PIONEER VARIABLE CONTRACTS TRUST /MA/, 485BPOS, 1999-04-30

PIONEER VARIABLE CONTRACTS TRUST /MA/
485BPOS, 1999-04-30

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File No. 33-84546
File No. 811-8786

As Filed with the Securities and Exchange Commission on April 30, 1999

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. ___ /_ __/
Post-Effective Amendment No. _10_ /_X__/

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT _____
OF 1940 /_X__/

Amendment No. 11 /_X__/

(Check appropriate box or boxes)

PIONEER VARIABLE CONTRACTS TRUST
(Exact name of registrant as specified in charter)

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

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

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

It is proposed that this filing will become effective (check
appropriate box):

___ immediately upon filing pursuant to paragraph (b)
_X_ on May 3, 1999 pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
___ on [date] pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on [date] pursuant to paragraph (a)(2) of Rule 485

Title of Securities: Shares of Beneficial Interest, no par value
<PAGE>

Pioneer Variable Contracts Trust
Class I Shares Prospectus
May 3, 1999

Introduction

Pioneer Variable Contracts Trust is an open-end management investment company
that currently consists of twelve distinct portfolios. Pioneer Investment
Management, Inc. is the investment adviser to each portfolio. Class I shares of
the portfolios are offered through this prospectus. Shares of the portfolios
are offered primarily to insurance companies to fund the benefits under
variable annuity and variable life insurance contracts (Variable Contracts)
issued by their companies. You may obtain certain tax benefits by purchasing a
Variable Contract.

Each portfolio has its own distinct investment objective and policies. In
striving to meet its objective, each portfolio will face the challenges of
changing business, economic and market conditions. Each portfolio offers
different levels of potential return and risks. These risks are discussed in
the description of each portfolio.

No single portfolio constitutes a complete investment plan. Each portfolio's
share price (except as described below for Money Market portfolio), yield and
total return will fluctuate and an investment in a portfolio may be worth more
or less than the original cost when shares are redeemed. Money Market portfolio
seeks to maintain a constant $1.00 share price although there can be no
assurance it will do so.

Each portfolio complies with various insurance regulations. Please read your
insurance company's separate account prospectus for more specific information
relating to insurance regulations and instructions on how to invest among the
portfolios through a Variable Contract.

<TABLE>
<S> <C>
Contents
Basic information about the portfolios ......... 2
Common portfolio investment policies ........... 50
Management ..................................... 50
Distributions and taxes ........................ 51
Shareholder information ........................ 51
</TABLE>

Neither the Securities and Exchange Commission nor any state securities agency
has approved the portfolios' shares or determined whether this prospectus is
accurate or complete. Any representation to the contrary is a crime.

Portfolios

Strategic focus

Emerging Markets Invests in emerging market issuers for long-term growth of
capital.

International Growth Invests primarily in non-U.S. equity securities for
long-term growth of capital.

Europe Invests in European issuers for long-term growth of capital.

Capital Growth Invests in a diversified portfolio of common stock for capital
appreciation.

Growth Shares Invests in equity securities for appreciation of capital.

Real Estate Growth Invests primarily in REITs and other real estate industry
companies for long-term growth of capital. Current income is the portfolio's
secondary investment objective.

Growth and Income Invests in a broad list of carefully selected, reasonably
priced securities for reasonable income and growth.

Equity-Income Invests in a portfolio of income producing equity securities of
U.S. corporations for current income and long-term capital growth.

Balanced Invests for capital growth and current income by actively managing
investments in a diversified portfolio of common stocks and bonds.

Swiss Franc Bond Invests to approximate the performance of the Swiss franc
relative to the U.S. dollar while earning a reasonable level of income.

America Income Invests for as high a level of current income as is consistent
with the preservation of capital. The portfolio invests in U.S. government
securities.

Money Market Invests for current income consistent with preserving capital and
providing liquidity.

An investment in a portfolio is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

1
<PAGE>

Basic information about Emerging Markets Portfolio

Investment objective
Long-term growth of capital.

Investment strategies

The portfolio invests primarily in securities of emerging market issuers.
Although the portfolio invests in both equity and debt securities, it normally
emphasizes equity securities in its portfolio. Normally, the portfolio invests
at least 65% of its total assets in the securities of emerging market corporate
and government issuers.

-----------------------------------
Emerging market issuers

An emerging market issuer:
- Is organized under the laws
of an emerging market
country;
- Has a principal office in an
emerging market country; or
- Derives at least 50% of its
gross revenues or profits
from goods or services
produced in emerging markets
or sales made in emerging
markets.
-----------------------------------

The portfolio invests in at least six emerging markets. The portfolio considers
any market that is not developed to be an emerging market. The portfolio does
not allocate more than 25% of its total assets (at the time of purchase) to any
one country but can invest more than 25% of its total assets in a particular
region.

The portfolio's equity investments include common stocks, preferred stocks,
depository receipts, convertible debt securities, warrants, rights and other
equity interests. The portfolio may purchase forward foreign currency exchange
contracts in non-U.S. currencies in connection with its investments.

Pioneer, the portfolio's investment adviser, uses a value approach to select
the portfolio's investments. First, Pioneer determines the relative
attractiveness of investing in different emerging markets. Pioneer bases its
judgment on factors such as political stability, financial and market
practices, economic growth prospects, levels of interest rates and inflation,
general market valuations and potential changes in currency values. Using this
analysis, Pioneer sets a target weighting for the allocation of the portfolio's
assets among countries. At the same time, Pioneer seeks securities selling at
reasonable prices or substantial discounts to their underlying values and then
holds these securities until the market values reflect their intrinsic values.
Pioneer evaluates a security's potential value based on the company's assets
and prospects for earnings and revenue growth. In making that assessment,
Pioneer employs fundamental research and due diligence. Pioneer relies on the
knowledge, experience and judgment of its staff who have access to a wide
variety of research. Factors Pioneer looks for in selecting investments
include:

- Issuers in countries expected to have economic and market environments
that will be positive

- Estimated private market value in excess of current stock price. Private
market value is the price an independent investor would be willing to pay
to own the entire company

- Favorable expected returns relative to perceived risk
- Low debt levels relative to equity
- Companies expected to benefit from long-term trends in the economy and
society
- Low market valuations relative to earnings forecast, book value, cash
flow and sales
- Turnaround potential for companies that have been through difficult
periods

Principal risks of investing in the portfolio
An investment in the portfolio involves a substantial degree of risk. Even
though the portfolio seeks long-term capital growth, you could lose money on
your investment or not make as much as if you invested elsewhere if:

- Stock markets of emerging market countries go down or perform poorly
relative to other stock markets (this risk may be greater in the short
term)

- Securities of emerging market issuers or value stocks fall out of favor
with investors
- The portfolio's assets remain undervalued or do not have the potential
value initially expected

Investing in emerging market issuers involves unique risks compared to
investing in securities of issuers in the U.S. and other developed countries.
These risks are more pronounced to the extent the portfolio invests in issuers
in the lesser developed emerging markets or in any one region. These risks may
include:

- The U.S. dollar may appreciate against emerging market currencies or an
emerging market government may impose restrictions on currency conversion
or trading
- Less information about emerging market issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices

2
<PAGE>

- Many emerging markets are smaller, less liquid and more volatile than
developed markets. In a changing market, Pioneer may not be able to sell
the portfolio's investments in amounts and at prices Pioneer considers
reasonable

- Economic, political or social instability in an emerging market country
or region may significantly disrupt the principal financial markets in
which the portfolio invests
- The economies of emerging market countries may grow at slower rates than
expected or may experience a downturn or recession
- Emerging market countries may experience rising interest rates, or, more
significantly, rapid inflation or hyperinflation
- The portfolio could experience a loss from settlement and custody
practices in some emerging markets
- Withholding and other non-U.S. taxes may decrease the portfolio's return

The portfolio's past performance

The portfolio commenced operations on October 30, 1998. Prospectuses published
after December 31, 1999 will include performance information.

Other investment strategies

As discussed, the portfolio invests primarily in securities of emerging market
issuers to seek long-term growth of capital.

This section and "Common portfolio investment practices" describe additional
investments that the portfolio may make or strategies that it may pursue to a
lesser degree to achieve the portfolio's goal. Some of the portfolio's
secondary investment policies also entail risks. To learn more about these
investments and risks, you should obtain and read the statement of additional
information (SAI).

Investments other than equity securities of emerging market issuers

The portfolio may invest up to 35% of its total assets (at the time of
purchase) in equity and debt securities of corporate or government issuers in
any developed country (other than the U.S.) and short-term debt securities for
cash management purposes. Short-term investments normally include high-quality
commercial paper, certificates of deposit and other bank-related investments,
U.S. and non-U.S. government obligations and repurchase agreements.

The portfolio may also invest in Brady bonds, which are restructured debt of
governmental issuers of emerging market countries. The portfolio may invest in
debt securities of any quality or maturity. The portfolio may not invest more
than 10% of its total assets in debt securities rated below investment grade or
in unrated securities of comparable quality. The portfolio invests in debt
securities when Pioneer believes they are consistent with the portfolio's
investment objective and offer the potential for capital growth, to diversify
the portfolio or for greater liquidity.

Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors which could
contribute to a decline in the market value of debt securities in the portfolio
include rising interest rates or a reduction in the perceived creditworthiness
of the issuer of the securities. A debt security is investment grade if it is
rated in one of the top four categories by a nationally recognized securities
rating organization or determined to be of equivalent credit quality by
Pioneer. Debt securities rated below investment grade are commonly referred to
as "junk bonds" and are considered speculative. Below investment grade debt
securities involve greater risk of loss, are subject to greater price
volatility and are less liquid, especially during periods of economic
uncertainty or change, than higher quality debt securities.

Management

Portfolio manager

Day-to-day management of the portfolio is the responsibility of Mark Madden.
Mr. Madden is a senior vice president of Pioneer. He joined Pioneer in 1990 as
an equity analyst, has managed the portfolio since its inception and has been
an investment professional since 1984.

Mr. Madden is supported by a team of portfolio managers and analysts who
specialize in international equity securities. This team provides research for
the portfolio and other Pioneer mutual funds with similar investment objectives
or styles. Mr. Madden and his team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher

3
<PAGE>

is chief investment officer of Pioneer. She joined Pioneer in 1997 and has been
an investment professional since 1984; most recently as chief investment
officer at another investment adviser.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 1.15% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. Pioneer has agreed not to impose all or a
portion of its fee or to reduce the portfolio's expenses in order to limit the
portfolio's total operating expenses to 1.75% of the portfolio's average daily
net assets. This agreement is voluntary and temporary and may be revised or
terminated at any time. For the most recent fiscal year, the portfolio paid
Pioneer a management fee equal to 0.00% of average daily net assets.

Distributions

The portfolio generally makes distributions of any net long-term capital gains
in November. The portfolio makes distributions from net investment income and
from net short-term capital gains, if any, annually. The portfolio may pay
additional distributions and dividends at other times if necessary for the
portfolio to avoid a federal tax.

Financial highlights
The financial highlights table helps you understand the portfolio's financial
performance. Certain information reflects financial results for a single
portfolio share. The total returns in the table represent the rate that you
would have earned on an investment in the portfolio (assuming reinvestment of
all dividends and distributions). This information has been audited by Arthur
Andersen LLP, whose report is included in the portfolio's annual report along
with the portfolio's financial statements. The annual report is available upon
request.

Emerging Markets Portfolio

<TABLE>
<CAPTION>
October 30,
1998 through
December 31, 1998
------------------
<S> <C>
Net asset value, beginning of period $ 10.00
--------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.00
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 0.49
--------
Net increase (decrease) in net asset value $ 0.49
--------
Net asset value, end of period $ 10.49
========
Total return* 4.90%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 1.75%* *
Ratio of net investment income (loss) to average net assets (0.01)%**
Portfolio turnover rate 60%**
Net assets, end of period (in thousands) $ 133
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer:
Net expenses 104.83%* *
Net investment income (loss) (103.09)%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of the period,
reinvestment of distributions and the complete redemption of the investment
at net asset value at the end of the period.
** Annualized.

4
<PAGE>

Basic information about International Growth Portfolio

Investment objective
Long-term capital growth.

Investment strategies

The portfolio invests primarily in common stocks and other equity securities of
non-U.S. issuers. These companies may be located in both developed and emerging
markets. Normally, the portfolio invests at least 80% of its total assets in
these securities. Generally, the portfolio's investments in any country are
limited to 25% or less of its total assets (at the time of investment). However,
the portfolio may invest more than 25% of its assets in issuers organized in
Japan or the United Kingdom or in securities quoted or denominated in the
currencies of those countries. The portfolio may invest in other equity
securities including preferred stocks, depository receipts, convertible debt
securities, warrants, rights and other equity interests. The portfolio may
purchase forward foreign currency exchange contracts in non-U.S. currencies in
connection with its investments.

-----------------------------------
International investing

The fund invests in the
securities of non-U.S. issuers.
Non-U.S. issuers are issuers
that are organized and have
their principal offices outside
the United States.
-----------------------------------

Pioneer, the portfolio's investment adviser, uses a value approach to select
the portfolio's investments. Using this investment style, Pioneer seeks
securities selling at reasonable prices or substantial discounts to their
underlying value and holds these securities until the market values reflect
their intrinsic values. Pioneer evaluates a security's potential value based on
the company's assets and prospects for earnings and revenue growth, employing a
bottom-up analytical style. In making that assessment, Pioneer employs
fundamental research and due diligence. Pioneer relies on the knowledge,
experience and judgment of its staff who have access to a wide variety of
research. Factors Pioneer looks for in selecting investments include:

- Favorable expected returns relative to perceived risk
- Low market valuations relative to earnings forecast, book value, cash
flow and sales
- Turnaround potential for companies that have been through difficult
periods
- Issuer's industry has strong fundamentals
- Management with demonstrated ability and commitment to the company
- Low debt levels relative to equity

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio avoids concentrating in any
one sector or industry.

Principal risks of investing in the portfolio
Even though the portfolio seeks long-term capital growth, you could lose money
on your investment or not make as much as if you invested elsewhere if:

- The non-U.S. stock markets go down or perform poorly relative to U.S.
stock markets (this risk may be greater in the short term)

- Securities of non-U.S. issuers or value stocks fall out of favor with
investors

- The market continues to undervalue the securities in the portfolio or the
securities in the portfolio turn out not to be undervalued

Investing in non-U.S. issuers may involve unique risks compared to investing in
securities of U.S. issuers. Some of these risks do not apply to the larger more
developed markets. These risks are more pronounced to the extent the portfolio
invests in issuers in countries with emerging markets or if the portfolio
invests significantly in any one country. These risks may include:

- Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure or accounting standards or regulatory
practices

- Many non-U.S. markets are smaller, less liquid and more volatile than
U.S. markets. In a changing market, Pioneer may not be able to sell the
portfolio's investments in amounts and at prices Pioneer considers
reasonable

- The economies of non-U.S. countries may grow at slower rates than
expected or may experience a downturn or recession
- The U.S. dollar appreciates against non-U.S. currencies or a non-U.S.
government may impose restrictions on currency conversion or trading
- Economic, political or social instability in non-U.S. countries may
significantly disrupt the principal financial markets in which the
portfolio invests
- Withholding and other non-U.S. taxes may decrease the portfolio's return

5
<PAGE>

The portfolio's past performance

The bar chart and table indicate the risks of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 20.16% (9/30/98 to
12/31/98).
The portfolio's lowest calendar quarterly return was -21.44% (6/30/98 to
9/30/98).

[Begin: Description of Bar Chart]

Annual return Class I shares
(Year ended December 31)

8.54 4.87 -3.32

'96 '97 '98

[End: Description of Bar Chart]

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

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- ---------------------------------------------------
Since Inception
1 Year Inception Date
- ---------------------------------------------------
<S> <C> <C> <C>
Class I -3.32 5.20 3/1/95
- ---------------------------------------------------
MSCI EAFE Index 19.97 9.68 --
- ---------------------------------------------------
</TABLE>

<PAGE>

Other investment strategies

As discussed, the portfolio invests primarily in non-U.S. equity securities to
seek long-term capital growth.

This section and "Common portfolio investment policies" describe additional
investments that the portfolio may make or strategies that it may pursue to a
lesser degree to achieve the portfolio's goal. Some of the portfolio's
secondary investment policies also entail risks. To learn more about these
investments and risks, you should obtain and read the statement of additional
information (SAI).

Investments other than equity securities

The portfolio may invest up to 20% of its total assets (at the time of
purchase) in debt securities. The debt securities may be issued by U.S. or
non-U.S. corporate and government issuers. Generally, the portfolio may acquire
debt securities that are investment grade, but the portfolio may invest up to
5% of its net assets in below investment grade convertible debt securities. The
portfolio invests in debt securities when Pioneer believes they are consistent
with the portfolio's investment objective and offer the potential for capital
growth, to diversify the portfolio or for greater liquidity.

Economic and Monetary Union (EMU)
January 1, 1999, 11 European countries adopted a single currency--the Euro. The
conversion to the Euro is being phased in over a three-year period. During this
time, valuation, systems and other operational problems may occur in connection
with the portfolio's investments quoted in the Euro. For participating
countries, EMU will mean sharing a single currency and single official interest
rate and adhering to agreed upon limits on government borrowing. Budgetary
decisions will remain in the hands of each participating country, but will be
subject to each country's commitment to avoid "excessive deficits" and other
more specific budgetary criteria. A European Central Bank is responsible for
setting the official interest rate to maintain price stability within the Euro
zone.

EMU is driven by the expectation of a number of economic benefits, including
lower transaction costs, reduced exchange risk, greater competition and a
broadening and deepening of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty may increase the
volatility of European markets.

Portfolio turnover
While the portfolio does not engage in short-term trading, its investment
policies have caused its annual turnover rate to exceed 100% in recent years. A
high portfolio turnover rate may result in high transaction costs that are
borne by the portfolio and its shareholders. See "Financial highlights" for
actual turnover rates.

Management

Portfolio manager
Day-to-day management of the portfolio is the responsibility of Pavlos M.
Alexandrakis. Mr. Alexandrakis is senior vice president of Pioneer. He joined
Pioneer in 1998 and has been an investment professional since 1984. Prior to
joining Pioneer, Mr. Alexandrakis was a portfolio manager at Salomon Smith
Barney from 1995 to 1998 and a portfolio manager for Lazard Freres Asset
Management from 1990 to 1994.

Mr. Alexandrakis is supported by a team of portfolio managers and analysts who
specialize in international securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Alexandrakis and his team operate under the supervision of Theresa
A. Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

7
<PAGE>

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 1.00% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. Pioneer has agreed not to impose all or a
portion of its fee or reduce the portfolio's expenses in order to limit the
portfolio's total operating expenses to 1.50% of its average daily net assets.
This agreement is voluntary and temporary and may be revised or terminated at
any time. For the most recent fiscal year, the portfolio paid Pioneer a
management fee equal to 0.96% of the portfolio's average daily net assets.

Distributions

<TABLE>
<CAPTION>
International Growth Portfolio
For the year ended December 31 March 1,
------------------------------------------ 1995 through
1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.23 $ 11.83 $ 10.93 $ 10.00
------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.09 $ 0.06 $ 0.05 $ --
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (0.45) 0.53 0.88 1.04
------------------------------------------------------
Net increase (decrease)
from investment operations $ (0.36) $ 0.59 $ 0.93 $ 1.04
Distributions to shareholders:
Net investment income (0.19) (0.03) -- --
In excess of net investment income -- -- -- (0.02)
Net realized gain (0.89) (0.16) (0.03) (0.09)
------------------------------------------------------
Net increase (decrease) in net asset value $ (1.44) $ 0.40 $ 0.90 $ 0.93
------------------------------------------------------
Net asset value, end of period $ 10.79 $ 12.23 $ 11.83 $ 10.93
======================================================
Total return* (3.32)% 4.87% 8.54% 10.42%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 1.44%+ 1.49%+ 1.52%+ 2.10%**+
Ratio of net investment income (loss)
to average net assets 1.00%+ 0.78%+ 0.78%+ (0.25)%**+
Portfolio turnover rate 113% 133% 115% 139%**
Net assets, end of period (in thousands) $ 51,525 $ 49,412 $ 24,770 $ 2,967
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 1.47% 1.71% 3.04% 17.22%**
Net investment income (loss) 0.97% 0.56% (0.74)% (15.37)%**
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 1.43% 1.48% 1.50% 1.75%**
Net investment income (loss) 1.01% 0.79% 0.80% 0.10%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of
the investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

8
<PAGE>

Basic information about Europe Portfolio

Investment objective
Long-term growth of capital.

Investment strategies The portfolio invests primarily in equity securities of
European issuers. For purposes of the portfolio's investment policies, equity
investments include securities with common stock characteristics such as
preferred stocks, depository receipts, warrants and debt securities convertible
into common stock. Normally, the fund invests at least 80% of its total assets
in equity securities of European issuers. The portfolio may also purchase
forward foreign currency exchange contracts in European currencies in connection
with its investments.

The portfolio uses a "growth at a reasonable price" style of management. The
portfolio seeks to invest in companies with above average potential for earnings
and revenue growth that are also trading at attractive market valuations. To
select stocks, Pioneer, the portfolio's investment adviser, employs fundamental
research and due diligence. Pioneer relies on the knowledge, experience and
judgment of its own staff who have access to a wide variety of research. Factors
Pioneer looks for in selecting investments include:

--------------------------------------
European issuers

A European issuer:
- Is organized and has a
principal business office in
a European country;
- Derives at least 50% of its
total revenues from business
transacted in Europe; or
- Has equity securities that
trade principally on a stock
exchange in Europe.
--------------------------------------

- Favorable expected returns relative to perceived risk
- Low market valuations relative to earnings forecast, book value, cash
flow and sales

- Issuer's industry has strong fundamentals

- Increasing earnings forecast

Principal risks of investing in the portfolio
Even though the portfolio seeks long-term capital growth, you could lose money
on your investment or not make as much as if you invested elsewhere if:

- European stock markets go down or perform poorly relative to U.S. markets
(this risk may be greater in the short term)

- Securities of European issuers or growth stocks fall out of favor with
investors
- The portfolio's investments do not have the growth potential originally
expected

Investing in developed European issuers involves unique risks compared to
investing in securities of U.S. issuers. These risks may include:

- Less information about some European issuers or markets may be available
due to less rigorous disclosure and accounting standards or regulatory
practices

- Many European markets are smaller, less liquid and more volatile than the
U.S. markets. In a changing market, Pioneer may not be able to sell the
portfolio's investments in amounts and at prices Pioneer considers
reasonable

- The economies of European countries may grow at slower rates than
expected or suffer a downturn or recession
- The U.S. dollar may appreciate against European currencies or European
countries may impose restrictions on currency conversion or trading
- Economic and Monetary Union (EMU) and the introduction of a single
European currency may increase the volatility of European markets

The portfolio's past performance

The portfolio commenced operations on October 30, 1998. Prospectuses published
after December 31, 1999 will include performance information.

Other investment strategies
As discussed, the portfolio invests primarily in equity securities of European
issuers to seek long-term capital growth.

9
<PAGE>

Investment in other European issuers
The portfolio invests primarily in issuers domiciled in developed European
countries. However, the portfolio may invest up to 10% of its total assets (at
the time of purchase) in securities of European issuers domiciled in Eastern
European nations or emerging European markets.

The risks relating to investment in developed European issuers described above
are more pronounced to the extent the portfolio invests in issuers in Eastern
European nations or emerging European markets. Additional risks include:

- Political, economic or social developments may adversely affect European
securities markets

- Withholding and other non-U.S. taxes may decrease the portfolio's return

Economic and Monetary Union (EMU)

On January 1, 1999, 11 European countries adopted a single currency--the Euro.
The conversion to the Euro is being phased in over a three-year period. During
this time, valuation, systems and other operational problems may occur in
connection with the portfolio's investments quoted in the Euro. For
participating countries, EMU will mean sharing a single currency and single
official interest rate and adhering to agreed upon limits on government
borrowing. Budgetary decisions will remain in the hands of each participating
country, but will be subject to each country's commitment to avoid "excessive
deficits" and other more specific budgetary criteria. A European Central Bank
is responsible for setting the official interest rate to maintain price
stability within the Euro zone.

Investments other than in common stock
The portfolio may invest up to 5% of its total assets (at the time of purchase)
in below investment grade debt securities of corporate and government issuers.
The portfolio invests in debt securities when Pioneer believes that they are
consistent with the portfolio's investment objective and offer the potential
for capital growth, to diversify the portfolio or for greater liquidity.

Management

Portfolio manager
Day-to-day management of the portfolio is the responsibility of Patrick M.
Smith. Mr. Smith is a senior vice president of Pioneer. He joined Pioneer in
1992 and has been an investment professional since 1986.

Mr. Smith is supported by a team of portfolio managers and analysts who
specialize in international securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Smith and his team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment

10
<PAGE>

officer of Pioneer. She joined Pioneer in 1997 and has been an investment
professional since 1984; most recently as chief investment officer at another
investment adviser.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 1.00% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. Pioneer as agreed not to impose all or a
portion of its fee or to reduce the portfolio's expenses in order to limit the
portfolio's total operating expenses to 1.50% of the portfolio's average daily
net assets. This agreement is voluntary and temporary and may be revised or
terminated at any time. For the most recent fiscal year, the portfolio paid a
management fee equal to 0.00% of its average daily net assets.

Distributions

Europe Portfolio

<TABLE>
<CAPTION>
October 30,
1998 through
December 31, 1998
------------------
<S> <C>
Net asset value, beginning of period $ 10.00
--------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.00
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 0.60
--------
Net increase (decrease) in net asset value $ 0.60
--------
Net asset value, end of period $ 10.60
========
Total return* 6.00%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 1.50%**
Ratio of net investment income (loss) to average net assets 0.00%**
Portfolio turnover rate 6%**
Net assets, end of period (in thousands) $ 1,620
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer:
Net expenses 16.56%**
Net investment income (loss) (15.06)%**
</TABLE>

11
<PAGE>

Basic information about Capital Growth Portfolio

Investment objective

Capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.

Investment strategies
The portfolio invests primarily in common stocks of U.S. companies. Normally,
the portfolio invests at least 80% of its total assets in common stock. The
portfolio focuses its investments in mid-size companies, that is companies with
market values within the range of market values of issuers included in Standard
& Poor's MidCap 400 Index. A company's market value or capitalization is
calculated by multiplying the number of its outstanding shares by the current
market price of a share. On March 31, 1999, the market value of companies in
the index varied from approximately $170 million to over $14.4 billion. The
portfolio considers securities that trade like common stocks, such as
convertible debt, warrants, interests in real estate investment trusts (REITs)
and preferred stocks, to be common stocks.

Pioneer, the portfolio's investment adviser, uses a value approach to select
the portfolio's investments. Using this investment style, Pioneer seeks
securities selling at substantial discounts to their underlying values and
holds these securities until market values reflect their intrinsic values.
Pioneer evaluates a security's potential value based on the company's assets
and prospects for earnings growth. In making that assessment, Pioneer employs
fundamental research and due diligence, employing a bottom-up analytic style.
Pioneer relies on the knowledge, experience and judgment of its staff who have
access to a wide variety of research. Factors Pioneer looks for in selecting
investments include:

- Favorable expected returns relative to perceived risk
- Management with demonstrated ability and commitment to the company
- Low market valuations relative to earnings forecast, book value, cash
flow and sales
- Turnaround potential for companies that have been through difficult
periods

- Estimated private market value in excess of current stock price. Private
market value is the price an independent investor would be willing to pay
to own the entire company
- Issuer's industry has strong fundamentals

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio avoids concentrating in any
one sector or industry.

Principal risks of investing in the portfolio

Even though the portfolio seeks capital appreciation, you could lose money on
your investment or not make as much as if you invested elsewhere if:

- The stock market goes down (this risk may be greater in the short term)
- Mid-size or value stocks fall out of favor with investors
- The portfolio's assets remain undervalued or do not have the potential
value originally expected
The fund also has risks associated with investing in mid-size companies.
Compared to large companies, mid-size companies, and the market for their common
stocks, are likely to:
- Be more sensitive to changes in earnings results and investor
expectations
- Have more limited product lines and capital resources
- Experience sharper swings in market values
- Be harder to sell at the times and prices Pioneer thinks appropriate
- Offer greater potential for gain and loss

12
<PAGE>

The portfolio's past performance
The bar chart and table indicate the risks of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 12.99% (6/30/97 to
9/30/97).
The portfolio's lowest calendar quarterly return was -20.94% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

15.03 24.69 -4.02

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's
500 Index

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- -------------------------------------------------
Since Inception
1 Year Inception Date
- -------------------------------------------------
<S> <C> <C> <C>
Class I -4.02 13.25 3/1/95
- -------------------------------------------------
S&P 500 Index 28.73 29.98 --
- -------------------------------------------------
</TABLE>

13
<PAGE>

Other investment strategies
As discussed, the portfolio invests primarily in common stocks of U.S.
companies.

Investments other than U.S. common stocks

The portfolio may invest up to 25% of its total assets (at the time of
purchase) in equity and debt securities of non-U.S. issuers. The portfolio will
not invest more than 5% of its total assets (at the time of purchase) in the
securities of emerging markets issuers. Investing in non-U.S. issuers may
involve unique risks compared to investing in securities of U.S. issuers. These
risks may include:

- Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure and accounting standards or regulatory
practices
- Many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the portfolio's
investments in amounts and at prices it considers reasonable

- Adverse effect of currency exchange rates or controls on the value of the
portfolio's investments

- Political, economic and social developments that adversely affect the
securities markets
- Withholding and other non-U.S. taxes may decrease the portfolio's return

The portfolio may invest up to 25% of its total assets (at the time of
purchase) in real estate investment trusts. Real estate investment trusts are
pooled investment vehicles that invest primarily in real estate or real estate
related loans. Investing in real estate investment trusts involves unique
risks. They are significantly affected by the market for real estate and are
dependent upon management skills and cash flow.

The portfolio may invest up to 20% of its total assets (at the time of
purchase) in debt securities of corporate and government issuers. Generally the
portfolio may acquire debt securities that are investment grade, but the
portfolio may invest up to 5% of its net assets (at the time of purchase) in
below investment grade convertible debt securities. The portfolio invests in
debt securities when Pioneer believes they are consistent with the portfolio's
investment objective and offer the potential for capital growth, to diversify
the portfolio or for greater liquidity.

Management

Portfolio manager

Day-to-day management of the portfolio is the responsibility of J. Rodman
Wright. Mr. Wright is a vice president of Pioneer. He joint Pioneer in 1994 and
has been an investment professional since 1988. Prior to joining Pioneer, Mr.
Wright was an analyst for Prudential Insurance Company of America from 1989 to
1994.

Mr. Wright is supported by a team of portfolio managers and analysts who
specialize in U.S. equity securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Wright and his team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

14
<PAGE>

Management fee
The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 0.65% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. For the most recent fiscal year, the portfolio
paid Pioneer a management fee equal to 0.65% of the portfolio's average daily
net assets.

Distributions

<TABLE>
<CAPTION>
Capital Growth Portfolio
For the year ended December 31 March 1,
------------------------------------------ 1995 through
1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.15 $ 13.05 $ 11.57 $ 10.00
-------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.12 $ 0.12 $ 0.03 $ 0.02
Net realized and unrealized gain (loss)
on investments (0.65) 3.09 1.71 1.69
-------------------------------------------------------
Net increase (decrease)
from investment operations $ (0.53) $ 3.21 $ 1.74 $ 1.71
Distributions to shareholders:
Net investment income (0.10) -- (0.03) (0.02)
Net realized gain (1.03) (0.11) (0.23) (0.12)
-------------------------------------------------------
Net increase (decrease) in net asset value $ (1.66) $ 3.10 $ 1.48 $ 1.57
-------------------------------------------------------
Net asset value, end of period $ 14.49 $ 16.15 $ 13.05 $ 11.57
=======================================================
Total return* (4.02)% 24.69% 15.03% 17.13%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.74%+ 0.80%+ 0.93%+ 1.56%**+
Ratio of net investment income (loss)
to average net assets 0.90%+ 1.02%+ 0.37%+ 0.48%**+
Portfolio turnover rate 81% 50% 41% 46%**
Net assets, end of period (in thousands) $113,359 $105,476 $ 48,572 $ 9,357
Ratio assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 0.74% 0.80% 0.95% 3.95%**
Net investment income (loss) 0.90% 1.02% 0.35% (1.91)%**
Ratio assuming waiver of management fees and
assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 0.74% 0.79% 0.92% 1.49%**
Net investment income (loss) 0.90% 1.03% 0.38% 0.55%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

15
<PAGE>

Basic information about Growth Shares Portfolio

Investment objective
Appreciation of capital.

Investment strategies

The portfolio invests primarily in common stocks and other equity securities of
U.S. companies. The portfolio considers securities that trade like common
stocks, such as convertible debt, warrants, interests in real estate investment
trusts (REITs) and preferred stocks, to be common stocks.

The portfolio uses a "growth" style of management and seeks to invest in
companies with above average potential for earnings and revenue growth. To
select growth stocks, Pioneer, the portfolio's investment adviser, employs
fundamental research and due diligence. Pioneer relies on the knowledge,
experience and judgment of its staff who have access to a wide variety of
research. Factors Pioneer looks for in selecting investments include:

- Market leadership in a company's primary products and services
- Companies expected to benefit from long-term trends in the economy and
society

- Issuer's industry has strong fundamentals

- A sustainable competitive advantage, such as a brand name, customer base,
proprietary technology or economies of scale

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio avoids concentrating in any
one sector or industry.

Principal risks of investing in the portfolio
Even though the portfolio seeks capital appreciation, you could lose money on
your investment or not make as much as if you invested elsewhere if:

- The stock market goes down (this risk may be greater in the short term)

- Growth stocks fall out of favor with investors
- The portfolio's investments do not have the growth potential originally
expected

16
<PAGE>

The portfolio's past performance

The bar chart and table indicate the risks of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 18.09% (9/30/98 to
12/31/98).
The portfolio's lowest calendar quarterly return was -11.53% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

32.60

'98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's
500 Index

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- -------------------------------------------------
Since Inception
1 Year Inception Date
- -------------------------------------------------
<S> <C> <C> <C>
Class I 32.60 29.74 10/31/97
- -------------------------------------------------
S&P 500 Index 28.73 30.81 --
- -------------------------------------------------
</TABLE>

17
<PAGE>

Other investment strategies
As discussed, the portfolio invests primarily in common stocks of U.S.
companies.

Investments other than U.S. common stocks

- Less information about non-U.S. issuers or markets may be available due
to less rigorous disclosure and accounting standards or regulatory
practices

- Many non U.S. markets are smaller, less liquid and more volatile than
U.S. markets. In a changing market, Pioneer might not be able to sell the
portfolio's investments in amounts and at prices it considers reasonable
- Adverse effect of currency exchange rates or controls on the value of the
portfolio's investments

- Political, economic and social developments that adversely affect the
non-U.S. securities markets
- Withholding and other non-U.S. taxes may decrease the portfolio's return

The portfolio may invest the balance of its assets in debt securities of
corporate and government issuers. Generally, the portfolio may acquire debt
securities that are investment grade, but the portfolio may invest up to 5% of
its net assets (at the time of purchase) in lower quality debt securities
including convertible debt securities. The portfolio invests in debt securities
when Pioneer believes they are consistent with the portfolio's investment
objective and offer the potential for capital growth, to diversify the
portfolio or for greater liquidity.

Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors which could
contribute to a decline in the market value of debt securities in the
portfolio's portfolio include rising interest rates or a reduction in the
perceived creditworthiness of the issuer of the securities. A debt security is
investment grade if it is rated in one of the top four categories by a
nationally recognized securities rating organization or determined to be of
equivalent credit quality by Pioneer. Debt securities rated below investment
grade are commonly referred to as "junk bonds" and are considered speculative.
Below investment grade debt securities involve greater risk of loss, are
subject to greater price volatility and are less liquid, especially during
periods of economic uncertainty or change, than higher quality debt securities.

Management

Portfolio manager

Day-to-day management of the portfolio is the responsibility of Jeffrey B.
Poppenhagen, a senior vice president of Pioneer. Mr. Poppenhagen joined Pioneer
in 1996 and has been an investment professional since 1988. Prior to joining
Pioneer, Mr. Poppenhagen was a portfolio manager and analyst for Transamerica
Investment Services from 1991 to 1996.

Mr. Poppenhagen is supported by a team of portfolio managers and analysts who
specialize in U.S. equity securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Poppenhagen and his team operate under the supervision of Theresa
A. Hamacher. Ms. Hamacher is chief

18
<PAGE>

investment officer of Pioneer. She joined Pioneer in 1997 and has been an
investment professional since 1984; most recently as chief investment officer
at another investment adviser.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 0.70% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. Pioneer has agreed not to impose all or a
portion of its fee or to reduce the portfolio's expenses in order to limit the
portfolio's total operating expenses to 1.25% of portfolio's average daily net
assets. This agreement is voluntary and temporary and may be revised or
terminated at any time. For the most recent fiscal year, the portfolio paid
Pioneer a management fee equal to 0.61% of the portfolio's average daily net
assets.

Distributions

Growth Shares Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 October 31,
1998 1997 through
-------------------------------- December 31, 1997
<S> <C> <C>
Net asset value, beginning of period $ 15.34 $ 15.00
-----------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.00 $ 0.01
Net realized and unrealized gain (loss) on investments 5.00 0.33
-----------------------------------
Net increase (decrease) from investment operations $ 5.00 $ 0.34
Distributions to shareholders:
Net investment income 0.00 --
-----------------------------------
Net increase (decrease) in net asset value $ 5.00 $ 0.34
-----------------------------------
Net asset value, end of period $ 20.34 $ 15.34
===================================
Total return* 32.60% 2.27%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.88%+ 1.25%**
Ratio of net investment income (loss) to average net assets 0.08%+ 0.60%**
Portfolio turnover rate 28% 16%**
Net assets, end of period (in thousands) $ 85,670 $ 4,646
Ratio assuming no waiver of management fees and
assumption of expenses by Pioneer and no reduction for
fees paid indirectly:
Net expenses 0.92% 6.57%**
Net investment income (loss) 0.04% (4.72)%**
Ratio assuming waiver of management fees and assumption
of expenses by Pioneer and reduction for fees paid indirectly:
Net expenses 0.88% 1.25%**
Net investment income (loss) 0.08% 0.60%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

19
<PAGE>

Basic information about Real Estate Growth Portfolio

Investment objectives

Long-term growth of capital. Current income is a secondary objective.

Investment strategies

The portfolio invests primarily in equity securities of real estate investment
trusts (REITs) and other real estate industry companies. Normally, the portfolio
invests at least 75% of its total assets in these securities. The portfolio's
equity investments include common stock, common stock equivalents such as
preferred stock and convertible debt securities and shares of REITs.

------------------------------------------
Real estate industry
companies
A real estate industry company
is a company that derives at
least 50% of its gross
revenues or net profits from
either
- the ownership, development,
construction, financing,
management or sale of
commercial, industrial or
residential real estate; or
- products or services related
to the real estate industry
like building supplies or
mortgage servicing.
------------------------------------------

REITs are pooled investment vehicles that primarily invest in income producing
real estate or real estate related loans or interests. Some REITs invest
directly in real estate and derive their income from the collection of rents and
capital gains on the sale of properties. Other REITs invest primarily in
mortgages secured by real estate and derive their income from collection of
interest.

The portfolio uses a "growth at a reasonable price" style of management. Using
this investment style, Pioneer, the portfolio's investment adviser, seeks to
invest in companies with above average potential for earnings and revenue growth
that are also trading at attractive market valuations. To select stocks, Pioneer
employs fundamental research and due diligence. Factors Pioneer looks for in
selecting investments include:

- Favorable expected returns relative to perceived risk
- Increasing cash flow or favorable prospects for cash flow growth
- Low market valuations relative to earnings forecast, net asset value
and cash flow
- Favorable prospects for dividend growth

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market strategy.

Principal risks of investing in the portfolio

Even though the portfolio seeks long-term growth of capital, you could lose
money on your investment or not make as much as if you invested elsewhere if:

- The stock market goes down (this risk may be greater in the short term)

- REITs and other real estate industry companies fall out of favor with
investors
- The portfolio's investments do not have the growth potential originally
expected

The portfolio also has risks associated with the real estate industry. Although
the portfolio does not invest directly in real estate, it does invest in REITs
and other equity securities of real estate industry companies and concentrates
its investments in the real estate industry. These risks include:

- The U.S. or a local real estate market declines due to adverse economic
conditions, overbuilding and high vacancy rates, reduced or regulated
rents or other causes

- Interest rates go up. Rising interest rates can adversely affect the
availability and cost of financing for property acquisitions and other
purposes and reduce the value of a REIT's fixed income investments

- The values of properties owned by a REIT or the prospects of other real
estate industry companies may be hurt by property tax increases, zoning
changes, other governmental actions, environmental liabilities, natural
disasters or increased operating expenses

- A REIT owned by the portfolio is, or is perceived by the market to be,
poorly managed

Investing in REITs involves certain unique risks. REITs are dependent on
management skills, are not diversified and are subject to the risks of
financing projects. REITs are subject to heavy cash flow dependency, default by
borrowers, self-liquidation and the possibility of failing to qualify for
certain tax and regulatory exemptions. REITs may have limited financial
resources, may trade less frequently and in a limited volume and may be more
volatile than securities of larger issuers.

20
<PAGE>

The portfolio is not diversified, which means that it can invest a higher
percentage of its assets in any one issuer than a diversified portfolio. Being
non-diversified may magnify the portfolio's losses from adverse events
affecting a particular issuer.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 17.17% (9/30/96 to
12/31/96).
The portfolio's lowest calendar quarterly return was -13.37% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

35.73 21.16 -18.74

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's 500 Index and Wilshire Real Estate Securities
Index

- - The sale of the shares at the end of the
period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- -----------------------------------------------------
Since Inception
1 Year Inception Date
- -----------------------------------------------------
<S> <C> <C> <C>
Class I -18.74 12.33 3/31/95
- -----------------------------------------------------
S&P 500 Index 28.73 29.98 --
- -----------------------------------------------------
Wilshire Real
Estate Securities
Index -17.43 11.80 --
- -----------------------------------------------------
</TABLE>

21
<PAGE>

Other investment strategies
As discussed, the portfolio primarily invests in the equity securities of REITs
and other real estate industry companies to seek long-term growth of capital.

Investments other than equity securities of REITs and other real estate
industry companies

The portfolio may invest up to 25% of its total assets (at the time of
purchase) in debt securities of real estate industry companies, mortgage-backed
securities and short-term investments. Generally the portfolio may acquire debt
securities that are investment grade, but the portfolio may invest up to 5% of
its total assets (at the time of purchase) in below investment grade debt
securities. The portfolio invests in debt securities when Pioneer believes they
are consistent with the portfolio's investment objectives and offer the
potential for reasonable income or capital growth, to diversify the portfolio's
investments or for greater liquidity.

Mortgage-backed securities may be issued by private companies or by agencies of
the U.S. government and represent direct or indirect participations in, or are
collateralized by and payable from, mortgage loans secured by real property.
Certain mortgage-backed securities may only pay principal at maturity or may
only represent the right to receive payments of principal or payments of
interest on underlying pools of mortgages or government securities, but not
both. The value of these types of instruments may change more drastically than
debt securities that pay both principal and interest during periods of changing
interest rates. Principal only mortgage-backed securities generally increase in
value if interest rates decline, but are also subject to the risk of
prepayment. Interest only instruments generally increase in value in a rising
interest rate environment when fewer of the underlying mortgages are prepaid.

The fund may invest in mortgage derivatives and structured securities. Because
these securities have imbedded leverage features, small changes in interest or
prepayment rates may cause large and sudden price movements. Mortgage
derivatives can also become illiquid and hard to value in declining markets.

The portfolio may invest up to 10% of its total assets (at the time of
purchase) in securities of non-U.S. issuers provided that the purchase of
Canadian securities are not subject to the non-U.S. issuer limitation. The
portfolio will not invest more than 5% of its total assets (at the time of
purchase) in the securities of emerging markets issuers. Investing in Canadian
and non-U.S. issuers may involve unique risks compared to investing in
securities of U.S. issuers.

Management

Portfolio manager

Day-to-day management of the portfolio is the responsibility of Matthew L.
Ostrower, a vice president of Pioneer since 1999. Mr. Ostrower has worked for
The Boston Financial Group as a real estate analyst since 1995 and has been
working with Pioneer as an investment professional since 1996.

Mr. Ostrower is supervised by Theresa A. Hamacher, chief investment officer of
Pioneer. She joined Pioneer in 1997 and has been an investment professional
since 1984; most recently as chief investment officer at another investment
adviser.

22
<PAGE>

Subadviser

Boston Financial Securities, Inc. (BFS), which is an affiliate of The Boston
Financial Group Limited Partnership, has extensive experience and expertise in
placing, evaluating and providing advice on a variety of real estate related
investments since 1969. In its capacity as subadviser to the portfolio, BFS (i)
identifies and analyzes real estate industry companies, (ii) analyzes market
conditions affecting the real estate industry generally and specific
geographical and securities markets, (iii) reviews and analyzes the portfolio's
investments and (iv) furnishes advisory reports to Pioneer.

Fred N. Pratt, Jr. has the ultimate responsibility for overseeing the
provisions of subadvisory services to the portfolio. Mr. Pratt is president and
chief executive officer of Boston Financial Group, a director of BFS, and a
trustee of the fund. Mr. Pratt has worked in the real estate industry since
1969.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 1.00% of the portfolio's average daily net assets. This fee is
normally computed daily and paid monthly. Pioneer pays a portion of its fee to
BFS. Pioneer has agreed to waive a portion of its management fee to the extent
required to reduce the fee from 1.00% to 0.80% of the portfolio's average daily
net assets. Pioneer will not charge its management fee and will make other
arrangements, if necessary, to limit the portfolio's Class I share total annual
operating expenses to 1.25% of the portfolio's average daily net assets
attributable to Class I shares. These agreements are voluntary and may be
revised or terminated at any time. For the most recent fiscal year, the
portfolio paid Pioneer a management fee equal to 0.98% of the portfolio's
average daily net assets.

Distributions

The portfolio generally makes distributions of any net long-term capital gains
in November. The portfolio generally pays dividends from any net investment
income or distributions of net short-term capital gains quarterly during March,
June, September and December. The portfolio may pay additional distributions
and dividends at other times if necessary for the portfolio to avoid a federal
tax.

23
<PAGE>

Real Estate Growth Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 March 31,
------------------------------------------ 1995 through
1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.90 $ 14.46 $ 11.23 $ 10.00
-------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.60 $ 0.47 $ 0.54 $ 0.12
Net realized and unrealized gain (loss)
on investments (3.72) 2.54 3.34 1.55
-------------------------------------------------------
Net increase (decrease)
from investment operations $ (3.12) $ 3.01 $ 3.88 $ 1.67
Distributions to shareholders:
Net investment income (0.56) (0.45) (0.53) (0.23)
Tax return of capital -- -- -- (0.18)
Net realized gain (0.15) (0.12) (0.12) (0.03)
-------------------------------------------------------
Net increase (decrease) in net asset value $ (3.83) $ 2.44 $ 3.23 $ 1.23
-------------------------------------------------------
Net asset value, end of period $ 13.07 $ 16.90 $ 14.46 $ 11.23
=======================================================
Total return* (18.74)% 21.16% 35.73% 16.96%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 1.19%+ 1.25%+ 1.34%+ 2.10%**+
Ratio of net investment income (loss)
to average net assets 4.06%+ 3.16%+ 4.63%+ 2.68%**+
Portfolio turnover rate 18% 28% 41% 1%**
Net assets, end of period (in thousands) $ 35,579 $ 42,187 $ 11,115 $ 512
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 1.20% 1.37% 3.35% 45.96%**
Net investment income (loss) 4.05% 3.04% 2.62% (41.18)%**
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 1.19% 1.24% 1.24% 1.57%**
Net investment income (loss) 4.06% 3.17% 4.73% 3.21%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

24
<PAGE>

Basic information about Growth and Income Portfolio

Investment objective
Reasonable income and capital growth.

Investment strategies

The portfolio invests in a broad list of carefully selected, reasonably priced
securities rather than in securities whose prices reflect a premium resulting
from their current market popularity. The portfolio invests the major portion
of its assets in equity securities, primarily of U.S. issuers. For purposes of
the portfolio's investment policies, equity securities include common and
preferred stocks, interests in real estate investment trusts (REITs) and
convertible debt securities. Although the portfolio focuses on securities that
have paid dividends in the preceding 12 months, it may purchase or hold
securities that do not provide income if the portfolio expects them to increase
in value.

Pioneer, the portfolio's investment adviser, uses a value approach to select
the portfolio's investments. Using this investment style, Pioneer seeks
securities selling at reasonable prices or substantial discounts to their
underlying values and holds these securities until the market values reflect
their intrinsic values. Pioneer evaluates a security's potential value based on
the company's assets and prospects for earnings growth. In making that
assessment, Pioneer employs fundamental research and due diligence. Pioneer
also considers a security's potential to provide a reasonable amount of income.
Pioneer relies on the knowledge, experience and judgment of its staff who have
access to a wide variety of research. Factors Pioneer looks for in selecting
investments include:

- Favorable expected returns relative to perceived risk
- Above average potential for earnings and revenue growth
- Low market valuations relative to earnings forecast, book value, cash
flow and sales
- A sustainable competitive advantage, such as a brand name, customer base,
proprietary technology or economies of scale

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio avoids concentrating in any
one sector or industry.

Principal risks of investing in the portfolio
Even though the portfolio seeks reasonable income and capital growth, you could
lose money on your investment or not make as much as if you invested elsewhere
if:

- The stock market goes down (this risk may be greater in the short term)

- Value stocks fall out of favor with investors
- The portfolio's assets remain undervalued or do not have the potential
value originally expected
- Stocks selected for income do not achieve the same return as securities
selected for capital growth

25
<PAGE>

The portfolio's past performance

The bar chart and table indicate the risks of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 21.71% (9/30/98 to
12/31/98).
The portfolio's lowest calendar quarterly return was -11.70% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

26.11

'98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's
500 Index

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- -------------------------------------------------
Since Inception
1 Year Inception Date
- -------------------------------------------------
<S> <C> <C> <C>
Class I 26.12 27.57 10/31/97
- -------------------------------------------------
S&P 500 Index 28.73 30.81 --
- -------------------------------------------------
</TABLE>

26
<PAGE>

Other investment strategies
As discussed, the portfolio invests primarily in common stocks of U.S.
companies to seek reasonable income and capital growth.

Investments other than U.S. common stocks

The portfolio may invest up to 10% of its total assets (at the time of
purchase) in equity and debt securities of non-U.S. issuers. The portfolio will
not invest more than 5% of its total assets (at the time of purchase) in the
securities of emerging markets issuers. Investing in non-U.S. issuers may
involve unique risks compared to investing in securities of U.S. issuers.

The portfolio may invest the balance of its assets in debt securities of
corporate and government issuers. Generally the portfolio may acquire debt
securities that are investment grade, but the portfolio may invest up to 5% of
its net assets (at the time of purchase) in lower quality debt securities
including convertible debt securities. The portfolio invests in debt securities
when Pioneer believes that they are consistent with the portfolio's investment
objective and offer the potential for reasonable income or capital growth, to
diversify the portfolio or for greater liquidity.

Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors which could
contribute to a decline in the market value of debt securities in the
portfolio's portfolio include rising interest rates or a reduction in the
perceived creditworthiness of the issuer of the securities. A debt security is
investment grade if it is rated in one of the top four categories by a
nationally recognized securities rating organization or determined to be of
equivalent credit quality by Pioneer. Debt securities rated below investment
grade are commonly referred to as "junk bonds" and are considered speculative.
Below investment grade debt securities involve greater risk of loss, are
subject to greater price volatility and are less liquid, especially during
periods of economic uncertainty or change, than higher quality debt securities.

Management

Portfolio manager

Day-to-day management of the portfolio is the responsibility of John A. Carey.
Mr. Carey is a senior vice president of Pioneer. He joined Pioneer in 1979 and
has over 19 years of investment experience.

Mr. Carey is supported by a team of portfolio managers and analysts who
specialize in U.S. equity securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Carey and his team operates under the supervision of Theresa A.
Hamacher. Mr. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

Management fee

27
<PAGE>

net assets. This agreement is voluntary and temporary and may be revised or
terminated at any time. For the most recent fiscal year, the portfolio paid
Pioneer a management fee equal to 0.64% of the portfolio's average daily net
assets.

Distributions

Growth and Income Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 October 31,
1998 1997 through
-------------------------------- December 31, 1997
<S> <C> <C>
Net asset value, beginning of period $ 15.80 $ 15.00
-----------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.15 $ 0.01
Net realized and unrealized gain (loss) on investments 3.96 0.80
-----------------------------------
Total increase (decrease) from investment operations $ 4.11 $ 0.81
Distributions to shareholders:
Net investment income (0.15) (0.01)
-----------------------------------
Net increase (decrease) in net asset value $ 3.96 $ 0.80
-----------------------------------
Net asset value, end of period $ 19.76 $ 15.80
===================================
Total return* 26.12% 5.43%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.86%+ 1.25%**
Ratio of net investment income (loss) to average net assets 0.97%+ 1.07%**
Portfolio turnover rate 4% --
Net assets, end of period (in thousands) $ 89,860 $ 4,493
Ratios assuming no waiver of management fees and
assumption of expenses by Pioneer and no reduction for
fees paid indirectly:
Net expenses 0.87% 5.30%**
Net investment income (loss) 0.96% (2.98)%**
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and reduction for fees
paid indirectly:
Net expenses 0.86% 1.25%**
Net investment income (loss) 0.97% 1.07%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

28
<PAGE>

Basic information about Equity-Income Portfolio

Investment objective

Current income and long-term growth of capital from a portfolio consisting
primarily of income producing equity securities of U.S. corporations.

Investment strategies

Normally, the portfolio invests at least 80% of its total assets in income
producing equity securities of U.S. companies. The income producing equity
securities in which the portfolio may invest include common stocks, preferred
stocks and interests in real estate investment trusts (REITs). The remainder of
the portfolio may be invested in debt securities, most of which are expected to
be convertible into common stocks.

Pioneer, the portfolio's investment adviser, uses a value approach to select
the portfolio's investments. Using this investment style, Pioneer seeks
securities selling at substantial discounts to their underlying values and
holds these securities until the market values reflect their intrinsic values.
Pioneer evaluates a security's potential value based on the company's assets
and prospects for earnings growth. Pioneer also considers a security's
potential to provide a reasonable amount of income. In making these
assessments, Pioneer employs fundamental research and due diligence, employing
a bottom-up analytic style. Pioneer relies on the knowledge, experience and
judgment of its staff who have access to a wide variety of research. Factors
Pioneer looks for in selecting investments include:

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio avoids concentrating in any
one sector or industry.

Principal risks of investing in the portfolio
Even though the portfolio seeks current income and long-term growth of capital,
you could lose money on your investment or not make as much as if you invested
elsewhere if:

- The stock market goes down (this risk may be greater in the short term)

29
<PAGE>

The portfolio's past performance

The bar chart and table indicate the risks of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 15.04% (9/30/98 to
12/31/98).
The portfolio's lowest calendar quarterly return was -5.76% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

15.16 35.23 21.80

'96 '97 '98

[End: Description Bar Chart]

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

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- -------------------------------------------------
Since Inception
1 Year Inception Date
- -------------------------------------------------
<S> <C> <C> <C>
Class I 21.80 24.86 3/1/95
- -------------------------------------------------
S&P 500 Index 28.73 29.98 --
- -------------------------------------------------
</TABLE>

<PAGE>

Other investment strategies
As discussed, the portfolio primarily invests in income producing equity
securities of U.S. corporations to seek current income and long-term capital
growth.

Other investments

The portion of the portfolio's assets not invested in equity securities may be
invested in debt securities of corporate and government issuers. Most of the
debt securities the portfolio acquires are expected to be securities
convertible into common stocks. Generally, the portfolio may acquire debt
securities that are investment grade, but the portfolio may invest up to 10% of
its total assets (at the time of purchase) in lower quality debt securities
including convertible debt securities.

Debt securities are subject to the risk of an issuer's inability to meet
principal or interest payments on its obligations. Factors which could
contribute to a decline in the market value of debt securities in the portfolio
include rising interest rates or reduction in the perceived creditworthiness of
the issuer of the securities. A debt security is investment grade if it is
rated in one of the top four categories by a nationally recognized securities
rating organization or determined to be of equivalent credit quality by
Pioneer. Debt securities rated below investment grade are commonly referred to
as "junk bonds" and are considered speculative. Below investment grade
securities involve greater risk of loss, are subject to greater price
volatility and are less liquid, especially during periods of economic
uncertainty or change, than higher quality debt securities.

Management

Portfolio manager
Day-to-day management of the portfolio is the responsibility of John A. Carey.
Mr. Carey is a senior vice president of Pioneer. He joined Pioneer in 1979 and
has been an investment professional since 1979.

Mr. Carey is supported by a team of portfolio managers and analysts who
specialize in U.S. equity securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Carey and his team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

Management fee
The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 0.65% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. For the portfolio's most recent fiscal year,
the portfolio paid a management fee equal to 0.65% of the portfolio's average
daily net assets.

31
<PAGE>

Distributions
The portfolio generally makes distributions of any net long-term capital gains
in November. The portfolio generally pays dividends from any net investment
income or distributions of net short-term capital gains quarterly during March,
June, September and December. The portfolio may pay additional distributions
and dividends at other times if necessary for the portfolio to avoid a federal
tax.

Equity-Income Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 March 1,
------------------------------------------ 1995 through
1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.14 $ 13.73 $ 12.17 $ 10.00
-------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.39 $ 0.35 $ 0.29 $ 0.19
Net realized and unrealized gain (loss)
on investments 3.52 4.44 1.54 2.16
-------------------------------------------------------
Net increase (decrease)
from investment operations $ 3.91 $ 4.79 $ 1.83 $ 2.35
Distributions to shareholders:
Net investment income (0.39) (0.37) (0.27) (0.18)
Net realized gain (0.22) (0.01) -- --
-------------------------------------------------------
Net increase (decrease) in net asset value $ 3.30 $ 4.41 $ 1.56 $ 2.17
-------------------------------------------------------
Net asset value, end of period $ 21.44 $ 18.14 $ 13.73 $ 12.17
=======================================================
Total return* 21.80% 35.23% 15.19% 23.62%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.71%+ 0.77%+ 0.96%+ 1.63%**+
Ratio of net investment income (loss)
to average net assets 2.04%+ 2.31%+ 2.67%+ 2.89%**+
Portfolio turnover rate 19% 15% 18% --
Net assets, end of period (in thousands) $203,976 $124,213 $ 46,871 $ 6,914
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 0.71% 0.77% 0.98% 5.32%**
Net investment income (loss) 2.04% 2.31% 2.65% (0.80)%**
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 0.71% 0.77% 0.95% 1.47%**
Net investment income (loss) 2.04% 2.31% 2.68% 3.05%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

32
<PAGE>

Basic information about Balanced Portfolio

Investment objectives
Capital growth and current income by actively managing investments in a
diversified portfolio of equity securities and bonds.

Investment strategies

The portfolio's equity investments include common stocks, interests in real
estate investment trusts (REITs), and securities with common stock
characteristics, such as convertible bonds and preferred stocks. The portfolio's
investments in debt securities include U.S. government securities, corporate
debt securities, mortgage- and asset-backed securities and commercial paper.
Debt securities in which the portfolio invests may have all types of interest
rate payment and reset terms, including fixed rate, adjustable rate, zero
coupon, contingent, deferred, payment-in-kind and auction rate features.

The portfolio uses a "growth at a reasonable price" style of management in
selecting equity securities. Using this investment style, Pioneer seeks to
invest in companies with above average potential for earnings and revenue growth
that are also trading at attractive market valuations. To select stocks, Pioneer
employs fundamental research and due diligence. Factors Pioneer looks for in
selecting investments include:

- Favorable expected returns relative to perceived risk
- Low market valuations relative to earnings forecast, book value, cash
flow and sales
- Increasing earnings forecast

---------------------------------
Asset allocation Pioneer
allocates the portfolio's
assets between equity and debt
securities based on its
assessment of current
business, economic and market
conditions. Normally, equity
and debt securities each
represent 35% to 65% of the
fund's assets.
---------------------------------

Pioneer considers both broad economic and issuer specific factors in selecting
debt securities for the portfolio. In assessing the appropriate maturity and
sector weighting for the portfolio, Pioneer considers a variety of factors that
are expected to influence economic activity and interest rates. These factors
include fundamental economic indicators such as the rates of economic growth
and inflation, Federal Reserve monetary policy and the relative value of the
U.S. dollar compared to other currencies. Once Pioneer determines the
preferable portfolio characteristics, Pioneer selects individual securities
based upon the terms of the securities (such as yields compared to U.S.
Treasuries or comparable issues), liquidity, sector and issuer diversification.
Pioneer also employs fundamental research and due diligence to assess an
issuer's credit quality, taking into account financial condition and
profitability, future capital needs, potential for change in rating, industry
outlook, the competitive environment and management ability.

In making portfolio decisions, Pioneer relies on the knowledge, experience and
judgment of its own staff who have access to a wide variety of research.

Principal risks of investing in the portfolio
Even though the portfolio seeks capital growth and current income, you could
lose money on your investment or not make as much as if you invested elsewhere
if:

- The stock market goes down (this risk may be greater in the short term)

- The portfolio's equity investments do not have the growth potential
originally expected

- Stocks selected for income do not achieve the same return as securities
selected for capital growth
The portfolio also has risks associated with investing in bonds. The portfolio
could underperform other investments if:
- Interest rates go up causing the value of the portfolio's investments to
decline

- The issuer of a debt security owned by the portfolio defaults on its
obligation to pay principal or interest or has its credit rating
downgraded
- During periods of declining interest rates, the issuer of a security may
exercise its option to prepay earlier than scheduled, forcing the
portfolio to reinvest in lower yielding securities. This is known as call
or prepayment risk
- During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration and reduce the value of the security.
This is known as extension risk.

- Pioneer's judgment about the attractiveness, relative value or potential
appreciation of a particular sector, security or investment strategy
proves to be incorrect

33
<PAGE>

The portfolio's past performance

The bar chart and table indicate the risk of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may make or lose money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 10.05% (3/31/97 to
6/30/97).
The portfolio's lowest calendar quarterly return was -6.32% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

14.25 17.62 2.64

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's 500 Index and Lehman Brothers
Government/Corporate Bond Index

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- -----------------------------------------------
Since Inception
1 Year Inception Date
- -----------------------------------------------
<S> <C> <C> <C>
Class I 2.64 14.23 3/1/95
- -----------------------------------------------
S&P 500 Index 28.73 29.98 --
- -----------------------------------------------
LB Govt/Corp
Bond Index 9.47 9.46 --
- -----------------------------------------------
</TABLE>

34
<PAGE>

Other investment policies
As discussed, the portfolio primarily invests in equity securities and bonds to
seek capital growth and current income.

Investments in lower rated debt securities
Up to 10% of the portfolio's total assets (at the time of purchase) may be
invested in debt securities rated below investment grade. A debt security is
investment grade if it is rated in one of the top four categories by a
nationally recognized securities rating organization or determined to be of
equivalent credit quality by Pioneer. Debt securities rated below investment
grade are commonly referred to as "junk bonds" and are considered speculative.
Below investment grade debt securities involve greater risk of loss, are
subject to greater price volatility and are less liquid, especially during
periods of economic uncertainty or change, than higher quality debt securities.

Investments other than U.S. common stocks

The portfolio may invest up to 25% of its total assets (at the time of
purchase) in securities of non-U.S. issuers. The portfolio will not invest more
than 5% of its total assets (at the time of purchase) in the securities of
emerging markets issuers. Investing in non-U.S. issuers may involve unique
risks compared to investing in securities of U.S. issuers. These risks include:

- Adverse effect of currency exchange rates or controls on the value of the
portfolio's investments
- Political, economic and social developments that adversely affect the
securities markets

- Withholding and other non-U.S. taxes may decrease the portfolio's return

Management

Portfolio manager
Day-to-day management of the portfolio is the responsibility of co-managers Tin
Chan and Eric Weigel, vice presidents of Pioneer. Mr. Chan is responsible for
the equity investments of the portfolio. He joined Pioneer in August 1998 and
has been an investment professional since 1993. Prior to joining Pioneer, Mr.
Chan was an Equity Portfolio Manager with Allmerica Financial from 1995 to 1998
and was an Equity Research Analyst with Key Corp. from 1993 to 1995. Mr. Weigel
is responsible for the asset allocation decisions for the portfolio. He joined
Pioneer in August 1998 and has been an investment professional since 1989.
Prior to joining Pioneer, Mr. Weigel was Head of Global Asset Allocation and
Portfolio Manager at Chancellor LGT Asset Management from 1994 to 1997 and
managed domestic and international portfolios for INVESCO Management and
Research from 1993 to 1994. Mr. Chan and Mr. Weigel are supported by a team of
portfolio managers and analysts who focus on equity securities. The team
provides research for the fund and other Pioneer mutual funds with similar
investment objectives or styles.

Day-to-day management of the fixed income portion of the portfolio is the
responsibility of a team of managers and analysts which focuses on fixed income
investments, supervised by Kenneth J. Taubes, a vice president of Pioneer. Mr.
Taubes joined Pioneer in September 1998 and has been an investment professional
since 1989. Prior to joining Pioneer, Mr. Taubes had served since 1991 as a
senior vice president and senior portfolio manager for several Putnam
Investments institutional accounts and mutual funds.

35
<PAGE>

The portfolio management team operates under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

<TABLE>
<CAPTION>
Balanced Portfolio
For the year ended December 31 March 1,
------------------------------------------ 1995 through
1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.99 $ 13.19 $ 11.87 $ 10.00
-------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.42 $ 0.36 $ 0.29 $ 0.20
Net realized and unrealized gain (loss)
on investments 0.00 1.94 1.39 1.87
-------------------------------------------------------
Net increase (decrease)
from investment operations $ 0.42 $ 2.30 $ 1.68 $ 2.07
Distributions to shareholders:
Net investment income (0.42) (0.36) (0.29) (0.20)
Net realized gain (0.52) (0.14) (0.07) --
-------------------------------------------------------
Net increase (decrease) in net asset value $ (0.52) $ 1.80 $ 1.32 $ 1.87
-------------------------------------------------------
Net asset value, end of period $ 14.47 $ 14.99 $ 13.19 $ 11.87
=======================================================
Total return* 2.64% 17.62% 14.26% 20.84%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.80%+ 0.96%+ 1.20%+ 1.76%**+
Ratio of net investment income (loss)
to average net assets 2.93%+ 2.63%+ 2.83%+ 2.99%**+
Portfolio turnover rate 104% 63% 74% --
Net assets, end of period (in thousands) $ 66,930 $ 44,008 $ 16,783 $ 2,661
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 0.80% 0.96% 1.58% 14.77%**
Net investment income (loss) 2.93% 2.63% 2.45% (10.02)%**
Ratios assuming waiver of management fees
and assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 0.80% 0.95% 1.15% 1.45%**
Net investment income (loss) 2.93% 2.64% 2.88% 3.30%**
</TABLE>

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

* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

36
<PAGE>

Basic information about Swiss Franc Bond Portfolio

Investment objective
To approximate the performance of the Swiss franc relative to the U.S. dollar
while earning a reasonable level of income.

Investment strategies

Normally, the portfolio invests at least 65% of its total assets in 1)
government and corporate debt securities that are denominated in Swiss francs
and 2) combinations of forward foreign currency exchange contracts and debt
securities that are not denominated in Swiss francs. These combinations are
designed to link the value of the investment in the non-Swiss franc security to
the performance of the Swiss franc. The portfolio normally will not invest more
than 25% of its total assets in such combination transactions.

The portfolio may invest up to 35% of its total assets in investment grade
commercial paper, bank obligations and money market instruments which may be
denominated in Swiss francs or other currencies. Normally, at least 50% of the
portfolio's investments will be denominated in Swiss francs.

The portfolio's average weighted maturity normally will not exceed three years.
However, the average weighted maturity may be as long as five years if Pioneer
determines that a longer maturity is appropriate to respond to existing or
expected market conditions.

Pioneer, the portfolio's investment adviser, considers both broad economic and
issuer specific factors in selecting a portfolio designed to achieve the
portfolio's investment objective. In assessing the appropriate maturity and
sector weighting for the portfolio, Pioneer considers a variety of factors that
are expected to influence economic activity and interest rates. These factors
include fundamental economic indicators, such as the rates of economic growth
and inflation, Federal Reserve monetary policy and the relative value of the
U.S. dollar compared to other currencies. Once Pioneer determines the
preferable portfolio characteristics, Pioneer selects individual securities
based upon the terms of the securities (such as yields compared to U.S.
Treasuries or comparable issues), liquidity, sector and issuer diversification.
Pioneer also employs fundamental research and due diligence to assess an
issuer's credit quality, taking into account financial condition and
profitability, future capital needs, potential for change in rating, industry
outlook, the competitive environment and management ability. In making these
portfolio decisions, Pioneer relies on the knowledge, experience and judgment
of its own staff who have access to a wide variety of research.

Principal risks of investing in the portfolio

Even though the portfolio seeks to approximate the performance of the Swiss
franc relative to the U.S. dollar while earning a reasonable level of income,
you could lose money on your investment or the portfolio could fail to generate
current income if:

- Interest rates go up causing the value of the portfolio's investments to
decline
- The issuer of a debt security owned by the portfolio defaults on its
obligation to pay principal or interest or has its credit rating
downgraded

- During periods of declining interest rates, the issuer of a security may
exercise its option to prepay principal earlier than scheduled, forcing
the portfolio to reinvest in lower yielding securities. This is known as
call or prepayment risk
- During periods of rising interest rates, the average life of certain
types of securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate,
increase the security's duration and reduce the value of the security.
This is known as extension risk

- Pioneer's judgment about the attractiveness, relative value or potential
appreciation of a particular sector, security or investment strategy
proves to be incorrect

Investing primarily in Swiss issuers may involve unique risks compared to the
securities of U.S. issuers. These risks may include:

- The U.S. dollar may appreciate against the Swiss franc or Switzerland may
impose restrictions on currency conversion or trading. The portfolio is
particularly susceptible to this risk since Pioneer does not actively
manage the currency exchange rate risk of the portfolio's investments
- The Swiss market is smaller and may be less liquid and more volatile than
the U.S. market

- The Swiss economy may grow at a slower rate than expected or suffer a
downturn or recession
- Political, economic or social developments may adversely affect the Swiss
securities market

37
<PAGE>

- Economic and Monetary Union (EMU) and the introduction of a single
European currency may increase the volatility of European markets

- Withholding and other non-U.S. taxes may decrease the portfolio's return

The portfolio's past performance
The bar chart and table indicate the risk of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The chart shows the performance of the portfolio's Class I shares for each full
calendar year since the portfolio's inception on November 1, 1995. The chart
does not reflect any fees or expenses payable with respect to a Variable
Contract. Such fees and expenses will reduce your return.

The portfolio's highest calendar quarterly return was 11.12% (6/30/98 to
9/30/98).
The portfolio's lowest calendar quarterly return was -6.02% (3/31/96 to
6/30/96).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

- -10.81 -6.93 9.48

'96 '97 '98

[End: Description Bar Chart]

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

Comparison with Merrill Lynch

Global Bond Index

The table shows the average annual total returns of the portfolio's Class I
shares over time and compares these returns to the returns of the Merrill Lynch
Global Bond Index. This index is a measure of approximately 3,000 global
government securities and Eurobonds. Unlike the portfolio, the index is not
managed and does not incur expenses. The table assumes:

- - The sale of the shares at the end of the
period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- --------------------------------------------
Since Inception
1 Year Inception Date
- --------------------------------------------
<S> <C> <C> <C>
Class I 9.48 -2.85 11/1/95
- --------------------------------------------
ML Global
Bond Index 12.78 6.76 --
- --------------------------------------------
</TABLE>

38
<PAGE>

Management

Portfolio manager
Day-to-day management of the portfolio is the responsibility of Salvatore P.
Pramas. Mr. Pramas is a vice president of Pioneer. He joined Pioneer in 1994
after working for a number of investment management firms.

Mr. Pramas is supported by a team of portfolio managers and analysts who
specialize in fixed income securities. This team provides research for the
portfolio and other Pioneer mutual funds with similar investment objectives or
styles. Mr. Pramas and his team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 0.65% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. Pioneer has agreed not to impose all or a
portion of its fee or to reduce the portfolio's expenses in order to limit the
portfolio's total operating expenses to 1.25% of the portfolio's average daily
net assets. This agreement is voluntary and temporary and may be revised or
terminated at any time. For the most recent fiscal year, the portfolio paid
Pioneer a management fee equal to 0.65% of the portfolio's average daily net
assets.

Distributions

39
<PAGE>

Swiss Franc Bond Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 November 1,
------------------------------------------ 1995 through
1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.50 $ 13.42 $ 15.06 $ 15.00
-------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.36 $ 0.30 $ 0.14 $ 0.04
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 0.82 (1.22) (1.78) 0.02
-------------------------------------------------------
Net increase (decrease)
from investment operations $ 1.18 $ (0.92) $ (1.64) $ 0.06
Distributions to shareholders:
Net investment income (0.46) -- -- --
-------------------------------------------------------
Net increase (decrease) in net asset value $ 0.72 $ (0.92) $ (1.64) $ 0.06
-------------------------------------------------------
Net asset value, end of period $ 13.22 $ 12.50 $ 13.42 $ 15.06
========================================================
Total return* 9.48% (6.92)% (10.88)% 0.40%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.91%+ 1.23%+ 1.20%+ 2.25%**+
Ratio of net investment income (loss)
to average net assets 3.41%+ 3.22%+ 3.37%+ 1.70%**+
Portfolio turnover rate 29% 17% 39% --
Net assets, end of period (in thousands) $ 41,174 $ 22,088 $ 13,079 $ 189
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 0.91% 1.25% 2.58% 69.22%**
Net investment income (loss) 3.41% 3.20% 1.99% (65.27)%**
Ratios assuming waiver of management fees
and assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 0.90% 1.22% 1.15% 1.25%**
Net investment income (loss) 3.42% 3.23% 3.42% 2.70%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

40
<PAGE>

Basic information about America Income Portfolio

Investment objective
As high a level of current income as is consistent with preservation of
capital.

Investment strategies
Normally, the portfolio invests exclusively in U.S. government securities and
repurchase agreements and "when-issued" commitments with respect to these
securities. These securities include:

- U.S. Treasury obligations, which differ only in their interest rates,
maturities and times of issuance, including U.S. Treasury bills
(maturities of one year or less), U.S. Treasury notes (maturities of one
to 10 years), and U.S. Treasury bonds (generally maturities greater than
10 years)

- Obligations issued by or guaranteed as to payment of principal and
interest by the U.S. Treasury and certain agencies and instrumentalities
of the U.S. government, such as Government National Mortgage Association
(GNMA) and Federal Housing Administration (FHA)
- Securities issued by an agency or instrumentality that are not guaranteed
by the U.S. Treasury, such as securities issued by Student Loan Marketing
Association (SLMA) and Federal National Mortgage Association (FNMA),
which are supported by the right to borrow money from the U.S. Treasury
under certain circumstances, or securities issued by the Federal Home
Loan Bank which are supported solely by the credit of the agency

The portfolio's investments may have fixed or variable principal payments and
all types of interest rate payment and reset terms, including fixed rate,
adjustable rate, zero coupon, contingent, deferred, payment in kind and auction
rate features. The portfolio may invest in securities of any maturity. Although
the average dollar weighted maturity of the portfolio's assets may vary
significantly, it generally will not exceed 20 years.

In making portfolio decisions, Pioneer relies on the knowledge, experience and
judgment of its own staff who have access to a wide variety of research.

Principal risks of investing in the portfolio

Even though the portfolio seeks a high level of current income and preservation
of capital, you could lose money on your investment or the portfolio could fail
to generate current income if:

- Interest rates go up causing the value of the portfolio's investments to
decline

- Pioneer's judgment about the attractiveness, relative value or potential
appreciation of a particular sector, security or investment strategy
proves to be incorrect

To the extent the portfolio invests significantly in mortgage-backed
securities, its exposure to prepayment and extension risks may be greater than
other investments in fixed income securities. Mortgage derivatives held by the
portfolio may have especially volatile prices and may have a disproportionate
effect on the portfolio's share price.

Not all U.S. government securities are backed by the full faith and credit of
the United States. Some agencies and instrumentalities, such as SLMA and FNMA,
are only supported by the right to borrow money from the U.S. Treasury under
certain circumstances. Other agencies and instrumentalities, such as the
Federal Home Loan Bank, are supported solely by the credit of the agency. The
guarantee by the U.S. Treasury or agency or instrumentality of the U.S.
government applies only to payment of principal and interest and does not
extend to the market value of the security.

41
<PAGE>

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

- --------------------------------------------------------------------------------
Portfolio performance

The portfolio's highest calendar quarterly return was 4.75% (6/30/98 to
9/30/98).
The portfolio's lowest calendar quarterly return was -0.90% (12/31/96 to
3/31/97).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

1.30 8.44 8.15

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Lehman Brothers
Government Bond Index

The table shows the average annual total returns of the portfolio's Class I
shares over time and compares these returns to the returns of the Lehman
Brothers Government Bond Index. This index is a measure of the performance of
U.S. Treasury debt, all publicly issued debt of U.S. government agencies and
quasi-federal corporations, and corporate debt guaranteed by the U.S.
government. Unlike the portfolio, the index is not managed and does not incur
expenses. The table assumes:

- - The sale of the shares at the end of the
period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- --------------------------------------------
Since Inception
1 Year Inception Date
- --------------------------------------------
<S> <C> <C> <C>
Class I 8.15 6.11 3/1/95
- --------------------------------------------
LB Govt
Bond Index 9.85 9.35 --
- --------------------------------------------
</TABLE>

42
<PAGE>

Other investment strategies
As discussed, the portfolio invests exclusively in U.S. government securities
and repurchase agreements and "when-issued" commitments with respect to these
securities.

Additional information about debt securities

The portfolio may invest in mortgage-backed securities issued by agencies or
instrumentalities of the U.S. government. These securities represent direct or
indirect participation in, or are collateralized by and payable from, mortgage
loans secured by real estate. Certain debt instruments may only pay principal
at maturity or may only represent the right to receive payments of principal or
payments of interest on underlying pools of mortgage or government securities,
but not both. The value of these types of instruments may change more
drastically than debt securities that pay both principal and interest during
periods of changing interest rates. Principal only mortgage-backed securities
generally increase in value if interest rates decline, but are also subject to
the risk of prepayment. Interest only instruments generally increase in value
in a rising interest rate environment when fewer of the underlying mortgages
are prepaid. For mortgage derivatives and structured securities that have
imbedded leverage features, small changes in interest or prepayment rates may
cause large and sudden price movements. Mortgage derivatives can also become
illiquid and hard to value in declining markets.

Repurchase agreements

Repurchase agreements are arrangements under which the portfolio purchases
securities and the seller agrees to repurchase the securities within a specific
time and at a specific price. The repurchase price is generally higher than the
portfolio's purchase price, with the difference being income to the portfolio.
The other party's obligations under the repurchase agreement are collateralized
with U.S. Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily. Repurchase agreements afford the
portfolio an opportunity to earn income on temporarily available cash at low
risk. However, in the event that the other party to the repurchase agreement
defaults on its obligations, the portfolio may encounter delay and incur costs
before being able to sell the security. Such a delay may involve loss of
interest or a decline in price of the security. In addition, if the portfolio
is characterized by a court as an unsecured creditor, it would be at risk of
losing some or all of the principal and interest involved in the transaction.

"When-Issued" securities

The portfolio may purchase and sell securities, including GNMA certificates, on
a when-issued or delayed delivery basis. These transactions arise when
securities are purchased or sold by the portfolio with payment and delivery
taking place at a fixed future date. The portfolio may engage in these
transactions when it believes they would result in a favorable price and yield
for the security being purchased or sold. The market value of when-issued or
delayed delivery transactions may increase or decrease as a result of changes
in interest rates. These transactions involve risk of loss if the value of the
underlying security changes unfavorably before the settlement date. There is
also a risk that the other party to the transaction will default on its
obligation to purchase or sell the security, which may result in the portfolio
missing the opportunity to obtain a favorable price or yield elsewhere.

Management

Portfolio manager

Day-to-day management of the portfolio is the responsibility of a team of fixed
income portfolio managers and analysts supervised by Sherman B. Russ and
Kenneth J. Taubes. Mr. Russ and Mr. Taubes are jointly responsible for
overseeing Pioneer's U.S. and global fixed income team. Mr. Russ is a senior
vice President of Pioneer. He joined Pioneer in 1983 and has been an investment
professional since 1962. Mr. Taubes joined Pioneer as a senior vice president
in September 1998 and has been an investment professional since 1986. Prior to
joining Pioneer, Mr. Taubes had served since 1991 as a senior vice president
and senior portfolio manager for several Putnam Investments institutional
accounts and mutual funds.

43
<PAGE>

Mr. Russ, Mr. Taubes and their team operate under the supervision of Theresa A.
Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined
Pioneer in 1997 and has been an investment professional since 1984; most
recently as chief investment officer at another investment adviser.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 0.55% of the portfolio's average daily net assets. This fee is
normally computed daily and paid monthly. Pioneer has agreed not to impose all
or a portion of its fee or to reduce the portfolio's expenses in order to limit
the portfolio's total operating expenses to 1.25% of the portfolio's average
daily net assets. This agreement is voluntary and temporary and may be revised
or terminated at any time. For the most recent fiscal year, the portfolio paid
Pioneer a management fee equal to 0.55% of the portfolio's average daily net
assets.

Distributions

The portfolio declares a dividend daily. The dividend consists of substantially
all of the portfolio's net income. Investors begin to earn dividends on the
first business day following receipt of payment for shares and continue to earn
dividends up to the date of sale. Dividends are normally paid on the last
business day of each month. The portfolio makes distributions from net
long-term capital gains, if any, annually, generally in November. The portfolio
may pay additional distributions and dividends at other times if necessary for
the portfolio to avoid a federal tax.

44
<PAGE>

America Income Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 March 1,
------------------------------------------- 1995 through
1998 1997 1996 December 31, 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.04 $ 9.78 $ 10.18 $ 10.00
--------------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.55 $ 0.54 $ 0.52 $ 0.38
Net realized and unrealized gain (loss)
on investments 0.25 0.26 (0.40) 0.18
--------------------------------------------------------
Net increase (decrease)
from investment operations $ 0.80 $ 0.80 $ 0.12 $ 0.56
Distributions to shareholders:
Net investment income (0.55) (0.54) (0.52) (0.38)
--------------------------------------------------------
Net increase (decrease) in net asset value $ 0.25 $ 0.26 $ (0.40) $ 0.18
--------------------------------------------------------
Net asset value, end of period $ 10.29 $ 10.04 $ 9.78 $ 10.18
========================================================
Total return* 8.15% 8.44% 1.30% 5.68%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.94%+ 1.26%+ 1.31%+ 1.12%**+
Ratio of net investment income (loss)
to average net assets 5.35%+ 5.46%+ 5.25%+ 5.22%**+
Portfolio turnover rate 36% 11% 60% 96%**
Net assets, end of period (in thousands) $ 28,822 $ 14,519 $ 6,872 $ 3,514
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 0.94% 1.43% 2.24% 11.86%**
Net investment income (loss) 5.35% 5.29% 4.32% (5.52)%**
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 0.93% 1.23% 1.25% 0.99%**
Net investment income (loss) 5.36% 5.49% 5.31% 5.35%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

45
<PAGE>

Basic information about Money Market Portfolio

Investment objective
Current income consistent with preservation of capital and providing liquidity.

Investment strategies

The portfolio seeks to maintain a constant net asset value of $1.00 per share by
investing in high quality money market securities. The portfolio may invest more
than 25% of its assets in U.S. government securities and bank obligations.

The portfolio invests in U.S. government obligations and securities rated (at
the time of purchase) in one of the two highest rating categories for short-term
debt by a nationally recognized rating organization or determined by Pioneer to
be of equivalent credit quality. If rating organizations differ in the rating
assigned to a security, the portfolio will only treat the security as having the
higher rating if at least two rating organizations assigned that rating.

- -----------------------------------
Money market securities

Money market securities
include:
- Securities issued or
guaranteed by the U.S.
government, its agencies or
instrumentalities
- Corporate debt securities
- Bank obligations
- Commercial paper
- Repurchase agreements
- -----------------------------------

The portfolio invests exclusively in securities with a maximum remaining
maturity of 397 days from the date of settlement of the purchase and maintains
a dollar-weighted average portfolio maturity of 90 days or less. The
portfolio's investments may have fixed, floating or variable interest rates.

In selecting the portfolio's investments, Pioneer complies with the rating,
maturity and diversification requirements applicable to money market funds.
Within those limits, Pioneer's assessment of macroeconomic factors that are
expected to affect economic activity and interest rates influences its
securities selection. Pioneer also employs fundamental research and due
diligence to assess an issuer's credit quality.

Principal risks of investing in the portfolio
Although the portfolio seeks to maintain a $1 share price, you could lose money
on your investment or the portfolio could fail to generate high current income
if:

- Interest rates rise go up causing the value of the portfolio's
investments to decline
- The issuer of a security owned by the portfolio defaults on its
obligation to pay principal and/or interest or has its credit rating
downgraded

- Pioneer's judgment about the credit quality, attractiveness or relative
value of a particular security proves to be incorrect

46
<PAGE>

The portfolio's past performance

The bar chart and table indicate the risks of investing in the portfolio by
showing how the portfolio has performed in the past. The portfolio's
performance varies from year to year.

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance
The chart shows the performance of the portfolio's Class I shares for each full
calendar year since the portfolio's inception on March 1, 1995. The chart does
not reflect any fees or expenses payable with respect to a Variable Contract.
Such fees and expenses will reduce your return.

The portfolio's highest calendar quarterly return was 1.18% (6/30/98 to
9/30/98).
The portfolio's lowest calendar quarterly return was 1.08% (12/31/96 to
3/31/97).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

4.51 4.64 4.68

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with 90-day Treasury Bills

The table shows the average annual total returns of the portfolio's Class I
shares over time and compares these returns to the returns of the 90-day
Treasury bill. The table also provides the portfolio's 7-day yield for the
period December 24 to December 31, 1998. Please contact Pioneer at
1-800-225-6292 to obtain the portfolio's current 7-day yield. The table
assumes:

- - The sale of the shares at the end of the
period
- - Reinvestment of all dividends and
distributions

<TABLE>
<CAPTION>
Average annual total return (%)
(for periods ended December 31, 1998)
- ----------------------------------------------------------
Since Inception 7-day
1 Year Inception Date Yield
- ----------------------------------------------------------
<S> <C> <C> <C> <C>
Class I 4.68 4.74 3/1/95 4.19
- ----------------------------------------------------------
90-day
Treasury bill 4.83 5.09 --
- ----------------------------------------------------------
</TABLE>

47
<PAGE>

Management

Portfolio manager
Day-to-day management of the portfolio is the responsibility of a team of fixed
income portfolio managers and analysts supervised by Sherman B. Russ and
Kenneth J. Taubes. Mr. Russ and Mr. Taubes are jointly responsible for
overseeing Pioneer's U.S. and global fixed income team. Mr. Russ is a senior
vice president of Pioneer. He joined Pioneer in 1983 and has been an investment
professional since 1962. Mr. Taubes joined Pioneer as a senior vice president
in September 1998 and has been an investment professional since 1986. Prior to
joining Pioneer, Mr. Taubes had served since 1991 as a senior vice president
and senior portfolio manager for several Putnam Investments institutional
accounts and mutual funds.

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 0.50% of the portfolio's average daily net assets. The fee is normally
computed daily and paid monthly. Pioneer has agreed not to impose all or a
portion of its fee or to reduce the portfolio's expenses in order to limit the
portfolio's total operating expenses to 1.00% of the portfolio's average daily
net assets. This agreement is voluntary and temporary and may be revised or
terminated at any time. For the most recent fiscal year, the portfolio paid
Pioneer a management fee equal to 0.45% of the portfolio's average daily net
assets.

Distributions

The portfolio declares a dividend daily. The dividend consists of substantially
all of the portfolio's net income. Investors begin to earn dividends on the
first business day following receipt of payment for shares and continue to earn
dividends up to the date of sale. Dividends are normally paid on the last
business day of each month. The portfolio makes distributions from long-term
capital gains, if any, annually, generally in November. The portfolio may pay
additional distributions and dividends at other times if necessary for the
portfolio to avoid a federal tax.

48
<PAGE>

Pioneer Money Market Portfolio

<TABLE>
<CAPTION>
For the year ended December 31 March 1,
----------------------------------------- 1995 through
1998 1997 1996 December 31, 1995
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.05 $ 0.05 $ 0.04 $ 0.04
----------------------------------------------------
Distributions to shareholders:
Net investment income (0.05) (0.05) (0.04) (0.04)
----------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================
Total return* 4.68% 4.64% 4.51% 4.35%
Ratios/Supplemental Data
Ratio of net expenses to average net assets 0.92%+ 1.00%+ 0.97%+ 0.81%**+
Ratio of net investment income (loss)
to average net assets 4.55%+ 4.55%+ 4.43%+ 5.00%**+
Net assets, end of period (in thousands) $ 21,497 $13,739 $11,744 $ 3,416
Ratios assuming no waiver of management fees
and assumption of expenses by Pioneer and
no reduction for fees paid indirectly:
Net expenses 0.97% 1.17% 1.29% 8.34%**
Net investment income (loss) 4.50% 4.38% 4.11% (2.53)%**
Ratios assuming waiver of management fees and
assumption of expenses by Pioneer and
reduction for fees paid indirectly:
Net expenses 0.92% 0.99% 0.96% 0.74%**
Net investment income (loss) 4.55% 4.56% 4.44% 5.07%**
</TABLE>

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

49
<PAGE>

Some policies of the portfolios are stated as a percentage of assets. These
percentages are applied at the time of purchase of a security and subsequently
may be exceeded because of changes in the value of a portfolio's investments.
If a rating organization downgrades the quality rating assigned to one or more
of the fund's portfolio securities, Pioneer will consider what actions, if any,
are appropriate including selling the downgraded security or purchasing
additional securities as soon as it is prudent to do so.

Temporary investments
Normally, each portfolio invests substantially all of its assets to meet its
investment objective. Each portfolio may invest the remainder of its assets in
securities with a remaining maturity of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, a portfolio may depart from
its principal investment strategies and invest part or all of its assets in
these securities. During such periods, the portfolio may not be able to achieve
its investment objective. Each portfolio intends to adopt a defensive strategy
only when Pioneer believes there to be extraordinary risks in investing in the
securities in which the portfolio normally invests due to political or economic
factors.

Short-term trading
The portfolios usually do not trade for short-term profits. Each portfolio will
sell an investment, however, even if it has only been held for a short time, if
it no longer meets the portfolio's investment criteria. If a portfolio does a
lot of trading, it may incur additional operating expenses, which would reduce
performance.

Derivatives

Each portfolio (other than Money Market portfolio) may use futures, options and
other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The portfolios
do not use derivatives as a primary investment technique and generally limit
their use to hedging. However, each portfolio may use derivatives for a variety
of purposes, including:

- As a hedge against adverse changes in stock market prices, interest rates
or currency exchange rates
- As a substitute for purchasing or selling securities

- To increase the portfolio's return as a non-hedging strategy that may be
considered speculative

Even a small investment in derivatives can have a significant impact on the
portfolio's exposure to stock market values, interest rates or currency
exchange rates. If changes in a derivative's value do not correspond to changes
in the value of the portfolio's other investments, the portfolio may not fully
benefit from or could lose money on the derivative position. In addition, some
derivatives involve risk of loss if the person who issued the derivative
defaults on its obligation. Certain derivatives may be less liquid and more
difficult to value.

Management

Pioneer, the portfolios' investment adviser, selects each portfolio's
investments and oversees the portfolios' operations.

Pioneer Group
The Pioneer Group, Inc. and its subsidiaries are engaged in financial services
businesses in the United States and many foreign countries. As of December 31,
1998, the firm had more than $23 billion in assets under management worldwide
including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual
fund investment history includes creating in 1928 of one of the first mutual
funds. John F. Cogan, chairman of the board and president of The Pioneer Group,
Inc., owns approximately 14% of the firm. He is also an officer and director of
each of the Pioneer mutual funds.

The investment adviser
Pioneer manages a family of U.S. and international stock funds, bond funds and
money market funds. Pioneer is a subsidiary of The Pioneer Group, Inc. Its main
office is at 60 State Street, Boston, Massachusetts 02109.

50
<PAGE>

Year 2000

Information technology experts are concerned about computer and other
electronic systems' ability to process date-related information on and after
January 1, 2000. This scenario, commonly referred to as the "Year 2000
problem," could have an adverse impact on the portfolios and the provision of
services to their shareowners. Pioneer is addressing the Year 2000 problem with
respect to its systems and those used by its affiliates. During 1999, Pioneer
expects to finish addressing all material Year 2000 issues and to participate
in industry-wide testing. The portfolios have obtained assurances from their
other service providers that they are taking appropriate Year 2000 measures and
Pioneer is monitoring their efforts. Although the portfolios do not expect the
Year 2000 problem to adversely impact them, the portfolios cannot guarantee
that their, or the portfolio's service providers', efforts will be successful.

Distributions and taxes

You should read the prospectus for your insurance company's Variable Contract
for a discussion of the tax status of a Variable Contract, including the tax
consequences of withdrawals or other payments. You should keep all statements
you receive from the insurance company or the portfolios to assist in your
personal recordkeeping. Class I shares of the portfolios are held by life
insurance company separate accounts that fund Variable Contracts or by certain
qualified pension and retirement plans (Qualified Plans). A portfolio's
dividends and capital gain distributions to those accounts are generally
treated as ordinary income and long-term capital gain, respectively, under the
Internal Revenue Code and are treated as received by the insurance company
rather than the owner of the qualified Variable Contract. Insurance companies
should consult their own tax advisers regarding the tax treatment of dividends
or capital gain distributions they receive from any portfolio.

Each portfolio is treated as a separate entity for federal income tax purposes
and has elected or intends to elect to be treated, and intends to qualify each
year, as a regulated investment company under Subchapter M of the Code. Each
portfolio must satisfy certain requirements relating to the sources of its
income, diversification of its assets and distribution of its income to
shareholders to qualify as a regulated investment company. As a regulated
investment company, each portfolio will not be subject to federal income tax on
any net investment income and net realized capital gains that are distributed
to its shareholders as required under the Code.

In addition to the above, each portfolio also follows certain portfolio
diversification requirements imposed by the Code on separate accounts of
insurance companies relating to the tax-deferred status of Variable Contracts.
More specific information on these diversification requirements is contained in
the insurance company's separate account prospectus and in the portfolios' SAI.

Shareholder information

Net asset values

Each portfolio's net asset value is the value of its portfolio of securities
plus any other assets minus its operating expenses and any other liabilities.
Each portfolio calculates a net asset value for each class of shares every day
the New York Stock Exchange is open when regular trading closes (normally 4:00
p.m. Eastern time).

Each portfolio generally values its portfolio securities based on market prices
or quotations. When market prices are not available or are considered by Pioneer
to be unreliable, the portfolio may use an asset's fair value. Fair value is
determined in accordance with procedures approved by the portfolios' trustees.
International securities markets may be open on days when the U.S. markets are
closed. For this reason, the values of any international securities owned by a
portfolio could change on a day when insurance companies or Qualified Plans
cannot buy or sell shares of the portfolio.

Money Market portfolio's investments are valued on the basis of amortized cost.
This means of valuation assumes a steady rate of amortization of any premium and
discount from the date of purchase until maturity.

Share price

The net asset value per share
calculated on the day of a
transaction, is often referred
to as the share price.

51
<PAGE>

Investments in shares of the portfolios

Each portfolio may sell its shares directly to separate accounts established and
maintained by insurance companies for the purpose of funding Variable Contracts
and to Qualified Plans. Shares of the portfolios are sold at net asset value.
Variable Contracts may or may not allow you to allocate your investments in the
Variable Contracts to all the portfolios described in this prospectus.
Investments in each portfolio are expressed in terms of the full and fractional
shares of the portfolio purchased. Investments in a portfolio are credited to an
insurance company's separate account immediately upon acceptance of the
investment by the portfolio. Investments will be processed at the next net asset
value calculated after an order is received and accepted by a portfolio. The
offering of shares of any portfolio may be suspended for a period of time and
each portfolio reserves the right to reject any specific purchase order.
Purchase orders may be refused if, in Pioneer's opinion, they are of a size that
would disrupt the management of a portfolio.

Since you may not directly
purchase shares of the
portfolios, you should read
the prospectus for your
insurance company's Variable
Contract to learn how to
purchase a Variable Contract
based on the portfolios.

The interests of Variable Contracts and Qualified Plans investing in the
portfolios could conflict due to differences of tax treatment and other
considerations. The portfolios currently do not foresee any disadvantages to
investors arising out of the fact that each portfolio may offer its shares to
insurance company separate accounts that serve as the investment medium for
their Variable Contracts or that each portfolio may offer its shares to
Qualified Plans. Nevertheless, the portfolios' trustees intend to monitor events
in order to identify any material irreconcilable conflicts which may possibly
arise, and to determine what action, if any, should be taken in response to such
conflicts. If such a conflict were to occur, one or more insurance companies'
separate accounts or Qualified Plans might be required to withdraw their
investments in one or more portfolios and shares of another portfolio may be
substituted. This might force a portfolio to sell securities at disadvantageous
prices. In addition, the trustees may refuse to sell shares of any portfolio to
any separate account or Qualified Plan or may suspend or terminate the offering
of shares of any portfolio if such action is required by law or regulatory
authority or is in the best interests of the shareholders of the portfolio.

Selling

Shares of a portfolio may be sold on any business day. Portfolio shares are
sold at net asset value next determined after receipt by the portfolio of a
redemption request in good order from the insurance company as described in the
prospectus of the insurance company's Variable Contract. Sale proceeds will
normally be forwarded by bank wire to the selling insurance company on the next
business day after receipt of the sales instructions by a portfolio but in no
event later than 7 days following receipt of instructions. Each portfolio may
suspend transactions in shares or postpone payment dates when trading on the
New York Stock Exchange is closed or restricted, when an emergency exists that
makes it impracticable for the portfolio to sell or value its portfolio
securities or with the permission of the Securities and Exchange Commission.

52
<PAGE>

Pioneer Variable Contracts Trust Class I Shares

You can obtain more free information about the portfolios by writing to
Pioneering Services Corporation, 60 State Street, Boston, Massachusetts 02109.
You may also call 1-800-225-6292.

Shareowner reports
Annual and semiannual reports to shareowners provide information about the
portfolios' investments. The annual report discusses market conditions and
investment strategies that significantly affected each portfolio's performance
during its last fiscal year.

Statement of additional information
The statement of additional information provides more detailed information
about the portfolio. It is incorporated by reference into this prospectus.

You can also review each portfolio's shareowner reports, prospectus and
statement of additional information at the Securities and Exchange Commission's
Public Reference room in Washington, D.C. or by calling 1-800-SEC-0330 to
request a copy. The commission charges a fee for this service. You can get the
same information free from the commission's Internet website
(http://www.sec.gov).

(Investment Company Act file no. 811-08786)

Pioneer Funds Distributor, Inc.

60 State Street

Boston, MA 02109

www.pioneerfunds.com

0499-6253
(C)Pioneer Funds Distributor, Inc.

<PAGE>

Pioneer Variable Contracts Trust
Class I Shares Prospectus
May 3, 1999

Introduction

Pioneer Variable Contracts Trust is an open-end management investment company
that currently consists of twelve distinct portfolios. Pioneer Investment
Management, Inc. is the investment adviser to each portfolio. Class I shares of
the the Capital Growth and Real Estate Growth portfolios are offered through
this prospectus. Shares of the portfolios are offered primarily to insurance
companies to fund the benefits under variable annuity and variable life
insurance contracts (Variable Contracts) issued by their companies. You may
obtain certain tax benefits by purchasing a Variable Contract.

No single portfolio constitutes a complete investment plan. Each portfolio's
share price, yield and total return will fluctuate and an investment in a
portfolio may be worth more or less than the original cost when shares are
redeemed.

<TABLE>
<S> <C>
Contents
Basic information about the portfolios ......... 1
Common portfolio investment policies ........... 10
Management ..................................... 10
Distributions and taxes ........................ 11
Shareholder information ........................ 11
</TABLE>

Portfolios

Strategic focus

Capital Growth Invests in a diversified portfolio of common stock for capital
appreciation.

Real Estate Growth Invests primarily in REITs and other real estate industry
companies for long-term growth of capital. Current income is the portfolio's
secondary investment objective.

An investment in a portfolio is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

Basic information about Capital Growth Portfolio

Investment objective

Capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market-timing strategies. The portfolio avoids concentrating in any
one sector or industry.

Principal risks of investing in the portfolio

Even though the portfolio seeks capital appreciation, you could lose money on
your investment or not make as much as if you invested elsewhere if:

1
<PAGE>

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 12.99% (6/30/97 to
9/30/97).
The portfolio's lowest calendar quarterly return was -20.94% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

15.03 24.69 -4.02

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's
500 Index

- - The sale of the shares at the end
of the period
- - Reinvestment of all dividends and distributions

2
<PAGE>

Other investment strategies
As discussed, the portfolio invests primarily in common stocks of U.S.
companies.

Investments other than U.S. common stocks

- Adverse effect of currency exchange rates or controls on the value of the
portfolio's investments

- Political, economic and social developments that adversely affect the
securities markets
- Withholding and other non-U.S. taxes may decrease the portfolio's return

Management

Portfolio manager

3
<PAGE>

Distributions

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

4
<PAGE>

Basic information about Real Estate Growth Portfolio

Investment objectives

Long-term growth of capital. Current income is a secondary objective.

Investment strategies

Pioneer focuses on the quality and price of individual issuers, not on economic
sector or market strategy.

Principal risks of investing in the portfolio

Even though the portfolio seeks long-term growth of capital, you could lose
money on your investment or not make as much as if you invested elsewhere if:

- The stock market goes down (this risk may be greater in the short term)

- REITs and other real estate industry companies fall out of favor with
investors
- The portfolio's investments do not have the growth potential originally
expected

- The U.S. or a local real estate market declines due to adverse economic
conditions, overbuilding and high vacancy rates, reduced or regulated
rents or other causes

- A REIT owned by the portfolio is, or is perceived by the market to be,
poorly managed

5
<PAGE>

The portfolio's past performance does not necessarily indicate how it will
perform in the future. As a shareowner, you may lose or make money on your
investment.

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

Portfolio performance

The portfolio's highest calendar quarterly return was 17.17% (9/30/96 to
12/31/96).
The portfolio's lowest calendar quarterly return was -13.37% (6/30/98 to
9/30/98).

[Begin: Description Bar Chart]

Annual return Class I shares
(Year ended December 31)

35.73 21.16 -18.74

'96 '97 '98

[End: Description Bar Chart]

- --------------------------------------------------------------------------------
Comparison with Standard & Poor's 500 Index and Wilshire Real Estate Securities
Index

- - The sale of the shares at the end of the
period
- - Reinvestment of all dividends and
distributions

6
<PAGE>

Other investment strategies
As discussed, the portfolio primarily invests in the equity securities of REITs
and other real estate industry companies to seek long-term growth of capital.

Investments other than equity securities of REITs and other real estate
industry companies

Management

Portfolio manager

7
<PAGE>

Subadviser

Management fee

The portfolio pays Pioneer a fee for managing the portfolio and to cover the
cost of providing certain services to the portfolio. Pioneer's annual fee is
equal to 1.00% of the portfolio's average daily net assets. This fee is
normally computed daily and paid monthly. Pioneer pays a portion of its fee to
BFS. Pioneer has agreed to waive a portion of its management fee to the extent
required to reduce the fee from 1.00% to 0.80% of the portfolio's average daily
net assets. Pioneer will not charge its management fee and will make other
arrangements, if necessary, to limit the portfolio's Class I share total annual
operating expenses to 1.25% of the portfolio's average daily net assets
attributable to Class I shares. These agreements are voluntary and may be
revised or terminated at any time. For the most recent fiscal year, the
portfolio paid Pioneer a management fee equal to 0.98% of the portfolio's
average daily net assets.

Distributions

8
<PAGE>

Real Estate Growth Portfolio

- --------------------------------------------------------------------------------
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of distributions and the complete redemption of the
investment at net asset value at the end of each period.
** Annualized.
+ Ratio assuming no reduction for fees paid indirectly.

Common portfolio investment policies

Derivatives

- As a hedge against adverse changes in stock market prices, interest rates
or currency exchange rates
- As a substitute for purchasing or selling securities

- To increase the portfolio's return as a non-hedging strategy that may be
considered speculative

Management

Pioneer, the portfolios' investment adviser, selects each portfolio's
investments and oversees the portfolios' operations.

10
<PAGE>

Year 2000

Distributions and taxes

Shareholder information

Net asset values

Share price

The net asset value per share
calculated on the day of a
transaction, is often referred
to as the share price.

11
<PAGE>

Investments in shares of the portfolios

Selling

12
<PAGE>

Pioneer Variable Contracts Trust Class I Shares

You can obtain more free information about the portfolios by writing to
Pioneering Services Corporation, 60 State Street, Boston, Massachusetts 02109.
You may also call 1-800-225-6292.

Statement of additional information
The statement of additional information provides more detailed information
about the portfolio. It is incorporated by reference into this prospectus.

(Investment Company Act file no. 811-08786)

Pioneer Funds Distributor, Inc.

60 State Street

Boston, MA 02109

www.pioneerfunds.com

0499-6484
(C)Pioneer Funds Distributor, Inc.

<PAGE>

Pioneer Variable Contracts Trust
Class II Shares Prospectus
May 3, 1999

Introduction

<TABLE>
<S> <C>
Contents
Basic information about the portfolios ......... 2
Common portfolio investment policies ........... 37
Management ..................................... 37
Distributions and taxes ........................ 38
Shareholder information ........................ 38
</TABLE>