April 3, 1995
SUPPLEMENT
to the prospectuses for:
<TABLE>
<CAPTION>
<S> <C>
Pioneer Fund April 29, 1994 (revised October 28, 1994)
Pioneer Growth Shares July 1, 1994
Pioneer Winthrop Real Estate Investment Fund October 28, 1994 (revised February 8, 1995)
Pioneer Income Fund July 1, 1994
Pioneer America Income Trust April 29, 1994 (revised July 1, 1994)
Pioneer Intermediate Tax-Free Fund April 29, 1994
Pioneer Tax-Free Income Fund July 1, 1994
</TABLE>
How to Buy Fund Shares
In addition to the exceptions listed in each FundOs prospectus, 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 company providers for the Program, (ii) all
authorized investment company providers offer their shares to Program
participants at net asset value, (iii) the employer has agreed in writing to
actively promote the authorized investment company providers to Program
participants and (iv) the Program provides for a matching contribution for each
participant contribution.
0495-2418
(C) Pioneer Funds Distributor, Inc.
<PAGE>
[pioneer logo]
Pioneer India Fund
Prospectus
Class A and Class B Shares
February 28, 1995
Pioneer India Fund (the "Fund") seeks long-term growth of capital by
investing in a portfolio consisting primarily of equity securities of
companies in India. 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 long-
term capital growth. There is, of course, no assurance that the Fund will
achieve its investment objective.
Pioneering Management Corporation (the "Manager") is the Fund's investment
manager. ITI Pioneer AMC Ltd. (the "Indian Adviser") is the Fund's investment
adviser in India and, subject to the Manager's supervision, is responsible
for managing the Fund's investments in the Indian securities markets. The
Indian Adviser is a joint venture between the Manager and Investment Trust of
India Limited ("ITI"), a corporation organized under the laws of India. ITI
was established in 1946 and is one of India's leading providers of financial
services. The Indian Adviser was the first institution to establish locally-
registered private sector mutual funds in India.
Because of recent economic and political developments in India, both the
Manager and the Indian Adviser believe that India's economy has significant
potential to experience rapid growth in the next several years. For these
reasons, the Manager and the Indian Adviser also believe that the equity
securities of many companies in India offer significant potential for
long-term capital growth.
Investments in India's securities markets entail significant risks in
addition to the risks 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--Risk Factors" for a discussion of
these risks. Because the Fund invests primarily in securities of companies in
India, the Fund is not intended to be a complete investment program.
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 are not federally insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any other
government agency. Shares of the Fund involve investment risks, including the
possible loss of some or all of the principal investment.
This Prospectus (Part A of the Registration Statement) provides information
about the Fund that you should know before investing in the Fund. Please read
and retain it for your future reference. More information about the Fund is
included in the Statement of Additional Information also dated February 28,
1995 (Part B of the Registration Statement), which is incorporated in 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 8
V. FUND SHARE ALTERNATIVES 9
VI. SHARE PRICE 9
VII. HOW TO BUY FUND SHARES 10
Class A Shares 10
Class B Shares 11
VIII. HOW TO SELL FUND SHARES 12
IX. HOW TO EXCHANGE FUND SHARES 13
X. DISTRIBUTION PLANS 14
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 15
XII. SHAREHOLDER SERVICES 15
Account and Confirmation Statements 16
Additional Investments 16
Automatic Investment Plans 16
Financial Reports and Tax Information 16
Distribution Options 16
Directed Dividends 16
Direct Deposit 16
Voluntary Tax Withholding 16
Telephone Transactions and Related Liabilities 16
Retirement Plans 17
Telecommunications Device for the Deaf (TDD) 17
Systematic Withdrawal Plans 17
Reinstatement Privilege (Class A Shares Only) 17
XIII. THE FUND 17
XIV. INVESTMENT RESULTS 18
APPENDIX A: India A-1
APPENDIX B: Certain Investment Practices B-1
</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.
1
<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 on
actual expenses for the period ended October 31, 1994, expressed as a
percentage of the Fund's average net assets.
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C>
Shareholder Transaction Expenses
(as a percentage of average net assets):
Maximum Sales Charge on Purchases 5.75%(1) none
Maximum Sales Charge on Reinvestment of Dividends none none
Maximum Deferred Sales Charge 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(4) 0.25% 1.00%
Other Expenses (including accounting and transfer agent
fees, custodian fees and printing expenses): 5.07% 5.25%
Total Gross Operating Expenses 6.57% 7.50%
Expense Limitation by Manager(3) (4.32)% (4.29)%
Net Operating Expenses 2.25% 3.21%
</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) The Manager has 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 reduce Class A expenses to 2.25% of the
average daily net assets attributable to Class A shares; the portion of 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.
(4) These are the maximum annual fees and assume that the Distribution Plans
are in effect for an entire year; actual expenses of the Class A shares for
the fiscal period ending October 31, 1995 are expected to be lower.
Example:
You would pay the following dollar amounts on a $1,000 investment, assuming a
5% annual return at the end of each time period:
<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 $72 $129 $188 $330*
--Assuming no
redemption $32 $ 99 $168 $330*
</TABLE>
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share 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 percentages set forth in the table above under the caption "Other
Expenses" are based on the amount of expenses incurred by the Fund during the
period from June 23, 1994 (commencement of operations) to October 31, 1994.
The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.
For further information regarding management fees, 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 Plan" 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 indirectly paying more than the economic
equivalent of the maximum 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 of the
Fund 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 audited financial
statements as of October 31, 1994 appears in the Fund's Annual Report which
is incorporated by reference in the Fund's Statement of Additional
Information. The information listed below should be read in conjunction with
the financial statements contained in the 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 India Fund
Financial Highlights for Each Class A Share Outstanding Throughout Each
Period
For the period from June 23, 1994
(Commencement of Operations) to October 31, 1994(+)
<TABLE>
<S> <C>
Net asset value, beginning of period $11.50
Income from investment operations:
Net investment income $0.04
Net realized and unrealized loss on investments and other
foreign currency related transactions*** (0.26)
Total loss from investment operations $(0.22)
Distribution to shareholders --
Net decrease in net asset value $(0.22)
Net asset value, end of period $11.28
Total return* (1.91%)
Ratio of net operating expenses to average net assets 2.25%**
Ratio of net investment income to average net assets 0.92%**
Portfolio turnover rate 108.73%**
Net assets, end of period (in thousands) $11,445
Ratios assuming no waiver of management fees or assumption of
expenses by PMC:
Net operating expenses 6.57%**
Net investment loss (3.40%)**
</TABLE>
Financial Highlights for Each Class B Share Outstanding Throughout Each Period
<TABLE>
<S> <C>
Net asset value, beginning of period $ 11.50
Income from investment operations:
Net investment income --
Net realized and unrealized loss on investments and other
foreign currency related transactions*** (0.26)
Total loss from investment operations $ (0.26)
Distribution to shareholders --
Net decrease in net asset value $ (0.26)
Net asset value, end of period $ 11.24
Total return* (2.26%)
Ratio of net operating expenses to average net assets 3.21%**
Ratio of net investment income to average net assets (0.01%)**
Portfolio turnover rate 108.73%**
Net assets, end of period (in thousands) $6,084
Ratios assuming no waiver of management fees or assumption of
expenses by PMC:
Net operating expenses 7.50%**
Net investment loss (4.28%)**
</TABLE>
(+)The per share data presented above is based upon average shares and
average net assets outstanding 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 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, under normal circumstances, at least 65%
of its total assets in equity securities of Indian Companies (including
Depositary Receipts as defined below). For purposes of its investment
policies, the Fund considers a company to be an "Indian Company" if it (i) is
organized under the laws of India, (ii) derives at least 50% of its revenues
from goods produced or sold, investments made, or services performed, in
India, or has at least 50% of its assets in India, or (iii) has securities
that are traded principally on any Indian stock exchange (including India's
Over the Counter Exchange).
The Fund may invest up to 35% of its total assets in (i) equity securities of
issuers (other than Indian Companies) which, in the judgment of the Manager
or the Indian Adviser, may benefit from the Indian economy, (ii) debt
securities issued by Indian Companies or by the Government of India or its
agencies or instrumentalities, and (iii) short-term investments (as described
below).
Equity securities in which the Fund may invest consist of common and
preferred stock (including convertible preferred stock); American, Global or
other types of depositary receipts (collectively, "Depositary Receipts");
convertible bonds, notes and debentures; shares of closed-end investment
companies; equity interests in trusts, partnerships, joint ventures or
similar enterprises; and common stock purchase warrants and rights.
Substantially all of the equity securities purchased by the Fund are expected
to be traded on an Indian or other foreign stock exchange or over-the-counter
market. However, as described in "Risk Factors," the Fund may be subject to
significant delays or limitations on the timing and amount of its direct
investments in India.
Debt securities in which the Fund may invest consist of bonds, debentures,
notes and similar debt instruments which may be comparable in quality to debt
securities rated BB or lower by Standard & Poor's Ratings Group ("Standard &
Poors") or Ba or lower by Moody's Investors Service, Inc. ("Moody's"). The
Fund may invest up to 25% of its total assets in debt securities. For a
description of the risks of investing in lower quality debt securities, see
"Risk Factors" in this Prospectus. The Manager expects that most of the
Fund's investments in debt securities will not be rated by Standard & Poor's,
Moody's, or any other U.S. rating organization.
The Fund may employ forward foreign currency exchange contracts in an attempt
to hedge foreign currency risks associated with the Fund's investments.
However, there currently is no market, or only a limited market for these
contracts with respect to the Indian rupee (hereinafter the "rupee") and the
currencies of certain other foreign countries in which the Fund may invest.
Consequently, there can be no assurance that these contracts will be
available for hedging currency risks at the times when the Fund wishes to use
them. See Appendix B and the Statement of Additional Information for a
description of forward foreign currency exchange contracts and associated
risks.
The Fund also may invest in restricted and illiquid securities and repurchase
agreements, and may borrow money for temporary emergency purposes. See
Appendix B and the Statement of Additional Information for a description of
these investment and management techniques, associated risks and limitations
on the Fund's use of these techniques.
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
India's economy or securities market to such an extent that
3
<PAGE>
the Manager or the Indian Adviser believes there to be extraordinary risks in
being substantially invested in the equity securities of Indian Companies.
In selecting securities for investment by the Fund, the Manager and/or the
Indian Adviser perform a fundamental analysis of each company being
considered for inclusion in the Fund's portfolio. In performing this
fundamental analysis, the Manager and the Indian Adviser consider a variety
of factors, including financial condition, growth prospects, asset valuation,
management expertise, existing or potential dividend payments, the liquidity
of the security, the market valuation of the company and the effect the
investment would have on the diversification of the Fund's portfolio. 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, and may be affected by limitations imposed by U.S. or Indian
law.
Investment in India
Because of recent economic and political developments and changes in India,
the Manager and the Indian Adviser believe that India's economy has
significant potential to experience rapid growth in the next several years.
For these reasons, the Manager and the Indian Adviser also believe that the
equity securities of many Indian Companies offer significant potential for
long-term capital growth. For a summary description of India and its
securities markets, see Appendix A.
Since mid-1991, the Government of India, led by India's Prime Minister and
Finance Minister, has taken steps to liberalize India's trade policies,
reform India's financial sector, and place greater reliance on market
mechanisms to direct economic activity. A significant component of the
Government's reform program has been the creation and empowerment of the
Securities and Exchange Board of India (the "SEBI") as the governmental
regulator of India's securities market. Another important component of the
reform program has been the promotion of foreign investment in key areas of
India's economy and the further development of India's private sector. As a
result of this policy and other factors, foreign investment in India's
economy and securities market has increased significantly during the last two
years. See "Risk Factors," "Restrictions on Investment in India" and Appendix
A.
In 1992, the Government of India announced, under a new policy intended to
encourage foreign investment, that Foreign Institutional Investors ("FIIs")
who satisfied certain conditions would be permitted to make direct
investments in India's securities market. Previously, non-Indian nationals
generally were not permitted to make portfolio investments in India's
securities market. Under the new policy, FIIs are permitted to invest
directly or on behalf of their institutional clients in any equity or debt
instrument which is listed on any Indian stock exchange. FIIs are required to
register with the SEBI. The Manager is registered with the SEBI as an FII to
invest in India on behalf of the Fund and other approved clients. At present,
FII authorizations are granted for five years and may be renewed with the
approval of the SEBI. The Manager intends to renew its registration as an FII
on March 18, 1998 (the date on which the Manager's current FII registration
expires). See "Risk Factors" and "Restrictions on Investment in India."
Risk Factors
Investing in the Fund entails a substantial degree of risk. Because of the
special risks associated with investing in India, 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 India, which are in addition to the
usual risks of investing in developed countries around the world.
Investment in India and Certain Other Foreign Countries. The concentration of
the Fund's investments in Indian Companies will cause the value of the Fund's
assets to be particularly susceptible to the effects of political and
economic developments in India. India has a longstanding border dispute with
Pakistan. In addition, religious and ethnic unrest persists in India and has
caused disruptions in the recent past. It remains possible that disruption
associated with these tensions could destabilize India's economy and
adversely affect the net asset value of the Fund. Moreover, it is possible
that changes in the current leadership of the Government of India could
result in a halt in, or even reverse the progress of, economic reforms that
are currently being undertaken in India. See Appendix A.
The Fund expects that, under normal circumstances, most of its investments in
Indian Companies will be in securities that are listed or traded on an Indian
stock exchange. The securities markets in India and in certain other foreign
countries in which the Fund may invest are smaller and less liquid, and may
be significantly more volatile, than the securities market in the United
States. The Bombay Stock Exchange (the "BSE") was established in 1875 and is
the principal stock exchange in India, accounting for over two-thirds of the
secondary trading market in India. Although the BSE has greater liquidity and
a greater number of listed issues than many emerging markets, the relatively
small trading volume and market capitalization of most securities listed on
the BSE may cause the Fund's investments to be less liquid and subject to
greater volatility than comparable U.S. investments. The limited liquidity of
the BSE and other securities markets in which the Fund may invest also may
affect the Fund's ability to accurately value its portfolio securities or to
acquire or dispose of securities at the prices and times that it desires or
in order to meet redemption requests.
In managing the Fund's portfolio, the Manager and the Indian Adviser will
attempt to prevent the Fund from being exposed to undue illiquidity risk that
may be associated with investing in the Indian securities market. For
example, if deemed appropriate by the Manager or the Indian Adviser, the Fund
may concentrate its equity investments in Indian Companies in larger
capitalization issuers and/or issuers whose
4
<PAGE>
equity securities (including Depositary Receipts) are traded in securities
markets outside of India. At times, the market for such securities may be
more liquid than the market for equity securities of smaller capitalization
Indian Companies.
Disclosure and regulatory standards in India's securities markets and in
other foreign markets in which the Fund may invest are less stringent than
U.S. standards in certain respects. Although issuers in India are subject to
accounting, auditing and financial standards and requirements that are based
on U.K. standards and requirements, such standards and requirements, as well
as those applicable to other foreign issuers, may differ significantly from
those applicable to issuers located in developed countries. In addition,
there may be substantially less publicly available information about issuers
in India and many of the other foreign countries in which the Fund may invest
than there is about U.S. issuers.
There is generally less governmental supervision and regulation of securities
exchanges and securities professionals in India and other foreign countries
in which the Fund may invest than exists in the United States. However, the
Government of India, acting through the SEBI, has promulgated several rules
and regulations to reform India's securities market and regulate the
activities of securities professionals. For example, in late 1992, the SEBI
promulgated regulations prohibiting insider trading in the Indian securities
markets. However, there can be no assurance that the SEBI will be able to
enforce such rules and regulations as effectively as similar rules and
regulations are enforced in U.S. securities markets. See Appendix A for a
further description of recent reforms in India's securities market.
The value of the Fund's investments in India could be adversely affected by
the circulation of improperly registered shares or the occurrence of other
fraudulent activities in India's securities markets. In 1992, irregularities
and frauds in the Indian securities transactions of several banks were
exposed. Certain bank officials and stockbrokers were found to have violated
established rules and guidelines by using bank funds for speculative
securities transactions. A special committee formed by the Government of
India's Parliament blamed the scandal on the Reserve Bank of India and
India's Ministry of Finance for failing to prevent and detect the fraudulent
activity and on the behavior of various market participants and four foreign
banks in particular. Subsequent to the discovery of the bank/securities
scandal, major Indian securities market indices fell more than 40% from their
highest levels. However, as a result of the scandal, India's Ministry of
Finance strengthened the SEBI's regulatory authority and made other
significant reforms in India's securities markets. See Appendix A.
Indian stock exchanges have in the past been subject to repeated closure and
there can be no assurance that this will not recur. Settlement procedures in
India and other foreign countries in which the Fund may invest are less
developed and reliable than those in the United States and the Fund may
experience settlement delays or other material differences. In addition,
significant delays are common in registering transfers of securities in
India, and the Fund may be unable to sell portfolio securities until the
registration process is completed. The recent inflow of funds into the Indian
securities market has placed added strains on the settlement system, and
several custodial institutions in India have announced that they do not
possess the physical capacity to undertake new business. Accordingly, the
Fund may be subject to significant delays or limitations on the timing of its
direct investments in India and significant limitations on the volume of
trading during any particular period, imposed by its subcustodian in India or
otherwise as a result of such physical or other operational constraints. The
foregoing factors could impede the ability of the Fund to effect portfolio
transactions on a timely basis, have an adverse effect on the net asset value
of the Fund's shares and make it more difficult for the Fund to obtain cash
necessary to satisfy applicable federal income tax requirements for avoiding
federal income and/or excise taxation. See "Dividends, Distributions and U.S.
Taxation."
The value of the Fund's investments in the securities of Indian Companies and
other foreign issuers may be adversely affected by fluctuations in the
relative rates of exchange between the currencies of different countries. 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 quoted or denominated in a foreign currency will increase
or decrease in response to changes in the value of foreign currencies in
relation to the U.S. dollar. In addition, the value of the Fund's investments
in Indian Companies and other foreign issuers may be adversely affected by
exchange control regulations. Under the FII guidelines as currently in effect
in India, the Manager has received approvals required to establish bank and
custodial accounts and to convert rupees into U.S. dollars on behalf of the
Fund. Although the Government of India has announced its intention ultimately
to make the rupee fully convertible, there can be no assurance that it will
not impose restrictions in the future that may adversely affect the ability
of the Fund to convert its income and capital from certain investments from
rupees to U.S. dollars. See Appendix A.
Brokerage commissions and other securities transaction costs, including
custody costs, in India and in certain other foreign countries in which the
Fund may invest are generally higher than in the United States. In addition,
brokers in India and certain other countries in which the Fund may invest
generally are not as well capitalized as brokers in the United States, and
are therefore more susceptible to financial failure in times of market,
political or economic stress.
Additionally, in India and other foreign countries in which the Fund may
invest, there is the possibility of expropriation or confiscatory taxation,
limitations on the removal of securities, property or other assets of the
Fund, political or social instability, or diplomatic developments which could
adversely affect U.S. investments in these countries.
Investment in Lower Quality Debt Securities. The Fund's investments in debt
securities may consist of debt securities
5
<PAGE>
issued by Indian Companies or the Government of India or its agencies or
instrumentalities. These debt securities may be comparable in quality to debt
securities rated BB or lower by Standard & Poor's or Ba or lower by Moody's.
Debt securities of such quality are commonly referred to in the United States
as "junk bonds" and 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. While generally providing
greater income than investments in higher quality securities, lower quality
debt securities involve greater risk of loss of principal and income,
including the possibility of default or bankruptcy of the issuers of such
securities, and have greater price volatility, especially during periods of
economic uncertainty or change. Lower quality debt securities also tend to be
affected by economic changes and short-term corporate developments to a
greater extent than higher quality securities, which react primarily to
fluctuations in the general level of interest rates. Lower quality debt
securities will also be affected by the market's perception of their credit
quality, especially during times of adverse publicity, and the outlook for
economic growth. The market for lower quality debt securities is generally
less liquid than the market for higher quality debt securities. Therefore,
the Manager's and the Indian Adviser's judgment may at times play a greater
role in valuing these securities than in the case of higher quality debt
securities.
The Fund's investments in debt securities issued by the Government of India
or its agencies or instrumentalities involve special risks in addition to
those described above. The willingness or ability of an Indian governmental
issuer to repay principal and pay interest when due may be affected adversely
by the size of the issuer's debt service burden relative to India's economy
as a whole, changes in India's economy, political constraints to which the
issuer is subject and various other factors. In addition, there are no legal
proceedings available in India by which the Fund could seek recourse for the
default of a debt security issued by the Government of India or one of its
agencies or instrumentalities.
The Fund's investments in debt securities may also include zero coupon and
payment-in-kind debt securities, which tend to be affected to a greater
extent by interest rate changes, and therefore tend to be more volatile, than
debt securities which pay interest periodically and in cash.
Restrictions on Investment in India
Under India's guidelines applicable to FIIs, the Fund's direct investments in
India may include only securities that are listed or traded on an Indian
stock exchange, and the Fund may not hold more than 5% of the total issued
capital of any issuer of such securities. Further, at least 70% of the total
investments made by the Fund pursuant to the Manager's FII authorization must
be in equity securities. In addition, all non-resident portfolio investments,
including the Fund's investments, may not exceed 24% of the issued share
capital of any Indian issuer. Accordingly, the Fund's ability to invest in
certain Indian Companies may be restricted. Although the Government of India
recently has implemented policies to encourage foreign investment, there can
be no assurance that additional restrictions will not be imposed in the
future.
Indian Taxes
It is expected that most of the Fund's investments in Indian Companies will
be subject to the following taxes imposed by the Government of India. India
imposes a withholding tax at a rate of 20% on dividend and interest income
earned on Indian investments. India also imposes a tax on capital gains
realized on Indian investments at a rate of 10% on long-term capital gains
and 30% on short-term capital gains. Gains from all listed securities
(including debt) held for periods in excess of 12 months are treated as
long-term gains. Under the Income Tax Treaty in effect between India and the
United States, the applicable Indian tax rate on interest income is generally
reduced to 15%, and the applicable Indian tax rate on dividend income may be
reduced to 15% in the event that the Fund owns at least 10% of the voting
stock of the Indian resident company that pays dividends to the Fund. This
treaty does not reduce or eliminate the Indian taxation of capital gains the
Fund may realize with respect to its Indian investments. If the Fund elects
to "pass-through" to shareholders amounts of qualified foreign taxes it pays,
Fund shareholders will be required to include such amounts in income (in
addition to the dividends they actually receive) and certain Fund
shareholders may be able to claim a foreign tax credit or deduction on their
U.S. federal income tax returns for their proportionate shares of Indian
taxes paid by the Fund, subject to applicable limitations under the U.S.
Internal Revenue Code of 1986, as amended (the "Code"). "See Dividends,
Distributions and U.S. Taxation."
The Manager may decide to explore opportunities for the Fund to invest in
India through a structure that would reduce withholding and other taxes
imposed by India.
Other Eligible Investments
Equity Securities of Companies That May Benefit From India's Economy. As
noted above, the Fund may invest in the equity securities of companies, other
than Indian Companies (defined above), that may benefit from India's economy.
The Fund's investments in the equity securities of such issuers may involve
some or all of the risks associated with investments in Indian issuers. See
"Risk Factors."
Short-Term Investments. As noted above, 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 securities outstanding that are rated Prime-1
or better by Moody's, or A-1, AA or better by Standard & Poor's; obligations
(including certificates of deposit, time deposits, demand deposits and
bankers' acceptances) of banks (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
6
<PAGE>
guaranteed by the U.S. Government or the government of a foreign country or
their respective agencies or instrumentalities; and repurchase agreements.
In addition, the Fund may invest up to 100% of its total assets in such
short-term investments for temporary defensive purposes. The Fund will assume
a temporary defensive posture only when political and economic factors cause
the Manager or the Indian Adviser to believe that there are extraordinary
risks in being substantially invested in the equity securities of Indian
Companies.
Debt Securities. Although the Fund invests primarily in equity securities of
Indian Companies, the Fund may invest up to 25% of its total assets in debt
securities (including short-term debt securities) issued by Indian Companies
or by the Government of India or its agencies or instrumentalities. The Fund
may invest in debt securities of any quality or maturity. See "Risk Factors."
The net asset value of the Fund attributable to its investments in debt
securities can generally be expected to change as general levels of interest
rates fluctuate. The value of debt securities generally varies inversely with
changes in interest rates, and prices of debt securities with longer
maturities are more sensitive to interest rate changes than those with
shorter maturities.
Other Investment Companies. The Fund may invest up to 10% of its total
assets, calculated at the time of purchase, in the securities of closed-end
investment companies. The Fund may not invest more than 5% of its total
assets in the securities of any one investment company or acquire more than
3% of the voting securities of any other investment company. The Fund will
indirectly bear its proportionate share of any management or other fees paid
by closed-end investment companies in which it invests, in addition to its
own fees.
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 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 securities for which they
may be exchanged. For purposes of the Fund's investment policies, investments
in ADRs, GDRs and similar instruments will be deemed to be investments in the
equity securities of the foreign issuers into which they may be converted.
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.
Investments in Initial Public Offerings. The Fund may invest in initial
public offerings of Indian issuers. At the initial stage of such an offering,
the issuer may reserve up to 24% of the offering for nonresident Indian
investors and certain foreign institutional investors such as the Fund. The
issuer also may reserve up to 20% of the offering for locally offered mutual
funds. The price available to the Fund in such an offering may be higher or
lower than the price available to other institutions. When the Fund commits
to purchase from the reserved portion of such an offering, it will be
required to place the purchase price in a bank deposit account (that does not
pay interest) before receiving securities. In addition, until the purchase is
settled, the Fund may not know if it will receive the amount of securities
for which it has subscribed.
Portfolio Turnover
The Fund will attempt to be substantially fully invested at all times, except
as described above. To the extent consistent with investment considerations,
the Manager and the Indian Adviser intend to minimize the Fund's realization
of short-term capital gains with respect to securities subject to Indian
short-term capital gains taxes. See "Indian Taxes." However, changes in the
Fund's portfolio may be made promptly when determined by the Manager or the
Indian Adviser 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 100% 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. The Fund's
investment policies and nonfundamental investment restrictions may be changed
by the Board of Trustees without shareholder approval. See "Investment
Policies, Restrictions and Risk Factors" in the Statement of Additional
Information.
7
<PAGE>
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
Manager and by ITI Pioneer AMC Ltd. as Indian 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 Manager
The Fund is managed under a contract with the Manager. The Manager is
responsible for the overall management of the Fund's business affairs and the
day-to-day management of Fund assets that are not under the Indian Adviser's
management, subject only to the authority of the Board of Trustees. The
Manager is a wholly-owned subsidiary of The Pioneer Group, Inc. ("PGI"), a
publicly-traded Delaware corporation. Pioneer Funds Distributor, Inc.
("PFD"), a wholly-owned subsidiary of PGI, is the principal underwriter of
the Fund.
Each international equity portfolio managed by PMC, including this 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 Funds. Mr. Tripple joined PMC in 1974 and has
had general responsibility for PMC's investment operations and specific
portfolio assignments for more than the last 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. Tripple.
The Manager manages and serves as the investment adviser for several 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 manages the Fund's
business affairs, supervises the Indian Adviser's performance of its
portfolio management responsibilities and allocates the management of Fund
assets between itself and the Indian Adviser. The Manager's supervisory
responsibilities include consulting with the Indian Adviser on a regular
basis regarding the Indian Adviser's decisions to purchase, sell or hold
particular securities. The Manager is authorized in its discretion to use
Fund assets that are under its management to buy and sell securities for the
Fund's account. The Manager pays all advisory fees to the Indian Adviser and
all 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 paid by the Fund: (a) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including,
to the extent such services are performed by personnel of the Manager or its
affiliates, office space and facilities and personnel compensation, training
and benefits; (b) the charges and expenses of auditors; (c) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing
agent and registrar appointed by the Fund with respect to shares of the Fund;
(d) issue and transfer taxes chargeable to the Fund in connection with
securities transactions to which the Fund is a party; (e) insurance premiums,
interest charges, dues and fees for membership in trade associations, and all
taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the Fund and/or its shares with the SEC,
individual states or blue sky securities agencies, territories and foreign
countries, including the preparation of prospectuses and statements of
additional information for filing with the SEC; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the Fund and to Trustees; (i) distribution fees paid by the Fund
in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940
Act; (j) 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; (k) the cost of preparing and printing share certificates; and
(l) interest on borrowed money, if any. The Fund also pays all brokers' and
underwriting commissions chargeable to the Fund in connection with its
portfolio transactions.
Orders for the Fund's portfolio securities transactions in the Indian
securities markets are placed by the Indian Adviser. Orders for the Fund's
portfolio securities transactions in all other markets are placed by the
Manager. Both the Manager and the Indian Adviser strive 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 by the Indian Adviser or the Manager 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 and Indian
Adviser'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
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<PAGE>
Fund's average daily net assets. While this fee, which is computed daily and
paid monthly, is higher than most management fees, the costs of managing the
Fund are significantly greater than the costs of managing a domestic fund.
The Manager has 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 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. This agreement is
voluntary and temporary and may be revised or terminated by the Manager at
any time.
During the period from June 23, 1994 through October 31, 1994, the Fund
incurred expenses of $222,831, including management fees paid or payable to
PMC of $40,723. Pursuant to its expense limitation agreement, PMC did not
impose management fees and limited expenses, resulting in a reduction of
$139,908.
The Indian Adviser
ITI Pioneer AMC Ltd., the Indian investment adviser to the Fund, is
responsible for investing the Fund's assets in the Indian securities markets
and providing certain related services to the Manager, subject to the
supervision of the Manager, which, in turn, is subject to the supervision of
the Fund's Board of Trustees. The Indian Adviser is a joint venture of the
Manager, a Delaware corporation, and Investment Trust of India Limited
("ITI"), a corporation organized under the laws of India. ITI was established
in 1946 and is one of India's leading providers of financial services. The
Indian Adviser was the first institution in India to establish locally-
registered private sector mutual funds in India. The Manager and ITI
currently own approximately 45% and 54%, respectively, of the Indian
Adviser's total equity capital.
All investment decisions made by the Indian Adviser are made by an investment
committee comprised of certain of the Indian Adviser's directors and
officers. As compensation for its services under its Subadvisory Agreement
with the Manager, the Indian Adviser receives a subadvisory fee at an annual
rate from 0.10% to 0.60% of the Fund's average gross assets invested in
India's securities markets, including assets invested in Depositary Receipts
for securities traded in India's securities markets. The fee, which is paid
by the Manager, accrues monthly and is paid quarterly.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD and
the Manager and President and a Director of PGI, beneficially owned 15% of
the outstanding capital stock of PGI as of the date of this Prospectus.
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.
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 or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer 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 United States 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.
9
<PAGE>
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 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 "Waiver or Reduction of Contingent Deferred Sales Charge." 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
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<PAGE>
be purchased to the aggregate value (at the then current offering price) of
shares of any of the other Pioneer mutual funds previously purchased and then
owned, provided PFD is notified by such person or his or her broker-dealer
each time a purchase is made which would qualify. Pioneer mutual funds
include all mutual funds for which PFD serves as principal underwriter. 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 financial
planners 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. 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.
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
11
<PAGE>
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 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
registered owners occurring after the purchase of the shares being redeemed
or (b) the redemption is made in connection with limited automatic
redemptions as set forth in "Systematic Withdrawal Plans" (limited in any
year to 10% of the value of the account in the Fund at the time the
withdrawal plan is established).
The CDSC on Class B shares 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
(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.
General
The Fund reserves the right in its sole discretion to withdraw all or any
part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) Fund shares on any day the Exchange is open
by selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to the
Fund. Please note the following:
* If you are selling shares from a retirement account, you must make your
request in writing (except for exchanges to other Pioneer 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.
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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 apply:
* 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 PSC. Proper account identification will be
required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire. 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. 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 fund will continue to be subject to
the CDSC 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 or BSE is closed
or trading on either 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
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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 indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. 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 mutual fund. Not all Pioneer
mutual 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 below 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 tax basis of these shares and the timing of the transaction,
and special tax rules may apply.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making
any exchange. 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 (the
"Class A Plan") and Class B shares (the "Class B Plan") in accordance with
Rule 12b-1 under the 1940 Act pursuant to which certain distribution and
service fees are paid.
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
average daily net assets attributable to Class A shares; (ii) reimbursement
to PFD for its expenditures for broker-dealer commissions and employee
compensation on certain sales of the Fund's Class A shares with no initial
sales charge (see "How to Buy Fund Shares"); and (iii) reimbursement to PFD
for expenses incurred in providing services to Class A shareholders and
supporting broker-dealers and other organizations (such as banks and trust
companies) in their efforts to provide such services. Banks are currently
prohibited under the Glass-Steagall Act from providing certain underwriting
or distribution services. If a bank was prohibited from acting in any
capacity or providing any of the described services, management would
consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A
Plan may not be amended to increase materially the annual percentage
limitation of average net assets which may be spent for the services
described therein without approval of the Fund's Class A shareholders. The
Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 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
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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% federal excise
tax on a portion of its undistributed ordinary income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The Fund intends to make distributions in a timely manner and,
accordingly, does not expect to be subject to the excise tax.
The Fund's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net capital gains, if any, in
December. Distributions from net short-term capital gains, if any, may be
paid with such dividends; distributions from income and/or capital gains may
also be made at such times as may be necessary 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.
The Fund will be subject to foreign withholding taxes or other foreign taxes
on income (including interest, dividend and capital gains taxes imposed by
India and possibly other countries) from certain foreign investments, which
will reduce the yield on those investments. 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 all
or a portion of foreign income or other qualified taxes, including Indian
income taxes on interest, dividends and capital gains, paid by the Fund. Each
shareholder would then include in gross income (in addition to dividends
actually received) his or her proportionate share of the amount of qualified
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. Certain shareholders,
including shareholders not subject to U.S. federal income taxation, will not
be entitled to the benefit of a deduction or credit with respect to foreign
income taxes paid by the Fund. As a result of certain limitations under the
Code on foreign tax credits, which have different effects depending upon a
shareholder's particular tax situation, shareholders may be able to claim a
credit only for less than the full amount of their proportionate share of the
foreign taxes paid by the Fund. Further, the creditable portion may be
smaller to the extent the Fund's income consists of U.S.-source income,
generally including capital gains from the sale of both U.S. and foreign
stocks and securities and certain foreign currency gains, rather than
foreign-source income such as interest and dividends on foreign stocks and
securities.
Dividends and other distributions and the proceeds of redemptions,
repurchases or exchanges 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 such backup withholding or if the Fund
receives notice from the IRS or a broker that backup withholding applies.
Please refer to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income taxes. 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 advisers 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
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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 the
custodian of the Fund's portfolio securities and other assets. The principal
business address of the Mutual Fund Division of the Custodian is 40 Water
Street, Boston, Massachusetts 02109. The Custodian oversees a network of
subcustodians and depositories in the countries in which the Fund may invest.
The Custodian has appointed Standard Chartered Bank as subcustodian to hold
investments purchased by the Fund in India.
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 all
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 redemptions, 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 a Pioneer Investomatic
Plan, are invested in full and fractional shares of the Fund at the
applicable offering price in effect as of the close of the Exchange on the
day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized draft drawn on a checking
account. Pioneer Investomatic Plan investments are voluntary, and you may
discontinue the Plan at any time without penalty upon 30 days' written notice
to PSC. 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 fund
account invested in a second Pioneer 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 establish this service by completing
the appropriate section on the Account Application when opening a new account
or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from an account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may sell or exchange your Fund shares by telephone by
calling 1-800-225-6292 between the hours of 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 the caller to provide the personal
identification number (PIN) for the account and send you a written
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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 for business, 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 accompanying 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 share 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
checks of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly, and your periodic redemptions of shares may be taxable
to you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another person after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Fund at a
time when you have a SWP in effect may result in the payment of unnecessary
sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Reinvestment 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 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 India Fund is an open-end, diversified management investment company
(commonly referred to as a mutual fund) organized as a Delaware business
trust on April 4, 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 purpose
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
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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 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 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 fund performance 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.
18
<PAGE>
APPENDIX A
INDIA
The information set forth in this Appendix is based on various publicly
available sources. No representation is made that any correlation exists or
will exist between India or its economy in general and the performance of the
Fund.
I. THE COUNTRY OF INDIA
Geography and Population
India is the seventh largest country in the world, covering an area of
approximately 3,300,000 square kilometers. It is situated in South Asia and
is bordered by Nepal, Bhutan and China in the north, Myanmar and Bangladesh
in the east, Pakistan in the west and Sri Lanka in the south.
India is the world's second most populous country. The 1991 census estimated
India's total population at approximately 844 million. Although migration
from rural to urban centers has been increasing steadily, India's population
remains predominantly rural; the 1991 census reported that 74.3% of the total
population still lives in the countryside. India's total population is
projected to increase to 925 million in 1996, 1 billion in 2001 and 1.1
billion in 2007.
Hindi is the official national language and is spoken by approximately 30% of
India's population. English is widely used in India as the language of
jurisprudence, commercial transactions and higher and technical education.
Government
India became independent from the United Kingdom in 1947. India is a federal
republic and is governed by a parliamentary democracy under the Constitution
of India. The executive, legislative and judicial functions of India's
Government are separated and certain powers are reserved to India's 25 States
and 7 Union Territories.
India's Parliament consists of the Lok Sabha (House of the People) and the
Rajya Sabha (Council of States). The Lok Sabha is elected directly by
universal suffrage for a period of five years while the Rajya Sabha comprises
members indirectly elected by the States and Union Territories for a 6-year
term and members nominated by the President of India. The Prime Minister and
the Council of Ministers, who are responsible to the Lok Sabha, hold
effective executive power. The present Prime Minister is Mr. Narasimha Rao,
who leads the Congress (I) Party. The Congress (I) Party holds the largest
number of seats in the Lok Sabha, and, since December 1993, has held an
absolute parliamentary majority.
International Relations
With the exception of Pakistan, India's foreign relations are generally
stable. In 1993, India renegotiated its foreign debt to Russia and undertook
to rebuild its trade ties with the Central Asian states emerging from the
break-up of the former Soviet Union. In addition, India and China in
September 1993 agreed to pursue a negotiated settlement of the two countries'
longstanding border dispute. Although relations with the United States have
generally improved following the breakup of the former Soviet Union,
important differences persist between the United States and India regarding
relations with Pakistan, protection of intellectual property rights and
India's refusal to become a signatory to the Nuclear Non-Proliferation
Treaty. More than one million persons of Indian origin live in the United
States.
India's relations with Pakistan remain tense. Amidst allegations that
Pakistan was involved in the outbreak of urban bombings in India that
occurred after the destruction of the Ayodhya mosque in late 1992, India has
attempted to have Pakistan denounced by the international community as a
terrorist state. The principal dispute between the two countries relates to
Pakistan's claim to the Indian border state of Jammu and Kashmir, which was
created in connection with the partition of India at the time of
independence. India has fought two wars with Pakistan (1947-48 and 1965)
since independence to retain its control over Jammu and Kashmir. A third war
with Pakistan resulted in 1971 over the secession of Pakistan's eastern
province, which is now the People's Republic of Bangladesh. Meetings between
the Indian and Pakistani foreign ministers were held in early January 1994,
but no progress was reported on the Jammu and Kashmir issue.
Ethnic and Cultural Diversity and Conflict
India has a diverse mix of ethnic and cultural groups. The major line of
distinction, however, tends to be religion, which in some areas closely
mirrors cultural or ethnic divisions as well. There are a large number of
religions practiced in India, with Hinduism being the major religion,
followed by an estimated 82% of the total population. The other principal
religious groups are Muslims, constituting an estimated 11% of the total
population, Christians, Sikhs, Buddhists, and Jains.
Religious and ethnic differences have been a recurring source of conflict in
India throughout the post-independence era and on several occasions have
erupted in violence. Most recently, Hindu fundamentalist groups, encouraged
by elements within the Bharatiya Janata Party ("BJP"), a fundamentalist Hindu
party and the principal opposition to the current Government, were
responsible for the destruction of a 16th century mosque in Ayodhya in
December 1992. This incident led to a major conflict between elements of the
Hindu and Muslim populations and to widespread communal rioting throughout
the country. Particularly serious were bombings in Bombay in March 1993 which
killed more than 250 people and temporarily closed the Bombay Stock Exchange.
Terrorists bombings have occurred from time to time in a number of other
Indian cities.
Within the past two years, the Government of India appears to have brought
under control separatist movements in the States of Assam and Punjab.
However, separatist movements in the northeastern states of Nagaland and
Manipur have mounted new guerilla insurgencies. Since 1990, the Government of
India has been involved in a struggle with Muslim separatist guerilla groups
in the State of Jammu and Kashmir and has committed more than 250,000 army
troops to control the insurgency.
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Overview of India's Economy and Recent Developments
Modern economic development in India began in the mid-1940s with the
publication of the Bombay Plan. The Planning Commission was established in
1950 to assess the country's available resources and to identify growth
areas. A centrally planned economic model was adopted, and in order to
control the direction of private investment, all investment and major
economic decisions required government approval. Foreign investment was
allowed only selectively. This protectionist regime held back development of
India's economy until the mid-1980s when there began to be some move towards
liberalization and market orientation of the economy. With the measures
introduced in the budget of 1985, the annual growth of the country's real
gross domestic product ("GDP") rose from an average 3-4 percent since the
1940s to an average 6.1 percent between 1986 and 1990.
In 1991, faced with a rising oil import bill, an adverse balance of payments
and a large foreign debt, India had reached a position where it was unable to
obtain further commercial borrowings. At this time, the government of Prime
Minister Narasimha Rao took office and has since moved to significantly
reform the structure of India's economic system. The Government's reforms
generally have been supported by consensus among India's other main political
parties, including the BJP.
In July 1991, the new Government's Finance Minister, Dr. Manmohan Singh,
presented the Government's first budget and announced a new industrial
policy. In consequence, for many industrial sectors, it became no longer
necessary to obtain government approval for new investments. Foreign
companies can now hold up to 51 percent of an Indian company as opposed to 40
percent previously. As a result of these policies and other factors, foreign
investment in India has greatly increased in recent years. For example, U.S.
private sector investment in India during 1992 and 1993 exceeded the total
amount of money invested in India by U.S. companies during the previous 40
years.
The process of liberalization was taken further with the budget of February
1992 when the rupee was made partially convertible and import tariffs were
reduced. Personal tax rates were brought down and it was announced that
foreign institutional investors would be able to invest directly in the
Indian capital markets. In September 1992, the guidelines for foreign
institutional investors were published and a number of foreign institutional
investors have been registered by the Securities and Exchange Board of India.
While political instability and communal violence have led to a slowdown in
India's economic growth and the implementation of reforms, the Manager and
the Indian Adviser believe that the prospects for economic growth and
liberalization remain sound.
The budgets of February 1993 and 1994 continued to demonstrate the Government
of India's commitment to economic reform. In particular, the rupee was
allowed to float freely, interest rates were reduced and major reductions
were made in customs and excise duties. Tax holidays were given to encourage
new investment in industrially backward areas and in new power projects. In
order to stimulate capital investment a system for computing long-term
capital gains tax was introduced, which favors those whose gains accrue over
a longer period. Further, the proposed Finance Bill 1994 proposes to reduce
tax rates for certain corporations and withdraw a surcharge applicable to
individual tax rates.
II. INDIA'S SECURITIES MARKET
There currently are 22 recognized stock exchanges in India (including the
Over The Counter Exchange of India). Activity and broad interest in the
market have increased in recent years compared to historical norms. This
increase reflects the growth of the private sector's role in the Indian
economy and greater participation in the market by individual investors and
foreign institutional investors. In addition, the Government of India has
actively promoted expanded capital market activity by both foreign and
domestic investors and has adopted policies designed to increase domestic
companies' reliance on the capital markets as a source of financing.
In 1991, the Government of India introduced a program of economic structural
reforms, including certain measures to stimulate growth and activity in
India's capital markets. These reforms included the grant of statutory
authority to the Securities and Exchange Board of India ("SEBI") as an
independent agency to promulgate and enforce rules governing India's capital
markets. The SEBI has undertaken a number of initiatives to reform the Indian
securities market and regulate the activities of securities professionals.
For example, the SEBI has promulgated rules and regulations that prohibit
securities trading on the basis of material nonpublic inside information. The
SEBI has also required broker-dealers to register, and has established
registration criteria that must be met by broker-dealers. The SEBI has
occasionally encountered resistance to its reforms from portions of India's
community of securities brokers.
Banking and Securities Market Scandal
In April 1992, irregularities and frauds in the securities transactions of
several banks were exposed. Certain bank officials and stockbrokers were
found to be violating established rules and guidelines in a manner designed
to siphon off bank funds to brokers for speculative transactions in shares.
These irregularities and frauds are commonly referred to in India as the
"securities scam". An important contributing cause of the securities scam was
the prevalence of low rates of interest that put pressure on banks to find
various mechanisms for earning higher rates of return on their assets. The
fall in share prices subsequent to the discovery of the securities scam
brought the major market indices down over 40% from their highs.
The Indian Parliament formed a special Joint Parliamentary Committee ("JPC")
to investigate the securities scam. In its report issued in December 1993,
the JPC blamed the scandal on the Reserve Bank of India and India's Ministry
of Finance for failing to prevent and detect this fraudulent activ-
A-2
<PAGE>
ity and on the behavior of various market participants and four foreign banks
in particular. The JPC cited a "culture of nonaccountability which permeated
all sections of the Government and Banking system over the years" as a factor
contributing to the scandal. However, as a result of the scandal, India's
Ministry of Finance strengthened the SEBI's regulatory authority and made
other significant reforms in India's securities markets.
A and B Shares
Equity securities that are traded in the Indian securities markets are
divided into two groups, A shares (also known as "specified shares") and B
shares (also known as "non-specified shares"). A shares are actively traded,
listed equity shares of companies which have a large equity base, and which
meet certain other requirements. All other listed equity shares traded in
India's securities markets are B shares.
The distinction between A shares and B shares is important because the trade
settlement practices for these two classes of securities are different. While
B shares trade only on a cash basis, trades in A shares may be effected on
either a cash basis or a "squared-up" basis. Squaring up a position involves
effecting a trade which is the opposite of an earlier trade. On the
settlement date for such a trade, only the net cash from the offsetting or
squared-up trades is transferred. Transactions in A shares are settled once
every 14 days through the Bombay Stock Exchange's clearing house.
Transactions involving B shares are settled once every 7 days among exchange
members.
Prior to January 21, 1994, A shares were also traded on a "carryover" basis
in which settlement of a trade often would not occur for up to 90 days or
more. The SEBI issued a directive in late 1993 that "carryover" trading be
eliminated by January 21, 1994. The implementation of this directive caused a
general decline in the prices of securities traded in India's securities
markets.
The Bombay Stock Exchange
Shares listed on the Bombay Stock Exchange ("BSE") account for over 90% of
the market capitalization of securities listed on India's 22 stock exchanges,
and over two-thirds of secondary market trading volume in India occurs on the
BSE. The BSE was established in 1875 and is a self-regulatory organization
owned by its members and governed by a Board of Governors. The BSE at present
consists of approximately 560 member brokers. The BSE has a high daily
trading volume, both in terms of the number of transactions and their value.
Active trading on the BSE and other Indian stock exchanges is concentrated in
shares of relatively few issuers and only a limited portion of many
companies' shares are part of the public float. However, compared to the
securities markets of many other emerging countries, India's securities
market is broad-based and unconcentrated in that the ten largest issuers
represent a relatively small portion of total market capitalization.
The BSE is officially open from 11:30 a.m. to 2:30 p.m. Monday through
Friday. However, brokers currently are unable to process the volume of
transactions resulting from a three hour trading session because their
recordkeeping is not computerized. Therefore, trading is normally conducted
for two hours a day from 12:30 p.m. to 2:30 p.m. The BSE is closed on bank
holidays and certain religious holidays. Special trading sessions are held
outside normal trading hours simultaneously with the annual Government budget
announcements and on the commencement of the BSE's financial year. A special
trading session for odd lots is held for an hour on Saturdays.
Orders executed on the BSE are transmitted from the offices of brokers to the
trading floor for execution by an open outcry auction. There are separate
trading posts for different groups of securities. Spreads may vary
considerably. A computerized system is used for settling daily transactions.
The BSE clearing house is managed by the State Bank of India and receives
payments and deliveries on behalf of members of the BSE in respect of A
shares. For B shares, delivery and payment is made outside the clearing house
directly among members. There is usually a lag of a few days between delivery
of securities by sellers and receipt of payment.
The following table shows performance information for the periods indicated
for the Bombay Stock Exchange, as represented by the BSE Sensitive Index,
which is comprised of securities of large capitalization issuers.
BSE SENSITIVE INDEX
[Base Year = 1979-80 = 100]
<TABLE>
<CAPTION>
Period-End Index Level
<S> <C>
1982 235.83
1983 252.92
1984 271.87
1985 527.36
1986 524.45
1987 442.17
1988 666.26
1989 778.64
1990 1048.29
1991 1908.85
1992 2615.37
1993 3346.06
1994 3926.90
</TABLE>
The Over the Counter Exchange of India
The Over the Counter Exchange of India ("OTCEI") was built along the lines of
the U.S. Nasdaq National Market and began operations in mid-1992. Trading on
this exchange is fully automated. The OTCEI is a "quote driven market" with a
network of market makers and dealers. The OTCEI is operated only in Bombay at
present, and it intends to commence trading in Delhi and Madras. These cities
are expected to be connected through the OTCEI main computer, offering
uniform national quotations and considerably reducing arbitrage
opportunities. The OTCEI mainly provides an avenue for raising funds for
small companies having a capital float between 300,000 rupees and 250 million
rupees. The OTCEI has approximately 50 members and 95 dealers in Bombay and
it has appointed approximately 75 dealers in Delhi. The OTCEI has recently
initiated market making and trading in corporate debt instruments.
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Creation of the National Stock Exchange
The National Stock Exchange ("NSE") was created by the Government of India in
part to increase the interconnectivity among India's several stock exchanges
and thereby to reduce interexchange arbitrage opportunities (i.e., to
increase the transparency of India's securities exchanges). It is expected
that the NSE will commence trading in late 1994 with fully computerized
trading, settlement and information dissemination systems. Financial
institutions own the NSE but they must apply and qualify for trading on the
same basis as others wishing to trade. Membership will be open to
corporations and individuals on an equal basis. Qualifications for membership
will include capital adequacy standards and educational training.
Other NSE features that will benefit investors (when implemented) include the
use of a normal T+5 settlement system for equities and next day settlement
for debt. The existence of a fully automated system with all members
connected using dedicated lines should eliminate arbitrage opportunities on
multiple-exchange listed stocks. Computerization will also provide the
ability to match trades, thereby promoting best execution of investors'
transactions.
The NSE commenced operations in November 1994. Equity trading is open to both
institutional and individual investors. Debt and equity trading will
eventually be book-entry with a central depositary. Futures and option
trading is planned to begin in 1995.
A-4
<PAGE>
APPENDIX B
CERTAIN INVESTMENT PRACTICES
Forward Foreign Currency Exchange Contracts
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency exchange 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 hedge against an
anticipated decline in the U.S. 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.
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 debt
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 use of forward foreign currency exchange contracts is a highly
specialized activity which involves investment techniques and risks that are
different from those associated with ordinary portfolio transactions. The use
of forward foreign currency exchange contracts 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 a hedging position may not
match the foreign currency fluctuations intended to be hedged, and (3) market
risk that an incorrect prediction of exchange rates by the Manager or the
Indian Adviser may cause the Fund to perform less favorably than if such
position had not been entered. The loss that may be incurred by the Fund in
entering into forward foreign currency exchange contracts is potentially
unlimited. There is no limit on the percentage of the Fund's assets that may
be invested in forward foreign currency exchange contracts.
There currently is no market, or only a limited market, for forward foreign
currency exchange contracts with respect to the rupee and the currencies of
certain other foreign countries in which the Fund may invest. Consequently,
there can be no assurance that such contracts will be available for hedging
currency risks at the times when the Fund wishes to use them. In addition,
the Fund's transactions in forward foreign currency exchange 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.
Borrowing
The Fund may borrow money only from banks and only for temporary emergency
purposes such as in connection with the redemption of Fund shares or in
connection with the clearance of portfolio transactions. The aggregate amount
of the Fund's borrowings may not exceed 33-1/3% of the Fund's total assets
(including the amount borrowed) taken at market value. In addition, the Fund
will not purchase securities for its portfolio while the Fund's outstanding
borrowings exceed 5% of its total assets. The Fund will incur interest and
other expenses in connection with its borrowings.
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 illiquid securities, including
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 may adopt guidelines and delegate to the
Manager the daily function of determining and monitoring the liquidity of
restricted securities. The Board, however, will retain sufficient oversight
and be 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 will
carefully monitor 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.
B-1
<PAGE>
Pioneer India Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
JASKARAN S. TEJA, Vice President
NORMAN KURLAND, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT MANAGER
PIONEERING MANAGEMENT CORPORATION
INDIAN INVESTMENT ADVISER
ITI PIONEER AMC LTD.
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANT
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
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
0295-2308
(c)Pioneer Funds Distributor, Inc.
<PAGE>
