As filed with the Securities and Exchange Commission on June 29, 2001
File No.33-76894
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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___ ___
/___/ Pre-Effective Amendment No. ___ Post-Effective Amendment No. /___/
(Check appropriate box or boxes)
________________________________________________________________________________
Exact Name of Registrant
as Specified in Charter: Area Code and Telephone Number:
Pioneer Emerging Markets Fund (617) 742-7825
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Address of Principal Executive Offices: (Number, Street, City, State, ZIP Code)
60 State Street, Boston, Massachusetts 02109
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Name and Address of Agent for Service:
Joseph P. Barri, Hale and Dorr LLP
60 State Street, Boston, Massachusetts 02109
(Number and Street) (City) (State) (ZIP Code)
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Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this registration
statement under the Securities Act of 1933.
It is proposed that this registration statement will become effective on
July 30, 2001 pursuant to Rule 488 under the Securities Act of 1933.
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Title of Securities Being Registered:
Shares of Beneficial Interest (without par value) (no filing fee is due because
of reliance on Section 24(f) under the Investment Company Act of 1940)
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PIONEER INDO-ASIA FUND
60 State Street
Boston, Massachusetts 02109
1-800-622-3265
NOTICE OF MEETING OF SHAREHOLDERS
SCHEDULED FOR SEPTEMBER 18, 2001
This is the formal agenda for your fund's shareholder meeting. It tells
you what matters will be voted on and the time and place of the meeting, in case
you want to attend in person.
TO THE SHAREHOLDERS OF PIONEER INDO-ASIA FUND:
A meeting of shareholders of your fund will be held at the offices of
Hale and Dorr LLP, 60 State Street, 26th Floor, Boston, Massachusetts on
Tuesday, September 18, 2001, at 2:30 p.m., Boston time, to consider the
following:
1. A proposal to approve an Agreement and Plan of Reorganization
between your fund and Pioneer Emerging Markets Fund. Under
this Agreement your fund would transfer all of its assets to
Emerging Markets Fund in exchange for shares of Emerging
Markets Fund. These shares would be distributed
proportionately to you and the other shareholders of your
fund. Emerging Markets Fund would also assume your fund's
liabilities. Your board of trustees recommends that you vote
FOR this proposal.
2. Any other business that may properly come before the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY CARD.
Shareholders of record as of the close of business on July 20, 2001 are
entitled to vote at the meeting and any related follow-up meetings.
By Order of the Board of Trustees,
Joseph P. Barri, SECRETARY
Boston, Massachusetts
August 3, 2001
10348-00-0801
PROXY STATEMENT OF
PIONEER INDO-ASIA FUND
PROSPECTUS
FOR CLASS A, CLASS B AND CLASS C SHARES
OF PIONEER EMERGING MARKETS FUND
This proxy statement and prospectus contains the information you should
know before voting on the proposed reorganization of your fund into Pioneer
Emerging Markets Fund. Please read it carefully and retain it for future
reference.
HOW THE REORGANIZATION WILL WORK:
o Your fund will transfer all of its assets to Emerging Markets Fund.
Emerging Markets Fund will assume your fund's liabilities.
o Emerging Markets Fund will issue Class A shares to your fund with an
aggregate value equal to the value of your fund's Class A shares. These
shares will be distributed to your fund's Class A shareholders in
proportion to their holdings on the reorganization date. In this same
manner, Emerging Markets Fund will issue Class B and Class C shares to
your fund that will be distributed to your fund's Class B and Class C
shareholders in proportion to their respective holdings on the
reorganization date.
o The reorganization will not result in income, gain or loss for federal income
tax purposes.
o Your fund will be terminated and you will end up as a shareholder of Emerging
Markets Fund.
WHY YOUR FUND'S TRUSTEES RECOMMEND THE REORGANIZATION:
The trustees of your fund believe that reorganizing your fund into a
larger fund with similar investment policies would enable the shareholders of
your fund to benefit from increased diversification, the ability to achieve
better net prices on securities trades and economies of scale that could
contribute to a lower expense ratio. Therefore, the trustees recommend you vote
FOR the reorganization.
INVESTMENT OBJECTIVES
INDO-ASIA EMERGING MARKETS
Investment Long-term growth of capital. Long-term growth of capital.
objective
MORE INFORMATION IS AVAILABLE
WHAT WHERE
Emerging Markets Fund's annual On file with the Securities and
and more recent semiannual reports Exchange Commission (SEC) and
to shareholders. These reports are available at no charge by calling
incorporated by reference into this Pioneer at 1-800-622-3265.
proxy statement and prospectus.
Your fund's annual report to
shareholders.
Most recent prospectuses of your fund
and Emerging Markets Fund (dated
3/1/01 (as supplemented) and
4/2/01, respectively)
Statement of Additional Information
dated August 3, 2001. It contains
additional information about your
fund and Emerging Markets Fund.
This statement of additional information
is incorporated by reference into this
proxy statement and prospectus.
To ask questions about this proxy Call our toll-free telephone number:
statement and prospectus: 1-800-622-3265.
AN INVESTMENT IN EMERGING MARKETS FUND IS NOT A BANK DEPOSIT AND IS NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
NO GOVERNMENT SECURITIES COMMISSION OR AGENCY HAS APPROVED EMERGING
MARKETS FUND'S SHARES OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIME.
The date of this proxy statement and prospectus is
August 3, 2001.
TABLE OF CONTENTS
PAGE
Introduction.............................................................5
Summary of Proxy Statement/Prospectus....................................5
Risk/Return Summary.....................................................12
Capitalization..........................................................26
Boards' Evaluation and Recommendation...................................27
Voting Rights and Required Vote.........................................28
Additional Information About the Funds..................................28
Information Concerning the Meeting......................................56
Ownership of Shares of the Funds........................................58
Experts.................................................................58
Available Information...................................................59
Exhibit A: Agreement and Plan of Reorganization.......................A-1
Exhibit B: Excerpts from Your Fund's and Emerging Markets Fund's Most Recent
Annual and Semiannual Reports
B-1
INTRODUCTION
This proxy statement and prospectus is being used by the board of
trustees of your fund to solicit proxies to be voted at a meeting of
shareholders of your fund. This meeting will be held at the offices of Hale and
Dorr LLP, 60 State Street, 26th Floor, Boston, Massachusetts on Tuesday,
September 18, 2001, at 2:30 p.m., Boston time. The purpose of the meeting is to
consider a proposal to approve an Agreement and Plan of Reorganization providing
for the reorganization of your fund into Pioneer Emerging Markets Fund. This
proxy statement and prospectus is being mailed to your fund's shareholders on or
about August 3, 2001.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record on July 20, 2001 are entitled to attend and vote
at the meeting or any adjourned meeting. Each share is entitled to one vote.
Shares represented by properly executed proxies, unless revoked before or at the
meeting, will be voted according to shareholders' instructions. If you sign a
proxy, but do not fill in a vote, your shares will be voted to approve the
Agreement and Plan of Reorganization. If any other business comes before the
meeting, your shares will be voted at the discretion of the persons named as
proxies.
SUMMARY OF PROXY STATEMENT/PROSPECTUS
The following is a summary of more complete information appearing later
in this proxy statement. You should carefully read the entire proxy statement
and exhibits because they contain details that are not in the summary.
COMPARISON OF INDO-ASIA FUND WITH EMERGING MARKETS FUND
BUSINESS AND INVESTMENTS
NET ASSETS AS OF
JUNE 30, 2001:
INDO-ASIA:
$___ million
EMERGING MARKETS:
$___ million
INVESTMENT
OBJECTIVE:
INDO-ASIA:
Long-term growth of capital.
EMERGING MARKETS:
Long-term growth of capital.
BUSINESS AND INVESTMENTS
PRIMARY
INVSTMENTS:
INDO-ASIA:
Normally, your fund invests at least 65% of its total assets in equity
securities of Indo-Asian issuers. Your fund's investments will include
securities of issuers in Australia and New Zealand but will exclude securities
of issuers in Japan.
An Indo-Asian issuer:
o Is organized under the laws of a country in Asia or the Indian Subcontinent;
o Derives at least 50% of its revenues from business transacted, or has at
least 50% of its assets, in Asia or the Indian Subcontinent; or
o Has equity securities that trade principally on a stock exchange (including
an over-the-counter market) in Asia or the Indian Subcontinent.
EMERGING MARKETS:
Normally, Emerging Markets Fund invests at least 65% of its total assets in both
equity and debt securities of emerging market issuers. The fund normally
emphasizes equity securities in its portfolio. An emerging markets issuer:
o Is organized under the laws of an emerging market country;
o Has a principal office in an emerging market country; or
o Derives at least 50% of its gross revenues or profits from goods or services
produced in emerging markets or sales made in emerging markets.
Emerging Markets Fund invests in at least six emerging markets. The fund does
not allocate more than 25% of its total assets (at the time of purchase) to any
one country but can invest more than 25% of its total assets in a particular
region.
OTHER INVESTMENTS:
INDO-ASIA
Your fund may invest up to 35% of its total assets (at the time of purchase) in
equity securities of companies located outside of Asia and the Indian
Subcontinent.
Your fund may invest up to 25% of its total assets (at the time of purchase) in
debt securities of corporate and governmental issuers.
EMERGING MARKETS
Emerging Markets Fund may invest up to 35% of its total assets (at the time of
purchase) in equity and debt securities of corporate or government issuers in
any developed country (other than the U.S.) and short-term debt securities for
cash management purposes.
Emerging Markets Fund may also invest in Brady bonds and debt securities of any
quality or maturity. The fund may not invest more than 10% of its net assets in
debt securities rated below investment grade or in unrated securities of
comparable quality.
PERMITTED TRANSACTIONS IN DERIVATIVE INSTRUMENTS:
INDO-ASIA
Your fund may purchase and sell forward foreign currency exchange contracts in
Indo-Asian currencies in connection with its investments and is otherwise
subject to the fund's general policies on derivatives.
EMERGING MARKETS
Emerging Markets Fund may purchase and sell forward foreign currency exchange
contracts in non-U.S. currencies in connection with its investments and is
otherwise subject to the fund's general policies on derivatives.
INDUSTRY CONCENTRATION:
Neither fund concentrates 25% or more of its total assets in any one industry.
BUSINESS AND INVESTMENTS
INVESTMENT ADVISER
AND PORTFOLIO MANAGERS:
BOTH FUNDS
The investment adviser for both funds is Pioneer Investment
Management, Inc. ("Pioneer"). Day-to-day management of your
fund's portfolio is the responsibility of co-managers Mark
Madden, Manish Modi and Paul Clooney. Day-to-day management of
the Emerging Markets Fund's portfolio is the responsibility of
Mr. Madden.
Mr. Madden joined Pioneer in 1990 as an equity analyst, has
been a portfolio manager since 1994 and has been an investment
professional since 1984. Mr. Modi, associate portfolio
manager, is a vice president of Pioneer. He joined Pioneer in
1994 as an equity analyst and has been an investment
professional since 1994. Mr. Cloonan, associate portfolio
manager, is a vice president of Pioneer. He joined Pioneer in
1997 as an equity analyst. Prior to joining Pioneer, Mr.
Cloonan was a manager in the Financial Advisory Services Group
of Ernst & Young LLP from 1994 to 1997.
In each case, Mr. Madden and, if applicable, his co-managers may draw upon the
research and investment management experience of Pioneer's affiliate, Pioneer
Investment Management Limited. The co-managers operate under the supervision of
Theresa A. Hamacher, chief investment officer of Pioneer. She joined Pioneer in
1997 and has been an investment professional since 1984, most recently as a
chief investment officer at another investment adviser.
INDO-ASIA
Pioneer currently retains its Indian affiliate, Kothari Pioneer AMC Limited
("Kothari Pioneer") as a subadviser to your fund with respect to investments in
India. For such services, Pioneer pays a portion of its advisory fee to Kothari
Pioneer, based upon the percentage of the fund's investments in India, for its
services. If the reorganization is completed, the subadvisory arrangement with
Kothari Pioneer will be terminated.
EMERGING MARKETS
Pioneer has not engaged the services of an investment subadviser for Emerging
Markets Fund.
BUSINESS:
Each fund is a diversified open-end investment company organized as a
Delaware business trust.
CLASSES OF SHARES
CLASS A SHARES:
INDO-ASIA
EMERGING MARKETS
Each fund's Class A shares are offered with front-end sales charges up to
5.75% of the fund's offering price, depending on the amount invested.
CLASS A SHARES OF BOTH FUNDS HAVE THE SAME CHARACTERISTICS
For both funds:
o There is no front-end sales charge for investments of $1 million or more,
but there is a contingent deferred sales charge (CDSC) of 1.00% on shares
sold within one year of purchase.
o Investors can combine multiple purchases of Class A shares to take advantage
of breakpoints in the sales charge schedule.
o Class A shares are subject to 12b-1 distribution and service fees up to
0.25% annually of average daily net assets.
o Sales charges are waived or reduced for the categories of investors listed
in each fund's prospectus.
CLASS B SHARES:
CLASS B SHARES OF BOTH FUNDS HAVE THE SAME CHARACTERISTICS AND CDSC STRUCTURE.
Each fund's Class B shares are offered without a front-end sales charge, but are
subject to a CDSC if sold within six years after purchase. The CDSC is up to
4.00% depending on how long the shares are held. No CDSC is imposed on shares
held more than six years. Class B shares automatically convert to Class A shares
after eight years.
For both funds:
o CDSCs are waived for the categories of investors listed in each fund's
prospectus.
o Class B shares are subject to 12b-1 distribution and service fees of up to
1.00% annually of average daily net assets.
CLASS C SHARES:
CLASS C SHARES OF BOTH FUNDS HAVE THE SAME CHARACTERISTICS AND CDSC STRUCTURE.
Each fund's Class C shares are offered without a front-end sales charge, but are
subject to a CDSC of 1.00% if sold within one year after purchase. No CDSC is
imposed thereafter.
For both funds:
o The CDSC is waived for the categories of investors listed in each fund's
prospectus.
o Class C shares are subject to 12b-1 distribution and service fees of up to
1.00% annually of average daily net assets.
o Class C shares have no conversion feature.
CLASSES OF SHARES
REDEMPTION FEE:
INDO-ASIA
You may be charged up to 2.00% if you sell shares of Indo-Asia Fund worth more
than $25,000 within 90 days of any purchase of fund shares. Indo-Asia Fund
shares exchanged for Emerging Markets Fund shares in connection with the
reorganization are not subject to the redemption fee.
EMERGING MARKETS
None.
BUYING, SELLING AND EXCHANGING:
The procedures for buying, selling and exchanging shares are identical for both
funds. These procedures are described in detail below.
REORGANIZATION
o The reorganization is scheduled to occur as of 5:00 p.m., Eastern time,
on September 28, 2001, but may occur as of any later date before
January 2, 2002. Your fund will transfer all of its assets to Emerging
Markets Fund. Emerging Markets Fund will assume your fund's
liabilities. The net asset values of both funds will be computed as of
the close of the New York Stock Exchange (normally 4:00 p.m. Eastern
time) on the reorganization date.
o Emerging Markets Fund will issue to your fund Class A shares of
Emerging Markets Fund with an aggregate value equal to the aggregate
net asset value of your fund's Class A shares. Your fund will
immediately distribute these shares to your fund's Class A
shareholders in proportion to their holdings on the reorganization
date. In this same manner, Emerging Markets Fund will issue to
your fund Class B and Class C shares that will be distributed to your
fund's Class B and Class C shareholders in proportion to their
respective holdings on the reorganization date. As a result, Class
A shareholders of your fund will end up as Class A shareholders of
Emerging Markets Fund, Class B shareholders of your fund will end
up as Class B shareholders of Emerging Markets Fund and Class C
shareholders of your fund will end up as Class C shareholders of
Emerging Markets Fund.
o After the shares are issued, your fund will be terminated.
o The reorganization will not result in income, gain or loss for federal
income tax purposes and will not take place unless both funds receive a
satisfactory opinion concerning the federal income tax consequences of
the reorganization from Hale and Dorr LLP, counsel to the funds.
OTHER CONSEQUENCES OF THE REORGANIZATION. Each fund pays monthly
advisory fees equal to the following annual percentage of average daily net
assets:
FUND ANNUAL FEE RATE
---- ---------------
Indo-Asia Fund 1.10%
Emerging Markets Fund 1.25%
Emerging Markets Fund shareholders currently pay a higher advisory fee
than shareholders of your fund. The reorganization will, however, provide other
economic benefits to your fund's shareholders. For instance, your fund's
expenses have historically been lower than those of Emerging Markets Fund solely
due to a voluntary expense limitation agreement that Pioneer may terminate at
October 31, 2001, the end of your fund's current fiscal year. Emerging Markets
Fund's Class A expense ratio of 2.19% for the Emerging Markets Fund's fiscal
year ended November 30, 2000, as well as its PRO FORMA expense ratio of 2.47%
for the same period, are lower than your fund's gross Class A expense ratio of
2.61% (2.10% for net expenses with the expense limitation) for Indo-Asia Fund's
fiscal year ended October 31, 2000. Both funds pay the same 12b-1 fee rates for
each class.
Without Pioneer's voluntary agreement to limit your fund's expenses,
your fund's total annual operating expenses would be higher than Emerging
Markets Fund's. In light of your fund's inability to attract significant assets,
Pioneer may not continue to subsidize a portion of your fund's expenses
indefinitely. If Pioneer discontinued this voluntary limitation, your fund's
total annual operating expenses would rise above those of the Emerging Markets
Fund.
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVES
INDO-ASIA FUND. Long-term growth of capital.
EMERGING MARKETS FUND. Long-term growth of capital.
INVESTMENT STRATEGIES
INDO-ASIA FUND. Under normal circumstances, Indo-Asia Fund invests at
least 65% of its total assets in equity securities of Indo-Asian issuers. The
fund's investments will include securities of issuers in Australia and New
Zealand but will exclude securities of issuers in Japan. The fund may invest up
to 35% of its total assets (at the time of purchase) in equity securities
located outside of Asia and the Indian Subcontinent. The fund may invest up to
25% of its total assets (at the time of purchase) in debt securities of
corporate and government issuers. The fund may purchase and sell forward foreign
currency exchange contracts in Indo-Asian currencies in connection with its
investments and is otherwise subject to the fund's general policies on
derivatives.
EMERGING MARKETS FUND. Under normal circumstances, Emerging Markets
Fund invests at least 65% of its total assets in both equity and debt securities
of emerging market issuers. The fund normally emphasizes equity securities in
its portfolio. The fund invests in at least six emerging markets. The fund does
not allocate more than 25% of its total assets (at the time of purchase) to any
one country but can invest more than 25% of its total assets in a particular
region. The fund may invest up to 35% of its total assets (at the time of
purchase) in equity and debt securities of corporate or government issuers in
any developed country (other than the U.S.) and short-term debt securities for
cash management purposes. The fund may also invest in Brady bonds and debt
securities of any quality or maturity. The fund may not invest more than 10% of
its net assets in debt securities rated below investment grade or in unrated
securities of comparable quality. The fund may purchase and sell forward foreign
currency exchange contracts in non-U.S. currencies in connection with its
investments and is otherwise subject to the fund's general policies on
derivatives.
Pioneer, each fund's investment adviser, uses a value approach to
select each fund's investments. Using this investment style, Pioneer seeks
securities selling at reasonable prices or substantial discounts to their
underlying values and then holds these securities until the market values
reflect their intrinsic values. Pioneer evaluates a security's potential value,
including the attractiveness of its market valuation, based on the company's
assets and prospects for long-term revenue, earnings and cash flow growth.
Pioneer employs qualitative analysis, quantitative techniques, due diligence and
fundamental research, an evaluation of the issuer based on its financial
statements and operations. In addition to analyzing specific securities, Pioneer
determines the relative attractiveness of investing in different markets. In
assessing the investment potential of each country, Pioneer considers economic
growth prospects, monetary conditions, political risks, currency risk, capital
flows and other factors.
Factors Pioneer looks for in selecting investments include:
o Issuers in countries expected to have economic and market environments
that will be positive
o Favorable expected returns relative to perceived risk
o Companies expected to benefit from long-term trends in the economy
o Low market valuations relative to expected earnings, assets, cash flow
and revenues
o Turnaround potential for companies that have been through difficult
periods
o Management with demonstrated ability and commitment to the company
o Issuer's industry has strong fundamentals, such as increasing or
sustainable demand and barriers to entry
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
Each fund is subject to similar risks. Most of the countries in Asia
and the Indian Subcontinent in which your fund invests are considered emerging
markets and involve the risks of investing in emerging market issuers. Even
though each fund seeks long-term growth capital, you could lose money on your
investment or not make as much as if you invested elsewhere if:
o Stock markets of emerging market countries go down or perform poorly
relative to other stock markets (this risk may be greater in the short
term)
o Securities of emerging market issuers or value stocks fall out of favor
with investors
o The fund's assets remain undervalued or do not have the potential value
initially expected
Investing in emerging market issuers involves unique risks compared to
investing in securities of issuers in the U.S. and other developed
countries. These risks are more pronounced to the extent a fund invests
in issuers in the lesser developed emerging markets or in one region.
These risks may include:
o Less information about emerging market issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices
o Many emerging markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the fund's portfolio
securities at times, in amounts and at prices it considers reasonable
o Adverse effect of currency exchange rates or controls on the value of
the fund's investments
o The economies of emerging market countries may grow at slower rates
than expected or may experience a downturn or recession
o Economic, political and social developments may adversely affect
securities markets
o Emerging market countries may experience rising interest rates, or,
more significantly, rapid inflation or hyperinflation
o The fund could experience a loss from settlement and custody practices
in some emerging markets
o Withholding and other non-U.S. taxes may decrease the fund's return
EACH FUND'S PAST PERFORMANCE
The bar chart and table indicate the risks of investing in each fund by
showing how the funds have performed in the past. Each fund's performance varies
from year to year. A fund's past performance does not necessarily indicate how
it will perform in the future. As a shareholder, you may lose or make money on
your investment. Your fund began investing in Indo-Asian issuers in October,
1998. Before that time, it primarily invested its assets in securities of Indian
issuers.
The chart shows the performance of each fund's Class A shares for each
full calendar year since each fund's inception on June 23, 1994. Class B and
Class C shares have different performance. The chart does not reflect any Class
A sales charges you may pay when you buy or sell fund shares. Any sales charge
will reduce your return.
- -------------- ----------- ----------- ------------ ----------- ----------- -----------
'95 '96 '97 '98 '99 '00
- -------------- ----------- ----------- ------------ ----------- ----------- -----------
- -------------- ----------- ----------- ------------ ----------- ----------- -----------
Indo-Asia -19.94 -16.44 -7.49 10.79 106.73 -36.24
- -------------- ----------- ----------- ------------ ----------- ----------- -----------
- -------------- ----------- ----------- ------------ ----------- ----------- -----------
Emerging 2.47 17.78 9.87 -32.14 91.04 -33.71
Markets
- -------------- ----------- ----------- ------------ ----------- ----------- -----------
INDO-ASIA FUND'S HIGHEST CALENDAR QUARTERLY RETURN FOR CLASS A SHARES
WAS 47.63% (3/31/99 TO 6/30/99); EMERGING MARKETS FUND'S HIGHEST CALENDAR
QUARTERLY RETURN FOR CLASS A SHARES WAS 55.30% (6/30/98 TO 12/31/99)
INDO-ASIA FUND'S LOWEST CALENDAR QUARTERLY RETURN FOR CLASS A SHARES
WAS -25.03% (6/30/96 TO 9/30/96); EMERGING MARKETS FUND'S LOWEST CALENDAR
QUARTERLY RETURN FOR CLASS A SHARES WAS -29.12% (6/30/98 TO 9/30/98)
AT 3/31/01 YOUR FUND'S AND EMERGING MARKETS FUND'S YEAR-TO-DATE RETURNS
WERE -4.67% AND -9.04%, RESPECTIVELY.
COMPARATIVE PERFORMANCE
The table shows the average annual total returns of each class of the
funds over time and compares these returns to the returns of the Morgan Stanley
Capital International (MSCI) All Country (AC) Asia Free ex Japan Index, a widely
recognized capitalization-weighted index of stocks traded in Asia, and the MSCI
Emerging Markets Free Index, a widely recognized measure of the performance of
emerging market stocks. Unlike either fund, the indices are not managed and do
not incur expenses. The table:
o Reflects sales charges applicable to the class
o Assumes that you sell your shares at the end of the period
o Assumes you reinvest all of your dividends and distributions
AVERAGE ANNUAL TOTAL RETURN
(for periods ended December 31, 2000)
SINCE INCEPTION
1 YEAR 5 YEARS INCEPTION DATE
Indo-Asia Fund:
Class A -39.91% 1.24% -4.20% 6/23/94
Class B -39.28% 1.47% -4.07% 6/23/94
Class C -36.71% n/a 2.04% 1/31/96
Emerging Markets Fund:
Class A -37.53% 0.94% 0.24% 6/23/94
Class B -36.95% 1.16% 0.37% 6/23/94
Class C -34.17% n/a -1.04% 1/31/96
MSCI AC Asia Free ex Japan Index -35.22% -8.36% -5.89%* ----
MSCI Emerging Markets Free Index -30.61% -4.17% -3.51%** ----
* Reflects the return of the index since the inception of each fund's Class A
and Class B shares. The return of the index since the inception of Class C
shares of Indo-Asia Fund is -9.88%. The return of the index since the
inception of Class C shares of Emerging Markets Fund is _______%.
** Reflects the return of the index since the inception of each fund's Class A
and Class B shares. The return of the index since the inception of Class C
shares of Emerging Markets Fund is -5.57%. The return of the index since
the inception of Class C shares of Indo-Asia Fund is ______%.
FEES AND EXPENSES
Shareholders of both funds pay various expenses, either directly or
indirectly. The first two expense tables appearing below show fund expenses for
the most recently completed fiscal year. Future expenses may be greater or less.
INDO-ASIA FUND
SHAREOWNER FEES PAID DIRECTLY FROM YOUR
INVESTMENT CLASS A CLASS B CLASS C
------- ------- -------
Maximum sales charge (load) when you buy shares 5.75% None None
as a percentage of offering price
Maximum deferred sales charge (load) as a None(1) 4.00% 1.00%
Redemption fee as a percentage of amount 2.00%(2) None None
ANNUAL FUND OPERATING EXPENSES PAID FROM THE
ASSETS OF THE FUND AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS CLASS A CLASS B CLASS C
------- ------- -------
Management Fee 1.10% 1.10% 1.10%
Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00%
Other Expenses 1.26% 1.31% 1.29%
Total Operating Expenses 2.61% 3.41% 3.39%
Fee Waiver and Expense Limitation(3) -0.51% -0.46% -0.50%
Net Expenses(3) 2.10% 2.95% 2.89%
(1) Except for investments of $1 million or more.
(2) If you sell or exchange Class A shares of your fund worth more than $25,000
within 90 days of any purchase of fund shares, the fund will apply a 2% fee
to the entire amount of your sale proceeds.
(3) The expenses in the table reflect the expense limitation in effect through
October 31, 2001 under which Pioneer has agreed not to impose all or a
portion of its management fee, and, if necessary, to limit other ordinary
operating expenses to the extent required to reduce Class A expenses to
2.10% of the average daily net assets attributable to Class A shares; the
portion of fund expenses attributable to Class B and Class C shares will be
reduced only to the extent such expenses are reduced for Class A shares.
INDO-ASIA FUND EXAMPLE
This example helps you compare the cost of investing in the fund with
the cost of investing in other mutual funds. It assumes that: a) you invest
$10,000 in the fund for the time periods shown, b) you reinvest all dividends
and distributions, c) your investment has a 5% return each year, d) the fund's
operating expenses remain the same, and e) Pioneer's expense limitation is in
effect for year one.
Although your actual costs may be higher or lower, under these
assumptions your costs would be:
INDO-ASIA FUND YEAR 1 YEAR 3 YEAR 5 YEAR 10
- -------------- ------ ------ ------ -------
Class A shares $776 $1,294 $1,838 $3,314
Class B shares:
Assuming redemption at end of period 698 1,305 1,935 3,483
Assuming no redemption 298 1,005 1,735 3,483
Class C shares:
Assuming redemption at end of period 392 996 1,722 3,643
Assuming no redemption 292 996 1,722 3,643
EMERGING MARKETS FUND
SHAREOWNER FEES PAID DIRECTLY FROM YOUR INVESTMENT
CLASS A CLASS B CLASS C
Maximum sales charge (load) when you buy shares as a 5.75% None None
percentage of offering price
Maximum deferred sales charge (load) as a percentage None(1) 4.00% 1.00%
ANNUAL FUND OPERATING EXPENSES PAID FROM THE ASSETS
OF THE FUND AS A PERCENTAGE OF AVERAGE DAILY NET
ASSETS CLASS A CLASS B CLASS C
------- ------- -------
Management Fee 1.25% 1.25% 1.25%
Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00%
Other Expenses 0.69% 0.80% 0.60%
Total Annual Fund Operating Expenses 2.19% 3.05% 2.85%
EMERGING MARKETS FUND EXAMPLE
This example helps you compare the cost of investing in the fund with
the cost of investing in other mutual funds. It assumes that: a) you invest
$10,000 in the fund for the time periods shown, b) you reinvest all dividends
and distributions, c) your investment has a 5% return each year and d) the
fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these
assumptions your costs would be:
EMERGING MARKETS FUND YEAR 1 YEAR 3 YEAR 5 YEAR 10
- --------------------- ------ ------ ------ -------
Class A shares $784 $1,221 $1,682 $2,954
Class B shares:
Assuming redemption at end of period 708 1,242 1,801 3,164
Assuming no redemption 308 942 1,601 3,164
Class C shares:
Assuming redemption at end of period 388 883 1,504 3,176
Assuming no redemption 288 883 1,504 3,176
PRO FORMA EXPENSE TABLE
The next expense table shows the PRO FORMA expenses of Emerging Markets
Fund assuming that a reorganization with your fund occurred on December 1, 1999.
The expenses shown in the table are based on fees and expenses incurred by the
funds during the year ended November 30, 2000. Emerging Markets Fund's actual
expenses after the reorganization may be greater or less than those shown. The
PRO FORMA expense example shows what you would pay on a $10,000 investment if
the reorganization had occurred on December 1, 1999 using the assumptions
previously stated for the funds individually. The PRO FORMA example is for
comparison purposes only and is not a representation of Emerging Markets Fund's
actual expenses or returns, either past or future.
EMERGING MARKETS FUND (PRO FORMA)
(ASSUMING REORGANIZATION WITH INDO-ASIA FUND)
SHAREOWNER FEES PAID DIRECTLY FROM YOUR INVESTMENT
CLASS A CLASS B CLASS C
Maximum sales charge (load) when you buy shares as 5.75% None None
a percentage of offering price
Maximum deferred sales charge (load) as a None(1) 4.00% 1.00%
ANNUAL FUND OPERATING EXPENSES PAID FROM THE ASSETS
OF THE FUND AS A PERCENTAGE OF AVERAGE DAILY NET
ASSETS CLASS A CLASS B CLASS C
------- ------- -------
Management Fee 1.25% 1.25% 1.25%
Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00%
Other Expenses 0.69% 0.80% 0.60%
Total Annual Fund Operating Expenses 2.19% 3.05% 2.85%
PRO FORMA EXAMPLE
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- ----------- ------ ------ ------ -------
Class A shares $784 $1,221 $1,682 $2,954
Class B shares:
Assuming redemption at end of period 708 1,242 1,801 3,164
Assuming no redemption 308 942 1,601 3,164
Class C shares:
Assuming redemption at end of period 388 883 1,504 3,176
Assuming no redemption 288 883 1,504 3,176
(1) Except for investments of $1 million or more.
OTHER INVESTMENT STRATEGIES
As discussed, your fund invests primarily in equity securities of
Indo-Asian issuers to seek long-term growth of capital. Emerging Markets Fund
invests primarily in securities of emerging market issuers to seek long-term
growth of capital.
This section describes additional investments that a fund may make or
strategies that it may pursue to a lesser degree to achieve the fund's goal.
Some of the funds' secondary investment policies also entail risks. To learn
more about these investments and risks, you should obtain and read the statement
of additional information (SAI).
Your fund may invest up to 25% of its total assets (at the time of
purchase) in debt securities of corporate and government issuers. The fund
invests in debt securities when Pioneer believes they are consistent with the
fund's investment objective, to diversify the fund's portfolio or for greater
liquidity. While the fund may invest in debt securities of any quality, the debt
securities purchased by the fund may be comparable in quality to debt securities
rated below investment grade by a nationally recognized securities rating
organization or determined to be of equivalent credit quality by Pioneer.
Emerging Markets Fund may invest up to 35% of its total assets (at the
time of purchase) in equity and debt securities of corporate or government
issuers in any developed country (other than the U.S.) and short-term debt
securities for cash management purposes. Emerging Markets Fund may also invest
in Brady bonds, which are restructured debt of governmental issuers of emerging
market countries. The fund may invest in debt securities of any quality or
maturity. The fund may not invest more than 10% of its net assets in debt
securities rated below investment grade or in unrated securities of comparable
quality. The fund invests in debt securities when Pioneer believes they are
consistent with the fund's investment objective, to diversify the fund's
portfolio or for greater liquidity.
Debt securities are subject to the risk of an issuer's inability to
meet principal or interest payments on its obligations. Factors which could
contribute to a decline in the market value of debt securities in the fund's
portfolio include rising interest rates or a reduction in the perceived
creditworthiness of the issuer of the securities. A debt security is investment
grade if it is rated in one of the top four categories by a nationally
recognized securities rating organization or determined to be of equivalent
credit quality by Pioneer. Debt securities rated below investment grade are
commonly referred to in the U.S. as "junk bonds" and are considered speculative.
Below investment grade debt securities involve greater risk of loss, are subject
to greater price volatility and are generally less liquid, especially during
periods of economic uncertainty or change, than higher quality debt securities.
TEMPORARY INVESTMENTS
Normally, each fund invests substantially all of its assets to meet its
investment objective. Each fund may invest the remainder of its assets in
securities with remaining maturities of less than one year, cash equivalents or
may hold cash. For temporary defensive purposes, each fund may depart from its
principal investment strategies and invest part or all of its assets in these
securities or may hold cash. During such periods, each fund may not be able to
achieve its investment objective. The funds intend to adopt a defensive strategy
only when Pioneer believes securities in which the funds normally invest have
extraordinary risks due to political or economic factors.
SHORT-TERM TRADING
The funds usually do not trade for short-term profits. Each fund will
sell an investment, however, even if it has only been held for a short time, if
it no longer meets the fund's investment criteria. If a fund does a lot of
trading, it may incur additional operating expenses, which would reduce
performance, and could cause shareholders to incur a higher level of taxable
income or capital gains.
DERIVATIVES
Each fund may use futures, options, forward foreign currency exchange
contracts and other derivatives. A derivative is a security or instrument whose
value is determined by reference to the value or the change in value of one or
more securities, currencies, indices or other financial instruments. Each fund
does not use derivatives as a primary investment technique and generally limits
their use to hedging. However, each fund may use derivatives for a variety of
non-principal purposes, including:
o As a hedge against adverse changes in stock market prices, interest
rates or currency exchange rates
o As a substitute for purchasing or selling securities
o To increase the fund's return as a non-hedging strategy that may be
considered speculative
Even a small investment in derivatives can have a significant impact on
a fund's exposure to stock market values, interest rates or currency exchange
rates. If changes in a derivative's value do not correspond to changes in the
value of the fund's other investments, the fund may not fully benefit from or
could lose money on the derivative position. In addition, some derivatives
involve risk of loss if the person who issued the derivative defaults on its
obligation. Certain derivatives may be less liquid and more difficult to value.
PORTFOLIO TURNOVER
Each fund's annual portfolio turnover rate has exceeded 100% in recent
years. A high portfolio turnover rate may result in high transaction costs that
are borne by the fund and its shareholders. See "Financial highlights" for
actual annual turnover rates.
PROPOSAL 1
APPROVE THE AGREEMENT
AND PLAN OF REORGANIZATION
DESCRIPTION OF REORGANIZATION
The shareholders of your fund are being asked to approve an Agreement
and Plan of Reorganization, a copy of which is attached as Exhibit A. The
Agreement provides for a reorganization on the following terms:
o The reorganization is scheduled to occur as of 5:00 p.m., Eastern time,
on September 28, 2001, but may occur on any later date before January
2, 2002. Your fund will transfer all of its assets to Emerging Markets
Fund, and Emerging Markets Fund will assume all of your fund's
liabilities. This will result in the addition of your fund's assets to
Emerging Markets Fund's portfolio. The net asset values of both funds
will be computed as of the close of the New York Stock Exchange
(normally 4:00 p.m. Eastern time) on the reorganization date.
o Emerging Markets Fund will issue to your fund Class A shares of
Emerging Markets Fund with an aggregate value equal to the aggregate
net asset value of your fund's Class A shares. As part of the
liquidation of your fund, your fund will immediately distribute
these shares to Class A shareholders of record of your fund in
proportion to their holdings on the reorganization date. In this
same manner, Emerging Markets Fund will issue to your fund Class B
and Class C shares that will be distributed to your fund's Class B
and Class C shareholders in proportion to their respective holdings
on the reorganization date. As a result, Class A shareholders of
your fund will end up as Class A shareholders of Emerging Markets
Fund, Class B shareholders of your fund will end up as Class B
shareholders of Emerging Markets Fund and Class C shareholders of your
fund will end up as Class C shareholders of Emerging Markets Fund.
o After the shares are issued, your fund will be terminated.
REASONS FOR THE PROPOSED REORGANIZATION
The board of trustees of your fund believes that the proposed
reorganization will be advantageous to the shareholders of your fund for several
reasons. The board of trustees considered the following matters, among others,
in approving the proposal.
FIRST, that Emerging Markets Fund shares received in the reorganization
will provide your fund's shareholders with substantially the same investment
advantages as they currently have, with potential for higher return.
SECOND, that a combined fund offers better potential for economies of
scale and better control over expenses than is possible for your fund due to its
small size. Both funds incur substantial costs for accounting, legal, transfer
agency, insurance, advisory and custodial and administrative services, some of
which do not vary with the size of the fund.
THIRD, that, without giving effect to the expense limitation, Emerging
Markets Fund's expenses are currently lower than your fund's expenses. If
Pioneer terminates the voluntary limitation on your fund's per share expenses,
your fund's expenses would be substantially higher than Emerging Markets Fund's
per share expenses. Shareholders of your fund would pay relatively lower
expenses each month as shareholders of Emerging Markets Fund than they would if
the voluntary expense limitation on your fund's expenses were discontinued.
FOURTH, that Emerging Markets Fund is more widely recognized in the
broker community as Pioneer's primary emerging markets fund. By offering both
funds simultaneously, it has been increasingly difficult to attract assets to
your fund. Although shares of your fund have been offered since June 23, 1994,
your fund had net assets of $__________ at June 30, 2001 compared to Emerging
Market Fund's net assets of $_______________ on such date.
FIFTH, that, except for one time period, Emerging Markets Fund has
performed better than your fund since its inception. While past performance
cannot predict future results, the trustees believe that Emerging Markets Fund
is better positioned than your fund to continue to generate strong returns
because of its lower expense ratio and more flexible investment policies.
SIXTH, that shareholders may be better served by a less restrictive
fund. Your fund concentrates its investments in equity securities of Indo-Asian
issuers. This has limited your fund's ability to invest significantly in
countries outside of the Indo-Asian geographic area, to invest in debt
securities of Indo-Asian and other issuers and to gather assets. Emerging
Markets Fund has the flexibility to invest in emerging market issuers outside of
the Indo-Asian geographic area, allowing it to invest in a broader range of
securities and may invest in debt securities of such issuers. In addition,
Emerging Markets Fund has a significantly larger asset size than your fund.
The board of trustees of Emerging Markets Fund considered that the
reorganization presents an excellent opportunity for Emerging Markets Fund to
acquire investment assets without the obligation to pay commissions or other
transaction costs that are normally associated with the purchase of securities.
The trustees also believe that your fund's shareholders and Emerging Markets
Fund's shareholders will benefit from improved diversification as a result of
the reorganization. Because Emerging Markets Fund is a significantly larger fund
than your fund and because it does not place as many restrictions on geographic
areas in which the fund may invest, the trustees feel that the addition of your
fund's assets will improve the diversification of Emerging Markets Fund's
overall portfolio. This opportunity provides an economic benefit to Emerging
Markets Fund and its shareholders. Similarly, the trustees feel that
shareholders of your fund will benefit from the greater diversification of
Emerging Markets Fund's investment portfolio after the transaction.
The boards of trustees of both funds also considered that the adviser
and the funds' distributor will also benefit from the reorganization. For
example, the adviser might realize time savings from a consolidated portfolio
management effort and from the need to prepare fewer reports and regulatory
filings as well as prospectus disclosure for one fund instead of two. The
trustees believe, however, that these savings will not amount to a significant
economic benefit. Because of the fee waiver on your fund, Pioneer will also
receive a higher effective fee for managing the assets attributable to your fund
if they are a part of Emerging Markets Fund than if the reorganization does not
take place.
COMPARATIVE FEES AND EXPENSE RATIOS.
As discussed above in the Summary, each fund pays monthly advisory fees
equal to the following annual percentage of average daily net assets:
FUND ANNUAL FEE RATE
---- ---------------
Indo-Asia Fund 1.10%
Emerging Markets Fund 1.25%
Emerging Markets Fund shareholders currently pay a higher advisory fee
than shareholders of your fund. The reorganization will, however, provide other
economic benefits to your fund's shareholders. For instance, your fund's
expenses have historically been lower than those of Emerging Markets Fund solely
due to a voluntary expense limitation agreement that Pioneer may terminate at
October 31, 2001, the end of your fund's current fiscal year.
Emerging Markets Fund's Class A expense ratio of 2.19% for the Emerging
Markets Fund's fiscal year ended November 30, 2000, as well as its PRO FORMA
expense ratio of 2.47%, are lower than your fund's gross Class A expense ratio
of 2.61% (2.10% for net expenses with the expense limitation) for the Indo-Asia
Fund's fiscal year ended October 31, 2000. Furthermore, Emerging Markets Fund's
other expenses are lower than your fund's gross other expenses. Both funds pay
the same 12b-1 fee rates for each class.
The trustees do not believe, given your fund's current size and growth
rate, that your fund will grow to an asset size which would allow your fund to
realize the benefits of economies of scale, including better control over
expenses. The trustees also do not believe that your fund will reach an asset
size which will allow your fund to significantly improve the diversification of
its investment portfolio. In light of your fund's inability to attract
significant assets, the adviser may not continue to subsidize a portion of your
fund's expenses. When the adviser discontinues this voluntary limitation, your
fund's expense ratio will rise above Emerging Markets Fund's.
COMPARATIVE PERFORMANCE. The trustees also took into consideration the
relative performance of your fund and Emerging Markets Fund. As shown in the
table in the Summary, except for one time period, Emerging Markets Fund has had
better performance than your fund over time.
UNREIMBURSED CLASS A DISTRIBUTION AND SHAREHOLDER SERVICE EXPENSES
The boards of trustees of your fund and Emerging Markets Fund have
determined that, if the reorganization occurs, unreimbursed distribution and
shareholder service expenses incurred under your fund's Class A Rule 12b-1 Plan
will be reimbursable expenses under Emerging Markets Fund's Class A Rule 12b-1
Plan. However, the maximum aggregate amount payable annually under Emerging
Markets Fund's Class A Rule 12b-1 Plan (0.25% of average daily net assets
attributable to Class A shares) will not increase. The Class B and Class C Rule
12b-1 Plans are compensation plans and, consequently, the amounts payable under
such Plans are not determined by references to actual distribution expenses
incurred.
The following table shows the actual and PRO FORMA unreimbursed
distribution and shareholder service expenses of Class A shares of your fund and
Emerging Markets Fund. The table shows both the dollar amount of these expenses
and the percentage of each class' net assets that they represent.
EMERGING MARKETS
UNREIMBURSED CLASS A RULE 12B-1 EXPENSES INDO-ASIA CLASS A SHARES
CLASS A SHARES
Actual expenses as of December 31, 2000 $433 $71,386
%0.023% 0.876%
PRO FORMA combined expenses as of ---- $71,819
January 1, 2001 ---- 0.737%
The Class A Plan does not provide for the carryover of reimbursable
expenses beyond 12 months from the time a fund is first invoiced for an expense.
The limited carryover provision in the Class A Plan may result in an expense
invoiced to a fund in one fiscal year being paid in the subsequent fiscal year
and thus being treated for purposes of calculating the maximum expenditures of
the fund as having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Class A Plan, a fund has 12 months to
reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the fund during such 12-month period
shall not exceed 0.25% of the fund's average daily net assets during such
period.
TAX STATUS OF THE REORGANIZATION
The reorganization will not result in income, gain or loss for federal
income tax purposes and will not take place unless both funds receive a
satisfactory opinion from Hale and Dorr LLP, counsel to the funds, substantially
to the effect that the reorganization described above will be a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
As a result, for federal income tax purposes:
No gain or loss will be recognized by your fund upon (1) the transfer of all of
its assets to Emerging Markets Fund as described above or (2) the distribution
by your fund of Emerging Markets Fund shares to your fund's shareholders;
No gain or loss will be recognized by Emerging Markets Fund upon the receipt of
your fund's assets solely in exchange for the issuance of Emerging Markets Fund
shares to your fund and the assumption of all of your fund's liabilities by
Emerging Markets Fund;
The basis of the assets of your fund acquired by Emerging Markets Fund will be
the same as the basis of those assets in your fund immediately before the
transfer;
The tax holding period of the assets of your fund in Emerging Markets Fund will
include your fund's tax holding period for those assets;
The shareholders of your fund will not recognize gain or loss upon the exchange
of all their shares of your fund solely for Emerging Markets Fund shares as part
of the reorganization;
The basis of Emerging Markets Fund shares received by your fund's shareholders
in the reorganization will be the same as the basis of the shares of your fund
surrendered in exchange; and
The tax holding period of the Emerging Markets Fund shares received by your
fund's shareholders will include, for each shareholder, the tax holding period
of the shares of your fund surrendered in exchange, provided that shares of your
fund were held as capital assets on the date of the exchange.
In addition, the use of certain tax attributes of your fund, such as capital
loss carryforwards, by Emerging Markets Fund may be limited after the
reorganization.
ADDITIONAL TERMS OF AGREEMENT AND PLAN OF REORGANIZATION
SURRENDER OF SHARE CERTIFICATES. If you hold a share certificate for
shares of your fund, it will not represent ownership of Emerging Markets Fund
shares after the reorganization. Pioneer will contact you (at your address
and/or phone number on its records) to arrange to deposit your certificated
shares in book-entry form prior to the reorganization. If the reorganization is
completed, the transfer agent will issue Class A share certificates for Emerging
Markets Fund shares only at your request. If you haven't heard from Pioneer,
please call 1-800-XXX-XXXX to discuss arrangements for your certificate. If
these arrangements are not made and Pioneer cannot reach you by mail or by
phone, or you have not contacted Pioneer about your certificate, your Emerging
Markets Fund shares will remain deposited in book-entry form on the transfer
agent's records until you contact Pioneer to reissue a certificate. Certificates
will be issued for Class A shares only.
CONDITIONS TO CLOSING THE REORGANIZATION. The obligation of your fund
to consummate the reorganization is subject to the satisfaction of certain
conditions, including the performance by Emerging Markets Fund of all its
obligations under the Agreement and the receipt of all consents, orders and
permits necessary to consummate the reorganization (see Agreement, sections 6
and 8).
The obligation of Emerging Markets Fund to consummate the
reorganization is subject to the satisfaction of certain conditions, including
your fund's performance of all of its obligations under the Agreement, the
receipt of certain documents and financial statements from your fund and the
receipt of all consents, orders and permits necessary to consummate the
reorganization (see Agreement, sections 7 and 8).
The obligations of both funds are subject to the approval of the
Agreement by the necessary vote of the outstanding shares of your fund, in
accordance with the provisions of your fund's declaration of trust and by-laws.
The funds' obligations are also subject to the receipt of a favorable opinion of
Hale and Dorr LLP as to certain federal income tax consequences of the
reorganization (see Agreement, paragraph 8.7).
TERMINATION OF AGREEMENT. The board of trustees of either your fund or
Emerging Markets Fund may terminate the Agreement (even if the shareholders of
your fund have approved it) at any time before the reorganization date if that
board believes that proceeding with the reorganization would no longer be
advisable.
EXPENSES OF THE REORGANIZATION. Pioneer has agreed to bear the expenses
incurred in connection with entering into and carrying out the provisions of the
Agreement, whether or not the reorganization occurs.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of
November 30, 2000, and the PRO forma combined capitalization of both funds as if
the reorganization had occurred on such date. The table reflects PRO FORMA
exchange ratios of approximately .8425 Class A Emerging Markets Fund shares
being issued for each Class A share of your fund, approximately .8437 Class B
Emerging Markets Fund shares being issued for each Class B share of your fund
and approximately .8401 Class C Emerging Markets Fund shares being issued for
each Class C share of your fund. If the reorganization occurs, the actual
exchange ratios on the reorganization date will vary due to changes in the
market value of the portfolio securities of both Emerging Markets Fund and your
fund between November 30, 2000 and the reorganization date, changes in the
amount of undistributed net investment income and net realized capital
gains/losses of Emerging Markets Fund and your fund during that period resulting
from income and distributions, and changes in the accrued liabilities of
Emerging Markets Fund and your fund during the same period.
NOVEMBER 30, 2000
EMERGING MARKETS
INDO-ASIA EMERGING MARKETS PRO FORMA
Net Assets $30,288,918 $189,176,179 219,806,372
Net Asset Value Per Share
Class A 9.20 10.82 10.82
Class B 8.76 10.28 10.28
Class C 8.67 10.23 10.23
Class Y N/A 11.03 11.03
Shares Outstanding
Class A 1,882,187 8,152,532 9,766,186
Class B 1,124,941 3,965,962 4,936,383
Class C 359,963 1,257,814 1,565,266
Class Y N/A 4,296,503
It is impossible to predict how many Class A, Class B and Class C
shares of Emerging Markets Fund will actually be received and distributed by
your fund on the reorganization date. The table should not be relied upon to
determine the number or value of Emerging Markets Fund shares that will actually
be received and distributed.
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the board of trustees of your fund,
including the trustees who are not "interested persons" of your fund or the
adviser (the independent trustees), approved the reorganization. In particular,
the trustees determined that the reorganization was in the best interests of
your fund and that the interests of your fund's shareholders would not be
diluted as a result of the reorganization. Similarly, the board of trustees of
Emerging Markets Fund, including the independent trustees, approved the
reorganization. They also determined that the reorganization was in the best
interests of Emerging Markets Fund and that the interests of Emerging Markets
Fund's shareholders would not be diluted as a result of the reorganization.
THE TRUSTEES OF YOUR FUND RECOMMEND THAT YOU VOTE FOR THE PROPOSAL TO APPROVE
THE AGREEMENT AND PLAN OF REORGANIZATION.
VOTING RIGHTS AND REQUIRED VOTE
Each share of your fund is entitled to one vote. Approval of the above
proposal requires the affirmative vote of a majority of the shares of your fund
outstanding and entitled to vote. For this purpose, a majority of the
outstanding shares of your fund means the vote of the lesser of:
(1) 67% or more of the shares present at the meeting, if the holders
of more than 50% of the shares of the
fund are present or represented by proxy, or
(2) more than 50% of the outstanding shares of the fund.
Shares of your fund represented in person or by proxy, including shares
which abstain or do not vote with respect to the proposal, will be counted for
purposes of determining whether there is a quorum at the meeting. Accordingly,
an abstention from voting has the same effect as a vote AGAINST the proposal.
However, if a broker or nominee holding shares in "street name"
indicates on the proxy card that it does not have discretionary authority to
vote on the proposal, those shares will NOT be considered present and entitled
to vote on the proposal. Thus, a "broker non-vote" has NO EFFECT on the voting
in determining whether the proposal has been adopted in accordance with clause
(1) above, if more than 50% of the outstanding shares (excluding the "broker
non-votes") are present or represented. However, for purposes of determining
whether the proposal has been adopted in accordance with clause (2) above, a
"broker non-vote" has the same effect as a vote AGAINST the proposal because
shares represented by a "broker non-vote" are considered to be outstanding
shares.
If the required approval of shareholders is not obtained, your fund
will continue to engage in business as a separate mutual fund and the board of
trustees will consider what further action may be appropriate.
ADDITIONAL INFORMATION ABOUT THE FUNDS
NET ASSET VALUE
Each fund's net asset value is the value of its portfolio of securities
plus any other assets minus its operating expenses and any other liabilities.
Each fund calculates a net asset value for each class of shares every day the
New York Stock Exchange is open when regular trading closes (normally 4:00 p.m.
Eastern time).
Each fund generally values its portfolio securities based on market
prices or quotations. When market prices are not available or are considered by
Pioneer to be unreliable, the fund may use an asset's fair value. Fair value is
determined in accordance with procedures approved by the fund's trustees.
International securities markets may be open on days when the U.S. markets are
closed. For this reason, the values of any international securities owned by
either fund would change on a day when you cannot buy or sell shares of the
fund.
You buy or sell shares at the share price. When you buy Class A shares,
you pay an initial sales charge. When you sell Class B or Class C shares, you
may pay a CDSC depending on how long you have owned your shares.
CHOOSING A CLASS OF SHARES
Each fund offers Class A, Class B and Class C shares. Emerging Markets
Fund also offers Class Y shares. Each class has different sales charges and
expenses, allowing you to choose the class that best meets your needs.
Factors you should consider include:
o How long you expect to own the shares
o The expenses paid by each class
o Whether you qualify for any reduction or waiver of sales charges
Your investment professional can help you determine which class meets
your goals. Your investment firm may receive different compensation depending
upon which class you choose. If you are not a U.S. citizen and are purchasing
shares outside the U.S., you may pay different sales charges under local laws
and business practices.
DISTRIBUTION PLANS
Each fund has adopted a distribution plan for its Class A, Class B and
Class C shares in accordance with Rule 12b-1 under the Investment Company Act of
1940. Under each plan, the fund pays distribution and service fees to the
distributor. Because these fees are an ongoing expense, over time they increase
the cost of your investment and your shares may cost more than shares that are
subject to other types of sales charges.
WHY YOU MIGHT PREFER EACH CLASS
CLASS A
Class A shares may be your best alternative if you prefer to pay an initial
sales charge and have lower annual expenses, or if you qualify for any reduction
or waiver of the initial sales charge.
CLASS B
You may prefer Class B shares if you do not want to pay an initial sales charge,
or if you plan to hold your investment for at least six years. Class B shares
are not recommended if you are investing $250,000 or more.
CLASS C
You may prefer Class C shares if you do not wish to pay an initial sales charge
and you would rather pay higher annual expenses over time.
INITIAL SALES CHARGE
CLASS A
Up to 5.75% of the offering price, which is reduced or waived for large
purchases and certain types of investors. At the time of your purchase, your
investment firm may receive a commission from the distributor of up to 5%,
declining as the size of your investment increases.
CLASS B
None.
CLASS C
None.
CONTINGENT DEFERRED SALES CHARGES
CLASS A
None, except in certain circumstances when the initial sales charge is waived.
CLASS B
Up to 4% is charged if you sell your shares. The charge is reduced over time and
not charged after six years. Your investment firm may receive a commission from
the distributor at the time of your purchase of up to 4%.
CLASS C
A 1% charge if you sell your shares within one year of purchase. Your investment
firm may receive a commission from the distributor at the time of your purchase
of up to 1%.
REDEMPTION FEE
CLASS A
Up to 2.00% is charged if you sell shares of Indo-Asia Fund worth more than
$25,000 within 90 days of any purchase of fund shares.
CLASS B
None.
CLASS C
None.
DISTRIBUTION AND SERVICE FEES
CLASS A
Up to 0.25% of average daily net assets.
CLASS B
Up to 1% of average daily net assets.
CLASS C
Up to 1% of average daily net assets.
ANNUAL EXPENSES (INCLUDING DISTRIBUTION AND SERVICE FEES)
CLASS A
Lower than Class B or Class C.
CLASS B
Higher than Class A shares; Class B shares convert to Class A shares after eight
years.
CLASS C
Higher than Class A shares; Class C shares do not convert to any other class of
shares. You continue to pay higher annual expenses.
EXCHANGE PRIVILEGE
CLASS A
Class A shares of other Pioneer mutual funds.
CLASS B
Class B shares of other Pioneer mutual funds.
CLASS C
Class C shares of other Pioneer mutual funds.
SALES CHARGES: CLASS A SHARES
You pay the offering price when you buy Class A shares unless you
qualify to purchase shares at net asset value. You pay a lower sales charge as
the size of your investment increases. You do not pay a sales charge when you
reinvest dividends or distribution paid by the fund.
INVESTMENTS OF $1 MILLION OR MORE
You do not pay a sales charge when you purchase Class A shares if you
are investing $1 million or more or you are a participant in certain group
plans. However, you pay a deferred sales charge if you sell your Class A shares
within one year of purchase. The sales charge is equal to 1% of your investment
or your sales proceeds, whichever is less.
REDUCED SALES CHARGES
You may qualify for a reduced Class A sales charge if you own or are
purchasing shares of Pioneer mutual funds. If you or your investment
professional notifies the distributor of your eligibility for a reduced sales
charge at the time of your purchase, the distributor will credit you with the
combined value (at the current offering price) of all your Pioneer mutual fund
shares and the shares of your spouse and the shares of any children under 21.
Certain trustees and fiduciaries may also qualify for a reduced sales charge.
For this purpose, Pioneer mutual funds include any fund for which the
distributor is principal underwriter and, at the distributor's discretion, may
include funds organized outside the U.S. managed by Pioneer or an affiliate.
SALES CHARGES: CLASS A SHARES
SALES CHARGE AS A % OF
AMOUNT OF PURCHASE OFFERING PRICE NET AMOUNT INVESTED
- ------------------ -------------- -------------------
Less than $50,000 5.75 6.10
$50,000 but less than $100,000 4.50 4.71
$100,000 but less than $250,000 3.50 3.63
$250,000 but less than $500,000 2.50 2.56
$500,000 but less than $1 million 2.00 2.04
$1 million or more -0- -0-
SALES CHARGES: CLASS B SHARES
You buy Class B shares at net asset value per share without paying an
initial sales charge. However, if you sell your Class B shares within six years
of purchase, you will pay the distributor a CDSC. The CDSC decreases as the
number of years since your purchase increases.
CONTINGENT DEFERRED SALES CHARGE
AS A % OF DOLLAR AMOUNT SUBJECT TO THE
ON SHARES SOLD BEFORE THE END OF YEAR SALES CHARGE
1 4
2 4
3 3
4 3
5 2
6 1
7 -0-
8 -0-
9 Convert to Class A shares
after eight years
CONVERSION TO CLASS A SHARES
Class B shares automatically convert into Class A shares. This helps
you because Class A shares pay lower expenses.
Your Class B shares will convert to Class A shares at the beginning of
the calendar month (calendar quarter for shares purchased before October 1,
1998) that is eight years after the date of purchase except that:
o Shares purchased by reinvesting dividends and capital gain
distributions will convert to Class A shares at the same time as shares
on which the dividend or distribution was paid
o Shares purchased by exchanging shares from another fund will convert on
the date that the shares originally acquired would have converted into
Class A shares
Currently, the Internal Revenue Service permits the conversion of
shares to take place without imposing a federal income tax. Conversion may not
occur if the Internal Revenue Service deems it a taxable event for federal tax
purposes.
PAYING THE CONTINGENT DEFERRED SALES CHARGE
Several rules apply for Class B shares so that you pay the lowest
possible CDSC.
o The CDSC is calculated on the current market value or the original
cost of the shares you are selling, whichever is less
o You do not pay a CDSC on reinvested dividends or distributions
o In determining the number of years since your purchase, all purchases
are considered to have been made on the first day of that month
(quarter for shares purchased before October 1, 1998)
o If you sell only some of your shares, the transfer agent will first
sell your shares that are not subject to any CDSC and then the shares
that you have owned the longest
o You may qualify for a waiver of the CDSC normally charged
SALES CHARGES: CLASS C SHARES
You buy Class C shares at net asset value per share without paying an
initial sales charge. However, if you sell your Class C shares within one year
of purchase, you will pay the distributor a contingent deferred sales charge of
1% of the current market value, or the original cost, of the shares you are
selling, whichever is less.
PAYING THE CONTINGENT DEFERRED SALES CHARGE
Several rules apply for Class C shares so that you pay the lowest
possible CDSC.
o The CDSC is calculated on the current market value or the original
cost of the shares you are selling, whichever is less
o You do not pay a CDSC on reinvested dividends or distributions
o In determining the amount of time since your purchase, all purchases
are considered to have been made on the first day of that month
(quarter for shares purchased before October 1, 1998)
o If you sell only some of your shares, the transfer agent will first
sell your shares that are not subject to any CDSC and then the shares
that you purchased most recently
o You may qualify for a waiver of the CDSC normally charged
REDEMPTION FEE
If you sell or exchange Class A shares of Indo-Asia Fund worth more
than $25,000 within 90 days of any purchase of fund shares, Indo-Asia Fund will
apply a 2% fee to the entire amount of your sale proceeds.
OPENING YOUR ACCOUNT
If your shares are held in your investment firm's name, the options and
services available to you may be different from those discussed in this
prospectus. Ask your investment professional for more information.
If you invest in the fund through investment professionals or other
financial intermediaries, including wrap programs and fund supermarkets,
additional conditions may apply to your investment in the fund, and the
investment professional or intermediary may charge you a transaction-based or
other fee for its services. These conditions and fees are in addition to those
imposed by the fund and its affiliates. You should ask your investment
professional or financial intermediary about its services and any applicable
fees.
ACCOUNT OPTIONS
Use your account application to select options and privileges for your
account. You can change your selections at any time by sending a completed
account options form to the transfer agent. You may be required to obtain a
signature guarantee to make certain changes to an existing account.
Call or write to the transfer agent for account applications, account
options forms and other account information:
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
P.O. Box 9014
Boston, Massachusetts 02205-9014
Telephone 1-800-225-6292
TELEPHONE TRANSACTION PRIVILEGES
If your account is registered in your name, you can buy, exchange or
sell Class A, Class B or Class C shares by telephone. If you do not want your
account to have telephone transaction privileges, you must indicate that choice
on your account application or by writing to the transfer agent.
When you request a telephone transaction the transfer agent will try to
confirm that the request is genuine. The transfer agent records the call,
requires the caller to provide the personal identification number for the
account and sends you a written confirmation. The fund may implement other
confirmation procedures from time to time. Different procedures may apply if you
have a non-U.S. account or if your account is registered in the name of an
institution, broker-dealer or other third party.
GENERAL RULES ON BUYING, EXCHANGING AND SELLING YOUR FUND SHARES
SHARE PRICE
If you place an order with your investment firm before the New York
Stock Exchange closes and your investment firm submits the order to the
distributor prior to the distributor's close of business (usually 5:30 p.m.
Eastern time), your share price will be calculated that day. Otherwise, your
share price will be calculated at the close of the New York Stock Exchange after
the distributor receives your order. Your investment firm is responsible for
submitting your order to the distributor.
BUYING
You may buy fund shares from any investment firm that has a sales
agreement with the distributor. If you do not have an investment firm, please
call 1-800-225-6292 for information on how to locate an investment professional
in your area.
You can buy fund shares at the offering price. The distributor may
reject any order until it has confirmed the order in writing and received
payment. The fund reserves the right to stop offering any class of shares.
MINIMUM INVESTMENT AMOUNTS
Your initial investment must be at least $1,000. Additional investments
must be at least $100 for Class A shares and $500 for Class B or Class C shares.
You may qualify for lower initial or subsequent investment minimums if you are
opening a retirement plan account, establishing an automatic investment plan or
placing your trade through your investment firm.
EXCHANGING
You may exchange your shares for shares of the same class of another
Pioneer mutual fund.
Your exchange request must be for at least $1,000 unless the fund you
are exchanging into has a different minimum. The fund allows you to exchange
your shares at net asset value without charging you either an initial or
contingent deferred sales charge at the time of the exchange. Shares you acquire
as part of an exchange will continue to be subject to any contingent deferred
sales charge that applies to the shares you originally purchased. When you
ultimately sell your shares, the date of your original purchase will determine
your contingent deferred sales charge.
Before you request an exchange, consider each fund's investment
objective and policies as described in the fund's prospectus.
SELLING
Your shares will be sold at net asset value per share next calculated
after the fund receives your request in good order.
If the shares you are selling are subject to a deferred sales charge,
it will be deducted from the sale proceeds. The fund generally will send your
sale proceeds by check, bank wire or electronic funds transfer. Normally you
will be paid within seven days. If you recently sent a check to purchase the
shares being sold, the fund may delay payment of the sale proceeds until your
check has cleared. This may take up to 15 calendar days from the purchase date.
If you are selling shares from a non-retirement account or certain
IRAs, you may use any of the methods described below. If you are selling shares
from a retirement account other than an IRA, you must make your request in
writing.
You may have to pay income taxes on a sale or an exchange.
GOOD ORDER MEANS THAT:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o If you have any fund share certificates, you submit them and they are
signed by each record owner exactly as the shares are registered
o Your request includes a signature guarantee if you:
-- Are selling over $100,000 or exchanging over $500,000 worth
of shares
-- Changed your account registration or address within the last
30 days
-- Instruct the transfer agent to mail the check to an
address different from the one on your account
-- Want the check paid to someone other than the account owner(s)
-- Are transferring the sale proceeds to a Pioneer mutual
fund account with a different registration
BUYING, EXCHANGING AND SELLING SHARES
BUYING SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your purchase request to the fund's
transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your
investment firm may receive a commission from the distributor for your purchase
of fund shares. The distributor or its affiliates may pay additional
compensation, out of their own assets, to certain investment firms or their
affiliates based on objective criteria established by the distributor.
EXCHANGING SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your exchange request to the fund's
transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION ABOUT
EXCHANGING YOUR SHARES.
BUYING SHARES
BY PHONE
YOU CAN USE THE TELEPHONE PURCHASE PRIVILEGE IF you have an existing
non-retirement account or certain IRAs. You can purchase additional fund shares
by phone if:
o You established your bank account of record at least 30 days ago
o Your bank information has not changed for at least 30 days
o You are not purchasing more than $25,000 worth of shares per account per day
o You can provide the proper account identification
When you request a telephone purchase, the transfer agent will electronically
debit the amount of the
purchase from your bank account of record. The transfer agent will purchase
fund shares for the amount of the debit at the offering price determined after
the transfer agent receives your telephone purchase instruction and good funds.
It usually takes three business days for the transfer agent to receive
notification from your bank that good funds are available in the amount of your
investment.
EXCHANGING SHARES
BY PHONE
After you establish your fund account, YOU CAN EXCHANGE FUND SHARES BY PHONE IF:
o You are using the exchange to establish a new account, provided the new
account has a registration identical to the original account
o The fund into which you are exchanging offers the same class of shares
o You are not exchanging more than $500,000 worth of shares per account per
day
o You can provide the proper account identification information
BUYING SHARES
IN WRITING, BY MAIL OR BY FAX
You can purchase fund shares for an existing fund account by MAILING A CHECK TO
THE TRANSFER AGENT. Make your check payable to the fund. Neither initial nor
subsequent investments should be made by third party check. Your check must be
in U.S. dollars and drawn on a U.S. bank. Include in your purchase request the
fund's name, the account number and the name or names in the account
registration.
EXCHANGING SHARES
IN WRITING, BY MAIL OR BY FAX
You can exchange fund shares by MAILING OR FAXING A LETTER OF INSTRUCTION TO THE
TRANSFER AGENT. You can exchange fund shares directly through the fund only if
your account is registered in your name. However, you may not fax an exchange
request for more than $500,000. Include in your letter:
o The name, social security number and signature of all registered owners
o A signature guarantee for each registered owner if the amount of the
exchange is more than $500,000
o The name of the fund out of which you are exchanging and the name of the
fund into which you are exchanging
o The class of shares you are exchanging
o The dollar amount or number of shares you are exchanging
SELLING SHARES
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE
INFORMATION. The fund has authorized the distributor to act as its agent in the
repurchase of fund shares from qualified investment firms. The fund reserves the
right to terminate this procedure at any time.
YOU MAY SELL UP TO $100,000 PER ACCOUNT PER DAY. You may sell fund shares held
in a retirement plan account by phone only if your account is an IRA. You may
not sell your shares by phone if you have changed your address (for checks) or
your bank information (for wires and transfers) in the last 30 days.
You may receive your sale proceeds:
o By check, provided the check is made payable exactly as your account is
registered
o By bank wire or by electronic funds transfer, provided the sale proceeds are
being sent to your bank address of record
You can sell some or all of your fund shares by WRITING DIRECTLY TO THE FUND
only if your account is registered in your name. Include in your request your
name, your social security number, the fund's name, your fund account number,
the class of shares to be sold, the dollar amount or number of shares to be sold
and any other applicable requirements as described below. The transfer agent
will send the sale proceeds to your address of record unless you provide other
instructions. Your request must be signed by all registered owners and be in
good order. The transfer agent will not process your request until it is
received in good order. You may sell up to $100,000 per account per day by fax.
HOW TO CONTACT US
BY PHONE
For information or to request a telephone transaction between 8:00 a.m. and
9:00 p.m. (Eastern time) by speaking with a shareholder services
representative call
1-800-225-6292
To request a transaction using FactFoneSM call
1-800-225-4321
Telecommunications Device for the Deaf (TDD)
1-800-225-1997
BY MAIL
Send your written instructions to:
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
P.O. Box 9014
Boston, Massachusetts 02205-9014
BY FAX
Fax your exchange and sale requests to: 1-800-225-424
SHAREOWNER ACCOUNT POLICIES
REDEMPTION FEE (INDO-ASIA FUND ONLY)
Class A shares worth more than $25,000 redeemed or exchanged within 90 days of
any purchase of fund shares will be subject to a 2% fee.
EXCHANGE PRIVILEGE
You make up to four exchange redemptions of $25,000 or more per account per
calendar year. The fund and the distributor reserve the right to refuse any
exchange request or restrict, at any time without notice, the number and/or
frequency of exchanges to prevent abuses of the exchange privilege. Abuses
include frequent trading in response to short-term market fluctuations and a
pattern of trading that appears to be an attempt to "time the market." In
addition, the fund and the distributor reserve the right, at any time without
notice, to charge a fee for exchanges or to modify, limit, suspend or
discontinue the exchange privilege. The fund will provide 60 days' notice of
material amendment to or termination of the privilege.
SHAREOWNER ACCOUNT POLICIES
SIGNATURE GUARANTEES AND OTHER REQUIREMENTS You are required to obtain a
signature guarantee when you are:
o Requesting certain types of exchanges or sales of fund shares
o Redeeming shares for which you hold a share certificate
o Requesting certain types of changes for your existing account
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. You cannot obtain a signature guarantee from a notary public.
Fiduciaries and corporations are required to submit additional documents to sell
fund shares.
REDEMPTION FEE AND EXCHANGE LIMITATION
Indo-Asia Fund's redemption fee and each fund's exchange limitation policies are
intended to discourage short-term trading in fund shares. Short-term trading can
increase the expenses incurred by the fund and make portfolio management less
efficient.
The redemption fee and exchange limitation policies may not apply to
transactions made through an omnibus account for fund shares. In determining
whether the redemption fee applies or the exchange redemption limit has been
reached, Pioneer may aggregate a series of transactions and/or fund accounts if
the accounts making the transactions appear to be under common ownership or
control. Pioneer may view accounts for which one person gives instructions or
accounts that act on advice provided by a single source to be under common
control.
REDEMPTION FEE (INDO-ASIA FUND ONLY). This fee is payable to the fund and is not
a deferred sales charge or commission. The fee is calculated after any
applicable sales charge is deducted and is in addition to any sales charge paid.
When you request a sale or exchange, the fund will first process any shares that
are not subject to the fee. The fee does not apply to shares purchased by
reinvesting dividend or capital gain distributions, to systematic withdrawal
plan transactions or to transactions made through IRA or SEP-IRA accounts or
employer-sponsored retirement plans, including 401(k) plans, 403(b) plans, 457
plans, profit-sharing and employee benefit plans. The fund may waive the fee if
your sale results from certain hardship situations including death, illness or a
natural disaster.
EXCHANGE LIMITATION. The exchange limitation does not apply to automatic
exchange transactions or to exchanges made by participants in employer-sponsored
retirement plans qualified under Section 401(a) of the Internal Revenue Code.
The exchange limitation does not apply to accounts that have a written agreement
with the distributor.
MINIMUM ACCOUNT SIZE
The fund requires that you maintain a minimum account value of $500. If you hold
less than the minimum in your account because you have sold or exchanged some of
your shares, the fund will notify you of its intent to sell your shares and
close your account. You may avoid this by increasing the value of your account
to at least the minimum within six months of the notice from the fund.
SHAREOWNER ACCOUNT POLICIES
TELEPHONE ACCESS
You may have difficulty contacting the fund by telephone during times of market
volatility or disruption in telephone service. On New York Stock Exchange
holidays or on days when the exchange closes early, the telephone center will
adjust its hours accordingly. If you are unable to reach the fund by telephone,
you should communicate with the fund in writing.
SHARE CERTIFICATES
Normally, your shares will remain on deposit with the transfer agent and
certificates will not be issued. If you are legally required to obtain a
certificate, you may request one for your Class A shares only. A fee may be
charged for this service.
OTHER POLICIES
The fund may suspend transactions in shares when trading on the New York Stock
Exchange is closed or restricted, when an emergency exists that makes it
impracticable for the fund to sell or value its portfolio securities or with the
permission of the Securities and Exchange Commission.
The fund or the distributor may revise, suspend or terminate the account options
and services available to shareholders at any time. The fund reserves the right
to redeem in kind by delivering portfolio securities to a redeeming shareowner,
provided that the fund must pay redemptions in cash if a shareowner's aggregate
redemptions in a 90-day period are less than $250,000 or 1% of the fund's net
assets.
DIVIDENDS AND CAPITAL GAINS
Each fund generally pays any distributions of net short- and long-term
capital gains in November. Each fund generally pays dividends from any net
investment income in December. Each fund may also pay dividends and capital gain
distributions at other times if necessary for the fund to avoid U.S. federal
income or excise tax. If you invest in a fund close to the time that the fund
makes a distribution, generally you will pay a higher price per share and you
will pay taxes on the amount of the distribution whether you reinvest the
distribution or receive it as cash.
TAXES
For U.S. federal income tax purposes, your distributions from a fund's
net long-term capital gains are considered long-term capital gains and may be
taxable to you at different maximum rates depending upon their source and other
factors. Dividends and short-term capital gain distributions are taxable as
ordinary income. Dividends and distributions are taxable, whether you take
payment in cash or reinvest them to buy additional fund shares. When you sell or
exchange fund shares you will generally recognize a capital gain or capital loss
in an amount equal to the difference between the net amount of sale proceeds
(or, in the case of an exchange, the fair market value of the shares) that you
receive and your tax basis for the shares that you sell or exchange. In January
of each year the fund will mail to you information about your dividends,
distributions and any shares you sold in the previous calendar year.
You must provide your social security number or other taxpayer
identification number to the fund along with the certifications required by the
Internal Revenue Service when you open an account. If you do not or if it is
otherwise legally required to do so, the fund will withhold "backup withholding"
tax from your dividends and distributions, sales proceeds and any other payments
to you.
You should ask your tax adviser about any federal and state tax
considerations, including possible additional withholding taxes for non-U.S.
shareholders. You may also consult the fund's statement of additional
information for a more detailed discussion of U.S. federal income tax
considerations that may affect the fund and its shareowners.
FINANCIAL HIGHLIGHTS
PIONEER INDO-ASIA FUND
SELECTED DATA FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
NOVEMBER
1, 2000
THROUGH
APRIL 30, FOR THE YEAR ENDED OCTOBER 31,
2001
(UNAUDITED) 2000 1999 1998 1997 1996
----------- ---- ---- ---- ---- ----
Net asset value, 30, 2001
beginning of period $9.38 $11.05 $6.28 $7.14 $6.93 $8.47
Increase (decrease) from
investment operations:
Net investment income
(loss) $(0.03) $(0.12) $(0.05) $(0.02) $(0.01) $0.03
Net realized and
unrealized gain
(loss) on
investments, futures
contracts and foreign
currency transactions (0.24) (1.55) 4.82 (0.84) 0.22 (1.57)
--------- -------- -------- ------- ---------
Net increase (decrease)
in net asset value (0.27) $(1.67) $4.77 $(0.86) $0.21 $(1.54)
--------- -------- -------- ------- ---------
Net asset value, end of
period $9.11 $9.38 $11.05 $6.28 $7.14 $6.93
--------- -------- -------- ------- ---------
Total return* (2.88)% (15.11)% 75.96% (12.04)% 3.03% (18.18)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to
average net assets+ 2.17%** 2.16% 2.14% 2.31% 2.29% 2.28%
Ratio of net investment
income (loss) to
average net assets+ (0.77)%** (0.88)% (0.39)% (0.52)% (0.09)% 0.32%
Portfolio turnover rate 90%** 103% 108% 101% 71% 64%
Net assets, end of period
(in thousands) $18,585 $18,164 $19,384 $5,230 $9,846 $12,388
Ratios assuming no waiver
of management fees and
assumption of expensese
by Pioneer and no reduction
for fees paid indirectly:
Net expenses 2.66%** 2.61% 3.81% 5.30% 4.39% 4.29%
Net investment income
(loss) (1.26)%** (1.33)% (2.06)% (3.51)% (2.19)% (1.69)%
Ratios assuming waiver of
management fees and
assumption of expenses
by Pioneer and
reduction for fees paid
indirectly:
Net expenses 2.10%** 2.10% 2.09% 2.24% 2.25% 2.25%
Net investment income
(loss) (0.70)%** (0.82)% (0.34)% (0.45)% (0.05)% 0.35%
.........
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
FINANCIAL HIGHLIGHTS (CONTINUED)
PIONEER INDO-ASIA FUND
SELECTED DATA FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
NOVEMBER
1, 2000
THROUGH FOR THE YEAR ENDED
APRIL OCTOBER 31,
30, 2001 2000 1999 1998 1997 1996
- -------- ---- ---- ---- ---- ----
(UNAUDITED)
Net asset value,
beginning of period $8.94 $10.62 $6.08 $6.96 $6.80 $8.39
Increase (decrease) from
investment operations:
Net investment income
(loss) $(0.13) $(0.31) $(0.03) $(0.09) $(0.04) $(0.03)
Net realized and
unrealized gain (loss)
on investments, futures
contracts and foreign
currency transactions (0.19) (1.37) 4.57 (0.79) 0.20 (1.56)
Net increase (decrease)
in net asset value $(0.32) $(1.68) $4.54 $(0.88) $0.16 $(1.59)
--------- -------- -------- --------- ---------
Net asset value, end of
period $8.62 $8.94 $10.62 $6.08 $6.96 $6.80
--------- -------- -------- --------- ---------
Total return* (3.58)% (15.82)% 74.67% (12.64)% 2.35% (18.95)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to
average net assets+ 3.64%** 2.97% 2.80% 2.81% 2.90% 3.15%
Ratio of net investment
income (loss) to average
net assets+ (2.25)%** (1.68)% (0.91)% (1.03)% (0.62)% (0.45)%
Portfolio turnover rate 90%** 103% 108% 101% 71% 64%
Net assets, end of period
(in thousands) $8,656 $10,322 $16,078 $5,036 $9,392 $8,275
Ratios assuming no waiver
of management fees and
assumption of expenses
by Pioneer and no
reduction for fees paid
indirectly:
Net expenses 4.13%** 3.41% 4.60% 5.94% 4.99% 5.23%
Net investment income
(loss) (2.74)%** (2.12)% (2.71)% (4.16)% (2.71)% (2.53)%
Ratios assuming waiver of
management fees and
assumption of expenses
by Pioneer and
reduction for fees paid
indirectly:
Net expenses 3.62%** 2.95% 2.77% 2.76% 2.86% 3.13%
Net investment income
(loss) (2.23)%** (1.66)% (0.88)% (0.98)% (0.58)% (0.43)%
.........
- ---------------------------
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
FINANCIAL HIGHLIGHTS (CONTINUED)
PIONEER INDO-ASIA FUND
SELECTED DATA FOR A CLASS C SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
JANUARY
NOVEMBER 31, 1996
1, 2000 THROUGH
THROUGH FOR THE YEAR ENDED OCTOBER
APRIL OCTOBER 31, 31, 1996
30, 2001 2000 1999 1998 1997 1996
- -------- ---- ---- ---- ---- ----
(UNAUDITED)
Net asset value,
beginning of period $8.84 $10.50 $6.00 $6.93 $6.77 $7.85
Increase (decrease) from
investment operations:
Net investment income
(loss) $(0.09) $(0.19) $(0.03) $(0.07) $(0.04) $(0.02)
Net realized and
unrealized gain
(loss) on
investments, futures
contracts and foreign
currency transactions (0.19) (1.47) 4.53 (0.86) 0.20 (1.06)
--------- -------- -------- --------- ---------
Net increase (decrease)
in net asset value $(0.28) $(1.66) $4.50 $(0.93) $0.16 $(1.08)
--------- -------- -------- --------- ---------
Net asset value, end of
period $8.56 $8.84 $10.50 $6.00 $6.93 $6.77
--------- -------- -------- --------- ---------
Total return* (3.17)% (15.81)% 75.00% (13.42)% 2.36% (13.76)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to
average net assets+ 2.77%** 2.92% 2.70% 2.85% 2.84% 3.12%**
Ratio of net investment
income (loss) to average
net assets+ (1.38)%** (1.61)% (0.89)% (1.06)% (0.56)% (0.42)%**
Portfolio turnover rate 90%** 103% 108% 101% 71% 64%
Net assets, end of period
(in thousands) $2,605 $3,217 $2,514 $536 $803 $557
Ratios assuming no waiver
of management fese and
assumption of expenses
by Pioneer and no
reduction for fees paid
indirectly:
Net expenses 3.26%** 3.39% 4.40% 6.12% 4.89% 4.63%**
Net investment income
(loss) (1.87)%** (2.08)% (2.59)% (4.33)% (2.61)% (1.93)%**
Ratios assuming waiver of
management fees and
assumption of expenses
by Pioneer and
reduction for fees paid
indirectly:
Net expenses 2.74%** 2.89% 2.64% 2.76% 2.78% 3.06%**
Net investment income
(loss) (1.35)%** (1.58)% (0.83)% (0.97)% (0.50%)% (0.36)%**
--
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
FINANCIAL HIGHLIGHTS (CONTINUED)
PIONEER EMERGING MARKETS FUND
SELECTED DATA FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
FOR THE YEAR ENDED NOVEMBER 30,
-------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Net asset value, beginning
of period $13.80 $8.79 $14.42 $13.94 $11.56
Increase (decrease) from
investment operations:
Net investment income
(loss) $(0.17) $(0.09) $0.00(a) $(0.05) $(0.07)
Net realized and
unrealized gain (loss)
on investments, futures
contracts and foreign
currency transactions (2.81) 5.10 (4.23) 1.40 2.45
--------- -------- -------- ------- ---------
Net increase (decrease) from
investment operations $(2.98) $5.01 $(4.23) $1.35 $2.38
Distributions to shareholders:
Net realized gain -- -- (1.40) (0.87) --
--------- -------- -------- ------- ---------
Net increase (decrease) in
net asset value $(2.98) $5.01 $(5.63) $0.48 $2.38
--------- -------- -------- ------- ---------
Net asset value, end of
period $10.82 $13.80 $8.79 $14.42 $13.94
--------- -------- -------- ------- ---------
Total return* (21.59)% 57.00% (32.19)% 10.37% 20.59%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to
average net assets+ 2.19% 2.44% 2.26% 2.23% 2.28%
Ratio of net investment
income (loss) to average
net assets+ (1.13)% (0.73)% 0.07% (0.40)% (0.61)%
Portfolio turnover rate 139% 180% 195% 140% 143%
Net assets, end of period
(in thousands) $88,175 $91,092 $76,257 $87,628 $56,465
Ratios assuming no waiver of
management fees and
assumption of expenses by
Pioneer and no reduction for
fees paid indirectly:
Net expenses 2.19% 2.44% 2.27% 2.25% 3.00%
Net investment income (loss) (1.13)% (0.73)% 0.06% (0.42)% (1.33)%
Ratios assuming waiver of
management fees and
assumption of expenses by
Pioneer and reduction for
fees paid indirectly:
Net expenses 2.16% 2.40% 2.25% 2.19% 2.25%
Net investment income
(loss) (1.10)% (0.69)% 0.08% (0.36)% (0.58)%
.........
(a) Amount rounds to less than once cent per share.
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
FINANCIAL HIGHLIGHTS (CONTINUED)
PIONEER EMERGING MARKETS FUND
SELECTED DATA FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
FOR THE YEAR ENDED NOVEMBER 30,
-------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Net asset value, beginning
of period $13.23 $8.49 $14.09 $13.73 $11.47
Increase (decrease) from
investment operations:
Net investment income (loss) $(0.34) $(0.17) $(0.12) $(0.14) $(0.03)
Net realized and
unrealized gain (loss)
on investments, futures
contracts and foreign
currency transactions (2.61) 4.91 (4.08) 1.37 2.29
--------- -------- -------- ------- ---------
Net increase (decrease) from
investment operations $(2.95) $4.74 $(4.20) $1.23 $2.26
Distributions to
shareholders:
Net realized gain -- -- (1.40) (0.87) --
--------- -------- -------- ------- ---------
Net increase (decrease) in
net asset value $(2.95) $4.74 $(5.60) $0.36 $2.26
--------- -------- -------- ------- ---------
Net asset value, end of
period $10.28 $13.23 $8.49 $14.09 $13.73
--------- -------- -------- ------- ---------
Total return* (22.30)% 55.83% (32.79)% 9.61% 19.70%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to
average net assets+ 3.05% 3.20% 3.09% 2.94% 3.00%
Ratio of net investment
income (loss) to average net
assets+ (1.97)% (1.53)% (0.84)% (1.10)% (1.47)%
Portfolio turnover rate 139% 180% 195% 140% 143%
Net assets, end of period $40,763 $51,093 $35,954 $70,218 $39,893
Ratios assuming no waiver of
management fees and
assumption of expenses by
Pioneer and reduction for
fees paid indirectly:
Net expenses 3.05% 3.20% 3.10% 2.95% 3.66%
Net investment income (loss) (1.97)% (1.53)% (0.85)% (1.11)% (2.13)%
Ratios assuming waiver of
management fees and
assumption of expenses by
Pioneer and reduction for
fees paid indirectly:
Net expenses 3.03% 3.18% 3.08% 2.90% 2.96%
Net investment income
(loss) (1.95)% (1.51)% (0.83)% (1.06)% (1.43)%
.........
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
FINANCIAL HIGHLIGHTS (CONTINUED)
PIONEER EMERGING MARKETS FUND
SELECTED DATA FOR A CLASS C SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
JANUARY
31, 1996
THROUGH
NOVEMBER
FOR THE YEAR ENDED NOVEMBER 30, 30,
-------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Net asset value, beginning
of period $13.12 $8.47 $14.08 $13734 $13.22
Increase (decrease) from
investment operations:
Net investment income
(loss) $(0.14) $(0.29) $(0.08) $(0.13) $(0.09)
Net realized and
unrealized gain (loss)
on investments,
futures contracts and
foreign currency
transactions (2.75) 4.94 (4.13) 1.35 0.60
--------- -------- ------- ------- -----------
Net increase (decrease)
from investment
operations $(2.89) $4.65 $(4.21) $1.22 $0.51
Distributions to shareholders:
Net realized gain -- -- (1.40) (0.87) --
--------- -------- ------- ------- -----------
Net increase (decrease) in
net asset value $(2.89) $4.65 $(5.61) $0.35 $0.51
--------- -------- ------- ------- -----------
Net asset value, end of
period $10.23 $13.12 $8.47 $14.08 $13.73
--------- -------- ------- ------- -----------
Total return* (22.03)% 54.90% (32.90)% 9.53% 3.86%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to
average net assets+ 2.85% 3.82% 3.32% 2.89% 2.91%**
Ratio of net investment
income (loss) to average net
assets+ (1.81)% (2.09)% (1.08)% (1.09)% (1.51)%**
Portfolio turnover rate 139% 180% 195% 140% 143%
Net assets, end of period
(in thousands) $12,861 $11,656 $12,162 $12,730 $5,566
Ratios assuming no waiver
of management fees and
assumption of expenses by
Pioneer and no reduction
for fees paid indirectly:
Net expenses 2.85% 3.82% 3.33% 2.90% 3.48%**
Net investment income (loss) (1.81)% (2.09)% (1.09)% (1.10)% (2.08)%**
Ratios assuming waiver of
management fees and
assumption of expenses by
Pioneer and reduction for
fees paid indirectly:
Net expenses 2.82% 3.80% 3.31% 2.85% 2.86%**
Net investment income
(loss) (1.78)% (2.07)% (1.07)% (1.05)% (1.46)%**
.........
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
FINANCIAL HIGHLIGHTS (CONTINUED)
PIONEER EMERGING MARKETS FUND
SELECTED DATA FOR A CLASS Y SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
, APRIL 9,
1998
FOR THE YEAR ENDED THROUGH
NOVEMBER 30, NOVEMBER 30
2000 1999 1998
---- ---- ----
Net asset value, beginning of
period $13.99 $8.85 $14.55
Increase (decrease) from
operations:
Net investment income (loss) $(0.10) $0.01 --
Net realized and unrealized gain
(loss) on investments, futures
contracts and foreign currency
transactions (2.86) 5.13 (5.55)
----------- -------- -------------
Net increase (decrease) from
investment operations $(2.96) $5.14 $(5.55)
Distributions to shareholders:
Net realized gain -- -- (0.15)
----------- -------- -------------
Net increase (decrease) in net $(2.96) $5.14 $(5.70)
asset value
----------- -------- -------------
Net asset value, end of period $11.03 $13.99 $8.85
----------- -------- -------------
Total return* (21.16)% 58.08% (38.32)%
RATIOS/SUPPLEMENTAL DATA
Ratio of net expenses to average
net assets+ 1.62% 2.51% 1.75%**
Ratio of net investment income
(loss) to average net assets+ (0.62)% (1.07)% (0.06)%**
Portfolio turnover rate 139% 180% 195%
Net assets, end of period
(in thousands) $47,378 $27,225 $1,241
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.60% 2.41% 1.75%**
Net investment income (loss) (0.60)% (0.97)% (0.06)%**
.........
* 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 the end of each period.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
INFORMATION CONCERNING THE MEETING
SHAREHOLDER PROPOSALS
Your fund is not required to hold annual meetings of shareholders
and does not currently intend to hold an annual meeting of shareholders in 2001.
Shareholder proposals to be presented at the next meeting of
shareholders, whenever held, must be received at the fund's offices, 60 State
Street, Boston, Massachusetts 02109, at a reasonable time prior to the trustees'
solicitation of proxies for the meeting. The submission by a shareholder of a
proposal for inclusion in a proxy statement does not guarantee that it will be
included.
Shareholder proposals are subject to certain regulations under the
federal securities laws.
SHARES HELD IN RETIREMENT PLANS
The trustee or custodian of certain retirement plans is required to
vote any unvoted shares held in such plans in proportion to the percentages
voted by shareholders in person and by proxy.
PROXIES, QUORUM AND VOTING AT THE MEETING
Any shareholder who has given his or her proxy to someone has the power
to revoke that proxy at any time prior to its exercise by executing a
superseding proxy or by submitting a notice of revocation to the secretary of
the fund. In addition, although mere attendance at the shareholder meeting will
not revoke a proxy, a shareholder present at the shareholder meeting may
withdraw his or her proxy and vote in person. All properly executed and
unrevoked proxies received in time for the shareholder meeting will be voted in
accordance with the instructions contained in the proxies. If no instruction is
given, the persons named as proxies will vote the shares represented thereby in
favor of the proposals described above and will use their best judgment in
connection with the transaction of such other business as may properly come
before the shareholder meeting or any adjournment thereof.
With respect to your fund, one-third of the shares entitled to vote,
present in person or represented by proxy, constitutes a quorum for the
transaction of business with respect to any proposal (unless otherwise noted in
the proxy statement). In the event that, at the time any session of the
shareholder meeting for the fund is called to order, a quorum is not present in
person or by proxy, the persons named as proxies may vote those proxies which
have been received to adjourn the shareholder meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of any of the
proposals have not been received, the persons named as proxies may propose one
or more adjournments of the shareholder meeting to permit further solicitation
of proxies with respect to such proposal. Any such adjournment will require the
affirmative vote of more than one half of the shares of the fund present in
person or by proxy at the session of the shareholder meeting to be adjourned.
The persons named as proxies will vote those proxies which they are entitled to
vote in favor of any such proposal in favor of such an adjournment and will vote
those proxies required to be voted against any such proposal against any such
adjournment. A shareholder vote may be taken on one or more of the proposals in
the proxy statement prior to such adjournment if sufficient votes for its
approval have been received and it is otherwise appropriate. Such vote will be
considered final regardless of whether the meeting is adjourned to permit
additional solicitation with respect to any other proposal.
Shares of the fund represented in person or by proxy, including shares
which abstain or do not vote with respect to a proposal, will be counted for
purposes of determining whether there is a quorum at the shareholder meeting.
Accordingly, an abstention from voting has the same effect as a vote against a
proposal. However, if a broker or nominee holding shares in "street name"
indicates on the proxy card that it does not have discretionary authority to
vote on a proposal, those shares will not be considered present and entitled to
vote on that proposal. Thus, a "broker non-vote" has no effect on the voting in
determining whether a proposal has been adopted by 67% or more of the fund's
shares present at the shareholder meeting, if more than 50% of the outstanding
shares (excluding the "broker non-votes") of the fund are present or
represented. However, for purposes of determining whether a proposal has been
adopted by more than 50% of the outstanding shares of the fund, a "broker
non-vote" has the same effect as a vote against that proposal because shares
represented by a "broker non-vote" are considered to be outstanding shares.
METHOD OF SOLICITATION AND EXPENSES
The cost of preparing, assembling and mailing this proxy statement and
prospectus and the attached notice of special meeting of shareholders and the
accompanying proxy card will be borne by Pioneer. In addition to soliciting
proxies by mail, Pioneer may, at its expense, have one or more of the funds'
officers, representatives or compensated third-party agents, including Pioneer,
Pioneer Investment Management Shareholder Services, Inc. ("PIMSS") and Pioneer
Funds Distributor, aid in the solicitation of proxies by personal interview or
telephone and telegraph and may request brokerage houses and other custodians,
nominees and fiduciaries to forward proxy soliciting material to the beneficial
owners of the shares held of record by such persons.
The fund may also arrange to have votes recorded by telephone, the
internet or other electronic means. The voting procedures used in connection
with such voting methods are designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been properly
recorded. If these procedures were subject to a successful legal challenge, such
votes would not be counted at the shareholder meeting. The fund is unaware of
any such challenge at this time. In the case of telephone voting, shareholders
would be called at the phone number PIMSS has in its records for their accounts,
and would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to authorize
proxies to vote their shares at the meeting in accordance with their
instructions. In the case of automated telephone and internet voting,
shareholders would be required to provide their Social Security number or other
identifying information and will receive a confirmation of their instructions.
Persons holding shares as nominees will be reimbursed by Pioneer, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
OUTSTANDING SHARES
As of July 20, 2001, _______ Class A shares, __________ Class B shares
and __________ Class C shares of beneficial interest of your fund were
outstanding. Only shareholders of record on July 20, 2001 (the record date) are
entitled to notice of and to vote at the meeting.
OTHER BUSINESS
While the shareholder meeting has been called to transact any business
that may properly come before it, the only matters that the trustees intend to
present are those matters stated in the attached notice of special meeting of
shareholders. However, if any additional matters properly come before the
shareholder meeting, and on all matters incidental to the conduct of the
meeting, the persons named in the enclosed proxy intend to vote the proxy in
accordance with their judgment on such matters unless instructed to the
contrary.
OWNERSHIP OF SHARES OF THE FUNDS
To the knowledge of the fund, as of May 31, 2001, the following persons
owned of record or beneficially 5% or more of the outstanding Class A, Class B
and Class C shares of your fund and the outstanding Class A, Class B, Class C
and Class Y shares Emerging Markets Fund:
NAMES AND
ADDRESSES OF PRO FORMA OWNERSHIP OF EMERGING
OWNERS OF MORE MARKETS FUND AS OF __________,
THAN 5% OF SHARES INDO-ASIA 2001
Class A Class B Class C Class Y Class A Class B Class C Class Y
N/A
EMERGING MARKETS FUND
As of May 31, , 2001, the trustees and officers of your fund and
Emerging Markets Fund, each as a group, owned in the aggregate less than 1% of
the outstanding shares of the respective funds.
- ------------------------------------------------------------------------------
EXPERTS
The financial statements and the financial highlights of Indo-Asia Fund
and Emerging Markets Fund, as of October 31, 2000 and November 30, 2000,
respectively, are incorporated by reference into this proxy statement and
prospectus. The financial statements and highlights have been independently
audited by Arthur Andersen LLP, as stated in their reports with respect thereto.
These financial statements and highlights are included in reliance upon the
reports given upon the authority of such firm as experts in giving said reports.
AVAILABLE INFORMATION
Each fund is subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act and files reports, proxy
statements and other information with the SEC. You can view these reports, proxy
statements and other information at the SEC's Public Reference Room in
Washington, D.C. Call 1-202-942-8090 for information. The SEC charges a fee for
copies. You can get the same information free from the SEC's EDGAR database on
the Internet (http://www.sec.gov). You may also e-mail requests for these
documents to publicinfo@sec.gov or make a request in writing to the SEC's Public
Reference Section Washington, D.C. 20549-0102.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made as
of this th day of July, 2001, between Pioneer Emerging Markets Fund (the
"ACQUIRING FUND"), a business trust organized under the laws of the State of
Delaware with its principal place of business at 60 State Street, Boston,
Massachusetts 02109, and Pioneer Indo-Asia Fund, a business trust organized
under the laws of the State of Delaware with its principal place of business at
60 State Street, Boston, Massachusetts 02109 (the "ACQUIRED FUND").
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "CODE"). The reorganization (the
"REORGANIZATION") will consist of (a) the transfer of all of the assets of the
Acquired Fund to the Acquiring Fund in exchange for (i) the issuance to the
Acquired Fund of shares of beneficial interest of each Class of the Acquiring
Fund that corresponds to each Class of shares of the Acquired Fund
(collectively, the "ACQUIRING FUND SHARES" and each, an "ACQUIRING FUND SHARE")
, and (ii) the assumption by the Acquiring Fund of (I) the liabilities of the
Acquired Fund that are included in the calculation of net asset value ("NAV") on
the closing date set forth below (the "CLOSING DATE") and (II) the liabilities
of the Acquired Fund with respect to its investment operations that are not
required by generally accepted accounting principles ("GAAP") to be included in
the calculation of NAV consistent with liabilities incurred by registered
management investment companies in the ordinary course of their businesses
(i.e., not including any extraordinary obligations, including, but not limited
to legal proceedings, shareholder claims and distribution payments) (the
"ASSUMED LIABILITIES"), and (b) the distribution by the Acquired Fund, on the
Closing Date, or as soon thereafter as practicable, of the Acquiring Fund Shares
to the shareholders of the Acquired Fund in liquidation of the Acquired Fund and
the termination of the Acquired Fund, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Fund and the Acquired Fund are each registered
investment companies classified as management companies of the open-end type,
and the Acquired Fund owns securities that generally are assets of the character
in which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of
beneficial interest;
WHEREAS, the Board of Trustees of the Acquiring Fund has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of the Assumed Liabilities of the Acquired Fund by the
Acquiring Fund are in the best interests of the Acquiring Fund shareholders;
WHEREAS, the Board of Trustees of the Acquired Fund has determined that
the exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares
and the assumption of the Assumed Liabilities of the Acquired Fund by the
Acquiring Fund are in the best interests of the Acquired Fund shareholders.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES AND LIQUIDATION
AND TERMINATION OF THE ACQUIRED FUND.
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer its assets as set forth in paragraph 1.2 to the Acquiring
Fund free and clear of all liens and encumbrances (other than those arising
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), liens for
taxes not yet due and contractual restrictions on the transfer of the acquired
assets), and the Acquiring Fund agrees in exchange therefor: (a) to issue to the
Acquired Fund the number of Acquiring Fund Shares of each Class, including
fractional Acquiring Fund Shares, determined (to at least two decimal places) by
dividing the value of the Acquired Fund's net assets attributable to a Class of
shares and transferred to the Acquiring Fund, computed in the manner and as of
the time and date set forth in paragraph 2.1, by the NAV of one Acquiring Fund
Share of the applicable Class, computed in the manner and as of the time and
date set forth in paragraph 2.2; and (b) to assume the Assumed Liabilities, as
set forth in paragraph 1.3. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "CLOSING").
1.2. (a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all of its property, including, without
limitation, all goodwill, all contractual rights of the Acquired Fund, all other
intangible property owned by the Acquired Fund and originals or copies of all
books and records of the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a
list of all of the Acquired Fund's securities and other assets as of the date of
this Agreement. The Acquired Fund reserves the right to sell any of these
securities but will not, without the prior approval of the Acquiring Fund,
acquire any additional securities other than securities of the type in which the
Acquiring Fund is permitted to invest and shall not acquire, without the consent
of the Acquiring Fund, any securities that are valued at "fair value" under the
valuation procedures of either the Acquired Fund or the Acquiring Fund.
1.3. The Acquired Fund will endeavor to discharge all the Acquired
Fund's known liabilities and obligations that are or will become due prior to
the Closing Date. The Acquired Fund shall prepare an unaudited statement of
assets and liabilities (the "CLOSING STATEMENT"), as of the Valuation Date (as
defined in paragraph 2.1), in accordance with GAAP consistently applied from the
prior audited period, including a calculation of the net assets of the Acquired
Fund as of the close of business on the Closing Date. The Acquiring Fund shall
assume the Assumed Liabilities.
1.4. On the Closing Date or as soon thereafter as is conveniently
practicable, the Acquired Fund shall liquidate and distribute pro rata to the
Acquired Fund's shareholders of record determined as of the close of business on
the Closing Date (the "ACQUIRED FUND SHAREHOLDERS") the Acquiring Fund Shares it
receives pursuant to paragraph 1.1. Such liquidation and distribution will be
accomplished by the Acquired Fund instructing the Acquiring Fund to transfer the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders (as provided to
the Acquiring Fund by the Acquired Fund) and representing the respective pro
rata number of the Acquiring Fund Shares due such shareholders. The Acquired
Fund shall promptly provide the Acquiring Fund with evidence of such liquidation
and distribution. All issued and outstanding shares of the Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will represent a number
of Acquiring Fund Shares after the Closing Date as determined in accordance with
paragraph 1.1. The Acquiring Fund will not issue share certificates representing
Acquiring Fund Shares unless a shareholder specifically requests the Acquiring
Fund Shares in certificated form and, if applicable, in exchange for outstanding
certificates representing.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's Registration Statement on Form N-14 in
the form attached to this Agreement as Annex A.
1.6. Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund shares on
the books of the Acquired Fund as of the time of issuance shall, as a condition
of such issuance and transfer, be paid by the person to whom such Acquiring Fund
Shares are to be issued and transferred.
1.7. Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the Closing
Date and such later date on which the Acquired Fund is terminated.
1.8. The Acquired Fund shall, following the Closing Date and the making
of all distributions pursuant to paragraph 1.4, be terminated under the laws of
the State of Delaware and in accordance with the Agreement and Declaration of
Trust (the "Declaration of Trust") and By-Laws of the Acquired Fund.
2. VALUATION
2.1. The value of the assets of the Acquired Fund to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of the
close of regular trading on the New York Stock Exchange, Inc. on the Closing
Date (such time and date being hereinafter called the "VALUATION DATE"), using
the valuation procedures set forth in the prospectus or statement of additional
information of the Acquired Fund as in effect on the date hereof.
2.2. The NAV of the Acquiring Fund shares shall be calculated in
accordance with the valuation procedures described in paragraph 2.1.
2.3. All computations of value shall be made by Pioneer
Investment Management, Inc., or its agent, in accordance with its regular
practice as pricing agent for the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be September __, 2001, or such later date
as the parties may agree to in writing. All acts taking place at the Closing
shall be deemed to take place simultaneously as of the close of business on the
Closing Date unless otherwise provided. The Closing shall be held as of 5:00
p.m. (Eastern time) at the offices of Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts, or at such other time and/or place as the parties may
agree.
3.2. Portfolio securities shall be presented by the Acquired Fund to
Brown Brothers Harriman & Co. ("BBH") as custodian for the Acquiring Fund for
examination no later than three business days preceding the Valuation Date. The
Acquiring Fund may, in its sole discretion, reject any securities if it
reasonably believes that the ownership of such securities by the Acquired Fund
or the acquisition of such securities by the Acquiring Fund would violate the
investment policies and restrictions of the Acquired Fund and the Acquiring
Fund. The portfolio securities, cash and due bills shall be delivered by the
Acquired Fund to BBH as custodian for the Acquiring Fund for the account of the
Acquiring Fund at the Closing duly endorsed in proper form for transfer in such
condition as to constitute good delivery thereof in accordance with the custom
of brokers. The cash shall be delivered by wire in federal funds or transferred
to an account of the Acquiring Fund specified by the Acquiring Fund.
3.3. BBH, custodian for the Acquired Fund, shall deliver at the Closing
a certificate of an authorized officer stating that: (a) the Acquired Fund's
assets have been delivered in proper form to the Acquiring Fund on the Closing
Date and (b) all necessary transfer taxes including all applicable federal and
state stock transfer stamps, if any, have been paid, or provision for payment
shall have been made, in conjunction with the delivery of portfolio securities.
3.4. In the event that on the Valuation Date (a) the primary trading
market for portfolio securities of the Acquired Fund shall be closed to trading
or trading thereon shall be restricted or (b) trading or the reporting of
trading on such market shall be disrupted so that accurate calculation based
upon available market prices of the value of the net assets of the parties
hereto is impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed and
reporting shall have been restored, provided that unless the parties otherwise
agree, if the transactions contemplated by this Agreement shall not have
occurred on or prior to December 31, 2001, each party's obligations under this
Agreement shall terminate without liability to the other party, except for any
liability that may arise out of a party's breach of its obligations under this
Agreement prior to such termination.
3.5. The Acquired Fund shall deliver to the Acquiring Fund at the
Closing (or, if not reasonably available at the Closing, as soon as practicable
thereafter) a list of the names, addresses, taxpayer identification numbers and
backup withholding and nonresident alien withholding status of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding shares owned
by each such shareholder immediately prior to the Closing, certified by the
President, Executive Vice President or Treasurer of the Acquired Fund as being
an accurate record of the information (i) provided by Acquired Fund Shareholders
or (ii) derived from the Acquired Fund's records by such officers or one of the
Acquired Fund's service providers.
3.6. The Acquiring Fund shall issue and deliver a confirmation
evidencing the Acquiring Fund Shares to be credited to the Acquired Fund's
account on the Closing Date to the Secretary of the Acquired Fund, or provide
evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have
been credited to the Acquired Fund's account on the books of the Acquiring Fund.
At the Closing, each party shall deliver to the other such bills of sale,
checks, assignments, share certificates, if any, receipts or other documents as
such other party or its counsel may reasonably request.
4. LIQUIDATION AND TERMINATION OF ACQUIRED FUND
4.1. As soon as practicable after the Closing, the Acquired Fund shall
liquidate and distribute pro rata to the Acquired Fund Shareholders the
Acquiring Fund Shares received pursuant to paragraph 1.1. Such liquidation and
distribution will be accomplished by the transfer of the Acquiring Fund Shares
credited to the account of the Acquired Fund to open accounts on the share
records in the names of Acquired Fund Shareholders as delivered to the Acquiring
Fund prior to the Closing Date in accordance with paragraph 3.5 and representing
the respective pro rata entitlement of each Acquired Fund Shareholder in the
Acquiring Fund Shares of the corresponding Class held by the Acquired Fund
Shareholder at the time of the Closing.
4.2. In connection with such liquidating distributions, (a) the
Acquiring Fund shall not deliver certificates representing its shares and (b)
the share transfer books of the Acquired Fund shall be permanently closed as of
the Closing Date and arrangements satisfactory to the Acquiring Fund, acting
reasonably, shall be made to restrict the further transfer of the Acquired
Fund's shares.
4.3. As soon as practicable after the liquidation of the Acquired Fund,
the Acquired Fund shall terminate its existence as a business trust under the
laws of the State of Delaware and in accordance with the Declaration of Trust
and By-Laws of the Acquired Fund.
5. REPRESENTATIONS AND WARRANTIES
5.1. The Acquired Fund represents and warrants to the Acquiring Fund,
which representations and warranties will be true and correct on the date hereof
and on the Closing Date as though made on and as of the Closing Date, as
follows:
(a) The Acquired Fund is a business trust validly existing and
in good standing under the laws of the State of Delaware and has the power to
own all of its properties and assets and, subject to approval by the Acquired
Fund Shareholders, to perform its obligations under this Agreement. The Acquired
Fund is not required to qualify to do business in any jurisdiction in which it
is not so qualified or where failure to qualify would not subject it to any
material liability or disability. The Acquired Fund has all necessary federal,
state and local authorizations to own all of its properties and assets and to
carry on the business of the Acquired Fund as now being conducted;
(b) The Acquired Fund is a registered investment company
classified as a management company of the open-end type, and its registration
with the Securities and Exchange Commission (the "COMMISSION") as an investment
company under the Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT")
is in full force and effect;
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of its
Declaration of Trust or By-Laws or of any material agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquired
Fund to which it is a party or by which its assets are bound;
(d) Except as included in the calculation of NAV on the
Valuation Date, the Acquired Fund has no material contracts or other commitments
(other than this Agreement) which will be terminated with liability to the
Acquired Fund on or prior to the Closing Date;
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Acquired Fund or any of the Acquired
Fund's properties or assets, except as previously disclosed in writing to, and
acknowledged in writing by, the Acquiring Fund. The Acquired Fund is not a party
to or subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Acquired Fund's
business or its ability to consummate the transactions herein contemplated;
(f) The statement of assets and liabilities of the Acquired
Fund as of October 31, 2000 has been audited by Arthur Andersen LLP, independent
certified public accountants, has been prepared in accordance with GAAP
consistently applied and fairly reflects the financial condition of the Acquired
Fund as of such date; except for the Assumed Liabilities, the Acquired Fund will
not have any known or contingent liabilities on the Closing Date;
(g) Since October 31, 2000, except as disclosed on a schedule
to this Agreement or specifically disclosed in the Acquired Fund's prospectus or
statement of additional information as in effect on the date of this Agreement,
there has not been any material adverse change in the Acquired Fund's financial
condition, assets, liabilities, business or prospects, or any incurrence by the
Acquired Fund of indebtedness, except for normal contractual obligations
incurred in the ordinary course of business or in connection with the settlement
of purchases and sales of portfolio securities. For the purposes of this
subparagraph (g), a decline in NAV per share of the Acquired Fund arising out of
its normal investment operations or a decline in net assets of the Acquired Fund
as a result of redemptions shall not constitute a material adverse change;
(h) For each taxable year of its operation, the Acquired Fund
has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has elected to be treated as
such and will qualify as such as of the Closing Date. The Acquired Fund has not
taken any action which has caused or will cause the Acquired Fund to fail to
qualify as a regulated investment company under the Code. The Acquired Fund has
not been notified that any tax return or other filing of the Acquired Fund has
been reviewed or audited by any federal, state, local or foreign taxing
authority. Except as set forth on Schedule 5.1:
(A) Within the times and in the manner prescribed by
law, the Acquired Fund has filed all federal, state
and local tax returns, including all information
returns and payee statements, and all tax returns for
foreign countries, provinces and other governing
bodies that have jurisdiction to levy taxes upon it
and which are required to be filed;
(B) The Acquired Fund has paid all taxes, interest,
penalties, assessments and deficiencies which have
become due or which have been claimed to be due;
(C) All tax returns filed by the Acquired Fund
constitute complete and accurate reports of the
respective tax liabilities of the Acquired Fund or,
in the case of information returns and payee
statements, the amounts required to be reported
accurately set forth all items required to be
included or reflected in such returns except for such
instances of misreporting with respect to which,
individually or in the aggregate, the Acquired Fund
is not required to notify any shareholder;
(D) The Acquired Fund has not waived or extended any
applicable statute of limitations relating to the
assessment of federal, state, local or foreign taxes;
and
(E) The Acquired Fund has not been notified that any
examinations of the federal, state, local or foreign
tax returns of the Acquired Fund are currently in
progress or threatened and no deficiencies have been
asserted or assessed against the Acquired Fund as a
result of any audit by the Internal Revenue Service
or any state, local or foreign taxing authority, and
no such deficiency has been proposed or threatened;
(i) All issued and outstanding shares of the Acquired Fund
are, and at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable. To the Acquired Fund's knowledge, all of the
issued and outstanding shares of the Acquired Fund will, at the time of Closing,
be held of record by the persons and in the amounts set forth in the records of
the transfer agent as provided in paragraph 3.5. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the Acquired Fund, nor is there outstanding any security
convertible into any shares of the Acquired Fund;
(j) At the Closing Date, the Acquired Fund will have good and
marketable title to the assets to be transferred to the Acquiring Fund pursuant
to paragraph 1.1 and full right, power and authority to sell, assign, transfer
and deliver such assets hereunder, and, upon delivery and payment for such
assets, the Acquiring Fund will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, except such
restrictions as might arise under the Securities Act, other than as disclosed in
writing to, and acknowledged in writing by, the Acquiring Fund;
(k) The Acquired Fund has the power and authority to enter
into and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement has been duly authorized by all necessary
action on the part of the Acquired Fund's Board of Trustees, and, subject to the
approval of the Acquired Fund Shareholders, assuming due authorization,
execution and delivery by the Acquiring Fund, this Agreement will constitute a
valid and binding obligation of the Acquired Fund, enforceable in accordance
with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(l) Any information furnished by the Acquired Fund for use in
registration statements, proxy materials and any information necessary to
compute the total return of the Acquired Fund shall be accurate and complete in
all material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto or the requirements
of any form for which its use is intended;
(m) The proxy statement to be included in the Acquiring Fund's
Registration Statement on Form N-14 attached hereto as Annex A (other than
information therein that relates to Pioneer Investment Management, Inc., the
Acquiring Fund or their affiliates) will, on the effective date of that
Registration Statement and on the Closing Date, not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(n) Except as set forth on Schedule 5.1 and as will be
obtained on or prior to the Closing Date, no consent, approval, authorization or
order of any court or governmental authority is required for the consummation by
the Acquired Fund of the transactions contemplated by this Agreement;
(o) To the Acquired Fund's knowledge, all of the issued and
outstanding shares of beneficial interest of the Acquired Fund have been offered
for sale and sold in conformity with all applicable federal and state securities
laws;
(p) The Acquired Fund currently complies in all material
respects with and since its organization has complied in all material respects
with the requirements of, and the rules and regulations under, the Investment
Company Act, the Securities Act, the Securities Exchange Act of 1934 (the
"EXCHANGE ACT"), state "Blue Sky" laws and all other applicable federal and
state laws or regulations. The Acquired Fund currently complies in all material
respects with, and since its organization has complied in all material respects
with, all investment objectives, policies, guidelines and restrictions and any
compliance procedures established by the Acquired Fund. All advertising and
sales material used by the Acquired Fund complies in all material respects with
and has complied in all material respects with the applicable requirements of
the Securities Act, the rules and regulations of the Commission, and, to the
extent applicable, the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") and any applicable state regulatory authority. All
registration statements, prospectuses, reports, proxy materials or other filings
required to be made or filed with the Commission, the NASD or any state
securities authorities by the Acquired Fund have been duly filed and have been
approved or declared effective, if such approval or declaration of effectiveness
is required by law. Such registration statements, prospectuses, reports, proxy
materials and other filings under the Securities Act, the Exchange Act and the
Investment Company Act (i) are or were in compliance in all material respects
with the requirements of all applicable statutes and the rules and regulations
thereunder and (ii) do not or did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not false or misleading;
(q) The prospectus of the Acquired Fund dated March 1, 2001,
and any amendments or supplements thereto, previously furnished to the Acquiring
Fund, did not as of their dates or the dates of their distribution to the public
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading; and
(r) The Acquired Fund Tax Representation Certificate to be
delivered by the Acquired Fund to the Acquiring Fund at Closing pursuant to
Section 8.4 (the "Acquired Fund Tax Representation Certificate") will not on the
Closing Date contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading.
5.2. The Acquiring Fund represents and warrants to the Acquired Fund,
which representations and warranties will be true and correct on the date hereof
and on the Closing Date as though made on and as of the Closing Date, as
follows:
(a) The Acquiring Fund is a business trust, validly existing
and in good standing under the laws of the State of Delaware and has the power
to own all of its properties and assets and to perform its obligations under
this Agreement. The Acquiring Fund is not required to qualify to do business in
any jurisdiction in which it is not so qualified or where failure to qualify
would not subject it to any material liability or disability. The Acquiring Fund
has all necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
(b) The Acquiring Fund is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the Investment Company Act is
in full force and effect;
(c) The prospectus and statement of additional information of
the Acquiring Fund included in the Acquiring Fund's registration statement that
will be in effect on the Closing Date will conform in all material respects with
the applicable requirements of the Securities Act and the Investment Company Act
and the rules and regulations of the Commission thereunder and will not as of
its date and as of the Closing Date contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading;
(d) The Acquiring Fund is not, and its execution, delivery and
performance of this Agreement will not result, in a violation of its Declaration
of Trust or By-Laws or a material violation of any agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquiring
Fund to which it is a party or by which its assets are bound;
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Acquiring Fund or any of the
Acquiring Fund's properties or assets, except as previously disclosed in writing
to, and acknowledged in writing by, the Acquired Fund. The Acquiring Fund is not
a party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects the Acquiring
Fund's business or its ability to consummate the transactions herein
contemplated;
(f) The Acquiring Fund has the power and authority to enter
into and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement has been duly authorized by all necessary
action, if any, on the part of the Acquiring Fund's Board of Trustees, and,
assuming due authorization, execution and delivery by the Acquired Fund, this
Agreement will constitute a valid and binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(g) The Acquiring Fund Shares to be issued and delivered to
the Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant
to the terms of this Agreement, will at the Closing Date have been duly
authorized and, when so issued and delivered, will be duly and validly issued
Acquiring Fund Shares and will be fully paid and non-assessable; the Acquiring
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any Acquiring Fund Shares, nor is there outstanding
any security convertible into any of the Acquiring Fund Shares;
(h) The information to be furnished by the Acquiring Fund for
use in proxy materials and other documents which may be necessary in connection
with the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto or the requirements
of any form for which its use is intended;
(i) The Acquiring Fund is a qualified institutional buyer
as defined in Rule 144A under the Securities Act;
(j) Neither the Acquiring Fund nor, to the knowledge of the
Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted
of any felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated
person of the Acquiring Fund been the subject, or presently is the subject, of
any proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an investment
adviser under Section 203(e) of the Investment Advisers Act of 1940 or Rule
206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange
Act, or for disqualification as an investment adviser, employee, officer or
director of an investment company under Section 9 of the Investment Company Act;
(k) For each taxable year of its operation, the Acquiring Fund
has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has elected to be treated as
such and will qualify as such as of the Closing Date. The Acquiring Fund has not
taken any action which has caused or will cause the Acquiring Fund to fail to
qualify as a regulated investment company under the Code. The Acquiring Fund has
not been notified that any tax return or other filing of the Acquiring Fund has
been reviewed or audited by any federal, state, local or foreign taxing
authority. Except as set forth on Schedule 5.1:
(A) Within the times and in the manner prescribed by
law, the Acquiring Fund has filed all federal, state
and local tax returns, including all information
returns and payee statements, and all tax returns for
foreign countries, provinces and other governing
bodies that have jurisdiction to levy taxes upon it
and which are required to be filed;
(B) The Acquiring Fund has paid all taxes, interest,
penalties, assessments and deficiencies which have
become due or which have been claimed to be due;
(C) All tax returns filed by the Acquiring Fund
constitute complete and accurate reports of the
respective tax liabilities of the Acquiring Fund or,
in the case of information returns and payee
statements, the amounts required to be reported
accurately set forth all items required to be
included or reflected in such returns except for such
instances of misreporting with respect to which,
individually or in the aggregate, the Acquiring Fund
is not required to notify any shareholder;
(D) The Acquiring Fund has not waived or extended any
applicable statute of limitations relating to the
assessment of federal, state, local or foreign taxes;
and
(E) The Acquiring Fund has not been notified that any
examinations of the federal, state, local or foreign
tax return of the Acquiring Fund are currently in
progress or threatened and no deficiencies have been
asserted or assessed against the Acquiring Fund as a
result of any audit by the Internal Revenue Service
or any state, local or foreign taxing authority, and
no such deficiency has been proposed or threatened;
(l) Immediately prior to the Closing, the Acquiring Fund will
be in compliance in all material respects with all applicable laws, rules and
regulations, including, without limitation, the Investment Company Act, the
Securities Act, the Exchange Act and all applicable state securities laws.
Immediately prior to the Closing, the Acquiring Fund will be in compliance in
all material respects with the applicable investment policies and restrictions
set forth in its registration statement currently in effect and will have
calculated its NAV in accordance with the Acquiring Fund's registration
statement;
(m) The Acquiring Fund Shares to be issued pursuant to this
Agreement shall on the Closing Date be duly registered under the Securities Act
by a Registration Statement on Form N-14 of the Acquiring Fund then in effect
and qualified for sale under the applicable state securities laws;
(n) The Acquiring Fund Shares to be issued pursuant to this
Agreement are duly authorized and on the Closing Date will be validly issued and
fully paid and non-assessable and will conform in all material respects to the
description thereof contained in the Acquiring Fund's Registration Statement on
Form N-14. On the Closing Date, the Acquiring Fund shall not, except as provided
herein, have outstanding any warrants, options, convertible securities or any
other type of right pursuant to which any person could acquire Acquiring Fund
Shares; and
o) The Acquiring Fund Tax Representation Certificate to be
delivered by the Acquiring Fund to the Acquired Fund at Closing pursuant to
Section 7.3 (the "Acquiring Fund Tax Representation Certificate") will not on
the Closing Date contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading.
6. COVENANTS OF EACH OF THE PARTIES
6.1. The Acquired Fund will operate its business in the ordinary course
between the date hereof and the Closing Date. It is understood that such
ordinary course of business will include the declaration and payment of
customary dividends and distributions and any other dividends and distributions
necessary or advisable (except to the extent distributions that are not
customary may be limited by representations made in connection with the issuance
of the tax opinion described in paragraph 9.5 hereof), in each case payable
either in cash or in additional shares.
6.2. The Acquired Fund will call a meeting of the Acquired Fund
Shareholders to consider and act upon the matters set forth in the proxy
statement. Each of the Acquired Fund and the Acquiring Fund will use reasonable
efforts to promptly prepare and file with the Commission a Registration
Statement on Form N-14 relating to the transactions contemplated by this
Agreement.
6.3. The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
6.4. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
6.5. Subject to the provisions of this Agreement, each of the Acquired
Fund and the Acquiring Fund will take, or cause to be taken, all actions, and do
or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
6.6 Neither the Acquired Fund nor the Acquiring Fund shall take any
action that is inconsistent with the representations set forth in, with respect
to the Acquired Fund, the Acquired Fund Tax Representation Certificate, and with
respect to the Acquiring Fund, the Acquiring Fund Tax Representation
Certificate, to the extent such action would prevent the Reorganization from
qualifying as a "reorganization" under Section 368(a) of the Code.
6.7. The Acquired Fund shall furnish to the Acquiring Fund on the
Closing Date the Closing Statement, which statement shall be prepared in
accordance with GAAP consistently applied and shall be certified by the Acquired
Fund's Treasurer or any Assistant Treasurer. As promptly as practicable, but in
any case within 90 days after the Closing Date, the Acquired Fund shall furnish
to the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for
federal income tax purposes, and of any capital loss carryovers and other items
that will be carried over to the Acquiring Fund as a result of Section 381 of
the Code, and which statement will be certified by the Treasurer of the Acquired
Fund.
6.8. The Acquired Fund shall provide the Acquiring Fund with
information reasonably necessary for the preparation of a prospectus, which will
include the proxy statement, referred to in paragraph 5.1(m), all to be included
in the Acquiring Fund's Registration Statement on Form N-14, in compliance with
the Securities Act, the Exchange Act and the Investment Company Act in
connection with the meeting of the Acquired Fund Shareholders to consider
approval of this Agreement and the transactions contemplated herein.
6.9. The Acquired Fund shall maintain errors and omissions insurance
covering management of the Acquired Fund prior to and including the Closing
Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
7.1. All representations and warranties made in this Agreement by the
Acquiring Fund shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
7.2. The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its President, Executive Vice President,
Treasurer or any Assistant Treasurer, in form and substance reasonably
satisfactory to the Acquired Fund and dated as of the Closing Date, to the
effect that the representations and warranties made in this Agreement by of the
Acquiring Fund are true and correct in all material respects at and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement; and
7.3 The Acquiring Fund shall have delivered to the Acquired Fund an
Acquiring Fund Tax Representation Certificate substantially in the form attached
to this Agreement as ANNEX B concerning certain tax-related matters with respect
to the Acquiring Fund.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all of its obligations hereunder on or before the Closing Date
and, in addition thereto, the following further conditions:
8.1. All representations and warranties made in this Agreement by the
Acquired Fund shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
8.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities showing the federal tax
bases and holding periods as of the Closing Date, certified by the Acquired
Fund's Treasurer or any Assistant Treasurer;
8.3. The Acquired Fund shall have delivered to the Acquiring Fund on
the Closing Date a certificate executed in its name by its President, Executive
Vice President, Treasurer or any Assistant Treasurer, in form and substance
reasonably satisfactory to the Acquiring Fund and dated as of the Closing Date,
to the effect that the representations and warranties made in this Agreement are
true and correct in all material respects at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this Agreement; and
8.4 The Acquired Fund shall have delivered to the Acquiring Fund an
Acquired Fund Tax Representation Certificate substantially in the form attached
to this Agreement as ANNEX C concerning certain tax-related matters with respect
to the Acquired Fund.
9. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
9.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of each of the Acquired
Fund's Declaration of Trust and By-Laws, and certified copies of the votes
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither party hereto may waive
the conditions set forth in this paragraph 9.1;
9.2. On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
9.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by either party hereto to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
either party hereto, provided that either party may for itself waive any of such
conditions;
9.4. The Acquiring Fund's Registration Statement on Form N-14 shall
have become effective under the Securities Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the Securities Act;
9.5. The parties shall have received a favorable opinion of Hale and
Dorr LLP, addressed to the Acquiring Fund and the Acquired Fund and satisfactory
to the Acquiring Fund and the Acquired Fund, substantially to the effect that
for federal income tax purposes, on the basis of the facts, representations and
assumptions set forth in such opinion, the acquisition by the Acquiring Fund of
all of the assets of the Acquired Fund solely in exchange for the issuance of
Acquiring Fund Shares to the Acquired Fund and the assumption of all of the
Assumed Liabilities by the Acquiring Fund, followed by the distribution by the
Acquired Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to
the Acquired Fund Shareholders in exchange for their Acquired Fund shares of
beneficial interest and the termination of the Acquired Fund, will constitute a
reorganization within the meaning of Section 368(a) of the Code.,
10. BROKERAGE FEES AND EXPENSES
10.1. Each party hereto represents and warrants to the other party
hereto that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
10.2. The parties have been informed by Pioneer Investment Management,
Inc. that it will pay all expenses incurred in connection with the
Reorganization (including, but not limited to, the preparation of the proxy
statement and solicitation expenses).
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1. The parties hereto agree that no party has made any
representation, warranty or covenant not set forth herein or referred to in
paragraph 9.6 hereof and that this Agreement constitutes the entire agreement
between the parties.
11.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
12. TERMINATION
12.1. This Agreement may be terminated at any time prior to the Closing
Date by: (a) the mutual agreement of the Acquired Fund and the Acquiring Fund;
(b) any party in the event that the other party hereto shall breach any material
representation, warranty or agreement contained herein to be performed at or
prior to the Closing Date and has not cured such breach within 10 days of notice
thereof; or (c) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears that it will
not or cannot be met.
12.2. In the event of any such termination, there shall be no liability
for damages on the part of any party hereto or their respective Trustees or
officers to the other party, but, except as provided in Section 10, each shall
bear the expenses incurred by it incidental to the preparation and carrying out
of this Agreement.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Acquired Fund and the Acquiring Fund; provided, however, that following the
meeting of the Acquired Fund Shareholders called by the Acquired Fund pursuant
to paragraph 6.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Acquired Fund Shareholders under this Agreement to the
detriment of the Acquired Fund Shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by hand,
prepaid telegraph, telecopy or certified mail addressed to the Acquired Fund and
the Acquiring Fund at 60 State Street, Boston, Massachusetts 02109.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
15.1. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
15.3. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
15.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the written consent of the other party hereto. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm, corporation or other entity, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
15.5 It is expressly agreed that the obligations of the Acquiring Fund
and the Acquired Fund shall not be binding upon any of their respective
Trustees, shareholders, nominees, officers, agents or employees personally, but
bind only the property of the Acquiring Fund or the Acquired Fund, as the case
may be, as provided in the Declaration of Trust of the Acquiring Fund and the
Acquired Fund, respectively. The execution and delivery of this Agreement have
been authorized by the Trustees of each of the Acquiring Fund and the Acquired
Fund and this Agreement has been executed by authorized officers of the
Acquiring Fund and the Acquired Fund acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the property of the
Acquiring Fund and the Acquired Fund, as the case may be, as provided in the
Declaration of Trust of the Acquiring Fund and the Acquired Fund, respectively.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Executive Vice President and
attested by its Secretary or Assistant Secretary.
Attested PIONEER INDO-ASIA FUND
By: __________________________ By: __________________________
Name: Joseph P. Barri Name:
Title: Secretary Title:
Attest: PIONEER EMERGING MARKETS
FUND
By: _________________________ By:__________________________
Name: Joseph P. Barri Name:
Title: Secretary Title:
EXHIBIT B
EXCERPTS FROM INDO-ASIA FUND'S OCTOBER 31, 2000 ANNUAL REPORT
PIONEER INDO-ASIA FUND
INVESTMENT RETURNS (CLASS A SHARES)
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Indo-Asia Fund, compared to the growth of the MSCI All-Country Asia Free
(Ex-Japan) Index.
AVERAGE ANNUAL TOTAL RETURNS
(as of October 31, 2000)
PERIOD NET ASSET VALUE PUBLIC OFFERING PRICE*
Life of Fund (6/23/94) -3.13% -4.02%
5 Years 2.06% 0.85%
1 Year -15.11% -19.97%
*Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
GROWTH OF $10,000+
Pioneer Indo Asia Fund: $7,702*
MSCI All-Country Asia Free (Ex-Japan) Index: $7,018
[plot points:
DATE TOTAL VALUE
6/30/94 9425 10000
10/31/94 9246 11312
4/30/95 7538 9604
10/31/95 6955 10166
4/30/96 8252 11853
10/31/96 5690 10993
4/30/97 6084 10976
10/31/97 5863 7638
4/30/98 5797 6816
10/31/98 5157 5725
4/30/99 7686 8072
10/31/99 9073 8785
4/30/00 10592 9420
10/31/00 7702 7018]
PIONEER INDO-ASIA FUND
INVESTMENT RETURNS (CLASS B SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of October 31, 2000)
PERIOD IF HELD IF REDEEMED*
Life of Fund (6/23/94) -3.87% -3.87%
5 Years 1.28% 1.09%
1 Year -15.82% -19.19%
*Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
GROWTH OF $10,000+
Pioneer Indo Asia Fund: $7,778*
MSCI All-Country Asia Free (Ex-Japan) Index: $7,018
[plot points:
DATE TOTAL VALUE
6/30/94 10000 10000
10/31/94 9783 11312
4/30/95 7944 9604
10/31/95 7300 10166
4/30/96 8640 11853
10/31/96 5917 10993
4/30/97 6308 10976
10/31/97 6056 7638
4/30/98 5977 6816
10/31/98 5290 5725
4/30/99 7866 8072
10/31/99 9240 8785
4/30/00 10754 9420
10/31/00 7778 7018]
PIONEER INDO-ASIA FUND
INVESTMENT RETURNS (CLASS C SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of October 31, 2000)
PERIOD IF HELD IF REDEEMED*
Life of Fund (1/31/96) 2.53% 2.53%
5 Years -2.77% -2.77%
1 Year -15.81% -15.81%
*Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to investments sold within one year of purchase.
GROWTH OF $10,000
Pioneer Indo Asia Fund: $11,261*
MSCI All-Country Asia Free (Ex-Japan) Index: $6,246
[plot points:
DATE TOTAL VALUE
1/31/96 10000 10000
4/30/96 12548 10549
7/31/96 10611 9517
10/31/96 8624 9784
1/31/97 8739 10421
4/30/97 9197 9768
7/31/97 10433 10672
10/31/97 8828 6798
1/31/98 7019 5568
4/30/98 8713 6067
7/31/98 7045 4448
10/31/98 7682 5095
1/31/99 8586 5532
4/30/99 11376 7184
7/31/99 13656 7949
10/31/99 13376 7819
1/31/00 17529 9211
4/30/00 15567 8384
7/31/00 14331 7714
10/31/00 11261 6246]
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
+Index comparison begins 6/30/94 for Class A and Class B shares. The Morgan
Stanley Capital International (MSCI) All-Country Asia Free (Ex-Japan) Index is
an unmanaged, capitalization-weighted measure of securities trading in China,
Hong Kong, India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore,
Sri Lanka, Taiwan and Thailand; it reflects only those securities available to
foreign investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
PIONEER INDO-ASIA FUND
PORTFOLIO MANAGEMENT DISCUSSION 10/31/00
For the fiscal year ended October 31, 2000, Pioneer Indo-Asia Fund's
Class A, B and C shares delivered total returns at net asset value of -15.11%,
- -15.82% and -15.81% respectively. This performance surpasses the -21.11% return
for the MSCI All-Country Asia Free (ex- Japan) Index for the same period.
In the following discussion, the portfolio management team of Mark
Madden, Manish Modi and Paul Cloonan address the factors impacting the Fund's
performance and the outlook for the Asian markets (excluding Japan).
Q: What is your investment strategy?
A: Our investment process is driven by rigorous research that focuses
on companies with strong long-term growth prospects, proven management ability
and selling at a discount to our estimation of fair value. We look for companies
that are well-positioned in industries with favorable long-term trends and
growth potential. We manage risk through diversification among various Asian
countries, sectors and companies while emphasizing stocks that are attractively
valued.
Q: What factors influenced the performance of the Asian equity markets
in the year ended October 31, 2000?
A: Despite the continued improvement in most Asian economies, Asian
equity markets experienced dramatic corrections this year due to a number of
factors. Most significant among these factors were the concerns related to
rising interest rates and slowing growth in the United States. These concerns,
along with rising oil prices, contributed to global equity market weakness.
Asian equity markets reacted negatively to the potential for a slowdown in
exports caused by weaker demand from the United States and Europe. Political
uncertainty also contributed to equity market weakness in some Asian countries
as elections approached or new leadership assumed power.
We believe that Asian equity markets already reflect these risks and
that prices of many stocks have reached attractively low levels. In some cases,
valuations have approached those last seen during the worst of the Asian crisis
in 1998. In our view, this market reaction is an opportunity to buy stocks at
undervalued prices. We believe that the market is not properly reflecting the
substantial improvements in many Asian companies, economies and financial
systems that have been made since 1998. The structural and cyclical improvements
that have occurred in the last two years have reduced many of the risks of
investing in Asia while the prospects for growth have improved. We are,
therefore, optimistic that performance of the Asian equity markets will improve.
Q: How are the Asian economies performing this year?
A: All of the major countries in Asia returned to positive growth in
1999 after experiencing very difficult economic conditions during the Asian
crisis of 1997-98. The economic recovery is continuing this year. South Korea,
China, Taiwan, India, Malaysia and Singapore are showing the strongest economic
activity with growth rates expected to be more than 6% this year. We expect the
positive growth trends to continue next year, as we expect that Asia (excluding
Japan) once again will become one of the fastest growing regions in the world.
In addition to strong growth, inflation and interest rates in Asia are
relatively low, providing a good environment for equity investing.
Today, Asian economies are counter-cyclical to the U.S. economy. While
the current 10-year expansion of the U.S. economy may be losing momentum, Asian
economies are entering their second year of recovery from the recession that was
brought on by the Asian currency crisis of 1997-98. Consumer demand has been
depressed for the last few years and should recover in the years ahead. In
addition, Asia's favorable demographics with its young and growing populations,
high savings rates, improved manufacturing expertise and strengthened financial
systems provide a good foundation for economic growth and attractive investment
opportunities over the next few years.
Q: What is your outlook?
A: The leading indicators show that the U.S. economy is beginning to
decelerate, which should take pressure off the Federal Reserve to increase
interest rates. If this trend holds, Asian equity markets could benefit, as long
as the slowdown in the United States is not much worse than expected. The
uncertainty related to U.S. monetary policy has worked against the performance
of Asian equity markets this year. As those uncertainties are resolved investors
will refocus on the positive trends in Asian economies such as strong growth,
stable inflation rates and relatively low interest rates. Valuation levels of
Asian stocks are attractive, and the earnings outlook for Asian businesses is
strong; accordingly, we are optimistic about the prospects for favorable
investment performance in the coming year.
Investing in emerging markets carries its own set of risks, including
but not limited to, currency fluctuations, and social and economic instability.
However, we feel confident that the long-term prospects invite serious
consideration.
EXCERPTS FROM INDO-ASIA FUND'S APRIL 30, 2001 SEMIANNUAL REPORT
PIONEER INDO-ASIA FUND
INVESTMENT RETURNS (CLASS A SHARES)
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Indo-Asia Fund, compared to the growth of the MSCI All-Country Asia Free
(Ex-Japan) Index.
AVERAGE ANNUAL TOTAL RETURNS
(as of April 30, 2001)
PERIOD NET ASSET VALUE PUBLIC OFFERING PRICE*
Life of Fund (6/23/94) -3.31% -4.14%
5 Years -1.95% -3.09%
1 Year -29.38% -33.45%
*Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
GROWTH OF $10,000+
Pioneer Indo Asia Fund: $7,480*
MSCI All-Country Asia Free (Ex-Japan) Index: $6,430
[plot points:
Date Fund Index
6/94 9425 10000
9246 11312
4/95 7538 9604
6955 10166
8252 11853
5690 10993
4/97 6084 10976
5863 7638
5797 6816
5157 5725
4/99 7686 8072
9073 8785
10592 9420
7735 7018
4/01 7480 6430]
PIONEER INDO-ASIA FUND
INVESTMENT RETURNS (CLASS B SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of April 30, 2001)
PERIOD IF HELD IF REDEEMED*
Life of Fund (6/23/94) -4.11% -4.11%
5 Years -2.79% -2.98%
1 Year -30.26% -33.05%
*Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
GROWTH OF $10,000+
Pioneer Indo Asia Fund: $7,500*
MSCI All-Country Asia Free (Ex-Japan) Index: $6,430
[plot points:
Date Fund Index
6/94 10000 10000
9783 1312
4/95 7944 9604
7300 10166
8640 11853
5917 10993
4/97 6308 10976
6056 7638
5977 6816
5290 5725
4/99 7866 8072
9240 8785
10754 9420
7813 7018
4/01 7500 6430]
PIONEER INDO-ASIA FUND
INVESTMENT RETURNS (CLASS C SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of April 30, 2001)
PERIOD IF HELD IF REDEEMED*
Life of Fund (1/31/96) 1.66% 1.66%
1 Year -29.95% -29.95%
*Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to investments sold within one year of purchase.
GROWTH OF $10,000
Pioneer Indo Asia Fund: $10,904*
MSCI All-Country Asia Free (Ex-Japan) Index: $6,723
[plot points
Date Fund Index
1/96 10000 10000
12548 10549
8624 9784
4/97 9197 9768
8828 6798
8713 6067
7682 5095
4/99 11376 7184
13376 7819
15567 8384
11312 6246
4/01 10904 5723]
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
+Index comparison begins 6/30/94 for Class A and Class B shares. The Morgan
Stanley Capital International (MSCI) All-Country Asia Free (Ex-Japan) Index is
an unmanaged, capitalization-weighted measure of securities trading in China,
Hong Kong, India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore,
Sri Lanka, Taiwan and Thailand; it reflects only those securities available to
foreign investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
PIONEER INDO-ASIA FUND
PORTFOLIO MANAGEMENT DISCUSSION 4/30/01
For the six months ended April 30, 2001, Pioneer Indo-Asia Fund's Class
A, B and C shares delivered total returns at net asset value of -2.88%, -3.58%
and -3.17%, respectively. This performance surpassed the -8.37% return for the
MSCI All-Country Asia Free (excluding Japan) Index.
In the following discussion, the portfolio management team of Mark
Madden, Manish Modi and Paul Cloonan address the factors affecting the Fund's
performance and the outlook for Asian markets (excluding Japan).
Q: What factors influenced the performance of the Asian equity markets
during the six months ended April 30, 2001?
A: The last six months were extremely challenging for equity investors
around the world. Fears of slowing global growth and a potential recession in
the United States led to negative returns for most equity markets. The Asian
(excluding Japan) region fared a bit better than many other areas of the world,
partly because Asian economies are in a different cycle than the U.S. economy.
Many Asian countries went through a painful recession in 1997-98. In response to
the difficult economic conditions, many companies in Asia initiated
restructuring to improve efficiency and to lay the foundation for a recovery in
profits. In addition, Asian governments strengthened their financial systems to
better deal with crises in the future. We are now in the early years of an
economic recovery and the profit cycle may be turning up. In contrast, the
United States appears to be in the early stages of a deceleration in economic
growth and profits.
Q: What is your general investment strategy?
A: Our investment process is driven by rigorous research that focuses
on companies with strong long-term growth prospects, proven management ability
and selling at a discount to our estimation of fair value. We look for companies
that are well positioned in industries with favorable long-term trends and
growth potential. We manage risk through diversification among various Asian
countries, sectors and companies while emphasizing stocks that are attractively
valued.
Q: What were some of the areas you emphasized given the investment
backdrop during the six months under review?
A: We were particularly optimistic on the prospects for China and
India. The economies in these countries, we think, are poised to grow at rates
faster than the rest of the region, and the stocks in these countries are
attractively valued. In the last six months, our stock selection in China and
Hong Kong added significantly to our performance enabling us to outpace the MSCI
Asia Ex-Japan Index. China is expected to enter the World Trade Organization
(WTO) later this year. China's entry into WTO may encourage more foreign direct
investment (FDI) into China and may help bolster economic growth. China now has
the second highest level of FDI in the world behind the United States. We
believe these continued developments in the Chinese economy provide a positive
environment for our China and Hong Kong stocks.
As for sectors, we currently favor domestic-oriented areas such as the
financial, consumer and telecommunication sectors. We are less optimistic for
export-oriented sectors, such as technology hardware and equipment, that are
more dependent on the health of the U.S. and European economies. In the last six
months, our stock selection in the financial and telecommunication sectors
contributed significantly to performance while our consumer stocks detracted
slightly from performance. We expect consumer stocks to show improved results
later this year as economic growth in Asia is expected to remain resilient
despite the slowdown in exports.
Q: What is your outlook?
A: We continue to be optimistic about the prospects for Asian equity
markets. First, the interest rate and liquidity environment has improved
dramatically from last year. Second, valuations of Asian stocks are very
attractive. Finally, earnings growth potential remains strong for many Asian
companies that do not depend on sales to customers in the United States. Local
demand in many Asian countries is just beginning to recover after the crises of
1997-98. Thus, many of the concerns that weighed on Asian equity markets last
year appear to be easing this year. The main risk relates to the health of the
U.S. and world economy. If the downturn in the U.S. economy proves steeper and
longer than expected, this will negatively impact the performance of global
equity markets. Once it is perceived that global growth has stabilized, we
believe that investors may recognize the relatively strong fundamentals in Asian
economies (excluding Japan), and equity market performance may improve.
Investing in emerging markets carries its own set of risks, including
but not limited to, currency fluctuations, and social and economic instability.
However, we feel confident that the long-term prospects invite serious
consideration.
EXCERPTS FROM EMERGING MARKETS FUND'S NOVEMBER 30, 2000 ANNUAL REPORT
PIONEER EMERGING MARKETS FUND
INVESTMENT RETURNS
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Emerging Markets Fund at public offering price, compared to the growth
of the Morgan Stanley Capital International (MSCI) Emerging Markets Free Index.
AVERAGE ANNUAL TOTAL RETURNS
(as of November 30, 2000)
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
Life-of-Fund 0.66% -0.26%
(6/23/94)
5 Years 2.12 0.91
1 Year -21.59 -26.09
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging
Markets Fund* Markets Free Index
6/94 $9,425 $10,000
11/94 $9,128 $11,242
$8,743 $9,970
$8,756 $9,385
$10,998 $10,780
11/96 $10,558 $10,347
$12,385 $11,616
$11,653 $8,972
$11,302 $8,329
11/98 $7,902 $6,962
$9,798 $8,618
$12,405 $10,130
$13,637 $10,150
11/00 $9,726 $7,738
+ Index comparison begins June 30, 1994. The MSCI Emerging Markets Free Index is
an unmanaged, capitalization-weighted measure of 1,009 securities trading in
26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
PIONEER EMERGING MARKETS FUND
INVESTMENT RETURNS (CLASS B SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of November 30, 2000)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund -0.11% -0.11%
(6/23/94)
5 Years 1.32 1.15
1 Year -22.30 -25.41
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging Markets
Markets Fund* Free Index
6/94 $10,000 $10,000
11/94 $9,644 $11,242
$9,209 $9,970
$9,199 $9,385
$11,517 $10,780
11/96 $11,011 $10,347
$12,870 $11,616
$12,069 $8,972
$11,659 $8,329
11/98 $8,112 $6,962
$10,023 $8,618
$12,641 $10,130
$13,835 $10,150
11/00 $9,822 $7,738
+ Index comparison begins June 30, 1994. The MSCI Emerging Markets Free Index is
an unmanaged, capitalization-weighted measure of 1,009 securities trading in
26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
PIONEER EMERGING MARKETS FUND
INVESTMENT RETURNS (CLASS C SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of November 30, 2000)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund -1.67% -1.67%
(1/31/96)
1 Year -22.03 -22.03
* Assumes reinvestment of distributions. The 1% contingent deferred sales charge
(CDSC) applies to redemptions made within one year of purchase.
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging Markets
Markets Fund* Free Index
1/96 $10,000 $10,000
$10,008 $9,841
$10,855 $10,268
$10,234 $9,872
$10,386 $9,855
2/97 $11,746 $11,027
$12,131 $11,064
$12,281 $10,325
$11,384 $8,546
$11,796 $8,908
5/98 $10,997 $7,934
$6,966 $5,209
$7,633 $6,631
$7,480 $6,492
$9,390 $8,209
8/99 $9,670 $8,973
$11,824 $9,649
$16,825 $11,086
$12,932 $9,668
$12,914 $9,540
11/00 $9,219 $7,370
+ Index comparison begins January 31, 1996. The MSCI Emerging Markets Free
Index is an unmanaged, capitalization-weighted measure of 1,009 securities
trading in 26 emerging markets; it reflects only those securities available to
foreign investors. Index returns are calculated monthly, assume reinvestment
of dividends and, unlike Fund returns, do not reflect any sales charges, fees
or expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
PIONEER EMERGING MARKETS FUND
INVESTMENT RETURNS (CLASS Y SHARES)
AVERAGE ANNUAL TOTAL RETURNS
(as of November 30, 2000)
AVERAGE ANNUAL TOTAL RETURNS*
(As of November 30, 2000)
IF IF
PERIOD HELD REDEEMED
Life-of-Fund -9.45% -9.45%
(4/9/98)
1 Year -21.16 -21.16
* Assumes reinvestment of distributions.
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging Markets
Markets Fund* Free Index
4/1998 $10,000 $10,000
$8,759 $8,630
8/1998 $5,578 $5,666
$6,155 $7,213
$6,065 $7,062
5/1999 $7,658 $8,929
$7,915 $9,760
$9,730 $10,495
2/2000 $13,889 $12,058
$10,725 $10,516
$10,739 $10,377
11/2000 $7,672 $8,017
+ Index comparison begins April 30, 1998. The MSCI Emerging Markets Free Index
is an unmanaged, capitalization-weighted measure of 1,009 securities trading
in 26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
PIONEER EMERGING MARKETS FUND
PORTFOLIO MANAGEMENT DISCUSSION 10/31/00
For the fiscal year ended November 30, 2000, Pioneer Emerging Markets Fund's
Class A, B, C and Y shares delivered total returns at net asset value of
- -21.59%, -22.30%, -22.03% and -21.16, respectively. This performance surpassed
the -24.92% return for the MSCI Emerging Markets Free Index for the same period
while lagging the -20.76 average return posted by emerging market funds tracked
by Lipper Inc. (Lipper is an independent mutual fund monitor).
In the following discussion, Mark Madden, portfolio manager of Pioneer Emerging
Markets Fund, addresses the factors impacting the Fund's performance and the
outlook for the emerging markets.
Q: WHAT FACTORS INFLUENCED THE PERFORMANCE OF EMERGING MARKETS IN THE YEAR ENDED
NOVEMBER 30, 2000?
A: Despite the continued improvement in many developing economies, emerging
equity markets fell this year for a number of reasons. Most significant were
the concerns about rising interest rates and slowing growth in the United
States, which, along with rising oil prices, contributed to global equity
market weakness. Political uncertainty also contributed to equity market
weakness in some countries as elections approached or new leadership assumed
power. In Russia, Vladmir Putin, an obscure intelligence official, managed to
win the election to succeed Boris Yeltsin, but his political agenda and his
economic instincts remained vague and contradictory. In Mexico, meanwhile,
former Coca-Cola executive Vincente Fox, the first opposition candidate to
win the presidency in seven decades, outlined an ambitious program of reforms
but his ability to implement them was far from certain.
We believe that the emerging markets are oversold and already reflect many of
these risks and that prices of many stocks have reached attractive levels. In
Asia, valuations in some cases have approached those last seen during the
worst of the Asian crisis in 1998. In our view, this market reaction is an
opportunity to buy stocks at undervalued prices. We believe that the market
does not properly reflect the substantial progress we have observed during
the last two years in many emerging market companies, economies and financial
systems.
Banking and corporate sector reforms in Asia, in particular, have reduced
many of the risks of investing in those markets while the long-term
prospects for growth have improved.
Q: WHAT IS YOUR INVESTMENT STRATEGY?
A: Our investment process is driven by rigorous research that identifies
companies with strong long-term prospects, proven managerial teams and
attractive valuations. We look for companies that are well positioned in
industries with strong long-term growth potential. We are also careful to
manage the risk of investing in these markets by careful diversification of
the portfolio across countries and industrial sectors.
Q: WHERE ARE YOU FINDING ATTRACTIVE INVESTMENT OPPORTUNITIES IN THE EMERGING
MARKETS?
A: We are cautious in our view of the sustainability of strong demand in the
U.S. economy. We believe that U.S. imports of electronic equipment, autos and
other goods will slow in the near term, and so we have reduced our exposure
to companies that derive significant revenues from U.S. sales. We believe
there are better opportunities available in companies that derive revenues
from the domestic economy of their home country. In Asia, for example, local
demand in many countries is just beginning to recover after the crises of
1997-98. Moreover, while profit margins may have peaked in the United States,
we are looking for improvement in profit margins and earnings of Asian
companies in the financial, consumer and telecommunication sectors.
In Eastern Europe, a slowing German economy has hurt, but Poland, Hungary and
the Czech Republic look attractive as their economies continue to introduce
the market reforms that we believe will place them next in line for admission
to the European Union.
In all markets, we continue to find companies that benefit from a global
trend toward outsourcing. Increasingly, multinational corporations in the
United States and Europe are shifting production and services to firms in
developing countries to reduce costs and improve efficiency. While this
practice is already well entrenched in Mexico's MAQUILADORA, the assemblers
of inexpensive consumer goods along the U.S. border, the trend is expanding
in Asia and Eastern Europe. Outsourcing opportunities are also cutting across
industry lines to more sophisticated products such as pharmaceuticals,
software services, semiconductors and customer service calling centers.
Q: WHAT IS YOUR OUTLOOK FOR THE COMING YEAR?
A: The leading indicators show that the U.S. economy is beginning to decelerate,
which may enable the Federal Reserve to maintain a less restrictive monetary
policy and perhaps reduce interest rates. This could be a positive
development for domestic consumption in many emerging markets. In 2000,
global investors became increasingly risk averse as fears mounted over
inflation, interest rates, oil prices and growth prospects in the developed
world. We believe that many of these uncertainties will ease next year, and
investors will focus once again on the positive trends in emerging markets:
strong growth, stable inflation rates and, in many cases, corporate
restructuring. Emerging market valuations are low and earnings prospects have
improved in the past year, which leaves us optimistic about the months ahead.
INVESTING IN EMERGING MARKETS CARRIES ITS OWN SET OF RISKS, INCLUDING BUT NOT
LIMITED TO, CURRENCY FLUCTUATIONS AND SOCIAL AND ECONOMIC INSTABILITY. HOWEVER,
WE FEEL CONFIDENT THAT THE LONG-TERM PROSPECTS INVITE SERIOUS CONSIDERATION.
EXCERPTS FROM EMERGING MARKETS FUND'S MAY 31, 2001 SEMIANNUAL REPORT
[Will be provided when it becomes available]
(Investment Company Act file no. 811-08448)
FORM OF PROXY
- ----------------------------------------------------- -------------------------
[LOGO] PIONEER FAMILY OF FUNDS PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS OF
PIONEER INDO-ASIA FUND
- ------------------------------------------------------- -----------------------------------------------------
- ------------------------------------------------------- -----------------------------------------------------
P.O. Box 9126 TO BE HELD SEPTEMBER 18, 2001
Hingham, MA 02043-9126 VOTE VIA THE INTERNET: HTTP://WWW.PROXYWEB.COM
-----------------------
TOUCH-TONE VOTING: 1-888-221-0697
- ------------------------------------------------------- -----------------------------------------------------
[CONTROL NUMBER] [TRIANGLE] PLEASE FOLD AND DETACH AT PERFORATION
BEFORE MAILING [TRIANGLE]
PIONEER INDO-ASIA FUND
I (we), having received notice of the meeting and management's proxy statement
therefor, and revoking all prior proxies, hereby appoint John F. Cogan, Jr.,
David D. Tripple, Dorothy E. Bourassa, Joseph P. Barri and David C. Phelan, and
each of them, my (our) attorneys (with full power of substitution in them and
each of them) for and in my (our) name(s) to attend the Special Meeting of
Shareholders of my (our) fund to be held on September 18, 2001, at 2:30 p.m.
(Boston time) at the offices of Hale and Dorr LLP, counsel to the fund, 60 State
Street, 26th Floor, Boston, Massachusetts 02109, and any adjourned session or
sessions thereof, and there to vote and act upon the following matters (as more
fully described in the accompanying proxy statement) in respect of all shares of
the fund which I (we) will be entitled to vote or act upon, with all the powers
I (we) would possess if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL.
Date _______________________, 2001
NOTE: In signing, please write name(s) exactly as
Signature(s)
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
IN THE ENCLOSED ENVELOPE.
[triangle] Please fold and detach at perforation before
mailing [triangle]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF YOUR FUND AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED. THE BOARD
RECOMMENDS THAT YOU VOTE IN FAVOR OF THE FOLLOWING:
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
FOR AGAINST ABSTAIN
1. To approve an Agreement and Plan of Reorganization between your fund and
Pioneer Emerging Markets Fund. Under this Agreement your fund would transfer all
of its assets to Emerging Markets Fund in exchange for shares of Emerging
Markets Fund. These shares would be distributed proportionately to you and the
other shareholders of your fund. Emerging Markets Fund would also assume your
fund's liabilities.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
[DEALER CORRESPONDENCE]
IMPORTANT INFORMATION ABOUT PIONEER FAMILY OF INTERNATIONAL FUNDS
June 2001
Deepening and broadening our product lines for you and your clients are two of
many important enhancements underway at Pioneer. Our newly expanded organization
overseas greatly enhances our ability to accomplish new product implementations.
It also allows us to effectively leverage our global research and investment
expertise. Outlined below are changes approved for three of our international
funds by the Trustees in their May meeting.
PIONEER INTERNATIONAL GROWTH FUND NAME CHANGE TO PIONEER INTERNATIONAL VALUE
FUND:
o Pioneer International Growth Fund will change its name to Pioneer
International Value Fund effective July 30, 2001, to better reflect the Fund's
investment style. o This change will better distinguish the Fund within
Pioneer's international equity fund offerings.
PIONEER WORLD EQUITY FUND NAME CHANGE TO PIONEER INTERNATIONAL EQUITY FUND: o
The name change will be effective July 30, 2001.
o The Fund will transition from a global fund investing in both U.S. and
non-U.S. issuers, to an international fund primarily focused on developed
markets outside the U.S. Its makeup will complement Pioneer International Value
Fund. o The transition of this fund to a more pure international objective
should prove advantageous to financial advisors who want to fine tune their
clients' international exposure.
PIONEER INDO-ASIA FUND TAX-FREE REORGANIZATION INTO PIONEER EMERGING MARKETS
FUNd:
o Pioneer Indo-Asia Fund will be reorganized into Pioneer Emerging Markets Fund
effective on or after September 28, 2001, pending approval by Pioneer Indo-Asia
Fund shareowners. o The fund will be closed to new investors effective June 30,
2001.
o Pioneer believes this will be a positive change for shareowners seeking
international exposure, as well as for advisors counseling new and prospective
clients on portfolio diversification and the benefits of a multi-regional
emerging markets strategy.
You may view your book of business - sorted by clients or funds - on Pioneer's
Investment Professionals Web site, PIONEERFUNDS.COM. Call our Customer Service
Representatives at 1-800-225-6292 Monday through Friday, between 8 a.m. and 9
p.m. Eastern time, to establish a password. Also enclosed in this letter are
prospectus supplements and shareowner notices that your clients will receive.
Strengthening and expanding our international product line is a natural
extension of Pioneer's many years of experience in international investing. We
look forward to doing business with you as we initiate these and other product
enhancements.
Pioneer Funds Distributor, Inc.
- ---------------------------------------------------------------------------------------------------------------------
Pioneer Family of International Funds
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- --------------------------- ----------------------- ----------------------- ----------------------- -----------------
INTERNATIONAL EMERGING MARKETS REGIONAL GLOBAL SECTORS
- --------------------------- ----------------------- ----------------------- ----------------------- -----------------
- --------------------------- ----------------------- ----------------------- ----------------------- -----------------
PIONEER MUTUAL FUND Pioneer International Pioneer Emerging Pioneer Europe Fund Pioneer Global
- --------------------------- ----------------------- ----------------------- ----------------------- -----------------
- --------------------------- ----------------------- ----------------------- ----------------------- -----------------
WHERE WE INVEST Anywhere outside the In developing markets Within a major Within a
U.S. around the world geographic region sector anywhere
around the world
- --------------------------- ----------------------- ----------------------- ----------------------- -----------------
- --------------------------- -----------------------------------------------------------------------------------------
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- --------------------------- -----------------------------------------------------------------------------------------
DIVERSIFICATION
- --------------------------- -----------------------------------------------------------------------------------------
Investments outside the U.S. are subject to additional risks, including currency
fluctuations, political and social instability, differing securities regulations
and accounting standards, limited public information, possible changes in
taxation and periods of illiquidity. Emerging markets have certain risks beyond
those associated with developed countries. Investments in lower-rated bonds may
be more volatile and less liquid than more highly rated bonds. For more
information on any Pioneer fund, please request a prospectus from
pioneerfunds.com. Investors should read it carefully before investing.
(c) Pioneer Funds Distributor, Inc.
PIONEER EMERGING MARKETS FUND
STATEMENT OF ADDITIONAL INFORMATION
July 30, 2001
This statement of additional information is not a prospectus. It should be read
in conjunction with the related prospectus (also dated July 30, 2001) which
covers Class A, Class B and Class C shares of beneficial interest of Pioneer
Emerging Markets Fund ("Emerging Markets Fund") to be issued in exchange for all
of the net assets of Pioneer Indo-Asia Fund ("Indo-Asia Fund"). Please read this
statement of additional information carefully and retain it for further
reference.
A copy of the prospectus can be obtained free of charge by calling Shareholder
Services at 1-800-225-6292 or by written request to Emerging Markets Fund at 60
State Street, Boston, Massachusetts 02109. You can also obtain a copy of the
Emerging Markets Fund's Class A, Class B and Class C shares prospectus from our
website at: www.pioneerfunds.com.
TABLE OF CONTENTS
INTRODUCTION
ADDITIONAL INFORMATION ABOUT INDO-ASIA FUND
Fund History
Description of Indo-Asia Fund and Its Investments and Risks
Management of Indo-Asia Fund
Investment Advisory and Other Services
Brokerage Allocation and Other Practices
Capital Stock and Other Securities
Purchase, Redemption and Pricing of Indo-Asia Fund Shares
Taxation of Indo-Asia Fund
Principal Underwriter
Calculation of Performance Data
Financial Statements
ADDITIONAL INFORMATION ABOUT EMERGING MARKETS FUND
Fund History
Description of Emerging Markets Fund and Its Investments and Risks
Management of Emerging Markets Fund
Control Persons and Principal Holders of Emerging Markets Fund Shares
Investment Advisory and Other Services
Brokerage Allocation and Other Practices
Capital Stock and Other Securities
Purchase, Redemption and Pricing of Emerging Markets Fund Shares
Taxation of Emerging Markets Fund
Principal Underwriter
Calculation of Performance Data
Financial Statements
EXHIBITS
A Statement of Additional Information,
dated March 1, 2001, of Pioneer
Indo-Asia Fund.
B Statement of Additional Information,
dated April 2, 2001, of Pioneer
Emerging Markets Fund.
C Audited Financial Statements of
Pioneer Indo-Asia Fund as of October
31, 2000 and unaudited semiannual
report dated April 30, 2000.
D Audited Financial Statements of
Pioneer Emerging Markets Fund as of
November 30, 2000.
E Pro Forma Combined Financial
Statements at November 30, 2000 and
for the 12 months ended December 31,
2000 of Pioneer Indo-Asia Fund and
Pioneer Emerging Markets Fund.
INTRODUCTION
This statement of additional information is intended to supplement the
information provided in a proxy statement and prospectus dated July 30, 2001
(the "Proxy Statement and Prospectus"). The Proxy Statement and Prospectus has
been sent to the shareholders of Indo-Asia Fund in connection with the
solicitation by the management of Indo-Asia Fund of proxies to be voted at the
Meeting of Shareholders of Indo-Asia Fund to be held on September 18, 2001. This
statement of additional information includes the statements of additional
information, dated March 1, 2001, of Indo-Asia Fund (the "Indo-Asia Fund SAI")
and dated April 2, 2001, of Emerging Markets Fund (the "Emerging Markets Fund
SAI").
ADDITIONAL INFORMATION ABOUT INDO-ASIA FUND
FUND HISTORY
For additional information about Indo-Asia Fund generally and its history, see
"Fund History" and "Description of Shares" in the Indo-Asia Fund SAI.
DESCRIPTION OF INDO-ASIA FUND AND ITS INVESTMENTS AND RISKS
For additional information about Indo-Asia Fund's investment objective and
policies, see "Investment Policies, Risks and Restrictions" in the Indo-Asia
Fund SAI.
MANAGEMENT OF INDO-ASIA FUND
For additional information about Indo-Asia Fund's Board of Trustees, officers
and management personnel, see "Management of the Fund" and "Investment Adviser"
in the Indo-Asia Fund SAI.
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information about Indo-Asia Fund's investment adviser, custodian
and independent accountants, see "Investment Adviser," "Principal Underwriter
and Distribution Plans," "Shareholder Servicing/Transfer Agent," "Custodian" and
"Independent Public Accountants" in the Indo-Asia Fund SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about Indo-Asia Fund's brokerage allocation
practices, see "Portfolio Transactions" in the Indo-Asia Fund SAI.
CAPITAL STOCK AND OTHER SECURITIES
For additional information about the voting rights and other characteristics of
shares of beneficial interest of Indo-Asia Fund, see "Description of Shares" in
the Indo-Asia Fund SAI.
PURCHASE, REDEMPTION AND PRICING OF INDO-ASIA FUND SHARES
For additional information about the purchase, redemption and pricing of
Indo-Asia Fund shares, see "Sales Charges," "Redeeming Shares," "Telephone
Transactions" and "Pricing of Shares" in the Indo-Asia Fund SAI.
TAXATION OF INDO-ASIA FUND
For additional information about the tax status of Indo-Asia Fund, see "Tax
Status" in the Indo-Asia Fund SAI.
PRINCIPAL UNDERWRITER
For additional information about Indo-Asia Fund's principal underwriter and the
distribution contract between the principal underwriter and Indo-Asia Fund, see
"Principal Underwriter and Distribution Plans" in the Indo-Asia Fund SAI.
CALCULATION OF PERFORMANCE DATA
For additional information about the investment performance of Indo-Asia Fund,
see "Investment Results" in the Indo-Asia Fund SAI.
FINANCIAL STATEMENTS
Audited financial statements of Indo-Asia Fund as at October 31, 2000 and April
30, 2000 are attached as Exhibit C.
ADDITIONAL INFORMATION ABOUT EMERGING MARKETS FUND
FUND HISTORY
For additional information about Emerging Markets Fund generally and its
history, see "Fund History" and "Description of Shares" in the Emerging Markets
Fund SAI.
DESCRIPTION OF EMERGING MARKETS FUND AND ITS INVESTMENTS AND RISKS
For additional information about Emerging Markets Fund's investment objective,
policies and restrictions see "Investment Objective, Risks and Policies" in the
Emerging Markets Fund SAI.
MANAGEMENT OF EMERGING MARKETS FUND
For additional information about Emerging Markets Fund's Board of Trustees,
officers and management personnel, see "Management of the Fund" and "Investment
Adviser" in the Emerging Markets Fund SAI.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF EMERGING MARKETS FUND SHARES
For additional information about control persons of Emerging Markets Fund and
principal holders of shares of Emerging Markets Fund see "Management of the
Fund" in the Emerging Markets Fund SAI.
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information about Emerging Markets Fund's investment adviser,
custodian and independent accountants, see "Investment Adviser," "Principal
Underwriter and Distribution Plans," "Shareholder Servicing/Transfer Agent,"
"Custodian" and "Independent Public Accountants" in the Emerging Markets Fund
SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about Emerging Markets Fund's brokerage allocation
practices, see "Portfolio Transactions" in the Emerging Markets Fund SAI.
CAPITAL STOCK AND OTHER SECURITIES
For additional information about the voting rights and other characteristics of
shares of beneficial interest of Emerging Markets Fund, see "Description of
Shares" in the Emerging Markets Fund SAI.
PURCHASE, REDEMPTION AND PRICING OF EMERGING MARKETS FUND SHARES
For additional information about the purchase, redemption and pricing of
Emerging Markets Fund shares, see "Sales Charges," "Redeeming Shares,"
"Telephone Transactions" and "Pricing of Shares" in the Emerging Markets Fund
SAI.
TAXATION OF EMERGING MARKETS FUND
For additional information about the tax status of Emerging Markets Fund, see
"Tax Status" in the Emerging Markets Fund SAI.
PRINCIPAL UNDERWRITER
For additional information about Emerging Markets Fund's principal underwriter
and the distribution contract between the principal underwriter and Emerging
Markets Fund, see "Principal Underwriter and Distribution Plans" in the Emerging
Markets Fund SAI.
CALCULATION OF PERFORMANCE DATA
For additional information about the investment performance of Emerging Markets
Fund, see "Investment Results" in the Emerging Markets Fund SAI.
FINANCIAL STATEMENTS
Audited financial statements of Emerging Markets Fund at November 30, 2000 are
attached as e. Pro Forma Combined Financial Statement at November 30,
2000 and for the 12 months ended December 31, 2000 for Emerging Markets Fund as
though a reorganization had occurred on January 1, 2001 are attached as Exhibit
E.
EXHIBIT A
PIONEER INDO-ASIA FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
CLASS A, CLASS B AND CLASS C SHARES
MARCH 1, 2001
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class B and Class C shares prospectus,
dated March 1, 2001, as supplemented or revised from time to time. A copy of the
prospectus can be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the fund at 60 State Street, Boston,
Massachusetts 02109. You can also obtain a copy of the fund's prospectus from
our website at: www.pioneerfunds.com. The fund's financial statements for the
fiscal year ended October 31, 2000 are incorporated into this statement of
additional information by reference. The most recent annual report to
shareholders is attached to this statement of additional information.
TABLE OF CONTENTS
PAGE
----
1. Fund History....................................................................................2
2. Investment Policies, Risks and Restrictions.....................................................2
3. Management of the Fund.........................................................................19
4. Investment Adviser.............................................................................23
5. Principal Underwriter and Distribution Plans...................................................25
6. Shareholder Servicing/Transfer Agent...........................................................30
7. Custodian......................................................................................30
8. Independent Public Accountants.................................................................30
9. Portfolio Transactions.........................................................................30
10. Description of Shares..........................................................................31
11. Sales Charges..................................................................................33
12. Redeeming Shares...............................................................................37
13. Telephone Transactions.........................................................................38
14. Pricing of Shares..............................................................................39
15. Tax Status.....................................................................................40
16. Investment Results.............................................................................45
17. Financial Statements...........................................................................47
18. Appendix A - Annual Fee, Expense and Other Information.........................................48
19. Appendix B - Description of Short-Term Debt, Corporate Bond and Preferred Stock Ratings........51
20. Appendix C - Performance Statistics............................................................57
21. Appendix D - Other Pioneer Information.........................................................75
1. FUND HISTORY
The fund is a diversified open-end management investment company organized as a
Delaware business trust on April 4, 1994. Prior to October 1, 1998, the fund's
name was "Pioneer India Fund" and primarily invested its assets in securities of
Indian issuers.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectus presents the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectus and provides additional information on the fund's investment
policies or restrictions. Restrictions or policies stated as a maximum
percentage of the fund's assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable (other than the
limitations on borrowing and illiquid securities). Accordingly, any later
increase or decrease resulting from a change in values, net assets or other
circumstances will not be considered in determining whether the investment
complies with the fund's restrictions and policies.
PRIMARY INVESTMENTS
Under normal circumstances, at least 65% of the fund's total assets are
invested in equity securities of companies in Asia and the Indian Subcontinent.
For purposes of the fund's investment policies, Indo-Asian countries include
Australia, Bangladesh, China, Hong Kong, India, Indonesia, Korea, Malaysia,
Mongolia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan
and Thailand, as well as any other country in Asia (other than Japan) to the
extent that foreign investors are now or in the future permitted by applicable
law to make such investments. Pioneer Investment Management, Inc. ("Pioneer"),
the fund's investment adviser, allocates the fund's investments among these
countries based upon Pioneer's views of the relative attractiveness of the
Indo-Asian markets and particular issuers.
ILLIQUID SECURITIES
The fund will not invest more than 15% of its net assets in illiquid and other
securities that are not readily marketable. Repurchase agreements maturing in
more than seven days will be included for purposes of the foregoing limit.
Securities subject to restrictions on resale under the Securities Act of 1933,
as amended (the "1933 Act"), are considered illiquid unless they are eligible
for resale pursuant to Rule 144A or another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Pioneer. Pioneer
determines the liquidity of Rule 144A and other restricted securities according
to procedures adopted by the Board of Trustees. The Board of Trustees monitors
Pioneer's application of these guidelines and procedures. The inability of the
fund to dispose of illiquid investments readily or at reasonable prices could
impair the fund's ability to raise cash for redemptions or other purposes. If
the fund sold restricted securities other than pursuant to an exception from
registration under the 1933 Act such as Rule 144A, it may be deemed to be acting
as an underwriter and subject to liability under the 1933 Act.
INVESTMENTS IN INITIAL PUBLIC OFFERINGS
To the extent consistent with its investment objective, the fund may invest in
initial public offerings of equity securities. The market for such securities
may be more volatile and entail greater risk of loss than investments in more
established companies. Investments in initial public offerings may represent a
significant portion of the fund's investment performance. The fund cannot assure
that investments in
2
initial public offerings will continue to be available to the fund or, if
available, will result in positive investment performance. In addition, as
the fund's portfolio grows in size, the impact of investments in initial
public offerings on the overall performance of the fund is likely to
decrease.
DEBT SECURITIES SELECTION
In selecting fixed income securities for the fund, Pioneer gives primary
consideration to the fund's investment objective, the attractiveness of the
market for debt securities given Pioneer's outlook for the equity markets and
the fund's liquidity requirements. Once Pioneer determines to allocate a portion
of the fund's assets to debt securities, Pioneer generally focuses on short-term
instruments to provide liquidity and may invest in a range of fixed income
securities if the fund is investing in such instruments for income or capital
gains. Pioneer selects individual securities based on broad economic factors and
issuer specific factors including the terms of the securities (such as yields
compared to U.S. Treasuries or comparable issues), liquidity and rating, sector
and issuer diversification.
CONVERTIBLE DEBT SECURITIES
The fund may invest in convertible debt securities which are debt obligations
convertible at a stated exchange rate or formula into common stock or other
equity securities of or owned by the issuer. Convertible securities rank senior
to common stocks in an issuer's capital structure and consequently may be of
higher quality and entail less risk than the issuer's common stock. As with all
debt securities, the market values of convertible securities tend to increase
when interest rates decline and, conversely, tend to decline when interest rates
increase.
DEBT OBLIGATIONS OF NON-U.S. GOVERNMENTS
The fund may invest in debt obligations of non-U.S. governments. An investment
in debt obligations of non-U.S. governments and their political subdivisions
(sovereign debt) involves special risks which are not present when investing in
corporate debt obligations. The non-U.S. issuer of the sovereign debt or the
non-U.S. governmental authorities that control the repayment of the debt may be
unable or unwilling to repay principal or interest when due, and the fund may
have limited recourse in the event of a default. During periods of economic
uncertainty, the market prices of sovereign debt may be more volatile than
prices of U.S. debt issues. In the past, certain non-U.S. countries have
encountered difficulties in servicing their debt obligations, withheld payments
of principal and interest and declared moratoria on the payment of principal and
interest on their sovereign debt.
A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its non-U.S. currency reserves, the availability of
sufficient non-U.S. exchange, the relative size of the debt service burden, the
sovereign debtor's policy toward principal international lenders and local
political constraints. Sovereign debtors may also be dependent on expected
disbursements from non-U.S. governments, multilateral agencies and other
entities to reduce principal and interest arrearages on their debt. The failure
of a sovereign debtor to implement economic reforms, achieve specified levels of
economic performance or repay principal or interest when due may result in the
cancellation of third party commitments to lend funds to the sovereign debtor,
which may further impair such debtor's ability or willingness to service its
debts.
DEBT SECURITIES RATING CRITERIA
Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other
nationally recognized securities rating
3
organizations. Debt securities rated BBB are considered medium grade
obligations with speculative characteristics, and adverse economic conditions
or changing circumstances may weaken the issuer's ability to pay interest and
repay principal. If the rating of an investment grade debt security falls
below investment grade, Pioneer will consider if any action is appropriate in
light of the fund's investment objective and policies.
Below investment grade debt securities are those rated "BB" and below by
Standard & Poor's or the equivalent rating of other nationally recognized
securities rating organizations. See Appendix B for a description of rating
categories. The fund may invest in convertible debt securities rated "D" or
better.
Below investment grade debt securities or comparable unrated securities are
commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments.
Changes in economic conditions are more likely to lead to a weakened capacity to
make principal payments and interest payments. The amount of high yield
securities outstanding has proliferated as an increasing number of issuers have
used high yield securities for corporate financing. An economic downturn could
severely affect the ability of highly leveraged issuers to service their debt
obligations or to repay their obligations upon maturity. Factors having an
adverse impact on the market value of lower quality securities will have an
adverse effect on the fund's net asset value to the extent that it invests in
such securities. In addition, the fund may incur additional expenses to the
extent it is required to seek recovery upon a default in payment of principal or
interest on its portfolio holdings.
The secondary market for high yield securities may not be as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the fund's ability to dispose of a particular security when
necessary to meet its liquidity needs. Under adverse market or economic
conditions, the secondary market for high yield securities could contract
further, independent of any specific adverse changes in the condition of a
particular issuer. As a result, the fund could find it more difficult to sell
these securities or may be able to sell the securities only at prices lower than
if such securities were widely traded. Prices realized upon the sale of such
lower rated or unrated securities, under these circumstances, may be less than
the prices used in calculating the fund's net asset value.
Since investors generally perceive that there are greater risks associated with
lower quality debt securities of the type in which the fund may invest a portion
of its assets, the yields and prices of such securities may tend to fluctuate
more than those for higher rated securities. In the lower quality segments of
the debt securities market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced manner than do changes in
higher quality segments of the debt securities market, resulting in greater
yield and price volatility.
Lower rated and comparable unrated debt securities tend to offer higher yields
than higher rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers. However, lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities. Pioneer will attempt to reduce these risks through portfolio
diversification and by analysis of each issuer and its ability to make timely
payments of income and principal, as well as broad economic trends and corporate
developments.
RISKS OF NON-U.S. INVESTMENTS
Investing in securities of non-U.S. issuers involves considerations and risks
not typically associated with investing in the securities of issuers in the U.S.
or other developed markets. Indo-Asian countries are generally considered to
have emerging markets
4
and economies. The risks of investing in securities of non-U.S. issuers
generally, or in issuers with significant exposure to non-U.S. markets, may
be related, among other things, to (i) differences in size, liquidity and
volatility of, and the degree and manner of regulation of, the securities
markets of certain non-U.S. markets compared to the securities markets in the
U.S.; (ii) economic, political and social factors; and (iii) foreign exchange
matters, such as restrictions on the repatriation of capital, fluctuations in
exchange rates between the U.S. dollar and the currencies in which the fund's
portfolio securities are quoted or denominated, exchange control regulations
and costs associated with currency exchange. The political and economic
structures in certain countries, particularly emerging markets, are expected
to undergo significant evolution and rapid development, and such countries
may lack the social, political and economic stability characteristic of more
developed countries. Unanticipated political or social developments may
affect the values of the fund's investments in such countries. The economies
and securities and currency markets of many emerging markets have experienced
significant disruption and declines. There can be no assurances that these
economic and market disruptions will not continue.
The fund may invest more than 25% of its total assets in the securities of
issuers located in a single country. The risks associated with investing in
non-U.S. issuers are heightened to the extent the fund invests a substantial
portion of its assets in any one Indo-Asian country.
NON-U.S. SECURITIES MARKETS AND REGULATIONS. There may be less publicly
available information about non-U.S. markets and issuers than is available with
respect to U.S. securities and issuers. Non-U.S. companies generally are not
subject to accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The trading
markets for most non-U.S. securities are generally less liquid and subject to
greater price volatility than the markets for comparable securities in the U.S.
The markets for securities in certain emerging markets are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in certain non-U.S. markets, including emerging market countries, may
not be able to absorb, without price disruptions, a significant increase in
trading volume or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and arbitrage activities are
generally less extensive in such markets, which may contribute to increased
volatility and reduced liquidity. The less liquid a market, the more difficult
it may be for the fund to price its portfolio securities accurately or to
dispose of such securities at the times determined by Pioneer to be appropriate.
The risks associated with reduced liquidity may be particularly acute in
situations in which the fund's operations require cash, such as in order to meet
redemptions and to pay its expenses.
ECONOMIC, POLITICAL AND SOCIAL FACTORS. Certain countries, including emerging
markets, may be subject to a greater degree of economic, political and social
instability than is the case in the U.S. and Western European countries. Such
instability may result from, among other things: (i) authoritarian governments
or military involvement in political and economic decision making; (ii) popular
unrest associated with demands for improved economic, political and social
conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial disaffection and conflict. Such
economic, political and social instability could significantly disrupt the
financial markets in such countries and the ability of the issuers in such
countries to repay their obligations. Investing in emerging market countries
also involves the risk of expropriation, nationalization, confiscation of assets
and property or the imposition of restrictions on foreign investments and on
repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation in any emerging country, the fund could
lose its entire investment in that country.
Certain Indo-Asian countries restrict or control foreign investment in their
securities markets to varying degrees. These restrictions may limit the fund's
investment in those markets and may increase the expenses of the fund. In
addition, the repatriation of both investment income and capital from certain
5
markets in the region is subject to restrictions such as the need for certain
governmental consents. Even where there is no outright restriction on
repatriation of capital, the mechanics of repatriation may affect certain
aspects of the fund's operation.
Economies in individual Indo-Asian countries may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross domestic product,
rates of inflation, currency valuation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many Indo-Asian countries
have experienced substantial, and in some cases extremely high, rates of
inflation for many years. Inflation and rapid fluctuations in inflation rates
have had, and may continue to have, very negative effects on the economies and
securities markets of certain emerging countries.
Unanticipated political or social developments may also affect the values of the
fund's investments and the availability to the fund of additional investments in
such countries. During 1997 and 1998, the political stability, economies and
securities and currency markets of many markets in India and the Asian
subcontinent experienced significant disruption and declines. There can be no
assurances that these economic and market disruptions will not continue or
spread to other countries in the region.
Economies in emerging market countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, affected adversely by economic conditions in the countries with
which they trade.
CURRENCY RISKS. Because the fund, under normal circumstances, will invest a
substantial portion of its assets in securities which are denominated or quoted
in non-U.S. currencies, the strength or weakness of the U.S. dollar against such
currencies will affect the fund's investment performance. A decline in the value
of any particular non-U.S. currency against the U.S. dollar will cause a decline
in the U.S. dollar value of the fund's holdings of securities denominated or
quoted in such currency and, therefore, may cause an overall decline in the
fund's net asset value and any net investment income and capital gains to be
distributed in U.S. dollars to shareholders of the fund. Even if the fund
attempts to hedge against the effects of adverse changes in non-U.S. currency
exchange rates, there will be significant limitations on the fund's ability to
hedge effectively against the currency risks associated with its portfolio
investments.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries and the U.S.,
and other economic and financial conditions affecting the world economy.
Although the fund values its assets daily in terms of U.S. dollars, the fund
does not intend to convert its holdings of non-U.S. currencies into U.S. dollars
on a daily basis. The fund may do so from time to time, however, and investors
should be aware of the costs of currency conversion. Although currency dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a non-U.S. currency to the fund at
one rate, while offering a lesser rate of exchange should the fund desire to
sell that currency to the dealer.
CUSTODIAN SERVICES AND RELATED INVESTMENT COSTS. Custodial services and other
costs relating to investment in international securities markets generally are
more expensive than in the U.S. Such markets have settlement and clearance
procedures that differ from those in the U.S. In certain markets there have
6
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions.
The inability of the fund to make intended securities purchases due to
settlement problems could cause the fund to miss attractive investment
opportunities. Inability to dispose of a portfolio security caused by
settlement problems could result either in losses to the fund due to a
subsequent decline in value of the portfolio security or could result in
possible liability to the fund. In addition, security settlement and
clearance procedures in some emerging countries may not fully protect the
fund against loss or theft of its assets.
WITHHOLDING AND OTHER TAXES. The fund will be subject to taxes, including
withholding taxes, on income (possibly including, in some cases, capital gains)
that are or may be imposed by certain countries with respect to the fund's
investments in such countries. These taxes will reduce the return achieved by
the fund. Treaties between the U.S. and such countries may not be available to
reduce the otherwise applicable tax rates.
ECONOMIC MONETARY UNION (EMU). On January 1, 1999, 11 European countries adopted
a single currency - the Euro. The conversion to the Euro is being phased in over
a three-year period. During this time, valuation, systems and other operational
problems may occur in connection with the fund's investments quoted in the Euro.
For participating countries, EMU will mean sharing a single currency and single
official interest rate and adhering to agreed upon limits on government
borrowing. Budgetary decisions will remain in the hands of each participating
country but will be subject to each country's commitment to avoid "excessive
deficits" and other more specific budgetary criteria. A European Central Bank is
responsible for setting the official interest rate to maintain price stability
within the Euro zone.
EMU is driven by the expectation of a number of economic benefits, including
lower transaction costs, reduced exchange risk, greater competition, and a
broadening and deepening of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty may increase the
volatility of European markets.
INVESTMENTS IN DEPOSITARY RECEIPTS. The fund may hold securities of non-U.S.
issuers in the form of American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other
similar instruments. Generally, ADRs in registered form are designed for use in
U.S. securities markets, and EDRs and GDRs and other similar global instruments
in bearer form are designed for use in non-U.S. securities markets.
ADRs are denominated in U.S. dollars and represent an interest in the right to
receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent
bank. ADRs do not eliminate all the risk inherent in investing in the securities
of non-U.S. issuers. However, by investing in ADRs rather than directly in
equity securities of non-U.S. issuers, the fund will avoid currency risks during
the settlement period for either purchases or sales. EDRs and GDRs are not
necessarily denominated in the same currency as the underlying securities which
they represent.
For purposes of the fund's investment policies, investments in ADRs, GDRs and
similar instruments will be deemed to be investments in the underlying equity
securities of non-U.S. issuers. The fund may acquire depositary receipts from
banks that do not have a contractual relationship with the issuer of the
security underlying the depositary receipt to issue and secure such depositary
receipt. To the extent the fund invests in such unsponsored depositary receipts
there may be an increased possibility that the fund may not become aware of
events affecting the underlying security and thus the value of the related
7
depositary receipt. In addition, certain benefits (i.e., rights offerings) which
may be associated with the security underlying the depositary receipt may not
inure to the benefit of the holder of such depositary receipt.
OTHER INVESTMENT COMPANIES
The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may not acquire the
securities of other domestic or non-U.S. investment companies if, as a result,
(i) more than 10% of the fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the fund, or (iii) more than 5% of the fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The fund will not invest in other investment companies for
which Pioneer or any of its affiliates act as an investment adviser or
distributor.
The fund, as a holder of the securities of other investment companies, will bear
its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
fund's own operations.
REPURCHASE AGREEMENTS
The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with the difference being income to the fund. Under the
direction of the Board of Trustees, Pioneer reviews and monitors the
creditworthiness of any institution which enters into a repurchase agreement
with the fund. The counterparty's obligations under the repurchase agreement are
collateralized with U.S. Treasury and/or agency obligations with a market value
of not less than 100% of the obligations, valued daily. Collateral is held by
the fund's custodian in a segregated, safekeeping account for the benefit of the
fund. Repurchase agreements afford the fund an opportunity to earn income on
temporarily available cash at low risk. In the event of commencement of
bankruptcy or insolvency proceedings with respect to the seller of the security
before repurchase of the security under a repurchase agreement, the fund may
encounter delay and incur costs before being able to sell the security. Such a
delay may involve loss of interest or a decline in price of the security. If the
court characterizes the transaction as a loan and the fund has not perfected a
security interest in the security, the fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the fund would be at risk of losing some or
all of the principal and interest involved in the transaction.
SHORT SALES AGAINST THE BOX
The fund may sell securities "short against the box." A short sale involves
the fund borrowing securities from a broker and selling the borrowed
securities. The fund has an obligation to return securities identical to the
borrowed securities to the broker. In a short sale against the box, the fund
at all times owns an equal amount of the security sold short or securities
convertible into or exchangeable for, with or without payment of additional
consideration, an equal amount of the security sold short. The fund intends
to use short sales against the box to hedge. For example, when the fund
believes that the price of a current
8
portfolio security may decline, the fund may use a short sale against the box
to lock in a sale price for a security rather than selling the security
immediately. In such a case, any future losses in the fund's long position
should be offset by a gain in the short position and, conversely, any gain in
the long position should be reduced by a loss in the short position.
If the fund effects a short sale against the box at a time when it has an
unrealized gain on the security, it may be required to recognize that gain as if
it had actually sold the security (a "constructive sale") on the date it effects
the short sale. However, such constructive sale treatment may not apply if the
fund closes out the short sale with securities other than the appreciated
securities held at the time of the short sale provided that certain other
conditions are satisfied. Uncertainty regarding certain tax consequences of
effecting short sales may limit the extent to which the fund may make short
sales against the box.
ASSET SEGREGATION
The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the fund's
portfolio. If the fund enters into a transaction requiring segregation, such as
a forward commitment, the custodian or Pioneer will segregate liquid assets in
an amount required to comply with the 1940 Act. Such segregated assets will be
valued at market daily. If the aggregate value of such segregated assets
declines below the aggregate value required to satisfy the 1940 Act, additional
liquid assets will be segregated.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The fund may purchase securities, including U.S. government securities, on a
when-issued basis or may purchase or sell securities for delayed delivery. In
such transactions, delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The fund will
not earn income on these securities until delivered. The purchase of securities
on a when-issued or delayed delivery basis involves the risk that the value of
the securities purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices available in
the market on the delivery date may be greater than those obtained in the sale
transaction. When-issued and delayed delivery transactions will be fully
collateralized by segregating liquid assets. See "Asset Segregation."
PORTFOLIO TURNOVER
It is the policy of the fund not to engage in trading for short-term profits
although portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater transactions costs
which must be borne by the fund and its shareholders. See Appendix A for the
fund's annual portfolio turnover rate.
FOREIGN CURRENCY TRANSACTIONS
The fund may engage in foreign currency transactions. These transactions may be
conducted at the prevailing spot rate for purchasing or selling currency in the
foreign exchange market. The fund also has authority to enter into forward
foreign currency exchange contracts involving currencies of the different
countries in which the fund invests as a hedge against possible variations in
the foreign exchange rates between these currencies and the U.S. dollar. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the contract.
9
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the fund, accrued
in connection with the purchase and sale of its portfolio securities quoted in
foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the fund will be engaged in
hedging activities when adverse exchange rate movements occur. The fund will not
attempt to hedge all of its foreign portfolio positions and will enter into such
transactions only to the extent, if any, deemed appropriate by Pioneer.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the fund to hedge against a devaluation that is so generally
anticipated that the fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency, if Pioneer determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include entering
into a forward transaction involving two foreign currencies, using one foreign
currency as a proxy for the U.S. dollar to hedge against variations in the other
foreign currency, if Pioneer determines that there is a pattern of correlation
between the proxy currency and the U.S. dollar.
The cost to the fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the size of the contract, the length of
the contract period, differences in interest rates between the two currencies
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward contracts to
protect the value of the fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which the fund can
achieve at some future point in time. The precise projection of short-term
currency market movements is not possible, and short-term hedging provides a
means of fixing the U.S. dollar value of only a portion of the fund's foreign
assets.
While the fund will enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. While
the fund may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the fund than if it had
not engaged in any such transactions. Moreover, there may be imperfect
correlation between the fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by the
fund. Such imperfect correlation may cause the fund to sustain losses which will
prevent the fund from achieving a complete hedge or expose the fund to risk of
foreign exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer
less protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
10
would deprive the fund of unrealized profits or force the fund to cover its
commitments for purchase or resale, if any, at the current market price.
If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
OPTIONS ON FOREIGN CURRENCIES
The fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that of transactions in forward contracts. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are quoted or denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains constant. In an
attempt to protect against such decreases in the value of portfolio securities,
the fund may purchase put options on the foreign currency. If the value of the
currency declines, the fund will have the right to sell such currency for a
fixed amount of dollars which exceeds the market value of such currency. This
would result in a gain that may offset, in whole or in part, the negative effect
of currency depreciation on the value of the fund's securities quoted or
denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected for those
securities to be acquired, thereby increasing the cost of such securities, the
fund may purchase call options on such currency. If the value of such currency
increases, the purchase of such call options would enable the fund to purchase
currency for a fixed amount of dollars which is less than the market value of
such currency. Such a purchase would result in a gain that may offset, at least
partially, the effect of any currency related increase in the price of
securities the fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
The fund may also write options on foreign currencies for hedging purposes. For
example, if the fund anticipated a decline in the dollar value of securities
quoted or denominated in a foreign currency because of declining exchange rates,
it could, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
partially offset by the amount of the premium received by the fund.
Similarly, the fund could write a put option on the relevant currency, instead
of purchasing a call option, to hedge against an anticipated increase in the
dollar cost of securities to be acquired. If exchange rates move in the manner
projected, the put option will expire unexercised and allow the fund to offset
such increased cost up to the amount of the premium. However, as in the case of
other types of options transactions, the writing of a foreign currency option
will constitute only a partial hedge up to the amount of the premium, only if
rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the fund would be required
to purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the premium. As a result of writing options on foreign
currencies, the fund also may be required to forego all or a portion of the
benefits which might otherwise have been obtained from favorable movements in
currency exchange rates.
A call option written on foreign currency by the fund is "covered" if the fund
owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency
11
without additional cash consideration. A call option is also covered if the
fund holds a call on the same foreign currency for the same principal amount
as the call written where the exercise price of the call held is (a) equal to
or less than the exercise price of the call written or (b) greater than the
exercise price of the call written if the amount of the difference is
maintained by the fund in cash or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the
option it has purchased or entering into an offsetting option. An
exchange-traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series. Although the
fund will generally purchase or write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time. For some options no secondary market on an exchange may exist. In such
event, it might not be possible to effect closing transactions in particular
options, with the result that the fund would have to exercise its options in
order to realize any profit and would incur transaction costs upon the sale of
underlying currencies pursuant to the exercise of put options. If the fund as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying currency (or
security quoted or denominated in that currency) until the option expires or it
delivers the underlying currency upon exercise.
The fund may also use options on currencies to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates of a different currency with a pattern of correlation.
Cross-hedging may also include using a foreign currency as a proxy for the U.S.
dollar, if Pioneer determines that there is a pattern of correlation between
that currency and the U.S. dollar.
The fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by the fund.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The fund may purchase put and call options on any security in which it may
invest or options on any securities index based on securities in which it may
invest. The fund would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options it has purchased.
WRITING CALL AND PUT OPTIONS ON SECURITIES. A call option written by the fund
obligates the fund to sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the expiration
date. All call options written by the fund are covered, which means that the
fund will own the securities subject to the options as long as the options are
outstanding, or the fund will use the other methods described below. The fund's
purpose in writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, the fund may
forego the opportunity to profit from an increase in the market price of the
underlying security.
A put option written by the fund would obligate the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by the
fund would be covered, which means that the fund would have segregated assets
with a value at least equal to the exercise price of the put option. The purpose
of writing such options is to generate additional income for the fund. However,
in return for the option premium, the fund accepts the risk that it may be
required to purchase the underlying security at a price in excess of its market
value at the time of purchase.
12
Call and put options written by the fund will also be considered to be covered
to the extent that the fund's liabilities under such options are wholly or
partially offset by its rights under call and put options purchased by the fund.
In addition, a written call option or put may be covered by entering into an
offsetting forward contract and/or by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise, reduces the
fund's net exposure on its written option position.
WRITING CALL AND PUT OPTIONS ON SECURITIES INDICES. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
The fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional consideration if cash in such
amount is segregated) upon conversion or exchange of other securities in its
portfolio. The fund may cover call and put options on a securities index by
segregating assets with a value equal to the exercise price.
PURCHASING CALL AND PUT OPTIONS. The fund would normally purchase call options
in anticipation of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle the fund, in
return for the premium paid, to purchase specified securities at a specified
price during the option period. The fund would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of the fund's securities. Put
options may also be purchased by the fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.
The fund may terminate its obligations under an exchange-traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
RISKS OF TRADING OPTIONS. There is no assurance that a liquid secondary market
on an options exchange will exist for any particular exchange-traded option, or
at any particular time. If the fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not be
able to sell the underlying securities or dispose of its segregated assets until
the options expire or are exercised. Similarly, if the fund is unable to effect
a closing sale transaction with respect to options it has
13
purchased, it will have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of
underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding
options on that exchange, if any, that had been issued by the OCC as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms.
The fund may purchase and sell both options that are traded on U.S. and non-U.S.
exchanges and options traded over the counter with broker-dealers who make
markets in these options. The ability to terminate over-the-counter options is
more limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations. Until such time as the staff of the Securities and Exchange
Commission (the "SEC") changes its position, the fund will treat purchased
over-the-counter options and all assets used to cover written over-the-counter
options as illiquid securities, except that with respect to options written with
primary dealers in U.S. government securities pursuant to an agreement requiring
a closing purchase transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the formula.
Transactions by the fund in options on securities and indices will be subject to
limitations established by each of the exchanges, boards of trade or other
trading facilities governing the maximum number of options in each class which
may be written or purchased by a single investor or group of investors acting in
concert. Thus, the number of options which the fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
Pioneer. An exchange, board of trade or other trading facility may order the
liquidations of positions found to be in excess of these limits, and it may
impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on Pioneer's ability to predict future
price fluctuations and the degree of correlation between the options and
securities markets.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that cannot be reflected in the options
markets.
In addition to the risks of imperfect correlation between the fund's portfolio
and the index underlying the option, the purchase of securities index options
involves the risk that the premium and transaction costs paid by the fund in
purchasing an option will be lost. This could occur as a result of unanticipated
movements in the price of the securities comprising the securities index on
which the option is based.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
14
To hedge against changes in securities prices or currency exchange rates or to
seek to increase total return, the fund may purchase and sell various kinds of
futures contracts, and purchase and write (sell) call and put options on any of
such futures contracts. The fund may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. government
securities), securities indices, non-U.S. currencies and other financial
instruments and indices. The fund will engage in futures and related options
transactions for bona fide hedging and non-hedging purposes as described below.
All futures contracts entered into by the fund are traded on U.S. exchanges or
boards of trade that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC") or on non-U.S. exchanges.
FUTURES CONTRACTS. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The fund can
purchase futures contracts on a non-U.S. currency to establish the price in U.S.
dollars of a security denominated in such currency that the fund has acquired or
expects to acquire.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities or currency will usually be
liquidated in this manner, the fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the fund owns or proposes to
acquire. The fund may, for example, take a "short" position in the futures
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or non-U.S. currency rates
that would adversely affect the value of the fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by the fund or securities with characteristics similar to those of the
fund's portfolio securities. Similarly, the fund may sell futures contracts in a
non-U.S. currency in which its portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of Pioneer, there is
a sufficient degree of correlation between price trends for the fund's portfolio
securities and futures contracts based on other financial instruments,
securities indices or other indices, the fund may also enter into such futures
contracts as part of its hedging strategies. Although under some circumstances
prices of securities in the fund's portfolio may be more or less volatile than
prices of such futures contracts, Pioneer will attempt to estimate the extent of
this volatility difference based on historical patterns and compensate for any
such differential by having the fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against price
changes affecting the fund's portfolio securities. When hedging of this
character is successful, any depreciation in the value of portfolio securities
will be substantially offset by appreciation in the value of
15
the futures position. On the other hand, any unanticipated appreciation in
the value of the fund's portfolio securities would be substantially offset by
a decline in the value of the futures position.
On other occasions, the fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
OPTIONS ON FUTURES CONTRACTS. The acquisition of put and call options on futures
contracts will give the fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of the fund's assets. By writing a call
option, the fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that the fund intends to purchase. However, the fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The fund will incur transaction costs in connection
with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
OTHER CONSIDERATIONS. The fund will engage in futures and related options
transactions only for bona fide hedging or non-hedging purposes in accordance
with CFTC regulations which permit principals of an investment company
registered under the 1940 Act to engage in such transactions without registering
as commodity pool operators. The fund will determine that the price fluctuations
in the futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the fund or
which the fund expects to purchase. Except as stated below, the fund's futures
transactions will be entered into for traditional hedging purposes--i.e.,
futures contracts will be sold to protect against a decline in the price of
securities (or the currency in which they are denominated) that the fund owns,
or futures contracts will be purchased to protect the fund against an increase
in the price of securities (or the currency in which they are denominated) it
intends to purchase. As evidence of this hedging intent, the fund expects that
on 75% or more of the occasions on which it takes a long futures or option
position (involving the purchase of futures contracts), the fund will have
purchased, or will be in the process of purchasing, equivalent amounts of
related securities or assets denominated in the related currency in the cash
market at the time when the futures or option position is closed out. However,
in particular cases, when it is economically advantageous for the fund to do so,
a long futures position may be terminated or an option may expire without the
corresponding purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the fund to elect to comply with a different test, under
which the sum of the amounts of initial margin deposits on the fund's existing
non-hedging futures contracts and premiums paid for options on futures
16
entered into for non-hedging purposes (net of the amount the positions are
"in the money") would not exceed 5% of the market value of the fund's total
assets. The fund will engage in transactions in futures contracts and related
options only to the extent such transactions are consistent with the
requirements of theInternal Revenue Codeof 1986, as amended (the "Code"), for
maintaining its qualification as a regulated investment company for federal
income tax purposes.
Futures contracts and related options involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the fund to
purchase securities or currencies, require the fund to segregate assets to cover
such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and the
fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of non-U.S.
securities because currency movements impact the value of different securities
in differing degrees.
WARRANTS AND STOCK PURCHASE RIGHTS
The fund may invest in warrants, which are securities permitting, but not
obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer.
The fund may also invest in stock purchase rights. Stock purchase rights are
instruments, frequently distributed to an issuer's shareholders as a dividend,
that entitle the holder to purchase a specific number of shares of common stock
on a specific date or during a specific period of time. The exercise price on
the rights is normally at a discount from market value of the common stock at
the time of distribution. The rights do not carry with them the right to
dividends or to vote and may or may not be transferable. Stock purchase rights
are frequently used outside of the United States as a means of raising
additional capital from an issuer's current shareholders.
As a result, an investment in warrants or stock purchase rights may be
considered more speculative than certain other types of investments. In
addition, the value of a warrant or a stock purchase right does not necessarily
change with the value of the underlying securities, and warrants and stock
purchase rights expire worthless if they are not exercised on or prior to their
expiration date.
PREFERRED SHARES
The fund may invest in preferred shares of beneficial interest of trust
instruments. Preferred shares are equity securities, but they have many
characteristics of fixed income securities, such as a fixed dividend payment
rate and/or a liquidity preference over the issuer's common shares. However,
because preferred shares are equity securities, they may be more susceptible to
risks traditionally associated with equity investments than the fund's fixed
income securities.
LENDING OF PORTFOLIO SECURITIES
17
The fund may lend portfolio securities to member firms of the New York Stock
Exchange (the "Exchange") under agreements which require that the loans be
secured continuously by collateral in cash, cash equivalents or U.S. Treasury
bills maintained on a current basis at an amount at least equal to the market
value of the securities loaned. The fund continues to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned as well as
the benefit of an increase and the detriment of any decrease in the market value
of the securities loaned and would also receive compensation based on investment
of the collateral. The fund would not, however, have the right to vote any
securities having voting rights during the existence of the loan, but would call
the loan in anticipation of an important vote to be taken among holders of the
securities or of the giving or withholding of consent on a material matter
affecting the investment.
As with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The fund will lend portfolio securities only to firms that have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 5% of the value of the fund's total assets.
INVESTMENT RESTRICTIONS
The fund does not intend to enter into any reverse repurchase agreement, lend
portfolio securities or invest in securities index put and call warrants, as
described in fundamental investment restrictions (2) and (6), during the current
fiscal year.
FUNDAMENTAL INVESTMENT RESTRICTIONS. The fund has adopted certain fundamental
investment restrictions which, along with the fund's investment objective, may
not be changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the fund. For
this purpose, a majority of the outstanding shares of the fund means the vote of
the lesser of:
(i) 67% or more of the shares represented at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or by proxy, or
(ii) more than 50% of the outstanding shares of the fund.
The fund may not:
(1) Issue senior securities, except as permitted by paragraphs (2), (5) and (6)
below. For purposes of this restriction, the issuance of shares of beneficial
interest in multiple classes or series, the purchase or sale of options, futures
contracts and options on futures contracts, forward commitments, forward foreign
exchange contracts, repurchase agreements and reverse repurchase agreements
entered into in accordance with the fund's policies, and the pledge, mortgage or
hypothecation of the fund's assets within the meaning of paragraph (3) below are
not deemed to be senior securities.
(2) Borrow money, except from banks as a temporary measure to facilitate the
meeting of redemption requests or for extraordinary or emergency purposes and
except pursuant to reverse repurchase agreements, in all cases in amounts not to
exceed 33 1/3% of the fund's total assets (including the amount borrowed) taken
at market value.
18
(3) Act as an underwriter, except to the extent that, in connection with the
disposition of portfolio securities, the fund may be deemed to be an underwriter
for purposes of the Securities Act of 1933, as amended (the "1933 Act").
(4) Purchase or sell real estate, except that the fund may (i) lease office
space for its own use, (ii) invest in securities of issuers that invest in real
estate or interests therein, (iii) invest in securities that are secured by real
estate or interests therein, (iv) purchase and sell mortgage-related securities
and (v) hold and sell real estate acquired by the fund as a result of the
ownership of securities.
(5) Make loans, except by purchase of debt obligations, by entering into
repurchase agreements or through the lending of portfolio securities.
(6) Invest in commodities or commodity contracts, except that the fund may
invest in financial futures contracts and related options and in any other
financial instruments which may be deemed to be commodities or commodity
contracts in which the fund is not prohibited from investing by the Commodity
Exchange Act and the rules and regulations thereunder.
(7) With respect to 75% of its total assets, purchase securities of an issuer
(other than the U.S. Government, its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the fund's total assets,
taken at market value, to be invested in the securities of such issuer, or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund.
It is the fundamental policy of the fund not to concentrate its investments in
securities of companies in any particular industry. In the opinion of the SEC,
investments are concentrated in a particular industry if such investments
aggregate 25% or more of the fund's net assets. The fund's policy does not apply
to investments in U.S. Government securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The following restrictions have been
designated as non-fundamental and may be changed by a vote of the fund's
Board of Trustees without approval of shareholders. The fund may not:
(1) Purchase securities on margin or make short sales unless by virtue of its
ownership of other securities, the fund has the right to obtain, without payment
of additional consideration, securities equivalent in kind and amount to the
securities sold and, if the right is conditional, the sale is made upon the same
conditions, except that the fund may obtain such short-term credits as may be
necessary for the clearance of purchases and sales of securities and in
connection with forward foreign currency exchange transactions, options, futures
contracts and options on futures contracts.
(2) Invest for the purpose of exercising control over or management of any
company.
3. MANAGEMENT OF THE FUND
The fund's Board of Trustees provides broad supervision over the affairs of the
fund. The officers of the fund are responsible for the fund's operations. The
Trustees and executive officers of the fund are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the fund within the meaning of the
1940 Act.
19
JOHN F. COGAN, JR.*, CHAIRMAN OF THE BOARD, PRESIDENT AND TRUSTEE, DOB:
JUNE 1926
Director-Deputy Chairman of Pioneer Global Asset Management S.p.A. ("PGAM");
Non-Executive Chairman and a Director of Pioneer Investment Management USA Inc.
("PIM-USA"); Chairman and a Director of Pioneer and Pioneer Global Funds
Distributor, Ltd.; President and Director of Pioneer International Corporation
("PIntl"); Member of the Supervisory Board of Pioneer Fonds Marketing GmbH,
Pioneer First Polish Investment Fund Joint Stock Company ("Pioneer First
Polish"), Pioneer Czech Investment Company, a.s. ("Pioneer Czech") and Pioneer
Universal Pension Fund Company; Chairman, President and Trustee of all of the
Pioneer mutual funds; Director of Pioneer America Fund Plc, Pioneer Global
Equity Fund Plc, Pioneer Global Bond Fund Plc, Pioneer Euro Reserve Fund Plc,
Pioneer European Equity Fund Plc, Pioneer Emerging Europe Fund Plc, Pioneer
Greater Asia Fund Plc, Pioneer U.S. Growth Fund Plc, Pioneer U.S. High Yield
Fund Plc and Pioneer US Real Estate Fund Plc; and Of Counsel, Hale and Dorr LLP
(counsel to PIM-USA and the fund).
MARY K. BUSH, TRUSTEE, DOB: APRIL 1948
4201 CATHEDRAL AVENUE, NW, WASHINGTON, DC 20016
President, Bush & Co. (international financial advisory firm); Director and/or
Trustee of Mortgage Guaranty Insurance Corporation, Hoover Institution, March of
Dimes, Texaco, Inc., R.J. Reynolds Tobacco Holdings, Inc. and Brady Corporation
(industrial identification and specialty coated material products manufacturer);
Advisory Board Member, Washington Mutual Investors Fund (registered investment
company); and Trustee of all of the Pioneer mutual funds.
RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926
BOSTON UNIVERSITY HEALTHCARE ENTREPRENEURSHIP PROGRAM, 53 BAY STATE ROAD,
BOSTON, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health;
Professor of Surgery, Boston University School of Medicine; University
Professor, Boston University; Director, Boston University Health Policy
Institute, University Program for Health Care Entrepreneurship; Trustee,
Boston Medical Center; and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, TRUSTEE, DOB: MAY 1947
THE KEEP, P.O. BOX 110, LITTLE DEER ISLE, ME 04650
Founding Director, The Winthrop Group, Inc. (consulting firm); and Trustee of
all of the Pioneer mutual funds.
20
MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948
ONE BOSTON PLACE, 26TH FLOOR, BOSTON, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm); Trustee of
Boston Medical Center; Member of the Board of Governors of the Investment
Company Institute; Director, Organogenesis Inc. (tissue engineering company);
and Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, TRUSTEE AND EXECUTIVE VICE PRESIDENT, DOB: FEBRUARY 1944
Chief Executive Officer-Pioneer US of PGAM; Director, Chief Executive Officer
and President of PIM-USA; Chairman and a Director of Pioneer Funds Distributor,
Inc. ("PFD"); President and a Director of Pioneer; Director of Pioneer
Investment Management Shareholder Services, Inc. ("PIMSS") and PIntl; Member of
the Supervisory Board of Pioneer First Polish, Pioneer Czech and Pioneer Asset
Management, S.A.; and Executive Vice President and Trustee of all of the Pioneer
mutual funds.
STEPHEN K. WEST, TRUSTEE, DOB: SEPTEMBER 1928
125 BROAD STREET, NEW YORK, NY 10004
Of Counsel, Sullivan & Cromwell (law firm); Director, Dresdner RCM Global
Strategic Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc.
since 1995 (investment companies), AMVESCAP PLC (investment managers) since 1997
and ING American Insurance Holdings, Inc.; and Trustee of all of the Pioneer
mutual funds.
JOHN WINTHROP, TRUSTEE, DOB: JUNE 1936
ONE NORTH ADGERS WHARF, CHARLESTON, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of NUI
Corp. (energy sales, services and distribution); and Trustee of all of the
Pioneer mutual funds.
JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946
Corporate Secretary of PIM-USA and most of its subsidiaries until October 2000;
Secretary of all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP.
VINCENT NAVE, TREASURER, DOB: JUNE 1945
Vice President-Fund Accounting and Custody Services of PIM-USA (Manager from
September 1996 to February 1999); and Treasurer of all of the Pioneer mutual
funds (Assistant Treasurer from June 1999 to November 2000).
21
LUIS I. PRESUTTI, ASSISTANT TREASURER, DOB: APRIL 1965
Assistant Vice President-Fund Accounting, Administration and Custody Services of
Pioneer (Fund Accounting Manager from 1994 to 1999); and Assistant Treasurer of
all of the Pioneer mutual funds since November 2000.
JOHN F. DALY III, ASSISTANT TREASURER, DOB: AUGUST 1965
Global Custody and Settlement Division Manager of PIM-USA; and Assistant
Treasurer of all of the Pioneer mutual funds since November 2000.
DOROTHY E. BOURASSA, ASSISTANT SECRETARY, DOB: JANUARY 1948
Senior Vice President-Legal and Secretary of PIM-USA and Secretary/Clerk of most
of its subsidiaries since October 2000; Assistant Secretary of all of the
Pioneer mutual funds since November 2000; Senior Counsel, Assistant Vice
President and Director of Compliance of PIM-USA from April 1998 through October
2000; Vice President and Assistant General Counsel, First Union Corporation from
December 1996 through March 1998; and Vice President and Counsel, Keystone
Investments, Inc. from March 1986 through November 1996.
The business address of all officers is 60 State Street, Boston,
Massachusetts 02109.
All of the outstanding capital stock of PFD, Pioneer and PIMSS is indirectly
majority owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the
largest banking groups in Italy. Pioneer, the fund's investment adviser,
provides investment management and financial services to mutual funds,
institutional and other clients.
The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.
INVESTMENT PRINCIPAL
FUND NAME ADVISER UNDERWRITER
Pioneer International Growth Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer World Equity Fund Pioneer PFD
Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Indo-Asia Fund Pioneer PFD
Pioneer Mid-Cap Value Fund Pioneer PFD
Pioneer Mid-Cap Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
22
INVESTMENT PRINCIPAL
FUND NAME ADVISER UNDERWRITER
Pioneer Small Company Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Micro-Cap Fund Pioneer PFD
Pioneer Balanced Fund Pioneer PFD
Pioneer Equity-Income Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer II Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Limited Maturity Bond Fund Pioneer PFD
Pioneer America Income Trust Pioneer PFD
Pioneer Bond Fund Pioneer PFD
Pioneer Tax-Free Income Fund Pioneer PFD
Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Strategic Income Fund Pioneer PFD
Pioneer Tax-Managed Fund Pioneer PFD
Pioneer High Yield Fund Pioneer PFD
Pioneer Science & Technology Fund Pioneer PFD
Pioneer Europe Select Fund Pioneer PFD
Pioneer Global Financials Fund Pioneer PFD
Pioneer Global Health Care Fund Pioneer PFD
Pioneer Global Telecoms Fund Pioneer PFD
Pioneer Interest Shares Pioneer Note 2
Pioneer Variable Contracts Trust Pioneer Note 3
Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of 16 separate portfolios designed to provide investment
vehicles for the variable annuity and variable life insurance contracts of
various insurance companies or for certain qualified pension plans.
SHARE OWNERSHIP
See Appendix A for annual information on the ownership of fund shares by the
Trustees, the fund's officers and owners in excess of 5% of any class of shares
of the fund.
COMPENSATION OF OFFICERS AND TRUSTEES
The fund pays no salaries or compensation to any of its officers. Effective
October 3, 2000, the Pioneer U.S. mutual funds compensate their Trustees as
follows:
| | each fund with assets greater than $250 million pays each Trustee who is
not affiliated with PIM-USA, Pioneer, PFD, PIMSS or UniCredito Italiano
(i.e., independent trustees) an annual base fee calculated on the basis of
the fund's net assets.
| | each fund with assets less than $250 million pays each independent Trustee
an annual fee of $1,000.
23
| | each fund, regardless of its assets, pays each Trustee affiliated with
Pioneer an annual fee of $500 (Pioneer reimburses the fund for these fees).
| | each fund with assets greater than $250 million pays each independent
Trustee who serves on each board committee an annual committee fee based
the fund's net assets (with additional compensation for chairpersons of
such committees).
Prior to October 3, 2000, the fund compensated each independent Trustee with a
base fee, a variable fee calculated on the basis of average net assets of the
fund, per meeting fees, and annual committee participation fees for each
committee member or chairperson that were based on percentages of his or her
aggregate annual fee. See the fee table in Appendix A.
SALES LOADS. Current and former Trustees and officers of the fund and other
qualifying persons may purchase the fund's Class A shares without an initial
sales charge.
4. INVESTMENT ADVISER
The fund has contracted with Pioneer to act as its investment adviser. Pioneer
is a majority owned subsidiary of UniCredito Italiano. Certain Trustees or
officers of the fund are also directors and/or officers of certain of UniCredito
Italiano's subsidiaries (see management biographies above).
As the fund's investment adviser, Pioneer provides the fund with investment
research, advice and supervision and furnishes an investment program for the
fund consistent with the fund's investment objective and policies, subject to
the supervision of the fund's Trustees. Pioneer determines what portfolio
securities will be purchased or sold, arranges for the placing of orders for the
purchase or sale of portfolio securities, selects brokers or dealers to place
those orders, maintains books and records with respect to the fund's securities
transactions, and reports to the Trustees on the fund's investments and
performance.
Under the terms of its management contract with the fund, Pioneer pays all the
operating expenses, including executive salaries and the rental of office space,
relating to its services for the fund, with the exception of the following,
which are to be paid by the fund: (a) charges and expenses for fund accounting,
pricing and appraisal services and related overhead, including, to the extent
such services are performed by personnel of Pioneer or its affiliates, office
space and facilities and personnel compensation, training and benefits; (b) the
charges and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed by
the fund; (d) issue and transfer taxes chargeable to the fund in connection with
securities transactions to which the fund is a party; (e) insurance premiums,
interest charges, dues and fees for membership in trade associations and all
taxes and corporate fees payable by the fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the fund and/or its shares with federal regulatory
agencies, state or blue sky securities agencies and foreign jurisdictions,
including the preparation of prospectuses and statements of additional
information for filing with such regulatory authorities; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and distributing
prospectuses, notices, proxy statements and all reports to shareholders and to
governmental agencies; (h) charges and expenses of legal counsel to the fund and
the Trustees; (i) distribution fees paid by the fund in accordance with Rule
12b-1 promulgated by the SEC pursuant to the 1940 Act; (j) compensation of those
Trustees of the fund who are not affiliated with or interested persons of
Pioneer, the fund (other than as Trustees), PIM-USA or PFD; (k) the cost of
preparing and printing share certificates; and (l) interest on borrowed money,
if any. In addition, the fund shall pay all brokers' and underwriting
commissions chargeable to the fund in connection with securities transactions to
which the fund is a party. The
24
Trustees' approval of and the terms, continuance and termination of the
management contract are governed by the 1940 Act and the Investment Advisers
Act of 1940, as applicable. Pursuant to the management contract, Pioneer will
not be liable for any error of judgment or mistake of law or for any loss
sustained by reason of the adoption of any investment policy or the purchase,
sale or retention of any securities on the recommendation of Pioneer.
Pioneer, however, is not protected against liability by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
the management contract.
ADVISORY FEE. As compensation for its management services and expenses incurred,
Pioneer is entitled to a management fee at the rate of 1.10% per annum of the
fund's average daily net assets. This fee is computed and accrued daily and paid
monthly.
THE INDIAN ADVISER. As described in the prospectus, Kothari Pioneer AMC
Limited (the "Indian Adviser") serves as investment adviser with respect to the
fund's investments in India. The Indian Adviser is a joint venture between
Pioneer and The Investment Trust of India Limited, a leading provider of
financial services in India. The Indian Adviser has entered into a subadvisory
contract with Pioneer and the fund. The subadvisory contract is renewable
annually by the vote of a majority of the Board of Trustees of the fund
(including a majority of the Board of Trustees who are not parties to the
contract or interested persons of any such parties) cast in person at a meeting
called for the purpose of voting on such renewal. The subadvisory contract
terminates if assigned and may be terminated without penalty by any party by
vote of its Board of Directors or Trustees, as the case may be, or a majority of
the fund's outstanding voting securities and the giving of sixty days' written
notice.
The Indian Adviser is entitled to a subadvisory fee (payable by Pioneer and not
by the fund) as compensation for its subadvisory services and expenses incurred
of 0.10% of the fund's average gross assets in India's securities markets,
including assets invested in American, Global or other types of depositary
receipts for securities traded in India's securities markets if such gross
assets are no greater than $15,000,000; 0.20% of such gross assets if such gross
assets are greater than $15,000,000 but no greater than $45,000,000; 0.40% of
such gross assets if such gross assets are greater than $45,000,000 but no
greater than $60,000,000; and 0.60% of such gross assets if such gross assets
are greater than $60,000,000. The subadvisory fee is normally computed monthly
and paid quarterly. In addition, the applicable fee rate applies to all assets
that are the basis for the Indian Adviser's fee. For example, if such assets
were $50,000,000 for any one year, the Indian Adviser's fee pursuant to the
above fee schedule would be $200,000 ($50,000,000 X 0.40%).
See the table in Appendix A for management fees paid to Pioneer and the Indian
Adviser during recently completed fiscal years.
ADMINISTRATION AGREEMENT. The fund has entered into an administration agreement
with Pioneer pursuant to which certain accounting and legal services which are
expenses payable by the fund under the management contract are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services. See Appendix A for fees the fund paid to Pioneer for
administration and related services.
EXPENSE LIMIT. Pioneer has agreed to waive all or part of its management fee or
to reimburse the fund for other expenses (other than extraordinary expenses) to
the extent the expenses of the fund's Class A shares exceed 2.10% of average
daily net assets. The portion of fund expenses attributable to Class B and Class
C shares will be reduced only to the extent such expenses were reduced for the
fund's Class A shares. If Pioneer waives any fee or reimburses any expenses, and
the expenses of the fund's Class A shares are subsequently less than 2.10% of
average daily net assets, the fund will reimburse Pioneer for
25
such waived fees or reimbursed expenses provided that such reimbursement does
not cause the fund's Class A expenses to exceed 2.10% of average daily net
assets. In addition, the fund will not reimburse Pioneer for such waived fees
or reimbursed expenses more than three years after such fees were waived or
such expenses were incurred.
POTENTIAL CONFLICT OF INTEREST. The fund is managed by Pioneer which also serves
as investment adviser to other Pioneer mutual funds and private accounts with
investment objectives identical or similar to those of the fund. Securities
frequently meet the investment objectives of the fund, the other Pioneer mutual
funds and such private accounts. In such cases, the decision to recommend a
purchase to one fund or account rather than another is based on a number of
factors. The determining factors in most cases are the amount of securities of
the issuer then outstanding, the value of those securities and the market for
them. Other factors considered in the investment recommendations include other
investments which each fund or account presently has in a particular industry
and the availability of investment funds in each fund or account.
It is possible that at times identical securities will be held by more than one
fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that more than one of the Pioneer
mutual funds or a private account managed by Pioneer seeks to acquire the same
security at about the same time, the fund may not be able to acquire as large a
position in such security as it desires or it may have to pay a higher price for
the security. Similarly, the fund may not be able to obtain as large an
execution of an order to sell or as high a price for any particular portfolio
security if Pioneer decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the fund. In the event more than one account purchases or sells the same
security on a given date, the purchases and sales will normally be made as
nearly as practicable on a pro rata basis in proportion to the amounts desired
to be purchased or sold by each account. Although the other Pioneer mutual funds
may have the same or similar investment objectives and policies as the fund,
their portfolios do not generally consist of the same investments as the fund or
each other, and their performance results are likely to differ from those of the
fund.
PERSONAL SECURITIES TRANSACTIONS. The fund, Pioneer, PFD and the Indian
Adviser have adopted codes of ethics under Rule 17j-1 of the 1940 Act which are
applicable to officers, trustees/directors and designated employees. The codes
permit such persons to engage in personal securities transactions for their own
accounts, including securities that may be purchased or held by the fund, and
are designed to prescribe means reasonably necessary to prevent conflicts of
interest from arising in connection with personal securities transactions. The
codes are on public file with and available from the SEC.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS
PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is an
indirect wholly owned subsidiary of PIM-USA.
The fund entered into an underwriting agreement with PFD which provides that PFD
will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed
26
or compensated by the fund under the distribution plans (discussed below).
PFD bears all expenses it incurs in providing services under the underwriting
agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution-related services
performed for the fund. PFD also pays certain expenses in connection with the
distribution of the fund's shares, including the cost of preparing, printing
and distributing advertising or promotional materials, and the cost of
printing and distributing prospectuses and supplements to prospective
shareholders. The fund bears the cost of registering its shares under federal
and state securities law and the laws of certain non-U.S. countries. Under
the underwriting agreement, PFD will use its best efforts in rendering
services to the fund.
See "Class A Share Sales Charges" for the schedule of initial sales charge
reallowed to dealers as a percentage of the offering price of the fund's Class A
shares.
See the tables in Appendix A for commissions retained by PFD and reallowed to
dealers in connection with PFD's offering of the fund's Class A shares during
recently completed fiscal years.
The fund will not generally issue fund shares for consideration other than cash.
At the fund's sole discretion, however, it may issue fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.
The redemption price of shares of beneficial interest of the fund may, at
Pioneer's discretion, be paid in cash or portfolio securities. The fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which the fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the fund's net asset value during any 90-day period for any
one shareholder. Should the amount of redemptions by any shareholder exceed such
limitation, the fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken at their
value employed in determining the fund's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of such securities will be made in
such manner as the Board of Trustees deems fair and reasonable.
DISTRIBUTION PLANS
The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan"), a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans"), pursuant to which certain distribution and service fees
are paid to PFD. Because of the Plans, long-term shareholders may pay more than
the economic equivalent of the maximum sales charge permitted by the National
Association of Securities Dealers, Inc. (the "NASD") regarding investment
companies.
CLASS A PLAN. Pursuant to the Class A Plan the fund reimburses PFD for its
actual expenditures to finance any activity primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are approved
by the Board of Trustees. The Board of Trustees has approved the following
categories of expenses that may be reimbursed under the Class A Plan: (i) a
service fee to be paid to qualified broker-dealers in an amount not to exceed
0.25% per annum of the fund's daily net assets attributable to Class A shares;
(ii) reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the fund's Class A shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations (such as banks and trust companies) in their efforts to
provide such services. The expenses
27
of the fund pursuant to the Class A Plan are accrued daily at a rate which
may not exceed the annual rate of 0.25% of the fund's average daily net
assets attributable to Class A shares. Distribution expenses of PFD are
expected to substantially exceed the distribution fees paid by the fund in a
given year.
The Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the fund in one fiscal year being paid in the subsequent fiscal year
and thus being treated for purposes of calculating the maximum expenditures of
the fund as having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Class A Plan, the fund has 12 months to
reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the fund during such 12-month period
shall not exceed 0.25% of the fund's average daily net assets attributable to
Class A shares during such period. See Appendix A for the amount, if any, of
carryover of distribution expenses as of the end of the most recent calendar
year.
CLASS B PLAN. PFD pays the selling broker-dealer a commission on the sale of
Class B shares equal to 3.75% of the amount invested. This commission is paid at
the time of sale of the Class B Shares. In order to be entitled to a commission,
the selling broker-dealer must have entered into a sales agreements with PFD. At
the time of the sale of a Class B share, PFD may also advance to the
broker-dealer, from PFD's own assets, the first-year service fee payable under
the Class B Plan at a rate up to 0.25% of the purchase price of such shares. If
such an advance is made, the broker-dealer would not receive any further service
fee until the 13th month following the purchase of Class B shares. As
compensation for advancing the service fee, PFD may retain the service fee paid
by the fund with respect to such shares for the first year after purchase.
The Class B Plan provides that the fund shall pay to PFD, as the fund's
distributor for its Class B shares:
28
-- a distribution fee equal on an annual basis to 0.75% of the fund's
average daily net assets attributable to Class B shares. The
distribution fee compensates PFD for its distribution services with
respect to Class B shares. PFD pays the commissions to broker-dealers
discussed above and also pays:
-- the cost of printing prospectuses and reports used for sales
purposes and the preparation and printing of sales literature
and
-- other distribution-related expenses, including, without
limitation, the cost necessary to provide distribution-related
services, or personnel, travel, office expenses and equipment.
-- a service fee equal to 0.25% of the fund's average daily net assets
attributable to Class B shares. PFD in turn pays the service fee to
broker-dealers at a rate of up to 0.25% of the fund's average daily net
assets attributable to Class B shares owned by shareholder for whom that
broker-dealer is the holder or dealer of record. This service fee
compensates the broker-dealer for providing personal services and/or
account maintenance services rendered by the broker-dealer with respect
to Class B shares. PFD may from time to time require that dealers, in
addition to providing these services, meet certain criteria in order to
receive service fees. PFD is entitled to retain all service fees with
respect to Class B shares for which there is no dealer of record or with
respect to which a dealer is not otherwise entitled to a service fee.
Such service fees are paid to PFD for personal services and/or account
maintenance services that PFD or its affiliates perform for shareholder
accounts.
PFD also receives contingent deferred sales charges ("CDSCs") attributable to
Class B shares to compensate PFD for its distribution expenses. When a
broker-dealer sells Class B shares and elects, with PFD's approval, to waive its
right to receive the commission normally paid at the time of the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
the broker-dealer.
29
Since PFD pays commissions to broker-dealers at the time of the sale of Class B
shares but only receives compensation for such expenses over time through the
distribution fee and CDSC, the Class B Plan and underwriting agreement permit
PFD to finance the payment of commissions to broker-dealers. In order to
facilitate such financing, the fund has agreed that the distribution fee will
not be terminated or modified (including a modification in the rules relating to
the conversion of Class B shares into Class A shares) with respect to Class B
shares:
-- issued prior to the date of any termination or modification;
-- attributable to Class B shares issued through one or a series of
exchanges of shares of another investment company for which PFD acts as
principal underwriter which were initially issued prior to the date of
such termination or modification; or
-- issued as a dividend or distribution upon Class B shares initially
issued or attributable to Class B shares issued prior to the date of
any such termination or modification.
The foregoing limitation does not apply to Class B shares issued after the
termination or modification. The foregoing limitation on terminating or
modifying the Class B Plan also does not apply to a termination or modification:
-- if a change in the 1940 Act, the rules or regulations under the 1940
Act, the Conduct Rules of the NASD or an order of any court or
governmental agency requires such termination or modification (e.g. if
the Conduct Rules were amended to establish a lower limit on the
maximum aggregate sales charges that could be imposed on sales of fund
shares);
30
-- if the fund (or any successor) terminates the Class B Plan and all
payments under the plan and neither the fund (nor any successor)
establishes another class of shares which has substantially similar
characteristics to the Class B Shares of the fund; or
-- at any time by the Board of Trustees. However, the Board of Trustees
may terminate or modify the Class B Plan only if the fund and Pioneer
agree that none of the fund, PFD or any of their affiliates will pay,
after the date of termination or modification, a service fee with
respect to the fund's Class B shares and the termination or
modification of the distribution fee applies equally to all Class B
shares outstanding from time to time.
In the underwriting agreement, the fund agrees that subsequent to the issuance
of a Class B share, the fund will not waive or change any CDSC (including a
change in the rules applicable to conversion of Class B shares into another
class) in respect of such Class B share, except:
-- as provided in the fund's prospectus or statement of additional
information; or
-- as required by a change in the 1940 Act and the rules and regulations
thereunder, the Conduct Rules of the NASD or any order of any court or
governmental agency.
CLASS C PLAN. Commissions on the sale of Class C shares of up to 0.75% of the
amount invested in Class C shares are paid to broker-dealers who have sales
agreements with PFD. PFD may also advance to dealers the first-year service fee
payable under the Class C Plan at a rate up to 0.25% of the purchase price of
such shares. As compensation for such advance of the service fee, PFD may retain
the service fee paid by the fund with respect to such shares for the first year
after purchase.
The Class C Plan provides that the fund will pay PFD, as the fund's distributor
for its Class C shares, a distribution fee accrued daily and paid quarterly,
equal on an annual basis to 0.75% of the fund's average daily net assets
attributable to Class C shares and will pay PFD a service fee equal to 0.25% of
the fund's average daily net assets attributable to Class C shares. PFD will in
turn pay to securities dealers which enter into a sales agreement with PFD a
distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the fund with respect to such shares for the
first year after purchase. Commencing in the 13th month following the purchase
of Class C shares, dealers will become eligible for additional annual
distribution fees and service fees of up to 0.75% and 0.25%, respectively, of
the net asset value of such shares. Dealers may from time to time be required to
meet certain other criteria in order to receive service fees. PFD or its
affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to Class C shares of
the fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. When a broker-dealer sells Class C shares and
elects, with PFD's approval, to waive its right to
31
receive the commission normally paid at the time of the sale, PFD may cause
all or a portion of the distribution fees described above to be paid to the
broker-dealer.
GENERAL
In accordance with the terms of each Plan, PFD provides to the fund for review
by the Trustees a quarterly written report of the amounts expended under the
Plan and the purposes for which such expenditures were made. In the Trustees'
quarterly review of the Plans, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plans provide.
No interested person of the fund, nor any Trustee of the fund who is not an
interested person of the fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the fund and except to the
extent certain officers may have an interest in PFD's ultimate parent,
UniCredito Italiano.
Each Plan's adoption, terms, continuance and termination are governed by Rule
12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit the fund and its current and
future shareholders. The Plans may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the fund
affected thereby, and material amendments of the Plans must also be approved by
the Trustees as provided in Rule 12b-1.
See Appendix A for fund expenses under the Class A Plan, Class B Plan and Class
C Plan and CDSCs paid to PFD for the most recently completed fiscal year.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares and Class C shares may be subject to a 1% CDSC.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PIMSS, 60 State Street, Boston, Massachusetts
02109, to act as shareholder servicing and transfer agent for the fund.
Under the terms of its contract with the fund, PIMSS services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the fund; (ii) distributing dividends and capital gains
associated with the fund's portfolio; and (iii) maintaining account records and
responding to shareholder inquiries.
PIMSS receives an annual fee of $25.25 for each Class A, Class B and Class C
shareholder account from the fund as compensation for the services described
above. PIMSS is also reimbursed by the fund for its cash out-of-pocket
expenditures. The fund may compensate entities which have agreed to provide
certain sub-accounting services such as specific transaction processing and
recordkeeping services. Any such payments by the fund would be in lieu of the
per account fee which would otherwise be paid by the fund to PIMSS.
7. CUSTODIAN
32
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is
the custodian of the fund's assets. The custodian's responsibilities include
safekeeping and controlling the fund's cash and securities, handling the receipt
and delivery of securities, and collecting interest and dividends on the fund's
investments.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110, the
fund's independent public accountants, provides audit services, tax return
review, and assistance and consultation with respect to the preparation of
filings with the SEC.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the fund by Pioneer pursuant to authority contained in the fund's management
contract. Pioneer seeks to obtain the best execution on portfolio trades. The
price of securities and any commission rate paid are always factors, but
frequently not the only factors, in judging best execution. In selecting brokers
or dealers, Pioneer considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security to be purchased or sold; the execution efficiency,
settlement capability and financial condition of the dealer; the dealer's
execution services rendered on a continuing basis; and the reasonableness of any
dealer spreads. Transactions in non-U.S. equity securities are executed by
broker-dealers in non-U.S. countries in which commission rates may not be
negotiable (as such rates are in the U.S.).
Pioneer may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts managed
by Pioneer. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Pioneer determines in good faith that the
amount of commissions charged by a broker-dealer is reasonable in relation to
the value of the brokerage and research services provided by such broker, the
fund may pay commissions to such broker-dealer in an amount greater than the
amount another firm may charge. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analyses, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). Pioneer maintains a listing of broker-dealers who provide such
services on a regular basis. However, because many transactions on behalf of the
fund and other investment companies or accounts managed by Pioneer are placed
with broker-dealers (including broker-dealers on the listing) without regard to
the furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such dealers solely because such services were
provided. Pioneer believes that no exact dollar value can be calculated for such
services.
The research received from broker-dealers may be useful to Pioneer in rendering
investment management services to the fund as well as other investment companies
or other accounts managed by Pioneer, although not all such research may be
useful to the fund. Conversely, such information provided by brokers or dealers
who have executed transaction orders on behalf of such other accounts may be
useful to Pioneer in carrying out its obligations to the fund. The receipt of
such research has not reduced Pioneer's normal independent research activities;
however, it enables Pioneer to avoid the additional
33
expenses which might otherwise be incurred if it were to attempt to develop
comparable information through its own staff.
In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the fund as well as shares of other investment companies managed by Pioneer.
This policy does not imply a commitment to execute all portfolio transactions
through all broker-dealers that sell shares of the fund.
The Pioneer funds have entered into third-party brokerage and/or expense offset
arrangements to reduce the funds' total operating expenses. Pursuant to
third-party brokerage arrangements, certain of the funds that invest primarily
in U.S. equity securities may incur lower custody fees by directing brokerage to
third-party broker-dealers. Pursuant to expense offset arrangements, the funds
incur lower transfer agency expenses by maintaining their cash balances with the
custodian. See "Financial highlights" in the prospectus.
See the table in Appendix A for aggregate brokerage and underwriting commissions
paid by the fund in connection with its portfolio transactions during recently
completed fiscal years. The Board of Trustees periodically reviews Pioneer's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the fund.
10. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon the
demand of any shareholder at the next determined net asset value per share less
any applicable CDSC. See "Sales Charges." When issued and paid for in accordance
with the terms of the prospectus and statement of additional information, shares
of the fund are fully paid and non-assessable. Shares will remain on deposit
with the fund's transfer agent and certificates will not normally be issued. The
fund reserves the right to charge a fee for the issuance of Class A share
certificates; certificates will not be issued for Class B or Class C shares.
The fund's Agreement and Declaration of Trust, dated as of April 4, 1994 (the
"Declaration"), permits the Board of Trustees to authorize the issuance of an
unlimited number of full and fractional shares of beneficial interest which may
be divided into such separate series as the Trustees may establish. Currently,
the fund consists of only one series. The Trustees may, however, establish
additional series of shares and may divide or combine the shares into a greater
or lesser number of shares without thereby changing the proportionate beneficial
interests in the fund. The Declaration further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of Class A shares,
Class B shares and Class C shares. Each share of a class of the fund represents
an equal proportionate interest in the assets of the fund allocable to that
class. Upon liquidation of the fund, shareholders of each class of the fund are
entitled to share pro rata in the fund's net assets allocable to such class
available for distribution to shareholders. The fund reserves the right to
create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
The shares of each class represent an interest in the same portfolio of
investments of the fund. Each class has equal rights as to voting, redemption,
dividends and liquidation, except that each class bears different distribution
and transfer agent fees and may bear other expenses properly attributable to the
particular class. Class A, Class B and Class C shareholders have exclusive
voting rights with respect to the Rule 12b-1 Plans adopted by holders of those
shares in connection with the distribution of shares.
34
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The fund is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.
The shares of each series of the fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the fund vote together as a
class on matters that affect all series of the fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of the fund's shares. Shares have no preemptive or conversion rights,
except that under certain circumstances Class B shares may convert to Class A
shares.
As a Delaware business trust, the fund's operations are governed by the
Declaration. A copy of the fund's Certificate of Trust, dated April 4, 1994, is
on file with the office of the Secretary of State of Delaware. Generally,
Delaware business trust shareholders are not personally liable for obligations
of the Delaware business trust under Delaware law. The Delaware Business Trust
Act (the "Delaware Act") provides that a shareholder of a Delaware business
trust shall be entitled to the same limitation of liability extended to
shareholders of private for-profit corporations. The Declaration expressly
provides that the fund is organized under the Delaware Act and that the
Declaration is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the fund's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of the fund and provides that
notice of such disclaimer may be given in each agreement, obligation or
instrument entered into or executed by the fund or its Trustees, (ii) provides
for the indemnification out of fund property of any shareholders held personally
liable for any obligations of the fund or any series of the fund and (iii)
provides that the fund shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial loss
beyond his or her investment because of shareholder liability is limited to
circumstances in which all of the following factors are present: (1) a court
refused to apply Delaware law; (2) the liability arose under tort law or, if
not, no contractual limitation of liability was in effect; and (3) the fund
itself would be unable to meet its obligations. In light of Delaware law, the
nature of the fund's business and the nature of its assets, the risk of personal
liability to a fund shareholder is remote.
In addition to the requirements under Delaware law, the Declaration provides
that a shareholder of the fund may bring a derivative action on behalf of the
fund only if the following conditions are met: (a) shareholders eligible to
bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to
35
reimburse the fund for the expense of any such advisers in the event that the
Trustees determine not to bring such action.
The Declaration further provides that the fund shall indemnify each of its
Trustees and officers against liabilities and expenses reasonably incurred by
them in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the fund.
The Declaration does not authorize the fund to indemnify any Trustee or officer
against any liability to which he or she would otherwise be subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.
The Declaration provides that any Trustee who is not an "interested person" of
Pioneer shall be considered to be independent for purposes of Delaware law
notwithstanding the fact that such Trustee receives compensation for serving as
a trustee of the fund or other investment companies for which Pioneer acts as
investment adviser.
11. SALES CHARGES
The fund continuously offers three classes of shares designated as Class A,
Class B and Class C as described in the prospectus.
CLASS A SHARE SALES CHARGES
You may buy Class A shares at the public offering price, including a sales
charge, as follows:
SALES CHARGE AS A % OF
----------------------
OFFERING NET AMOUNT DEALER
AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE
Less than $50,000 5.75 6.10 5.00
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 see below
The schedule of sales charges above is applicable to purchases of Class A shares
of the fund by (i) an individual, (ii) an individual and his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a trust
estate or fiduciary account or related trusts or accounts including pension,
profit-sharing and other employee benefit trusts qualified under Sections 401 or
408 of the Code although more than one beneficiary is involved. The sales
charges applicable to a current purchase of Class A shares of the fund by a
person listed above is determined by adding the value of shares to be purchased
to the aggregate value (at the then current offering price) of shares of any of
the other Pioneer mutual funds previously purchased and then owned, provided PFD
is notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of Pioneer, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1 million
or more, or for purchases by participants in certain group plans described below
subject to a CDSC of 1% which may be imposed in
36
the event of a redemption of Class A shares within 12 months of purchase. PFD
may, in its discretion, pay a commission to broker-dealers who initiate and
are responsible for such purchases as follows: 1% on the first $5 million
invested; 0.50% on the next $45 million invested; and 0.25% on the excess
over $50 million invested. These commissions shall not be payable if the
purchaser is affiliated with the broker-dealer or if the purchase represents
the reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commissions paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase.
LETTER OF INTENT ("LOI"). Reduced sales charges are available for purchases of
$50,000 or more of Class A shares (excluding any reinvestments of dividends and
capital gain distributions) made within a 13-month period pursuant to an LOI
which may be established by completing the Letter of Intent section of the
Account Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to PIMSS within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PIMSS, registered in your name, until the terms of the
LOI are fulfilled. When you sign the Account Application, you agree to
irrevocably appoint PIMSS your attorney-in-fact to surrender for redemption any
or all shares held in escrow with full power of substitution. An LOI is not a
binding obligation upon the investor to purchase, or the fund to sell, the
amount specified in the LOI.
If the total purchases, less redemptions, exceed the amount specified under the
LOI and are in an amount which would qualify for a further quantity discount,
all transactions will be recomputed on the expiration date of the LOI to effect
the lower sales charge. Any difference in the sales charge resulting from such
recomputation will be either delivered to you in cash or invested in additional
shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.
If the total purchases, less redemptions, are less than the amount specified
under the LOI, you must remit to PFD any difference between the sales charge on
the amount actually purchased and the amount originally specified in the LOI.
When the difference is paid, the shares held in escrow will be deposited to your
account. If you do not pay the difference in sales charge within 20 days after
written request from PFD or your dealer, PIMSS, after receiving instructions
from PFD, will redeem the appropriate number of shares held in escrow to realize
the difference and release any excess.
37
CLASS B SHARES
You may buy Class B shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class B shares redeemed within six years of purchase will be subject to
a CDSC at the rates shown in the table below. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial purchase price, including shares derived from
the reinvestment of dividends or capital gain distributions.
The amount of the CDSC, if any, will vary depending on the number of years from
the time of purchase until the time of redemption of Class B shares. For the
purpose of determining the number of years from the time of any purchase after
September 30, 1998, all payments during a month will be aggregated and deemed to
have been made on the first day of that month. For the purpose of determining
the number of years from the time of any purchase made prior to October 1, 1998,
all payments during a quarter will be aggregated and deemed to have been made on
the first day of that quarter. In processing redemptions of Class B shares, the
fund will first redeem shares not subject to any CDSC and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be determined
as follows:
CDSC AS A % OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CDSC
First 4.0
Second 4.0
Third 3.0
Fourth 3.0
Fifth 2.0
Sixth 1.0
Seventh and thereafter 0.0
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the beginning
of the calendar month (or the calendar quarter for purchases made prior to
October 1, 1998) that is eight years after the purchase date, except as noted
below. Class B shares acquired by exchange from Class B shares of another
Pioneer mutual fund will convert into Class A shares based on the date of the
initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the date
of the initial purchase to which such shares relate. For this purpose, Class B
shares acquired through reinvestment of distributions will be attributed to
particular purchases of Class B shares in accordance with such procedures as the
Trustees may determine from time to time. The conversion of Class B shares to
Class A shares is subject to the continuing availability of a ruling from the
Internal Revenue Service (the "IRS") or an opinion of counsel that such
conversions will not constitute taxable events for U.S. federal income tax
purposes. The conversion of Class B shares to Class A shares will not occur if
such ruling or opinion is not available and, therefore, Class B shares would
continue to be subject to higher expenses than Class A shares for an
indeterminate period.
38
CLASS C SHARES
You may buy Class C shares at net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class C shares redeemed within one year of purchase will be subject to
a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of
the current market value or the original purchase cost of the shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gain distributions. Class C shares do not convert to any
other class of fund shares.
For the purpose of determining the time of any purchase after September 30,
1998, all payments during a month will be aggregated and deemed to have been
made on the first day of that month. For the purpose of determining the time of
any purchase made prior to October 1, 1998, all payments made during a calendar
quarter will be aggregated and deemed to have been made on the first day of that
quarter. In processing redemptions of Class C shares, the fund will first redeem
shares not subject to any CDSC and then shares held for the shortest period of
time during the one-year period. As a result, you will pay the lowest possible
CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.
ADDITIONAL PAYMENTS TO DEALERS
From time to time, PFD or its affiliates may elect to make payments to
broker-dealers in addition to the commissions described above. PFD may elect to
reallow the entire initial sales charge to participating dealers for all Class A
sales with respect to which orders are placed during a particular period.
Dealers to whom substantially the entire sales charge is reallowed may be deemed
to be underwriters under federal securities laws. Contingent upon the
achievement of certain sales objectives, PFD may pay to Mutual of Omaha Investor
Services, Inc. 50% of PFD's retention of any sales commission on sales of the
fund's Class A shares through such dealer. PFD will reallow to participating
broker/dealers the entire sales charge for all sales of Class A shares of the
above listed funds for orders placed for IRA accounts from January 2, 2001
through April 30, 2001. In addition, PFD or its affiliates may elect to pay
broker-dealers an additional commission based on the net asset value of all
shares sold by a dealer during a particular period. PFD has elected to pay
participating dealers an amount equal to 0.50% of the net asset value of the
fund's Class B shares sold to IRA accounts from January 2, 2001 through April
30, 2001. PFD has elected to pay participating dealers an amount equal to 0.50%
of the net asset value of the fund's Class C shares sold to IRA accounts from
January 2, 2001 through April 30, 2001. PFD may elect to pay, at its own
expense, additional cash or other incentives to dealers that sell or arrange for
the sale of shares of the fund. Such cash or other incentives may take the form
of payment for attendance at preapproved conferences or seminars, sales or
training programs for invited registered representatives and other employees,
payment for travel expenses, including lodging, incurred by registered
representatives and other employees for such seminars or training programs,
seminars for the public, advertising and preapproved sales campaigns or
dealer-sponsored events. PFD may also elect to make expense reimbursements for
special training of a dealer's registered representatives and other employees in
group meetings or to help pay the expenses of sales contests. PFD will offer
such cash and other incentives only to the extent permitted by applicable law or
by a self-regulatory agency such as the National Association of Securities
Dealers, Inc.
12. REDEEMING SHARES
39
Redemptions may be suspended or payment postponed during any period in which any
of the following conditions exist: the Exchange is closed or trading on the
Exchange is restricted; an emergency exists as a result of which disposal by the
fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the fund to fairly determine the value of the net
assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.
SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP"). A SWP is designed to provide a convenient
method of receiving fixed payments at regular intervals from fund share accounts
having a total value of not less than $10,000. You must also be reinvesting all
dividends and capital gain distributions to use the SWP option.
Periodic payments of $50 or more will be deposited monthly, quarterly,
semiannually or annually directly into a bank account designated by the
applicant or will be sent by check to the applicant, or any person designated by
the applicant. Payments can be made either by check or electronic funds transfer
to a bank account designated by you. Class B accounts must meet the minimum
initial investment requirement prior to establishing a SWP. Withdrawals from
Class B and Class C share accounts are limited to 10% of the value of the
account at the time the SWP is established. See "Qualifying for a reduced sales
charge" in the prospectus. If you direct that withdrawal payments be paid to
another person, want to change the bank where payments are sent or designate an
address that is different from the account's address of record after you have
opened your account, a signature guarantee must accompany your instructions.
Withdrawals under the SWP are redemptions that may have tax consequences for
you.
Purchases of Class A shares of the fund at a time when you have a SWP in effect
may result in the payment of unnecessary sales charges and may, therefore, be
disadvantageous. SWP redemptions reduce and may ultimately exhaust the number of
shares in your account. In addition, the amounts received by a shareholder
cannot be considered as yield or income on his or her investment because part of
such payments may be a return of his or her investment.
A SWP may be terminated at any time (1) by written notice to PIMSS or from PIMSS
to the shareholder; (2) upon receipt by PIMSS of appropriate evidence of the
shareholder's death; or (3) when all shares in the shareholder's account have
been redeemed.
You may obtain additional information by calling PIMSS at 1-800-225-6292.
REINSTATEMENT PRIVILEGE (CLASS A AND CLASS B SHARES). Subject to the provisions
outlined in the prospectus, you may
40
reinvest all or part of your sale proceeds from Class A or Class B shares
without a sales charge into Class A shares of a Pioneer mutual fund. However,
the distributor will not pay your investment firm a commission on any
reinvested amount.
13. TELEPHONE TRANSACTIONS
You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone. See the prospectus for more information. For personal assistance,
call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern time on weekdays.
Computer-assisted transactions may be available to shareholders who have
prerecorded certain bank information (see "FactFoneSM"). YOU ARE STRONGLY URGED
TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE
TRANSACTION.
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
the personal identification number ("PIN") for the account and send you a
written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the fund may be liable for any loss due to unauthorized or
fraudulent instructions. The fund may implement other procedures from time to
time. In all other cases, neither the fund, PIMSS nor PFD will be responsible
for the authenticity of instructions received by telephone; therefore, you bear
the risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of severe
weather or a natural disaster, it may be difficult to contact the fund by
telephone to institute a purchase, exchange or redemption. You should
communicate with the fund in writing if you are unable to reach the fund by
telephone.
FACTFONESM. FactFoneSM is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFoneSM allows shareholder access to current information on Pioneer mutual
fund accounts and to the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFoneSM to make computer-assisted
telephone purchases, exchanges or redemptions from your Pioneer mutual fund
accounts, access your account balances and last three transactions and order a
duplicate statement if you have activated your PIN. Telephone purchases or
redemptions require the establishment of a bank account of record. YOU ARE
STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING
ANY TELEPHONE TRANSACTION. Shareholders whose accounts are registered in the
name of a broker-dealer or other third party may not be able to use FactFoneSM.
Call PIMSS for assistance.
FactFoneSM allows shareholders to hear the following recorded fund information:
-- net asset value prices for all Pioneer mutual funds;
-- annualized 30-day yields on Pioneer's fixed income funds;
41
-- annualized 7-day yields and 7-day effective (compound) yields for
Pioneer's money market fund; and
-- dividends and capital gain distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
All performance numbers communicated through FactFoneSM represent past
performance, and figures include the maximum applicable sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. The value of Class A, Class B and Class C shares (except for Pioneer
Cash Reserves Fund, which seeks to maintain a stable $1.00 share price) will
also vary, and such shares may be worth more or less at redemption than their
original cost.
14. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the
close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on
each day on which the Exchange is open for trading. As of the date of this
statement of additional information, the Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of each
class of the fund is also determined on any other day on which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The fund is not required to determine its net asset
value per share on any day on which no purchase orders in good order for fund
shares are received and no shares are tendered and accepted for redemption.
Securities are valued at the last sale price on the principal exchange or market
where they are traded. Securities which have not traded on the date of valuation
or securities for which sales prices are not generally reported are valued at
the mean between the current bid and asked prices. Securities quoted in foreign
currencies are converted to U.S. dollars utilizing foreign exchange rates
employed by the fund's independent pricing services. Generally, trading in
non-U.S. securities is substantially completed each day at various times prior
to the close of regular trading on the Exchange. The values of such securities
used in computing the net asset value of the fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of regular trading on the Exchange. Occasionally, events which
affect the values of such securities and such exchange rates may occur between
the times at which they are determined and the close of regular trading on the
Exchange and will therefore not be reflected in the computation of the fund's
net asset value. If events materially affecting the value of such securities
occur during such period, then these securities may be valued at their fair
value as determined in good faith by the Trustees. All assets of the fund for
which there is no other readily available valuation method are valued at their
fair value as determined in good faith by the Trustees, although the actual
computations may be made by persons acting pursuant to the direction of the
Board of Trustees.
The net asset value per share of each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the fund are accrued daily and taken into account.
The fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. Class B and Class
C shares are offered at net asset value without the imposition of an initial
sales charge (Class B and Class C shares may be subject to a CDSC).
42
15. TAX STATUS
The fund has elected to be treated, has qualified and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Code so that
it will not pay U.S. federal income tax on income and capital gains distributed
to shareholders. If the fund did not qualify as a regulated investment company,
it would be treated as a U.S. corporation subject to U.S. federal income tax.
Under the Code, the fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The fund intends to make distributions in a timely manner and accordingly
does not expect to be subject to the excise tax.
The fund generally distributes any net short- and long-term capital gains in
November. The fund generally pays dividends from any net investment income in
December. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the fund to avoid U.S. federal income or
excise tax.
In order to qualify as a regulated investment company under Subchapter M, the
fund must, among other things, derive at least 90% of its gross income for each
taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including gains from options, futures and forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "90% income test") and satisfy certain annual
distribution and quarterly diversification requirements. For purposes of the 90%
income test, the character of income earned by certain entities in which the
fund invests that are not treated as corporations (e.g., partnerships or trusts)
for U.S. tax purposes will generally pass through to the fund. Consequently, the
fund may be required to limit its equity investments in such entities that earn
fee income, rental income or other nonqualifying income.
Unless shareholders specify otherwise, all distributions will be automatically
reinvested in additional full and fractional shares of the fund. For U.S.
federal income tax purposes, all dividends are taxable whether a shareholder
takes them in cash or reinvests them in additional shares of the fund. Dividends
from investment company taxable income, which includes net investment income,
net short-term capital gain in excess of net long-term capital loss and certain
net foreign exchange gains, are taxable as ordinary income. Dividends from net
long-term capital gain in excess of net short-term capital loss ("net capital
gain"), if any, are taxable as long-term capital gains for U.S. federal income
tax purposes without regard to the length of time the shareholder has held
shares of the fund. The U.S. federal income tax status of all distributions will
be reported to shareholders annually.
Any dividend declared by the fund as of a record date in October, November or
December and paid during the following January will be treated for U.S. federal
income tax purposes as received by shareholders on December 31 of the calendar
year in which it is declared.
Foreign exchange gains and losses realized by the fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code,
which generally causes such gains and losses to be treated as ordinary income
and losses and may affect the amount, timing and character of distributions
to shareholders. Under future regulations, any such transactions that are not
directly related to the fund's investments in stock or securities (or its
options contracts or futures contracts with respect to stock or securities)
may have to be limited in order to enable the fund to satisfy the 90% income
test. If
43
the net foreign exchange loss for a year were to exceed the fund's investment
company taxable income (computed without regard to such loss), the resulting
ordinary loss for such year would not be deductible by the fund or its
shareholders in future years.
If the fund acquires any equity interest (under future regulations, generally
including not only stock but also an option to acquire stock such as is inherent
in a convertible bond) in certain foreign corporations that receive at least 75%
of their annual gross income from passive sources (such as interest, dividends,
certain rents and royalties, or capital gains) or that hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), the fund could be subject to U.S. federal income tax and
additional interest charges on "excess distributions" received from such
companies or on gain from the sale of stock in such companies, even if all
income or gain actually received by the fund is timely distributed to its
shareholders. The fund would not be able to pass through to its shareholders any
credit or deduction for such a tax. An election may generally be available that
would ameliorate these adverse tax consequences, but any such election could
require the fund to recognize taxable income or gain (subject to tax
distribution requirements) without the concurrent receipt of cash. These
investments could also result in the treatment of associated capital gains as
ordinary income. The fund may limit and/or manage its holdings in passive
foreign investment companies to limit its tax liability or maximize its return
from these investments.
The fund may invest in debt obligations that are in the lowest rating categories
or are unrated, including debt obligations of issuers not currently paying
interest or who are in default. Investments in debt obligations that are at risk
of or in default present special tax issues for the fund. Tax rules are not
entirely clear about issues such as when the fund may cease to accrue interest,
original issue discount or market discount, when and to what extent deductions
may be taken for bad debts or worthless securities, how payments received on
obligations in default should be allocated between principal and income and
whether exchanges of debt obligations in a workout context are taxable. These
and other issues will be addressed by the fund, in the event it invests in such
securities, in order to seek to ensure that it distributes sufficient income to
preserve its status as a regulated investment company and does not become
subject to U.S. federal income or excise tax.
If the fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount if the fund elects to include market
discount in income currently), the fund must accrue income on such investments
for each taxable year, which generally will be prior to the receipt of the
corresponding cash payments. However, the fund must distribute, at least
annually, all or substantially all of its net income, including such accrued
income, to shareholders to qualify as a regulated investment company under the
Code and avoid U.S. federal income and excise taxes. Therefore, the fund may
have to dispose of its portfolio securities under disadvantageous circumstances
to generate cash, or may have to leverage itself by borrowing the cash, to
satisfy distribution requirements.
Effective for 2001, the fund is eligible to make a federal tax election with
respect to certain stocks and securities it owns and that it intends to continue
to hold for more than five years which would have the effect of reducing the
applicable federal capital gains rate on the sale of the stock or securities
when they are eventually sold by the fund on or after January 3, 2006. Any such
reduction in the capital gains rate would be passed on to the shareholders at
that time. However, if the fund makes such an election, it will be treated for
federal income tax purposes as if it had sold such stocks or securities on
January 2, 2001 and reacquired them on the same date. As a result, the fund
would be required to recognize current capital gains (if any) (but not losses)
on such stock or securities without the concurrent receipt of any cash which may
cause the fund to have difficulty obtaining cash to satisfy its distribution
requirements. The fund will
44
carefully consider these factors in determining whether to make any such
election and will attempt to minimize the fund's tax liability and to
maximize its return from these investments.
For U.S. federal income tax purposes, the fund is permitted to carry forward a
net capital loss for any year to offset its capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in U.S. federal income
tax liability to the fund and are not expected to be distributed as such to
shareholders. See Appendix A for the fund's available capital loss
carryforwards.
At the time of an investor's purchase of fund shares, a portion of the purchase
price may be attributable to realized or unrealized appreciation in the fund's
portfolio or undistributed taxable income of the fund. Consequently, subsequent
distributions by the fund with respect to these shares from such appreciation or
income may be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events for shareholders that are subject
to tax. Shareholders should consult their own tax advisers with reference to
their individual circumstances to determine whether any particular transaction
in fund shares is properly treated as a sale for tax purposes, as the following
discussion assumes, and the tax treatment of any gains or losses recognized in
such transactions. Any loss realized by a shareholder upon the redemption,
exchange or other disposition of shares with a tax holding period of six months
or less will be treated as a long-term capital loss to the extent of any amounts
treated as distributions of long-term capital gain with respect to such shares.
For taxable year 2001, certain shareholders that are individuals or pass-through
entities (but not corporate shareholders) who purchased fund shares prior to
January 1, 2001 and who hold fund shares as capital assets may be eligible to
make an irrevocable federal income tax election relating to certain fund shares
that would reduce the applicable capital gains rate that would be applied to
such shares on the future redemption or other disposition of the shares from 20%
to 18%, provided that the shareholder does not redeem or otherwise dispose of
such shares for more than five years from the effective date of the election.
However, if a shareholder makes this election, the shareholder will be treated
as if such shares were sold by the shareholder on January 2, 2001 for a selling
price equal to the closing market price of such fund shares on such date and
will be required to recognize any capital gains (but not losses) on such shares
in taxable year 2001 (without receiving any additional proceeds from the fund)
at the current applicable capital gains rate. Electing shareholders will receive
a new basis in such shares equal to the closing market price of such fund shares
on January 2, 2001.
In addition, if Class A or Class B shares that have been held for less than 91
days are redeemed and the proceeds are reinvested in Class A shares of the fund
or in Class A shares of another mutual fund at net asset value pursuant to the
reinstatement privilege, or if Class A shares in the fund that have been held
for less than 91 days are exchanged for Class A shares in another fund at net
asset value pursuant to the exchange privilege, all or a portion of the sales
charge paid on the shares that are redeemed or exchanged will not be included in
the tax basis of such shares under the Code to the extent a sales charge that
would otherwise apply to the shares received is reduced pursuant to the
reinstatement or exchange privilege. In either case, the portion of the sales
charge not included in the tax basis of the shares redeemed or surrendered in an
exchange is included in the tax basis of the shares acquired in the reinvestment
or exchange. Losses on redemptions or other dispositions of shares may be
disallowed under "wash sale" rules in the event of other investments in the fund
(including those made pursuant to reinvestment of dividends and/or capital gain
distributions) within a
45
period of 61 days beginning 30 days before and ending 30 days after a
redemption or other disposition of shares. In such a case, the disallowed
portion of any loss generally would be included in the federal tax basis of
the shares acquired in the other investments.
Options written or purchased and futures contracts entered into by the fund on
certain securities, indices and foreign currencies, as well as certain forward
foreign currency contracts, may cause the fund to recognize gains or losses from
marking-to-market even though such options may not have lapsed, been closed out,
or exercised, or such futures or forward contracts may not have been performed
or closed out. The tax rules applicable to these contracts may affect the
characterization of some capital gains and losses realized by the fund as
long-term or short-term. Certain options, futures and forward contracts relating
to foreign currency may be subject to Section 988, as described above, and
accordingly may produce ordinary income or loss. Additionally, the fund may be
required to recognize gain if an option, futures contract, forward contract,
short sale or other transaction that is not subject to the mark-to-market rules
is treated as a "constructive sale" of an "appreciated financial position" held
by the fund under Section 1259 of the Code. Any net mark-to-market gains and/or
gains from constructive sales may also have to be distributed to satisfy the
distribution requirements referred to above even though the fund may receive no
corresponding cash amounts, possibly requiring the disposition of portfolio
securities or borrowing to obtain the necessary cash. Losses on certain options,
futures or forward contracts and/or offsetting positions (portfolio securities
or other positions with respect to which the fund's risk of loss is
substantially diminished by one or more options, futures or forward contracts)
may also be deferred under the tax straddle rules of the Code, which may also
affect the characterization of capital gains or losses from straddle positions
and certain successor positions as long-term or short-term. Certain tax
elections may be available that would enable the fund to ameliorate some adverse
effects of the tax rules described in this paragraph. The tax rules applicable
to options, futures, forward contracts and straddles may affect the amount,
timing and character of the fund's income and gains or losses and hence of its
distributions to shareholders.
The fund's dividends will generally not qualify to any material extent for any
dividends-received deduction that might otherwise be available for certain
dividends received by shareholders that are corporations. No portion of the
fund's distributions from net capital gain will qualify for this deduction.
The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries, which would, if imposed, reduce the yield
on or return from those investments. Tax conventions between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. If more than 50%
of the fund's total assets at the close of any taxable year consists of stock or
securities of foreign corporations, the fund may elect to pass through to its
shareholders their pro rata shares of qualified foreign taxes paid by the fund
(not in excess of its actual tax liability), with the result that shareholders
would be required to include such taxes in their gross incomes (in addition to
dividends and distributions they actually received), would treat such taxes as
foreign taxes paid by them, and may be entitled to a tax deduction for such
taxes or a tax credit, subject to a holding period requirement and other
limitations under the Code.
Qualified foreign taxes generally include taxes that would be treated as income
taxes under U.S. tax regulations but do not include most other taxes, such as
stamp taxes, securities transaction taxes, and similar taxes. If the fund makes
the election described above, shareholders may deduct their pro rata portion of
qualified foreign taxes paid by the fund (not in excess of the tax actually owed
by the fund) in computing their income subject to U.S. federal income taxation
or, alternatively, use them as foreign tax credits, subject to applicable
limitations under the Code, against their U.S. federal income taxes.
Shareholders who do not itemize deductions for federal income tax purposes will
not, however, be able to
46
deduct their pro rata portion of qualified foreign taxes paid by the fund,
although such shareholders will be required to include their shares of such
taxes in gross income if the fund makes the election described above.
If the fund makes this election and a shareholder chooses to take a credit for
the foreign taxes deemed paid by such shareholder, the amount of the credit that
may be claimed in any year may not exceed the same proportion of the U.S. tax
against which such credit is taken which the shareholder's taxable income from
foreign sources (but not in excess of the shareholder's entire taxable income)
bears to his entire taxable income. For this purpose, long-term and short-term
capital gains the fund realizes and distributes to shareholders will generally
not be treated as income from foreign sources in their hands, nor will
distributions of certain foreign currency gains subject to Section 988 of the
Code and of any other income realized by the fund that is deemed, under the
Code, to be U.S.-source income in the hands of the fund. This foreign tax credit
limitation may also be applied separately to certain specific categories of
foreign-source income and the related foreign taxes. As a result of these rules,
which may have different effects depending upon each shareholder's particular
tax situation, certain shareholders may not be able to claim a credit for the
full amount of their proportionate share of the foreign taxes paid by the fund.
Shareholders who are not liable for U.S. federal income taxes, including
tax-exempt shareholders, will ordinarily not benefit from this election. If the
fund does make the election, it will provide required tax information to
shareholders. The fund generally may deduct any foreign taxes that are not
passed through to its shareholders in computing its income available for
distribution to shareholders to satisfy applicable tax distribution
requirements.
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
Federal law requires that the fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain distributions and the
proceeds of redemptions and exchanges or repurchases of fund shares, paid to
shareholders who have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders must certify on their Account
Applications, or on separate IRS Forms W-9, that the Social Security Number or
other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. The fund may nevertheless be required to
withhold if it receives notice from the IRS or a broker that the number provided
is incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.
If, as anticipated, the fund continues to qualify as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes or any Delaware corporation income tax.
The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e.,
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description
does not address the special tax rules that may be applicable to particular
types of investors, such as financial institutions, insurance companies,
securities dealers, or tax-exempt or tax-deferred plans, accounts or
entities. Investors other than U.S. persons may be subject to different U.S.
tax treatment, including a non-resident alien U.S. withholding tax at the
rate of 30% or at a lower treaty rate on amounts treated as ordinary
dividends from the fund and, unless an effective IRS Form W-8BEN, or other
authorized withholding certificate is on file, to backup withholding at the
rate of 31% on
47
certain other payments from the fund. Shareholders should consult their own
tax advisers on these matters and on state, local and other applicable tax
laws.
16. INVESTMENT RESULTS
QUOTATIONS, COMPARISONS AND GENERAL INFORMATION
From time to time, in advertisements, in sales literature or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives and
to stock or other relevant indices. For example, total return of the fund's
classes may be compared to averages or rankings prepared by Lipper, Inc., a
widely recognized independent service which monitors mutual fund performance;the
MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI") ALL COUNTRY ASIA FREE EX-JAPAN
INDEX, THE MSCI EMERGING MARKETS FREE INDEX AND THE MSCI EUROPE, AUSTRALASIA,
FAR EAST ("EAFE") INDEX, unmanaged indexes of international stock markets, or
other appropriate indexes of MSCI; International Finance Corporation Composite,
an unmanaged index of foreign stock markets including Latin America, East Asia,
South Africa, Europe/Mid East and; STANDARD & POOR'S 500 STOCK INDEX (the "S&P
500"), an unmanaged index of common stocks; or the Dow Jones Industrial Average,
a recognized unmanaged index of common stocks of 30 industrial companies listed
on the Exchange; or any other appropriate index.
In addition, the performance of the classes of the fund may be compared to
alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. The fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the fund's shares. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as BARRON'S, BUSINESS WEEK, CONSUMERS DIGEST, CONSUMER REPORTS, FINANCIAL
WORLD, FORBES, FORTUNE, INVESTORS BUSINESS DAILY, KIPLINGER'S PERSONAL FINANCE
MAGAZINE, MONEY MAGAZINE, NEW YORK TIMES, SMART MONEY, USA TODAY, U.S. NEWS AND
WORLD REPORT, THE WALL STREET JOURNAL and WORTH, may also be cited (if the fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson
Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre
and Co., Lipper, Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to shareholders of the fund.
The fund may also present, from time to time, historical information depicting
the value of a hypothetical account in one or more classes of the fund since
inception.
In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class of the
fund is "total return." Total return will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of the
fund, over any period up to the lifetime of that class of the fund. Total return
calculations will usually assume the reinvestment of all dividends and capital
gain distributions and will
48
be expressed as a percentage increase or decrease from an initial value for
the entire period or for one or more specified periods within the entire
period. Total return percentages for periods of less than one year will
usually be annualized; total return percentages for periods longer than one
year will usually be accompanied by total return percentages for each year
within the period and/or by the average annual compounded total return for
the period. The income and capital components of a given return may be
separated and portrayed in a variety of ways in order to illustrate their
relative significance. Performance may also be portrayed in terms of cash or
investment values without percentages. Past performance cannot guarantee any
particular future result.
The fund's average annual total return quotations for each of its classes as
that information may appear in the fund's prospectus, this statement of
additional information or in advertising are calculated by standard methods
prescribed by the SEC.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS
Average annual total return quotations for each class of shares are computed by
finding the average annual compounded rates of return that would cause a
hypothetical investment in the class made on the first day of a designated
period (assuming all dividends and distributions are reinvested) to equal the
ending redeemable value of such hypothetical investment on the last day of the
designated period in accordance with the following formula:
n
P(1+T) = ERV
Where:
P = a hypothetical initial payment of $1,000, less the maximum
sales load of $57.50 for Class A shares or the deduction of the
CDSC for Class B and Class C shares at the end of the period
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 initial
payment made at the beginning of the designated period (or
fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class of shares are taken into consideration. For any account fees
that vary with the size of the account, the account fee used for purposes of the
above computation is assumed to be the fee that would be charged to a class'
mean account size.
See Appendix A for the annual total returns for each class of fund shares as of
the most recently completed fiscal year.
49
17. FINANCIAL STATEMENTS
The fund's audited financial statements for the fiscal year ended October 31,
1999 from the fund's annual report filed with the SEC on December 21, 2000
(Accession No. 0000921447-00-000011) are incorporated by reference into this
statement of additional information. Those financial statements, including the
financial highlights in the prospectus, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
to the financial statements and are included in reliance upon the authority of
Arthur Andersen LLP as experts in accounting and auditing in giving their
report.
The fund's annual report includes the financial statements referenced above and
is available without charge upon request by calling Shareholder Services at
1-800-225-6292.
50
18. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION
PORTFOLIO TURNOVER
The fund's annual portfolio turnover rate was 103% for the fiscal year ended
October 31, 2000.
SHARE OWNERSHIP
As of January 31, 2001, the Trustees and officers of the fund owned beneficially
in the aggregate 1.11% of the outstanding shares of the fund. The following is a
list of the holders of 5% or more of any class of the fund's outstanding shares
as of January 31, 2001:
PAGE
RECORD HOLDER NUMBER % OF
SHARE CLASS OF SHARES CLASS
Merrill Lynch, Piece, Fenner & Smith for the Sole Class A 115,904.834 6.13
Benefit of its Customers Class B 188,932.926 17.60
4800 Deer Lake Drive East, 2nd Floor Class C 96,782.289 29.45
Jacksonville, FL 32246-6484
COMPENSATION OF OFFICERS AND TRUSTEES
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
TOTAL COMPENSATION
PENSION OR RETIREMENT FROM THE FUND AND
AGGREGATE BENEFITS ACCRUED AS OTHER PIONEER MUTUAL
COMPENSATION FROM PART OF FUND EXPENSES FUNDS**
NAME OF TRUSTEE FUND*
John F. Cogan, Jr.*** $666.67 $0 $21,000.00
Mary K. Bush 2,659.83 0 108,498.75
Richard H. Egdahl, M.D. 2,607.33 0 106,311.75
Margaret B.W. Graham 2,619.50 0 110,624.50
John W. Kendrick**** 1,305.42 0 37,425.00
Marguerite A. Piret 2,790.25 0 130,749.50
David D. Tripple*** 666.67 0 20,500.00
Stephen K. West 2,622.58 0 118,948.75
John Winthrop 2,664.00 0 116,998.50
$18,602.25 $0 $771,056.75
*For the fiscal year ended October 31, 2000.
**For the calendar year ended December 31, 2000. In addition to the fund, there
are 45 other funds in the Pioneer Family of Funds. ***Under the management
contract, Pioneer reimburses the fund for any Trustees fees paid by the fund.
****Mr. Kendrick resigned as a Trustee effective May 8, 2000.
51
APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED PIONEER
FOR THE FISCAL YEARS ENDED OCTOBER 31,
2000 1999 1998
$340,758* $ 0* $ 0*
- ------------------
* Pioneer has agreed not to impose all or a portion of its management fee and to
make other arrangements, if necessary, to limit certain other expenses of the
fund to the extent necessary to reduce Class A expenses to 2.10% of the average
daily net assets attributable to the fund's Class A shares; the portion of the
fund-wide expenses attributable to Class B and Class C shares will be reduced
only to the extent such expenses are reduced for Class A shares. Prior to
October 1, 1998, Pioneer had voluntarily agreed to limit management fees and
other operating expenses to reduce Class A shares to 2.25% of the average daily
net assets attributable to Class A shares; the portion of fund-wide expenses
attributable to Class B and Class C shares were reduced only to the extent that
such expenses were reduced for Class A shares. The fund paid no management fees
for the fiscal years ended October 31, 1998 and 1999. If Pioneer's fee reduction
and expense limitation had not been in effect, the fund would have paid
management fees of $165,913, $236,831 and $577,152, respectively, for such
periods.
SUBADVISORY FEES PAID OR OWED TO THE INDIAN ADVISER BY PIONEER
FOR THE FISCAL YEARS ENDED OCTOBER 31,
2000 1999 1998
$16,022 $41,002 $23,278
FEES THE FUND PAID TO PIONEER UNDER THE ADMINISTRATION AGREEMENT
EFFECTIVE OCTOBER 9, 1998
FOR THE FISCAL YEARS ENDED OCTOBER 31,
2000 1999
$29,996 $32,716
CARRYOVER OF DISTRIBUTION PLAN EXPENSES
As of December 31, 2000 there was a carryover of distribution expenses in the
amount of $433 under the Class A Plan.
APPROXIMATE NET UNDERWRITING COMMISSIONS RETAINED BY PFD
FOR THE FISCAL YEARS ENDED OCTOBER 31,
2000 1999 1998
$11,000 $14,000 $3,000
APPROXIMATE COMMISSIONS REALLOWED TO DEALERS
FOR THE FISCAL YEARS ENDED OCTOBER 31,
2000 1999 1998
$163,000 $220,000 $22,000
52
FUND EXPENSES UNDER THE DISTRIBUTION PLANS
FOR THE FISCAL YEAR ENDED OCTOBER 31, 2000
CLASS A PLAN CLASS B PLAN CLASS C PLAN
$68,706 $203,828 $46,032
CDSCS
During the fiscal year ended October 31, 2000, CDSCs in the amount of $169,956
were paid to PFD.
APPROXIMATE BROKERAGE AND UNDERWRITING COMMISSIONS (PORTFOLIO TRANSACTIONS)
FOR THE FISCAL YEARS ENDED OCTOBER 31,
2000 1999 1998
$459,827 $340,308 $146,370
CAPITAL LOSS CARRYFORWARDS AS OF OCTOBER 31, 2000
As of the end of its most recent taxable year, the fund had a capital loss
carryforward of $4,891,082 which will expire in 2006 if not used.
AVERAGE ANNUAL TOTAL RETURNS (OCTOBER 31, 2000)
AVERAGE ANNUAL TOTAL RETURN (%)
FIVE TEN SINCE INCEPTION
CLASS OF SHARES ONE YEAR YEARS YEARS INCEPTION DATE
Class A Shares -19.97 0.85 N/A -4.02 6/23/94
Class B Shares -19.19 1.09 N/A -3.87 6/23/94
Class C Shares -15.81 N/A N/A 2.53 1/31/96
53
19. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED
STOCK RATINGS1
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") PRIME RATING SYSTEM
Moody's short-term issuer ratings are opinions of the ability of issuers to
honor senior financial obligations and contracts. These obligations have an
original maturity not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection. Broad margins in earnings coverage of fixed financial charges
and high internal cash generation. Well-established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
- ----------------
1The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the fund's fiscal year-end.
54
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment. Moody's
makes no representation and gives no opinion on the legal validity or
enforceability of any support arrangements.
MOODY'S DEBT RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
55
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Issues that are secured by escrowed funds held in trust, reinvested in direct,
non-callable US government obligations or noncallable obligations
unconditionally guaranteed by the US Government or Resolution Funding
Corporation are identified with a # (hatchmark) symbol, e.g., #Aaa.
Con. (...): Bonds for which the security depends on the completion of some act
or the fulfillment of some condition are rated conditionally. These are bonds
secured by a) earnings of projects under construction, b) earnings of projects
unseasoned in operation experience, c) rentals which begin when facilities are
completed, or d) payments to which some other limiting condition attaches. The
parenthetical rating denotes probable credit stature upon completion of
construction or elimination of the basis of the condition
Moody's assigns ratings to individual long-term debt securities issued from
medium-term note (MTN) programs, in addition to indicating ratings to MTN
programs themselves. Notes issued under MTN programs with such indicated ratings
are rated at issuance at the rating applicable to all pari passu notes issued
under the same program, at the program's relevant indicated rating, provided
such notes do not exhibit any of the characteristics listed below. For notes
with any of the following characteristics, the rating of the individual note may
differ from the indicated rating of the program:
1) Notes containing features which link the cash flow and/or market value to the
credit performance of any third party or parties.
2) Notes allowing for negative coupons, or negative principal.
3) Notes containing any provision which could obligate the investor to make any
additional payments.
56
Market participants must determine whether any particular note is rated, and if
so, at what rating level.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
MOODY'S PREFERRED STOCK RATINGS
Because of the fundamental differences between preferred stocks and bonds,
Moody's employs a variation of Moody's familiar bond rating symbols in the
quality ranking of preferred stock. These symbols, presented below, are designed
to avoid comparison with bond quality in absolute terms. It should always be
borne in mind that preferred stock occupies a junior position to bonds within a
particular capital structure and that these securities are rated within the
universe of preferred stocks.
aaa: An issue rated aaa is considered to be a top-quality preferred stock. This
rating indicates good asset protection and the least risk of dividend impairment
within the universe of preferred stocks.
aa: An issue rated aa is considered a high-grade preferred stock. This rating
indicates that there is a reasonable assurance the earnings and asset protection
will remain relatively well maintained in the foreseeable future.
a: An issue rated a is considered to be an upper-medium-grade preferred stock.
While risks are judged to be somewhat greater than in the aaa and aa
classifications, earnings and asset protection are, nevertheless, expected to be
maintained at adequate levels.
baa: An issue rated baa is considered to be a medium-grade preferred stock,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
ba: An issue rated ba is considered to have speculative elements. Its future
cannot be considered well assured. Earnings and asset protection may be very
moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.
b: An issue rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small.
caa: An issue rated caa is likely to be in arrears on dividend payments. This
rating designation does not purport to indicate the future status of payments.
ca: An issue rated ca is speculative in a high degree and is likely to be in
arrears on dividends with little likelihood of eventual payments.
c: This is the lowest-rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Note: As in the case of bond ratings, Moody's applies to preferred stock ratings
the numerical modifiers 1, 2, and 3 in rating classifications aa through b. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a
57
mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
STANDARD & POOR'S LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation; Nature of and provisions of the obligation; Protection afforded by,
and relative position of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.
58
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: A subordinated debt or preferred stock obligation rated C is CURRENTLY HIGHLY
VULNERABLE to nonpayment. The C rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action taken, but payments on this
obligation are being continued. A C also will be assigned to a preferred stock
issue in arrears on dividends or sinking fund payments but that is currently
paying.
D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
59
r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.
LOCAL CURRENCY AND FOREIGN CURRENCY RISKS
Country risk considerations are a standard part of Standard & Poor's analysis
for credit ratings on any issuer or issue. Currency of repayment is a key factor
in this analysis. An obligor's capacity to repay foreign currency obligations
may be lower than its capacity to repay obligations in its local currency due to
the sovereign government's own relatively lower capacity to repay external
versus domestic debt. These sovereign risk considerations are incorporated in
the debt ratings assigned to specific issues. Foreign currency issuer ratings
are also distinguished from local currency issuer ratings to identify those
instances where sovereign risks make them different for the same issuer.
60
20. APPENDIX C - PERFORMANCE STATISTICS
PIONEER INDO-ASIA FUND
CLASS A SHARES
SALES NET ASSET INITIAL NET
INITIAL OFFERING PRICE CHARGE SHARES VALUE PER ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED SHARE VALUE
6/23/94 $10,000.00 $12.20 5.75% 819.672 $11.50 $9,425.00
VALUE OF SHARES
(DIVIDENDS AND CAPITAL GAINS REINVESTED)
FROM CAPITAL
FROM GAINS FROM DIVIDENDS
DATE INVESTMENT REINVESTED REINVESTED TOTAL VALUE
12/31/94 $8,344 $0 $15 $8,359
12/31/95 $6,680 $0 $12 $6,692
12/31/96 $5,582 $0 $10 $5,592
12/31/97 $5,164 $0 $9 $5,173
12/31/98 $5,721 $0 $10 $5,731
12/31/99 $11,828 $0 $21 $11,849
12/31/00 $7,541 $0 $13 $7,554
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
61
PIONEER INDO-ASIA FUND
CLASS B SHARES
SALES NET ASSET INITIAL NET
INITIAL OFFERING CHARGE SHARES VALUE PER ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED SHARE VALUE
6/23/94 $10,000.00 $11.50 $0.00% 869.565 $11.50 $10,000.00
VALUE OF SHARES
(DIVIDENDS AND CAPITAL GAINS REINVESTED)
FROM CAPITAL FROM CONTINGENT
FROM GAINS DIVIDENDS DEFERRED TOTAL
DATE INVESTMENT REINVESTED REINVESTED SALES CHARGE VALUE CDSC (%)
12/31/94 $8,826 $0 $5 $353 $8,478 4.00
12/31/95 $7,018 $0 $4 $281 $6,741 4.00
12/31/96 $5,818 $0 $3 $175 $5,646 3.00
12/31/97 $5,339 $0 $3 $160 $5,182 3.00
12/31/98 $5,870 $0 $3 $117 $5,756 2.00
12/31/99 $12,044 $0 $7 $100 $11,591 1.00
12/31/00 $7,618 $0 $4 $0 $7,622 0.00
CLASS C SHARES
SALES NET ASSET INITIAL NET
INITIAL OFFERING CHARGE SHARES VALUE PER ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED SHARE VALUE
1/31/96 $10,000.00 $7.85 0.00% 1,273.885 $7.85 $10,000.00
VALUE OF SHARES
(DIVIDENDS AND CAPITAL GAINS REINVESTED)
FROM CAPITAL FROM CONTINGENT
FROM GAINS DIVIDENDS DEFERRED TOTAL
DATE INVESTMENT REINVESTED REINVESTED SALES CHARGE VALUE CDSC (%)
12/31/96 $8,471 $0 $0 $85 $8,386 1.00
12/31/97 $7,796 $0 $0 $0 $7,796 0.00
12/31/98 $8,484 $0 $0 $0 $8,484 0.00
12/31/99 $17,452 $0 $0 $0 $17,452 0.00
12/31/00 $11,045 $0 $0 $0 $11,045 0.00
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
62
COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS
The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the fund may refer to these
indices or may present comparisons between the performance of the fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the fund, do not reflect past
performance and do not guarantee future results.
S&P 500. This index is a readily available, carefully constructed, market value
weighted benchmark of common stock performance. Currently, the S&P 500 includes
500 of the largest stocks (in terms of stock market value) in the U.S.
DOW JONES INDUSTRIAL AVERAGE. This is a total return index based on the
performance of stocks of 30 blue chip companies widely held by individuals and
institutional investors. The 30 stocks represent about a fifth of the $8
trillion-plus market value of all U.S. stocks and about a fourth of the value of
stocks listed on the New York Stock Exchange (NYSE).
U.S. SMALL STOCK INDEX. This index is a market value weighted index of the ninth
and tenth deciles of the NYSE, plus stocks listed on the American Stock Exchange
and over the counter with the same or less capitalization as the upper bound of
the NYSE ninth decile.
U.S. INFLATION. The Consumer Price Index for All Urban Consumers (CPI-U), not
seasonally adjusted, is used to measure inflation, which is the rate of change
of consumer goods prices. Unfortunately, the inflation rate as derived by the
CPI is not measured over the same period as the other asset returns. All of the
security returns are measured from one month-end to the next month-end. CPI
commodity prices are collected during the month. Thus, measured inflation rates
lag the other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES. The S&P/BARRA Growth and Value Indexes are constructed by
dividing the stocks in the S&P 500 according to price-to-book ratios. The Growth
Index contains stocks with higher price-to-book ratios, and the Value Index
contains stocks with lower price-to-book ratios. Both indexes are market
capitalization weighted.
MERRILL LYNCH MICRO-CAP INDEX. The Merrill Lynch Micro-Cap Index represents the
performance of 1,980 stocks ranging in market capitalization from $50 million to
$125 million. Index returns are calculated monthly.
MERRILL LYNCH HIGH YIELD MASTER II INDEX. This index is a market capitalization
weighted total return index covering U.S. dollar-denominated high-yield bonds.
Qualifying bonds must have at least $100 million par amount outstanding, a
remaining term to maturity greater than or equal to one year, and a credit
rating less than BBB3 but not in default (based on the composite of Moody's and
Standard & Poor's). The index includes deferred interest and pay-in-kind bonds,
but excludes structured notes, floating rate notes and other variable coupon
securities. The index also excludes emerging markets debt (issuers domiciled in
below investment grade rated countries). Index constituents are rebalanced
monthly on the last calendar day of the month. Index values are calculated
daily.
MERRILL LYNCH INDEX OF CONVERTIBLE BONDS (SPECULATIVE QUALITY). This is a market
capitalization weighted index including all mandatory and non-mandatory domestic
corporate convertible securities
63
with at least an original par of $50 million or a $50 million market value;
securities dropping below a market value of $40 million are excluded. Returns
are calculated weekly based on Thursday's closing prices and are linked
monthly. All securities must be convertible to common stock only. Quality
range is D3-BB1 based on composite Moody's and Standard & Poor's ratings.
LONG-TERM U.S. GOVERNMENT BONDS. The total returns on long-term government bonds
after 1977 are constructed with data from The Wall Street Journal and are
calculated as the change in the flat price or and-interest price. From 1926 to
1976, data are obtained from the government bond file at the Center for Research
in Security Prices (CRSP), Graduate School of Business, University of Chicago.
Each year, a one-bond portfolio with a term of approximately 20 years and a
reasonably current coupon was used and whose returns did not reflect potential
tax benefits, impaired negotiability or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates minus the current date. The
bond was "held" for the calendar year and returns were computed.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS. Total returns of intermediate-term
government bonds after 1987 are calculated from The Wall Street Journal prices,
using the change in flat price. Returns from 1934 to 1986 are obtained from the
CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five years, and this bond is
"held" for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds
with maturities near five years were partially or fully tax-exempt and were
selected using the rules described above. Personal tax rates were generally low
in that period, so that yields on tax-exempt bonds were similar to yields on
taxable bonds. From 1926 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI") INDICES. These indices are in U.S.
dollar terms with or without dividends reinvested and measure the performance of
developed and emerging stock markets in individual countries and regions around
the world. MSCI All Country indices represent both the developed and the
emerging markets for a particular region. The Free indices exclude shares which
are not readily purchased by non-local investors. These indices are unmanaged.
MSCI covers thousands of securities in 51 stock markets around the world.
Several Pioneer mutual funds that invest in international securities compare
their performance to various MSCI indices.
64
6-MONTH CDS. Data sources include the Federal Reserve Bulletin and The Wall
Street Journal.
LONG-TERM U.S. CORPORATE BONDS. Since 1969, corporate bond total returns are
represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index.
As most large corporate bond transactions take place over the counter, a major
dealer is the natural source of these data. The index includes nearly all Aaa-
and Aa-rated bonds with at least 10 years to maturity. If a bond is downgraded
during a particular month, its return for the month is included in the index
before removing the bond from future portfolios.
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. Capital appreciation returns were calculated from
yields assuming (at the beginning of each monthly holding period) a 20-year
maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
coupon and a 20-year maturity. The conventional present-value formula for bond
price for the beginning and end-of-month prices was used. (This formula is
presented in Ross, Stephen A., and Westerfield, Randolph W., Corporate Finance,
Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly
income return was assumed to be one-twelfth the coupon.
LEHMAN BROTHERS GOVERNMENT/CREDIT BOND INDEX - INTERMEDIATE. This index is
comprised of securities with one to ten years to maturity. It includes Treasury
and government agency securities, investment-grade corporate bonds and Yankee
bonds.
U.S. (30-DAY) TREASURY BILLS. For the U.S. Treasury Bill Index, data from The
Wall Street Journal are used after 1977; the CRSP government bond file is the
source until 1976. Each month a one-bill portfolio containing the shortest-term
bill having not less than one month to maturity is constructed. (The bill's
original term to maturity is not relevant.) To measure holding period returns
for the one-bill portfolio, the bill is priced as of the last trading day of the
previous month-end and as of the last trading day of the current month.
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS ("NAREIT") EQUITY REIT
INDEX. All of the data are based upon the last closing price of the month for
all tax-qualified REITs listed on the NYSE, AMEX and Nasdaq. The data are
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighting at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
65
RUSSELL U.S. EQUITY INDEXES. The Russell 3000(R) Index (the "Russell 3000") is
comprised of the 3,000 largest U.S. companies as determined by market
capitalization representing approximately 98% of the U.S. equity market. The
average market capitalization is approximately $5.1 billion. The Russell 2500TM
Index measures performance of the 2,500 smallest companies in the Russell 3000.
The average market capitalization is approximately $958.8 million, and the
largest company in the index has an approximate market capitalization of $4
billion. The Russell 2000(R) Index measures performance of the 2,000 smallest
stocks in the Russell 3000; the largest company in the index has a market
capitalization of approximately $1.5 billion. The Russell 1000(R) Index (the
"Russell 1000") measures the performance of the 1,000 largest companies in the
Russell 3000. The average market capitalization is approximately $14.1 billion.
The smallest company in the index has an approximate market capitalization of
$1.6 billion. The Russell Midcap(R) Index measures performance of the 800
smallest companies in the Russell 1000. The largest company in the index has an
approximate market capitalization of $13 billion. The Russell 1000(R) Growth
Index measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values. The Russell 1000(R)
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values.
The Russell indexes are reconstituted annually as of June 30, based on May 31
market capitalizations.
WILSHIRE REAL ESTATE SECURITIES INDEX. The Wilshire Real Estate Securities Index
is a broad measure of the performance of publicly traded real estate securities,
such as REITs and real estate operating companies ("REOCs"). The index is
capitalization-weighted. As of July 31, 2000, 112 companies were included in the
index, with a total market cap of $133.753 illion. At December 31, 2000, the
companies in the index were 92.92% equity and hybrid REITs and 7.08% REOCs.
STANDARD & POOR'S MIDCAP 400 INDEX. The S&P 400 is a
market-capitalization-weighted index. The performance data for the index were
calculated by taking the stocks presently in the index and tracking them
backwards in time as long as there were prices reported. No attempt was made to
determine what stocks "might have been" in the S&P 400 five or ten years ago had
it existed. Dividends are reinvested on a monthly basis prior to June 30, 1991,
and are reinvested daily thereafter.
LIPPER INDEXES. These indexes represent equally weighted performance, adjusted
for capital gain distributions and income dividends, of mutual funds that are
considered peers of the Pioneer mutual funds. Lipper, Inc. is an independent
firm that tracks mutual fund performance.
LEHMAN BROTHERS AGGREGATE BOND INDEX. The Lehman Brothers Aggregate Bond Index
is composed of the Lehman Brothers Government/Credit Index, the Lehman Brothers
Mortgage-Backed Securities Index, the Lehman Brothers Asset-Backed Securities
Index and the Lehman Brothers Commercial Mortgage-Backed Securities Index. The
index is a recognized measure of the performance of the U.S. investment grade
fixed rate bond market.
66
BANK SAVINGS ACCOUNT. Data sources include the U.S. League of Savings
Institutions Sourcebook; average annual yield on savings deposits in FSLIC
[FDIC] insured savings institutions for the years 1963 to 1987; and The Wall
Street Journal thereafter.
NASDAQ COMPOSITE INDEX. The Nasdaq Composite Index measures all Nasdaq domestic
and non-U.S. based common stocks listed on The Nasdaq Stock Market. The index is
market-value weighted. The Nasdaq Composite includes over 5,000 companies and is
one of the most widely followed and quoted major market indices because it is so
broad-based.
Sources: Ibbotson Associates, Towers Data Systems, Lipper, Inc. and PIM-USA
67
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/ MERRILL
JONES U.S. SMALL BARRA BARRA LYNCH
S&P INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP
500 AVERAGE INDEX INFLATION GROWTH VALUE INDEX
- --------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 N/A N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.60 N/A 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.55 N/A -51.36 0.20 N/A N/A N/A
Dec 1930 -24.78 N/A -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.13 N/A -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.26 N/A -5.39 -10.30 N/A N/A N/A
Dec 1933 54.20 N/A 142.87 0.51 N/A N/A N/A
Dec 1934 -1.52 N/A 24.22 2.03 N/A N/A N/A
Dec 1935 47.61 N/A 40.19 2.99 N/A N/A N/A
Dec 1936 33.74 N/A 64.80 1.21 N/A N/A N/A
Dec 1937 -34.73 N/A -58.01 3.10 N/A N/A N/A
Dec 1938 30.76 N/A 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.38 N/A 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.77 N/A -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 N/A -9.00 9.72 N/A N/A N/A
Dec 1942 20.15 N/A 44.51 9.29 N/A N/A N/A
Dec 1943 25.63 N/A 88.37 3.16 N/A N/A N/A
Dec 1944 19.53 N/A 53.72 2.11 N/A N/A N/A
Dec 1945 36.31 N/A 73.61 2.25 N/A N/A N/A
Dec 1946 -8.02 N/A -11.63 18.16 N/A N/A N/A
Dec 1947 5.63 N/A 0.92 9.01 N/A N/A N/A
Dec 1948 5.37 N/A -2.11 2.71 N/A N/A N/A
Dec 1949 18.60 N/A 19.75 -1.80 N/A N/A N/A
Dec 1950 31.46 N/A 38.75 5.79 N/A N/A N/A
Dec 1951 23.97 N/A 7.80 5.87 N/A N/A N/A
Dec 1952 18.16 N/A 3.03 0.88 N/A N/A N/A
Dec 1953 -0.94 N/A -6.49 0.62 N/A N/A N/A
Dec 1954 52.27 N/A 60.58 -0.50 N/A N/A N/A
Dec 1955 31.41 N/A 20.44 0.37 N/A N/A N/A
Dec 1956 6.48 N/A 4.28 2.86 N/A N/A N/A
Dec 1957 -10.72 N/A -14.57 3.02 N/A N/A N/A
Dec 1958 43.15 N/A 64.89 1.76 N/A N/A N/A
Dec 1959 11.95 N/A 16.40 1.50 N/A N/A N/A
Dec 1960 0.45 -6.12 -3.29 1.48 N/A N/A N/A
Dec 1961 26.88 22.64 32.09 0.67 N/A N/A N/A
Dec 1962 -8.66 -7.46 -11.90 1.22 N/A N/A N/A
Dec 1963 22.76 20.86 23.57 1.65 N/A N/A N/A
68
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
DOW S&P/ S&P/ MERRILL
JONES U.S. SMALL BARRA BARRA LYNCH
S&P INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP
500 AVERAGE INDEX INFLATION GROWTH VALUE INDEX
- --------------------------------------------------------------------------------------------------------
Dec 1964 16.43 18.92 23.52 1.19 N/A N/A N/A
Dec 1965 12.46 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.02 -15.85 -7.01 3.35 N/A N/A N/A
Dec 1967 23.89 19.22 83.57 3.04 N/A N/A N/A
Dec 1968 11.04 7.94 35.97 4.72 N/A N/A N/A
Dec 1969 -8.40 -11.84 -25.05 6.11 N/A N/A N/A
Dec 1970 3.89 9.28 -17.43 5.49 N/A N/A N/A
Dec 1971 14.22 9.89 16.50 3.36 N/A N/A N/A
Dec 1972 18.96 18.52 4.43 3.41 N/A N/A N/A
Dec 1973 -14.67 -13.29 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.31 -23.73 -19.95 12.20 N/A N/A N/A
Dec 1975 37.14 44.87 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.81 22.93 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.19 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.52 2.81 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.45 10.68 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.45 22.13 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.88 -3.65 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.50 27.20 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.46 26.05 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.22 1.35 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 31.64 33.62 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.62 27.25 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.18 5.55 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.50 16.21 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.59 32.24 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.11 -0.54 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.34 24.25 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.61 7.40 23.35 2.90 5.07 10.53 36.62
Dec 1993 10.03 16.97 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.36 5.02 3.11 2.67 3.13 -0.63 1.81
Dec 1995 37.44 36.94 34.46 2.54 38.13 37.00 30.70
Dec 1996 22.90 28.91 17.62 3.32 23.98 21.99 13.88
Dec 1997 33.32 24.91 22.78 1.70 36.38 29.99 24.61
Dec 1998 28.52 18.16 -7.31 1.61 42.15 14.68 -6.15
Dec 1999 21.01 27.29 29.79 2.81 28.25 12.72 40.04
Dec 2000 -9.11 -4.69 -3.59 3.86 -22.08 6.08 -6.13
69
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
LONG- INTERMEDIATE- MSCI LONG- LEHMAN
TERM TERM U.S. EAFE 6- TERM U.S. BROS. U.S.
U.S. GOV'T GOVERNMENT (NET OF MONTH CORPORATE GOV'T/CREDIT T-BILL
BONDS BONDS TAXES) CDS BONDS INTERMEDIATE (30-DAY)
- ------------------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 N/A 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 N/A 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 N/A 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 N/A 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 N/A 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 N/A 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 N/A 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 N/A 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 N/A 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 N/A 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 N/A 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 N/A 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 N/A -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 N/A 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 N/A 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 N/A 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 N/A 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 N/A 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 N/A 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 N/A 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 N/A 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 N/A 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 N/A 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 N/A 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 N/A 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 N/A 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 N/A 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 N/A 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 N/A 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 N/A 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 N/A 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 N/A 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 N/A 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 N/A 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 N/A 2.66
70
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
LONG- INTERMEDIATE- MSCI LONG- LEHMAN
TERM TERM U.S. EAFE 6- TERM U.S. BROS. U.S.
U.S. GOV'T GOVERNMENT (NET OF MONTH CORPORATE GOV'T/CREDIT T-BILL
BONDS BONDS TAXES) CDS BONDS INTERMEDIATE (30-DAY)
- ------------------------------------------------------------------------------------------------------------------
Dec 1961 0.97 1.85 N/A N/A 4.82 N/A 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 N/A 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 N/A 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 N/A 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 N/A 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 N/A 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 N/A 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 N/A 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 N/A 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 N/A 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 N/A 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 N/A 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 3.34 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 5.86 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 9.49 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 12.33 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 3.31 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 2.12 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 5.99 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 6.42 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 10.51 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 26.11 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.60 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 14.37 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 18.06 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 13.13 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 3.66 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.67 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 12.77 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 9.16 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 14.62 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 7.17 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 8.79 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 -1.93 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 15.33 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 4.05 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 7.87 5.26
Dec 1998 13.06 10.21 20.00 5.34 10.76 8.44 4.86
Dec 1999 -8.96 -1.77 26.96 5.43 -7.45 0.39 4.68
Dec 2000 21.48 12.59 -14.17 6.64 12.87 10.12 5.89
71
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT WILSHIRE LIPPER MSCI
EQUITY RUSSELL REAL ESTATE BALANCED EMERGING BANK
REIT 2000(R) SECURITIES S&P FUND MARKETS SAVINGS
INDEX INDEX INDEX 400 INDEX FREE INDEX ACCOUNT
- -------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
72
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT WILSHIRE LIPPER MSCI
EQUITY RUSSELL REAL ESTATE BALANCED EMERGING BANK
REIT 2000(R) SECURITIES S&P FUND MARKETS SAVINGS
INDEX INDEX INDEX 400 INDEX FREE INDEX ACCOUNT
- -------------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.07 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.60 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.69 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.08 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 20.14 35.59 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.80 -7.86 -2.04 4.13 N/A 6.92
Dec 1988 13.49 25.02 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.26 2.37 35.55 19.70 64.96 7.91
Dec 1990 -15.35 -19.48 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.04 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.88 15.24 13.95 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.58 -2.05 -7.32 4.96
Dec 1995 15.27 28.45 13.65 30.95 24.89 -5.21 5.24
Dec 1996 35.26 16.50 36.87 19.20 13.05 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.25 20.30 -11.59 5.17
Dec 1998 -17.51 -2.55 -17.43 19.11 15.09 -25.34 4.63
Dec 1999 -4.62 21.26 14.72 14.72 8.98 66.41 5.29
Dec 2000 25.77 -3.02 30.74 17.50 2.39 -30.61 3.71
73
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI ALL MERRILL
MSCI COUNTRY LYNCH
ALL (AC) MERRILL INDEX OF LIPPER
COUNTRY ASIA LEHMAN LYNCH CONVERTIBLE LIPPER GROWTH &
(AC) ASIA PACIFIC BROTHERS HIGH YIELD BONDS RUSSELL GROWTH INCOME
FREE FREE AGGREGATE MASTER II (SPECULATIVE 1000(R) FUND FUND
EX JAPAN EX JAPAN BOND INDEX INDEX QUALITY) INDEX INDEX INDEX
- ---------------------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1931 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1932 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1933 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1934 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1935 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1936 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1937 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1938 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1939 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1940 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1941 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1942 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1943 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1944 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1945 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1946 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1947 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1948 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1949 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1950 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1951 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1952 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1953 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1954 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1955 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1956 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1957 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1958 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1959 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1960 N/A N/A N/A N/A N/A N/A 6.36 3.04
Dec 1961 N/A N/A N/A N/A N/A N/A 30.16 26.00
74
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI ALL MERRILL
MSCI COUNTRY LYNCH
ALL (AC) MERRILL INDEX OF LIPPER
COUNTRY ASIA LEHMAN LYNCH CONVERTIBLE LIPPER GROWTH &
(AC) ASIA PACIFIC BROTHERS HIGH YIELD BONDS RUSSELL GROWTH INCOME
FREE FREE AGGREGATE MASTER II (SPECULATIVE 1000(R) FUND FUND
EX JAPAN EX JAPAN BOND INDEX INDEX QUALITY) INDEX INDEX INDEX
- ---------------------------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A N/A N/A -16.84 -11.87
Dec 1963 N/A N/A N/A N/A N/A N/A 22.43 19.10
Dec 1964 N/A N/A N/A N/A N/A N/A 14.99 15.23
Dec 1965 N/A N/A N/A N/A N/A N/A 26.61 19.00
Dec 1966 N/A N/A N/A N/A N/A N/A -1.80 -6.04
Dec 1967 N/A N/A N/A N/A N/A N/A 45.31 27.59
Dec 1968 N/A N/A N/A N/A N/A N/A 15.34 15.29
Dec 1969 N/A N/A N/A N/A N/A N/A -10.62 -11.80
Dec 1970 N/A N/A N/A N/A N/A N/A -8.57 1.10
Dec 1971 N/A N/A N/A N/A N/A N/A 26.17 13.77
Dec 1972 N/A N/A N/A N/A N/A N/A 18.08 12.87
Dec 1973 N/A N/A N/A N/A N/A N/A -24.75 -14.27
Dec 1974 N/A N/A N/A N/A N/A N/A -30.73 -20.85
Dec 1975 N/A N/A N/A N/A N/A N/A 32.83 34.62
Dec 1976 N/A N/A 15.60 N/A N/A N/A 20.07 25.66
Dec 1977 N/A N/A 3.04 N/A N/A N/A -2.62 -3.64
Dec 1978 N/A N/A 1.39 N/A N/A N/A 12.53 7.99
Dec 1979 N/A N/A 1.93 N/A N/A 22.31 29.29 23.87
Dec 1980 N/A N/A 2.71 N/A N/A 31.88 38.67 28.27
Dec 1981 N/A N/A 6.25 N/A N/A -5.10 -6.82 -1.39
Dec 1982 N/A N/A 32.62 N/A N/A 20.30 24.04 24.17
Dec 1983 N/A N/A 8.36 N/A N/A 22.13 21.35 22.76
Dec 1984 N/A N/A 15.15 N/A N/A 4.75 -3.60 4.29
Dec 1985 N/A N/A 22.10 N/A N/A 32.27 30.14 28.55
Dec 1986 N/A N/A 15.26 N/A N/A 17.87 15.59 17.63
Dec 1987 N/A N/A 2.76 4.47 N/A 2.94 3.25 2.64
Dec 1988 30.00 30.45 7.89 13.36 16.19 17.23 14.13 18.35
Dec 1989 32.13 21.43 14.53 2.31 9.82 30.42 27.47 23.73
Dec 1990 -6.54 -11.86 8.96 -4.36 -8.61 -4.16 -5.41 -5.99
Dec 1991 30.98 32.40 16.00 39.17 37.53 33.03 36.33 27.75
Dec 1992 21.81 9.88 7.40 17.44 24.06 9.04 7.63 9.63
Dec 1993 103.39 84.94 9.75 16.69 19.37 10.15 11.98 14.62
Dec 1994 -16.94 -12.59 -2.92 -1.03 -6.91 0.38 -1.57 -0.41
Dec 1995 4.00 10.00 18.47 20.46 25.14 37.77 32.65 31.14
Dec 1996 10.05 8.08 3.63 11.27 15.29 22.45 17.53 20.67
Dec 1997 -40.31 -34.20 9.65 13.27 16.76 32.85 28.03 26.88
Dec 1998 -7.79 -4.42 8.69 2.95 12.62 27.02 25.69 13.58
Dec 1999 64.67 49.83 -0.82 2.51 38.91 20.91 27.96 11.86
Dec 2000 -35.22 -29.97 11.63 -5.12 18.86 -7.79 -10.88 0.39
75
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI ALL
COUNTRY RUSSELL RUSSELL
MSCI MSCI WORLD FREE 1000(R) 1000(R) NASDAQ
EUROPE WORLD EX U.S. GROWTH VALUE COMPOSITE
INDEX INDEX INDEX INDEX INDEX INDEX
- -------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A
Dec 1931 N/A N/A N/A N/A N/A N/A
Dec 1932 N/A N/A N/A N/A N/A N/A
Dec 1933 N/A N/A N/A N/A N/A N/A
Dec 1934 N/A N/A N/A N/A N/A N/A
Dec 1935 N/A N/A N/A N/A N/A N/A
Dec 1936 N/A N/A N/A N/A N/A N/A
Dec 1937 N/A N/A N/A N/A N/A N/A
Dec 1938 N/A N/A N/A N/A N/A N/A
Dec 1939 N/A N/A N/A N/A N/A N/A
Dec 1940 N/A N/A N/A N/A N/A N/A
Dec 1941 N/A N/A N/A N/A N/A N/A
Dec 1942 N/A N/A N/A N/A N/A N/A
Dec 1943 N/A N/A N/A N/A N/A N/A
Dec 1944 N/A N/A N/A N/A N/A N/A
Dec 1945 N/A N/A N/A N/A N/A N/A
Dec 1946 N/A N/A N/A N/A N/A N/A
Dec 1947 N/A N/A N/A N/A N/A N/A
Dec 1948 N/A N/A N/A N/A N/A N/A
Dec 1949 N/A N/A N/A N/A N/A N/A
Dec 1950 N/A N/A N/A N/A N/A N/A
Dec 1951 N/A N/A N/A N/A N/A N/A
Dec 1952 N/A N/A N/A N/A N/A N/A
Dec 1953 N/A N/A N/A N/A N/A N/A
Dec 1954 N/A N/A N/A N/A N/A N/A
Dec 1955 N/A N/A N/A N/A N/A N/A
Dec 1956 N/A N/A N/A N/A N/A N/A
Dec 1957 N/A N/A N/A N/A N/A N/A
Dec 1958 N/A N/A N/A N/A N/A N/A
Dec 1959 N/A N/A N/A N/A N/A N/A
Dec 1960 N/A N/A N/A N/A N/A N/A
Dec 1961 N/A N/A N/A N/A N/A N/A
76
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI ALL
COUNTRY RUSSELL RUSSELL
MSCI MSCI WORLD FREE 1000(R) 1000(R) NASDAQ
EUROPE WORLD EX U.S. GROWTH VALUE COMPOSITE
INDEX INDEX INDEX INDEX INDEX INDEX
- -------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A N/A N/A
Dec 1963 N/A N/A N/A N/A N/A N/A
Dec 1964 N/A N/A N/A N/A N/A N/A
Dec 1965 N/A N/A N/A N/A N/A N/A
Dec 1966 N/A N/A N/A N/A N/A N/A
Dec 1967 N/A N/A N/A N/A N/A N/A
Dec 1968 N/A N/A N/A N/A N/A N/A
Dec 1969 N/A N/A N/A N/A N/A N/A
Dec 1970 -10.64 -3.09 N/A N/A N/A N/A
Dec 1971 26.33 18.36 N/A N/A N/A N/A
Dec 1972 14.40 22.48 N/A N/A N/A 17.18
Dec 1973 -8.77 -15.24 N/A N/A N/A -31.06
Dec 1974 -24.07 -25.47 N/A N/A N/A -35.11
Dec 1975 41.45 32.80 N/A N/A N/A 29.76
Dec 1976 -7.80 13.40 N/A N/A N/A 26.10
Dec 1977 21.90 0.68 N/A N/A N/A 7.33
Dec 1978 21.88 16.52 N/A N/A N/A 12.31
Dec 1979 12.31 10.95 N/A 23.91 20.55 28.11
Dec 1980 11.90 25.67 N/A 39.57 24.41 33.88
Dec 1981 -12.46 -4.79 N/A -11.31 1.26 -3.21
Dec 1982 3.97 9.71 N/A 20.46 20.04 18.67
Dec 1983 20.96 21.93 N/A 15.98 28.28 19.87
Dec 1984 0.62 4.72 N/A -0.95 10.10 -11.22
Dec 1985 78.93 40.56 N/A 32.85 31.51 31.36
Dec 1986 43.85 41.89 N/A 15.36 19.98 7.36
Dec 1987 3.66 16.16 N/A 5.31 0.50 -5.26
Dec 1988 15.81 23.29 27.90 11.27 23.16 15.41
Dec 1989 28.51 16.61 12.03 35.92 25.19 19.26
Dec 1990 -3.85 -17.02 -22.74 -0.26 -8.08 -17.80
Dec 1991 13.11 18.28 13.96 41.16 24.61 56.84
Dec 1992 -4.71 -5.23 -10.97 5.00 13.81 15.45
Dec 1993 29.28 22.50 34.90 2.90 18.12 14.75
Dec 1994 2.28 5.08 6.63 2.66 -1.99 -3.20
Dec 1995 21.62 20.72 9.94 37.19 38.35 39.92
Dec 1996 21.09 13.48 6.68 23.12 21.64 22.71
Dec 1997 23.80 15.76 2.04 30.49 35.18 21.64
Dec 1998 28.53 24.34 14.46 38.71 15.63 39.63
Dec 1999 15.89 24.93 30.91 33.16 7.35 85.59
Dec 2000 -8.39 -13.18 -15.09 -22.42 7.01 -39.29
77
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI MSCI
MSCI WORLD WORLD TELE-
WORLD HEALTH COMMUNICATION
FINANCIALS CARE SERVICES
INDEX INDEX INDEX
- -----------------------------------------------------------
Dec 1925 N/A N/A N/A
Dec 1926 N/A N/A N/A
Dec 1927 N/A N/A N/A
Dec 1928 N/A N/A N/A
Dec 1929 N/A N/A N/A
Dec 1930 N/A N/A N/A
Dec 1931 N/A N/A N/A
Dec 1932 N/A N/A N/A
Dec 1933 N/A N/A N/A
Dec 1934 N/A N/A N/A
Dec 1935 N/A N/A N/A
Dec 1936 N/A N/A N/A
Dec 1937 N/A N/A N/A
Dec 1938 N/A N/A N/A
Dec 1939 N/A N/A N/A
Dec 1940 N/A N/A N/A
Dec 1941 N/A N/A N/A
Dec 1942 N/A N/A N/A
Dec 1943 N/A N/A N/A
Dec 1944 N/A N/A N/A
Dec 1945 N/A N/A N/A
Dec 1946 N/A N/A N/A
Dec 1947 N/A N/A N/A
Dec 1948 N/A N/A N/A
Dec 1949 N/A N/A N/A
Dec 1950 N/A N/A N/A
Dec 1951 N/A N/A N/A
Dec 1952 N/A N/A N/A
Dec 1953 N/A N/A N/A
Dec 1954 N/A N/A N/A
Dec 1955 N/A N/A N/A
Dec 1956 N/A N/A N/A
Dec 1957 N/A N/A N/A
Dec 1958 N/A N/A N/A
Dec 1959 N/A N/A N/A
Dec 1960 N/A N/A N/A
Dec 1961 N/A N/A N/A
78
MSCI MSCI
MSCI WORLD WORLD TELE-
WORLD HEALTH COMMUNICATION
FINANCIALS CARE SERVICES
INDEX INDEX INDEX
- -----------------------------------------------------------
Dec 1962 N/A N/A N/A
Dec 1963 N/A N/A N/A
Dec 1964 N/A N/A N/A
Dec 1965 N/A N/A N/A
Dec 1966 N/A N/A N/A
Dec 1967 N/A N/A N/A
Dec 1968 N/A N/A N/A
Dec 1969 N/A N/A N/A
Dec 1970 N/A N/A N/A
Dec 1971 N/A N/A N/A
Dec 1972 N/A N/A N/A
Dec 1973 N/A N/A N/A
Dec 1974 N/A N/A N/A
Dec 1975 N/A N/A N/A
Dec 1976 N/A N/A N/A
Dec 1977 N/A N/A N/A
Dec 1978 N/A N/A N/A
Dec 1979 N/A N/A N/A
Dec 1980 N/A N/A N/A
Dec 1981 N/A N/A N/A
Dec 1982 N/A N/A N/A
Dec 1983 N/A N/A N/A
Dec 1984 N/A N/A N/A
Dec 1985 N/A N/A N/A
Dec 1986 N/A N/A N/A
Dec 1987 N/A N/A N/A
Dec 1988 N/A N/A N/A
Dec 1989 N/A N/A N/A
Dec 1990 N/A N/A N/A
Dec 1991 N/A N/A N/A
Dec 1992 N/A N/A N/A
Dec 1993 N/A N/A N/A
Dec 1994 N/A N/A N/A
Dec 1995 N/A N/A N/A
Dec 1996 N/A N/A N/A
Dec 1997 N/A N/A N/A
Dec 1998 N/A N/A N/A
Dec 1999 8.57 -10.08 44.66
Dec 2000 10.62 26.96 -42.49
Source: Lipper, Inc., Ibbotson Associates and The Wall Street Journal
79
21. APPENDIX D - OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the U.S.
As of December 31, 2000, Pioneer and its investment management affiliates
employed a professional investment staff of approximately 150.
Total assets of all Pioneer's U.S. mutual funds at December 31, 2000, were over
$22 billion representing 1,345,985 shareholder accounts, including 830,459
non-retirement accounts and 515,526 retirement accounts.
EXHIBIT B
PIONEER EMERGING MARKETS FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B, Class C and Class Y Shares
April 2, 2001
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class B and Class C shares prospectus
and its Class Y shares prospectus, each dated April 2, 2001, as supplemented or
revised from time to time. A copy of each prospectus can be obtained free of
charge by calling Shareholder Services at 1-800-225-6292 or by written request
to the fund at 60 State Street, Boston, Massachusetts 02109. You can also obtain
a copy of the fund's Class A, Class B and Class C shares prospectus from our
website at: www.pioneerfunds.com. The fund's financial statements for the fiscal
year ended November 30, 2000 are incorporated into this statement of additional
information by reference. The most recent annual report to shareholders is
attached to this statement of additional information.
TABLE OF CONTENTS
Page
----
1. Fund History.............................................................2
2. Investment Policies, Risks and Restrictions..............................2
3. Management of the Fund..................................................20
4. Investment Adviser......................................................24
5. Principal Underwriter and Distribution Plans............................26
6. Shareholder Servicing/Transfer Agent....................................30
7. Custodian...............................................................30
8. Independent Public Accountants..........................................31
9. Portfolio Transactions..................................................31
10. Description of Shares...................................................32
11. Sales Charges...........................................................34
12. Redeeming Shares........................................................37
13. Telephone Transactions..................................................38
14. Pricing of Shares.......................................................40
15. Tax Status..............................................................40
16. Investment Results......................................................46
17. Financial Statements....................................................47
18. Appendix A - Annual Fee, Expense and Other Information..................49
19. Appendix B - Description of Short-Term Debt, Corporate Bond
and Preferred Stock Ratings.............................................52
20. Appendix C - Performance Statistics.....................................58
21. Appendix D - Other Pioneer Information..................................77
1. FUND HISTORY
The fund is a diversified open-end management investment company. The fund was
organized as a Delaware business trust on March 23, 1994.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectuses present the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in the
fund's prospectuses and provides additional information on the fund's investment
policies or restrictions. Restrictions or policies stated as a maximum
percentage of the fund's assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable (other than the
limitations on borrowing and illiquid securities). Accordingly, any later
increase or decrease resulting from a change in values, net assets or other
circumstances will not be considered in determining whether the investment
complies with the fund's restrictions and policies.
Primary Investments
Under normal circumstances, at least 65% of the fund's total assets are invested
in securities of companies that are domiciled or primarily doing business in
emerging countries and securities of these countries' governmental issuers. For
purposes of the fund's investments, "emerging countries" are countries with
economies or securities markets that are not considered by Pioneer Investment
Management, Inc. ("Pioneer"), the fund's investment adviser, to be developed.
Currently, emerging countries include: Algeria, Argentina, Bangladesh, Brazil,
Bulgaria, Chile, China, Columbia, Costa Rica, Czech Republic, Ecuador, Egypt,
Ghana, Greece, Hong Kong, Hungary, India, Indonesia, Israel, Jamaica, Jordan,
Kenya, Kuwait, Malaysia, Mexico, Morocco, Nigeria, Pakistan, Peru, the
Philippines, Poland, Russia, Singapore, South Africa, South Korea, Sri Lanka,
Taiwan, Thailand, Turkey, Uruguay, Venezuela, Vietnam and Zimbabwe. At Pioneer's
discretion, the fund may invest in other emerging countries. The fund may also
invest up to 35% of its total assets in equity and debt securities of companies
in developed countries, other than the U.S., and of such countries' governmental
issuers and in short-term investments. Although the fund may invest in both
equity and debt securities, Pioneer expects that equity and equity-related
securities will constitute the majority of the fund's assets.
Illiquid Securities
The fund will not invest more than 15% of its net assets in illiquid and other
securities that are not readily marketable. Repurchase agreements maturing in
more than seven days will be included for purposes of the foregoing limit.
Securities subject to restrictions on resale under the Securities Act of 1933,
as amended (the "1933 Act"), are considered illiquid unless they are eligible
for resale pursuant to Rule 144A or another exemption from the registration
requirements of the 1933 Act and are determined to be liquid by Pioneer. Pioneer
determines the liquidity of Rule 144A and other restricted securities according
to procedures adopted by the Board of Trustees. The Board of Trustees monitors
Pioneer's application of these guidelines and procedures. The inability of the
fund to dispose of illiquid investments readily or at reasonable prices could
impair the fund's ability to raise cash for redemptions or other purposes. If
the fund sold restricted securities other than pursuant to an exception from
registration under the 1933 Act such as Rule 144A, it may be deemed to be acting
as an underwriter and subject to liability under the 1933 Act.
2
Investments in Initial Public Offerings
To the extent consistent with its investment objective, the fund may invest in
initial public offerings of equity securities. The market for such securities
may be more volatile and entail greater risk of loss than investments in more
established companies. Investments in initial public offerings may represent a
significant portion of the fund's investment performance. The fund cannot assure
that investments in initial public offerings will continue to be available to
the fund or, if available, will result in positive investment performance. In
addition, as the fund's portfolio grows in size, the impact of investments in
initial public offerings on the overall performance of the fund is likely to
decrease.
Debt Securities Selection
In selecting fixed income securities for the fund, Pioneer gives primary
consideration to the fund's investment objective, the attractiveness of the
market for debt securities given Pioneer's outlook for the equity markets and
the fund's liquidity requirements. Once Pioneer determines to allocate a portion
of the fund's assets to debt securities, Pioneer generally focuses on short-term
instruments to provide liquidity and may invest in a range of fixed income
securities if the fund is investing in such instruments for income or capital
gains. Pioneer selects individual securities based on broad economic factors and
issuer specific factors including the terms of the securities (such as yields
compared to U.S. Treasuries or comparable issues), liquidity and rating, sector
and issuer diversification.
Convertible Debt Securities
The fund may invest in convertible debt securities which are debt obligations
convertible at a stated exchange rate or formula into common stock or other
equity securities of or owned by the issuer. Convertible securities rank senior
to common stocks in an issuer's capital structure and consequently may be of
higher quality and entail less risk than the issuer's common stock. As with all
debt securities, the market values of convertible securities tend to increase
when interest rates decline and, conversely, tend to decline when interest rates
increase.
Debt Obligations of Non-U.S. Governments
The fund may invest in debt obligations of non-U.S. governments. An investment
in debt obligations of non-U.S. governments and their political subdivisions
(sovereign debt) involves special risks which are not present when investing in
corporate debt obligations. The non-U.S. issuer of the sovereign debt or the
non-U.S. governmental authorities that control the repayment of the debt may be
unable or unwilling to repay principal or interest when due, and the fund may
have limited recourse in the event of a default. During periods of economic
uncertainty, the market prices of sovereign debt may be more volatile than
prices of U.S. debt issues. In the past, certain non-U.S. countries have
encountered difficulties in servicing their debt obligations, withheld payments
of principal and interest and declared moratoria on the payment of principal and
interest on their sovereign debt.
A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its non-U.S. currency reserves, the availability of
sufficient non-U.S. exchange, the relative size of the debt service burden, the
sovereign debtor's policy toward principal international lenders and local
political constraints. Sovereign debtors may also be dependent on expected
disbursements from non-U.S. governments, multilateral agencies and other
entities to reduce principal and interest arrearages on their debt. The failure
of a sovereign debtor to implement economic reforms, achieve specified levels of
economic performance or repay principal or
3
interest when due may result in the cancellation of third-party commitments to
lend funds to the sovereign debtor, which may further impair such debtor's
ability or willingness to service its debts.
Brady Bonds
The fund may invest in Brady bonds of countries that have restructured or are in
the process of restructuring sovereign debt pursuant to the "Brady Plan." Brady
bonds are debt securities issued under the framework of the Brady Plan as a
mechanism for debtor nations to restructure their outstanding external
indebtedness (generally, commercial bank debt). In restructuring its external
debt under the Brady Plan framework, a debtor nation negotiates with its
existing bank lenders as well as multilateral institutions such as the World
Bank and the International Monetary Fund. The Brady Plan framework, as it has
developed, contemplates the exchange of commercial bank debt for newly issued
bonds (Brady bonds).
Brady bonds may involve a high degree of risk, may be in default or present the
risk of default. Investors should recognize that Brady bonds have been issued
only recently, and, accordingly, they do not have a long payment history.
Agreements implemented under the Brady Plan to date are designated to achieve
debt and debt-service reduction through specific options negotiated by a debtor
nation with its creditors. As a result, the financial packages offered by each
country differ.
Debt Securities Rating Criteria
Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other
nationally recognized securities rating organizations. Debt securities rated BBB
are considered medium grade obligations with speculative characteristics, and
adverse economic conditions or changing circumstances may weaken the issuer's
ability to pay interest and repay principal. If the rating of an investment
grade debt security falls below investment grade, Pioneer will consider if any
action is appropriate in light of the fund's investment objective and policies.
Below investment grade debt securities are those rated "BB" and below by
Standard & Poor's or the equivalent rating of other nationally recognized
securities rating organizations. See Appendix B for a description of rating
categories. The fund may invest in debt securities rated "D" or better.
Below investment grade debt securities or comparable unrated securities are
commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments.
Changes in economic conditions are more likely to lead to a weakened capacity to
make principal payments and interest payments. The amount of high yield
securities outstanding has proliferated as an increasing number of issuers have
used high yield securities for corporate financing. An economic downturn could
severely affect the ability of highly leveraged issuers to service their debt
obligations or to repay their obligations upon maturity. Factors having an
adverse impact on the market value of lower quality securities will have an
adverse effect on the fund's net asset value to the extent that it invests in
such securities. In addition, the fund may incur additional expenses to the
extent it is required to seek recovery upon a default in payment of principal or
interest on its portfolio holdings.
The secondary market for high yield securities may not be as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the fund's ability to dispose of a particular security when
necessary to meet its liquidity needs. Under adverse market or economic
4
conditions, the secondary market for high yield securities could contract
further, independent of any specific adverse changes in the condition of a
particular issuer. As a result, the fund could find it more difficult to sell
these securities or may be able to sell the securities only at prices lower than
if such securities were widely traded. Prices realized upon the sale of such
lower rated or unrated securities, under these circumstances, may be less than
the prices used in calculating the fund's net asset value.
Since investors generally perceive that there are greater risks associated with
lower quality debt securities of the type in which the fund may invest a portion
of its assets, the yields and prices of such securities may tend to fluctuate
more than those for higher rated securities. In the lower quality segments of
the debt securities market, changes in perceptions of issuers' creditworthiness
tend to occur more frequently and in a more pronounced manner than do changes in
higher quality segments of the debt securities market, resulting in greater
yield and price volatility.
Lower rated and comparable unrated debt securities tend to offer higher yields
than higher rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers. However, lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities. Pioneer will attempt to reduce these risks through portfolio
diversification and by analysis of each issuer and its ability to make timely
payments of income and principal, as well as broad economic trends and corporate
developments.
Short-Term Investments
For temporary defensive or cash management purposes, the fund may invest in all
types of short-term investments including, but not limited to, corporate
commercial paper and other short-term commercial obligations issued by
international or domestic companies which have issued similar securities that
are rated A-1, AA or better by Standard & Poor's; obligations (including
certificates of deposit, time deposits, demand deposits and bankers'
acceptances) of banks located in the U.S. or non-U.S. countries with securities
outstanding that are rated A-1, AA or better by Standard & Poor's; obligations
of comparable quality issued or guaranteed by the U.S. government or the
government of a non-U.S. country or their respective agencies or
instrumentalities; and repurchase agreements. These securities may be
denominated in U.S. dollars or in non-U.S. currencies.
Risks of Non-U.S. Investments
Investing in securities of non-U.S. issuers involves considerations and risks
not typically associated with investing in the securities of issuers in the U.S.
or other developed markets. Emerging countries are generally considered to have
emerging markets and economies. The risks of investing in securities of non-U.S.
issuers generally, or in issuers with significant exposure to non-U.S. markets,
may be related, among other things, to (i) differences in size, liquidity and
volatility of, and the degree and manner of regulation of, the securities
markets of certain non-U.S. markets compared to the securities markets in the
U.S.; (ii) economic, political and social factors; and (iii) foreign exchange
matters, such as restrictions on the repatriation of capital, fluctuations in
exchange rates between the U.S. dollar and the currencies in which the fund's
portfolio securities are quoted or denominated, exchange control regulations and
costs associated with currency exchange. The political and economic structures
in certain countries, particularly emerging markets, are expected to undergo
significant evolution and rapid development, and such countries may lack the
social, political and economic stability characteristic of more developed
countries. Unanticipated political or social developments may affect the values
of the fund's investments in such countries. The economies and
5
securities and currency markets of many emerging markets have experienced
significant disruption and declines. There can be no assurances that these
economic and market disruptions will not continue.
Non-U.S. Securities Markets and Regulations. There may be less publicly
available information about non-U.S. markets and issuers than is available with
respect to U.S. securities and issuers. Non-U.S. companies generally are not
subject to accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to U.S. companies. The trading
markets for most non-U.S. securities are generally less liquid and subject to
greater price volatility than the markets for comparable securities in the U.S.
The markets for securities in certain emerging markets are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in certain non-U.S. markets, including emerging market countries, may
not be able to absorb, without price disruptions, a significant increase in
trading volume or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and arbitrage activities are
generally less extensive in such markets, which may contribute to increased
volatility and reduced liquidity. The less liquid a market, the more difficult
it may be for the fund to price its portfolio securities accurately or to
dispose of such securities at the times determined by Pioneer to be appropriate.
The risks associated with reduced liquidity may be particularly acute in
situations in which the fund's operations require cash, such as in order to meet
redemptions and to pay its expenses.
Economic, Political and Social Factors. Certain countries, including emerging
markets, may be subject to a greater degree of economic, political and social
instability than is the case in the U.S. and Western European countries. Such
instability may result from, among other things: (i) authoritarian governments
or military involvement in political and economic decision making; (ii) popular
unrest associated with demands for improved economic, political and social
conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial disaffection and conflict. Such
economic, political and social instability could significantly disrupt the
financial markets in such countries and the ability of the issuers in such
countries to repay their obligations. Investing in emerging market countries
also involves the risk of expropriation, nationalization, confiscation of assets
and property or the imposition of restrictions on foreign investments and on
repatriation of capital invested. In the event of such expropriation,
nationalization or other confiscation in any emerging country, the fund could
lose its entire investment in that country.
Certain emerging market countries restrict or control foreign investment in
their securities markets to varying degrees. These restrictions may limit the
fund's investment in those markets and may increase the expenses of the fund. In
addition, the repatriation of both investment income and capital from certain
markets in the region is subject to restrictions such as the need for certain
governmental consents. Even where there is no outright restriction on
repatriation of capital, the mechanics of repatriation may affect certain
aspects of the fund's operation.
Economies in individual countries may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross domestic product, rates of
inflation, currency valuation, capital reinvestment, resource self-sufficiency
and balance of payments positions. Many countries have experienced substantial,
and in some cases extremely high, rates of inflation for many years. Inflation
and rapid fluctuations in inflation rates have had, and may continue to have,
very negative effects on the economies and securities markets of certain
emerging countries.
Unanticipated political or social developments may also affect the values of the
fund's investments and the availability to the fund of additional investments in
such countries. During 1997 and 1998, the political stability, economies and
securities and currency markets of many markets in India and the Asian
6
subcontinent experienced significant disruption and declines. There can be no
assurances that these economic and market disruptions will not continue or
spread to other countries in the region.
Economies in emerging market countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, affected adversely by economic conditions in the countries with
which they trade.
Currency Risks. Because the fund, under normal circumstances, will invest a
substantial portion of its assets in securities which are denominated or quoted
in non-U.S. currencies, the strength or weakness of the U.S. dollar against such
currencies will affect the fund's investment performance. A decline in the value
of any particular non-U.S. currency against the U.S. dollar will cause a decline
in the U.S. dollar value of the fund's holdings of securities denominated or
quoted in such currency and, therefore, may cause an overall decline in the
fund's net asset value and any net investment income and capital gains to be
distributed in U.S. dollars to shareholders of the fund. Even if the fund
attempts to hedge against the effects of adverse changes in non-U.S. currency
exchange rates, there will be significant limitations on the fund's ability to
hedge effectively against the currency risks associated with its portfolio
investments.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries and the U.S.,
and other economic and financial conditions affecting the world economy.
Although the fund values its assets daily in terms of U.S. dollars, the fund
does not intend to convert its holdings of non-U.S. currencies into U.S. dollars
on a daily basis. The fund may do so from time to time, however, and investors
should be aware of the costs of currency conversion. Although currency dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a non-U.S. currency to the fund at
one rate, while offering a lesser rate of exchange should the fund desire to
sell that currency to the dealer.
Custodian Services and Related Investment Costs. Custodial services and other
costs relating to investment in international securities markets generally are
more expensive than in the U.S. Such markets have settlement and clearance
procedures that differ from those in the U.S. In certain markets there have been
times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the fund to make intended securities purchases due to settlement
problems could cause the fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the fund due to a subsequent decline in value of the
portfolio security or could result in possible liability to the fund. In
addition, security settlement and clearance procedures in some emerging
countries may not fully protect the fund against loss or theft of its assets.
Withholding and Other Taxes. The fund will be subject to taxes, including
withholding taxes, on income (possibly including, in some cases, capital gains)
that are or may be imposed by certain countries with respect to the fund's
investments in such countries. These taxes will reduce the return achieved by
the fund. Treaties between the U.S. and such countries may not be available to
reduce the otherwise applicable tax rates.
7
Economic Monetary Union (EMU). On January 1, 1999, 11 European countries adopted
a single currency - the Euro. The conversion to the Euro is being phased in over
a three-year period. During this time, valuation, systems and other operational
problems may occur in connection with the fund's investments quoted in the Euro.
For participating countries, EMU will mean sharing a single currency and single
official interest rate and adhering to agreed upon limits on government
borrowing. Budgetary decisions will remain in the hands of each participating
country but will be subject to each country's commitment to avoid "excessive
deficits" and other more specific budgetary criteria. A European Central Bank is
responsible for setting the official interest rate to maintain price stability
within the Euro zone.
EMU is driven by the expectation of a number of economic benefits, including
lower transaction costs, reduced exchange risk, greater competition, and a
broadening and deepening of European financial markets. However, there are a
number of significant risks associated with EMU. Monetary and economic union on
this scale has never been attempted before. There is a significant degree of
uncertainty as to whether participating countries will remain committed to EMU
in the face of changing economic conditions. This uncertainty may increase the
volatility of European markets.
Investments in Depositary Receipts. The fund may hold securities of non-U.S.
issuers in the form of American Depositary Receipts ("ADRs"), European
Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs") and other
similar instruments. Generally, ADRs in registered form are designed for use in
U.S. securities markets, and EDRs and GDRs and other similar global instruments
in bearer form are designed for use in non-U.S. securities markets.
ADRs are denominated in U.S. dollars and represent an interest in the right to
receive securities of non-U.S. issuers deposited in a U.S. bank or correspondent
bank. ADRs do not eliminate all the risk inherent in investing in the securities
of non-U.S. issuers. However, by investing in ADRs rather than directly in
equity securities of non-U.S. issuers, the fund will avoid currency risks during
the settlement period for either purchases or sales. EDRs and GDRs are not
necessarily denominated in the same currency as the underlying securities which
they represent.
Russian Depositary Trust Certificates ("RDCs") are offered through a unit trust
with one or more sub-trusts in which each RDC represents a fractional undivided
beneficial interest in a specific sub-trust. Each sub-trust holds as its only
assets the shares of a single Russian issuer. RDCs are generally not denominated
in the same currency as the underlying security that they represent. Voting
rights for an RDC holder of any Russian company are not direct and the trust
votes in accordance with the wishes of the majority of the RDC holders of such
company. RDCs are subject to the risks inherent in a direct investment in any
Russian issuer's shares, including the possibility of adverse changes in the
Russian government and Russian securities regulations, and certain RDC-specific
risks such as custodial, title and registration risk and the volatility of the
Russian secondary securities market. RDCs are considered to be Rule 144A
securities under the 1933 Act.
For purposes of the fund's investment policies, investments in ADRs, GDRs, RDCs
and similar instruments will be deemed to be investments in the underlying
equity securities of non-U.S. issuers. The fund may acquire depositary receipts
from banks that do not have a contractual relationship with the issuer of the
security underlying the depositary receipt to issue and secure such depositary
receipt. To the extent the fund invests in such unsponsored depositary receipts
there may be an increased possibility that the fund may not become aware of
events affecting the underlying security and thus the value of the related
depositary receipt. In addition, certain benefits (i.e., rights offerings) which
may be associated
8
with the security underlying the depositary receipt may not inure to the benefit
of the holder of such depositary receipt.
Other Investment Companies
The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment objective
and policies and permissible under the Investment Company Act of 1940, as
amended (the "1940 Act"). Under the 1940 Act, the fund may not acquire the
securities of other domestic or non-U.S. investment companies if, as a result,
(i) more than 10% of the fund's total assets would be invested in securities of
other investment companies, (ii) such purchase would result in more than 3% of
the total outstanding voting securities of any one investment company being held
by the fund, or (iii) more than 5% of the fund's total assets would be invested
in any one investment company. These limitations do not apply to the purchase of
shares of any investment company in connection with a merger, consolidation,
reorganization or acquisition of substantially all the assets of another
investment company. The fund will not invest in other investment companies for
which Pioneer or any of its affiliates act as an investment adviser or
distributor.
The fund, as a holder of the securities of other investment companies, will bear
its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
fund's own operations.
Repurchase Agreements
The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with the difference being income to the fund. Under the
direction of the Board of Trustees, Pioneer reviews and monitors the
creditworthiness of any institution which enters into a repurchase agreement
with the fund. The counterparty's obligations under the repurchase agreement are
collateralized with U.S. Treasury and/or agency obligations with a market value
of not less than 100% of the obligations, valued daily. Collateral is held by
the fund's custodian in a segregated, safekeeping account for the benefit of the
fund. Repurchase agreements afford the fund an opportunity to earn income on
temporarily available cash at low risk. In the event of commencement of
bankruptcy or insolvency proceedings with respect to the seller of the security
before repurchase of the security under a repurchase agreement, the fund may
encounter delay and incur costs before being able to sell the security. Such a
delay may involve loss of interest or a decline in price of the security. If the
court characterizes the transaction as a loan and the fund has not perfected a
security interest in the security, the fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the fund would be at risk of losing some or
all of the principal and interest involved in the transaction.
Asset Segregation
The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the fund's
portfolio. If the fund enters into a transaction requiring segregation, such as
a forward commitment, the custodian or Pioneer will segregate liquid assets in
an amount required to comply with the 1940 Act. Such segregated assets will be
valued at market daily. If
9
the aggregate value of such segregated assets declines below the aggregate value
required to satisfy the 1940 Act, additional liquid assets will be segregated.
When-Issued and Delayed Delivery Securities
The fund may purchase securities, including U.S. government securities, on a
when-issued basis or may purchase or sell securities for delayed delivery. In
such transactions, delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The fund will
not earn income on these securities until delivered. The purchase of securities
on a when-issued or delayed delivery basis involves the risk that the value of
the securities purchased will decline prior to the settlement date. The sale of
securities for delayed delivery involves the risk that the prices available in
the market on the delivery date may be greater than those obtained in the sale
transaction. When-issued and delayed delivery transactions will be fully
collateralized by segregating liquid assets. See "Asset Segregation."
Portfolio Turnover
It is the policy of the fund not to engage in trading for short-term profits
although portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater transaction costs which
must be borne by the fund and its shareholders. See Appendix A for the fund's
annual portfolio turnover rate.
Foreign Currency Transactions
The fund may engage in foreign currency transactions. These transactions may be
conducted at the prevailing spot rate for purchasing or selling currency in the
foreign exchange market. The fund also has authority to enter into forward
foreign currency exchange contracts involving currencies of the different
countries in which the fund invests as a hedge against possible variations in
the foreign exchange rates between these currencies and the U.S. dollar. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the contract.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the fund, accrued
in connection with the purchase and sale of its portfolio securities quoted in
foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the fund will be engaged in
hedging activities when adverse exchange rate movements occur. The fund will not
attempt to hedge all of its foreign portfolio positions and will enter into such
transactions only to the extent, if any, deemed appropriate by Pioneer.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the fund to hedge against a devaluation that is so generally
anticipated that the fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency, if Pioneer determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include entering
into a
10
forward transaction involving two foreign currencies, using one foreign currency
as a proxy for the U.S. dollar to hedge against variations in the other foreign
currency, if Pioneer determines that there is a pattern of correlation between
the proxy currency and the U.S. dollar.
The cost to the fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the size of the contract, the length of
the contract period, differences in interest rates between the two currencies
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward contracts to
protect the value of the fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which the fund can
achieve at some future point in time. The precise projection of short-term
currency market movements is not possible, and short-term hedging provides a
means of fixing the U.S. dollar value of only a portion of the fund's foreign
assets.
While the fund will enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. While
the fund may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the fund than if it had
not engaged in any such transactions. Moreover, there may be imperfect
correlation between the fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by the
fund. Such imperfect correlation may cause the fund to sustain losses which will
prevent the fund from achieving a complete hedge or expose the fund to risk of
foreign exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer
less protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the fund of unrealized profits or force the fund to cover its
commitments for purchase or resale, if any, at the current market price.
If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
Options on Foreign Currencies
The fund may purchase and write options on foreign currencies for hedging
purposes in a manner similar to that of transactions in forward contracts. For
example, a decline in the dollar value of a foreign currency in which portfolio
securities are quoted or denominated will reduce the dollar value of such
securities, even if their value in the foreign currency remains constant. In an
attempt to protect against such decreases in the value of portfolio securities,
the fund may purchase put options on the foreign currency. If the value of the
currency declines, the fund will have the right to sell such currency for a
fixed amount of dollars which exceeds the market value of such currency. This
would result in a gain that
11
may offset, in whole or in part, the negative effect of currency depreciation on
the value of the fund's securities quoted or denominated in that currency.
Conversely, if a rise in the dollar value of a currency is projected for those
securities to be acquired, thereby increasing the cost of such securities, the
fund may purchase call options on such currency. If the value of such currency
increases, the purchase of such call options would enable the fund to purchase
currency for a fixed amount of dollars which is less than the market value of
such currency. Such a purchase would result in a gain that may offset, at least
partially, the effect of any currency related increase in the price of
securities the fund intends to acquire. As in the case of other types of options
transactions, however, the benefit the fund derives from purchasing foreign
currency options will be reduced by the amount of the premium and related
transaction costs. In addition, if currency exchange rates do not move in the
direction or to the extent anticipated, the fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
The fund may also write options on foreign currencies for hedging purposes. For
example, if the fund anticipated a decline in the dollar value of securities
quoted or denominated in a foreign currency because of declining exchange rates,
it could, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the decrease in value of portfolio securities will be
partially offset by the amount of the premium received by the fund.
Similarly, the fund could write a put option on the relevant currency, instead
of purchasing a call option, to hedge against an anticipated increase in the
dollar cost of securities to be acquired. If exchange rates move in the manner
projected, the put option will expire unexercised and allow the fund to offset
such increased cost up to the amount of the premium. However, as in the case of
other types of options transactions, the writing of a foreign currency option
will constitute only a partial hedge up to the amount of the premium, only if
rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the fund would be required
to purchase or sell the underlying currency at a loss which may not be fully
offset by the amount of the premium. As a result of writing options on foreign
currencies, the fund also may be required to forego all or a portion of the
benefits which might otherwise have been obtained from favorable movements in
currency exchange rates.
A call option written on foreign currency by the fund is "covered" if the fund
owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency without additional
cash consideration. A call option is also covered if the fund holds a call on
the same foreign currency for the same principal amount as the call written
where the exercise price of the call held is (a) equal to or less than the
exercise price of the call written or (b) greater than the exercise price of the
call written if the amount of the difference is maintained by the fund in cash
or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the
option it has purchased or entering into an offsetting option. An
exchange-traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series. Although the
fund will generally purchase or write only those options for which there appears
to be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time. For some options no secondary market on an exchange may exist. In such
event, it might not be possible to effect closing transactions in particular
options, with the result that the fund would have to exercise its options in
order to realize any profit and would incur transaction costs
12
upon the sale of underlying currencies pursuant to the exercise of put options.
If the fund as a covered call option writer is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying currency (or security quoted or denominated in that currency) until
the option expires or it delivers the underlying currency upon exercise.
The fund may also use options on currencies to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates of a different currency with a pattern of correlation.
Cross-hedging may also include using a foreign currency as a proxy for the U.S.
dollar if Pioneer determines that there is a pattern of correlation between that
currency and the U.S. dollar.
The fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by the fund.
Options on Securities and Securities Indices
The fund may purchase put and call options on any security in which it may
invest or options on any securities index based on securities in which it may
invest. The fund would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options it has purchased.
Writing Call and Put Options on Securities. A call option written by the fund
obligates the fund to sell specified securities to the holder of the option at a
specified price if the option is exercised at any time before the expiration
date. All call options written by the fund are covered, which means that the
fund will own the securities subject to the options as long as the options are
outstanding, or the fund will use the other methods described below. The fund's
purpose in writing covered call options is to realize greater income than would
be realized on portfolio securities transactions alone. However, the fund may
forego the opportunity to profit from an increase in the market price of the
underlying security.
A put option written by the fund would obligate the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. All put options written by the
fund would be covered, which means that the fund would have segregated assets
with a value at least equal to the exercise price of the put option. The purpose
of writing such options is to generate additional income for the fund. However,
in return for the option premium, the fund accepts the risk that it may be
required to purchase the underlying security at a price in excess of its market
value at the time of purchase.
Call and put options written by the fund will also be considered to be covered
to the extent that the fund's liabilities under such options are wholly or
partially offset by its rights under call and put options purchased by the fund.
In addition, a written call option or put may be covered by entering into an
offsetting forward contract and/or by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise, reduces the
fund's net exposure on its written option position.
Writing Call and Put Options on Securities Indices. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
13
The fund may cover call options on a securities index by owning securities whose
price changes are expected to be similar to those of the underlying index, or by
having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional consideration if cash in such
amount is segregated) upon conversion or exchange of other securities in its
portfolio. The fund may cover call and put options on a securities index by
segregating assets with a value equal to the exercise price.
Purchasing Call and Put Options. The fund would normally purchase call options
in anticipation of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle the fund, in
return for the premium paid, to purchase specified securities at a specified
price during the option period. The fund would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of the fund's securities. Put
options may also be purchased by the fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.
The fund may terminate its obligations under an exchange-traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
Risks of Trading Options. There is no assurance that a liquid secondary market
on an options exchange will exist for any particular exchange-traded option, or
at any particular time. If the fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not be
able to sell the underlying securities or dispose of its segregated assets until
the options expire or are exercised. Similarly, if the fund is unable to effect
a closing sale transaction with respect to options it has purchased, it will
have to exercise the options in order to realize any profit and will incur
transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular class
or series of options), in which event the secondary market on that exchange (or
in that class or series of options) would cease to exist, although outstanding
14
options on that exchange, if any, that had been issued by the OCC as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms.
The fund may purchase and sell both options that are traded on U.S. and non-U.S.
exchanges and options traded over the counter with broker-dealers who make
markets in these options. The ability to terminate over-the-counter options is
more limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations. Until such time as the staff of the Securities and Exchange
Commission (the "SEC") changes its position, the fund will treat purchased
over-the-counter options and all assets used to cover written over-the-counter
options as illiquid securities, except that with respect to options written with
primary dealers in U.S. government securities pursuant to an agreement requiring
a closing purchase transaction at a formula price, the amount of illiquid
securities may be calculated with reference to the formula.
Transactions by the fund in options on securities and indices will be subject to
limitations established by each of the exchanges, boards of trade or other
trading facilities governing the maximum number of options in each class which
may be written or purchased by a single investor or group of investors acting in
concert. Thus, the number of options which the fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
Pioneer. An exchange, board of trade or other trading facility may order the
liquidations of positions found to be in excess of these limits, and it may
impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on Pioneer's ability to predict future
price fluctuations and the degree of correlation between the options and
securities markets.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that cannot be reflected in the options
markets.
In addition to the risks of imperfect correlation between the fund's portfolio
and the index underlying the option, the purchase of securities index options
involves the risk that the premium and transaction costs paid by the fund in
purchasing an option will be lost. This could occur as a result of unanticipated
movements in the price of the securities comprising the securities index on
which the option is based.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or currency exchange rates or to
seek to increase total return, the fund may purchase and sell various kinds of
futures contracts, and purchase and write (sell) call and put options on any of
such futures contracts. The fund may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. government
securities), securities indices, non-U.S. currencies and other financial
instruments and indices. The fund will engage in futures and related options
transactions for bona fide hedging and non-hedging purposes as described below.
All futures contracts entered into by the fund are traded on U.S. exchanges or
boards of trade that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC") or on non-U.S. exchanges.
15
Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The fund can
purchase futures contracts on a non-U.S. currency to establish the price in U.S.
dollars of a security denominated in such currency that the fund has acquired or
expects to acquire.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities or currency will usually be
liquidated in this manner, the fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
Hedging Strategies. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the fund owns or proposes to
acquire. The fund may, for example, take a "short" position in the futures
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or non-U.S. currency rates
that would adversely affect the value of the fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by the fund or securities with characteristics similar to those of the
fund's portfolio securities. Similarly, the fund may sell futures contracts in a
non-U.S. currency in which its portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of Pioneer, there is
a sufficient degree of correlation between price trends for the fund's portfolio
securities and futures contracts based on other financial instruments,
securities indices or other indices, the fund may also enter into such futures
contracts as part of its hedging strategies. Although under some circumstances
prices of securities in the fund's portfolio may be more or less volatile than
prices of such futures contracts, Pioneer will attempt to estimate the extent of
this volatility difference based on historical patterns and compensate for any
such differential by having the fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against price
changes affecting the fund's portfolio securities. When hedging of this
character is successful, any depreciation in the value of portfolio securities
will be substantially offset by appreciation in the value of the futures
position. On the other hand, any unanticipated appreciation in the value of the
fund's portfolio securities would be substantially offset by a decline in the
value of the futures position.
On other occasions, the fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
16
Options on Futures Contracts. The acquisition of put and call options on futures
contracts will give the fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of the fund's assets. By writing a call
option, the fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that the fund intends to purchase. However, the fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The fund will incur transaction costs in connection
with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
Other Considerations. The fund will engage in futures and related options
transactions only for bona fide hedging or non-hedging purposes in accordance
with CFTC regulations which permit principals of an investment company
registered under the 1940 Act to engage in such transactions without registering
as commodity pool operators. The fund will determine that the price fluctuations
in the futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the fund or
which the fund expects to purchase. Except as stated below, the fund's futures
transactions will be entered into for traditional hedging purposes--i.e.,
futures contracts will be sold to protect against a decline in the price of
securities (or the currency in which they are denominated) that the fund owns,
or futures contracts will be purchased to protect the fund against an increase
in the price of securities (or the currency in which they are denominated) it
intends to purchase. As evidence of this hedging intent, the fund expects that
on 75% or more of the occasions on which it takes a long futures or option
position (involving the purchase of futures contracts), the fund will have
purchased, or will be in the process of purchasing, equivalent amounts of
related securities or assets denominated in the related currency in the cash
market at the time when the futures or option position is closed out. However,
in particular cases, when it is economically advantageous for the fund to do so,
a long futures position may be terminated or an option may expire without the
corresponding purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the fund to elect to comply with a different test, under
which the sum of the amounts of initial margin deposits on the fund's existing
non-hedging futures contracts and premiums paid for options on futures entered
into for non-hedging purposes (net of the amount the positions are "in the
money") would not exceed 5% of the market value of the fund's total assets. The
fund will engage in transactions in futures contracts and related options only
to the extent such transactions are consistent with the requirements of the
Internal Revenue Code of 1986, as amended (the "Code"), for maintaining its
qualification as a regulated investment company for federal income tax purposes.
17
Futures contracts and related options involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the fund to
purchase securities or currencies, require the fund to segregate assets to cover
such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and the
fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of non-U.S.
securities because currency movements impact the value of different securities
in differing degrees.
Warrants and Stock Purchase Rights
The fund may invest in warrants, which are securities permitting, but not
obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer.
The fund may also invest in stock purchase rights. Stock purchase rights are
instruments, frequently distributed to an issuer's shareholders as a dividend,
that entitle the holder to purchase a specific number of shares of common stock
on a specific date or during a specific period of time. The exercise price on
the rights is normally at a discount from market value of the common stock at
the time of distribution. The rights do not carry with them the right to
dividends or to vote and may or may not be transferable. Stock purchase rights
are frequently used outside of the United States as a means of raising
additional capital from an issuer's current shareholders.
As a result, an investment in warrants or stock purchase rights may be
considered more speculative than certain other types of investments. In
addition, the value of a warrant or a stock purchase right does not necessarily
change with the value of the underlying securities, and warrants and stock
purchase rights expire worthless if they are not exercised on or prior to their
expiration date.
Preferred Shares
The fund may invest in preferred shares of beneficial interest of trust
instruments. Preferred shares are equity securities, but they have many
characteristics of fixed income securities, such as a fixed dividend payment
rate and/or a liquidity preference over the issuer's common shares. However,
because preferred shares are equity securities, they may be more susceptible to
risks traditionally associated with equity investments than the fund's fixed
income securities.
Lending of Portfolio Securities
The fund may lend portfolio securities to member firms of the New York Stock
Exchange (the "Exchange") under agreements which require that the loans be
secured continuously by collateral in cash, cash equivalents or U.S. Treasury
bills maintained on a current basis at an amount at least equal to the market
value of the securities loaned. The fund continues to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned as well as
the benefit of an increase and the detriment
18
of any decrease in the market value of the securities loaned and would also
receive compensation based on investment of the collateral. The fund would not,
however, have the right to vote any securities having voting rights during the
existence of the loan, but would call the loan in anticipation of an important
vote to be taken among holders of the securities or of the giving or withholding
of consent on a material matter affecting the investment.
As with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The fund will lend portfolio securities only to firms that have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 33 1/3% of the value of the fund's total assets.
Investment Restrictions
The fund does not intend to enter into any reverse repurchase agreement, lend
portfolio securities or invest in securities index put and call warrants, as
described in fundamental investment restrictions (2), (6) and (7) during the
current fiscal year.
Fundamental Investment Restrictions. The fund has adopted certain fundamental
investment restrictions which, along with the fund's investment objective, may
not be changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the fund. For
this purpose, a majority of the outstanding shares of the fund means the vote of
the lesser of:
(i) 67% or more of the shares represented at a meeting, if the holders of more
than 50% of the outstanding shares are present in person or by proxy, or
(ii) more than 50% of the outstanding shares of the fund.
The fund may not:
(1) Issue senior securities, except as permitted by paragraphs (2), (6) and (7)
below. For purposes of this restriction, the issuance of shares of beneficial
interest in multiple classes or series, the purchase or sale of options, futures
contracts and options on future contracts, forward commitments, forward foreign
exchange contracts, repurchase agreements and reverse repurchase agreements
entered into in accordance with the fund's investment policy, and the pledge,
mortgage or hypothecation of the fund's assets within the meaning of paragraph
(3) below are not deemed to be senior securities.
(2) Borrow money, except from banks as a temporary measure for extraordinary
emergency purposes and except pursuant to reverse repurchase agreements and then
only in amounts not to exceed 33 1/3% of the fund's total assets (including the
amount borrowed) taken at market value. The fund will not use leverage to
attempt to increase income. The fund will not purchase securities while
outstanding borrowings (including reverse repurchase agreements) exceed 5% of
the fund's total assets.
(3) Pledge, mortgage, or hypothecate its assets, except to secure indebtedness
permitted by paragraph (2) above and then only if such pledging, mortgaging or
hypothecating does not exceed 33 1/3% of the fund's total assets taken at market
value.
19
(4) Act as an underwriter, except to the extent that, in connection with the
disposition of portfolio securities, the fund may be deemed to be an underwriter
for purposes of the 1993 Act.
(5) Purchase or sell real estate, except that the fund may (i) lease office
space for its own use, (ii) invest in securities of issuers that invest in real
estate or interests therein, (iii) invest in securities that are secured by real
estate or interests therein, (iv) purchase and sell mortgage-related securities
and (v) hold and sell real estate acquired by the fund as a result of the
ownership of securities.
(6) Make loans, except that the fund may lend portfolio securities in accordance
with the fund's investment policies and may purchase or invest in repurchase
agreements, bank certificates of deposit, a portion of an issue of publicly
distributed bonds, bank loan participation agreements, bankers' acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities.
(7) Invest in commodities or commodity contracts or in puts, calls, or
combinations of both, except interest rate futures contracts, options on
securities, securities indices, currency and other financial instruments,
futures contracts on securities, securities indices, currency and other
financial instruments and options on such futures contracts, forward foreign
currency exchange contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with the fund's
investment policies.
(8) With respect to 75% of its total assets, purchase securities of an issuer
(other than the U.S. government, its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the fund's total assets,
taken at market value, to be invested in the securities of such issuer,
or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the fund.
It is the fundamental policy of the fund not to concentrate its investments in
securities of companies in any particular industry. A fund's investments are
concentrated in a particular industry if such investments aggregate 25% or more
of the fund's net assets. The fund's policy on industry concentration does not
apply to investments in U.S. government securities.
Non-Fundamental Investment Restrictions. The following lists non-fundamental
investment restrictions applicable to the fund. These non-fundamental
restrictions may be changed by a vote of the Board of Trustees without
shareholder approval. The fund may not: (a) purchase securities "on margin" or
effect "short sales" of securities or (b) invest for the purpose of exercising
control over or management of any company.
3. MANAGEMENT OF THE FUND
The fund's Board of Trustees provides broad supervision over the affairs of the
fund. The officers of the fund are responsible for the fund's operations. The
Trustees and executive officers of the fund are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the fund within the meaning of the
1940 Act.
20
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
Director-Deputy Chairman of Pioneer Global Asset Management S.p.A. ("PGAM");
Non-Executive Chairman and a Director of Pioneer Investment Management USA Inc.
("PIM-USA"); Chairman and a Director of Pioneer and Pioneer Global Funds
Distributor, Ltd.; President and Director of Pioneer International Corporation
("PIntl"); Member of the Supervisory Board of Pioneer Fonds Marketing GmbH,
Pioneer First Polish Investment Fund Joint Stock Company ("Pioneer First
Polish"), Pioneer Czech Investment Company, a.s. ("Pioneer Czech") and Pioneer
Universal Pension Fund Company; Chairman, President and Trustee of all of the
Pioneer mutual funds; Director of Pioneer America Fund Plc, Pioneer Global
Equity Fund Plc, Pioneer Global Bond Fund Plc, Pioneer Euro Reserve Fund Plc,
Pioneer European Equity Fund Plc, Pioneer Emerging Europe Fund Plc, Pioneer
Greater Asia Fund Plc, Pioneer U.S. Growth Fund Plc, Pioneer U.S. High Yield
Fund Plc and Pioneer US Real Estate Fund Plc; and Of Counsel, Hale and Dorr LLP
(counsel to PIM-USA and the fund).
MARY K. BUSH, Trustee, DOB: April 1948
4201 Cathedral Avenue, NW, Washington, DC 20016
President, Bush & Co. (international financial advisory firm); Director and/or
Trustee of Mortgage Guaranty Insurance Corporation, Hoover Institution, March of
Dimes, Texaco, Inc., R.J. Reynolds Tobacco Holdings, Inc. and Brady Corporation
(industrial identification and specialty coated material products manufacturer);
Advisory Board Member, Washington Mutual Investors Fund (registered investment
company); and Trustee of all of the Pioneer mutual funds.
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Healthcare Entrepreneurship Program, 53 Bay State Road,
Boston, MA 02215
Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston
University; Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; University Professor, Boston
University; Director, Boston University Health Policy Institute, University
Program for Health Care Entrepreneurship; Trustee, Boston Medical Center; and
Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110, Little Deer Isle, ME 04650
Founding Director, The Winthrop Group, Inc. (consulting firm); and Trustee of
all of the Pioneer mutual funds.
21
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, 26th Floor, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm); Trustee of
Boston Medical Center; Member of the Board of Governors of the Investment
Company Institute; Director, Organogenesis Inc. (tissue engineering company);
and Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Chief Executive Officer-Pioneer US of PGAM; Director, Chief Executive Officer
and President of PIM-USA; Chairman and a Director of Pioneer Funds Distributor,
Inc. ("PFD"); President and a Director of Pioneer; Director of Pioneer
Investment Management Shareholder Services, Inc. ("PIMSS") and PIntl; Member of
the Supervisory Board of Pioneer First Polish, Pioneer Czech and Pioneer Asset
Management, S.A.; and Executive Vice President and Trustee of all of the Pioneer
mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Of Counsel, Sullivan & Cromwell (law firm); Director, Dresdner RCM Global
Strategic Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc.
since 1995 (investment companies), AMVESCAP PLC (investment managers) since 1997
and ING American Insurance Holdings, Inc.; and Trustee of all of the Pioneer
mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of NUI
Corp. (energy sales, services and distribution); and Trustee of all of the
Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Corporate Secretary of PIM-USA and most of its subsidiaries until October 2000;
Secretary of all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP.
VINCENT NAVE, Treasurer, DOB: June 1945
Vice President-Fund Accounting and Custody Services of PIM-USA (Manager from
September 1996 to February 1999); and Treasurer of all of the Pioneer mutual
funds (Assistant Treasurer from June 1999 to November 2000).
22
LUIS I. PRESUTTI, Assistant Treasurer, DOB: April 1965
Assistant Vice President-Fund Accounting, Administration and Custody Services of
Pioneer (Fund Accounting Manager from 1994 to 1999); and Assistant Treasurer of
all of the Pioneer mutual funds since November 2000.
JOHN F. DALY III, Assistant Treasurer, DOB: August 1965
Global Custody and Settlement Division Manager of PIM-USA; and Assistant
Treasurer of all of the Pioneer mutual funds since November 2000.
DOROTHY E. BOURASSA, Assistant Secretary, DOB: January 1948
Senior Vice President-Legal and Secretary of PIM-USA and Secretary/Clerk of most
of its subsidiaries since October 2000; Assistant Secretary of all of the
Pioneer mutual funds since November 2000; Senior Counsel, Assistant Vice
President and Director of Compliance of PIM-USA from April 1998 through October
2000; Vice President and Assistant General Counsel, First Union Corporation from
December 1996 through March 1998; and Vice President and Counsel, Keystone
Investments, Inc. from March 1986 through November 1996.
The business address of all officers is 60 State Street, Boston, Massachusetts
02109.
All of the outstanding capital stock of PFD, Pioneer and PIMSS is indirectly
majority owned by UniCredito Italiano S.p.A. ("UniCredito Italiano"), one of the
largest banking groups in Italy. Pioneer, the fund's investment adviser,
provides investment management and financial services to mutual funds,
institutional and other clients.
The table below lists all of the U.S.-registered Pioneer mutual funds currently
offered to the public and the investment adviser and principal underwriter for
each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund Pioneer PFD
Pioneer Europe Fund Pioneer PFD
Pioneer World Equity Fund Pioneer PFD
Pioneer Emerging Markets Fund Pioneer PFD
Pioneer Indo-Asia Fund Pioneer PFD
Pioneer Mid-Cap Value Fund Pioneer PFD
Pioneer Mid-Cap Fund Pioneer PFD
Pioneer Growth Shares Pioneer PFD
Pioneer Small Company Fund Pioneer PFD
Pioneer Independence Fund Pioneer Note 1
Pioneer Micro-Cap Fund Pioneer PFD
23
Pioneer Balanced Fund Pioneer PFD
Pioneer Equity-Income Fund Pioneer PFD
Pioneer Fund Pioneer PFD
Pioneer II Pioneer PFD
Pioneer Real Estate Shares Pioneer PFD
Pioneer Limited Maturity Bond Fund Pioneer PFD
Pioneer America Income Trust Pioneer PFD
Pioneer Bond Fund Pioneer PFD
Pioneer Tax-Free Income Fund Pioneer PFD
Pioneer Cash Reserves Fund Pioneer PFD
Pioneer Strategic Income Fund Pioneer PFD
Pioneer Tax-Managed Fund Pioneer PFD
Pioneer High Yield Fund Pioneer PFD
Pioneer Science & Technology Fund Pioneer PFD
Pioneer Europe Select Fund Pioneer PFD
Pioneer Global Financials Fund Pioneer PFD
Pioneer Global Health Care Fund Pioneer PFD
Pioneer Global Telecoms Fund Pioneer PFD
Pioneer Interest Shares Pioneer Note 2
Pioneer Variable Contracts Trust Pioneer Note 3
Note 1 This fund is available to the general public only through Pioneer
Independence Plans, a systematic investment plan sponsored by PFD.
Note 2 This fund is a closed-end fund.
Note 3 This is a series of 16 separate portfolios designed to provide investment
tttrvehicles for the variable annuity and variable life insurance contracts of
various insurance companies or for certain qualified pension plans.
Share Ownership
See Appendix A for annual information on the ownership of fund shares by the
Trustees, the fund's officers and owners in excess of 5% of any class of shares
of the fund.
Compensation of Officers and Trustees
The fund pays no salaries or compensation to any of its officers. Effective
October 3, 2000, the Pioneer U.S. mutual funds compensate their Trustees as
follows:
o each fund with assets greater than $250 million pays each Trustee who is
not affiliated with PIM-USA, Pioneer, PFD, PIMSS or UniCredito Italiano
(i.e., independent trustees) an annual base fee calculated on the basis of
the fund's net assets.
o each fund with assets less than $250 million pays each independent Trustee
an annual fee of $1,000.
o each fund, regardless of its assets, pays each Trustee affiliated with
Pioneer an annual fee of $500 (Pioneer reimburses the fund for these fees).
24
o each fund with assets greater than $250 million pays each independent
Trustee who serves on each board committee an annual committee fee based
the fund's net assets (with additional compensation for chairpersons of
such committees).
Prior to October 3, 2000, the fund compensated each independent Trustee with a
base fee, a variable fee calculated on the basis of average net assets of the
fund, per meeting fees, and annual committee participation fees for each
committee member or chairperson that were based on percentages of his or her
aggregate annual fee. See the fee table in Appendix A.
Sales Loads. Current and former Trustees and officers of the fund and other
qualifying persons may purchase the fund's Class A shares without an initial
sales charge.
4. INVESTMENT ADVISER
The fund has contracted with Pioneer to act as its investment adviser. Pioneer
is a majority owned subsidiary of UniCredito Italiano. Certain Trustees or
officers of the fund are also directors and/or officers of certain of UniCredito
Italiano's subsidiaries (see management biographies above).
As the fund's investment adviser, Pioneer provides the fund with investment
research, advice and supervision and furnishes an investment program for the
fund consistent with the fund's investment objective and policies, subject to
the supervision of the fund's Trustees. Pioneer determines what portfolio
securities will be purchased or sold, arranges for the placing of orders for the
purchase or sale of portfolio securities, selects brokers or dealers to place
those orders, maintains books and records with respect to the fund's securities
transactions, and reports to the Trustees on the fund's investments and
performance.
Under the terms of its management contract with the fund, Pioneer pays all the
operating expenses, including executive salaries and the rental of office space,
relating to its services for the fund, with the exception of the following,
which are paid by the fund: (a) charges and expenses for fund accounting,
pricing and appraisal services and related overhead, including, to the extent
such services are performed by personnel of Pioneer or its affiliates, office
space and facilities and personnel compensation, training and benefits; (b) the
charges and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed by
the fund; (d) issue and transfer taxes chargeable to the fund in connection with
securities transactions to which the fund is a party; (e) insurance premiums,
interest charges, dues and fees for membership in trade associations and all
taxes and corporate fees payable by the fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the fund and/or its shares with federal regulatory
agencies, state or blue sky securities agencies and foreign jurisdictions,
including the preparation of prospectuses and statements of additional
information for filing with such regulatory authorities; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and distributing
prospectuses, notices, proxy statements and all reports to shareholders and to
governmental agencies; (h) charges and expenses of legal counsel to the fund and
the Trustees; (i) distribution fees paid by the fund in accordance with Rule
12b-1 promulgated by the SEC pursuant to the 1940 Act; (j) compensation of those
Trustees of the fund who are not affiliated with or interested persons of
Pioneer, the fund (other than as Trustees), PIM-USA or PFD; (k) the cost of
preparing and printing share certificates; and (l) interest on borrowed money,
if any. In addition, the fund shall pay all brokers' and underwriting
commissions chargeable to the fund in connection with securities transactions to
which the fund is a party. The Trustees' approval of and the terms, continuance
and termination of the management contract are governed by the 1940 Act and the
Investment Advisers Act of 1940, as
25
applicable. Pursuant to the management contract, Pioneer will not be liable for
any error of judgment or mistake of law or for any loss sustained by reason of
the adoption of any investment policy or the purchase, sale or retention of any
securities on the recommendation of Pioneer. Pioneer, however, is not protected
against liability by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the management contract.
Advisory Fee. As compensation for its management services and expenses incurred,
the fund pays Pioneer a fee at the annual rate of 1.25% of the fund's average
daily net assets. The fee is computed and accrued daily and paid monthly.
See the table in Appendix A for management fees paid to Pioneer during recently
completed fiscal years.
Administration Agreement. The fund has entered into an administration agreement
with Pioneer pursuant to which certain accounting and legal services which are
expenses payable by the fund under the management contract are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services. See Appendix A for fees the fund paid to Pioneer for
administration and related services.
Potential Conflict of Interest. The fund is managed by Pioneer which also serves
as investment adviser to other Pioneer mutual funds and private accounts with
investment objectives identical or similar to those of the fund. Securities
frequently meet the investment objectives of the fund, the other Pioneer mutual
funds and such private accounts. In such cases, the decision to recommend a
purchase to one fund or account rather than another is based on a number of
factors. The determining factors in most cases are the amount of securities of
the issuer then outstanding, the value of those securities and the market for
them. Other factors considered in the investment recommendations include other
investments which each fund or account presently has in a particular industry
and the availability of investment funds in each fund or account.
It is possible that at times identical securities will be held by more than one
fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that more than one of the Pioneer
mutual funds or a private account managed by Pioneer seeks to acquire the same
security at about the same time, the fund may not be able to acquire as large a
position in such security as it desires or it may have to pay a higher price for
the security. Similarly, the fund may not be able to obtain as large an
execution of an order to sell or as high a price for any particular portfolio
security if Pioneer decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the fund. In the event more than one account purchases or sells the same
security on a given date, the purchases and sales will normally be made as
nearly as practicable on a pro rata basis in proportion to the amounts desired
to be purchased or sold by each account. Although the other Pioneer mutual funds
may have the same or similar investment objectives and policies as the fund,
their portfolios do not generally consist of the same investments as the fund or
each other, and their performance results are likely to differ from those of the
fund.
Personal Securities Transactions. The fund, Pioneer and PFD have adopted a code
of ethics under Rule 17j-1 of the 1940 Act which is applicable to officers,
trustees/directors and designated employees. The code permits such persons to
engage in personal securities transactions for their own accounts, including
securities that may be purchased or held by the fund, and is designed to
prescribe means reasonably
26
necessary to prevent conflicts of interest from arising in connection with
personal securities transactions. The code is on public file with and available
from the SEC.
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS
Principal Underwriter
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is an
indirect wholly owned subsidiary of PIM-USA.
The fund entered into an underwriting agreement with PFD which provides that PFD
will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed or compensated by the fund
under the distribution plans (discussed below). PFD bears all expenses it incurs
in providing services under the underwriting agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution-related services performed for the fund. PFD also pays certain
expenses in connection with the distribution of the fund's shares, including the
cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
non-U.S. countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.
See "Class A Share Sales Charges" for the schedule of initial sales charge
reallowed to dealers as a percentage of the offering price of the fund's Class A
shares.
See the tables in Appendix A for commissions retained by PFD and reallowed to
dealers in connection with PFD's offering of the fund's Class A shares during
recently completed fiscal years.
The fund will not generally issue fund shares for consideration other than cash.
At the fund's sole discretion, however, it may issue fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.
The redemption price of shares of beneficial interest of the fund may, at
Pioneer's discretion, be paid in cash or portfolio securities. The fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which the fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the fund's net asset value during any 90-day period for any
one shareholder. Should the amount of redemptions by any shareholder exceed such
limitation, the fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken at their
value employed in determining the fund's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of such securities will be made in
such manner as the Board of Trustees deems fair and reasonable.
Distribution Plans
The fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan"), a plan of
distribution with respect to its Class B shares (the "Class B Plan") and a plan
of distribution with respect to its Class C shares (the "Class C Plan")
(together, the "Plans"), pursuant to which certain distribution and service fees
are paid to PFD. The fund has not adopted a plan of distribution with respect to
its Class Y shares. Because of the Plans, long-term
27
shareholders may pay more than the economic equivalent of the maximum sales
charge permitted by the National Association of Securities Dealers, Inc. (the
"NASD") regarding investment companies.
Class A Plan. Pursuant to the Class A Plan the fund reimburses PFD for its
actual expenditures to finance any activity primarily intended to result in the
sale of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are approved
by the Board of Trustees. The Board of Trustees has approved the following
categories of expenses that may be reimbursed under the Class A Plan: (i) a
service fee to be paid to qualified broker-dealers in an amount not to exceed
0.25% per annum of the fund's daily net assets attributable to Class A shares;
(ii) reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the fund's Class A shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations (such as banks and trust companies) in their efforts to
provide such services. The expenses of the fund pursuant to the Class A Plan are
accrued daily at a rate which may not exceed the annual rate of 0.25% of the
fund's average daily net assets attributable to Class A shares. Distribution
expenses of PFD are expected to substantially exceed the distribution fees paid
by the fund in a given year.
The Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the fund in one fiscal year being paid in the subsequent fiscal year
and thus being treated for purposes of calculating the maximum expenditures of
the fund as having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Class A Plan, the fund has 12 months to
reimburse any expense which it incurs prior to such termination or
non-continuance, provided that payments by the fund during such 12-month period
shall not exceed 0.25% of the fund's average daily net assets attributable to
Class A shares during such period. See Appendix A for the amount, if any, of
carryover of distribution expenses as of the end of the most recent calendar
year.
Class B Plan. PFD pays the selling broker-dealer a commission on the sale of
Class B shares equal to 3.75% of the amount invested. This commission is paid at
the time of sale of the Class B Shares. In order to be entitled to a commission,
the selling broker-dealer must have entered into a sales agreements with PFD. At
the time of the sale of a Class B share, PFD may also advance to the
broker-dealer, from PFD's own assets, the first-year service fee payable under
the Class B Plan at a rate up to 0.25% of the purchase price of such shares. If
such an advance is made, the broker-dealer would not receive any further service
fee until the 13th month following the purchase of Class B shares. As
compensation for advancing the service fee, PFD may retain the service fee paid
by the fund with respect to such shares for the first year after purchase.
28
The Class B Plan provides that the fund shall pay to PFD, as the fund's
distributor for its Class B shares:
o a distribution fee equal on an annual basis to 0.75% of the fund's
average daily net assets attributable to Class B shares. The
distribution fee compensates PFD for its distribution services with
respect to Class B shares. PFD pays the commissions to broker-dealers
discussed above and also pays:
o the cost of printing prospectuses and reports used for sales
purposes and the preparation and printing of sales literature and
o other distribution-related expenses, including, without
limitation, the cost necessary to provide distribution-related
services, or personnel, travel, office expenses and equipment.
o a service fee equal to 0.25% of the fund's average daily net assets
attributable to Class B shares. PFD in turn pays the service fee to
broker-dealers at a rate of up to 0.25% of the fund's average daily
net assets attributable to Class B shares owned by shareholder for
whom that broker-dealer is the holder or dealer of record. This
service fee compensates the broker-dealer for providing personal
services and/or account maintenance services rendered by the
broker-dealer with respect to Class B shares. PFD may from time to
time require that dealers, in addition to providing these services,
meet certain criteria in order to receive service fees. PFD is
entitled to retain all service fees with respect to Class B shares for
which there is no dealer of record or with respect to which a dealer
is not otherwise entitled to a service fee. Such service fees are paid
to PFD for personal services and/or account maintenance services that
PFD or its affiliates perform for shareholder accounts.
PFD also receives contingent deferred sales charges ("CDSCs") attributable to
Class B shares to compensate PFD for its distribution expenses. When a
broker-dealer sells Class B shares and elects, with PFD's approval, to waive its
right to receive the commission normally paid at the time of the sale, PFD may
cause all or a portion of the distribution fees described above to be paid to
the broker-dealer.
29
Since PFD pays commissions to broker-dealers at the time of the sale of Class B
shares but only receives compensation for such expenses over time through the
distribution fee and CDSC, the Class B Plan and underwriting agreement permit
PFD to finance the payment of commissions to broker-dealers. In order to
facilitate such financing, the fund has agreed that the distribution fee will
not be terminated or modified (including a modification in the rules relating to
the conversion of Class B shares into Class A shares) with respect to Class B
shares:
o issued prior to the date of any termination or modification;
o attributable to Class B shares issued through one or a series of
exchanges of shares of another investment company for which PFD acts
as principal underwriter which were initially issued prior to the date
of such termination or modification; or
o issued as a dividend or distribution upon Class B shares initially
issued or attributable to Class B shares issued prior to the date of
any such termination or modification.
30
The foregoing limitation does not apply to Class B shares issued after the
termination or modification. The foregoing limitation on terminating or
modifying the Class B Plan also does not apply to a termination or modification:
o if a change in the 1940 Act, the rules or regulations under the 1940
Act, the Conduct Rules of the NASD or an order of any court or
governmental agency requires such termination or modification (e.g. if
the Conduct Rules were amended to establish a lower limit on the
maximum aggregate sales charges that could be imposed on sales of fund
shares);
o if the fund (or any successor) terminates the Class B Plan and all
payments under the plan and neither the fund (nor any successor)
establishes another class of shares which has substantially similar
characteristics to the Class B Shares of the fund; or
o at any time by the Board of Trustees. However, the Board of Trustees
may terminate or modify the Class B Plan only if the fund and Pioneer
agree that none of the fund, PFD or any of their affiliates will pay,
after the date of termination or modification, a service fee with
respect to the fund's Class B shares and the termination or
modification of the distribution fee applies equally to all Class B
shares outstanding from time to time.
In the underwriting agreement, the fund agrees that subsequent to the issuance
of a Class B share, the fund will not waive or change any CDSC (including a
change in the rules applicable to conversion of Class B shares into another
class) in respect of such Class B share, except:
o as provided in the fund's prospectus or statement of additional
information; or
o as required by a change in the 1940 Act and the rules and regulations
thereunder, the Conduct Rules of the NASD or any order of any court or
governmental agency.
Class C Plan. Commissions on the sale of Class C shares of up to 0.75% of the
amount invested in Class C shares are paid to broker-dealers who have sales
agreements with PFD. PFD may also advance to dealers the first-year service fee
payable under the Class C Plan at a rate up to 0.25% of the purchase price of
such shares. As compensation for such advance of the service fee, PFD may retain
the service fee paid by the fund with respect to such shares for the first year
after purchase.
The Class C Plan provides that the fund will pay PFD, as the fund's distributor
for its Class C shares, a distribution fee accrued daily and paid quarterly,
equal on an annual basis to 0.75% of the fund's average daily net assets
attributable to Class C shares and will pay PFD a service fee equal to 0.25% of
the fund's average daily net assets attributable to Class C shares. PFD will in
turn pay to securities dealers which enter into a sales agreement with PFD a
distribution fee and a service fee at rates of up to 0.75% and 0.25%,
respectively, of the fund's average daily net assets attributable to Class C
shares owned by investors for whom that securities dealer is the holder or
dealer of record. The service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class C shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the fund with respect to such shares for the
first year after purchase. Commencing in the 13th month following the purchase
of Class C shares, dealers will become eligible for additional annual
distribution fees and service
31
fees of up to 0.75% and 0.25%, respectively, of the net asset value of such
shares. Dealers may from time to time be required to meet certain other criteria
in order to receive service fees. PFD or its affiliates are entitled to retain
all service fees payable under the Class C Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to Class C shares of
the fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel, office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. When a broker-dealer sells Class C shares and
elects, with PFD's approval, to waive its right to receive the commission
normally paid at the time of the sale, PFD may cause all or a portion of the
distribution fees described above to be paid to the broker-dealer.
General
In accordance with the terms of each Plan, PFD provides to the fund for review
by the Trustees a quarterly written report of the amounts expended under the
Plan and the purposes for which such expenditures were made. In the Trustees'
quarterly review of the Plans, they will consider the continued appropriateness
and the level of reimbursement or compensation the Plans provide.
No interested person of the fund, nor any Trustee of the fund who is not an
interested person of the fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the fund and except to the
extent certain officers may have an interest in PFD's ultimate parent,
UniCredito Italiano, or in UniCredito's subsidiaries.
Each Plan's adoption, terms, continuance and termination are governed by Rule
12b-1 under the 1940 Act. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit the fund and its current and
future shareholders. The Plans may not be amended to increase materially the
annual percentage limitation of average net assets which may be spent for the
services described therein without approval of the shareholders of the fund
affected thereby, and material amendments of the Plans must also be approved by
the Trustees as provided in Rule 12b-1.
See Appendix A for fund expenses under the Class A Plan, Class B Plan and Class
C Plan and CDSCs paid to PFD for the most recently completed fiscal year.
Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are
subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost
or market value of the shares and Class C shares may be subject to a 1% CDSC.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with PIMSS, 60 State Street, Boston, Massachusetts
02109, to act as shareholder servicing and transfer agent for the fund.
32
Under the terms of its contract with the fund, PIMSS services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the fund; (ii) distributing dividends and capital gains
associated with the fund's portfolio; and (iii) maintaining account records and
responding to shareholder inquiries.
PIMSS receives an annual fee of $25.25 for each Class A, Class B, Class C and
Class Y shareholder account from the fund as compensation for the services
described above. PIMSS is also reimbursed by the fund for its cash out-of-pocket
expenditures. The fund may compensate entities which have agreed to provide
certain sub-accounting services such as specific transaction processing and
recordkeeping services. Any such payments by the fund would be in lieu of the
per account fee which would otherwise be paid by the fund to PIMSS.
7. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, is
the custodian of the fund's assets. The custodian's responsibilities include
safekeeping and controlling the fund's cash and securities, handling the receipt
and delivery of securities, and collecting interest and dividends on the fund's
investments.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110, the
fund's independent public accountants, provides audit services, tax return
review, and assistance and consultation with respect to the preparation of
filings with the SEC.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the fund by Pioneer pursuant to authority contained in the fund's management
contract. Pioneer seeks to obtain the best execution on portfolio trades. The
price of securities and any commission rate paid are always factors, but
frequently not the only factors, in judging best execution. In selecting brokers
or dealers, Pioneer considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security to be purchased or sold; the execution efficiency,
settlement capability and financial condition of the dealer; the dealer's
execution services rendered on a continuing basis; and the reasonableness of any
dealer spreads. Transactions in non-U.S. equity securities are executed by
broker-dealers in non-U.S. countries in which commission rates may not be
negotiable (as such rates are in the U.S.).
Pioneer may select broker-dealers that provide brokerage and/or research
services to the fund and/or other investment companies or other accounts managed
by Pioneer. In addition, consistent with Section 28(e) of the Securities
Exchange Act of 1934, as amended, if Pioneer determines in good faith that the
amount of commissions charged by a broker-dealer is reasonable in relation to
the value of the brokerage and research services provided by such broker, the
fund may pay commissions to such broker-dealer in an amount greater than the
amount another firm may charge. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or the purchasers or sellers of
securities; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analyses, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and performance of
accounts and particular investment decisions; and effecting securities
33
transactions and performing functions incidental thereto (such as clearance and
settlement). Pioneer maintains a listing of broker-dealers who provide such
services on a regular basis. However, because many transactions on behalf of the
fund and other investment companies or accounts managed by Pioneer are placed
with broker-dealers (including broker-dealers on the listing) without regard to
the furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such dealers solely because such services were
provided. Pioneer believes that no exact dollar value can be calculated for such
services.
The research received from broker-dealers may be useful to Pioneer in rendering
investment management services to the fund as well as other investment companies
or other accounts managed by Pioneer, although not all such research may be
useful to the fund. Conversely, such information provided by brokers or dealers
who have executed transaction orders on behalf of such other accounts may be
useful to Pioneer in carrying out its obligations to the fund. The receipt of
such research has not reduced Pioneer's normal independent research activities;
however, it enables Pioneer to avoid the additional expenses which might
otherwise be incurred if it were to attempt to develop comparable information
through its own staff.
In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the fund as well as shares of other investment companies managed by Pioneer.
This policy does not imply a commitment to execute all portfolio transactions
through all broker-dealers that sell shares of the fund.
The Pioneer funds have entered into third-party brokerage and/or expense offset
arrangements to reduce the funds' total operating expenses. Pursuant to
third-party brokerage arrangements, certain of the funds that invest primarily
in U.S. equity securities may incur lower custody fees by directing brokerage to
third-party broker-dealers. Pursuant to expense offset arrangements, the funds
incur lower transfer agency expenses by maintaining their cash balances with the
custodian. See "Financial highlights" in the prospectus.
See the table in Appendix A for aggregate brokerage and underwriting commissions
paid by the fund in connection with its portfolio transactions during recently
completed fiscal years. The Board of Trustees periodically reviews Pioneer's
performance of its responsibilities in connection with the placement of
portfolio transactions on behalf of the fund.
10. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon the
demand of any shareholder at the next determined net asset value per share less
any applicable CDSC. See "Sales Charges." When issued and paid for in accordance
with the terms of the prospectus and statement of additional information, shares
of the fund are fully paid and non-assessable. Shares will remain on deposit
with the fund's transfer agent and certificates will not normally be issued. The
fund reserves the right to charge a fee for the issuance of Class A share
certificates; certificates will not be issued for Class B, Class C or Class Y
shares.
The fund's Agreement and Declaration of Trust, dated as of March 23, 1994 (the
"Declaration"), permits the Board of Trustees to authorize the issuance of an
unlimited number of full and fractional shares of beneficial interest which may
be divided into such separate series as the Trustees may establish. Currently,
the fund consists of only one series. The Trustees may, however, establish
additional series of shares and may divide or combine the shares into a greater
or lesser number of shares without thereby
34
changing the proportionate beneficial interests in the fund. The Declaration
further authorizes the Trustees to classify or reclassify any series of the
shares into one or more classes. Pursuant thereto, the Trustees have authorized
the issuance of Class A shares, Class B shares, Class C shares and Class Y
shares. Each share of a class of the fund represents an equal proportionate
interest in the assets of the fund allocable to that class. Upon liquidation of
the fund, shareholders of each class of the fund are entitled to share pro rata
in the fund's net assets allocable to such class available for distribution to
shareholders. The fund reserves the right to create and issue additional series
or classes of shares, in which case the shares of each class of a series would
participate equally in the earnings, dividends and assets allocable to that
class of the particular series.
The shares of each class represent an interest in the same portfolio of
investments of the fund. Each class has equal rights as to voting, redemption,
dividends and liquidation, except that each class bears different distribution
and transfer agent fees and may bear other expenses properly attributable to the
particular class. Class A, Class B and Class C shareholders have exclusive
voting rights with respect to the Rule 12b-1 Plans adopted by holders of those
shares in connection with the distribution of shares.
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. The fund is not required, and does not intend, to hold annual
shareholder meetings although special meetings may be called for the purpose of
electing or removing Trustees, changing fundamental investment restrictions or
approving a management contract.
The shares of each series of the fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of all series of the fund vote together as a
class on matters that affect all series of the fund in substantially the same
manner. As to matters affecting a single series or class, shares of such series
or class will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Declaration without the affirmative vote of a
majority of the fund's shares. Shares have no preemptive or conversion rights,
except that under certain circumstances Class B shares may convert to Class A
shares.
As a Delaware business trust, the fund's operations are governed by the
Declaration. A copy of the fund's Certificate of Trust, also dated March 23,
1994, is on file with the office of the Secretary of State of Delaware.
Generally, Delaware business trust shareholders are not personally liable for
obligations of the Delaware business trust under Delaware law. The Delaware
Business Trust Act (the "Delaware Act") provides that a shareholder of a
Delaware business trust shall be entitled to the same limitation of liability
extended to shareholders of private for-profit corporations. The Declaration
expressly provides that the fund is organized under the Delaware Act and that
the Declaration is to be governed by Delaware law. There is nevertheless a
possibility that a Delaware business trust, such as the fund, might become a
party to an action in another state whose courts refused to apply Delaware law,
in which case the fund's shareholders could become subject to personal
liability.
To guard against this risk, the Declaration (i) contains an express disclaimer
of shareholder liability for acts or obligations of the fund and provides that
notice of such disclaimer may be given in each agreement, obligation or
instrument entered into or executed by the fund or its Trustees, (ii) provides
for the indemnification out of fund property of any shareholders held personally
liable for any obligations of the fund or any series of the fund and (iii)
provides that the fund shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the fund and satisfy any
judgment
35
thereon. Thus, the risk of a shareholder incurring financial loss beyond his or
her investment because of shareholder liability is limited to circumstances in
which all of the following factors are present: (1) a court refused to apply
Delaware law; (2) the liability arose under tort law or, if not, no contractual
limitation of liability was in effect; and (3) the fund itself would be unable
to meet its obligations. In light of Delaware law, the nature of the fund's
business and the nature of its assets, the risk of personal liability to a fund
shareholder is remote.
In addition to the requirements under Delaware law, the Declaration provides
that a shareholder of the fund may bring a derivative action on behalf of the
fund only if the following conditions are met: (a) shareholders eligible to
bring such derivative action under Delaware law who hold at least 10% of the
outstanding shares of the fund, or 10% of the outstanding shares of the series
or class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and investigate
the basis of such claim. The Trustees shall be entitled to retain counsel or
other advisers in considering the merits of the request and shall require an
undertaking by the shareholders making such request to reimburse the fund for
the expense of any such advisers in the event that the Trustees determine not to
bring such action.
The Declaration further provides that the fund shall indemnify each of its
Trustees and officers against liabilities and expenses reasonably incurred by
them in connection with, or arising out of, any action, suit or proceeding,
threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the fund.
The Declaration does not authorize the fund to indemnify any Trustee or officer
against any liability to which he or she would otherwise be subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.
The Declaration provides that any Trustee who is not an "interested person" of
Pioneer shall be considered to be independent for purposes of Delaware law
notwithstanding the fact that such Trustee receives compensation for serving as
a trustee of the fund or other investment companies for which Pioneer acts as
investment adviser.
11. SALES CHARGES
The fund continuously offers four classes of shares designated as Class A, Class
B, Class C and Class Y as described in the prospectus.
Class A Share Sales Charges
You may buy Class A shares at the public offering price, including a sales
charge, as follows:
Sales Charge as a % of
----------------------
Offering Net Amount Dealer
Amount of Purchase Price Invested Reallowance
Less than $50,000 5.75 6.10 5.00
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than $250,000 3.50 3.63 3.00
$250,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 see below
36
The schedule of sales charges above is applicable to purchases of Class A shares
of the fund by (i) an individual, (ii) an individual and his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a trust
estate or fiduciary account or related trusts or accounts including pension,
profit-sharing and other employee benefit trusts qualified under Sections 401 or
408 of the Code although more than one beneficiary is involved. The sales
charges applicable to a current purchase of Class A shares of the fund by a
person listed above is determined by adding the value of shares to be purchased
to the aggregate value (at the then current offering price) of shares of any of
the other Pioneer mutual funds previously purchased and then owned, provided PFD
is notified by such person or his or her broker-dealer each time a purchase is
made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. At the sole discretion of PFD,
holdings of funds domiciled outside the U.S., but which are managed by
affiliates of Pioneer, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $1 million
or more, or for purchases by participants in certain group plans described below
subject to a CDSC of 1% which may be imposed in the event of a redemption of
Class A shares within 12 months of purchase. PFD may, in its discretion, pay a
commission to broker-dealers who initiate and are responsible for such purchases
as follows: 1% on the first $5 million invested; 0.50% on the next $45 million
invested; and 0.25% on the excess over $50 million invested. These commissions
shall not be payable if the purchaser is affiliated with the broker-dealer or if
the purchase represents the reinvestment of a redemption made during the
previous 12 calendar months. Broker-dealers who receive a commission in
connection with Class A share purchases at net asset value by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least $10
million in plan assets will be required to return any commissions paid or a pro
rata portion thereof if the retirement plan redeems its shares within 12 months
of purchase.
Letter of Intent ("LOI"). Reduced sales charges are available for purchases of
$50,000 or more of Class A shares (excluding any reinvestments of dividends and
capital gain distributions) made within a 13-month period pursuant to an LOI
which may be established by completing the Letter of Intent section of the
Account Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to PIMSS within 90 days of such
purchase. You may also obtain the reduced sales charge by including the value
(at current offering price) of all your Class A shares in the fund and all other
Pioneer mutual funds held of record as of the date of your LOI in the amount
used to determine the applicable sales charge for the Class A shares to be
purchased under the LOI. Five percent of your total intended purchase amount
will be held in escrow by PIMSS, registered in your name, until the terms of the
LOI are fulfilled. When you sign the Account Application, you agree to
irrevocably appoint PIMSS your attorney-in-fact to surrender for redemption any
or all shares held in escrow with full power of substitution. An LOI is not a
binding obligation upon the investor to purchase, or the fund to sell, the
amount specified in the LOI.
37
If the total purchases, less redemptions, exceed the amount specified under the
LOI and are in an amount which would qualify for a further quantity discount,
all transactions will be recomputed on the expiration date of the LOI to effect
the lower sales charge. Any difference in the sales charge resulting from such
recomputation will be either delivered to you in cash or invested in additional
shares at the lower sales charge. The dealer, by signing the Account
Application, agrees to return to PFD, as part of such retroactive adjustment,
the excess of the commission previously reallowed or paid to the dealer over
that which is applicable to the actual amount of the total purchases under the
LOI.
If the total purchases, less redemptions, are less than the amount specified
under the LOI, you must remit to PFD any difference between the sales charge on
the amount actually purchased and the amount originally specified in the LOI.
When the difference is paid, the shares held in escrow will be deposited to your
account. If you do not pay the difference in sales charge within 20 days after
written request from PFD or your dealer, PIMSS, after receiving instructions
from PFD, will redeem the appropriate number of shares held in escrow to realize
the difference and release any excess.
Class B Shares
You may buy Class B shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class B shares redeemed within six years of purchase will be subject to
a CDSC at the rates shown in the table below. The charge will be assessed on the
amount equal to the lesser of the current market value or the original purchase
cost of the shares being redeemed. No CDSC will be imposed on increases in
account value above the initial purchase price, including shares derived from
the reinvestment of dividends or capital gain distributions.
The amount of the CDSC, if any, will vary depending on the number of years from
the time of purchase until the time of redemption of Class B shares. For the
purpose of determining the number of years from the time of any purchase after
September 30, 1998, all payments during a month will be aggregated and deemed to
have been made on the first day of that month. For the purpose of determining
the number of years from the time of any purchase made prior to October 1, 1998,
all payments during a quarter will be aggregated and deemed to have been made on
the first day of that quarter. In processing redemptions of Class B shares, the
fund will first redeem shares not subject to any CDSC and then shares held
longest during the six-year period. As a result, you will pay the lowest
possible CDSC.
The CDSC for Class B shares subject to a CDSC upon redemption will be determined
as follows:
CDSC as a % of Dollar
Year Since Purchase Amount Subject to CDSC
First 4.0
Second 4.0
Third 3.0
Fourth 3.0
Fifth 2.0
Sixth 1.0
Seventh and thereafter 0.0
38
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class B shares, including the payment of
compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the beginning
of the calendar month (or the calendar quarter for purchases made prior to
October 1, 1998) that is eight years after the purchase date, except as noted
below. Class B shares acquired by exchange from Class B shares of another
Pioneer mutual fund will convert into Class A shares based on the date of the
initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the date
of the initial purchase to which such shares relate. For this purpose, Class B
shares acquired through reinvestment of distributions will be attributed to
particular purchases of Class B shares in accordance with such procedures as the
Trustees may determine from time to time. The conversion of Class B shares to
Class A shares is subject to the continuing availability of a ruling from the
Internal Revenue Service (the "IRS") or an opinion of counsel that such
conversions will not constitute taxable events for U.S. federal income tax
purposes. The conversion of Class B shares to Class A shares will not occur if
such ruling or opinion is not available and, therefore, Class B shares would
continue to be subject to higher expenses than Class A shares for an
indeterminate period.
Class C Shares
You may buy Class C shares at net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class C shares redeemed within one year of purchase will be subject to
a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of
the current market value or the original purchase cost of the shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gain distributions. Class C shares do not convert to any
other class of fund shares.
For the purpose of determining the time of any purchase after September 30,
1998, all payments during a month will be aggregated and deemed to have been
made on the first day of that month. For the purpose of determining the time of
any purchase made prior to October 1, 1998, all payments made during a calendar
quarter will be aggregated and deemed to have been made on the first day of that
quarter. In processing redemptions of Class C shares, the fund will first redeem
shares not subject to any CDSC and then shares held for the shortest period of
time during the one-year period. As a result, you will pay the lowest possible
CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.
Additional Payments to Dealers
From time to time, PFD or its affiliates may elect to make payments to
broker-dealers in addition to the commissions described above. PFD may elect to
reallow the entire initial sales charge to participating dealers for all Class A
sales with respect to which orders are placed during a particular period.
Dealers to whom substantially the entire sales charge is reallowed may be deemed
to be underwriters under federal securities laws. Contingent upon the
achievement of certain sales objectives, PFD may pay to Mutual of
39
Omaha Investor Services, Inc. 50% of PFD's retention of any sales commission on
sales of the fund's Class A shares through such dealer. PFD will reallow to
participating broker/dealers the entire sales charge for all sales of Class A
shares of the above listed funds for orders placed for IRA accounts from January
2, 2001 through April 30, 2001. In addition, PFD or its affiliates may elect to
pay broker-dealers an additional commission based on the net asset value of all
shares sold by a dealer during a particular period. PFD has elected to pay
participating dealers an amount equal to 0.50% of the net asset value of the
fund's Class B shares sold to IRA accounts from January 2, 2001 through April
30, 2001. PFD has elected to pay participating dealers an amount equal to 0.50%
of the net asset value of the fund's Class C shares sold to IRA accounts from
January 2, 2001 through April 30, 2001. PFD may elect to pay, at its own
expense, additional cash or other incentives to dealers that sell or arrange for
the sale of shares of the fund. Such cash or other incentives may take the form
of payment for attendance at preapproved conferences or seminars, sales or
training programs for invited registered representatives and other employees,
payment for travel expenses, including lodging, incurred by registered
representatives and other employees for such seminars or training programs,
seminars for the public, advertising and preapproved sales campaigns or
dealer-sponsored events. PFD may also elect to make expense reimbursements for
special training of a dealer's registered representatives and other employees in
group meetings or to help pay the expenses of sales contests. PFD will offer
such cash and other incentives only to the extent permitted by applicable law or
by a self-regulatory agency such as the National Association of Securities
Dealers, Inc.
12. REDEEMING SHARES
Redemptions may be suspended or payment postponed during any period in which any
of the following conditions exist: the Exchange is closed or trading on the
Exchange is restricted; an emergency exists as a result of which disposal by the
fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the fund to fairly determine the value of the net
assets of its portfolio; or the SEC, by order, so permits.
Redemptions and repurchases are taxable transactions for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.
Systematic Withdrawal Plan(s) ("SWP") (Class A, Class B and Class C Shares). A
SWP is designed to provide a convenient method of receiving fixed payments at
regular intervals from fund share accounts having a total value of not less than
$10,000. You must also be reinvesting all dividends and capital gain
distributions to use the SWP option.
Periodic payments of $50 or more will be deposited monthly, quarterly,
semiannually or annually directly into a bank account designated by the
applicant or will be sent by check to the applicant, or any person designated by
the applicant. Payments can be made either by check or electronic funds transfer
to a bank account designated by you. Class B accounts must meet the minimum
initial investment requirement prior to establishing a SWP. Withdrawals from
Class B and Class C share accounts are limited to 10% of the value of the
account at the time the SWP is established. See "Qualifying for a reduced sales
charge" in the prospectus. If you direct that withdrawal payments be paid to
another person, want to change the bank where payments are sent or designate an
address that is different from the account's address of record after you have
opened your account, a signature guarantee must accompany your instructions.
Withdrawals under the SWP are redemptions that may have tax consequences for
you.
40
Purchases of Class A shares of the fund at a time when you have a SWP in effect
may result in the payment of unnecessary sales charges and may, therefore, be
disadvantageous. SWP redemptions reduce and may ultimately exhaust the number of
shares in your account. In addition, the amounts received by a shareholder
cannot be considered as yield or income on his or her investment because part of
such payments may be a return of his or her investment.
A SWP may be terminated at any time (1) by written notice to PIMSS or from PIMSS
to the shareholder; (2) upon receipt by PIMSS of appropriate evidence of the
shareholder's death; or (3) when all shares in the shareholder's account have
been redeemed.
You may obtain additional information by calling PIMSS at 1-800-225-6292.
Reinstatement Privilege (Class A and Class B Shares). Subject to the provisions
outlined in the prospectus, you may reinvest all or part of your sale proceeds
from Class A or Class B shares without a sales charge into Class A shares of a
Pioneer mutual fund. However, the distributor will not pay your investment firm
a commission on any reinvested amount.
13. TELEPHONE TRANSACTIONS
You may purchase, exchange or sell Class A, Class B or Class C shares by
telephone (Class Y shares may not be purchased by telephone). See the prospectus
for more information. For personal assistance, call 1-800-225-6292 between 8:00
a.m. and 9:00 p.m.(Class Y account holders should contact Pioneer's Group Plans
Department at 1-888-294-4480between 9:00 a.m. and 6:00 p.m.) Eastern time on
weekdays. Computer-assisted transactions may be available to shareholders who
have prerecorded certain bank information (see "FactFone(SM)"). You are strongly
urged to consult with your investment professional prior to requesting any
telephone transaction.
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
the personal identification number ("PIN") for the account and send you a
written confirmation of each telephone transaction. Different procedures may
apply to accounts that are registered to non-U.S. citizens or that are held in
the name of an institution or in the name of an investment broker-dealer or
other third party. If reasonable procedures, such as those described above, are
not followed, the fund may be liable for any loss due to unauthorized or
fraudulent instructions. The fund may implement other procedures from time to
time. In all other cases, neither the fund, PIMSS nor PFD will be responsible
for the authenticity of instructions received by telephone; therefore, you bear
the risk of loss for unauthorized or fraudulent telephone transactions.
41
During times of economic turmoil or market volatility or as a result of severe
weather or a natural disaster, it may be difficult to contact the fund by
telephone to institute a purchase, exchange or redemption. You should
communicate with the fund in writing if you are unable to reach the fund by
telephone.
FactFone(SM). FactFone(SM) is an automated inquiry and telephone transaction
system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFone(SM) allows shareholder access to current information on Pioneer mutual
fund accounts and to the prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFone(SM) to make computer-assisted
telephone purchases, exchanges or redemptions from your Pioneer mutual fund
accounts, access your account balances and last three transactions and order a
duplicate statement if you have activated your PIN. Telephone purchases or
redemptions require the establishment of a bank account of record.
Computer-assisted Class Y share telephone purchases, exchanges and redemptions
and certain other FactFone(SM) features for Class Y shareholders are not
currently available through FactFone(SM). You are strongly urged to consult with
your investment professional prior to requesting any telephone transaction.
Shareholders whose accounts are registered in the name of a broker-dealer or
other third party may not be able to use FactFone(SM). Call PIMSS for
assistance.
FactFone(SM) allows shareholders to hear the following recorded fund
information:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for Pioneer's
money market fund; and
o dividends and capital gain distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
All performance numbers communicated through FactFone(SM) represent past
performance, and figures include the maximum applicable sales charge. A
shareholder's actual yield and total return will vary with changing market
conditions. The value of Class A, Class B, Class C and Class Y shares (except
for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share
price) will also vary, and such shares may be worth more or less at redemption
than their original cost.
14. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the
close of regular trading on the Exchange (normally 4:00 p.m. Eastern time) on
each day on which the Exchange is open for trading. As of the date of this
statement of additional information, the Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. The net asset value per share of each
class of the fund is also determined on any other day on which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The fund is not required to
42
determine its net asset value per share on any day on which no purchase orders
in good order for fund shares are received and no shares are tendered and
accepted for redemption.
Securities are valued at the last sale price on the principal exchange or market
where they are traded. Securities which have not traded on the date of valuation
or securities for which sales prices are not generally reported are valued at
the mean between the current bid and asked prices. Securities quoted in foreign
currencies are converted to U.S. dollars utilizing foreign exchange rates
employed by the fund's independent pricing services. Generally, trading in
non-U.S. securities is substantially completed each day at various times prior
to the close of regular trading on the Exchange. The values of such securities
used in computing the net asset value of the fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of regular trading on the Exchange. Occasionally, events which
affect the values of such securities and such exchange rates may occur between
the times at which they are determined and the close of regular trading on the
Exchange and will therefore not be reflected in the computation of the fund's
net asset value. If events materially affecting the value of such securities
occur during such period, then these securities may be valued at their fair
value as determined in good faith by the Trustees. All assets of the fund for
which there is no other readily available valuation method are valued at their
fair value as determined in good faith by the Trustees, although the actual
computations may be made by persons acting pursuant to the direction of the
Board of Trustees.
The net asset value per share of each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number of
outstanding shares of that class. For purposes of determining net asset value,
expenses of the classes of the fund are accrued daily and taken into account.
The fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. Class B, Class C
and Class Y shares are offered at net asset value without the imposition of an
initial sales charge (Class B and Class C shares may be subject to a CDSC).
15. TAX STATUS
The fund has elected to be treated, has qualified and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Code so that
it will not pay U.S. federal income tax on income and capital gains distributed
to shareholders. If the fund did not qualify as a regulated investment company,
it would be treated as a U.S. corporation subject to U.S. federal income tax.
Under the Code, the fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The fund intends to make distributions in a timely manner and accordingly
does not expect to be subject to the excise tax.
The fund generally distributes any net short- and long-term capital gains in
November. The fund generally pays dividends from any net investment income in
December. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the fund to avoid U.S. federal income or
excise tax.
In order to qualify as a regulated investment company under Subchapter M of the
Code, the fund must, among other things, derive at least 90% of its gross income
for each taxable year from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock, securities
or foreign currencies, or other income (including gains from options, futures
and forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "90% income test") and
43
satisfy certain annual distribution and quarterly diversification requirements.
For purposes of the 90% income test, the character of income earned by certain
entities in which the fund invests that are not treated as corporations (e.g.,
partnerships or trusts) for U.S. federal income tax purposes will generally pass
through to the fund. Consequently, the fund may be required to limit its equity
investments in such entities that earn fee income, rental income or other
nonqualifying income.
Unless shareholders specify otherwise, all distributions will be automatically
reinvested in additional full and fractional shares of the fund. For U.S.
federal income tax purposes, all dividends are taxable whether a shareholder
takes them in cash or reinvests them in additional shares of the fund. Dividends
from investment company taxable income, which includes net investment income,
net short-term capital gain in excess of net long-term capital loss and certain
net foreign exchange gains, are taxable as ordinary income. Dividends from net
long-term capital gain in excess of net short-term capital loss ("net capital
gain"), if any, are taxable as long-term capital gains for U.S. federal income
tax purposes without regard to the length of time the shareholder has held
shares of the fund. The U.S. federal income tax status of all distributions will
be reported to shareholders annually.
Any dividend declared by the fund as of a record date in October, November or
December and paid during the following January will be treated for U.S. federal
income tax purposes as received by shareholders on December 31 of the calendar
year in which it is declared.
Foreign exchange gains and losses realized by the fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Under future regulations, any such transactions that are not
directly related to the fund's investments in stock or securities (or its
options contracts or futures contracts with respect to stock or securities) may
have to be limited in order to enable the fund to satisfy the 90% income test.
If the net foreign exchange loss for a year were to exceed the fund's investment
company taxable income (computed without regard to such loss), the resulting
ordinary loss for such year would not be deductible by the fund or its
shareholders in future years.
If the fund acquires any equity interest (under future Treasury regulations,
generally including not only stock but also an option to acquire stock such as
is inherent in a convertible bond) in certain foreign corporations that receive
at least 75% of their annual gross income from passive sources (such as
interest, dividends, certain rents and royalties, or capital gains) or that hold
at least 50% of their assets in investments producing such passive income
("passive foreign investment companies"), the fund could be subject to U.S.
federal income tax and additional interest charges on "excess distributions"
received from such companies or on gain from the sale of stock in such
companies, even if all income or gain actually received by the fund is timely
distributed to its shareholders. The fund would not be able to pass through to
its shareholders any credit or deduction for such a tax. An election may
generally be available that would ameliorate these adverse tax consequences, but
any such election could require the fund to recognize taxable income or gain
(subject to tax distribution requirements) without the concurrent receipt of
cash. These investments could also result in the treatment of associated capital
gains as ordinary income. The fund may limit and/or manage its holdings in
passive foreign investment companies to limit its tax liability or maximize its
return from these investments.
The fund may invest to a limited extent in debt obligations that are in the
lowest rating categories or are unrated, including debt obligations of issuers
not currently paying interest or who are in default.
44
Investments in debt obligations that are at risk of or in default present
special tax issues for the fund. Tax rules are not entirely clear about issues
such as when the fund may cease to accrue interest, original issue discount or
market discount, when and to what extent deductions may be taken for bad debts
or worthless securities, how payments received on obligations in default should
be allocated between principal and income and whether exchanges of debt
obligations in a workout context are taxable. These and other issues will be
addressed by the fund, in the event it invests in such securities, in order to
seek to ensure that it distributes sufficient income to preserve its status as a
regulated investment company and does not become subject to U.S. federal income
or excise tax.
If the fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount if the fund elects to include market
discount in income currently), the fund must accrue income on such investments
for each taxable year, which generally will be prior to the receipt of the
corresponding cash payments. However, the fund must distribute, at least
annually, all or substantially all of its net income, including such accrued
income, to shareholders to qualify as a regulated investment company under the
Code and avoid U.S. federal income and excise taxes. Therefore, the fund may
have to dispose of its portfolio securities under disadvantageous circumstances
to generate cash, or may have to leverage itself by borrowing the cash, to
satisfy distribution requirements.
Effective for 2001, the fund is eligible to make a federal tax election with
respect to certain stocks and securities it owns and that it intends to continue
to hold for more than five years. If the fund makes such an election, the
applicable federal capital gains rate would be reduced on the sale of the stock
or securities when they are eventually sold by the fund on or after January 3,
2006. Any such reduction in the capital gains rate would be passed on to the
shareholders at that time. However, if the fund makes such an election, it will
be treated for U.S. federal income tax purposes as if it had sold such stocks or
securities on January 2, 2001 and reacquired them on the same date. As a result,
the fund would be required to recognize current capital gains (if any) (but not
losses) on such stock or securities without the concurrent receipt of any cash
which may cause the fund to have difficulty obtaining cash to satisfy its
distribution requirements. The fund will carefully consider these factors in
determining whether to make any such election and will attempt to minimize the
fund's tax liability and to maximize its return from these investments.
For U.S. federal income tax purposes, the fund is permitted to carry forward a
net capital loss for any year to offset its capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in U.S. federal income
tax liability to the fund and are not expected to be distributed as such to
shareholders. See Appendix A for the fund's available capital loss
carryforwards.
At the time of an investor's purchase of fund shares, a portion of the purchase
price may be attributable to realized or unrealized appreciation in the fund's
portfolio or undistributed taxable income of the fund. Consequently, subsequent
distributions by the fund with respect to these shares from such appreciation or
income may be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced below the
investor's cost for such shares and the distributions economically represent a
return of a portion of the investment.
Redemptions and exchanges are taxable events for shareholders that are subject
to tax. Shareholders should consult their own tax advisers with reference to
their individual circumstances to determine whether any particular transaction
in fund shares is properly treated as a sale for tax purposes, as the following
discussion assumes, and the tax treatment of any gains or losses recognized in
such
45
transactions. Any loss realized by a shareholder upon the redemption, exchange
or other disposition of shares with a tax holding period of six months or less
will be treated as a long-term capital loss to the extent of any amounts treated
as distributions of long-term capital gain with respect to such shares.
For taxable year 2001, certain shareholders that are individuals or pass-through
entities (but not corporate shareholders) who purchased fund shares prior to
January 1, 2001 and who hold fund shares as capital assets may be eligible to
make an irrevocable U.S. federal income tax election relating to certain fund
shares that would reduce the applicable federal capital gains rate that would be
applied to such shares on the future redemption or other disposition of the
shares from 20% to 18%, provided that the shareholder does not redeem or
otherwise dispose of such shares for more than five years from the effective
date of the election. However, if a shareholder makes this election, the
shareholder will be treated as if such shares were sold by the shareholder on
January 2, 2001 for a selling price equal to the closing market price of such
fund shares on such date and will be required to recognize any capital gains
(but not losses) on such shares in taxable year 2001 (without receiving any
additional proceeds from the fund) at the current applicable federal capital
gains rate. Electing shareholders will receive a new basis in such shares equal
to the closing market price of such fund shares on January 2, 2001.
In addition, if Class A or Class B shares that have been held for less than 91
days are redeemed and the proceeds are reinvested in Class A shares of the fund
or in Class A shares of another mutual fund at net asset value pursuant to the
reinstatement privilege, or if Class A shares in the fund that have been held
for less than 91 days are exchanged for Class A shares in another fund at net
asset value pursuant to the exchange privilege, all or a portion of the sales
charge paid on the shares that are redeemed or exchanged will not be included in
the tax basis of such shares under the Code to the extent a sales charge that
would otherwise apply to the shares received is reduced pursuant to the
reinstatement or exchange privilege. In either case, the portion of the sales
charge not included in the tax basis of the shares redeemed or surrendered in an
exchange is included in the tax basis of the shares acquired in the reinvestment
or exchange. Losses on redemptions or other dispositions of shares may be
disallowed under "wash sale" rules in the event of other investments in the fund
(including those made pursuant to reinvestment of dividends and/or capital gain
distributions) within a period of 61 days beginning 30 days before and ending 30
days after a redemption or other disposition of shares. In such a case, the
disallowed portion of any loss generally would be included in the U.S. federal
tax basis of the shares acquired in the other investments.
Options written or purchased and futures contracts entered into by the fund on
certain securities, indices and foreign currencies, as well as certain forward
foreign currency contracts, may cause the fund to recognize gains or losses from
marking-to-market even though such options may not have lapsed, been closed out,
or exercised, or such futures or forward contracts may not have been performed
or closed out. The tax rules applicable to these contracts may affect the
characterization of some capital gains and losses realized by the fund as
long-term or short-term. Certain options, futures and forward contracts relating
to foreign currency may be subject to Section 988 of the Code, as described
above, and accordingly may produce ordinary income or loss. Additionally, the
fund may be required to recognize gain if an option, futures contract, forward
contract, short sale or other transaction that is not subject to the
mark-to-market rules is treated as a "constructive sale" of an "appreciated
financial position" held by the fund under Section 1259 of the Code. Any net
mark-to-market gains and/or gains from constructive sales may also have to be
distributed to satisfy the distribution requirements referred to above even
though the fund may receive no corresponding cash amounts, possibly requiring
the disposition of portfolio securities or borrowing to obtain the necessary
cash. Losses on certain options, futures or forward contracts and/or offsetting
positions (portfolio securities or other positions with respect
46
to which the fund's risk of loss is substantially diminished by one or more
options, futures or forward contracts) may also be deferred under the tax
straddle rules of the Code, which may also affect the characterization of
capital gains or losses from straddle positions and certain successor positions
as long-term or short-term. Certain tax elections may be available that would
enable the fund to ameliorate some adverse effects of the tax rules described in
this paragraph. The tax rules applicable to options, futures, forward contracts
and straddles may affect the amount, timing and character of the fund's income
and gains or losses and hence of its distributions to shareholders.
The fund's dividends will generally not qualify to any material extent for any
dividends-received deduction that might otherwise be available for certain
dividends received by shareholders that are corporations. In addition, No
portion of the fund's distributions from net capital gain will qualify for this
deduction.
The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries, which would, if imposed, reduce the yield
on or return from those investments. Tax conventions between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. If more than 50%
of the fund's total assets at the close of any taxable year consists of stock or
securities of foreign corporations, the fund may elect to pass through to its
shareholders their pro rata shares of qualified foreign taxes paid by the fund
(not in excess of its actual tax liability), with the result that shareholders
would be required to include such taxes in their gross incomes (in addition to
dividends and distributions they actually received), would treat such taxes as
foreign taxes paid by them, and may be entitled to a tax deduction for such
taxes or a tax credit, subject to a holding period requirement and other
limitations under the Code.
Qualified foreign taxes generally include taxes that would be treated as income
taxes under U.S. tax regulations but do not include most other taxes, such as
stamp taxes, securities transaction taxes, and similar taxes. If the fund makes
the election described above, shareholders may deduct their pro rata portion of
qualified foreign taxes paid by the fund (not in excess of the tax actually owed
by the fund) in computing their income subject to U.S. federal income taxation
or, alternatively, use them as foreign tax credits, subject to applicable
limitations under the Code, against their U.S. federal income taxes.
Shareholders who do not itemize deductions for federal income tax purposes will
not, however, be able to deduct their pro rata portion of qualified foreign
taxes paid by the fund, although such shareholders will be required to include
their shares of such taxes in gross income if the fund makes the election
described above.
If the fund makes this election and a shareholder chooses to take a credit for
the foreign taxes deemed paid by such shareholder, the amount of the credit that
may be claimed in any year may not exceed the same proportion of the U.S. tax
against which such credit is taken which the shareholder's taxable income from
foreign sources (but not in excess of the shareholder's entire taxable income)
bears to his entire taxable income. For this purpose, long-term and short-term
capital gains the fund realizes and distributes to shareholders will generally
not be treated as income from foreign sources in their hands, nor will
distributions of certain foreign currency gains subject to Section 988 of the
Code and of any other income realized by the fund that is deemed, under the
Code, to be U.S.-source income in the hands of the fund. This foreign tax credit
limitation may also be applied separately to certain specific categories of
foreign-source income and the related foreign taxes. As a result of these rules,
which may have different effects depending upon each shareholder's particular
tax situation, certain shareholders may not be able to claim a credit for the
full amount of their proportionate share of the foreign taxes paid by the fund.
Shareholders who are not liable for U.S. federal income taxes, including
tax-exempt shareholders, will ordinarily not
47
benefit from this election. If the fund does make the election, it will provide
required tax information to shareholders. The fund generally may deduct any
foreign taxes that are not passed through to its shareholders in computing its
income available for distribution to shareholders to satisfy applicable tax
distribution requirements.
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
Federal law requires that the fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain distributions and the
proceeds of redemptions and exchanges or repurchases of fund shares, paid to
shareholders who have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders must certify on their Account
Applications, or on separate IRS Forms W-9, that the Social Security Number or
other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. The fund may nevertheless be required to
withhold if it receives notice from the IRS or a broker that the number provided
is incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.
If, as anticipated, the fund continues to qualify as a regulated investment
company under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes or any Delaware corporation income tax.
The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e.,
U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates, and who are subject to U.S. federal income tax. This description does
not address the special tax rules that may be applicable to particular types of
investors, such as financial institutions, insurance companies, securities
dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors
other than U.S. persons may be subject to different U.S. tax treatment,
including a non-resident alien U.S. withholding tax at the rate of 30% or at a
lower treaty rate on amounts treated as ordinary dividends from the fund and,
unless an effective IRS Form W-8BEN, or other authorized withholding certificate
is on file, to backup withholding at the rate of 31% on certain other payments
from the fund. Shareholders should consult their own tax advisers on these
matters and on state, local and other applicable tax laws.
16. INVESTMENT RESULTS
Quotations, Comparisons and General Information
From time to time, in advertisements, in sales literature or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives and
to stock or other relevant indices. For example, total return of the fund's
classes may be compared to averages or rankings prepared by Lipper, Inc., a
widely recognized independent service which monitors mutual fund performance;
the Morgan Stanley Capital International ("MSCI") Emerging Markets Free Index,
the MSCI Europe, Australasia, Far East ("EAFE") Index, unmanaged indexes of
international stock markets, or any of the other country indexes or regional
indexes prepared by MSCI; Standard & Poor's 500 Stock Index (the "S&P 500"), an
unmanaged index of common
48
stocks; the Dow Jones Industrial Average, a recognized unmanaged index of common
stocks of 30 industrial companies listed on the Exchange; or any other
appropriate index.
In addition, the performance of the classes of the fund may be compared to
alternative investment or savings vehicles and/or to indices or indicators of
economic activity, e.g., inflation or interest rates. The fund may also include
securities industry or comparative performance information generally and in
advertising or materials marketing the fund's shares. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, The Wall Street Journal and Worth, may also be cited (if the fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Ibbotson
Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre
and Co., Lipper, Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature or in reports to shareholders of the fund.
The fund may also present, from time to time, historical information depicting
the value of a hypothetical account in one or more classes of the fund since
inception.
In presenting investment results, the fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class of the
fund is "total return." Total return will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of the
fund, over any period up to the lifetime of that class of the fund. Total return
calculations will usually assume the reinvestment of all dividends and capital
gain distributions and will be expressed as a percentage increase or decrease
from an initial value for the entire period or for one or more specified periods
within the entire period. Total return percentages for periods of less than one
year will usually be annualized; total return percentages for periods longer
than one year will usually be accompanied by total return percentages for each
year within the period and/or by the average annual compounded total return for
the period. The income and capital components of a given return may be separated
and portrayed in a variety of ways in order to illustrate their relative
significance. Performance may also be portrayed in terms of cash or investment
values without percentages. Past performance cannot guarantee any particular
future result.
The fund's average annual total return quotations for each of its classes as
that information may appear in the fund's prospectuses, this statement of
additional information or in advertising are calculated by standard methods
prescribed by the SEC.
49
Standardized Average Annual Total Return Quotations
Average annual total return quotations for each class of shares are computed by
finding the average annual compounded rates of return that would cause a
hypothetical investment in the class made on the first day of a designated
period (assuming all dividends and distributions are reinvested) to equal the
ending redeemable value of such hypothetical investment on the last day of the
designated period in accordance with the following formula:
(n)
P(1+T) = ERV
Where:
P = a hypothetical initial payment of $1,000, less the maximum
sales load of $57.50 for Class A shares or the deduction of the
CDSC for Class B and Class C shares at the end of the period;
for Class Y shares, no sales load or CDSC applies
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 initial
payment made at the beginning of the designated period (or
fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class of shares are taken into consideration. For any account fees
that vary with the size of the account, the account fee used for purposes of the
above computation is assumed to be the fee that would be charged to a class'
mean account size.
See Appendix A for the annual total returns for each class of fund shares as of
the most recently completed fiscal year.
17. FINANCIAL STATEMENTS
The fund's audited financial statements for the fiscal year ended November 30,
2000 from the fund's annual report filed with the SEC on January 16, 2001
(Accession No. 0000921023-01-000001) are incorporated by reference into this
statement of additional information. Those financial statements, including the
financial highlights in the prospectuses, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
to the financial statements and are included in reliance upon the authority of
Arthur Andersen LLP as experts in accounting and auditing in giving their
report.
The fund's annual report includes the financial statements referenced above and
is available without charge upon request by calling Shareholder Services at
1-800-225-6292.
50
18. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION
Portfolio Turnover
The fund's annual portfolio turnover rate was 139% for the fiscal year ended
November 30, 2000.
Share Ownership
As of February 28, 2001, the Trustees and officers of the fund owned
beneficially in the aggregate less than 1% of the outstanding shares of the
fund. The following is a list of the holders of 5% or more of any class of the
fund's outstanding shares as of February 28, 2001:
Record Holder Share Class Number of Shares % of Class
Frank Russell Trust Co. Class A 569,312 6.11
UAL Pilots Directed Account Plan
909 A Street
Tacoma, WA 98402-5111
Merrill Lynch, Pierce, Fenner & Smith for the Class B 646,427 16.07
Sole Benefit of its Customers Class C 251,137 16.85
4800 Deer Lake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
Banc One Securities Corp. Class C 83,423 5.59
FBO The One Investment Solution
1111 Polaris Parkway
Columbus, OH 43271-1244
Lauer & Co. Class Y 4,088,944 95.16
c/o The Glenmede Trust Company
1 Liberty Place, Suite 1200
1650 Market Street
Philadelphia, PA 19103-7301
Compensation of Officers and Trustees
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
51
Aggregate Pension or Retirement Total Compensation from
Compensation Benefits Accrued as the Fund and Other
Name of Trustee from Fund* Part of Fund Expenses Pioneer Mutual Funds**
John F. Cogan, Jr.*** $583.33 $0 $21,000.00
Mary K. Bush 2,706.42 0 108,498.75
Richard H. Egdahl, M.D. 2,645.67 0 106,311.75
Margaret B.W. Graham 2,701.58 0 110,624.50
John W. Kendrick**** 1,309.08 0 37,425.00
Marguerite A. Piret 2,973.42 0 130,749.50
David D. Tripple*** 583.33 0 20,500.00
Stephen K. West 2,740.00 0 118,948.75
John Winthrop 2,798.42 0 116,998.50
---------- -- -----------
$19,041.25 $0 $771,056.75
* For the fiscal year ended November 30, 2000.
** For the calendar year ended December 31, 2000.
*** Under the management contract, Pioneer reimburses the fund for any Trustees
fees paid by the fund. In addition to the fund, there are 45 other funds in
the Pioneer Family of Funds.
**** Mr. Kendrick resigned as a Trustee effective May 8, 2000.
Management Fees the Fund Paid or Owed Pioneer
For the Fiscal Years Ended November 30,
2000 1999 1998
$3,351,434 $1,624,774 $2,121,803*
- -------------
*An expense limitation was in effect during the year ended November 30, 1998. In
the absence of the expense limitation, the fund would have paid $2,129,694 in
management fees for the period.
Fees the Fund Paid to Pioneer under the Administration Agreement effective
October 9, 1998
For the Fiscal Years Ended November 30,
2000 1999
$84,693 $14,894
Carryover of Distribution Expenses
As of December 31, 2000 there was a carryover of distribution expenses in the
amount of $71,386 under the Class A Plan.
52
Approximate Net Underwriting Commissions Retained by PFD
For the Fiscal Years Ended November 30,
2000 1999 1998
$32,000 $25,000 $50,000
Approximate Commissions Reallowed to Dealers
For the Fiscal Years Ended November 30,
2000 1999 1998
$599,000 $182,000 $371,000
Fund Expenses under the Distribution Plans
For the Fiscal Year Ended November 30, 2000
Class A Plan Class B Plan Class C Plan
$326,385 $698,080 $171,483
CDSCs
During the fiscal year ended November 30, 2000, CDSCs in the amount of $324,402
were paid to PFD.
Approximate Brokerage and Underwriting Commissions (Portfolio Transactions)
For the Fiscal Years Ended November 30,
2000 1999 1998
$1,189,000 $1,662,000 $2,432,000
Capital Loss Carryforwards as of November 30, 1999
At November 30, 2000, the fund had a capital loss carryforward of $9,796,063
which will expire in 2006 if not used.
53
Average Annual Total Returns (November 30, 2000)
Average Annual Total Return (%)
Five Ten Since Inception
Class of Shares One Year Years Years Inception Date
Class A Shares -26.09 0.91 N/A -0.26 06/23/94
Class B Shares -25.41 1.15 N/A -0.26 06/23/94
Class C Shares -22.03 N/A N/A -0.11 01/31/96
Class Y Shares -21.16 N/A N/A -1.67 04/09/98
54
19. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED
STOCK RATINGS1
Moody's Investors Service, Inc. ("Moody's") Prime Rating System
Moody's short-term issuer ratings are opinions of the ability of issuers to
honor senior financial obligations and contracts. These obligations have an
original maturity not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt and ample
asset protection. Broad margins in earnings coverage of fixed financial charges
and high internal cash generation. Well-established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.
Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
- ---------------
(1) The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the fund's fiscal year-end.
55
If an issuer represents to Moody's that its short-term debt obligations are
supported by the credit of another entity or entities, then the name or names of
such supporting entity or entities are listed within the parenthesis beneath the
name of the issuer, or there is a footnote referring the reader to another page
for the name or names of the supporting entity or entities. In assigning ratings
to such issuers, Moody's evaluates the financial strength of the affiliated
corporations, commercial banks, insurance companies, foreign governments or
other entities, but only as one factor in the total rating assessment. Moody's
makes no representation and gives no opinion on the legal validity or
enforceability of any support arrangements.
Moody's Debt Ratings
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
56
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Issues that are secured by escrowed funds held in trust, reinvested in direct,
non-callable US government obligations or noncallable obligations
unconditionally guaranteed by the US Government or Resolution Funding
Corporation are identified with a # (hatchmark) symbol, e.g., #Aaa.
Con. (...): Bonds for which the security depends on the completion of some act
or the fulfillment of some condition are rated conditionally. These are bonds
secured by a) earnings of projects under construction, b) earnings of projects
unseasoned in operation experience, c) rentals which begin when facilities are
completed, or d) payments to which some other limiting condition attaches. The
parenthetical rating denotes probable credit stature upon completion of
construction or elimination of the basis of the condition
Moody's assigns ratings to individual long-term debt securities issued from
medium-term note (MTN) programs, in addition to indicating ratings to MTN
programs themselves. Notes issued under MTN programs with such indicated ratings
are rated at issuance at the rating applicable to all pari passu notes issued
under the same program, at the program's relevant indicated rating, provided
such notes do not exhibit any of the characteristics listed below. For notes
with any of the following characteristics, the rating of the individual note may
differ from the indicated rating of the program:
1) Notes containing features which link the cash flow and/or market value to the
credit performance of any third party or parties.
57
2) Notes allowing for negative coupons, or negative principal.
3) Notes containing any provision which could obligate the investor to make any
additional payments.
Market participants must determine whether any particular note is rated, and if
so, at what rating level.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
Moody's Preferred Stock Ratings
Because of the fundamental differences between preferred stocks and bonds,
Moody's employs a variation of Moody's familiar bond rating symbols in the
quality ranking of preferred stock. These symbols, presented below, are designed
to avoid comparison with bond quality in absolute terms. It should always be
borne in mind that preferred stock occupies a junior position to bonds within a
particular capital structure and that these securities are rated within the
universe of preferred stocks.
aaa: An issue rated aaa is considered to be a top-quality preferred stock. This
rating indicates good asset protection and the least risk of dividend impairment
within the universe of preferred stocks.
aa: An issue rated aa is considered a high-grade preferred stock. This rating
indicates that there is a reasonable assurance the earnings and asset protection
will remain relatively well maintained in the foreseeable future.
a: An issue rated a is considered to be an upper-medium-grade preferred stock.
While risks are judged to be somewhat greater than in the aaa and aa
classifications, earnings and asset protection are, nevertheless, expected to be
maintained at adequate levels.
baa: An issue rated baa is considered to be a medium-grade preferred stock,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
ba: An issue rated ba is considered to have speculative elements. Its future
cannot be considered well assured. Earnings and asset protection may be very
moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.
b: An issue rated b generally lacks the characteristics of a desirable
investment. Assurance of dividend payments and maintenance of other terms of the
issue over any long period of time may be small.
caa: An issue rated caa is likely to be in arrears on dividend payments. This
rating designation does not purport to indicate the future status of payments.
ca: An issue rated ca is speculative in a high degree and is likely to be in
arrears on dividends with little likelihood of eventual payments.
c: This is the lowest-rated class of preferred or preference stock. Issues so
rated can thus be regarded as having extremely poor prospects of ever attaining
any real investment standing.
58
Note: As in the case of bond ratings, Moody's applies to preferred stock ratings
the numerical modifiers 1, 2, and 3 in rating classifications aa through b. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Standard & Poor's Short-Term Issue Credit Ratings
A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
B: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
Standard & Poor's Long-Term Issue Credit Ratings
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation; Nature of and provisions of the obligation; Protection afforded by,
and relative position of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the
59
lower priority in bankruptcy, as noted above. (Such differentiation applies when
an entity has both senior and subordinated obligations, secured and unsecured
obligations, or operating company and holding company obligations.) Accordingly,
in the case of junior debt, the rating may not conform exactly with the category
definition.
AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated AA differs from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B: An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: A subordinated debt or preferred stock obligation rated C is currently highly
vulnerable to nonpayment. The C rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action taken, but payments on this
obligation are being continued. A C also will be assigned to a preferred stock
issue in arrears on dividends or sinking fund payments but that is currently
paying.
D: An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also
60
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.
Local Currency and Foreign Currency Risks
Country risk considerations are a standard part of Standard & Poor's analysis
for credit ratings on any issuer or issue. Currency of repayment is a key factor
in this analysis. An obligor's capacity to repay foreign currency obligations
may be lower than its capacity to repay obligations in its local currency due to
the sovereign government's own relatively lower capacity to repay external
versus domestic debt. These sovereign risk considerations are incorporated in
the debt ratings assigned to specific issues. Foreign currency issuer ratings
are also distinguished from local currency issuer ratings to identify those
instances where sovereign risks make them different for the same issuer.
61
20. APPENDIX C - PERFORMANCE STATISTICS
Pioneer Emerging Markets Fund
Class A Shares
Net Asset Initial Net
Initial Offering Sales Charge Shares Value Per Asset
Date Investment Price Included Purchased Share Value
6/23/94 $10,000 $13.26 5.75% 754.148 $12.50 $9,425
Value of Shares
(Dividends and Capital Gains Reinvested)
From Capital From
From Gains Dividends Total
Date Investment Reinvested Reinvested Value
12/31/94 $8,809 $61 $41 $8,911
12/31/95 $8,990 $99 $42 $9,131
12/31/96 $9,985 $723 $46 $10,754
12/31/97 $9,940 $1,829 $46 $11,815
12/31/98 $6,651 $1,336 $31 $8,018
12/31/99 $12,707 $2,552 $59 $15,318
12/31/00 $8,424 $1,692 $39 $10,155
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
62
Pioneer Emerging Markets Fund
Class B Shares
Net Asset Initial Net
Initial Offering Sales Charge Shares Value Per Asset
Date Investment Price Included Purchased Share Value
6/23/94 $10,000 $12.50 0.00% 800.000 $12.50 $10,000
Value of Shares
(Dividends and Capital Gains Reinvested)
From From
From Capital Gains Dividends CDSC if Total
Date Investment Reinvested Reinvested Redeemed Value CDSC %
12/31/94 $9,312 $65 $24 $372 $9,029 4.00
12/31/95 $9,456 $105 $25 $378 $9,208 4.00
12/31/96 $10,416 $764 $27 $300 $10,907 3.00
12/31/97 $10,272 $1,929 $27 $300 $11,928 3.00
12/31/98 $6,608 $1,396 $18 $132 $7,890 2.00
12/31/99 $12,912 $2,648 $34 $100 $15,494 1.00
12/31/00 $8,480 $1,739 $22 $0 $10,241 0.00
Class C Shares
Net Asset Initial Net
Initial Offering Sales Charge Shares Value Per Asset
Date Investment Price Included Purchased Share Value
1/31/96 $10,000 $13.22 0.00% 756.429 $13.22 $10,000
Value of Shares
(Dividends and Capital Gains Reinvested)
From From
From Capital Gains Dividends CDSC if Total
Date Investment Reinvested Reinvested Redeemed Value CDSC %
12/31/96 $9,841 $604 $0 $98 $10,347 1.00
12/31/97 $9,705 $1,692 $0 $0 $11,397 0.00
12/31/98 $6,422 $1,229 $0 $0 $7651 0.00
12/31/99 $12,110 $2,318 $0 $0 $14,428 0.00
12/31/00 $7,973 $1,526 $0 $0 $9,499 0.00
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
63
Pioneer Emerging Markets Fund
Class Y Shares
Net Asset
Initial Offering Sales Charge Shares Value Per Initial Net
Date Investment Price Included Purchased Share Asset Value
4/9/98 $10,000 $14.55 0.00% 687.285 $14.55 $10,000
Value of Shares
(Dividends and Capital Gains Reinvested)
From From
From Capital Gains Dividends Total
Date Investment Reinvested Reinvested Value
12/31/98 $6,103 $86 $0 $6,189
12/31/99 $11,739 $165 $0 $11,904
12/31/00 $7,821 $110 $0 $7,931
Past performance does not guarantee future results. Return and share price
fluctuate and your shares when redeemed may be worth more or less than your
original cost.
64
Comparative Performance Index Descriptions
The following securities indices are well known, unmanaged measures of market
performance. Advertisements and sales literature for the fund may refer to these
indices or may present comparisons between the performance of the fund and one
or more of the indices. Other indices may also be used, if appropriate. The
indices are not available for direct investment. The data presented are not
meant to be indicative of the performance of the fund, do not reflect past
performance and do not guarantee future results.
S&P 500. This index is a readily available, carefully constructed, market value
weighted benchmark of common stock performance. Currently, the S&P 500 includes
500 of the largest stocks (in terms of stock market value) in the U.S.
Dow Jones Industrial Average. This is a total return index based on the
performance of stocks of 30 blue chip companies widely held by individuals and
institutional investors. The 30 stocks represent about a fifth of the $8
trillion-plus market value of all U.S. stocks and about a fourth of the value of
stocks listed on the New York Stock Exchange (NYSE).
U.S. Small Stock Index. This index is a market value weighted index of the ninth
and tenth deciles of the NYSE, plus stocks listed on the American Stock Exchange
and over the counter with the same or less capitalization as the upper bound of
the NYSE ninth decile.
U.S. Inflation. The Consumer Price Index for All Urban Consumers (CPI-U), not
seasonally adjusted, is used to measure inflation, which is the rate of change
of consumer goods prices. Unfortunately, the inflation rate as derived by the
CPI is not measured over the same period as the other asset returns. All of the
security returns are measured from one month-end to the next month-end. CPI
commodity prices are collected during the month. Thus, measured inflation rates
lag the other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA Indexes. The S&P/BARRA Growth and Value Indexes are constructed by
dividing the stocks in the S&P 500 according to price-to-book ratios. The Growth
Index contains stocks with higher price-to-book ratios, and the Value Index
contains stocks with lower price-to-book ratios. Both indexes are market
capitalization weighted.
Merrill Lynch Micro-Cap Index. The Merrill Lynch Micro-Cap Index represents the
performance of 1,980 stocks ranging in market capitalization from $50 million to
$125 million. Index returns are calculated monthly.
Merrill Lynch High Yield Master II Index. This index is a market capitalization
weighted total return index covering U.S. dollar-denominated high-yield bonds.
Qualifying bonds must have at least $100 million par amount outstanding, a
remaining term to maturity greater than or equal to one year, and a credit
rating less than BBB3 but not in default (based on the composite of Moody's and
Standard & Poor's). The index includes deferred interest and pay-in-kind bonds,
but excludes structured notes, floating rate notes and other variable coupon
securities. The index also excludes emerging markets debt (issuers domiciled in
below investment grade rated countries). Index constituents are rebalanced
monthly on the last calendar day of the month. Index values are calculated
daily.
65
Merrill Lynch Index of Convertible Bonds (Speculative Quality). This is a market
capitalization weighted index including all mandatory and non-mandatory domestic
corporate convertible securities with at least an original par of $50 million or
a $50 million market value; securities dropping below a market value of $40
million are excluded. Returns are calculated weekly based on Thursday's closing
prices and are linked monthly. All securities must be convertible to common
stock only. Quality range is D3-BB1 based on composite Moody's and Standard &
Poor's ratings.
Long-Term U.S. Government Bonds. The total returns on long-term government bonds
after 1977 are constructed with data from The Wall Street Journal and are
calculated as the change in the flat price or and-interest price. From 1926 to
1976, data are obtained from the government bond file at the Center for Research
in Security Prices (CRSP), Graduate School of Business, University of Chicago.
Each year, a one-bond portfolio with a term of approximately 20 years and a
reasonably current coupon was used and whose returns did not reflect potential
tax benefits, impaired negotiability or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates minus the current date. The
bond was "held" for the calendar year and returns were computed.
Intermediate-Term U.S. Government Bonds. Total returns of intermediate-term
government bonds after 1987 are calculated from The Wall Street Journal prices,
using the change in flat price. Returns from 1934 to 1986 are obtained from the
CRSP government bond file.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than five years, and this bond is
"held" for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds
with maturities near five years were partially or fully tax-exempt and were
selected using the rules described above. Personal tax rates were generally low
in that period, so that yields on tax-exempt bonds were similar to yields on
taxable bonds. From 1926 to 1933, there are few bonds suitable for construction
of a series with a five-year maturity. For this period, five-year bond yield
estimates are used.
Morgan Stanley Capital International ("MSCI") Indices. These indices are in U.S.
dollar terms with or without dividends reinvested and measure the performance of
developed and emerging stock markets in individual countries and regions around
the world. MSCI All Country indices represent both the developed and the
emerging markets for a particular region. The Free indices exclude shares which
are not readily purchased by non-local investors. These indices are unmanaged.
MSCI covers thousands of securities in 51 stock markets around the world.
Several Pioneer mutual funds that invest in international securities compare
their performance to various MSCI indices.
6-Month CDs. Data sources include the Federal Reserve Bulletin and The Wall
Street Journal.
Long-Term U.S. Corporate Bonds. Since 1969, corporate bond total returns are
represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index.
As most large corporate bond transactions take place over the counter, a major
dealer is the natural source of these data. The index includes nearly all Aaa-
and Aa-rated bonds with at least 10 years to maturity. If a bond is downgraded
during a particular month, its return for the month is included in the index
before removing the bond from future portfolios.
66
From 1926 to 1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946 to 1968,
Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon
Brothers' monthly yield data with a methodology similar to that used by Salomon
Brothers for 1969 to 1995. Capital appreciation returns were calculated from
yields assuming (at the beginning of each monthly holding period) a 20-year
maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's
monthly high-grade corporate composite yield data were used, assuming a 4%
coupon and a 20-year maturity. The conventional present-value formula for bond
price for the beginning and end-of-month prices was used. (This formula is
presented in Ross, Stephen A., and Westerfield, Randolph W., Corporate Finance,
Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly
income return was assumed to be one-twelfth the coupon.
Lehman Brothers Government/Credit Bond Index - Intermediate. This index is
comprised of securities with one to ten years to maturity. It includes Treasury
and government agency securities, investment-grade corporate bonds and Yankee
bonds.
U.S. (30-Day) Treasury Bills. For the U.S. Treasury Bill Index, data from The
Wall Street Journal are used after 1977; the CRSP government bond file is the
source until 1976. Each month a one-bill portfolio containing the shortest-term
bill having not less than one month to maturity is constructed. (The bill's
original term to maturity is not relevant.) To measure holding period returns
for the one-bill portfolio, the bill is priced as of the last trading day of the
previous month-end and as of the last trading day of the current month.
National Association of Real Estate Investment Trusts ("NAREIT") Equity REIT
Index. All of the data are based upon the last closing price of the month for
all tax-qualified REITs listed on the NYSE, AMEX and Nasdaq. The data are
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighting at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
Russell U.S. Equity Indexes. The Russell 3000(R) Index (the "Russell 3000") is
comprised of the 3,000 largest U.S. companies as determined by market
capitalization representing approximately 98% of the U.S. equity market. The
average market capitalization is approximately $5.1 billion. The Russell
2500(TM) Index measures performance of the 2,500 smallest companies in the
Russell 3000. The average market capitalization is approximately $958.8 million,
and the largest company in the index has an approximate market capitalization of
$4 billion. The Russell 2000(R) Index measures performance of the 2,000 smallest
stocks in the Russell 3000; the largest company in the index has a market
capitalization of approximately $1.5 billion. The Russell 1000(R) Index (the
"Russell 1000") measures the performance of the 1,000 largest companies in the
Russell 3000. The average market capitalization is approximately $14.1 billion.
The smallest company in the index has an approximate market capitalization of
$1.6 billion. The Russell Midcap(R) Index measures performance of the 800
smallest companies in the Russell 1000. The largest company in the index has an
approximate market capitalization of $13 billion. The Russell 1000(R) Growth
Index measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values. The Russell 1000(R)
Value Index measures the
67
performance of those Russell 1000 companies with lower price-to-book ratios and
lower forecasted growth values.
The Russell indexes are reconstituted annually as of June 30, based on May 31
market capitalizations.
Wilshire Real Estate Securities Index. The Wilshire Real Estate Securities Index
is a broad measure of the performance of publicly traded real estate securities,
such as REITs and real estate operating companies ("REOCs"). The index is
capitalization-weighted. As of July 31, 2000, 112 companies were included in the
index, with a total market cap of $133.753 billion. At December 31, 2000, the
companies in the index were 92.92% equity and hybrid REITs and 7.08% REOCs.
Standard & Poor's MidCap 400 Index. The S&P 400 is a market-capitalization-
weighted index. The performance data for the index were calculated by taking the
stocks presently in the index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the S&P 400 five or ten years ago had it existed. Dividends are
reinvested on a monthly basis prior to June 30, 1991, and are reinvested daily
thereafter.
Lipper Indexes. These indexes represent equally weighted performance, adjusted
for capital gain distributions and income dividends, of mutual funds that are
considered peers of the Pioneer mutual funds. Lipper, Inc. is an independent
firm that tracks mutual fund performance.
Lehman Brothers Aggregate Bond Index. The Lehman Brothers Aggregate Bond Index
is composed of the Lehman Brothers Government/Credit Index, the Lehman Brothers
Mortgage-Backed Securities Index, the Lehman Brothers Asset-Backed Securities
Index and the Lehman Brothers Commercial Mortgage-Backed Securities Index. The
index is a recognized measure of the performance of the U.S. investment grade
fixed rate bond market.
Bank Savings Account. Data sources include the U.S. League of Savings
Institutions Sourcebook; average annual yield on savings deposits in FSLIC
[FDIC] insured savings institutions for the years 1963 to 1987; and The Wall
Street Journal thereafter.
Nasdaq Composite Index. The Nasdaq Composite Index measures all Nasdaq domestic
and non-U.S. based common stocks listed on The Nasdaq Stock Market. The index is
market-value weighted. The Nasdaq Composite includes over 5,000 companies and is
one of the most widely followed and quoted major market indices because it is so
broad-based.
Sources: Ibbotson Associates, Towers Data Systems, Lipper, Inc. and PIM-USA
68
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Dow S&P/ S&P/ Merrill
Jones U.S. Small BARRA BARRA Lynch
S&P Industrial Stock U.S. 500 500 Micro-Cap
500 Average Index Inflation Growth Value Index
- -------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A 0.28 -1.49 N/A N/A N/A
Dec 1927 N/A N/A 22.10 -2.08 N/A N/A N/A
Dec 1928 43.60 N/A 39.69 -0.97 N/A N/A N/A
Dec 1929 -8.55 N/A -51.36 0.20 N/A N/A N/A
Dec 1930 -24.78 N/A -38.15 -6.03 N/A N/A N/A
Dec 1931 -43.13 N/A -49.75 -9.52 N/A N/A N/A
Dec 1932 -8.26 N/A -5.39 -10.30 N/A N/A N/A
Dec 1933 54.20 N/A 142.87 0.51 N/A N/A N/A
Dec 1934 -1.52 N/A 24.22 2.03 N/A N/A N/A
Dec 1935 47.61 N/A 40.19 2.99 N/A N/A N/A
Dec 1936 33.74 N/A 64.80 1.21 N/A N/A N/A
Dec 1937 -34.73 N/A -58.01 3.10 N/A N/A N/A
Dec 1938 30.76 N/A 32.80 -2.78 N/A N/A N/A
Dec 1939 -0.38 N/A 0.35 -0.48 N/A N/A N/A
Dec 1940 -9.77 N/A -5.16 0.96 N/A N/A N/A
Dec 1941 -11.59 N/A -9.00 9.72 N/A N/A N/A
Dec 1942 20.15 N/A 44.51 9.29 N/A N/A N/A
Dec 1943 25.63 N/A 88.37 3.16 N/A N/A N/A
Dec 1944 19.53 N/A 53.72 2.11 N/A N/A N/A
Dec 1945 36.31 N/A 73.61 2.25 N/A N/A N/A
Dec 1946 -8.02 N/A -11.63 18.16 N/A N/A N/A
Dec 1947 5.63 N/A 0.92 9.01 N/A N/A N/A
Dec 1948 5.37 N/A -2.11 2.71 N/A N/A N/A
Dec 1949 18.60 N/A 19.75 -1.80 N/A N/A N/A
Dec 1950 31.46 N/A 38.75 5.79 N/A N/A N/A
Dec 1951 23.97 N/A 7.80 5.87 N/A N/A N/A
Dec 1952 18.16 N/A 3.03 0.88 N/A N/A N/A
Dec 1953 -0.94 N/A -6.49 0.62 N/A N/A N/A
Dec 1954 52.27 N/A 60.58 -0.50 N/A N/A N/A
Dec 1955 31.41 N/A 20.44 0.37 N/A N/A N/A
Dec 1956 6.48 N/A 4.28 2.86 N/A N/A N/A
Dec 1957 -10.72 N/A -14.57 3.02 N/A N/A N/A
Dec 1958 43.15 N/A 64.89 1.76 N/A N/A N/A
Dec 1959 11.95 N/A 16.40 1.50 N/A N/A N/A
Dec 1960 0.45 -6.12 -3.29 1.48 N/A N/A N/A
Dec 1961 26.88 22.64 32.09 0.67 N/A N/A N/A
Dec 1962 -8.66 -7.46 -11.90 1.22 N/A N/A N/A
Dec 1963 22.76 20.86 23.57 1.65 N/A N/A N/A
69
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Dow S&P/ S&P/ Merrill
Jones U.S. Small BARRA BARRA Lynch
S&P Industrial Stock U.S. 500 500 Micro-Cap
500 Average Index Inflation Growth Value Index
- -------------------------------------------------------------------------------------------------------
Dec 1964 16.43 18.92 23.52 1.19 N/A N/A N/A
Dec 1965 12.46 14.39 41.75 1.92 N/A N/A N/A
Dec 1966 -10.02 -15.85 -7.01 3.35 N/A N/A N/A
Dec 1967 23.89 19.22 83.57 3.04 N/A N/A N/A
Dec 1968 11.04 7.94 35.97 4.72 N/A N/A N/A
Dec 1969 -8.40 -11.84 -25.05 6.11 N/A N/A N/A
Dec 1970 3.89 9.28 -17.43 5.49 N/A N/A N/A
Dec 1971 14.22 9.89 16.50 3.36 N/A N/A N/A
Dec 1972 18.96 18.52 4.43 3.41 N/A N/A N/A
Dec 1973 -14.67 -13.29 -30.90 8.80 N/A N/A N/A
Dec 1974 -26.31 -23.73 -19.95 12.20 N/A N/A N/A
Dec 1975 37.14 44.87 52.82 7.01 31.72 43.38 N/A
Dec 1976 23.81 22.93 57.38 4.81 13.84 34.93 N/A
Dec 1977 -7.19 -12.84 25.38 6.77 -11.82 -2.57 N/A
Dec 1978 6.52 2.81 23.46 9.03 6.78 6.16 27.76
Dec 1979 18.45 10.68 43.46 13.31 15.72 21.16 43.18
Dec 1980 32.45 22.13 39.88 12.40 39.40 23.59 32.32
Dec 1981 -4.88 -3.65 13.88 8.94 -9.81 0.02 9.18
Dec 1982 21.50 27.20 28.01 3.87 22.03 21.04 33.62
Dec 1983 22.46 26.05 39.67 3.80 16.24 28.89 42.44
Dec 1984 6.22 1.35 -6.67 3.95 2.33 10.52 -14.97
Dec 1985 31.64 33.62 24.66 3.77 33.31 29.68 22.89
Dec 1986 18.62 27.25 6.85 1.13 14.50 21.67 3.45
Dec 1987 5.18 5.55 -9.30 4.41 6.50 3.68 -13.84
Dec 1988 16.50 16.21 22.87 4.42 11.95 21.67 22.76
Dec 1989 31.59 32.24 10.18 4.65 36.40 26.13 8.06
Dec 1990 -3.11 -0.54 -21.56 6.11 0.20 -6.85 -29.55
Dec 1991 30.34 24.25 44.63 3.06 38.37 22.56 57.44
Dec 1992 7.61 7.40 23.35 2.90 5.07 10.53 36.62
Dec 1993 10.03 16.97 20.98 2.75 1.68 18.60 31.32
Dec 1994 1.36 5.02 3.11 2.67 3.13 -0.63 1.81
Dec 1995 37.44 36.94 34.46 2.54 38.13 37.00 30.70
Dec 1996 22.90 28.91 17.62 3.32 23.98 21.99 13.88
Dec 1997 33.32 24.91 22.78 1.70 36.38 29.99 24.61
Dec 1998 28.52 18.16 -7.31 1.61 42.15 14.68 -6.15
Dec 1999 21.01 27.29 29.79 2.81 28.25 12.72 40.04
Dec 2000 -9.11 -4.69 -3.59 3.86 -22.08 6.08 -6.13
70
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Long- Intermediate- MSCI Long- Lehman
Term Term U.S. EAFE 6- Term U.S. Bros. U.S.
U.S. Gov't Government (Net of Month Corporate Gov't/Credit T-Bill
Bonds Bonds Taxes) CDs Bonds Intermediate (30-Day)
- ------------------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 N/A 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 N/A 3.12
Dec 1928 0.10 0.92 N/A N/A 2.84 N/A 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 N/A 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 N/A 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 N/A 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 N/A 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 N/A 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 N/A 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 N/A 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 N/A 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 N/A 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 N/A -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 N/A 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 N/A 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 N/A 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 N/A 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 N/A 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 N/A 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 N/A 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 N/A 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 N/A 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 N/A 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 N/A 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 N/A 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 N/A 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 N/A 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 N/A 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 N/A 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 N/A 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 N/A 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 N/A 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 N/A 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 N/A 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 N/A 2.66
71
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Long- Intermediate- MSCI Long- Lehman
Term Term U.S. EAFE 6- Term U.S. Bros. U.S.
U.S. Gov't Government (Net of Month Corporate Gov't/Credit T-Bill
Bonds Bonds Taxes) CDs Bonds Intermediate (30-Day)
- ------------------------------------------------------------------------------------------------------------------
Dec 1961 0.97 1.85 N/A N/A 4.82 N/A 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 N/A 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 N/A 3.12
Dec 1964 3.51 4.04 N/A 4.17 4.77 N/A 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 N/A 3.93
Dec 1966 3.65 4.69 N/A 5.76 0.20 N/A 4.76
Dec 1967 -9.18 1.01 N/A 5.47 -4.95 N/A 4.21
Dec 1968 -0.26 4.54 N/A 6.45 2.57 N/A 5.21
Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 N/A 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 N/A 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 N/A 4.39
Dec 1972 5.69 5.16 36.35 5.39 7.26 N/A 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 3.34 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 5.86 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 9.49 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 12.33 5.08
Dec 1977 -0.69 1.41 18.06 6.11 1.71 3.31 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 2.12 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 5.99 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 6.42 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 10.51 14.71
Dec 1982 40.36 29.10 -1.86 12.18 42.56 26.11 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.60 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 14.37 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 18.06 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 13.13 6.16
Dec 1987 -2.71 2.90 24.63 6.59 -0.27 3.66 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.67 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 12.77 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 9.16 7.81
Dec 1991 19.30 15.46 12.13 4.95 19.89 14.62 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 7.17 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 8.79 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 -1.93 3.90
Dec 1995 31.67 16.80 11.21 5.21 27.20 15.33 5.60
Dec 1996 -0.93 2.10 6.05 5.21 1.40 4.05 5.21
Dec 1997 15.85 8.38 1.78 5.71 12.95 7.87 5.26
Dec 1998 13.06 10.21 20.00 5.34 10.76 8.44 4.86
Dec 1999 -8.96 -1.77 26.96 5.43 -7.45 0.39 4.68
Dec 2000 21.48 12.59 -14.17 6.64 12.87 10.12 5.89
72
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT Wilshire Lipper MSCI
Equity Russell Real Estate Balanced Emerging Bank
REIT 2000(R) Securities S&P Fund Markets Savings
Index Index Index 400 Index Free Index Account
- -------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86
Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
73
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
NAREIT Wilshire Lipper MSCI
Equity Russell Real Estate Balanced Emerging Bank
REIT 2000(R) Securities S&P Fund Markets Savings
Index Index Index 400 Index Free Index Account
- -------------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08
Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17
Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19
Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23
Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45
Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67
Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68
Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80
Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14
Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30
Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37
Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51
Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96
Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21
Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23
Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56
Dec 1979 35.86 43.07 70.81 N/A 14.67 N/A 7.29
Dec 1980 24.37 38.60 22.08 N/A 19.70 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.69 30.63 N/A 11.19
Dec 1983 30.64 29.13 27.61 26.08 17.44 N/A 9.71
Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92
Dec 1985 19.10 31.05 20.14 35.59 29.83 N/A 9.02
Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84
Dec 1987 -3.64 -8.80 -7.86 -2.04 4.13 N/A 6.92
Dec 1988 13.49 25.02 24.18 20.87 11.18 40.43 7.20
Dec 1989 8.84 16.26 2.37 35.55 19.70 64.96 7.91
Dec 1990 -15.35 -19.48 -33.46 -5.12 0.66 -10.55 7.80
Dec 1991 35.70 46.04 20.03 50.10 25.83 59.91 4.61
Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89
Dec 1993 19.65 18.88 15.24 13.95 11.95 74.83 2.73
Dec 1994 3.17 -1.82 1.64 -3.58 -2.05 -7.32 4.96
Dec 1995 15.27 28.45 13.65 30.95 24.89 -5.21 5.24
Dec 1996 35.26 16.50 36.87 19.20 13.05 6.03 4.95
Dec 1997 20.29 22.36 19.80 32.25 20.30 -11.59 5.17
Dec 1998 -17.51 -2.55 -17.43 19.11 15.09 -25.34 4.63
Dec 1999 -4.62 21.26 14.72 14.72 8.98 66.41 5.29
Dec 2000 25.77 -3.02 30.74 17.50 2.39 -30.61 3.71
74
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Merrill
MSCI MSCI All Lynch
All Country Merrill Index of Lipper
Country (AC) Asia Lehman Lynch Convertible Lipper Growth &
(AC) Asia Pacific Brothers High Yield Bonds Russell Growth Income
Free Free Aggregate Master II (Speculative 1000(R) Fund Fund
ex Japan ex Japan Bond Index Index Quality) Index Index Index
- ---------------------------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1931 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1932 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1933 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1934 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1935 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1936 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1937 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1938 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1939 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1940 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1941 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1942 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1943 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1944 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1945 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1946 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1947 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1948 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1949 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1950 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1951 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1952 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1953 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1954 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1955 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1956 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1957 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1958 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1959 N/A N/A N/A N/A N/A N/A N/A N/A
Dec 1960 N/A N/A N/A N/A N/A N/A 6.36 3.04
Dec 1961 N/A N/A N/A N/A N/A N/A 30.16 26.00
75
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Merrill
MSCI MSCI All Lynch
All Country Merrill Index of Lipper
Country (AC) Asia Lehman Lynch Convertible Lipper Growth &
(AC) Asia Pacific Brothers High Yield Bonds Russell Growth Income
Free Free Aggregate Master II (Speculative 1000(R) Fund Fund
ex Japan ex Japan Bond Index Index Quality) Index Index Index
- ---------------------------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A N/A N/A -16.84 -11.87
Dec 1963 N/A N/A N/A N/A N/A N/A 22.43 19.10
Dec 1964 N/A N/A N/A N/A N/A N/A 14.99 15.23
Dec 1965 N/A N/A N/A N/A N/A N/A 26.61 19.00
Dec 1966 N/A N/A N/A N/A N/A N/A -1.80 -6.04
Dec 1967 N/A N/A N/A N/A N/A N/A 45.31 27.59
Dec 1968 N/A N/A N/A N/A N/A N/A 15.34 15.29
Dec 1969 N/A N/A N/A N/A N/A N/A -10.62 -11.80
Dec 1970 N/A N/A N/A N/A N/A N/A -8.57 1.10
Dec 1971 N/A N/A N/A N/A N/A N/A 26.17 13.77
Dec 1972 N/A N/A N/A N/A N/A N/A 18.08 12.87
Dec 1973 N/A N/A N/A N/A N/A N/A -24.75 -14.27
Dec 1974 N/A N/A N/A N/A N/A N/A -30.73 -20.85
Dec 1975 N/A N/A N/A N/A N/A N/A 32.83 34.62
Dec 1976 N/A N/A 15.60 N/A N/A N/A 20.07 25.66
Dec 1977 N/A N/A 3.04 N/A N/A N/A -2.62 -3.64
Dec 1978 N/A N/A 1.39 N/A N/A N/A 12.53 7.99
Dec 1979 N/A N/A 1.93 N/A N/A 22.31 29.29 23.87
Dec 1980 N/A N/A 2.71 N/A N/A 31.88 38.67 28.27
Dec 1981 N/A N/A 6.25 N/A N/A -5.10 -6.82 -1.39
Dec 1982 N/A N/A 32.62 N/A N/A 20.30 24.04 24.17
Dec 1983 N/A N/A 8.36 N/A N/A 22.13 21.35 22.76
Dec 1984 N/A N/A 15.15 N/A N/A 4.75 -3.60 4.29
Dec 1985 N/A N/A 22.10 N/A N/A 32.27 30.14 28.55
Dec 1986 N/A N/A 15.26 N/A N/A 17.87 15.59 17.63
Dec 1987 N/A N/A 2.76 4.47 N/A 2.94 3.25 2.64
Dec 1988 30.00 30.45 7.89 13.36 16.19 17.23 14.13 18.35
Dec 1989 32.13 21.43 14.53 2.31 9.82 30.42 27.47 23.73
Dec 1990 -6.54 -11.86 8.96 -4.36 -8.61 -4.16 -5.41 -5.99
Dec 1991 30.98 32.40 16.00 39.17 37.53 33.03 36.33 27.75
Dec 1992 21.81 9.88 7.40 17.44 24.06 9.04 7.63 9.63
Dec 1993 103.39 84.94 9.75 16.69 19.37 10.15 11.98 14.62
Dec 1994 -16.94 -12.59 -2.92 -1.03 -6.91 0.38 -1.57 -0.41
Dec 1995 4.00 10.00 18.47 20.46 25.14 37.77 32.65 31.14
Dec 1996 10.05 8.08 3.63 11.27 15.29 22.45 17.53 20.67
Dec 1997 -40.31 -34.20 9.65 13.27 16.76 32.85 28.03 26.88
Dec 1998 -7.79 -4.42 8.69 2.95 12.62 27.02 25.69 13.58
Dec 1999 64.67 49.83 -0.82 2.51 38.91 20.91 27.96 11.86
Dec 2000 -35.22 -29.97 11.63 -5.12 18.86 -7.79 -10.88 0.39
76
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI All Russell Russell
MSCI MSCI Country World 1000(R) 1000(R) Nasdaq
Europe World Free ex U.S. Growth Value Composite
Index Index Index Index Index Index
- ------------------------------------------------------------------------------------------------
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A N/A N/A
Dec 1931 N/A N/A N/A N/A N/A N/A
Dec 1932 N/A N/A N/A N/A N/A N/A
Dec 1933 N/A N/A N/A N/A N/A N/A
Dec 1934 N/A N/A N/A N/A N/A N/A
Dec 1935 N/A N/A N/A N/A N/A N/A
Dec 1936 N/A N/A N/A N/A N/A N/A
Dec 1937 N/A N/A N/A N/A N/A N/A
Dec 1938 N/A N/A N/A N/A N/A N/A
Dec 1939 N/A N/A N/A N/A N/A N/A
Dec 1940 N/A N/A N/A N/A N/A N/A
Dec 1941 N/A N/A N/A N/A N/A N/A
Dec 1942 N/A N/A N/A N/A N/A N/A
Dec 1943 N/A N/A N/A N/A N/A N/A
Dec 1944 N/A N/A N/A N/A N/A N/A
Dec 1945 N/A N/A N/A N/A N/A N/A
Dec 1946 N/A N/A N/A N/A N/A N/A
Dec 1947 N/A N/A N/A N/A N/A N/A
Dec 1948 N/A N/A N/A N/A N/A N/A
Dec 1949 N/A N/A N/A N/A N/A N/A
Dec 1950 N/A N/A N/A N/A N/A N/A
Dec 1951 N/A N/A N/A N/A N/A N/A
Dec 1952 N/A N/A N/A N/A N/A N/A
Dec 1953 N/A N/A N/A N/A N/A N/A
Dec 1954 N/A N/A N/A N/A N/A N/A
Dec 1955 N/A N/A N/A N/A N/A N/A
Dec 1956 N/A N/A N/A N/A N/A N/A
Dec 1957 N/A N/A N/A N/A N/A N/A
Dec 1958 N/A N/A N/A N/A N/A N/A
Dec 1959 N/A N/A N/A N/A N/A N/A
Dec 1960 N/A N/A N/A N/A N/A N/A
Dec 1961 N/A N/A N/A N/A N/A N/A
77
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI All Russell Russell
MSCI MSCI Country World 1000(R) 1000(R) Nasdaq
Europe World Free ex U.S. Growth Value Composite
Index Index Index Index Index Index
- ------------------------------------------------------------------------------------------------
Dec 1962 N/A N/A N/A N/A N/A N/A
Dec 1963 N/A N/A N/A N/A N/A N/A
Dec 1964 N/A N/A N/A N/A N/A N/A
Dec 1965 N/A N/A N/A N/A N/A N/A
Dec 1966 N/A N/A N/A N/A N/A N/A
Dec 1967 N/A N/A N/A N/A N/A N/A
Dec 1968 N/A N/A N/A N/A N/A N/A
Dec 1969 N/A N/A N/A N/A N/A N/A
Dec 1970 -10.64 -3.09 N/A N/A N/A N/A
Dec 1971 26.33 18.36 N/A N/A N/A N/A
Dec 1972 14.40 22.48 N/A N/A N/A 17.18
Dec 1973 -8.77 -15.24 N/A N/A N/A -31.06
Dec 1974 -24.07 -25.47 N/A N/A N/A -35.11
Dec 1975 41.45 32.80 N/A N/A N/A 29.76
Dec 1976 -7.80 13.40 N/A N/A N/A 26.10
Dec 1977 21.90 0.68 N/A N/A N/A 7.33
Dec 1978 21.88 16.52 N/A N/A N/A 12.31
Dec 1979 12.31 10.95 N/A 23.91 20.55 28.11
Dec 1980 11.90 25.67 N/A 39.57 24.41 33.88
Dec 1981 -12.46 -4.79 N/A -11.31 1.26 -3.21
Dec 1982 3.97 9.71 N/A 20.46 20.04 18.67
Dec 1983 20.96 21.93 N/A 15.98 28.28 19.87
Dec 1984 0.62 4.72 N/A -0.95 10.10 -11.22
Dec 1985 78.93 40.56 N/A 32.85 31.51 31.36
Dec 1986 43.85 41.89 N/A 15.36 19.98 7.36
Dec 1987 3.66 16.16 N/A 5.31 0.50 -5.26
Dec 1988 15.81 23.29 27.90 11.27 23.16 15.41
Dec 1989 28.51 16.61 12.03 35.92 25.19 19.26
Dec 1990 -3.85 -17.02 -22.74 -0.26 -8.08 -17.80
Dec 1991 13.11 18.28 13.96 41.16 24.61 56.84
Dec 1992 -4.71 -5.23 -10.97 5.00 13.81 15.45
Dec 1993 29.28 22.50 34.90 2.90 18.12 14.75
Dec 1994 2.28 5.08 6.63 2.66 -1.99 -3.20
Dec 1995 21.62 20.72 9.94 37.19 38.35 39.92
Dec 1996 21.09 13.48 6.68 23.12 21.64 22.71
Dec 1997 23.80 15.76 2.04 30.49 35.18 21.64
Dec 1998 28.53 24.34 14.46 38.71 15.63 39.63
Dec 1999 15.89 24.93 30.91 33.16 7.35 85.59
Dec 2000 -8.39 -13.18 -15.09 -22.42 7.01 -39.29
78
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI MSCI
MSCI World World Tele-
World Health communication
Financials Care Services
Index Index Index
- -----------------------------------------------------------
Dec 1925 N/A N/A N/A
Dec 1926 N/A N/A N/A
Dec 1927 N/A N/A N/A
Dec 1928 N/A N/A N/A
Dec 1929 N/A N/A N/A
Dec 1930 N/A N/A N/A
Dec 1931 N/A N/A N/A
Dec 1932 N/A N/A N/A
Dec 1933 N/A N/A N/A
Dec 1934 N/A N/A N/A
Dec 1935 N/A N/A N/A
Dec 1936 N/A N/A N/A
Dec 1937 N/A N/A N/A
Dec 1938 N/A N/A N/A
Dec 1939 N/A N/A N/A
Dec 1940 N/A N/A N/A
Dec 1941 N/A N/A N/A
Dec 1942 N/A N/A N/A
Dec 1943 N/A N/A N/A
Dec 1944 N/A N/A N/A
Dec 1945 N/A N/A N/A
Dec 1946 N/A N/A N/A
Dec 1947 N/A N/A N/A
Dec 1948 N/A N/A N/A
Dec 1949 N/A N/A N/A
Dec 1950 N/A N/A N/A
Dec 1951 N/A N/A N/A
Dec 1952 N/A N/A N/A
Dec 1953 N/A N/A N/A
Dec 1954 N/A N/A N/A
Dec 1955 N/A N/A N/A
Dec 1956 N/A N/A N/A
Dec 1957 N/A N/A N/A
Dec 1958 N/A N/A N/A
Dec 1959 N/A N/A N/A
Dec 1960 N/A N/A N/A
Dec 1961 N/A N/A N/A
79
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
MSCI MSCI
MSCI World World Tele-
World Health communication
Financials Care Services
Index Index Index
- -------------------------------------------------------------
Dec 1962 N/A N/A N/A
Dec 1963 N/A N/A N/A
Dec 1964 N/A N/A N/A
Dec 1965 N/A N/A N/A
Dec 1966 N/A N/A N/A
Dec 1967 N/A N/A N/A
Dec 1968 N/A N/A N/A
Dec 1969 N/A N/A N/A
Dec 1970 N/A N/A N/A
Dec 1971 N/A N/A N/A
Dec 1972 N/A N/A N/A
Dec 1973 N/A N/A N/A
Dec 1974 N/A N/A N/A
Dec 1975 N/A N/A N/A
Dec 1976 N/A N/A N/A
Dec 1977 N/A N/A N/A
Dec 1978 N/A N/A N/A
Dec 1979 N/A N/A N/A
Dec 1980 N/A N/A N/A
Dec 1981 N/A N/A N/A
Dec 1982 N/A N/A N/A
Dec 1983 N/A N/A N/A
Dec 1984 N/A N/A N/A
Dec 1985 N/A N/A N/A
Dec 1986 N/A N/A N/A
Dec 1987 N/A N/A N/A
Dec 1988 N/A N/A N/A
Dec 1989 N/A N/A N/A
Dec 1990 N/A N/A N/A
Dec 1991 N/A N/A N/A
Dec 1992 N/A N/A N/A
Dec 1993 N/A N/A N/A
Dec 1994 N/A N/A N/A
Dec 1995 N/A N/A N/A
Dec 1996 N/A N/A N/A
Dec 1997 N/A N/A N/A
Dec 1998 N/A N/A N/A
Dec 1999 8.57 -10.08 44.66
Dec 2000 10.62 26.96 -42.49
Source: Lipper, Inc., Ibbotson Associates and The Wall Street Journal
80
21. APPENDIX D - OTHER PIONEER INFORMATION
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the U.S.
As of December 31, 2000, Pioneer and its investment management affiliates
employed a professional investment staff of approximately 150.
Total assets of all Pioneer's U.S. mutual funds at December 31, 2000, were over
$22 billion representing 1,345,985 shareholder accounts, including 830,459
non-retirement accounts and 515,526 retirement accounts.
EXHIBIT C
[logo] PIONEER
Investments(R)
Pioneer
Indo-Asia
Fund
ANNUAL REPORT 10/31/00
Table of Contents
- -------------------------------------------------------------------------------
- -
Letter from the President 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 17
Notes to Financial Statements 23
Report of Independent Public Accountants 30
Results of Shareowner Meeting 31
Trustees, Officers and Service Providers 32
The Pioneer Family of Mutual Funds 33
Programs and Services for Pioneer Shareowners 34
Retirement Plans from Pioneer 36
Pioneer Indo-Asia Fund
LETTER FROM THE PRESIDENT 10/31/00
Dear Shareowner,
- -------------------------------------------------------------------------------
The year 2000, the last year of the old millennium, is ending on an
historically unsettling note. The bewildering final days of the presidential
election have come on top of a period of increased market volatility, leaving
us all feeling unsettled. We at Pioneer are convinced that the market's
volatility has its roots not in politics but in the signs of a slowing economy
and in the sudden realization by investors that some market valuations,
notably technology, had become irrational. As the new millennium unfolds we
expect investors to get back to work assessing the policies of the new
administration, evaluating the prospects for a growing economy and identifying
undervalued companies.
As seasoned investors we treat periods of turmoil as periods of opportunity,
looking for the few significant facts and trends that hide well behind the
clutter of daily events. I think that you should do the same thing. This is a
good year, and a good time of year, to evaluate your retirement program
contributions, to compare a Roth IRA with a traditional IRA and to reassess
your investment allocations in light of current market conditions. A
successful investment program requires not only money, but time and planning.
Your investment professional is your best guide to making these important
decisions.
An important announcement from Pioneer
I'm very happy to report that, on October 24, 2000, Pioneer Investment
Management became a wholly owned subsidiary of UniCredito Italiano S.p.A., one
of Italy's largest and most successful banking groups. All of UniCredito's
investment operations will be combined to form Pioneer Global Asset Management
S.p.A., which will manage over $110 billion for global individual and
institutional clients. The new Pioneer Global will bring to Pioneer greater
analytical resources that complement our investment skills, reinforcing
Pioneer's tradition of fundamental investment analysis and sound long-term
portfolio management. We believe fund shareowners, will benefit from this
merger.
All of us at Pioneer Investments appreciate your decision to invest with
us and look forward to helping you reach your financial goals.
Sincerely,
[GRAPHIC OMITTED]
David Tripple
President
Pioneer Investment Management, Inc.
Pioneer Indo-Asia Fund
PORTFOLIO SUMMARY 10/31/00
Portfolio Diversification
- -------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[GRAPHIC OMITTED]
Geographical Distribution
- -------------------------------------------------------------------------------
(As a percentage of equity holdings) [GRAPHIC OMITTED]
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Hutchinson Whampoa Ltd. 5.44%
2. Samsung Electronics Co. 4.30
3. Taiwan Semiconductor Manufacturing Co. 4.05
4. Cheung Kong Holdings Ltd. 3.75
5. China Mobile Ltd. 3.70
6. Development Bank of Singapore Ltd. 2.86
7. SK Telecom Co., Ltd. (A.D.R.) 2.56
8. United Microelectronic Corp., Ltd. 2.51
9. Sun Hung Kai Properties Ltd. 2.14
10. Wharf Holdings Ltd. 2.11
Fund holdings will vary for other periods.
2
Pioneer Indo-Asia Fund
PERFORMANCE UPDATE 10/31/00 CLASS A SHARES
Share Prices and Distributions
- -------------------------------------------------------------------------------
- -
Net Asset Value
per Share 10/31/00 10/31/99
$ 9.38 $ 11.05
Distributions per Share Income Short-Term Long-Term
(10/31/99 - 10/31/00) Dividends Capital Gains Capital Gains
- - -
Investment Returns
- -------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Indo-Asia Fund at public offering price, compared to the growth of
the MSCI All-Country Asia Free (Ex-Japan) Index.
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
Index comparison begins 6/30/94. The Morgan Stanley Capital International
(MSCI) All-Country Asia Free (Ex-Japan) Index is an unmanaged,
capitalization-weighted measure of securities trading in China, Hong Kong,
India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore, Sri
Lanka, Taiwan and Thailand; it reflects only those securities available to
foreign investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
Average Annual Total Returns
(As of October 31, 2000)
Net Asset Public Offering
Period Value Price*
Life of Fund
(6/23/94) -3.13% -4.02%
5 Years 2.06 0.85
1 Year -15.11 -19.97
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[plot points:
DATE TOTAL VALUE
6/30/94 9425 10000
10/31/94 9246 11312
4/30/95 7538 9604
10/31/95 6955 10166
4/30/96 8252 11853
10/31/96 5690 10993
4/30/97 6084 10976
10/31/97 5863 7638
4/30/98 5797 6816
10/31/98 5157 5725
4/30/99 7686 8072
10/31/99 9073 8785
4/30/00 10592 9420
10/31/00 7702 7018]
Pioneer Indo-Asia Fund*
MSCI All-Country Asia Free
(Ex-Japan) Index
$7,702
$7,018
Pioneer Indo-Asia Fund
PERFORMANCE UPDATE 10/31/00 CLASS B SHARES
Share Prices and Distributions
- -------------------------------------------------------------------------------
- -
Net Asset Value
per Share 10/31/00 10/31/99
$ 8.94 $ 10.62
Distributions per Share Income Short-Term Long-Term
(10/31/99 - 10/31/00) Dividends Capital Gains Capital Gains
- - -
Investment Returns
- -------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Indo-Asia Fund, compared to the growth of the MSCI All-Country Asia
Free (Ex-Japan) Index.
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
Index comparison begins 6/30/94. The Morgan Stanley Capital International
(MSCI) All-Country Asia Free (Ex-Japan) Index is an unmanaged,
capitalization-weighted measure of securities trading in China, Hong Kong,
India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore, Sri
Lanka,
Taiwan and Thailand; it reflects only those securities available to foreign
investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their
original cost.
4
Average Annual Total Returns
(As of October 31, 2000)
If If
Period Held Redeemed*
Life of Fund
(6/23/94) -3.87% -3.87%
5 Years 1.28 1.09
1 Year -15.82 -19.19
* Reflects deduction of the maximum
applicable contingent deferred sales
charge (CDSC) at the end of the
period and assumes reinvestment
of distributions. The maximum CDSC
of 4% declines over six years.
[plot points:
DATE TOTAL VALUE
6/30/94 10000 10000
10/31/94 9783 11312
4/30/95 7944 9604
10/31/95 7300 10166
4/30/96 8640 11853
10/31/96 5917 10993
4/30/97 6308 10976
10/31/97 6056 7638
4/30/98 5977 6816
10/31/98 5290 5725
4/30/99 7866 8072
10/31/99 9240 8785
4/30/00 10754 9420
10/31/00 7778 7018]
Pioneer Indo-Asia Fund*
MSCI All-Country Asia Free
(Ex-Japan) Index
$7,778
$7,018
Pioneer Indo-Asia Fund
PERFORMANCE UPDATE 10/31/00 CLASS C SHARES
Share Prices and Distributions
- -------------------------------------------------------------------------------
- -
Net Asset Value
per Share 10/31/00 10/31/99
$ 8.84 $ 10.50
Distributions per Share Income Short-Term Long-Term
(10/31/99 - 10/31/00) Dividends Capital Gains Capital Gains
- - -
Investment Returns
- -------------------------------------------------------------------------------
- -
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Indo-Asia Fund, compared to the growth of the MSCI All-Country Asia
Free (Ex-Japan) Index.
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
The Morgan Stanley Capital International (MSCI) All-Country Asia Free
(Ex-Japan) Index is an unmanaged, capitalization-weighted measure of
securities
trading in China, Hong Kong, India, Indonesia, Korea, Malaysia, Pakistan,
Philippines, Singapore, Sri Lanka, Taiwan and Thailand; it reflects only those
securities available to foreign investors. 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
Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
5
Average Annual Total Returns
(As of October 31, 2000)
If If
Period Held Redeemed*
Life of Fund
(1/31/96) 2.53% 2.53%
1 Year -15.81 -15.81
* Assumes reinvestment of distribu-tions. The 1% contingent deferred
sales charge (CDSC) applies to
investments sold within one year
of purchase.
[plot points:
DATE TOTAL VALUE
1/31/96 10000 10000
4/30/96 12548 10549
7/31/96 10611 9517
10/31/96 8624 9784
1/31/97 8739 10421
4/30/97 9197 9768
7/31/97 10433 10672
10/31/97 8828 6798
1/31/98 7019 5568
4/30/98 8713 6067
7/31/98 7045 4448
10/31/98 7682 5095
1/31/99 8586 5532
4/30/99 11376 7184
7/31/99 13656 7949
10/31/99 13376 7819
1/31/00 17529 9211
4/30/00 15567 8384
7/31/00 14331 7714
10/31/00 11261 6246]
Pioneer Indo-Asia Fund*
MSCI All-Country Asia Free
(Ex-Japan) Index
$11,261
$6,246
Pioneer Indo-Asia Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/00
For the fiscal year ended October 31, 2000, Pioneer Indo-Asia Fund's Class
A, B
and C shares delivered total returns at net asset value of -15.11%,
- -15.82% and
- -15.81% respectively. This performance surpasses the -21.11% return for the
MSCI All-Country Asia Free (ex- Japan) Index for the same period.
In the following discussion, the portfolio management team of Mark Madden,
Manish Modi and Paul Cloonan address the factors impacting the Fund's
performance and the outlook for the Asian markets (excluding Japan).
Q: What is your investment strategy?
A: Our investment process is driven by rigorous research that focuses on
companies with strong long-term growth prospects, proven management
ability and selling at a discount to our estimation of fair value. We look
for companies that are well-positioned in industries with favorable
long-term trends and growth potential. We manage risk through
diversification among various Asian countries, sectors and companies while
emphasizing stocks that are attractively valued.
Q: What factors influenced the performance of the Asian equity markets in the
year ended October 31, 2000?
A: Despite the continued improvement in most Asian economies, Asian equity
markets experienced dramatic corrections this year due to a number of
factors. Most significant among these factors were the concerns related to
rising interest rates and slowing growth in the United States. These
concerns, along with rising oil prices, contributed to global equity
market weakness. Asian equity markets reacted negatively to the potential
for a slowdown in exports caused by weaker demand from the United States
and Europe. Political uncertainty also contributed to equity market
weakness in some Asian countries as elections approached or new leadership
assumed power.
6
Pioneer Indo-Asia Fund
We believe that Asian equity markets already reflect these risks and that
prices of many stocks have reached attractively low levels. In some cases,
valuations have approached those last seen during the worst of the Asian
crisis in 1998. In our view, this market reaction is an opportunity to buy
stocks at undervalued prices. We believe that the market is not properly
reflecting the substantial improvements in many Asian companies, economies
and financial systems that have been made since 1998. The structural and
cyclical improvements that have occurred in the last two years have
reduced many of the risks of investing in Asia while the prospects for
growth have improved. We are, therefore, optimistic that performance of
the Asian equity markets will improve.
Q: How are the Asian economies performing this year?
A: All of the major countries in Asia returned to positive growth in 1999
after experiencing very difficult economic conditions during the Asian
crisis of 1997-98. The economic recovery is continuing this year. South
Korea, China, Taiwan, India, Malaysia and Singapore are showing the
strongest economic activity with growth rates expected to be more than 6%
this year. We expect the positive growth trends to continue next year, as
we expect that Asia (excluding Japan) once again will become one of the
fastest growing regions in the world. In addition to strong growth,
inflation and interest rates in Asia are relatively low, providing a good
environment for equity investing.
Today, Asian economies are counter-cyclical to the U.S. economy. While the
current 10-year expansion of the U.S. economy may be losing momentum,
Asian economies are entering their second year of recovery from the
recession that was brought on by the Asian currency crisis of 1997-98.
Consumer demand has been depressed for the last few years and should
recover in the years ahead. In addition, Asia's favorable demographics
with its young and growing populations, high savings rates, improved
manufacturing expertise and strengthened financial systems provide a good
foundation for economic growth and attractive investment opportunities
over the next few years.
7
Pioneer Indo-Asia Fund
PORTFOLIO MANAGEMENT DISCUSSION 10/31/00 (continued)
Q: What is your outlook?
A: The leading indicators show that the U.S. economy is beginning to
decelerate, which should take pressure off the Federal Reserve to increase
interest rates. If this trend holds, Asian equity markets could benefit,
as long as the slowdown in the United States is not much worse than
expected. The uncertainty related to U.S. monetary policy has worked
against the performance of Asian equity markets this year. As those
uncertainties are resolved investors will refocus on the positive trends
in Asian economies such as strong growth, stable inflation rates and
relatively low interest rates. Valuation levels of Asian stocks are
attractive, and the earnings outlook for Asian businesses is strong;
accordingly, we are optimistic about the prospects for favorable
investment performance in the coming year.
Investing in emerging markets carries its own set of risks, including but not
limited to, currency fluctuations, and social and economic instability.
However, we feel confident that the long-term prospects invite serious
consideration.
8
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 10/31/00
Shares Value
PREFERRED STOCKS - 0.9%
681,600 Siam Commercial Bank* $ 282,645
----------
Total Preferred Stock
(Cost $558,255) $ 282,645
----------
COMMON STOCKS - 99.0%
Basic Materials - 1.5%
Chemicals (Specialty) - 0.4%
685,000 Yizheng Chemical Fibre Co., Ltd. $ 124,721
----------
Construction (Cements & Aggregates) - 0.3%
9,800 Siam Cement Public Co., Ltd.* $ 92,188
----------
Metals Mining - 0.8%
924,000 Yanzhou Coal Mining (Class H) $ 245,839
----------
Total Basic Materials $ 462,748
----------
Capital Goods - 2.4%
Electrical Equipment - 0.5%
75,000 Bharat Heavy Electricals Ltd.* $ 164,185
----------
Engineering & Construction - 0.6%
120,000 Cheung Kong Infrastructure Holdings $ 186,178
----------
Manufacturing (Diversified) - 0.4%
25,000 Grasim Industries Ltd. $ 108,496
----------
Trucks and Parts - 0.9%
60,000 Escorts Ltd. $ 92,283
56,595 Larsen and Tourbo Ltd. 178,985
405 Larsen and Tourbo Ltd. (Bonus Shares) 1,281
----------
$ 272,549
----------
Total Capital Goods $ 731,408
----------
Communication Services - 20.0%
Cellular/Wireless Telecommunications - 14.6%
178,000 China Mobile Ltd.* $1,146,878
13,400 China Mobile Ltd. (A.D.R.)* 413,725
136,000 Hutchison Whampoa Ltd. 1,687,139
31,600 SK Telecom Co., Ltd. (A.D.R.) 791,975
12,000 Taiwan Cellular Corp.* 25,077
269,000 Technology Resources Industries Bhd. 218,032
The accompanying notes are an integral part of these financial statements.
9
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 10/31/00 (continued)
Shares
Value
Cellular/Wireless Telecommunications - (continued)
42,000 Total Access Communication Ltd.* $ 133,560
138,000 United Communications Industry Ltd. 100,341
----------
$4,516,727
----------
Telecommunications (Long Distance) - 1.0%
158,000 Asia Satellite Telecommunications Holdings Ltd. $ 320,092
----------
Telephone - 4.4%
12,800 Korea Telecom Corp. $ 472,000
90,000 Pacific Century Cyberworks 69,240
10,600 Philippine Long Distance Telephone Co. (A.D.R.) 164,300
34,500 PT Indosat Indonesian Satellite Corp. (A.D.R.) 243,656
65,176 Telekomunik Indonesia (A.D.R.) 342,174
8,700 Videsh Sanchar Nigam Ltd. (A.D.R.) 64,163
----------
2,900 Videsh Sanchar Nigam Ltd. (G.D.R.) (144A) 21,206
----------
$1,376,739
----------
Total Communication Services $6,213,558
----------
Consumer Cyclicals - 8.3%
Auto Parts & Equipment - 1.0%
12,500 Halla Climate Control Co. $ 295,604
----------
Automobiles - 0.4%
27,000 Mahindra & Mahindra Ltd. $ 73,833
14,000 Mahindra & Mahindra Ltd. (G.D.R.) 38,500
----------
$ 112,333
----------
Leisure Time (Products) - 0.6%
150,000 Berjaya Sports Toto Bhd. $ 197,368
----------
Publishing (Newspapers) - 2.4%
14,200 Singapore Press Holdings $ 202,938
630,000 South China Morning Post Ltd. 432,171
33,500 Star Publications Inc. 105,789
----------
$ 740,898
----------
Retail (Deptartment Stores) - 0.4%
3,000 Shinsegae Department Store Co. $ 138,198
----------
Retail (General Merchandise) - 0.8%
2,500 LG Home Shopping Inc. $ 150,330
4,400 39Shopping Corp. 84,132
----------
$ 234,462
----------
10 The accompanying notes are an integral part of these financial
statements.
Pioneer Indo-Asia Fund
Shares Value
Retail (Specialty Apparel) - 0.5%
250,000 Giordano International Ltd. $ 146,653
----------
Retail (Specialty) - 0.1%
130,548 CCT Multimedia Holdings Ltd. $ 4,068
----------
Services (Advertising/Marketing) - 0.9%
2,200 Cheil Communications, Inc. $ 141,187
4,450 LG AD Inc. 140,444
----------
$ 281,631
----------
Services (Commercial & Consumer) - 0.5%
10,500 ASE Test Ltd.* $ 162,094
251 Hansol CSN 585
----------
$ 162,679
----------
Textiles (Home Furnishings) - 0.7%
281,366 Far Eastern Textile Ltd. $ 231,714
----------
Total Consumer Cyclicals $2,545,608
----------
Consumer Staples - 6.3%
Broadcasting (Television/Radio/Cable) - 2.2%
225,800 ABS-CBN Broadcasting Corp. (A.D.R.)* $ 174,371
2,811,000 Benpres Holdings Corp.* 140,138
70,000 Television Broadcasts Ltd. 383,254
----------
$ 697,763
----------
Distributors (Food & Health) - 1.0%
112,000 Li & Fung Ltd. $ 208,232
254,000 Ng Fung Hong Ltd. 112,361
----------
$ 320,593
----------
Entertainment - 0.8%
127,000 Tanjong PLC $ 237,289
----------
Foods - 0.6%
6,000 Cheil Jedang Corp. $ 175,648
----------
Personal Care - 0.2%
17,500 Hindustan Lever Ltd. $ 66,403
----------
Restaurants - 0.8%
185,000 Kentucky Fried Chicken Bhd. $ 245,855
----------
Retail Stores (Food Chains) - 0.7%
71,702 President Chain Store Corp. $ 204,228
----------
Total Consumer Staples $1,947,779
----------
The accompanying notes are an integral part of these financial statements.
11
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 10/31/00 (continued)
Shares
Value
Energy - 0.9%
Oil & Gas (Refining & Marketing) - 0.5%
71,800 Hindustan Petroleum Corp. Ltd. $ 163,924
----------
Oil (International Integrated) - 0.4%
870,000 Sinopec Zhenhai Refining and Chemical Co., Ltd. $ 120,477
----------
Total Energy $ 284,401
----------
Financial - 25.7%
Banks (Major Regional) - 8.3%
527,626 Bank Sinopac* $ 219,712
50,500 Dao Heng Bank Group Ltd. 255,122
75,193 Development Bank of Singapore Ltd. 886,235
5,590 Housing & Commercial Bank, Korea 134,406
13,650 Kookmin Bank 156,000
52,100 Malayan Bank Bhd. 208,400
842,000 National Finance Public Co., Ltd.* 93,747
13,500 Shinhan Bank 135,297
32,752 United Overseas Bank Ltd. 242,428
75,000 Wing Hang Bank Ltd. 228,876
----------
$2,560,223
----------
Banks (Money Center) - 0.5%
1,980,000 PT Lippo Bank (Certificate of Entitlement)* $ --
260,512 United World Chinese Commercial Bank 169,373
----------
$ 169,373
----------
Banks (Regional) - 0.2%
13,400 ICICI Bank Ltd. (A.D.R.)* $ 63,650
----------
Financial (Diversified) - 14.6%
100,000 Bank of East Asia $ 226,311
105,000 Cheung Kong Holdings Ltd. 1,161,207
66,000 City Developments Inc. 304,390
135,000 Great Eagle Holdings Ltd. 193,871
40,000 Henderson Land Development Company Ltd. 172,330
20,000 Housing Development Finance Corp., Ltd. 201,025
15,000 HSBC Holdings Plc 208,681
550,400 New World China Land Ltd.* 176,433
75,000 New World Development Co., Ltd. 88,954
80,300 Sun Hung Kai Properties Inc. 664,104
12 The accompanying notes are an integral part of these financial
statements.
Pioneer Indo-Asia Fund
Shares Value
Financial (Diversified) - (continued)
76,000 Swire Pacific Ltd. $ 468,727
321,000 Wharf Holdings Ltd. 654,430
----------
$4,520,463
----------
Insurance (Property/Casualty) - 1.5%
251,272 Cathay Life Insurance Co. $ 451,201
----------
Investment (Bank & Brokerage) - 0.6%
176,000 Arab Malaysian Merchant Bank Holdings Bhd. $ 197,305
----------
Total Financial $7,962,215
----------
Healthcare - 1.8%
Biotechnology - 0.2%
2,000 Dr. Reddy's Laboratories, Ltd. $ 59,853
----------
Healthcare (Drugs & Major Pharmaceuticals) - 1.6%
17,000 E. Merck Ltd. $ 135,779
15,500 Hoechst Marion Roussel Ltd. 147,158
15,050 Ranbaxy Laboratories Ltd. 224,055
----------
$ 506,992
----------
Total Healthcare $ 566,845
----------
Technology - 30.0%
Communications Equipment - 1.5%
13,500 China Unicom Ltd. (A.D.R.) $ 276,750
90,000 China Unicom Ltd. 180,600
----------
$ 457,350
----------
Computer (Hardware) - 5.2%
86,250 Acer Inc. $ 71,563
18,000 Compeq Manufacturing Co., Ltd. 67,988
10,628 Samsung Electronics Co. 1,331,420
65,000 Synnex Technology International Corp. 136,842
----------
$1,607,813
----------
Computer (Peripherals) - 0.0%
165 Korea Data System* $ 397
----------
Computer (Software & Services) - 6.5%
14,538 BFL Software Ltd.* $ 118,722
10,000 HCL Technologies Ltd.* 253,933
381,000 Informatics Holdings Ltd. 177,885
3,200 Infosys Technologies Ltd.* 489,744
The accompanying notes are an integral part of these financial statements.
13
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 10/31/00 (continued)
Shares Value
Computer (Software & Services) - (continued)
400 Mastek Ltd. $ 5,662
5,600 Mastek Ltd. (New Shares) 79,263
19,050 NIIT Ltd. 641,222
38,000 Satyam Computer Services Ltd. 242,139
645 Sunevision Holdings* 316
----------
$2,008,886
----------
Electronics (Component Distributors) - 3.0%
68,320 Asustek Computer Inc. $ 340,542
3,500 L.G. Electronics 48,769
311,532 Phoenixtec Power Co., Ltd. 261,378
1,500 Samsung Electronics Co. (G.D.R.) 111,000
17,000 Venture Manufacturing Ltd. 164,550
----------
$ 926,239
----------
Electronics (Instrumentation) - 1.6%
135,000 Elec & Eltek International Co., Ltd. $ 376,650
152,700 Yageo Corp.* 117,243
----------
$ 493,893
----------
Electronics (Semiconductors) - 11.8%
163,060 Advanced Semiconductor Engineering $ 187,292
35,000 Ambit Microsystems Corp. 162,539
4,100 Chartered Semiconductor (A.D.R.)* 190,650
41,200 Hana Microelectronics Public Co., Ltd. 102,040
74,080 Hon Hai Precision Industry 387,601
43,250 Hyundai Electronics Industry* 265,774
30,000 Siliconware Precision Industries Co., Ltd.* 120,000
414,147 Taiwan Semiconductor Manufacturing Co.* 1,256,546
441,000 United Microelectronics Corp., Ltd. 778,235
10,000 United Microelectronics Corp., Ltd. (A.D.R.) 113,750
12,000 Winbond Electronics Corp. (G.D.R.) 117,000
----------
$3,681,427
----------
Services (Computer Systems) - 0.2%
30,000 Mercuries Data Systems Ltd.* $ 46,904
----------
Services (Data Processing) - 0.2%
28,000 Shinawatra Computer Co., Plc $ 83,345
----------
Total Technology $9,306,254
----------
14 The accompanying notes are an integral part of these financial
statements.
Pioneer Indo-Asia Fund
Shares Value
Transportation - 0.8%
Railroads - 0.5%
97,000 Malaysia International Shipping Bhd. $ 171,026
-----------
Shipping - 0.3%
440,000 Far Eastern Silo & Shipping Corp. $ 87,183
-----------
Total Transportation $ 258,209
-----------
Utilities - 1.3%
Electric Companies - 0.5%
13,200 Korea Electric Power Co. (A.D.R.) $ 160,875
-----------
Natural Gas - 0.8%
188,740 Hong Kong & China Gas Co., Ltd. $ 238,375
-----------
Total Utilities $ 399,250
-----------
Total Common Stocks
(Cost $36,167,588) $30,678,275
-----------
WARRANTS - 0.1%
1,980,000 PT Lippo Bank TBK, 4/15/02* $ -
217,500 PT Pan Indonesia Bank TBK, 7/8/02* 881
104,600 Siam Commercial Bank, 5/10/02* 7,606
56,211 TelecomAsia Foreign Corp. Public Co. Ltd.* 18,616
-----------
Total Warrants
(Cost $33,223) $ 27,103
-----------
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $36,759,066) (a)(b)(c) $30,988,023
===========
The accompanying notes are an integral part of these financial statements.
15
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 10/31/00 (continued)
* 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 October 31,
2000, the
value of these securities amounted to $21,206 or 0.07% of total net
assets.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
Hong Kong 32.0%
Taiwan 18.9
South Korea 15.1
India 11.9
Singapore 8.1
Malaysia 5.3
Thailand 2.9
Peoples Republic of China 2.4
Indonesia 1.9
Philippines 1.5
-----
100.0%
=====
(b) At October 31, 2000, the net unrealized gain on investments based on
cost for
federal
income tax purposes of $36,819,404 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost
$ 3,330,033
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value
(9,161,414)
- -----------
Net unrealized loss
$(5,831,381)
===========
(c) At October 31, 2000, the Fund had a capital loss carryforward of
$4,891,082 which will expire in 2006 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended October 31, 2000 aggregated $53,701,940 and $50,800,246,
respectively.
16 The accompanying notes are an integral part of these financial
statements.
Pioneer Indo-Asia Fund
BALANCE SHEET 10/31/00
ASSETS:
Investment in securities, at value (cost $36,759,066) $
30,988,023
Cash 593,131
Foreign currencies, at value 378,699
Receivables -
Investment securities sold 446,935
Fund shares sold 435,491
Forward foreign currency settlement hedge contracts - ne t 1
Dividends, interest and foreign taxes withheld 95,334
Other 37,603
- ------------
Total assets $32,975,217
- ------------
LIABILITIES:
Payables -
Investment securities purchased $ 941,487
Fund shares repurchased 43,381
Reserve for repatriation tax 61,018
Due to affiliates 86,135
Accrued expenses 139,629
- ------------
Total liabilities $ 1,271,650
- ------------
NET ASSETS:
Paid-in capital $42,488,885
Accumulated net realized loss on investments and foreign
currency transactions
(4,951,419)
Net unrealized loss on investments (including reserve for
repatriation taxes of $61,018)
(5,832,061)
Net unrealized loss on forward foreign currency contracts
and other assets and liabilities denominated in
foreign currencies
(1,838)
- ------------
Total net assets $31,703,567
============
NET ASSET VALUE PER SHARE:
Class A (based on $18,164,040/1,936,651 shares) $ 9.38
============
Class B (based on $10,322,287/1,154,691 shares) $ 8.94
============
Class C (based on $3,217,240/363,815 shares) $ 8.84
============
MAXIMUM OFFERING PRICE:
Class A $ 9.95
============
The accompanying notes are an integral part of these financial statements.
17
Pioneer Indo-Asia Fund
STATEMENT OF OPERATIONS
For the Year Ended 10/31/00
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $52,831) $ 626,504
Interest (net of foreign taxes withheld of $1,497) 47,598
------------
Total investment income
$ 674,102
- ------------
EXPENSES:
Management fees 577,152
Transfer agent fees
Class A 108,708
Class B 91,571
Class C 19,561
Distribution fees
Class A 68,706
Class B 203,828
Class C 46,032
Administrative fees 29,996
Custodian fees 259,589
Registration fees 59,511
Professional fees 41,783
Printing 18,632
Fees and expenses of nonaffiliated trustees 22,378
Miscellaneous 21,836
------------
Total expenses
$ 1,569,283
Less management fees waived and expenses reim-
bursed by Pioneer Investment Management, Inc.
(236,394)
Less fees paid indirectly
(22,169)
- ------------
Net expenses
$ 1,310,720
- ------------
Net investment loss
$ (636,618)
- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments $ 5,174,549
Futures contracts 98,584
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (126,073)
$ 5,147,060
------------
- ------------
Change in net unrealized gain (loss) from:
Investments $(12,053,139)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (2,053)
$(12,055,192)
------------
- ------------
Net loss on investments and foreign currency
transactions
$ (6,908,132)
- ------------
Net decrease in net assets resulting from operation s
$ (7,544,750)
============
18 The accompanying notes are an integral part of these financial
statements.
Pioneer Indo-Asia Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended 10/31/00 and 10/31/99
Year Ended
Year Ended
10/31/00
10/31/99
FROM OPERATIONS:
Net investment loss $ (636,618) $
(126,994)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 5,147,060
3,982,920
Change in net unrealized gain (loss) on
investments and foreign currency
transactions (12,055,192)
5,460,262
-------------
- -----------
Net increase (decrease) in net assets
resulting from operations $ (7,544,750) $
9,316,188
-------------
- -----------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $100,290,455
$95,334,963
Cost of shares repurchased (99,017,798)
(77,476,468)
-------------
- -----------
Net increase in net assets resulting from
Fund share transactions $ 1,272,657
$17,858,495
-------------
- -----------
Net increase (decrease) in net assets $ (6,272,093)
$27,174,683
NET ASSETS:
Beginning of year 37,975,660
10,800,977
-------------
- -----------
End of year (including accumulated net investment
loss of $0 and $4,760, respectively) $ 31,703,567
$37,975,660
=============
===========
CLASS A '00 Shares '00 Amount '99
Shares '99 Amount
Shares sold 5,217,207 $68,649,688
5,781,204 $59,415,867
Less shares repurchased (5,034,213) (66,077,346)
(4,860,199) (50,171,135)
---------- -----------
- ---------- -----------
Net increase 182,994 $ 2,572,342
921,005 $ 9,244,732
========== ===========
========== ===========
CLASS B
Shares sold 1,435,155 $19,004,056
1,920,982 $19,147,136
Less shares repurchased (1,793,816) (22,162,447)
(1,235,422) (11,843,517)
---------- -----------
- ---------- -----------
Net increase (decrease) (358,661) $(3,158,391)
685,560 $ 7,303,619
========== ===========
========== ===========
CLASS C
Shares sold 989,712 $12,636,711
1,908,859 $16,771,960
Less shares repurchased (865,233) (10,778,005)
(1,758,788) (15,461,816)
---------- -----------
- ---------- -----------
Net increase 124,479 $ 1,858,706
150,071 $ 1,310,144
========== ===========
========== ===========
The accompanying notes are an integral part of these financial statements.
19
FINANCIAL HIGHLIGHTS 10/31/00
Pioneer Indo-Asia Fund
Year
Ended Year Ended Year Ended Year Ended Year Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
20
CLASS A
Net asset value, beginning of year $ 11.05
$ 6.28 $ 7.14 $ 6.93 $ 8.47
--------
- ------- -------- ------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $
(0.12) $ (0.05) $ (0.02) $ (0.01) $ 0.03
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (
1.55) 4.82 ( 0.84) 0.22 ( 1.57)
--------
- ------- -------- ------- --------
Net increase (decrease) in net asset value $
(1.67) $ 4.77 $ (0.86) $ 0.21 $ (1.54)
--------
- ------- -------- ------- --------
Net asset value, end of year $ 9.38
$ 11.05 $ 6.28 $ 7.14 $ 6.93
========
======= ======== ======= ========
Total return*
(15.11)% 75.96% (12.04)% 3.03% (18.18)%
Ratio of net expenses to average net assets+
2.16% 2.14% 2.31% 2.29% 2.28%
Ratio of net investment income (loss) to average net assets+ (
0.88)% ( 0.39)% ( 0.52)% (0.09)% 0.32%
Portfolio turnover rate
103% 108% 101% 71% 64%
Net assets, end of year (in thousands) $ 18,164
$19,384 $ 5,230 $ 9,846 $ 12,388
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses
2.61% 3.81% 5.30% 4.39% 4.29%
Net investment loss (
1.33)% ( 2.06)% ( 3.51)% (2.19)% ( 1.69)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses
2.10% 2.09% 2.24% 2.25% 2.25%
Net investment income (loss) (
0.82)% ( 0.34)% ( 0.45)% (0.05)% 0.35%
* Assumes initial investment at net asset value at the beginning of each
year,
reinvestment of all distributions, the complete redemption of the investment
at net asset value at the end of each year, and no sales charges. Total
return
would be reduced if sales charges were taken into account.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS 10/31/00
Pioneer Indo-Asia Fund
Year
Ended Year Ended Year Ended Year Ended Year Ended
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
21
CLASS B
Net asset value, beginning of year $ 10.62
$ 6.08 $ 6.96 $ 6.80 $ 8.39
--------
- ------- -------- ------- --------
Increase (decrease) from investment operations:
Net investment loss $
(0.31) $ (0.03) $ (0.09) $ (0.04) $ (0.03)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (
1.37) 4.57 ( 0.79) 0.20 ( 1.56)
--------
- ------- -------- ------- --------
Net increase (decrease) in net asset value $
(1.68) $ 4.54 $ (0.88) $ 0.16 $ (1.59)
--------
- ------- -------- ------- --------
Net asset value, end of year $ 8.94
$ 10.62 $ 6.08 $ 6.96 $ 6.80
========
======= ======== ======= ========
Total return*
(15.82)% 74.67% (12.64)% 2.35% (18.95)%
Ratio of net expenses to average net assets+
2.97% 2.80% 2.81% 2.90% 3.15%
Ratio of net investment loss to average net assets+ (
1.68)% ( 0.91)% ( 1.03)% (0.62)% ( 0.45)%
Portfolio turnover rate
103% 108% 101% 71% 64%
Net assets, end of year (in thousands) $ 10,322
$16,078 $ 5,036 $ 9,392 $ 8,275
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses
3.41% 4.60% 5.94% 4.99% 5.23%
Net investment loss (
2.12)% ( 2.71)% ( 4.16)% (2.71)% ( 2.53)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses
2.95% 2.77% 2.76% 2.86% 3.13%
Net investment loss (
1.66)% ( 0.88)% ( 0.98)% (0.58)% ( 0.43)%
* Assumes initial investment at net asset value at the beginning of each
year,
reinvestment of all distributions, the complete redemption of the investment
at net asset value at the end of each year, and no sales charges. Total
return
would be reduced if sales charges were taken into account.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
FINANCIAL HIGHLIGHTS 10/31/00
Pioneer Indo-Asia Fund
22
Year
Ended Year Ended
10/31/00 10/31/99
CLASS C
Net asset value, beginning of period $
10.50 $ 6.00
- --------- -------
Increase (decrease) from investment operations:
Net investment loss $
(0.19) $ (0.03)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (
1.47) 4.53
- --------- -------
Net increase (decrease) in net asset value $
(1.66) $ 4.50
- --------- -------
Net asset value, end of period $
8.84 $ 10.50
========= =======
Total return*
(15.81)% 75.00%
Ratio of net expenses to average net assets+
2.92% 2.70%
Ratio of net investment loss to average net assets+ (
1.61)% ( 0.89)%
Portfolio turnover rate
103% 108%
Net assets, end of period (in thousands) $
3,217 $ 2,514
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses
3.39% 4.40%
Net investment loss (
2.08)% ( 2.59)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses
2.89% 2.64%
Net investment loss (
1.58)% ( 0.83)%
FINANCIAL HIGHLIGHTS 10/31/00
Pioneer Indo-Asia Fund
22
Year
Ended Year Ended 1/31/96 to
10/31/98
10/31/97 10/31/96
CLASS C
Net asset value, beginning of period $ 6.93
$ 6.77 $ 7.85
---------
- ------- --------
Increase (decrease) from investment operations:
Net investment loss $
(0.07) $ (0.04) $ (0.02)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (
0.86) 0.20 ( 1.06)
---------
- ------- ----------
Net increase (decrease) in net asset value $
(0.93) $ 0.16 $ (1.08)
---------
- ------- ----------
Net asset value, end of period $ 6.00
$ 6.93 $ 6.77
=========
======= ==========
Total return*
(13.42)% 2.36% (13.76) %
Ratio of net expenses to average net assets+
2.85% 2.84% 3.12%* *
Ratio of net investment loss to average net assets+ (
1.06)% (0.56)% ( 0.42)%**
Portfolio turnover rate
101% 71% 64%
Net assets, end of period (in thousands) $ 536
$ 803 $ 557
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses
6.12% 4.89% 4.63%* *
Net investment loss (
4.33)% (2.61)% ( 1.93)%**
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses
2.76% 2.78% 3.06%* *
Net investment loss (
0.97)% (0.50)% ( 0.36)%**
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00
1. Organization and Significant Accounting Policies
Pioneer Indo-Asia Fund (the Fund) is a Delaware business 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 long-term
growth of capital.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Shares of Class A, Class B and Class C each represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees, and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class
A, Class B and Class C shareowners, respectively.
The Fund's financial statements have been prepared in conformity with
accounting principles generally accepted in the United States 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 revenues and expenses during the reporting periods.
Actual results could differ from those estimates. The following is a
summary of
significant accounting policies consistently followed by the Fund, which
are in
conformity with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value
is computed once daily, on each day the New York Stock Exchange is open,
as of the close of regular trading on the Exchange. In computing the net
asset value, securities are valued at the last sale price on the principal
exchange where they are traded. Securities that have not traded on the
date of valuation, or securities for which sale prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available are
valued at their fair values as determined by, or under the direction of,
the Board of Trustees. Trading in foreign securities is substantially
completed each day at various times prior to the close of the New York
Stock Exchange. The values of such securities used in computing the net
asset value of the Fund's shares are determined as of such times. Dividend
23
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00 (continued)
income is recorded on the ex-dividend date, except that certain dividends
from foreign securities where the ex-dividend date may have passed are
recorded as soon as the Fund is informed of the ex-dividend data in the
exercise of reasonable diligence. Interest income, including interest on
income bearing cash accounts, is recorded on the accrual basis, net of
unrecoverable foreign taxes withheld at the applicable country rates.
Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
The Fund's investments in countries with limited or developing markets may
subject the Fund to a greater degree of risk than in a developed market.
Risks associated with these developing markets, attributable to political,
social or economic factors, may affect the price of the Fund's investments
and income generated by these investments, as well as the Fund's ability
to repatriate such amounts.
In addition, delays are common in registering transfers of securities in
India, and the Fund may be unable to sell portfolio securities until the
registration process is completed.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between
the amount of income accrued and the U.S. dollar actually received.
Further, the effects of changes in foreign currency exchange rates on
investments are not segregated in the statement of operations from the
effects of changes in market price of those securities but are included
with the net realized and unrealized gain or loss on investments.
C. Futures Contracts
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices and currency rates or to
24
Pioneer Indo-Asia Fund
seek to increase total return. Upon entering into a futures contract, the
Fund is required to deposit with a broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the associated
futures exchange. Subsequent payments for futures contracts ("variation
margin") are paid or received by the Fund, depending on the daily
fluctuation in the value of the contracts, and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund realizes
a gain or loss equal to the difference between the opening and closing
value of the contract. The use of futures contracts involves, to varying
degrees, elements of market and counterparty risks which may exceed the
amounts recognized by the Fund. Changes in value of the contracts may not
directly correlate to the changes in value of the underlying securities.
These risks may decrease the effectiveness of the Fund's hedging
strategies and potentially result in a loss. At October 31, 2000, the Fund
had no open futures contracts.
D. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio
hedges). All contracts are marked to market daily at the applicable
exchange rates and any resulting unrealized gains or losses are recorded
in the Fund's financial statements. The Fund records realized gains and
losses at the time a portfolio hedge is offset by entry into a closing
transaction or extinguished by delivery of the currency. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar.
As of October 31, 2000 the Fund had no outstanding portfolio hedges. The
Fund's gross forward foreign currency settlement contracts receivable and
payable were $8,623 and $8,622, respectively, resulting in a net
receivable of $1.
E. 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
25
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00 (continued)
gains, if any, to its shareowners. Therefore, no federal income tax
provision is required.
In addition to the requirements of the Internal Revenue Code, the Fund may
also be required to pay local taxes on the recognition of capital gains
and/or the repatriation of foreign currencies in certain countries. During
the year ended October 31, 2000, the Fund paid no such taxes.
In determining the daily net asset value, the Fund estimates the reserve
for such taxes, if any, associated with investments in certain countries.
The estimated reserve for capital gains is based on the net unrealized
appreciation on certain portfolio securities, the holding period of such
securities and the related tax rates, tax loss carryforward (if
applicable) and other such factors. As of October 31, 2000, the Fund had
no reserve related to capital gains. The estimated reserve for
repatriation of foreign currencies is based on principal balances and/or
unrealized appreciation of applicable securities, the holding period of
such investments and the related tax rates and other such factors. As of
October 31, 2000, the Fund had a reserve of $61,018 related to taxes on
the repatriation of foreign currencies.
At October 31, 2000, the Fund reclassified $641,378 and $123,380 from
paid-in capital to accumulated net investment loss and accumulated net
realized loss on investments and foreign currency transactions,
respectively. The reclassification has no impact on the net asset value of
the Fund and is designed to present the Fund's capital accounts on a tax
basis.
F. 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 subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano), earned $10,352 in underwriting commissions on the
sale of fund shares during the year ended October 31, 2000.
G. Class Allocations
Distribution fees are calculated based on the average daily net asset
value attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareowners of each class share all
26
Pioneer Indo-Asia Fund
expenses and fees paid to the transfer agent, Pioneering Services
Corporation (PSC), for their services, which are allocated based on the
number of accounts in each class and the ratable allocation of related
out-of-pocket expense (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.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different
transfer agent and distribution fees.
H. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value
of the underlying securities (collateral), including accrued interest
received from 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.
2. Management Agreement
PIM manages the Fund's portfolio and is a wholly owned subsidiary of
UniCredito
Italiano. Management fees are calculated daily at the annual rate of 1.10% of
the Fund's average daily net assets.
PIM has agreed not to impose a portion of its management fee and to assume
other operating expenses of the Fund to the extent necessary to limit Class A
expenses to 2.10% of the average daily net assets attributable to Class A
shares; the portion of the Fund-wide expenses attributable to Class B and
Class
C shares will be reduced only to the extent that such expenses are reduced for
Class A shares. PIM's agreement is voluntary and temporary and may be revised
or terminated at any time.
27
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 10/31/00 (continued)
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At October 31, 2000, $27,572 was payable
to PIM
related to management fees, administrative fees and certain other services.
PIM has appointed Khothari Pioneer AMC Ltd. (the Indian Adviser) as the Fund's
adviser in India. In managing the Fund's Indian investments, PIM relies on the
advice and local expertise of the Indian Adviser. The Indian Adviser is a
joint
venture between PIM and Investment Trust of India Limited (ITI), a corporation
organized under the laws of India. As compensation for its services under its
subadvisory agreement with PIM and the Fund, PIM pays the Indian Adviser a
management fee at the annual rate from 0.10% to 0.60% of the Fund's average
gross assets invested in India's securities markets, including assets invested
in American, global or other types of depository receipts for securities
traded
in India's securities markets. The annual rate is 0.10% of such gross
assets up
to $15 million; 0.20% of the next $30 million; 0.40% of the next $15 million;
and 0.60% of the excess over $60 million.
3. Transfer Agent
PSC, a wholly owned subsidiary of UniCredito Italiano, provides substantially
all transfer agent and shareowner services to the Fund at negotiated rates.
Included in due to affiliates is $42,080 in transfer agent fees payable to PSC
at October 31, 2000.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A
Plan,
Class B Plan and Class C 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. Included in due to affiliates is $16,483
in distribution fees payable to PFD at October 31, 2000.
28
Pioneer Indo-Asia Fund
In addition, redemptions of each class of shares may be subject to a
contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of
purchase. Also, upon the redemption or exchange of Class A shares worth more
than $25,000 within 90 days of any purchase of fund shares, the fund will
apply
a 2.0% fee to the entire amount of the sale proceeds. The fee is payable
to the
Fund and is not a CDSC or commission. The fee is calculated after any
applicable sales charge is deducted and is in addition to any sales charge
paid. Class B shares that are redeemed within six years of purchase are
subject
to a CDSC at declining rates beginning at 4.00%, based on the lower of cost or
market value of shares being redeemed. Redemptions of Class C shares
within one
year of purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are
paid to PFD. For the year ended October 31, 2000, CDSCs in the amount of
$169,956 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended October 31, 2000,
the Fund's expenses were reduced by $22,169 under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary or
emergency purposes. The Fund may borrow up to the lesser of $50 million or the
limits set by its prospectus for borrowings. Interest on collective borrowings
of up to $25 million is payable at the Federal Funds Rate plus 3/8% on an
annualized basis, or at the Federal Funds Rate plus 1/2% if the borrowing
exceeds $25 million at any one time. The Funds pay an annual commitment
fee for
this facility. The commitment fee is allocated among such Funds based on their
respective borrowing limits.
The average daily amount of borrowings outstanding during the year ended
October 31, 2000 was $159,701. The average daily shares outstanding during the
period were 2,443,042 resulting in an average borrowing per share of
$0.65. The
related weighted average annualized interest rate for the period was 6.5%, and
the total interest expense on such borrowings was $15,621.
29
Pioneer Indo-Asia Fund
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareowners and the Board of Trustees
of Pioneer Indo-Asia Fund:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Indo-Asia Fund as of October 31, 2000, and the related
statement of operations, the statements of changes in net assets, and the
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform
the audit to obtain reasonable assurance about whether the financial
statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of October 31, 2000 by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Indo-Asia Fund as of October 31, 2000, the results of its operations,
the changes in its net assets, and the financial highlights for the periods
presented, in conformity with accounting principles generally accepted in the
United States.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
December 5, 2000
30
Pioneer Indo-Asia Fund
RESULTS OF SHAREOWNER MEETING
On September 11, 2000, Pioneer Indo-Asia Fund held a special meeting of
shareowners to approve a new management contract between the Fund and Pioneer
Investment Management, Inc., the Fund's investment adviser. Shareowners also
voted to elect trustees. Both proposals passed by shareowner vote. The new
management contract took effect when UniCredito Italiano S.p.A. completed its
acquisition of The Pioneer Group, Inc. on October 24, 2000. Here are the
detailed results of the votes.
Note, proposal 1(b) applies to Indo-Asia Fund. Please call with any questions.
Proposal 1(a) - To approve a new management contract.
Affirmative Against Abstain
3,126,322.835 54,690.197 52,876.539
Proposal 1(b) - To approve a new subadvisory contract.
Affirmative Against Abstain
3,134,048.628 50,176.419 49,664.524
Proposal 2 - To elect Trustees.
Nominee Affirmative Withheld
M.K. Bush 3,101,629.948 132,259.623
J.F. Cogan, Jr. 3,097,139.732 136,749.839
Dr. R. H. Egdahl 3,101,744.902 132,144.669
M.B.W. Graham 3,101,744.902 132,144.669
M.A. Piret 3,105,527.061 128,362.510
D.D. Tripple 3,096,950.732 136,938.839
S.K. West 3,104,694.750 129,194.821
J. Winthrop 3,107,425.339 126,464.232
31
Pioneer Indo-Asia Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Officers Trustees
John F. Cogan, Jr., John F. Cogan, Jr., President
Chairman David D. Tripple, Executive Vice President
Mary K. Bush Vincent Nave, Treasurer
Richard H. Egdahl, M.D. Joseph P. Barri, Secretary
Margaret B.W. Graham
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
32
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
professional, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds
United States
Pioneer Growth Shares
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Mid-Cap Value Fund
Pioneer Science & Technology Fund
Pioneer Small Company Fund
Pioneer Tax-Managed Fund
International/Global
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer High Yield Fund
Pioneer Limited Maturity Bond Fund
Pioneer Strategic Income Fund
Tax-Free
Pioneer Tax-Free Income Fund
Money Market Fund
Pioneer Cash Reserves Fund*
*An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund
seeks to preserve the value of your investment at $1 per share, it is
possible to lose money by investing in the Fund.
33
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFoneSM
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFoneSM gives you a quick and easy way to check fund
share prices, yields, dividends and distributions, as well as information
about
your own account. Simply call 1-800-225-4321. For specific account
information,
have your 13-digit account number and four-digit personal identification
number
at hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as
you meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
34
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds
you wish to invest in. You choose the amounts and dates for Pioneer to sell
shares of your original fund and use the proceeds to buy shares of the other
funds you have chosen. Over time, your investment will be shifted out of the
original fund. (Automatic Exchange is available for originating accounts
with a
balance of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month you want. Pioneer will send
the proceeds by check to the address you designate, or electronically to your
bank account. You also can authorize Pioneer to make the redemptions
payable to
someone else. (SWPs are available for accounts with a value of $10,000 or
more.)
35
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 Plans
Individual Retirement Account (IRA)
An IRA is a tax-favored account that allows anyone under age 701|M/2 with
earned income to contribute up to $2,000 annually. Spouses may contribute
up to
$2,000 annually into a separate IRA, for a total of $4,000 per year for a
married couple. Earnings are tax-deferred, and contributions may be
tax-deductible.
Roth IRA
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and became
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $10,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees) IRA Plan
Businesses with 100 or fewer eligible employees can establish a plan; it
resembles a traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and
an employer contribution is required.
36
403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available
only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their
salary, before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must
contribute the same percentage of pay for themselves and any eligible
employees; contributions are made directly to employees' IRAs. SEPs are
easy to
administer and can be an especially good choice for firms with few or no
employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing
them to
decide each year whether a contribution will be made and how much, up to
15% of
each participant's pay. These plans can include provisions for loans and
vesting schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are
flexible, but
age-weighted plans allocate contributions based on both age and salary.
Age-weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit-sharing plans, but allow for higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
37
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact
us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, propectuses, applications
and service forms 1-800-225-6292
FactFoneSM 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:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@piog.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
9442-00-1200
(Copyright) Pioneer Funds Distributor, Inc.
[GRAPHIC OMITTED]
Printed on Recycled Paper
[logo] PIONEER
Investments(R)
Pioneer
Indo-Asia
Fund
SEMIANNUAL REPORT 4/30/01
Table of Contents
- --------------------------------------------------------------------------------
Letter from the President 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 6
Schedule of Investments 9
Financial Statements 17
Notes to Financial Statements 23
Trustees, Officers and Service Providers 30
The Pioneer Family of Mutual Funds 31
Programs and Services for Pioneer Shareowners 32
Retirement Plans from Pioneer 34
Pioneer Indo-Asia Fund
LETTER FROM THE PRESIDENT 4/30/01
Dear Shareowner,
- -------------------------------------------------------------------------------
I don't think you could find a better argument for a diversified portfolio than
the volatile markets we have experienced in the last several months. The
turbulence began when the dot-com bubble burst in the spring of 2000. Then, as
higher interest rates began to drain strength from the economy, companies in a
wide range of industries issued warnings of declining profits. The result has
been a very weak stock market, with high-flying growth and internet-related
stocks suffering the most damage. In contrast to these sharp declines, however,
less aggressive investments, including many bonds and value stocks, did much
better over this painful period.
You can never eliminate risk entirely, but you and your financial advisor can
work to mitigate it. The first step is to review your portfolio diversification,
and modify it as necessary. You will probably want to continue holding a mix of
stocks and bonds. A portfolio containing a variety of investments with varying
risk and opportunity characteristics may be the most comfortable course for most
investors. It could also be the most successful.
As professional investors, we view market downturns as opportunities to
reposition our funds' portfolios and take advantage of lower prices to purchase
attractive securities. For more than 70 years, that strategy has helped Pioneer
fund managers and shareowners reach their financial goals. You may want to put
your own investment portfolio through the same process: Look past the bad news
and try to bring your portfolio in line with current conditions and your own
needs.
Sincerely,
/s/ David Tripple
David Tripple
Pioneer Investment Management, Inc.
1
Pioneer Indo-Asia Fund
PORTFOLIO SUMMARY 4/30/01
Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[pie chart]
International Common Stocks 81.3%
Depositary Receipts for International Stocks 15.1%
U.S. Common Stocks 3.5%
Rights/Warrants 0.1%
Geographical Distribution
- --------------------------------------------------------------------------------
(As a percentage of equity holdings) [GRAPHIC OMITTED]
[bar chart]
Hong Kong 36%
South Korea 16%
India 12%
Taiwan 10%
Singapore 10%
Malaysia 5%
People's Republic of China 5%
Thailand 3%
Indonesia 2%
Philippines 1%
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. Hutchison Whampoa Ltd. 4.53%
2. Samsung Electronics Co. 4.34
3. Sun Hung Kai Properties Ltd. 3.15
4. Cheung Kong Holdings Ltd. 3.14
5. China Mobile Ltd. 2.90
6. Development Bank of Singapore Ltd. 2.73
7. SK Telecom Co., Ltd. (A.D.R.) 2.43
8. Asia Satellite Telecommunications Holdings Ltd. 1.93
9. China Moblie Ltd. (A.D.R.) 1.88
10. Wharf Holdings Ltd. 1.66
Fund holdings will vary for other periods.
2
Pioneer Indo-Asia Fund
PERFORMANCE UPDATE 4/30/01 CLASS A SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 4/30/01 10/31/00
$9.11 $9.38
Distributions per Share Income Short-Term Long-Term
(10/31/00 - 4/30/01) Dividends Capital Gains Capital Gains
- - -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Indo-Asia Fund at public offering price, compared to the growth of the
MSCI All-Country Asia Free (Ex-Japan) Index.
Average Annual Total Returns
(As of April 30, 2001)
Net Asset Public Offering
Period Value Price*
Life of Class
(6/23/94) -3.31% -4.14%
5 Years -1.95 -3.09
1 Year -29.38 -33.45
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[mountain chart]
Pioneer Indo-Asia Fund* MSCI All-Country Asia Free
(Ex-Japan) Index
6/94 9425 10000
9246 11312
4/95 7538 9604
6955 10166
8252 11853
5690 10993
4/97 6084 10976
5863 7638
5797 6816
5157 5725
4/99 7686 8072
9073 8785
10592 9420
7735 7018
4/01 7480 6430
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
+ Index comparison begins 6/30/94. The Morgan Stanley Capital International
(MSCI) All-Country Asia Free (Ex-Japan) Index is an unmanaged,
capitalization-weighted measure of securities trading in China, Hong Kong,
India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore, Sri
Lanka, Taiwan and Thailand; it reflects only those securities available to
foreign investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
Pioneer Indo-Asia Fund
PERFORMANCE UPDATE 4/30/01 CLASS B SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 4/30/01 10/31/00
$8.62 $8.94
Distributions per Share Income Short-Term Long-Term
(10/31/00 - 4/30/01) Dividends Capital Gains Capital Gains
- - -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Indo-Asia Fund, compared to the growth of the MSCI All-Country Asia Free
(Ex-Japan) Index.
Average Annual Total Returns
(As of April 30, 2001)
If If
Period Held Redeemed*
Life of Class
(6/23/94) -4.11% -4.11%
5 Years -2.79 -2.98
1 Year -30.26 -33.05
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
[mountain chart]
Pioneer Indo-Asia Fund* MSCI All-Country Asia Free
(Ex-Japan) Index
6/94 10000 10000
9783 11312
4/95 7944 9604
7300 10166
8640 11853
5917 10993
4/97 6308 10976
6056 7638
5977 6816
5290 5725
4/99 7866 8072
9240 8785
10754 9420
7813 7018
4/01 7500 6430
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
+ Index comparison begins 6/30/94. The Morgan Stanley Capital International
(MSCI) All-Country Asia Free (Ex-Japan) Index is an unmanaged,
capitalization-weighted measure of securities trading in China, Hong Kong,
India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Singapore, Sri
Lanka, Taiwan and Thailand; it reflects only those securities available to
foreign investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
4
Pioneer Indo-Asia Fund
PERFORMANCE UPDATE 4/30/01 CLASS C SHARES
Share Prices and Distributions
- --------------------------------------------------------------------------------
Net Asset Value
per Share 4/30/01 10/31/00
$8.56 $8.84
Distributions per Share Income Short-Term Long-Term
(10/31/00 - 4/30/01) Dividends Capital Gains Capital Gains
- - -
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made in
Pioneer Indo-Asia Fund, compared to the growth of the MSCI All-Country Asia Free
(Ex-Japan) Index.
Average Annual Total Returns
(As of April 30, 2001)
If If
Period Held Redeemed*
Life of Class
(1/31/96) 1.66% 1.66%
5 Years -2.77 -2.77
1 Year -29.95 -29.95
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to investments sold within one year of purchase.
[mountain chart]
Pioneer Indo-Asia Fund* MSCI All-Country Asia Free
(Ex-Japan) Index
1/96 10000 10000
12548 10549
8624 9784
4/97 9197 9768
8828 6798
8713 6067
7682 5095
4/99 11376 7184
13376 7819
15567 8384
11312 6246
4/01 10904 5723
Prior to October 1, 1998, the Fund was named Pioneer India Fund and primarily
invested in securities of Indian issuers.
+ The Morgan Stanley Capital International (MSCI) All-Country Asia Free
(Ex-Japan) Index is an unmanaged, capitalization-weighted measure of
securities trading in China, Hong Kong, India, Indonesia, Korea, Malaysia,
Pakistan, Philippines, Singapore, Sri Lanka, Taiwan and Thailand; it reflects
only those securities available to foreign investors. 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 Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
5
Pioneer Indo-Asia Fund
PORTFOLIO MANAGEMENT DISCUSSION 4/30/01
For the six months ended April 30, 2001, Pioneer Indo-Asia Fund's Class A, B and
C shares delivered total returns at net asset value of -2.88%, -3.58% and
- -3.17%, respectively. This performance surpassed the -8.37% return for the MSCI
All-Country Asia Free (excluding Japan) Index.
In the following discussion, the portfolio management team of Mark Madden,
Manish Modi and Paul Cloonan address the factors affecting the Fund's
performance and the outlook for Asian markets (excluding Japan).
Q: What factors influenced the performance of the Asian equity markets during
the six months ended April 30, 2001?
A: The last six months were extremely challenging for equity investors around
the world. Fears of slowing global growth and a potential recession in the
United States led to negative returns for most equity markets. The Asian
(excluding Japan) region fared a bit better than many other areas of the
world, partly because Asian economies are in a different cycle than the U.S.
economy. Many Asian countries went through a painful recession in 1997-98. In
response to the difficult economic conditions, many companies in Asia
initiated restructuring to improve efficiency and to lay the foundation for a
recovery in profits. In addition, Asian governments strengthened their
financial systems to better deal with crises in the future. We are now in the
early years of an economic recovery and the profit cycle may be turning up.
In contrast, the United States appears to be in the early stages of a
deceleration in economic growth and profits.
Q: What is your general investment strategy?
A: Our investment process is driven by rigorous research that focuses on
companies with strong long-term growth prospects, proven management ability
and selling at a discount to our estimation of fair value. We look for
companies that are well positioned in industries with favorable long-term
trends and growth potential. We manage risk through diversification among
various Asian countries, sectors and companies while emphasizing stocks that
are attractively valued.
6
Pioneer Indo-Asia Fund
Q: What were some of the areas you emphasized given the investment backdrop
during the six months under review?
A: We were particularly optimistic on the prospects for China and India. The
economies in these countries, we think, are poised to grow at rates faster
than the rest of the region, and the stocks in these countries are
attractively valued. In the last six months, our stock selection in China and
Hong Kong added significantly to our performance enabling us to outpace the
MSCI Asia Ex-Japan Index. China is expected to enter the World Trade
Organization (WTO) later this year. China's entry into WTO may encourage more
foreign direct investment (FDI) into China and may help bolster economic
growth. China now has the second highest level of FDI in the world behind the
United States. We believe these continued developments in the Chinese economy
provide a positive environment for our China and Hong Kong stocks.
As for sectors, we currently favor domestic-oriented areas such as the
financial, consumer and telecommunication sectors. We are less optimistic for
export-oriented sectors, such as technology hardware and equipment, that are
more dependent on the health of the U.S. and European economies. In the last
six months, our stock selection in the financial and telecommunication
sectors contributed significantly to performance while our consumer stocks
detracted slightly from performance. We expect consumer stocks to show
improved results later this year as economic growth in Asia is expected to
remain resilient despite the slowdown in exports.
Q: What is your outlook?
A: We continue to be optimistic about the prospects for Asian equity markets.
First, the interest rate and liquidity environment has improved dramatically
from last year. Second, valuations of Asian stocks are very attractive.
Finally, earnings growth potential remains strong for many Asian companies
that do not depend on sales to customers in the United States. Local demand
in many Asian countries is just beginning to recover after the crises of
1997-98. Thus, many of the concerns that weighed on Asian equity markets last
year appear to be easing this year. The main
7
Pioneer Indo-Asia Fund
PORTFOLIO MANAGEMENT DISCUSSION 4/30/01 (continued)
risk relates to the health of the U.S. and world economy. If the downturn in the
U.S. economy proves steeper and longer than expected, this will negatively
impact the performance of global equity markets. Once it is perceived that
global growth has stabilized, we believe that investors may recognize the
relatively strong fundamentals in Asian economies (excluding Japan), and equity
market performance may improve.
Investing in emerging markets carries its own set of risks, including but not
limited to, currency fluctuations, and social and economic instability. However,
we feel confident that the long-term prospects invite serious consideration.
8
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 4/30/01 (unaudited)
Shares Value
COMMON STOCKS - 99.9%
Basic Materials - 4.0%
Chemicals - 0.6%
9,200 Reliance Industries Ltd. (G.D.R.) (144A)* $ 145,820
----------
Chemicals (Specialty) - 0.7%
87,000 Nan Ya Plastics Corp.* $ 95,491
401,000 Yizheng Chemical Fibre Co., Ltd. 82,781
----------
$ 178,272
----------
Construction (Cement & Aggregates) - 0.3%
23,700 Gujarat Ambuja Cements Ltd. (G.D.R.) $ 90,060
----------
Iron & Steel - 1.0%
8,100 Pohang Iron & Steel Co. Ltd. (A.D.R.) $ 162,081
37,000 Tata Iron and Steel Co. Ltd. 106,493
----------
$ 268,574
----------
Metals Mining - 1.4%
942,000 Yanzhou Coal Mining (Class H) $ 386,511
----------
Total Basic Materials $1,069,237
----------
Capital Goods - 1.4%
Electrical Equipment - 0.4%
35,000 Bharat Heavy Electricals Ltd. $ 117,588
----------
Manufacturing (Diversified) - 0.3%
11,100 Grasim Industries Ltd. $ 68,719
----------
Trucks & Parts - 0.7%
38,595 Larsen & Toubro Ltd. $ 181,211
----------
Total Capital Goods $ 367,518
----------
Communication Services - 24.0%
Cellular/Wireless Telecommunications - 16.1%
159,000 China Mobile Ltd.* $ 780,831
20,000 China Mobile Ltd. (A.D.R.)* 506,400
113,000 Hutchison Whampoa Ltd. 1,220,701
6,200 Korea Telecom Freetel Co.* 222,202
770 SK Telecom Co., Ltd. 132,426
31,100 SK Telecom Co., Ltd. (A.D.R.) 654,655
130,000 Smartone Telecommunications 152,520
83,000 Taiwan Cellular Corp.* 131,225
426,000 Technology Resources Industries Bhd.* 199,547
The accompanying notes are an integral part of these financial statements. 9
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 4/30/01 (unaudited) (continued)
Shares Value
Cellular/Wireless Telecommunications - (continued)
83,800 Total Access Communication Ltd.* $ 230,450
138,000 United Communication Industry Ltd.* 101,271
----------
$4,332,228
----------
Telecommunications (Long Distance) - 3.1%
228,000 Asia Satellite Telecommunications Holdings Ltd. $ 518,913
23,375 Videsh Sanchar Nigam Ltd.* 315,563
----------
$ 834,476
----------
Telephone - 4.8%
3,000 Korea Telecom Corp. $ 143,508
12,800 Korea Telecom Corp. (A.D.R.) 353,664
39,200 Mahanagar Telephone Nigam Ltd. 125,547
90,000 Pacific Century Cyberworks* 31,158
53,500 PT Indosat Indonesian Satellite Corp. (A.D.R.) 373,965
65,676 Telekomunik Indonesia (A.D.R.) 267,301
----------
$1,295,143
----------
Total Communication Services $6,461,847
----------
Consumer Cyclicals - 7.4%
Auto Parts & Equipment - 0.9%
57,000 Cycle & Carriage Co. $ 103,295
6,300 Halla Climate Control Co. 139,681
----------
$ 242,976
----------
Automobiles - 0.5%
27,000 Mahindra & Mahindra Ltd. $ 78,230
14,000 Mahindra & Mahindra Ltd. (G.D.R.) 38,500
----------
$ 116,730
----------
Leisure Time (Products) - 1.1%
205,000 Berjaya Sports Toto Bhd. $ 207,158
30,600 Hero Honda Motors* 91,405
----------
$ 298,563
----------
Lodging - Hotels - 0.4%
17,300 The Indian Hotels Co., Ltd. (G.D.R.) (144A) $ 114,613
----------
Publishing - 1.3%
2,554,000 Oriental Press* $ 343,852
----------
Publishing (Newspapers) - 0.9%
14,200 Singapore Press Holdings $ 162,976
33,500 Star Publications Inc. 77,138
----------
$ 240,114
----------
10 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
Shares Value
Retail (Department Stores) - 0.3%
1,350 Shinsegae Department Co., Ltd. $ 81,492
----------
Retail (General Merchandise) - 0.9%
6,225 LG Home Shopping $ 248,149
----------
Retail (Specialty-Apparel) - 0.8%
400,000 Giordano International Ltd. $ 207,719
----------
Services (Advertising/Marketing) - 0.0%
133 LG AD Inc. $ 3,676
----------
Services (Commercial & Consumer) - 0.0%
251 Hansol CSN $ 497
----------
Textiles (Home Furnishings) - 0.3%
141,366 Far Eastern Textile Ltd. (G.D.R.) $ 86,393
----------
Total Consumer Cyclicals $1,984,774
----------
Consumer Staples - 7.1%
Broadcasting (Cable/Television/Radio) - 1.1%
95,000 ABS-CBN Broadcasting Corp. (A.D.R.) $ 66,537
1,601,000 Benpres Holdings Corp.* 40,492
40,000 Television Broadcasts Ltd. 202,077
----------
$ 309,106
----------
Distributors (Food & Health) - 0.8%
112,000 Li & Fung Ltd. $ 212,540
----------
Entertainment - 0.6%
97,000 Tanjong Plc $ 158,263
----------
Foods - 1.6%
6,000 Cheil Jedang Corp. $ 177,677
198,000 President Enterprises Corp. 101,739
894,000 Tingyi Holding Co. 142,141
----------
$ 421,557
----------
Personal Care - 0.5%
29,000 Hindustan Lever Ltd. $ 130,495
----------
Restaurants - 0.7%
185,000 Kentucky Fried Chicken Bhd. $ 194,737
----------
Retail Stores (Food Chains) - 1.1%
25,000 Hotel Shilla Co.* $ 106,302
71,701 President Chain Store Corp. 207,102
----------
$ 313,404
----------
The accompanying notes are an integral part of these financial statements. 11
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 4/30/01 (unaudited) (continued)
Shares Value
Tobacco - 0.7%
9,200 ITC Ltd.* $ 183,080
----------
Total Consumer Staples $1,923,182
----------
Energy - 2.9%
Oil & Gas (Drilling & Equipment) - 1.3%
17,700 CNOOC Ltd.* $ 339,132
----------
Oil & Gas (Production/Exploration) - 0.7%
9,000 Petrochina Co., Ltd. (A.D.R.) $ 193,950
----------
Oil & Gas (Refining & Marketing) - 0.3%
24,800 Hindustan Petroleum Corp., Ltd. $ 88,483
----------
Oil (International Integrated) - 0.6%
826,000 Sinopec Zhenhai Refining and Chemical Co., Ltd. $ 150,394
----------
Total Energy $ 771,959
----------
Financials - 31.3%
Banks (Major Regional) - 9.8%
125,000 Bangkok Bank Ltd.* $ 138,280
227,635 Bank Sinopac* 101,740
50,500 Dao Heng Bank Group Ltd. 375,561
84,193 Development Bank of Singapore Ltd. 735,128
3,249 H&CB 31,190
10,900 Housing & Commercial Bank, Korea 207,323
13,650 Kookmin Bank 161,686
47,000 Malayan Banking Bhd. 121,211
762,000 National Finance Public Co., Ltd.* 141,884
13,500 Shinhan Bank 119,932
32,752 United Overseas Bank Ltd. 217,627
75,000 Wing Hang Bank Ltd. 297,153
----------
$2,648,715
----------
Banks (Money Center) - 2.8%
23,000 Hang Seng Bank $ 271,317
24,000 Overseas-Chinese Banking Corp., Ltd. 144,975
1,980,000 PT Lippo Bank (Certificate of Entitlement)* -
325,000 Taishin International Bank* 146,245
260,512 United World Chinese Commercial Bank 188,513
----------
$ 751,050
----------
12 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
Shares Value
Banks (Regional) - 0.8%
33,100 ICICI Bank Ltd.* $ 219,784
----------
Financial (Diversified) - 14.4%
50,000 Bank of East Asia $ 113,476
76,000 Cheung Kong Holdings Ltd. 847,801
84,000 City Developments Inc. 295,222
65,000 Great Eagle Holdings Ltd. 92,512
52,000 Henderson Land Development Co., Ltd. 238,697
20,000 Housing Development Finance Corp., Ltd. 246,077
15,000 HSBC Holdings Plc 190,409
80,000 Industrial Credit & Investment Corp., Ltd. 141,945
75,000 New World Development Co., Ltd. 93,281
91,300 Sun Hung Kai Properties Ltd. 848,731
59,000 Swire Pacific Ltd. 325,298
191,000 Wharf Holdings Ltd. 448,173
----------
$3,881,622
----------
Insurance (Multi-Line) - 0.3%
105,000 Fubon Insurance Co.* $ 84,919
----------
Insurance (Property-Casualty) - 1.1%
209,272 Cathay Life Insurance Co. $ 308,595
----------
Investment Banks/Brokerage - 1.3%
100,000 Arab Malaysian Merchant Bank Holdings Bhd. $ 75,526
34,000 Hong Kong Exchanges & Clearing Ltd. 60,815
174,000 Polaris Securities Co., Ltd.* 79,355
160,000 Yuanta Securities Co., Ltd.* 121,618
----------
$ 337,314
----------
Real Estate - 0.8%
550,400 New World China Land Ltd.* $ 213,484
----------
Total Financials $8,445,483
----------
Health Care - 1.3%
Health Care (Drugs/Major Pharmaceuticals) - 1.3%
4,800 Cipla Ltd. $ 117,497
8,500 E. Merck Ltd. 76,143
15,500 Hoechst Marion Roussel Ltd. 146,246
----------
$ 339,886
----------
Total Health Care $ 339,886
----------
The accompanying notes are an integral part of these financial statements. 13
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 4/30/01 (unaudited) (continued)
Shares Value
Technology - 16.6%
Communications Equipment - 1.2%
90,000 China Unicom Ltd.* $ 126,362
13,500 China Unicom Ltd. (A.D.R).* 195,075
----------
$ 321,437
----------
Computer (Hardware) - 4.5%
18,000 Compeq Manufacturing Co., Ltd.* $ 55,002
6,728 Samsung Electronics Co. 1,169,865
----------
$1,224,867
----------
Computers (Peripherals) - 0.0%
165 Korea Data System* $ 298
----------
Computers (Software & Services) - 3.4%
7,038 BFL Software Ltd.* $ 23,292
8,500 Hughes Software Systems* 135,907
281,000 Informatics Holdings Ltd. 144,281
1,700 Infosys Technologies Ltd. 135,310
4,000 NIIT Ltd. 32,424
25,000 Satyam Computer Services Ltd. 115,432
4,000 Software Solution Integrated Ltd.* 47,110
645 Sunevision Holdings* 156
400,000 Travelsky Technology Ltd.* 269,265
----------
$ 903,177
----------
Electronics (Component Distributors) - 0.5%
22,720 Asustek Computer, Inc. $ 103,273
3,500 L.G. Electronics 37,206
----------
$ 140,479
----------
Electronics (Instrumentation) - 1.0%
99,600 Elec & Eltek International Co., Ltd. $ 259,956
----------
Electronics (Semiconductors) - 4.7%
163,060 Advanced Semiconductor Engineering* $ 126,918
7,600 Chartered Semiconductor (A.D.R.)* 243,124
32,080 Hon Hai Precision Industry 188,247
30,000 Siliconware Precision Industries Co., Ltd., (A.D.R.)* 118,500
106,983 Taiwan Semiconductor Manufacturing Co.* 296,000
100,000 United Microelectronics Corp., Ltd.* 159,623
12,000 Winbond Electronics Corp. (G.D.R.)* 142,440
----------
$1,274,852
----------
14 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
Shares Value
Services (Data Processing) - 1.3%
333,000 Singapore Exchange $ 223,097
35,000 Shinawatra Computer Co., Plc* 126,506
-----------
$ 349,603
-----------
Total Technology $ 4,474,669
-----------
Transportation - 1.7%
Airlines - 0.9%
680 Korean Air $ 3,356
30,000 Singapore Airlines Ltd. 238,880
-----------
$ 242,236
-----------
Railroads - 0.8%
132,000 Malaysia International Shipping Bhd. $ 227,526
-----------
Total Transportation $ 469,762
-----------
Utilities - 2.2%
Electric Companies - 1.4%
300,000 Beijing Datang Power Generation Co., Ltd. $ 100,013
2,200 Huaneng Power International, Inc. (A.D.R.) 50,578
23,200 Korea Electric Power ( A.D.R.) 218,776
-----------
$ 369,367
-----------
Natural Gas - 0.8%
207,614 Hong Kong & China Gas Co., Ltd. $ 247,576
-----------
Total Utilities $ 616,943
-----------
Total Common Stocks
(Cost $28,798,806) $26,925,260
-----------
RIGHTS/WARRANTS - 0.1%
56,210 TelecomAsia Foreign Corp., Public Co., Ltd.* $ 16,808
217,500 PT Pan Indonesia Bank TBK, 7/8/02* 300
1,980,000 PT Lippo Bank TBK, 4/15/02* -
-----------
(Cost $33,223) $ 17,108
-----------
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $28,832,029) (a)(b)(c) $26,942,368
===========
The accompanying notes are an integral part of these financial statements. 15
Pioneer Indo-Asia Fund
SCHEDULE OF INVESTMENTS 4/30/01 (unaudited) (continued)
* 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 April 30, 2001, the
value of these securities amounted to $260,433 or 0.9% of total net assets.
(a) Distribution of investments by country of issue, as a percentage of total
equity holdings, is as follows:
Hong Kong 35.8%
South Korea 16.2
India 12.3
Taiwan 10.5
Singapore 10.3
Malaysia 4.7
People's Republic of China 4.6
Thailand 2.8
Indonesia 2.4
Philippines 0.4
-----
100.0%
=====
(b) At April 30, 2001, the net unrealized loss on investments based on cost for federal
income tax purposes of $29,316,792 was as follows:
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 3,000,782
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (5,375,206)
-----------
Net unrealized loss $(2,374,424)
===========
(c) At October 31, 2000, the Fund had a capital loss carryforward of
$4,891,082 which will expire in 2006 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended April 30, 2001 aggregated $13,069,293 and $16,903,935, respectively.
16 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
BALANCE SHEET 4/30/01 (unaudited)
ASSETS:
Investment in securities, at value (cost $28,832,029) $26,942,368
Cash 2,326,867
Foreign currencies, at value 661,252
Receivables -
Investment securities sold 164,782
Fund shares sold 523,006
Dividends, interest and foreign taxes withheld 104,797
Other 2,578
-----------
Total assets $30,725,650
-----------
LIABILITIES:
Payables -
Investment securities purchased $ 459,675
Fund shares repurchased 234,646
Reserve for repatriation taxes 15,493
Due to affiliates 113,717
Accrued expenses 56,417
-----------
Total liabilities $ 879,948
-----------
NET ASSETS:
Paid-in capital $41,061,096
Accumulated net investment loss (190,441)
Accumulated net realized loss on investments and foreign
currency transactions (9,117,212)
Net unrealized loss on investments (including reserve for
repatriation taxes of $15,493) (1,905,154)
Net unrealized loss on forward foreign currency contracts
and other assets and liabilities denominated in
foreign currencies (2,587)
-----------
Total net assets $29,845,702
===========
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $18,584,801/2,041,057 shares) $ 9.11
===========
Class B (based on $8,656,357/1,004,669 shares) $ 8.62
===========
Class C (based on $2,604,544/304,427 shares) $ 8.56
===========
MAXIMUM OFFERING PRICE:
Class A $ 9.67
===========
The accompanying notes are an integral part of these financial statements. 17
Pioneer Indo-Asia Fund
STATEMENT OF OPERATIONS (unaudited)
For the Six Months Ended 4/30/01
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $24,699) $ 198,283
Interest (net of foreign taxes withheld of $2,021) 13,754
-----------
Total investment income $ 212,037
-----------
EXPENSES:
Management fees $ 167,032
Transfer agent fees
Class A 65,202
Class B 71,146
Class C 8,752
Distribution fees
Class A 22,025
Class B 48,746
Class C 15,004
Administrative fees 15,620
Custodian fees 16,660
Registration fees 7,783
Professional fees 34,478
Printing 7,240
Fees and expenses of nonaffiliated trustees 1,429
Miscellaneous 3,739
-----------
Total expenses $ 484,856
Less management fees waived and expenses
assumed by Pioneer Investment Management, Inc. (75,019)
Less fees paid indirectly (7,359)
-----------
Net expenses $ 402,478
-----------
Net investment loss $ (190,441)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss from:
Investments $(4,092,923)
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (72,870) $(4,165,793)
----------- -----------
Change in net unrealized gain (loss) from:
Investments $ 3,926,907
Forward foreign currency contracts and other assets
and liabilities denominated in foreign currencies (749) $ 3,926,158
----------- -----------
Net loss on investments and foreign currency
transactions $ (239,635)
-----------
Net decrease in net assets resulting from operations $ (430,076)
===========
18 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended 4/30/01 and the Year Ended 10/31/00
Six Months Ended
4/30/01 Year Ended
(unaudited) 10/31/00
FROM OPERATIONS:
Net investment loss $ (190,441) $ (636,618)
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions (4,165,793) 5,147,060
Change in net unrealized gain (loss) on
investments and foreign currency
transactions 3,926,158 (12,055,192)
----------- ------------
Net decrease in net assets resulting from
operations $ (430,076) $ (7,544,750)
----------- ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $29,568,094 $100,290,455
Cost of shares repurchased (30,995,883) (99,017,798)
----------- ------------
Net increase (decrease) in net assets resulting
from Fund share transactions $(1,427,789) $ 1,272,657
----------- ------------
Net decrease in net assets $(1,857,865) $ (6,272,093)
NET ASSETS:
Beginning of period 31,703,567 37,975,660
----------- ------------
End of period (including accumulated net investment
loss of $190,441 and $0, respectively) $29,845,702 $ 31,703,567
=========== ============
'01 Shares '01 Amount
CLASS A (unaudited) (unaudited) '00 Shares '00 Amount
Shares sold 2,886,683 $27,054,198 5,217,207 $68,649,688
Less shares repurchased (2,782,277) (26,556,598) (5,034,213) (66,077,346)
---------- ----------- ---------- -----------
Net increase 104,406 $ 497,600 182,994 $ 2,572,342
========== =========== ========== ===========
CLASS B
Shares sold 152,965 $ 1,384,045 1,435,155 $19,004,056
Less shares repurchased (302,987) (2,761,944) (1,793,816) (22,162,447)
---------- ----------- ---------- -----------
Net decrease (150,022) $(1,377,899) (358,661) $(3,158,391)
========== =========== ========== ===========
CLASS C
Shares sold 128,078 $ 1,129,851 989,712 $12,636,711
Less shares repurchased (187,466) (1,677,341) (865,233) (10,778,005)
---------- ----------- ---------- -----------
Net increase (decrease) (59,388) $ (547,490) 124,479 $ 1,858,706
========== =========== ========== ===========
The accompanying notes are an integral part of these financial statements. 19
Pioneer Indo-Asia Fund
FINANCIAL HIGHLIGHTS 4/30/01
Six Months
Ended
4/30/01 Year Ended
(unaudited) 10/31/00
CLASS A
Net asset value, beginning of period $ 9.38 $ 11.05
------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.03) $ (0.12)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (0.24) (1.55)
------- -------
Net increase (decrease) in net asset value $ (0.27) $ (1.67)
------- -------
Net asset value, end of period $ 9.11 $ 9.38
======= =======
Total return* (2.88)% (15.11)%
Ratio of net expenses to average net assets+ 2.17%** 2.16%
Ratio of net investment income (loss) to average net assets+ (0.77)%** (0.88)%
Portfolio turnover rate 90%** 103%
Net assets, end of period (in thousands) $18,585 $18,164
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.66%** 2.61%
Net investment loss (1.26)%** (1.33)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.10%** 2.10%
Net investment income (loss) (0.70)%** (0.82)%
Year Ended Year Ended Year Ended Year Ended
10/31/99 10/31/98 10/31/97 10/31/96
CLASS A
Net asset value, beginning of period $ 6.28 $ 7.14 $ 6.93 $ 8.47
------- ------- ------ -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.05) $ (0.02) $(0.01) $ 0.03
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 4.82 (0.84) 0.22 (1.57)
------- ------- ------ -------
Net increase (decrease) in net asset value $ 4.77 $ (0.86) $ 0.21 $ (1.54)
------- ------- ------ -------
Net asset value, end of period $ 11.05 $ 6.28 $ 7.14 $ 6.93
======= ======= ====== =======
Total return* 75.96% (12.04)% 3.03% (18.18)%
Ratio of net expenses to average net assets+ 2.14% 2.31% 2.29% 2.28%
Ratio of net investment income (loss) to average net assets+ (0.39)% (0.52)% (0.09)% 0.32%
Portfolio turnover rate 108% 101% 71% 64%
Net assets, end of period (in thousands) $19,384 $ 5,230 $9,846 $12,388
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 3.81% 5.30% 4.39% 4.29%
Net investment loss (2.06)% (3.51)% (2.19)% (1.69)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.09% 2.24% 2.25% 2.25%
Net investment income (loss) (0.34)% (0.45)% (0.05)% 0.35%
* 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 assuming no reduction for fees paid indirectly.
20 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
FINANCIAL HIGHLIGHTS 4/30/01
Six Months
Ended
4/30/01 Year Ended
(unaudited) 10/31/00
CLASS B
Net asset value, beginning of period $ 8.94 $ 10.62
------ -------
Increase (decrease) from investment operations:
Net investment loss $(0.13) $ (0.31)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (0.19) (1.37)
------ -------
Net increase (decrease) in net asset value $(0.32) $ (1.68)
------ -------
Net asset value, end of period $ 8.62 $ 8.94
====== =======
Total return* (3.58)% (15.82)%
Ratio of net expenses to average net assets+ 3.64%** 2.97%
Ratio of net investment loss to average net assets+ (2.25)%** (1.68)%
Portfolio turnover rate 90%** 103%
Net assets, end of period (in thousands) $8,656 $10,322
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 4.13%** 3.41%
Net investment loss (2.74)%** (2.12)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 3.62%** 2.95%
Net investment loss (2.23)%** (1.66)%
Year Ended Year Ended Year Ended Year Ended
10/31/99 10/31/98 10/31/97 10/31/96
CLASS B
Net asset value, beginning of period $ 6.08 $ 6.96 $ 6.80 $ 8.39
------- ------- ------ -------
Increase (decrease) from investment operations:
Net investment loss $ (0.03) $ (0.09) $(0.04) $ (0.03)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions 4.57 (0.79) 0.20 (1.56)
------- ------- ------ -------
Net increase (decrease) in net asset value $ 4.54 $ (0.88) $ 0.16 $ (1.59)
------- ------- ------ -------
Net asset value, end of period $ 10.62 $ 6.08 $ 6.96 $ 6.80
======= ======= ====== =======
Total return* 74.67% (12.64)% 2.35% (18.95)%
Ratio of net expenses to average net assets+ 2.80% 2.81% 2.90% 3.15%
Ratio of net investment loss to average net assets+ (0.91)% (1.03)% (0.62)% (0.45)%
Portfolio turnover rate 108% 101% 71% 64%
Net assets, end of period (in thousands) $16,078 $ 5,036 $9,392 $ 8,275
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 4.60% 5.94% 4.99% 5.23%
Net investment loss (2.71)% (4.16)% (2.71)% (2.53)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.77% 2.76% 2.86% 3.13%
Net investment loss (0.88)% (0.98)% (0.58)% (0.43)%
* 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 assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 21
Pioneer Indo-Asia Fund
FINANCIAL HIGHLIGHTS 4/30/01
Six Months
Ended
4/30/01 Year Ended Year Ended
(unaudited) 10/31/00 10/31/99
CLASS C
Net asset value, beginning of period $ 8.84 $ 10.50 $ 6.00
------ ------- ------
Increase (decrease) from investment operations:
Net investment loss $(0.09) $ (0.19) $(0.03)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (0.19) (1.47) 4.53
------ ------- ------
Net increase (decrease) in net asset value $(0.28) $ (1.66) $ 4.50
------ ------- ------
Net asset value, end of period $ 8.56 $ 8.84 $10.50
====== ======= ======
Total return* (3.17)% (15.81)% 75.00%
Ratio of net expenses to average net assets+ 2.77%** 2.92% 2.70%
Ratio of net investment loss to average net assets+ (1.38)%** (1.61)% (0.89)%
Portfolio turnover rate 90%** 103% 108%
Net assets, end of period (in thousands) $2,605 $ 3,217 $2,514
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 3.26%** 3.39% 4.40%
Net investment loss (1.87)%** (2.08)% (2.59)%
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.74%** 2.89% 2.64%
Net investment loss (1.35)%** (1.58)% (0.83)%
Year Ended Year Ended 1/31/96 to
10/31/98 10/31/97 10/31/96
CLASS C
Net asset value, beginning of period $ 6.93 $ 6.77 $ 7.85
------- ------ -------
Increase (decrease) from investment operations:
Net investment loss $ (0.07) $(0.04) $ (0.02)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (0.86) 0.20 (1.06)
------- ------ -------
Net increase (decrease) in net asset value $ (0.93) $ 0.16 $ (1.08)
------- ------ -------
Net asset value, end of period $ 6.00 $ 6.93 $ 6.77
======= ====== =======
Total return* (13.42)% 2.36% (13.76)%
Ratio of net expenses to average net assets+ 2.85% 2.84% 3.12%**
Ratio of net investment loss to average net assets+ (1.06)% (0.56)% (0.42)%**
Portfolio turnover rate 101% 71% 64%
Net assets, end of period (in thousands) $ 536 $ 803 $ 557
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 6.12% 4.89% 4.63%**
Net investment loss (4.33)% (2.61)% (1.93)%**
Ratios assuming waiver of management fees and assumption
of expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.76% 2.78% 3.06%**
Net investment loss (0.97)% (0.50)% (0.36)%**
* 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 assuming no reduction for fees paid indirectly.
22 The accompanying notes are an integral part of these financial statements.
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 4/30/01 (unaudited)
1. Organization and Significant Accounting Policies
Pioneer Indo-Asia Fund (the Fund) is a Delaware business 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 long-term
growth of capital.
The Fund offers three classes of shares - Class A, Class B and Class C shares.
Shares of Class A, Class B and Class C each represent an interest in the same
portfolio of investments of the Fund and have equal rights to voting,
redemptions, dividends and liquidation, except that each class of shares can
bear different transfer agent and distribution fees, and have exclusive voting
rights with respect to the distribution plans that have been adopted by Class A,
Class B and Class C shareowners, respectively.
The Fund's financial statements have been prepared in conformity with accounting
principles generally accepted in the United States 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 revenues and expenses during the reporting periods. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the Exchange. In computing the net asset
value, securities are valued at the last sale price on the principal exchange
where they are traded. Securities that have not traded on the date of
valuation, or securities for which sale prices are not generally reported,
are valued at the mean between the last bid and asked prices. Securities for
which market quotations are not readily available are valued at their fair
values as determined by, or under the direction of, the Board of Trustees.
Trading in foreign securities is substantially completed each day at various
times prior to the close of the
23
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 4/30/01 (unaudited) (continued)
New York Stock Exchange. The values of such securities used in computing the
net asset value of the Fund's shares are determined as of such times.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have passed
are recorded as soon as the Fund is informed of the ex-dividend data in the
exercise of reasonable diligence. Interest income, including interest on
income bearing cash accounts, is recorded on the accrual basis, net of
unrecoverable foreign taxes withheld at the applicable country rates.
Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
The Fund's investments in countries with limited or developing markets may
subject the Fund to a greater degree of risk than in a developed market.
Risks associated with these developing markets, attributable to political,
social or economic factors, may affect the price of the Fund's investments
and income generated by these investments, as well as the Fund's ability to
repatriate such amounts.
In addition, delays are common in registering transfers of securities in
India, and the Fund may be unable to sell portfolio securities until the
registration process is completed.
B. Foreign Currency Translation
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
24
Pioneer Indo-Asia Fund
C. Futures Contracts
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices and currency rates or to seek to increase
total return. Upon entering into a futures contract, the Fund is required to
deposit with a broker an amount of cash or securities equal to the minimum
"initial margin" requirements of the associated futures exchange. Subsequent
payments for futures contracts ("variation margin") are paid or received by
the Fund, depending on the daily fluctuation in the value of the contracts
and are recorded by the Fund as unrealized gains or losses. When the contract
is closed, the Fund realizes a gain or loss equal to the difference between
the opening and closing value of the contract. The use of futures contracts
involve, to varying degrees, elements of market and counterparty risks which
may exceed the amounts recognized by the Fund. Changes in value of the
contracts may not directly correlate to the changes in value of the
underlying securities. These risks may decrease the effectiveness of the
Fund's hedging strategies and potentially result in a loss. As of April 30,
2001, the Fund had no open futures contracts.
D. Forward Foreign Currency Contracts
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the time
a portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar. As of April 30, 2001, the
Fund had no outstanding portfolio or settlement hedges.
25
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 4/30/01 (unaudited) (continued)
E. 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.
In addition to the requirements of the Internal Revenue Code, the Fund may
also be required to pay local taxes on the recognition of capital gains
and/or the repatriation of foreign currencies in certain countries. During
the six months ended April 30, 2001, the Fund paid no such taxes.
In determining the daily net asset value, the Fund estimates the reserve for
such taxes, if any, associated with investments in certain countries. The
estimated reserve for capital gains taxes is based on the net unrealized
appreciation on certain portfolio securities, the holding period of such
securities and the related tax rates, tax loss carryforward (if applicable)
and other such factors. As of April 30, 2001, the Fund had no reserve related
to capital gains. The estimated reserve for repatriation of foreign
currencies is based on principal balances and/or unrealized appreciation of
applicable securities, the holding period of such investments and the related
tax rates and other such factors. As of April 30, 2001, the Fund had a
reserve of $15,493 related to taxes on the repatriation of foreign
currencies. Effective, May 2, 2001, the Malaysian government eliminated its
tax on the repatriation of foreign currencies.
F. 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 majority owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano) earned $2,276 in underwriting commissions on the sale
of fund shares during the six months ended April 30, 2001.
G. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Shareowners of each class share all
26
Pioneer Indo-Asia Fund
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.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B and Class C shares can bear different transfer
agent and distribution fees.
H. Repurchase Agreements
With respect to repurchase agreements entered into by the Fund, the value of
the underlying securities (collateral), including accrued interest received
from 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.
2. Management Agreement
PIM manages the Fund's portfolio and is a majority owned indirect subsidiary of
UniCredito Italiano. Management fees are calculated daily at the annual rate of
1.10% of the Fund's average daily net assets.
PIM has agreed not to impose a portion of its management fee and to assume other
operating expenses of the Fund to the extent necessary to limit Class A expenses
to 2.10% of the average daily net assets attributable to Class A shares; the
portion of the Fund-wide expenses attributable to Class B and Class C shares
will be reduced only to the extent that such expenses are reduced for Class A
shares. PIM's agreement is voluntary and temporary and may be revised or
terminated at any time.
27
Pioneer Indo-Asia Fund
NOTES TO FINANCIAL STATEMENTS 4/30/01 (unaudited) (continued)
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At April 30, 2001, $2,935 was payable to PIM
related to management fees, administration fees and certain other services.
PIM has appointed Khothari Pioneer AMC Ltd. (the Indian Adviser) as the Fund's
adviser in India. In managing the Fund's Indian investments, PIM relies on the
advice and local expertise of the Indian Adviser. The Indian Adviser is a joint
venture between PIM and Investment Trust of India Limited (ITI), a corporation
organized under the laws of India. As compensation for its services under its
subadvisory agreement with PIM and the Fund, PIM pays the Indian Adviser a
management fee at the annual rate from 0.10% to 0.60% of the Fund's average
gross assets invested in India's securities markets, including assets invested
in American, global or other types of depository receipts for securities traded
in India's securities markets. The annual rate is 0.10% of such gross assets up
to $15 million; 0.20% of the next $30 million; 0.40% of the next $15 million;
and 0.60% of the excess over $60 million.
3. Transfer Agent
PIMSS, a majority owned indirect subsidiary of UniCredito Italiano, provides
substantially all transfer agent and shareowners services to the Fund at
negotiated rates. Included in due to affiliates is $98,322 in transfer agent
fees payable to PIMSS at April 30, 2001.
4. Distribution Plans
The Fund adopted a Plan of Distribution for each class of shares (Class A Plan,
Class B Plan and Class C 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 Fund's average daily net assets 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. Included in due to affiliates is $12,460 in distribution fees payable to
PFD at April 30, 2001.
28
Pioneer Indo-Asia Fund
In addition, redemptions of each class of shares may be subject to a contingent
deferred sales charge (CDSC). A CDSC of 1.00% may be imposed on redemptions of
certain net asset value purchases of Class A shares within one year of purchase.
Also, upon the redemption or exchange of Class A shares worth more than $25,000
within 90 days of any purchase of fund shares, the fund will apply a 2.00% fee
to the entire amount of the sale proceeds. The fee is payable to the Fund and is
not a CDSC or commission. The fee is calculated after any applicable sales
charge is deducted and is in addition to any sales charge paid. Class B shares
that are redeemed within six years of purchase are subject to a CDSC at
declining rates beginning at 4.00%, based on the lower of cost or market value
of shares being redeemed. Redemptions of Class C shares within one year of
purchase are subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to
PFD. For the six months ended April 30, 2001, CDSCs in the amount of $31,633
were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the six months ended April 30, 2001,
the Fund's expenses were reduced by $7,359 under such arrangements.
6. Line of Credit Facility
The Fund, along with certain other Funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured revolving
line of credit facility. Borrowings are used solely for temporary or emergency
purposes. The Fund may borrow up to the lesser of $50 million or the limits set
by its prospectus for borrowings. Interest on collective borrowings of up to $25
million is payable at the Federal Funds Rate plus 3/8% on an annualized basis,
or at the Federal Funds Rate plus 1/2% if the borrowing exceeds $25 million at
any one time. The Funds pay an annual commitment fee for this facility. The
commitment fee is allocated among such Funds based on their respective borrowing
limits. During the six months ended April 30, 2001, the Fund had no borrowings
under this agreement.
29
Pioneer Indo-Asia Fund
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
Trustees Officers
John F. Cogan, Jr., John F. Cogan, Jr., President
Chairman David D. Tripple, Executive Vice President
Mary K. Bush Vincent Nave, Treasurer
Richard H. Egdahl, M.D. Joseph P. Barri, Secretary
Margaret B.W. Graham
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management
Shareholder Services, Inc.
30
THE PIONEER FAMILY OF MUTUAL FUNDS
For information about any Pioneer mutual fund, please contact your investment
professional, or call Pioneer at 1-800-225-6292. Ask for a free fund information
kit, which includes a fund prospectus. Please read the prospectus carefully
before you invest or send money.
Growth Funds
United States
Pioneer Growth Shares
Pioneer Micro-Cap Fund
Pioneer Mid-Cap Fund
Pioneer Mid-Cap Value Fund
Pioneer Small Company Fund
Pioneer Tax-Managed Fund
International/Global
Pioneer Emerging Markets Fund
Pioneer Europe Fund
Pioneer Europe Select Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Sector Funds
Pioneer Global Financials Fund
Pioneer Global Health Care Fund
Pioneer Global Telecoms Fund
Pioneer Real Estate Shares
Pioneer Science & Technology Fund
Growth and Income Funds
Pioneer Fund
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Value Fund (formerly Pioneer II)
Income Funds
Taxable
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer High Yield Fund
Pioneer Limited Maturity Bond Fund
Pioneer Strategic Income Fund
Tax-Free
Pioneer Tax-Free Income Fund
Money Market Fund
Pioneer Cash Reserves Fund*
* An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1 per share, it is possible to
lose money by investing in the Fund.
31
PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-8O0-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFoneSM gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
Six-Month Reinstatement Privilege (for Class A and Class B Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within six months from your
redemption. You have the choice of investing in any Pioneer fund provided the
account has the exact same registration and meets the fund's investment minimum
requirement. Reinstated accounts may only purchase Class A fund shares.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need to
do is authorize a set amount of money to be moved out of your bank account into
the Pioneer fund of your choice. Investomatic also allows you to change the
dollar amount, frequency and investment date right over the phone. By putting
aside affordable amounts of money regularly, you can build a long-term
investment without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing Pioneer
to deduct from participating employees' paychecks. You specify the dollar amount
you want to invest into the Pioneer fund(s) of your choice.
32
Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds you
wish to invest in. You choose the amounts and dates for Pioneer to sell shares
of your original fund and use the proceeds to buy shares of the other funds you
have chosen. Over time, your investment will be shifted out of the original
fund. (Automatic Exchange is available for originating accounts with a balance
of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals. You
decide the frequency and the day of the month you want. Pioneer will send the
proceeds by check to the address you designate, or electronically to your bank
account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or more.)
33
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 Plans
Individual Retirement Account (IRA)
An IRA is a tax-favored account that allows anyone under age 70-1/2 with earned
income to contribute up to $2,000 annually. Spouses may contribute up to $2,000
annually into a separate IRA, for a total of $4,000 per year for a married
couple. Earnings are tax-deferred, and contributions may be tax-deductible.
Roth IRA
The Roth IRA came about as part of the Taxpayer Relief Act of 1997 and became
available to investors in 1998. Contributions, up to $2,000 a year, are not
tax-deductible, but earnings are tax-free for qualified withdrawals.
401(k) Plan
The traditional 401(k) plan allows employees to make pre-tax contributions
through payroll deduction, up to $10,500 per year or 25% of pay, whichever is
less. Employers may contribute.
SIMPLE (Savings Incentive Match PLan for Employees) IRA Plan
Businesses with 100 or fewer eligible employees can establish a plan; it
resembles a traditional 401(k), but with less testing and lower administration
costs. Employees can make pre-tax contributions of up to $6,000 per year, and an
employer contribution is required.
34
403(b) Plan
Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is available only to
employees of public schools, not-for-profit hospitals and other tax-exempt
organizations. A 403(b) plan lets employees set aside a portion of their salary,
before taxes, through payroll deduction.
Simplified Employee Pension Plan (SEP)
SEPs let self-employed people and small-business owners make tax-deductible
contributions of up to 15% of their income. Generally, employers must contribute
the same percentage of pay for themselves and any eligible employees;
contributions are made directly to employees' IRAs. SEPs are easy to administer
and can be an especially good choice for firms with few or no employees.
Profit Sharing Plan
Profit sharing plans offer companies considerable flexibility, allowing them to
decide each year whether a contribution will be made and how much, up to 15% of
each participant's pay. These plans can include provisions for loans and vesting
schedules.
Age-Weighted Profit Sharing Plan
Like traditional profit sharing plans, employer contributions are flexible, but
age-weighted plans allocate contributions based on both age and salary.
Age-weighted plans are designed for employers who want to maximize their own
contributions while keeping contributions to employees affordable.
Money Purchase Pension Plan (MPP)
Money purchase plans are similar to profit-sharing plans, but allow for higher
annual contributions - up to 25% of pay. MPPs aren't as flexible as profit
sharing plans; a fixed percentage of pay must be contributed each year,
determined when the plan is established. Businesses often set up both MPPs and
profit sharing plans.
Most retirement plan withdrawals must meet specific conditions to avoid
penalties.
35
This page for your notes.
36
This page for your notes.
37
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account Information, including existing accounts,
new accounts, propectuses, 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 9014
Boston, Massachusetts 02205-9014
Our toll-free fax 1-800-225-4240
Our internet e-mail address ask.pioneer@piog.com
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current Fund prospectus.
[logo] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
www.pioneerfunds.com
1266-00-0601
(C) Pioneer Funds Distributor, Inc.
Underwriter of Pioneer mutual funds
[recycle symbol] Printed on Recycled Paper
EXHIBIT D
[LOGO] PIONEER
INVESTMENTS-Registered Trademark-
PIONEER
EMERGING MARKETS
FUND
ANNUAL REPORT 11/30/00
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Letter from the President 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 7
Schedule of Investments 10
Financial Statements 22
Notes to Financial Statements 29
Report of Independent Public Accountants 35
Results of Shareowner Meeting 36
Trustees, Officers and Service Providers 37
PIONEER EMERGING MARKETS FUND
LETTER FROM THE PRESIDENT 11/30/00
DEAR SHAREOWNER,
- --------------------------------------------------------------------------------
The year 2000, the last year of the old millennium, is ending on an
historically unsettling note. The bewildering final days of the presidential
election have come on top of a period of increased market volatility, leaving
us all feeling unsettled. We at Pioneer are convinced that the market's
volatility has its roots not in politics but in the signs of a slowing economy
and in the sudden realization by investors that some market valuations, notably
technology, had become irrational. As the new millennium unfolds we expect
investors to get back to work assessing the policies of the new administration,
evaluating the prospects for a growing economy and identifying undervalued
companies.
As seasoned investors we treat periods of turmoil as periods of opportunity,
looking for the few significant facts and trends that hide well behind the
clutter of daily events. I think that you should do the same thing. This is a
good year, and a good time of year, to evaluate your retirement program
contributions, to compare a Roth IRA with a traditional IRA and to reassess
your investment allocations in light of current market conditions. A
successful investment program requires not only money, but time and planning.
Your investment professional is your best guide to making these important
decisions.
AN IMPORTANT ANNOUNCEMENT FROM PIONEER
I'm very happy to report that, on October 24, 2000, Pioneer Investment
Management, Inc. became a wholly owned subsidiary of UniCredito Italiano
S.p.A., one of Italy's largest and most successful banking groups. Early in
2001 all of UniCredito's investment operations will be combined to form
Pioneer Global Asset Management S.p.A., which will manage over $110 billion
for global individual and institutional clients under the name Pioneer
Investments-Registered Trademark-. The new Pioneer Global will bring to
Pioneer greater analytical resources that complement our investment skills,
reinforcing Pioneer's tradition of fundamental investment analysis and sound
long-term portfolio management. We believe fund shareowners, will benefit
from this merger.
All of us at Pioneer appreciate your decision to invest with us and look
forward to helping you reach your financial goals.
Sincerely,
/s/ David Tripple
David Tripple
President
Pioneer Investment Management, Inc.
1
PIONEER EMERGING MARKETS FUND
PORTFOLIO SUMMARY 11/30/00
PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[PIE CHART]
Transportation 1%
Capital Goods 2%
Healthcare 3%
Energy 4%
Basic Materials 4%
Utilities 4%
Consumer Cyclicals 7%
Consumer Staples 11%
Technology 13%
Financial 24%
Communication Services 27%
GEOGRAPHICAL DISTRIBUTION
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[GRAPH]
Brazil 12.2%
Mexico 11.5%
India 10.8%
South Korea 9.6%
Taiwan 6.6%
Hong Kong 5.7%
Turkey 5.7%
South Africa 5.3%
Thailand 3.9%
Malaysia 3.6%
Russia 3.6%
Indonesia 3.4%
Israel 3.1%
Philippines 2.8%
Singapore 2.4%
Egypt 1.7%
Chile 1.6%
Poland 1.6%
Greece 1.0%
China 0.9%
Argentina 0.8%
Hungary 0.5%
Venezuela 0.4%
Pakistan 0.3%
British Virgin Islands 0.3%
Czech Republic 0.2%
United Kingdom 0.2%
Peru 0.2%
Columbia 0.1%
10 LARGEST HOLDINGS
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
1. SK Telecom Co., Ltd. (A.D.R.) 2.10%
2. Telefonos de Mexico SA 1.94
(L Shares) (A.D.R.)
3. China Mobile Ltd. (Hong Kong) 1.94
4. Carso Global Telecom 1.80
5. Petroleo Brasileiro SA (A.D.R.) 1.51
6. Korea Electric Power Corp. (A.D.R.) 1.44
7. PT Indosat Indonesian Satellite 1.42
Corp. (A.D.R.) (Local Shares)
8. Samsung Electronics 1.32
9. Grupo Televisa SA (G.D.R.) 1.31
10. Telemig Celular Participacoes 1.26
SA (A.D.R.) (Preferred)
Fund holdings will vary for other periods.
2
PIONEER EMERGING MARKETS FUND
PERFORMANCE UPDATE 11/30/00 CLASS A SHARES
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE 11/30/00 11/30/99
$10.82 $13.80
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(11/30/99-11/30/00) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
- - -
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund at public offering price, compared to the
growth of the Morgan Stanley Capital International (MSCI) Emerging Markets Free
Index.
- ------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(As of November 30, 2000)
NET ASSET PUBLIC OFFERING
PERIOD VALUE PRICE*
Life-of-Fund 0.66% -0.26%
(6/23/94)
5 Years 2.12 0.91
1 Year -21.59 -26.09
- ------------------------------------------
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
[GRAPH]
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging
Markets Fund* Markets Free Index
6/94 $9,425 $10,000
11/94 $9,128 $11,242
$8,743 $9,970
$8,756 $9,385
$10,998 $10,780
11/96 $10,558 $10,347
$12,385 $11,616
$11,653 $8,972
$11,302 $8,329
11/98 $7,902 $6,962
$9,798 $8,618
$12,405 $10,130
$13,637 $10,150
11/00 $9,726 $7,738
+ Index comparison begins June 30, 1994. The MSCI Emerging Markets Free Index
is an unmanaged, capitalization-weighted measure of 1,009 securities trading
in 26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
3
PIONEER EMERGING MARKETS FUND
PERFORMANCE UPDATE 11/30/00 CLASS B SHARES
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE 11/30/00 11/30/99
$10.28 $13.23
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(11/30/99-11/30/00) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
- - -
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) Emerging Markets Free Index.
- --------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(As of November 30, 2000)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund -0.11% -0.11%
(6/23/94)
5 Years 1.32 1.15
1 Year -22.30 -25.41
- --------------------------------
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions. The
maximum CDSC of 4% declines over six years.
[GRAPH]
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging Markets
Markets Fund* Free Index
6/94 $10,000 $10,000
11/94 $9,644 $11,242
$9,209 $9,970
$9,199 $9,385
$11,517 $10,780
11/96 $11,011 $10,347
$12,870 $11,616
$12,069 $8,972
$11,659 $8,329
11/98 $8,112 $6,962
$10,023 $8,618
$12,641 $10,130
$13,835 $10,150
11/00 $9,822 $7,738
+ Index comparison begins June 30, 1994. The MSCI Emerging Markets Free Index
is an unmanaged, capitalization-weighted measure of 1,009 securities trading
in 26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
PIONEER EMERGING MARKETS FUND
PERFORMANCE UPDATE 11/30/00 CLASS C SHARES
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE 11/30/00 11/30/99
$10.23 $13.12
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(11/30/99-11/30/00) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
- - -
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) Emerging Markets Free Index.
- ---------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(As of November 30, 2000)
IF IF
PERIOD HELD REDEEMED*
Life-of-Fund -1.67% -1.67%
(1/31/96)
1 Year -22.03 -22.03
- ---------------------------------
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
[GRAPH]
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging Markets
Markets Fund* Free Index
1/96 $10,000 $10,000
$10,008 $9,841
$10,855 $10,268
$10,234 $9,872
$10,386 $9,855
2/97 $11,746 $11,027
$12,131 $11,064
$12,281 $10,325
$11,384 $8,546
$11,796 $8,908
5/98 $10,997 $7,934
$6,966 $5,209
$7,633 $6,631
$7,480 $6,492
$9,390 $8,209
8/99 $9,670 $8,973
$11,824 $9,649
$16,825 $11,086
$12,932 $9,668
$12,914 $9,540
11/00 $9,219 $7,370
+ Index comparison begins January 31, 1996. The MSCI Emerging Markets Free
Index is an unmanaged, capitalization-weighted measure of 1,009 securities
trading in 26 emerging markets; it reflects only those securities available to
foreign investors. Index returns are calculated monthly, assume reinvestment
of dividends and, unlike Fund returns, do not reflect any sales charges, fees
or expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
PIONEER EMERGING MARKETS FUND
PERFORMANCE UPDATE 11/30/00 CLASS Y SHARES
SHARE PRICES AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
NET ASSET VALUE
PER SHARE 11/30/00 11/30/99
$11.03 $13.99
DISTRIBUTIONS PER SHARE INCOME SHORT-TERM LONG-TERM
(11/30/99-11/30/00) DIVIDENDS CAPITAL GAINS CAPITAL GAINS
- - -
INVESTMENT RETURNS
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Emerging Markets Fund, compared to the growth of the Morgan Stanley
Capital International (MSCI) Emerging Markets Free Index.
- ----------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
(As of November 30, 2000)
IF IF
PERIOD HELD REDEEMED
Life-of-Fund -9.45% -9.45%
(4/9/98)
1 Year -21.16 -21.16
- ---------------------------------
* Assumes reinvestment of distributions.
[GRAPH]
GROWTH OF $10,000+
Pioneer Emerging MSCI Emerging Markets
Markets Fund* Free Index
4/1998 $10,000 $10,000
$8,759 $8,630
8/1998 $5,578 $5,666
$6,155 $7,213
$6,065 $7,062
5/1999 $7,658 $8,929
$7,915 $9,760
$9,730 $10,495
2/2000 $13,889 $12,058
$10,725 $10,516
$10,739 $10,377
11/2000 $7,672 $8,017
+ Index comparison begins April 30, 1998. The MSCI Emerging Markets Free Index
is an unmanaged, capitalization-weighted measure of 1,009 securities trading
in 26 emerging markets; it reflects only those securities available to foreign
investors. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any sales charges, fees or
expenses. You cannot invest directly in the Index.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
6
PIONEER EMERGING MARKETS FUND
PORTFOLIO MANAGEMENT DISCUSSION 11/30/00
For the fiscal year ended November 30, 2000, Pioneer Emerging Markets Fund's
Class A, B, C and Y shares delivered total returns at net asset value of
- -21.59%, -22.30%, -22.03% and -21.16, respectively. This performance surpassed
the -24.92% return for the MSCI Emerging Markets Free Index for the same period
while lagging the -20.76 average return posted by emerging market funds tracked
by Lipper Inc. (Lipper is an independent mutual fund monitor).
In the following discussion, Mark Madden, portfolio manager of Pioneer Emerging
Markets Fund, addresses the factors impacting the Fund's performance and the
outlook for the emerging markets.
Q: WHAT FACTORS INFLUENCED THE PERFORMANCE OF EMERGING MARKETS IN THE YEAR ENDED
NOVEMBER 30, 2000?
A: Despite the continued improvement in many developing economies, emerging
equity markets fell this year for a number of reasons. Most significant were
the concerns about rising interest rates and slowing growth in the United
States, which, along with rising oil prices, contributed to global equity
market weakness. Political uncertainty also contributed to equity market
weakness in some countries as elections approached or new leadership assumed
power. In Russia, Vladmir Putin, an obscure intelligence official, managed to
win the election to succeed Boris Yeltsin, but his political agenda and his
economic instincts remained vague and contradictory. In Mexico, meanwhile,
former Coca-Cola executive Vincente Fox, the first opposition candidate to
win the presidency in seven decades, outlined an ambitious program of reforms
but his ability to implement them was far from certain.
We believe that the emerging markets are oversold and already reflect many of
these risks and that prices of many stocks have reached attractive levels. In
Asia, valuations in some cases have approached those last seen during the
worst of the Asian crisis in 1998. In our view, this market reaction is an
opportunity to buy stocks at undervalued prices. We believe that the market
does not properly reflect the substantial progress we have observed during
the last two years in many emerging market
7
PIONEER EMERGING MARKETS FUND
PORTFOLIO MANAGEMENT DISCUSSION 11/30/00 (CONTINUED)
companies, economies and financial systems. Banking and corporate sector
reforms in Asia, in particular, have reduced many of the risks of investing
in those markets while the long-term prospects for growth have improved.
Q: WHAT IS YOUR INVESTMENT STRATEGY?
A: Our investment process is driven by rigorous research that identifies
companies with strong long-term prospects, proven managerial teams and
attractive valuations. We look for companies that are well positioned in
industries with strong long-term growth potential. We are also careful to
manage the risk of investing in these markets by careful diversification of
the portfolio across countries and industrial sectors.
Q: WHERE ARE YOU FINDING ATTRACTIVE INVESTMENT OPPORTUNITIES IN THE EMERGING
MARKETS?
A: We are cautious in our view of the sustainability of strong demand in the
U.S. economy. We believe that U.S. imports of electronic equipment, autos and
other goods will slow in the near term, and so we have reduced our exposure
to companies that derive significant revenues from U.S. sales. We believe
there are better opportunities available in companies that derive revenues
from the domestic economy of their home country. In Asia, for example, local
demand in many countries is just beginning to recover after the crises of
1997-98. Moreover, while profit margins may have peaked in the United States,
we are looking for improvement in profit margins and earnings of Asian
companies in the financial, consumer and telecommunication sectors.
In Eastern Europe, a slowing German economy has hurt, but Poland, Hungary and
the Czech Republic look attractive as their economies continue to introduce
the market reforms that we believe will place them next in line for admission
to the European Union.
8
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
In all markets, we continue to find companies that benefit from a global
trend toward outsourcing. Increasingly, multinational corporations in the
United States and Europe are shifting production and services to firms in
developing countries to reduce costs and improve efficiency. While this
practice is already well entrenched in Mexico's MAQUILADORA, the assemblers
of inexpensive consumer goods along the U.S. border, the trend is expanding
in Asia and Eastern Europe. Outsourcing opportunities are also cutting across
industry lines to more sophisticated products such as pharmaceuticals,
software services, semiconductors and customer service calling centers.
Q: WHAT IS YOUR OUTLOOK FOR THE COMING YEAR?
A: The leading indicators show that the U.S. economy is beginning to decelerate,
which may enable the Federal Reserve to maintain a less restrictive monetary
policy and perhaps reduce interest rates. This could be a positive
development for domestic consumption in many emerging markets. In 2000,
global investors became increasingly risk averse as fears mounted over
inflation, interest rates, oil prices and growth prospects in the developed
world. We believe that many of these uncertainties will ease next year, and
investors will focus once again on the positive trends in emerging markets:
strong growth, stable inflation rates and, in many cases, corporate
restructuring. Emerging market valuations are low and earnings prospects have
improved in the past year, which leaves us optimistic about the months ahead.
INVESTING IN EMERGING MARKETS CARRIES ITS OWN SET OF RISKS, INCLUDING BUT NOT
LIMITED TO, CURRENCY FLUCTUATIONS AND SOCIAL AND ECONOMIC INSTABILITY. HOWEVER,
WE FEEL CONFIDENT THAT THE LONG-TERM PROSPECTS INVITE SERIOUS CONSIDERATION.
9
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS 11/30/00
SHARES VALUE
PREFERRED STOCKS - 5.7%
19,560,000 Banco Itau SA $ 1,487,830
97,000 Centrails Electricas Brasileiras SA* 806,313
17,500,000 Companhia Brasileira de Distribuicao Grupo Pao de Acucar 586,587
16 Companhia Brasileira de Distribuicao Grupo Pao de Acucar
(Certificate of Entitlement)* -
12,000,000 Eletropaulo Metropolitana SA* 554,969
35,300 Embraer Aircraft Corp. (A.D.R.) 972,956
61,894 Tele Norte Leste Participacoes (A.D.R.) 1,121,829
13,700 Telecomunicacoes Brasileiras SA(A.D.R.) 790,319
23,000 Telecular Sul Participoes (A.D.R.)* 460,000
44,800 Telemig Celular Participacoes (A.D.R.)* 2,296,000
57,400 Telesp Celular Participacoes SA (A.D.R.) 1,216,162
-------------
TOTAL PREFERRED STOCKS
(Cost $11,111,474) $ 10,292,965
-------------
COMMON STOCKS - 93.8%
BASIC MATERIALS - 4.1%
CHEMICALS - 0.4%
155,909 Daelim Industrial Co. $ 631,075
-------------
CHEMICALS (SPECIALITY) - 0.4%
641,000 Nan Ya Plastics Corp. $ 785,967
-------------
CONSTRUCTION (CEMENT & AGGREGATES) - 1.3%
38,500 Cemex SA (A.D.R.) $ 743,531
106,900 Siam Cement Public Co., Ltd. 1,098,538
225,400 Siam City Cement Co., Ltd. 566,202
-------------
$ 2,408,271
-------------
GOLD & PRECIOUS METALS MINING - 0.4%
25,650 Anglogold Ltd. $ 625,569
39,640 Gold Fields Ltd. 111,511
-------------
$ 737,080
-------------
IRON & STEEL - 0.4%
1,472,000 China Steel Corp., Ltd. $ 793,267
50 Tata Iron & Steel Co., Ltd. 131
-------------
$ 793,398
-------------
The accompanying notes are an integral part of these financial statements.
10
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SHARES VALUE
METALS MINING - 1.2%
49,200 Comphania Vale do Rico Doce (A.D.R.) $ 971,700
76,200 KGHM Polska Miedz SA 443,043
2,650,000 Yanzhou Coal Mining 672,705
-------------
$ 2,087,448
-------------
TOTAL BASIC MATERIALS $ 7,443,239
-------------
CAPITAL GOODS - 2.4%
CONTAINERS (METAL & GLASS) - 0.2%
450,000 Cosco Pacific Ltd. $ 325,968
-------------
ELECTRICAL EQUIPMENT - 0.5%
331,196 Bharat Heavy Electricals Ltd.* $ 908,438
-------------
MANUFACTURING (DIVERSIFIED) - 0.9%
586,000 China Resources Enterprise Ltd. $ 676,167
2,800,000 Glorious Sun Enterprise Ltd. 466,676
87,000 Grasim Industries Ltd. 458,129
-------------
$ 1,600,972
-------------
TRUCKS & PARTS - 0.8%
382,467 Escorts Ltd. $ 760,360
167,500 Larsen & Tourbo Ltd. (New Shares) 648,289
42,000 Larsen & Tourbo Ltd. (Local Shares) 162,556
-------------
$ 1,571,205
-------------
TOTAL CAPITAL GOODS $ 4,406,583
-------------
COMMUNICATION SERVICES - 23.4%
CELLULAR/WIRELESS TELECOMMUNICATIONS - 8.9%
82,400 Advanced Information Service, Plc. $ 662,361
22,100 Advanced Service Co., Ltd. 221,050
646,000 China Mobile Ltd. 3,528,222
98,844 Grupo Iusacell SA (Series V) (A.D.R.)* 1,099,639
34,340 MIH Ltd. 485,053
33,600 Mobile Telesystems 739,200
89,600 Mobinil Ltd. 1,864,865
178,700 SK Telecom Co., Ltd. (A.D.R.) 3,808,544
11,050 Stet Hellas Telecomm SA (A.D.R.)* 113,263
787,000 Technology Resources Industries Bhd. 577,824
28,000 Tele Norte Celular Particpacoes SA (A.D.R.) 840,000
190,000 Total Access Communication Public Co. Ltd. 604,200
114,400 Turkcell Iletism Hizmet (A.D.R.) 707,850
The accompanying notes are an integral part of these financial statements.
11
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS 11/30/00 (CONTINUED)
- --------------------------------------------------------------------------------
SHARES VALUE
CELLULAR/WIRELESS TELECOMMUNICATIONS - (CONTINUED)
888,300 United Communication Industry Public Co., Ltd. $ 709,991
16,300 Vimpel Communications (A.D.R.) 196,619
-------------
$ 16,158,681
-------------
TELECOMMUNICATIONS (LONG DISTANCE) - 0.8%
5,541,000 Celular CRT Particpacoes SA $ 1,517,312
181 Celular CRT Particpacoes SA (Bonus Shares) -
-------------
$ 1,517,312
-------------
TELEPHONE - 13.7%
101,200 Bezeq Israeli Telecommunications Corp., Ltd. $ 521,932
10,200 Brasil Telecom Participacoes SA 444,975
1,651,600 Carso Global Telecom 3,264,760
56,400 Compania de Telephonos de Venezuela 810,750
45,900 Compania Anonima Nacional Telefonos de Venezuela (A.D.R.) 731,531
93,200 Embratel Participacoes (A.D.R.)* 1,124,225
124,450 Hellenic Telecommunication Organization SA 1,784,281
65,300 Korea Telecom Corp. (A.D.R.) 1,779,425
42,000 Matav (A.D.R.) 669,375
77,950 Philippine Long Distance Telephone Co. (A.D.R.) 1,261,816
282,600 PT Indosat Indonesian Satellite Corp. (A.D.R.) 2,578,725
175,800 Rostelocom (A.D.R.) 1,010,850
158,100 Tele Centro Oeste Celular Participacoes SA (A.D.R.) * 1,393,256
75,300 Telefonos de Mexico SA (L Shares) (A.D.R.) 3,529,688
884,500 TelecomAsia Corp. Public Co., Ltd. 419,122
444,000 Telekomunikasi Indonesia (A.D.R.) 2,192,250
121,000 Telekomunikacja Poliska SA 644,219
76,000 Videsh Sanchar Nigam Ltd. (G.D.R.) (144A) 684,000
-------------
$ 24,845,180
-------------
TOTAL COMMUNICATION SERVICES $ 42,521,173
-------------
CONSUMER CYCLICALS - 7.5%
AUTO PARTS & EQUIPMENT - 0.6%
262,000 Cycle & Carriage Co. $ 516,801
21,000 Halla Climate Control Co. 490,662
200,000 Mirgor Sacifia (Class C) (A.D.R.) (144A) 100,000
-------------
$ 1,107,463
-------------
The accompanying notes are an integral part of these financial statements.
12
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SHARES VALUE
AUTOMOBILES - 1.4%
28,400,000 Koc Holdings AS $ 1,060,633
312,000 Mahindra & Mahindra Ltd. (G.D.R.) 943,800
1,848,000 PT Astra International TbK (Local Shares)* 440,807
-------------
$ 2,445,240
-------------
BUILDING MATERIALS - 0.3%
68,000 Suez Cement Co. (G.D.R.) (144A) $ 623,900
-------------
HOUSEHOLD FURNITURE & APPLIANCES - 0.4%
5,050,000 Vestel Elektronik Sanayi Ve Ticaret AS* $ 684,131
-------------
LEISURE TIME (PRODUCTS) - 0.7%
40,000 Hero Honda Motors, Ltd* $ 728,892
120,000 TVS Suzuki, Ltd. 446,124
-------------
$ 1,175,016
-------------
LODGING (HOTELS) - 0.5%
125,000 The Indian Hotels Co., Ltd. (G.D.R.) (144A) $ 534,375
245,000 Resorts World Bhd. 373,947
-------------
$ 908,322
-------------
PUBLISHING - 0.6%
132,860,000 Dogan Sirketler Grubu Holding AS* $ 1,050,738
-------------
PUBLISHING (NEWSPAPERS) - 1.2%
125,800,000 Hurriyet Gazeteci ve Matbaacilik AS $ 921,206
287,260 Naspers, Ltd. 1,186,182
-------------
$ 2,107,388
-------------
RETAIL (DEPARTMENT STORES) - 0.3%
14,600 Shinsegae Department Store Co. $ 624,599
-------------
RETAIL (GENERAL MERCHANDISE) - 0.4%
19,500 39Shopping Corp.* $ 297,594
11,200 LG Home Shopping, Inc.* 455,187
-------------
$ 752,781
-------------
RETAIL (DISCOUNTERS) - 0.4%
394,000 Walmart De Mexico SA de CV (Series C) $ 774,643
-------------
SERVICES (ADVERTISING/MARKETING) - 0.5%
11,400 Cheil Communications Inc. $ 632,135
11,400 LG AD, Inc. 295,434
-------------
$ 927,569
-------------
The accompanying notes are an integral part of these financial statements.
13
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS 11/30/00 (CONTINUED)
SHARES VALUE
TEXTILES (HOME FUNRNISHINGS) - 0.2%
516,920 Far Eastern Textile Ltd. $ 410,030
-------------
TEXTILES (SPECIALTY) - 0.0%
347,700 Asia Fiber Co., Ltd.* $ 49,626
-------------
TOTAL CONSUMER CYCLICALS $ 13,641,446
-------------
CONSUMER STAPLES - 11.1%
BEVERAGES (ALCOHOLIC) - 0.6%
183,000 South African Breweries Plc $ 1,088,625
-------------
BEVERAGES (NON-ALCOHOLIC) - 0.9%
26,700 Coca-Cola SA de CV (A.D.R.) $ 502,294
45,800 Embotelladors Andina SA (A.D.R.) 529,563
17,500 Fomento Economico Mexicano, SA de CV 598,281
-------------
$ 1,630,138
-------------
BROADCASTING (TELEVISION/RADIO/CABLE) - 4.6%
2,147,100 ABS-CBN Broadcasting Corp. (A.D.R.)* $ 2,011,892
18,758,000 Benpres Holdings Corp.* 1,001,687
11,000 Ceske Radiokomunikace AS (G.D.R.)* (144A) 345,400
101,250 Globo Cabo SA (A.D.R.)* 803,672
218,650 Grupo Radio Centro SA de CV (A.D.R.) 1,885,856
51,000 Grupo Televisa SA (G.D.R.)* 2,374,688
-------------
$ 8,423,195
-------------
DISTRIBUTORS (FOOD & HEALTH) - 0.8%
359,700 Kimbererly-Clark de Mexico SA de CV $ 898,342
1,024,000 Ng Fung Hong Ltd. 630,166
-------------
$ 1,528,508
-------------
ENTERTAINMENT - 0.9%
168,890 Corporacion Interamericana de Entretenimiento SA
(Series B)* $ 682,058
460,700 Tanjong Public Co., Ltd. 897,153
-------------
$ 1,579,211
-------------
FOODS - 1.1%
32,800 Cheil Jedang Corp. $ 854,068
654,000 President Enterprises Corp. 415,804
7,701,300 PT Indofood Sukses Makmur Tbk 666,168
-------------
$ 1,936,040
-------------
HOUSEHOLD PRODUCTS (NON-DURABLES) - 0.5%
49,422,000 Arcelik A.S. $ 940,958
-------------
The accompanying notes are an integral part of these financial statements.
14
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SHARES VALUE
RESTAURANTS - 0.8%
1,184,900 Kentucky Fried Chicken Bhd. $ 1,502,952
-------------
RETAIL STORES (FOOD CHAINS) - 0.7%
1,327,400 Metro Cash and Carry Ltd. $ 301,468
3,000,000 Migros Turk T.A.S. 276,801
248,664 President Chain Store Corp. 670,030
-------------
$ 1,248,299
-------------
TOBACCO - 0.2%
187,000 PT Hanjaya Mandala Sampoerna Tbk $ 275,476
-------------
TOTAL CONSUMER STAPLES $ 20,153,402
-------------
ENERGY - 3.9%
OIL (INTERNATIONAL INTERGRATED) - 2.4%
106,640 Petroleo Brasileiro SA $ 2,745,980
7,500,000 Sinopec Zhenhai Refining and Chemical Company Limited 951,941
75,000 Surgutneftegaz (A.D.R.) 693,750
-------------
$ 4,391,671
-------------
OIL & GAS (EXPLORATION/PRODUCTION) - 0.7%
35,600 Lukoil Holding (A.D.R.) $ 1,272,700
-------------
OIL & GAS (REFINING & MARKETING) - 0.8%
402,150 Hindustan Petroleum Corp., Ltd. (New Shares)* $ 1,092,323
51,200 Polski Koncern Nafto (G.D.R.) 454,400
-------------
$ 1,546,723
-------------
TOTAL ENERGY $ 7,211,094
-------------
FINANCIAL - 22.3%
BANKS (MAJOR REGIONAL) - 10.0%
66,670,000 Akbank T.A.S. $ 312,455
114,700 Banco Bradesco SA 795,731
54,000 Banco Gandero (A.D.R.) 192,375
49,600 Banco Santander Chile (A.D.R.) 713,000
246,600 Bangkok Bank Ltd. 218,218
63,000 Commerical International Bank 591,471
65,200 Credicorp Ltd. 395,275
200,000 Development Bank of Singapore Ltd. 2,268,970
1,374,000 Grupo Financiero Banamex Accival (Class O)* 1,889,533
95,300 Grupo Financiero Galicia (A.D.R.) 1,328,244
59,980 Kookmin Bank 668,638
241,200 Malayan Banking Bhd. 888,632
The accompanying notes are an integral part of these financial statements.
15
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS 11/30/00 (CONTINUED)
SHARES VALUE
BANKS (MAJOR REGIONAL) - (CONTINUED)
7,735,000 National Finance Public Co., Ltd.* $ 1,042,167
7,400 OTP Bank (G.D.R.)* 327,783
68,900 Powszechny Bank Kredy 1,327,656
63,700 Shinhan Bank 584,331
124,240 Standard Bank Investment Corporation Ltd. 427,253
87,300,000 Turkiye Garanti Bankasi* 536,995
55,600 Uniao de Bancos Brasileiros SA (G.D.R.) 1,237,100
375,000 Wing Hang Bank Ltd. 1,228,389
187,849,885 Yapi Ve Kredi Bankasi SA 990,421
-------------
$ 17,964,637
-------------
BANKS (MONEY CENTER) - 1.8%
204,100 Bank Hapoalim Ltd. $ 537,524
261,200 Bank Leumi Le-Israel 564,223
10,692,000 PT Lippo Bank Tbk (Certificate of Entitlement)* -
132,855,000 Turkeiy Is Bankasi 1,673,335
850,000 United World Chinese Commercial Bank 568,725
-------------
$ 3,343,807
-------------
BANKS (REGIONAL) - 0.4%
173,100 Commerce Asset Holdings Bhd. $ 341,645
68,000 ICICI Bank Ltd. (A.D.R.) 454,750
-------------
$ 796,395
-------------
CONSUMER FINANCE - 0.6%
1,593,050 African Bank Investments, Ltd.* $ 1,068,954
-------------
FINANCIAL (DIVERSIFIED) - 5.2%
189,500 ABSA Group Ltd. $ 594,213
270,000 Bank Of East Asia 586,742
106,500 Citic Pacific Ltd. 367,296
601,210 FirstRand Ltd. 543,063
556,400 Grupo Financiero Bancomer (B Shares)* 2,040,045
146,000 Henderson Land Development 563,421
119,400 Housing Development Finance Corp. Ltd. 1,347,999
34,700 ICICI Ltd. (A.D.R.) 342,662
123,470 Imperial Holdings Ltd.* 876,299
740,000 New World Development Co., Ltd. 773,220
277,400 Pakistan Investment Fund Inc. 554,800
7,982,000 SM Prime Holdings, Inc. 804,234
-------------
$ 9,393,994
-------------
The accompanying notes are an integral part of these financial statements.
16
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SHARES VALUE
INSURANCE (LIFE/HEALTH) - 0.2%
51,430 Liberty Group Ltd. $ 394,875
-------------
INSURANCE (MULTI-LINE) - 0.2%
28,500,000 Aksigorta AS $ 354,789
-------------
INSURANCE (PROPERTY/CASUALTY) - 1.2%
144,100 Ayudhya Jardine CMG Life Assurance Public Co., Ltd.* $ 32,084
1,255,800 Cathay Life Insurance Co., Ltd. 2,243,179
-------------
$ 2,275,263
-------------
INVESTMENT BANKING/BROKERAGE - 1.0%
881,000 Arab Malay Merchant Bank Bhd. $ 871,726
17,340 Investec Group Ltd. 501,214
185,410 Old Mutual Plc. 397,317
-------------
$ 1,770,257
-------------
INVESTMENT MANAGEMENT - 1.4%
1,226,000 China Development Industrial $ 924,233
37,280 Coronation Holdings Ltd. 442,578
103,400,000 Haci Omer Sabanci Holding AS 757,176
22,750 Nedcor Ltd. 460,901
-------------
$ 2,584,888
-------------
REAL ESTATE - 0.3%
2,099,200 New World China Land Ltd. $ 565,180
-------------
TOTAL FINANCIAL $ 40,513,039
-------------
HEALTHCARE - 2.6%
BIOTECHNOLOGY - 0.6%
37,700 Dr. Reddy's Laboratories Ltd. $ 1,087,890
-------------
HEALTHCARE (DRUGS/MAJOR PHARMACEUTICALS) - 2.0%
76,000 E Merck (India) Ltd. $ 589,272
75,780 Hoechst Marion Roussel Ltd. 792,915
200 Knoll Pharmaceuticals Ltd. 1,329
41,800 Knoll Pharmaceuticals Ltd. (New Shares) 277,819
78,000 Ranbaxy Laboratories Ltd. 1,291,922
56,699 Sun Pharmaceutical Industries, Ltd.* 612,695
-------------
$ 3,565,952
-------------
TOTAL HEALTHCARE $ 4,653,842
-------------
The accompanying notes are an integral part of these financial statements.
17
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS 11/30/00 (CONTINUED)
SHARES VALUE
TECHNOLOGY - 12.3%
COMMUNICATIONS EQUIPMENT - 1.3%
7,100 AudioCodes $ 117,150
509,000 China Unicom Ltd. 724,360
200 China Unicom Ltd. (A.D.R.) 2,825
10,400 Gilat Satellite Networks Ltd.* 408,850
21,400 Nice Systems Ltd. (A.D.R.)* 930,900
15,000 Radvision Ltd.* 243,750
-------------
$ 2,427,835
-------------
COMPUTERS (HARDWARE) - 1.5%
402,200 Acer Co. $ 247,189
18,000 Samsung Electronics 2,399,013
-------------
$ 2,646,202
-------------
COMPUTERS (PERIPHERALS) - 0.5%
83,731 Daou Technology, Inc.* $ 297,932
2,800,000 Grupo Dataflux SA de CV 532,653
-------------
$ 830,585
-------------
COMPUTERS (SOFTWARE & SERVICES) - 4.8%
100 BFL Software Ltd. * $ 985
15,700 Check Point Software Technologies Ltd.* 1,611,213
520,000 Idion Technology Holdings, Ltd.* 520,034
13,200 Infosys Technology, Ltd. 2,017,827
570,000 Ixchange Technology Holdings Ltd.* 338,344
61,200 Mastek Ltd. 738,569
30,232 NITT, Ltd. 1,096,015
150,000 Satyam Computer Services, Ltd. 1,097,053
660,000 Softline, Ltd.* 116,679
150,500 VocalTec Communications, Ltd.* 776,016
7,500 Wipro Limited (A.D.R.) 406,875
-------------
$ 8,719,610
-------------
ELECTRONICS (COMPONENT DISTRIBUTORS) - 0.4%
106,720 Asustek Computer, Inc. $ 450,725
33,454 L.G. Electronics Inc. 327,522
-------------
$ 778,247
-------------
ELECTRONICS (INSTRUMENTATION) - 0.5%
330,000 Elec & Eltek International Co., Ltd. $ 976,800
-------------
The accompanying notes are an integral part of these financial statements.
17
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SHARES VALUE
ELECTRONICS (SEMICONDUCTORS) - 2.6%
345,100 Advanced Semiconductor Engineering Inc. $ 340,607
105,000 Hyundai Electronics Industries Co.* 590,868
77,858 Siliconware Precision Industries Co., Ltd. 296,834
622,540 Taiwan Semiconductor Manufacturing Co. 1,686,870
902,800 United Microelectronic Corp., Ltd. 1,421,302
36,800 Winbond Electronics Corp. (G.D.R.) 356,040
-------------
$ 4,692,521
-------------
SERVICES (DATA PROCESSING) - 0.7%
180,000 Shinawatra Computer Co., Plc. $ 645,353
832,000 Singapore Exchange Ltd. 626,099
-------------
$ 1,271,452
-------------
TOTAL TECHNOLOGY $ 22,343,252
-------------
TRANSPORTATION - 0.8%
RAILROADS - 0.6%
609,700 Malaysia International Shipping Bhd. $ 1,074,997
-------------
SHIPPING - 0.2%
2,100,000 Far Eastern Silo & Shipping Corp. $ 314,714
-------------
TOTAL TRANSPORTATION $ 1,389,711
-------------
UTILITIES - 3.4%
ELECTRIC COMPANIES - 2.2%
30,900 Empresa Nacional Electricidad Chile (A.D.R.) $ 310,931
35,000 Enersis S.A. (A.D.R.) 603,750
137,900 Korea Electric Power Corp. (A.D.R.)* 2,609,379
199,789 Mosenergo (A.D.R.) 474,499
-------------
$ 3,998,559
-------------
NATURAL GAS - 0.4%
119,700 Gazprom (A.D.R.) (144A) $ 763,087
-------------
POWER PRODUCERS (INDEPENDENT) - 0.8%
173,140 Unified Energy System (G.D.R.) (144A)* $ 1,369,805
-------------
TOTAL UTILITIES $ 6,131,451
-------------
TOTAL COMMON STOCKS
(Cost $231,804,248) $ 170,408,232
-------------
The accompanying notes are an integral part of these financial statements.
19
PIONEER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS 11/30/00 (CONTINUED)
SHARES VALUE
RIGHTS/WARRANTS - 0.5%
21,000 Cemex SA, 12/13/02* $ 7,253
16 Companhia Brasileira de Distribuicao Grupo
Pao de Acucar, 8/31/05* -
10,692,000 PT Lippo Bank, 4/15/02* -
26,130 Queenbee Restaurant, 3/24/03* 5,160
9,179,800 Siam Commercial Bank, 5/10/02* 691,787
470,211 TelecomAsia Public Co. Ltd., 4/3/02* 128,116
-------------
TOTAL WARRANTS
(Cost $1,971,559) $ 832,316
-------------
TOTAL INVESTMENT IN SECURITIES
(Cost $244,887,281)(a)(b)(c) $ 181,533,513
=============
* 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 November 30, 2000,
the value of these securities amounted to $4,420,567 or 2.3% of total net
assets.
(a) Distribution of investments by country of issue, as percentage of total
equity holdings, is as follows:
Brazil 12.2%
Mexico 11.5
India 10.8
South Korea 9.6
Taiwan 6.6
Hong Kong 5.7
Turkey 5.7
South Africa 5.3
Thailand 3.9
Malaysia 3.6
Russia 3.6
Indonesia 3.4
Israel 3.1
Phillipines 2.8
Singapore 2.4
Egypt 1.7
Chile 1.6
Poland 1.6
Greece 1.0
Others (Individually less than 1%) 3.9
-----
100.0%
=====
The accompanying notes are an integral part of these financial statements.
20
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
(b) At November 30, 2000, the net unrealized loss on investments based on cost
for federal income tax purposes of $247,070,956 was as follows:
Aggregate gross unrealized gain for all investments in
which there is an excess of value over tax cost $ 8,646,518
Aggregate gross unrealized loss for all investments in
which there is an excess of tax cost over value (74,183,961)
------------
Net Unrealized loss $(65,537,443)
============
(c) At November 30, 2000, the Fund had a capital loss carryforward of
$9,796,063 which will expire in 2006 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for the
year ended November 30, 2000 aggregated $411,634,415 and $346,817,174,
respectively.
The accompanying notes are an integral part of these financial statements.
21
PIONEER EMERGING MARKETS FUND
BALANCE SHEET 11/30/00
ASSETS:
Investment in securities, at value (cost $244,887,281) $181,533,513
Foreign currencies, at value 13,967,556
Receivables -
Investment securities sold 3,820,839
Fund shares sold 363,869
Dividends, interest and foreign taxes withheld 237,743
Forward foreign currency settlement contracts - net 183
Other 291,570
------------
Total assets $200,215,273
------------
LIABILITIES:
Payables -
Investment securities purchased $ 4,983,799
Fund shares repurchased 692,371
Due to bank 4,611,067
Due to affiliates 388,170
Accrued expenses 308,899
Reserve for repatriation taxes 54,788
------------
Total liabilities $ 11,039,094
------------
NET ASSETS:
Paid-in capital $273,892,326
Accumulated net investment loss (71,257)
Accumulated net realized loss on investments, futures
contracts and foreign currency transactions (21,124,676)
Net unrealized loss on investments (including reserve
for repatriation taxes of $54,788) (63,408,556)
Net unrealized loss on forward foreign currency contracts
and other assets and liabilities denominated in foreign
currencies (111,658)
------------
Total net assets $189,176,179
============
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $88,174,545/8,152,532 shares) $ 10.82
============
Class B (based on $40,762,886/3,965,962 shares) $ 10.28
============
Class C (based on $12,861,209/1,257,814 shares) $ 10.23
============
Class Y (based on $47,377,539/4,296,503 shares) $ 11.03
============
MAXIMUM OFFERING PRICE:
Class A $ 11.48
============
The accompanying notes are an integral part of these financial statements.
22
PIONEER EMERGING MARKETS FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 11/30/00
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $285,448) $ 2,467,093
Interest (net of foreign taxes withheld of $8,667) 348,395
------------
Total investment income $ 2,815,488
------------
EXPENSES:
Management fees $ 3,351,434
Transfer agent fees
Class A 397,381
Class B 282,700
Class C 38,093
Class Y 98
Distribution fees
Class A 326,385
Class B 698,080
Class C 171,483
Administrative fees 84,693
Custodian fees 602,610
Registration fees 98,085
Professional fees 103,175
Printing 75,145
Fees and expenses of nonaffiliated trustees 26,445
Miscellaneous 46,003
------------
Total expenses $ 6,301,810
Less fees paid indirectly (65,382)
------------
Net expenses $ 6,236,428
------------
Net investment loss $ (3,420,940)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Investments (net of capital gains taxes paid of
$4,464,854) $ 28,647,702
Forward foreign currency contracts and other
assets and liabilities denominated in foreign
currencies (672,371) $ 27,975,331
------------ ------------
Change in net unrealized loss from:
Investments $(97,010,974)
Forward foreign currency contracts and other
assets and liabilities denominated in foreign
currencies (59,138) $(97,070,112)
------------ ------------
Net loss on investments and foreign currency
transactions $(69,094,781)
------------
Net decrease in net assets resulting from operations $(72,515,721)
------------
The accompanying notes are an integral part of these financial statements.
23
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEARS ENDED 11/30/00 AND 11/30/99
YEAR ENDED YEAR ENDED
11/30/00 11/30/99
FROM OPERATIONS:
Net investment loss $ (3,420,940) $ (1,350,097)
Net realized gain on investments, futures
contracts and foreign currency transactions 27,975,331 2,804,075
Change in net unrealized gain (loss) on investments and
foreign currency transactions (97,070,112) 58,084,393
------------- -------------
Net increase (decrease) in net assets resulting from
operations $ (72,515,721) $ 59,538,371
------------- -------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 329,505,782 $ 189,422,052
Reinvestment of distributions - -
Cost of shares repurchased (248,879,736) (193,508,476)
------------- -------------
Net increase (decrease) in net assets resulting from
fund share transactions $ 80,626,046 $ (4,086,424)
------------- -------------
Net increase in net assets $ 8,110,325 $ 55,451,947
NET ASSETS:
Beginning of year 181,065,854 125,613,907
------------- -------------
End of year (including accumulated net investment loss
of $71,257 and $1,392,414, respectively) $ 189,176,179 $ 181,065,854
============= =============
CLASS A '00 SHARES '00 AMOUNT '99 SHARES '99 AMOUNT
Shares sold 13,630,214 $ 216,021,888 13,457,290 $ 139,753,516
Reinvestment of distributions - - - -
Less shares repurchased (12,077,994) (187,103,890) (15,527,823) (158,319,918)
----------- ------------- ----------- -------------
Net increase (decrease) 1,552,220 $ 28,917,998 (2,070,533) $ (18,566,402)
=========== ============= =========== =============
CLASS B
Shares sold 2,965,548 $ 51,179,580 2,174,781 $ 23,059,774
Reinvestment of distributions - - - -
Less shares repurchased (2,860,823) (44,175,696) (2,546,532) (25,753,021)
----------- ------------- ----------- -------------
Net increase (decrease) 104,725 $ 7,003,884 (371,751) $ (2,693,247)
=========== ============= =========== =============
CLASS C
Shares sold 1,336,618 $ 20,688,386 427,313 $ 4,608,232
Reinvestment of distributions - - - -
Less shares repurchased (966,914) (14,463,955) (974,574) (8,869,386)
----------- ------------- ----------- -------------
Net increase (decrease) 369,704 $ 6,224,431 (547,261) $ (4,261,154)
=========== ============= =========== =============
CLASS Y
Shares sold 2,545,138 $ 41,615,928 1,855,799 $ 22,000,530
Reinvestment of distributions - - - -
Less shares repurchased (194,625) (3,136,195) (50,089) (566,151)
----------- ------------- ----------- -------------
Net increase 2,350,513 $ 38,479,733 1,805,710 $ 21,434,379
=========== ============= =========== =============
The accompanying notes are an integral part of these financial statements.
24
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS 11/30/00
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
11/30/00 11/30/99 11/30/98 11/30/97 11/30/96
CLASS A
Net asset value, beginning of year $ 13.80 $ 8.79 $ 14.42 $ 13.94 $ 11.56
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.17) $ (0.09) $ 0.00(a) $ (0.05) $ (0.07)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (2.81) 5.10 (4.23) 1.40 2.45
------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.98) $ 5.01 $ (4.23) $ 1.35 $ 2.38
Distributions to shareowners:
Net realized gain - - (1.40) (0.87) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.98) $ 5.01 $ (5.63) $ 0.48 $ 2.38
------- ------- ------- ------- -------
Net asset value, end of year $ 10.82 $ 13.80 $ 8.79 $ 14.42 $ 13.94
======= ======= ======= ======= =======
Total return* (21.59)% 57.00% (32.19)% 10.37% 20.59%
Ratio of net expenses to average net assets+ 2.19% 2.44% 2.26% 2.23% 2.28%
Ratio of net investment income (loss) to average net assets+ (1.13)% (0.73)% 0.07% (0.40)% (0.61)%
Portfolio turnover rate 139% 180% 195% 140% 143%
Net assets, end of year (in thousands) $88,175 $91,092 $76,257 $87,628 $56,465
Ratios assuming no waiver of management fees and assumption
of expenses by PIM and no reduction for fees paid indirectly:
Net expenses 2.19% 2.44% 2.27% 2.25% 3.00%
Net investment income (loss) (1.13)% (0.73)% 0.06% (0.42)% (1.33)%
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 2.16% 2.40% 2.25% 2.19% 2.25%
Net investment income (loss) (1.10)% (0.69)% 0.08% (0.36)% (0.58)%
(a) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each year,
reinvestment of all distributions, the complete redemption of the investment
at net asset value at the end of each year, and no sales charges. Total
return would be reduced if sales charges were taken into account.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
25
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS 11/30/00
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
11/30/00 11/30/99 11/30/98 11/30/97 11/30/96
CLASS B
Net asset value, beginning of year $ 13.23 $ 8.49 $ 14.09 $ 13.73 $ 11.47
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.34) $ (0.17) $ (0.12) $ (0.14) $ (0.03)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (2.61) 4.91 (4.08) 1.37 2.29
------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.95) $ 4.74 $ (4.20) $ 1.23 $ 2.26
Distributions to shareowners:
Net realized gain - - (1.40) (0.87) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.95) $ 4.74 $ (5.60) $ 0.36 $ 2.26
------- ------- ------- ------- -------
Net asset value, end of year $ 10.28 $ 13.23 $ 8.49 $ 14.09 $ 13.73
======= ======= ======= ======= =======
Total return* (22.30)% 55.83% (32.79)% 9.61% 19.70%
Ratio of net expenses to average net assets+ 3.05% 3.20% 3.09% 2.94% 3.00%
Ratio of net investment income (loss) to average net assets+ (1.97)% (1.53)% (0.84)% (1.10)% (1.47)%
Portfolio turnover rate 139% 180% 195% 140% 143%
Net assets, end of year (in thousands) $40,763 $51,093 $35,954 $70,218 $39,893
Ratios assuming no waiver of management fees and assumption of
expenses by PIM and no reduction for fees paid indirectly:
Net expenses 3.05% 3.20% 3.10% 2.95% 3.66%
Net investment loss (1.97)% (1.53)% (0.85)% (1.11)% (2.13)%
Ratios assuming waiver of management fees and assumption of
expenses by PIM and reduction for fees paid indirectly:
Net expenses 3.03% 3.18% 3.08% 2.90% 2.96%
Net investment loss (1.95)% (1.51)% (0.83)% (1.06)% (1.43)%
* Assumes initial investment at net asset value at the beginning of each year,
reinvestment of all distributions, the complete redemption of the investment
at net asset value at the end of each year, and no sales charges. Total
return would be reduced if sales charges were taken into account.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
26
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS 11/30/00
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 1/31/96 TO
11/30/00 11/30/99 11/30/98 11/30/97 11/30/96
CLASS C
Net asset value, beginning of period $ 13.12 $ 8.47 $ 14.08 $ 13.73 $ 13.22
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment loss $ (0.14) $ (0.29) $ (0.08) $ (0.13) $ (0.09)
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency transactions (2.75) 4.94 (4.13) 1.35 0.60
------- ------- ------- ------- -------
Net increase (decrease) from investment operations $ (2.89) $ 4.65 $ (4.21) $ 1.22 $ 0.51
Distributions to shareowners:
Net realized gain - - (1.40) (0.87) -
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (2.89) $ 4.65 $ (5.61) $ 0.35 $ 0.51
------- ------- ------- ------- -------
Net asset value, end of period $ 10.23 $ 13.12 $ 8.47 $ 14.08 $ 13.73
======= ======= ======= ======= =======
Total return* (22.03)% 54.90% (32.90)% 9.53% 3.86%
Ratio of net expenses to average net assets+ 2.85% 3.82% 3.32% 2.89% 2.91%**
Ratio of net investment loss to average net assets+ (1.81)% (2.09)% (1.08)% (1.09)% (1.51)%**
Portfolio turnover rate 139% 180% 195% 140% 143%
Net assets, end of period (in thousands) $12,861 $11,656 $12,162 $12,730 $5,566
Ratios assuming no waiver of management fees
by PIM and no reduction for fees paid indirectly:
Net expenses 2.85% 3.82% 3.33% 2.90% 3.48%**
Net investment loss (1.81)% (2.09)% (1.09)% (1.10)% (2.08)%**
Ratios assuming waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses 2.82% 3.80% 3.31% 2.85% 2.86%**
Net investment loss (1.78)% (2.07)% (1.07)% (1.05)% (1.46)%**
* 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.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
27
PIONEER EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS 11/30/00
YEAR ENDED YEAR ENDED 4/9/98 TO
11/30/00 11/30/99 11/30/98
CLASS Y
Net asset value, beginning of period $ 13.99 $ 8.85 $ 14.55
------- ------- -------
Increase (decrease) from investment operations:
Net investment income (loss) $ (0.10) $ 0.01 $ -
Net realized and unrealized gain (loss) on
investments, futures contracts and foreign
currency transactions $ (2.86) $ 5.13 $ (5.55)
------- ------- -------
Net increase (decrease) from investment
operations (2.96) 5.14 (5.55)
Distributions to shareowners:
Net realized gain - - (0.15)
------- ------- -------
Net increase (decrease) in net asset value (2.96) 5.14 (5.70)
------- ------- -------
Net asset value, end of period $ 11.03 $ 13.99 $ 8.85
======= ======= =======
Total return* (21.16)% 58.08% (38.32)%
Ratio of net expenses to average net assets+ 1.62% 2.51% 1.75%**
Ratio of net investment income (loss) to
average net assets+ (0.62)% (1.07)% 0.06%**
Portfolio turnover rate 139% 180% 195%
Net assets, end of period (in thousands) $47,378 $27,225 $1,241
Ratios assuming reduction for fees
paid indirectly:
Net expenses 1.60% 2.41% 1.75%**
Net investment income (loss) (0.60)% (0.97)% 0.06%**
* 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 the end of each period.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements.
28
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS 11/30/00
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Emerging Markets Fund (the Fund) is a Delaware business 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 long-term
growth of capital.
The Fund offers four classes of shares - Class A, Class B, Class C and Class Y
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 the level of transfer agent and distribution fees
may differ among classes. Class A, Class B and Class C shareowners have
exclusive voting rights with respect to the distribution plan for each class.
There is no distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with accounting
principles generally accepted in the United States 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 revenues and expenses during the reporting periods. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry:
A. SECURITY VALUATION
Security transactions are recorded as of trade date. The net asset value
is computed once daily, on each day the New York Stock Exchange is open,
as of the close of regular trading on the Exchange. In computing the net
asset value, securities are valued at the last sale price on the principal
exchange where they are traded. Securities that have not traded on the
date of valuation, or securities for which sale prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available are
valued at their fair values as determined by, or under the direction of,
the Board of Trustees. Trading in foreign securities is substantially
completed each day at various times prior to the close of the New York
Stock Exchange. The values of such securities used in computing the net
asset value of the Fund's shares are determined as of such times. Dividend
income is recorded on the ex-dividend date, except that certain dividends
from foreign securities where the ex-dividend date
29
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS 11/30/00 (CONTINUED)
may have passed are recorded as soon as the Fund is informed of the
ex-dividend data in the exercise of reasonable diligence. Interest income,
including interest on income bearing cash accounts, is recorded on the
accrual basis, net of unrecoverable foreign taxes withheld at the applicable
country rates. Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
The Fund's investments in emerging markets or countries with limited or
developing markets may subject the Fund to a greater degree of risk than in a
developed market. Risks associated with these developing markets include
political, social or economic factors and may affect the price of the Fund's
investments and income generated by these investments, as well as the Fund's
ability to repatriate such amounts. In addition, delays are common in
registering transfers of securities in certain countries, and the Fund may be
unable to sell portfolio securities until the registration process is
completed.
B. FOREIGN CURRENCY TRANSLATION
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
C. FORWARD FOREIGN CURRENCY CONTRACTS
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized
30
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
gains and losses at the time a portfolio hedge is offset by entry into a
closing transaction or extinguished by delivery of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar.
(See Note 6)
D. FUTURES CONTRACTS
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices, and currency rates or to seek to increase
total return. Upon entering into a futures contract, the Fund is required to
deposit with a broker an amount of cash or securities equal to the minimum
"initial margin" requirements of the associated futures exchange. Subsequent
payments for futures contracts ("variation margin") are paid or received by
the Fund, depending on the daily fluctuation in the value of the contracts,
and are recorded by the Fund as unrealized gains or losses. When the contract
is closed, the Fund realizes a gain or loss equal to the difference between
the opening and closing values of the contract. The use of futures contracts
involves, to varying degrees, elements of market and counterparty risks which
may exceed the amounts recognized by the Fund. Changes in value of the
contracts may not directly correlate to the changes in value of the
underlying securities. These risks may decrease the effectiveness of the
Fund's hedging strategies and potentially result in a loss. At November 30,
2000, the Fund had no open futures contracts.
E. 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.
In addition to the requirements of the Internal Revenue Code, the Fund may
also be required to pay local taxes on the recognition of capital gains
and/or the repatriation of foreign currencies in certain countries. During
the year ended November 30, 2000, the Fund paid $4,464,854 in such taxes.
31
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS 11/30/00 (CONTINUED)
In determining the daily net asset value, the Fund estimates the reserve for
such taxes, if any, associated with investments in certain countries. The
estimated reserve for the capital gains is based on the net unrealized
appreciation on certain portfolio securities, the holding period of such
securities and the related tax rates, tax loss carryforward (if applicable)
and other such factors. As of November 30, 2000, the Fund had no reserve
related to capital gains. The estimated reserve for the repatriation of
foreign currencies is based on principal balances and/or unrealized
appreciation of applicable securities, the holding period of such investments
and the related tax rates and other such factors. As of November 30, 2000,
the Fund had a reserve of $54,788 related to taxes on the repatriation of
foreign currencies.
The characterization of distributions to shareowners for financial reporting
purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
At November 30, 2000, the Fund has reclassified $4,742,097 and $5,137,225
from paid-in capital to accumulated net investment loss and accumulated net
realized loss on investments, futures contracts and foreign currency
transactions, respectively. The reclassification has no impact on the net
asset value of the Fund and is designed to present the Fund's capital
accounts on a tax basis.
F. 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 subsidiary of UniCredito Italiano S.p.A. (UniCredito
Italiano), earned $32,385 in underwriting commissions on the sale of Fund
shares during the year ended November 30, 2000.
G. CLASS ALLOCATIONS
Distribution fees are calculated based on the average daily net asset values
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan.
Shareowners of each class share all expenses and fees paid to the transfer
agent, Pioneering Services Corporation (PSC), for their services, which are
allocated based on the number of accounts in each class and the ratable
allocation of related out-of-pocket expense (see Note 3). Income, common
expenses and realized and unrealized gains and losses
32
PIONEER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
are calculated at the Fund level and allocated daily to each class of shares
based on its respective percentage of adjusted net assets at the beginning of
the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, Class C and Class Y shares can bear different
transfer agent and distribution fees.
2. MANAGEMENT AGREEMENT
Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of UniCredito
Italiano. Management fees are calculated daily at the annual rate of 1.25% of
the Fund's average daily net assets.
In addition, under the management and administration agreements, certain
other services and costs, including accounting, regulatory reporting and
insurance premiums, are paid by the Fund. At November 30, 2000, $229,412 was
payable to PIM related to management fees, administrative fees and certain
other services.
3. TRANSFER AGENT
PSC, a wholly owned subsidiary of UniCredito Italiano, provides substantially
all transfer agent and shareowner services to the Fund at negotiated rates.
Included in due to affiliates is $88,814 in transfer agent fees payable to
PSC at November 30, 2000.
4. DISTRIBUTION PLANS
The Fund adopted a Plan of Distribution with respect to each of Class A,
Class B and Class C shares (Class A Plan, Class B Plan and Class C 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. Included in due to affiliates is $69,944 in distribution fees
payable to PFD at November 30, 2000.
In addition, redemptions of each class of shares (except Class Y shares) may
be subject to a contingent deferred sales charge (CDSC). A CDSC of
33
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS 11/30/00 (CONTINUED)
1.00% may be imposed on redemptions of certain net asset value purchases of
Class A shares within one year of purchase. Class B shares that are redeemed
within six years of purchase are subject to a CDSC at declining rates
beginning at 4.0%, based on the lower of cost or market value of shares being
redeemed. Redemptions of Class C shares within one year of purchase are
subject to a CDSC of 1.00%. Proceeds from the CDSCs are paid to PFD. For the
year ended November 30, 2000, CDSCs in the amount of $324,402 were paid to
PFD.
5. EXPENSE OFFSETS
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended November 30, 2000,
the Fund's expenses were reduced by $65,382 under such arrangements.
6. FORWARD FOREIGN CURRENCY CONTRACTS
At November 30, 2000, the Fund had entered into various contracts that
obligate the Fund to deliver currencies at specified future dates. At the
maturity of a contract, the Fund must make delivery of the foreign currency.
Alternatively, prior to the settlement date of a portfolio hedge, the Fund
may close out such contracts by entering into an offsetting hedge contract.
As of November 30, 2000, the Fund had no outstanding portfolio hedges. At
November 30, 2000, the gross forward currency settlement contracts receivable
and payable were $1,543,680 and $1,543,497, respectively, resulting in a net
receivable of $183.
7. LINE OF CREDIT FACILITY
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary
or emergency purposes. The Fund may borrow up to the lesser of $50 million or
the limits set by its prospectus for borrowings. Interest on collective
borrowings of up to $25 million is payable at the Federal Funds Rate plus
3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowing exceeds $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated among such
Funds based on their respective borrowing limits.
The average daily amount of borrowings outstanding during the year ended
November 30, 2000 was $558,232. The average daily shares outstanding during
the period were 17,078,521 resulting in an average borrowing per share of
$0.03. The related weighted average annualized interest rate for the year was
6.51%, and the total interest expense on such borrowings was $36,921.
34
PIONEER EMERGING MARKETS FUND
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREOWNERS AND THE BOARD OF TRUSTEES OF PIONEER EMERGING MARKETS FUND:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Emerging Markets Fund (the Fund) as of November 30,
2000, and the related statement of operations, the statements of changes in net
assets, and the financial highlights for the periods presented. These financial
statements and the financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of November 30, 2000 by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Emerging Markets Fund as of November 30, 2000, the results of its
operations, the changes in its net assets, and the financial highlights for the
periods presented, in conformity with accounting principles generally accepted
in the United States.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 8, 2000
35
PIONEER EMERGING MARKETS FUND
RESULTS OF SHAREOWNER MEETING
On September 11, 2000, Pioneer Emerging Markets Fund held a special meeting of
shareowners to approve a new management contract between the Fund and Pioneer
Investment Management, Inc., the Fund's investment adviser. Shareowners also
voted to elect trustees. Both proposals passed by shareowner vote. The new
management contract took effect when UniCredito Italiano S.p.A. completed its
acquisition of The Pioneer Group, Inc. on October 24, 2000. Here are the
detailed results of the votes.
PROPOSAL 1 - TO APPROVE A NEW MANAGEMENT CONTRACT.
AFFIRMATIVE AGAINST ABSTAIN
12,528,588.765 252,835.051 219,299.876
PROPOSAL 2 - TO ELECT TRUSTEES.
NOMINEE AFFIRMATIVE WITHHELD
M.K. Bush 12,757,218.412 243,505.280
J.F. Cogan, Jr. 12,751,841.667 248,882.025
Dr. R.H. Egdahl 12,774,860.937 225,862.755
M.B.W. Graham 12,772,587.872 228,135.820
M.A. Piret 12,778,735.574 221,988.118
D.D. Tripple 12,757,500.577 243,223.115
S.K. West 12,771,825.041 228,898.651
J. Winthrop 12,779,367.939 221,355.753
36
PIONEER EMERGING MARKETS FUND
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
TRUSTEES
John F. Cogan, Jr., Chairman
Mary K. Bush
Richard H. Egdahl, M.D.
Margaret B.W. Graham
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
OFFICERS
John F. Cogan, Jr., President
David D. Tripple, Executive Vice President
Vincent Nave, Treasurer
Joseph P. Barri, Secretary
INVESTMENT ADVISER
Pioneer Investment Management, Inc.
CUSTODIAN
Brown Brothers Harriman & Co.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
PRINCIPAL UNDERWRITER
Pioneer Funds Distributor, Inc.
LEGAL COUNSEL
Hale and Dorr LLP
SHAREOWNER SERVICES AND TRANSFER AGENT
Pioneering Services Corporation
37
HOW TO CONTACT PIONEER
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
CALL US FOR:
ACCOUNT INFORMATION, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FACTFONE-SM- for automated fund yields, prices,
account information and transactions 1-800-225-4321
RETIREMENT PLANS INFORMATION 1-800-622-0176
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) 1-800-225-1997
WRITE TO US:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
OUR TOLL-FREE FAX 1-800-225-4240
OUR INTERNET E-MAIL ADDRESS ask.pioneer@piog.com
(for general questions about Pioneer only)
VISIT OUR WEB SITE: www.pioneerfunds.com
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT FUND PROSPECTUS.
[LOGO] PIONEER
INVESTMENTS-Registered Trademark-
PIONEER INVESTMENT MANAGEMENT, INC.
60 STATE STREET 9500-00-0101
BOSTON, MASSACHUSETTS 02109 -C- PIONEER FUNDS DISTRIBUTOR, INC.
www.pioneerfunds.com Y PRINTED ON RECYCLED PAPER
EXHIBIT E
Pioneer Emerging Markets Fund
Pro Forma Schedule of Investment 11/30/00
(unaudited)
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
PREFERRED STOCKS
19,560,000 19,560,000 Banco Itau SA
97,000 97,000 Centrails Electricas Brasileiras SA*
17,500,000 17,500,000 Companhia Brasileira de Distribuicao Grupo Pao de Acucar
16 16 Companhia Brasileira de Distribuicao Grupo Pao de Acucar
(Certificate of Entitlement)*
12,000,000 12,000,000 Eletropaulo Metropolitana SA*
35,300 35,300 Embraer Aircraft Corp. (A.D.R.)
61,894 61,894 Tele Norte Leste Participacoes (A.D.R.)
13,700 13,700 Telecomunicacoes Brasileiras SA(A.D.R.)
681,600 681,600 Siam Commercial Bank*
23,000 23,000 Telecular Sul Participoes (A.D.R.)*
44,800 44,800 Telemig Celular Participacoes (A.D.R.)*
57,400 57,400 Telesp Celular Participacoes SA (A.D.R.)
TOTAL PREFERRED STOCKS
COMMON STOCKS
BASIC MATERIALS
CHEMICALS
155,909 155,909 Daelim Industrial Co.
CHEMICALS (SPECIALITY)
641,000 641,000 Nan Ya Plastics Corp.
811,000 811,000 Yizheng Chemical Fibre Co., Ltd.
CONSTRUCTION (CEMENT & AGGREGATES)
38,500 38,500 Cemex SA (A.D.R.)
106,900 15,300 122,200 Siam Cement Public Co., Ltd.
225,400 225,400 Siam City Cement Co., Ltd.
GOLD & PRECIOUS METALS MINING
25,650 25,650 Anglogold Ltd.
39,640 39,640 Gold Fields Ltd.
IRON & STEEL
1,472,000 1,472,000 China Steel Corp., Ltd.
11,000 11,000 Pohang Iron & Steel Co., Ltd. (A.D.R.)
50 50 Tata Iron & Steel Co., Ltd.
Pioneer EmerginPioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 1,487,830 $ 1,487,830
806,313 806,313
586,587 586,587
- - -
$ 554,969 $ 554,969
972,956 972,956
1,121,829 1,121,829
790,319 790,319
$ 311,304 311,304
460,000 460,000
2,296,000 2,296,000
1,216,162 1,216,162
- ----------------------------------------------------
$10,292,965 311,304 $ 10,604,269
- ----------------------------------------------------
$ 631,075 $ 631,075
- ----------------------------------------------------
$ 785,967 $ 785,967
139,328 139,328
- ----------------------------------------------------
- ----------------------------------------------------
$ 785,967 139,328 $ 925,295
- ----------------------------------------------------
$ 743,531 743,531
1,098,538 157,228 1,255,766
566,202 566,202
- ----------------------------------------------------
- ----------------------------------------------------
$ 2,408,271 157,228 $ 2,565,499
- ----------------------------------------------------
$ 625,569 $ 625,569
111,511 111,511
- ----------------------------------------------------
- ----------------------------------------------------
$ 737,080 $ 737,080
- ----------------------------------------------------
$ 793,267 $ 793,267
158,813 158,813
131 131
- ---------------------------------------------------
$ 793,398 158,813 952,211
- ----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
METALS MINING
49,200 49,200 Comphania Vale do Rico Doce (A.D.R.)
76,200 76,200 KGHM Polska Miedz SA
2,650,000 2,650,000 Yanzhou Coal Mining
924,000 924,000 Yanzhou Coal Mining (Class H)
TOTAL BASIC MATERIALS
CAPITAL GOODS
CONTAINERS (METAL & GLASS)
450,000 450,000 Cosco Pacific Ltd.
ELECTRICAL EQUIPMENT
331,196 75,000 406,196 Bharat Heavy Electricals Ltd.*
MANUFACTURING (DIVERSIFIED)
586,000 586,000 China Resources Enterprise Ltd.
120,000 120,000 Cheung Kong Infrastructure Holdings
2,800,000 2,800,000 Glorious Sun Enterprise Ltd.
87,000 25,000 112,000 Grasim Industries Ltd.
TRUCKS & PARTS
382,467 60,000 442,467 Escorts Ltd.
167,500 167,500 Larsen & Tourbo Ltd. (New Shares)
42,000 56,595 98,595 Larsen & Tourbo Ltd. (Local Shares)
405 405 Larsen and Tourbo Ltd. (Bonus Shares)
TOTAL CAPITAL GOODS
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 971,700 971,700
443,043 443,043
672,705 672,705
$ 234,558 234,558
----------------------------------------------------
----------------------------------------------------
$ 2,087,448 234,558 $ 2,322,006
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
$ 7,443,239 689,927 8,133,166
----------------------------------------------------
$ 325,968 $ 325,968
----------------------------------------------------
$ 908,438 205,717 $ 1,114,155
----------------------------------------------------
$ 676,167 $ 676,167
182,311 182,311
466,676 466,676
458,129 131,646 589,775
----------------------------------------------------
$ 1,600,972 313,957 1,914,929
----------------------------------------------------
$ 760,360 119,283 $ 879,643
648,289 648,289
162,556 219,044 381,600
1,568 1,568
----------------------------------------------------
----------------------------------------------------
$ 1,571,205 339,895 1,911,100
----------------------------------------------------
$ 4,406,583 859,569 5,266,152
----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
COMMUNICATION SERVICES
CELLULAR/WIRELESS TELECOMMUNICATIONS
82,400 82,400 Advanced Information Service, Plc.
22,100 22,100 Advanced Service Co., Ltd.
646,000 178,000 824,000 China Mobile Ltd.
13,400 13,400 China Mobile Ltd. (A.D.R.)*
98,844 98,844 Grupo Iusacell SA (Series V) (A.D.R.)*
126,000 126,000 Hutchison Whampoa Ltd.
34,340 34,340 MIH Ltd.
33,600 33,600 Mobile Telesystems
89,600 89,600 Mobinil Ltd.
130,000 130,000 Smartone Telecommunications
178,700 31,600 210,300 SK Telecom Co., Ltd. (A.D.R.)
11,050 11,050 Stet Hellas Telecomm SA (A.D.R.)*
50,000 50,000 Taiwan Cellular Corp.*
787,000 269,000 1,056,000 Technology Resources Industries Bhd.
28,000 28,000 Tele Norte Celular Particpacoes SA (A.D.R.)
190,000 190,000 Total Access Communication Public Co. Ltd.
114,400 114,400 Turkcell Iletism Hizmet (A.D.R.)
888,300 138,000 1,026,300 United Communication Industry Public Co., Ltd.
42,000 42,000 Total Access Communication Ltd.*
16,300 16,300 Vimpel Communications (A.D.R.)
TELECOMMUNICATIONS (LONG DISTANCE)
158,000 158,000 Asia Satellite Telecommunications Holdings Ltd.
8,700 8,700 Videsh Sanchar Nigan Ltd.
5,541,000 5,541,000 Celular CRT Particpacoes SA
181 181 Celular CRT Particpacoes SA (Bonus Shares)
TELEPHONE
101,200 101,200 Bezeq Israeli Telecommunications Corp., Ltd.
10,200 10,200 Brasil Telecom Participacoes SA
1,651,600 1,651,600 Carso Global Telecom
56,400 56,400 Compania de Telephonos de Venezuela
45,900 45,900 Compania Anonima Nacional Telefonos de Venezuela (A.D.R
93,200 93,200 Embratel Participacoes (A.D.R.)*
124,450 124,450 Hellenic Telecommunication Organization SA
12,800 12,800 Korea Telecom Corp.
65,300 65,300 Korea Telecom Corp. (A.D.R.)
42,000 42,000 Matav (A.D.R.)
90,000 90,000 Pacific Century Cyberworks
77,950 12,100 90,050 Philippine Long Distance Telephone Co. (A.D.R.)
282,600 46,500 329,100 PT Indosat Indonesian Satellite Corp. (A.D.R.)
175,800 175,800 Rostelocom (A.D.R.)
158,100 158,100 Tele Centro Oeste Celular Participacoes SA (A.D.R.) *
75,300 75,300 Telefonos de Mexico SA (L Shares) (A.D.R.)
884,500 884,500 TelecomAsia Corp. Public Co., Ltd.
444,000 65,176 509,176 Telekomunikasi Indonesia (A.D.R.)
121,000 121,000 Telekomunikacja Poliska SA
76,000 2,900 78,900 Videsh Sanchar Nigam Ltd. (G.D.R.) (144A)
TOTAL COMMUNICATION SERVICES
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 662,361 $ 662,361
221,050 221,050
3,528,222 972,173 4,500,395
355,100 355,100
1,099,639 1,099,639
1,506,375 1,506,375
485,053 485,053
739,200 739,200
1,864,865 1,864,865
203,337 203,337
3,808,544 673,475 4,482,019
113,263 113,263
96,882 96,882
577,824 197,503 775,327
840,000 840,000
604,200 604,200
707,850 707,850
709,991 110,299 820,290
133,560 133,560
196,619 196,619
----------------------------------------------------
----------------------------------------------------
$ 16,158,681 4,248,704 $ 20,407,385
----------------------------------------------------
$ 386,905 $ 386,905
77,756 77,756
1,517,312 1,517,312
----------------------------------------------------
----------------------------------------------------
$ 1,517,312 464,661 $ 1,981,973
----------------------------------------------------
$ 521,932 $ 521,932
444,975 444,975
3,264,760 3,264,760
810,750 810,750
.) 731,531 731,531
1,124,225 1,124,225
1,784,281 1,784,281
348,800 348,800
1,779,425 1,779,425
669,375 669,375
55,963 55,963
1,261,816 195,869 1,457,685
2,578,725 424,313 3,003,038
1,010,850 1,010,850
1,393,256 1,393,256
3,529,688 3,529,688
419,122 419,122
2,192,250 321,807 2,514,057
644,219 644,219
684,000 26,100 710,100
----------------------------------------------------
$ 24,845,180 1,372,852 26,218,032
----------------------------------------------------
42,521,173 6,086,217 48,607,390
----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
CONSUMER CYCLICALS
AUTO PARTS & EQUIPMENT
262,000 57,000 319,000 Cycle & Carriage Co.
21,000 12,500 33,500 Halla Climate Control Co.
200,000 200,000 Mirgor Sacifia (Class C) (A.D.R.) (144A)
AUTOMOBILES
28,400,000 28,400,000 Koc Holdings AS
27,000 27,000 Mahindra & Mahindra Ltd.
312,000 14,000 326,000 Mahindra & Mahindra Ltd. (G.D.R.)
1,848,000 1,848,000 PT Astra International TbK (Local Shares)*
BUILDING MATERIALS
68,000 68,000 Suez Cement Co. (G.D.R.) (144A)
HOUSEHOLD FURNITURE & APPLIANCES
5,050,000 5,050,000 Vestel Elektronik Sanayi Ve Ticaret AS*
LEISURE TIME (PRODUCTS)
150,000 150,000 Berjaya Sports Toto Bhd.
40,000 40,000 Hero Honda Motors, Ltd*
120,000 120,000 TVS Suzuki, Ltd.
LODGING (HOTELS)
125,000 125,000 The Indian Hotels Co., Ltd. (G.D.R.) (144A)
245,000 245,000 Resorts World Bhd.
PUBLISHING
132,860,000 132,860,000 Dogan Sirketler Grubu Holding AS*
PUBLISHING (NEWSPAPERS)
125,800,000 125,800,000 Hurriyet Gazeteci ve Matbaacilik AS
287,260 287,260 Naspers, Ltd.
14,200 14,200 Singapore Press Holdings
630,000 630,000 South China Morning Post Ltd.
33,500 33,500 Star Publications Inc.
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 516,801 112,434 $ 629,235
490,662 292,061 782,723
100,000 100,000
----------------------------------------------------
----------------------------------------------------
$ 1,107,463 404,495 $ 1,511,958
----------------------------------------------------
$ 1,060,633 $ 1,060,633
83,946 83,946
943,800 42,350 986,150
440,807 440,807
----------------------------------------------------
$ 2,445,240 126,296 2,571,536
------------------------------------------------------
$ 623,900 623,900
----------------------------------------------------
$ 684,131 684,131
----------------------------------------------------
$ 176,053 $ 176,053
728,892 728,892
446,124 446,124
----------------------------------------------------
----------------------------------------------------
$ 1,175,016 176,053 $ 1,351,069
----------------------------------------------------
$ 534,375 $ 534,375
373,947 373,947
----------------------------------------------------
----------------------------------------------------
$ 908,322 $ 908,322
----------------------------------------------------
$ 1,050,738 $ 1,050,738
----------------------------------------------------
$ 921,206 $ 921,206
1,186,182 1,186,182
221,002 221,002
415,970 415,970
92,566 92,566
----------------------------------------------------
----------------------------------------------------
$ 2,107,388 729,538 $ 2,836,926
----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
RETAIL (DEPARTMENT STORES)
14,600 3,000 17,600 Shinsegae Department Store Co.
RETAIL (GENERAL MERCHANDISE)
19,500 4,400 23,900 39Shopping Corp.*
11,200 2,500 13,700 LG Home Shopping, Inc.*
RETAIL (DISCOUNTERS)
394,000 394,000 Walmart De Mexico SA de CV (Series C)
Retail (Specialty Apparel)
250,000 250,000 Giordano International Ltd.
SERVICES (ADVERTISING/MARKETING)
11,400 2,200 13,600 Cheil Communications Inc.
11,400 4,450 15,850 LG AD, Inc.
Services (Commercial & Consumer)
10,500 10,500 ASE Test Ltd.*
251 251 Hansol CSN
TEXTILES (HOME FUNRNISHINGS)
516,920 281,366 798,286 Far Eastern Textile Ltd.
TEXTILES (SPECIALTY)
347,700 347,700 Asia Fiber Co., Ltd.*
TOTAL CONSUMER CYCLICALS
CONSUMER STAPLES
BEVERAGES (ALCOHOLIC)
183,000 183,000 South African Breweries Plc
BEVERAGES (NON-ALCOHOLIC)
26,700 26,700 Coca-Cola SA de CV (A.D.R.)
45,800 45,800 Embotelladors Andina SA (A.D.R.)
17,500 17,500 Fomento Economico Mexicano, SA de CV
BROADCASTING (TELEVISION/RADIO/CABLE)
2,147,100 225,800 2,372,900 ABS-CBN Broadcasting Corp. (A.D.R.)*
18,758,000 4,711,000 23,469,000 Benpres Holdings Corp.*
11,000 11,000 Ceske Radiokomunikace AS (G.D.R.)* (144A)
101,250 101,250 Globo Cabo SA (A.D.R.)*
218,650 218,650 Grupo Radio Centro SA de CV (A.D.R.)
51,000 51,000 Grupo Televisa SA (G.D.R.)*
40,000 40,000 Television Broadcasts Ltd.
DISTRIBUTORS (FOOD & HEALTH)
359,700 359,700 Kimbererly-Clark de Mexico SA de CV
112,000 112,000 Li & Fung Ltd.
1,024,000 254,000 1,278,000 Ng Fung Hong Ltd.
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 624,599 128,342 $ 752,941
----------------------------------------------------
$ 297,594 67,149 $ 364,743
455,187 101,604 556,791
----------------------------------------------------
----------------------------------------------------
$ 752,781 168,753 $ 921,534
----------------------------------------------------
$ 774,643 $ 774,643
----------------------------------------------------
$ 121,797 $ 121,797
----------------------------------------------------
$ 632,135 121,991 $ 754,126
295,434 115,323 410,757
----------------------------------------------------
----------------------------------------------------
$ 927,569 237,314 $ 1,164,883
----------------------------------------------------
$ 112,875 $ 112,875
408 408
----------------------------------------------------
----------------------------------------------------
$ 113,283 $ 113,283
----------------------------------------------------
$ 410,030 223,185 $ 633,215
----------------------------------------------------
$ 49,626 $ 49,626
----------------------------------------------------
$ 13,641,446 2,429,056 $ 16,070,502
----------------------------------------------------
$ 1,088,625 $ 1,088,625
----------------------------------------------------
$ 502,294 $ 502,294
529,563 529,563
598,281 598,281
----------------------------------------------------
----------------------------------------------------
$ 1,630,138 $ 1,630,138
----------------------------------------------------
$ 2,011,892 211,581 $ 2,223,473
1,001,687 251,570 1,253,257
345,400 345,400
803,672 803,672
1,885,856 1,885,856
2,374,688 2,374,688
217,440 217,440
----------------------------------------------------
----------------------------------------------------
$ 8,423,195 680,591 $ 9,103,786
----------------------------------------------------
$ 898,342 $ 898,342
234,056 234,056
630,166 156,311 786,477
----------------------------------------------------
----------------------------------------------------
$ 1,528,508 390,367 $ 1,918,875
----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
ENTERTAINMENT
168,890 168,890 Corporacion Interamericana de Entretenimiento SA
(Series B)*
460,700 127,000 587,700 Tanjong Public Co., Ltd.
FOODS
32,800 6,000 38,800 Cheil Jedang Corp.
654,000 654,000 President Enterprises Corp.
7,701,300 7,701,300 PT Indofood Sukses Makmur Tbk
Personal Care
17,500 17,500 Hindustan Lever Ltd.
HOUSEHOLD PRODUCTS (NON-DURABLES)
49,422,000 49,422,000 Arcelik A.S.
RESTAURANTS
1,184,900 185,000 1,369,900 Kentucky Fried Chicken Bhd.
RETAIL STORES (FOOD CHAINS)
1,327,400 1,327,400 Metro Cash and Carry Ltd.
3,000,000 3,000,000 Migros Turk T.A.S.
248,664 71,702 320,366 President Chain Store Corp.
TOBACCO
187,000 187,000 PT Hanjaya Mandala Sampoerna Tbk
TOTAL CONSUMER STAPLES
ENERGY
OIL (INTERNATIONAL INTERGRATED)
106,640 106,640 Petroleo Brasileiro SA
7,500,000 1,076,000 8,576,000 Sinopec Zhenhai Refining and Chemical Company Ltd.
75,000 75,000 Surgutneftegaz (A.D.R.)
OIL & GAS (EXPLORATION/PRODUCTION)
35,600 35,600 Lukoil Holding (A.D.R.)
OIL & GAS (REFINING & MARKETING)
402,150 71,800 473,950 Hindustan Petroleum Corp., Ltd. (New Shares)*
51,200 51,200 Polski Koncern Nafto (G.D.R.)
TOTAL ENERGY
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 682,058 $ 682,058
897,153 247,316 1,144,469
----------------------------------------------------
----------------------------------------------------
$ 1,579,211 247,316 $ 1,826,527
----------------------------------------------------
$ 854,068 156,232 $ 1,010,300
415,804 415,804
666,168 666,168
----------------------------------------------------
----------------------------------------------------
$ 1,936,040 156,232 $ 2,092,272
----------------------------------------------------
$ 72,048 72,048
----------------------------------------------------
$ 940,958 $ 940,958
----------------------------------------------------
$ 1,502,952 234,658 $ 1,737,610
----------------------------------------------------
$ 301,468 301,468
276,801 276,801
670,030 193,202 863,232
----------------------------------------------------
----------------------------------------------------
$ 1,248,299 193,202 $ 1,441,501
----------------------------------------------------
$ 275,476 $ 275,476
----------------------------------------------------
$ 20,153,402 1,974,414 $ 22,127,816
----------------------------------------------------
$ 2,745,980 $ 2,745,980
951,941 136,572 1,088,513
693,750 693,750
----------------------------------------------------
----------------------------------------------------
$ 4,391,671 136,572 $ 4,528,243
----------------------------------------------------
$ 1,272,700 $ 1,272,700
----------------------------------------------------
$ 1,092,323 195,024 $ 1,287,347
454,400 454,400
----------------------------------------------------
----------------------------------------------------
$ 1,546,723 195,024 $ 1,741,747
----------------------------------------------------
$ 7,211,094 331,596 $ 7,542,690
----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
FINANCIAL
BANKS (MAJOR REGIONAL)
66,670,000 66,670,000 Akbank T.A.S.
527,626 527,626 Bank Sinopac*
114,700 114,700 Banco Bradesco SA
54,000 54,000 Banco Gandero (A.D.R.)
49,600 49,600 Banco Santander Chile (A.D.R.)
246,600 246,600 Bangkok Bank Ltd.
63,000 63,000 Commerical International Bank
65,200 65,200 Credicorp Ltd.
50,500 50,500 Dao Heng Bank Group Ltd.
200,000 75,193 275,193 Development Bank of Singapore Ltd.
1,374,000 1,374,000 Grupo Financiero Banamex Accival (Class O)*
95,300 95,300 Grupo Financiero Galicia (A.D.R.)
11,180 11,180 Housing & Commercial Bank, Korea
59,980 13,650 73,630 Kookmin Bank
241,200 52,100 293,300 Malayan Banking Bhd.
7,735,000 842,000 8,577,000 National Finance Public Co., Ltd.*
7,400 7,400 OTP Bank (G.D.R.)*
68,900 68,900 Powszechny Bank Kredy
63,700 13,500 77,200 Shinhan Bank
124,240 124,240 Standard Bank Investment Corporation Ltd.
87,300,000 87,300,000 Turkiye Garanti Bankasi*
55,600 55,600 Uniao de Bancos Brasileiros SA (G.D.R.)
32,752 32,752 United Overseas Bank Ltd.
375,000 75,000 450,000 Wing Hang Bank Ltd.
187,849,885 187,849,885 Yapi Ve Kredi Bankasi SA
BANKS (MONEY CENTER)
204,100 204,100 Bank Hapoalim Ltd.
261,200 261,200 Bank Leumi Le-Israel
10,692,000 1,980,000 12,672,000 PT Lippo Bank Tbk (Certificate of Entitlement)*
132,855,000 132,855,000 Turkeiy Is Bankasi
850,000 260,512 1,110,512 United World Chinese Commercial Bank
BANKS (REGIONAL)
173,100 173,100 Commerce Asset Holdings Bhd.
68,000 20,000 88,000 ICICI Bank Ltd. (A.D.R.)
CONSUMER FINANCE
1,593,050 1,593,050 African Bank Investments, Ltd.*
FINANCIAL (DIVERSIFIED)
189,500 189,500 ABSA Group Ltd.
112,000 112,000 Ayala Corp.
270,000 100,000 370,000 Bank Of East Asia
106,500 106,500 Citic Pacific Ltd.
105,000 105,000 Cheung Kong Holdings Ltd.
66,000 66,000 City Developments Inc.
601,210 601,210 FirstRand Ltd.
556,400 556,400 Grupo Financiero Bancomer (B Shares)*
135,000 135,000 Great Eagle Holdings Ltd.
146,000 40,000 186,000 Henderson Land Development
119,400 20,000 139,400 Housing Development Finance Corp. Ltd.
15,000 15,000 HSBC Holdings Plc
34,700 80,000 114,700 ICICI Ltd. (A.D.R.)
123,470 123,470 Imperial Holdings Ltd.*
550,400 550,400 New World China Land Ltd.*
740,000 75,000 815,000 New World Development Co., Ltd.
277,400 277,400 Pakistan Investment Fund Inc.
7,982,000 120,000 8,102,000 SM Prime Holdings, Inc.
80,300 80,300 Sun Hung Kai Properties Inc.
59,000 59,000 Swire Pacific Ltd.
241,000 241,000 Wharf Holdings Ltd.
INSURANCE (LIFE/HEALTH)
51,430 51,430 Liberty Group Ltd.
INSURANCE (MULTI-LINE)
28,500,000 28,500,000 Aksigorta AS
INSURANCE (PROPERTY/CASUALTY)
144,100 144,100 Ayudhya Jardine CMG Life Assurance Public Co., Ltd.*
1,255,800 251,272 1,507,072 Cathay Life Insurance Co., Ltd.
INVESTMENT BANKING/BROKERAGE
881,000 121,000 1,002,000 Arab Malay Merchant Bank Bhd.
17,340 17,340 Investec Group Ltd.
185,410 185,410 Old Mutual Plc.
INVESTMENT MANAGEMENT
1,226,000 1,226,000 China Development Industrial
37,280 37,280 Coronation Holdings Ltd.
103,400,000 103,400,000 Haci Omer Sabanci Holding AS
22,750 22,750 Nedcor Ltd.
REAL ESTATE
2,099,200 2,099,200 New World China Land Ltd.
TOTAL FINANCIAL
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 312,455 $ 312,455
196,486 196,486
795,731 795,731
192,375 192,375
713,000 713,000
218,218 218,218
591,471 591,471
395,275 395,275
246,678 246,678
2,268,970 853,053 3,122,023
1,889,533 1,889,533
1,328,244 1,328,244
113,896 113,896
668,638 152,166 820,804
888,632 191,947 1,080,579
1,042,167 113,446 1,155,613
327,783 327,783
1,327,656 1,327,656
584,331 123,838 708,169
427,253 427,253
536,995 536,995
1,237,100 1,237,100
235,263 235,263
1,228,389 245,678 1,474,067
990,421 990,421
----------------------------------------------------
----------------------------------------------------
$ 17,964,637 2,472,451 $ 20,437,088
----------------------------------------------------
$ 537,524 537,524
564,223 564,223
1,673,335 1,673,335
568,725 174,306 743,031
----------------------------------------------------
$ 3,343,807 174,306 $ 3,518,113
----------------------------------------------------
$ 341,645 $ 341,645
454,750 133,750 588,500
----------------------------------------------------
----------------------------------------------------
$ 796,395 133,750 $ 930,145
----------------------------------------------------
$ 1,068,954 $ 1,068,954
----------------------------------------------------
$ 594,213 $ 594,213
16,250 16,250
586,742 217,312 804,054
367,296 367,296
1,181,273 1,181,273
301,009 301,009
543,063 543,063
2,040,045 2,040,045
199,042 199,042
563,421 154,362 717,783
1,347,999 225,795 1,573,794
200,965 200,965
342,662 149,135 491,797
876,299 876,299
148,187 148,187
773,220 78,367 851,587
554,800 554,800
804,234 12,091 816,325
620,278 620,278
378,212 378,212
489,734 489,734
----------------------------------------------------
----------------------------------------------------
$ 9,393,994 4,372,012 $ 13,766,006
----------------------------------------------------
$ 394,875 $ 394,875
----------------------------------------------------
$ 354,789 $ 354,789
----------------------------------------------------
$ 32,084 $ 32,084
2,243,179 448,836 2,692,015
----------------------------------------------------
----------------------------------------------------
$ 2,275,263 448,836 $ 2,724,099
----------------------------------------------------
$ 871,726 119,726 $ 991,452
501,214 501,214
397,317 397,317
----------------------------------------------------
----------------------------------------------------
$ 1,770,257 119,726 $ 1,889,983
----------------------------------------------------
$ 924,233 $ 924,233
442,578 442,578
757,176 757,176
460,901 460,901
----------------------------------------------------
----------------------------------------------------
$ 2,584,888 $ 2,584,888
----------------------------------------------------
$ 565,180 $ 565,180
----------------------------------------------------
$ 40,513,039 7,721,081 $ 48,234,120
----------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
HEALTHCARE
BIOTECHNOLOGY
37,700 2,000 39,700 Dr. Reddy's Laboratories Ltd.
-
HEALTHCARE (DRUGS/MAJOR PHARMACEUTICALS)
76,000 17,000 93,000 E Merck (India) Ltd.
75,780 15,500 91,280 Hoechst Marion Roussel Ltd.
200 200 Knoll Pharmaceuticals Ltd.
41,800 41,800 Knoll Pharmaceuticals Ltd. (New Shares)
78,000 15,050 93,050 Ranbaxy Laboratories Ltd.
56,699 56,699 Sun Pharmaceutical Industries, Ltd.*
-
-
-
TOTAL HEALTHCARE
-
TECHNOLOGY
COMMUNICATIONS EQUIPMENT
7,100 7,100 AudioCodes
509,000 90,000 599,000 China Unicom Ltd.
200 13,500 13,700 China Unicom Ltd. (A.D.R.)
10,400 10,400 Gilat Satellite Networks Ltd.*
21,400 21,400 Nice Systems Ltd. (A.D.R.)*
15,000 15,000 Radvision Ltd.*
-
-
-
COMPUTERS (HARDWARE)
402,200 86,250 488,450 Acer Co.
18,000 18,000 Compeq Manufacturing Co., Ltd.
18,000 10,628 28,628 Samsung Electronics
65,000 65,000 Synnex Technology International Corp.
-
-
-
COMPUTERS (PERIPHERALS)
83,731 83,731 Daou Technology, Inc.*
2,800,000 2,800,000 Grupo Dataflux SA de CV
165 165 Korea Data System*
-
-
-
COMPUTERS (SOFTWARE & SERVICES)
100 14,538 14,638 BFL Software Ltd. *
15,700 15,700 Check Point Software Technologies Ltd.*
5,900 5,900 HCL Technologies Ltd.*
520,000 520,000 Idion Technology Holdings, Ltd.*
13,200 1,600 14,800 Infosys Technology, Ltd.
381,000 381,000 Informatics Holdings Ltd.
570,000 570,000 Ixchange Technology Holdings Ltd.*
61,200 400 61,600 Mastek Ltd.
5,600 5,600 Mastek Ltd. (New Shares)
30,232 19,050 49,282 NITT, Ltd.
150,000 38,000 188,000 Satyam Computer Services, Ltd.
660,000 660,000 Softline, Ltd.*
645 645 Sunevision Holdings*
150,500 150,500 VocalTec Communications, Ltd.*
7,500 7,500 Wipro Limited (A.D.R.)
-
-
ELECTRONICS (COMPONENT DISTRIBUTORS)
106,720 45,320 152,040 Asustek Computer, Inc.
33,454 3,500 36,954 L.G. Electronics Inc.
151,532 151,532 Phoenixtec Power Co., Ltd.
17,000 17,000 Venture Manufacturing Ltd.
1500 1,500 Samsung Electronics
-
-
-
ELECTRONICS (INSTRUMENTATION)
330,000 135,000 465,000 Elec & Eltek International Co., Ltd.
-
ELECTRONICS (SEMICONDUCTORS)
345,100 163,060 508,160 Advanced Semiconductor Engineering Inc.
2,200 2,200 Chartered Semiconductor (A.D.R.)*
74,080 74,080 Hon Hai Precision Industry
105,000 43,250 148,250 Hyundai Electronics Industries Co.*
77,858 30,000 107,858 Siliconware Precision Industries Co., Ltd.
622,540 249,147 871,687 Taiwan Semiconductor Manufacturing Co.
902,800 441,000 1,343,800 United Microelectronic Corp., Ltd.
36,800 12,000 48,800 Winbond Electronics Corp. (G.D.R.)
-
-
-
SERVICES (DATA PROCESSING)
180,000 28,000 208,000 Shinawatra Computer Co., Plc.
832,000 663,000 1,495,000 Singapore Exchange Ltd.
-
-
-
-
TOTAL TECHNOLOGY
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 1,087,890 57,713 $ 1,145,603
---------------------------------------------------
$ 589,272 131,811 $ 721,083
792,915 160,726 953,641
1,329 1,329
277,819 277,819
1,291,922 249,275 1,541,197
612,695 612,695
---------------------------------------------------
---------------------------------------------------
$ 3,565,952 541,812 $ 4,107,764
---------------------------------------------------
$ 4,653,842 599,525 $ 5,253,367
---------------------------------------------------
$ 117,150 $ 117,150
724,360 128,079 852,439
2,825 190,688 193,513
408,850 408,850
930,900 930,900
243,750 243,750
---------------------------------------------------
---------------------------------------------------
$ 2,427,835 318,767 $ 2,746,602
---------------------------------------------------
$ 247,189 53,009 $ 300,198
78,747 78,747
2,399,013 1,416,484 3,815,497
123,978 123,978
---------------------------------------------------
---------------------------------------------------
$ 2,646,202 1,672,218 $ 4,318,420
---------------------------------------------------
$ 297,932 $ 297,932
532,653 532,653
348 348
---------------------------------------------------
---------------------------------------------------
$ 830,585 348 $ 830,933
---------------------------------------------------
$ 985 143,176 $ 144,161
1,611,213 1,611,213
75,454 75,454
520,034 520,034
2,017,827 244,585 2,262,412
178,108 178,108
338,344 338,344
738,569 4,827 743,396
67,581 67,581
1,096,015 949,936 2,045,951
1,097,053 277,920 1,374,973
116,679 116,679
260 260
776,016 776,016
406,875 406,875
---------------------------------------------------
$ 8,719,610 1,941,847 $ 10,661,457
---------------------------------------------------
$ 450,725 191,406 $ 642,131
327,522 34,266 361,788
155,982 155,982
138,590 138,590
95,475 95,475
---------------------------------------------------
---------------------------------------------------
$ 778,247 615,719 $ 1,393,966
---------------------------------------------------
$ 976,800 399,600 $ 1,376,400
---------------------------------------------------
$ 340,607 160,937 $ 501,544
69,438 69,438
148,442 148,442
590,868 243,381 834,249
296,834 114,375 411,209
1,686,870 748,264 2,435,134
1,421,302 434,514 1,855,816
356,040 116,100 472,140
---------------------------------------------------
---------------------------------------------------
$ 4,692,521 2,035,451 $ 6,727,972
---------------------------------------------------
$ 645,353 100,388 $ 745,741
626,099 498,923 1,125,022
---------------------------------------------------
---------------------------------------------------
$ 1,271,452 599,311 $ 1,870,763
---------------------------------------------------
---------------------------------------------------
$ 22,343,252 7,583,261 29,926,513
---------------------------------------------------
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
TRANSPORTATION
AIRLINES
17,000 17,000 Singapore Airlines Ltd.
RAILROADS
609,700 97,000 706,700 Malaysia International Shipping Bhd.
SHIPPING
2,100,000 440,000 2,540,000 Far Eastern Silo & Shipping Corp.
TOTAL TRANSPORTATION
UTILITIES
ELECTRIC COMPANIES
30,900 30,900 Empresa Nacional Electricidad Chile (A.D.R.)
35,000 35,000 Enersis S.A. (A.D.R.)
137,900 13,200 151,100 Korea Electric Power Corp. (A.D.R.)*
199,789 199,789 Mosenergo (A.D.R.)
NATURAL GAS
119,700 119,700 Gazprom (A.D.R.) (144A)
188,740 188,740 Hong Kong & China Gas Co., Ltd.
POWER PRODUCERS (INDEPENDENT)
173,140 173,140 Unified Energy System (G.D.R.) (144A)*
TOTAL UTILITIES
TOTAL COMMON STOCKS
RIGHTS/WARRANTS
21,000 21,000 Cemex SA, 12/13/02*
16 16 Companhia Brasileira de Distribuicao Grupo
Pao de Acucar, 8/31/05*
10,692,000 1,980,000 12,672,000 PT Lippo Bank, 4/15/02*
217,500 217,500 PT Pan Indonesia Bank TBK, 7/8/02*
26,130 26,130 Queenbee Restaurant, 3/24/03*
9,179,800 104,600 9,284,400 Siam Commercial Bank, 5/10/02*
470,211 56,211 526,422 TelecomAsia Public Co. Ltd., 4/3/02*
TOTAL WARRANTS
TOTAL INVESTMENT IN SECURITIES
Investment in Securities at Cost
- Pioneer Emerging Markets Fund
- Pioneer Indo-Asia Fund
Pro Forma Combined - Investments at Cost
Pioneer Emerging Pioneer Indo- Pro Forma
Markets Fund Asia Fund Combined
$ 163,788 $ 163,788
----------------------------------------------------
$ 1,074,997 171,026 $ 1,246,023
----------------------------------------------------
$ 314,714 65,940 $ 380,654
----------------------------------------------------
$ 1,389,711 400,754 $ 1,790,465
----------------------------------------------------
$ 310,931 $ 310,931
603,750 603,750
2,609,379 132,000 2,741,379
474,499 474,499
----------------------------------------------------
----------------------------------------------------
$ 3,998,559 132,000 $ 4,130,559
----------------------------------------------------
$ 763,087 $ 763,087
237,139 237,139
----------------------------------------------------
----------------------------------------------------
$ 763,087 237,139 $ 1,000,226
----------------------------------------------------
$ 1,369,805 $ 1,369,805
----------------------------------------------------
$ 6,131,451 369,139 $ 6,500,590
----------------------------------------------------
$ 170,408,232 29,355,843 $ 199,452,771
----------------------------------------------------
$ 7,253 $ 7,253
- - -
- - -
798 798
5,160 5,160
691,787 7,883 699,670
128,116 15,315 143,431
----------------------------------------------------
----------------------------------------------------
$ 832,316 23,996 $ 856,312
----------------------------------------------------
$ 181,533,513 29,379,839 $ 210,913,352
----------------------------------------------------
$ 244,887,281
35,384,752
---------------
---------------
280,272,033
---------------
Pioneer Emerging Markets Fund
Pro Forma Statement of Assets and Liabilities
November 30, 2000
(unaudited)
Pioneer Pioneer
Emerging Indo-Asia Pro Forma
Markets Fund Fund Adjustments
ASSETS:
Investment in securities, at value $ 181,533,513 $ 29,379,839
(Pro-forma combined cost $280,272,033)
Cash - -
Foreign currencies, at value 13,967,556 2,303,761
Receivables -
Investment securities sold 3,820,839 450,261
Fund shares sold 363,869 69,184
Forward foreign currency settlement hedge contracts - net 183 -
Dividends, interest and foreign taxes withheld 237,743 70,821
Other 291,570 37,019
Total assets $ 200,215,273 $ 32,310,885
LIABILITIES:
Payables -
Investment securities purchased $ 4,983,799 $ 272,818
Fund shares repurchased 692,371 141,886
Reserve of repatriation tax 54,788 50,407
Due to bank 4,611,067 1,293,287
Due to affiliates 388,170 92,047 286,894 (b)
Accrued expenses 308,899 171,522 (54,381)(a)
Total liabilities $ 11,039,094 $ 2,021,967
NET ASSETS:
Paid-in capital $ 273,892,326 $ 42,321,361
Accumulated undistributed net investment loss (71,257) (683,475) (232,513)(b)(a)
Accumulated net realized loss on investments and
foreign currency transactions. (21,124,676) (5,251,904)
Net unrealized gain (loss) on investments, foreign currency contracts
and other liabilities denominated in foreign currencies (including a
reserve for repatriation of taxes of $54,788 and $50,407, (63,520,214)) (6,097,064)
Total net assets $ 189,176,179 $ 30,288,918
OUTSTANDING SHARES:
(Unlimited number of shares authorized)
Class A 8,152,532 1,882,187 (296,512) (c)
Class B 3,965,962 1,124,941 (175,872) (c)
Class C 1,257,814 359,963 (57,551) (c)
Class Y 4,296,503 - -
NET ASSET VALUE PER SHARE:
Class A $ 10.82 $ 9.20
Class B $ 10.28 $ 8.76
Class C $ 10.23 $ 8.67
$ 11.03 $
MAXIMUM OFFERING PRICE:
Class A $ 11.48 $ 9.76
(a) Reflects reduction in expenses due to elimination of duplicate services.
Pro Forma
Combined
$ 210,913,352
-
16,271,317
-
4,271,100
433,053
183
308,564
328,589
$ 232,526,158
$ 5,256,617
834,257
105,195
5,904,354
767,111
426,040
$ 13,293,574
$ 316,213,687
(987,245)
(26,376,580)
(69,617,278)
$ 219,232,584
9,738,207
4,915,031
1,560,226
4,296,503
$ 10.82
$ 10.28
$ 10.23
$ 11.03
$ 11.48
PRO FORMA STATEMENT OF OPERATIONS
(unaudited)
PIONEER PIONEER
EMERGING INDO-ASIA PRO FORMA PRO FORMA
MARKETS FUND FUND ADJUSTMENTS COMBINED
Dividends (net of foreign taxes withheld of
$285,448 and $53,834, respectively) $ 2,467,093 $ 605,643 $ 3,072,736
Interest (net of foreign taxes withheld of
$8,667 and $1,965, respectively) 348,395 46,472 394,867
Total investment income $ 2,815,488 $ 652,115 $ 3,467,603
Management fees $ 3,351,434 $ 570,652 77,536 (b) $ 3,999,622
Transfer agent fees - -
Class A 397,381 114,984 512,365
Class B 282,700 100,595 383,295
Class C 38,093 20,281 58,374
Class Y 98 - 98
Distribution fees - -
Class A 326,385 68,413 394,798
Class B 698,080 198,540 896,620
Class C 171,483 46,581 218,064
Administrative fees 84,693 29,996 114,689
Custodian fees 602,610 232,979 835,589
Registration fees 98,085 54,531 152,616
Professional fees 103,175 34,013 (34,013)(a) 103,175
Printing 75,145 18,332 93,477
Fees and expenses of nonaffiliated trustees 26,445 20,368 (20,368)(a) 26,445
Miscellaneous 46,003 21,822 67,825
Total expenses $ 6,301,810 $ 1,532,087 $ 7,857,052
Less management fees waived by Pioneer -
Investment Management, Inc. (209,358) 209,358 (b) -
Less fees paid indirectly (65,382) (22,169) (87,551)
Net expenses $ 6,236,428 $ 1,300,560 $ 7,769,501
Net investment income $ (3,420,940) $ (648,445) $ (4,301,898)
Net realized gain (loss) from:
Investments (net of capital gains taxes paid
of $4,464,854 and $0, respectively) $ 28,647,702 $ 4,158,333 $ 32,806,035
Forward foreign currency contracts and other assets - -
and liabilities denominated in foreign currencies (672,371) (30,990) (703,361)
- -
Change in net unrealized gain (loss) from: - -
Investments (97,010,974) (16,666,231) (113,677,205)
Forward foreign currency contracts and other assets - -
and liabilities denominated in foreign currencies (59,138) - (59,138)
Net gain on investments and forward currency t$ansa(69,094,781) $ (12,538,888) $ (81,633,669)
Net increase in net assets resulting from oper$tion(72,515,721) $ (13,187,333) $ (85,935,567)
(a) Reflects reduction in expenses due to elimination of duplicate services.
(b) Management fees conformed to Pioneer Emerging Markets Fund's management contract.
PIONEER EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS 11/30/00 (unaudited)
1. GENERAL
The accompanying pro forma financial statements are presented to show the effect
of the proposed acquisition of Pioneer Indo-Asia Fund by Pioneer Emerging
Markets Fund, as if such acquisition had taken place on December 1, 1999.
Under the terms of an Agreement and Plan of Reorganization, the combination of
Pioneer Emerging Markets Fund and Pioneer Indo-Asia Fund will be treated as a
tax-free business combination and accordingly will be accounted for by a method
of accounting for tax-free mergers of investment companies. The acquisition
would be accomplished by an acquisition of the net assets of Pioneer Indo-Asia
Fund in exchange for shares of Pioneer Emerging Markets Fund at net asset value.
The statement of assets and liabilities and the related statement of operations
of Pioneer Emerging Markets Fund and Pioneer Indo-Asia Fund have been combined
as of and for the fiscal year ended November 30, 2000.
The following notes refer to the accompanying pro forma financial statements as
if the above mentioned merger of Pioneer Emerging Markets Fund and Pioneer
Indo-Asia Fund had taken place as of December 1, 1999.
2. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Pioneer Emerging Markets Fund (the Fund) is a Delaware business 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 long-term
growth of capital.
The Fund offers four classes of shares - Class A, Class B, Class C and Class Y
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 the level of transfer agent and distribution fees
may differ among classes. Class A, Class B and Class C shareowners have
exclusive voting rights with respect to the distribution plan for each class.
There is no distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with accounting
principles generally accepted in the United States 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 revenues and expenses during the reporting periods. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry:
A. SECURITY VALUATION
Security transactions are recorded as of trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the Exchange. In computing the net asset
value, securities are valued at the last sale price on the principal exchange
where they are traded. Securities that have not traded on the date of
valuation, or securities for which sale prices are not generally reported,
are valued at the mean between the last bid and asked prices. Securities for
which market quotations are not readily available are valued at their fair
values as determined by, or under the direction of, the Board of Trustees.
Trading in foreign securities is substantially completed each day at various
times prior to the close of the New York Stock Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Dividend income is recorded on the ex-dividend
date, except that certain dividends
from foreign securities where the ex-dividend date may have passed are
recorded as soon as the Fund is informed of the ex-dividend data in the
exercise of reasonable diligence. Interest income, including interest on
income bearing cash accounts, is recorded on the accrual basis, net of
unrecoverable foreign taxes withheld at the applicable country rates.
Temporary cash investments are valued at amortized cost.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
The Fund's investments in emerging markets or countries with limited or
developing markets may subject the Fund to a greater degree of risk than in a
developed market. Risks associated with these developing markets include
political, social or economic factors and may affect the price of the Fund's
investments and income generated by these investments, as well as the Fund's
ability to repatriate such amounts. In addition, delays are common in
registering transfers of securities in certain countries, and the Fund may be
unable to sell portfolio securities until the registration process is
completed.
B. FOREIGN CURRENCY TRANSLATION
The books and records of the Fund are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions represent,
among other things, the net realized gains and losses on foreign currency
contracts, disposition of foreign currencies and the difference between the
amount of income accrued and the U.S. dollar actually received. Further, the
effects of changes in foreign currency exchange rates on investments are not
segregated in the statement of operations from the effects of changes in
market price of those securities but are included with the net realized and
unrealized gain or loss on investments.
C. FORWARD FOREIGN CURRENCY CONTRACTS
The Fund enters into forward foreign currency contracts (contracts) for the
purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific investment
transactions (settlement hedges) or portfolio positions (portfolio hedges).
All contracts are marked to market daily at the applicable exchange rates,
and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund records realized gains and losses at the
time a portfolio hedge is offset by entry into a closing transaction or
extinguished by delivery of the currency. Risks may arise upon entering
into these contracts from the potential inability of counterparties to meet
the terms of the contract and from unanticipated movements in the value of
foreign currencies relative to the U.S. dollar. (See Note 8)
D. FUTURES CONTRACTS
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices, and currency rates or to seek to increase
total return. Upon entering into a futures contract, the Fund is required to
deposit with a broker an amount of cash or securities equal to the minimum
"initial margin" requirements of the associated futures exchange. Subsequent
payments for futures contracts ("variation margin") are paid or received by
the Fund, depending on the daily fluctuation in the value of the contracts,
and are recorded by the Fund as unrealized gains or losses. When the contract
is closed, the Fund realizes a gain or loss equal to the difference between
the opening and closing values of the contract. The use of futures contracts
involves, to varying degrees, elements of market and counterparty risks which
may exceed the amounts recognized by the Fund. Changes in value of the
contracts may not directly correlate to the changes in value of the
underlying securities. These risks may decrease the effectiveness of the
Fund's hedging strategies and potentially result in a loss. At November 30,
2000, the Fund had no open futures contracts.
E. 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.
In addition to the requirements of the Internal Revenue Code, the Fund may
also be required to pay local taxes on the recognition of capital gains
and/or the repatriation of foreign currencies in certain countries. During
the year ended November 30, 2000, the Fund paid $4,464,854 in such taxes.
In determining the daily net asset value, the Fund estimates the reserve for
such taxes, if any, associated with investments in certain countries. The
estimated reserve for the capital gains is based on the net unrealized
appreciation on certain portfolio securities, the holding period of such
securities and the related tax rates, tax loss carryforward (if applicable)
and other such factors. As of November 30, 2000, the Fund had no reserve
related to capital gains. The estimated reserve for the repatriation of
foreign currencies is based on principal balances and/or unrealized
appreciation of applicable securities, the holding period of such investments
and the related tax rates and other such factors. As of November 30, 2000,
the Fund had a reserve of $105,195 related to taxes on the repatriation of
foreign currencies.
The characterization of distributions to shareowners for financial reporting
purposes is determined in accordance with federal income tax rules.
Therefore, the source 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.
F. 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 majority owned indirect subsidiary of UniCredito Italiano S.p.A.
(UniCredito Italiano), earned underwriting commissions on the sale of Fund
shares during the year ended November 30, 2000.
G. CLASS ALLOCATIONS
Distribution fees are calculated based on the average daily net asset values
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan.
Shareowners of each class share all expenses and fees paid to the transfer
agent, Pioneer Investment Management Shareholder Services, Inc.(PIMSS), for
their services, which are allocated based on the number of accounts in each
class and the ratable allocation of related out-of-pocket expense (see Note
5). 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 its respective percentage of adjusted net
assets at the beginning of the day.
Distributions to shareowners are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, Class C and Class Y shares can bear different
transfer agent and distribution fees.
3. PRO FORMA ADJUSTMENTS
The accompanying pro forma financial statements reflect changes in fund
shares as if the merger had taken place on December 1, 1999. Adjustments
have been made to expenses for duplicated services that would not have been
incurred if the merger took place on December 1, 1999. In addition,
adjustments have been made to expenses to reflect management fees incurred
and no longer waived as if the merger had taken place on December 1, 1999.
4. MANAGEMENT AGREEMENT
Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser,
manages the Fund's portfolio and is a majority owned indirect subsidiary of
UniCredito Italiano. Management fees are calculated daily at the annual rate of
1.25% of the Fund's average daily net assets.
In addition, under the management and administration agreements, certain
other services and costs, including accounting, regulatory reporting and
insurance premiums, are paid by the Fund. At November 30, 2000, $34,565 was
payable to PIM related to management fees, administrative fees and certain
other services.
PIM has appointed Khothari Pioneer AMC Ltd. (the Indian Adviser) as the
Fund's adviser in India. In managing the Fund's Indian investments, PIM
relies on the advice and local expertise of the Indian Adviser. The Indian
Adviser is a joint venture between PIM and Investment Trust of India
Limited (ITI), a corporation organized under the laws of India. As
compensation for its services under its subadvisory agreement with PIM and
the Fund, PIM pays the Indian Adviser a management fee at the annual rate
from 0.10% to 0.60% of the Fund's average gross assets invested in India's
securities markets, including assets invested in American, global or other
types of depository receipts for securities traded in India's securities
markets. The annual rate is 0.10% of such gross assets up to $15 million;
0.20% of the next $30 million; 0.40% of the next $15 million; and 0.60% of
the excess over $60 million.
5. TRANSFER AGENT
PIMSS, a majority 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 $88,814 in transfer agent
fees payable to PIMSS at November 30, 2000.
6. DISTRIBUTION PLANS
The Fund adopted a Plan of Distribution with respect to each of Class A,
Class B and Class C shares (Class A Plan, Class B Plan and Class C 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. Included in due to affiliates is $69,944 in distribution fees
payable to PFD at November 30, 2000.
In addition, redemptions of each class of shares (except Class Y shares) may
besubject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may
be imposed on redemptions of certain net asset value purchases of Class A
shares within one year of purchase. Class B shares that are redeemed within
six years of purchase are subject to a CDSC at declining rates beginning at
4.0%, based on the lower of cost or market value of shares being redeemed.
Redemptions of Class C shares within one year of purchase are subject to a
CDSC of 1.00%. Proceeds from the CDSCs are paid to PFD.
7. EXPENSE OFFSETS
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended November 30, 2000,
the Fund's expenses were reduced by $87,551 under such arrangements.
8. FORWARD FOREIGN CURRENCY CONTRACTS
At November 30, 2000, the Fund had entered into various contracts that
obligate the Fund to deliver currencies at specified future dates. At the
maturity of a contract, the Fund must make delivery of the foreign currency.
Alternatively, prior to the settlement date of a portfolio hedge, the Fund
may close out such contracts by entering into an offsetting hedge contract.
As of November 30, 2000, the Fund had no outstanding portfolio hedges.
At November 30, 2000, the gross forward currency settlement contracts
receivable and payable were $1,543,680 and $1,543,497, respectively,
resulting in a net receivable of $183.
9. LINE OF CREDIT FACILITY
The Fund, along with certain other funds in the Pioneer Family of Funds (the
Funds), collectively participate in a $50 million committed, unsecured
revolving line of credit facility. Borrowings are used solely for temporary
or emergency purposes. The Fund may borrow up to the lesser of $50 million or
the limits set by its prospectus for borrowings. Interest on collective
borrowings of up to $25 million is payable at the Federal Funds Rate plus
3/8% on an annualized basis, or at the Federal Funds Rate plus 1/2% if the
borrowing exceeds $25 million at any one time. The Funds pay an annual
commitment fee for this facility. The commitment fee is allocated among such
Funds based on their respective borrowing limits.
PART C
OTHER INFORMATION
Item 15. Indemnification
Except for the Agreement and Declaration of Trust, dated March 23,
1994 (the "Declaration"), establishing the Fund as a business trust under
Delaware law, there is no contract, arrangement or statute under which any
Trustee, officer, underwriter or affiliated person of the Fund is insured or
indemnified. The Declaration provides that no Trustee or officer will be
indemnified against any liability to which the Fund would otherwise be subject
by reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be available to Trustees, officers
and controlling persons of the Fund pursuant to the foregoing provisions, or
otherwise, the Fund has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund of expenses incurred or
paid by a Trustee, officer or controlling person of the Fund in the successful
defense of any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being registered, the
Fund will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
Item 16. Exhibits
Exhibit Reference
1.1. Agreement and Declaration of Trust.(1)
1.2. Certificate of Trust.(1)
1.3. Establishment and Designation of Class A and Class B
Shares of Beneficial Interest.(1)
1.4. Establishment and Designation of Class A, Class B
and Class C Shares of Beneficial Interest.(2)
1.5. Establishment and Designation of Class A, Class B
Class C and Class Y Shares of Beneficial Interest.(3)
2. Restated By-Laws.(5)
3. Not applicable.
4. Form of Agreement and Plan of Reorganization between
Pioneer Emerging Markets Fund and Pioneer Indo-Asia
Fund. (6)
5. Not applicable.
6. Management Contract between the Fund and Pioneer
Investment Management, Inc.(5)
7.1. Underwriting Agreement between the Fund and Pioneer
Funds Distributor, Inc.(5)
7.2. Updated Dealer Sales Agreement.(5)
8. None.
9. Custodian Agreement between the Fund and Brown
Brothers Harriman & Co.(1)
10.1. Class A Distribution Plan.(5)
10.2. Class B Distribution Plan.(5)
10.3 Class C Distribution Plan.(2)
11. Opinion of Counsel (legality of securities being
registered)(6)
12. Form of Opinion of Counsel (supporting tax matters in the
Prospectus) (6)
13.1 Investment Company Service Agreement between
the Fund and Pioneer Investment Management Shareholder
Services Inc. (formerly Pioneer Services
Corporation).(5)
13.2 Administration Agreement between the Fund and Pioneer
Investment Management, Inc. (formerly Pioneering
Management Corporation).(4)
14. Consent of Independent Public Accountants (6)
15. Not applicable.
16. Powers of Attorney. (6)
17. Multiple Class Plan for Class A, Class B, Class C and
Class Y Shares pursuant to Rule 18f-3. (3)
- ------------------------
(1) Previously filed. Incorporated herein by reference from the exhibits
filed with Post-Effective Amendment No. 2 to the Registration Statement (File
No. 33-76894) as filed with the Securities and Exchange Commission (the "SEC")
on March 30, 1995 (Accession No. 0000921023-95-000008).
(2) Previously filed. Incorporated herein by reference from the exhibits
filed with Post-Effective Amendment No. 3 to the Registration Statement as filed
with the SEC on March 28, 1996 (Accession No. 0000921023-96-000009).
(3) Previously filed. Incorporated herein by reference from the exhibits
filed with Post-Effective Amendment No. 6 to the Registration Statement as filed
with the SEC on April 9, 1998 (Accession No. 0001016964-98-000030).
(4) Previously filed. Incorporated herein by reference from the exhibits
filed with Post-Effective Amendment No. 8 to the Registration Statement as filed
with the SEC on January 14, 1999 (Accession No. 0001016964-99-000004).
(5) Previously filed. Incorporated herein by reference from the exhibits filed
with Post-Effective Amendment No. 11 to the Registration Statement as filed with
the SEC on March 30, 2001.
(6) Filed herewith.
Item 17. Undertakings
(1) The Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Exchange Act of 1934, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the registrant, in the City of Boston, and the
Commonwealth of Massachusetts on the 29th day of June 2001.
PIONEER EMERGING MARKETS FUND
By: /s/ David D. Tripple
David D. Tripple
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title
John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
)
/s/ Vincent Nave Chief Financial Officer )
Vincent Nave and Treasurer (Principal )
Financial and Accounting )
Officer) )
)
)
Trustees: )
)
)
Mary K. Bush* )
Mary K. Bush )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl* )
Richard H. Egdahl )
)
)
Margaret BW Graham* )
Margaret B. W. Graham )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
/s/ David D. Tripple )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
)
)
*By: /s/ David D. Tripple Dated: June 29, 2001 )
David D. Tripple
Attorney-in-fact
Exhibit Index
Exhibit
Number Document Title
4. Form of Agreement and Plan of Reorganization between
Pioneer Emerging Markets Fund and Pioneer Indo-Asia
Fund (Exhibit A to proxy statement)
11. Opinion of Counsel (legality of securities being
registered)
12. Form of Opinion of Counsel (supporting tax matters in the
Prospectus)
14. Consent of Independent Public Accountants
16. Powers of Attorney