGE>

ent maximum tax rates, (which will be indicated in the annual tax information
the Fund provides to shareholders), depending generally upon the sources of,
and the Fund's holding periods for the assets that produce, the gains.

Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the Fund.
For federal income tax purposes, all dividends are taxable as described above
whether a shareholder takes them in cash or reinvests them in additional shares
of the Fund. Information as to the federal tax status of dividends and
distributions will be provided to shareholders annually. For further
information on the distribution options available to shareholders, see
"Distribution Options" and "Directed Dividends" below.

Distributions by the Fund of the dividend income it receives from U.S.
domestic corporations, if any, may qualify for the dividends-received deduction
for corporate shareholders, subject to holding-period requirements and
debt-financing restrictions under the Code.

The Fund may be subject to foreign withholding taxes or other foreign
taxes on income (possibly including capital gains) on certain of its foreign
investments which will reduce the yield on or return from those investments.

Dividends and other distributions and the proceeds of redemptions,
exchanges or repurchases of Fund shares paid to individuals and other
non-exempt payees will be subject to 31% backup withholding of federal income
tax if the Fund is not provided with the shareholder's correct taxpayer
identification number and certification that the number is correct and that the
shareholder is not subject to backup withholding or if the Fund receives notice
from the IRS or a broker that such withholding applies. Please refer to the
Account Application for additional information.

The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S.
corporations, partnerships, trusts or estates and who are subject to U.S.
federal income tax. Non-U.S. shareholders and tax-exempt shareholders are
subject to different tax treatment that is not described above. Shareholders
should consult their own tax advisors regarding state, local and other
applicable tax laws, including the effect of recent federal tax legislation, in
their particular circumstances .

XII. SHAREHOLDER SERVICES

PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Shareholder Services, Pioneering Services
Corporation, P.O. Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers
Harriman & Co. (the "Custodian") serves as the custodian of the Fund's
portfolio securities and other assets. The principal business address of the
Mutual Fund Division of the Custodian is 40 Water Street, Boston, Massachusetts
02109.

Account and Confirmation Statements

PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur, except
Automatic Investment Plan transactions which are confirmed quarterly. The
Pioneer Combined Account Statement, mailed quarterly, is available to all
shareholders who have more than one Pioneer mutual fund account.

Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with the Fund
and might not be able to utilize some of the services available to shareholders
of record. Examples of services that might not be available are purchases,
exchanges or redemption of shares by mail or telephone, automatic reinvestment
of dividends and capital gains distributions, systematic withdrawal plan,
Letters of Intent, rights of accumulation and newsletters.

Additional Investments

You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B and Class C shares) to PSC (account number and
Class of shares should be clearly indicated). The bottom portion of a
confirmation statement may be used as a remittance slip to make additional
investments.

Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of regular trading on
the Exchange on the day of receipt.

Automatic Investment Plans

You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized electronic funds transfer from
your bank account. Pioneer Investomatic Plan investments are voluntary, and you
may discontinue your plan at any time or change your plan elections for the
dollar amount, frequency or investment date by calling PSC at 1-800-225-6292,
or by sending a written request to Pioneering Services Corporation, P.O. Box
9014, Boston, Massachusetts 02205-9014. A change to your bank information must
be made in writing on an Account Options Form. You should allow up to five
business days for PSC to make changes to an established plan. PSC acts as agent
for the purchasers, the broker-dealer and PFD in maintaining these plans.

Financial Reports and Tax Information

As a shareholder, you will receive financial reports at least
semiannually. In January of each year the Fund will mail to you information
about the tax status of dividends and distributions.

Distribution Options

Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.

Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options

<PAGE>

are not available, however, for retirement plans or an account with a net asset
value of less than $500. Changes in the distribution option may be made by
written request to PSC.

If you elect to receive either dividends or capital gains or both in cash
and a distribution check issued to you is returned by the U. S. Postal Service
as not deliverable or a distribution check remains uncashed for six months or
more, the amount of the check may be reinvested in your account. Such
additional shares will be purchased at the then current net asset value.
Furthermore, the distribution option on the account will automatically be
changed to the reinvestment option until such time as you request a different
option by writing to PSC.

Directed Dividends

You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer mutual fund. The value of this
second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount. There are no fees or charges for this
service. Retirement plan shareholders may only direct dividends to accounts
with identical registrations; e.g., PGI IRA Cust for John Smith may only go
into another account registered PGI IRA Cust for John Smith.

Direct Deposit

If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking, or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.

Voluntary Tax Withholding

You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from an account (before any reinvestment) and
forward the amount withheld to the IRS as a credit against your federal income
taxes. This option is not available for retirement plan accounts or for
accounts subject to backup withholding.

Telephone Transactions

Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange your Fund shares by
telephone by calling 1-800-225-6292 between the hours of 8:00 a.m. and 9:00
p.m. Eastern time on weekdays. Computer-assisted transactions are available to
shareholders who have pre-recorded certain bank information (see "FactFoneSM").
You are strongly urged to consult with your financial representative prior to
requesting any telephone transaction. See "How to Buy Fund Shares," "How to
Sell Fund Shares" and "How to Exchange Fund Shares" for more information.

To confirm that each transaction instruction received by telephone is
genuine, the Fund will record each telephone transaction, require the caller to
provide the personal identification number ("PIN") for the account and send you
a written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the Fund may be liable for any loss due to unauthorized or
fraudulent instructions. In all other cases, neither the Fund, PSC nor PFD will
be responsible for the authenticity of instructions received by telephone,
therefore, you bear the risk of loss for unauthorized or fraudulent telephone
transactions. The Fund may implement other procedures from time to time.

During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate with
the Fund in writing if you are unable to reach the Fund by telephone.

FactFone(SM)

FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM) allows
you to obtain current information on your Pioneer mutual fund accounts and to
inquire about the prices and yields of all publicly available Pioneer mutual
funds. In addition, you may use FactFone(SM) to make computer-assisted telephone
purchases, exchanges and redemptions from your Pioneer mutual fund accounts if
you have activated your PIN. Telephone purchases and redemptions require the
establishment of a bank account of record. You are strongly urged to consult
with your financial representative prior to requesting any telephone
transaction. Shareholders whose accounts are registered in the name of a
broker-dealer or other third party may not be able to use FactFone(SM). See "How
to Buy Fund Shares," "How to Exchange Fund Shares," "How to Sell Fund Shares"
and "Telephone Transactions." Call PSC for assistance.

Retirement Plans

Please contact the Retirement Plans Department of PSC at 1-800-622-0176
for information relating to tax-deferred retirement plans for individuals,
businesses and tax-exempt organizations, all of which are available in
conjunction with investments in the Fund. The Account Application accompanying
this Prospectus should not be used to establish such plans. Separate
applications are required.

Telecommunications Device for the Deaf (TDD)

If you have a hearing disability and access to TDD keyboard equipment, you
can call our TDD number toll-free at 1-800- 225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern time, to contact our telephone representatives with
questions about your account.

Systematic Withdrawal Plans

If your account has a total value of at least $10,000, you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B and Class C shares accounts are limited to
10% of the value of the account at the time the SWP is implemented if a CDSC is
applicable. See "Waiver or Reduction of Contin-

<PAGE>

gent Deferred Sales Charge" for more information. Periodic checks of $50 or
more will be sent to you, or any person designated by you, monthly or
quarterly, and your periodic redemptions of shares may be taxable to you.
Payments can be made either by check or by electronic funds transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another person after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Fund at a time
when you have a SWP in effect may result in the payment of unnecessary sales
charges and may therefore be disadvantageous.

You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.

Reinstatement Privilege (Class A Shares Only)

If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in Class
A shares of the Fund if you send a written request to PSC not more than 90 days
after your shares were redeemed. Your redemption proceeds will be reinvested at
the next determined net asset value of the Class A shares of the Fund in effect
immediately after receipt of the written request for reinstatement. You may
realize a gain or loss for federal income tax purposes as a result of the
redemption, and special tax rules may apply if a reinstatement occurs. In
addition, if a redemption resulted in a loss and an investment is made in
shares of the Fund within 30 days before or after the redemption, you may not
be able to recognize the loss for federal income tax purposes. You may also
reinvest in the Class A shares of certain other Pioneer mutual funds; in this
case you must meet the minimum investment requirement for each fund you enter.

The 90-day reinstatement period may be extended by PFD for periods of up
to one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.

----------------------------------------------

The options and services available to shareholders, including the terms of the
Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended, or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may also
establish or revise many of them on an existing account by completing an
Account Options Form, which you may obtain by calling 1-800-225-6292.

XIII. THE FUND

The Fund, a non-diversified open-end management investment company
(commonly referred to as a mutual fund), was established as a Massachusetts
business trust on July 1, 1993 and was reorganized as a Delaware business trust
on April 28, 1995 under an Agreement and Declaration of Trust (the "Declaration
of Trust"). Prior to September 1, 1995, the Fund was named "Pioneer Winthrop
Real Estate Investment Fund." The Fund has authorized an unlimited number of
shares of beneficial interest. As an open-end investment company, the Fund
continuously offers its shares to the public and under normal conditions must
redeem its shares upon the demand of any shareholder at the then current net
asset value per share, less any applicable CDSC. See "How to Sell Fund Shares."
The Fund is not required, and does not intend, to hold annual shareholder
meetings although special meetings may be called for the purpose of electing or
removing Trustees, changing fundamental investment restrictions or approving a
management contract.

The Fund reserves the right to create and issue additional series of
shares. The Trustees have the authority, without further shareholder approval,
to classify and reclassify the shares of the Fund, or any additional series of
the Fund, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of four classes of shares, designated
Class A, Class B, Class C and Class Y. The shares of each class represent an
interest in the same portfolio of investments of the Fund. Each class has equal
rights as to voting, redemption, dividends and liquidation, except that each
class bears different distribution and transfer agent fees and may bear other
expenses properly attributable to the particular class. Class A, Class B and
Class C shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection with
the distribution of shares.

In addition to the requirements under Delaware law, the Declaration of
Trust provides that a shareholder of the Fund may bring a derivative action on
behalf of the Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Fund, or 10% of the outstanding shares of
the series or class to which such action relates, shall join in the request for
the Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the Fund for
the expense of any such advisers in the event that the Trustees determine not
to bring such action.

When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Fund are fully-paid and
non-assessable. Shares will remain on deposit with the Fund's transfer agent
and certificates; certificates will not normally be issued. The Fund reserves
the right to charge a fee for the issuance of Class A shares certificates;
certificates will not be issued for Class B and Class C shares.

XIV. INVESTMENT RESULTS

The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for each
Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal or
state income taxes.

<PAGE>

In addition, for Class A shares the calculation assumes the deduction of the
maximum sales charge of 5.75%; for Class B and Class C shares the calculation
reflects the deduction of any applicable CDSC. The periods illustrated would
normally include one, five and ten years (or since the commencement of the
public offering of the shares of a Class, if shorter) through the most recent
calendar quarter.

One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share values;
or any graphic illustration of such data may also be used. These data may cover
any period of the Fund's existence and may or may not include the impact of
sales charges, taxes or other factors.

Other investments or savings vehicles and/or unmanaged market indices,
indicators of economic activity or averages of mutual fund results may be cited
or compared with the investment results of the Fund. Rankings or listings by
magazines, newspapers or independent statistical or rating services, such as
Lipper Analytical Services, Inc., may also be referenced. The Fund may also
include securities industry, real estate industry or comparative performance
information in advertising or materials marketing the Fund's shares. Such
performance information may include rankings or listings by magazines,
newspapers, or independent statistical or ratings services, such as Lipper
Analytical Services, Inc. or Ibbotson Associates.

The Fund's investment results will vary from time to time depending on
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund. All quoted investment results are historical and should
not be considered representative of what an investment in the Fund may earn in
any future period. For further information about the calculation methods and
uses of the Fund's investment results, see the Statement of Additional
Information.

From time to time, the Fund may include in advertisements or other
communications to existing or proposed shareholders its respective "yield" and
"effective yield." Whenever yield information is provided, it includes a
standardized yield calculation computed by dividing the Fund's net investment
income per share for a Class of Fund shares during a base period of 30 days, or
one month, by the maximum offering price per share for that Class of shares on
the last day of such base period. The resulting "30-day yield" is then
annualized as described below. The Fund's net investment income per share for
each Class is determined by dividing the Fund's net investment income for that
Class during the base period by the average number of shares of that Class
entitled to receive dividends during the base period. The Class's 30-day yield
is then "annualized" by a computation that assumes that the Class's net
investment income is earned and reinvested for a six-month period at the same
rate as during the 30-day base period and that the resulting six-month income
will be generated over an additional six months.

For more information about the calculation methods used to compute the
Fund's investment results, see the Statement of Additional Information.

APPENDIX A: Certain Investment Practices

This Appendix provides a brief description of certain securities in which
the Fund may invest and certain transactions it may make. For a more complete
discussion of these and other securities and practices, see "Investment
Objectives and Policies" in this Prospectus and "Investment Policies and
Restrictions" in the Statement of Additional Information.

Mortgage-Backed Securities and Associated Risks

The Fund may invest up to 25% of its total assets in mortgage pass-through
certificates and multiple-class pass-through securities, such as real estate
mortgage investment-conduits ("REMIC") pass-through certificates, collateralized
mortgage obligations ("CMOs") and stripped mortgage-backed securities ("SMBS"),
and other types of Mortgage-Backed Securities that may be available in the
future.

Guaranteed Mortgage Pass-Through Securities. The Fund may invest in
guaranteed mortgage pass-through securities which represent participation
interests in pools of residential mortgage loans and are issued by U.S.
Governmental or private lenders and guaranteed by the U.S. Government or one of
its agencies or instrumentalities, including but not limited to the Government
National Mortgage Association ("Ginnie Mae"), the Federal National Mortgage
Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation
("Freddie Mac"). Ginnie Mae certificates are guaranteed by the full faith and
credit of the U.S. government for timely payment of principal and interest on
the certificates. Fannie Mae certificates are guaranteed by Fannie Mae, a
federally chartered and privately-owned corporation for full and timely payment
of principal and interest on the certificates. Freddie Mac certificates are
guaranteed by Freddie Mac, a corporate instrumentality of the U.S. government,
for timely payment of interest and the ultimate collection of all principal of
the related mortgage loans.

Multiple-Class Pass-Through Securities and Collateralized Mortgage
Obligations. The Fund may also invest in CMOs and REMIC pass-through or
participation certificates, which may be issued by, among others, U.S.
Government agencies and instrumentalities as well as private lenders. CMOs and
REMIC certificates are issued in multiple classes and the principal of and
interest on the mortgage assets may be allocated among the several classes of
CMOs or REMIC certificates in various ways. Each class of CMOs or REMIC
certificates, often referred to as a "tranche," is issued at a specific
adjustable or fixed interest rate and must be fully retired no later than its
final distribution date. Generally, interest is paid or accrues on all classes
of CMOs or REMIC certificates on a monthly basis.

Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie
Mac certificates but also may be collateralized by other mortgage assets such
as whole loans or private mortgage pass-through securities. Debt service on
CMOs is provided from payments of principal and interest on collateral of
mortgaged assets and any reinvestment income thereon.

A REMIC is a CMO that qualifies for special tax treatment under the Code
and invests in certain mortgages primarily secured by interests in real
property and other permitted

<PAGE>

investments. Investors may purchase "regular" and "residual" interest shares of
beneficial interest in REMIC trusts although the Fund does not intend to invest
in residual interests.

Risk Factors Associated with Mortgage-Backed Securities. As discussed
above, investing in Mortgage-Backed Securities involves certain unique risks in
addition to those risks associated with investing in the real estate industry
in general. These risks include the failure of a counter-party to meet its
commitments, adverse interest rate changes and the effects of prepayments on
mortgage cash flows. The Fund will not invest in the lowest tranche of CMOs and
REMIC certificates. When interest rates decline, the value of an investment in
fixed rate obligations can be expected to rise. Conversely, when interest rates
rise, the value of an investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on investments in such loans will gradually align
themselves to reflect changes in market interest rates, causing the value of
such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

Further, the yield characteristics of Mortgage-Backed Securities, such as
those in which the Fund may invest, differ from those of traditional fixed
income securities. The major differences typically include more frequent
interest and principal payments (usually monthly), the adjustability of
interest rates, and the possibility that prepayments of principal may be made
substantially earlier than their final distribution dates.

Prepayment rates are influenced by changes in current interest rates and a
variety of economic, geographic, social and other factors and cannot be
predicted with certainty. Both adjustable rate mortgage loans and fixed rate
mortgage loans may be subject to a greater rate of principal prepayments in a
declining interest rate environment and to a lesser rate of principal
prepayments in an increasing interest rate environment. Under certain interest
rate and prepayment rate scenarios, the Fund may fail to recoup fully its
investment in Mortgage-Backed Securities notwithstanding any direct or indirect
governmental or agency guarantee. When the Fund reinvests amounts representing
payments and unscheduled prepayments of principal, it may receive a rate of
interest that is lower than the rate on existing adjustable rate mortgage
pass-through securities. Thus, Mortgage-Backed Securities, and adjustable rate
mortgage pass-through securities in particular, may be less effective than
other types of U.S. Government securities as a means of "locking in" interest
rates.

Repurchase Agreements

The Fund may enter into repurchase agreements, generally not exceeding
seven days. In a repurchase agreement, an investor (e.g., the Fund) purchases a
debt security from a seller which undertakes to repurchase the security at a
specified resale price on an agreed future date (ordinarily a week or less).
The resale price generally exceeds the purchase price by an amount which
reflects an agreed-upon market interest rate for the term of the repurchase
agreement. Repurchase agreements entered into by the Fund will be fully
collateralized with U.S. Treasury and/or U.S. Government agency obligations
with a market value of not less than 100% of the obligation, valued daily.
Collateral will be held in a segregated, safekeeping account for the benefit of
the Fund. In the event that a repurchase agreement is not fulfilled, the Fund
could suffer a loss to the extent that the value of the collateral falls below
the repurchase price or if the Fund is prevented from realizing the value of
the collateral by reason of an order of a court with jurisdiction over an
insolvency proceeding with respect to the other party to the repurchase
agreement.

Restricted and Illiquid Securities

The Fund may invest up to 5% of its net assets in "restricted securities"
(i.e., securities that would be required to be registered prior to distribution
to the public), excluding restricted securities eligible for resale to certain
institutional investors pursuant to Rule 144A of the Securities Act of 1933 or
foreign securities which are offered or sold outside the United States;
provided, however, that no more than 15% of the Fund's net assets may be
invested in restricted securities including securities eligible for resale
under Rule 144A. The Fund may also invest up to 15% of its net assets in
illiquid investments, which includes securities that are not readily marketable
and repurchase agreements maturing in more than seven days. The Board of
Trustees has adopted guidelines and delegated to PMC the daily function of
determining and monitoring the liquidity of portfolio securities. The Board,
however, retains sufficient oversight and is ultimately responsible for the
determinations.

Since it is not possible to predict with assurance exactly how this market
for restricted securities sold and offered under Rule 144A will develop, the
Board monitors the Fund's investments in these securities, focusing on such
important factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of increasing the
level of illiquidity in the Fund to the extent that qualified institutional
buyers become for a time uninterested in purchasing these restricted
securities.

Limitations and Risks Associated with Transactions in Options and Futures
Contracts

The Fund may employ certain active management techniques including options
on securities indices, futures contracts and options on futures contacts. Each
of these active management techniques involves transaction costs as well as (1)
liquidity risk that contractual positions cannot be easily closed out in the
event of market changes or generally in the absence of a liquid secondary
market, (2) correlation risk that changes in the value of hedging positions may
not match the securities market fluctuations intended to be hedged, and (3)
market risk that an incorrect prediction of securities prices by PMC may cause
the Fund to perform less well than if such positions had not been entered. The
ability to terminate over-the-counter options is more limited than with
exchange traded options and may involve the risk that the counter-party to the
option will not fulfill its obligations. The use of options and futures
contracts are highly specialized activities which involve investment techniques
and risks that are different from those associated with ordinary portfolio

<PAGE>

transactions. The loss that may be incurred by the Fund in entering into
futures contracts and written options thereon is potentially unlimited. There
is no limit on the percentage of the Fund's assets that may be invested in
futures contracts and related options. The Fund may not invest more than 5% of
its total assets in purchased options other than protective put options.

The Fund's transactions in options, futures contracts and options on
futures contracts may be limited by the requirements for qualification of the
Fund as a regulated investment company for tax purposes. See "Tax Status" in
the Statement of Additional Information. The Fund may purchase put and call
options on securities indices that are based on securities in which it may
invest in an attempt to hedge against risks of market-wide price fluctuations.

The Fund may purchase put options in an attempt to hedge against an
anticipated decline in securities prices that might adversely affect the value
of the Fund's portfolio securities. If the Fund purchases a put option on a
securities index, the amount of the payment it would receive upon exercising
the option would depend on the extent of any decline in the level of the
securities index below the exercise price. Such payments would tend to offset a
decline in the value of the Fund's portfolio securities. However, if the level
of the securities index increases and remains above the exercise price while
the put option is outstanding, the Fund will not be able to profitably exercise
the option and will lose the amount of the premium and any transaction costs.
Such loss may be partially offset by an increase in the value of the Fund's
portfolio securities.

The Fund may purchase call options on securities indices in an attempt to
lock in a favorable price on securities that it intends to buy in the future.
If the Fund purchases a call option on a securities index, the amount of the
payment it receives upon exercising the option depends on the extent of an
increase in the level of other securities indices above the exercise price.
Such payments would in effect allow the Fund to benefit from securities market
appreciation even though it may not have had sufficient cash to purchase the
underlying securities. Such payments may also offset increases in the price of
securities that the Fund intends to purchase. If, however, the level of the
securities index declines and remains below the exercise price while the call
option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Fund pays to buy
additional securities for its portfolio.

The Fund may sell an option it has purchased or a similar option prior to
the expiration of the purchased option in order to close out its position in an
option which it has purchased. The Fund may also allow options to expire
unexercised, which would result in the loss of the premium paid.

Futures Contracts and Options on Futures Contracts

To hedge against changes in securities prices or interest rates, the Fund
may purchase and sell various kinds of futures contracts, and purchase and
write call and put options on any of such futures contracts. The Fund may also
enter into closing purchase and sale transactions with respect to any of such
contracts and options. The futures contracts may be based on various securities
and other financial instruments and indices. The Fund will engage in futures
and related options transactions for bona fide hedging purposes as are
permitted by regulations of the Commodity Futures Trading Commission.

The Fund may not purchase or sell non-hedging futures contracts or
purchase or sell related non-hedging options, except for closing purchase or
sale transactions. These transactions involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the Fund to
purchase securities, require the Fund to segregate assets to cover such
contracts and options.

<PAGE>

THE PIONEER FAMILY OF MUTUAL FUNDS

Growth Funds

Global/International

Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Gold Shares
Pioneer India Fund
Pioneer International Growth Fund
Pioneer World Equity Fund

United States

Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer Mid-Cap Fund
Pioneer Small Company Fund
Pioneer Micro-Cap Fund*

Growth and Income Funds

Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer Real Estate Shares
Pioneer II

Income Funds

Taxable

Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Short-Term Income Trust*

Tax-Exempt

Pioneer Intermediate Tax-Free Fund**
Pioneer Tax-Free Income Fund**

Money Market Fund

Pioneer Cash Reserves Fund

*Offers Class A and B Shares only
**Not suitable for retirement accounts

<PAGE>

[PIONEER LOGO]

Pioneer Real Estate Shares
60 State Street
Boston, Massachusetts 02109

OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
ROBERT W. BENSON, Senior Vice President
STEPHEN G. KASNET, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary

INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION

CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.

INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP

LEGAL COUNSEL
HALE AND DORR LLP

PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.

SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292

SERVICE INFORMATION
If you would like information on the following, please call:

Existing and new accounts, prospectuses,
applications, service forms
and telephone transactions.................................... 1-800-225-6292
FactFone(SM)
Automated fund yields and prices,
account information and computer transactions................. 1-800-225-4321
Retirement plans............................................... 1-800-622-0176
Toll-free fax.................................................. 1-800-225-4240
Telecommunications Device for the Deaf (TDD)................... 1-800-225-1997
Visit our website: www.pioneerfunds.com

0398-4969

(C)Pioneer Funds Distributor, Inc.

<PAGE>
PIONEER REAL ESTATE SHARES

PART A

CLASS Y PROSPECTUS
<PAGE>

Pioneer Real
Estate Shares

Class Y Shares
Prospectus

April 9, 1998

Fund returns and share prices fluctuate and the value of your account
upon redemption may be more or less than your purchase price. Shares in the
Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank
or other depository institution, and the shares are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other government agency. Investments in securities of real estate industry
companies entail risks in addition to those customarily associated with
investing in securities in general. The Fund is intended for investors who can
accept such risks and may not be suitable for all investors. See "Investment
Objective and Policies and Associated Risks" for a discussion of these risks.

This Prospectus provides information about the Fund that you should know
before investing in the Fund. Please read and retain it for your future
reference. More information about the Fund is included in the Statement of
Additional Information, also dated April 9, 1998, as supplemented or revised
from time to time, which is incorporated into this Prospectus by reference. A
copy of the Statement of Additional Information may be obtained free of charge
by calling Shareholder Services at 1-800-225-6292 or by written request to the
Fund at 60 State Street, Boston, Massachusetts 02109. Other information about
the Fund has been filed with the Securities and Exchange Commission (the "SEC")
and is available upon request and without charge through the SEC's Internet web
site (http://www.sec.gov).

[PIONEER LOGO]

TABLE OF CONTENTS PAGE
- ---------------------------------------------------------------------
I. EXPENSE INFORMATION ............................... 2
II. FINANCIAL HIGHLIGHTS .............................. 3
III. INVESTMENT OBJECTIVES AND POLICIES AND
ASSOCIATED RISKS ................................. 3
IV. MANAGEMENT OF THE FUND ............................ 5
V. FUND SHARES ....................................... 7
VI. SHARE PRICE ....................................... 7
VII. PURCHASING CLASS Y SHARES ......................... 7
VIII. REDEEMING CLASS Y SHARES .......................... 8
IX. EXCHANGING CLASS Y SHARES ......................... 9
X. DISTRIBUTION OF CLASS Y SHARES .................... 9
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION ............. 10
XII. SHAREHOLDER SERVICES .............................. 10
Account and Confirmation Statements .............. 10
Financial Reports and Tax Information ............ 10
Distribution Options ............................. 10
Telephone Transactions ........................... 11
FactFone(SM) ..................................... 11
XIII. THE FUND .......................................... 11
XIV. INVESTMENT RESULTS ................................ 12
APPENDIX A: Certain Investment Practices .......... 12

I. EXPENSE INFORMATION

This table is designed to help investors understand the charges and
expenses that an investor will bear directly or indirectly when investing in
the Fund. Operating expenses for Class Y shares are based on expenses that
would have been incurred for the fiscal year ended December 31, 1997 had such
shares been outstanding for the entire fiscal year.+

Shareholder Transaction Expenses: Class Y
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) ..................... None
Maximum Sales Charge on Reinvestment of Dividends ......... None
Maximum Deferred Sales Charge
(as a percentage of original purchase price
or redemption proceeds, as applicable) ................. None
Redemption Fee ............................................ None
Exchange Fee .............................................. None
Annual Operating Expenses
(As a Percentage of Average Net Assets):
Management Fee ............................................ 1.00%
12b-1 Fee ................................................. None
Other Expenses (estimated)
(including accounting and transfer agent fees,
custodian fees and printing expenses) ................... 0.38%
----
Total Operating Expenses ................................... 1.38%
====

- --------------------

+ Class Y shares were first offered April 9, 1998.

Example:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class Y Shares $14 $44 $76 $166

The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.

For further information regarding management fees and other expenses of
the Fund, see "Management of the Fund" and "Distribution of Class Y Shares" in
this Prospectus and "Management of the Fund" and "Underwriting Agreement and
Distribution Plans" in the Statement of Additional Information.

II. FINANCIAL HIGHLIGHTS

Class Y shares are a new class of shares; financial highlights are not
currently available for Class Y shares. Arthur Andersen LLP's report on the
Fund's audited financial statements as of December 31, 1997 for Class A, Class
B and Class C shares appears in the Fund's Annual Report which is incorporated
by reference into the Statement of Additional Information. The Annual Report
includes more information about the Fund's performance and is available free of
charge by calling Shareholder Services at 1-800-225-6292.

III. INVESTMENT OBJECTIVES AND POLICIES AND ASSOCIATED RISKS

The Fund's primary investment objective is to seek long-term growth of
capital. Current income is a secondary investment objective. The Fund seeks
these objectives by investing in a non-diversified portfolio of equity
securities of real estate investment trusts and other real estate industry
companies and, to a lesser extent, in debt securities of such companies and in
mortgage-backed securities.

Risk Factors Associated with the Real Estate Industry

Real Estate Investment Trusts and Associated Risk Factors
The Fund may invest without limitation in shares of REITs. REITs are
pooled investment vehicles which invest primarily in income producing real
estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs invest the majority of their assets in
real estate mortgages and derive income from the collection of interest
payments. Like investment companies such as the Fund, REITs are not taxed on
income distributed to shareholders provided they

<PAGE>

comply with several requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). The Fund will indirectly bear its proportionate share of
any expenses paid by REITs in which it invests in addition to the expenses paid
by the Fund.

Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. REITs are subject to heavy cash
flow dependency, default by borrowers, self-liquidation, and the possibilities
of failing to qualify for the exemption from tax for distributed income under
the Code and failing to maintain their exemptions from the Investment Company
Act of 1940, as amended (the "1940 Act"). REITs whose underlying assets include
long-term health care properties, such as nursing, retirement and assisted
living homes, may be impacted by federal regulations concerning the health care
industry.

Other Eligible Investments
The Fund may invest up to 25% of its total assets in any of the
investments described in this section.

Short-Term Investments. The Fund may invest in short-term investments
consisting of: corporate commercial paper and other short-term commercial
obligations, in each case rated or issued by companies with similar securities
outstanding that are rated Prime-1, Aa or better by Moody's or A-1, AA or better
by Standard & Poor's; obligations (including certificates of deposit, time
deposits, demand deposits and bankers' acceptances) of banks with securities
outstanding that are rated Prime-1, Aa or better by Moody's, or A-1, AA or
better by Standard & Poor's; obligations issued or guaranteed by the U.S.
government or its agencies or instrumentalities with remaining maturities not
exceeding 18 months; and repurchase agreements.

Foreign Investments

The Fund may invest up to 10% of its net assets in equity and debt
securities of foreign real estate companies, provided that purchases of
Canadian securities are not subject to the limitations of this paragraph.
Investing in securities of foreign companies involves certain considerations
and risks which are not typically associated with investing in securities of
U.S. companies. Foreign companies are not subject to uniform accounting,
auditing and financial standards and requirements comparable to those
applicable to U.S. companies. There may also be less publicly available
information about foreign companies compared to reports and ratings published
about U.S. companies. In addition, foreign securities markets have
substantially less volume than U.S. markets and securities of some foreign
companies are less liquid and more volatile than securities of comparable U.S.
companies. There may also be less government supervision and regulation of
foreign securities exchanges, brokers and listed companies than exists in the
U.S. Dividends or interest or, in some cases capital gains, from foreign
investments may be subject to withholding or other foreign taxes which will
decrease the net return on such investments as compared to the return on Fund's
U.S. investments. Finally, there may be the possibility of expropriations,
confiscatory taxation, politi-

<PAGE>

cal, economic or social instability or diplomatic developments which could
adversely affect assets of the Fund held in foreign countries.

The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value
of a foreign security held by the Fund as measured in U.S. dollars will
decrease if the foreign currency in which the security is denominated declines
in value against the U.S. dollar. In such event, this will cause an overall
decline in the Fund's net asset value and may also reduce net investment income
and capital gains, if any, to be distributed in U.S. dollars to shareholders of
the Fund. See "Foreign Real Estate Companies and Associated Risks" in the
Statement of Additional Information for a description of the risks associated
with foreign investments.

Restricted and Illiquid Securities

Non-Diversified Status

The Fund is "non-diversified" for purposes of the 1940 Act. As a
non-diversified mutual fund, the Fund may be more susceptible to risks
associated with a single economic, political or regulatory occurrence than a
diversified fund might be. Like most other registered investment companies,
however, the Fund has qualified, and intends to continue to qualify, as a
"regulated investment company" under the Code and therefore will be subject to
diversification limits, which generally require that, as of the close of each
quarter of its taxable year, (i) no more than 25% of its assets may be invested
in the securities of a single issuer (except for U.S. government securities)
and (ii) with respect to 50% of its total assets, no more than 5% of its total
assets may be invested in the securities of a single issuer (except for U.S.
government securities) or invested in more than 10% of the outstanding voting
securities of a single issuer.

Portfolio Turnover

PMC generally avoids market-timing or speculating on broad market
fluctuations. Therefore, except as described above, the Fund will be
substantially fully invested at all times. Changes in the portfolio may be made
promptly when determined to be advisable by reason of developments not foreseen
at the time of the initial investment decision, and usually without reference
to the length of time a security has been held. Accordingly, portfolio turnover
rates are not considered a limiting factor in the execution of investment
decisions. Portfolio turnover rates were 28% and 41% for the fiscal years ended
December 31, 1997 and 1996, respectively.

IV. MANAGEMENT OF THE FUND

The Manager
The Fund is managed under a management contract with PMC. PMC serves as
investment adviser to the Fund and is responsible for the overall management of
the Fund's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly owned subsidiary of The Pioneer Group, Inc. ("PGI"),
a Delaware corporation. Pioneer Funds Distributor, Inc. ("PFD"), an indirect
wholly owned subsidiary of PGI, is the principal underwriter of shares of the
Fund. John F. Cogan, Jr., Chairman and Chief Executive Officer of the Fund,
Chairman and a Director of PMC and PFD, and President and a Director of PGI,
beneficially owned approximately 14% of the outstanding capital stock of PGI as
of the date of this Prospectus.

Research and management of the Fund is the responsibility of a team
consisting of a PMC portfolio manager and analysts from Boston Financial
Securities, Inc. ("BFS"), the Fund's subadviser. Members of the team meet
regularly to discuss holdings, prospective investments and portfolio
composition. Mr. Robert Bensen, a Vice President of PMC and the Fund, is the
senior member of the team. Mr. Bensen joined PMC in 1974 and has 24 years of
investment experience. Mr. Bensen is responsible for the day-to-day management
of the Fund.

In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. The executive offices of PMC, PGI and PFD are located
at 60 State Street, Boston, Massachusetts 02109. In an effort to avoid
conflicts of interest with the Fund, the Fund, PMC and BFS, the subadviser to
the Fund, have adopted a Code of Ethics that is designed to maintain a high
standard of personal conduct by directing that all personnel defer to the
interests of the Fund and its shareholders in making personal securities
transactions.

<PAGE>

which are to be paid by the Fund: (a) charges and expenses for fund accounting,
pricing and appraisal services and related overhead, including, to the extent
such services are performed by personnel of PMC or its affiliates, office space
and facilities and personnel compensation, training and benefits; (b) the
charges and expenses of auditors; (c) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and registrar
appointed by the Fund with respect to the Fund; (d) issue and transfer taxes,
chargeable to the Fund in connection with securities transactions to which the
Fund is a party; (e) insurance premiums, interest charges, dues and fees for
membership in trade associations and all taxes and corporate fees payable by
the Fund to federal, state or other governmental agencies; (f) fees and
expenses involved in registering and maintaining registrations of the Fund
and/or its shares with the SEC, state or blue sky securities agencies and
foreign countries, including the preparation of Prospectuses and Statements of
Additional Information for filing with the SEC; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the Fund and the Trustees; (i) distribution fees paid by the Fund
pursuant to the 1940 Act; (j) compensation of those Trustees of the Fund who
are not affiliated with or interested persons of PMC, the Fund (other than as
Trustees), PGI or PFD; (j) the cost of preparing and printing share
certificates; (k) interest on borrowed money, if any; and (l) organizational
expenses of the Fund. The Fund also pays all brokerage commissions and any
taxes or other charges in connection with its portfolio transactions. In
addition, the expense of organizing the Fund and initially registering and
qualifying its shares under federal and state securities laws are being charged
to the Fund's operations, as an expense, over a period not to exceed 60 months
from the Fund's inception date.

Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund or other funds for which PMC or any other
affiliate or subsidiary serves as investment adviser or manager. See the
Statement of Additional Information for a further description of PMC's
brokerage allocation practices.

6
<PAGE>

V. FUND SHARES

The Fund continuously offers four Classes of shares designated as Class A,
Class B, Class C and Class Y shares. Class A, Class B and Class C shares are
offered in a separate prospectus which may be obtained by contacting your sales
representative or by calling Pioneering Services Corporation ("PSC") at
1-800-225-6292.

Class Y shares are sold at net asset value, without either an initial
sales charge or a contingent deferred sales charge. Class Y shares are not
subject to any ongoing service fee or distribution fee and do not convert to
any other class of shares. Class Y shares are described more fully in
"Purchasing Class Y Shares" in this Prospectus.

Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund .
Shares sold outside the U.S. to persons who are not U.S. citizens may be
subject to different sales charges, contingent deferred sales charges and
dealer compensation arrangements in accordance with local laws and business
practices.

VI. SHARE PRICE
Class Y shares of the Fund are sold at the net asset value per share. The
net asset value per share of each Class of the Fund is determined by dividing
the value of its assets, less liabilities attributable to that Class, by the
number of shares of that Class outstanding. The net asset value is computed
once daily, on each day the New York Stock Exchange (the "Exchange") is open,
as of the close of regular trading on the Exchange. The net asset value per
share of Class Y shares will generally be higher than the net asset value per
share of the Fund's other three classes of shares because Class Y shares are
not subject to any ongoing distribution fee, and certain other expenses are
expected to be lower.

Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities quoted
in foreign currencies are converted to U.S. dollars utilizing foreign exchange
rates employed by the Fund's independent pricing services. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of regular trading on the Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also generally
determined prior to the close of regular trading on the Exchange. Occasionally,
events which affect the values of such securities and such exchange rates may
occur between the times at which they are determined and the close of regular
trading on the Exchange and will therefore not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities may be valued at
their fair value as determined in good faith by the Trustees. All assets of the
Fund for which there is no other readily available valuation method are valued
at their fair value as determined in good faith by the Trustees.

VII. PURCHASING CLASS Y SHARES
To open an account for an individual or other non-institutional investor,
a completed Account Application must be received by Pioneering Service
Corporation ("PSC") by mail or by fax prior to the purchase of Class Y shares.
All other investors should call PSC at 1-888-294-4480 to obtain an account
set-up kit and to obtain an account number. A bank wire address of record (your
predesignated bank account) must be provided to PSC at the time an account is
established.

The minimum initial investment for Class Y shares is $5 million which may
be invested in one or more of the Pioneer mutual funds that currently offer
Class Y shares. There is no minimum additional investment amount. Class Y
shares will be purchased at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge
and are not subject to a contingent deferred sales charge. All purchases must
be made in U.S. dollars.

The $5 million minimum investment requirement will be waived if:

(i) a trust company or bank trust department is initially investing at least
$1 million in any of the Pioneer mutual funds and, at the time of the
purchase, such assets are held in a fiduciary, advisory, custodial or
similar capacity over which the trust company or bank trust department has
full or shared investment discretion; or

(ii) the investment is made by an employer sponsored retirement plan that
meets the requirements of Sections 401, 403 or 457 of the Code, provided
that the number of employees covered by the plan is 5,000 or more or the
plan has assets of $25 million or more; or

(iii) the investment is at least $1 million in any of the Pioneer mutual funds
and the purchaser is an insurance company separate account; or

(iv) the investment is made by an employer sponsored retirement plan
established for the benefit of (1) employees of PGI or employees of PGI's
affiliates or (2) employees or affiliates of broker-dealers who have a
Class Y shares sales agreement with PFD.

Payment By Wire. Funds may be wired in payment of a request to purchase
Class Y shares provided that such funds are wired to a Class Y shares account.
See above for information on establishing an account. To wire funds in payment
of a request to purchase Class Y shares instruct your bank to wire funds to:

<TABLE>
<S> <C>
Receiving Bank State Street Bank and Trust Company
Address 225 Franklin Street
Boston, MA 02101
ABA Routing No. 011000028
For further credit to: Shareholder Name
Existing Pioneer Account No.
Pioneer Real Estate Shares
</TABLE>

A request to purchase shares must be received by PSC or by your
broker-dealer by the close of regular trading of the Exchange (currently 4:00
p.m. Eastern time) in order to pur-

<PAGE>

chase shares at the price determined on that day. Funds wired in payment of
such requests must be received by State Street Bank and Trust Company by 11:00
a.m. Eastern time on the next business day following receipt of the request to
purchase shares. If wired funds are not received by State Street Bank and Trust
Company by 11:00 a.m. of the next business day following receipt of the request
to purchase shares, the transaction will be canceled at the expense and risk of
the purchaser. Wire transfers normally take two or more hours to complete and a
fee may be charged by the sending bank. Wire transfers may be restricted on
holidays and at certain other times. Questions on wire transfers should be
directed to PSC or your broker-dealer.

By Mail. Purchases of Class Y shares may always be made by mail. For
accounts registered to individuals or non-institutional investors, make your
check payable to Pioneer Real Estate Shares and mail a completed Account
Application to PSC at: P.O. Box 9150, Boston, Massachusetts 02205-8573. For
accounts registered to institutions, completed account set-up kit materials
must be sent to PSC with payment. Checks written on non-U.S. banks will delay
purchases until U.S. funds are received and a collection charge may be imposed.

Broker-Dealers. An order for Class Y shares received by a broker-dealer
prior to the close of regular trading on the Exchange is confirmed at the price
for Class Y shares as determined at the close of regular trading on the
Exchange on the day the order is received, provided the order is received by
PFD from the broker-dealer prior to PFD's close of business (usually, 5:30 p.m.
Eastern time), except as described above for wire transfers. It is the
responsibility of broker-dealers to transmit orders so that they will be
received by PFD prior to its close of business.

VIII. REDEEMING CLASS Y SHARES
Class Y shares will be redeemed at the share price next calculated after a
redemption request is received in good order as described below. Redemption
proceeds generally will be sent to the registered owner by check or by wire
transfer, normally within seven days after the request is received in good
order. The Fund reserves the right to withhold payment of the redemption
proceeds until checks or wire transfers received by the Fund in payment for the
shares being sold have cleared, which may take up to 15 calendar days from the
purchase date.

In Writing. Class Y shares may be redeemed by delivering a written
request, signed by all registered owners, in good order to PSC. A written
request, including a signature guarantee, must be used to redeem Class Y shares
if any of the following applies:

[bullet] the requested redemption is for over $100,000 and there is no
record of a predesignated bank account,

[bullet] the requested redemption is for over $100,000 and the account
registration or address of record has changed within the last 30
days,

[bullet] the requested redemption is for over $5 million,

[bullet] the check for the amount of the redemption proceeds is not being
mailed to the address of record,

[bullet] the check for the amount of the redemption proceeds is not being
made payable to the account's record owners, or

[bullet] the redemption proceeds are being transferred to a Pioneer mutual
fund account with a different registration.

Include in the request the account's registration name, the Fund's name,
the Fund account number, the Class of shares to be redeemed, the dollar amount
or number of shares to be redeemed, and any other applicable requirements as
described below. Redemption requests for accounts registered in the name of a
corporation or other fiduciary must name an authorized person and must be
accompanied by a certified copy of a current corporate resolution, certificate
of incumbency or similar legal document showing that the named individual is
authorized to act on behalf of the record owner. Unless instructed otherwise,
PSC will send the proceeds of the redemption by check to the address of record.
For more information, contact PSC at 1-888-294-4480.

Written requests will not be processed until they are received in good
order by PSC. Good order means that there are no outstanding claims or requests
to hold redemptions on the account, any share certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) on
the share certificate are guaranteed by an eligible guarantor. A bank, broker,
dealer, credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association will generally be able to
provide a signature guarantee. A notary public cannot provide a signature
guarantee. Signature guarantees are not accepted by facsimile ("fax"). For
additional information about the necessary documentation for redemption by
mail, please contact PSC at 1-888-294-4480.

A signature guarantee must also accompany any request to change your
predesignated bank account information.

By Telephone or Fax. Class Y share accounts are automatically authorized
to have the telephone redemption privilege unless indicated otherwise on the
Account Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. A maximum of $5 million per account per
day may be redeemed by telephone or fax if PSC has a predesignated bank account
number on record. If there is no predesignated bank account number on file, a
maximum of $100,000 may be redeemed by telephone or fax. The proceeds of a
telephone or fax redemption may be received by bank wire, electronic funds
transfer or by check. Proceeds of a telephone or fax request will normally be
mailed or transmitted the next business day.

To redeem by telephone, see "Shareholder Services--Telephone Transactions"
for more information.

To redeem by fax, send your redemption request to 1-888-294-4485.

<PAGE>

To receive the proceeds by bank wire: the proceeds must be sent to the
bank wire address of record which must have been properly predesignated either
on your Account Application or on an Account Options Form and which must not
have changed in the last 30 days.

To receive the proceeds by check: the check must be made payable exactly
as the account is registered and the check must be sent to the address of
record which must not have changed in the last 30 days.

You may always elect to deliver redemption instructions to PSC by mail.

Redeeming Shares Through a Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Broker-dealers must receive redemption requests prior to the close of business
of the Exchange and must transmit each redemption request to PFD before PFD's
close of business to receive that day's redemption price. Broker-dealers are
responsible for providing all necessary documentation to PFD and may charge for
their services.

Redemptions and repurchases are taxable transactions to shareholders
unless the account qualifies as tax-exempt. The net asset value per share
received upon redemption or repurchase may be more or less than the cost of
shares to an investor, depending on the market value of the portfolio at the
time of redemption or repurchase.

IX. EXCHANGING CLASS Y SHARES
Exchanges of Class Y shares must be at least $1,000. You may exchange your
investment from one Class of Fund shares at net asset value, without a sales
charge, for shares of the same Class of any other Pioneer mutual fund. Not all
Pioneer mutual funds offer Class Y shares. A new Pioneer mutual fund account
opened through an exchange must have a registration identical to that on the
original account.

PSC will process exchanges only after receiving an exchange request in
good order. Exchange requests received by PSC before the close of the Exchange,
generally 4:00 p.m. Eastern time, will be effective on that day if the
requirements above have been met, otherwise, they will be effective on the next
business day. There are currently no fees or sales charges imposed at the time
of an exchange. An exchange of shares may be made only in states where legally
permitted. For federal and (generally) state income tax purposes, an exchange
is considered to be a sale of the shares of the Fund exchanged and a purchase
of shares in another Pioneer mutual fund. Therefore, an exchange could result
in a gain or loss on the shares sold, depending on the tax basis of these
shares and the timing of the transaction, and special tax rules may apply.

Telephone and Fax Exchanges. Class Y share accounts are automatically
authorized to have the telephone exchange privilege unless indicated otherwise
on the Account Application or by writing to PSC. Proper account identification
will be required for each telephone exchange. Telephone exchanges or fax
exchanges of Class Y shares may not exceed $5 million per account per day. Each
telephone exchange request will be recorded. See "Telephone Transactions"
below.

Written Exchanges. Class Y shares may be exchanged by sending a letter of
instruction to PSC. Include in your letter the record name on the account, the
name of the Pioneer mutual fund out of which to exchange and the name of the
Pioneer mutual fund into which to exchange, the fund account number(s), the
Class of shares to be exchanged and the dollar amount or number of shares to be
exchanged. Written exchange requests must be signed by all record owner(s)
exactly as the shares are registered. Written documentation may be required for
accounts registered in the name of a corporation or fiduciary.

X. DISTRIBUTION OF CLASS Y SHARES
PFD incurs the expenses of distributing the Fund's Class Y shares, none of
which are reimbursed or paid for by the Fund. These expenses include fees paid
to, or on account of, broker-dealers and other qualifying institutions which
have sales agreements with PFD, advertising expenses, the cost of printing and
mailing prospectuses to potential investors and other direct and indirect
expenses associated with the sale of Fund's Class Y shares.

PFD or its affiliates may make payments out of its own resources to
dealers and other persons who distribute shares of the Fund, including Class Y
shares. Such payments may be calculated by reference to the net asset value of
shares sold by such person or otherwise. Dealers and other persons may from
time to time be required to meet certain criteria in order to receive such
payments. Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the

9
<PAGE>

described services, management would consider what action, if any, would be
appropriate.

The Fund has adopted a Plan of Distribution for each Class of shares,
other than Class Y shares, in accordance with Rule 12b-1 under the 1940 Act
pursuant to which certain distribution fees are paid to PFD. For more
information, see "Underwriting Agreement and Distribution Plans" in the
Statement of Additional Information.

The Fund's distributions of long-term capital gains to individuals or
other noncorporate taxpayers are subject to different maximum tax rates, (which
will be indicated in the annual tax information the Fund provides to
shareholders), depending generally upon the sources of, and the Fund's holding
periods for the assets that produce, the gains.

Distributions by the Fund of the dividend income it receives from U.S.
domestic corporations may qualify for the dividends-received deduction for
corporate shareholders, subject to holding-period requirements and
debt-financing restrictions under the Code.

The Fund may be subject to foreign withholding taxes or other foreign
taxes on income (possibly including, in some cases, capital gains) on certain
of its foreign investments which will reduce the yield on or return from those
investments.

Dividends and other distributions and the proceeds of redemptions,
exchanges or repurchases of Fund shares paid to individuals and other
non-exempt payees will be subject to a 31% backup withholding of federal income
tax if the Fund is not provided with the shareholder's correct taxpayer
identification number and certification that the number is correct and that the
shareholder is not subject to backup withholding or if the Fund receives notice
from the IRS or a broker that such withholding applies.

XII. SHAREHOLDER SERVICES

PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Shareholder Services, Pioneering Services
Corporation, P.O. Box 9150, Boston, Massachusetts 02205-8573. Brown Brothers
Harriman & Co. (the "Custodian") serves as the custodian of the Fund's
portfolio securities and other assets. The principal business address of the
Mutual Fund Division of the Custodian is 40 Water Street, Boston, Massachusetts
02109.

Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur.

Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least
semiannually. In January of each year the Fund will mail to you information
about the tax status of dividends and distributions.

Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.

Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or an account with a net asset value of less than $500.
Changes in the distribution option may be made by written request to PSC.

10
<PAGE>

If you elect to receive either dividends or dividends and capital gains in
cash and a distribution check issued to you is returned by the U. S. Postal
Service as not deliverable or a distribution check remains uncashed for six
months or more, the amount of the check may be reinvested in your account. Such
additional shares will be purchased at the then current net asset value.
Furthermore, the distribution option on the account will automatically be
changed to the reinvestment option until such time as you request a different
option by writing to PSC.

Telephone Transactions
Class Y accounts are automatically authorized to have telephone
transaction privileges as described above . To redeem or exchange Class Y
shares by telephone, call 1-888-294-4480 between the hours of 9:00 a.m. and
6:00 p.m. Eastern time on weekdays. See "Selling Class Y Shares" and
"Exchanging Class Y Shares" for more information.

To confirm that each transaction instruction received by telephone is
genuine, the Fund will record each telephone transaction, require the caller to
provide the personal identification number ("PIN") for the account and send you
a written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the Fund may be liable for any loss due to unauthorized or
fraudulent instructions. In all other cases, neither the Fund, PSC nor PFD will
be responsible for the authenticity of instructions received by telephone;
therefore, you bear the risk of loss for unauthorized or fraudulent telephone
transactions. The Fund may implement other procedures from time to time.

FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM) allows
shareholder access to current information on Pioneer mutual fund accounts and
to the prices and yields of all publicly available Pioneer mutual funds.
Computer assisted telephone purchases, exchanges and redemptions of Class Y
shares are not currently available through FactFone(SM).

The options and services available to shareholders may be revised,
suspended, or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may also
establish or revise many of them on an existing account by completing an
Account Options Form, which you may obtain by calling 1-888-294-4480.

XIII. THE FUND
The Fund, a non-diversified open-end management investment company
(commonly referred to as a mutual fund), was established as a Massachusetts
business trust on July 1, 1993 and was reorganized as a Delaware business trust
on April 28, 1995 under an Agreement and Declaration of Trust (the "Declaration
of Trust"). Prior to September 1, 1995, the Fund was named "Pioneer Winthrop
Real Estate Investment Fund." The Fund has authorized an unlimited number of
shares of beneficial interest. As an open-end investment company, the Fund
continuously offers its shares to the public and under normal conditions must
redeem its shares upon the demand of any shareholder at the then current net
asset value per share (less any applicable contingent deferred sales for Class
A, Class B and Class C share transactions). The Fund is not required, and does
not intend, to hold annual shareholder meetings although special meetings may
be called for the purpose of electing or removing Trustees, changing
fundamental investment restrictions or approving a management contract.

When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Fund are fully paid and
non-assessable. Shares will remain on deposit with the Fund's transfer agent
and certificates will not normally be issued. The Fund reserves the right to
charge a fee for the issuance of Class A shares cer-

11
<PAGE>

tificates; certificates will not be issued for Class B, Class C or Class Y
shares.

XIV. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for each
Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal or
state income taxes. The periods illustrated would normally include one, five
and ten years (or since the commencement of the public offering of the shares
of a Class, if shorter) through the most recent calendar quarter.

For more information about the calculation methods used to compute the
Fund's investment results, see the Statement of Additional Information.

APPENDIX A: Certain Investment Practices
This Appendix provides a brief description of certain securities in which
the Fund may invest and certain transactions it may make. For a more complete
discussion of these and other securities and practices, see "Investment
Objectives and Policies" in this Prospectus and "Investment Policies and
Restrictions" in the Statement of Additional Information.

Mortgage-Backed Securities and Associated Risks
The Fund may invest up to 25% of its total assets in mortgage pass-through
certificates and multiple-class pass-through securities, such as real estate
mortgage investment conduits ("REMIC") pass-through certificates,
collateralized mortgage obligations ("CMOs") and stripped mortgage-backed
securities ("SMBS"), and other types of Mortgage-Backed Securities that may be
available in the future.

Typically, CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie
Mac certificates but also may be collateral-

<PAGE>

ized by other mortgage assets such as whole loans or private mortgage
pass-through securities. Debt service on CMOs is provided from payments of
principal and interest on collateral of mortgaged assets and any reinvestment
income thereon.

A REMIC is a CMO that qualifies for special tax treatment under the Code
and invests in certain mortgages primarily secured by interests in real
property and other permitted investments. Investors may purchase "regular" and
"residual" interest shares of beneficial interest in REMIC trusts although the
Fund does not intend to invest in residual interests.

Repurchase Agreements
The Fund may enter into repurchase agreements, generally not exceeding
seven days. In a repurchase agreement, an investor (e.g., the Fund) purchases a
debt security from a seller which undertakes to repurchase the security at a
specified resale price on an agreed future date (ordinarily a week or less).
The resale price generally exceeds the purchase price by an amount which
reflects an agreed-upon market interest rate for the term of the repurchase
agreement. Repurchase agreements entered into by the Fund will be fully
collateralized with U.S. Treasury and/or U.S. Government agency obligations
with a market value of not less than 100% of the obligation, valued daily.
Collateral will be held in a segregated, safekeeping account for the benefit of
the Fund. In the event that a repurchase agreement is not fulfilled, the Fund
could suffer a loss to the extent that the value of the collateral falls below
the repurchase price or if the Fund is prevented from realizing the value of
the collateral by reason of an order of a court with jurisdiction over an
insolvency proceeding with respect to the other party to the repurchase
agreement.

Restricted and Illiquid Securities
The Fund may invest up to 5% of its net assets in "restricted securities"
(i.e., securities that would be required to be registered prior to distribution
to the public), excluding restricted securities eligible for resale to certain
institutional investors pursuant to Rule 144A of the Securities Act of 1933 or
foreign securities which are offered or sold outside the United States;
provided, however, that no more than 15% of the Fund's net assets may be
invested in restricted securities including securities eligible for resale
under Rule 144A. The Fund may also invest up to 15% of its net assets in
illiquid investments, which includes securities that are not readily marketable
and repurchase agreements maturing in more than seven days. The Board of
Trustees has adopted guidelines and delegated to PMC the daily function of
determining and monitoring the liquidity of portfolio securities. The Board,
however, retains sufficient oversight and is ultimately responsible for the
determinations.

Limitations and Risks Associated with Transactions in Options and Futures
Contracts
The Fund may employ certain active management techniques including options
on securities indices, futures contracts and options on futures contacts. Each
of these active management techniques involves transaction costs as well as (1)
liquidity risk that contractual positions cannot be easily closed out in the
event of market changes or generally in the absence of a liquid secondary
market, (2) correlation risk that changes in the value of hedging positions may
not match the securities market fluctuations intended to be hedged, and (3)
market risk that an incorrect prediction of securities prices by PMC may cause
the Fund to perform less well than if such positions had not been entered. The
ability to termi-

13
<PAGE>

nate over-the-counter options is more limited than with exchange traded options
and may involve the risk that the counter-party to the option will not fulfill
its obligations. The use of options and futures contracts are highly
specialized activities which involve investment techniques and risks that are
different from those associated with ordinary portfolio transactions. The loss
that may be incurred by the Fund in entering into futures contracts and written
options thereon is potentially unlimited. There is no limit on the percentage
of the Fund's assets that may be invested in futures contracts and related
options. The Fund may not invest more than 5% of its total assets in purchased
options other than protective put options.

Futures Contracts and Options on Futures Contracts

14
<PAGE>

[PIONEER LOGO]

Pioneer Real Estate Shares
60 State Street
Boston, Massachusetts 02109

OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
ROBERT W. BENSON, Vice President
STEPHEN G. KASNET, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary

INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION

CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.

INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP

LEGAL COUNSEL
HALE AND DORR LLP

PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.

SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109

Telephone: 1-888-294-4480

SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications, service forms
and telephone transactions................................... 1-888-294-4480
FactFone(SM)
Automated fund yields, automated prices and
account information.......................................... 1-800-225-4321
Toll-free fax................................................. 1-888-294-4485
Visit our website:...................................... www.pioneerfunds.com

0398-4918

(C)Pioneer Funds Distributor, Inc.

<PAGE>
PIONEER REAL ESTATE SHARES

PART B

STATEMENT OF ADDITIONAL INFORMATION
<PAGE>

PIONEER REAL ESTATE SHARES
60 State Street
Boston, Massachusetts 02109

STATEMENT OF ADDITIONAL INFORMATION

Class A, Class B, Class C and Class Y Shares

April 9, 1998

This Statement of Additional Information is not a Prospectus, but
should be read in conjunction with the Class A, Class B and Class C Shares
Prospectus and the Class Y Shares Prospectus, both dated April 9, 1998, (each, a
"Prospectus", and together, the "Prospectuses") as amended and/or supplemented
from time to time, of Pioneer Real Estate Shares (the "Fund"). A copy of each
Prospectus can be obtained free of charge by calling 1-800-225-6292 for a Class
A, B and C Prospectus and 1-888-294-4480 for a Class Y Prospectus, or by written
request to the Fund at 60 State Street, Boston, Massachusetts 02109. The Fund's
Annual Report to Shareholders is attached to, and is hereby incorporated into,
this Statement of Additional Information.

TABLE OF CONTENTS

Page

1. General Fund Information and History.................................... 2
2. Investment Policies and Restrictions.................................... 2
3. Management of the Fund.................................................. 9
4. Advisory Services....................................................... 13
5. Underwriting Agreement and Distribution Plans........................... 14
6. Shareholder Servicing/Transfer Agent.................................... 17
7. Custodian............................................................... 17
8. Principal Underwriter................................................... 17
9. Independent Public Accountant........................................... 18
10. Portfolio Transactions.................................................. 18
11. Tax Status.............................................................. 19
12. Description of Shares................................................... 22
13. Certain Liabilities..................................................... 23
14. Letter of Intent........................................................ 24
15. Systematic Withdrawal Plan.............................................. 24
16. Determination of Net Asset Value........................................ 23
17. Investment Results...................................................... 25
18. Financial Statements.................................................... 27

APPENDIX A - Description of Short-Term Debt and Corporate Bond Ratings.. 31
APPENDIX B - Performance Statistics..................................... 33
APPENDIX C - Other Pioneer Information.................................. 46

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A
PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.

<PAGE>

1. GENERAL FUND INFORMATION AND HISTORY

.On April 28, 1995, the Fund, a Delaware business trust, acquired all
the assets and liabilities of Pioneer Winthrop Real Estate Investment Fund, a
Massachusetts business trust ("Winthrop Trust"), in a tax-free reorganization
effected for the sole purpose of changing Winthrop Trust's domicile from a
Massachusetts business trust to a Delaware business trust. In connection with
the reorganization, the Fund adopted Pioneer Winthrop Trust's Registration
Statement on Form N-1A. Effective September 1, 1995, the Fund changed its name
from Winthrop Trust to Pioneer Real Estate Shares.

2. INVESTMENT POLICIES AND RESTRICTIONS

The Prospectuses of the Fund identify the investment objectives and the
principal investment policies of the Fund. Other investment policies of the Fund
are set forth below. Capitalized terms not otherwise defined herein have the
meaning given to them in the Prospectuses.

Lower-Rated Debt Securities and Associated Risks

As described in the Prospectuses, the Fund may make a variety of
investments, including corporate debt obligations of real estate industry
companies which may be unrated or rated in the lowest rating categories by
Standard & Poor's Ratings Group ("Standard & Poor's") or by Moody's Investor
Services, Inc. ("Moody's") (i.e., ratings of BB or lower by Standard & Poor's or
Ba or lower by Moody's). Bonds rated BB or Ba or below (or comparable unrated
securities) are commonly referred to as "junk bonds" and are considered
speculative and may be questionable as to principal and interest payments. In
some cases, such bonds may be highly speculative, have poor prospects for
reaching investment standing and be in default. As a result, investment in such
bonds will entail greater speculative risks than those associated with
investment in investment-grade bonds (i.e., bonds rated BBB or better by
Standard & Poor's or Baa or better by Moody's). The Fund will limit its
investment in non-investment grade corporate debt obligations, and comparable
unrated debt obligations, to less than 5% of its net assets. See Appendix A for
a description of the ratings issued by investment rating services.

The amount of junk bond securities outstanding has proliferated in
conjunction with the increase in merger and acquisition and leveraged buyout
activity. An economic downturn could severely affect the ability of highly
leveraged issuers to service their debt obligations or to repay their
obligations upon maturity. Factors having an adverse impact on the market value
of lower rated securities will have an adverse effect on the Fund's net asset
value to the extent it invests in such securities. In addition, the Fund may
incur additional expenses to the extent it is required to seek recovery upon a
default in payment of principal or interest on its portfolio holdings.

The secondary market for junk bond securities, which is concentrated in
relatively few market makers, may not be as liquid as the secondary market for
more highly rated securities, a factor which may have an adverse effect on the
Fund's ability to dispose of a particular security when necessary to meet its
liquidity needs. Under adverse market or economic conditions, the secondary
market for junk bond securities could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result,
PMC, the Fund's investment adviser, could find it more difficult to sell these
securities or may be able to sell the securities only at prices lower than if
such securities were widely traded. Prices realized upon the sale of such lower
rated or unrated securities, under these circumstances, may be less than the
prices used in calculating the Fund's net asset value.

Proposed federal laws designed to limit the use, or tax and other
advantages, of junk bond securities could adversely affect the Fund's net asset
value to the extent that the Fund invests in lower-rated debt securities. Such
proposals could also adversely affect the secondary market for junk bond
securities, the financial condition of issuers of these securities and the value
of outstanding junk bond securities.

Since investors generally perceive that there are greater risks
associated with the medium to lower rated securities of the type in which the
Fund may invest, the yields and prices of such securities may tend to fluctuate
more than those for higher rated securities. In the lower quality segments of
the fixed-income securities market, changes in perceptions of issuers'
creditworthiness tend to occur more frequently and in a more pronounced manner
than do changes in higher quality segments of the fixed-income securities market
resulting in greater yield and price volatility.

Another factor which causes fluctuations in the prices of fixed-income
securities is the supply and demand for similarly rated securities. In addition,
the prices of fixed-income securities fluctuate in response to the general level
of interest rates. Fluctuations in the prices of portfolio securities subsequent
to their acquisition will not affect cash income from such securities but will
be reflected in the Fund's net asset value.

Medium to lower rated and comparable unrated securities tend to offer
higher yields than higher rated securities with the same maturities because the
historical financial condition of the issuers of such securities may not have
been as strong as that of other issuers. Since medium to lower rated securities
generally involve greater risks of loss of income and principal than higher
rated securities, investors should consider carefully the relative risks
associated with investment in securities which carry medium to lower ratings and
in comparable unrated securities. In addition to the risk of default, there are
the related costs of recovery on defaulted issues. PMC will attempt to reduce
these risks through diversification of the Fund's portfolio and by analysis of
each issuer and its ability to make timely payments of income and principal, as
well as broad economic trends in corporate developments.

Foreign Real Estate Companies and Associated Risks

The Fund may invest up to 10% of its net assets in securities of
foreign real estate companies, provided that purchases of Canadian securities
are not subject to the limitations in this paragraph. Such investments involve
certain risks which are not typically associated with investing in securities of
domestic real estate companies. Foreign companies are not subject to uniform
accounting, auditing and financial standards and requirements comparable to
those applicable to U.S. companies. There may also be less government
supervision and regulation of foreign securities exchanges, brokers and listed
companies than exists in the United States. Interest and dividends, or in some
cases capital gains, from foreign investments may be subject to withholding or
other foreign taxes which will decrease the net return on such investments as
compared to the income or return to the Fund from its investments issued by the
U.S. government or by U.S. companies. In addition, there may be the possibility
of expropriation, confiscatory taxation, political, economic or social
instability, or diplomatic developments which could affect assets of the Fund
invested in foreign securities.

In addition, the value of foreign securities may also be adversely
affected by fluctuations in the relative rates of exchange between the
currencies of different nations and exchange control regulations. There may be
less publicly available information about foreign companies compared to reports
and ratings published about U.S. companies. Foreign securities markets have
substantially less trading volume than domestic markets and securities of some
foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. Transaction costs on foreign securities exchanges are
generally higher than in the United States.

The Fund's investments in securities denominated in foreign currencies
are also subject to currency risk, as the U.S. dollar value of these securities
may be favorably or unfavorably affected by changes in foreign currency exchange
rates and exchange control regulations. Currency exchange rates may fluctuate
significantly over short periods of time causing, among other factors, the
Fund's net asset value to fluctuate as well. Currency exchange rates are
generally determined by forces of supply and demand and the perceived relative
merits of investments in various countries, but can be affected unpredictable by
intervention from U.S. and foreign governments or central banks, political
events and currency control measures. PMC will take these and other factors into
consideration in managing the Fund's investments.

Securities Index Options

The Fund may purchase call and put options on securities indices for
the purpose of hedging against the risk of unfavorable price movements adversely
affecting the value of the Fund's securities or securities the Fund intends to
buy. Securities index options will not be used for speculative purposes.

Options on stock indices are traded on national securities exchanges
and over-the-counter, both in the U.S. and in foreign countries. A securities
index fluctuates with changes in the market values of the securities included in
the index. For example, some stock index options are based on a broad market
index such as the S&P 500, the Value Line Composite Index, the Nikkei in Japan
or the FTSE in the United Kingdom. Index options may also be based on a narrower
market index such as the S&P 100 or on an industry or market segment such as the
AMEX Oil and Gas Index or the Computer and Business Equipment Index.

The Fund may purchase put options in order to hedge against an
anticipated decline in securities prices that might adversely affect the value
of the Fund's portfolio securities. If the Fund purchases a put option on a
securities index, the amount of the payment it would receive upon exercising the
option would depend on the extent of any decline in the level of the securities
index below the exercise price. Such payments would tend to offset a decline in
the value of the Fund's portfolio securities. However, if the level of the
securities index increases and remains above the exercise price while the put
option is outstanding, the Fund will not be able to profitably exercise the
option and will lose the amount of the premium and any transaction costs. Such
loss may be partially offset by an increase in the value of the Fund's portfolio
securities.

The Fund may purchase call options on securities indices in an attempt
to lock in a favorable price on securities that it intends to buy in the future.
If the Fund purchases a call option on a securities index, the amount of the
payment it receives upon exercising the option depends on the extent of an
increase in the level of the securities index above the exercise price. Such
payments would in effect allow the Fund to benefit from securities market
appreciation even though it may not have had sufficient cash to purchase the
underlying securities. Such payments may also offset increases in the price of
securities that the Fund intends to purchase. If, however, the level of the
securities index declines and remains below the exercise price while the call
option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs. Such
loss may be partially offset by a reduction in the price the Fund pays to buy
additional securities for its portfolio.

The Fund may sell the securities index option it has purchased or write
a similar offsetting securities index option in order to close out a position in
a securities index option which it has purchased. These closing sale
transactions enable the Fund to immediately realize gains or minimize losses on
its options positions. However, there is no assurance that a liquid secondary
market on an options exchange will exist for any particular option, or at any
particular time, and for some options no secondary market may exist. In
addition, securities index prices may be distorted by interruptions in the
trading of securities of certain companies or of issuers in certain industries,
or by restrictions that may be imposed by an exchange on opening or closing
transactions, or both, which would disrupt trading in options on such indices
and preclude the Fund from closing out its options positions. If the Fund is
unable to effect a closing sale transaction with respect to options that it has
purchased, it would have to exercise the options in order to realize any profit.

The hours of trading for options may not conform to the hours during
which the underlying securities are traded. To the extent that the options
markets close before the markets for the underlying securities, significant
price and rate movements can take place in the underlying markets that can not
be reflected in the options markets. The purchase of options is a highly
specialized activity which involves investment techniques and risks different
from those associated with ordinary portfolio securities transactions.

In addition to the risks of imperfect correlation between the Fund's
portfolio and the index underlying the option, the purchase of securities index
options involves the risk that the premium and transaction costs paid by the
Fund in purchasing an option will be lost. This could occur as a result of
unanticipated movements in prices of the securities comprising the securities
index on which the option is based.

Futures Contracts and Options on Futures Contracts

To hedge against changes in securities prices, the Fund may purchase
and sell various kinds of futures contracts, and purchase and write (sell) call
and put options on such futures contracts. The Fund may also enter into closing
purchase and sale transactions with respect to such contracts and options. The
futures contracts may be based on various securities (such as U.S. government
securities), securities indices and other financial instruments and indices. The
Fund will engage in futures and related options transactions for bona fide
hedging and, although the Fund has no current intention of doing so, for
non-hedging purposes as described below. All futures contracts entered into by
the Fund are traded on U.S. exchanges or boards of trade that are licensed and
regulated by the Commodity Futures Trading Commission (the "CFTC") or on foreign
exchanges.

Futures Contracts. A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
for an agreed price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).

When interest rates are rising or securities prices are falling, the
Fund can seek to offset a decline in the value of its current portfolio
securities through the sale of futures contracts. When interest rates are
falling or securities prices are rising, the Fund, through the purchase of
futures contracts, can attempt to secure better rates or prices than might later
be available in the market when it effects anticipated purchases.

Positions taken in the futures markets are not normally held to
maturity but are instead liquidated through offsetting transactions which may
result in a profit or a loss. A clearing corporation associated with the
exchange on which futures on securities are traded guarantees that, if still
open, the sale or purchase will be performed on the settlement date.

Hedging Strategies. Hedging, by use of futures contracts, seeks to
establish with more certainty the effective price and rate of return on
portfolio securities and securities that the Fund owns or proposes to acquire.
The Fund may, for example, take a "short" position in the futures market by
selling futures contracts in order to hedge against an anticipated rise in
interest rates that would adversely affect the value of the Fund's portfolio
securities. Such futures contracts may include contracts for the future delivery
of securities held by the Fund or securities with characteristics similar to
those of the Fund's portfolio securities. If, in the opinion of PMC, there is a
sufficient degree of correlation between price trends for the Fund's portfolio
securities and futures contracts based on other financial instruments,
securities indices or other indices, the Fund may also enter into such futures
contracts as part of its hedging strategy. Although under some circumstances
prices of securities in the Fund's portfolio may be more or less volatile than
prices of such futures contracts, PMC will attempt to estimate the extent of
this volatility difference based on historical patterns and compensate for any
such differential by having the Fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against price
changes affecting the Fund's securities portfolio. When hedging of this
character is successful, any depreciation in the value of portfolio securities
will be substantially offset by appreciation in the value of the futures
position. On the other hand, any unanticipated appreciation in the value of the
Fund's portfolio securities would be substantially offset by a decline in the
value of the futures position.

On other occasions, the Fund may take a "long" position by purchasing
futures contracts. This would be done, for example, when the Fund anticipates
the subsequent purchase of particular securities when it has the necessary cash,
but expects the prices or currency exchange rates then available in the
applicable market to be less favorable than prices or rates that are currently
available.

Options on Futures Contracts. The acquisition of put and call options
on futures contracts will give the Fund the right (but not the obligation) for a
specified price to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, the Fund obtains the benefit of the futures position if
prices move in a favorable direction but limits its risk of loss in the event of
an unfavorable price movement to the loss of the premium and transaction costs.

The writing of a call option on a futures contract generates a premium
which may partially offset a decline in the value of the Fund's assets. By
writing a call option, the Fund becomes obligated, in exchange for the premium,
to sell a futures contract (if the option is exercised), which may have a value
higher than the exercise price. Conversely, the writing of a put option on a
futures contract generates a premium which may partially offset an increase in
the price of securities that the Fund intends to purchase. However, the Fund
becomes obligated to purchase a futures contract (if the option is exercised)
which may have a value lower than the exercise price. Thus, the loss incurred by
the Fund in writing options on futures is potentially unlimited and may exceed
the amount of the premium received. The Fund will incur transaction costs in
connection with the writing of options on futures.

The holder or writer of an option on a futures contract may terminate
its position by selling or purchasing an offsetting option on the same
securities. There is no guarantee that such closing transactions can be
effected. The Fund's ability to establish and close out positions on such
options will be subject to the development and maintenance of a liquid market.

Other Considerations. The Fund may engage in futures and related
options transactions only for bona fide hedging and, although the Fund has no
current intention of doing so, for non-hedging purposes in accordance with CFTC
regulations which permit principals of an investment company registered under
the 1940 Act to engage in such transactions without registering as commodity
pool operators. The Fund is not permitted to engage in speculative futures
trading. The Fund will determine that the price fluctuations in the futures
contracts and options on futures used for hedging purposes are substantially
related to price fluctuations in securities held by the Fund or which it expects
to purchase. The Fund's futures transactions will be entered into for
traditional hedging purposes -- i.e., futures contracts will be sold to protect
against a decline in the price of securities that the Fund owns, or futures
contracts will be purchased to protect the Fund against an increase in the price
of securities it intends to purchase. As evidence of this hedging intent, the
Fund expects that on 75% or more of the occasions on which it takes a long
futures or option position (involving the purchase of futures contracts), the
Fund will have purchased, or will be in the process of purchasing, equivalent
amounts of related securities or assets in the cash market at the time when the
futures or option position is closed out. However, in particular cases, when it
is economically advantageous for the Fund to do so, a long futures position may
be terminated or an option may expire without the corresponding purchase of
securities or other assets.

As an alternative to literal compliance with the bona fide hedging
definition, a CFTC regulation permits the Fund to elect to comply with a
different test, under which the sum of the amounts of initial margin deposits on
the Fund's existing non-hedging futures contracts and premiums paid for
non-hedging options on futures (net of the amount the positions are "in the
money") would not exceed 5% of the market value of the Fund's net assets. As
noted above, the Fund has no current intention of entering into non-hedging
futures contracts and non-hedging options on futures. The Fund will engage in
transactions in futures contracts and related options only to the extent such
transactions are consistent with the requirements of the Code for maintaining
its qualification as a regulated investment company for federal income tax
purposes.

Transaction costs associated with futures contracts and related options
involve brokerage costs, require margin deposits and, in the case of contracts
and options obligating the Fund to purchase securities, require the Fund to
segregate assets to cover such contracts and options.

While transactions in futures contracts and options on futures may
reduce certain risks, such transactions themselves entail certain other risks.
Thus, while the Fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for the Fund than if it had not entered into any
futures contracts or options transactions. In the event of an imperfect
correlation between a futures position and a portfolio position which is
intended to be protected, the desired protection may not be obtained and the
Fund may be exposed to risk of loss. The only futures contracts available to
hedge the Fund's portfolio are various futures on U.S. government securities,
futures on a municipal securities index and stock index futures.

Repurchase Agreements

The Fund may enter into repurchase agreements with "primary dealers" in
U.S. government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. The Fund may also enter into repurchase agreements
involving certain foreign government securities. The primary risk is that, if
the seller defaults, the Fund might suffer a loss to the extent that the
proceeds from the sale of the underlying securities and other collateral held by
the Fund in connection with the related repurchase agreement are less than the
agreed-upon repurchase price. Another risk is that, in the event of bankruptcy
of the seller, the Fund could be delayed in or prohibited from disposing of the
underlying securities and other collateral held by the Fund in connection with
the related repurchase agreement pending court proceedings. In evaluating
whether to enter a repurchase agreement, PMC will carefully consider the
creditworthiness of the seller pursuant to procedures reviewed and approved by
the Trustees.

Investment Restrictions

The Fund has adopted certain additional investment restrictions which
may not be changed without the affirmative vote of the holders of a majority of
the Fund's outstanding voting securities. The Fund may not:

(1)......Issue senior securities, except as permitted by paragraphs
(2), (6) and (7) below. For purposes of this restriction, the issuance of shares
of beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign exchange contracts, repurchase agreements and
reverse repurchase agreements entered into in accordance with the Fund's
investment policy, and the pledge, mortgage or hypothecation of the Fund's
assets within the meaning of paragraph (3) below are not deemed to be senior
securities.

(2)......Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes and except pursuant to reverse repurchase
agreements and then only in amounts not to exceed 33 1/3% of the Fund's total
assets (including the amount borrowed) taken at market value. The Fund will not
use leverage to attempt to increase income. The Fund will not purchase
securities while outstanding borrowings (including reverse repurchase
agreements) exceed 5% of the Fund's total assets.

(3)......Pledge, mortgage, or hypothecate its assets, except to secure
indebtedness permitted by paragraph (2) above and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the Fund's total assets
taken at market value.

(4)......Act as an underwriter, except to the extent that, in
connection with the disposition of portfolio securities, the Fund may be deemed
to be an underwriter for purposes of the Securities Act of 1933.

(5)......Purchase or sell real estate, including limited partnership
interests, except that the Fund may invest in securities that are secured by
real estate or interests therein and may purchase and sell mortgage-related
securities and may hold and sell real estate acquired by the Fund as a result of
the ownership of securities.

(6)......Make loans, except that the Fund may lend portfolio securities
in accordance with the Fund's investment policies and may purchase or invest in
repurchase agreements, bank certificates of deposit, all or a portion of an
issue of publicly distributed bonds, bank loan participation agreements,
bankers' acceptances, debentures or other securities, whether or not the
purchase is made upon the original issuance of the securities.

(7)......Invest in commodities or commodity contracts or in puts,
calls, or combinations of both, except interest rate futures contracts, options
on securities, securities indices, currency and other financial instruments,
futures contracts on securities, securities indices, currency and other
financial instruments and options on such futures contracts, forward foreign
currency exchange contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with the Fund's
investment policies.

The Fund will invest 25% or more of its total assets in securities
issued by companies in the real estate industry. Except as noted in the previous
sentence, it is a fundamental policy of the Fund not to concentrate its
investments in securities of companies in any particular industry. Following the
current opinion of the staff of the SEC, investments are concentrated in a
particular industry if such investments (but not investments in U.S. government
securities) aggregate 25% or more of the Fund's total assets.

The Fund does not intend to invest in or to enter into any forward
commitments, forward foreign currency exchange contracts, reverse repurchase
agreements, options on securities or currency or securities index put and call
warrants or to lend portfolio securities as described in fundamental investment
restrictions (1), (2), (6) and (7) above, during the current fiscal year.

In addition, as a matter of nonfundamental investment policy and in
connection with the offering of its shares in various states and foreign
countries, the Fund has agreed not to:

(a)......Participate on a joint-and-several basis in any securities
trading account. The "bunching" of orders for the sale or purchase of marketable
portfolio securities with other accounts under the management of PMC to save
commissions or to average prices among them is not deemed to result in a
securities trading account.

(b)......Purchase securities on margin or make short sales unless by
virtue of its ownership of other securities, the Fund has the right to obtain,
without payment of additional consideration, securities equivalent in kind and
amount to the securities sold and, if the right is conditional, the sale is made
upon the same conditions, except that a Fund may obtain such short-term credits
as may be necessary for the clearance of purchases and sales of securities and
in connection with transactions involving forward foreign currency exchange
transactions.

(c)......Purchase a security if, as a result, (i) more than 10% of the
Fund's assets would be invested in securities of closed-end investment
companies, (ii) such purchase would result in more than 3% of the total
outstanding voting securities of any one such closed-end investment company
being held by the Fund, or (iii) more than 5% of the Fund's assets would be
invested in any one such closed-end investment company; provided, however, the
Fund can exceed such limitations in connection with a plan of merger or
consolidation with or acquisition of substantially all the assets of such other
closed-end investment company. The Fund will not invest in the securities of any
open-end investment company, except in connection with a plan of merger or
consolidation with or acquisition of substantially all the assets of such other
open-end investment company.

(d)......Purchase securities of any issuer which, together with any
predecessor, has a record of less than three years' continuous operations prior
to the purchase if such purchase would cause investments of the Fund in all such
issuers to exceed 5% of the value of the total assets of the Fund.

(e)......Invest for the purpose of exercising control over or
management of any company.

(f)......Purchase warrants of any issuer, if, as a result of such
purchases, more than 2% of the value of the Fund's total assets would be
invested in warrants which are not listed on the New York Stock Exchange or the
American Stock Exchange or more than 5% of the value of the total assets of the
Fund would be invested in warrants generally, whether or not so listed. For
these purposes, warrants are to be valued at the lesser of cost or market, but
warrants acquired by the Fund in units with or attached to debt securities shall
be deemed to be without value.

(g)......Knowingly purchase or retain securities of an issuer if one or
more of the Trustees or officers of the Fund or directors or officers of PMC or
any investment management subsidiary of PMC individually owns beneficially more
than 0.5% and together own beneficially more than 5% of the securities of such
issuer.

(h)......Purchase interests in oil, gas or other mineral leases or
exploration programs; however, this policy will not prohibit the acquisition of
securities of companies engaged in the production or transmission of oil, gas or
other minerals.

(i)......Purchase any security, including stripped mortgage-backed
securities and any repurchase agreement maturing in more than seven days, which
is illiquid, if more than 15% of the net assets of the Fund, taken at market
value, would be invested in such securities; provided, however, that the Fund
may invest up to 10% of its total assets in shares of real estate investment
trusts that are illiquid.

(j)......Invest more than 10% of its total assets in restricted
securities, excluding restricted securities eligible for resale pursuant to Rule
144A under the Securities Act of 1933; provided, however, that no more than 15%
of the Fund's total assets may be invested in restricted securities including
restricted securities eligible for resale under Rule 144A.

(k)......Write covered calls or put options with respect to more than
25% of the value of its total assets or invest more than 5% of its total assets
in puts, calls, spreads, or straddles, other than protective put options.

These restrictions may not be changed without the approval of the
regulatory agencies in such states or foreign countries.

3. MANAGEMENT OF THE FUND

The Fund's Board of Trustees provides broad supervision over the
affairs of the Fund. The officers of the Fund are responsible for the Fund's
operations. The Trustees and executive officers of the Fund are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Fund within
the meaning of the 1940 Act.

JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee,
DOB: June 1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC"); Pioneer Real
Estate Advisors, Inc., Pioneer Forest, Inc., Pioneer Explorer, Inc., Pioneer
Management (Ireland) Ltd. ("PMIL") and Closed Joint Stock Company
"Forest-Starma"; President and Director of Pioneer Metals and Technology, Inc.
("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First Russia, Inc.
("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the Board and
Director of Pioneer Goldfields Limited ("PGL") and Teberebie Goldfields Limited;
Chairman of the Supervisory Board of Pioneer Fonds Marketing, GmbH, Pioneer
First Polish Investment Fund Joint Stock Company, S.A. and Pioneer Czech
Investment Company, A.S.; Chairman, President and Trustee of all of the Pioneer
mutual funds; Director of Pioneer Global Equity Fund Plc, Pioneer Global Bond
Fund Plc, Pioneer DM Cashfonds Plc, Pioneer European Equity Fund Plc, Pioneer
Central & Eastern Europe Fund Plc and Pioneer US Real Estate Fund Plc; and
Partner, Hale and Dorr LLP (counsel to PGI and the Fund).

MARY K. BUSH, Trustee, DOB: April 1948
4201 Cathedral Avenue, NW, Washington, DC 20016
President, Bush & Co., an international financial advisory firm;
Director and Trustee of Mortgage Guaranty Insurance Corporation, Novecon
Management Company, Hoover Institution, Folger Shakespeare Library, March of
Dimes, Project 2000, Inc., Small Enterprise Assistance Fund and Wilberforce
University; Advisory Board Member, Washington Mutual Investors Fund, a
registered investment company; and Trustee of all the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.

RICHARD H. EGDAHL, M.D., Ph.D. Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Road, Boston, MA 02115
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; University Professor, Boston
University; Director, Boston University Health Policy Institute and Boston
University Program for Health Care Entrepreneurship; Director, CORE (management
of workers' compensation and disability costs - NASDAQ); Director, WellSpace
(provider of complementary health care); Trustee, Boston Medical Center;
Honorary Trustee, Franciscan Children's Hospital; and Trustee of all of the
Pioneer mutual funds.

MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110, Little Deer Isle, ME 04650
Founding Director, The Winthrop Group, Inc. (consulting firm); Manager
of Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994;
Professor of Operations Management and Management of Technology and Associate
Dean, Boston University School of Management from 1989 to 1993; and Trustee of
all the Pioneer mutual funds, except Pioneer Variable Contracts Trust.

JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus, George Washington University; Director, American
Productivity and Quality Center; Adjunct Scholar, American Enterprise Institute;
and Trustee of all of the Pioneer mutual funds, except Pioneer Variable
Contracts Trust.

MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm);
Trustee of Boston Medical Center; Member of the Board of Governors of the
Investment Company Institute; and Trustee of all of the Pioneer mutual funds.

DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIntl, First
Russia, Omega, Pioneer SBIC Corporation ("Pioneer SBIC"), PMIL, Pioneer Global
Equity Fund Plc, Pioneer Global Bond Fund Plc, Pioneer DM Cashfonds Plc, Pioneer
European Equity Fund Plc, Pioneer Central and Eastern Europe Fund Plc and
Pioneer US Real Estate Fund Plc; and Executive Vice President and Trustee of all
of the Pioneer mutual funds.

STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Of Counsel to Sullivan & Cromwell (law firm); Trustee, The Winthrop
Focus Funds (mutual funds); and Trustee of all of the Pioneer mutual funds.

JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp. (energy sales, services and distribution); and Trustee of
all of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.

STEPHEN G. KASNET*, Trustee and Vice President, DOB: May 1945

Vice President of PGI and President of Pioneer Real Estate Advisors,
Inc. since 1995; Vice President of Pioneer Variable Contracts Trust; Managing
Director, Winthrop Financial Associates and First Winthrop Corp. from 1991 to
1995; Executive Vice President, Cabot, Cabot & Forbes from 1989 to 1991.

FRED N. PRATT, JR.*, Trustee, DOB: December 1944
Boston Financial, 101 Arch Street, Boston, MA 02110
Chief Executive Officer, Chairman of the Board, Boston Financial; Vice
Chairman and Member of the Executive committee, National Realty Committee;
Member, World Affairs Council of Boston; Trustee, The Chestnut Hill School;
Member, Advisory Committee, Massachusetts Institute of Technology, Center for
Real Estate.

BLAKE EAGLE, Trustee, DOB: June 1933
Massachusetts Institute of Technology, Building W31 310, Cambridge, MA 02139

Chairman of the Center for Real Estate, Massachusetts Institute of
Technology since 1994; Member of the Capital Markets Task Force for the Urban
Land Institute; Associated with Frank Russell Company from June, 1971 to
December, 1993, serving as President of Real Estate Consulting from 1985 to
1991; Director of Bentall Corporation (Canadian real estate firm), Cornerstone
Properties, Inc. (real estate firm listed on the Frankfurt Stock Exchange) and
Storage Trust Realty (real estate firm listed on the New York Stock Exchange);
Chairman of the Institutional Real Estate Clearinghouse (a non-profit
organization); Member of the Real Estate Advisory Committee of the New York
State Teachers' Retirement Plan; Member of the Shared Investment Committee of
Copley Investors Limited Partnership.

ROBERT W. BENSON, Vice President, DOB: April 1947
Senior Vice President of PMC.

WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC; and Treasurer of all of the Pioneer mutual funds.

JOSEPH P. BARRI, Secretary, DOB: August 1946

Corporate Secretary of PGI and most of its subsidiaries; Secretary of all
of the Pioneer mutual funds; and Partner, Hale and Dorr LLP.

ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.

ROBERT P. NAULT, Assistant Secretary, DOB: March 1964

General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and junior partner of Hale and Dorr LLP
prior to 1995.

The Fund's Agreement and Declaration of Trust of Trust, dated March 10,
1995, as amended, (the "Declaration of Trust of Trust") provides that the
holders of two-thirds of its outstanding shares may vote to remove a Trustee of
the Fund at any meeting of shareholders. See "Description of Shares" below. The
business address of all officers is 60 State Street, Boston, Massachusetts
02109.

All of the outstanding capital stock of PFD, PMC and PSC is owned,
directly or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the
Fund's investment adviser, serves as the investment adviser for the Pioneer
mutual funds listed below and manages the investments of certain institutional
accounts.

The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.

Investment Principal
Fund Name Adviser Underwriter

Pioneer World Equity Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Micro-Cap Fund PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Independence Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Balanced Fund PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2

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Note 1 This fund is a closed-end fund.

Note 2 This is a series of ten separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.

PMC also manages the investments of certain institutional private
accounts. As of March 31, 1998, to the knowledge of the Fund, no officer or
Trustee of the Fund owned 5% or more of the issued and outstanding shares of
PGI, except Mr. Cogan who then owned approximately 14% of such shares. As of a
date no earlier than 30 days prior to the date of this Statement of Additional
Information, the Trustees and officers of the Fund owned in the aggregate less
than 2% of the outstanding shares of the Fund and there were no shareholders of
record who owned 5% or more of the Fund's outstanding voting securities, except
MLPF&S For the Sole Benefit of its Customers, Mutual Fund Administration, 4800
Deer Lake Drive East, Third Floor, Jacksonville, Florida 32246-6484, owned
approximately 1,255,685 (26%) of the Class B shares of the Fund and 492,170
(35.04%) of the Class C shares of the Fund.

Remuneration of Trustees

The Fund pays no salaries or compensation to any of its officers.
However, the Fund pays an annual trustees' fee to each Trustee who is not
affiliated with PGI, PMC, PFD or PSC consisting of two components: (a) a base
fee of $500 and (b) a variable fee, calculated on the basis of the Fund's
average net assets of the Fund. In addition, the Fund pays a per meeting fee of
$100 to each Trustee who is not affiliated with PGI, PMC, PFD or PSC and pays an
annual Trustee's fee of $500 plus expenses to each Trustee affiliated with PGI,
PMC, PFD and PSC. The Fund also pays an annual committee participation fee to
each Trustee who serves as a member of any committees established to act on
behalf of one or more of the of Pioneer mutual funds. Committee fees are
allocated to the Fund on the basis of the Fund's average net assets. Each
Trustee who is a member of the Audit Committee for the Pioneer mutual funds
receives an annual fee equal to 10% of the aggregate annual trustees' fee,
except the Committee Chairperson who receives an annual trustees' fee equal to
20% of the aggregate annual trustees' fee. Members of the Pricing Committee for
the Pioneer mutual funds, as well as any other committee which renders material
functional services to the Boards of Trustees for the Pioneer mutual funds,
receives an annual fee equal to 5% of the annual trustees' fee, except the
Committee Chairperson who receives an annual trustees' fee equal to 10% of the
annual trustees' fee. Each Trustee who is not affiliated with PGI, PMC, PFD or
PSC also receives $375 per meeting for attendance at meetings of the
Non-Interested Trustees Committee, except for the Committee Chairperson who will
receive an additional $375 per meeting. Any such fees paid to affiliated or
interested persons of PGI, PMC, PFD or PSC are reimbursed to the Fund under its
management contract.

The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund:

Total Compensa-
tion from the
Pension or Fund and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
TrusteeFrom the Fund* Accrued of Mutual Funds**

John F. Cogan, Jr. $500 0 $12,000
Mary K. Bush 555 0 30,000
David D. Tripple 500 0 12,000
Stephen G. Kasnet 500 0 500
Blake Eagle 1,110 0 1,110
Richard H. Egdahl, M.D. 1,086 0 62,000
Margaret B.W. Graham 1,086 0 60,000
John W. Kendrick 1,008 0 55,800
Marguerite A. Piret 1,402 0 80,000
Fred N. Pratt, Jr 500 0 500
Stephen K. West 1,139 0 63,800
John Winthrop 1,324 0 69,000

Totals $10,710 $446,710

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* As of December 31, 1997.
** For the calendar year ended December 31, 1997.

4. ADVISORY SERVICES

Investment Adviser.

As stated in the Prospectus, PMC, 60 State Street, Boston,
Massachusetts 02109, serves as the Fund's investment adviser. The management
contract is renewable annually by the vote of a majority of the Board of
Trustees of the Fund (including a majority of the Board of Trustees who are not
parties to the contract or interested persons of any such parties) cast in
person at a meeting called for the purpose of voting on such renewal. The
contract terminates if assigned and may be terminated without penalty by either
party upon 60 days' written notice by vote of the Board of Directors or Trustees
or a majority of the Fund's outstanding voting securities. Pursuant to the
management contract, PMC will not be liable for any error of judgment of mistake
of law or for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale or retention of any securities on the
recommendation of PMC. PMC, however, is not protected against liability by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under the management contract.

As compensation for its investment advisory and management services and
expenses incurred, PMC is entitled to a management fee at the rate of 1.00% per
annum of the Fund's average daily net assets. The fee is computed daily and paid
monthly. Prior to October 22, 1996, PMC voluntarily agreed not to impose a
portion of its management fee and to make other arrangements to the extent
necessary to limit operating expenses of the Class A shares of the Fund to 1.75%
of the Fund's average daily net assets; the portion of the Fund-wide expenses
attributable to Class B and Class C shares were reduced only to the extent they
were reduced for Class A shares. From the Fund's inception through July 17,
1995, Pioneer Winthrop Advisers ("PWA") served as investment adviser to the Fund
and PMC and Winthrop Advisers Limited Partnership ("WALP") served as subadvisers
to the Fund. During the period that PWA served as adviser, PWA voluntarily
agreed not to impose a portion of its management fee and to make other
arrangements to the extent necessary to limit the Fund's total expenses to 1.75%
of the Fund's average daily net assets.

For the period from January 1, 1995 through July 17, 1995, the Fund
would have incurred total management fees to PWA of $142,839 but $117,002 of
such fee was not imposed pursuant to PWA's voluntary agreement described above.
For the period from July 18, 1995 through December 31, 1995 and for the fiscal
year ended December 31, 1996, the Fund would have incurred total management fees
to PMC of $122,260 and $428,114, respectively, but $99,216 and $145,879,
respectively, of such fees were not imposed pursuant to PMC's voluntary
agreement described above. For the fiscal year ended December 31, 1997, the Fund
incurred management fees of $1,740,437.

For the period from January 1, 1995 through July 17, 1995, PWA incurred
total subadvisory fees to PMC and WALP of $15,502.

In an attempt to avoid any potential conflict with portfolio
transactions for the Fund, PMC and the Fund have adopted extensive restrictions
on personal securities trading by personnel of PMC and its affiliates. These
restrictions include: pre-clearance of all personal securities transactions and
a prohibition of purchasing initial public offerings of securities. These
restrictions are a continuation of the basic principle that the interests of the
Fund and its shareholders come before those of PMC and its employees.

The Subadviser.

Boston Financial Securities, Inc. ("BFS"), 101 Arch Street, Boston,
Massachusetts 02110, serves as the Fund's subadviser. The subadvisory agreement
among the Fund, PMC and BFS is renewable annually by the vote of a majority of
the Board of Trustees of the Fund (including a majority of the Board of Trustees
who are not parties to the contract or interested persons of any such parties)
cast in person at a meeting called for the purpose of voting on such renewal.
This contract terminates if assigned and may be terminated without penalty by
either party by vote of its Board of Directors or Trustees, as the case may be,
or a majority of the Fund's outstanding voting securities and the giving of 60
days' written notice.

As compensation for its subadvisory services, PMC pays BFS a
subadvisory fee equal to 0.25% per annum of the Fund's average daily net assets
up to $27 million and 0.50% of average daily net assets in excess of $27
million. The fee is computed daily and paid monthly. The subadvisory fee payable
by PMC to BFS will be reduced proportionally to the extent that PMC, after
written notice to BFS, elects to utilize a portion of the management fees paid
to PMC by the Fund to make payments to third parties. BFS is a registered
broker-dealer and may in the future act as a broker in connection with the sale
of shares of the Fund under a selling agreement with PFD.

As of December 31, 1997, the following individuals owned beneficially
more than 10% of the outstanding common stock of BFS: Randolph G Hawthorne
(11.45%), Fred N. Pratt, Jr. (13.42%), William B Haynsworth (11.53%). The
address for each of these individuals is BFS, 101 Arch Street, Boston,
Massachusetts 02110.

5. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS

The Fund and Pioneer Funds Distributor, Inc. are parties to an
Underwriting Agreement. See "Principal Underwriter" below. The Trustees who were
not at the time they voted interested persons of the Fund, as defined in the
1940 Act, approved the Underwriting Agreement. The Underwriting Agreement will
continue from year to year if annually approved by the Trustees. The
Underwriting Agreement provides that PFD will bear certain distribution expenses
not borne by the Fund.

PFD bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Fund. PFD also pays certain expenses in connection with the
distribution of the Fund's shares, including the cost of preparing, printing and
distributing advertising or promotional materials, and the cost of printing and
distributing prospectuses and supplements to prospective shareholders. The Fund
bears the cost of registering its shares under federal and state securities law.

The Fund and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Fund.

The Fund has adopted a Plan of Distribution for each Class of shares
(except Class Y shares) in accordance with Rule 12b-1 under the 1940 Act
pursuant to which certain distribution fees are paid to PFD.

Class A Plan

Pursuant to the Class A Plan the Fund reimburses PFD for its
expenditures in financing certain activities primarily intended to result in the
sale of Class A shares. Certain categories of such expenditures have been
approved by the Board of Trustees and are set forth in the Prospectus. See
"Distribution Plans" in the Prospectus. The expenses of the Fund pursuant to the
Class A Plan are accrued on a fiscal year basis and may not exceed the annual
rate of 0.25% of the Fund's average daily net assets attributable to Class A
shares.

Class B Plan

The Class B Plan provides that the Fund will pay PFD, as the Fund's
distributor for its Class B shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis to 0.75% of the Fund's average daily net
assets attributable to Class B shares and will pay PFD a service fee equal to
0.25% of the Fund's average daily net assets attributable to Class B shares
(which PFD will in turn pay to securities dealers which enter into a selling
agreement with PFD at a rate of up to 0.25% of the Fund's average daily net
assets attributable to Class B shares owned by investors for whom that
securities dealer is the holder or dealer of record). This service fee is
intended to be in consideration of personal services and/or account maintenance
services rendered by the dealer with respect to Class B shares. PFD will advance
to dealers the first year's service fee at a rate equal to 0.25% of the amount
invested. As compensation therefor, PFD may retain the service fee paid by the
Fund with respect to such shares for the first year after purchase. Commencing
in the thirteenth month following a purchase of Class B shares, dealers will
become eligible for additional service fees or other compensation with respect
to such shares. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.

The purpose of distribution payments to PFD under the Class B Plan is
to compensate PFD for its distribution services with respect to the Class B
shares of the Fund. PFD pays commissions to dealers as well as expenses of
printing prospectuses and reports used for sales purposes, expenses with respect
to the preparation and printing of sales literature and other
distribution-related expenses, including, without limitation, the cost necessary
to provide distribution-related services, or personnel, travel office expenses
and equipment. The Class B Plan also provides that PFD will receive all CDSCs
attributable to Class B shares. (See "Distribution Plans" in the Prospectus).
When a broker-dealer sells Class B shares and elects, with PFD's approval, to
waive its right to receive the commissions normally paid on the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
that broker-dealer.

Class C Plan

The Class C Plan provides that the Fund will pay PFD, as the Fund's
distributor for its Class C shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis to 0.75% of the Fund's average daily net
assets attributable to Class C shares and will pay PFD a service fee equal to
0.25% of the Fund's average daily net assets attributable to Class C shares. PFD
will in turn pay to securities dealers which enter into a selling agreement with
PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the Fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first year's service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Commencing in the thirteenth month following a
purchase of Class C shares, dealers will become eligible for additional service
fees at a rate of up to 0.25% of the net asset value of such shares and
additional compensation at a rate of up to 0.75% of the net asset value of such
shares. Dealers may from time to time be required to meet certain other criteria
in order to receive service fees. PFD or its affiliates are entitled to retain
all service fees payable under the Class C Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.

The purpose of distribution payments to PFD under the Class C Plan is
to compensate PFD for its distribution services with respect to the Class C
shares of the Fund. PFD pays commissions to dealers as well as expenses of
printing prospectuses and reports used for sales purposes, expenses with respect
to the preparation and printing of sales literature and other
distribution-related expenses, including, without limitation, the cost necessary
to provide distribution-related services, or personnel, travel office expenses
and equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distribution Plans" in the Prospectus).
When a broker-dealer sells Class C shares and elects, with PFD's approval, to
waive its right to receive the commissions normally paid on the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
that broker-dealer.

Class Y Shares

PFD incurs the expenses of distributing the Fund's Class Y shares;
those expenses are not reimbursed or paid for by the Fund. These expenses
include any commissions or account servicing fees paid to, or on account of,
broker-dealers which have selling agreements with PFD and certain qualifying
registered investment advisers and other financial institutions.

General

In accordance with the terms of the Plans, PFD provides to the Fund for
review by the Trustees a quarterly written report of the amounts expended under
the respective Plan and the purpose for which such expenditures were made. In
the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.

No interested person of the Fund, nor any Trustee of the Fund who is
not an interested person of the Fund, has any direct or indirect financial
interest in the operation of the Plans except to the extent that PFD and certain
of its employees may be deemed to have such an interest as a result of receiving
a portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.

The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Fund, as defined in the 1940 Act (none of whom has or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plans, the Trustees identified and considered a number of
potential benefits which the Plans may provide. The Board of Trustees believes
that there is a reasonable likelihood that the Plans will benefit the Fund and
its current and future shareholders. Under their terms, the Plans remain in
effect from year to year provided such continuance is approved annually by vote
of the Trustees in the manner described above. The Plans may not be amended to
increase materially the annual percentage limitation of average net assets which
may be spent for the services described therein without approval of the
shareholders of the Class affected thereby.. Material amendments of the Plans
must also be approved by the Trustees in the manner described above. A Plan may
be terminated at any time, without payment of any penalty, by vote of the
majority of the Trustees who are not interested persons of the Fund and have no
direct or indirect financial interest in the operations of the Plan, or by a
vote of "a majority of the outstanding voting securities" of the respective
Class of the Fund (as defined in the 1940 Act). A Plan will automatically
terminate in the event of its "assignment" (as defined in the 1940 Act).

During the fiscal year ended December 31,1997, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan, Class B Plan, and Class C
Plan, respectively, as follows: $243,318, $587,260 and $175,276. The
distribution fees were paid by the Fund to PFD in reimbursement of or
compensation for expenses related to servicing shareholder accounts and to
compensate dealers and sales personnel.

Redemptions of each class of shares (except Class Y shares) may be
subject to a CDSC. A CDSC of 1.00% 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 6 years of purchase are subject to a CDSC at
declining rates beginning at 4% based on the lower of the cost or market value
of the shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. During the fiscal year ended December
31, 1997, CDSCs, in the amount of $129,808 were paid to PFD.

6. SHAREHOLDER SERVICING/TRANSFER AGENT

The Fund has contracted with PSC, 60 State Street, Boston,
Massachusetts 02109, to act as shareholder servicing agent and transfer agent
for the Fund. This contract terminates if assigned and may be terminated without
penalty by either party by vote of its Board of Directors or Trustees, as the
case may be, or a majority of the Fund's outstanding voting securities and the
giving of ninety days' written notice.

Under the terms of its contract with the Fund, PSC will service
shareholder accounts, and its duties will include: (i) processing sales,
redemptions and exchanges of shares of the Fund; (ii) distributing dividends and
capital gains associated with Fund portfolio accounts; and (iii) maintaining
account records and responding to routine shareholder inquiries.

PSC receives from the Fund an annual fee of $22.75 for each
shareholder account as compensation for the services described above. This fee
is set at an amount determined by vote of a majority of the Trustees (including
a majority of the Trustees who are not parties to the contract with PSC or
interested persons of any such parties) to be comparable to fees for such
services being paid by other investment companies. The Fund may compensate
entities which have agreed to provide certain sub-accounting services such as
specific transaction processing and recordkeeping services. Any such payments by
the Fund would be in lieu of the per account fee which would otherwise be paid
by the Fund to PSC.

7. CUSTODIAN

Brown Brothers Harriman & Co. (the "Custodian"), 40 Water Street,
Boston, Massachusetts 02109, is the custodian of the Fund's assets. The
Custodian's responsibilities include safekeeping and controlling the Fund's cash
and securities in the U.S. as well as in foreign countries, handling the receipt
and delivery of securities, and collecting interest and dividends on the Fund's
investments. The Custodian fulfills its function in foreign countries through a
network of subcustodian banks located around the world.

The Custodian does not determine the investment policies of the Fund or
decide which securities it will buy or sell. The Fund may invest in securities
issued by the Custodian, deposit cash in the Custodian and deal with the
Custodian as a principal in securities transactions. Portfolio securities may be
deposited into the Federal Reserve-Treasury Department Book Entry System or the
Depository Trust Company in the U.S. or in recognized central depositories in
foreign countries.

8. PRINCIPAL UNDERWRITER

Pioneer Funds Distributor, Inc., 60 State Street, Boston, Massachusetts
02109, serves as the principal underwriter for the Fund in connection with the
continuous offering of its shares. The Fund will not generally issue Fund shares
for consideration other than cash. At the Fund's sole discretion, however, it
may issue Fund shares for consideration other than cash in connection with an
acquisition of portfolio securities pursuant to a purchase of assets, merger or
reorganization.

The redemption price of shares of beneficial interest of the Fund
may, at PMC's discretion, be paid in cash or portfolio securities. The Fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the Fund's net asset value during any 90-day period for any
one shareholder. Should the amount of redemptions by any shareholder exceed such
limitation, the Fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken at their
value employed in determining the Fund's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of such securities will be made in
such manner as the Board deems fair and reasonable.

During the fiscal years ended December 31, 1995, 1996 and 1997, net
underwriting commissions retained by PFD in connection with its offering of
Class A, Class B and Class C shares were $29,767, $61,469 and $172,149,
respectively. Commissions reallowed to dealers by PFD for the same fiscal years
were $187,036, $1,142,385 and $1,126,368, respectively. See "Underwriting
Agreement and Distribution Plan" above for a description of the terms of the
Underwriting Agreement with PFD.

9. INDEPENDENT PUBLIC ACCOUNTANTS

Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts
02110, is the Fund's independent public accountants, providing audit services,
tax return review, and assistance and consultation with respect to the
preparation of filings with the Commission.

10. PORTFOLIO TRANSACTIONS

All orders for the purchase or sale of portfolio securities are
placed on behalf of the Fund by PMC pursuant to authority contained in the
Management Contract with PMC. In selecting brokers or dealers, PMC considers
other factors relating to best execution, including, but not limited to, the
size and type of the transaction; the nature and character of the markets of the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the dealer; the dealer's execution
services rendered on a continuing basis; and the reasonableness of any dealer
spreads. Most transactions in foreign equity securities are executed by
broker-dealers in foreign countries in which commission rates are fixed and,
therefore, are not negotiable (as such rates are in the U.S.) and are generally
higher than in the U.S..

PMC may select dealers which provide brokerage and/or research services
to the Fund and/or other investment companies or accounts managed by PMC. In
addition, if PMC determines in good faith that the amount of commissions charged
by a broker is reasonable in relation to the value of the brokerage and research
services provided by such broker, the Fund may pay commissions to such broker in
an amount greater than the amount another firm may charge. Such services may
include advice concerning the value of securities; the advisability of investing
in, purchasing or selling securities; the availability of securities or the
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement). PMC
maintains a listing of dealers who provide such services on a regular basis.
However, because many transactions on behalf of the Fund and other investment
companies or accounts managed by PMC are placed with broker-dealers (including
broker-dealers on the listing) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such transactions
directed to such dealers solely because such services were provided.

The research received from dealers may be useful to PMC in rendering
investment management services to the Fund and to other investment companies or
other accounts managed by PMC, although not all of such research may be useful
to the Fund. Conversely, such information provided by brokers or dealers who
have executed transaction orders on behalf of such other PMC clients may be
useful to PMC in carrying out their obligations to the Fund. The receipt of such
research has not reduced PMC's normal independent research activities; however,
it enables PMC to avoid the additional expenses which might otherwise be
incurred if it were to attempt to develop comparable information through its own
staff.

In circumstances where two or more broker-dealers offer comparable
prices and executions, preference may be given to a broker-dealer which has sold
shares of the Fund as well as shares of other investment companies or accounts
managed by PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Fund.

The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Fund.

In addition to serving as investment subadviser to the Fund, PMC acts
as investment adviser to other mutual funds in the Pioneer group and private
accounts with investment objectives similar to those of the Fund. As such,
securities may meet investment objectives of the Fund, such other funds and such
private accounts. In such cases, the decision to recommend to purchase for one
fund or account rather than another is based on a number of factors. The
determining factors in most cases are the amount of securities of the issuer
then outstanding, the value of those securities and the market for them. Other
factors considered in the investment recommendations include other investments
which each fund or account presently has in a particular industry or country and
the availability of investment funds in each fund or account.

It is possible that, at times, identical securities will be held by
more than one fund and/or account. However, the position of any fund or account
in the same issue may vary and the length of time that any fund or account may
choose to hold its investment in the same issue may likewise vary. To the extent
that the Fund, another Pioneer mutual fund or a private account managed by PMC
seeks to acquire the same security at about the same time, the Fund may not be
able to acquire as large a position in such security as it desires or it may
have to pay a higher price for the security. Similarly, the Fund may not be able
to obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if PMC decides to sell on behalf of another
account the same portfolio security at the same time. On the other hand, if the
same securities are bought or sold at the same time by more than one account,
the resulting participation in volume transactions could produce better
executions for the Fund or other account. In the event that more than one
account purchases or sells the same security on a given date, the purchases and
sales will normally be made as nearly as practicable on a pro rata basis in
proportion to the amounts desired to be purchased or sold by each.

During the fiscal years ended December 31, 1995, 1996 and 1997 the Fund
paid or accrued aggregate brokerage and underwriting commissions of
approximately$18,000, $224,000 and $354,000, respectively

11. TAX STATUS

It is the Fund's policy to meet the requirements of Subchapter M of the
Code, for qualification as a regulated investment company. These requirements
relate to the sources of the Fund's income, the diversification of its assets
and the distribution of its income to shareholders. If the Fund meets all such
requirements and distributes to its shareholders, in accordance with the Code's
timing requirements, all investment company taxable income and net capital gain,
if any, which it earns, the Fund will be relieved of the necessity of paying
federal income tax.

In order to qualify as a regulated investment company under Subchapter
M, the Fund must, among other things, derive at least 90% of its annual gross
income from dividends, interest, gains from the sale or other disposition of
stock, securities or foreign currencies, or other income (including gains from
options and futures contracts) derived with respect to its business of investing
in such stock, securities or currencies (the "90% income test"), and satisfy
certain diversification and income distribution requirements. For purposes of
the 90% income test, income the Fund earns from equity interests in certain
entities that are not treated as corporations (e.g., are treated as partnerships
or trusts) for U.S. tax purposes will generally have the same character for the
Fund as in the hands of such entities; consequently, the Fund may be required to
limit its equity investments in such entities that earn fee income, rental
income, or other nonqualifying income. Similarly, the Fund may need to limit its
holdings of and income from any direct ownership interests that it may acquire
in real estate in order to seek to ensure satisfaction of the 90% income test.

Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign exchange gains, are taxable as ordinary
income, whether received in cash or reinvested in additional shares. Dividends
from net long-term capital gain in excess of net short-term capital loss ("net
capital gain"), if any, whether received in cash or reinvested in additional
shares, are taxable to the Fund's shareholders as capital gains for federal
income tax purposes without regard to the length of time shares of the Fund have
been held. As a result of the enactment of the Taxpayer Relief Act of 1997 (the
"1997 TRA") on August 5, 1997, gain recognized after May 6, 1997 from the sale
of a capital asset is taxable to individual (noncorporate) investors at
different maximum federal income tax rates, depending generally upon the tax
holding period for the asset, the federal income tax bracket of the taxpayer,
and the dates the asset was acquired and/or sold. The Treasury Department has
issued guidance under the 1997 TRA that (subject to possible modification by
future "technical corrections" legislation) enables the Fund to pass through to
its shareholders the benefits of the capital gains tax rates enacted in the 1997
TRA. The Fund will provide appropriate information to its shareholders about its
distributions, including the tax rate(s) applicable to its distributions from
long-term capital gains, in accordance with this and any future guidance.
Shareholders should consult their own tax advisers on the correct application of
these new rules in their particular circumstances

Any dividend declared by the Fund in October, November or December as
of a record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.

Foreign exchange gains and losses realized by the Fund in connection
with certain transactions involving foreign currency-denominated debt
securities, foreign currencies, or payables or receivables denominated in a
foreign currency are subject to Section 988 of the Code, which generally causes
such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders. Under future
regulations, any transactions in foreign currencies that are not directly
related to the Fund's investments in stock or securities (or its options or
futures contracts with respect to stock or securities) may need to be limited in
order to enable the Fund to satisfy the 90% income test.. If the net foreign
exchange loss for a year were to exceed the Fund's investment company taxable
income (computed without regard to such loss), the resulting ordinary loss for
such year would not be deductible by the Fund or its shareholders in future
years.

If the Fund acquires any equity interest (under proposed regulations,
generally including not only stock but also an option to acquire stock such as
is inherent in a convertible bond) in certain foreign corporations that receive
at least 75% of their annual gross income from passive sources (such as
interest, dividends, certain rents and royalties, or capital gain) or hold at
least 50% of their assets in investments producing such passive income ("passive
foreign investment companies"), the Fund could be subject to federal income tax
and additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its shareholders.
The Fund would not be able to pass through to its shareholders any credit or
deduction for such a tax. An election may generally be available that would
ameliorate these adverse tax consequences, but any such election would require
the Fund to recognize taxable income or gain (subject to distribution
requirements) without the concurrent receipt of cash. These investments could
also result in the treatment of associated capital gains as ordinary income. The
Fund may limit and/or manage its holdings in passive foreign investment
companies to minimize its tax liability or maximize its return from these
investments.

The Fund may invest in debt obligations that are in the lowest rating
categories or are unrated, including debt obligations of issuers not currently
paying interest or who are in default. Investments in debt obligations that are
at risk of or in default present special tax issues for the Fund. Tax rules are
not entirely clear about issues such as when the Fund may cease to accrue
interest, original issue discount, or market discount, when and to what extent
deductions may be taken for bad debts or worthless securities, how payments
received on obligations in default should be allocated between principal and
income, and whether exchanges of debt obligations in a workout context are
taxable. These and other issues will be addressed by the Fund, in the event it
invests in such securities, in order to seek to ensure that it distributes
sufficient income to preserve its status as a regulated investment company and
does not become subject to federal income or excise tax.

If the Fund invests in certain pay-in-kind securities ("PIKs"), zero
coupon securities, deferred interest securities or, in general, any other
securities with original issue discount (or with market discount if the Fund
elects to include market discount in income currently), the Fund must accrue
income on such investments for each taxable year, which generally will be prior
to the receipt of the corresponding cash payments. However, the Fund must
distribute, at least annually, all or substantially all of its net income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid Federal income and excise taxes.
Therefore, the Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.

For federal income tax purposes, the Fund is permitted to carry forward
a net capital loss for any year to offset its capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the Fund and therefore are not expected to be distributed as such
to shareholders. As of the end of its most recent taxable year, the Fund had no
capital loss carryforwards.

At the time of an investor's purchase of Fund shares, a portion of the
purchase price may be attributable to realized or unrealized appreciation in the
Fund's portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions by the Fund on these shares from such appreciation or
income may be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.

Redemptions and exchanges are taxable events for shareholders that are
subject to tax. Shareholders should consult their own tax advisers with
reference to their individual circumstances to determine whether any particular
transaction in Fund shares is properly treated as a sale for tax purposes, as
the following discussion assumes, and the character of and tax rate applicable
to any gains or losses recognized in such transactions under the new rate
structure enacted in the 1997 TRA. Any loss realized by a shareholder upon the
redemption, exchange or other disposition of shares with a tax holding period of
six months or less will be treated as a long-term capital loss to the extent of
any amounts treated as distributions of long-term capital gain with respect to
such shares.

In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1) in the case of a reinvestment in the Fund at net asset value
pursuant to the reinvestment privilege, the sales charge paid on such shares is
not included in their tax basis under the Code, and (2) in the case of an
exchange, all or a portion of the sales charge paid on such shares is not
included in their tax basis under the Code, to the extent a sales charge that
would otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange. Losses on
redemptions or other dispositions of shares may be disallowed under "wash sale"
rules in the event of other investments in the Fund (including those made
pursuant to reinvestment of dividends and/or capital gain distributions) within
a period of 61 days beginning 30 days before and ending 30 days after a
redemption or other disposition of shares. In such a case, the disallowed
portion of any loss would be included in the federal tax basis of the shares
acquired in the other investments.

Options written or purchased and futures contracts entered into by the
Fund on certain securities or indices may cause the Fund to recognize gains or
losses from marking-to-market even though such options may not have lapsed, been
closed out, or exercised or such futures contracts may not have been performed
or closed out. The tax rules applicable to these contracts may affect the
characterization as long-term or short-term of some capital gains and losses
realized by the Fund. Additionally, the Fund may be required to recognize gain
if an option, futures contract or other transaction that is not subject to the
mark to market rules is treated as a "constructive sale" of an "appreciated
financial position" held by the Fund under Section 1259 of the Code. Any net
mark to market gains and/or gains from constructive sales may also have to be
distributed to satisfy the distribution requirements referred to above even
though no corresponding cash amounts may concurrently be received, possibly
requiring the disposition of portfolio securities or borrowing to obtain the
necessary cash. Losses on certain options or futures contracts and/or offsetting
positions (portfolio securities or other positions with respect to which the
Fund's risk of loss is substantially diminished by one or more options or
futures contracts) may also be deferred under the tax straddle rules of the
Code, which may also affect the characterization of capital gains or losses from
straddle positions and certain successor positions as long-term or short-term.
Certain tax elections may be available that would enable the Fund to ameliorate
some adverse effects of the tax rules described in this paragraph. The tax rules
applicable to options, futures contracts and straddles may affect the amount,
timing and character of the Fund's income and losses and hence of its
distributions to shareholders.

For purposes of the 70% dividends-received deduction generally
available to corporations under the Code, dividends received by the Fund from
U.S. domestic corporations in respect of any share of stock with a tax holding
period of at least 46 days (91 days in the case of certain preferred stock)
extending before and after each dividend held in an unleveraged position and
distributed and designated by the Fund may be treated as qualifying dividends.
Any corporate shareholder should consult its tax advisor regarding the
possibility that its tax basis in its shares may be reduced, for federal income
tax purposes, by reason of "extraordinary dividends" received with respect to
the shares and, to the extent such basis would be reduced below zero, current
recognition of income may be required. In order to qualify for the deduction,
corporate shareholders must meet the minimum holding period requirement stated
above with respect to their Fund shares, taking into account any holding period
reductions from certain hedging or other transactions or positions that diminish
their risk of loss with respect to their Fund shares, and, if they borrow to
acquire or otherwise incur debt attributable to Fund shares, they may be denied
a portion of the dividends-received deduction. The entire qualifying dividend,
including the otherwise deductible amount, will be included in determining the
excess (if any) of a corporation's adjusted current earnings over its
alternative minimum taxable income, which may increase a corporation's
alternative minimum tax liability.

The Fund may be subject to withholding and other taxes imposed by
foreign countries including taxes on interest, dividends and capital gains, with
respect to its investments in those countries. Tax conventions between certain
countries and the U.S. may reduce or eliminate such taxes in some cases. The
Fund does not expect to satisfy the requirements for passing through to its
shareholders their pro rata shares of qualified foreign taxes paid by the Fund,
with the result that shareholders will not include such taxes in their gross
incomes and will not be entitled to a tax deduction or credit for such taxes on
their own tax returns.

Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.

A state income (and possibly local income and/or intangible property)
tax exemption is generally available to the extent (if any) the Fund's
distributions are derived from interest on (or, in the case of intangible
property taxes, the value of its assets is attributable to) certain U.S.
government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. The
Fund will not seek to satisfy any threshold or reporting requirements that may
apply in particular taxing jurisdictions, although the Fund may in its sole
discretion provide relevant information to shareholders.

Federal law requires that the Fund withhold (as "backup withholding")
31% of reportable payments, including dividends, capital gain dividends and the
proceeds of redemptions (including exchanges) and repurchases to shareholders
who have not complied with IRS regulations. In order to avoid this withholding
requirement, shareholders must certify on their Account Applications, or on
separate IRS Forms W-9, that the Social Security Number or other Taxpayer
Identification Number they provide is their correct number and that they are not
currently subject to backup withholding, or that they are exempt from backup
withholding. The Fund may nevertheless be required to withhold if it receives
notice from the IRS or a broker that the number provided is incorrect or backup
withholding is applicable as a result of previous underreporting of interest or
dividend income.

If, as anticipated, the Fund continues to qualify as a regulated
investment company under the Code, it will not be required to pay any
Massachusetts income, corporate excise or franchise taxes or any Delaware
corporation income tax.

The description of certain federal tax provisions above relates only to
U.S. federal income tax consequences for shareholders who are U.S. persons, i.e.
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a possible 30% non-resident alien U.S. withholding tax (or
non-resident alien withholding tax at a lower treaty rate) on amounts treated as
ordinary dividends from the Fund and, unless an effective IRS Form W-8 or
authorized substitute for Form W-8 is on file, to 31% backup withholding on
certain other payments from the Fund. Shareholders should consult their own tax
advisers on these matters and on state, local and other applicable tax laws.

12. DESCRIPTION OF SHARES

The Fund's Declaration of Trust of Trust permits the Board of Trustees
to authorize the issuance of an unlimited number of full and fractional shares
of beneficial interest which may be divided into such separate series as the
Trustees may establish. Currently, the Fund consists of only one series. The
Trustees may, however, establish additional series of shares in the future, and
may divide or combine the shares into a greater or lesser number of shares
without thereby changing the proportionate beneficial interests in the Fund. The
Declaration of Trust of Trust further authorizes the Trustees to classify or
reclassify any series of the shares into one or more classes. Pursuant thereto,
the Trustees have authorized the issuance of four classes of shares of the Fund,
designated as Class A, Class B, Class C and Class Y shares. Each share of a
class of the Fund represents an equal proportionate interest in the assets of
the Fund allocable to that class. Upon liquidation of the Fund, shareholders of
each class of the Fund are entitled to share pro rata in the Fund's net assets
allocable to such class available for distribution to shareholders. The Fund
reserves the right to create and issue additional series or classes of shares,
in which case the shares of each class of a series would participate equally in
the earnings, dividends and assets allocable to that class of the particular
series.

Shareholders are entitled to one vote for each share held and may vote
in the election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees.

The shares of each series of the Fund are entitled to vote separately
to approve investment advisory agreements or changes in investment restrictions,
but shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series or classes of the Fund vote
together as a class on matters that affect all series or classes of the Fund in
substantially the same manner. As to matters affecting a single series or class,
shares of such series or class will vote separately. No amendment adversely
affecting the rights of shareholders may be made to the Fund's Declaration of
Trust of Trust without the affirmative vote of a majority of its shares. Shares
have no preemptive or conversion rights. Shares are fully paid and
non-assessable by the Fund, except as stated below.

13. CERTAIN LIABILITIES

As a Delaware business trust, the Fund's operations are governed by its
Declaration of Trust, a copy of which has been filed with the Fund's
registration statement.

Generally, Delaware business trust shareholders are not personally
liable for obligations of the Delaware business trust under Delaware law. The
Delaware Business Trust Act (the "Delaware Act") provides that a shareholder of
a Delaware business trust shall be entitled to the same limitation of liability
extended to shareholders of private for-profit corporations. The Fund's
Declaration of Trust expressly provides that the Fund has been organized under
the Delaware Act and that the Agreement and Declaration of Trust is to be
governed by Delaware law. It is nevertheless possible that a Delaware business
trust, such as the Fund, might become a party to an action in another state
whose courts refused to apply Delaware law, in which case the trust's
shareholders could be subject to personal liability.

To guard against this risk, the Declaration of Trust (i) contains an
express disclaimer of shareholder liability for acts or obligations of the Fund
and provides that notice of such disclaimer may be given in each agreement,
obligation and instrument entered into or executed by the Fund or its Trustees,
(ii) provides for the indemnification out of Fund property of any shareholders
held personally liable for any obligations of the Fund or any series of the Fund
and (iii) provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any judgment thereon. Thus, the risk of a Fund shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which all of the following factors are present: (1)
a court refused to apply Delaware law; (2) the liability arose under tort law
or, if not, no contractual limitation of liability was in effect; and (3) the
Fund itself would be unable to meet its obligations. In light of Delaware law,
the nature of the Fund's business and the nature of its assets, the risk of
personal liability to a Fund shareholder is remote.

The Declaration of Trust further provides that the Fund shall indemnify
each of its Trustees and officers against liabilities and expenses reasonably
incurred by them, in connection with, or arising out of, any action, suit or
proceeding, threatened against or otherwise involving such Trustee or officer,
directly or indirectly, by reason of being or having been a Trustee or officer
of the Fund. The Declaration of Trust does not authorize the Fund to indemnify
any Trustee or officer against any liability to which he or she would otherwise
be subject by reason of or for willful misfeasance, bad faith, gross negligence
or reckless disregard of such person's duties.

14. LETTER OF INTENT (Class A shares only)

A Letter of Intent (an "LOI") may be established by completing the LOI
section of the Account Application. When you sign the Account Application, you
agree to irrevocably appoint PSC your attorney-in-fact to surrender for
redemption any or all shares held in escrow with full power of substitution. An
LOI is not a binding obligation upon the investor to purchase, or the Fund to
sell, the full amount indicated.

If the total purchases, less redemptions, exceed the amount specified
under the LOI and are in an amount which would qualify for a further quantity
discount, all transactions will be recomputed on the expiration date of the LOI
to effect the lower sales charge. Any difference in the sales charge resulting
from such recomputation will be either delivered to you in cash or invested in
additional shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.

If the total purchases, less redemptions, are less than the amount
specified under the LOI, you must remit to PFD any difference between the sales
charge on the amount actually purchased and the amount originally specified in
the LOI section of the Account Application. When the difference is paid, the
shares held in escrow will be deposited to your account. If you do not pay the
difference in sales charge within 20 days after written request from PFD or your
dealer, PSC, after receiving instructions from PFD, will redeem the appropriate
number of shares held in escrow to realize the difference and will release any
excess. See "How to Purchase Fund Shares - Letter of Intent" in the Prospectus
for more information.

15. SYSTEMATIC WITHDRAWAL PLAN (Class A, Class B and Class C shares only)

The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from shares
of the Fund deposited by the applicant under this SWP. The applicant must
deposit or purchase for deposit with PSC shares of the Fund having a total value
of not less than $10,000. Periodic payments of $50 or more will be deposited,
monthly or quarterly, directly into a bank account designated by the applicant,
or will be sent to the applicant, or any person designated by him. Class B
accounts must meet the minimum initial investment requirement prior to
establishing a SWP. Withdrawals from Class B and Class C share accounts are
limited to 10% of the value of the account at the time the SEP is established
See "Waiver or Reduction of Contingent Deferred Sales Charge" in the Prospectus.
Designation of another person to receive the payments subsequent to opening an
account must be accompanied by a signature guarantee.

Any income; dividends or capital gains distributions on shares under
the SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.

SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. To the extent that such redemptions
for periodic withdrawals exceed dividend income reinvested in the SWP account,
such redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. Redemptions are potentially taxable transactions
to shareholders. In addition, the amounts received by a shareholder cannot be
considered as an actual yield or income on his or her investment because part of
such payments may be a return of his or her investment.

The SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the SWP have been
redeemed.

16. DETERMINATION OF NET ASSET VALUE

The net asset value per share of each class of the Fund is determined
as of the close of regular trading (normally 4:00 p.m., Eastern time) on each
day on which the Exchange is open for regular trading. As of the date of this
Statement of Additional Information, the Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of each
class of the Fund is also determined on any other day in which the level of
trading in its portfolio securities is sufficiently high so that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The Fund is not required to determine its net asset
value per share on any day in which no purchase orders for the shares of the
Fund are received and no shares are tendered for redemption.

The net asset value per share of each class of the Fund is computed by
taking the value of all of the Fund's assets attributable to a class, less the
Fund's liabilities attributable to a class, and dividing the result by the
number of outstanding shares for that class. For the purposes of determining net
asset value, expenses of the classes of the Fund are accrued daily.

Securities which have not traded on the date of valuation or securities
for which sales prices are not generally reported are valued at the mean between
the last bid and asked prices. Securities for which no market quotations are
readily available (including those the trading of which has been suspended) will
be valued at fair value as determined in good faith by the Board of Trustees,
although the actual computations may be made by persons acting pursuant to the
direction of the Board.

The maximum offering price per Class A share is the net asset value per
Class A share, plus the maximum applicable sales charge. Class B and Class C
shares are offered at net asset value without the imposition of an initial sales
charge, but are subject to a CDSC. Class Y shares are offered without an initial
sales charge and are not subject to a CDSC. See "Fund Share Alternatives" in the
Prospectus.

17. INVESTMENT RESULTS

The Fund's yield quotations and average annual total return quotations
as they may appear in the Prospectus, this Statement of Additional Information
or in advertising are calculated by standard methods prescribed by the SEC

Standardized Yield Quotations

The yield of a class is computed by dividing the class's net investment
income per share during a base period of 30 days, or one month, by the maximum
offering price per share of the class on the last day of such base period in
accordance with the following formula:

a-b
YIELD = 2[ ( ----- +1)6-1]
cd

Where: a = interest earned during the period

b = net expenses accrued for the period

c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends

d = the maximum offering price per share on the
last day of the period

For purposes of calculating interest earned on debt obligations as provided in
item "a" above:

(i) The yield to maturity of each obligation held by the Fund is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates.

(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period.

(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled.

(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date.

With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the Fund accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the Fund may elect (i) to
amortize the discount or premium on a remaining security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the discount or premium
on a remaining security.

For purposes of computing yield, interest income is recognized by
accruing 1/360 of the stated interest rate of each obligation in the Fund's
portfolio each day that the obligation is in the portfolio. Expenses of a class
accrued during any base period, if any, pursuant to the respective Distribution
Plan are included among the expenses accrued during the base period.

The Fund's yield for the 30 days ended December 31, 1997, computed as
above was 2.84% for Class A shares, 2.19% for Class B shares and 2.25% for Class
C shares.

Standardized Average Annual Total Return Quotations

One of the primary methods used to measure the Fund's performance is
"total return." Total return will normally represent the percentage change in
value of an account, or of a hypothetical investment in a class of the Fund,
over any period up to the lifetime of that class of the Fund. Total return
calculations will usually assume the reinvestment of all dividends and capital
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will usually be annualized; total return percentages for periods
longer than one year will usually be accompanied by total return percentages for
each year within the period and/or by the average annual compounded total return
for the period. The income and capital components of a given return may be
separated and portrayed in a variety of ways in order to illustrate their
relative significance. Performance may also be portrayed in terms of cash or
investment values, without percentages. Past performance cannot guarantee any
particular future result.

With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the Fund accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the Fund may elect (i) to
amortize the discount or premium remaining on a security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the remaining discount
or premium on a security.

Standardized Average Annual Total Return Quotations. Average annual
total return quotations for each class of Fund shares are computed by finding
the average annual compounded rates of return that would cause a hypothetical
investment made on the first day of a designated period (assuming all dividends
and distributions are reinvested) to equal the ending redeemable value of such
hypothetical investment on the last day of the designated period in accordance
with the following formula:

P(1+T)n = ERV

Where: P = a hypothetical initial payment of $1000,
less the maximum sales load of 5.75% for
Class A shares or the deduction of any CDSC
applicable to Class B or C shares as of
the end of the period. For Class Y shares,
no sales load or deduction of a CDSC is
applicable.

T = average annual total return

n = number of years

ERV = ending redeemable value of the hypothetical
$1000 initial payment made at the
beginning of the designated period (or
fractional portion thereof)

For purposes of the above computation, all dividends and distributions
made by the Fund are reinvested at net asset value during the designated period.
The average annual total return quotation is determined to the nearest 1/100 of
1%.

In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts of
a particular class of shares are taken into consideration. For any account fees
that vary with the size of the account, the account fee used for purposes of the
above computation is assumed to be the fee that would be charged to the Fund's
mean account size.

The average annual total return* for shares of the Fund for the fiscal
year ended December 31, 1997

were:

1 Year 5 Years Since Inception
------ -------
Class A Shares 12.83% N/A 12.93%
Class B Shares 14.85% N/A 26.16%
Class C Shares 18.86% N/A 27.81%
Class Y Shares N/A N/A N/A

- -----------

* Total return would have been reduced if no effect were given to the expense
limitation previously in place. ** For Class A shares, inception was October 25,
1993. For Class B and Class C shares inception was January 31, 1996.
For Class Y shares, inception was April 9, 1998.

Other Quotations, Comparisons, and General Information. From time to
time, in advertisements, in sales literature, or in reports to shareholders, the
past performance of the Fund may be illustrated and/or compared with that of
other mutual funds with similar investment objectives, and to stock or other
relevant indices. For example, the total return of the Fund's classes may be
compared to averages or rankings prepared by Lipper Analytical Services, Inc., a
widely recognized independent service which monitors mutual fund performance;
the S&P 500, an unmanaged index of common stocks; or the Dow Jones Industrial
Average, a recognized unmanaged index of common stocks of 30 industrial
companies listed on the Exchange.

In addition, the performance of the classes of the Fund may be compared
to alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumer's Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Lipper Real Estate Funds Average, Money Magazine, NAREIT All REIT
Index, NAREIT Equity REIT Index, the New York Times, RUSSELL-NACRIEF Index,
Smart Money, USA Today, U.S. News and World Report, The Wall Street Journal,
Wilshire Real Estate Securities Trust and Worth may also be cited (if the Fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Systems, CDA/Wiesenberger Investment Companies Service, Donoghue's
Mutual Fund Almanac, Investment Company Data, Inc., Johnson's Charts, Kanon
Bloch Carre & Co., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems.

In addition, from time to time, quotations from articles from financial
publications, such as those listed above, may be used in advertisements, in
sales literature or in reports to shareholders of the Fund.

Automated Information Line

FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:

o net asset value prices for all Pioneer mutual funds;

o annualized 30-day yields on Pioneer's bond funds;

o annualized 7-day yields and 7-day effective
(compound) yields for Pioneer's money market funds;
and

o dividends and capital gains distributions on all
Pioneer mutual funds.

Yields are calculated in accordance with standard formulas mandated by the SEC.

In addition, by using a personal identification number ("PIN"),
shareholders may enter purchases, exchanges and redemptions, access their
account balance and last three transactions and may order a duplicate statement.
See

"FactFoneSM" in the Prospectus for more information.

All performance numbers communicated through FactFoneSM represent past
performance; figures for all quoted bond funds include the maximum applicable
sales charge. A shareholder's actual yield and total return will vary with
changing market conditions. The value of Class A, Class B, Class C and Class Y
shares (except for Pioneer Cash Reserves Fund, which seeks to maintain a stable
$1.00 share price) will also vary, and shares may be worth more or less at
redemption than their original cost. Certain FactFoneSM features are not
available to Class Y shareholders.

18. FINANCIAL STATEMENTS

The Fund's Annual Report, filed with the SEC on March 3, 1998 (Accession No.
0000908996-98-000006), is incorporated by reference into this Statement of
Additional Information. The financial statements in the Fund's Annual Report,
including the financial highlights, for the period ended December 31, 1997,
included or incorporated by reference into the Prospectus and this Statement of
Additional Information, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect to the financial
statements, and are included in reliance upon the authority of Arthur Andersen
LLP as experts in accounting and auditing in giving said report.

<PAGE>

APPENDIX A

DESCRIPTION OF SHORT-TERM DEBT AND CORPORATE BOND RATINGS1

MOODY'S INVESTORS SERVICE, INC. SHORT-TERM PRIME RATING SYSTEM -
TAXABLE DEBT AND DEPOSITS GLOBALLY

Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year, unless explicitly noted.

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:

Leading market positions in well-established industries. High rates of
return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection. Broad margins in earnings coverage of fixed
financial charges and high internal cash generation. Well-established
access to a range of financial markets and assured sources of alternate
liquidity.

Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.

Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.

Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating on
a bank's ability to repay senior obligations extends only to branches located in
countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch
obligations are rated at the lower of the bank's rating or Moody's Sovereign
Rating for Bank Deposits for the country in which the branch is located.

When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings do
not incorporate an opinion as to whether payment of the obligation will be
affected by actions of the government controlling the currency of denomination.
In addition, risks associated with bilateral conflicts between an investor's
home country and either the issuer's home country or the country where an
issuer's branch is located are not incorporated into Moody's short-term debt
ratings.

If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment.

MOODY'S CORPORATE BOND RATINGS

Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa: Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicated that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicated
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS

A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

STANDARD & POOR'S CORPORATE BOND RATINGS

AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

AA: An obligation rated AA differs from the highest-rated obligations only in a
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to the
obligor's capacity to meet its financial commitment on the obligation.

B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated CC is currently highly vulnerable to nonpayment.

C: The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments are jeopardized.

PLUS (+) OR MINUS (-): The rating from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major categories.

r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk, such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

- --------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Statement of Additional Information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the Fund's fiscal year-end.

<PAGE>

APPENDIX B
PERFORMANCE STATISTICS

Pioneer Real Estate Shares
CLASS A SHARES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>

Net Asset
Initial Offering Price Sales Charge Shares Value Per Initial Net
Date Investment Included Purchased Share Asset Value

10/25/93 $10,000 $13.2600 5.75% 754.148 $12.5000 $9,425

</TABLE>

Dividends and Capital Gains Reinvested

Value of Shares
<TABLE>

<S> <C> <C> <C> <C>
From Dividends
From Cap. Gains Reinvested
Date From Investment Reinvested Total Value

12/31/93 $9,012 $0 $55 $9,067
12/31/94 $8,583 $20 $485 $9,088
12/31/95 $9,065 $23 $1,100 $10,188
12/31/96 $11,704 $369 $1,829 $13,902
12/31/97 $13,431 $629 $2586 $16,646

</TABLE>

<PAGE>

Pioneer Real Estate Shares
CLASS B SHARES

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net Asset
Initial Offering Price Sales Charge Shares Value Per Initial Net
Date Investment Included Purchased Share Asset Value

01/31/96 $10,000 $12.0900 0.00% 827.130 $12.9000 $10,000

</TABLE>
Dividends and Capital Gains Reinvested

Value of Shares

<TABLE>

<S> <C> <C> <C> <C> <C>
From Cap. Gains From Dividends CDSC If Total Value CDSC
Date From Reinvested Reinvested Redeemed If Redeemed %
Investment

12/31/96 $12,780 $330 $372 $400 $13,082 4.00%
12/31/97 $14,640 $577 $806 $400 $15,623 4.00%

</TABLE>

<PAGE>

Pioneer Real Estate Shares
CLASS C SHARES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>

Net Asset
Initial Offering Price Sales Charge Shares Value Per Initial Net
Date Investment Included Purchased Share Asset Value

01/31/96 $10,000 $12.0900 0.00% 827.130 $12.9000 $10,000

</TABLE>
Dividends and Capital Gains Reinvested

Value of Shares

<TABLE>
<S> <C> <C> <C> <C> <C>
From Cap. Gains From Dividends CDSC If Total Value CDSC
Date From Reinvested Reinvested Redeemed If Redeemed %
Investment

12/31/96 $12,787 $330 $359 $100 $13,376 1.00%
12/31/97 $14,641 $577 $801 0 $16,019 0

</TABLE>

<PAGE>

COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS

The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the Fund, do not reflect past
performance and do not guarantee future results.

S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P 500 includes 500 of
the largest stocks (in terms of stock market value) in the U.S.

DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of stocks of 30 blue chip
companies widely held by individuals and institutional investors. The 30 stocks
represent about a fifth of the $8 trillion-plus market value of all U.S. stocks
and about a fourth of the value of stocks listed on the New York Stock Exchange
(NYSE).

U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the NYSE, plus stocks listed on the American Stock Exchange and over the counter
with the same or less capitalization as the upper bound of the NYSE ninth
decile.

U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S.
Department of Labor, Bureau of Labor Statistics, Washington, DC.

S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 according to price-to-book ratios. The Growth Index contains stocks
with higher price-to-book ratios, and the Value Index contains stocks with lower
price-to-book ratios. Both indexes are market capitalization weighted.

MERRILL LYNCH MICRO-CAP INDEX
The Merrill Lynch Micro-Cap Index represents the performance of 2,036 stocks
ranging in market capitalization from $50 million to $220 million. Index returns
are calculated monthly.

LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds after 1977 are constructed with
data from The Wall Street Journal and are calculated as the change in the flat
price or and-interest price. From 1926 to 1976, data are obtained from the
government bond file at the Center for Research in Security Prices (CRSP),
Graduate School of Business, University of Chicago. Each year, a one-bond
portfolio with a term of approximately 20 years and a reasonably current coupon
was used and whose returns did not reflect potential tax benefits, impaired
negotiability or special redemption or call privileges. Where callable bonds had
to be used, the term of the bond was assumed to be a simple average of the
maturity and first call dates minus the current date. The bond was "held" for
the calendar year and returns were computed.

INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of intermediate-term government bonds after 1987 are calculated
from The Wall Street Journal prices, using the change in flat price. Returns
from 1934 to 1986 are obtained from the CRSP government bond file.

Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five years, and this bond is
"held" for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds
with maturities near five years were partially or fully tax-exempt and were
selected using the rules described above. Personal tax rates were generally low
in that period, so that yields on tax-exempt bonds were similar to yields on
taxable bonds. From 1926 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.

MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI")
MSCI's international indices are based on the share prices of approximately
1,700 companies listed on stock exchanges in the 22 countries that make up the
MSCI World Index. MSCI's emerging market indices are comprised of approximately
1000 stocks from 26 countries.

Countries in the MSCI EAFE Index are: Australia, Austria, Belgium, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia,
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland and
United Kingdom.

Countries in the MSCI Emerging Markets Free Index are: Argentina, Brazil, Chile,
China Free, Czech Republic, Colombia, Greece, Hungary, India, Indonesia Free,
Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru,
Philippines Free, Poland, Portugal, South Africa, Sri Lanka, Taiwan (at 50%),
Thailand Free, Turkey and Venezuela.

6-MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.

LONG-TERM U.S. CORPORATE BONDS
Since 1969, corporate bond total returns are represented by the Salomon Brothers
Long-Term High-Grade Corporate Bond Index. As most large corporate bond
transactions take place over the counter, a major dealer is the natural source
of these data. The index includes nearly all Aaa- and Aa-rated bonds with at
least 10 years to maturity. If a bond is downgraded during a particular month,
its return for the month is included in the index before removing the bond from
future portfolios.

From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. Capital appreciation returns were calculated from
yields assuming (at the beginning of each monthly holding period) a 20-year
maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
coupon and a 20-year maturity. The conventional present-value formula for bond
price for the beginning and end-of-month prices was used. (This formula is
presented in Ross, Stephen A., and Westerfield, Randolph W. Corporate Finance,
Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly
income return was assumed to be one-twelfth the coupon.

U.S. (30-DAY) TREASURY BILLS
For the U.S. Treasury Bill Index, data from The Wall Street Journal are used
after 1977; the CRSP government bond file is the source until 1976. Each month a
one-bill portfolio containing the shortest-term bill having not less than one
month to maturity is constructed. (The bill's original term to maturity is not
relevant.) To measure holding period returns for the one-bill portfolio, the
bill is priced as of the last trading day of the previous month-end and as of
the last trading day of the current month.

NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS
("NAREIT")EQUITY REIT INDEX
All of the data are based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighting at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income.
Liquidating dividends, whether full or partial, are treated as income.

RUSSELL U.S. EQUITY INDEXES
The Russell 3000(R) Index (the "Russell 3000") is comprised of the 3,000 largest
U.S. companies as determined by market capitalization representing approximately
98% of the U.S. equity market. The average market capitalization is
approximately $2.8 billion. The Russell 2500TM Index measures performance of the
2,500 smallest companies in the Russell 3000. The average market capitalization
is approximately $733.4 million, and the largest company in the index has an
approximate market capitalization of $2.9 billion. The Russell 2000(R) Index
measures performance of the 2,000 smallest stocks in the Russell 3000; the
largest company in the index has a market capitalization of approximately $1.1
billion. The Russell 1000(R) Index (the "Russell 1000") measures the performance
of the 1,000 largest companies in the Russell 3000. The average market
capitalization is approximately $7.6 billion. The smallest company in the index
has an approximate market capitalization of $1.1 billion. The Russell MidcapTM
Index measures performance of the 800 smallest companies in the Russell 1000.
The largest company in the index has an approximate market capitalization of
$8.0 billion.

The Russell indexes are reconstituted annually as of July 1, based on May 31
market capitalization rankings.

WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization weighted
index of 120 publicly traded real estate securities, such as REITs, real estate
operating companies ("REOCs") and partnerships.

The index contains performance data on five major categories of property:
office, retail, industrial, apartment and miscellaneous. The companies in the
index are 91.66% equity and hybrid REITs and 8.33% REOCs.

STANDARD & POOR'S MIDCAP 400 INDEX
The S&P 400 is a market-capitalization-weighted index. The performance data for
the index were calculated by taking the stocks presently in the index and
tracking them backward in time as long as there were prices reported. No attempt
was made to determine what stocks "might have been" in the S&P 400 five or ten
years ago had it existed. Dividends are reinvested on a monthly basis prior to
June 30, 1991, and are reinvested daily thereafter.

LIPPER BALANCED FUNDS INDEX
This index represents equally weighted performance, adjusted for capital gains
distributions and income dividends, of approximately 30 of the largest funds
with a primary objective of conserving principal by maintaining at all times a
balanced portfolio of stocks and bonds. Typically, the stock/bond ratio ranges
around 60%/40%.

BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963 to 1987; and The Wall Street Journal thereafter.

Sources: Ibbotson Associates, Towers Data Systems,
Lipper Analytical Services, Inc. Merrill Lynch and PGI

<PAGE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT

<S> <C> <C> <C> <C> <C> <C>
Dow S&P/ S&P/
S&P Jones U.S. Small BARRA BARRA
500 Industrial Stock U.S. 500 500
Average Index Inflation Growth Value

- -------------------------------------------------------------------------------------------------------

Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A
Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.02 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.72 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.08 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.13 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A

</TABLE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT

Dow S&P/ S&P/
S&P Jones U.S. Small BARRA 500 BARRA
500 Industrial Stock U.S. Growth 500
Average Index Inflation Value

- ----------------------------------------------------------------------------------------------------

Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99
Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99
Dec 1997 33.36 24.88 22.78 1.92 36.52 29.98

</TABLE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
Long- Intermediate- MSCI Long-
Term Term U.S. EAFE 6- Term U.S. U.S.
U.S. Gov't Government (Net of Month Corporate T-Bill
Bonds Bonds Taxes) CDs Bonds (30-Day)

- ------------------------------------------------------------------------------------------------------

Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66

</TABLE>
<PAGE>

- ------------------------------------------------------------------------------------------------------

Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26

</TABLE>

PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
<S> <C> <C> <C> <C> <C> <C>
NAREIT Lipper MSCI
Equity Russell Wilshire Balanced Emerging Bank
REIT 2000 Real Estate S&P Fund Markets Savings
Index Index Securities 400 Index Free Index Account

- -----------------------------------------------------------------------------------------------------------------------

Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------

Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 22.20 35.58 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92
Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 -7.32 4.96
Dec 1995 15.27 28.44 13.65 30.94 24.89 -5.21 5.24
Dec 1996 35.26 16.53 36.87 19.20 13.01 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.26 20.05 -11.59 5.17

</TABLE>

<PAGE>

APPENDIX C

OTHER PIONEER INFORMATION

The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the United States.

As of December 31, 1997, PMC employed a professional investment staff of 58,
with a combined average of 12 years' experience in the financial services
industry.

Total assets of all Pioneer mutual funds at December 31, 1997, were
approximately $19.8 billion representing 1,177,148 shareholder accounts
consisting of 791,468 non-retirement accounts and 385,680 retirement accounts.

<PAGE>
Part C
- ------

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements:

The financial statements of Class A, Class B and Class C shares of
the Registrant are incorporated by reference from the Annual Report
to Shareholders for the fiscal year ended December 31, 1997 (filed
with the Securities and Exchange Commission on March 3, 1998,
Accession No. 0000908996-98-000006).

(b) Exhibits:

1.1 Agreement and Declaration of Trust (1)

1.2 Certificate of Trust (3)

1.3 Amendment to Certificate of Trust. (3)

1.4 Amendment to Agreement and Declaration of Trust. (3)

1.5 Establishment and Designation of Classes A, B and C. (4)

1.6 Establishment and Designation of Class Y+

2. By-Laws. (1)

3. None.

4. None.

5.1. Management Contract between the Registrant and Pioneering
Management Corporation. (4)

5.2. Form of Subadvisory Agreement by and among the Registrant,
Pioneering Management Corporation and Boston Financial
Securities, Inc. (5)

6.1. Underwriting Agreement between the Registrant and Pioneer
Funds Distributor, Inc. (1)

6.2. Form of Dealer Sales Agreement. (2)

7. None.

8. Custodian Agreement between the Registrant and Brown
Brothers Harriman & Co. (1)

<PAGE>

9. Investment Company Service Agreement between the Registrant
and Pioneering Services Corporation. (1)

10. Opinion and Consent of Counsel. (3)

11. Consent of Independent Public Accountants.+

12. None.

13. Share Purchase Agreement. (1)

14. None.

15.1 Distribution Plan relating to Class A shares. (1)

15.2 Distribution Plan relating to Class B shares. (4)

15.3 Distribution Plan relating to Class C shares. (4)

16. None.

17. Financial Data Schedule.+

18. Multiple Class Plan pursuant to Rule 18f-3
dated March 26, 1998. (7)

19. Powers of Attorney. (1), (6) and (7)

- --------------

+ Filed herewith.

1 Filed with Post-Effective Amendment No. 4 to the Registration
Statement on April 25, 1995 and incorporated herein by
reference.

2 Filed with Pre-Effective Amendment No. 1 on September 20, 1993 and
incorporated herein by reference.

3 Filed with Post-Effective Amendment No. 5 to the Registration Statement
on November 8, 1995 and incorporated herein by reference.

4 Filed with Post-Effective Amendment No. 6 to the Registration Statement
on November 14, 1995 and incorporated herein by reference.

5 Filed with Post-Effective Amendment No. 8 to the Registration Statement
on February 29, 1996 and incorporated herein by reference.

6 Filed with Post-Effective Amendment No. 10 to the Registration Statement
on Ap[ril 28, 1997 and incorporated herein by reference.

7 Filed with Post-Effective Amendment No. 11 to the Registration Statement
on January 27, 1998 and incorporated herein by reference.

C-2
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant

No person is controlled by the Registrant. A common control
relationship could exist from a management perspective because the Chairman and
President of the Registrant owns approximately 14% of the outstanding shares of
The Pioneer Group, Inc. (PGI), the parent company of the Registrant's investment
adviser, and certain Trustees or officers of the Registrant (i) hold similar
positions with other investment companies advised by PGI and (ii) are directors
or officers of PGI and/or its direct or indirect subsidiaries. The following
lists all U.S. and the principal non-U.S. subsidiaries of PGI and those
registered investment companies with a common or similar Board of Trustees
advised by PGI.

<TABLE>
<S> <C> <C> <C>
Owned By Percent of Shares State/Country of
Company Incorporation
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneer Funds Distributor, Inc. (PFD) PMC 100% MA
Pioneer Explorer, Inc. (PEI) PMC 100% DE
Pioneer Fonds Marketing GmbH (GmbH) PFD 100% Germany
Pioneer Forest, Inc. (PFI) PGI 100% DE
CJSC "Forest-Starma" (Forest-Starma) PFI 95% Russia
Pioneer Metals and Technology, Inc. (PMT) PGI 100% DE
Pioneer Capital Corp. (PCC) PGI 100% DE
Pioneer SBIC Corp. PCC 100% MA
Pioneer Real Estate Advisors, Inc. (PREA) PGI 100% DE
Pioneer Management (Ireland) Ltd. (PMIL) PGI 100% Ireland
Pioneer Plans Corporation (PPC) PGI 100% DE
PIOGlobal Corp. (PIOGlobal) PGI 100% DE
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Goldfields Holdings, Inc. (PGH) PGI 100% DE
Pioneer Goldfields Ltd. (PGL) PGH 100% Guernsey
Teberebie Goldfields Ltd. (TGL) PGL 90% Ghana
Pioneer Omega, Inc. (Omega) PGI 100% DE
Pioneer First Russia, Inc. (First Russia) Omega 81.65% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer International Corp. (PIntl) PGI 100% DE
Pioneer First Polish Trust Fund JSC, S.A. (First
Polish) PIntl 100% Poland
Pioneer Czech Investment Company, A.S.
(Pioneer Czech) PIntl 100% Czech Republic
</TABLE>
Registered investment companies that are parties to management contracts with
PMC:

Funds Business Trust
Pioneer International Growth Fund MA
Pioneer World Equity Fund DE
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Fund DE
Pioneer II DE
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Trust MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Balanced Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares DE
Pioneer Micro-Cap Fund DE

The following table lists John F. Cogan, Jr.'s positions with the
investment companies, PGI and principal direct or indirect PGI subsidiaries
referenced above and the Registrant's counsel.

Trustee/
Entity Chairman President Director Other
Pioneer mutual funds
X X X
PGL
X X X
PGI
X X X
PPC
X X
PIC
X X
PIntl
X X
PMT
X X
Omega
X X
PIOGlobal
X X
First Russia
X X
PCC
X
PSC
X
PMIL
X
PEI
X
PFI
X
PREA
X
Forest-Starma
X
PMC
X X
PFD
X X
TGL
X X
First Polish
Chairman of
Supervisory Board

GmbH Chairman of
Supervisory Board

Pioneer Czech Chairman of
Supervisory Board

Hale and Dorr LLP Partner

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

Number of Record Holders

Title of Class as of March 31, 1997
-------------- -----------------------

Class A Shares of Beneficial Interest 8,049
Class B Shares of Beneficial Interest 5,628
Class C Shares of Beneficial Interest 1,167

ITEM 27. INDEMNIFICATION.

Except for the Agreement and Declaration of Trust dated March 10,
1995 establishing the Registrant as a Trust under Delaware law, there is no
contract, arrangement or statute under which any director, officer, underwriter
or affiliated person of the Registrant is insured or indemnified. The Agreement
and Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.

Insofar as indemnification for liability arising under the
Securities Act of 1933, as amended (the "Act"), may be available to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment of the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense

C-5
<PAGE>

of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

The business and other connections of the officers and directors of
the Registrant's investment adviser, Pioneering Management Corporation ("PMC"),
and the Registrant's investment subadviser, Boston Financial Securities, Inc.
("BFS"), are listed on the Forms ADV of PMC and BFS as currently on file with
the Commission (PMC File No. 801-8255; BFS File No. 801-11170), the text of
which are hereby incorporated by reference.

The following sections of such Forms ADV are incorporated herein by
reference:

(a) Items 1 and 2 of Part 2;

(b) Section IV, Business Background, of each Schedule D.

Item 28. Business and Other Connections of Investment Adviser

All of the information required by this item is set forth in the Form
ADV, as amended, of PMC, the Registrant's investment adviser. The following
sections of such Form ADV are incorporated herein by reference:

(a) Items 1 and 2 of Part 2; and

(b) Section IV, Business Background, of each Schedule D.

Item 29. Principal Underwriters

(a) See Item 25 above.

(b) Directors and officers of PFD:

Positions and Offices Positions and Offices
Name with Underwriter with Registrant

John F. Cogan, Jr. Director and Chairman Chairman of the
Board, President
and Trustee

Robert L. Butler Director and President None

David D. Tripple Director Executive Vice
President and
Trustee

Steven M. Graziano Senior Vice President None

Stephen W. Long Senior Vice President None

Barry G. Knight Vice President None

William A. Misata Vice President None

Anne W. Patenaude Vice President None

Elizabeth B. Bennett Vice President None

Gail A. Smyth Vice President None

Constance D. Spiros Vice President None

Marcy L. Supovitz Vice President None

Mary Kleeman Vice President None

Steven R. Berke Assistant Vice President None

Steven H. Forss Assistant Vice President None

Mary Sue Hoban Assistant Vice President None

Debra A. Levine Assistant Vice President None

Junior Roy McFarland Assistant Vice President None

Marie E. Moynihan Assistant Vice President None

William H. Keough Treasurer Treasurer

Roy P. Rossi Assistant Treasurer None

Joseph P. Barri Clerk Secretary

Robert P. Nault Assistant Clerk Assistant Secretary

The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

The accounts and records are maintained at the Registrant's office
at 60 State Street, Boston, Massachusetts; contact the Treasurer.

ITEM 31. MANAGEMENT SERVICES.

C-7
<PAGE>

The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and Statement of Additional
Information.

ITEM 32. UNDERTAKINGS.

(a) Not applicable.

(b) Not applicable.

(c) The Registrant undertakes to deliver, or cause to be delivered
with the Prospectus, to each person to whom the Prospectus is sent or given a
copy of the Registrant's report to shareholders furnished pursuant to and
meeting the requirements of Rule 30d-1 under the Investment Company Act of 1940
from which the specified information is incorporated by reference, unless such
person currently holds securities of the Registrant and otherwise has received a
copy of such report, in which case the Registrant shall state in the Prospectus
that it will furnish, without charge, a copy of such report on request, and the
name, address and telephone number of the person to whom such a request should
be directed.

C-8
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 11 to
its Registration Statement (the "Amendment") pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
The Commonwealth of Massachusetts, on the 9th day of April, 1998.

PIONEER REAL ESTATE SHARES

By: /s/ David D. Tripple
----------------------
David D. Tripple
Executive Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities and on the date indicated:

Title and Signature Date

Principal Executive Officer: )
)
)
John F. Cogan, Jr.* )
- ------------------------------ )
John F. Cogan, Jr., President )
)
)
Principal Financial and )
Accounting Officer: )
)
)
/s/ William H. Keough )
- ------------------------------ )
William H. Keough, Treasurer )
)
)
Trustees: )

)
Mary K. Bush* )
- ------------------------------ )
Mary K. Bush )

John F. Cogan, Jr.* )
- ------------------------------ )
John F. Cogan, Jr. )
)
)
Blake Eagle* )
- ------------------------------ )
Blake Eagle )

-1-

<PAGE>

)
)
Richard H. Egdahl, M.D.* )
- ------------------------------ )
Richard H. Egdahl, M.D. )
)
)
Margaret B. W. Graham* )
- ------------------------------ )
Margaret B. W. Graham )
)
)
Stephen G. Kasnet* )
- ------------------------------ )
Stephen G. Kasnet )
)
)
John W. Kendrick* )
- ------------------------------ )
John W. Kendrick )
)
)
Marguerite A. Piret* )
- ------------------------------ )
Marguerite A. Piret )
)
)
Fred N. Pratt, Jr.* )
- ------------------------------ )
Fred N. Pratt, Jr. )
)
)
/s/ David D. Tripple )
- ------------------------------ )
David D. Tripple )
)
)
Stephen K. West* )
- ------------------------------ )
Stephen K. West )
)
)
John Winthrop* )
- ------------------------------ )
John Winthrop )

* By: /s/ David D. Tripple April 9, 1998
------------------- -------------
David D. Tripple
Attorney-in-fact

-2-

<PAGE>

Exhibit Index
-------------

Exhibit
Number Document Title
- ------ --------------

1.6 Establishment and Designation of Class Y Shares

11. Consent of Independent Public Accountants

17. Financial Data Schedule (filed as Exhibit 27)

PIONEER REAL ESTATE SHARES

Establishment and Designation
of
Class A Shares, Class B Shares, Class C Shares and Class Y Shares
of Beneficial Interest of
Pioneer Real Estate Shares

The undersigned, being a majority of the Trustees of Pioneer Real
Estate Shares, a Delaware business trust (the "Fund"), acting pursuant to
Article V, Section 1 of the Agreement and Declaration of Trust dated March 10,
1995 of the Fund (the "Declaration"), do hereby divide the shares of beneficial
interest of the Fund (the "Shares") to create four classes of Shares of the Fund
as follows:

1. The four classes of Shares established and designated hereby are
"Class A Shares," "Class B Shares," "Class C Shares" and "Class Y Shares,"
respectively.

2. Class A Shares, Class B Shares, Class C Shares and Class Y Shares
shall each be entitled to all of the rights and preferences accorded to Shares
under the Declaration.

3. The purchase price of Class A Shares, Class B Shares, Class C Shares
and Class Y Shares, the method of determining the net asset value of Class A
Shares, Class B Shares, Class C Shares and Class Y Shares and the relative
dividend rights of holders of Class A Shares, Class B Shares, Class C Shares and
Class Y Shares shall be established by the Trustees of the Trust in accordance
with the provisions of the Declaration and shall be set forth in the Trust's
Registration Statement on Form N-1A under the Securities Act of 1933 and/or the
Investment Company Act of 1940, as amended and as in effect at the time of
issuing such Shares.

4. The Trustees, acting in their sole discretion, may determine that
any Shares of the Fund issued are Class A Shares, Class B Shares, Class C
Shares, Class Y Shares, or Shares of any other class of the Fund hereinafter
established and designated by the Trustees.

IN WITNESS WHEREOF, the undersigned have executed this instrument this
1st day of July, 1997.

John F. Cogan, Jr. Marguerite A. Piret
as Trustee and not individually as Trustee and not individually
975 Memorial Drive, #802 162 Washington Street
Cambridge, MA 02138 Belmont, MA 02178

Mary K. Bush David D. Tripple
as Trustee and not individually as Trustee and not individually
Health Policy Institute 6 Woodbine Road
53 Bay State Road Belmont, MA 02178
Boston, MA 02215

Richard H. Egdahl, M.D. Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
Health Policy Institute Sullivan & Cromwell
53 Bay State Road 125 Board Street
Boston, MA 02215 New York, NY 10004

Margaret B.W. Graham John Winthrop
as Trustee and not individually as Trustee and not individually
The Keep One Adgers Wharf
P.O. Box 110 Charlestown, SC 29401
Little Deer Isle, ME 04650

Stephen G. Kasnet Fred N. Pratt, Jr.
as Trustee and not individually as Trustee and not individually
One University Lane c/o Boston Financial
Manchester, MA 01944 101 Arch Street
Boston MA 02110

John W. Kendrick Blake Eagle
as Trustee and not individually as Trustee and not individually
6363 Waterway Drive Massachusetts Institute
Falls Church, VA 22044 of Technology
Building W31 310
Cambridge, MA 02139

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report on
Pioneer Real Estate Shares dated February 2, 1998 (and to all references to our
firm) included in or made a part of Post-Effective Amendment No. 12 and
Amendment No. 13 to registration statement File Nos. 33-65822 and 811-07379,
respectively.

/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP

Boston, Massachusetts
April 7, 1998

<ARTICLE> 6
<CIK> 0000908996
<NAME> PIONEER REAL ESTATE SHARES
<SERIES>
<NUMBER> 001
<NAME> PIONEER REAL ESTATE SHARES CLASS A

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 180588320
<INVESTMENTS-AT-VALUE> 222974610
<RECEIVABLES> 1803085
<ASSETS-OTHER> 25362
<OTHER-ITEMS-ASSETS> 202
<TOTAL-ASSETS> 224803259
<PAYABLE-FOR-SECURITIES> 1197673
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 911061
<TOTAL-LIABILITIES> 2108734
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 180265110
<SHARES-COMMON-STOCK> 6501897
<SHARES-COMMON-PRIOR> 4674628
<ACCUMULATED-NII-CURRENT> 134364
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (91239)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 42386290
<NET-ASSETS> 222694525
<DIVIDEND-INCOME> 7172860
<INTEREST-INCOME> 121692
<OTHER-INCOME> 0
<EXPENSES-NET> 3393558
<NET-INVESTMENT-INCOME> 3900994
<REALIZED-GAINS-CURRENT> 2506156
<APPREC-INCREASE-CURRENT> 26016052
<NET-CHANGE-FROM-OPS> 32423202
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2173335
<DISTRIBUTIONS-OF-GAINS> 1455824
<DISTRIBUTIONS-OTHER> 822854
<NUMBER-OF-SHARES-SOLD> 3141703
<NUMBER-OF-SHARES-REDEEMED> 1543533
<SHARES-REINVESTED> 229099
<NET-CHANGE-IN-ASSETS> 117043915
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 20855
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1740437
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3430973
<AVERAGE-NET-ASSETS> 97908333
<PER-SHARE-NAV-BEGIN> 15.52
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> 2.61
<PER-SHARE-DIVIDEND> .36
<PER-SHARE-DISTRIBUTIONS> .23
<RETURNS-OF-CAPITAL> .14
<PER-SHARE-NAV-END> 17.81
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000908996
<NAME> PIONEER REAL ESTATE SHARES
<SERIES>
<NUMBER> 002
<NAME> PIONEER REAL ESTATE SHARES CLASS B

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 180588320
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