As Filed with the Securities and Exchange Commission on March 30, 1995.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
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Pre-Effective Amendment No. ___ /____/
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Post-Effective Amendment No. _2_ /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT ____
OF 1940 /_X__/
Amendment No. _4_ /_X__/
(Check appropriate box or boxes)
PIONEER EMERGING MARKETS 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:
/X/ immediately upon filing pursuant to Rule 485(b)
/ / on (date) pursuant to Rule 485(b)
/ / 60 days after filing pursuant to Rule 485(a)(1)
/ / 0n May 1, 1995 pursuant to Rule 485(a)(1)
/ / 75 days after filing pursuant to Rule 485(a)(2)
/ / 0n (date) pursuant to Rule 485(a)(2)
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) of the Investment Company Act
of 1940. Registrant filed a Rule 24f-2 Notice for its initial fiscal period
ended November 30, 1994 on or about January 31, 1995.
<PAGE>
PIONEER EMERGING MARKETS FUND
Cross-Reference Sheet Showing Location in Prospectus and Statement
of Additional Information of Information Required
by Items of the Registration Form
<TABLE>
<CAPTION>
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
<S> <C>
1. Cover Page....................................................... Prospectus - Cover Page
2. Synopsis......................................................... Prospectus - Expense Information
3. Condensed Financial Information.................................. Financial Highlights
4. General Description of Registrant................................ Prospectus - Investment Objective and Policies;
Management of the Fund; Fund Share Alternatives;
Share Price; How to Sell Fund Shares; How to Exchange
Fund Shares; The Fund
5. Management of the Fund........................................... Prospectus - Management of the Fund
6. Capital Stock and Other Securities............................... Prospectus - Investment Objective and
Policies; Fund Share Alternatives; Share Price;
How to Sell Fund Shares; How to Exchange Fund
Shares; The Fund
7. Purchase of Securities Being
Offered........................................................ Prospectus - Fund Share Alternatives;
Share Price; How to Sell Fund Shares; How to
Exchange Fund Shares; The Fund; Shareholder Services;
Distribution Plans
8. Redemption or Repurchase......................................... Prospectus - Fund Share Alternatives;
Share Price; How to Sell Fund Shares; How to Exchange
Fund Shares; The Fund; Shareholder Services
9. Pending Legal Proceedings........................................ Not Applicable
10. Cover Page....................................................... Statement of Additional Information -
Cover Page
11. Table of Contents................................................ Statement of Additional Information -
Cover Page
12. General Information and History.................................. Statement of Additional Information -
Cover Page; Description of Shares
13. Investment Objectives and Policy................................. Statement of Additional Information -
Investment Policies, Restrictions and Associated Risks
14. Management of the Fund........................................... Statement of Additional Information -
Management of the Fund; Investment Adviser
15. Control Persons and Principle Holders
of Securities.................................................. Statement of Additional Information -
Management of the Fund
16. Investment Advisory and Other
Services....................................................... Statement of Additional Information -
Management of the Fund; Investment Adviser;
Principal Underwriter; Distribution Plans;
Shareholder Servicing/Transfer Agent; Custodian;
Independent Public Accountant
17. Brokerage Allocation and Other
Practices...................................................... Statement of Additional Information -
Portfolio Transactions
<PAGE>
Location in
Prospectus or
Statement of
Additional
Form N-1A Item Number and Caption Information
18. Capital Stock and Other Securities............................... Statement of Additional Information -
Description of Shares
19. Purchase Redemption and Pricing of
Securities Being Offered....................................... Statement of Additional Information -
Letter of Intention; Systematic Withdrawal Plan;
Determination of Net Asset Value
20. Tax Status....................................................... Statement of Additional Information - Tax
Status
21. Underwriters..................................................... Statement of Additional Information -
Principal Underwriter; Distribution Plans
22. Calculation of Performance Data.................................. Statement of Additional Information -
Investment Results
23. Financial Statements............................................. Financial Statements
</TABLE>
<PAGE>
Pioneer
Emerging Markets
Fund
Prospectus
Class A and Class B Shares
March 31, 1995
Pioneer Emerging Markets Fund (the "Fund") seeks longterm growth of capital
by investing primarily in securities of issuers in countries with emerging
economies or securities markets. Any current income generated from these
securities is incidental to the investment objective of the Fund. The Fund is
a diversified open-end investment company designed for investors seeking to
achieve capital growth and diversification through foreign investments. There
is, of course, no assurance that the Fund will achieve its investment
objective.
In pursuit of its objective, the Fund may employ active investment management
techniques, including futures and options, in an attempt to hedge the foreign
currency and other risks associated with the Fund's investments.
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.
Investing in countries with emerging economies or securities markets may
offer significant investment opportunities. However, investments in foreign
securities, particularly in emerging markets, entail significant risks in
addition to those customarily associated with investing in U.S. securities.
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
Objective and Policies" for a discussion of these risks.
This Prospectus (Part A of the Registration Statement) provides information
about the Fund that you should know before investing. Please read and retain
it for your future reference. More information about the Fund is included in
the Statement of Additional Information (Part B of the Registration
Statement), also dated March 31, 1995, 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. Additional information about the Fund has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge.
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 2
III. INVESTMENT OBJECTIVE AND POLICIES 3
Risk Factors 4
IV. MANAGEMENT OF THE FUND 6
V. FUND SHARE ALTERNATIVES 7
Class A Shares 8
Class B Shares 8
VI. SHARE PRICE 8
VII. HOW TO BUY FUND SHARES 8
VIII. HOW TO SELL FUND SHARES 11
IX. HOW TO EXCHANGE FUND SHARES 12
X. DISTRIBUTION PLANS 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 13
XII. SHAREHOLDER SERVICES 13
Account and Confirmation Statements 14
Additional Investments 14
Automatic Investment Plans 14
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 14
Direct Deposit 14
Voluntary Tax Withholding 14
Telephone Transactions and Related Liabilities 14
Retirement Plans 14
Telecommunications Device for the Deaf (TDD) 15
Systematic Withdrawal Plans 15
Reinvestment Privilege (Class A Shares Only) 15
XIII. THE FUND 15
XIV. INVESTMENT RESULTS 15
APPENDIX 17
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES 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 estimated annual operating expenses based upon
actual expenses for the fiscal year ended November 30, 1994.
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Charge on Purchases
(as a percentage of offering price) 5.75%(1) none
Maximum Sales Charge on Reinvestment of Dividends none none
Maximum Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) none 4.00%
Redemption Fee(2) none none
Exchange Fee none none
Annual Operating Expenses
(as a percentage of average net assets):
Management Fees(3) 1.25% 1.25%
12b-1 Fees 0.25% 1.00%
Other Expenses (including accounting and transfer
agent fees, custodian fees and printing expenses) 2.63% 2.96%
Total Gross Operating Expenses 4.13% 5.21%
Expense Limitation by Manager(3) (1.88%) (1.88%)
Net Operating Expenses: 2.25% 3.33%
</TABLE>
(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject to
a contingent deferred sales charge.
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international bank wire transfers of redemption proceeds.
(3) Pioneering Management Corporation (the "Manager") has agreed not to
impose a portion of its management fee and to make other arrangements, if
necessary, to limit other operating expenses of the Fund to the extent
required to reduce Class A expenses to 2.25% of the average daily net assets
attributable to the Class A shares; the portion of the Fund-wide expenses
attributable to Class B shares will be reduced only to the extent such
expenses are reduced for Class A shares. This agreement is voluntary and
temporary and may be revised or terminated by the Manager at any time.
Example:
You would pay the following dollar amounts on a $1,000 investment, assuming a
5% annual return:
<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Class A Shares $79 $124 $171 $301
Class B Shares
--Assuming complete
redemption at end
of period $74 $132 $194 $339*
--Assuming no
redemption $34 $102 $174 $339*
</TABLE>
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
The example above assumes reinvestment of all dividends and distributions and
that the percentage amounts listed under "Annual Operating Expenses" remain
the same each year.
The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or returns. Actual
Fund expenses and returns vary from year to year and may be higher or lower
than those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
fees and expenses are reduced or reallocated, see "Management of the Fund,"
"Distribution Plans" and "How to Buy Fund Shares" in this Prospectus and
"Management of the Fund," "Principal Underwriter" and "Distribution Plans" in
the Statement of Additional Information. The Fund's payment of a 12b-1 fee
may result in long-term shareholders paying more than the economic equivalent
of the maximum initial sales charge permitted under the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified larger
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 the Fund for shares of other publicly available
Pioneer mutual funds. See "How to Exchange Fund Shares."
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by Arthur Andersen LLP, independent public accountants, in
connection with their examination of the Fund's financial statements. Arthur
Andersen LLP's report on the Fund's financial statements as of November 30,
1994 appears in the Fund's Annual Report, which is incorporated by reference
into the Statement of Information. The information listed below should be
read in conjunction with the financial statements contained in the Fund's
Annual Report. 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.
2
<PAGE>
Pioneer Emerging Markets Fund
For the Period Beginning June 23, 1994 (Commencement of Operations) to
November 30, 1994
Financial Highlights for Each Class A Share Outstanding Throughout Each
Period:
<TABLE>
<S> <C>
Net asset value, beginning of period $ 12.50
Income from investment operations:
Net investment income $ 0.08
Net realized and unrealized loss on investments and other foreign currency
related transactions*** (0.34)
Total loss from investment operations $ (0.26)
Distribution to shareholders --
Net decrease in net asset value $ (0.26)
Net asset value, end of period $ 12.24
Total return* (2.08%)
Ratio of net operating expenses to average net assets 2.25%**
Ratio of net investment income to average net assets 1.85%**
Portfolio turnover rate 259.22%**
Net assets, end of period (in thousands) $17,067
Ratios assuming no reduction of fees or expenses by PMC:
Net operating expenses 4.13%**
Net investment loss (0.03%)**
</TABLE>
Financial Highlights for Each Class B Share Outstanding Throughout Each
Period:
<TABLE>
<CAPTION>
<S> <C>
Net asset value, beginning of period $ 12.50
Income from investment operations:
Net investment income $ 0.02
Net realized and unrealized loss on investments and other foreign currency
related transactions*** (0.33)
Total loss from investment operations $ (0.31)
Distribution to shareholders --
Net decrease in net asset value $ (0.31)
Net asset value, end of period $ 12.19
Total return* (2.48%)
Ratio of net operating expenses to average net assets 3.33%**
Ratio of net investment income to average net assets 0.77%**
Portfolio turnover rate 259.22%**
Net assets, end of period (in thousands) $ 4,319
Ratios assuming no reduction of fees or expenses by PMC:
Net operating expenses 5.21%**
Net investment loss (1.11%)**
</TABLE>
+ The per share data presented above is based upon average shares
outstanding and average net assets for the period presented.
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of the period, and no sales charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
*** Includes the balancing effect of calculating per share amounts.
III. INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is long-term growth of capital. The Fund
pursues this objective by investing in securities of issuers in countries
with emerging economies or securities markets.
Under normal circumstances, at least 65% of the Fund's total assets are
invested in securities of companies that are domiciled or primarily doing
business in emerging countries and securities of these countries'
governmental issuers. For purpose of the Fund's investments, "emerging
countries" are countries with economies or securities markets that are not
considered by the Manager to be developed. Currently, emerging countries
include: Algeria, Argentina, Australia, Bangladesh, Brazil, Bulgaria, Chile,
China, Columbia, Costa Rica, Czech Republic, Ecuador, Egypt, Ghana, Greece,
Hong Kong, Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kenya, Kuwait,
Malaysia, Mexico, Morocco, Nigeria, Pakistan, Peru, the Philippines, Poland,
Portugal, Russia, South Africa, South Korea, Sri Lanka, Taiwan, Thailand,
Turkey, Uruguay, Venezuela, Vietnam and Zimbabwe. At the Manager's
discretion, the Fund may invest in other emerging countries.
A company is considered to be domiciled in an emerging country if it is
organized under the laws of, and has a principal office in, such country. A
company is considered by the Manager as primarily doing business in an
emerging country if that company derives at least 50% of its gross revenues
or profits from either (i) goods or services produced in emerging countries
or (ii) sales made in emerging countries.
Under normal circumstances, the Fund maintains investments in at least six
emerging countries. Except for temporary defensive purposes, the Fund will
not invest 25% or more of its total assets in securities of issuers in any
one country, emerging or developed. From time to time, the Fund may
concentrate its investments in a particular region.
3
<PAGE>
The Fund may also invest up to 35% of its total assets in equity and debt
securities of companies in any developed country, other than the United
States, and of such countries' governmental issuers and in short-term
investments (as described below). See "Other Eligible Investments."
Although the Fund may invest in both equity and debt securities, the Manager
expects that equity and equity-related securities will ordinarily offer the
greatest potential for long-term growth of capital and will constitute the
majority of the Fund's assets. The equity and equity-related securities of
companies in which the Fund invests consist of common stock and securities
with common stock characteristics, such as preferred stock, equity interests
in other unincorporated entities, warrants, rights or debt securities
convertible into common stock, and depositary receipts for these securities.
The Fund will also invest in call options on such securities.
The Fund may also invest in debt securities of corporate and governmental
issuers that the Manager believes offer opportunities for long-term capital
appreciation due to favorable credit quality, interest rate or currency
exchange rate changes. Debt securities in which the Fund invests may be of
any quality or maturity. Many of the debt securities available in emerging
market countries are of poor credit quality and may be in default. However,
the Fund will not invest more than 10% of its total assets in debt securities
rated below investment grade or unrated securities of comparable quality. See
"Lower-Rated Debt Securities and Associated Risk Factors" in the Appendix to
this Prospectus. The value of debt securities, particularly those with longer
maturities, can generally be expected to rise as interest rates decline and
to fall as interest rates rise. Movements in currency exchange rates may
offset or amplify such fluctuations, as measured
in U.S. dollars.
In pursuit of its objective, the Fund may employ certain active investment
management techniques including forward foreign currency exchange contracts,
options and futures contracts on currencies and securities indices and
options on these futures contracts. These techniques may be employed in an
attempt to hedge foreign currency and other risks associated with the Fund's
portfolio securities. The Fund may also enter into repurchase agreements and
invest in restricted and illiquid securities. See the Appendix to this
Prospectus and the Statement of Additional Information 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 described below). The Fund will assume a
temporary defensive posture when political and economic factors affect
securities markets to such an extent that the Manager believes there to be
extraordinary risks in being substantially invested in emerging countries.
In selecting securities for investment by the Fund, the Manager assesses the
general attractiveness of specific countries based on an analysis of internal
conditions, including political stability, financial practices, market
practices, economic growth prospects, levels of interest rates and inflation,
general market valuations and potential changes in currency relationships.
Based on the relative return and risk among countries, a target weighting is
set for the allocation of the Fund's assets among emerging countries. As a
parallel process, which involves many of the same factors as, and influences
the outcome of, country allocation, the Manager performs a fundamental
analysis of each company being considered for inclusion in the Fund's
portfolio. In performing this fundamental analysis, the Manager considers a
variety of factors, including financial condition, growth prospects, asset
valuation, management expertise, existing or potential dividend payments,
stock liquidity and the market valuation of the company. The specific size of
the Fund's investment in any one company is determined by the relationship of
the relative return and risk among individual investments. Because current
income is not the Fund's investment objective, the Fund will not restrict its
investments to securities of issuers with a record of timely dividend
payments.
While investing in emerging countries involves substantial risks, as
discussed below, the Manager believes investments in such countries offer
opportunities for capital growth. Certain emerging countries have at times
experienced economic growth rates well in excess of those of the more
developed countries, including the United States. By carefully selecting
securities of issuers in emerging countries, the Manager seeks to provide,
over the long term, a higher rate of capital appreciation than would
generally be possible by investing in securities of issuers in developed
countries. Of course there can be no assurance that the Manager will achieve
this objective.
Risk Factors
Investing in the Fund entails a substantial degree of risk. Because of the
special risks associated with investing in emerging countries, an investment
in the Fund may not be suitable for all investors and should not be
considered an overall investment program. Investors are strongly advised to
consider carefully the special risks involved in investing in emerging
countries, which are in addition to the usual risks of investing in developed
countries around the world. See the Appendix to this Prospectus for
additional risks associated with an investment in the Fund.
The political and economic structures in many emerging countries are expected
to undergo significant evolution and rapid development, and such countries
may lack the social, political and economic stability characteristic of more
developed countries. Unanticipated political or social developments may
affect the values of the Fund's investments and the availability to the Fund
of additional investments in such countries. The small size and limited
history of the securities markets in certain of such countries and the
limited volume of trading in securities in those countries makes the Fund's
investments in such countries less liquid and more volatile than investments
in countries with more developed securities markets, such as the United
States, Japan and most Western European countries.
Investing in emerging countries involves the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested.
In the event of such expropriation, nationalization or other confiscation in
any emerging
4
<PAGE>
country, the Fund could lose its entire investment in that country.
Economies in individual emerging countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross
domestic product, rates of inflation, currency valuation, capital
reinvestment, resource self-sufficiency and balance of payments positions.
Many emerging countries have experienced substantial, and in some cases
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had, and may continue to have, very
negative effects on the economies and securities markets of certain emerging
countries.
Economies in emerging countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be
affected adversely by trade barriers, exchange controls, managed adjustments
in relative currency values and other protectionist measures imposed or
negotiated by the countries with which they trade. These economies also have
been, and may continue to be, affected adversely by economic conditions in
the countries with which they trade.
The securities markets of many emerging countries are substantially smaller,
less developed, less liquid and more volatile than the securities markets of
developed countries. Disclosure and regulatory standards in many respects are
less stringent than in the U.S. and other major markets. There also may be a
lower level of monitoring and regulation of emerging securities markets and
the activities of investors in such markets, and enforcement of existing
regulations has been extremely limited.
There may be less publicly available information about international
securities and issuers than is available with respect to U.S. securities and
issuers. International companies generally are not subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The Fund's net
investment income and/or capital gains from its international investment
activities may be subject to non-U.S. withholding and other taxes.
In addition, the value of securities denominated or quoted in international
currencies may also be adversely affected by fluctuations in the relative
rates of exchange between the currencies of different nations and by exchange
control regulations. The Fund's investment performance may be negatively
affected by a devaluation of a currency in which the Fund's investments are
denominated or quoted. Further, the Fund's investment performance may be
significantly affected, either positively or negatively, by currency exchange
rates because the U.S. dollar value of securities denominated or quoted in
another currency will increase or decrease in response to changes in the
value of such currency in relation to the U.S. dollar.
Brokerage commissions, custodial services and other costs relating to
investment in international securities markets generally are more expensive
than in the United States; this is particularly true with respect to
securities markets in emerging countries. Such markets have settlement and
clearance procedures that differ from those of more developed markets. In
certain markets there have been times when settlements have been unable to
keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. The inability of the Fund to make intended
securities purchases due to settlement problems could cause the Fund to miss
attractive investment opportunities. Inability to dispose of a portfolio
security caused by settlement problems could result either in losses to the
Fund due to a subsequent decline in value of the portfolio security or, if
the Fund has entered into a contract to sell the security, could result in
possible liability to the Fund.
In addition, security settlement and clearance procedures in some emerging
countries may not fully protect the Fund against loss or theft of its assets
in situations that may arise that may not be foreseeable. By way of example
and without limitation, a fraudulent or otherwise deficient security
settlement or a conversion, theft or default by a broker, dealer or other
intermediary could result in losses to the Fund. Neither the Manager nor the
Fund's custodian is liable to the Fund or its shareholders for such losses
incurred by the Fund in the absence of willful misfeasance, bad faith or
gross negligence in the performance of their respective duties.
Most of the emerging market companies in which the Fund invests are
relatively small, lesser-known companies. Although many such companies offer
greater growth potential than larger, more mature, better-known companies,
investing in the securities of such companies also involves greater risk and
the possibility of greater portfolio price volatility. Among the reasons for
the greater price volatility of these smaller companies are the lower degree
of liquidity in the markets for such stocks and the greater sensitivity of
small companies to changing economic conditions. These companies may have
higher investment risk than that associated with larger companies due to
greater business risks of small size and limited product lines, markets,
distribution channels and financial and managerial resources.
In addition to risks associated with investments in foreign private issuers,
investments in foreign governmental securities entail risk that the foreign
government will repudiate its underlying obligation or alter any favorable
tax treatment associated with the obligation. There may be difficulty in
enforcing outside the United States legal rights against foreign governments.
Other Eligible Investments
Under normal circumstances, the Fund may invest up to 35% of its total assets
in the investments described in this section.
Securities of Developed Country Issuers. The Fund may invest in equity and
debt securities of companies that are domiciled or primarily doing business
in developed countries, other than the United States, and of such countries'
governmental issuers.
Short-Term Investments. For temporary defensive or cash management purposes
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 international or domestic companies with similar
5
<PAGE>
securities outstanding that are rated Prime-1, Aa or better by Moody's
Investors Service, Inc. ("Moody's") or A-1, AA or better by Standard and
Poor's Ratings Group ("Standard & Poor's"); obligations (including
certificates of deposit, time deposits, demand deposits and bankers'
acceptances) of banks (located in the United States or foreign countries)
with securities outstanding that are rated Prime-1, Aa or better by Moody's,
or A-1, AA or better by Standard and Poor's; obligations of comparable
quality issued or guaranteed by the U.S. Government or the government of a
foreign country or their respective agencies or instrumentalities; and
repurchase agreements.
Investments in Depositary Receipts
The Fund may hold securities of foreign issuers in the form of American
Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs") and other
similar instruments or other securities convertible into securities of
eligible issuers. Generally, ADRs in registered form are designed for use in
U.S. securities markets, and GDRs and other similar global instruments in
bearer form are designed for use in non-U.S. securities markets.
ADRs are denominated in U.S. dollars and represent an interest in the right
to receive securities of foreign issuers deposited in a U.S. bank or
correspondent bank. ADRs do not eliminate all the risk inherent in investing
in the securities of non-U.S. issuers. However, by investing in ADRs rather
than directly in equity securities of non-U.S. issuers, the Fund will avoid
currency risks during the settlement period for either purchases or sales.
GDRs are not necessarily denominated in the same currency as the underlying
securities which they represent. For purposes of the Fund's investment
policies, investments in ADRs, GDRs and similar instruments will be deemed to
be investments in the underlying equity securities of the foreign issuers.
The Fund may acquire depositary receipts from banks that do not have a
contractual relationship with the issuer of the security underlying the
depositary receipt to issue and secure such depositary receipt. To the extent
the Fund invests in such unsponsored depositary receipts there may be an
increased possibility that the Fund may not become aware of events affecting
the underlying security and thus the value of the related depositary receipt.
In addition, certain benefits (i.e., rights offerings) which may be
associated with the security underlying the depositary receipt may not inure
to the benefit of the holder of such depositary receipt.
Brady Bonds
The Fund may invest in so-called "Brady Bonds" and other sovereign debt
securities of countries that have restructured or are in the process of
restructuring sovereign debt pursuant to the "Brady Plan." Brady Bonds are
debt securities issued under the framework of the Brady Plan as a mechanism
for debtor nations to restructure their outstanding external indebtedness
(generally, commercial bank debt). In restructuring its external debt under
the Brady Plan framework, a debtor nation negotiates with its existing bank
lenders as well as multilateral institutions such as the World Bank and the
International Monetary Fund (the "IMF"). The Brady Plan framework, as it has
developed, contemplates the exchange of commercial bank debt for newly issued
bonds (Brady Bonds).
Brady Bonds have recently been issued by Costa Rica, Mexico, Nigeria, the
Philippines, Uruguay and Venezuela and may be issued by other countries.
Brady Bonds may involve a high degree of risk, may be in default or present
the risk of default. Investors should recognize that Brady Bonds have been
issued only recently, and, accordingly, they do not have a long payment
history. Agreements implemented under the Brady Plan to date are designed to
achieve debt and debt-service reduction through specific options negotiated
by a debtor nation with its creditors. As a result, the financial packages
offered by each country differ.
Portfolio Turnover
The Fund will be substantially fully invested at all times, except as
described above. However, the volatility of certain emerging markets and the
need for the Manager to allocate and reallocate the Fund's investments among
several markets can be expected to generate a portfolio turnover rate higher
than that of funds investing in equity securities of issuers in the U.S. or
other developed countries. 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. It is anticipated that the portfolio turnover rate of the Fund
will not exceed 300% in the coming year. A high rate of portfolio turnover
(100% or more) involves correspondingly greater transaction costs which must
be borne by the Fund and its shareholders and may, under certain
circumstances, make it more difficult for the Fund to qualify as a regulated
investment company under the Internal Revenue Code. See "Dividends,
Distributions and Taxation."
The Fund's investment objective 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 management and
supervision of the Fund. There are currently eight Trustees, six of whom are
not "interested persons" of the Fund, as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"). The Board meets at least quarterly.
By virtue of the functions performed by Pioneering Management Corporation as
investment adviser, the Fund requires no employees other than its executive
officers, all of whom receive their compensation from the Manager or other
sources. The Statement of Additional Information contains the names and
general business and professional background of each Trustee and executive
officer of the Fund.
The Fund is managed under a contract with the Manager, which 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
6
<PAGE>
Trustees. The Manager is a wholly owned subsidiary of The Pioneer Group,
Inc. ("PGI"), a Delaware corporation. Pioneer Funds Distributor, Inc.
("PFD"), a wholly owned subsidiary of PGI, is the principal underwriter of
shares of the Fund. John F. Cogan, Jr., Chairman and President of the Fund,
Chairman and a Director of the Manager, Chairman of PFD, and President and a
Director of PGI, beneficially owned approximately 15% of the outstanding
capital stock of PGI as of the date of this Prospectus.
Each international equity portfolio managed by PMC, including the Fund, is
overseen by an Equity Committee, which consists of PMC's most senior equity
professionals, and a Portfolio Management Committee, which consists of PMC's
international equity portfolio managers. Both committees are chaired by Mr.
David Tripple, PMC's President and Chief Investment Officer and Executive
Vice President of each of the Pioneer mutual funds. Mr. Tripple joined PMC in
1974 and has had general responsibility for PMC's investment operations and
specific portfolio assignments for over five years.
Dr. Norman Kurland, Senior Vice President of the Manager and Vice President
of the Fund, is generally responsible for the management of the international
portfolios managed by the Manager. Dr. Kurland joined the Manager in 1990
after working with a variety of investment and industrial concerns. Day to
day management of the Fund is the responsibility of Mr. Mark Madden, Vice
President of the Manager. Mr. Madden joined the Manager in 1990 after working
for other investment and industrial firms.
In addition to the Fund, the Manager also manages and serves as the
investment adviser for other mutual funds and is an investment adviser to
certain other institutional accounts. The Manager's and PFD's executive
offices are located at 60 State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Fund, the Manager assists in the
management of the Fund and is authorized in its discretion to buy and sell
securities for the account of the Fund. The Manager 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: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including,
to the extent such services are performed by personnel of the Manager, or its
affiliates, office space and facilities and personnel compensation, training
and benefits; (ii) the charges and expenses of auditors; (iii) the charges
and expenses of any custodian, transfer agent, plan agent, dividend
disbursing agent and registrar appointed by the Fund; (iv) issue and transfer
taxes, chargeable to the Fund in connection with securities transactions to
which the Fund is a party; (v) 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; (vi)
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; (vii) 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; (viii) charges and expenses of
legal counsel to the Fund and the Trustees; (ix) distribution fees paid by
the Fund in accordance with Rule 12b-1 promulgated by the SEC pursuant to the
1940 Act; (x) compensation of those Trustees of the Fund who are not
affiliated with or interested persons of the Manager, the Fund (other than as
Trustees), PGI or PFD; (xi) the cost of preparing and printing share
certificates; and (xii) interest on borrowed money, if any. In addition to
the expenses described above, the Fund pays all brokers' and underwriting
commissions chargeable to the Fund in connection with securities transactions
to which the Fund is a party.
Orders for the Fund's portfolio securities transactions are placed by the
Manager, 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 the Fund or other funds for which PGI or any
affiliate or subsidiary serves as investment adviser or manager. See the
Statement of Additional Information for a further description of the
Manager's brokerage allocation practices.
As compensation for its management services and certain expenses which the
Manager incurs, the Manager is entitled to a management fee equal to 1.25%
per annum of the Fund's average daily net assets. The fee is normally
computed daily and paid monthly. The management fee paid by the Fund is
greater than those paid by most funds. Due to the added complexity of
managing funds with an emerging markets investment strategy, however,
management fees for emerging markets funds tend to be higher than those paid
by most funds.
The Manager has agreed not to impose a portion of its management fee and to
make other arrangements, if necessary, to limit other expenses of the Fund to
the extent required to reduce operating Class A expenses to 2.25% of the
average daily net assets attributable to the Class A shares; the portion of
the Fund-wide expenses attributable to Class B shares will be reduced only to
the extent such expenses are reduced for Class A shares. This agreement is
voluntary and temporary and may be revised or terminated by the Manager at
any time. For the period from June 23, 1994 to November 30, 1994, the Fund
incurred expenses of $291,103, including management fees paid or payable to
the Manager of $84,871. As a result of the voluntary expense limitation
described above, PMC waived its entire management fee for the period ended
November 30, 1994. See the Statement of Additional Information for more
information.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers two Classes of shares designated as Class A and
Class B shares, as described more fully in "How to Buy Fund Shares." 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.
7
<PAGE>
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 contingent deferred
sales charge ("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 1.00% of the Fund's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is invested in the Fund
without deduction of any sales charge at 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
per share 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.
Purchasing Class A or Class B 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.
Investment dealers and 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 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 the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the fair market 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 international currencies are converted to U.S. dollars utilizing
foreign exchange rates employed by the Fund's independent pricing services.
Generally, trading in international 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 are 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 at the public offering price 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 for assistance.
The minimum initial investment is $1,000 for Class A and Class B 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; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B shares, except that the subsequent minimum investment
amount for Class B share accounts may be as little as $50 if an automatic
investment plan (see "Automatic Investment Plans") is established.
Class A Shares
You may buy Class A shares at the public offering price, that is, at the net
asset value per share next computed after receipt of a purchase order, plus a
sales charge as follows:
<TABLE>
<CAPTION>
Dealer
Sales Charge as a Allowance
Percentage of as a
Net Percentage of
Offering Amount Offering
Amount of Purchase Price Invested Price
<S> <C> <C> <C>
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
$1,000,000 or more -0- -0- see below
</TABLE>
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain
8
<PAGE>
group plans (described below) subject to a CDSC of 1% which may be imposed
in the event of a redemption of Class A shares within 12 months of purchase.
See "How to Sell Fund Shares." 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 $1 million invested; 0.50% on the next $4 million;
and 0.10% on the excess over $5 million. These commissions will 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 pays to Mutual of Omaha
Investor Services, Inc. 50% of PFD's retention of any sales commission on
sales of the Fund's Class A shares through such dealer.
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 Internal Revenue Code of 1986, as
amended (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 (except direct purchases of Pioneer Money Market Trust's Class A
shares), 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. See
the "Letter of Intention" section of the Account Application.
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. Information about such arrangements is
available from PFD.
Class A shares of the Fund may 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 the Manager serves as investment adviser, and the subsidiaries 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
investment advisers adhering to standards established by PFD; (i) other funds
and accounts for which the Manager 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 upon the receipt by PFD of
written notification of eligibility. In addition, Class A shares of a Fund
may be sold at net asset value per share without a sales charge to Optional
Retirement Program participants if (i) the employer has authorized a limited
number of investment providers for the Program, (ii) all authorized 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. Shares may also be
sold at net asset value in connection with certain reorganization,
liquidation, or acquisition transactions involving other investment companies
or personal holding companies.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention procedure, including
its terms, is contained in the Statement of Additional Information. Investors
who are clients of a broker-dealer with a current sales 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 the 60
days immediately preceding the purchase of shares of the Fund; 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 funds.
Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value 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.
9
<PAGE>
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.
<TABLE>
<CAPTION>
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
<S> <C>
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
</TABLE>
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 fund will convert into Class A shares based on the date of
the initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the
date of the initial purchase of the shares 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 ("IRS"), for which
the Fund is applying, or an opinion of counsel that such conversions will not
constitute taxable events for federal tax purposes. There can be no assurance
that such ruling or opinion will be available. The conversion of Class B
shares to Class A shares will not occur if such ruling or opinion is not
available and, therefore, Class B shares would continue to be subject to
higher expenses than Class A shares for an indeterminate period.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares and on any Class A shares subject to a CDSC 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 UGMAs, UTMAs and other
trust accounts, 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
shareholders 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 and on any Class A shares subject to a CDSC 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 Individual Retirement Account ("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 by Pioneer); (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 B shares and on any Class A shares subject to a CDSC may be
waived or reduced for either non-retirement or retirement plan accounts if:
(a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers
An order for either Class of Fund shares received by PFD from 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.
10
<PAGE>
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 redeem Fund shares on any day the Exchange is open by
selling (redeeming) 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:
* If you are selling shares from a retirement account, 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.
* If you are selling shares from a non-retirement account, 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 and accepted less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
accepted. 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 Pioneering Services Corporation
("PSC"), however, you must use a written request, including a signature
guarantee, to sell your shares if any of the following situations applies:
* you wish to sell over $50,000 worth of shares,
* your account registration or address has changed within the last 30 days,
* the check is not being mailed to the address on your account (address of
record),
* the check is not being made out to the account owners, or
* the sale proceeds are being transferred to a Pioneer 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, Pioneer 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, certificates are endorsed by the record
owner(s) exactly as the shares are registered and, if a signature guarantee
is required, 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 by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to the Fund. You may redeem up to $50,000 of your
shares by telephone or fax and receive the proceeds by check or by bank wire.
The redemption proceeds must be made payable exactly as the account is
registered. 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: the wire 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. The telephone redemption option is not available to
retirement plan accounts. You may always elect to deliver redemption
instructions to PSC by mail. See "Telephone Transactions and Related
Liabilities" below. Telephone and fax redemptions will be priced as described
above.
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.
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 $1,000,000 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
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subject to the CDSC of the shares originally held until the original
12-month period expires. However, no CDSC is payable with respect to
purchases of Class A shares 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
Fund out of which you wish to exchange and the name of the 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 the PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. All telephone exchange requests will be
recorded. See "Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
account for shares of the same Class in another Pioneer 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 18th day of the month.
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 fund. Not all Pioneer funds
offer more than one Class of shares. A new Pioneer account opened through an
exchange must have a registration identical to that on the original account.
Class A or Class B shares which would normally be subject to a CDSC upon
redemption will not be charged the applicable CDSC at the time of the
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 Class B 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 fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the cost basis of these shares and the timing of the
transaction, and special tax rules may apply in particular circumstances.
You should consider the differences in objectives and policies of the Pioneer
funds, as described in each fund's current prospectus, before making any
exchange. To prevent abuse of the exchange privilege to the detriment of
other Fund shareholders, the Fund and PFD reserve the right to limit the
number and/or frequency of exchanges and/or to charge a fee for exchanges.
The exchange privilege may be changed or discontinued and may be subject to
additional limitations, including certain restrictions on purchases by market
timer accounts.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for both Class A shares ("Class A
Plan") and Class B shares ("Class B Plan") in accordance with Rule 12b-1
under the 1940 Act pursuant to which certain distribution and service fees
are paid. Expenditures of the Fund for continuing service fees to
broker-dealers pursuant to the Class A Plan are accrued daily beginning
January 1, 1995; other expenses pursuant to the Class A Plan will be paid as
accrued.
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. Distribu-
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tion 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
shareholders of the Fund. The Class A Plan does not provide for the carryover
of reimbursable expenses beyond twelve months from the time the Fund is first
invoiced for an expense. The limited carryover provision in the Class A Plan
may result in an expense invoiced to the Fund in one fiscal year being paid
in the subsequent fiscal year and thus being treated for purposes of
calculating the maximum expenditures of the Fund as having been incurred in
the subsequent fiscal year. In the event of termination or non-continuance
of the Class A Plan, the Fund has 12 months to reimburse any expense which it
incurs prior to such termination or non-continuance, provided that payments
by the Fund during such twelve-month period shall not exceed 0.25% of the
Fund's average daily net assets attributable to the Class A shares during
such period.
The Class B Plan provides 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
Class B 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 Class B shares. The
distribution fee is intended to compensate PFD for its 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
shares. PFD also receives the proceeds of any CDSC imposed on the redemption
of Class B shares.
Commissions of 4%, 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 selling 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 therefor, 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 service fees with
respect to such shares commencing in the 13th month following the purchase.
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 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 taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% excise tax on
a portion of its undistributed 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 pays dividends from net investment income and distributes its net
realized short and long-term capital gains, if any, annually, usually in the
month of December, with additional distributions made only as required to
avoid federal income or excise tax. Unless shareholders specify otherwise,
all distributions will be automatically reinvested in additional full and
fractional shares of the Fund. Dividends from the Fund's net investment
income, certain net foreign exchange gains and net short-term capital gains
are taxable as ordinary income, and dividends from the Fund's net long- term
capital gains are taxable as long-term capital gains. 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 annually. For further information on the distribution options
available to shareholders, see "Distribution Options" and "Directed
Dividends" below.
In any year in which the Fund qualifies, it may make an election that will
permit certain of its shareholders to take a credit (or, if more
advantageous, a deduction) for foreign income taxes paid by the Fund. Each
shareholder would then treat as an additional dividend his or her appropriate
share of the amount of foreign taxes paid by the Fund. If this election is
made, the Fund will notify its shareholders annually as to their share of the
amount of foreign taxes paid and the foreign source income of the Fund.
Dividends and other distributions and the proceeds of redemptions 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 the shareholder is not
subject to backup withholding or the Fund receives notice from the Internal
Revenue Service (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, trust 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.
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 Pioneering Services Corporation, P.O.
Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co.
(the "Custodian") serves as
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custodian of the Fund's portfolio securities. The principal business address
of the mutual fund division of the Custodian is 40 Water Street, Boston,
Massachusetts 02109. The Custodian oversees a network of subcustodians and
depositories in the countries in which the Fund may invest.
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
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
shareholders who have more than one Pioneer 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 which might not be available are investment or
redemption of shares by mail or telephone, automatic reinvestment of
dividends and capital gains distributions, withdrawal plans, Letters of
Intention, Rights of Accumulation, telephone exchanges, 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 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 an 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 pre-authorized draft drawn on a checking
account. Investomatic Plan investments are voluntary, and you may discontinue
the plan at any time without penalty upon 30 days' written notice. PSC acts
as agent for the purchaser, 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 are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request 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 account. 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, and there are no fees or
charges for this service. Retirement plan shareholders may only direct
dividends to accounts with identical registrations, i.e., PGA IRA Cust for
John Smith may only go into another account registered PGA 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 also 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 your 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 and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicated otherwise on your Account Application or by
writing to the PSC. You may sell or exchange your Fund shares by telephone by
calling 1-800-225-6292 between 8:00 a.m. and 8:00 p.m. Eastern Time on
weekdays. See "Share Price" for more information. To confirm that each
transaction instruction received by telephone is genuine, the Fund will
record each telephone transaction, require you to provide your personal
identification number (PIN) 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. The Fund may implement other procedures from time to
time. In all other cases, neither the Fund nor 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.
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.
Retirement Plans
You should contact the Retirement Plans Department of PSC at 1-800-622-0176
for information relating to retirement plans
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for businesses, age-weighted profit sharing plans, Simplified Employee
Pension Plans, IRAs, and Section 403(b) retirement plans for employees of
certain non-profit organizations and public school systems, all of which are
available in conjunction with investments in the Fund. The Account
Application enclosed with this Prospectus should not be used to establish any
of these plans. Separate applications are required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and you own 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 shares accounts are limited to 10% of the
value of the account at the time the plan is implemented. See "Waiver or
Reduction of Contingent Deferred Sales Charge" for more information.
Periodic payments of $50 or more will be sent to you, or any person
designated by you, monthly or quarterly and your periodic redemptions may be
taxable to you. Payments can be made either by check or electronic transfer
to a bank account designated by you. If you direct that withdrawal payments
be made 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
reinvestment occurs. Subject to the provisions outlined under "How to
Exchange Fund Shares" above, you may also reinvest in Class A shares of 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 request by calling 1-800-225-6292.
XIII. THE FUND
Pioneer Emerging Markets Fund is an open-end, diversified management
investment company (commonly referred to as a mutual fund) organized as a
Delaware business trust on March 23, 1994. The Fund has authorized an
unlimited number of shares of beneficial interest. As an open-end management
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 purposes of electing or removing Trustees,
changing fundamental investment restrictions or approving a management or
subadvisory contract.
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 two classes of shares, designated
Class A and Class B. 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 and Class B
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. The Fund reserves the right to create and issue
additional series and classes of shares.
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 by the Fund. 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 certificates.
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. In addition, for Class A shares the calculation
assumes the deduction of the maximum sales charge of 5.75%; for Class
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B 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 indexes,
indicators of economic activity or averages of mutual funds 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'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.
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APPENDIX
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
Objective and Policies" in this Prospectus and "Investment Policies and
Restrictions" in the Statement of Additional Information.
Lower-Rated Debt Securities and Associated Risk Factors
Although the Fund invests primarily in equity and equity-related securities,
the Fund may also invest in debt securities of corporate and governmental
issuers which are considered by the Manager to offer the potential for
long-term growth of capital. The Fund may invest in debt securities of any
maturity or quality including those not currently paying interest or in
default. However, the Fund will not invest more than 10% of its total assets
in debt securities which are rated at the time of investment below investment
grade by Moody's or by Standard & Poor's or, if unrated, judged by the
Manager to be of comparable credit quality. Debt securities in the lowest
investment grade (those rated Baa by Moody's or BBB by Standard & Poor's or
comparable unrated securities) have speculative characteristics and changes
in economic conditions or other circumstances are more likely to lead to a
weakened capacity to make interest payments and repay principal than is the
case with higher grade debt securities. In addition, debt securities rated Ba
or below by Moody's or BB or below by Standard & Poor's (or comparable
unrated securities), commonly called "junk bonds," are considered
speculative, and payments of interest thereon and repayment of principal may
be questionable. In some cases, such securities may be highly speculative,
have poor prospects for reaching investment grade standing and be in default.
As a result, investment in such debt securities will entail greater
speculative risks than those associated with investment in investment-grade
debt securities (i.e., debt securities rated Baa or higher by Moody's or BBB
or higher by Standard & Poor's).
Corporate debt securities are subject to the risk of an issuer's inability to
meet principal and interest payments on the obligations (credit risk) and may
also be subject to price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer and
general market liquidity (market risk). Lower rated or unrated (i.e., junk
bond) debt securities are more likely to react to developments affecting
market and credit risk than are more highly rated securities, which react
primarily to movements in the general level of interest rates. The Manager
considers both credit risk and market risk in making investment decisions for
the Fund.
Options on Securities Indices
The Fund may purchase put and call options on indices that are based on
securities in which it may invest to manage cash flow and to manage its
exposure to foreign and domestic stocks or stock markets instead of, or in
addition to, buying and selling stock. The Fund may also purchase options 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 order to remain
fully invested in a particular foreign stock market or 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.
Forward Foreign Currency Exchange Contracts and Options on Foreign Currencies
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency contracts to facilitate
settlement of foreign securities transactions or to protect against changes
in foreign currency exchange rates. The Fund might sell a foreign currency on
either a spot or forward basis to seek to hedge against an anticipated
decline in the dollar value of securities in its portfolio or securities it
intends or has contracted to sell or to preserve the U.S. dollar value of
dividends, interest or other amounts it expects to receive. Although this
strategy could minimize the risk of loss due to a decline in the value of the
hedged foreign currency, it could also limit any potential gain which might
result from an increase in the value of the currency. Alternatively, the Fund
might purchase a foreign currency or enter into a forward purchase contract
for the currency to preserve the U.S. dollar price of securities it is
authorized to purchase or has contracted to purchase.
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If the Fund enters into a forward contract to buy foreign currency for any
purpose, the Fund will be required to place cash or liquid, high grade
securities in a segregated account of the Fund maintained by the Fund's
custodian in an amount equal to the value of the Fund's total assets
committed to the consummation of the forward contract.
The Fund may purchase put and call options on foreign currencies for the
purpose of protecting against declines in the dollar value of foreign
portfolio securities and against increases in the U.S. dollar cost of foreign
securities to be acquired. The purchase of an option on a foreign currency
may constitute an effective hedge against exchange rate fluctuations.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices, currency exchange rates 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 stock and other securities indices, foreign
currencies and other financial instruments and indices. The Fund may engage
in futures and related options transactions for hedging and other
non-speculative purposes permitted by regulations of the Commodity Futures
Trading Commission. These transactions involve brokerage costs, require
margin deposits and, in the case of contracts and options obligating the Fund
to purchase currencies, require the Fund to segregate assets to cover such
contracts and options.
Risks and Limitations Associated with Transactions in Options, Futures
Contracts and Forward Foreign Currency Exchange Contracts
The Fund may employ certain active investment management techniques including
options on securities indices, options on currency, futures contracts and
options on futures, forward foreign currency exchange contracts and currency
swaps. Each of these active management techniques involves (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 and foreign currency fluctuations intended to be
hedged, and (3) market risk that an incorrect prediction of securities prices
or exchange rates by the Manager may cause the Fund to perform less favorably
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, futures and forward foreign
currency exchange contracts are highly specialized activities which involve
investment techniques and risks that are different from those associated with
ordinary portfolio transactions. The Fund may not enter into futures
contracts and options on futures contracts for speculative purposes. There is
no limit on the percentage of the Fund's assets that may be subject to
futures contracts and options on such contracts entered into for bona fide
hedging purposes or forward foreign currency exchange contracts. The loss
that may be incurred by the Fund in entering into futures contracts and
written options thereon and forward foreign currency exchange contracts is
potentially unlimited. 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, forward foreign currency exchange
contracts, 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.
Repurchase Agreements
The Fund may enter into repurchase agreements not exceeding seven days in
duration. 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 in restricted securities (i.e., securities that would be
required to be registered prior to distribution to the public), including
restricted securities eligible for resale to certain institutional investors
pursuant to Rule 144A under the Securities Act of 1933. In addition, the Fund
may invest up to 15% of its net assets in restricted securities sold and
offered under Rule 144A that are illiquid either as a result of legal or
contractual restrictions or the absence of a trading market.
The Board of Trustees of the Fund has adopted guidelines and delegated to the
Manager the daily function of determining and monitoring the liquidity of
restricted 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 the market for restricted securities sold
and offered under Rule 144A will develop, the Board carefully 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.
Securities of non-U.S. issuers that the Fund acquires in Rule 144A
transactions, but which the Fund may resell publicly in a non-U.S. securities
market, are not considered restricted securities.
18
<PAGE>
The Pioneer Family of Mutual Funds
Growth Funds
Pioneer Capital Growth Fund
Pioneer Growth Shares
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Growth and Income Funds
Pioneer Three
Pioneer II
Pioneer Fund
Pioneer Equity-Income Fund
Pioneer Winthrop Real Estate Investment Fund
Income Funds
Pioneer Income Fund
Pioneer Bond Fund
Pioneer America Income Trust
Pioneer Tax-Free Income Fund
Pioneer California Double Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
Pioneer Intermediate Tax-Free Fund
Pioneer Short-Term Income Trust
Specialized Growth Funds
Pioneer Gold Shares
Pioneer India Fund
Money Market Funds
Pioneer Cash Reserves Fund
Pioneer U.S. Government Money Fund
Pioneer Tax-Free Money Fund
19
<PAGE>
Pioneer
Emerging Markets
Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
NORMAN KURLAND, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
0395-2368
(C)Pioneer Funds Distributor, Inc.
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
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
and service forms and telephone transactions............ 1-800-225-6292
Automated fund yields, prices and account information ... 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
<PAGE>
PIONEER EMERGING MARKETS FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A and Class B Shares
March 31, 1995
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus, but should be read in conjunction with the
Prospectus dated March 31, 1995, of Pioneer Emerging Markets Fund (the "Fund").
A copy of the Prospectus can 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.
TABLE OF CONTENTS
Page
1. Investment Policies, Restrictions
and Associated Risks............................................B-2
2. Management of the Fund..........................................B-19
3. Investment Adviser..............................................B-23
4. Principal Underwriter...........................................B-24
5. Distribution Plans..............................................B-25
6. Shareholder Servicing/Transfer Agent............................B-28
7. Custodian.......................................................B-28
8. Independent Public Accountant...................................B-29
9. Portfolio Transactions..........................................B-29
10. Tax Status......................................................B-31
11. Description of Shares...........................................B-36
12. Certain Liabilities.............................................B-36
13. Determination of Net Asset Value................................B-38
14. Systematic Withdrawal Plan......................................B-38
15. Letter of Intention.............................................B-39
16. Investment Results..............................................B-40
17. Financial Statements............................................B-43
APPENDIX A -- Description of Bond Ratings.......................1A
APPENDIX B -- Additional General Economic
Information and Information Regarding
Pioneer...........................................1B
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. INVESTMENT POLICIES, RESTRICTIONS AND ASSOCIATED RISKS
The Fund's Prospectus (the "Prospectus") identifies the investment
objective and the principal investment policies of the Fund and the risk factors
associated with the Fund's investments. Other investment policies of the Fund
and associated risk factors are set forth below. This Statement of Additional
Information should be read in conjunction with the Prospectus. Capitalized terms
not otherwise defined herein have the meaning given to them in the Prospectus.
Emerging Markets and Associated Risk
Emerging Countries. Investing in securities of issuers in emerging
countries may entail greater risks than investing in securities of issuers in
developed countries. These risks include (i) less social, political and economic
stability; (ii) the small current size of the markets for such securities and
the currently low or nonexistent volume of trading, which result in a lack of
liquidity and in greater price volatility; (iii) certain national policies which
may restrict the Fund's investment opportunities, including restrictions on
investment in issuers or industries deemed sensitive to national interests; (iv)
foreign taxation; and (v) the absence of developed structures governing private
or foreign investment or allowing for judicial redress for injury to private
property.
Political and Economic Risks. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment and on repatriation of capital invested. In the event of such
expropriation, nationalization or other confiscation by any country, the Fund
could lose its entire investment in any such country.
In addition, even though opportunities for investment may exist in
emerging markets, any change in the leadership or policies of the governments of
those countries or in the leadership or policies of any other government which
exercises a significant influence over those countries, may halt the expansion
of or reverse the liberalization of foreign investment policies now occurring
and thereby eliminate any investment opportunities which may currently exist.
Investors should note that upon the accession to power of authoritarian
regimes, the governments of a number of Latin American countries previously
expropriated large quantities of real and personal property similar to the
property which will be represented by the securities purchased by the Fund. The
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<PAGE>
claims of property owners against those governments were never finally settled.
There can be no assurance that any property represented by securities purchased
by the Fund will not also be expropriated, nationalized, or otherwise
confiscated. If such confiscation were to occur, the Fund could lose a
substantial portion of its investments in such countries. The Fund's investments
would similarly be adversely affected by exchange control regulation in any of
those countries.
Religious, Political and Ethnic Instability. Certain countries in which
the Fund may invest may have vocal minorities that advocate radical religious or
revolutionary philosophies or support ethnic independence. Any disturbance on
the part of such individuals could carry the potential for wide-spread
destruction or confiscation of property owned by individuals and entities
foreign to such country and could cause the loss of the Fund's investment in
those countries.
Foreign Investment Restrictions. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as the Fund. As illustrations,
certain countries require governmental approval prior to investments by foreign
persons, or limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. The Fund could be
adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
Non-Uniform corporate Disclosure Standards and Governmental Regulation.
Foreign companies are subject to accounting, auditing and financial standards
and requirements that differ, in some cases significantly, from those applicable
to U.S. companies. In particular, the assets, liabilities and profits appearing
on the financial statements of such a company may not reflect its financial
position or results of operations in the way they would be reflected had such
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. Most of the securities held by the Fund will not be
registered with the Securities and Exchange Commission (the "Commission") and
such issuers thereof will not be subject to the Commission's reporting
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<PAGE>
requirements. Thus, there will be less available information concerning foreign
issuers of securities held by the Fund than is available concerning U.S.
issuers. In instances where the financial statements of an issuer are not deemed
to reflect accurately the financial situation of the issuer, the Fund's
investment adviser, Pioneering Management Corporation ("PMC"), will take
appropriate steps to evaluate the proposed investment, which may include on-site
inspection of the issuer, interviews with its management and consultations with
accountants, bankers and other specialists. There is substantially less publicly
available information about foreign companies than there are reports and ratings
published about U.S. companies and the U.S. government. In addition, where
public information is available, it may be less reliable than such information
regarding U.S.
issuers.
Currency Fluctuations. Because the Fund, under normal circumstances,
will invest a substantial portion of its total assets in the securities which
are denominated or quoted in foreign currencies, the strength or weakness of the
U.S. dollar against such currencies will account for part of the Fund's
investment performance. A decline in the value of any particular currency
against the U.S. dollar will cause a decline in the U.S. dollar value of the
Fund's holdings of securities denominated in such currency and, therefore, will
cause an overall decline in the Fund's net asset value and any net investment
income and capital gains to be distributed in the U.S. dollars to shareholders
of the Fund.
The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the movement
of interest rates, the pace of business activity in certain other countries, and
the U.S., and other economic and financial conditions affecting the world
economy.
Although the Fund values its assets daily in terms of U.S. dollars, the
Fund does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may do so from time to time, and investors
should be aware of the costs of currency conversion. Although currency dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to sell that currency to the dealer.
B-4
<PAGE>
Adverse Market Characteristics. Securities of many emerging country
issuers may be less liquid and their prices more volatile than securities of
comparable U.S. issuers. In addition, foreign securities exchanges and brokers
are generally subject to less governmental supervision and regulation than in
the U.S., and foreign securities exchange transactions are usually subject to
fixed commissions, which are generally higher than negotiated commissions on
U.S. transactions. In addition, foreign securities exchange transactions may be
subject to difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets of the Fund
are uninvested and no return is earned thereon. The inability of the Fund to
make intended security purchases due to settlement problems could cause the Fund
to miss attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to the Fund
due to subsequent declines in value of the portfolio security or, if the Fund
has entered into a contract to sell the security could result in possible
liability to the purchaser. PMC will consider such difficulties when determining
the allocation of the Fund's assets, although PMC does not believe that such
difficulties will have a material adverse effect on the Fund's portfolio trading
activities.
Non-U.S. Withholding Taxes. The Fund's investment income or, in some
cases, capital gains from foreign issuers may be subject to foreign withholding
or other taxes, thereby reducing the Fund's net investment income and/or net
realized capital gains. See "Taxes."
Rule 144A Illiquid Securities
The Fund may invest up to 15% of its net assets in restricted
securities sold and offered pursuant to Rule 144A under the Securities Act of
1933, as amended (the "1933 Act"), that are illiquid. See "Restricted and
Illiquid Securities" in the Prospectus. Generally, a security may be considered
illiquid if the Fund is unable to dispose of such security within seven days at
approximately the price at which it values such security. Securities may also be
considered illiquid as a result of certain legal or contractual restriction on
resale. The sale of illiquid securities, if they can be sold at all, generally
will require more time and result in higher brokerage charges and other selling
expenses than will the sale of liquid securities, such as securities eligible
for trading on U.S. securities exchanges or in the over-the-counter markets.
Moreover, restricted securities (i.e., securities that would be required to be
registered prior to distribution to the general public), such as securities
B-5
<PAGE>
eligible for resale pursuant to Rule 144 ("144A securities"), which may be
illiquid for purposes of this limitation, often sell, if at all, at a price
lower than similar securities that are not subject to restrictions on resale.
With respect to liquidity determinations generally, the Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including Rule 144A securities are liquid or illiquid. The Board has
delegated the function of making day to day determinations of liquidity to PMC,
pursuant to guidelines reviewed by the Trustees. PMC takes into account a number
of factors in reaching liquidity decisions. These factors may include, but are
not limited to: (i) the frequency of trading in the security; (ii) the number of
dealers who make quotes for the security; (iii) the number of dealers who have
undertaken to make a market in the security; (iv) the number of other potential
purchasers; and (v) the nature of the security and how trading is effected
(e.g., the time needed to sell the security, how offers are solicited and the
mechanics of transfer). PMC will monitor the liquidity of securities in the
Fund's portfolio and report periodically on such decisions to the Trustees.
State securities laws may impose further limitations on the amount of
illiquid securities that the Fund may purchase.
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. The Fund will not invest in securities index options for speculative
purposes.
Currently, options on stock indices are traded only on national
securities exchanges and over-the-counter, both in the United States 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 or the Value Line
Composite Index in the U.S., the Nikkei in Japan or the FTSE 100 in the United
Kingdom. Index options may also be based on a narrower market 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
B-6
<PAGE>
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 order 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 may 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 any 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.
B-7
<PAGE>
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.
Forward Foreign Currency Transactions
The foreign currency transactions of the Fund may be conducted on a
spot, i.e. cash basis at the spot rate for purchasing or selling currency
prevailing in the foreign exchange market. The Fund also has authority to deal
in forward foreign currency exchange contracts involving currencies of the
different countries in which it will invest as a hedge against possible
variations in the foreign exchange rate between these currencies and the U.S.
dollar. This is accomplished through contractual agreements to purchase or sell
a specified currency at a specified future date and price set at the time of the
contract. The Fund's dealings in forward foreign currency contracts will be
limited to hedging either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the Fund accruing
in connection with the purchase and sale of its portfolio securities denominated
in foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the Fund will be engaged in
hedging activities when adverse exchange rate movements occur. The Fund may not
necessarily attempt to hedge all of its foreign portfolio positions and will
enter into such transactions only to the extent, if any, deemed appropriate by
PMC. The Fund will not enter into speculative forward foreign currency
contracts.
If the Fund enters into a forward contract to purchase foreign
currency, its custodian bank will segregate cash or high grade liquid debt
securities in a separate account of the Fund in an amount equal to the value of
the Fund's total assets committed to the consummation of such forward contract.
Those assets will be valued at market daily and if the value of the assets in
the separate account declines, additional cash or securities will be placed in
the accounts so that the value of the account will equal the amount of the
Fund's commitment with respect to such contracts.
Although the Fund has no current intention of doing so in the coming
year, the Fund may engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency, if PMC determines that there is a pattern of correlation
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<PAGE>
between the two currencies. Cross-hedging may also include entering into a
forward transaction involving two foreign currencies, using one foreign currency
as a proxy for the U.S. dollar to hedge against variations in the other foreign
currency, if PMC determines that there is a pattern of correlation between the
proxy currency and the U.S.
dollar.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The cost to the Fund of engaging in foreign currency transactions
varies with such factors as the currency involved, the size of the contract, the
length of the contract period and the market conditions then prevailing. Since
transactions in foreign currency and forward contracts are usually conducted on
a principal basis, no fees or commissions are involved. The Fund may close out a
forward position in a currency by selling the forward contract or entering into
an offsetting forward contract.
Options on Foreign Currencies
The Fund may purchase options on foreign currencies for hedging
purposes in a manner similar to that of transactions in forward contracts. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are denominated will reduce the dollar value of such securities, even
if their value in the foreign currency remains constant. In order to protect
against such decreases in the value of portfolio securities, the Fund may
purchase put options on the foreign currency. If the value of the currency
declines, the Fund will have the right to sell such currency for a fixed amount
of dollars which exceeds the market value of such currency. This would result in
a gain that may offset, in whole or in part, the negative effect of currency
depreciation on the value of the Fund's securities denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected
for those securities to be acquired, thereby increasing the cost of such
securities, the Fund may purchase call options on such currency. If the value of
such currency increased, the purchase of such call options would enable the Fund
to purchase currency for a fixed amount of dollars which is less than the market
value of such currency. Such a purchase would result in a gain that may offset,
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<PAGE>
at least partially, the effect of any currency related increase in the price of
securities the Fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the Fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the Fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
The Fund may close out its position in a currency option by either
selling the option it has purchased or entering into an offsetting option.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or currency exchange
rates, the Fund may purchase and sell various kinds of futures contracts, and
purchase and write (sell) 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 (such as U.S. Government securities), securities indices,
foreign currencies and other financial instruments and indices. The Fund will
engage in futures and related options transactions for hedging purposes. 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. Similarly, the
Fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The Fund can
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<PAGE>
purchase futures contracts on foreign currency to establish the price in U.S.
dollars of a security denominated in such currency that the Fund has acquired or
expects to acquire.
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. While futures contracts on securities or currency
will usually be liquidated in this manner, the Fund may instead make, or take,
delivery of the underlying securities or currency whenever it appears
economically advantageous to do so. A clearing corporation associated with the
exchange on which futures on securities or currency are traded guarantees that,
if still open, the sale or purchase will be performed on the settlement date.
The Fund will be required, in connection with transactions in futures
contracts and the writing of options on futures, to make margin deposits, which
will be held by the Fund's custodian for the benefit of the futures commission
merchant through whom the Fund engages in such futures contracts and options
transactions. In the case of futures contracts or options requiring the Fund to
purchase securities, the Fund must place cash or high-grade liquid debt
securities in a segregated account maintained by the custodian and marked to
market daily to cover such futures contracts and options.
Hedging Strategies. Hedging, by use of futures contracts, seeks to
establish with more certainty the effective price, rate of return and currency
exchange rate 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 or a decline in market prices or foreign
currency 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. Similarly, the Fund may sell futures
contracts in currency in which its portfolio securities are denominated or in
one currency to hedge against fluctuations in the value of securities
denominated in a different currency if there is an established historical
pattern of correlation between the two currencies. 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
B-11
<PAGE>
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, 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 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 series.
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.
B-12
<PAGE>
The Fund may use options on futures contracts for hedging purposes.
Other Considerations. As noted above, the Fund may engage in futures
and related options transactions only for hedging purposes. CFTC regulations
permit principals of an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), to engage in such transactions
for bona fide hedging (as defined in such regulations) and certain other limited
purposes 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 contracts
used for hedging purposes are substantially related to price fluctuations in
securities held by the Fund or which it expects to purchase. Except as stated
below, 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 (or the currency in which they are
denominated) that the Fund owns, or futures contracts will be purchased to
protect the Fund against an increase in the price of securities (or the currency
in which they are denominated) 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 denominated in
the related currency 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 futures contracts and premiums paid for options on futures
entered into for the purpose of seeking to increase total return (net of the
amount the positions are "in the money") would not exceed 5% of the market value
of the Fund's net assets. 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 Internal Revenue Code of 1986, as
amended (the "Code"), for maintaining its qualification as a regulated
investment company for federal income tax purposes.
B-13
<PAGE>
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 or currencies, 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, securities prices or currency exchange
rates 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.
Perfect correlation between the Fund's futures positions and portfolio
positions will be difficult to achieve because no futures contracts based on
foreign corporate equity securities are currently available. The only futures
contracts available to hedge the Fund's portfolio are various futures on U.S.
Government securities and foreign currencies, futures on a municipal securities
index and stock index futures. In addition, it is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of foreign
securities because currency movements impact the value of different securities
in differing degrees.
Repurchase Agreements
The Fund may enter into repurchase agreements with "primary dealers" in
U.S. Government securities and banks 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 associated with repurchase agreements 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
repurchase price. Another risk is that, in the event of bankruptcy of the
seller, the Fund could be delayed 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. See
"Repurchase Agreements" in the Prospectus.
B-14
<PAGE>
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"
(as defined in the 1940 Act) 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 1933 Act.
(5) Purchase or sell real estate, except that the Fund may (i) lease
office space for its own use, (ii) invest in securities of issuers that invest
in real estate or interests therein, (iii) invest in securities that are secured
by real estate or interests therein, (iv) purchase and sell mortgage-related
securities and (v) 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, a portion of an issue of
B-15
<PAGE>
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.
(8) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the Fund's total
assets, taken at market value, to be invested in the securities of such
issuer, or
(b) such purchase would at the time result in more than 10% of
the outstanding voting securities of such issuer being held by the
Fund.
In addition, although the Fund is not currently registered in Germany,
the following restrictions will apply, to the extent required, upon such
registration. If and so long as the Fund is registered in Germany, the following
investment restrictions will apply which may not be changed without the prior
approval of the Fund's shareholders. The Fund may not:
(i) invest in the securities of any other domestic or foreign
investment company or investment fund, except in connection with a plan of
merger or consolidation with or acquisition of substantially all the assets of
such other investment company or investment fund;
(ii) purchase or sell real estate, or any interest therein, and real
estate mortgage loans, except that the Fund may invest in securities of
corporate or governmental entities secured by real estate or marketable
interests therein or securities issued by companies (other than real estate
limited partnerships, real estate investment trusts and real estate funds) that
invest in real estate or interests therein;
B-16
<PAGE>
(iii) borrow money in amounts exceeding 10% of the Fund's total assets
(including the amount borrowed) taken at market value;
(iv) pledge, mortgage or hypothecate its assets in amounts exceeding
10% of the Fund's total assets taken at market value;
(v) purchase securities on margin or make short sales; or
(vi) redeem its securities in-kind.
It is the fundamental policy of the Fund not to concentrate its
investments in securities of companies in any particular industry. In the
opinion of the Commission, investments are concentrated in a particular industry
if such investments aggregate 25% or more of the Fund's total assets. The Fund's
policy does not apply to investments in U.S. Government securities.
The Fund does not intend to enter into any reverse repurchase
agreement, lend portfolio securities or invest in securities index put and call
warrants, as described in fundamental investment restrictions (2), (6) and (7)
above, during the coming 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 the Adviser 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 the 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, options, futures contracts and options on futures contracts.
(c) Purchase a security if, as a result, (i) more than 10% of the
Fund's total assets would be invested in securities of closed-end investment
companies, (ii) such purchase would result in more than 3% of the total
B-17
<PAGE>
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 total 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) Invest more than 5% of its total assets in the securities of any
issuer which, together with its predecessors, has been in operation for less
than three years.
(e) Invest more than 15% of its total assets in restricted securities,
including securities eligible for resale pursuant to Rule 144A under the 1933
Act.
(f) Invest for the purpose of exercising control over or management of
any company.
(g) Purchase warrants of any issuer, if, as a result of such purchases,
more than 5% of the value of the Fund's net assets would be invested in
warrants, whether or not listed on the New York Stock Exchange, the American
Stock Exchange or comparable international exchanges. 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.
(h) 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 the Adviser
or any investment management subsidiary of the Adviser individually owns
beneficially more than 0.5% and together own beneficially more than 5% of the
securities of such issuer.
(i) 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.
(j) Purchase any security which is illiquid, if more than 15% of the
net assets of the Fund, taken at market value, would be invested in such
securities. The Fund may not invest in repurchase agreements maturing in more
than seven days. The Fund currently intends to limit its investments in illiquid
securities to illiquid Rule 144A securities.
B-18
<PAGE>
(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.
(l) Invest in real estate limited partnerships.
2. 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.*, President and Director of The
Chairman of the Board, Pioneer Group, Inc. ("PGI");
President and Trustee Chairman and Director of Pioneering
Management Corporation ("PMC"); Chairman of
the Board and Chief Executive Officer of
Pioneer Winthrop Advisers ("PWA") since 1993;
Chairman of the Board of Pioneer Funds
Distributor, Inc. ("PFD"); Director of
Pioneering Services Corporation ("PSC") and
Pioneer Capital Corporation ("PCC");
President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp.
("PIC"), Pioneer International Corp.
("PIntl"), and Pioneer Metals & Technology,
Inc. ("PMT"); Chairman of the Board and
Director of Teberebie Goldfields Limited;
Chairman, President and Director of Pioneer
Goldfields Limited ("PGL"); Chairman of the
Supervisory Board of Pioneer Fonds Marketing
GmbH; and Chairman and Partner, Hale and Dorr
(counsel to the Fund).
RICHARD H. EGDAHL, M.D., Professor of Management, Boston
Trustee University School of Management;
53 Bay State Road Professor of Public Health,
Boston, Massachusetts Boston University School of Public Health; of
ProfessorSurgery, Boston University School of
Medicine and Boston University Health Policy
B-19
<PAGE>
Institute; Director, Boston University
Medical Center; Executive Vice President and
Vice Chairman of the Board, University
Hospital; Academic Vice President for Health
Affairs, Boston University; Director, Essex
Investment Management Company, Inc.
(investment adviser), Health Payment Review,
Inc. (health care containment software firm),
Mediplex Group, Inc. (nursing care facilities
firm), Peer Review Analysis, Inc. (health
care utilization management firm) and
Springer-Verlag New York, Inc. (publisher);
Honorary Director, Franciscan Children's
Hospital. Boston University Health Policy
Institute.
MARGARET B.W. GRAHAM, Manager of Research Operations, Xerox Palo
Trustee Alto Research Center, since September 1991;
The Keep Professor of Operations Management and
Post Office Box 110 Management of Technology, Boston University
Little Deer Isle, Maine School of Management ("BUSM"), since 1989;
Associate Dean, BUSM, 1988 to 1990 and
previously, Associate Professor, Department
of Operations Management, BUSM.
JOHN W. KENDRICK, Professor Emeritus, George
Trustee Washington University; Economic
6363 Waterway Drive Consultant and Director, American
Falls Church, Virginia Productivity and Quality Center.
MARGUERITE A. PIRET, President, Newbury, Piret & Company,
Trustee Inc. (a merchant banking firm).
One Boston Place,
Suite 2635
Boston, Massachusetts.
DAVID D. TRIPPLE*, Executive Vice President and
Trustee and Executive Director of PGI and PWA (since
Vice President 1993); Director of PFD,
since 1989; Director of PCC and Pioneer SBIC
Corporation; President (since 1993), Director
and Chief Investment Officer of PMC.
B-19
<PAGE>
STEPHEN K. WEST, Partner, Sullivan & Cromwell (a law
Trustee firm).
125 Broad Street
New York, New York
JOHN WINTHROP, President, John Winthrop & Co., Inc.
Trustee (a private investment firm);
One North Adgers Wharf Director of NUI Corp., and Trustee
Charleston, South Carolina of Alliance Capital Reserves, Alliance
Government Reserves and Alliance Tax Exempt
Reserves.
NORMAN KURLAND, Senior Vice President of PMC since
Vice President 1993; Vice President of PMC from
1990 to 1993; International
Portfolio Manager and
Analyst, Keystone Custodian
Funds from 1987 to 1990.
WILLIAM H. KEOUGH, Senior Vice President, Chief
Treasurer Financial Officer and Treasurer of PGI
and Treasurer of PFD, PMC, PSC, PCC,
PPC, PIC, PIntl, PMT, PWA and Pioneer
SBIC Corporation.
JOSEPH P. BARRI, Secretary of PGI, PMC, PCC, PPC,
Secretary PIC, PIntl, PMT and PWA; Clerk
of PFD and PSC and Partner, Hale and Dorr
(counsel to the Fund).
ROBERT NAULT, General Counsel of PGI since 1995; formerly
Assistant Secretary of Hale and Dorr (counsel to the Fund) where
he most recently served as a junior partner.
ERIC RECKARD, Manager of Fund Accounting
Assistant Treasurer and Compliance of PMC since
May, 1994; Manager of Auditing and Business
Analysis of PGI prior to May, 1994
Each of the above (except Norman Kurland) is also an officer and/or
Trustee of the other Pioneer mutual funds. The Fund's Declaration 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.
B-21
<PAGE>
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
<TABLE>
<CAPTION>
Investment Principal
Fund Name Adviser Underwriter
<S> <C> <C>
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Three PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Winthrop Real Estate Note 1 PFD
Investment Fund
Pioneer Europe Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Short-Term Income Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double PMC PFD
Tax-Free Fund
Pioneer Cash Reserves Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Tax-Free Money Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 2
Pioneer Variable Contracts Trust PMC Note 3
-------------
<FN>
Note 1 Pioneer Winthrop Advisers is the investment adviser for this fund.
Note 2 This is a closed-end fund and it is underwritten by Mellon Bank.
Note 3 This is a series of seven 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.
</FN>
</TABLE>
B-22
<PAGE>
PMC also manages the investments of certain institutional private
accounts. All of the outstanding capital stock of PMC and PSC is owned by PGI, a
Delaware corporation. All of the capital stock of PFD is owned by PMC. Messrs.
Cogan, Tripple, Keough, Nault and Barri, officers and/or Trustees of the Fund,
are also officers and/or directors of PFD, PMC, PSC (except Mr. Tripple) and
PGI. 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 as of the date of this
Statement of Additional Information, except Mr. Cogan who then owned
approximately 15% of such shares.
The Fund pays no salaries or compensation to any of its officers. The
Fund pays an annual trustees' fee of $500 to each Trustee who is not affiliated
with PMC, PFD or PSC as well as an annual fee of $200 to each of the Trustees
who is a member of the Fund's Audit Committee, except for the Chairman of such
Committee, who receives an annual fee of $250. The Fund also pays an annual
trustees' fee of $500 plus expenses to each Trustee affiliated with PMC, PSC or
PFD.
<TABLE>
<CAPTION>
Total Compensa-
tion from the
Pension or Fund and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Director From the Fund Accrued of Mutual Funds**
<S> <C> <C> <C>
John F. Cogan, Jr. $208* $0 $ 9,000*
Richard H. Egdahl, M.D. 208 0 55,650
Margaret B.W. Graham 208 0 55,650
John W. Kendrick 208 0 55,650
Marguerite A. Piret 313 0 66,650
David D. Tripple 208* 0 9,000*
Stephen K. West 292 0 63,650
John Winthrop 292 0 63,650
---- --- -------
Totals $1,937.00 $0 $378,900
======== =======
<FN>
--------
* PMC fully reimbursed the Fund and the other funds in the Pioneer Family of
Mutual Funds for compensation paid to Messrs. Cogan and Tripple.
** For the calendar year ended December 31, 1994.
</FN>
</TABLE>
B-23
<PAGE>
Any such fees and expenses paid to affiliates or interested persons of
PMC, PFD or PSC are reimbursed to the Fund under its Management Contract. As of
the date of this Statement of Additional Information, the Trustees and officers
of the Fund owned beneficially in the aggregate less than 1% of the outstanding
shares of the Fund. As of such date, Merrill Lynch Pierce, Fenner & Smith Inc.,
Mutual Fund Operations, 4800 Deer Lake Drive East 3rd FL, Jacksonville, FL
32246-6484 owned 7.28% of the outstanding shares (91,096 shares) of the Fund.
3. INVESTMENT ADVISER
As stated in the Prospectus, PMC, 60 State Street, Boston,
Massachusetts, serves as the Fund's investment adviser. The Fund's management
contract with PMC expires initially on June 23, 1996, but it is renewable
annually after such date 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 sixty days' written
notice.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the rate of 1.25% per annum of the Fund's
average daily net assets. The fee is normally computed daily and paid monthly.
PMC has voluntarily agreed not to impose a portion of its management fee and to
make other arrangements, if necessary, to limit certain other expenses of the
Fund to the extent required to limit total Class A expenses to 2.25% of the
average daily net assets attributable to the Class A shares; the Fund-wide
expenses attributable to the Class B shares will be reduced only to the extent
such expenses are reduced for the Class A shares. This agreement is voluntary
and temporary and may be revised or terminated by PMC at any time. For the
period June 23, 1994 (commencement of operations) through November 30, 1994, the
Fund paid no management fees. The Fund would have incurred management fees
payable to PMC of $84,871 had the fee reduction agreement not been in place.
PMC has agreed that if in any fiscal year the aggregate expenses of the
Fund exceed the expense limitation established by any state having jurisdiction
over the Fund, PMC will reduce its management fee to the extent required by
state law. The most restrictive state expense limit currently applicable to the
Fund provides that the Fund's expenses in any fiscal year may not exceed 2.5% of
the first $30 million of average daily net assets, 2.0% of the next $70 million
B-24
<PAGE>
of such assets and 1.5% of such assets in excess of $100 million. In the past,
the relevant state has granted relief for emerging markets funds, such as the
Fund, because of their higher operations costs, and the Fund expects to seek
such relief to the extent it becomes necessary to do so.
4. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter in connection with the
continuous offering of the shares of the Fund pursuant to an Underwriting
Agreement, dated June 23, 1994. The Trustees who were not "interested persons"
(as defined in the 1940 Act) of the Fund approved the Underwriting Agreement,
which will continue in effect from year to year, if annually approved by the
Trustees, in conjunction with the continuance of the Plans of Distribution. See
"Distribution Plans" below. The Underwriting Agreement provides that PFD will
bear certain distribution expenses not borne by the Fund. During the period June
23, 1994 (commencement of operation) through November 30, 1994, net underwriting
commissions earned by PFD were approximately $12,044. Commissions reallowed to
dealers during such period were approximately $536,877.
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. 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, state and foreign securities law. See
"Distribution Plans" below.
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 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 a bona fide reorganization,
statutory merger or other acquisition of portfolio securities provided (i) the
securities meet the investment objectives and policies of the Fund; (ii) the
securities are acquired by the Fund for investment and not for resale; (ii) the
securities are not restricted as to transfer either by law or liquidity of
market; and (iv) the securities have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a listing on the
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American Stock exchange or the New York Stock Exchange or by quotation under the
Nasdaq National System. An exchange of securities for Fund shares will generally
be a taxable transaction to the shareholder.
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.
5. DISTRIBUTION PLANS
The Fund has adopted a plan of distribution pursuant to Rule 12b-1
promulgated by the Commission under the 1940 Act with respect to Class A shares
(the "Class A Plan") and a plan of distribution with respect to Class B shares
(the "Class B Plan") (together, the "Plans").
Class A Plan
Pursuant to the Class A Plan the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of the Class A Plan 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 daily at a rate which 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 shall pay PFD, as the Fund's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Fund's average daily net assets attributable to Class B
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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 sales 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 consideration for 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 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. Dealers will become eligible for additional service fees with
respect to such shares commencing in the thirteenth month following purchase.
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 to 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.)
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
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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)
(the "Qualified Trustees"), 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 or Classes affected thereby, and
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). In the Trustees' quarterly review of the Plans, they will
consider the Plans' continued appropriateness and the level of compensation they
provide.
During the period June 23, 1994 (commencement of operations) through
November 30, 1994, the Fund incurred total distribution fees of $0 and $2,400
pursuant to the Class A Plan and the Class B Plan, respectively. Distribution
fees were paid by the Fund to PFD in reimbursement of expenses related to
servicing of shareholder accounts and to compensate dealers and sales personnel.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with Pioneering Services Corporation ("PSC"),
60 State Street, Boston, Massachusetts, 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
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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 an annual fee of $20.83 per Class A and Class B
shareholder account from the Fund 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.
7. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109 (the "Custodian"), is the custodian of the Fund's assets. The Custodian's
responsibilities include safekeeping and controlling the Fund's cash and
securities in the United States 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 in the foreign countries (the
"Subcustodians"). The Custodian also provides fund accounting, bookkeeping and
pricing assistance to the Fund and assistance in arranging for forward currency
exchange contracts as described above under "Investment Policies, Restrictions
and Risk Factors."
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 or any of the Subcustodians, deposit cash in the
Custodian or any Subcustodian and deal with the Custodian or any of the
Subcustodians 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 United States or in recognized central
depositories in foreign countries. In selecting Brown Brothers Harriman & Co.
and its network of foreign subcustodians as the custodians for foreign countries
securities, the Board of Trustees made certain determinations required by Rule
17f-5 promulgated under the 1940 Act. The Trustees annually review and approve
the continuations of its international subcustodian arrangements.
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8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One International Place, Boston, Massachusetts
02110, is the Fund's independent public accountant, providing audit services,
tax return review, and assistance and consultation with respect to the
preparation of filings with the Commission.
9. 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. 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 United States) and are generally higher
than in the United States.
PMC may select broker-dealers which provide brokerage and/or research
services to the Fund and/or other investment companies or accounts managed by
PMC. 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 broker-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. Management believes that no exact dollar value can be calculated for
such services.
The research received from broker-dealers may be useful to PMC in
rendering investment management services to the Fund as well as to other
investment companies or accounts managed by PMC, although not all of such
research may be useful to the Fund. Conversely, such information provided by
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brokers or dealers who have executed transaction orders on behalf of such other
accounts may be useful to PMC in carrying out its 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 was 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. 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. For the period June
23, 1994 (commencement of operations) through November 30, 1994, the Fund paid
or accrued aggregate brokerage commissions of $136,329.
In addition to the Fund, PMC acts as investment adviser to the other
Pioneer Funds and certain 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 company 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 fund in the Pioneer group 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
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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.
The Trustees periodically review PMC's performance of its
responsibilities in connection with portfolio transactions on behalf of the
Fund.
10. 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. If the Fund meets all
such requirements and distributes to its shareholders at least annually all
investment company taxable income and net capital gain, if any, which it
receives, 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, futures and forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "90% income test"), limit
its gains from the sale of stock, securities and certain other investments held
for less than three months to less than 30% of its annual gross income (the "30%
test") and satisfy certain annual distribution and quarterly diversification
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.
Dividends from net investment income, net short-term capital gains, and
certain net foreign exchange gains are taxable as ordinary income, whether
received in cash or in additional shares. Dividends from net long-term capital
gains, if any, whether received in cash or additional shares, are taxable to the
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Fund's shareholders as long-term capital gains for federal income tax purposes
without regard to the length of time shares of the Fund have been held. The
federal income tax status of all distributions will be reported to shareholders
annually.
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, certain options and futures contracts relating to foreign currency,
forward foreign currency contracts, 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. Any such transactions that are not directly
related to the Fund's investment in stock or securities may increase the amount
of gain it is deemed to recognize from the sale of certain investments held for
less than 3 months for purposes of the 30% test and may under future Treasury
regulations produce income not among the types of "qualifying income" for
purposes of 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 overall ordinary loss for such year would not
be deductible by the Fund or its shareholders in future years.
If the Fund acquires the stock of certain non-U.S. corporations that
receive at least 75% of their annual gross income from passive sources (such as
sources that produce interest, dividend, rental, royalty or capital gain income)
or hold at least 50% of their assets in such passive sources ("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. In certain cases, an election may be available that
would ameliorate these adverse tax consequences. The Fund may limit its
investments in passive foreign investment companies and will undertake
appropriate actions, including consideration of any available elections, to
limit its tax liability, if any, or take other defensive actions with respect to
such investments.
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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 as well as issuers 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 ensure that it distributes
sufficient income to preserve its status as a regulated investment company and
to avoid becoming subject to federal income or excise tax.
Since, at the time of an investor's purchase of Fund shares, a portion
of the per share net asset value by which the purchase price is determined may
be represented by realized or unrealized appreciation in the Fund's portfolio or
undistributed taxable income of the Fund, subsequent distributions (or portions
thereof) on such shares may be taxable to such investor even if the net asset
value of his shares is, as a result of the distributions, reduced below his cost
for such shares and the distributions (or portions thereof) in reality represent
a return of a portion of his investment.
Any loss realized by a shareholder upon the redemption of shares with a
tax holding period at the time of redemption 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, the sales charge paid on
such shares is not included in their tax basis under the Code if a reinvestment
occurs, 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 certain redemptions may be disallowed under
"wash sale" rules in the event of other investments in the Fund within 30 days
before or after a redemption or other sale of shares.
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For federal income tax purposes, the Fund is permitted to carry forward
a net realized capital loss in any year to offset realized capital gains, if
any, during the eight years following the year of the loss. To the extent
subsequent net realized capital gains are offset by such losses, they would not
result in federal income tax liability to the Fund and are not expected to be
distributed as such to shareholders.
The Fund's dividends normally will not qualify for the 70%
dividends-received deduction available to corporations, because the Fund does
not expect to receive dividends from U.S domestic corporations.
The Fund may be subject to withholding and other taxes imposed by
foreign countries with respect to its investments in those countries. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. If more than 50% of the Fund's total assets at the close of any taxable
year consists of stock or securities of foreign corporations, the Fund may elect
to pass through to shareholders their pro rata shares of qualified foreign taxes
paid by the Fund, with the result that shareholders would be required to include
such taxes in their gross incomes (in addition to dividends actually received)
and would treat such taxes as foreign taxes paid by them, for which they may be
entitled to a tax deduction or credit on their own tax returns, subject to
certain limitations under the Code.
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.
Provided that the Fund qualifies as a regulated investment company
("RIC") under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes. Provided that the Fund qualifies as a RIC
and meets certain income source requirements under Delaware Law, the Fund should
also not be required to pay Delaware corporation income tax.
Options written or purchased and futures contracts entered into by the
Fund on certain securities, securities indices and foreign currencies, as well
as certain foreign currency forward contracts, may cause the Fund to recognize
gains or losses from marking-to-market at the end of its taxable year even
though such options may not have lapsed, been closed out, or exercised or such
futures or forward contracts may not have been closed out or disposed of and may
affect the characterization as long-term or short-term of some capital gains and
losses realized by the Fund. Certain options, futures and forward contracts on
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foreign currency may be subject to Section 988, described above, and accordingly
produce ordinary income or loss. Losses on certain options, futures or forward
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, futures or forward 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. The tax rules applicable to options, futures,
forward contracts and straddles may affect the amount, timing and character of
the Fund's income and loss and hence of distributions to shareholders. Certain
tax elections may be available that would enable the Fund to ameliorate some
adverse effects of the tax rules described in this paragraph.
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 W-9 Forms, that their Social Security or other Taxpayer Identification
Number is correct 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.
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 and U.S. domestic corporations, partnerships, trusts or estates, and
who are subject to U.S. federal income tax. The description does not address
special tax rules applicable to certain classes of investors, such as tax-exempt
entities, insurance companies, and financial institutions. Investors other than
U.S. persons may be subject to different U.S. tax treatment, including a
possible 30% U.S. withholding tax (or withholding tax at a lower treaty rate) on
dividends treated as ordinary income. Shareholders should consult their own tax
advisers on these matters and on state, local and other applicable tax laws.
11. DESCRIPTION OF SHARES
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The Fund's Agreement and Declaration of Trust permits the Board of
Trustees to authorize the issuance of an unlimited number of full and fractional
shares of beneficial interest (without par value) 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 Agreement and Declaration 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 two
classes of shares of the Fund, Class A shares and Class B 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
meetings of shareholders. Although Trustees are not elected annually by the
shareholders, shareholders have, under certain circumstances, the right to
remove one or more Trustees. No amendment adversely affecting the rights of
shareholders may be made to the Fund's Agreement and Declaration 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
Trust, except as stated below.
12. CERTAIN LIABILITIES
As a Delaware business trust, the Fund's operations are governed by its
Agreement and Declaration of Trust dated March 23, 1994. A copy of the Fund's
Certificate of Trust, also dated March 23, 1994, is on file with the Office of
the Secretary of State of the State of Delaware. 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 Trust's Agreement and Declaration of Trust
expressly provides that the Trust has been organized under the Delaware Act and
that the Agreement and Declaration of Trust is to be governed by Delaware law.
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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 Agreement and 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 the 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 Agreement and 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 Agreement and 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.
13. 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 (currently 4:00 p.m., Eastern Time) on each
day on which the New York Stock Exchange (the "Exchange") is open for 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,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
B-38
<PAGE>
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
become effective 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 it by the number of
outstanding shares of that class. For 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 sales charge. Class B shares are
offered at net asset value without the imposition of an initial sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from Class A
or Class B 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 checks of $50 or more
will be sent to the applicant, or any person designated by him, monthly or
quarterly. A designation of a third party to receive checks requires an
acceptable signature guarantee. Withdrawals from Class B shares accounts are
limited to 10% of the value of the account at the time the plan is implemented.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the Plan account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
B-39
<PAGE>
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 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.
15. LETTER OF INTENTION
Purchases in the Fund 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 Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Fund
Class A shares of $50,000 over a 13-month period would be charged at the 4.50%
sales charge rate with respect to all purchases during that period. Should the
amount actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all his Class A shares in the Fund and all other Pioneer Funds, except
Pioneer Money Market Trust's Class A Shares, held of record as of the date of
his Letter of Intention as a credit toward determining the applicable scale of
sales charge for the Class A shares to be purchased under the Letter of
Intention.
The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment in the Letter of Intention.
A Letter of Intention is not a binding obligation upon the investor to purchase,
or the Fund to sell, the full amount indicated and the investor should read the
provisions of the Letter of Intention contained in the Account Application
carefully before signing.
B-40
<PAGE>
16. INVESTMENT RESULTS
One of the primary methods used to measure the performance of a class
of the Fund 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.
The Fund's average annual total return quotations for each class of its
shares as that information may appear in the Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the Commission.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A and Class B shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in that class 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 $1,000, less the maximum
sales load of $57.50 for Class A shares or the deduction of the
CDSC for Class B shares at the end of the period.
T = average annual total return
B-41
<PAGE>
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, it is assumed that the maximum sales
charge of 5.75% was deducted from the initial investment and that 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 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 class' mean
account size.
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, 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 Europe Australia Far East Index ("EAFE"),
an unmanaged index of international stock markets, Morgan Stanley Capital
International USA Index, an unmanaged index of U.S. domestic stock markets, or
other appropriate indices of Morgan Stanley Capital International ("MSCI"); the
Standard & Poor's 500 Stock Index ("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 New York Stock Exchange.
In addition, the performance of the classes of the Fund may be compared
to alternative investment or savings vehicles and/or to indexes 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, Money Magazine, the New York Times, Smart Money, USA Today, U.S. News
B-42
<PAGE>
and World Report, The Wall Street Journal 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.
The Fund may also present, from time to time, historical information
depicting the value of a hypothetical account in one or more classes of the Fund
since the Fund's inception.
In presenting investment results, the Fund may also include references
to certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets. The total return of
the Class A shares and the Class B shares of the Fund for the period June 23,
1994 (commencement of operations) through November 30, 1994 were -2.48% and
-2.08%, respectively, assuming no payment of a sales charge. Assuming payment of
the maximum sales charge, the total return of the Class A shares and the Class B
shares of the Fund for the same period would have been -7.69% and -6.38%,
respectively. Assuming payment of the maximum sales charge and that the fee
reduction agreement had not been in place, the total return of the Class A
shares and the Class B shares of the Fund for the same period would have been
lower than the above total return figures.
Automated Information Line
FactFone, 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;
B-43
<PAGE>
o annualized 30-day yields on Pioneer's fixed income 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
Securities and Exchange Commission.
In addition, by using a personal identification number (PIN),
shareholders may access their account balance and last three transactions and
may order a duplicate statement.
All performance numbers communicated through FactFone 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 and Class B shares (except for
Pioneer money market funds, which seek a stable $1.00 share price) will also
vary and may be worth more or less at redemption than their original cost.
17. FINANCIAL STATEMENTS
The Fund's Annual Report dated November 30, 1994 is incorporated by
reference into this Statement of Additional Information in reliance upon the
report of Arthur Andersen LLP, independent public accountants, as expert. A copy
of the Fund's Annual Report may be obtained without charge by calling
Shareholder Services at 1-800-225-6292 or by written request to the Fund at 60
State Street, Boston, Massachusetts 02109.
B-44
<PAGE>
APPENDIX A
DESCRIPTION OF BOND RATINGS
The rating systems described herein are believed to be the most recent
ratings systems available from Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group 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.
Moody's Investors Service, Inc.
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.
1A
<PAGE>
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.
Unrated: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or
issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances
arise, the effects of which preclude satisfactory analysis; if there is no
longer available reasonable up-to-date data to permit a judgment to be formed;
if a bond is called for redemption; or for other reasons.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's
believe possess the strongest investment attributes are designated by the
symbols Aa1, A1, Baa1 and B1.
2A
<PAGE>
Standard & Poor's Ratings Group1
AAA: Bonds rated AAA have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher rated categories.
BB, B, CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties of major risk exposures to adverse
conditions.
D: Bonds rated D are in payment default. The D rating category is used
when interest payments or principal payments 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.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
Unrated: Indicates that no public rating has been requested, that there
is insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligations as a matter of policy.
3A
<PAGE>
APPENDIX B
ADDITIONAL GENERAL ECONOMIC INFORMATION
Market Capitalization
According to data as of December 31, 1994 supplied by Morgan Stanley
Capital International, capitalization of foreign equity markets has increased
dramatically since 1972. Investors not investing in stocks traded on non-U.S.
markets miss over 60% of the equity investment opportunities available
worldwide.
Market Capitalization
Year Non-U.S. U.S.
1974 44% 56%
1984 46% 54%
1994 64% 36%
2004* 89% 11%
-----------
* Projection calculated by PFD based on the historical rate of increase of
non-U.S. market capitalization as supplied by data from Morgan Stanley
Capital International.
Foreign and U.S. Market Performance
Overall, the performance of foreign securities markets, such as those in
the United Kingdom, Germany, Japan and France, has outpaced that of U.S.
securities markets. Although prices of international stocks fluctuate, they have
achieved a remarkably consistent long-term performance record. Of course, there
is no guarantee they will continue to perform as well as they have in the past.
1B
<PAGE>
APPENDIX B
OTHER PIONEER INFORMATION
The Pioneer family of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest, most respected and
successful money managers in the United States.
As of December 31, 1994, PMC employed a professional investment staff
of 46, with a combined average of 14 years' experience in the financial services
industry.
At December 31, 1994, there were 591,192 non-retirement shareholder
acccounts and 337,577 retirement shareholder accounts in Pioneer's funds. Total
assets for all Pioneer Funds were $10,038,000,000 representing a total of
928,769 shareholder accounts.
B2
<PAGE>
[Pioneer Logo]
Pioneer
Emerging
Markets
Fund
ANNUAL REPORT
NOVEMBER 30, 1994
<PAGE>
PIONEER EMERGING MARKETS FUND
DEAR SHAREOWNERS,
Welcome to the first annual report for Pioneer Emerging Markets Fund. This
report reviews the Fund's activities from its inception on June 23, 1994,
through the close of its fiscal year on November 30, 1994. We are pleased you
have selected this Fund as a way to participate in the dynamic growth of the
world's developing markets.
Fund Is Designed to Seek Long-Term Growth
Pioneer Emerging Markets Fund's objective is to seek long-term capital
appreciation by investing in stocks of companies located, or doing business, in
emerging nations around the world. Your Fund's management has the ability to
invest in developing nations where our research analysts uncover opportunities
we think will translate into rewarding growth over time. Of course,
participating in developing financial markets brings some risks you usually
don't find in mature markets such as the United States or Japan, for example. In
emerging markets, you can encounter political instability, changing securities
regulations, currency fluctuations, and periods of market illiquidity. However,
we think the long-term growth potential these markets offer will prove to be
worth the short-term volatility you should expect.
The past two years were an extraordinary time for emerging
markets, particularly in Latin America and the Pacific Basin. Nations in these
regions began to compete in earnest for foreign investment capital to fuel their
economic and social construction and expansion. A global trend emerged
--developing countries started to deregulate and privatize businesses. They also
changed securities regulations and tax laws that previously had penalized
foreign investors. As a result, investment capital flooded into developing
countries --much for the first time -- and stock prices in most emerging markets
soared to record high levels in late 1993 and January 1994.
Beginning in February 1994, however, stock prices in developing countries
dropped sharply in response to rising interest rates in the United States.
Investors from around the globe began to retrieve money they had invested in
developing countries during 1993, when historically low interest rates in the
United States and prolonged economic difficulties in Europe and Japan had
prompted them to look to newer arenas for fast-paced growth and market returns.
During Pioneer Emerging Markets Fund's first five months, stock markets in
emerging nations struggled to recover from the sharp price declines they had
experienced early in 1994.
The Fund's performance reflected the overall downward movement in emerging stock
markets. We report the following results for the period from June 23 through
November 30, 1994:
o Class A shares -- Net asset value was $12.24 per share on November 30, down
from $12.50 on June 23. The change in share price translates into a total return
of -2.08% at net asset value for the abbreviated fiscal year. If you paid the
maximum 5.75% sales charge on June 23, total return was -7.69%.
o Class B shares -- Net asset value closed the period at $12.19 per share,
versus $12.50 on June 23. If you held shares throughout the period, total return
was -2.48%. If you redeemed shares and paid the maximum 4.0% contingent deferred
sales charge (CDSC) on November 30, total return would have been -6.38%.
Building the Portfolio
Country analysis played an important role in building the Fund's portfolio over
the past few months, and will continue to be a key element of the Fund's
strategy going forward. In general, we mixed the Fund's investments among the
most- and least-developed emerging nations to help balance growth and stability.
Your management took advantage of Pioneer's global research capabilities and
on-site analysts to make investments in India and the now apartheid-free South
Africa. Both offer new government initiatives to spur economic growth and
encourage foreign investment. While South Africa has traveled further down the
path to economic development (thanks to its somewhat more sophisticated
workforce), both countries offer huge potential demand for basic goods and
services, along with large capacity for manufacturing. We think Fund shareowners
ultimately will benefit from the Fund's early investment in these two nations.
Elsewhere, we are attracted by Thailand's strong growth in gross domestic
product (GDP) and its transition to a manufacturer of more sophisticated
products. Hong Kong continues to play its role as the most sophisticated market
in Asia, outside of Japan. we Korea's fast-paced economic growth continues, and
our research indicates that this Asian country has additional aggressive growth
ahead. The accompanying chart shows the Fund's geographical distribution at the
close of the fiscal year.
<PAGE>
Geographical Distribution
(as of November 30, 1994)
[The table below was represented as a graph in the printed material]
Argentina 3%
Chile 2%
China 1%
Colombia 5%
Hong Kong 7%
India 9%
Indonesia 8%
Korea 7%
Malaysia 4%
Mexico 6%
Peru 2%
Phillipines 2%
South Africa 7%
Taiwan 4%
Thailand 9%
Careful Stock Selection
To your Fund's management, recent lower prices in emerging markets translated
into many excellent opportunities to buy appealing stocks at bargain prices. By
November 30, 46% of the Fund's portfolio had been invested in local shares of
companies located, or doing business, in nine countries. An additional 18% of
the portfolio was invested in Global Depositary Receipts (GDRs) of companies
based or involved in five emerging markets. GDRs trade in lieu of actual stock
certificates, which are held by custodians in London or Luxembourg. As a result,
GDRs can be easier to buy and sell and so may provide more liquidity than direct
investments in some local markets. They also allow the Fund to avoid currency
risk during settlement periods. GDR holders participate in the price movements
of the underlying stock, receive all the dividends and voting rights accorded to
direct shareholders, and are not subject to local capital gains taxes.
As with most new funds, your Fund's cash position was relatively high over the
past months and accounted for 24% of the portfolio on November 30. We expect to
put this money to work in long-term investments in 1995 as the outlook for
equity returns improves. In the meantime, your management has been selecting
mostly U.S. dollar-denominated short-term securities, which contributed some
stability to the portfolio over the past months.
In many emerging nations, the first order of business is to
update or introduce basic services such as telecommunications and
transportation. We selected several stocks in these groups that meet our
criteria for high-quality and good value. These include two of the Fund's
largest holdings, Telex Chile and Korea Mobile Telecom. Infrastructure growth
should translate into increasing demand for basic industrial materials. To take
advantage of this trend, the Fund's portfolio includes Cementos Paz del Rio
(Colombia).
Given the global trend toward rising interest rates, your Fund's management
tended to avoid companies whose growth or earnings are sensitive to changes in
interest rates. As a result, the Fund has relatively few holdings in the
financial industry (banks and insurance companies) and real estate-oriented
enterprises. An exception is Korea Exchange Bank, which is appealing for its low
price-to-earnings ratio and strong growth prospects. Your Fund's management also
limited the portfolio's exposure to utilities, which generally are still subject
to heavy regulation, in addition to being sensitive to changing interest rates.
Looking Ahead
As we move into Pioneer Emerging Markets Fund's first full fiscal year, we see
many opportunities for investors to capitalize on burgeoning economic growth and
market development. Important trends in many emerging markets -- political
reforms, privatization of government-owned enterprises, growth of free markets
-- continue to gain momentum. Economic growth in emerging nations has outpaced
that of more developed countries, including the United States, in recent years
and is on track to do the same in 1994 and 1995. While it is inevitable that
such rapid progress will occasionally encounter setbacks, as we saw in 1994, we
are excited by the long-term opportunities that should arise as smaller nations
build their futures. Importantly, we also believe shareowners can capture true
value and growth potential in these new markets.
Please read on through the following pages, which contain the Fund's audited
portfolio holdings and financial statements as of November 30, 1994. If you have
any questions about your investment in Pioneer Emerging Markets Fund, please
contact your investment representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Emerging Markets Fund
January 10, 1995
2
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
November 30, 1994
<TABLE>
<CAPTION>
Principal Market
Amount Value
-------------- --------------
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS--2.6%
380,000 United Micro Electronics CNV Bond, 1.25%, due 06/08/04............................. $ 548,150
--------------
TOTAL CONVERTIBLE CORPORATE BONDS (Cost $606,000) $ 548,150
--------------
COMMON STOCKS--71.7%
Shares BASIC INDUSTRIES--8.5%
--------------
Chemicals--1.7%
200,000 PT Unggul Indah Corp............................................................... $ 275,412
77,000 Tuntex Co. Ltd..................................................................... 98,346
-------------
$ 373,758
-------------
Forest Products--1.0%
46,000 Land &General Holdings............................................................. $ 212,405
-------------
Iron &Steel--1.9%
62,000 Maruichi Malaysia Steel Tube....................................................... $ 179,534
86,000 Sahaviriya Steel Industry*......................................................... 219,681
-------------
$ 399,215
-------------
Metals & Mining--1.1%
78,000 PT International Nickel Indonesia.................................................. $ 229,143
-------------
Electrical Equipment--2.8%
450,000 Voltex Holdings Ltd. .............................................................. $ 240,000
20,000 Yageo Corp. GDR.................................................................... 365,000
-------------
$ 605,000
-------------
TOTAL BASIC INDUSTRIES $1,819,521
-------------
CAPITAL GOODS--1.6%
Construction & Engineering--1.6%
980,000 International Pipe Ltd. ........................................................... $ 126,716
42,000 United Engineers................................................................... 221,874
-------------
$ 348,590
-------------
TOTAL CAPITAL GOODS $ 348,590
-------------
CONSUMER DURABLES--4.3%
Consumer Durables--1.0%
40,000 Jugos Del Valle S.A.-Series B...................................................... $ 221,348
-------------
Motor Vehicles--3.3%
50,000 Mirgor Sacifia -ADR................................................................ $ 400,000
282,000 Sime Darby Hong Kong Ltd. ......................................................... 302,644
-------------
$ 702,644
-------------
TOTAL CONSUMER DURABLES $ 923,992
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
November 30, 1994 (continued)
<TABLE>
<CAPTION>
Market
Shares Value
-------------- --------------
<C> <S> <C>
CONSUMER NON-DURABLES--16.3%
Agriculture & Food Manufacturing--4.0%
48,000 Charoen Pokphand Feedmill Co. Ltd................................................... $ 337,185
128,000 Premier Group Holdings Ltd.......................................................... 156,703
15,300 Tiger Oats Ltd...................................................................... 178,036
1,080 Tong Yang Confectionery Co.......................................................... 43,222
248,400 Victorias Milling Co. Inc........................................................... 138,000
-------------
$ 853,146
-------------
Textiles/Clothes--10.3%
382,800 Asia Fiber Co. Ltd.................................................................. $ 355,230
20,000 Garden Silk Mills Ltd. GDR.......................................................... 202,600
14,500 JCT Ltd. GDR........................................................................ 246,572
260,000 PT Indosepamas Anggun............................................................... 507,218
125,000 Sanghi Polyesters Ltd. GDR.......................................................... 703,750
2,400,000 Top Form International Ltd. 176,885
-------------
$2,192,255
-------------
Retail General--0.8%
71,000 Pick 'N Pay Stores Ltd. $ 170,400
-------------
Wholesale Special Line--0.8%
861,000 Goldlion Holdings Ltd $ 173,673
-------------
TOTAL CONSUMER NON-DURABLES $3,483,074
-------------
ENERGY--3.8%
Oil Refining--2.6%
25,000 Engen Ltd........................................................................... $ 206,061
18,300 Yukong Ltd. GDR..................................................................... 347,700
-------------
$ 553,761
-------------
Oil & Gas Extraction--1.2%
30,000 Capex S.A.*......................................................................... $ 259,669
-------------
TOTAL ENERGY $ 813,430
-------------
FINANCIAL--8.2%
Commercial Banks--7.5%
24,500 Banco Wiese Ltd. ADR*............................................................... $ 483,875
34,000 Grupo Financiero Banamex Class L.................................................... 227,756
44,000 Korea Exchange Bank*................................................................ 559,275
260,000 Siam City Bank Ltd.................................................................. 326,887
-------------
$1,597,793
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
November 30, 1994 (continued)
<TABLE>
<CAPTION>
Market
Shares Value
-------------- --------------
<C> <S> <C>
Finance-Misc.--0.7%
117,600 Om Sin Perm Poon Sub Fund........................................................... $ 59,846
67,000 Peregrine Investment Holdings....................................................... 97,028
-------------
$ 156,874
-------------
TOTAL FINANCIAL $1,754,667
-------------
SERVICES--4.9%
Broadcasting & Media--1.0%
11,000 Grupo Radio Centro S.A. ADR......................................................... $ 209,000
-------------
Hotel/Restaurant--1.8%
320,000 PT Jakarta International Hotel & Development........................................ $ 385,577
-------------
Pharmaceuticals--1.1%
22,500 Dr. Reddy's Labs GDR................................................................ $ 233,550
-------------
Publishing--1.0%
374,000 Sing Tao Holdings................................................................... $ 217,615
-------------
TOTAL SERVICES $1,045,742
-------------
TECHNOLOGY--4.1%
Electronics--4.1%
18,000 Loxley Co. Ltd...................................................................... $ 298,869
21,700 Muramoto Electron (Thailand) Co..................................................... 156,766
23,200 Sterlite Industrial Ltd. GDR........................................................ 423,400
-------------
$ 879,035
-------------
TOTAL TECHNOLOGY $ 879,035
-------------
TRANSPORTATION--2.6%
Ships & Shipping--2.6%
260,000 PT Berlian Laju Tankers............................................................. $ 220,789
1,755,000 Shanghai Haixing Shipping Co........................................................ 333,579
--------------
$ 554,368
--------------
TOTAL TRANSPORTATION $ 554,368
--------------
UTILITIES--5.2%
Telecommunications--5.2%
610 Korea Mobile Telecom Corp........................................................... $ 460,935
250,000 Shanghai Post & Telecommunications - B Shares*...................................... 145,000
40,000 Telex - Chile S.A.-ADR.............................................................. 505,000
--------------
$1,110,935
--------------
TOTAL UTILITIES $1,110,935
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
November 30, 1994 (continued)
<TABLE>
<CAPTION>
Market
Shares Value
-------------- --------------
<C> <S> <C>
MISCELLANEOUS--12.6%
Industrial Materials--7.2%
3,500 Anglo American Industrial Corp. Ltd................................................. $ 173,939
50,000 Cementos Paz Del Rio GDR*........................................................... 1,112,500
18,000 Tolmex S.A. de CV - Series B2....................................................... 262,648
--------------
$ 1,549,087
--------------
Conglomerates & Holdings--5.4%
21,800 Barlow Ltd.......................................................................... $ 178,364
30,000 Benpres Holdings Corp. - GDR*....................................................... 296,400
33,000 Desc S.A. - Series B................................................................ 259,502
36,500 Malbak Ltd.......................................................................... 203,515
62,000 Technology Resources Industries Bhd. ............................................... 211,078
--------------
$ 1,148,855
--------------
TOTAL MISCELLANEOUS $ 2,697,942
--------------
TOTAL COMMON STOCKS (Cost $17,537,654) $15,431,296
--------------
UNITS--0.4%
5,200 South Indian Viscose (Each unit consists of 3 common shares and 1 warrant).......... $ 93,600
--------------
TOTAL UNITS (Cost $99,320) $ 93,600
--------------
WARRANTS--0.2%
200,000 Sub Anan Fund Warrants.............................................................. $ 41,510
--------------
TOTAL WARRANTS (Cost $50,119) $ 41,510
--------------
TOTAL INVESTMENT IN SECURITIES (Cost $18,293,093) $16,020,956
--------------
Principal
Amount
-------------
REPURCHASE AGREEMENTS--24.3%
$5,200,000 Agreement with Citibank, dated 11/30/94, bearing 5.68%, to be repurchased at $5,200,000
plus accrued interest on 12/1/94, collateralized by $5,755,000 U.S. Treasury Note,
bearing 5.125%, due 12/31/98........................................................ $ 5,200,820
--------------
ALL OTHER ASSETS, LESS LIABILITIES--0.8%............................................. $ 164,029
--------------
TOTAL NET ASSETS--100.0% $21,385,805
==============
</TABLE>
* Represents non-income producing securities.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER EMERGING MARKETS FUND
BALANCE SHEET
November 30, 1994
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at market value (identified cost $18,293,093 and cost for federal
income tax purposes $18,311,209; see Schedule of Investments and Notes 1, 2 and 3) ............ $16,020,956
Repurchase Agreement, at approximate market value (see Schedule of Investments and Note 1) ...... 5,200,820
Foreign currency holdings, at value ............................................................. 772,998
Receivables--
Investment securities sold, at value (Note 1) ................................................. 398,793
Trust shares sold ............................................................................. 144,330
Dividends, interest and foreign taxes withheld, at value (Note 1) ............................. 15,901
Other ........................................................................................... 5,636
------------
Total assets .............................................................................. $22,559,434
------------
Liabilities:
Payables--
Investment securities purchased, at value (Note 1) ............................................ $ 745,349
Due to bank ................................................................................... 71,810
Trust shares repurchased ...................................................................... 262,377
Accrued expenses (Notes 4, 5 and 6) ............................................................. 94,093
------------
Total liabilities ......................................................................... $ 1,173,629
------------
Net Assets:
Paid-in capital ................................................................................. $23,357,215
Accumulated undistributed net investment income (Note 2) ........................................ 115,129
Accumulated undistributed net realized gain on investments and other foreign currency
related transactions (Note 2) ................................................................. 180,913
Net unrealized loss on investments (Notes 1 and 2) .............................................. (2,272,137)
Net unrealized gain--other foreign currency transactions (Note 1) .............................. 4,685
------------
Total net assets .......................................................................... $21,385,805
============
Net Asset Value Per Share:
Class A--(based on $17,066,413/1,394,586 shares of beneficial interest outstanding--unlimited
number of shares authorized) .................................................................. $12.24
=======
Class B--(based on $4,319,392/354,198 shares of beneficial interest outstanding--unlimited
number of shares authorized) .................................................................. $12.19
=======
Maximum Offering Price:
Class A ......................................................................................... $12.99
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
<TABLE>
PIONEER EMERGING MARKETS FUND
STATEMENT OF OPERATIONS
For the Period from June 23, 1994 (Commencement of Operations) to November 30, 1994
<S> <C>
Investment Income (Note 1):
Dividends (net of foreign taxes withheld of $14,720). .......................................... $ 222,184
Interest ....................................................................................... 56,051
------------
Total investment income ...................................................................... $ 278,235
------------
Expenses:
Management fees (Note 4) ....................................................................... 84,871
Distribution fees (Note 6)
Class A ...................................................................................... 2,400
Class B ...................................................................................... 7,186
Transfer fees (Note 5)
Class A ...................................................................................... 11,383
Class B ...................................................................................... 2,627
Registration fees .............................................................................. 12,144
Professional fees .............................................................................. 47,396
Accounting (Note 4) ............................................................................ 79,982
Custodian fees ................................................................................. 23,574
Printing ....................................................................................... 4,384
Fees and expenses of nonaffiliated trustees .................................................... 4,821
Miscellaneous .................................................................................. 10,335
------------
Total expenses ............................................................................... $ 291,103
Less management fees waived and expenses assumed by Pioneering Management Corporation (Note 4) 127,997
------------
Net Expenses ................................................................................. $ 163,106
------------
Net investment income ...................................................................... $ 115,129
------------
Realized and Unrealized Gain (Loss) on Investments and
Other Foreign Currency Related Transactions:
Net realized gain from:
Investments and other foreign currency related transactions (Note 1) ......................... $ 180,913
Net unrealized loss from:
Net unrealized loss on investments and other foreign
currency related transactions (Notes 1 and 2) .............................................. (2,267,452)
------------
Net loss on investments and other foreign currency related transactions ........................ $(2,086,539)
------------
Net decrease in net assets resulting from operations ........................................... $(1,971,410)
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<TABLE>
PIONEER EMERGING MARKETS FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Period from June 23, 1994 (Commencement of Operations) to November 30, 1994
<S> <C>
From Operations:
Net investment income ..................................................................... $ 115,129
Net realized gain on investments .......................................................... 180,913
Net unrealized loss on investments and other foreign currency related transactions ........ (2,267,452)
-------------
Net decrease in net assets resulting from operations .................................... $(1,971,410)
-------------
From Trust Share Transactions:
Net proceeds from sale of shares .......................................................... $30,183,625
Cost of shares repurchased ................................................................ (7,826,410)
-------------
Increase in net assets resulting from trust share transactions .......................... $22,357,215
-------------
Net increase in net assets .............................................................. $20,385,805
Net Assets:
Beginning of period (initial capitalization - 60,000 Class A shares and 20,000
Class B shares) 1,000,000
-------------
End of period (including undistributed net investment income of $115,129) ................... $21,385,805
=============
</TABLE>
SHARES AMOUNT
---------- ------------
CLASS A
Shares sold ......................... 1,871,054 $25,054,207
Less shares repurchased ............. (536,468) (7,156,547)
---------- ------------
Net increase ........................ 1,334,586 $17,897,660
========== ============
CLASS B
Shares sold ......................... 385,239 $ 5,129,418
Less shares repurchased ............. (51,041) (669,863)
---------- ------------
Net increase ........................ 334,198 $ 4,459,555
========== ============
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
<TABLE>
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS -- SELECTED DATA FOR A SHARE OUTSTANDING
For the Period from June 23, 1994 (Commencement of Operations) to November 30, 1994+
<S> <C>
CLASS A
Net asset value, beginning of period ............................................................... $ 12.50
-----------
Income from investment operations:
Net investment income ............................................................................ $ 0.08
Net realized and unrealized loss on investments and other foreign currency related transactions*** (0.34)
-----------
Total loss from investment operations .......................................................... $ (0.26)
Distribution to shareholders ....................................................................... --
-----------
Net decrease in net asset value .................................................................... $ (0.26)
-----------
Net asset value, end of period ..................................................................... $ 12.24
===========
Total return* ...................................................................................... (2.08%)
Ratio of net operating expenses to average net assets .............................................. 2.25%**
Ratio of net investment income to average net assets ............................................... 1.85%**
Portfolio turnover rate ............................................................................ 259.22%**
Net assets, end of period (in thousands) ........................................................... $ 17,067
Ratios assuming no waiver of fees or assumption of expenses by PMC:
Net operating expenses ........................................................................... 4.13%**
Net investment loss .............................................................................. (0.03%)**
CLASS B
Net asset value, beginning of period ............................................................... $ 12.50
-----------
Income from investment operations:
Net investment income ............................................................................ $ 0.02
Net realized and unrealized loss on investments and other foreign currency related transactions*** (0.33)
-----------
Total loss from investment operations .......................................................... $ (0.31)
Distribution to shareholders ....................................................................... --
-----------
Net decrease in net asset value .................................................................... $ (0.31)
-----------
Net asset value, end of period ..................................................................... $ 12.19
===========
Total return* (2.48%)
Ratio of net operating expenses to average net assets 3.33%**
Ratio of net investment income to average net assets 0.77%**
Portfolio turnover rate 259.22%**
Net assets, end of period (in thousands) $ 4,319
Ratios assuming no waiver of fees or assumption of expenses by PMC:
Net operating expenses 5.21%**
Net investment loss (1.11%)**
</TABLE>
+ The per share data presented above is based upon average shares outstanding
and average net assets for the period presented.
* Assumes initial investment at net asset value at the beginning of each period,
reinvestment of all distributions, the complete redemption of the investment
at net asset value at the end of each period, and no sales charges. Total
return would be reduced if sales charges were taken into account.
** Annualized.
*** Includes the balancing effect of calculating per share amounts.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1994
1. Pioneer Emerging Markets Fund (the Fund), a Delaware business trust, was
organized on March 23, 1994 and is registered under the Investment Company Act
of 1940 as a diversified, open-end management company. The Fund commenced
operations on June 23, 1994. Prior to June 23, 1994, the Fund had no operations
other than those relating to the organizational matters and the initial
capitalization of the Fund by The Pioneer Group, Inc. (PGI).
The Board of Trustees (Trustees) has authorized the issuance of two classes
of the Fund, designated as Class A and Class B shares. The shares of each class
represent an interest in the same portfolio of investments of the Fund and have
equal rights to voting, redemption, dividend and liquidation, except that each
class of shares can bear different transfer agent and distribution fees and have
exclusive voting rights with respect to the distribution plans that have been
adopted by holders of Class A and Class B shares, respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund, which are in conformity with those generally accepted in
the investment company industry:
A. Investment Securities--Security transactions are recorded on the date
the securities are purchased or sold. Each day, investments in securities are
valued at the last sale price on the principal exchange where they are traded.
Securities that 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 market quotations are not readily
available will be valued at their fair value as determined by or under the
direction of the Trustees. Generally, trading in foreign securities is completed
at various times prior to the close of the New York Stock Exchange. Temporary
investments are stated at cost plus accrued interest, which approximates market
value.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis net of unrecoverable foreign taxes withheld at the
applicable country rates.
Gains and losses from sales of investments are calculated on the
"identified cost" method for both financial reporting and federal income tax
purposes. It is the practice of the Fund to first select for sale those
securities which have the highest cost and also qualify for long-term capital
gain or loss treatment for tax purposes.
B. Foreign Currency Translation--The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars on the following basis:
(i) investment securities, other assets and liabilities initially expressed
in foreign currencies - converted each business day into U.S. dollars based upon
current exchange rates;
(ii) purchases and sales of foreign securities, income and expenses -
converted into U.S. dollars based upon currency exchange rates prevailing on the
respective dates of such transactions; and
(iii) foreign currencies held - converted at the rate of exchange of such
currencies against U.S. dollars.
The Fund does not isolate that portion of the changes in unrealized gain
(loss) arising from changes in the exchange rates from that portion arising from
changes in the market prices of investment securities.
Net realized and unrealized gain (loss) on foreign currency transactions
other than forward foreign currency contracts represents: (1) foreign exchange
gains and losses from the sale and holdings of foreign currencies, (2) gains and
losses between trade date and settlement date on investment securities
transactions and forward foreign currency settlement contracts related to these
11
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1994 (Continued)
transactions, (3) gains and losses from the difference between amounts of
interest and dividends recorded and the amount actually received.
At November 30, 1994, the unrealized gains (losses) on foreign currency
transactions other than forward foreign currency contracts were:
Market Unrealized
Cost Value Gain
---------- ---------- ----------
Foreign currency holdings $ 770,245 $ 772,998 $ 2,753
Payables--
Investment securities purchased (747,281) (745,349) 1,932
--------- --------- ---------
Net unrealized gain (loss) --
other than foreign
currency transactions $ 22,964 $ 27,649 $ 4,685
========= ========= =========
C. Forward Foreign Currency Contracts--The Fund is authorized to enter into
forward foreign currency contracts (contracts) for the purchase of a specific
foreign currency at a fixed price on a future date as a hedge or cross-hedge
against either specific investments transactions or portfolio positions. All
commitments are "marked-to-market" daily at the applicable translation rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains or losses at the time the
contract is offset by entry into a closing transaction or extinguished by
delivery of the currency. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of foreign currency
relative to the U.S. dollar. As of November 30, 1994, the Fund had not entered
into any forward foreign currency hedge contracts.
D. Federal Taxes--It is the policy of the Fund to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and net realized capital
gains, if any, to its shareholders. Therefore, no federal income tax provisions
are required.
The characterization of distributions to shareholders for financial
reporting purposes is generally determined in accordance with income tax rules.
Therefore, the source of a portfolio's distributions may be shown in the
accompanying financial statements as either from or in excess of net investment
income or net realized gain on investment transactions, or from capital,
depending on the type of book/tax differences that may exist.
E. Trust Shares--The Fund records sales and repurchases of its trust shares
on the trade date. Net losses, if any, as a result of cancellations are absorbed
by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund
and a wholly owned subsidiary of PGI. PFD earned $12,044 in underwriting
commissions on the sale of trust shares of the Fund during the period ended
November 30, 1994. Dividends and distributions to shareholders are recorded as
of the ex-dividend date. Dividends paid by the Fund, if any, with respect to
each class of shares are calculated in the same manner, at the same time and on
the same day and are in the same amount, except that Class A and Class B shares
can bear different transfer agent and distribution fees. As of November 30,
1994, no dividends had been paid to the Class A or Class B shareholders.
F. Class Allocations--Distribution expenses are calculated based on the
average daily net asset value attributable to Class A and Class B shares of the
Fund, respectively. Shareholders of Class A and Class B share all expenses and
fees paid to the transfer service organization, Pioneering Services Corporation
(PSC), for their services, which are allocated based on the number of accounts
in each class and the ratable allocation of related out of pocket expenses (See
Note 5). Income, common expenses and realized and unrealized gains (losses) are
calculated at the Fund level and allocated daily to each class of shares based
on the respective percentage of adjusted net assets at the beginning of the day.
12
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1994 (Continued)
G. Repurchase Agreements--The Fund may enter into repurchase agreements. At
the time the Fund enters into a repurchase agreement, the value of the
underlying security (collateral), including accrued interest, will be equal to
or exceed the value of the repurchase agreement, and in the case of repurchase
agreements exceeding one day, the value of the underlying security, including
accrued interest, is required during the term of the agreement to be equal to or
exceed the value of the repurchase agreement. The underlying securities for all
repurchase agreements are held in safekeeping in the customer-only account of
the Fund's custodian, or at a Federal Reserve Bank. If the seller defaults and
the value of the collateral declines, or if bankruptcy proceedings commence with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
2. At November 30, 1994, the total cost of securities for federal income tax
purposes was $18,311,209. The difference from total cost on a financial
reporting basis results from wash sale losses, which are not recognized for
federal income tax purposes. Aggregate gross unrealized gain on securities in
which there was an excess of market value over tax cost was $423,081. Aggregate
gross unrealized loss on securities in which there was an excess of tax cost
over market value was $2,713,334. Net unrealized loss for tax purposes was
$2,290,253.
During the period ended November 30, 1994, net realized gain on a financial
reporting basis and on a tax basis was $180,913 and $228,547, respectively. The
difference in net realized gain results from realized losses on foreign currency
related transactions included in net capital gain on a financial reporting
basis, but considered ordinary income on a tax basis, and wash sale losses not
recognized for federal income tax purposes.
During the period ended November 30, 1994, net investment income on a
financial reporting basis and on a tax basis was $115,129 and $85,611,
respectively. The difference in net investment income results from realized
losses on foreign currency related transactions considered as decreases of
ordinary income for tax purposes.
3. During the period ended November 30, 1994, the cost of purchases and the
proceeds from sales of investments, other than temporary cash investments, were
$35,667,486 and $17,584,825, respectively.
4. Pioneering Management Corporation (PMC) is the Fund's investment adviser and
a wholly owned subsidiary of PGI. Management fees earned by PMC are calculated
daily at the daily rate of 1.25% of the Fund's average daily net assets.
PMC furnishes investment advice, provides office facilities, and pays
executive salaries and certain other operating expenses under the management
agreement. No officer of the Fund receives any compensation directly from the
Fund. All officers of the Fund are directors and/or officers of PMC and/or PFD.
In addition, certain other services and costs including accounting, regulatory
reporting and insurance premiums, are paid by the Fund under the management
agreement. Included in Accrued expenses is $1,143 in accounting fees payable to
PMC at November 30, 1994.
PMC has agreed not to impose a portion of its management fee and to make
other arrangements, if necessary, to absorb certain other expenses of the Fund
to the extent necessary to limit Class A expenses to 2.25% of the average daily
net assets attributable to Class A shares; the portion of the Fund-wide expenses
attributable to Class B shares will be reduced only to the extent such expenses
are reduced for Class A shares. PMC's agreement is voluntary and temporary and
may be revised or terminated at any time.
5. PSC, a wholly owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Fund, at negotiated rates. Included in
Accrued expenses is $8,394 in transfer fees payable to PSC at November 30, 1994.
13
<PAGE>
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1994 (Continued)
6. The Fund has adopted a Plan of Distribution for both Class A shares ("Class A
Plan") and Class B shares ("Class B Plan") in accordance with Rule 12B-1 under
the Investment Company Act of 1940 pursuant to which certain distribution fees
are paid to PFD.
Pursuant to the Class A Plan, the Fund may reimburse 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.
Reimbursement for such expenditures, if any, may not exceed 0.25% of the Fund's
average annual assets attributable to Class A shares. The Class B Plan provides
that the Fund may pay a distribution fee at an annual rate of 0.75% of the
Fund's average annual net assets attributable to Class B shares and may pay PFD
a service fee at the annual rate of 0.25% of the Fund's average daily net assets
attributable to Class B shares. Class B shares distribution and service fees
were accrued daily beginning on the commencement of the Fund's operations.
Included in Accrued expenses is $3,514 in distribution fees payable to PFD at
November 30, 1994.
Class B shares which are redeemed within six years of purchase are subject
to a contingent deferred sales charge ("CDSC") at declining rates beginning at
4.0% of the lesser of the current market value at the time of redemption or the
original purchase cost of the shares being redeemed. Proceeds from the CDSC are
paid to PFD. As of November 30, 1994, CDSC fees in the amount of $674 have been
paid to PFD.
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP
OF TRUSTEES AND OFFICERS (UNAUDITED)
The aggregate direct remuneration paid by the Fund to nonaffiliated trustees and
officers during the period ended November 30, 1994, including expenses incurred
in attending trustees meetings, was approximately $1,266. Fees of trustees who
are affiliated with or "interested persons" of Pioneering Management Corporation
and Pioneer Funds Distributor, Inc., investment adviser and principal
underwriter, respectively, of the Fund, are reimbursed to the Fund by Pioneering
Management Corporation in accordance with the management contract with the Fund.
At November 30, 1994, the trustees and officers of the Fund owned beneficially
1,790 Class A shares of the Fund (approximately 0.13% of the outstanding
shares). The Pioneer Group, Inc., parent company of Pioneering Management
Corporation and Pioneer Funds Distributor, Inc., is a publicly held corporation
of which Mr. Cogan owned approximately 15% of the outstanding shares of capital
stock at November 30, 1994.
14
<PAGE>
PIONEER EMERGING MARKETS FUND
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER EMERGING MARKETS FUND:
We have audited the accompanying balance sheet of Pioneer Emerging Markets
Fund (a Delaware business trust), including the schedule of investments, as of
November 30, 1994, and the related statement of operations, statement of changes
in net assets and financial highlights for the period from June 23, 1994
(commencement of operations) to November 30, 1994. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Emerging Markets Fund as of November 30, 1994, and the results of its
operations, changes in its net assets and financial highlights for the period
from June 23, 1994 (commencement of operations) to November 30, 1994, in
conformity with generally accepted accounting principles.
Boston, Massachusetts ARTHUR ANDERSEN LLP
January 6, 1995
15
<PAGE>
PIONEER EMERGING MARKETS FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR.
Chairman and President
DAVID D. TRIPPLE
Executive Vice President
NORMAN KURLAND
Senior Vice President
WILLIAM H. KEOUGH
Treasurer
JOSEPH P. BARRI
Secretary
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B. W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
INVESTMENT ADVISER
PIONEERING MANAGEMENT
CORPORATION
CUSTODIAN
BROWN BROTHERS
HARRIMAN &CO.
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
PIONEERING SERVICES
CORPORATION
60 State Street
Boston, Massachusetts
02109
PRINCIPAL UNDERWRITER
PIONEER FUNDS
DISTRIBUTOR, INC.
LEGAL COUNSEL
HALE AND DORR
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
--------------------------------------------------------------------------------
Please call Pioneer for information on
Existing accounts, new accounts, prospectuses,
applications and service forms.............. 1-800-225-6292
Fund yields and prices...................... 1-800-225-4321
Toll-free fax............................... 1-800-225-4240
Retirement plans............................ 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
--------------------------------------------------------------------------------
When distributed to persons who are not shareholders of the
Fund, this report must be accompanied by an official prospectus, which
discusses the objectives, policies, sales charges and other information about
the Fund.
0195-2217
(C) Pioneer Funds Distributor, Inc.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) The financial statements (audited) of Pioneer Emerging Markets Fund
(the "Registrant") are incorporated by reference from the financial
statements (audited) attached to Part B, the Statement of Additional
Information.
(b) Exhibits:
1.1 Agreement and Declaration of Trust.1/_
1.2 Certificate of Trust.1/_
1.3 Establishment and Designation of Class A and Class B shares of
Beneficial Interest.3/_
2. By-Laws.2/_
3. None.
4. None.
5. Management Contract between the Registrant and Pioneering
Management Corporation._
6.1. Underwriting Agreement between the Registrant and Pioneer Funds
Distributor, Inc._
6.2. Form of Dealer Sales Agreement.
7. None.
8. Custodian Agreement between the Registrant and Brown Brothers
Harriman & Co._
9. Investment Company Service Agreement between the Registrant and
Pioneering Services Corporation._
10. Opinion and Consent of Counsel.3
11. Consent of Auditors._
C-1
<PAGE>
12. None.
13. Share Purchase Agreement._
14. None.
15.1 Class A Shares Distribution Plan.1/_
15.2 Class B Shares Distribution Plan.1/_
16. None.
17. Financial Data Schedule./_
18. Powers of Attorney.1/3/_
--------------
_ Filed herewith.
1 Filed with the initial Registration Statement on March 25, 1994 and
incorporated herein by reference.
2 Filed with Pre-Effective Amendment No. 1 to the Fund's Registration
Statement on May 25, 1994 and incorporated herein by reference.
3 Filed with Pre-Effective Amendment No. 2 to the Fund's Registration and
incorporated herein by reference.
Item 25. Persons Controlled By or Under
Common Control With Registrant.
The Pioneer Group, Inc., a publicly-traded Delaware corporation
("PGI"), owns all of the issued and outstanding shares of Pioneer Emerging
Markets Fund.
The Pioneer Group, Inc., a Delaware corporation ("PGI"), owns 100%
of the outstanding capital stock of Pioneering Management Corporation, a
Delaware corporation ("PMC"), Pioneering Services Corporation ("PSC"), Pioneer
Capital Corporation ("PCC"), Pioneer Fonds Marketing GmbH ("GmbH"), Pioneer SBIC
Corp. ("SBIC"), Pioneer Associates, Inc., Pioneer International Corporation,
Pioneer Plans Corporation ("PPC"), Pioneer Goldfields Limited ("PGL"), and
Pioneer Investments Corporation ("PIC"), all Massachusetts corporations. PMC
owns 100% of the outstanding capital stock of Pioneer Funds Distributor, Inc.
C-2
<PAGE>
("PFD"), a Massachusetts corporation. PGI also owns 100% of the outstanding
capital stock of Pioneer Metals and Technology, Inc. ("PMT"), a Delaware
corporation, and Pioneer First Polish Trust Fund Joint Stock Company ("First
Polish"), a Polish corporation. PGI owns 90% of the outstanding shares of
Teberebie Goldfields Limited ("TGL"). Pioneer Winthrop Advisers ("PWA"), a
Massachusetts general partnership, is a joint venture between PGI and Winthrop
Financial Associates, a Limited Partnership, a Delaware limited partnership.
Pioneer Fund, Pioneer II, Pioneer Three, Pioneer Bond Fund, Pioneer Intermediate
Tax-Free Fund, Pioneer Growth Trust, Pioneer Europe Fund, Pioneer International
Growth Fund, Pioneer Short-Term Income Trust, Pioneer Tax-Free State Series
Trust, Pioneer Money Market Trust and Pioneer America Income Trust (each of the
foregoing, a Massachusetts business trust), and Pioneer Interest Shares, Inc. (a
Nebraska corporation) and Pioneer Growth Shares, Pioneer Income Fund, Pioneer
India Fund, Pioneer Tax-Free Income Fund and the Registrant (each of the
foregoing, a Delaware business trust) are all parties to management contracts
with PMC. Pioneer Winthrop Real Estate Fund is a party to a sub-investment
management contract with PMC and a management contact with PWA. PCC owns 100% of
the outstanding capital stock of SBIC. SBIC is the sole general partner of
Pioneer Ventures Limited Partnership, a Massachusetts limited partnership. John
F. Cogan, Jr. owns approximately 15% of the outstanding shares of PGI. Mr. Cogan
is Chairman of the Board, President and Trustee of the Registrant and of each of
the Pioneer mutual funds; Director and President of PGI; President and Director
of PPC, PIC, Pioneer International Corporation and PMT; Director of PCC and PSC;
Chairman of the Board and Director of PMC, PFD and TGL; Chairman, President and
Director of PGL; Chairman of the Supervisory Board of GmbH; Chairman and Chief
Executive Officer of PWA; Chairman and Member of Supervisory Board of First
Polish; and Chairman and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities.
The following table sets forth the approximate number of record
holders of each class of securities of the Registrant as of February 28, 1995:
Class A Class B
Number of Record Holders: 2,184 734
Item 27. Indemnification.
Except for the Agreement and Declaration of Trust dated March 23,
1994, 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
C-3
<PAGE>
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 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.
All of the information required by this item is set forth in the
Form ADV, as amended, of Pioneering Management Corporation. The following
sections of such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section 6, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
<S> <C> <C>
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
C-4
<PAGE>
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice
President and Trustee
Stephen W. Long Senior Vice President None
Steven M. Graziano Senior Vice President None
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Rice Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy Supovitz Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
</TABLE>
(c) Not applicable.
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-5
<PAGE>
The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and the 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 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-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 2 to its Registration Statement on Form N-1A (which
meets all the requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933) to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston and The Commonwealth of Massachusetts, on
the 29th day of March, 1995.
PIONEER EMERGING MARKETS FUND
/s/Joseph P. Barri
Joseph P. Barri
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to the Registrant's Registration Statement on
Form N-1A has been signed below by the following persons in the capacities and
on the date indicated:
Signature Title
/s/John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
)
/s/William H. Keough* Chief Financial Officer )
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
Trustees:
)
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
/s/Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
)
/s/Margaret B. W. Graham* )
Margaret B. W. Graham )
<PAGE>
)
)
/s/John W. Kendrick* )
John W. Kendrick )
)
)
/s/Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/David D. Tripple* )
David D. Tripple )
)
)
/s/Stephen K. West* )
Stephen K. West )
)
)
/s/John Winthrop* )
John Winthrop )
*By: Dated: March 29, 1995
/s/Joseph P. Barri
Joseph P. Barri
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
1.1 Agreement and Declaration of Trust
1.2 Certificate of Trust
1.3 Establishment and Designation of Class A and Class B shares of
Beneficial Interest
2. By-Laws
5. Management Contract between the Registrant and Pioneering
Management Corporation
6.1. Underwriting Agreement between the Registrant and Pioneer Funds
Distributor, Inc.
8. Custodian Agreement between the Registrant and Brown Brothers
Harriman & Co.
9. Investment Company Service Agreement between the Registrant and
Pioneering Services Corporation
11. Consent of Auditors
13. Share Purchase Agreement
15.1 Class A Shares Distribution Plan
15.2 Class B Shares Distribution Plan
17. Financial Data Schedule
18. Powers of Attorney
<PAGE>
PIONEER EMERGING MARKETS FUND
AGREEMENT AND DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on March 23, 1994 by
John F. Cogan, Jr. and David D. Tripple (together with all other persons from
time to time duly elected, qualified and serving as Trustees in accordance with
the provisions of Article II hereof, the "Trustees").
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and Declaration
of Trust is "Pioneer Emerging Markets Fund."
Section 2. Definitions. Unless otherwise provided or required by the context:
(a) "Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
(b) "By-laws" means the By-laws of the Trust adopted by the Trustees,
as amended from time to time, which By-laws are expressly herein incorporated by
reference as part of the "governing instrument" within the meaning of the
Delaware Act.
(c) "Class" means the class of Shares of a Series established pursuant
to Article V.
(d) "Commission," "Interested Person" and "Principal Underwriter" have
the meanings provided in the 1940 Act. Except as such term may be otherwise
defined by the Trustees in conjunction with the establishment of any Series of
Shares, the term "vote of a majority of the Shares outstanding and entitled to
vote" shall have the same meaning as is assigned to the term "vote of a majority
of the outstanding voting securities" in the 1940 Act.
(e) "Covered Person" means a person so defined in Article IV, Section
2.
(f) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(g) "Declaration" shall mean this Agreement and Declaration of Trust,
as amended or restated from time to time. Reference in this Declaration of Trust
to "Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer
to this Declaration rather than exclusively to the article or section in which
such words appear.
(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.
<PAGE>
(i) "Distributor" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.
(j) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(k) "Investment Adviser" means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.
(l) "Net Asset Value" means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.
(m) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
and governments and agencies and political subdivisions, thereof, whether
domestic or foreign.
(n) "Series" means a series of Shares established pursuant to Article
V.
(o) "Shareholder" means a record owner of Outstanding Shares;
(p) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as
then issued and outstanding, but does not include Shares which have been
repurchased or redeemed by the Trust and which are held in the treasury of the
Trust.
(q) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(r) "Trust" means Pioneer Emerging Markets Fund established hereby,
and reference to the Trust, when applicable to one or more Series, refers to
that Series.
(s) "Trustees" means the persons who have signed this Declaration of
Trust, so long as they shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified and
serving as Trustees in accordance with Article II, in all cases in their
capacities as Trustees hereunder.
(t) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any Series
or the Trustees on behalf of the Trust or any Series.
(u) The "1940 Act" means the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by or under the direction of the Trustees, and they shall
have all powers necessary or desirable to carry out that responsibility. The
2
<PAGE>
Trustees may execute all instruments and take all action they deem necessary or
desirable to promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to
execute any contracts and instruments that they may consider necessary or
desirable in the management of the Trust. The Trustees shall not in any way be
bound or limited by current or future laws or customs applicable to trust
investments, but shall have full power and authority to make any investments
which they, in their sole discretion, deem proper to accomplish the purposes of
the Trust. The Trustees may exercise all of their powers without recourse to any
court or other authority. Subject to any applicable limitation herein or in the
By-laws or resolutions of the Trust, the Trustees shall have power and
authority, without limitation:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidence of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; or any other security, property or instrument in which the
Trust or any of its Series shall be authorized to invest.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f) To borrow money or other property in the name of the Trust
exclusively for Trust purposes and in this connection issue notes or other
3
<PAGE>
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To adopt By-laws not inconsistent with this Declaration providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.
(i) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate.
(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.
(k) To retain one or more transfer agents and shareholder servicing
agents, or both.
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or in the
By-laws.
(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not
indicating any trust, whether in bearer, book entry, unregistered or other
negotiable form, or (ii) either in the Trust's or Trustees' own name or in the
name of a custodian or a nominee or nominees, subject to safeguards according to
the usual practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.
(q) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a particular Series
and assets, liabilities and expenses to a particular Class or to apportion the
same between or among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class shall be
payable solely out of the assets belonging to that Series or Class as provided
for in Article V, Section 4.
4
<PAGE>
(r) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are held
by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern; and to pay calls or subscriptions with
respect to any security held in the Trust.
(s) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited to,
claims for taxes.
(t) To make distributions of income, capital gains, returns of capital
(if any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.
(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper, including a
committee consisting of fewer than all of the Trustees then in office, which may
act for and bind the Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any legal action,
suit or proceeding, pending or threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption, cancellation,
retirement, acquisition, holding, resale, reissuance, disposition of or dealing
in Shares; and, subject to Articles V and VI, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust or of the particular Series with respect to which such
Shares are issued.
(w) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
(x) To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to take
every other action incidental to the foregoing business or purposes, objects or
powers.
(y) To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other combinations
and associations.
(aa) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such Committee, depositary or trustee as the
Trustees shall deem proper;
5
<PAGE>
(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or limitations of
any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or officer of
the Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The
initial Trustees shall be the person initially signing this Declaration. The
number of Trustees (other than the initial Trustees) shall be fixed from time to
time by a majority of the Trustees; provided, that there shall be at least one
(1) Trustee and no more than fifteen (15). The Shareholders shall elect the
Trustees (other than the initial Trustees) on such dates as the Trustees may fix
from time to time.
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Section 5. Term of Office of Trustees. Each Trustee shall hold office
for life or until his successor is elected or the Trust terminates; except that
(a) any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, the Trustees in office, regardless of
their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by the Declaration. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate in, the affairs of the Trust during
such absence), or is physically or mentally incapacitated, the remaining
Trustees shall have all the powers hereunder and their certificate as to such
vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power
of attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.
Section 8. Chairman. The Trustees shall appoint one of their number to
be Chairman of the Board of Trustees. The Chairman shall preside at all meetings
of the Trustees, shall be responsible for the execution of policies established
by the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by majority
vote at a meeting duly called at which a quorum is present, including a meeting
held by conference telephone, teleconference or other electronic media or
communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
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Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or committee authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by facsimile or other similar electronic
mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
Section 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any restrictions
in the By-laws, any Trustee, officer, agent or independent contractor of the
Trust may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.
Section 13. Series of Trustees. In connection with the establishment of
one or more Series or Classes, the Trustees establishing such Series or Class
may appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Trustees shall have, to the exclusion of any other
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Trustee of the Trust, all the powers and authorities of Trustees hereunder with
respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders only shall entitle the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees affects all Series of the Trust or
two or more Series represented by different Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 1. Underwriting Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive distribution contract
or contracts providing for the sale of the Shares whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.
Section 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes separate administration agreements
with respect to each Series or Class, whereby the other party to such agreement
shall undertake to manage the business affairs of the Trust or of a Series or
Class thereof of the Trust and furnish the Trust or a Series or a Class thereof
with office facilities, and shall be responsible for the ordinary clerical,
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bookkeeping and recordkeeping services at such office facilities, and other
facilities and services, if any, and all upon such terms and conditions as the
Trustees may in their discretion determine.
Section 4. Service Agreement. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to administration plans
and service plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
Section 6. Custodian. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians, including such foreign banks and
securities depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon between the
Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust or any Series thereof is a shareholder, director, officer,
partner, trustee, employee, manager, adviser or distributor of or for
any partnership, corporation, trust, association or other organization
or of or for any parent or affiliate of any organization, with which a
contract of the character described in this Article III or for
services as Custodian, Transfer Agent or disbursing agent or for
related services may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as
Custodian, Transfer Agent or disbursing agent or for related services
may have been or may hereafter be made also has any one or more of
such contracts with one or more other partnerships, corporations,
trusts, associations or other organizations, or has other business or
interests, shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
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ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or
having any claim against the Trust or a particular Series shall look only to the
assets of all Series or such particular Series for payment under such contract
or claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i)every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who
serves at its request as director, officer, partner, trustee
or the like of another organization in which it has any
interest as a shareholder, creditor or otherwise) ("Covered
Person") shall be indemnified by the Trust or the appropriate
Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the
settlement thereof; and
(ii) as used herein, the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals),
actual or threatened, and the words "liability" and "expenses"
shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i)who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust
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or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office, or (B) not to have
acted in good faith in the reasonable belief that his action
was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
(A) by the court or other body approving the settlement; (B)
by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to
a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type inquiry) or
(D) by a vote of a majority of the Outstanding Shares entitled
to vote (excluding any Outstanding Shares owned of record or
beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors
and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or By-laws
inconsistent with this Article, shall be prospective only, to the extent that
such repeal, or modification would, if applied retrospectively, adversely affect
any limitation on the liability of any Covered Person or indemnification
available to any Covered Person with respect to any act or omission which
occurred prior to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the applicable Series to be held harmless from and indemnified
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against all loss and expense arising from such liability. The Trust, on behalf
of the affected Series, shall, upon request by such Shareholder, assume the
defense of any claim made against such Shareholder for any act or obligation of
the Series and satisfy any judgment thereon from the assets of the Series.
Section 4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee
of the Trust or a Series thereof shall, in the performance of his duties, powers
and discretions hereunder be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee.
ARTICLE V
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of
one or more Series. The Trustees hereby establish a single Series which shall be
designated Pioneer Emerging Markets Fund. Each additional Series shall be
established and is effective upon the adoption of a resolution of a majority of
the Trustees or any alternative date specified in such resolution. The Trustees
may designate the relative rights and preferences of the Shares of each Series.
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The Trustees may divide the Shares of any Series into Classes. The Shares of the
existing Series and each Class thereof herein established and designated and any
Shares of any further Series and Classes that may from time to time be
established and designated by the Trustees shall be established and designated,
and the variations in the relative rights and preferences as between the
different Series shall be fixed and determined, by the Trustees; provided, that
all Shares shall be identical except for such variations as shall be fixed and
determined between different Series or Classes by the Trustees in establishing
and designating such Class or Series. All references to Shares in this
Declaration shall be deemed to be Shares of any or all Series or Classes as the
context may require. The Trust shall maintain separate and distinct records for
each Series and hold and account for the assets thereof separately from the
other assets of the Trust or of any other Series. A Series may issue any number
of Shares or any Class thereof and need not issue Shares. Each Share of a Series
shall represent an equal beneficial interest in the net assets of such Series.
Each holder of Shares of a Series or a Class thereof shall be entitled to
receive his pro rata share of all distributions made with respect to such Series
or Class. Upon redemption of his Shares, such Shareholder shall be paid solely
out of the funds and property of such Series. The Trustees may adopt and change
the name of any Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued Shares of any Series or Classes into one or
more Series or Classes of Shares; to abolish any one or more Series or Classes
of Shares; to issue Shares to acquire other assets (including assets subject to,
and in connection with, the assumption of liabilities) and businesses; and to
take such other action with respect to the Shares as the Trustees may deem
desirable. Shares held in the treasury shall not confer any voting rights on the
Trustees and shall not be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class, (b) issue fractional
Shares, (c) determine the Net Asset Value per Share of the initial capital
contribution or (d) authorize the issuance of Shares at a price other than Net
Asset Value to the extent permitted by the 1940 Act or any rule, order or
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interpretation of the Commission thereunder. The Trustees shall have the right
to refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof (including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may
be), shall be held and accounted for separately from the assets of every other
Series and are referred to as "assets belonging to" that Series. The assets
belonging to a Series shall belong only to that Series for all purposes, and to
no other Series, subject only to the rights of creditors of that Series. Any
assets, income, earnings, profits, and proceeds thereof, funds, or payments
which are not readily identifiable as belonging to any particular Series shall
be allocated by the Trustees between and among one or more Series as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series for all purposes, and such assets,
earnings, income, profits or funds, or payments and proceeds thereof shall be
referred to as assets belonging to that Series. The assets belonging to a Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in trust for the benefit of the Shareholders of that Series. The assets
belonging to a Series shall be charged with the liabilities of that Series and
all expenses, costs, charges and reserves attributable to that Series, except
that liabilities and expenses allocated solely to a particular Class shall be
borne by that Class. Any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging to any
particular Series or Class shall be allocated and charged by the Trustees
between or among any one or more of the Series or Classes in such manner as the
Trustees deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Shareholders of all Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of any other Series. Notice of this contractual limitation on liabilities
among Series may, in the Trustees' discretion, be set forth in the certificate
of trust of the Trust (whether originally or by amendment) as filed or to be
filed in the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act, and upon the giving of such notice in the certificate of
trust, the statutory provisions of Section 3804 of the Delaware Act relating to
limitations on liabilities among Series (and the statutory effect under Section
3804 of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit to,
contracting with or having any claim against any Series may look only to the
assets of that Series to satisfy or enforce any debt, with respect to that
Series. No Shareholder or former Shareholder of any Series shall have a claim on
or any right to any assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
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adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or registrar or any
officer, employee or agent of the Trust, shall be affected by any notice of a
proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any such Shareholder
to an accounting or to take any action in court or elsewhere against the Trust
or the Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything, other than as
agreed by the Shareholder. Shareholders shall have the same limitation of
personal liability as is extended to shareholders of a private corporation for
profit incorporated in the State of Delaware. Every written obligation of the
Trust or any Series shall contain a statement to the effect that such obligation
may only be enforced against the assets of the appropriate Series or all Series;
however, the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.
ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
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determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
Section 2. Redemptions. Each Shareholder of a Series shall have the
right at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause
the Net Asset Value of Shares of each Series or Class to be determined from time
to time in a manner consistent with applicable laws and regulations. The
Trustees may delegate the power and duty to determine Net Asset Value per Share
to one or more Trustees or officers of the Trust or to a custodian, depository
or other agent appointed for such purpose. The Net Asset Value of Shares shall
be determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.
Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
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close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the Net
Asset Value per Share determined as of the time when the purchase or contract of
purchase is made or the Net Asset Value as of any time which may be later
determined, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy or in any manner provided for in the By-laws. The By-laws
may provide that proxies may be given by any electronic or telecommunications
device or in any other manner, but if a proposal by anyone other than the
officers or Trustees is submitted to a vote of the Shareholders of any Series or
Class, or if there is a proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees, Shares may be voted only
in person or by written proxy. Until Shares of a Series are issued, as to that
Series the Trustees may exercise all rights of Shareholders and may take any
action required or permitted to be taken by Shareholders by law, this
Declaration or the By-laws. Meetings of Shareholders shall be called and notice
thereof and record dates therefor shall be given and set as provided in the
By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding Shares
of each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
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larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Series (or Classes) any time
prior to the payment of a distribution. Nothing in this Section shall be
construed as precluding the Trustees from setting different record dates for
different Series (or Classes).
Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall reimburse the
Trustees from the assets belonging to all Series or the particular Series, for
their expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration fees and related expenses; and for such
non-recurring items as may arise, including litigation to which the Trust or a
Series (or a Trustee or officer of the Trust acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
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each such Series, prior to any rights or interests of the Shareholders thereto,
for the reimbursement to them of such expenses, disbursements, losses and
liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
Section 2. Trustee Action. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares outstanding
and entitled to vote of the Trust or of each Series to be affected, the Trustees
may
(i)sell and convey all or substantially all of the assets of
all Series or any affected Series to another Series or to
another entity which is an open-end investment company as
defined in the 1940 Act, or is a series thereof, for adequate
consideration, which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or any affected Series, and which
may include shares of or interests in such Series, entity, or
series thereof; or
(ii)at any time sell and convert into money all or
substantially all of the assets of all Series or any affected
Series.
Upon making reasonable provision for the payment of all known liabilities of all
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Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection
(a) (i) and (ii) above without obtaining the vote of a majority of the Shares
Outstanding and entitled to vote of the Trust or any Series if a majority of the
Trustees determines that the continuation of the Trust or Series is not in the
best interests of the Trust, such Series, or their respective Shareholders as a
result of factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable manner.
Such factors and events may include the inability of the Trust or a Series to
maintain its assets at an appropriate size, changes in laws or regulations
governing the Trust or the Series or affecting assets of the type in which the
Trust or Series invests, or economic developments or trends having a significant
adverse impact on the business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
Section 5. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classes thereof.
Section 6. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
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Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any matters in connection
with the Trust. The masculine gender herein shall include the feminine and
neuter genders. Headings herein are for convenience only and shall not affect
the construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least [10]% of the Outstanding Shares of the Trust, 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 to 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 Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.
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Section 10. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Declaration.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the date first written above.
John F. Cogan, Jr.,
as Trustee and not individually
975 Memorial Drive, #802
Cambridge, Massachusetts 02138
David D. Tripple,
as Trustee and not individually
6 Woodbine Road
Belmont, Massachusetts 02178
23
PIONEER EMERGING MARKETS FUND
Establishment and Designation
of
Class A Shares and Class B Shares
of Beneficial Interest of
Pioneer Emerging Markets Fund
The undersigned, being a majority of the Trustees of Pioneer Emerging
Markets Fund, a Delaware business trust (the "Fund"), acting pursuant to Article
V, Section 1 of the Agreement and Declaration of Trust dated March 23, 1994 of
the Fund (the "Declaration"), do hereby divide the shares of beneficial interest
of the Fund (the "Shares") to create two classes of Shares of the Fund as
follows:
1. The two classes of Shares established and designated hereby
are "Class A Shares" and "Class B Shares," respectively.
2. Class A Shares and Class B 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 and of Class B Shares,
the method of determining the net asset value of Class A
Shares and of Class B Shares, and the relative dividend
rights of holders of Class A Shares and of holders of Class
B Shares shall be established by the Trustees of the Fund in
accordance with the provisions of the Declaration and shall
be set forth in the Fund'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 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
_____ day of June, 1994.
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
Richard H. Egdahl, M.D. 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
Margaret B.W. Graham Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
776 Garland Drive Sullivan & Cromwell
Palo Alto, CA 94303 125 Broad Street
New York, NY 10004
John W. Kendrick John Winthrop
as Trustee and not individually as Trustee and not individually
6363 Waterway Drive 52 King Street
Falls Church, VA 22044 Charleston, SC 29401
CERTIFICATE OF TRUST
THIS Certificate of Trust of Pioneer Emerging Markets Fund (the
"Trust"), dated March 23, 1994, is being duly executed and filed by John F.
Cogan, Jr. and David D. Tripple, as trustees, to form a business trust under the
Delaware Business Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is
Pioneer Emerging Markets Fund.
2. Registered Agent. The business address of the registered
office of the Trust in the State of Delaware is 1201 North
Market Street in the City of Wilmington, County of New
Castle, 19801. The name of the Trust's registered agent at
such address is Delaware Corporation Organizers, Inc.
3. Effective Date. This Certificate of Trust shall be effective
upon the date and time of filing.
4. Series Trust. Notice is hereby given that pursuant to
Section 3804 of the Delaware Business Trust Act, the debts,
liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular
series of the Trust shall be enforceable against the assets
of such series only and not against the assets of the Trust
generally. The Trust is a registered investment company
under the Investment Company Act of 1940, as amended. IN
WITNESS WHEREOF, the undersigned, being the Trustees of the
Trust, have executed this Certificate of Trust as of the
date first above-written.
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
As Trustee and not individually
/s/David D. Tripple
David D. Tripple
As Trustee and not individually
BY-LAWS
of
PIONEER EMERGING MARKETS FUND
ARTICLE I
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a Chairman, a President,
a Treasurer, a Secretary, and such other officers with such other titles as
provided for herein or as the Trustees may from time to time elect. It shall not
be necessary for any Trustee or other officer to be a holder of shares in the
Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The Chairman and President shall be chosen annually by
and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their successors
are duly chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign by
filing a written resignation with the President, the Trustees or the Secretary,
which shall take effect upon such filing unless it is specified to be effective
at some other time or upon the happening of some other event. Any officer may be
removed at any time, with or without cause, by vote of a majority of the
Trustees.
SECTION 4. Vacancies. The Trustees may fill any vacancy occurring in any office
for any reason and may, in their discretion, leave unfilled for such period as
they may determine any offices other than those of Chairman, President,
Treasurer and Secretary. Each such successor shall hold office until his
successor is duly chosen and qualified.
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to fully
carry out that responsibility.
SECTION 2. Executive and other Committees. The Trustees may elect from their own
number an Executive Committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, and such other powers and duties as the Trustees
may from time to time delegate to such Committee. The Trustees may also elect
from their own number other Committees from time to time, the number composing
such Committees and the powers conferred upon the same to be determined by vote
of the Trustees.
SECTION 3. Chairman of the Trustees. The Chairman shall preside at all meetings
of the Trustees and he may be the chief executive, financial and accounting
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officer of the Trust. The Chairman may also perform such other duties as the
Trustees may from time to time designate.
SECTION 4. President. The President shall be the chief operating officer of the
Trust and, subject to the Trustees, shall have general supervision over the
business and policies of the Trust. The President shall have full power and
authority to bind the Trust and in connection therewith may execute and deliver
in the name and on behalf of the Trust any and all agreements, instruments,
notes and writings of any nature that he may consider necessary or appropriate
in connection with the management of the Trust. The President shall perform such
duties additional to all of the foregoing as the Trustees may from time to time
designate.
SECTION 5. Treasurer. The Treasurer may be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank(s) or trust compan(ies) as
the Trustees shall employ as Custodian(s) in accordance with Section 3.6 of the
Declaration of Trust and these By-Laws. He shall have the custody of the seal of
the Trust. He shall make annual reports in writing of the business conditions of
the Trust, which reports shall be preserved upon its records, and he shall
furnish such other reports regarding its business and condition as the Trustees
may from time to time require. The Treasurer shall perform such duties
additional to all of the foregoing as the Trustees or the President may from
time to time designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings.
The Secretary shall perform such duties and possess such powers additional to
the foregoing as the Trustees or the President may from time to time designate.
SECTION 7. Vice Presidents. Each Vice President of the Trust shall perform such
duties and possess such powers as the Trustees or the President may from time to
time designate. In the event of the absence, inability or refusal to act of the
President, the Vice President (or if there shall be more than one, the Vice
Presidents in the order determined by the Trustees) shall perform the duties of
the President and when so performing shall have all the powers of and be subject
to all the restrictions upon the President.
SECTION 8. Assistant Treasurer. The Assistant Treasurer of the Trust shall
perform such duties and possess such powers as the Trustees, the President or
the Treasurer may from time to time designate.
ARTICLE III
Shareholders' Meetings
SECTION 1. General. Voting powers and meetings of Shareholders shall be governed
by applicable provisions of law, the Declaration of Trust and as hereinafter
provided by these By-Laws.
SECTION 2. Special Meetings. A special meeting of the Shareholders of any Series
shall be called by the Secretary whenever ordered by the Trustees or requested
in writing by the holder or holders of at least one-tenth of the outstanding
Shares of any such Series entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than two days to call such special
meeting, the Trustees or the Shareholders so requesting may, in the name of the
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Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
SECTION 3. Notices. Except as above provided, notices of any special meeting of
the Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting, a written
or printed notification of such meeting, at least fifteen days before the
meeting, to such address as may be registered with the Trust by the Shareholder.
SECTION 4. Place of Meeting. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust in Boston, Massachusetts or
at such other place in the United States as the Trustees may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Meetings. Meetings of the Trustees shall be called orally or in
writing by the Chairman or at his order or direction or by any two other
Trustees, and if the Secretary when so requested refuses or fails for more than
one day to call such meeting, the Chairman, or such two other Trustees, may in
the name of the Secretary call such meeting by giving due notice in the manner
required when notice is given by the Secretary.
SECTION 2. Quorum. A majority of the Trustees shall constitute a quorum for the
transaction of business.
SECTION 3. Notices. Except as otherwise provided, notice of any meeting of the
Trustees shall be given by the Secretary to each Trustee, by mailing to him,
postage prepaid, addressed to him at his address as registered on the books of
the Trust or, if not so registered, at his last known address, a written or
printed notification of such meeting at least three days before the meeting or
by delivering such notice to him at least two days before the meeting, or by
telephoning him or by sending to him at least one day before the meeting, by
prepaid telegram, addressed to him at his said registered address, if any, or if
he has no such registered address, at his last known address, notice of such
meeting.
SECTION 4. Place of Meeting. All meetings of the Trustees shall be held at the
principal place of business of the Trust in Boston, Massachusetts, or such other
place within or without the Commonwealth as the person or persons requesting
said meeting to be called may designate, but any meeting may adjourn to any
other place.
SECTION 5. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
meeting without notice, or after the meeting shall sign a written assent thereto
on the record of such meeting, the acts of such meeting shall be valid as if
such meeting had been regularly held.
SECTION 6. Action by Consent. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by a majority of the Trustees and
filed with the records of the Trustees' meetings, or by telephone consent
provided a quorum of Trustees participate in any such telephone meeting. Such
consent shall be treated as a vote of the Trustees for all purposes, provided
however, no such consent shall be effective if the Investment Company Act of
1940 requires that a particular action be taken only at a meeting of the
Trustees.
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ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust and the
status of the owners thereof shall be defined, established and governed by
applicable provisions of law, the Declaration of Trust and as herein provided by
these By-Laws.
SECTION 2. Transfers. Shares may be transferred on the books of the Trust by
written request to the Trust or its transfer agent, with such proof of authority
or the authenticity of signature as the Trust or its transfer agent may
reasonably require. Except as may be otherwise required by law, by the
Declaration of Trust or by these By-Laws, the Trust shall be entitled to treat
the record holder of shares of beneficial interest as shown on its books as the
owner of such shares for all purposes, including the payment of dividends and
the right to vote with respect thereto, regardless of any transfer, pledge or
other disposition of such shares until the shares have been transferred on the
books of the Trust in accordance with the requirements of these By-Laws.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the shareholders; and no shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the shareholders.
ARTICLE VII
Custodian
The Custodian(s) employed by the Trust pursuant to Section 3.6 of
the Declaration of Trust shall be required to enter into a contract with the
Trust which shall contain in substance the following provisions:
(a) The Trust will cause all securities and funds owned by the
Trust to be delivered or paid to the Custodian(s).
(b) The Custodian(s) will receive and receipt for any moneys due
to the Trust and deposit the same in its own banking
department and in such other banking institutions, if any,
as the Custodian(s) and the Trustees may approve. The
Custodian(s) shall have the sole power to draw upon any such
account.
(c) The Custodian(s) shall release and deliver securities owned
by the Trust in the following cases only:
(1) Upon the sale of such securities for the account
of the Trust and receipt of payment therefor;
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(2) To the issuer thereof or its agent when such
securities are called, redeemed, retired or
otherwise become payable; provided that in any
such case, the cash is to be delivered to the
Custodian(s);
(3) To the issuer thereof or its agent for transfer
into the name of the Trust, the Custodian(s) or a
nominee of either, or for exchange for a different
number of bonds or certificates representing the
same aggregate face amount or number of units;
provided that in any such case the new securities
are to be delivered to the Custodian(s);
(4) To the broker selling the same for examination, in
accord with the "street delivery" custom;
(5) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities
of the issuer of such securities or pursuant to
provisions to any deposit agreement; provided
that, in any such case, the new securities and
cash, if any, are to be delivered to the
Custodian(s);
(6) In the case of warrants, rights, or similar
securities, the surrender thereof in the exercise
of such warrants, rights or similar securities or
the surrender of interim receipts or temporary
securities for definitive securities;
(7) To any pledge by way of pledge or hypothecation to
secure any loan; and
(8) For deposit in a system for the central handling
of securities.
(d) The Custodian(s) shall pay out moneys of the Trust only upon
the purchase of securities for the account of the Trust and
the delivery in due course of such securities to the
Custodian(s), or in connection with the conversion, exchange
or surrender of securities owned by the Trust as set forth
in (c), or for the redemption or repurchase of shares issued
by the Trust or for the making of any disbursements
authorized by the Trustees pursuant to the Declaration of
Trust or these By-laws, or for the payment of any expense or
liability incurred by the Trust; provided that, in every
case where payment is made by the Custodian(s) in advance of
receipt of the securities purchased, the Custodian(s) shall
be absolutely liable to the Trust for such securities to the
same extent as if the securities had been received by the
Custodian(s).
(e) The Custodian(s) shall make deliveries of securities and
payments of cash only upon written instructions signed or
initialed by such officer or officers or other agent or
agents of the Trust as may be authorized to sign or initial
such instructions by resolution of the Trustees; it being
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understood that the Trustees may from time to time authorize
a different person or persons to sign or initial
instructions for different purposes. The contract between
the Trust and the Custodian(s) may contain any such other
provisions not inconsistent with the provisions of Section
3.6 of the Declaration of Trust or with these By-laws as the
Trustees may approve.
Such contract shall be terminable by either party upon written
notice to the other within such time not exceeding sixty (60) days as may be
specified in the contract; provided, however, that upon termination of the
contract or inability of the Custodian(s) to continue to serve, the Custodian(s)
shall, upon written notice of appointment of another bank or trust company as
custodian, deliver and pay over to such successor custodian all securities and
moneys held by it for account of the Trust. In such case, the Trustees shall
promptly appoint a successor custodian, but in the event that no successor
custodian can be found having the required qualifications and willing to serve,
it shall be the duty of the Trustees to call as promptly as possible a special
meeting of the Shareholders to determine whether the Trust shall function
without a custodian or shall be liquidated. If so directed by vote of the
holders of a majority of the outstanding Shares, the Custodian(s) shall deliver
and pay over all property of the Trust held by it as specified in such vote.
Such contract shall also provide that, pending appointment of a
successor custodian or a vote of the shareholders specifying some other
disposition of the funds and property, the Custodian(s) shall not deliver funds
and property of the Trust to the Trust, but it may deliver them to a bank or
trust company doing business in Boston, Massachusetts, of its own selection
having aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than $2,000,000 as the property of the Trust to be
held under terms similar to those on which they were held by the retiring
custodian.
Any sub-custodian employed by the Custodian(s) pursuant to
authorization to do so granted by the Trust pursuant to Section 3.6 of the
Declaration of Trust shall be required to enter into a contract with the
Custodian containing in substance the same provisions as those described in
paragraphs (a) through (e) above, except that any contract with a sub-custodian
performing its duties outside the United States and its territories and
possessions, may omit or limit any of such conditions, provided that, any such
omission or limitation shall be expressly approved by a majority of the Trustees
of the Trust.
ARTICLE VIII
Miscellaneous Provisions
SECTION 1. Seal. The seal of the Trust shall be circular in form bearing the
inscription:
"PIONEER EMERGING MARKETS FUND"
"A DELAWARE BUSINESS TRUST 1994"
SECTION 2. Fiscal Year. The fiscal year of the Trust shall be the period of
twelve months ending on the last day of November in each calendar year.
SECTION 3. Reports to Shareholders. The Trustees shall at least semi-annually
submit to the shareholders a written financial report of the transactions of the
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Trust including financial statements which shall at least annually be certified
by independent public accountants.
SECTION 4. Voting of Securities. Except as the Trustees may otherwise designate,
the President or Treasurer may waive notice of, and act as, or appoint any
person or persons to act as, proxy or attorney-in-fact for the Trust (with or
without power of substitution) at, any meeting of stockholders or shareholders
of any corporation or other organization, the securities of which may be held by
the Trust.
SECTION 5. Evidence of Authority. A certificate by the Secretary or Assistant
Secretary, or a temporary Secretary, as to any action taken by the shareholders,
Trustees, any committee or any officer or representative of the Trust shall as
to all persons who rely on the certificate in good faith be conclusive evidence
of such action.
SECTION 6. Declaration of Trust. All references in these By-Laws to the
Declaration of Trust shall be deemed to refer to the Agreement and Declaration
of Trust of the Trust dated March 23, 1994, and known as "Pioneer Emerging
Markets Fund," as amended and in effect from time to time.
SECTION 7 Severability. Any determination that any provision of these By-Laws is
for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-Laws or the Declaration of Trust.
SECTION 8. Pronouns. All pronouns used in these By-Laws shall be deemed to refer
to the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
7
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 23rd day of June, 1994 between Pioneer
Emerging Markets Fund, a Delaware business trust (the "Fund"), and Pioneering
Management Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended,
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Fund's Board of
Trustees and officers, to manage the Fund,
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Fund and the Manager do hereby agree as follows:
1a The Manager will regularly provide the Fund with investment
research, advice and supervision and will furnish continuously an investment
program for the Fund consistent with the investment objectives and policies of
the Fund. The Manager will determine from time to time what securities shall be
purchased for the Fund, what securities shall be held or sold by the Fund and
what portion of the Fund's assets shall be held uninvested as cash, subject
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always to the provisions of the Fund's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statements under the 1940 Act
and under the Securities Act of 1933 covering the Fund's shares, as filed with
the Securities and Exchange Commission, and to the investment objectives,
policies and restrictions of the Fund, as each of the same shall be from time to
time in effect, and subject, further, to such policies and instructions as the
Board of Trustees of the Fund may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act for the Fund
in the same manner and with the same force and effect as the Fund itself might
or could do with respect to purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
2a The Manager will, to the extent reasonably required in the
conduct of the business of the Fund and upon the Fund's request, furnish to the
Fund research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Fund shall at the time have any investment in such industries,
businesses, corporations or securities. The Manager will use its best efforts in
the preparation of such reports and will endeavor to consult the persons and
sources believed by it to have information available with respect to such
industries, businesses, corporations or entities.
3a The Manager will maintain all books and records with
respect to the Fund's securities transactions required by sub-paragraphs(b)(5),
(6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than
those records being maintained by the custodian or transfer agent appointed by
the Fund) and preserve such records for the periods prescribed therefor by Rule
31a-2 of the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
4a Except as otherwise provided herein, the Manager, at its
own expense, shall furnish to the Fund office space in the offices of the
Manager or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the Fund's
affairs and investments, and shall arrange, if desired by the Fund, for members
of the Manager's organization to serve as officers or agents of the Fund.
5a The Manager shall pay directly or reimburse the Fund for:
(i) the compensation (if any) of the Trustees who are affiliated with, or
interested persons of, the Manager and all officers of the Fund as such; and
(ii) all expenses not hereinafter specifically assumed by the Fund where such
expenses are incurred by the Manager or by the Fund in connection with the
management of the affairs of, and the investment and reinvestment of the assets
of, the Fund.
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(c) The Fund shall assume and shall pay: (i) charges and
expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such services are performed by personnel of
the Manager, or its affiliates, office space and facilities and personnel
compensation, training and benefits; (ii) the charges and expenses of auditors;
(iii) 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; (iv) issue and transfer taxes, chargeable to the Fund in connection
with securities transactions to which the Fund is a party; (v) 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; (vi) fees and expenses involved in registering and
maintaining registrations of the Fund and/or its shares with the Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the Commission; (vii) 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; (viii)
charges and expenses of legal counsel to the Fund and the Trustees; (ix)
distribution fees paid by the Fund in accordance with Rule 12b-1 promulgated by
the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of
the Fund who are not affiliated with or interested persons of the Manager, the
Fund (other than as Trustees), The Pioneer Group, Inc. or Pioneer Funds
Distributor, Inc.; (xi) the cost of preparing and printing share certificates;
and (xii) interest on borrowed money, if any.
6a In addition to the expenses described in Section 2(c)
above, the Fund shall pay all brokers' and underwriting commissions chargeable
to the Fund in connection with securities transactions to which the Fund is a
party.
7a The Fund shall pay to the Manager, as compensation for the
Manager's services hereunder, a fee at the rate of 1.25% per annum of the Fund's
average daily net assets. The management fee payable hereunder shall be computed
daily and paid monthly in arrears. In the event of termination of this
Agreement, the fee provided in this Section shall be computed on the basis of
the period ending on the last business day on which this Agreement is in effect
subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month.
8a If the operating expenses of the Fund in any year exceed
the limits set by state securities laws or regulations in states in which shares
of the Fund are sold, the amount payable to the Manager under subsection (a)
above will be reduced (but not below $0), and the Manager shall make other
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arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulation. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Fund to the extent required by the preceding sentence.
9a In addition to the foregoing, the Manager may from time to
time agree not to impose all or a portion of its fee otherwise payable hereunder
(in advance of the time such fee or a portion thereof would otherwise accrue)
and/or undertake to pay or reimburse the Fund for all or a portion of its
expenses not otherwise required to be borne or reimbursed by the Manager. Any
such fee reduction or undertaking may be discontinued or modified by the Manager
at any time.
The Manager will not be liable for any error of judgment or
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 security on the
recommendation of the Manager, whether or not such recommendation shall have
been based upon its own investigation and research or upon investigation and
research made by any other individual, firm or corporation, but nothing
contained herein will be construed to protect the Manager against any liability
to the Fund or its shareholders 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 this Agreement.
10a Nothing in this Agreement will in any way limit or
restrict the Manager or any of its officers, Trustees, or employees from buying,
selling or trading in any securities for its or their own accounts or other
accounts. The Manager may act as an investment advisor to any other person, firm
or corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Fund or deemed to violate or give rise to any duty or
obligation of the Manager to the Fund except as otherwise imposed by law. The
Fund recognizes that Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
11a In connection with purchases or sales of fund securities
for the account of the Fund, neither the Manager nor any of its Trustees,
officers or employees will act as a principal or agent or receive any commission
except as permitted by the 1940 Act. The Manager shall arrange for the placing
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of all orders for the purchase and sale of fund securities for the Fund's
account with brokers or dealers selected by the Manager. In the selection of
such brokers or dealers and the placing of such orders, the Manager is directed
at all times to seek for the Fund the most favorable execution and net price
available except as described herein. It is also understood that it is desirable
for the Fund that the Manager have access to supplemental investment and market
research and security and economic analyses provided by brokers who may execute
brokerage transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and efficient execution. Therefore, the Manager is authorized to place
orders for the purchase and sale of securities for the Fund with such brokers,
subject to review by the Fund's Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Manager in connection with its or
its affiliates services to other clients.
12a On occasions when the Manager deems the purchase or sale
of a security to be in the best interest of the Fund as well as other clients,
the Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such clients.
This Agreement shall become effective on the date hereof and
shall remain in force until June 23, 1996 and from year to year thereafter, but
only so long as its continuance is approved annually by a vote of the Trustees
of the Fund voting in person, including a majority of its Trustees who are not
parties to this Agreement or interested persons (as the term "interested
persons" is defined in the 1940 Act) of any such parties, at a meeting of
Trustees called for the purpose of voting on such approval or by a vote of a
"majority of the outstanding voting securities" (as defined in the 1940 Act) of
the Fund, subject to the right of the Fund and the Manager to terminate this
contract as provided in Section 7 hereof.
Either party hereto may, without penalty, terminate this
Agreement by vote of its Board of Trustees or by vote of a "majority of its
outstanding voting securities" (as defined in the 1940 Act) of the Fund and the
giving of 60 days' written notice to the other party.
This Agreement shall automatically terminate in the event of
its assignment. For purposes of this Agreement, the term "assignment" shall have
the meaning given it by Section 2(a)(4) of the 1940 Act.
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9. The Fund agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Fund, the name of the
Fund, and any series thereof, will be changed to one that does not contain the
name "Pioneer" or otherwise suggest an affiliation with the Manager.
10. The Manager is an independent contractor and not an employee of the
Fund for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Fund, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Fund or series thereof.
11. This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
12. This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of Massachusetts.
13. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
14. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER EMERGING MARKETS FUND
/s/Joseph P. Barri /s/John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/Joseph P. Barri /s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary President
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 23rd day of June 1994, by and
between Pioneer Emerging Markets Fund, a Delaware business trust (the "Trust"),
and Pioneer Funds Distributor, Inc., a Massachusetts corporation (the
"Underwriter").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") for the purpose of registering shares of beneficial interest for
public offering under the Securities Act of 1933, as amended;
WHEREAS, the Underwriter engages in the purchase and sale of securities
both as a broker and a dealer and is registered as a broker-dealer with the
Commission and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale to the public of the shares of beneficial interest of the securities
portfolio of each series of the Trust which the Trustees may establish from time
to time (individually, a "Portfolio" and collectively, the "Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Underwriter do hereby agree as follows:
1. The Trust does hereby grant to the Underwriter the right and option
to purchase shares of beneficial interest of each class of each Portfolio of the
Trust (the "Shares") for sale to investors either directly or indirectly through
other broker-dealers. The Underwriter is not required to purchase any specified
number of Shares, but will purchase from the Trust only a sufficient number of
Shares as may be necessary to fill unconditional orders received from time to
time by the Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering
price based upon the net asset value of the Shares, to be calculated for each
class of Shares as described in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the offering,
plus any sales charges as approved by the Underwriter and the Trustees of the
Trust and as further outlined in the Trust's Prospectus. The offering price
shall be subject to any provisions set forth in the Prospectus from time to time
with respect thereto, including, without limitation, rights of accumulation,
letters of intention, exchangeability of shares, reinstatement privileges, net
asset value purchases by certain persons and reinvestments of dividends and
capital gain distributions.
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges, if any, will be reallowed
to such broker-dealers who are members of the NASD or, in the case of certain
sales by banks or certain sales to foreign nationals, to brokers or dealers
exempt from registration with the Commission. The concession reallowed to
broker-dealers shall be set forth in a written sales agreement and shall be
<PAGE>
generally the same for broker-dealers providing comparable levels of sales and
service.
4. This Agreement shall terminate on any anniversary hereof if its
terms and renewal have not been approved by a majority vote of the Trustees of
the Trust voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by the Trust on 60 days' written notice to the Underwriter, or by
the Underwriter upon similar notice to the Trust. This Agreement may also be
terminated by a party upon five (5) days' written notice to the other party in
the event that the Commission has issued an order or obtained an injunction or
other court order suspending effectiveness of the Registration Statement
covering the Shares of the Trust. Finally, this Agreement may also be terminated
by the Trust upon five (5) days' written notice to the Underwriter provided
either of the following events has occurred: (i) the NASD has expelled the
Underwriter or suspended its membership in that organization; or (ii) the
qualification, registration, license or right of the Underwriter to sell Shares
in a particular state has been suspended or cancelled in a state in which sales
of the Shares of the Trust during the most recent 12 month period exceeded 10%
of all Shares of the Trust sold by the Underwriter during such period.
5. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be (i) that part of the sales charge
which is retained by the Underwriter after allowance of discounts to dealers as
set forth in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, as amended, and (ii)
those amounts payable to the Underwriter as reimbursement of expenses pursuant
to any applicable distribution plan for the Trust which may be in effect.
Nothing contained herein shall relieve the Trust of any obligation under its
management contract or any other contract with any affiliate of the Underwriter.
6. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, of any nature
whatsoever, including without limitation, liabilities arising in connection with
any agreement of the Trust or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of the Trust and that no Trustee, officer or holder of shares of
beneficial interest of the Trust shall be personally liable for any of the
foregoing liabilities. The Trust's Certificate of Trust, as amended from time to
time, is on file in the Office of Secretary of State of the State of Delaware,
and a copy of the Trust's Declaration of Trust, as amended from time to time,
has been provided to the Underwriter. The Declaration of Trust describes in
detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of Shares of the Trust.
7. This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
8. In the event of any dispute between the parties, this Agreement
shall be construed according to the laws of The Commonwealth of Massachusetts.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers and their seal to be hereto
affixed as of day and year first above written.
ATTEST: PIONEER EMERGING MARKETS FUND
/s/Joseph P. Barri /s/John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
/s/Joseph P. Barri /s/Robert L. Butler
Joseph P. Barri Robert L. Butler
Clerk President
3
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER EMERGING MARKETS FUND
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this day of 23rd June 1994, between PIONEER EMERGING MARKETS FUND
(the "Fund") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the Custodian
as a custodian for the term and subject to the provisions of this Agreement. The
Custodian shall not be under any duty or obligation to require the Fund to
deliver to it any securities or funds owned by the Fund and shall have no
responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Declaration of
Trust or Certificate of Incorporation and By-Laws (or comparable documents) of
the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund held
by the Custodian in the United States: Except for securities and funds held by
any Subcustodians appointed pursuant to the provisions of Section 3 hereof, the
Custodian shall have and perform the following powers and duties:
A. Safekeeping - To keep safely the securities and other assets of the Fund that
have been delivered to the Custodian and, on behalf of the Fund, from time to
time to receive delivery of securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by physical
possession of the share certificates or other instruments representing such
securities in registered or bearer form, or (2) in book-entry form by a
Securities System (as said term is defined in Section 2U).
C. Registered Name; Nominee - To hold registered securities of the Fund (1) in
the name or any nominee name of the Custodian or the Fund, or in the name or any
nominee name of any Agent appointed pursuant to Section 6F, or (2) in street
certificate form, so-called, and in any case with or without any indication of
fiduciary capacity, provided that securities are held in an account of the
Custodian containing only assets of the Fund or only assets held as fiduciary or
custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined in Section X on
Page 16, insofar as funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment being made only upon
receipt of the securities (1) by the Custodian, or (2) by a clearing corporation
of a national securities exchange of which the Custodian is a member, or (3) by
a Securities System. However, (i) in the case of repurchase agreements entered
into by the Fund, the Custodian (as well as an Agent) may release funds to a
Securities System or to a Subcustodian prior to the receipt of advice from the
Securities System or Subcustodian that the securities underlying such repurchase
agreement have been transferred by book entry into the Account (as defined in
Section 2U) of the Custodian (or such Agent) maintained with such Securities
System or Subcustodian, so long as such payment instructions to the Securities
System or Subcustodian include a requirement that delivery is only against
payment for securities, (ii) in the case of foreign exchange contracts, options,
time deposits, call account deposits, currency deposits, and other deposits,
<PAGE>
contracts or options pursuant to Sections 2J, 2L, 2M and 2N, the Custodian may
make payment therefor without receiving an instrument evidencing said deposit,
contract or option so long as such payment instructions detail specific
securities to be acquired, and (iii) in the case of securities in which payment
for the security and receipt of the instrument evidencing the security are under
generally accepted trade practice or the terms of the instrument representing
the security expected to take place in different locations or through separate
parties, such as commercial paper which is indexed to foreign currency exchange
rates, derivatives and similar securities, the Custodian may make payment for
such securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
security.
E. Exchanges - Upon receipt of proper instructions, to exchange securities held
by it for the account of the Fund for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event, relating to the securities or the issuer of such
securities, and to deposit any such securities in accordance with the terms of
any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into a name or nominee name as permitted
in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian and further provided the Custodian shall at the time
of surrendering securities or instruments receive a receipt or other evidence of
ownership thereof.
F. Sales of Securities - Upon receipt of proper instructions, to make delivery
of securities which have been sold for the account of the Fund, but only against
payment therefor (1) in cash, by a certified check, bank cashier's check, bank
credit, or bank wire transfer, or (2) by credit to the account of the Custodian
with a clearing corporation of a national securities exchange of which the
Custodian is a member, or (3) by credit to the account of the Custodian or an
Agent of the Custodian with a Securities System; provided, however, that (i) in
the case of delivery of physical certificates or instruments representing
securities, the Custodian may make delivery to the broker buying the securities,
against receipt therefor, for examination in accordance with "street delivery"
custom, provided that the payment therefor is to be made to the Custodian (which
payment may be made by a broker's check) or that such securities are to be
returned to the Custodian, and (ii) in the case of securities referred to in
clause (iii) of the last sentence of Section 2D, the Custodian may make
settlement, including with respect to the form of payment, in accordance with
generally accepted trade practice relating to such securities or the terms of
the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to instruct a
Subcustodian or an Agent to surrender securities to the depositary used by an
issuer of American Depositary Receipts or International Depositary Receipts
(hereinafter collectively referred to as "ADRs") for such securities against a
written receipt therefor adequately describing such securities and written
evidence satisfactory to the Subcustodian or Agent that the depositary has
acknowledged receipt of instructions to issue with respect to such securities
ADRs in the name of the Custodian, or a nominee of the Custodian, for delivery
to the Custodian in Boston, Massachusetts, or at such other place as the
Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer thereof
against a written receipt therefor adequately describing the ADRs surrendered
2
<PAGE>
and written evidence satisfactory to the Custodian that the issuer of the ADRs
has acknowledged receipt of instructions to cause its depositary to deliver the
securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock dividends,
rights and other items of like nature; and to deal with the same pursuant to
proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase or writing of an option
on a security or securities index by the Fund; to deposit and maintain in a
segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
relating to such securities or other assets a notice or other communication
evidencing the expiration, termination or exercise of such covered option
furnished by The Options Clearing Corporation, the securities or options
exchange on which such covered option is traded or such other organization as
may be responsible for handling such options transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver securities of
the Fund to lenders or their agents as collateral for borrowings effected by the
Fund, provided that such borrowed money is payable to or upon the Custodian's
order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or accounts in
the name of the Fund on the Custodian's books subject only to draft or order by
the Custodian. All funds received by the Custodian from or for the account of
the Fund shall be deposited in said account(s). The responsibilities of the
Custodian to the Fund for deposits accepted on the Custodian's books shall be
that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as may
be designated by the Fund in such instructions (any such bank or trust company
so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) (hereinafter collectively referred
to as "demand deposit bank accounts") shall be in the name of the Custodian for
account of the Fund and subject only to the Custodian's draft or order. Such
demand deposit accounts may be opened with Banking Institutions in the United
States and in other countries and may be denominated in either U. S. Dollars or
other currencies as the Fund may determine. All such deposits shall be deemed to
be portfolio securities of the Fund and accordingly the responsibility of the
Custodian therefore shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing fixed term
and call deposits with such banks and in such amounts as the Fund may authorize
pursuant to proper instructions. Such deposits may be placed with the Custodian
3
<PAGE>
or with Subcustodians or other Banking Institutions as the Fund may determine.
Deposits may be denominated in U. S. Dollars or other currencies and need not be
evidenced by the issuance or delivery of a certificate to the Custodian,
provided that the Custodian shall include in its records with respect to the
assets of the Fund appropriate notation as to the amount and currency of each
such deposit, the accepting Banking Institution and other appropriate details,
and shall retain such forms of advice or receipt evidencing the deposit, if any,
as may be forwarded to the Custodian by the Banking Institution. Such deposits,
other than those placed with the Custodian, shall be deemed portfolio securities
of the Fund and the responsibilities of the Custodian therefor shall be the same
as those for demand deposit bank accounts placed with other banks, as described
in Section L of this Agreement. The responsibility of the Custodian for such
deposits accepted on the Custodian's books shall be that of a U.S. bank for a
similar deposit.
N. Foreign Exchange Transactions and Futures Contracts Pursuant to proper
instructions, to enter into foreign exchange contracts or options to purchase
and sell foreign currencies for spot and future delivery on behalf and for the
account of the Fund. Such transactions may be undertaken by the Custodian with
such Banking Institutions, including the Custodian and Subcustodian(s) as
principals, as approved and authorized by the Fund. Foreign exchange contracts
and options other than those executed with the Custodian, shall be deemed to be
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks as described in Section 2-L of this agreement. Upon receipt of
proper instructions, to receive and retain confirmations evidencing the purchase
or sale of a futures contract or an option on a futures contract by the Fund; to
deposit and maintain in a segregated account, for the benefit of any futures
commission merchant or to pay to such futures commission merchant, assets
designated by the fund as initial, maintenance or variation "margin" deposits
intended to secure the Fund's performance of its obligations under any futures
contracts purchased or sold or any options on futures contracts written by the
Fund, in accordance with the provisions of any agreement or agreements among any
of the Fund, the Custodian and such futures commission merchant, designated to
comply with the rules of the Commodity Futures Trading Commission and/or any
contract market, or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer assets in such margin accounts
only in accordance with any such agreements or rules.
O. Stock Loans - Upon receipt of proper instructions, to deliver securities of
the Fund, in connection with loans of securities by the Fund, to the borrower
thereof prior to receipt of the collateral, if any, for such borrowing, provided
that for stock loans secured by cash collateral the Custodian's instructions to
the Securities System require that the Securities System may deliver the
securities to the borrower thereof only upon receipt of the collateral for such
borrowing.
P. Collections - To collect, receive and deposit in said account or accounts all
income, payments of principal and other payments with respect to the securities
held hereunder, and in connection therewith to deliver the certificates or other
instruments representing the securities to the issuer thereof or its agent when
securities are called, redeemed, retired or otherwise become payable; provided,
that the payment is to be made in such form and manner and at such time, which
may be after delivery by the Custodian of the instrument representing the
security, as is in accordance with the terms of the instrument representing the
security, or such proper instructions as the Custodian may receive, or
governmental regulations, the rules of Securities Systems or other U.S.
securities depositories and clearing agencies or, with respect to securities
referred to in clause (iii) of the last sentence of Section 2D, in accordance
4
<PAGE>
with generally accepted trade practice; (ii) to execute ownership and other
certificates and affidavits for all federal and state tax purposes in connection
with receipt of income or other payments with respect to securities of the Fund
or in connection with transfer of securities, and (iii) pursuant to proper
instructions to take such other actions with respect to collection or receipt of
funds or transfer of securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all forms of
proxies and all notices of meetings and any other notices or announcements
affecting or relating to securities owned by the Fund that are received by the
Custodian, and upon receipt of proper instructions, to execute and deliver or
cause its nominee to execute and deliver such proxies or other authorizations as
may be required. Neither the Custodian nor its nominee shall vote upon any of
such securities or execute any proxy to vote thereon or give any consent or take
any other action with respect thereto (except as otherwise herein provided)
unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express authorization
from the Fund, to attend to all nondiscretionary details in connection with the
sale, exchange, substitution, purchase, transfer or other dealings with
securities, funds or other property of the Portfolio held by the Custodian
except as otherwise directed from time to time by the Directors or Trustees of
the Fund.
T. Bills - Upon receipt of proper instructions, to pay or cause to be paid,
insofar as funds are available for the purpose,, bills, statements, or other
obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may deposit
and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either directly or
through one or more Agents appointed by the Custodian (provided that any such
5
<PAGE>
agent shall be qualified to act as a custodian of the Fund pursuant to the
Investment Company Act of 1940 and the rules and regulations thereunder), in a
Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund which are
maintained in a Securities System shall identify by book-entry those securities
belonging to the Fund; 3) The Custodian shall pay for securities purchased for
the account of the Fund upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such payment and transfer
for the account of the Fund. The Custodian shall transfer securities sold for
the account of the Fund upon (i) receipt of advice from the Securities System
that payment for such securities has been transferred to the Account, and (ii)
the making of an entry on the records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advices from the
Securities System of transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian or an Agent as
referred to above, and be provided to the Fund at its request. The Custodian
shall furnish the Fund confirmation of each transfer to or from the account of
the Fund in the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the use of
any such Securities System on behalf of the Fund as promptly as practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver securities,
funds and other property of the Fund to a Subcustodian or another custodian of
the Fund; and, upon receipt of proper instructions, to make such other
disposition of securities, funds or other property of the Fund in a manner other
than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - In performing its duties generally, and particularly
in connection with the purchase, sale and exchange of securities made by or for
the Fund, the Custodian may assume unless and until notified in writing to the
contrary that proper instructions received by it are not in conflict with or in
any way contrary to any provisions of the Fund's Declaration of Trust or
Certificate of Incorporation or By-Laws (or comparable documents) or votes or
proceedings of the shareholders or Directors of the Fund. The Custodian shall in
no event be liable to the Fund and shall be indemnified by the Fund for any
violation which occurs in the course of carrying out instructions given by the
Fund of any investment limitations to which the Fund is subject or other
limitations with respect to the Fund's more powers to make expenditures,
encumber securities, borrow or take similar actions affecting the Fund.
6
<PAGE>
X. Proper Instructions - Proper instructions shall mean a tested telex from the
Fund or a written request, direction, instruction or certification signed or
initialled on behalf of the Fund by one or more person or persons as the Board
of Trustees or Directors of the Fund shall have from time to time authorized,
provided, however, that no such instructions directing the delivery of
securities or the payment of funds to an authorized signatory of the Fund shall
be signed by such person. Those persons authorized to give proper instructions
may be identified by the Board of Trustees or Directors by name, title or
position and will include at least one officer empowered by the Board to name
other individuals who are authorized to give proper instructions on behalf of
the Fund. Telephonic or other oral instructions given by any one of the above
persons will be considered proper instructions if the Custodian reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Oral instructions will be
confirmed by tested telex or in writing in the manner set forth above but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
Trustees, Directors, employees or agents) and will deliver to the Custodian a
similar authorization from any investment manager or adviser or person or entity
with similar reponsibilities which is authorized to give proper instructions on
behalf of the Fund to the Custodian. Proper instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form of
standing instructions. Proper instructions may include communications effected
directly between electromechanical or electronic devices or systems, in addition
to tested telex, provided that the Fund and the Custodian agree to the use of
such device or system.
Y. Segregated Account - The Custodian shall upon receipt of proper instructions
establish and maintain on its books a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities of the Fund, including securities maintained by the Custodian
pursuant to Section 2U hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. (or any futures commission merchant registered under
the Commodity Exchange Act) relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or securities in connection with options purchased, sold or written by the Fund
or commodity futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) as mutually
agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with respect to the
appointment of Subcustodians Outside the United States: Securities, funds and
other property of the Fund may be held by subcustodians appointed pursuant to
the provisions of this Section 3 (a "Subcustodian"). The Custodian may, at any
time and from time to time, appoint any bank or trust company (meeting the
requirements of a custodian or an "eligible foreign custodian" under the
Investment Company Act of 1940 and the rules and regulations thereunder) to act
as a Subcustodian for the Fund, and the Custodian may also utilize directly and
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<PAGE>
any Subcustodian may utilize such securities depositories located outside the
United States (as shall be approved in writing by Fund) and as meet the
requirements of an "eligible foreign custodian" as aforesaid, provided that the
Fund shall have approved in writing (1) any such bank or trust company and the
subcustodian agreement to be entered into between such bank or trust company and
the Custodian, and (2) if the Subcustodian is a bank organized under the laws of
a country other than the United States, the country or countries in which the
Subcustodian is authorized to hold securities, cash and other property of the
Fund, and (3) the securities depositories, if any, through which the
Subcustodian or the Custodian is authorized to hold securities, cash and other
property of the Fund. Upon such approval by the Fund, the Custodian is
authorized on behalf of the Fund to notify each Subcustodian of its appointment
as such. The Custodian may, at any time in its discretion, remove any bank or
trust company that has been appointed as a Subcustodian but will promptly notify
the Fund of any such action.
Those Subcustodians, and the countries where and the securities depositories
through which they or the Custodian may hold securities, cash and other property
of the Fund which the Fund has approved to date are set forth on Appendix A
hereto. Such Appendix shall be amended from time to time as Subcustodians,
and/or countries and/or securities depositories are changed, added or deleted.
The Fund shall be responsible for informing the Custodian sufficiently in
advance of a proposed investment which is to be held in a country not listed on
Appendix A, in order that there shall be sufficient time for the Fund to give
the approval required by the preceding paragraph and for the Custodian to put
the appropriate arrangements in place with such Subcustodian, including
negotiation of a subcustodian agreement and submission of such subcustodian
agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country before the
foregoing procedures have been completed, such security shall be held by such
agent as the Custodian may appoint. In any event, the Custodian shall be liable
to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either directly or
indirectly (including by a securities depository or clearing agency),
notwithstanding any provision of this Agreement to the contrary, payment for
securities purchased and delivery of securities sold may be made prior to
receipt of the securities or payment, respectively, and securities or payment
may be received in a form, in accordance with governmental regulations, rules of
securities depositories and clearing agencies, or generally accepted trade
practice in the applicable local market.
With respect to the securities and funds held by a Subcustodian, either directly
or indirectly, (including by a securities depository or a clearing agency)
including demand and interest bearing deposits, currencies or other deposits and
foreign exchange contracts as referred to in Sections 2L, 2M or 2N, the
Custodian shall be liable to the Fund if and only to the extent that such
Subcustodian is liable to the Custodian and the Custodian recovers under the
applicable subcustodian agreement.
The Custodian shall nevertheless be liable to the Fund for its own negligence
in transmitting any instructions received by it from the Fund and for its own
negligence in connection with the delivery of any securities or funds held by it
to any such Subcustodian.
8
<PAGE>
In the event that any Subcustodian appointed pursuant to the provisions of this
Section 3 fails to perform any of its obligations under the terms and conditions
of the applicable subcustodian agreement, the Custodian shall use its best
efforts to cause such Subcustodian to perform such obligations. In the event
that the Custodian is unable to cause such Subcustodian to perform fully its
obligations thereunder, the Custodian shall forthwith upon the Fund's request
terminate such Subcustodian in accordance with the termination provisions under
the applicable subcustodian agreement and, if necessary or desirable, appoint
another subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by such
Subcustodian.
At the written request of the Fund, the Custodian will terminate any
subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to the Fund,
terminate any Subcustodian of the Fund in accordance with the termination
provisions under the applicable Subcustodian Agreement, and at the written
request of the Fund, the Custodian will terminate any Subcustodian in accordance
with the termination provisions under the applicable Subcustodian Agreement.
If necessary or desirable, the Custodian may appoint another subcustodian to
replace a Subcustodian terminated pursuant to the foregoing provisions of this
Section 3, such appointment to be made upon approval of the successor
subcustodian by the Fund's Board of Directors or Trustees in accordance with the
provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under the
indemnification provisions of any subcustodian agreement, the Custodian shall
promptly give written notice to the Fund of such claim. No more than thirty days
after written notice to the Fund of the Custodian's intention to make such
payment, the Fund will reimburse the Custodian the amount of such payment except
in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may assist
generally in the preparation of reports to Fund shareholders and others, audits
of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as Financial
Agent: The Fund hereby also appoints the Custodian as the Fund's financial
agent. With respect to the appointment as financial agent, the Custodian shall
have and perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 3la-1 and 3la-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
B. Accounts - To keep books of account and render statements, including interim
monthly and complete quarterly financial statements, or copies thereof, from
9
<PAGE>
time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the Custodian
pursuant to Sections 5A and 5B shall at all times during the Custodian's regular
business hours be open to inspection and audit by officers of, attorneys for and
auditors employed by the Fund and by employees and agents of the Securities and
Exchange Commission, provided that all such individuals shall observe all
security requirements of the Custodian applicable to its own employees having
access to similar records within the Custodian and such regulations as may be
reasonably imposed by the Custodian.
D. Calculation of Net Asset Value - To compute and determine the net asset value
per share of capital stock of the Fund as of the close of business on the New
York Stock Exchange on each day on which such Exchange is open, unless otherwise
directed by proper instructions. Such computation and determination shall be
made in accordance with (1) the provisions of the Fund's Declaration of Trust or
Certificate of Incorporation or By-Laws, as they may from time to time be
amended and delivered to the Custodian, (2) the votes of the Board of Trustees
or Directors of the Fund at the time in force and applicable, as they may from
time to time be delivered to the Custodian, and (3) proper instructions from
such officers of the Fund or other persons as are from time to time authorized
by the Board of Trustees or Directors of the Fund to give instructions with
respect to computation and determination of the net asset value. On each day
that the Custodian shall compute the net asset value per share of the Fund, the
Custodian shall provide the Fund with written reports which permit the Fund to
verify that portfolio transactions have been recorded in accordance with the
Fund's instructions and are reconciled with the Fund's trading records.
In computing the net asset value, the Custodian may rely upon any information
furnished by proper instructions, including without limitation any information
(1) as to accrual of liabilities of the Fund and as to liabilities of the Fund
not appearing on the books of account kept by the Custodian, (2) as to the
existence, status and proper treatment of reserves, if any, authorized by the
Fund, (3) as to the sources of quotations to be used in computing the net asset
value, including those listed in Appendix B, (4) as to the fair value to be
assigned to any securities or other property for which price quotations are not
readily available, and (5) as to the sources of information with respect to
"corporate actions" affecting portfolio securities of the Fund, including those
listed in Appendix B. (Information as to "corporate actions" shall include
information as to dividends, distributions, stock splits, stock dividends,
rights offerings, conversions, exchanges, recapitalizations, mergers,
redemptions, calls, maturity dates and similar transactions, including the ex-
and record dates and the amounts or other terms thereof.)
In like manner, the Custodian shall compute and determine the net asset value as
of such other times as the Board of Trustees or Directors of the Fund from time
to time may reasonably request.
Notwithstanding any other provisions of this Agreement, including Section 6C,
the following provisions shall apply with respect to the Custodian's foregoing
responsibilities in this Section 5D: The Custodian shall be held to the exercise
of reasonable care in computing and determining net asset value as provided in
this Section 5D, but shall not be held accountable or liable for any losses,
damages or expenses the Fund or any shareholder or former shareholder of the
Fund may suffer or incur arising from or based upon errors or delays in the
determination of such net asset value unless such error or delay was due to the
Custodian's negligence, gross negligence or reckless or willful misconduct in
determination of such net asset value. (The parties hereto acknowledge, however,
that the Custodian's causing an error or delay in the determination of net asset
10
<PAGE>
value may, but does not in and of itself, constitute negligence, gross
negligence or reckless or willful misconduct.) In no event shall the Custodian
be liable or responsible to the Fund, any present or former shareholder of the
Fund or any other party for any error or delay which continued or was undetected
after the date of an audit performed by the certified public accountants
employed by the Fund if, in the exercise of reasonable care in accordance with
generally accepted accounting standards, such accountants should have become
aware of such error or delay in the course of performing such audit. The
Custodian's liability for any such negligence, gross negligence or reckless or
willful misconduct which results in an error in determination of such net asset
value shall be limited to the direct, out-of-pocket loss the Fund, shareholder
or former shareholder shall actually incur, measured by the difference between
the actual and the erroneously computed net asset value, and any expenses the
Fund shall incur in connection with correcting the records of the Fund affected
by such error (including charges made by the Fund's registrar and transfer agent
for making such corrections) or communicating with shareholders or former
shareholders of the Fund affected by such error.
Without limiting the foregoing, the Custodian shall not be held accountable or
liable to the Fund, any shareholder or former shareholder thereof or any other
person for any delays or losses, damages or expenses any of them may suffer or
incur resulting from (1) the Custodian's failure to receive timely and suitable
notification concerning quotations or corporate actions relating to or affecting
portfolio securities of the Fund or (2) any errors in the computation of the net
asset value based upon or arising out of quotations or information as to
corporate actions if received by the Custodian either (i) from a source which
the Custodian was authorized pursuant to the second paragraph of this Section 5D
to rely upon, or (ii) from a source which in the Custodian's reasonable judgment
was as reliable a source for such quotations or information as the sources
authorized pursuant to that paragraph. Nevertheless, the Custodian will use its
best judgment in determining whether to verify through other sources any
information it has received as to quotations or corporate actions if the
Custodian has reason to believe that any such information might be incorrect.
In the event of any error or delay in the determination of such net asset value
for which the Custodian may be liable, the Fund and the Custodian will consult
and make good faith efforts to reach agreement on what actions should be taken
in order to mitigate any loss suffered by the Fund or its present or former
shareholders, in order that the Custodian's exposure to liability shall be
reduced to the extent possible after taking into account all relevant factors
and alternatives. Such actions might include the Fund or the Custodian taking
reasonable steps to collect from any shareholder or former shareholder who has
received any overpayment upon redemption of shares such overpaid amount or to
collect from any shareholder who has underpaid upon a purchase of shares the
amount of such underpayment or to reduce the number of shares issued to such
shareholder. It is understood that in attempting to reach agreement on the
actions to be taken or the amount of the loss which should appropriately be
borne by the Custodian, the Fund and the Custodian will consider such relevant
factors as the amount of the loss involved, the Fund's desire to avoid loss of
shareholder good will, the fact that other persons or entitles could have been
reasonably expected to have detected the error sooner than the time it was
actually discovered, the appropriateness of limiting or eliminating the benefit
which shareholders or former shareholders might have obtained by reason of the
error, and the possibility that other parties providing services to the Fund
might be induced to absorb a portion of the loss incurred.
E. Disbursements - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
11
<PAGE>
taxes, management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper
Instruction; Evidence of Authority; Etc. The Custodian shall not be liable for
any action taken or omitted in reliance upon proper instructions believed by it
to be genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the Custodian
the names, signatures and scope of authority of all persons authorized to give
proper instructions or any other such notice, request, direction, instruction,
certificate or instrument on behalf of the Fund, the names and signatures of the
officers of the Fund, the name and address of the Shareholder Servicing Agent,
and any resolutions, votes, instructions or directions of the Fund's Board of
Trustees or Directors or shareholders. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set forth
therein and may be considered in full force and effect until receipt of a
similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive and act
upon advice of (i) counsel regularly retained by the Custodian in respect of
custodian matters, (ii) counsel for the Fund, or (iii) such other counsel as the
Fund and the Custodian may agree upon, with respect to all matters, and the
Custodian shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
B. Liability of the Custodian with Respect to Use of Securities System - With
respect to the portfolio securities, cash and other property of the Fund held by
a Securities System, the Custodian shall be liable to the Fund only for any loss
or damage to the Fund resulting from use of the Securities System if caused by
any negligence, misfeasance or misconduct of the Custodian or any of its agents
or of any of its or their employees or from any failure of the Custodian or any
such agent to enforce effectively such rights as it may have against the
Securities System. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage to the Fund if and to the extent that the
Fund has not been made whole for any such loss or damage.
C. Liability of the Custodian with respect to Subcustodians The Custodian shall
be liable to the Fund for any loss or damage to the Fund caused by or resulting
from the acts or omissions of any Subcustodian to the extent that under the
terms set forth in the subcustodian agreement between the Custodian and the
Subcustodian (or in the subcustodian agreement between a Subcustodian and any
secondary Subcustodian), the Subcustodian (or secondary Subcustodian) has failed
to perform in accordance with the standard of conduct imposed under such
subcustodian agreement as determined in accordance with the law which is
12
<PAGE>
adjudicated to govern such agreement and in accordance with any determination of
any court as to the duties of said Subcustodian pursuant to said agreement. The
Custodian shall also be liable to the Fund for its own negligence in
transmitting any instructions received by it from the Fund and for its own
negligence in connection with the delivery of any securities or funds held by it
to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The Custodian shall be held
only to the exercise of reasonable care and diligence in carrying out the
provisions of this Agreement, provided that the Custodian shall not thereby be
required to take any action which is in contravention of any applicable law. The
Fund agrees to indemnify and hold harmless the Custodian and its nominees from
all claims and liabilities (including counsel fees) incurred or assessed against
it or its nominees in connection with the performance of this Agreement, except
such as may arise from its or its nominee's breach of the relevant standard of
conduct set forth in this Agreement. Without limiting the foregoing
indemnification obligation of the Fund, the Fund agrees to indemnify the
Custodian and any nominee in whose name portfolio securities or other property
of the Fund is registered against any liability the Custodian or such nominee
may incur by reason of taxes assessed to the Custodian or such nominee or other
costs, liability or expense incurred by the Custodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other property
of the Fund is registered in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, a securities depository, an agent of
the Custodian or a Subcustodian, a Securities System, or a Banking Institution,
or for any loss arising from a foreign currency transaction or contract, where
the loss results from a Sovereign Risk or where the entity maintaining such
securities, currencies, deposits or other property of the Fund, whether the
Custodian, a Subcustodian, a securities depository, an agent of the Custodian or
a Subcustodian, a Securities System or a Banking Institution, has exercised
reasonable care maintaining such property or in connection with the transaction
involving such property. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to receive
reimbursement from the Fund on demand, in the manner provided in Section 7, for
its cash disbursements, expenses and charges (including the fees and expenses of
any Subcustodian or any Agent) in connection with this Agreement, but excluding
salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require the
Custodian to advance cash or securities for any purpose for the benefit of the
Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
13
<PAGE>
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's property,
including securities, to the extent necessary to obtain reimbursement or
indemnification.
G. Appointment of Agents - The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
as its agent (an "Agent") to carry out such of the provisions of this Agreement
as the Custodian may from time to time direct, provided, however, that the
appointment of such Agent (other than an Agent appointed pursuant to the third
paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this Agreement.
H. Powers of Attorney - Upon request, the Fund shall deliver to the Custodian
such proxies, powers of attorney or other instruments as may be reasonable and
necessary or desirable in connection with the performance by the Custodian or
any Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a custody fee
based on such fee schedule as may from time to time be agreed upon in writing by
the Custodian and the Fund. Such fee, together with all amounts for which the
Custodian is to be reimbursed in accordance with Section 6D, shall be billed to
the Fund in such a manner as to permit payment by a direct cash payment to the
Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in full force
and effect until terminated by either party by an instrument in writing
delivered or mailed, postage prepaid, to the other party, such termination to
take effect not sooner than seventy five (75) days after the date of such
delivery or mailing. In the event of termination the Custodian shall be entitled
to receive prior to delivery of the securities, funds and other property held by
it all accrued fees and unreimbursed expenses the payment of which is
contemplated by Sections 6D and 7, upon receipt by the Fund of a statement
setting forth such fees and expenses. In the event of the appointment of a
successor custodian, it is agreed that the funds and securities owned by the
Fund and held by the Custodian or any Subcustodian shall be delivered to the
successor custodian, and the Custodian agrees to cooperate with the Fund in
execution of documents and performance of other actions necessary or desirable
in order to substitute the successor custodian for the Custodian under this
Agreement.
9. Amendment: This Agreement constitutes the entire understanding and agreement
of the parties hereto with respect to the subject matter hereof. No provision of
this Agreement may be amended or terminated except by a statement in writing
signed by the party against which enforcement of the amendment or termination is
sought.
In connection with the operation of this Agreement, the Custodian and the Fund
may agree in writing from time to time on such provisions interpretative of or
in addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. No interpretative or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the parties
and in no way alter, amend, limit or restrict the contractual obligations of the
parties set forth in this Agreement.
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<PAGE>
10. Governing Law: This instrument is executed and delivered in The Commonwealth
of Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage prepaid to
the Fund addressed to the Fund at 60 State Street, Boston, Massachusetts or to
such other address as the Fund may have designated to the Custodian in writing,
or to the Custodian at 40 Water Street, Boston, Massachusetts 02109, Attention:
Manager, Securities Department, or to such other address as the Custodian may
have designated to the Fund in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure to the
benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original. This Agreement shall become effective
when one or more counterparts have been signed and delivered by each of the
parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in its name and behalf on the day and year first above written.
PIONEER EMERGING MARKETS FUND BROWN BROTHERS HARRIMAN &
CO.
By __________________________ Per Pro
---------------------
~
15
INVESTMENT COMPANY SERVICE AGREEMENT
June 23, 1994
Pioneer Emerging Markets Fund, a Delaware business trust with
its principal place of business at 60 State Street, Boston, Massachusetts 02109
("Customer") and Pioneering Services Corporation, a Massachusetts corporation
("PSC"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest (the "Series")
of Customer, which may be established, from time to time (the "Account"), with
the services described in Exhibits A, B, C and D (collectively, the "Exhibits")
that are attached hereto and incorporated herein by reference. It is understood
that PSC may subcontract any of such services to one or more firms designated by
PSC, provided that PSC (i) shall be solely responsible for all compensation
payable to any such firm and (ii) shall be liable to Customer for the acts or
omissions of any such firm to the same extent as PSC would be liable to Customer
with respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in
effect deliver all such materials and data as may be necessary or desirable to
enable PSC to perform its services hereunder, including without limitation,
those described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such times
as are prescribed for each service in the Exhibits attached hereto. Customer
agrees to examine or to ask any other authorized recipient to examine each such
report or copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC pursuant to this Agreement which are no longer
needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports
will be retained by PSC for six years from the year of creation, during the
first two of which the same will be in readily accessible form. At the end of
six years, such records and documents, will be turned over to Customer by PSC
unless Customer authorizes their destruction.
<PAGE>
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and
systems consistent with industry standards in order to safeguard Customer's
checks, records and other data from loss or damage attributable to fire or
theft. PSC shall maintain insurance adequate to protect against the costs of
reconstructing checks, records and other data in the event of such loss and
shall notify Customer in the event of a material adverse change in such
insurance coverage. In the event of damage or loss occurring to Customer's
records or data such that PSC is unable to meet the terms of this Agreement, PSC
shall transfer all records and data to a transfer agent of Customer's choosing
upon Customer's written authorization to do so.
Without limiting the generality of the foregoing, PSC shall
not be liable or responsible for delays or errors occurring by reason of
circumstances beyond its control including acts of civil, military or banking
authority, national emergencies, labor difficulties, fire, flood or other
catastrophes, acts of God, insurrection, war, riots, failure of transportation,
communication or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and Statement of Additional Information, or are
required by a valid subpoena or warrant issued by a court of competent
jurisdiction or by a state or federal agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agent, including inspecting PSC's operation
facilities. PSC shall not be liable for injury to or responsible in any way for
the safety of any individual visiting PSC's facilities under the authority of
this section. Customer will keep confidential and will cause to keep
confidential all confidential information obtained by its employees or agents or
any other individual representing Customer while on PSC's premises. Confidential
information shall include (1) any information of whatever nature regarding PSC's
operations, security procedures, and data processing capabilities, (2) financial
information regarding PSC, its affiliates, or subsidiaries, and (3) any
information of whatever kind or description regarding any customer of PSC, its
affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant
to proper instructions from Customer, PSC shall be entitled to rely upon any
certificate, letter or other instrument or telephone call reasonably believed by
PSC to be genuine and to have been properly made or signed by an officer or
other authorized agent of Customer, and shall be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by it
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hereunder a certificate signed by an officer of Customer or any other person
authorized by Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement,
Customer agrees to indemnify and hold PSC, its employees, agents and nominees
harmless from any and all claims, demands, actions and suits, whether groundless
or otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's action or non-action
upon information, instructions or requests given or made to PSC by Customer with
respect to the Account.
Notwithstanding the above, whenever Customer may be asked to
indemnify or hold PSC harmless, Customer shall be advised of all pertinent facts
arising from the situation in question. Additionally, PSC will use reasonable
care to identify and notify Customer promptly concerning any situation which
presents, actually or potentially, a claim for indemnification against Customer.
Customer shall have the option to defend PSC against any claim for which PSC is
entitled to indemnification from Customer under the terms hereof, and in the
event Customer so elects, it will notify PSC and, thereupon, Customer shall take
over complete defense of the claim and PSC shall sustain no further legal or
other expenses in such a situation for which indemnification shall be sought or
entitled. PSC may in no event confess any claim or make any compromise in any
case in which Customer will be asked to indemnify PSC except with Customer's
prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $20.83 per
account to PSC, such fee to be payable in equal monthly installments. In
addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such
as postage, forms, envelopes, checks, "outside" mailings, telephone line and
other charges, mailgrams, mail insurance on certificates and data processing
file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice to the other.
After the date of termination, for so long as PSC in fact
continues to perform any one or more of the services contemplated by this
Agreement or any exhibit hereto, the provisions of this Agreement, including
without limitation the provisions of Section 8 dealing with indemnification,
shall where applicable continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
A. Two (2) copies of the Agreement and Declaration of Trust of
Customer, and of any amendments thereto, certified by an
officer of the Customer.
B. Two (2) copies of the following documents, currently
certified by the Secretary of Customer:
a. Customer's By-laws and any amendment thereto.
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b. Certified copies of resolutions of Customer's
Board of Trustees covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of
Customers to instruct PSC hereunder (if
different from other officers of
Customer previously specified by
Customer as to other Customer accounts
being serviced by PSC).
C. List of all officers of Customer together with specimen
signatures of those officers who are authorized to sign
share certificates and to instruct PSC in all other matters.
D. Two (2) copies of the following:
a. Prospectus
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization
by and binding effect of this Agreement on Customer, the
applicability of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, and the
approval by such public authorities as may be prerequisite
to lawful sale and deliver in the various states.
F. Amendments to, and changes in, any of the foregoing
forthwith upon such amendments and changes being available,
but in no case later than the effective date.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and
agree that all liabilities arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, including without limitation,
liabilities arising in connection with any agreement of Customer or its Trustees
set forth herein to indemnify any party to this Agreement or any other person,
shall be satisfied out of the assets of the Account first and then of Customer
and that no Trustee, officer or holder of shares of beneficial interest of
Customer shall be personally liable for any of the foregoing liabilities.
Customer's Agreement and Declaration of Trust, dated March 23, 1994, describes
in detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of shares of beneficial interest of Customer.
14. MISCELLANEOUS. In connection with the operation of this Agreement,
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
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This Agreement shall be construed in accordance with the laws
of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PSC have caused this
Agreement to be executed in their respective names by their respective officers
thereunto duly authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
/s/Joseph P. Barri, Clerk /s/William H. Smith, Jr.
Joseph P. Barri, Clerk William H. Smith, Jr.
President
PIONEER EMERGING MARKETS FUND
/s/Joseph P. Barri, Secretary /s/John F. Cogan, Jr.
Joseph P. Barri, Secretary John F. Cogan, Jr.
President
<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for fund accounts and in accordance with the provisions of
the standard fund application and Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's
shares pay to the Customer's custodian the net asset value per
share and pay to the underwriter and to the dealer their
commission, if any, on a bimonthly basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue share certificates, upon instruction, resulting from
withdrawals from share accounts (It is the policy of PSC to issue
share certificates only upon request of the shareholder).
Maintain records showing name, address, certificate numbers and
number of shares.
6. Deposit certificates to shareholder accounts when furnished with
such documents as PSC deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon
direction of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or
his legal representative to substantiate the transfer of
ownership of shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer
in accordance with properly executed transfer instructions
furnished to PSC.
11. Upon receiving appropriate detailed instructions and written
materials prepared by Customer and, where applicable, proxy
proofs checked by Customer, mail shareholder reports, proxies and
related materials of suitable design for automatic enclosing,
receive and tabulate executed proxies, and furnish an annual
meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely
fashion.
16. Provide Customer with such information regarding correspondence
as well as enable Customer to comply with related N-SAR
requirements.
17. Maintain continuous proof of the outstanding shares of Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property
reports for those accounts that have been indicated by the Post
Office to be not at the address of record with no forwarding
address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to
Customer's Board of Trustees/Directors outlining the level of
service provided.
22. Provide sale/statistical reporting for purposes of providing fund
management with information to maximizing the return to
shareholders.
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as servicing
agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of Customer (i.e., copies of trade
confirmations and other documents deemed necessary or desirable
by PSC on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate
documentation; or
b. Written or telephone authorization (where no share
certificates are issued).
3. Verify there are sufficient available shares in an account to
cover redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's
treasury share account or, if applicable, cancel such shares for
retirement.
5. Pay the applicable redemption or repurchase price to the
shareholder in accordance with Customer's Prospectus and
Declaration of Trust on or before the seventh calendar day
succeeding any receipt of certificates or requests for redemption
or repurchase in "good order" as defined in the Prospectus.
6. Notify Customer and the underwriter on behalf of Customer of the
total number of shares presented and covered by such requests
within a reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or
request for redemption or repurchase is not in "good order"
together with notice of the documents required to comply with the
good order standards. Upon receipt of the necessary documents PSC
shall effect such redemption at the net asset value applicable at
the date and time of receipt of such documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly
executed exchange authorization. PSC will redeem existing
shares and use the proceeds to purchase new shares. Shares
of Customer purchased directly or acquired through
reinvestment of dividends on such shares may be exchanged
for shares of other Pioneer funds (which funds have sales
charges) only by payment of the applicable sales charge, if
any, as described in Customer's Prospectus. Shares of
Customer acquired by exchange and through reinvestment of
dividends on such shares may be re-exchanged to another
Pioneer fund at their respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered
for exchange. Mail new shares certificates, if requested, or
an account statement confirming the exchange by first class
mail to the address of record.
4. Maintain a record of unprocessed exchanges and produce a
periodic report.
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain
distributions, either through reinvestment or in cash, in
accordance with shareholder instructions.
2. On the mailing date, Customer shall make available to PSC
collected funds to make such distribution.
3. Adjust unsettled items relative to dividends and
distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information
returns of distributions and, in the case of Federal
returns, mail information copies to shareholders and report
and pay Federal income taxes withheld from distributions
made to non-resident aliens.
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
dated January 6, 1995 (and to all references to our firm) included in or made a
part of the Pioneer Emerging Markets Fund Post-Effective Amendment No. 2 to
Registration Statement File No. 33-76894 and Amendment No. 4 to Registration
Statement File No. 811-8448.
Arthur Andersen LLP
Boston, Massachusetts
March 27, 1995
SHARE PURCHASE AGREEMENT
This Agreement is made as of the _____ day of June, 1994 between The
Pioneer Group, Inc., a Delaware corporation ("PGI"), and Pioneer Emerging
Markets Fund, a Delaware business trust (the "Fund").
WHEREAS, the Fund wishes to sell to PGI, and PGI wishes to purchase
from the Fund, $750,000 of Class A shares of beneficial interest of the Fund
(60,000 Class A shares) and $250,000 of Class B shares of beneficial interest of
the Fund (20,000 Class B shares) at a purchase price of $12.50 per share
(collectively, the "Shares"); and
WHEREAS, PGI is purchasing $75,000 of the Class A shares (6,000 Class A
shares) and $25,000 of the Class B shares (2,000 Class B shares) for the purpose
of providing the initial capitalization of the Fund as required by the
Investment Company Act of 1940;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PGI is
delivering to the Fund a check in the amount of $1,000,000
in full payment for the Shares.
2. PGI agrees that it is purchasing the Shares for investment
and has no present intention of redeeming or reselling the
Shares.
3. PGI further agrees that it may not withdraw $75,000 of the
Class A shares (6,000 Class A shares) or $25,000 of the
Class B shares (2,000 Class B shares) from the Fund at a
rate, which at any time during the Fund's first five years
of operations, exceeds in the aggregate $1,666.67 per month.
Executed as of the date first set forth above.
THE PIONEER GROUP, INC.
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
President
PIONEER EMERGING MARKETS FUND
/s/Joseph P. Barri
Joseph P. Barri
Secretary
CLASS A SHARES DISTRIBUTION PLAN
PIONEER EMERGING MARKETS FUND
CLASS A SHARES DISTRIBUTION PLAN, dated as of June 23, 1994, of PIONEER
EMERGING MARKETS FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class A Shares") of each series of the Trust ("Portfolio") in accordance
with Rule 12b-1 promulgated by the Securities and Exchange Commission under the
1940 Act ("Rule 12b-1"), and desires to adopt this Class A distribution plan
(the "Class A Plan") as a plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class A Shares in connection with the Class A Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
A Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class A Shares in connection with the
offering of Class A Shares, (b) PFD may compensate any Dealer that sells Class A
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of shares, its
profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of shares by the Trust,
and PFD may retain (or receive from the Trust, as the case may be) all such
deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class A Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class A Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class A Plan will
benefit the Trust and its Class A shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class A Plan for the Trust as a plan of distribution of Class A Shares in
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accordance with Rule 12b-1, on the following terms and conditions:
The Trust may expend pursuant to this Class A Plan amounts not
to exceed 0.25% of the average daily net assets of each Portfolio per annum.
Subject to the limit in paragraph 1, the Trust shall reimburse
PFD for amounts expended by PFD to finance any activity which is primarily
intended to result in the sale of shares of the Trust or the provision of
services to shareholders of the Trust, including but not limited to commissions
or other payments to Dealers and salaries and other expenses of PFD relating to
selling or servicing efforts, provided, that the Board of Trustees of the Trust
shall approve categories of expenses for which reimbursement shall be made
pursuant to this paragraph 2 and, without limiting the generality of the
foregoing, the initial categories of such expenses shall be (i) a service fee to
be paid to qualified broker-dealers in an amount not to exceed 0.25% per annum
of each Portfolio's daily net assets; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on certain
sales of the Trust's Shares with no initial sales charge; and (iii)
reimbursement to PFD for expenses incurred providing services to shareholders
and supporting broker-dealers and other organizations, such as banks and trust
companies, in their effort to provide such services (any addition of such
categories shall be subject to the approval of the Qualified Trustees, as
defined below, of the Trust). Such reimbursement shall be paid ten (10) days
after the end of the month or quarter, as the case may be, in which such
expenses are incurred. The Trust acknowledges that PFD will charge an initial
sales load or a contingent sales load in connection with certain sales of Shares
of the Trust and that PFD will reallow to Dealers all or a portion of such sales
loads, as described in the Trust's Prospectus from time to time. Nothing
contained herein is intended to have any effect whatsoever on PFD's ability to
charge any such sales loads or to reallow all or any portion thereof to Dealers.
The Trust understands that agreements between PFD and Dealers
may provide for payment of fees to Dealers in connection with the sale of Shares
and the provision of services to shareholders of the Trust. Nothing in this
Class A Plan shall be construed as requiring the Trust to make any payment to
any Dealer or to have any obligations to any Dealer in connection with services
as a dealer of the Shares. PFD shall agree and undertake that any agreement
entered into between PFD and any Dealer shall provide that such Dealer shall
look solely to PFD for compensation for its services thereunder and that in no
event shall such Dealer seek any payment from the Trust.
Nothing herein contained shall be deemed to require the Trust
to take any action contrary to its Declaration of Trust or By-Laws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Trust.
This Class A Plan shall become effective upon approval by a
vote of the Board of Trustees and a vote of a majority of the Trustees who are
not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class A Plan or in any agreement
related to the Class A Plan (the "Qualified Trustees"), such votes to be cast in
person at a meeting called for the purpose of voting on this Class A Plan.
This Class A Plan will remain in effect indefinitely, provided
that such continuance is "specifically approved at least annually" by a vote of
both a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class A Plan shall
expire on October 5, 1994. In the event of termination or non-continuance of
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this Class A Plan, each Portfolio has twelve months to reimburse any expense
which it incurs prior to such termination or non-continuance, provided that
payments by such Portfolio during such twelve-month period shall not exceed
0.25% of each Portfolio's average daily net assets during such period.
This Class A Plan may be amended at any time by the Board of
Trustees, provided that this Class A Plan may not be amended to increase
materially the limitation on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of the Trust and may not be materially amended in
any case without a vote of a majority of both the Trustees and the Qualified
Trustees. Any amendment of this Class A Plan to increase or modify the expense
categories initially designated by the Trustees in paragraph 2 above shall only
require approval of a majority of the Trustees and the Qualified Trustees if
such amendment does not include an increase in the expense limitation set forth
in paragraph 1 above. This Class A Plan may be terminated at any time by a vote
of a majority of the Qualified Trustees or by a vote of the holders of a
"majority of the outstanding voting securities" of the Trust.
In the event of termination or expiration of this Class A
Plan, the Trust may nevertheless, within twelve months of such termination or
expiration reimburse any expense which it incurs prior to such termination or
expiration, provided that payments by the Trust during such twelve-month period
shall not exceed 0.25% of the Trust's average net daily assets during such
period and provided further that such payments are specifically approved by the
Board of Trustees, including a majority of the Qualified Trustees.
The Trust and PFD shall provide to the Trust's Board of
Trustees, and the Board of Trustees shall review, at least quarterly, a written
report of the amounts expended under this Class A Plan and the purposes for
which such expenditures were made.
While this Class A Plan is in effect, the selection and
nomination of Qualified Trustees shall be committed to the discretion of the
Trustees who are not "interested persons" of the Trust.
For the purposes of this Class A Plan, the terms "interested
persons," "majority of the outstanding voting securities" and "specifically
approved at least annually" are used as defined in the 1940 Act.
The Trust shall preserve copies of this Class A Plan, and each
agreement related hereto and each report referred to in paragraph 9 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
This Class A Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act.
If any provision of this Class A Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Plan shall not be affected thereby.
3
CLASS B DISTRIBUTION PLAN
PIONEER EMERGING MARKETS FUND
CLASS B DISTRIBUTION PLAN, dated as of June 23, 1994 of PIONEER
EMERGING MARKETS FUND, a Delaware business trust (the "Fund").
WITNESSETH
WHEREAS, the Fund is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Fund intends to distribute shares of beneficial interest
(the "Class B Shares") of the Fund in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B distribution plan (the "Class B Plan") as a plan
of distribution pursuant to such Rule;
WHEREAS, the Fund desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Fund's Class B Shares in connection with the Class B Plan;
WHEREAS, the Fund has entered into an underwriting agreement (in a form
approved by the Fund's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Fund in connection with the offering and distribution of Class B
Shares (the "Underwriting Agreement");
WHEREAS, the Fund also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class B Shares in connection with the
offering of Class B Shares, (b) PFD may compensate any Dealer that sells Class B
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class B
shares, its profits or any other source available to it;
WHEREAS, the Fund recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class B shares by
the Fund, and PFD may retain (or receive from the Fund, as the case may be) all
such deferred sales charges; and
WHEREAS, the Board of Trustees of the Fund, in considering whether the
Fund should adopt and implement this Class B Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Fund for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Fund and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Fund hereby adopts this
Class B Plan for the Fund as a plan of distribution of Class B Shares in
accordance with Rule 12b-1, on the following terms and conditions:
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11a The Fund is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection
with the Fund's Class B shares. Such compensation shall be
calculated and accrued daily and paid monthly or at such other
intervals as the Board of Trustees may determine.
12a The amount of compensation paid during any one
year for distribution services shall be .75% of the average
daily net assets of the Fund attributable to such year.
13a Distribution services and expenses for which PFD
may be compensated pursuant to this Plan include, without
limitation: compensation to and expenses (including allocable
overhead, travel and telephone expenses) of (i) Dealers,
brokers and other dealers who are members of the National
Association of Securities Dealers, Inc. ("NASD") or their
officers, sales representatives and employees, (ii) PFD and
any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their
officers, sales representatives and employees, who engage in
or support distribution of the Fund's Class B shares; printing
of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of
sales literature and advertising materials.
14a The amount of compensation paid for personal and
account maintenance services and expenses shall be .25% of the
average daily net assets of the Fund attributable to such
year. As partial consideration for personal services and/or
account maintenance services provided by PFD to the Class B
shares, PFD shall be entitled to be paid any fees payable
under this clause (d) with respect to Class B shares for which
no dealer of record exists, where less than all consideration
has been paid to a dealer of record or where qualification
standards have not been met.
15a Personal and account maintenance services for
which PFD or any of its affiliates, banks or Dealers may be
compensated pursuant to this Plan include, without limitation:
payments made to or on account of PFD or any of its
affiliates, banks, other brokers and dealers who are members
of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance
to, shareholders regarding their ownership of Class B shares
or their accounts or who provide similar services not
otherwise provided by or on behalf of the Fund.
16a PFD may impose certain deferred sales charges in
connection with the repurchase of Class B shares by the Fund
and PFD may retain (or receive from the Fund as the case may
be) all such deferred sales charges.
17a Appropriate adjustments to payments made pursuant
to clauses (b) and (d) of this paragraph 1 shall be made
whenever necessary to ensure that no payment is made by the
Fund in excess of the applicable maximum cap imposed on asset
based, front-end and deferred sales charges by subsection (d)
of Section 26 of Article III of the Rules of Fair Practice of
the NASD.
2
<PAGE>
The Fund understands that agreements between PFD and Dealers
may provide for payment of fees to Dealers in connection with the sale of Class
B Shares and the provision of services to shareholders of the Fund. Nothing in
this Class B Plan shall be construed as requiring the Fund to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Fund.
Nothing herein contained shall be deemed to require the Fund
to take any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Fund's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Fund.
This Class B Plan shall become effective upon approval by a
vote of the Board of Trustees and a vote of a majority of the Trustees who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of the Class B Plan or in any agreements
related to the Class B Plan (the "Qualified Trustees"), such votes to be cast in
person at a meeting called for the purpose of voting on this Class B Plan.
This Class B Plan will remain in effect indefinitely, provided
that such continuance is "specifically approved at least annually" by a vote of
both a majority of the Trustees of the Fund and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class B Plan shall
expire on April 30, 1995.
This Class B Plan may be amended at any time by the Board of
Trustees, provided that this Class B Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding Class B voting securities" of the Fund and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class B Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class B of the Fund.
The Fund and PFD shall provide to the Fund's Board of
Trustees, and the Board of Trustees shall review, at least quarterly, a written
report of the amounts expended under this Class B Plan and the purposes for
which such expenditures were made.
While this Class B Plan is in effect, the selection and
nomination of Qualified Trustees shall be committed to the discretion of the
Trustees who are not "interested persons" of the Fund.
For the purposes of this Class B Plan, the terms "interested
persons," "majority of the outstanding voting securities" and "specifically
approved at least annually" are used as defined in the 1940 Act.
The Fund shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
3
<PAGE>
This Class B Plan shall be construed in accordance with the
laws of The Commonwealth of Massachusetts and the applicable provisions of the
1940 Act.
If any provision of this Class B Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Class B Plan shall not be affected thereby.
4
POWER OF ATTORNEY
The undersigned officer and Trustee of Pioneer Emerging Markets Fund, a
Delaware business trust, does hereby severally constitute and appoint John F.
Cogan, Jr. and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer Emerging Markets Fund under the Investment Company Act of 1940,
as amended (the "1940 Act"), and under the Securities Act of 1933, as amended
(the "1933 Act"), with respect to the offering of its shares of beneficial
interest and any and all other documents and papers relating thereto, and
generally to do all such things in my name and on my behalf in the capacities
indicated to enable Pioneer Emerging Markets Fund to comply with the 1940 Act
and the 1933 Act, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
said attorneys or each of them to any and all amendments to said Registration
Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
____ day of March, 1994.
/s/David D. Tripple
David D. Tripple, Trustee and Executive Vice President
<PAGE>
POWER OF ATTORNEY
The undersigned officer of Pioneer Emerging Markets Fund, a Delaware
business trust, does hereby severally constitute and appoint John F. Cogan, Jr.,
David D. Tripple and Joseph P. Barri, and each of them acting singly, to be my
true, sufficient and lawful attorneys, with full power to each of them, and each
of them acting singly, to sign for me, in my name and in the capacities
indicated below, any and all amendments to the Registration Statement on Form
N-1A to be filed by Pioneer Emerging Markets Fund under the Investment Company
Act of 1940, as amended (the "1940 Act"), and under the Securities Act of 1933,
as amended (the "1933 Act"), with respect to the offering of its shares of
beneficial interest and any and all other documents and papers relating thereto,
and generally to do all such things in my name and on my behalf in the
capacities indicated to enable Pioneer Emerging Markets Fund to comply with the
1940 Act and the 1933 Act, and all requirements of the Securities and Exchange
Commission thereunder, hereby ratifying and confirming my signature as it may be
signed by said attorneys or each of them to any and all amendments to said
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
____ day of March, 1994.
/s/William H. Keough
William H. Keough
Chief Financial Officer and Treasurer
<PAGE>
POWER OF ATTORNEY
The undersigned officer and Trustee of Pioneer Emerging Markets Fund, a
Delaware business trust, does hereby severally constitute and appoint David D.
Tripple and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer Emerging Markets Fund under the Investment Company Act of 1940,
as amended (the "1940 Act"), and under the Securities Act of 1933, as amended
(the "1933 Act"), with respect to the offering of its shares of beneficial
interest and any and all other documents and papers relating thereto, and
generally to do all such things in my name and on my behalf in the capacities
indicated to enable Pioneer Emerging Markets Fund to comply with the 1940 Act
and the 1933 Act, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
said attorneys or each of them to any and all amendments to said Registration
Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
____ day of March, 1994.
/s/John F. Cogan, Jr.
John F. Cogan, Jr., Chairman, Trustee and President
<PAGE>
POWER OF ATTORNEY
The undersigned officer and Trustee of Pioneer Emerging Markets Fund, a
Delaware business trust, does hereby severally constitute and appoint John F.
Cogan, Jr. and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer Emerging Markets Fund under the Investment Company Act of 1940,
as amended (the "1940 Act"), and under the Securities Act of 1933, as amended
(the "1933 Act"), with respect to the offering of its shares of beneficial
interest and any and all other documents and papers relating thereto, and
generally to do all such things in my name and on my behalf in the capacities
indicated to enable Pioneer Emerging Markets Fund to comply with the 1940 Act
and the 1933 Act, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
said attorneys or each of them to any and all amendments to said Registration
Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
____ day of March, 1994.
/s/David D. Tripple
David D. Tripple, Trustee and Executive Vice President
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921023
<NAME> Pioneer Emerging Markets Fund
<SERIES>
<NUMBER> 000
<NAME> NONE
<MULTIPLIER> 1
<CURRENCY> U. S .Dollars
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-START> DEC-01-1993
<PERIOD-END> NOV-30-1994
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 18,293,093
<INVESTMENTS-AT-VALUE> 16,020,956
<RECEIVABLES> 559,024
<ASSETS-OTHER> 5,636
<OTHER-ITEMS-ASSETS> 5,973,818
<TOTAL-ASSETS> 22,559,434
<PAYABLE-FOR-SECURITIES> 745,349
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 428,280
<TOTAL-LIABILITIES> 1,173,629
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23,357,215
<SHARES-COMMON-STOCK> 1,748,784
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 115,129
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 180,913
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,267,452)
<NET-ASSETS> 21,385,805
<DIVIDEND-INCOME> 222,184
<INTEREST-INCOME> 56,051
<OTHER-INCOME> 0
<EXPENSES-NET> 163,106
<NET-INVESTMENT-INCOME> 115,129
<REALIZED-GAINS-CURRENT> 180,913
<APPREC-INCREASE-CURRENT> (2,267,452)
<NET-CHANGE-FROM-OPS> (1,971,410)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,256,293
<NUMBER-OF-SHARES-REDEEMED> 587,509
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 20,385,805
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 84,871
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 291,103
<AVERAGE-NET-ASSETS> 15,498,052
<PER-SHARE-NAV-BEGIN> 12.500
<PER-SHARE-NII> 0.080
<PER-SHARE-GAIN-APPREC> (0.340)
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 12.240
<EXPENSE-RATIO> 2.250
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
