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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-02864
Pioneer Bond Fund
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Dorothy E. Bourassa, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: June 30
Date of reporting period: July 1, 2006 through December 31, 2006
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREOWNERS.
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PIONEER
-------
BOND
FUND
Semiannual
Report
12/31/06
[LOGO]PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 8
Prices and Distributions 9
Performance Update 10
Comparing Ongoing Fund Expenses 15
Schedule of Investments 17
Financial Statements 27
Notes to Financial Statements 37
Factors Considered by the Independent Trustees in Approving
the Management Contract 46
Trustees, Officers and Service Providers 52
Chairman's
Dear Shareowner,
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As the global economy reacted to good and bad news of 2006, overall it managed
to keep chugging along with fairly stable growth. Looking back, the economic
stories included slowing economic growth bringing monetary tightening to an end
in the United States, price action in oil and other commodity markets
threatening to unsettle global growth and inflation, geopolitical uncertainties
and corporate earnings growth surpassing market expectations.
Global growth surpassed most analyst expectations in 2006. The International
Monetary Fund estimates world output increased by 5.1% in 2006, up from 4.9% in
2005 and above the 3.7% average annual pace of growth of the previous 20 years.
Growth is estimated to slow modestly in 2007 but to remain well above the
long-term average.
U.S. economic growth slowed gradually over 2006, with estimated full-year
growth of GDP of 3.3%, modestly below 2005 growth but still strong enough to
lower the unemployment rate to 4.5%. While many observers were concerned that a
weakening housing sector could be a drag on consumer spending, the consumer has
shown resilience supported by a strong labor market and associated income
growth and by oil and gasoline prices falling from record highs in the second
half of the year. Corporate America has also proved resilient in the face of
the slowing housing sector, with business investment growing at its fastest
rate since 2000.
The Federal Reserve stopped increasing interest rates in mid-2006, but has
retained its bias to raise rates, reflecting upside risks to inflation,
particularly from the tight labor market, and confidence that the economy
remained on solid ground. Consumers welcomed the relief from oil prices that
peaked at mid-year, and fell sharply towards year end. Likewise, they benefited
from core inflation (which excludes energy and food items) that has eased
modestly in the second half of the year, but remains above what is generally
considered the central bank's "comfort zone."
The European economy surpassed many economists' expectations in 2006. Eurozone
GDP grew at a 3% pace, much stronger than its 1.8% average annual growth pace
since 2000. Underlying this strength has been buoyant and broad-based strength
in business sentiment and investment and in exports. While household
consumption showed mixed results, the unemployment rate fell to 7.7% by the end
of 2006. The European Central Bank raised interest rates gradually to 3.50%
over the course of 2006, reflecting firm economic growth, steadily tightening
labor market conditions, and fast growing money supply. Core inflation in the
Eurozone remains reasonably benign, at roughly 1.5% per annum. European stock
markets posted strong returns; appreciation of the Euro relative to both the
dollar and Yen made the Eurozone stock market the top performer of 2006.
The Japanese economy continued to grow firmly in 2006, although the pace of
expansion slowed in the second half of the year. Business investment was the
major driver of expansion as increasing capacity utilization and better
sentiment encouraged a new wave of investment. As deflation ended, the Bank of
Japan ended its zero interest rate policy, although it has raised rates to only
0.25% thus
2
Letter
far. After a strong showing in 2005, the Japanese stock market posted only
muted gains in 2006.
Emerging economies enjoyed strong, relatively uninterrupted economic growth in
2006. Good financing conditions, buoyant commodity prices, which boosted income
and investment in commodity exporting countries, and strong export demand from
developed economies drove this growth. The emerging market stock index was very
strong in early 2006, declined to near start-of-year levels, then rallied to
finish the year only marginally behind the Eurozone. We believe similar growth
can be expected in the emerging markets if current domestic economic and
political conditions prevail.
While global economic momentum has started to slow, we expect the global
economy to continue growing firmly in 2007, supported by business investment,
rising employment, and lower energy prices. A slowdown in the U.S. growth rate
would be welcome, since rapid growth could increase the risk of inflationary
pressures, which would force the Federal Reserve to raise interest rates. We
expect Europe and Japan to grow similarly, while emerging market economies are
expected to continue their strong growth. In this scenario, fixed-income assets
are expected to produce total returns generally in line with their current
yields, while equities are expected to produce returns generally in line with
earnings growth, which we forecast to be moderately above bond yields.
Our cautiously optimistic outlook on most regions of the world and asset
classes reinforces the importance of Pioneer Investments' message that
investors should remain diversified; take a long-term view rather than
over-reacting to breaking news, and base investment decisions on economic and
market fundamentals rather than on emotion. Our investment philosophy and
approach continue to be based on the use of fundamental research to identify a
range of opportunities that offer an attractive balance of risk and reward to
help Fund shareowners work toward their long-term goals.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr., Chairman
Pioneer Investment Management, Inc.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of the report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
3
Pioneer Bond Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/06
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The domestic bond market recovered in the final half of 2006, after performing
weakly early in the year because of fears of potentially intensified
inflationary pressures and rising interest rates. Over the second half of the
year, the environment improved as concerns about inflation and high energy
prices receded and as the Federal Reserve Board left short-term rates
unchanged. In the following interview, Kenneth J. Taubes discusses the factors
that influenced the performance of Pioneer Bond Fund during the six months
ended December 31, 2006. Mr. Taubes, Director of Pioneer's Fixed Income Group,
is responsible for the daily management of the Fund.
Q: How did the Portfolio perform during the second half of 2006?
A: Pioneer Bond Fund Class A shares generated a total return of 4.73%, at net
asset value, for the six months ended December 31, 2006. During the same
six months, the Lehman Brothers Aggregate Bond Index rose 5.09%. The
average return of the 178 funds in Lipper's corporate debt, A- rated
mutual fund category was 4.93%. On December 31, 2006, the 30-day
Standardized SEC yield for the Fund's Class A shares was 4.07%.
Call 1-800-225-6292 or visit www.pioneerinvestments.com for the most
recent month-end performance results. Current performance may be lower or
higher than the performance data quoted?
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost?
Q: What was the investment environment like during the second half of 2006?
A: The period provided a different environment from that posed during the
first half, when most types of high-grade bonds posted negative results.
During the year's second half, the Federal Reserve Board paused in its
tightening policy and left the key Fed funds rate unchanged at 5.25%.
Stabilized short-term interest rates and easing oil prices encouraged
investors to believe that inflationary pressures were under control and
that the economy could sustain its expansion at a moderate rate. In this
environment, high-grade bonds improved in performance as yields across
many maturities
4
Pioneer Bond Fund
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receded over the final six months of the year. In many cases, the yield
curve became inverted - a phenomenon which reverses normal fixed-income
relationships, resulting in higher yields among shorter-maturity
securities than among some longer-maturity securities. In general,
government securities and higher-rated corporate securities delivered
positive results. Mortgage-backed securities tended to produce the best
results in the investment-grade universe. High-yield, lower-rated
corporate bonds, however, still delivered the strongest performance in the
domestic market.
Q: What were principal strategies during the six-month period, and how did
they affect performance?
A: The Fund's exposure to high-yield corporate bonds - the best-performing
area of the market - and an effective interest-rate strategy helped
performance. Although we became somewhat more defensive early in the
period and reduced our investments in corporate bonds, we still
maintained a healthy exposure to high-yield bonds, which at the end of
the fiscal year accounted for 4.3% of Fund assets. At the same time, we
lowered our exposure to investment-grade corporate debt, as we became
concerned that heavy activity in mergers-and-acquisitions and leveraged
buyouts would hurt bondholders while helping shareowners.
During a period of changing interest-rate trends, our management of
duration - which is a measure of a bond's price sensitivity to changes in
interest rates - was successful. After maintaining a relatively
short-duration early in 2006 when interest rates were rising, we moved to
a longer duration, starting in June. This positioned the Fund to benefit
when longer-maturity rates began to decline, as they did for the second
half of the year. However, we moved again to a shorter duration near the
end of 2006 to protect against the potential of a rise in rates. On
December 31, 2006, the Fund's effective duration was 4.19 years.
Within the investment-grade universe, we emphasized mortgage-backed
securities, which helped performance. At the end of the six months, on
December 31, 2006, 48.7% of Fund assets were invested in mortgages and
other pass-through securities. During the six months, we reduced our
exposure to Treasury Inflation Protected Securities (TIPS), which had
helped results earlier when interest rates were rising. This lower
exposure was timely as TIPS
5
Pioneer Bond Fund
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PORTFOLIO MANAGEMENT DISCUSSION 12/31/06 (continued)
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began to underperform straight Treasuries and other fixed-rate high-grade
securities as yields fell with reduced fears about inflation.
Nevertheless, our remaining TIPS holdings did not help during the six
months.
Q: What were some of the individual holdings that had the greatest influence
on the Fund's performance?
A: Several corporate securities helped performance. Bonds of Platinum
Underwriters, a property-and-casualty re-insurance company, appreciated
when the company encountered relatively few storm-related damage claims
in 2006 after raising premiums following the severe 2005 hurricane
season. Ohio Casualty, a property-and-casualty company specializing in
auto policies, also performed well. Trustreet Properties, a real estate
investment trust, contributed as its bonds were bought back when the
company was acquired.
The rating of the debt of HCA was lowered from investment-grade to
high-yield during the year as part of a leveraged buyout of the company,
which operates hospitals throughout the nation. As a result, the Fund's
holdings of HCA-issued bonds underperformed and detracted from results.
Q: What is your investment outlook?
A: Given expectations that the economy will continue to expand, we do not
expect the Federal Reserve to lower short-term rates in the near future.
As a consequence, we currently are maintaining a shorter-than-benchmark
duration policy to protect against the potential that interest rates
might rise. In this environment, we are placing the greatest emphasis on
mortgage-backed securities. In the corporate sector, we currently are
modestly overweighting high-yield bonds relative to the Fund's benchmark,
but have continued to de-emphasize investment-grade corporate debt due to
the small risk premium available on these securities and the
aforementioned leveraged buyout risk.
When interest rates rise, the prices of fixed-income securities in the
Fund will generally fall. Conversely, when interest rates fall, the prices
of fixed-income securities in the Fund will generally rise.
6
Pioneer Bond Fund
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Investments in the Fund are subject to possible loss due to the financial
failure of issuers of underlying securities and their inability to meet
their debt obligations.
Prepayment risk is the chance that mortgage-backed bonds will be paid off
early if falling interest rates prompt homeowners to refinance their
mortgages. Forced to reinvest the unanticipated proceeds at lower interest
rates, the Fund would experience a decline in income and lose the
opportunity for additional price appreciation associated with falling
interest rates. Investments in high-yield or lower-rated securities are
subject to greater-than-average risk. The securities issued by U.S.
Government sponsored entities (i.e., FNMA, Freddie Mac) are neither
guaranteed nor issued by the U.S. Government. The portfolio may invest in
mortgage-backed securities, which during times of fluctuating interest
rates may increase or decrease more than other fixed-income securities.
Mortgage-backed securities are also subject to pre-payments. At times, the
Fund's investments may represent industries or industry sectors that are
interrelated or have common risks, making it more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
Any information in this shareholder report regarding market or economic
trends or the factors influencing the Fund's historical or future
performance are statements of the opinion of Fund management as of the
date of this report. These opinions should not be relied upon for any
other purposes. Past performance is no guarantee of future results, and
there is no guarantee that market forecasts discussed will be realized.
7
Pioneer Bond Fund
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PORTFOLIO SUMMARY 12/31/06
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Portfolio Diversification
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(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
U.S. Government Securities 64.0%
U.S. Corporate Bonds 19.0%
Temporary Cash Investments 11.0%
Asset Backed Securities 2.9%
Collateralized Mortgage Obligations 3.0%
Municipal Bonds 0.1%
Portfolio Quality
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(As a percentage of holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
AAA 71.2%
AA 3.9%
A 7.2%
BBB 5.3%
BB 2.8%
B 1.5%
Commercial Paper 8.1%
10 Largest Holdings
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(As a percentage of long-term holdings)
1. U.S. Treasury Bonds, 4.25%, 11/15/13 4.07%
2. U.S. Treasury Bonds, 6.25%, 8/15/23 4.03
3. U.S. Treasury Notes, 4.0%, 11/15/12 2.84
4. U.S. Treasury Inflation Notes, 1.875%, 7/15/15 2.68
5. Federal National Mortgage Association, 5.5%, 4/1/36 2.54
6. Federal Home Loan Mortgage Corp., 5.0%, 11/1/35 1.75
7. Government National Mortgage Association, 5.5%, 1/15/36 1.59
8. U.S. Treasury Notes, 7.50%, 11/15/16 1.58
9. Federal Home Loan Mortgage Corp., 4.5%, 10/1/20 1.31
10. Federal Home Loan Mortgage Association, 5.5%, 4/1/36 1.17
This list excludes temporary cash investments and derivative instruments.
Portfolio holdings will vary for other periods. The holdings listed should not
be considered recommendations to buy or sell any security listed.
8
Pioneer Bond Fund
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PRICES AND DISTRIBUTIONS
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Net Asset Value Per Share
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Class 12/31/06 6/30/06
----- -------- -------
A $9.10 $8.89
B $9.05 $8.85
C $9.01 $8.81
R $9.19 $8.99
Y $9.03 $8.83
Class 12/10/06 6/30/06
----- -------- -------
Investor $9.16 $8.89
Distributions Per Share
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7/1/06 - 12/31/06
-----------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
----- ------ ------------- -------------
A $0.2096 $ - $ -
B $0.1681 $ - $ -
C $0.1676 $ - $ -
R $0.1993 $ - $ -
Y $0.2269 $ - $ -
7/1/06 - 12/10/06
-----------------
Net
Investment Short-Term Long-Term
Class Income Capital Gains Capital Gains
----- ------ ------------- -------------
Investor $0.1780 $ - $ -
9
Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/06 CLASS A SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund at public offering price, compared to that
of the Lehman Brothers Aggregate Bond Index.
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Average Annual Total Returns
(As of December 31, 2006)
Public
Net Asset Offering
Period Value (NAV) Price (POP)
10 Years 5.83% 5.35%
5 Years 5.84 4.88
1 Year 3.55 -1.08
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Expense Ratio
(As of May 1, 2006)
Gross Net
1.11% 1.00%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10.000 Pioneer Lehman Brothers
Investment Bond Fund Aggregate Bond Index
12/96 9550 10000
10426 10965
12/98 11228 11918
10869 11820
12/00 11787 13194
12676 14308
12/02 13788 15776
15008 16423
12/04 15865 17136
16256 17552
12/06 16833 18313
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
NAV results represent the percent change in net asset value per share. Returns
would have been lower had sales charges been reflected. POP returns reflect
deduction of maximum 4.5% sales charge. All results are historical and assume
the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 11/1/09 for Class A Shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time. Please see the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Aggregate Bond Index is a market value-weighted measure of
treasury and agency issues, corporate bond issues and mortgage-backed
securities. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in an Index.
10
Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/06 CLASS B SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund, compared to that of the Lehman Brothers
Aggregate Bond Index.
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Average Annual Total Returns
(As of December 31, 2006)
If If
Period Held Redeemed
10 Years 4.95% 4.95%
5 Years 4.89 4.89
1 Year 2.63 -1.34
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Expense Ratio
(As of May 1, 2006)
Gross Net
1.99% 1.90%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10.000 Pioneer Lehman Brothers
Investment Bond Fund Aggregate Bond Index
12/96 10000 10000
10839 10965
12/98 11577 11918
11132 11820
12/00 11944 13194
12762 14308
12/02 13756 15776
14849 16423
12/04 15565 17136
15789 17552
12/06 16203 18313
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. "If redeemed"
returns reflect the deduction of applicable contingent deferred sales charge
(CDSC). Effective December 1, 2004, the period during which a CDSC is applied
to withdrawals was shortened to 5 years. The maximum CDSC for Class B shares
continues to be 4%. For more complete information, please see the prospectus
for details. Note: Shares purchased prior to December 1, 2004 remain subject to
the CDSC in effect at the time you purchased those shares. For performance
information for shares purchased prior to December 1, 2004, please visit
www.pioneerinvestments.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 11/1/07 for Class B Shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time. Please see the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Aggregate Bond Index is a market value-weighted measure of
treasury and agency issues, corporate bond issues and mortgage-backed
securities. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in an Index.
11
Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/06 CLASS C SHARES
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Investment Returns
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The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund, compared to that of the Lehman Brothers
Aggregate Bond Index.
- ------------------------------------------------------
Average Annual Total Returns
(As of December 31, 2006)
If If
Period Held Redeemed
10 Years 4.86% 4.86%
5 Years 4.85 4.85
1 Year 2.57 2.57
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Expense Ratio
(As of May 1, 2006)
Gross Net
1.89% 1.89%
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[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10.000 Pioneer Lehman Brothers
Investment Bond Fund Aggregate Bond Index
12/96 10000 10000
10817 10965
12/98 11560 11918
11090 11820
12/00 11927 13194
12686 14308
12/02 13660 15776
14722 16423
12/04 15446 17136
15676 17552
12/06 16078 18313
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
"If Held" results represent the percent change in net asset value per share.
Returns would have been lower had sales charges been reflected. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 11/1/07 for Class C Shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time. Please see the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Aggregate Bond Index is a market value-weighted measure of
treasury and agency issues, corporate bond issues and mortgage-backed
securities. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in an Index.
12
Pioneer Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/06 CLASS R SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund, compared to that of the Lehman Brothers
Aggregate Bond Index.
- ------------------------------------------------------
Average Annual Total Returns
(As of December 31, 2006)
If If
Period Held Redeemed
10 Years 5.44% 5.44%
5 Years 5.59 5.59
1 Year 3.31 3.31
- ------------------------------------------------------
Expense Ratio
(As of May 1, 2006)
Gross Net
1.46% 1.25%
- ------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10.000 Pioneer Lehman Brothers
Investment Bond Fund Aggregate Bond Index
12/96 10000 10000
10862 10965
12/98 11640 11918
11211 11820
12/00 12098 13194
12945 14308
12/02 14011 15776
15248 16423
12/04 16105 17136
16445 17552
12/06 16988 18313
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of Class R shares for the period prior to the commencement of
operations of Class R shares on April 1, 2003 is based on the performance of
Class A shares, reduced to reflect the higher distribution and service fees of
Class R shares. For the period after April 1, 2003, the actual performance of
Class R shares is reflected. The performance of Class R shares does not reflect
the 1% CDSC that was in effect prior to July 1, 2004. Class R shares are not
subject to sales charges and are available for limited groups of eligible
investors, including institutional investors. All results are historical and
assume the reinvestment of dividends and capital gains. Other share classes are
available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The net expense ratio reflects contractual expense limitations currently in
effect through 11/1/07 for Class R Shares. There can be no assurance that
Pioneer will extend the expense limitations beyond such time. Please see the
prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Aggregate Bond Index is a market value-weighted measure of
treasury and agency issues, corporate bond issues and mortgage-backed
securities. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in an Index.
13
Pioneer Bond Fund
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 12/31/06 CLASS Y SHARES
- --------------------------------------------------------------------------------
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Bond Fund, compared to that of the Lehman Brothers
Aggregate Bond Index.
Average Annual Total Returns
(As of December 31, 2006)
- ------------------------------------------------------
If If
Period Held Redeemed
10 Years 6.07% 6.07%
5 Years 6.29 6.29
1 Year 3.98 3.98
- ------------------------------------------------------
Expense Ratio
(As of May 1, 2006)
Gross Net
0.58% 0.58%
- ------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Value of $10.000 Pioneer Lehman Brothers
Investment Bond Fund Aggregate Bond Index
6/96 10000 10000
10709 10815
6/98 11784 11955
11943 12331
6/00 12098 12894
13392 14342
6/02 14452 15579
16166 17200
6/04 16728 17255
18078 18428
6/06 17938 18280
Call 1-800-225-6292 or visit pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of the Fund's Class Y shares
reflects the NAV performance of the Fund's Class A shares. The performance does
not reflect differences in expenses, including the Rule 12b-1 fees applicable
to Class A shares. Since fees for Class A shares are generally higher than
those of Class Y shares, the performance shown for Y shares prior to their
inception would have been higher. Class A shares are used as a proxy through
9/20/01. Class Y shares are not subject to sales charges and are available for
limited groups of eligible investors, including institutional investors. All
results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Lehman Brothers Aggregate Bond Index is a market value-weighted measure of
treasury and agency issues, corporate bond issues and mortgage-backed
securities. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees, expenses or sales
charges. You cannot invest directly in an Index.
14
Pioneer Bond Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES
- --------------------------------------------------------------------------------
As a shareowner in the Fund, you incur two types of costs:
(1) ongoing costs, including management fees, distribution and/or service
(12b-1) fees, and other Fund expenses; and
(2) transaction costs, including sales charges (loads) on purchase payments.
This example is intended to help you understand your ongoing expenses (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds. The example is based on an investment
of $1,000 at the beginning of the Fund's latest six-month period and held
throughout the six months.
Using the Tables
Actual Expenses
The first table below provides information about actual account values and
actual expenses. You may use the information in this table, together with the
amount you invested, to estimate the expenses that you paid over the period as
follows:
1. Divide your account value by $1,000
Example: an $8,600 account value [divided by] $1,000 = 8.6
2. Multiply the result in (1) above by the corresponding share class's number
in the third row under the heading entitled "Expenses Paid During Period"
to estimate the expenses you paid on your account during this period.
Expenses Paid on a $1,000 Investment in Pioneer Bond Fund
Based on actual returns from July 1, 2006 through December 31, 2006
Investor
Share Class A B C Class R Y
- ----------------------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 7/1/06
Ending Account $ 1,047 $ 1,042 $ 1,042 $ 1,047 $ 1,045 $ 1,049
Value (after
expenses) On
12/31/06
Expenses Paid $ 5.16 $ 9.78 $ 9.78 $ 3.34 $ 6.44 $ 2.94
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.00%, 1.90%,
1.90%, 0.73%, 1.25% and 0.57%, for Class A, Class B, Class C, Investor
Class, Class R, and Class Y shares, respectively, multiplied by the average
account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
15
Pioneer Bond Fund
- --------------------------------------------------------------------------------
COMPARING ONGOING FUND EXPENSES (continued)
- --------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the
5% hypothetical examples that appear in the shareholder reports of the other
funds.
Please note that the expenses shown in the tables are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads) that are charged at the time of the transaction. Therefore, the
table below is useful in comparing ongoing costs only and will not help you
determine the relative total costs of owning different funds. In addition, if
these transaction costs were included, your costs would have been higher.
Expenses Paid on a $1,000 Investment in Pioneer Bond Fund
Based on a hypothetical 5% per year return before expenses, reflecting the
period from July 1, 2006 through December 31, 2006
Investor
Share Class A B C Class R Y
- ----------------------------------------------------------------------------------------------
Beginning Account $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Value On 7/1/06
Ending Account $ 1,020 $ 1,016 $ 1,016 $ 1,019 $ 1,019 $ 1,022
Value (after
expenses) On
12/31/06
Expenses Paid $ 5.09 $ 9.65 $ 9.65 $ 3.29 $ 6.36 $ 2.91
During Period*
* Expenses are equal to the Fund's annualized expense ratio of 1.00%, 1.90%,
1.90%, 0.73%, 1.25% and 0.57%, for Class A, Class B, Class C, Investor
Class, Class R, and Class Y shares, respectively, multiplied by the average
account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
16
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/06 (unaudited)
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
ASSET BACKED SECURITIES - 3.0%
Transportation - 0.1%
Airlines - 0.1%
1,381,858 A+/A2 Southwest Airlines Co., 7.67%, 1/2/14 $ 1,406,040
------------
Total Transportation $ 1,406,040
------------
Consumer Services - 0.1%
Restaurants - 0.1%
835,000 BB/Ba3 Dunkin Brands Master Finance LLC, 8.28%,
6/20/31 (144A) $ 849,127
------------
Total Consumer Services $ 849,127
------------
Banks - 0.6%
Thrifts & Mortgage Finance - 0.6%
3,375,000 AAA/Aaa GMAC Commercial Mortgage Securities, Inc.,
4.864%, 12/10/41 $ 3,275,689
2,776,474 A-/Baa1 Taganka Car Loan Finance Plc, Floating Rate Note,
11/14/13 (144A) 2,776,466
------------
$ 6,052,155
------------
Total Banks $ 6,052,155
------------
Diversified Financials - 1.8%
Diversified Financial Services - 1.8%
2,820,109 BB-/Ba2 Caithness Coso Fund Corp., 6.263%,
6/15/14 (144A) $ 2,749,578
9,885,000 AAA/Aaa JP Morgan Chase Commercial Mortgage Securities
Corp., 5.8755%, 4/15/45 10,327,069
1,508,960 BBB+/Baa2 PF Export Receivable Master Trust, 6.436%,
6/1/15 (144A) 1,539,139
2,472,783 BBB/Baa2 Power Receivables Finance, 6.29%, 1/1/12 (144A) 2,486,310
------------
$ 17,102,096
------------
Total Diversified Financials $ 17,102,096
------------
Utilities - 0.3%
Electric Utilities - 0.3%
1,709,820 BBB-/Baa3 FPL Energy America Wind LLC, 6.639%,
6/20/23 (144A) $ 1,760,225
554,400 BB-/Ba2 FPL Energy Wind Funding, 6.876%, 6/27/17 (144A) 559,251
1,015,442 BB-/Ba2 Tenaska Alabama, 7.0%, 6/30/21 (144A) 1,008,490
------------
$ 3,327,966
------------
Total Utilities $ 3,327,966
------------
TOTAL ASSET BACKED SECURITIES
(Cost $28,768,173) $ 28,737,384
------------
The accompanying notes are an integral part of these financial statements. 17
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.0%
Banks - 0.9%
Thrifts & Mortgage Finance - 0.8%
1,440,000 AAA/Aaa Banc of America Commercial Mortgage, Inc.,
4.877%, 7/10/42 $ 1,399,577
1,825,000 NR/Ba1 SBA CMBS Trust, 6.709%, 11/15/36 1,827,284
1,300,000 AAA/Aa2 TimberStar Trust, 5.7467%, 10/15/36 1,315,843
3,787,250 AAA/Aaa Wachovia Bank Commercial Mortgage Trust,
4.803%, 10/15/41 3,656,689
------------
$ 8,199,393
------------
Total Banks $ 8,199,393
------------
Diversified Financials - 1.5%
Diversified Financial Services - 1.5%
1,150,000 NR/Ba1 Global Signal, 7.036%, 2/15/36 (144A) $ 1,169,951
10,000,000 AAA/Aaa LB-UBS Commercial Mortgage, Floating Rate
Note, 6/15/38 10,463,672
2,177,551 AAA/Aaa RALI 2005-QA10 A41, 5.7412%, 9/25/35 2,172,541
575,000 NR/Ba2 Tower 2004-2A F, 6.376%, 12/15/14 556,114
------------
$ 14,362,278
------------
Total Diversified Financials $ 14,362,278
------------
Government - 0.7%
6,823,710 AAA/Aaa Freddie Mac, 6.1%, 9/15/18 $ 6,841,924
------------
Total Government $ 6,841,924
------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $29,461,760) $ 29,403,595
------------
CORPORATE BONDS - 19.6%
Energy - 1.4%
Integrated Oil & Gas - 0.6%
45,000 BBB/Baa2 Petro-Canada, 4.0%, 7/15/13 $ 40,859
2,000,000 A-/A1 Phillips Pete Co., 6.375%, 3/30/09 2,044,838
4,000,000 AA/Aa2 Texaco Capital, Inc., 7.09%, 2/1/07 4,003,968
25,000 BBB+/Baa1 USX Corp., 6.85%, 3/1/08 25,381
------------
$ 6,115,046
------------
Oil & Gas Equipment & Services - 0.1%
875,000 B+/B1 Holly Energy Partners LP, 6.25%, 3/1/15 $ 831,250
------------
18 The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
Oil & Gas Exploration & Production - 0.7%
2,000,000 BBB+/NR Gazprom International SA., 7.201%, 2/1/20 (144A) $ 2,115,000
75,000 BBB/Baa1 Pemex Project Funding Master, 9.125%, 10/13/10 84,113
1,849,650 A/Aa3 Ras Laffan Liquid Natural Gas, 3.437%,
9/15/09 (144A) 1,802,169
1,605,000 A/Aa3 Ras Laffan Liquid Natural Gas, 3 5.832%,
9/30/16 (144A) 1,609,719
650,000 BB+/Ba2 Southern Star Central Corp., 6.75%, 3/1/16 648,375
------------
$ 6,259,376
------------
Oil & Gas Refining & Marketing - 0.0%
320,000 BBB/Baa2 Boardwalk Pipelines LLC, 5.5%, 2/1/17 $ 308,250
------------
Oil & Gas Storage & Transportation - 0.0%
65,000 BBB+/Baa1 Kinder Morgan Energy Partners, 6.75%, 3/15/11 $ 67,632
------------
Total Energy $ 13,581,554
------------
Materials - 0.7%
Aluminum - 0.2%
1,700,000 B/B2 Novelis, Inc., 7.25%, 02/15/15 $ 1,644,750
------------
Commodity Chemicals - 0.2%
625,000 B+/Ba3 Invista, 9.25%, 5/1/12 (144A) $ 670,312
1,500,000 BB-/Ba3 Nova Chemicals, Ltd., 6.5%, 1/15/12 1,421,250
------------
$ 2,091,562
------------
Construction Materials - 0.2%
2,000,000 A+/A1 Vulcan Materials Co., 6.0%, 4/1/09 $ 2,029,412
------------
Fertilizers & Agricultural Chemicals - 0.0%
45,000 BBB+/Baa1 Potash Corp. Saskatchewan, 4.875%, 3/1/13 $ 43,413
------------
Paper Products - 0.1%
1,300,000 B+/B2 Bowater Canada Finance, 7.95%, 11/15/11 $ 1,274,000
------------
Total Materials $ 7,083,137
------------
Capital Goods - 2.8%
Aerospace & Defense - 0.2%
40,000 A+/A2 Boeing Co., 5.125%, 2/15/13 $ 39,651
2,000,000 A/A2 Honeywell, Inc., 7.0%, 3/15/07 2,004,980
------------
$ 2,044,631
------------
Construction & Farm Machinery & Heavy Trucks - 0.9%
2,300,000 A/A2 Caterpillar Financial Services, 3.10%, 5/15/07 $ 2,280,811
1,000,000 A/A2 Caterpillar, Inc., 6.55%, 5/1/11 1,046,870
5,000,000 A/A3 Deere & Co., 7.0%, 3/15/12 5,350,680
------------
$ 8,678,361
------------
The accompanying notes are an integral part of these financial statements. 19
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
Electrical Component & Equipment - 0.2%
1,528,863 NR/WD Orcal Geothermal, 6.21%, 12/30/20 (144A) $ 1,521,617
------------
Industrial Conglomerates - 1.2%
12,000,000 AAA/Aaa GE Electric Co., 5.0%, 2/1/13 $ 11,866,812
------------
Trading Companies & Distributors - 0.3%
2,350,000 BBB-/Baa3 Glencore Funding LLC, 6.0%, 4/15/14 (144A) $ 2,290,850
450,000 BB+/Ba1 Noble Group, Ltd., 6.625%, 3/17/15 (144A) 408,762
------------
$ 2,699,612
------------
Total Capital Goods $ 26,811,033
------------
Consumer Durables & Apparel - 0.1%
Homebuilding - 0.1%
1,230,000 BBB-/BBB- C10 Capital SPV, Ltd., Floating Rate Note, 12/31/49 $ 1,232,952
------------
Total Consumer Durables & Apparel $ 1,232,952
------------
Consumer Services - 0.5%
Casinos & Gaming - 0.2%
2,030,000 B/Ba3 Station Casinos, Inc., 6.625%, 3/15/18 $ 1,740,725
------------
Education Services - 0.3%
2,800,000 AAA/Aaa President & Fellows of Harvard, 6.3%, 10/1/37 $ 2,995,244
------------
Total Consumer Services $ 4,735,969
------------
Media - 0.6%
Broadcasting & Cable TV - 0.0%
135,000 BBB+/Baa2 Comcast Corp., 5.3%, 1/15/14 $ 132,227
------------
Media - 0.6%
5,000,000 BBB+/Baa2 Comcast Cable Corp., 6.75%, 1/30/11 $ 5,238,945
------------
Total Media $ 5,371,172
------------
Retailing - 0.1%
Department Stores - 0.1%
1,000,000 BBB/Baa1 May Department Store Co., 7.9%, 10/15/07 $ 1,014,940
25,000 A/Baa1 Nordstrom, Inc., 5.625%, 1/15/09 25,118
------------
$ 1,040,058
------------
Total Retailing $ 1,040,058
------------
Food Beverage & Tobacco - 0.6%
Brewers - 0.0%
55,000 BBB+/Baa1 Miller Brewing Co., 5.5%, 8/15/13 (144A) $ 54,390
------------
Packaged Foods & Meats - 0.6%
5,055,000 A+/A1 Unilever Capital Corp., 7.125%, 11/1/10 $ 5,369,542
------------
Soft Drinks - 0.0%
55,000 A/A3 Bottling Group LLC, 5.0%, 11/15/13 $ 53,756
------------
Total Food Beverage & Tobacco $ 5,477,688
------------
20 The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
Household & Personal Products - 0.2%
Household Products - 0.2%
2,900,000 HCA, Inc., 2.75%, 11/7/13 $ 2,935,484
1,700,000 AA-/Aa3 Kimberly Clark Corp., 7.1%, 8/1/07 1,716,431
------------
Total Household & Personal Products $ 4,651,915
------------
Pharmaceuticals & Biotechnology - 0.1%
Pharmaceuticals - 0.1%
1,000,000 AA/Aa2 Glaxosmithline Capital Plc, 2.375%, 4/16/07 $ 991,211
------------
Total Pharmaceuticals & Biotechnology $ 991,211
------------
Banks - 1.2%
Diversified Banks - 0.5%
1,100,000 A+/Aa3 Nationsbank Corp., 7.75%, 8/15/15 $ 1,265,545
1,880,000 BB+/Baa2 TNK-BP Finance SA, 7.5%, 7/18/16 (144A) 1,999,850
2,000,000 AA-/Aa1 US Bank, 3.75%, 2/6/09 1,943,346
------------
$ 5,208,741
------------
Regional Banks - 0.6%
4,500,000 A+/Aa3 Branch Banking & Trust Co., 4.875%, 1/15/13 $ 4,378,387
1,000,000 AA-/Aa2 Fifth Third FTB, 2.7%, 1/30/07 998,142
500,000 A+/Aa3 Suntrust Bank Atlanta, 6.375%, 4/1/11 519,933
------------
$ 5,896,462
------------
Total Banks $ 11,105,203
------------
Diversified Financials - 2.2%
Asset Management & Custody Banks - 1.6%
2,000,000 A/A1 Bank of New York, 4.95%, 3/15/15 $ 1,939,522
2,000,000 A/A2 Mellon Financial Co., 6.4%, 5/14/11 2,079,882
6,000,000 A+/A1 Northern Trust Co., 7.1%, 8/1/09 6,256,002
5,000,000 A+/A1 State Street Corp., 7.65%, 6/15/10 5,340,855
------------
$ 15,616,261
------------
Consumer Finance - 0.4%
2,055,000 B/B1 Ford Motor Credit Co., 5.7%, 1/15/10 $ 1,969,929
2,340,000 A/A2 SLM Corp., Floating Rate Note, 7/25/14 2,149,664
------------
$ 4,119,593
------------
Diversified Financial Services - 0.1%
1,000,000 A+/Aa3 Bank One Texas National, 6.25%, 2/15/08 $ 1,010,072
------------
Total Diversified Financials $ 20,745,926
------------
The accompanying notes are an integral part of these financial statements. 21
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
Insurance - 4.3%
Life & Health Insurance - 1.4%
1,000,000 A/A2 Metlife, 6.125%, 12/1/11 $ 1,033,750
2,830,000 B-/B2 Presidential Life Corp., 7.875%, 2/15/09 2,702,650
3,500,000 AA/Aa3 Protective Life, 4.0%, 10/7/09 3,386,817
6,000,000 AA-/A1 Prudential Funding LLC, 6.6%, 5/15/08 6,083,358
------------
$ 13,206,575
------------
Multi-Line Insurance - 1.2%
5,000,000 AA+/Aa2 Asif Global Financial XVIII, 3.85%, 11/26/07 (144A) $ 4,932,990
4,450,000 BB+/Ba1 Hanover Insurance Group, 7.625%, 10/15/25 4,768,958
1,950,000 A/A3 Loew Corp., 5.25%, 3/15/16 1,899,924
------------
$ 11,601,872
------------
Property & Casualty Insurance - 1.1%
3,000,000 AAA/Aaa Berkshire Hathway, Inc., 3.375%, 10/15/08 $ 2,907,516
1,000,000 A/A2 Chubb Corp., 6.0%, 11/15/11 1,026,394
3,385,000 BBB-/NR Kingsway America, Inc., 7.5%, 2/1/14 3,432,600
2,585,000 BBB-/Baa3 Ohio Casualty Corp., 7.3%, 6/15/14 2,759,759
------------
$ 10,126,269
------------
Reinsurance - 0.6%
5,700,000 BBB/NA Platinum Underwriters HD, 7.50%, 6/1/17 $ 6,011,083
------------
Total Insurance $ 40,945,799
------------
Real Estate - 1.4%
Real Estate Management & Development - 0.2%
2,200,000 BB-/Ba3 Forest City Enterprises, 7.625%, 6/1/15 $ 2,244,000
------------
Real Estate Investment Trust - 1.2%
1,100,000 BBB-/Baa3 Colonial Reality LP, 6.15%, 4/15/13 $ 1,115,424
890,000 B/B1 Crescent Real Estate, 7.5%, 9/15/07 893,337
3,575,000 BBB-/Baa3 Health Care, Inc., 6.2%, 6/1/16 3,592,142
860,000 BBB-/Baa3 Health Care, Inc., 6.0%, 11/15/13 858,203
935,000 BBB-/Baa3 Health Care, Inc., 8.0%, 9/12/12 1,027,740
775,000 BBB/Baa2 Hospitality Properties Trust, 5.125%, 2/15/15 736,282
1,815,000 B+/B1 Trustreet Properties, Inc., 7.5%, 4/1/15 1,960,200
985,000 BB+/Ba2 Ventas Realty Capital Corp., 7.125%, 6/1/15 (144A) 1,034,250
------------
$ 11,217,578
------------
Total Real Estate $ 13,461,578
------------
22 The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
Technology Hardware & Equipment - 0.7%
Computer Hardware - 0.7%
5,000,000 A+/A1 International Business Machines, 5.375%, 2/1/09 $ 5,017,700
2,000,000 BBB-/Baa3 NCR Corp., 7.125%, 6/15/09 2,051,148
------------
$ 7,068,848
------------
Total Technology Hardware & Equipment $ 7,068,848
------------
Semiconductors - 0.2%
2,195,000 BBB-/Baa3 Chartered Semiconductor, 6.375%, 8/3/15 $ 2,201,605
------------
Total $ 2,201,605
------------
Telecommunication Services - 0.2%
Integrated Telecom Services - 0.2%
1,500,000 A/A3 GTE California, Inc., 6.7%, 9/1/09 $ 1,544,104
------------
Total Telecommunication Services $ 1,544,104
------------
Utilities - 2.1%
Electric Utilities - 1.0%
1,700,000 A/A2 Alabama Power Co., 7.125%, 10/1/07 $ 1,719,853
703,312 BBB-/Baa3 Crocket Cogeneration, 5.869%, 3/30/25 (144A) 681,411
2,050,000 BBB+/Baa3 Entergy Gulf States, 5.7%, 6/1/15 2,001,458
3,000,000 A/A2 Georgia Power Co., 4.0%, 1/15/11 2,859,747
1,555,000 BBB-/Baa3 Kiowa Power Partners LLC, 5.737%, 3/30/21 (144A) 1,505,427
1,000,000 BB-/Ba3 MSW Energy Holdings, 7.375%, 9/1/10 1,020,000
------------
$ 9,787,896
------------
Gas Utilities - 0.2%
1,720,000 BB/Ba1 Southern Union Co., 7.2%, 11/1/66 $ 1,695,507
------------
Independent Power Producer & Energy Traders - 0.8%
3,100,000 A/Baa1 Baltimore Gas & Electric Co., 7.5%, 1/15/07 $ 3,101,398
5,000,000 BBB/A3 Duke Energy Corp., 6.25%, 1/15/12 5,206,260
------------
$ 8,307,658
------------
Total Utilities $ 19,791,061
------------
TOTAL CORPORATE BONDS
(Cost $187,215,009) $187,840,813
------------
The accompanying notes are an integral part of these financial statements. 23
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 66.0%
140,000 AAA/Aaa Federal National Mortgage Association,
5.24%, 8/7/18 $ 138,050
65,000 AAA/Aaa Federal Home Loan Bank, 3.875%, 6/14/13 61,096
179,794 AAA/Aaa Federal Home Loan Bank, 6.0%, 4/15/32 182,692
131,645 NR/NR Government National Mortgage Association,
7.5%, 12/15/31 137,430
14,336 NR/Aaa Government National Mortgage Association,
7.5%, 2/15/26 14,984
18,445 NR/NR Government National Mortgage Association,
7.5%, 2/15/31 19,256
48,915 AAA/Aaa Government National Mortgage Association,
7.5%, 8/15/11 50,496
36,508 NR/NR Government National Mortgage Association,
7.5%, 8/15/29 38,093
3,111 NR/NR Government National Mortgage Association,
7.75%, 11/15/29 3,277
10,427 AAA/Aaa Government National Mortgage Association,
7.75%, 2/15/30 10,977
33,357 AAA/Aaa Government National Mortgage Association,
8.0%, 5/15/10 34,523
4,025 NR/NR Government National Mortgage Association,
9.5%, 5/15/20 4,404
2,166 NR/NR Government National Mortgage Association,
10.0%, 1/15/06 2,395
2,429 NR/NR Government National Mortgage Association,
10.0%, 1/15/18 2,684
474,206 NR/NR Government National Mortgage Association, I,
6.0%, 2/15/29 481,913
55,220 NR/NR Government National Mortgage Association, I,
7.0%, 12/15/30 57,079
31,901 NR/NR Government National Mortgage Association, I,
7.0%, 3/15/31 32,968
18,973 NR/NR Government National Mortgage Association, I,
7.5%, 10/15/29 19,797
2,101,666 AAA/Aaa Government National Mortgage Association, II,
4.5%, 1/20/35 1,969,744
832,573 AAA/Aaa Government National Mortgage Association, II,
4.5%, 12/20/34 780,751
772,330 AAA/Aaa Government National Mortgage Association, II,
5.5%, 10/20/19 772,811
180,105 AAA/Aaa Government National Mortgage Association, II,
5.5%, 11/20/34 178,901
24 The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - (continued)
293,742 NR/NR Government National Mortgage Association, II,
5.5%, 2/20/34 $ 291,778
1,700,215 AAA/Aaa Government National Mortgage Association, II,
5.5%, 3/20/34 1,688,846
5,969,721 AAA/Aaa Government National Mortgage Association, II,
6.0%, 11/20/33 6,043,853
10,895 NR/NR Government National Mortgage Association, II,
6.5%, 2/20/29 11,165
5,208 NR/NR Government National Mortgage Association, II,
6.5%, 3/20/29 5,336
149,524 AAA/Aaa Government National Mortgage Association, II,
6.5%, 4/20/29 153,226
322,177 AAA/Aaa Government National Mortgage Association, II,
7%, 11/20/28 331,631
192,140 NR/NR Government National Mortgage Association, II,
7.0%, 1/20/29 197,825
12,001 NR/NR Government National Mortgage Association, II,
7.0%, 12/20/30 12,357
4,600,000 AAA/Aaa U.S. Treasury Bonds, 4.0%, 2/15/14 4,403,244
41,200,000 AAA/Aaa U.S. Treasury Bonds, 4.25%, 11/15/13 40,112,073
2,000,000 AAA/Aaa U.S. Treasury Bonds, 4.625%, 3/31/08 1,991,484
5,000,000 AAA/Aaa U.S. Treasury Bonds, 5.125%, 5/15/16 5,150,195
34,500,000 AAA/Aaa U.S. Treasury Bonds, 6.25%, 8/15/23 39,710,052
27,560,250 AAA/Aaa U.S. Treasury Inflation Protected Notes,
1.875%, 7/15/15 26,411,538
4,576,140 AAA/Aaa U.S. Treasury Inflation Protected Notes,
2.0%, 1/15/16 4,418,478
1,459,328 AAA/Aaa U.S. Treasury Inflation Protected Notes,
3.0%, 7/15/12 1,501,797
4,952,157 AAA/Aaa U.S. Treasury Inflation Protected Security,
2.375%, 4/15/11 4,932,428
2,046,042 AAA/Aaa U.S. Treasury Inflation Protected Security,
3.375%, 1/15/12 2,136,115
2,319 AAA/Aaa U.S. Treasury Inflation Protected Security,
3.5%, 1/15/11 2,414
3,000,000 AAA/Aaa U.S. Treasury Notes, 2.0%, 1/15/14 3,225,107
2,000,000 AAA/Aaa U.S. Treasury Notes, 3.625%, 1/15/10 1,938,282
11,000,000 AAA/Aaa U.S. Treasury Notes, 3.625%, 6/15/10 10,625,318
29,000,000 AAA/Aaa U.S. Treasury Notes, 4.0%, 11/15/12 28,059,043
The accompanying notes are an integral part of these financial statements. 25
Pioneer Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
S&P/Moody's
Shares Ratings Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - (continued)
12,800,000 AAA/Aaa U.S. Treasury Notes, 7.50%, 11/15/16 $ 15,553,997
4,550,000 AAA/Aaa U.S. Treasury Strip, 0.0%, 2/15/11 3,769,138
5,257,000 AAA/Aaa U.S. Treasury Strip, 0.0%, 11/15/13 3,822,766
------------
$630,671,041
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $630,187,373) $630,671,041
------------
MUNICIPAL BONDS - 0.1%
500,000 AAA/NR Tobacco Settlement Authority Iowa, 6.79%, 6/1/10 $ 511,060
------------
TOTAL MUNICIPAL BONDS
(Cost $500,000) $ 511,060
------------
TEMPORARY CASH INVESTMENTS - 11.3%
Commercial Paper - 11.3%
107,990,000 A-1+/P-1 Rabobank USA Financial Corp., 5.25%, 1/3/07 $107,911,257
------------
TOTAL COMMERCIAL PAPER
(Cost $107,990,000) $107,911,257
------------
TOTAL INVESTMENT IN SECURITIES - 102.9%
(Cost $984,122,315) (a) $985,075,150
------------
OTHER ASSETS AND LIABILITIES - (2.9)% $(27,495,435)
------------
TOTAL NET ASSETS - 100.0% $957,579,715
============
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At
December 31, 2006, the value of these securities amounted to $35,525,284
or 3.7% of total net assets.
(a) At December, 31, 2006 the net unrealized gain on investments based on
cost for federal income tax purposes of $984,118,629 was as follows:
Aggregate gross unrealized gain for all investments in which there
is an excess of value over tax cost. $ 10,240,791
Aggregate gross unrealized loss for all investments in which there
is an excess of value over tax cost. (9,284,270)
------------
Net Unrealized gain $ 956,521
============
Purchases and sales of securities (excluding temporary cash investments) for
the year ended December 31, 2006 aggregated $188,835,119 and $147,029,041,
respectively.
26 The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES 12/31/06(unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities (cost $984,122,315) $985,075,150
Receivables -
Fund shares sold 2,749,305
Dividends, interest and foreign taxes withheld 7,332,880
Due from Pioneer Investment Management, Inc. 32,719
Other 243,160
------------
Total assets $995,433,214
------------
LIABILITIES:
Payables -
Investment securities purchased $ 33,814,029
Fund shares repurchased 1,262,649
Dividends 2,002,567
Due to bank 379,802
Due to affiliates 242,159
Accrued expenses 152,293
------------
Total liabilities $ 37,853,499
------------
NET ASSETS:
Paid-in capital $961,062,435
Undistributed net investment income 862,461
Accumulated net realized loss on investments (5,298,016)
Net unrealized gain on investments 952,835
------------
Total net assets $957,579,715
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $285,537,733/31,374,619 shares) $ 9.10
============
Class B (based on $42,252,812/4,668,441 shares) $ 9.05
============
Class C (based on $31,941,291/3,544,435 shares) $ 9.01
============
Class R (based on $4,141,288/450,385 shares) $ 9.19
============
Class Y (based on $593,706,591/65,776,711 shares) $ 9.03
============
MAXIMUM OFFERING PRICE:
Class A ($9.10 [divided by] 95.5%) $ 9.53
============
The accompanying notes are an integral part of these financial statements. 27
Pioneer Bond Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- --------------------------------------------------------------------------------
For the Six Months Ended 12/31/06
INVESTMENT INCOME:
Interest $23,563,946
Income from securities loaned, net 870
-----------
Total investment income $23,564,816
-----------
EXPENSES:
Management fees $ 2,143,592
Transfer agent fees and expenses
Class A 299,871
Class B 128,998
Class C 83,892
Investor Class 8,120
Class R 3,547
Class Y 8,306
Distribution fees
Class A 268,765
Class B 234,488
Class C 177,041
Class R 9,150
Administrative reimbursements 109,901
Custodian fees 21,283
Registration fees 40,924
Professional fees 53,477
Printing expense 33,842
Fees and expenses of nonaffiliated trustees 5,984
Miscellaneous 12,255
-----------
Total expenses $ 3,643,436
Less management fees waived and expenses
reimbursed by Pioneer Investment
Management, Inc. (169,999)
Less fees paid indirectly (7,916)
-----------
Net expenses $ 3,465,521
-----------
Net investment income $20,099,295
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized gain on Investments $ 353,350
-----------
Change in net unrealized gain on Investments $18,114,400
-----------
Net gain on investments $18,467,750
-----------
Net increase in net assets resulting
from operations $38,567,045
===========
28 The accompanying notes are an integral part of these financial statements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Six Months Ended 12/31/06 and the Year Ended 6/30/06
Six Months Ended
12/31/06 Year Ended
(unaudited) 6/30/06
FROM OPERATIONS:
Net investment income $ 20,099,295 $ 29,202,535
Net realized gain on investments 353,350 1,169,174
Change in net unrealized gain (loss) on investments 18,114,400 (38,038,794)
-------------- --------------
Net increase (decrease) in net assets resulting
from operations $ 38,567,045 $ (7,667,085)
-------------- --------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.21 and $0.39 per share, respectively) $ (5,003,007) $ (8,907,383)
Class B ($0.17 and $0.31 per share, respectively) (861,267) (1,880,932)
Class C ($0.17 and $0.32 per share, respectively) (651,085) (1,376,068)
Investor Class ($0.19 and $0.42 per share,
respectively) (72,030) (181,120)
Class R ($0.20 and $0.38 per share, respectively) (79,012) (91,235)
Class Y ($0.23 and $0.43 per share, respectively) (13,778,873) (19,988,313)
-------------- --------------
Total distributions to shareowners $ (20,445,274) $ (32,425,051)
-------------- --------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 272,149,103 $ 261,100,711
Shares issued in reorganization - 582,614,812
Reinvestment of distributions 10,161,339 15,956,166
Cost of shares repurchased (164,784,469) (297,471,664)
-------------- --------------
Net increase in net assets resulting from fund
share transactions $ 117,525,973 $ 562,200,025
-------------- --------------
Net increase in net assets $ 135,647,744 $ 522,107,889
NET ASSETS:
Beginning of period 821,931,971 299,824,082
-------------- --------------
End of period $ 957,579,715 $ 821,931,971
============== ==============
Undistributed net investment income $ 862,461 $ 1,208,440
============== ==============
The accompanying notes are an integral part of these financial statements. 29
Pioneer Bond Fund
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
12/31/06 12/31/06 6/30/06 6/30/06
Shares Amount Shares Amount
(unaudited) (unaudited)
CLASS A
Shares sold 11,144,200 $ 101,565,141 7,982,595 $ 72,834,785
Shares issued in reorganization - - 4,818,649 44,668,880
Shares converted from
Investor Class 375,248 3,433,518 - -
Reinvestment of distributions 457,022 4,152,765 821,518 7,480,071
Less shares repurchased (4,046,775) (36,694,506) (8,698,451) (79,149,510)
---------- ------------- ---------- --------------
Net increase 7,929,695 $ 72,456,918 4,924,311 $ 45,834,226
========== ============= ========== ==============
CLASS B
Shares sold 428,389 $ 3,862,266 2,005,535 $ 18,264,422
Shares issued in reorganization - - 615,934 5,678,911
Reinvestment of distributions 71,708 648,307 154,981 1,406,793
Less shares repurchased (1,431,229) (12,906,408) (3,250,901) (29,489,973)
---------- ------------- ---------- --------------
Net decrease (931,132) $ (8,395,835) (474,451) $ (4,139,847)
========== ============= ========== ==============
CLASS C
Shares sold 678,661 $ 6,102,241 1,905,832 $ 17,283,129
Reinvestment of distributions 51,827 466,467 115,414 1,044,467
Less shares repurchased (1,265,036) (11,387,027) (2,463,706) (22,284,483)
---------- ------------- ---------- --------------
Net decrease (534,548) $ (4,818,319) (442,460) $ (3,956,887)
========== ============= ========== ==============
INVESTOR CLASS
Shares sold 10 $ 264 - $ -
Reinvestment of distributions 6,731 61,143 17,950 163,852
Shares converted to Class A (374,939) (3,433,518) - -
Less shares repurchased (21,047) (190,426) (106,887) (976,139)
---------- ------------- ---------- --------------
Net decrease (389,245) $ (3,562,537) (88,937) $ (812,287)
========== ============= ========== ==============
CLASS R
Shares sold 145,941 $ 1,336,581 288,594 $ 2,667,309
Reinvestment of distributions 5,579 51,268 5,418 49,620
Less shares repurchased (39,483) (362,917) (88,228) (812,829)
---------- ------------- ---------- --------------
Net increase 112,037 $ 1,024,932 205,784 $ 1,904,100
========== ============= ========== ==============
CLASS Y
Shares sold 17,296,790 $ 155,849,092 16,586,060 $ 150,051,066
Shares issued in reorganization - - 57,855,111 532,267,021
Reinvestment of distributions 529,541 4,781,389 645,641 5,811,363
Less shares repurchased (11,114,054) (99,809,667) (18,275,250) (164,758,730)
----------- ------------- ----------- --------------
Net increase 6,712,277 $ 60,820,814 56,811,562 $ 523,370,720
========== ============= ========== ==============
30 The accompanying notes are an integral part of these financialstatements.
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
12/31/06 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/06 6/30/05 6/30/04 6/30/03 6/30/02 (a)
CLASS A
Net asset value, beginning of period $ 8.89 $ 9.40 $ 9.18 $ 9.41 $ 8.89 $ 8.78
------- ------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.20 $ 0.35 $ 0.40 $ 0.41 $ 0.45 $ 0.52
Net realized and unrealized gain (loss) on investments 0.22 (0.47) 0.29 (0.14) 0.53 0.13
------- ------- -------- -------- -------- --------
Net increase (decrease) from investment operations $ 0.42 $ (0.12) $ 0.69 $ 0.27 $ 0.98 $ 0.65
Distributions to shareowners:
Net investment income (0.21) (0.39) (0.47) (0.50) (0.46) (0.54)
------- ------- -------- -------- -------- --------
Net increase (decrease) in net asset value $ 0.21 $ (0.51) $ 0.22 $ (0.23) $ 0.52 $ 0.11
------- ------- -------- -------- -------- --------
Net asset value, end of period $ 9.10 $ 8.89 $ 9.40 $ 9.18 $ 9.41 $ 8.89
======= ======= ======== ======== ======== ========
Total return* 4.73% (1.25)% 7.64% 2.98% 11.38% 7.58%
Ratio of net expenses to average net assets+ 1.00%** 1.00% 1.05% 1.14% 1.20% 1.16%
Ratio of net investment income to average net assets+ 4.53%** 3.91% 4.27% 4.42% 5.02% 5.79%
Portfolio turnover rate 17%** 60% 49% 63% 48% 59%
Net assets, end of period (in thousands) $285,538 $208,454 $174,055 $160,421 $183,338 $143,713
Ratios with no assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 1.09%** 1.11% 1.18% 1.14% 1.20% 1.16%
Net investment income 4.44%** 3.80% 4.14% 4.42% 5.02% 5.79%
Ratios with assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 1.00%** 1.00% 1.05% 1.14% 1.20% 1.16%
Net investment income 4.53%** 3.91% 4.27% 4.42% 5.02% 5.79%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(a) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
31
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
12/31/06 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/06 6/30/05 6/30/04 6/30/03 6/30/02 (a)
CLASS B
Net asset value, beginning of period $ 8.85 $ 9.36 $ 9.14 $ 9.37 $ 8.87 $ 8.77
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.17 $ 0.27 $ 0.32 $ 0.33 $ 0.37 $ 0.44
Net realized and unrealized gain (loss) on investments 0.20 (0.47) 0.28 (0.14) 0.53 0.14
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ 0.37 $ (0.20) $ 0.60 $ 0.19 $ 0.90 $ 0.58
Distributions to shareowners:
Net investment income (0.17) (0.31) (0.38) (0.42) (0.40) (0.48)
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.51) $ 0.22 $ (0.23) $ 0.50 $ 0.10
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.05 $ 8.85 $ 9.36 $ 9.14 $ 9.37 $ 8.87
======= ======= ======= ======= ======= =======
Total return* 4.17% (2.14)% 6.72% 2.04% 10.44% 6.78%
Ratio of net expenses to average net assets+ 1.91%** 1.90% 1.95% 1.98% 2.02% 1.95%
Ratio of net investment income to average net assets+ 3.58%** 3.06% 3.39% 3.55% 4.22% 5.02%
Portfolio turnover rate 17%** 60% 49% 63% 48% 59%
Net assets, end of period (in thousands) $42,253 $49,552 $56,828 $57,774 $77,367 $59,729
Ratios with no assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 2.11%** 1.99% 2.02% 1.98% 2.02% 1.95%
Net investment income 3.38%** 2.97% 3.32% 3.55% 4.22% 5.02%
Ratios with assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 1.90%** 1.90% 1.95% 1.98% 2.02% 1.95%
Net investment income 3.59%** 3.06% 3.39% 3.55% 4.22% 5.02%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(a) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
32
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
12/31/06 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/06 6/30/05 6/30/04 6/30/03 6/30/02 (a)
CLASS C
Net asset value, beginning of period $ 8.81 $ 9.32 $ 9.11 $ 9.31 $ 8.83 $ 8.73
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.17 $ 0.28 $ 0.32 $ 0.33 $ 0.37 $ 0.44
Net realized and unrealized gain (loss) on investments 0.20 (0.47) 0.28 (0.14) 0.51 0.12
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ 0.37 $ (0.19) $ 0.60 $ 0.19 $ 0.88 $ 0.56
Distributions to shareowners:
Net investment income (0.17) (0.32) (0.39) (0.39) (0.40) (0.46)
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.51) $ 0.21 $ (0.20) $ 0.48 $ 0.10
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.01 $ 8.81 $ 9.32 $ 9.11 $ 9.31 $ 8.83
======= ======= ======= ======= ======= =======
Total return* 4.18% (2.08)% 6.68% 2.11% 10.28% 6.55%
Ratio of net expenses to average net assets+ 1.90%** 1.89% 1.92% 1.97% 2.16% 2.14%
Ratio of net investment income to average net assets+ 3.59%** 3.07% 3.24% 3.59% 4.05% 4.78%
Portfolio turnover rate 17%** 60% 49% 63% 48% 59%
Net assets, end of period (in thousands) $31,941 $35,942 $42,160 $27,545 $29,777 $18,067
Ratios with no assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 2.04%** 1.89% 1.92% 1.97% 2.16% 2.15%
Net investment income 3.45%** 3.07% 3.24% 3.59% 4.05% 4.77%
Ratios with assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 1.90%** 1.89% 1.91% 1.97% 2.16% 2.15%
Net investment income 3.59%** 3.07% 3.25% 3.59% 4.05% 4.77%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(a) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
33
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
6/30/06 to
12/15/06 (c) Year Ended 12/11/04 to
(unaudited) 6/30/06 6/30/05 (b)
INVESTOR CLASS
Net asset value, beginning of period $ 8.89 $ 9.40 $ 9.40
------- ------- -------
Increase (decrease) from
investment operations:
Net investment income $ 0.20 $ 0.38 $ 0.22
Net realized and unrealized gain (loss)
on investments 0.26 (0.47) 0.04
------- ------- -------
Net increase (decrease) from
investment operations $ 0.46 $ (0.09) $ 0.26
Distributions to shareowners:
Net investment income (0.19) (0.42) (0.26)
------- ------- -------
Net decrease in net asset value $ 0.27 $ (0.51) $ 0.00
------- ------- -------
Net asset value, end of period $ 9.16 $ 8.89 $ 9.40
======= ======= =======
Total return* 4.73% (0.98)% 2.84%(a)
Ratio of net expenses to average net assets+ 0.74%** 0.74% 0.74%**
Ratio of net investment income to average
net assets+ 4.82%** 4.24% 4.43%**
Portfolio turnover rate 17%** 60% 49%(a)
Net assets, end of period (in thousands) $ 3,434 $ 3,462 $ 4,496
Ratios with no assumption of expenses
by PIM and no reduction for fees
paid indirectly:
Net expenses 1.09%** 0.94% 0.89%**
Net investment income 4.46%** 4.04% 4.28%**
Ratios with assumption of expenses by PIM
and reduction for fees paid indirectly:
Net expenses 0.73%** 0.74% 0.74%**
Net investment income 4.83%** 4.24% 4.43%**
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at each end of each period.
** Annualized.
+ Ratio with no reduction for fees paid indirectly.
(a) Not annualized.
(b) Investor class commenced operations on December 11, 2004
(c) Investor class shares were converted to Class A shares on December 10, 2006
The accompanying notes are an integral part of these financial statements.
34
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended
12/31/06 Year Ended Year Ended Year Ended 4/1/03 (a)
(unaudited) 6/30/06 6/30/05 6/30/04 to 6/30/03
CLASS R
Net asset value, beginning of period $ 8.99 $ 9.50 $ 9.28 $ 9.50 $ 9.19
-------- ------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.19 $ 0.34 $ 0.36 $ 0.47 $ 0.10
Net realized and unrealized gain (loss) on investments 0.21 (0.47) 0.30 (0.17) 0.32
-------- ------- ------- ------- --------
Net increase (decrease) from investment operations $ 0.40 $ (0.13) $ 0.66 $ 0.30 $ 0.42
Distributions to shareowners:
Net investment income (0.20) (0.38) (0.44) (0.52) (0.11)
-------- ------- ------- ------- --------
Net increase (decrease) in net asset value $ 0.20 $ (0.51) $ 0.22 $ (0.22) $ 0.31
-------- ------- ------- ------- --------
Net asset value, end of period $ 9.19 $ 8.99 $ 9.50 $ 9.28 $ 9.50
======== ======= ======= ======= ========
Total return* 4.46% (1.43)% 7.27% 3.20% 4.55%(b)
Ratio of net expenses to average net assets+ 1.25%** 1.25% 1.31% 1.32% 1.42%**
Ratio of net investment income to average net assets+ 4.25%** 3.50% 3.77% 4.71% 4.13%**
Portfolio turnover rate 17%** 60% 49% 63% 48%(b)
Net assets, end of period (in thousands) $ 4,141 $ 3,042 $ 1,259 $ 345 $ 1
Ratios with no assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 1.26%** 1.46% 1.43% 1.32% 1.42%**
Net investment income 4.24%** 3.29% 3.65% 4.71% 4.13%**
Ratios with assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 1.25%** 1.25% 1.31% 1.32% 1.42%**
Net investment income 4.25%** 3.50% 3.77% 4.71% 4.13%**
(a) Class R shares were first publicly offered on April 1, 2003.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at each end of each period.
** Annualized.
+ Ratio with no reduction for fees paid indirectly.
(b) Not annualized.
The accompanying notes are an integral part of these financial statements.
35
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Six Months
Ended 9/20/01 (a)
12/31/06 Year Ended Year Ended Year Ended Year Ended to
(unaudited) 6/30/06 6/30/05 6/30/04 6/30/03 6/30/02 (b)
CLASS Y
Net asset value, beginning of period $ 8.83 $ 9.33 $ 9.12 $ 9.35 $ 8.87 $ 8.85
-------- -------- ------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.23 $ 0.39 $ 0.44 $ 0.46 $ 0.51 $ 0.43
Net realized and unrealized gain (loss) on investments 0.20 (0.46) 0.28 (0.14) 0.51 0.04
-------- -------- ------- ------- ------- --------
Net increase (decrease) from investment operations $ 0.43 $ (0.07) $ 0.72 $ 0.32 $ 1.02 $ 0.47
Distributions to shareowners:
Net investment income (0.23) (0.43) (0.51) (0.55) (0.54) (0.45)
-------- -------- ------- ------- ------- --------
Net increase (decrease) in net asset value $ 0.20 $ (0.50) $ 0.21 $ (0.23) $ 0.48 $ 0.02
-------- -------- ------- ------- ------- --------
Net asset value, end of period $ 9.03 $ 8.83 $ 9.33 $ 9.12 $ 9.35 $ 8.87
======== ======== ======= ======= ======= ========
Total return* 4.86% (0.77)% 8.07% 3.48% 11.86% 5.48%(c)
Ratio of net expenses to average net assets+ 0.57%** 0.58% 0.61% 0.58% 0.67% 0.64%**
Ratio of net investment income to average net assets+ 4.91%** 4.20% 4.43% 5.05% 5.54% 6.28%**
Portfolio turnover rate 17%** 60% 49% 63% 48% 59%(c)
Net assets, end of period (in thousands) $593,706 $521,480 $21,027 $13,617 $ 7,719 $ 4,051
Ratios with no assumption of expenses by PIM and no
reduction for fees paid indirectly:
Net expenses 0.57%** 0.58% 0.61% 0.58% 0.67% 0.64%**
Net investment income 4.91%** 4.20% 4.43% 5.05% 5.54% 6.28%**
Ratios with assumption of expenses by PIM and
reduction for fees paid indirectly:
Net expenses 0.57%** 0.58% 0.61% 0.58% 0.67% 0.64%**
Net investment income 4.91%** 4.20% 4.43% 5.05% 5.54% 6.28%**
(a) Class Y shares were first publicly offered on September 20, 2001.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at each end of each period.
** Annualized
+ Ratio with no reduction for fees paid indirectly.
(b) As a result of a change in accounting principle, the effect due to mandatory
accretion of discounts and amortization of premiums on debt securities
resulted in a reduction of net investment income of $0.02 per share, an
increase in net realized and unrealized gain (loss) on investments of $0.02
per share, and the ratio of net investment income to average net assets
decreased by 0.23%.
(c) Not annualized.
The accompanying notes are an integral part of these financial statements.
36
Pioneer Bond Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/06 (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Bond Fund (the Fund) is a Delaware statutory trust registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The investment objectives of the Fund are to seek current income
consistent with preservation of capital.
The Trustees have authorized the issuance of five classes of shares of the
Fund. The Fund offers five classes of shares designated as Class A, Class B,
Class C, Class R, and Class Y shares. Class R shares were first publicly
offered April 1, 2003. On December 10, 2006 Investor Class shares were
converted to Class A shares. Each class of shares represents an interest in the
same portfolio of investments of the Fund and has equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distributions fees and has exclusive voting
rights with respect to the distribution plans that have been adopted by Class
A, Class B, Class C, and Class R shareowners, respectively. There is no
distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Fund to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gains and losses on investments during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements, which are consistent with those
policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Securities are valued
at prices supplied by independent pricing services, which consider such
factors as Treasury spreads, yields, maturities and ratings. Valuations
may be supplemented by dealers and other sources, as required. Securities
for which there are no other readily available valuation methods are
valued at their fair values as determined by, or under the direction of
the Board of Trustees. At December 31, 2006 there were no securities fair
37
Pioneer Bond Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
valued. Principal amounts of mortgage-backed securities are adjusted for
monthly paydowns. Temporary cash investments are valued at amortized cost.
All discounts/premiums on debt securities are accreted/amortized for
financial reporting purposes over the life of the respective securities,
and are included in interest income. Market discount and premium are
accreted or amortized daily. Premiums and discounts related to certain
mortgage-backed securities are amortized or accreted in proportion to the
underlying monthly paydowns. Interest income is recorded on the accrual
basis.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income and net realized capital gains, if
any, to its shareowners. Therefore, no federal income tax provision is
required.
The amounts and characterizations of distributions to shareowners for
financial reporting purposes are determined in accordance with federal
income tax rules. Therefore, the sources of the Fund's distributions may
be shown in the accompanying financial statements as either from or in
excess of net investment income or net realized gain on investment
transactions, or from paid-in capital, depending on the type of book/tax
differences that may exist.
At June 30, 2006 the Fund had a net capital loss carryforward of
$2,562,465 of which $1,096,027 will expire in 2009, $77,493 will expire in
2010, $1,084,416 will expire in 2011 and $304,529 will expire in 2013, if
not utilized.
Utilization of these capital losses could be subject to limitations
imposed by the Internal Revenue Code.
The Fund has elected to defer approximately $1,373,275 of capital losses
recognized between November 1, 2005 and June 30, 2006 to its fiscal year
ending June 30, 2007.
38
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The tax character of current year distributions paid will be determined at
the end of the current fiscal year. The tax character of distributions
paid during the years ended June 30, 2006 and 2005 were as follows:
- --------------------------------------------------------------------------------
2006 2005
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income $32,425,051 $12,889,176
----------- -----------
Total $32,425,051 $12,889,176
=========== ===========
- --------------------------------------------------------------------------------
The following shows the components of distributable earnings on a
federal income tax basis at June 30, 2006.
- --------------------------------------------------------------------------------
2006
- --------------------------------------------------------------------------------
Undistributed ordinary income $ 2,959,707
Undistributed long-term loss (2,562,465)
Post October loss deferred (1,373,275)
Dividends payable (1,751,267)
Unrealized appreciation (18,877,191)
------------
Total $(21,604,491)
============
- --------------------------------------------------------------------------------
The difference between book basis and tax-basis unrealized appreciation is
attributable to the tax deferral of losses on wash sales and the tax
treatment of amortization.
At June 30, 2006, the Fund reclassified $4,236,769 to increase
undistributed net investment income and $4,194,196 to increase accumulated
net realized loss and $42,573 to decrease paid in capital. This
reclassification has no impact on the net assets of the Fund and presents
the Fund's capital accounts on a tax basis.
C. Fund Shares
The Fund records sales and repurchases of its shares as of trade date.
Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A.,
(UniCredito Italiano), earned $16,745 in underwriting commissions on the
sale of Class A shares during the six months ended December 31, 2006.
39
Pioneer Bond Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
D. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B, Class C, and Class R shares of the
Fund, respectively. Class Y shares are not subject to a distribution plan.
Shareowners of each class share all expenses and fees paid to the transfer
agent, Pioneer Investment Management Shareholder Services, Inc. (PIMSS),
for its services, which are allocated based on the number of accounts in
each class and the ratable allocation of related out-of-pocket expenses
(see Note 3). Income, common expenses, and realized and unrealized gains
and losses are calculated at the Fund level and allocated daily to each
class of shares based on the respective percentage of adjusted net assets
at the beginning of the day.
The Fund declares as daily dividends substantially all of its net
investment income. All dividends are paid on a monthly basis. Short-term
capital gain distributions, if any, may be declared with the daily
dividends. Distributions to shareowners are recorded as of the ex-dividend
date. Distributions paid by the Fund with respect to each class of shares
are calculated in the same manner, at the same time, and in the same
amount, except that each class of shares can bear different transfer agent
and distribution fees.
E . Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value
of the underlying securities (collateral), including accrued interest
received from the counterparties, is required to be at least equal to or
in excess of the value of the repurchase agreement at the time of
purchase. The collateral for all repurchase agreements is held in
safekeeping in the customer-only account of the Fund's custodian, or
subcustodians. The Fund's investment adviser, Pioneer Investment
Management, Inc. (PIM), is responsible for determining that the value of
the collateral remains at least equal to the repurchase price.
F. Securities Lending
The Fund lends securities in its portfolio to certain broker-dealers or
other institutional investors, with the Fund's custodian acting as the
lending agent. When entering into a loan, the Fund receives collateral,
which is maintained by the custodian and earns income in the form of
negotiated lenders' fees. The Fund also continues to
40
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
receive interest or payments in lieu of dividends on the securities
loaned. Gain or loss on the fair value of the loaned securities that may
occur during the term of the loan will be for the account of the Fund. The
loans are secured by collateral of at least 102% at all times, of the fair
value of the securities loaned. The amount of the collateral will be
adjusted daily to reflect any price fluctuation in the value of loaned
securities. The Fund has the right under the lending agreements to recover
the securities on loan from the borrower on demand. The Fund invests cash
collateral in the Securities Lending Investment Fund, which is sponsored
by Brown Brothers Harriman & Co., the Fund's custodian.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredito Italiano, manages the
Fund's portfolio. Management fees are calculated daily at the annual rate of
0.50% of the Fund's average daily net assets.
Effective November 1, 2006, PIM has agreed to limit ordinary operating expenses
to the extent required to reduce Fund expenses to 1.00%, 1.90%, 1.90% and 1.25%
of the average daily net assets attributable to Class A, Class B, Class C and
Class R shares, respectively. Class Y shares do not have an expense limitation.
These expense limitations are in effect through November 1, 2009 for Class A
shares and through November 1, 2008 for Class B, Class C and Class R shares.
PIM expects to continue its limitation of expenses unless the expense limit
agreement with the Fund is terminated pursuant to the terms of the expense
limit agreement. However, there can be no assurance that PIM will extend the
expense limitation beyond November 1, 2009 for Class A shares and November 1,
2008 for Class B, Class C and Class R shares. The Fund may terminate the
expense limitation agreement at any time; provided, however, that the Board of
Trustees would not take such action unless it determined termination of the
agreement be in the best interests of the Fund and its shareowners.
Through December 10, 2006, PIM has contractually agreed not to impose all or a
portion of its management fee and to assume other operating expenses (excluding
taxes, commissions, interest and extraordinary expenses) of the Fund to the
extent necessary to limit Investor Class expenses to 0.74% of the average daily
net assets attributable to Investor Class shares.
41
Pioneer Bond Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/06 (unaudited) (continued)
- --------------------------------------------------------------------------------
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting, and insurance
premiums, are paid by the Fund. At December 31, 2006, $41,010 was payable to
PIM related to management fees, administrative costs and certain other
services, and is included in due to affiliates.
3. Transfer Agent
PIMSS, a wholly owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowner services to the Fund at
negotiated rates. Included in due to affiliates is $189,038 in transfer agent
fees payable to PIMSS at December 31, 2006.
4. Distribution and Service Plans
The Fund adopted a Plan of Distribution with respect to each class of shares
(Class A Plan, Class B Plan, Class C Plan and Class R Plan) in accordance with
Rule 12b-1 of the Investment Company Act of 1940. Pursuant to the Class A Plan,
the Fund pays PFD a service fee of up to 0.25% of the average daily net assets
attributable to Class A shares in reimbursement of its actual expenditures to
finance activities primarily intended to result in the sale of Class A shares.
Pursuant to the Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of
the average daily net assets attributable to each class of shares. The fee
consists of a 0.25% service fee and a 0.75% distribution fee both paid as
compensation for personal services and/or account maintenance services or
distribution services with regard to Class B and Class C shares. Pursuant to
the Class R Plan, the Fund pays PFD 0.50% of the average daily net assets
attributable to Class R shares for distribution services paid as compensation
for personal services and/or account maintenance services or distribution
services. The Fund also has adopted a separate service plan for Class R shares
(Service Plan). The Service Plan authorizes the Fund to pay securities dealers,
plan administrators or other service organizations that agree to provide
certain services to retirement plans or plan participants holding shares of the
Fund a service fee of up to 0.25% of the Fund's average daily net assets
attributable to Class R shares held by such plans. Included in due to
affiliates is $12,110 in distribution fees payable to PFD at December 31, 2006.
In addition, redemptions of Class A, Class B and Class C shares may be subject
to a contingent deferred sales charge (CDSC). A CDSC of
42
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1.00% may be imposed on redemptions of certain net asset value purchases of
Class A shares within 18 months of purchase. Class B shares that are redeemed
within five years of purchase are subject to a CDSC at declining rates
beginning at 4.00%, based on the lower of cost or market value of shares being
redeemed. Redemptions of Class C shares within one year of purchase are subject
to a CDSC of 1.00%. Proceeds from the CDSCs are paid to PFD. For the six months
ended December 31, 2006, $50,898 in CDSCs were paid to PFD.
5. Expense Offset Arrangements
The Fund has entered into certain expense offset arrangements with PIMSS
resulting in a reduction in the Fund's total expenses due to interest earned on
cash held by PIMSS. For the six months ended December 31, 2006, the Fund's
expenses were reduced $7,916 under such arrangements.
6. New Pronouncements
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions have a
"more-likely-than-not" probability of being sustained by the applicable tax
authority. Tax positions deemed to not meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the reporting period in which
they are realized. Adoption of FIN 48 is required for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of the
effective date. At this time, management is evaluating the implications of FIN
48 and any impact in the financial statements has not yet been determined.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal
years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
43
Pioneer Bond Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/06 (continued)
- --------------------------------------------------------------------------------
7. Merger Information
On December 8, 2004, beneficial owners of Safeco Intermediate Term Bond Fund
(one of the series that comprised Safeco Taxable Bond Trust) approved a
proposed Agreement and Plan of Reorganization that provided for the merger
listed below. This tax-free reorganization was accomplished on December 10,
2004, by exchanging all of Safeco's net assets for Investor Class shares, based
on the Fund's Class A shares' ending net asset value. The following charts show
the details of the reorganizations as of that closing date ("Closing Date"):
- -------------------------------------------------------------------------------------------------
Safeco
Pioneer Intermediate Pioneer
Bond Fund Term Bond Fund Bond Fund
(Pre-Reorganization) (Pre-Reorganization) (Post-Reorganization)
- -------------------------------------------------------------------------------------------------
Net Assets $257,177,281 $9,260,087 $266,437,368
Shares Outstanding 27,433,514 1,085,975 28,418,629
Investor Class
Shares Issued 985,115
- -------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Unrealized
Appreciation Accumulated
on Closing Date Gain
- --------------------------------------------------------------------------------
Safeco Intermediate Term Bond Fund $176,429 $26,968
======== =======
- --------------------------------------------------------------------------------
In addition, on September 22, 2005, beneficial owners of Amsouth High Quality
Bond approved a proposed Agreement and Plan of Reorganization that provided for
the merger listed below. This tax-free reorganization was accomplished on
September 23, 2005, by exchanging all of Amsouth High Quality Bond's net assets
in Class A, Class B and Class I for Pioneer Fund's Shares, based on Pioneer
Fund's Class A, Class B and Class Y shares' ending net asset value,
respectively. The following charts show the details of the reorganizations as
of that closing date ("Closing Date"):
44
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Pioneer Amsouth Pioneer
Bond Fund High Quality Bond Bond Fund
(Pre-Reorganization) (Pre-Reorganization) (Post-Reorganization)
- -------------------------------------------------------------------------------------------------
Net Assets
Class A $178,317,842 $ 44,668,880 $222,986,722
Class B $ 58,181,919 $ 5,678,911 $ 63,860,830
Class C $ 42,851,287 $ - $ 42,851,287
Investor Class $ 4,095,750 $ - $ 4,095,750
Class R $ 1,678,306 $ - $ 1,678,306
Class I $ - $532,267,021 $
Class Y $ 27,130,385 $ - $559,397,406
Total Net Assets $312,255,489 $582,614,812 $894,870,301
Shares Outstanding
Class A 19,242,520 4,085,199 24,061,169
Class B 6,307,434 520,998 6,923,368
Class C 4,661,389 4,661,389
Investor Class 441,773 441,773
Class R 179,118 179,118
Class I 48,671,755
Class Y 2,947,361 60,802,472
Total Shares
Outstanding 33,779,595 53,277,952 97,069,289
Shares Issued
in Reorganization
Class A 4,818,649
Class B 615,934
Class Y 57,855,111
- -------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Unrealized Accumulated
Appreciation Gain on
on Closing Date Closing Date
- --------------------------------------------------------------------------------
Amsouth High Quality Bond $15,276,095 $2,768,070
=========== ==========
- --------------------------------------------------------------------------------
45
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT
- --------------------------------------------------------------------------------
The Investment Company Act of 1940 requires that both the Board of Trustees and
a majority of the Independent Trustees (collectively "the Trustees"), voting
separately, annually approve the Fund's management contract (the "Management
Contract"). The Trustees have determined that the terms of the Management
Contract are fair and reasonable and that renewal of the contract: (i) will
enable the Fund to receive quality investment advisory services at a fee deemed
reasonable; and (ii) is in the best interests of the Fund and its shareowners.
In making such determinations, the Independent Trustees relied upon the
assistance of counsel to the Independent Trustees and counsel to the Fund.
Throughout the year, the Independent Trustees regularly met in executive
session, separately from the Interested Trustees of the Fund and any officer of
Pioneer Investment Management, Inc., the Fund's adviser (the "Investment
Adviser"), or its affiliates. While the Trustees, including the Interested
Trustees, act on all major matters relating to the Fund, a significant portion
of the activities of the Board of Trustees (including certain of those
described herein) is conducted through committees, the members of which are
comprised exclusively of Independent Trustees. Such committee meetings are
attended by officers of the Fund and/or officers of the Investment Adviser to
the extent requested by the members of the committee.
In evaluating the Management Contract, the Trustees conducted a review that was
specifically focused upon the renewal of the Management Contract, and also
relied upon their knowledge, resulting from their meetings throughout the year,
of the Investment Adviser, its services and the Fund. Both in meetings
specifically dedicated to renewal of the Management Contract and at other
meetings during the course of the year, the Trustees, including the Independent
Trustees, received materials relating to the Investment Adviser's investment
and management services under the Management Contract. These materials included
information on (i) the investment performance of the Fund, a peer group of
funds as classified by Morningstar, Inc., an independent evaluation service
("Morningstar") and an index considered appropriate by the Independent Trustees
for this purpose, (ii) sales and redemption activity in respect of the Fund,
(iii) the general investment outlook in the markets in which the Fund invests,
(iv) arrangements in respect of the distribution of the Fund's shares, (v) the
procedures employed to determine the value of each of the Fund's assets, (vi)
the Investment Adviser's management of the
46
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
relationships with the Fund's unaffiliated service providers, (vii) the record
of compliance with the Fund's investment policies and restrictions and with the
Fund's Code of Ethics and the structure and responsibilities of the Investment
Adviser's compliance department and (viii) the nature, cost and character of
non-investment management services provided by the Investment Adviser and its
affiliates.
Specifically in connection with the Independent Trustees' review of the
Management Contract, the Independent Trustees requested, and the Investment
Adviser provided, additional information in order to evaluate the quality of
the Investment Adviser's services and the reasonableness of the fee under the
Management Contract. Among other items, this information included data or
analyses of (1) investment performance for one, three, five and ten year
periods for the Fund and a peer group of funds selected on the basis of
criteria considered appropriate by the Independent Trustees for this purpose,
(2) management and other fees incurred by a peer group of funds selected on the
basis of criteria considered appropriate by the Independent Trustees for this
purpose, (3) the advisory fees of comparable portfolios of other clients of the
Investment Adviser, (4) expense ratios for the Fund and a peer group of funds
selected on the basis of criteria considered appropriate by the Independent
Trustees for this purpose, (5) the overall organization of the Investment
Adviser, (6) the Investment Adviser's financial results and condition,
including its and certain of its affiliates' profitability in providing
services to the Fund, (7) transfer agency fees and administrative
reimbursements paid to the Investment Adviser or affiliates, (8) investment
management staffing, and (9) operating expenses paid by the Funds to third
parties. The Trustees also reviewed information regarding the potential for
each of the Fund and the Investment Adviser to benefit from further economies
of scale in the management of the Fund in light of reasonable growth
expectations for the Fund and certain of the Fund's expenses that are incurred
on a basis other than as a percentage of net assets.
The following summarizes factors considered by the Trustees in connection with
reviewing the information described above and their renewal of the Fund's
Management Contract. The Trustees did not identify any single factor as
all-important or controlling, and the summary does not detail all the matters
that were considered.
47
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
A. Ancillary Benefits to Shareowners. The Trustees considered the benefits to
shareowners of investing in a Fund that is part of a large number of
investment companies offering a variety of investment disciplines and
providing for a large variety of Fund and shareholder services.
B. Compliance and Investment Performance. The Trustees determined that the
Investment Adviser had policies and systems reasonably designed to achieve
compliance with the Fund's investment objectives and regulatory
requirements. The Trustees also reviewed the Fund's absolute investment
performance based upon total return, as well as the Fund's performance
relative to the performance of both a peer group considered appropriate by
the Independent Trustees for this purpose and the Lehman Brothers
Aggregate Bond Index. The Fund's performance, based upon total return, was
in the fourth quintile of its Morningstar category peer group for the 12
months ended June 30, 2006, the first quintile of the peer group for the
three years ended June 30, 2006, the first quintile for the five years
ended June 30, 2006 and the second quintile for the ten year period ended
June 30, 2006. (In all quintile rankings referred to throughout this
discussion first quintile is most favorable to the Fund's shareowners.
Thus, highest relative performance would be first quintile and lowest
relative expenses also would be first quintile.) The Trustees also
considered the yield of the Fund, before deduction of expenses, compared
to the yield of the index . The Trustees, focusing on the three-year total
returns, concluded that the performance of the Fund was strong.
C. The Investment Adviser's Personnel and Methods. The Trustees reviewed the
background of members of the team responsible for the daily management of
the Fund and the Fund's investment objective and discipline. The
Independent Trustees also have had discussions with senior management of
the Investment Adviser responsible for investment operations and the
senior management of the Investment Adviser's fixed income group. Among
other things, the Trustees considered the size, education and experience
of the Investment Adviser's investment staff and their use of technology
and emphasis on analytics in view of the risk profile of securities in
which the Fund invests. The Trustees concluded that the Investment Adviser
had the quality and depth of personnel
48
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
and the well-developed methods essential to performing its duties under
the Management Contract.
D. Nature and Quality of Other Services. The Trustees considered the nature,
quality and extent of other services provided to shareowners of the Fund,
including administrative and shareowner services performed by the
Investment Adviser under the Management Contract. The Trustees also
considered the reasonableness of the arrangements for reimbursement of the
Investment Adviser's out-of-pocket costs and expenses, including overhead,
for certain administrative services that the Investment Adviser is not
required to provide under the Management Contract. The Trustees also
considered the nature and extent of the other services provided by the
Investment Adviser or its affiliates under other contracts, as well as the
Investment Adviser's supervision of third party service providers. Based
on these considerations, the Trustees concluded that the nature, quality
and extent of such services are satisfactory and reliable and serve the
shareowners of the Fund well.
E. Management Fee and Expenses. The Trustees considered the Investment
Adviser's fee under the Management Contract relative to the management
fees charged by its Morningstar category peer group. The Fund's management
fee for the 12 months ended June 30, 2006 was in the third quintile
relative to the management fees paid by the other funds in that peer group
for the comparable period. The Trustees also considered the Fund's expense
ratio for the 12 months ended June 30, 2006 and expense ratios for the
comparable period of the peer group of funds selected on the basis of
criteria considered appropriate by the Independent Trustees for this
purpose using data provided by Strategic Insight Mutual Fund Research and
Consulting, LLC, an independent third party. The Trustees found the Fund's
expense ratio for the 12 months ended June 30, 2006 (after giving effect
to the expense limitation) to be in the fourth quintile, according to data
for the applicable peer group for the most recent fiscal year.
F. Profitability. The Trustees considered the level of the Investment
Adviser's profits with respect to the management of the Pioneer Funds,
including a review of the Investment Adviser's methodology in allocating
certain of its costs to the management of each Fund, as well as the
financial results realized by the Investment Adviser in connection with
the operation of the Fund. They further considered
49
Pioneer Bond Fund
- --------------------------------------------------------------------------------
FACTORS CONSIDERED BY THE INDEPENDENT TRUSTEES IN
APPROVING THE MANAGEMENT CONTRACT (continued)
- --------------------------------------------------------------------------------
the profits realized by the Investment Adviser and its affiliates from
non-fund businesses that may benefit from or be related to the Fund's
business. The Trustees considered the Investment Adviser's profit margins
in comparison with the limited industry data available. The Trustees
concluded that the Investment Adviser's profits from management of the
Pioneer Funds, including the financial results derived from the Fund, bear
a reasonable relationship to the services rendered and are fair for the
management of the Fund.
G. Economies of Scale. The Trustees considered the economies of scale with
respect to the management of the Fund, whether the Fund had appropriately
benefited from any economies of scale, and whether there was potential for
realization of any further economies of scale. Because the fund's
management fee would remain in the third quintile of comparable funds
within reasonable anticipated growth of the Fund, the Trustees concluded
that break points were not needed at this time. As assets increase, the
Trustees will continue to evaluate the appropriateness of break points.
H. Other Benefits to the Investment Adviser. The Trustees also considered the
character and amount of fees paid by the Fund, other than under the
Management Contract, for services provided by the Investment Adviser and
affiliates, including fees for services such as shareowner services. The
Trustees also considered the receipt of sales loads and payments under
Rule 12b-1 plans in respect to the Pioneer Funds (including the Fund), and
benefits to the Investment Adviser from the use of "soft" commission
dollars to pay for research services. The Trustees further considered the
revenues and profitability of the Investment Adviser's businesses other
than the fund business, including the Investment Adviser's institutional
investment advisory business. The Trustees considered the intangible
benefits that accrue to the Investment Adviser and its affiliates by
virtue of its relationship with the Fund and the Pioneer Funds as a group.
The Trustees concluded that all these types of benefits accruing to the
Investment Adviser were reasonable in the context of the overall
relationship between the Investment Adviser and the Fund.
50
Pioneer Bond Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Conclusion. In light of the Investment Adviser's overall performance, the
Trustees considered it appropriate to continue to retain the management
services of the Investment Adviser. Based on their review of the overall nature
and quality of services provided by the Investment Adviser and the fees charged
by other funds in the Fund's relevant peer group, and taking into account all
material factors deemed relevant by the Trustees as well as the advice of
independent counsel, the Trustees concluded that the Management Contract with
the Fund, including the fee payable thereunder, was fair and reasonable and
that its renewal was in the best interests of the Fund and its shareowners.
Accordingly, the Trustees voted to approve the continuation of the Management
Contract for another year.
51
Pioneer Bond Fund
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees
John F. Cogan, Jr., Chairman
David R. Bock
Mary K. Bush
Margaret B.W. Graham
Osbert M. Hood*
Marguerite A. Piret
John Winthrop
Officers
John F. Cogan, Jr., President
Osbert M. Hood, Executive
Vice President*
Vincent Nave, Treasurer
Dorothy E. Bourassa, Secretary
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Wilmer Cutler Pickering Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
* Mr. Hood resigned as Trustee and EVP effective January 9, 2007.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 is publicly available to
shareowners at www.pioneerinvestments.com. This information is also available
on the Securities and Exchange Commission's web site at http://www.sec.gov.
52
- --------------------------------------------------------------------------------
HOW TO CONTACT PIONEER
- --------------------------------------------------------------------------------
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
PIMSS, Inc.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@pioneerinvestments.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerinvestments.com
Before investing consider the Fund's investment objectives, risks, charges and
expenses. Contact your advisor or Pioneer Investments for a prospectus
containing this information. Read it carefully.
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
web site at http://www.sec.gov. The filed form may also be viewed and copied at
the Commission's Public Reference Room in Washington, DC. Information regarding
the operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 10(a), a copy of its code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, as an exhibit to its annual
report on this Form N-CSR;
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
n/a
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
n/a
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
n/a
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
n/a
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
- ---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
- ---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
- ---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
- ---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
- ----------------------- --------------------------- -----------------------------------------------
- ------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
- ------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
- ----------------------- --------------------------- -----------------------------------------------
- --------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
- ------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
- ----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
- ----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
- ----------------------- ------------------------- -----------------------------------------------
- ------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
- ------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
- ------------------------------------------- ------------------------------
- --------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
- --------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
n/a
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrant's accountant
for services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
n/a
(h) Disclose whether the registrant's audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees has
considered whether the provision of non-audit services that
were rendered to the Affiliates (as defined) that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01
of Regulation S-X is compatible with maintaining the
principal accountant's independence.
Item 5. Audit Committee of Listed Registrants
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrants audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
Item 6. Schedule of Investments.
File Schedule I Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.12-
12 of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrants portfolio (Portfolio Manager). Also state each Portfolio
Managers business experience during the past 5 years.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrants equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781). Instruction to paragraph (a). Disclose
all purchases covered by this Item, including purchases that do not
satisfy the conditions of the safe harbor of Rule 10b-18 under the
Exchange Act (17 CFR 240.10b-18), made in the period covered by the
report. Provide disclosures covering repurchases made on a monthly basis.
For example, if the reporting period began on January 16 and ended on
July 15, the chart would show repurchases for the months from January 16
through February 15, February 16 through March 15, March 16 through
April 15, April 16 through May 15, May 16 through June 15, and June 16
through July 15.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrants board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G)
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrants board of
directors since the registrant last provided disclosure in response
to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14(A) in
its definitive proxy statement, or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, about the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR
270.30a-2(c))) based on their evaluation of these controls and procedures as of
a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph.
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on their evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose whether or not there were significant changes in the registrant's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2).
Filed herewith.
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Pioneer Bond Fund
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr, President
Date March 1, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John F. Cogan, Jr.
John F. Cogan, Jr., President
Date March 1, 2007
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date March 1, 2007
* Print the name and title of each signing officer under his or her signature.