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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: June 30, 2004 through December 31, 2004
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
12/31/04
[LOGO] PIONEER
Investments(R)
Table of Contents
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Letter to Shareowners 1
Portfolio Summary 2
Performance Update 3
Comparing Ongoing Fund Expenses 9
Portfolio Management Discussion 11
Schedule of Investments 14
Financial Statements 33
Notes to Financial Statements 43
Trustees, Officers and Service Providers 49
Retirement Plans from Pioneer 50
Pioneer Bond Fund
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LETTER TO SHAREOWNERS 12/31/04
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Dear Shareowner,
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After three calendar quarters of listless performance, U.S. equity markets
improved strongly late in the year. Anxiety over energy prices, international
tensions and the falling American dollar had held the markets back, but
uneasiness about the presidential election was the principal source of investor
hesitation. The election went smoothly, the result was decisive, and the ensuing
rally pushed major indices into the black for the second year running. However,
returns trailed 2003's levels. Small capitalization companies outperformed large
cap issues for the sixth consecutive year. Markets overseas were generally
buoyant: commodity-rich nations saw surging demand for copper, gold, lumber and
other materials, with much of their output destined to feed China's vast
economic appetite.
Bond investors focused on longer-term issues. Reflecting the risk aversion that
favored small cap stocks, high-yield bonds were the strongest performers, while
higher quality issues, including U.S. Treasury issues, scored more modest gains.
Municipal bond returns were generally favorable as well; economic growth spurred
rising tax revenues, putting many issuers into surplus for the first time in
years.
A measured pace of growth seems in store for the U.S. economy, which generated
2.2 million jobs after years of employment declines. By the end of September,
the economy had tallied twelve straight up quarters and the nation's annualized
growth rate stood at a respectable four percent. We believe this rate of
expansion is enough to sustain growth without provoking the Federal Reserve
Board into aggressive interest rate hikes aimed at calming inflation.
Welcome to former Safeco fund shareholders
With this report, we also would like to acknowledge the investors in former
Safeco mutual funds who now are shareholders of Pioneer funds. We would like to
welcome you again to the Pioneer fund family and assure you of our commitment to
provide the highest quality portfolio management and personal service. Pioneer
has emerged as a growing presence in the ranks of major U.S. management firms.
As a shareholder in a Pioneer mutual fund, you have significantly more
investment options available to you. A conversation with your investment
professional will help you understand how these new funds may enhance your
portfolio diversification and fit in with your long-range goals. Or, feel free
to call Pioneer directly at 1-800-225-6292 for assistance.
Please consider a fund's investment objective, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about each fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, contact your
financial advisor, call 1-800-225-6292 or visit our web site at
www.pioneerfunds.com.
Respectfully,
/s/ OSBERT M. HOOD
Osbert M. Hood
President
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 this 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.
1
Pioneer Bond Fund
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PORTFOLIO SUMMARY 12/31/04
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Portfolio Composition
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(As a percentage of total investment portfolio)
[DATA BELOW IS REPRESENTED BY A PIE CHART IN THE ORIGINAL REPORT]
U.S. Government Securities 56.5%
U.S. Corporate Bonds 35.1%
Temporary Cash Investment 4.4%
Asset Backed Securities 2.2%
Collateralized Mortgage Obligations 1.0%
Municiapl Bonds 0.8%
Portfolio Quality
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(As a percentage of holdings)
[DATA BELOW IS REPRESENTED BY A PIE CHART IN THE ORIGINAL REPORT]
Treasury/Agency 57.6%
AA 0.7%
A 3.3%
BBB 22.3%
BB 10.2%
B & Lower 3.6%
Commercial Paper 2.3%
10 Largest Holdings
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(As a percentage of long-term holdings)*
1. Government National Mortgage Association II, 6.0%, 11/20/33 4.36%
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2. US Treasury Notes, 5.375%, 2/15/31 3.02
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3. Federal Home Loan Mortgage Corp., 5/1/34 2.52
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4. Federal National Mortgage Association, 5.5%, 9/1/19 1.82
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5. Government National Mortgage Association, 5.5%, 7/15/34 1.50
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6. Federal National Mortgage Association, 6.0%, 4/1/33 1.24
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7. Federal National Mortgage Association, 6.0%, 7/1/33 1.18
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8. Thomas & Betts Corp., 7.25%, 6/1/13 1.16
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9. Federal Home Loan Mortgage Corp., 6.0%, 8/1/34 1.14
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10. Federal Home Loan Mortgage Corp., 6.0%, 3/1/33 1.12
- --------------------------------------------------------------------------------
* This list excludes temporary cash and derivative instruments. Portfolio
holdings will vary for other periods.
2
Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/04 CLASS A SHARES
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Share Prices and Distributions
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Net Asset Value
per Share 12/31/04 6/30/04
$9.38 $9.18
Distributions per Share Net Investment Short-Term Long-Term
(7/1/04 - 12/31/04) Income Capital Gains Capital Gains
$0.2485 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
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.
- ------------------------------------------
Average Annual Total Returns
(as of December 31, 2004)
Net Asset Public Offering
Period Value Price (POP)
10 Years 7.18% 6.69%
5 Years 7.86 6.86
1 Year 5.71 0.95
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Value of $10,000 Investment
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Lehman Brothers
Bond Fund Aggregate Bond Index
12/94 $9,550 $10,000
$11,286 $11,847
12/96 $11,507 $12,278
$12,562 $13,463
12/98 $13,528 $14,632
$13,095 $14,512
12/00 $14,201 $16,199
$15,272 $17,567
12/02 $16,611 $19,369
$18,082 $20,164
12/04 $19,114 $21,038
Call 1-800-225-6292 or visit www.pioneerfunds.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.
POP returns reflect deduction of maximum 5.75% 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 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 measure of the U.S. bond market.
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 the Indexes.
3
Pioneer Bond Fund
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PERFORMANCE UPDATE 12/31/04 CLASS B SHARES
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Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/04 6/30/04
$9.34 $9.14
Distributions per Share Net Investment Short-Term Long-Term
(7/1/04 - 12/31/04) Income Capital Gains Capital Gains
$0.2084 $ - $ -
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, 2004)
If If
Period Held Redeemed
10 Years 6.30% 6.30%
5 Years 6.93 6.93
1 Year 4.82 0.82
- ------------------------------------
Value of $10,000 Investment
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Lehman Brothers
Bond Fund Aggregate Bond Index
12/94 $10,000 $10,000
$11,310 $11,847
12/96 $11,540 $12,278
$12,533 $13,463
12/98 $13,507 $14,632
$13,081 $14,512
12/00 $14,142 $16,199
$15,110 $17,567
12/02 $16,286 $19,369
$17,581 $20,164
12/04 $18,428 $21,038
Call 1-800-225-6292 or visit www.pioneerfunds.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 redeemed" returns reflect the deduction of applicable contingent deferred
sales charge (CSDC). 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.pioneerfunds.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 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 measure of the U.S. bond market.
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 the Indexes.
4
Pioneer Bond Fund
================================================================================
PERFORMANCE UPDATE 12/31/04 CLASS C SHARES
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Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/04 6/30/04
$9.31 $9.11
Distributions per Share Net Investment Short-Term Long-Term
(7/1/04 - 12/31/04) Income Capital Gains Capital Gains
$0.2113 $ - $ -
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, 2004)
If If
Period Held Redeemed
Life-of-Class
(1/31/96) 5.09% 5.09%
5 Years 6.85 6.85
1 Year 4.91 4.91
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Value of $10,000 Investment
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Lehman Brothers
Bond Fund Aggregate Bond Index
1/96 $10,000 $10,000
$9,985 $10,295
$10,904 $11,289
12/98 $11,653 $12,269
$11,179 $12,168
12/00 $12,023 $13,583
$12,789 $14,730
12/02 $13,771 $16,241
$14,841 $16,907
12/04 $15,570 $17,640
Call 1-800-225-6292 or visit www.pioneerfunds.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. 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 measure of the U.S. bond market.
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 the Indexes.
5
Pioneer Bond Fund
================================================================================
PERFORMANCE UPDATE 12/31/04 CLASS R SHARES
================================================================================
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/04 6/30/04
$9.48 $9.28
Distributions per Share Net Investment Short-Term Long-Term
(7/1/04 - 12/31/04) Income Capital Gains Capital Gains
$0.2342 $ - $ -
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, 2004)
If If
Period Held Redeemed
10 Years 6.83% 6.83%
5 Years 7.71 7.71
1 Year 5.62 5.62
- -----------------------------------
Value of $10,000 Investment
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Lehman Brothers
Bond Fund Aggregate Bond Index
12/94 $10,000 $10,000
$11,754 $11,847
12/96 $11,922 $12,278
$12,948 $13,463
12/98 $13,881 $14,632
$13,358 $14,512
12/00 $14,422 $16,199
$15,429 $17,567
12/02 $16,698 $19,369
$18,338 $20,164
12/04 $19,370 $21,038
Call 1-800-225-6292 or visit www.pioneerfunds.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 4/1/03 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, which performance may be influenced by the smaller asset
size of Class R shares compared to Class A shares. 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 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, which performance may be influenced by the smaller
asset size of Class R shares compared to Class A shares.
The Lehman Brothers Aggregate Bond Index is a measure of the U.S. bond market.
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 the Indexes.
6
Pioneer Bond Fund
================================================================================
PERFORMANCE UPDATE 12/31/04 CLASS Y SHARES
================================================================================
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/04 6/30/04
$9.32 $9.12
Distributions per Share Net Investment Short-Term Long-Term
(7/1/04 - 12/31/04) Income Capital Gains Capital Gains
$0.2715 $ - $ -
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, 2004)
If If
Period Held Redeemed
10 Years 7.34% 7.34%
5 Years 8.18 8.18
1 Year 6.35 6.35
- ------------------------------------
Value of $10,000 Investment
[DATA BELOW IS REPRESENTED BY A MOUNTAIN CHART IN THE ORIGINAL REPORT]
Pioneer Lehman Brothers
Bond Fund Aggregate Bond Index
12/94 $10,000 $10,000
$11,816 $11,847
12/96 $12,047 $12,278
$13,151 $13,463
12/98 $14,162 $14,632
$13,709 $14,512
12/00 $14,868 $16,199
$16,006 $17,567
12/02 $17,476 $19,369
$19,103 $20,164
12/04 $20,315 $21,038
Call 1-800-225-6292 or visit www.pioneerfunds.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 Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect differences
in expenses, including the Rule 12b-1 fees applicable to A shares. Since fees
for A shares are generally higher than those of Y shares, the performance shown
for Y shares prior to their inception would have been higher. Class A shares are
used as a proxy from 10/31/78 to 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 measure of the U.S. bond market.
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 the Indexes.
7
Pioneer Bond Fund
================================================================================
PERFORMANCE UPDATE 12/31/04 INVESTOR CLASS SHARES
================================================================================
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 12/31/04 12/11/04
$9.39 $9.40
Distributions per Share Net Investment Short-Term Long-Term
(12/11/04 - 12/31/04) Income Capital Gains Capital Gains
$0.0277 $ - $ -
Investment Returns
- --------------------------------------------------------------------------------
-----------------------------------
Average Annual Total Returns
(as of December 31, 2004)
If If
Period Held Redeemed
Life of Fund
12/11/04 0.19% 0.19%
-----------------------------------
Call 1-800-225-6292 or visit www.pioneerfunds.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.
Certain Pioneer funds (the "Funds") issued Investor Class shares in connection
with the reorganization of Safeco mutual funds. The Funds are not offering
additional Investor Class shares except in connection with the reinvestment of
dividends on the Funds' outstanding Investor Class shares. All Investor Class
shares of the Funds, whenever issued, convert to Class A shares of their
respective Funds on December 10, 2006. Investor Class shares are not subject to
sales charges.
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 does not reflect the deduction of fees and taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
8
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 [divide] $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, 2004 through December 31, 2004
Investor
Share Class A B C R Y Class
- ------------------------------------------------------------------------------------------------
Beginning Account Value
On 7/1/04** $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value
(after expenses) On
12/31/04 $1,049.20 $1,045.00 $1,045.40 $1,047.10 $1,052.20 $1,001.90
Expenses Paid
During Period* $ 5.68 $ 10.31 $ 10.05 $ 7.33 $ 3.10 $ 0.45
* Expenses are equal to the Fund's annualized expense ratio of 1.10%, 2.00%,
1.95%, 1.42%, 0.60% and 0.87%, for Class A, Class B, Class C, Class R,
Class Y, and Investor Class shares, respectively, multiplied by the average
account value over the period, multiplied by 184/365 (to reflect the
one-half year period) 21/366 for Investor Class shares.
** 12/11/04 for Investor Class shares.
9
Pioneer Bond Fund
================================================================================
================================================================================
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).. 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, 2004 through December 31, 2004
Investor
Share Class A B C R Y Class
- -----------------------------------------------------------------------------------------------
Beginning Account Value
On 7/1/04 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value
(after expenses) On
12/31/04 $1,019.66 $1,015.12 $1,015.38 $1,018.05 $1,022.18 $1,002.15
Expenses Paid
During Period* $ 5.60 $ 10.16 $ 9.91 $ 7.22 $ 3.06 $ 0.45
* Expenses are equal to the Fund's annualized expense ratio of 1.10%, 2.00%,
1.95%, 1.42%, 0.60%, and 0.87%, for Class A, Class B, Class C, Class R,
Class Y, and Investor Class shares, respectively, multiplied by the average
account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
10
Pioneer Bond Fund
================================================================================
PORTFOLIO MANAGEMENT DISCUSSION 12/31/04
================================================================================
As the domestic economy showed evidence of a sustained recovery during the
second half of 2004, the U.S. Federal Reserve continued to raise short-term
interest rates gradually to contain the risk of inflation and keep the economy
in check. The fixed-income market reacted favorably to the Fed's series of
measured increases in the Fed funds rate, with the yields of longer-term
Treasuries actually declining modestly. Meanwhile corporate bonds and mortgages
continued to outperform Treasuries as investors sought out higher-yielding
investments in an environment of low, by historical standards, interest rates.
In the following discussion, Kenneth J. Taubes discusses the factors that
influenced Pioneer Bond Fund's performance during the six months. Mr. Taubes,
Director of Pioneer's Fixed Income Group, oversees the team responsible for
daily management of the Fund.
Q: How did the Fund perform during six months ended December 31, 2004?
A: Pioneer Bond Fund performed well, outpacing its benchmark as well as the
competitive funds average. For the six-month period, the Fund's Class A
shares returned 4.92%, at net asset value. During the same six months, the
Lehman Brothers Aggregate Bond Index returned 4.18%, while the average total
return of the 224 funds in Lipper's Corporate Debt A-Rated Bond Fund category
was also 4.18%. On December 31, 2004, the standardized 30-day SEC Yield on
Class A shares was 4.00%.
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 factors affected Fund performance?
A: During a period in which investors sought out yield, the Fund held to its
emphasis on sectors with yield advantages over Treasuries, corporate bonds
and mortgage-backed securities. Both corporate bonds and mortgage securities
outperformed Treasuries, with high-yield corporate securities turning in the
best performance of all sectors of the domestic bond market. Despite rising
short-term rates, the yields of longer maturity Treasuries were relatively
stable, and investors sought out securities with yield advantages
11
Pioneer Bond Fund
================================================================================
PORTFOLIO MANAGEMENT DISCUSSION 12/31/04 (continued)
================================================================================
over Treasuries. Against a backdrop of a strengthening economy, corporations
generated additional cash flow, which improved the overall credit quality of
corporate securities and further encouraged investments in both high-yield
and investment-grade corporate debt.
Our emphasis on high-yield and investment-grade corporate bonds as well as
mortgage securities helped support Fund performance throughout the six
months. At the end of the six-month period, about 55% of assets were invested
in mortgage securities and about 40% were invested in corporate debt,
including almost 15% high-yield bonds. We reduced our high-yield positions
slightly in the final quarter of the year. As we did so, we increased our
investments in mortgages, which offered yields competitive with
investment-grade corporates but with higher quality. Overall average credit
quality of the portfolio was raised slightly during the period from A to A+.
Less significant but also helpful was our decision to keep the Fund's
sensitivity to interest-rate changes -- as measured by duration -- either
neutral or slightly longer than the benchmark Lehman Brothers Aggregate Bond
Index. In an environment of stable to slightly-declining market interest
rates, this strategy tended to benefit performance. On December 31, 2004, the
Fund's average effective duration was a somewhat shorter 3.99 years.
Q: What were some of the individual holdings that most influenced portfolio
performance?
A: Among the high-yield holdings that helped performance were the bonds of two
steel companies: International Steel, which we sold to take profits before
the period ended, and ISPAT Inland ULC, which were upgraded in credit rating
after the company was acquired by a Dutch corporation. Other bonds which
appreciated strongly in price were those of financial service corporates
Allmerica Financial, E-Trade and Odyssey Re.
Detracting from results were insurance company Provident, whose bond prices
slipped amid controversy over the New York attorney general's investigation
of industry practices, Toys "R" Us, which announced restructuring plans, and
Intelsat, a satellite company that withdrew plans for an initial public stock
offering.
12
Pioneer Bond Fund
================================================================================
================================================================================
Q: What is your investment outlook?
A: We anticipate that the Federal Reserve will continue to raise the Fed funds
rate at a gradual pace during 2005. The fixed-income market already has
anticipated, in current bond prices, a series of further increases that would
bring the Fed funds rate from 2.25% to near 3.5% by the end of the year. We
believe the market rates of longer-term and intermediate-term securities
already are close to being fairly valued. As a result, we anticipate that the
yield curve -- which measures the relationship between short-term and
longer-term interest rates -- likely will flatten during the year as
short-term rates move up.
In general, valuations of corporate securities appear relatively high by
historical standards, but they probably are justified given the strong
economic fundamentals both in the United States and throughout the globe.
Strengthening economies are now helping companies across all sectors,
resulting in improved cash flows and corporate profits. In this environment,
we think corporate bonds should perform well, consistent with their yield
advantage over Treasuries. As a result, we will continue to look for
opportunities in the corporate sector. However, we expect to also put greater
emphasis on mortgage securities, which offer virtually the same yields as
investment-grade corporate debt but have the advantage of higher credit
ratings.
Investments in high yield or lower-rated securities are subject to
greater-than-average 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. 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. Investments in the Fund are subject to possible loss due to the
financial failure of underlying securities and their inability to meet their
debt obligations.
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 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.
13
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
ASSET BACKED SECURITIES - 2.3%
Diversified Financials - 1.2%
Consumer Finance - 0.0%
31,958 AAA/Aaa Americredit Automobile Receivables Trust,
Floating Rate Note, 12/12/07 $ 31,978
----------
Diversified Financial Services - 1.2%
1,864,000 BBB-/Baa2 PF Export Receivable Master Trust, 6.436%,
6/1/15 (144A) $1,852,648
1,387,018 BBB/Baa2 Power Receivables Finance, 6.29%,
1/1/12 (144A) 1,459,767
----------
$3,312,415
----------
Specialized Finance - 0.0%
90,000 AAA/Aaa MBNA Credit Card Master Note, Floating Rate
Note, 12/15/08 $ 90,123
----------
Total Diversified Financials $3,434,516
----------
Utilities - 1.0%
Electric Utilities - 1.0%
1,700,000 BBB-/Baa3 Empresa Electric Guacolda, 8.625%,
4/30/13 (144A) $1,941,407
662,200 BB-/Ba2 FPL Energy Wind Funding, 6.876%,
6/27/17 (144A) 682,894
----------
$2,624,301
----------
Total Utilities $2,624,301
----------
TOTAL ASSET BACKED SECURITIES
(Cost $5,755,014) $6,058,817
----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.0%
Diversified Financials - 1.0%
Consumer Finance - 0.0%
7,110 AAA/Aaa Asset Securitization Corp., Floating Rate Note,
1/13/30 $ 7,132
----------
Diversified Financial Services - 1.0%
2,175,000 BBB-/Baa3 Tower 2004-1A E, 5.395%, 1/15/34 $2,170,959
525,000 BB/NR Tower 2004-2A F, 6.376%, 12/15/14 522,375
----------
Total Diversified Financials $2,693,334
----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $2,707,371) $2,700,466
----------
The accompanying notes are an integral part of these financial statements.
14
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
CORPORATE BONDS - 35.6%
Energy - 1.6%
Integrated Oil & Gas - 0.0%
45,000 BBB/Baa2 Petro-Canada, 4.0%, 7/15/13 $ 42,153
25,000 BBB+/Baa1 USX Corp., 6.85%, 3/1/08 27,200
----------
$ 69,353
----------
Oil & Gas Exploration & Production - 0.8%
75,000 BBB-/Baa1 Pemex Project Funding Master, 9.125%,
10/13/10 $ 89,925
2,000,000 BBB-/NR Gazprom International SA.,
7.201%, 2/1/20 (144A) 2,115,000
----------
$2,204,925
----------
Oil & Gas Refining Marketing & Transportation - 0.8%
65,000 BBB+/Baa1 Kinder Morgan Energy Partners,
6.75%, 3/15/11 $ 72,568
1,750,000 BBB/Ba1 Magellan Midstream Partners, L.P.,
6.45%, 6/1/14 1,892,462
----------
$1,965,030
----------
Total Energy $4,239,308
----------
Materials - 4.9%
Commodity Chemicals - 1.1%
1,100,000 BBB-/Ba1 Methanex Corp., 8.75%, 8/15/12 $1,284,250
1,500,000 BB+/Ba2 Nova Chemicals, Ltd., 6.5%, 1/15/12 1,590,000
----------
$2,874,250
----------
Diversified Metals & Mining - 1.1%
2,575,000 BBB/Ba1 Kennametal, Inc., 7.2%, 6/15/12 $2,861,430
----------
Fertilizers & Agricultural Chemicals - 0.0%
45,000 BBB+/Baa2 Potash Corp. Saskatchewan, 4.875%, 3/1/13 $ 45,232
----------
Forest Products - 0.0%
17,000 BBB/Baa2 Weyerhaeuser Co., 5.5%, 3/15/05 $ 17,078
----------
Metal & Glass Containers - 0.8%
2,000,000 B+/B1 Greif Brothers Corp., 8.875%, 8/1/12 $2,225,000
----------
Paper Packaging - 0.4%
1,125,000 BB-/Ba3 Abitibi-Consolidated, Inc., 6.95%, 12/15/06 $1,167,188
----------
Paper Products - 0.5%
1,300,000 BB/Ba3 Bowater Canada Finance, 7.95%, 11/15/11 $1,400,845
----------
The accompanying notes are an integral part of these financial statements.
15
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Specialty Chemicals - 0.4%
600,000 BB+/Baa3 Ferro Corp., 7.625%, 5/1/13 $ 620,585
500,000 BB+/Baa3 Ferro Corp., 7.125%, 4/1/28 495,720
-----------
$ 1,116,305
-----------
Steel - 0.6%
1,400,000 BBB/B3 Ispat Inland ULC, Floating Rate Note, 4/1/10 $ 1,522,500
-----------
Total Materials $13,229,828
-----------
Capital Goods - 3.2%
Aerospace & Defense - 0.1%
40,000 A/A3 Boeing Co., 5.125%, 2/15/13 $ 41,379
120,000 A/A2 Honeywell International, 7.5%, 3/1/10 138,641
-----------
$ 180,020
-----------
Construction & Engineering - 0.4%
970,000 B+/Ba3 Shaw Group, Inc., 10.75%, 3/15/10 (b) $ 1,069,425
-----------
Electrical Component & Equipment - 1.1%
2,750,000 BBB-/Ba1 Thomas & Betts Corp., 7.25%, 6/1/13 $ 3,016,525
-----------
Industrial Machinery - 1.6%
1,950,000 B/B3 JLG Industries, Inc., 8.375%, 6/15/12 (b) $ 2,086,500
2,000,000 B+/Ba2 Sun Sage BV, 8.25%, 3/26/09 (144A) 2,100,000
-----------
$ 4,186,500
-----------
Total Capital Goods $ 8,452,470
-----------
Commercial Services & Supplies - 0.2%
Diversified Commercial Services - 0.2%
500,000 BBB+/Baa1 Deluxe Corp., 3.5%, 10/1/07 (144A) $ 493,561
-----------
Total Commercial Services & Supplies $ 493,561
-----------
Transportation - 0.6%
Airlines - 0.6%
1,548,465 A+/A2 Southwest Airlines Co., 7.67%, 1/2/14 $ 1,722,233
-----------
Total Transportation $ 1,722,233
-----------
Automobiles & Components - 0.4%
Auto Parts & Equipment - 0.1%
150,000 BBB-/Baa3 Lear Corp., 7.96%, 5/15/05 (144A) $ 152,395
-----------
The accompanying notes are an integral part of these financial statements.
16
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Automobile Manufacturers - 0.3%
130,000 BBB-/Baa1 Ford Motor Co., 7.25%, 10/1/08 $ 139,451
500,000 BBB-/Baa1 General Motors Capital Corp., 7.5%, 7/15/05 510,300
150,000 BBB-/Baa1 GMAC, 6.125%, 9/15/06 153,777
----------
$ 803,528
----------
Total Automobiles & Components $ 955,923
----------
Consumer Durables & Apparel - 0.0%
Housewares & Specialties - 0.0%
55,000 BBB+/Baa2 Newell Rubbermaid, Inc., 4.625%, 12/15/09 $ 55,519
----------
Total Consumer Durables & Apparel $ 55,519
----------
Media - 1.1%
Broadcasting & Cable Television - 1.1%
135,000 BBB/Baa3 Comcast Corp., 5.3%, 1/15/14 $ 139,227
2,500,000 BB+/Ba3 Rogers Cable, Inc., 7.875%, 5/1/12 2,737,500
----------
$2,876,727
----------
Movies & Entertainment - 0.0%
45,000 BBB+/Baa1 Time Warner, Inc., 6.75%, 4/15/11 $ 50,619
----------
Total Media $2,927,346
----------
Retailing - 0.9%
Department Stores - 0.0%
25,000 A-/Baa1 Nordstrom, Inc., 5.625%, 1/15/09 $ 26,458
----------
Specialty Stores - 0.9%
1,825,000 BB/Ba2 Toys "R" Us, 7.875%, 4/15/13 (b) $1,811,313
580,000 BB/Ba2 Toys "R" Us, 7.375%, 10/15/18 536,500
----------
$2,347,813
----------
Total Retailing $2,374,271
----------
Food & Drug Retailing - 0.4%
Hypermarkets & Supercenters - 0.4%
1,000,000 AA/Aa2 Wal-Mart Stores, Inc., 8.62%, 1/1/10 $1,088,120
----------
Total Food & Drug Retailing 1,088,120
----------
Food, Beverage & Tobacco - 0.6%
Brewers - 0.0%
55,000 BBB+/Baa1 Miller Brewing Co., 5.5%, 8/15/13 (144A) $ 57,489
----------
Packaged Foods & Meats - 0.1%
55,000 A+/A1 Unilever Capital Corp., 7.125%, 11/1/10 $ 63,262
----------
The accompanying notes are an integral part of these financial statements.
17
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Soft Drinks - 0.0%
55,000 A/A3 Bottling Group LLC, 5.0%, 11/15/13 $ 56,704
----------
Tobacco - 0.5%
1,225,000 BBB/Baa2 Altria Group, Inc., 7.0%, 11/4/13 $1,327,348
----------
Total Food, Beverage & Tobacco $1,504,803
----------
Health Care Equipment & Services - 2.6%
Health Care Distributors - 0.8%
2,066,000 BBB/Baa3 Cardinal Health, Inc., 6.0%, 1/15/06 $2,109,667
----------
Health Care Facilities - 1.0%
2,735,000 BB+/Ba2 HCA, Inc., 6.3%, 10/1/12 $2,773,851
----------
Health Care Supplies - 0.8%
1,874,000 BBB-/Ba1 Bausch & Lomb, 7.125%, 8/1/28 $1,996,743
----------
Total Health Care Equipment & Services $6,880,261
----------
Banks - 0.6%
Diversified Banks - 0.1%
45,000 A+/Aa3 U.S. Bancorp, 3.125%, 3/15/08 $ 44,211
145,000 AAA/Aaa International Bank for Reconstruction &
Development, 4.375%, 9/28/06 148,096
----------
$ 192,307
----------
Regional Banks - 0.5%
55,000 A-/A2 Keycorp, 2.75%, 2/27/07 $ 53,988
1,250,000 BBB-/Baa3 Hudson United Bank, 7.0%, 5/15/12 1,400,120
----------
$1,454,108
----------
Total Banks $1,646,415
----------
Diversified Financials - 3.4%
Consumer Finance - 0.9%
90,000 A/A2 National Rural Utilities, 7.25%, 3/1/12 $ 103,878
2,340,000 A/A2 SLM Corp., Floating Rate Note, 7/25/14 2,331,623
----------
$2,435,501
----------
Investment Banking & Brokerage - 0.8%
1,275,000 B+/B1 E*Trade Financial Corp., 8.0%, 6/15/11 (144A) $1,370,625
750,000 B/B3 Refco Finance Holdings, 9.0%, 8/1/12 (144A) 821,250
----------
$2,191,875
----------
The accompanying notes are an integral part of these financial statements.
18
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
Diversified Financial Services - 1.4%
1,550,000 BBB-/Baa3 Bombardier Capital, Inc., 7.09%, 3/30/07 $ 1,565,500
2,250,000 BBB-/Baa3 Glencore Funding LLC, 6.0%, 4/15/14 (144A) 2,176,826
-----------
$ 3,742,326
-----------
Specialized Finance - 0.3%
950,000 NR/Baa3 Tengizchevroil LLP, 6.124%, 11/15/14 (144A) $ 952,375
-----------
Total Diversified Financials $ 9,322,077
-----------
Insurance - 6.0%
Life & Health Insurance - 1.8%
85,000 AA/A1 Jackson National Life Global Funding, Floating
Rate Note, 3/11/05 (144A) $ 85,019
90,000 A-/A3 Lincoln National Corp., 5.25%, 6/15/07 93,218
2,000,000 B+/B2 Presidential Life Corp., 7.875%, 2/15/09 2,000,000
2,850,000 BB+/Ba1 Provident Co., Inc., 7.0%, 7/15/18 (b) 2,753,813
-----------
$ 4,932,050
-----------
Multi-Line Insurance - 1.3%
1,700,000 BB/Ba1 Allmerica Financial Corp., 7.625%, 10/15/25 $ 1,731,809
1,950,000 A/Baa1 Loews Corp., 5.25%, 3/15/16 1,885,779
-----------
$ 3,617,588
-----------
Property & Casualty Insurance - 1.9%
1,325,000 BBB-/Baa3 Arch Capital Group, Ltd., 7.35%, 5/1/34 $ 1,412,667
2,010,000 BBB-/NR Kingsway America, Inc., 7.5%, 2/1/14 2,083,918
1,400,000 BB/Baa3 Ohio Casualty Corp., 7.3%, 6/15/14 1,506,674
-----------
$ 5,003,259
-----------
Reinsurance - 1.0%
2,400,000 BBB-/Baa3 Odyssey Re Holdings, 7.65%, 11/1/13 $ 2,647,104
-----------
Total Insurance $16,200,001
-----------
Real Estate - 3.0%
Real Estate Management & Development - 0.9%
2,200,000 BB-/Ba3 Forest City Enterprises, 7.625%, 6/1/15 $ 2,332,000
-----------
Real Estate Investment Trusts - 2.1%
1,100,000 BBB-/Baa3 Colonial Reality LP, 6.15%, 4/15/13 $ 1,142,559
890,000 B/B1 Crescent Real Estate, 7.5%, 9/15/07 954,525
850,000 BBB-/Baa3 Health Care Real Estate Investment
Trust, 6.0%, 11/15/13 879,723
The accompanying notes are an integral part of these financial statements.
19
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
935,000 BBB-/Baa3 Health Care Real Estate Investment Trust,
Inc., 8.0%, 9/12/12 $ 1,095,517
1,450,000 BBB-/Baa3 Hospitality Properties Trust, 6.75%, 2/15/13 1,601,081
-----------
$ 5,673,405
-----------
Total Real Estate $ 8,005,405
-----------
Technology Hardware & Equipment - 1.7%
Communications Equipment - 0.9%
2,395,000 BB+/Ba2 Corning, Inc., 5.9%, 3/15/14 $ 2,400,312
-----------
Computer Hardware - 0.8%
2,000,000 BBB-/Baa3 NCR Corp., 7.125%, 6/15/09 $ 2,208,314
-----------
Total Technology Hardware & Equipment $ 4,608,626
-----------
Telecommunication Services - 1.8%
Integrated Telecommunications Services - 1.8%
300,000 BB+/Ba1 AT&T Corp., 7.75%, 3/1/07 $ 324,750
2,600,000 BBB+/Ba3 Intelsat, Ltd., 6.5%, 11/1/13 2,366,000
2,000,000 BBB+/Baa2 Telecom Italia Capital, 5.25%, 11/15/13 2,021,470
40,000 A+/A2 Verizon Global Funding Corp., 7.375%, 9/1/12 47,070
-----------
$ 4,759,290
-----------
Total Telecommunication Services $ 4,759,290
-----------
Utilities - 2.5%
Electric Utilities - 1.7%
1,871,500 BBB-/Baa3 FLP Energy American Wind LLC, 6.639%,
6/20/23 (144A) $ 1,995,730
1,555,000 BBB-/Baa3 Kiowa Power Partners LLC, 5.737%,
3/30/21 (144A) 1,561,220
1,000,000 BB-/Ba2 MSW Energy Holdings, 7.375%, 9/1/10 1,050,000
65,000 BBB/Baa1 PSE&G Power, 6.95%, 6/1/12 73,245
-----------
$ 4,680,195
-----------
Multi-Utilities & Unregulated Power - 0.8%
100,000 BBB-/Baa3 Avista Corp., 7.75%, 1/1/07 $ 107,311
25,000 BBB+/Baa1 Dominion Resources, 6.25%, 6/30/12 27,295
1,795,000 A-/Baa3 Illinova Corp., 7.5%, 6/15/09 2,024,527
-----------
$ 2,159,133
-----------
Total Utilities $ 6,839,328
-----------
TOTAL CORPORATE BONDS
(Cost $91,170,583) $95,304,785
-----------
The accompanying notes are an integral part of these financial statements.
20
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 57.2%
Government - 57.2%
65,000 AAA/Aaa Federal Home Loan Bank, 3.875%, 6/14/13 $ 62,728
2,228,769 AAA/Aaa Federal Home Loan Mortgage Corp.,
5.5%, 12/1/18 2,315,929
79,655 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.5%, 1/1/29 83,742
1,205,315 AAA/Aaa Federal Home Loan Mortgage Corp.,
5.5%, 9/1/33 1,225,584
1,891,991 AAA/Aaa Federal Home Loan Mortgage Corp.,
5.5%, 11/1/34 1,923,270
597,992 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 1/1/33 618,005
1,029,849 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 2/1/33 1,065,315
3,758,341 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 3/1/33 3,887,647
2,233,468 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 9/1/33 2,308,216
2,211,642 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 12/1/33 2,286,488
1,988,087 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 1/1/34 2,054,703
7,503,366 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 5/1/34 7,754,863
2,855,377 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.0%, 8/1/34 2,951,083
29,254 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.5%, 4/1/31 30,710
204,577 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.5%, 7/1/32 214,814
486,045 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.5%, 7/1/33 512,066
1,867,669 AAA/Aaa Federal Home Loan Mortgage Corp.,
6.5%, 10/1/33 1,968,344
10,157 AAA/Aaa Federal Home Loan Mortgage Corp.,
7.0%, 12/1/30 10,769
9,139 AAA/Aaa Federal Home Loan Mortgage Corp.,
7.0%, 6/1/31 9,688
The accompanying notes are an integral part of these financial statements.
21
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
26,254 AAA/Aaa Federal Home Loan Mortgage Corp.,
8.0%, 9/15/06 $ 26,333
257,913 AAA/Aaa Federal National Mortgage Association,
4.816%, 12/1/12 263,576
207,477 AAA/Aaa Federal National Mortgage Association,
5.0%, 3/1/33 206,260
163,278 AAA/Aaa Federal National Mortgage Association,
5.0%, 5/1/34 162,083
316,692 AAA/Aaa Federal National Mortgage Association,
5.0%, 12/1/17 322,157
140,000 AAA/Aaa Federal National Mortgage Association,
5.24%, 8/7/18 139,625
301,678 AAA/Aaa Federal National Mortgage Association,
5.5%, 2/1/18 313,223
1,191,751 AAA/Aaa Federal National Mortgage Association,
5.5%, 4/1/19 1,232,983
113,798 AAA/Aaa Federal National Mortgage Association,
5.5%, 7/1/23 116,411
2,794,986 AAA/Aaa Federal National Mortgage Association,
5.5%, 7/1/33 2,839,932
267,482 AAA/Aaa Federal National Mortgage Association,
5.5%, 9/1/17 276,736
4,581,285 AAA/Aaa Federal National Mortgage Association,
5.5%, 9/1/19 4,737,754
1,327,888 AAA/Aaa Federal National Mortgage Association,
5.5%, 11/1/33 1,349,242
1,577,841 AAA/Aaa Federal National Mortgage Association,
5.5%, 12/1/18 1,632,039
10,788 AAA/Aaa Federal National Mortgage Association,
6.0%, 1/1/29 11,194
125,946 AAA/Aaa Federal National Mortgage Association,
6.0%, 2/1/32 130,408
1,371,350 AAA/Aaa Federal National Mortgage Association,
6.0%, 2/1/33 1,419,905
145,191 AAA/Aaa Federal National Mortgage Association,
6.0%, 3/1/33 150,199
3,118,552 AAA/Aaa Federal National Mortgage Association,
6.0%, 4/1/33 3,226,105
The accompanying notes are an integral part of these financial statements.
22
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
1,286,301 AAA/Aaa Federal National Mortgage Association,
6.0%, 4/1/34 $1,330,750
195,000 AAA/Aaa Federal National Mortgage Association,
6.0%, 4/15/32 203,857
659,000 AAA/Aaa Federal National Mortgage Association,
6.0%, 6/1/16 690,980
2,951,240 AAA/Aaa Federal National Mortgage Association,
6.0%, 7/1/33 3,053,022
89,752 AAA/Aaa Federal National Mortgage Association,
6.0%, 8/1/32 92,930
1,821,851 AAA/Aaa Federal National Mortgage Association,
6.0%, 9/1/34 1,884,807
20,732 AAA/Aaa Federal National Mortgage Association,
6.0%, 9/1/29 21,485
1,224,960 AAA/Aaa Federal National Mortgage Association,
6.0%, 10/1/32 1,268,333
307,518 AAA/Aaa Federal National Mortgage Association,
6.0%, 11/1/32 318,406
18,269 AAA/Aaa Federal National Mortgage Association,
6.5%, 1/1/15 19,388
150,988 AAA/Aaa Federal National Mortgage Association,
6.5%, 2/1/32 158,503
250,352 AAA/Aaa Federal National Mortgage Association,
6.5%, 2/1/32 262,775
398,163 AAA/Aaa Federal National Mortgage Association,
6.5%, 3/1/32 417,920
195,535 AAA/Aaa Federal National Mortgage Association,
6.5%, 5/1/31 205,268
355,448 AAA/Aaa Federal National Mortgage Association,
6.5%, 6/1/31 373,250
97,704 AAA/Aaa Federal National Mortgage Association,
6.5%, 7/1/29 102,671
85,804 AAA/Aaa Federal National Mortgage Association,
6.5%, 7/1/34 90,012
171,810 AAA/Aaa Federal National Mortgage Association,
6.5%, 8/1/31 180,362
165,506 AAA/Aaa Federal National Mortgage Association,
6.5%, 9/1/31 173,745
The accompanying notes are an integral part of these financial statements.
23
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
134,738 AAA/Aaa Federal National Mortgage Association,
6.5%, 10/1/31 $ 141,445
54,554 AAA/Aaa Federal National Mortgage Association,
6.5%, 10/1/31 57,269
453,709 AAA/Aaa Federal National Mortgage Association,
6.5%, 10/1/32 476,222
256,899 AAA/Aaa Federal National Mortgage Association,
7.0%, 1/1/32 272,338
23,289 AAA/Aaa Federal National Mortgage Association,
7.0%, 3/1/12 24,693
126,564 AAA/Aaa Federal National Mortgage Association,
7.0%, 4/1/31 134,211
79,847 AAA/Aaa Federal National Mortgage Association,
7.0%, 7/1/22 85,076
206,230 AAA/Aaa Federal National Mortgage Association,
7.0%, 8/1/31 218,623
145,411 AAA/Aaa Federal National Mortgage Association,
7.0%, 9/1/31 154,150
215,397 AAA/Aaa Federal National Mortgage Association,
7.0%, 12/1/31 228,341
14,064 AAA/Aaa Federal National Mortgage Association,
7.0%, 12/1/30 14,914
51,029 AAA/Aaa Federal National Mortgage Association,
7.0%, 12/1/30 54,112
4,643 AAA/Aaa Federal National Mortgage Association,
7.5%, 4/1/30 4,975
16,060 AAA/Aaa Federal National Mortgage Association,
7.5%, 8/1/20 17,259
6,715 AAA/Aaa Federal National Mortgage Association,
8.0%, 1/1/31 7,281
19,097 AAA/Aaa Federal National Mortgage Association,
8.0%, 2/1/29 20,782
9,735 AAA/Aaa Federal National Mortgage Association,
8.0%, 2/1/30 10,583
1,866 AAA/Aaa Federal National Mortgage Association,
8.0%, 2/1/30 2,028
83,416 AAA/Aaa Federal National Mortgage Association,
8.0%, 3/1/31 90,678
The accompanying notes are an integral part of these financial statements.
24
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
11,901 AAA/Aaa Federal National Mortgage Association,
8.0%, 4/1/08 $ 12,459
15,023 AAA/Aaa Federal National Mortgage Association,
8.0%, 4/1/20 16,294
6,463 AAA/Aaa Federal National Mortgage Association,
8.0%, 4/1/30 7,008
3,739 AAA/Aaa Federal National Mortgage Association,
8.0%, 5/1/31 4,054
3,966 AAA/Aaa Federal National Mortgage Association,
8.0%, 7/1/30 4,300
5,606 AAA/Aaa Federal National Mortgage Association,
8.0%, 10/1/30 6,079
128,744 AAA/Aaa Federal National Mortgage Association,
7.0%, 10/25/07 132,598
22,765 AAA/Aaa Federal National Mortgage Association,
10.3%, 4/25/19 24,739
7,751 AAA/Aaa Federal National Mortgage Association,
10.3%, 4/25/19 9,508
2,876,936 AAA/Aaa Government National Mortgage Association,
4.5%, 8/15/33 2,810,001
2,134,586 AAA/Aaa Government National Mortgage Association,
4.5%, 8/15/33 2,084,923
1,380,446 AAA/Aaa Government National Mortgage Association,
4.5%, 9/15/33 1,348,328
1,514,381 AAA/Aaa Government National Mortgage Association,
4.5%, 10/15/33 1,479,148
2,212,685 AAA/Aaa Government National Mortgage Association,
5.0%, 4/15/34 2,215,407
1,099,891 AAA/Aaa Government National Mortgage Association,
5.0%, 7/15/19 1,129,068
25,000 AAA/Aaa Government National Mortgage Association,
5.0%, 7/15/19 25,647
1,036,481 AAA/Aaa Government National Mortgage Association,
5.0%, 9/15/33 1,038,717
24,270 AAA/Aaa Government National Mortgage Association,
5.5%, 4/15/19 25,311
2,342,560 AAA/Aaa Government National Mortgage Association,
5.5%, 4/20/34 2,391,554
The accompanying notes are an integral part of these financial statements.
25
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
3,815,049 AAA/Aaa Government National Mortgage Association,
5.5%, 7/15/34 $3,898,427
2,497,775 AAA/Aaa Government National Mortgage Association,
5.5%, 8/15/19 2,604,939
2,726,106 AAA/Aaa Government National Mortgage Association,
5.5%, 8/15/19 2,843,066
269,725 AAA/Aaa Government National Mortgage Association,
5.5%, 8/15/33 275,742
563,578 AAA/Aaa Government National Mortgage Association,
5.5%, 10/15/17 587,823
319,969 AAA/Aaa Government National Mortgage Association,
5.5%, 10/15/33 327,106
1,242,666 AAA/Aaa Government National Mortgage Association,
5.5%, 10/15/34 1,269,825
1,214,524 AAA/Aaa Government National Mortgage Association,
5.5%, 10/20/19 1,262,842
933,701 AAA/Aaa Government National Mortgage Association,
5.5%, 11/15/18 973,814
2,597,153 AAA/Aaa Government National Mortgage Association,
5.5%, 11/15/34 2,653,914
249,481 AAA/Aaa Government National Mortgage Association,
5.5%, 11/20/34 254,699
343,209 AAA/Aaa Government National Mortgage Association,
5.5%, 12/15/18 357,954
55,000 AAA/Aaa Government National Mortgage Association,
5.5%, 12/15/34 56,202
679,599 AAA/Aaa Government National Mortgage Association,
6.0%, 1/15/33 704,797
1,624,412 AAA/Aaa Government National Mortgage Association,
6.0%, 1/15/33 1,685,759
439,794 AAA/Aaa Government National Mortgage Association,
6.0%, 2/15/33 456,101
27,887 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/32 28,937
757,115 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/33 785,187
1,093,589 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/33 1,134,136
The accompanying notes are an integral part of these financial statements.
26
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
1,125,452 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/33 $1,167,180
2,096,619 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/33 2,174,355
1,383,086 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/33 1,435,379
1,782,336 AAA/Aaa Government National Mortgage Association,
6.0%, 3/15/33 1,849,879
6,171 AAA/Aaa Government National Mortgage Association,
6.0%, 4/15/14 6,510
925,980 AAA/Aaa Government National Mortgage Association,
6.0%, 4/15/33 960,312
639,737 AAA/Aaa Government National Mortgage Association,
6.0%, 5/1/17 670,101
884,171 AAA/Aaa Government National Mortgage Association,
6.0%, 5/15/17 931,676
1,835,904 AAA/Aaa Government National Mortgage Association,
6.0%, 5/15/33 1,903,974
179,022 AAA/Aaa Government National Mortgage Association,
6.0%, 6/15/17 188,641
189,195 AAA/Aaa Government National Mortgage Association,
6.0%, 6/18/33 196,210
873,483 AAA/Aaa Government National Mortgage Association,
6.0%, 7/15/33 875,368
25,523 AAA/Aaa Government National Mortgage Association,
6.0%, 8/15/13 26,925
106,024 AAA/Aaa Government National Mortgage Association,
6.0%, 8/15/32 110,135
1,715,368 AAA/Aaa Government National Mortgage Association,
6.0%, 9/15/19 1,807,190
540,367 AAA/Aaa Government National Mortgage Association,
6.0%, 9/15/32 560,706
51,772 AAA/Aaa Government National Mortgage Association,
6.0%, 9/15/32 53,721
573,228 AAA/Aaa Government National Mortgage Association,
6.0%, 9/15/34 594,516
515,055 AAA/Aaa Government National Mortgage Association,
6.0%, 10/15/32 534,440
The accompanying notes are an integral part of these financial statements.
27
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
1,026,756 AAA/Aaa Government National Mortgage Association,
6.0%, 10/15/33 $1,064,825
1,497,224 AAA/Aaa Government National Mortgage Association,
6.0%, 10/15/34 1,552,826
325,616 AAA/Aaa Government National Mortgage Association,
6.0%, 11/15/32 337,871
385,154 AAA/Aaa Government National Mortgage Association,
6.5%, 1/15/34 405,530
614,358 AAA/Aaa Government National Mortgage Association,
6.5%, 1/15/34 646,860
81,669 AAA/Aaa Government National Mortgage Association,
6.5%, 2/15/29 86,078
533,542 AAA/Aaa Government National Mortgage Association,
6.5%, 2/15/32 562,142
732,729 AAA/Aaa Government National Mortgage Association,
6.5%, 3/15/29 772,286
143,638 AAA/Aaa Government National Mortgage Association,
6.5%, 3/15/29 151,392
127,915 AAA/Aaa Government National Mortgage Association,
6.5%, 3/15/31 134,770
837,165 AAA/Aaa Government National Mortgage Association,
6.5%, 5/15/29 882,836
325,497 AAA/Aaa Government National Mortgage Association,
6.5%, 5/15/31 342,946
141,147 AAA/Aaa Government National Mortgage Association,
6.5%, 5/15/32 148,713
39,111 AAA/Aaa Government National Mortgage Association,
6.5%, 6/15/31 41,207
449,260 AAA/Aaa Government National Mortgage Association,
6.5%, 8/15/32 473,342
533,956 AAA/Aaa Government National Mortgage Association,
6.5%, 9/15/32 562,578
407,738 AAA/Aaa Government National Mortgage Association,
6.5%, 10/15/31 429,589
21,802 AAA/Aaa Government National Mortgage Association,
6.5%, 10/15/33 22,956
87,160 AAA/Aaa Government National Mortgage Association,
7.0%, 2/15/30 92,649
73,385 AAA/Aaa Government National Mortgage Association,
7.0%, 3/15/31 77,999
The accompanying notes are an integral part of these financial statements.
28
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
18,552 AAA/Aaa Government National Mortgage Association,
7.0%, 4/15/28 $ 19,749
179,195 AAA/Aaa Government National Mortgage Association,
7.0%, 4/15/29 190,612
54,197 AAA/Aaa Government National Mortgage Association,
7.0%, 4/15/31 57,606
195,544 AAA/Aaa Government National Mortgage Association,
7.0%, 6/15/31 207,840
364,864 AAA/Aaa Government National Mortgage Association,
7.0%, 6/15/31 387,842
14,659 AAA/Aaa Government National Mortgage Association,
7.0%, 8/15/28 15,605
463,520 AAA/Aaa Government National Mortgage Association,
7.0%, 11/15/28 493,495
198,918 AAA/Aaa Government National Mortgage Association,
7.0%, 11/15/28 211,782
55,880 AAA/Aaa Government National Mortgage Association,
7.0%, 12/15/13 59,543
33,692 AAA/Aaa Government National Mortgage Association,
7.0%, 12/15/30 35,814
32,864 AAA/Aaa Government National Mortgage Association,
7.5%, 2/15/26 35,394
38,137 AAA/Aaa Government National Mortgage Association,
7.5%, 2/15/31 40,959
84,480 AAA/Aaa Government National Mortgage Association,
7.5%, 5/15/27 90,931
95,260 AAA/Aaa Government National Mortgage Association,
7.5%, 8/15/29 102,334
33,672 AAA/Aaa Government National Mortgage Association,
7.5%, 10/15/29 36,173
460,773 AAA/Aaa Government National Mortgage Association,
7.5%, 12/15/31 494,873
25,672 AAA/Aaa Government National Mortgage Association,
7.75%, 2/15/30 27,717
7,915 AAA/Aaa Government National Mortgage Association,
7.75%, 11/15/29 8,548
4,285 AAA/Aaa Government National Mortgage Association,
9.5%, 5/15/20 4,835
10,311 AAA/Aaa Government National Mortgage Association,
10.0%, 1/15/06 10,779
The accompanying notes are an integral part of these financial statements.
29
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
2,362 AAA/Aaa Government National Mortgage Association,
10.0%, 1/15/18 2,630
7,658 AAA/Aaa Government National Mortgage Association,
10.0%, 1/15/18 8,527
677,103 AAA/Aaa Government National Mortgage Association I,
6.0%, 2/15/29 703,726
75,413 AAA/Aaa Government National Mortgage Association I,
7.0%, 12/15/30 80,162
453,100 AAA/Aaa Government National Mortgage Association II,
5.5%, 2/20/34 462,576
2,734,106 AAA/Aaa Government National Mortgage Association II,
5.5%, 3/20/34 2,791,290
10,924,479 AAA/Aaa Government National Mortgage Association II,
6.0%, 11/20/33 $ 11,315,870
21,593 AAA/Aaa Government National Mortgage Association II,
6.5%, 2/20/29 22,711
10,901 AAA/Aaa Government National Mortgage Association II,
6.5%, 3/20/29 11,466
381,933 AAA/Aaa Government National Mortgage Association II,
7.0%, 1/20/29 404,956
27,699 AAAAA Government National Mortgage Association II,
7.0%, 12/20/30 29,348
135,000 AAA/Aaa U.S. Treasury Bonds, 3.125%, 10/15/08 133,560
100,000 AAA/Aaa U.S. Treasury Bonds, 4.0%, 2/15/14 98,621
35,000 AAA/Aaa U.S. Treasury Bonds, 4.25%, 8/15/13 35,276
135,000 AAA/Aaa U.S. Treasury Bonds, 7.125%, 2/15/23 172,267
1,000,000 AAA/Aaa U.S. Treasury Bonds, 8.0%, 11/15/21 1,372,695
35,000 AAA/Aaa U.S. Treasury Notes, 1.5%, 7/31/05 34,785
340,000 AAA/Aaa U.S. Treasury Notes, 3.5%, 1/15/11 417,054
100,000 AAA/Aaa U.S. Treasury Notes, 5.25%, 2/15/29 104,899
7,260,000 AAA/Aaa U.S. Treasury Notes, 5.375%, 2/15/31 7,850,442
120,000 AAA/Aaa U.S. Treasury Notes, 5.5%, 8/15/28 129,881
105,000 AAA/Aaa U.S. Treasury Notes, 6.0%, 8/15/09 115,804
135,000 AAA/Aaa U.S. Treasury Notes, 7.0%, 7/15/06 143,132
------------
$153,440,708
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS
(Cost $152,130,134) $153,440,708
------------
The accompanying notes are an integral part of these financial statements.
30
Pioneer Bond Fund
================================================================================
================================================================================
Principal S&P/Moody's
Amount Ratings
USD ($) (unaudited) Value
MUNICIPAL BONDS - 0.9%
Government - 0.9%
1,225,000 BBB/Baa3 District of Columbia Tobacco Settlement
Financing Corp., 6.75%, 5/15/40 $1,215,090
555,000 A/Aa3 Tobacco Settlement Authority Iowa,
6.79%, 6/1/10 553,090
500,000 BBB/Baa3 Tobacco Settlement Financing Corp. Revenue,
5.875%, 5/15/39 448,450
----------
$2,216,630
----------
Municipal Power - 0.0%
105,000 BBB+/A3 California State Department of Water Resources
& Power Supply, 4.33%, 5/1/06 $ 106,066
----------
TOTAL MUNICIPAL BONDS
(Cost $2,152,180) $2,322,696
----------
TEMPORARY CASH INVESTMENTS - 1.8%
Repurchase Agreement - 1.2%
$7,600,000 UBS Warburg, Inc., 1.00%, dated 12/31/04,
repurchase price of 7,600,000 plus accrued
interest on 1/3/05 collateralized by
$7,572,000 U.S. Treasury Bill, 6.75%,
5/15/05 $7,600,000
----------
The accompanying notes are an integral part of these financial statements.
31
Pioneer Bond Fund
================================================================================
SCHEDULE OF INVESTMENTS 12/31/04 (unaudited) (continued)
================================================================================
Shares Value
Security Lending Collateral - 1.6%
4,350,803 Securities Lending Investment Fund, 2.18% $ 4,350,803
------------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $11,950,803) $ 11,950,803
------------
TOTAL INVESTMENTS IN SECURITIES - 101.4%
(Cost $265,866,085) (a) $271,778,275
------------
OTHER ASSETS AND LIABILITIES - (1.4.)% $ (3,696,039)
------------
TOTAL NET ASSETS - 100.0% $268,082,236
------------
* Non-Income producing security
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, 2004, the value of these securities amounted to $19,828,206
or 7.4% of net assets.
(a) At December 31, 2004, the net unrealized gain on investments based on cost for federal income
tax purposes of $265,882,312 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $6,825,334
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (929,371)
----------
Net unrealized gain $5,895,963
----------
(b) At December 31, 2004, the following securities were out on loan:
Principal
Amount Security Market Value
- --------- -------- ------------
$ 862,500 JLG Industries, Inc., 8.375%, 6/15/12 $ 922,875
537,500 Provident Companies, Inc., 7.0%, 7/15/18 521,375
921,100 Shaw Group, Inc., 10.75%, 3/15/10 1,013,100
1,733,750 Toys "R" Us, 7.875%, 4/15/13 1,716,413
----------
Total $4,173,763
----------
Purchases and sales of securities (excluding temporary cash investments) for the
six months ended December 31, 2004 aggregated $7,949,788,130 and $7,899,817,031,
respectively.
The accompanying notes are an integral part of these financial statements.
32
Pioneer Bond Fund
================================================================================
STATEMENT OF ASSETS AND LIABILITIES 12/31/04 (unaudited)
================================================================================
ASSETS:
Investment in securities (including securities loaned of
$4,173,763) (Cost $265,866,085) $271,778,275
Cash 703,978
Receivables -
Investment securities sold 1,775
Fund shares sold 631,162
Dividends, interest and foreign taxes withheld 2,509,912
Other 49,351
------------
Total assets $275,674,453
------------
LIABILITIES:
Payables -
Investment securities purchased $ 2,225,791
Fund shares repurchased 281,811
Dividends 335,627
Upon return of securities loaned 4,350,803
Due to affiliates 327,796
Accrued expenses 70,389
------------
Total liabilities $ 7,592,217
------------
NET ASSETS:
Paid-in capital $265,159,613
Undistributed net investment loss (36,495)
Accumulated net realized loss on investments (2,953,072)
Net unrealized gain on investments 5,912,190
------------
Total net assets $268,082,236
------------
NET ASSET VALUE PER SHARE:
(No par value, unlimited number of shares authorized)
Class A (based on $164,620,554/17,548,526 shares) $ 9.38
------------
Class B (based on $54,351,348/5,819,784 shares) $ 9.34
------------
Class C (based on $28,110,313/3,019,555 shares) $ 9.31
------------
Class R (based on $994,403/104,900 shares) $ 9.48
------------
Class Y (based on $10,848,212/1,163,989 shares) $ 9.32
------------
Investor Class (based on $9,157,406/975,437 shares) $ 9.39
------------
MAXIMUM OFFERING PRICE:
Class A ($9.38 [divided by] 95.5%) $ 9.82
------------
The accompanying notes are an integral part of these financial statements.
33
Pioneer Bond Fund
================================================================================
STATEMENT OF OPERATIONS (unaudited)
================================================================================
For the Six Months Ended 12/31/04
INVESTMENT INCOME:
Interest $7,761,562
Income from securities loaned, net 10,971
----------
Total investment income $ 7,772,533
-----------
EXPENSES:
Management fees 662,855
Transfer agent fees and expenses
Class A 252,947
Class B 117,451
Class C 49,303
Investor Class 1,168
Class R 930
Class Y 327
Distribution fees
Class A 206,378
Class B 282,826
Class C 141,850
Class R 1,529
Administrative reimbursements 26,983
Custodian fees 11,272
Registration fees 54,871
Professional fees 32,697
Printing expense 10,370
Fees and expenses of nonaffiliated trustees 4,085
Miscellaneous 1,645
----------
Total expenses $ 1,859,487
Less management fees waived and expenses
reimbursed by Pioneer Investment Management, Inc. (63,455)
Less fees paid indirectly (1,945)
-----------
Net expenses $ 1,794,087
-----------
Net investment income $ 5,978,446
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments $ 3,466,317
-----------
Change in net unrealized gain on investments $ 2,892,689
-----------
Net gain on investments $ 6,359,006
-----------
Net increase in net assets resulting from operations $12,337,452
-----------
The accompanying notes are an integral part of these financial statements.
34
Pioneer Bond Fund
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
For the Six Months Ended 12/31/04 and the Year Ended 6/30/04
Six Months
Ended
12/31/04 Year Ended
(unaudited) 6/30/04
FROM OPERATIONS:
Net investment income $ 5,978,446 $ 11,300,759
Net realized gain on investments 3,466,317 10,312,487
Change in net unrealized gain (loss) on investments 2,892,689 (15,238,151)
------------ ------------
Net increase in net assets resulting from
operations $ 12,337,452 $ 6,375,095
------------ ------------
DISTRIBUTIONS TO SHAREOWNERS:
Net investment income:
Class A ($0.25 and $0.50 per share, respectively) $ (4,355,735) $ (9,078,180)
Class B ($0.21 and $0.42 per share, respectively) (1,253,298) (2,946,305)
Class C ($0.21 and $0.39 per share, respectively) (640,417) (1,231,371)
Investor Class ($0.03 and $0.00 per share,
respectively) (15,977) (6,993)
Class R ($0.23 and $0.52 per share, respectively) (377,926) (599,222)
Class Y ($0.27 and $0.55 per share, respectively) (23,331)
------------ ------------
Total distributions to shareowners $ (6,666,684) $(13,862,071)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 34,321,647 $ 95,479,727
Shares issued in reorganization 9,260,087 --
Reinvestment of distributions 5,151,297 10,582,523
Cost of shares repurchased (46,024,524) (137,073,994)
------------ ------------
Net increase (decrease) in net assets resulting
from Fund share transactions $ 2,708,507 $(31,011,744)
------------ ------------
Net increase (decrease) in net assets $ 8,379,275 $(38,498,720)
NET ASSETS:
Beginning of period 259,702,961 298,201,681
------------ ------------
End of period (including undistributed net
investment income (loss) of $(36,495)
and $651,743, respectively) $268,082,236 $259,702,961
------------ ------------
The accompanying notes are an integral part of these financial statements.
35
Pioneer Bond Fund
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (continued)
================================================================================
For the Six Months Ended 12/31/04 and for the Year Ended 6/30/04
'04 Shares '04 Amounts
(unaudited) (unaudited) '04 Shares '04 Amount
CLASS A
Shares sold 1,622,929 $ 15,165,269 5,787,118 $ 53,766,418
Reinvestment of distributions 390,262 3,649,862 800,528 7,432,884
Less shares repurchased (1,941,126) (18,132,949) (8,595,535) (79,398,415)
---------- ------------- ---------- -------------
Net increase (decrease) 72,065 $ 682,182 (2,007,889) $ (18,199,113)
---------- ------------- ---------- -------------
CLASS B
Shares sold 624,036 $ 5,805,277 2,231,993 $ 20,804,787
Reinvestment of distributions 99,367 925,449 226,473 2,094,447
Less shares repurchased (1,222,322) (11,360,510) (4,398,519) (40,683,805)
---------- ------------- ---------- -------------
Net decrease (498,919) $ (4,629,784) (1,940,053) $ (17,784,571)
---------- ------------- ---------- -------------
CLASS C
Shares sold 542,798 $ 5,031,290 1,382,221 $ 12,730,696
Reinvestment of distributions 50,648 470,220 95,400 878,128
Less shares repurchased (596,516) (5,532,548) (1,652,312) (15,161,984)
---------- ------------- ---------- -------------
Net decrease (3,070) $ (31,038) (174,691) $ (1,553,160)
---------- ------------- ---------- -------------
INVESTOR CLASS
Shares sold - $ -
Shares issued in reorganization 985,115 9,260,087
Reinvestment of distributions 1,536 14,422
Less shares repurchased (11,214) (105,046)
---------- -------------
Net increase 975,437 $ 9,169,463
---------- -------------
CLASS R
Shares sold 78,158 $ 740,237 42,046 $ 399,828
Reinvestment of distributions 293 2,769 187 1,754
Less shares repurchased (10,760) (102,071) (5,079) (47,919)
---------- ------------- ---------- -------------
Net increase 67,691 $ 640,935 37,154 $ 353,663
---------- ------------- ---------- -------------
CLASS Y
Shares sold 815,512 $ 7,579,574 841,637 $ 7,777,998
Reinvestment of distributions 9,518 88,575 19,012 175,310
Less shares repurchased (1,153,673) (10,791,400) (193,348) (1,781,871)
---------- ------------- ---------- -------------
Net increase (decrease) (328,643) $ (3,123,251) 667,301 $ 6,171,437
---------- ------------- ---------- -------------
The accompanying notes are an integral part of these financial statements.
36
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended
12/31/04 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/04 6/30/03 6/30/02 (a) 6/30/01 6/30/00
CLASS A
Net asset value, beginning of period $ 9.18 $ 9.41 $ 8.89 $ 8.78 $ 8.47 $ 8.94
------- -------- -------- -------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.23 $ 0.41 $ 0.45 $ 0.52 $ 0.57 $ 0.58
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.53 0.13 0.31 (0.47)
------- -------- -------- -------- ------- --------
Net increase from investment operations $ 0.45 $ 0.27 $ 0.98 $ 0.65 $ 0.88 $ 0.11
Distributions to shareowners:
Net investment income (0.25) (0.50) (0.46) (0.54) (0.57) (0.58)
------- -------- -------- -------- ------- --------
Net increase (decrease) in net asset value $ 0.20 $ (0.23) $ 0.52 $ 0.11 $ 0.31 $ (0.47)
------- -------- -------- -------- ------- --------
Net asset value, end of period $ 9.38 $ 9.18 $ 9.41 $ 8.89 $ 8.78 $ 8.47
------- -------- -------- -------- ------- --------
Total return* 4.92% 2.98% 11.38% 7.58% 10.70% 1.30%
Ratio of net expenses to average net assets+ 1.10%** 1.14% 1.20% 1.16% 1.21% 1.18%
Ratio of net investment income to average net assets+ 4.76%** 4.42% 5.02% 5.79% 6.53% 6.68%
Portfolio turnover rate 61%** 63% 48% 59% 43% 60%
Net assets, end of period (in thousands) $164,621 $160,421 $183,338 $143,713 $98,004 $102,349
Ratios with no waiver of management fees by PIM and no
reductions for fees paid indirectly:
Net expenses 1.17%** 1.14% 1.20% 1.16% 1.18% 1.15%
Net investment income 4.70%** 4.42% 5.02% 5.79% 6.56% 6.71%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 1.10% 1.14% 1.20% 1.16% 1.18% 1.15%
Net investment income 4.76% 4.42% 5.02% 5.79% 6.56% 6.71%
* 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 reduc- tion 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 invest- ment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
37
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended
12/31/04 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/04 6/30/03 6/30/02 (a) 6/30/01 6/30/00
CLASS B
Net asset value, beginning of period $ 9.14 $ 9.37 $ 8.87 $ 8.77 $ 8.44 $ 8.91
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment gain $ 0.18 $ 0.33 $ 0.37 $ 0.44 $ 0.50 $ 0.50
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.53 0.14 0.30 (0.46)
------- ------- ------- ------- ------- -------
Net increase from investment operations $ 0.41 $ 0.19 $ 0.90 $ 0.58 $ 0.80 $ 0.04
Distributions to shareowners:
Net investment income (0.21) (0.42) (0.40) (0.48) (0.47) (0.51)
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.23) $ 0.50 $ 0.10 $ 0.33 $ (0.47)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.34 $ 9.14 $ 9.37 $ 8.87 $ 8.77 $ 8.44
------- ------- ------- ------- ------- -------
Total return* 4.50% 2.04% 10.44% 6.78% 9.71% 0.48%
Ratio of net expenses to average net assets+ 2.00%** 1.98% 2.02% 1.95% 2.05% 2.05%
Ratio of net investment income to average net assets+ 3.87%** 3.55% 4.22% 5.02% 5.72% 5.81%
Portfolio turnover rate 61%** 63% 48% 59% 43% 60%
Net assets, end of period (in thousands) $54,351 $57,774 $77,367 $59,729 $38,231 $37,269
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.02%** 1.98% 2.02% 1.95% 2.04% 2.03%
Net investment income 3.85%** 3.55% 4.22% 5.02% 5.73% 5.83%
Ratios with waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.00% 1.98% 2.02% 1.95% 2.04% 2.03%
Net investment income 3.87% 3.55% 4.22% 5.02% 5.73% 5.83%
* 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 reduc- tion 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 invest- ment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
38
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended
12/31/04 Year Ended Year Ended Year Ended Year Ended Year Ended
(unaudited) 6/30/04 6/30/03 6/30/02 (a) 6/30/01 6/30/00
CLASS C
Net asset value, beginning of period $ 9.11 $ 9.31 $ 8.83 $ 8.73 $ 8.46 $ 8.89
------- ------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.18 $ 0.33 $ 0.37 $ 0.44 $ 0.48 $ 0.48
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.51 0.12 0.30 (0.45)
------- ------- ------- ------- ------- -------
Net increase from investment operations $ 0.41 $ 0.19 $ 0.88 $ 0.56 $ 0.78 $ 0.03
Distributions to shareowners:
Net investment income (0.21) (0.39) (0.40) (0.46) (0.51) (0.46)
------- ------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.20) $ 0.48 $ 0.10 $ 0.27 $ (0.43)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.31 $ 9.11 $ 9.31 $ 8.83 $ 8.73 $ 8.46
------- ------- ------- ------- ------- -------
Total return* 4.54% 2.11% 10.28% 6.55% 9.46% 0.36%
Ratio of net expenses to average net assets+ 1.94%** 1.97% 2.16% 2.14% 2.18% 2.32%
Ratio of net investment income to average net assets+ 3.92%** 3.59% 4.05% 4.78% 5.56% 5.53%
Portfolio turnover rate 61%** 63% 48% 59% 43% 60%
Net assets, end of period (in thousands) $28,110 $27,545 $29,777 $18,067 $ 7,377 $ 6,264
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.96%** 1.97% 2.16% 2.15% 2.15% 2.30%
Net investment income 3.91%** 3.59% 4.05% 4.77% 5.59% 5.55%
Ratios with waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.94% 1.97% 2.16% 2.15% 2.15% 2.30%
Net investment income 3.92% 3.59% 4.05% 4.77% 5.59% 5.55%
* 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 reduc- tion 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 invest- ment income to average net assets
decreased by 0.18%.
The accompanying notes are an integral part of these financial statements.
39
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended Year 4/1/03(a)
12/31/04 Ended to
(unaudited) 6/30/04 6/30/03
CLASS R
Net asset value, beginning of period $ 9.28 $ 9.50 $ 9.19
------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.19 $ 0.47 $ 0.10
Net realized and unrealized gain (loss)
on investments 0.24 (0.17) 0.32
------- ------- -------
Net increase from investment operations $ 0.44 $ 0.30 $ 0.42
Distributions to shareowners:
Net investment income (0.23) (0.52) (0.11)
------- ------- -------
Net increase (decrease) in net asset value $ 0.20 $ (0.22) $ 0.31
------- ------- -------
Net asset value, end of period $ 9.48 $ 9.28 $ 9.50
------- ------- -------
Total return* 4.71% 3.20% 4.55%
Ratio of net expenses to average net assets+ 1.42%** 1.32% 1.42%**
Ratio of net investment income to average
net assets+ 4.38%** 4.71% 4.13%**
Portfolio turnover rate 61%** 63% 48%
Net assets, end of period (in thousands) $ 994 $ 345 $ 1
Ratios with no waiver of management
fees by PIM and no reduction for
fees paid indirectly:
Net expenses 1.42%** 1.32% 1.42%**
Net investment income 4.37%** 4.71% 4.13%**
Ratios with waiver of management fees by
PIM and reduction for fees paid indirectly:
Net expenses 1.42% 1.32% 1.42%
Net investment income 4.38% 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.
The accompanying notes are an integral part of these financial statements.
40
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
Six Months
Ended Year Year 9/20/01(a)
12/31/04 Ended Ended to
(unaudited) 6/30/04 6/30/03 6/30/02(b)
CLASS Y
Net asset value, beginning of period $ 9.12 $ 9.35 $ 8.87 $ 8.85
------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.25 $ 0.46 $ 0.51 $ 0.43
Net realized and unrealized gain (loss) on investments 0.22 (0.14) 0.51 0.04
------- ------- ------- --------
Net increase from investment operations $ 0.47 $ 0.32 $ 1.02 $ 0.47
Distributions to shareowners:
Net investment income (0.27) (0.55) (0.54) (0.45)
Net increase (decrease) in net asset value $ 0.20 $ (0.23) $ 0.48 $ 0.02
------- ------- ------- --------
Net asset value, end of period $ 9.32 $ 9.12 $ 9.35 $ 8.87
------- ------- ------- --------
Total return* 5.22% 3.48% 11.86% 5.48%
Ratio of net expenses to average net assets+ 0.60%** 0.58% 0.67% 0.64%**
Ratio of net investment income to average net assets+ 5.21%** 5.05% 5.54% 6.28%**
Portfolio turnover rate 61%** 63% 48% 59%
Net assets, end of period (in thousands) $10,848 $13,617 $ 7,719 $ 4,051
Ratios with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 0.60%** 0.58% 0.67% 0.64%**
Net investment income 5.21%** 5.05% 5.54% 6.28%**
Ratios with waiver of management fees by PIM and reduction for fees paid indirectly:
Net expenses 0.60% 0.58% 0.67% 0.64%
Net investment income 5.21% 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 reduc- tion 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 invest- ment income to average net assets
decreased by 0.23%.
The accompanying notes are an integral part of these financial statements.
41
Pioneer Bond Fund
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
12/11/04 to
12/31/04
INVESTOR CLASS
Net asset value, beginning of period $ 9.40
-------
Increase (decrease) from investment operations:
Net investment income $ 0.03
Net realized and unrealized loss on investments (0.01)
-------
Net increase from investment operations $ 0.02
Distributions to shareowners:
Net investment income (0.03)
-------
Net decrease in net asset value $ (0.01)
-------
Net asset value, end of period $ 9.39
-------
Total return* 0.19%
Ratio of net expenses to average net assets+ 0.30%**
Ratio of net investment income to average net assets+ 5.74%**
Portfolio turnover rate 61%**
Net assets, end of period (in thousands) $ 9,157
Ratios with no waiver of management fees
by PIM and no reduction for fees paid indirectly:
Net expenses 0.42%**
Net investment income 5.62%**
Ratios with waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 0.30%
Net investment income 5.74%
* 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.
The accompanying notes are an integral part of these financial statements.
42
Pioneer Bond Fund
================================================================================
NOTES TO FINANCIAL STATEMENTS 12/31/04 (unauditded)
================================================================================
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 objective of the Fund is to seek current income
consistent with preservation of capital.
The Trustees have authorized the issuance of six classes of shares of the Fund.
The Fund offers six classes of shares designated as Class A, Class B, Class C,
Investor Class, Class R, and Class Y shares. Class R shares were first publicly
offered April 1, 2003. Investor Class shares were first publicly offered on
December 10, 2004. The Fund is not offering additional Investor Class shares
except in connection with the reinvestment of dividends on the Fund's
Outstanding Investor Class 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 and Investor Class 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
43
Pioneer Bond Fund
================================================================================
NOTES TO FINANCIAL STATEMENTS 12/31/04 (unauditded) (continued)
================================================================================
determined by, or under the direction of the Board of Trustees. At December
31, 2004 there were no securities fair 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.
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 year ended December 31, 2004 was as follows:
- -----------------------------------------
2004
- -----------------------------------------
Distributions paid from:
Ordinary income $13,862,071
Long-term capital gain -
-----------
Total $13,862,071
-----------
=========================================
44
Pioneer Bond Fund
================================================================================
================================================================================
The following shows the components of distributable earnings on a federal
income tax basis at December 31, 2004.
- ------------------------------------------------
2004
- ------------------------------------------------
Undistributed ordinary income $ 881,220
Dividends payable $ (229,477)
Capital loss-carryforward $(6,403,162)
Unrealized appreciation $ 2,826,845
-----------
Total $(2,924,574)
-----------
================================================
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.
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 $25,658 in underwriting commissions on the sale
of Class A shares during the six months ended December 31, 2004.
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 and Investor Class 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
45
Pioneer Bond Fund
================================================================================
NOTES TO FINANCIAL STATEMENTS 12/31/04 (unauditded) (continued)
================================================================================
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 Class A, Class B, Class C, Investor Class, Class
R and Class Y 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 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 managed 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. In
46
Pioneer Bond Fund
================================================================================
================================================================================
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, 2004, $119,533 was payable to
PIM related to management fees, administrative costs and certain other
services, and is included in due to affiliates.
Through December 10, 2006, PIM has 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.
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 $99,738 in transfer agent
fees payable to PIMSS at December 31, 2004.
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 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. Included in due to
affiliates is $108,525 in distribution fees payable to PFD at December 31,
2004. 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
47
Pioneer Bond Fund
================================================================================
NOTES TO FINANCIAL STATEMENTS 12/31/04 (unauditded) (continued)
================================================================================
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.
In addition, redemptions of Class A, Class B, Class C and Class R shares may be
subject to a contingent deferred sales charge (CDSC). Effective February 1, 2004
a CDSC of 1.00% may be imposed on redemptions of certain net asset value
purchases of Class A shares within 18 months of purchase (12 months for shares
purchased prior to February 1, 2004). Effective December 1, 2004, 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. Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time those shares were purchased.
Redemptions of Class C shares within one year of purchase are subject to a CDSC
of 1.00%. Redemptions of Class R shares within 18 months of purchase were
subject to a CDSC of 1.00%. Effective July 1, 2004 the CDSC on Class R shares
was eliminated. Proceeds from the CDSCs are paid to PFD. For the six months
ended December 31, 2004, $71,576 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, 2004, the Fund's
expenses were reduced by $1,945 under such arrangements.
48
Pioneer Bond Fund
================================================================================
================================================================================
6. 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
--------------- -----------
Sefeco Intermediate Term Bond Fund $176,429 $26,968
===============================================================================
49
Pioneer Bond Fund
================================================================================
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
================================================================================
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
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.
Trustees and Officers
The Fund's Board of Trustees provides broad supervision over the Fund's affairs.
The officers of the Fund are responsible for the Fund's operations. The Fund's
Trustees and officers are listed below, together with their principal
occupations during the past five years. Trustees who are interested persons of
the Fund within the meaning of the Investment Company Act of 1940 are referred
to as Interested Trustees. Trustees who are not interested persons of the Fund
are referred to as Independent Trustees. Each of the Trustees serves as a
trustee of each of the 74 U.S. registered investment portfolios for which
Pioneer Investment Management, Inc. ("Pioneer") serves as investment adviser
(the "Pioneer Funds"). The address for all Interested Trustees and all officers
of the Fund is 60 State Street, Boston, Massachusetts 02109.
The Fund's statement of additional information provides more detailed
information regarding the Fund's Trustees and is available upon request, without
charge, by calling 1-800-225-6292.
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.pioneerfunds.com and on the SEC's website at http://www.sec.gov.
50
================================================================================
RETIREMENT PLANS FROM PIONEER
================================================================================
Pioneer has a long history of helping people work toward their retirement goals,
offering plans suited to the individual investor and businesses of all sizes.
For more information on Pioneer retirement plans, contact your investment
professional, or call Pioneer at 1-800-622-0176.
Individual Retirement Accounts (IRAs)
Traditional IRA*
For anyone under age 701/2 earning income. Individuals can contribute up to
$3,000, or $3,500 if age 50 or older, annually. Earnings are tax-deferred, and
contributions may be tax-deductible.
Roth IRA*
Available to single individuals earning less than $110,000 in income annually,
and married couples with joint income less than $160,000. Contributions of up
to $3,000, or $3,500 if age 50 or older, a year are not tax-deductible, but all
earnings are tax-free for qualified withdrawals. Distributions are tax and
penalty-free if certain conditions are met.
Employer-Sponsored Plans
Uni-K Plan*
A 401(k) plan designed specifically for any business that employs only owners
and their spouses. Participants can make salary deferral contributions up to
$13,000 per year, or $16,000 if age 50 or older. In addition, each year the
business may contribute up to 25% of pay.
Uni-DB Plan
A full service defined benefit plan for small business owners over age 45 with
up to five employees. Employer contributions are required. The plan allows for
the maximum deductible contribution up to $165,000 or more.
401(k) Plan*
Allows employees to make pre-tax contributions through payroll deduction, up to
$13,000, or $16,000 if age 50 or older, per year. Employers' contributions are
discretionary. The 401(k) offers companies maximum flexibility.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
51
================================================================================
(continued)
================================================================================
SIMPLE IRA Plan*
The Savings Incentive Match PLan for Employees (SIMPLE) is designed for
employers with 100 or fewer eligible employees. Employees can decide whether to
contribute. Employers must contribute.
403(b) Plan*
Also known as a Tax-Sheltered Account (TSA), this plan lets employees of public
schools, non-profit hospitals and other tax-exempt organizations make pre-tax
contributions through payroll deduction.
SEP-IRA
The Simplified Employee Pension (SEP) plan lets self-employed people and
small-business owners make tax-deductible contributions of up to 25% of income,
while maintaining complete contribution flexibility each year.
Profit Sharing Plan
Companies can decide each year whether - and how much - to contribute to
participants, up to 25% of each participant's pay. Can include vesting
schedules that are not available with a SEP-IRA.
Age-Based Profit Sharing Plan
Employer contributions are flexible, but are based on a formula using age and
salary. Each year, a business can contribute up to 25% of the total eligible
payroll.
Money Purchase Pension Plan (MPP)
Allows employer contributions, up to 25% of pay annually. Companies must
contribute a fixed percentage of pay each year.
* Special Catch-Up Provisions are available to individuals age 50 and older to
contribute additional amounts to their retirement accounts. For more
information, call our Retirement Plans Information line at 1-800-622-0176.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
52
================================================================================
HOW TO CONTACT PIONEER
================================================================================
We are pleased to offer a variety of convenient ways to 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@pioneerinvest.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
Please consider the Fund's investment objectives, risks, charges and expenses
carefully before investing. The prospectus contains this and other information
about the Fund and should be read carefully before you invest or send money. To
obtain a prospectus and for other information on any Pioneer fund, call
1-800-225-6292 or visit our web site www.pioneerfunds.com.
The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and the third quarters for each fiscal year on
Form N-Q. Shareowners 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 recognizes 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 recognizes 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.
The Fund's independent auditor, Ernst & Young
LLP ("E&Y"), recently has advised the Securities
and Exchange Commission, the Public Company
Accounting Oversight Board, and the Audit
Committee of the Fund's Board of Trustees that
certain non-audit work performed by E&Y's China
affiliate has raised questions regarding E&Y's
independence with respect to its performance of
audit services for the Fund. In July 2004, E&Y
became aware that member firms in China ("E&Y
China") provided certain tax services to offices of
UniCredito Italiano, S.p.A. ("UCI"), a member of
the Fund's Investment Company Complex. The
services included receipt and disbursement of
monies transferred to E&Y China by UCI in
payment of individual expatriate income taxes due
on returns prepared by E&Y China for certain UCI
employees located in China from October 1998 to
May 2003. E&Y became auditors of the Fund in
May 2002. These expatriate tax services were
discontinued in May 2003. The fees received by
E&Y China for all such services totaled $3,685.
The Fund's Audit Committee and E&Y have
discussed the matter, including the nature of the
services provided, the personnel involved in
providing the services and the fees received by
E&Y for performing the services. The Committee
continues to review the facts and circumstances
surrounding the matter, including the issue of
whether the monies transferred for employees' taxes
were de facto monies due the employees for tax
payments rather than monies belonging to UCI.
E&Y has informed the Audit Committee that based
on its internal reviews and the de minimis nature of
the services provided and fees received, it does not
believe its independence with respect to the Fund
has been impaired.
(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.
N/A
ITEMS 5-6. [RESERVED]
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. [RESERVED]
ITEM 9. 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 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.
ITEM 10. 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 9, 2005
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 9, 2005
By (Signature and Title)* /s/ Vincent Nave
Vincent Nave, Treasurer
Date March 9, 2005
* Print the name and title of each signing officer under his or her signature.