FOR INTERNAL USE ONLY
QUESTIONS AND ANSWERS ABOUT PROPOSED CHANGES TO
PIONEER LIMITED MATURITY BOND FUND
A supplement to the prospectus for Limited Maturity Bond Fund dated June 1, 2001
is mailing to shareholders of the fund on June 8, 2001. The supplement is
accompanied by a cover letter from Theresa Hamacher. A Dealer Advisory is
mailing as well.
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Here are the major points covered in the shareholder communications:
THE FUND TRUSTEES APPROVED A TAX-FREE REORGANIZATION (SOMETIMES REFERRED TO AS A
"MERGER") OF THE FUND INTO PIONEER BOND FUND PENDING APPROVAL OF LIMITED
MATURITY BOND FUND SHAREHOLDERS LATER THIS SUMMER.
THE FUND WILL CLOSE TO NEW INVESTORS ON JUNE 29, 2001.
THE FUND'S CHECK WRITING PRIVILEGE WILL BE DISCONTINUED ON JUNE 29, 2001.
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Q: What is a tax-free reorganization?
A: If approved by the Limited Maturity Bond Fund (LMBF) shareowners later
this summer, the assets of the fund would transfer to Pioneer Bond Fund
and shareowners of LMBF would have their assets converted into Pioneer
Bond Fund shares. This is treated as a non-taxable event.
Q: How will shareowners give their approval to this reorganization? When
would it become effective?
A: A proxy statement/prospectus will be to shareowners this summer. The
shareowner meeting is scheduled to be held in September 2001, with the
reorganization expected on or as soon as possible after September 28,
2001.
Q: Why is the check writing privilege being discontinued?
A: Pioneer Bond Fund does not offer check-writing privileges and there are no
plans to offer any at the current time. Investors that enjoy the
check-writing feature may wish to consider using Pioneer Cash Reserves,
our money market fund, for their check writing needs. You would need to
establish a new account in Cash Reserves and have new check writing checks
issued to you.
As an alternative to check writing, investors in Pioneer Bond Fund may
have pre-authorized fund redemptions sent directly to their personal bank
accounts (electronic funds transfer). It's easy to call toll-free and
request an amount up to $100,000 per day to be safely and quickly
transmitted for deposit to your bank account. You must complete an Account
Options Form to have this option set up on your account.
Keep in mind that check-writing services for Limited Maturity Bond Fund
terminate on June 29, 2001. [WE WILL HAVE A TWO-WEEK GRACE PERIOD UNTIL
JULY 16TH TO ALLOW CHECKS TO CLEAR THE BANK - A SEPARATE LETTER WILL MAIL
TO SHAREOWNERS WITH CHECK WRITING PRIVILEGES THE WEEK OF JUNE 18TH.]
Q: What are the differences in the investment policies of LMBF and Pioneer
Bond Fund?
A: The investment objectives of both Funds are generally similar - the
following table (also in the prospectus supplement) gives you a
comparison. The proxy statement/prospectus you'll receive later this
summer will contain greater detail on investment policies and other
issues.
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Limited Maturity Bond Fund Bond Fund
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A high level of current income consistent with a To provide current income from an investment grade
relatively high level of principal stability. portfolio with due regard to preservation of
capital and prudent investment risk. The fund also
seeks a relatively stable level of dividends; however,
the level of dividends will be maintained only if
consistent with preserving the investment grade
quality of the fund's portfolio.
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Invests at least 90% of its assets in U.S. government Invests at least 80% of its assets in debt
securities or debt securities that are rated securities issued or guaranteed by the U.S.
investment grade at the time of purchase or cash and government or its agencies and instrumentalities,
cash equivalents. debt securities of corporate and other issuers,
rated at least investment grade at the time of
investment, or cash and cash equivalents. The
fund may also invest up to 20% of its total assets
in below investment grade securities.
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The average life of the fund's portfolio will be in May invest in securities with a broad range of
the 1 to 5 year range and the average life of any maturities and maintains an average portfolio
single issue will be no greater than ten years. maturity which varies based upon the judgment of
Pioneer.
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Q: For Class A shares, there is a different front-end sales charge on LMBF
that is lower than the A shares sales charge for Bond Fund. What happens
after the merger occurs?
A: Shareowners of LMBF - Class A will become shareowners of Bond Fund - Class
A after the tax-free reorganization takes place on or after September 28,
2001. Purchases made after the merger will incur the sales charge schedule
for Bond Fund.
SALES CHARGES - CLASS A
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Amount of Purchase Limited Maturity Bond Bond Fund
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Less than $100,000 2.50% 4.50%
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$100,000 but less than $250,000 2.00% 3.50%
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$250,000 but less than $500,000 1.50% 2.50%
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$500,000 but less than $1 million 1.00% 2.00%
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$1 million or more -0- -0-
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Q: For Class B shares, there is a different contingent deferred sales
charge (CDSC) schedule on LMBF compared to Bond Fund. What happens
after the merger occurs?
A: Shareowners of LMBF - Class B will maintain the original aging schedule
of the shares purchased prior to the merger of the two funds. After the
tax-free reorganization takes place, new investments into Bond Fund
will be made under the Bond Fund CDSC schedule.
SALES CHARGES - CLASS B
Limited Maturity Bond
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# Years % Sales charge
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1 2
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2 2
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3 1
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4 -0-
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Bond Fund
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# Years % Sales charge
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1 4
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2 4
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3 3
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4 3
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5 2
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6 1
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7+ -0-
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Q: Do I need to take any action now?
A: No - shareowners are not being asked to do anything with regards to the
proposed reorganization. We do encourage investors to talk with their
investment professional if you have questions. If you wish to exchange
your LMBF account to another Pioneer fund, you may do this at any time.
Please keep in mind that exchanges for non-retirement accounts will have
tax implications. Again, talk with your investment professional before
making your decision.
(C) Pioneer Funds Distributor, Inc.
Underwriter of Pioneer Mutual Funds
60 State Street
Boston, MA 02109